EXHIBIT 10.7
CREDIT AGREEMENT
AMENDMENT NO. 1
By and Among
NATIONAL HOME HEALTH CARE CORP.,
HEALTH ACQUISITION CORP.,
NEW ENGLAND HOME CARE, INC.,
ACCREDITED HEALTH SERVICES, INC.,
CONNECTICUT STAFFING WORKS CORP.,
IMPRESSIVE STAFFING CORP.,
NEW JERSEY STAFFING WORKS CORP., and
MEDICAL RESOURCES HOME HEALTH CORP., as Borrower
and
HSBC BANK USA, as Bank
Dated: As of October 24, 2003
$7,500,000.00 Revolving Credit Facility
CREDIT AGREEMENT AMENDMENT NO. 1
THIS AMENDMENT No. 1 ("Amendment No. 1") to the Credit Agreement (the
"Credit Agreement") dated as of October 24, 2001 by and among NATIONAL HOME
HEALTH CARE CORP., a Delaware corporation, ("National") HEALTH ACQUISITION
CORP., a New York corporation, NEW ENGLAND HOME CARE, INC., a Connecticut
corporation, ACCREDITED HEALTH SERVICES, INC., a New Jersey corporation,
CONNECTICUT STAFFING WORKS CORP., a Connecticut corporation ("Original Operating
Subsidiaries") is dated as of October 24, 2003 and is made by and among
National, the Original Operating Subsidiaries, IMPRESSIVE STAFFING CORP., a New
York corporation, NEW JERSEY STAFFING WORKS CORP., a New Jersey corporation AND
MEDICAL RESOURCES HOME HEALTH CORP., a Massachusetts corporation ("New Operating
Subsidiaries") (National, Original Operating Subsidiaries and New Operating
Subsidiaries are hereinafter collectively referred to as "Borrowers") and HSBC
BANK USA, a New York banking corporation (the "Bank").
W I T N E S S E T H :
WHEREAS, the Borrower and the Bank entered into the Credit Agreement for
purposes of establishing in the Borrower's favor a Revolving Credit Facility in
the maximum aggregate principal amount of $7,500,000.00; and
WHEREAS, the Borrower and the Bank wish to modify certain terms in the
Agreement;
NOW, THEREFORE, in consideration of Ten and 00/100 ($10.00) Dollars and
other good and valuable consideration, each to the other in hand paid, receipt
thereof being hereby acknowledged, and in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:
SECTION I: AMENDMENTS TO THE AGREEMENT
ARTICLE 1
DEFINITIONS
Section 1.01. Defined Terms: Article 1, Section 1.01 of the Credit
Agreement is hereby amended so that the following terms are modified and amended
and in some cases added to have the meanings specified below:
"Amendment Date" shall mean October 24, 2003.
"Expiration Date" as to Revolving LIBOR Rate Loans and Revolving Prime
Rate Loans shall mean Twenty-Four (24) months from the Amendment Date which
shall be the date on which the Commitment expires.
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"Revolving LIBOR Rate Note" shall mean the amended and restated promissory
note in the form thereof attached hereto as Exhibit A1, made and delivered by
the Borrowers pursuant to Section 2.02(b).
"Revolving Prime Rate Note" shall mean the amended and restated promissory
note in the form thereof attached hereto as Exhibit A, made and delivered by the
Borrowers pursuant to Section 2.02(b).
"Security Agreement" shall mean the Security Agreement executed and
delivered by National and the Original Operating Subsidiaries in connection with
the original closing, dated October 24, 2001, attached to the Credit Agreement
as Exhibit B together with the Security Agreement in the form thereof attached
hereto as Exhibit B1, executed and delivered by the New Operating Subsidiaries
in favor of the Bank with respect to the Collateral pursuant to Section 4.01(f).
