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AMENDMENT NO. 5
Dated as of January 15, 1999
This AMENDMENT among U.S. HOMECARE CORPORATION AND ITS SUBSIDIARIES
LISTED IN ANNEX 1 HERETO (collectively, the "Borrowers" and each, individually,
a "Borrower") and FLEET NATIONAL BANK (successor by merger to Fleet Bank,
National Association)(the "Bank").
PRELIMINARY STATEMENT.
A. The Borrowers and the Bank have entered into a Credit Agreement
dated as of October 6, 1995, as amended by Amendment No. 1 dated as of November
14, 1996, Amendment No. 2 dated as of March 25, 1997, Amendment No. 3 dated as
of December 24, 1997, and Amendment No. 4 dated as of March 26, 1998 (said
Credit Agreement, as so amended, being hereinafter referred to as the "Credit
Agreement"; the terms defined therein being used herein as therein defined
unless otherwise defined herein).
B. Pursuant to the Credit Agreement, the Borrowers are indebted to the
Bank under the Note in the aggregate principal amount of $3,000,000 as of the
date hereof (the "Indebtedness"), which Indebtedness is owed by the Borrowers to
the Bank without offset, defense or counterclaim of any kind, nature or
description. As security for such Indebtedness, the Borrowers have heretofore
granted to the Bank a second priority security interest in all the Borrowers'
assets (excluding certain health care receivables as more fully set forth in the
Security Agreement), whether now owed or hereafter acquired, wherever located of
any kind, nature or description, tangible or intangible, including without
limitation, the Borrowers' accounts receivable, inventory, equipment, and
general intangibles, and such security interests and liens granted by the
Borrowers to the Bank are hereby reacknowledged and confirmed by the Borrowers.
C. The Borrowers and the Bank each hereby acknowledge that the
Borrowers have failed to comply with the covenants contained in Sections 7.1 and
7.3 of the Credit Agreement for the months of October, November and December of
1998. As a result of such noncompliance, Events of Default have occurred and are
continuing under Section 8.1(c) of the Credit Agreement (the "Subject Events of
Default"). The Borrowers have requested that the Bank forbear, from January 15,
1999 through February 15, 1999, from exercising their available rights and
remedies solely in connection with the Subject Events of Default.
D. The Borrowers and the Bank have agreed to amend the Credit Agreement
as hereinafter set forth.
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SECTION Amendments.
(a) The Credit Agreement is, effective as of the date hereof and subject to the
satisfaction of the conditions precedent set forth in Section 3 hereof, hereby
amended as follows:
The following definition contained in Section 1.1 of
the Credit Agreement is amended and restated in full to read
as follows:
"Termination Date" means (i) February 16, 1999 or
such later date that is set forth in any extension letter from
the Bank to the Borrowers from time to time; provided that if
such date is not a Banking Day, the Termination Date shall be
the next succeeding Banking Day, or (ii) the earlier date of
termination in whole of the Commitments pursuant to Section
2.6 or Section 8.2, or otherwise.
(a) The Note is, effective as of the date hereof and subject to the satisfaction
of the conditions precedent set forth in Section 3 hereof, hereby amended as
follows:
(b) The following definition contained in Section 1(ix) of the Note is amended
and restated in full to read as follows:
(c) (ix) "Termination Date" means February 16, 1999.
SECTION Forbearance and Extensions.
(a) From January 15, 1999 until and including February 15, 1999, and subject to
the satisfaction of the conditions precedent set forth in Section 3 hereof, the
Bank hereby agrees to forbear from pursuing its available rights and remedies
solely in connection with the Subject Events of Default, except that the Bank
may, in its sole discretion, refuse to make any additional Loan or Loans during
such period.
(b) In accordance with the Letter Waiver by and among the Borrowers and the Bank
dated November 13, 1998 (the "Letter Waiver"), the Borrowers were to provide the
Bank and the Guarantor, (i) not later than December 1, 1998, with
management-prepared 1999 projected financial statements (the "Projections"), and
(ii) not later than December 15, 1998, with a written report from X.X. Xxxxxx,
certified public accountants (the "Accountants"), detailing the results of their
review of the Projections. The Bank did not receive such Projections until on or
about December 15, 1998, and the Bank has not yet received the report from the
Accountants. The Bank reserves its rights and remedies with respect to the
failure of the Borrowers to comply with the foregoing terms of the Letter
Waiver, and nothing contained herein shall constitute a waiver by the Bank of
such rights and remedies.
(c) Nothing contained herein shall prejudice any rights or remedies the Bank may
have to exercise its rights and remedies with respect to the Subject Events of
Default after February 15, 1999, or, on any future date, to declare the
Borrowers to be out of compliance with
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any term or provision of the Credit Agreement, for any reason other than the
Subject Events of Default, or prevent the Bank now or hereafter from pursuing
any of their available remedies in connection with any Default or Event of
Default under the Credit Agreement, other than the Subject Events of Default.
SECTION Conditions of Effectiveness. This Amendment shall
become effective when, and only when, the Bank shall have received counterparts
of this Amendment executed by the Borrowers and the Bank and the consent hereto
executed by the Guarantor, except that Section 1 hereof shall become effective
when, and only when, the Bank shall have additionally received (i) true
photocopies of the executed originals of an Amendment No. 6 to Receivables
Purchase and Servicing Agreement extending the maturity date of the Purchase
Agreement to February 4, 1999 and in form and substance satisfactory to the Bank
and the Guarantor, (ii) true photocopies of the executed originals of all
waivers and amendments with respect to the Senior Debt (as defined in the
Intercreditor Agreement) concerning the matters covered by this Amendment, which
shall include an amendment to the Senior Debt documents extending the maturity
date thereof to February 4, 1999 and (iii) a fully executed amendment to the
Guarantee extending the termination date thereof to a date no earlier than March
1, 1999.
SECTION Representations and Warranties of the Borrowers. Each
Borrower represents and warrants as follows:
(a) Such Borrower is a corporation duly organized and validly existing under the
laws of the jurisdiction of its incorporation.
(b) The execution, delivery and performance by such Borrower of this Amendment
and the Facility Documents, as amended hereby, to which it is or is to be a
party are within such Borrower's corporate powers, have been duly authorized by
all necessary corporate action and do not contravene (i) such Borrower's charter
or by-laws, (ii) any contractual restriction binding on or affecting such
Borrower, or result in, or require, the creation or imposition of any mortgage,
deed of trust, pledge, lien, security interest or other charge, encumbrance or
preferential arrangement of any nature upon or with respect to any of the
properties now owned or hereafter acquired by such Borrower, or (iii) to the
best of such Borrower's knowledge, any law.
(c) No authorization, approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body is required for the due
execution, delivery and performance by such Borrower of this Amendment or any of
the Facility Documents, as amended hereby, to which it is or is to be a party.
(d) This Amendment and each of the other Facility Documents as amended hereby,
to which such Borrower is a party constitute legal, valid and binding
obligations of such Borrower enforceable against such Borrower in accordance
with their respective terms.
(e) To the best of such Borrower's knowledge, the Security Agreement constitutes
valid and perfected second priority security interests and liens in and to the
Collateral covered
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thereby enforceable against all third parties in all jurisdictions and secure
the payment of all obligations of such Borrower under the Facility Documents, as
amended hereby, and the execution, delivery and performance of this Amendment do
not adversely affect the aforesaid security interests and liens of such Security
Agreement.
(f) Except as set forth on Schedule 4(f), there is no pending or threatened
action or proceeding affecting such Borrower or any of its Subsidiaries before
any court, governmental agency or arbitrator, which may materially adversely
affect the financial condition or operations of such Borrower or any Subsidiary
or which purport to affect the legality, validity or enforceability of this
Amendment or any of the other Facility Documents, as amended hereby.
(g) After giving effect to the terms of the Amendment, no event has occurred and
is continuing which constitutes a Default or an Event of Default.
SECTION Reference to and Effect on the Facility Documents.
(a) Upon the effectiveness of this Amendment, on and after the date hereof each
reference in the Credit Agreement to "this Agreement," "hereunder," "hereof,"
"herein" or words of like import, and each reference in any Facility Documents
to the Credit Agreement or any other Facility Document, shall mean and be a
reference to the Credit Agreement or such other Facility Document as amended
hereby.