ARTICLE 6
NEGATIVE COVENANTS
Article 6 of the Credit Agreement is hereby amended so that the following
sections are modified by deleting the entire text thereof and replacing, in lieu
thereof, the following text:
Section 6.01 Financial Condition Covenants:
(a) Maintenance of Stockholder Equity. Have a Net Loss of One Million
Dollars ($1,000,000.00) in any one fiscal quarter or a Net Loss of One Million
Dollars ($1,000,000.00), in the aggregate in any series of consecutive fiscal
quarters, except that the after tax effect of any payment arising out of the
Sunstar Litigation shall not count toward the One Million Dollar ($1,000,000.00)
quarterly loss limitation. Notwithstanding any of the foregoing, total
consolidated stockholders' equity of National and its Subsidiaries, after giving
effect to operating results and all capital transactions, such as dividends or
stock buybacks, shall not be less than:
From 06/06/01 Through 07/30/01 $25,000,000
From 07/31/01 Through 07/30/02 $28,000,000
From 07/31/02 Through 07/30/03 $31,000,000
From 07/31/03 Through 07/30/04 $34,000,000
From 07/31/04 Through 07/30/05 $37,000,000
From 07/31/05 and thereafter $40,000,000
ARTICLE 8
MISCELLANEOUS
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Article 8 of the Credit Agreement is hereby amended to add the following
Sections:
Section 8.18 Full Force and Effect.
(a) Except as specifically amended above, all other terms of the
Agreement, all exhibits thereto, and the "Loan Documents" as defined therein,
shall remain the same and in full force and effect. After the effective date of
this Amendment No. 1, the term "Agreement" shall mean the Agreement as amended
by this Amendment No. 1. All capitalized words and phrases used in this
Amendment No. 1 not otherwise defined herein shall have the meaning set forth in
the Agreement.
(b) This Amendment No. 1 shall continue in full force and effect until
full payment of all amounts owed with respect to the Agreement, and the Notes as
defined in said Agreement, including but not limited to any and all outstanding
fees due thereunder, are paid to the Bank in full.
Section 8.19. Collateral. All of the collateral described in the "Security
Agreement" (as defined in the Agreement) shall remain in all respects subject to
the lien, charge and encumbrance of said Security Agreement, and nothing herein
contained and nothing done pursuant hereto shall affect or be construed to
affect the lien, charges or encumbrance of said Security Agreement or the
priority thereof over all liens, charges or encumbrances, except as expressly
provided herein.
SECTION II: MISCELLANEOUS PROVISIONS TO AMENDMENT NO. 1
Section 1.1. Default. Any default by the Borrower in any of the covenants
herein made shall, at the option of the Bank or its successors and assigns,
constitute a default under said Agreement and the Loan Documents entitling the
Bank or its successors or assigns to any or all of the other remedies it or they
may have thereunder.
Section 1.2. Binding. This Amendment No. 1 shall be binding upon Borrower
and shall be binding and inure to the benefit of the Bank, its successors and
assigns, including any subsequent holder of said Security Agreement.
Section 1.3. Counterparts. This Amendment No. 1 may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
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IN WITNESS WHEREOF, the undersigned have caused this Credit Agreement
Amendment No. 1 to be executed, sealed and delivered the day and year first
above written.
NATIONAL HOME HEALTH CARE CORP.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
HEALTH ACQUISITION CORP.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
NEW ENGLAND HOME CARE, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
ACCREDITED HEALTH SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
CONNECTICUT STAFFING WORKS CORP.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
IMPRESSIVE STAFFING CORP.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
NEW JERSEY STAFFING WORKS CORP.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
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MEDICAL RESOURCES HOME HEALTH CORP.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
HSBC BANK USA
By: /s/ Xxxxxxx X. Xxxx
--------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
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ACKNOWLEDGEMENTS
STATE OF NEW YORK )
) ss.:
COUNTY OF WESTCHESTER )
On the ____ day of October, 2003, before me, the undersigned, a Notary
Public in and for said State, personally appeared XXXXXX X. XXXXXX personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual whose name is subscribed to the within instrument and he acknowledged
to me that he executed the same in his capacity, and that by his signature on
the instrument, the individual, or the person upon behalf of which the
individual acted, executed the instrument.
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Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF WESTCHESTER )
On the ____ day of October, 2003, before me, the undersigned, a Notary
Public in and for said State, personally appeared XXXXXXX X. XXXX personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual whose name is subscribed to the within instrument and he acknowledged
to me that he executed the same in his capacity, and that by his signature on
the instrument, the individual, or the person upon behalf of which the
individual acted, executed the instrument.
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Notary Public
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