(b) Except as specifically amended above, the Credit Agreement and the other
Facility Documents shall remain in full force and effect and are hereby ratified
and confirmed. Without limiting the generality of the foregoing, the Pledge
Agreements and all of the Pledged Collateral described therein, and the Security
Agreement and all of the Collateral described therein, do and shall continue to
secure the payment of all Obligations (as defined in the Pledge Agreement and
the Security Agreement respectively), in each case as amended hereby.
(c) The execution, delivery and effectiveness of this Amendment shall not,
except as expressly provided herein, operate as a waiver of any right, power or
remedy of the Bank or the Guarantor under any of the Facility Documents, nor
constitute a waiver of any provision of any of the Facility Documents.
(d) The Bank is under no obligation to enter into this Amendment. The Bank's
entering into this Amendment shall not be deemed to limit or hinder any rights
of the Bank or the Guarantor under the Credit Agreement, nor shall it be deemed
to create or infer a course of dealing between the Bank and the Parent or any of
the other Borrowers with regard to any provision of the Credit Agreement.
SECTION Costs, Expenses and Taxes. The Borrowers jointly and
severally agree to pay on demand all costs and expenses of the Bank and the
Guarantor in connection with the preparation, execution and delivery of this
Amendment and the other instruments and documents to be delivered hereunder,
including, without limitation, the reasonable fees and out-
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of-pocket expenses of counsel for the Bank and the Guarantor with respect
thereto and with respect to advising the Bank and the Guarantor as to their
rights and responsibilities hereunder and thereunder. The Borrowers further
jointly and severally agree to pay on demand all costs and expenses, if any
(including, without limitation, reasonable counsel fees and expenses), in
connection with the enforcement (whether through negotiations, legal proceedings
or otherwise) of this Amendment and the other instruments and documents to be
delivered hereunder, including, without limitation, reasonable counsel fees and
expenses in connection with the enforcement of rights under this Section. In
addition, the Borrowers shall pay any and all stamp and other taxes payable or
determined to be payable in connection with the execution and delivery of this
Amendment and the other instruments and documents to be delivered hereunder, and
agrees to save the Bank and the Guarantor harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or omission to
pay such taxes.
SECTION Execution in Counterparts. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same instrument.
SECTION Governing Law. This Amendment shall be governed by,
and construed in accordance with, the laws of the State of Connecticut.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written..
Borrowers:
U.S. HOMECARE CORPORATION AND ITS
SUBSIDIARIES LISTED ON ANNEX 1 HERETO
By:
Name:
Vice President of each of the above
corporations
Bank:
FLEET NATIONAL BANK (successor by merger
to Fleet Bank, National Association)
By:
Xxxxxxxxxxx X. Xxxx
Vice President
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CONSENT OF GUARANTOR
The Guarantor hereby consents to the execution of the foregoing Amendment by the
Bank and to the terms and conditions contained therein.
CONNECTICUT DEVELOPMENT AUTHORITY
By
Its
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ANNEX 1
U.S. HOMECARE CORPORATION, AFFILIATED HOME CARE OF WESTCHESTER, INC., U.S.
HOMECARE CORPORATION OF NORTHERN WESTCHESTER, U.S. HOMECARE CORPORATION OF
MANHATTAN, U.S. HOMECARE CORPORATION OF THE BRONX, U.S. HOMECARE CERTIFIED
CORPORATION OF NEW YORK, U.S. HOMECARE CORPORATION OF ALBANY, U.S. HOMECARE
INFUSION THERAPY SERVICES CORPORATION OF NEW JERSEY, U.S. HOMECARE CORPORATION
OF CONNECTICUT, U.S. HOMECARE CERTIFIED CORPORATION OF CONNECTICUT, U.S.
HOMECARE CORPORATION OF PENNSYLVANIA, U.S. HOMECARE CERTIFIED CORPORATION OF
PENNSYLVANIA, U.S. HOMECARE INFUSION THERAPY PRODUCTS CORPORATION
