EXHIBIT 10.1
FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
This Fifth Amendment to Loan and Security Agreement ("Amendment") is
made as of this 4th day of April, 2005 by and among by and among the Lenders (as
defined in the Loan Agreement referenced below), Fleet Capital Corporation, a
Rhode Island corporation with an office at 000 Xxxxxxxxxxx Xxxxxxxxx,
Xxxxxxxxxxx, XX 00000, as administrative agent for the Lenders ("Agent"), and
Gentiva Health Services, Inc., a Delaware corporation with its chief executive
office at 0 Xxxxxxxxxx Xxxxxxxxxx Xxxxx 000X, Xxxxxxxx, XX 00000 (the
"Company"), Gentiva Health Services Holding Corp., a Delaware corporation with
its chief executive office at 0 Xxxxxxxxxx Xxxxxxxxxx Xxxxx 000X, Xxxxxxxx, XX
00000 ("GHS"), and each of the Subsidiary Borrowing Corporations listed on the
signature pages hereto, each with a state of incorporation and chief executive
office as listed on the exhibits to the Loan Agreement (except in the case of
Gentiva Health Services IPA, Inc., which is a New York corporation with its
chief executive office at 0 Xxxxxxxxxx Xxxxxxxxxx Xxxxx 000X, Xxxxxxxx, XX
00000) (each of the Company, GHS and each Subsidiary Borrowing Corporation, a
"Borrower," and collectively, "Borrowers").
BACKGROUND
A. Borrowers and Agent and the lending institutions listed in
Annex I thereto (each a "Lender", and collectively, "Lenders") are parties to a
certain Loan and Security Agreement dated June 13, 2002, as amended by that
certain First Amendment and Consent Agreement to Loan and Security Agreement
dated as of August 7, 2003, that certain Second Amendment to Loan and Security
Agreement dated as of November 26, 2003, that certain Third Amendment and
Joinder to Loan and Security Agreement dated as of February 25, 2004, that
certain Fourth Amendment to Loan and Security Agreement dated as of May 26, 2004
(as it may heretofore otherwise have been or may herein or hereafter be
modified, amended, restated or replaced from time to time, the "Loan Agreement")
pursuant to which Borrowers established certain financing arrangements with
Lenders including a Revolving Credit Loan facility and a Letter of Credit
facility. The Loan Agreement and all instruments, documents and agreements
executed in connection therewith or related thereto are referred to herein
collectively as the "Existing Loan Documents." All capitalized terms not
otherwise defined herein shall have the meaning ascribed thereto in the Loan
Agreement.
B. Borrowers, Agent and Lenders have agreed to amend certain
provisions of the Loan Agreement regarding permitted Company dividends and
permissible capital stock repurchases and distributions, such amendment to be
made on the terms and conditions set forth herein.
NOW, THEREFORE, with the foregoing Background incorporated by reference
and made a part hereof and intending to be legally bound, the parties agree as
follows:
1. Amendments to Loan Agreement.
(a) Amendment to Add Definition of "Permitted Company Dividends". Upon
the effectiveness of this Amendment, Appendix A to the Loan Agreement shall be
amended by adding the following new definition thereto in its proper
alphabetical place:
"Permitted Company Dividends" - any Distributions consisting of cash
dividends paid by the Company to its shareholders in respect of the
capital stock of the Company held by such shareholders provided that
(i) the aggregate amount of all such cash dividends calculated from
and after April 4, 2005 (and exclusive of the amount of any cash
dividends paid by the Company to its shareholders prior to such
date), together with the aggregate amount of all Permitted Stock
Repurchases calculated from and after April 4, 2005 (and exclusive of
the amount of any Permitted Stock Repurchases by the Company prior to
such date), shall not exceed Fifty-Five Million Dollars
($55,000,000.00), (ii) both prior and after giving effect to the
payment of any such cash dividend (and any proposed Permitted Stock
Repurchase being made contemporaneously therewith), no Default or
Event of Default shall exist and (iii) both prior to and immediately
after giving effect to any such cash dividend (and any proposed
Permitted Stock Repurchase being made contemporaneously therewith),
and at all times during each of the next two fiscal quarters ending
immediately after the date of any such cash dividend, Borrowers shall
have an Aggregate Excess Liquidity of at least Sixty Million Dollars
($60,000,000.00), and the financial information reported in the Form
10-K/10-Q reports filed by the Company with the Securities and
Exchange Commission for each such two fiscal quarters shall reflect
compliance as of the end of each such fiscal quarter with the
foregoing Aggregate Excess Liquidity covenant. The quarterly
Compliance Certificate provided by Borrowers at the end of each such
fiscal quarter shall include a certification with supporting
calculations as to whether or not Borrowers are in compliance with
the Aggregate Excess Liquidity covenant set forth in the preceding
sentence."
(b) Amendment to Definition of "Permitted Stock Repurchase". Upon the
effectiveness of this Amendment, the definition of "Permitted Stock Repurchase"
contained in Appendix A to the Loan Agreement shall be amended by deleting such
definition in its entirety and replacing it as follows:
"Permitted Stock Repurchase - any share repurchase of the capital
stock of the Company, provided that (i) the aggregate amount of all
such stock repurchases calculated from and after April 4, 2005 (and
exclusive of the amount of any stock repurchases by the Company prior
to such date), together with the aggregate amount of all Permitted
Company Dividends calculated from and after April 4, 2005 (and
exclusive of the amount of any cash dividends paid by the Company to
its shareholders prior to such date), shall not exceed Fifty-Five
Million Dollars ($55,000,000.00), (ii) both prior and after giving
effect to any such stock repurchase (and any proposed Permitted
Company Dividends being paid contemporaneously therewith), no Default
or Event of Default shall exist and (iii) both prior to and
immediately after giving effect to any such stock repurchase (and any
proposed Permitted Company Dividends being paid contemporaneously
therewith), and at all times during each of the next two fiscal
quarters ending immediately after the date of any such stock
repurchase, Borrowers shall have an Aggregate Excess Liquidity of at
least Sixty Million
2
Dollars ($60,000,000.00), and the financial information reported in
the Form 10-K/10-Q reports filed by the Company with the Securities
and Exchange Commission for each such two fiscal quarters shall
reflect compliance as of the end of each such fiscal quarter with the
foregoing Aggregate Excess Liquidity covenant. The quarterly
Compliance Certificate provided by Borrowers at the end of each such
fiscal quarter shall include a certification with supporting
calculations as to whether or not Borrowers are in compliance with
the Aggregate Excess Liquidity covenant set forth in the preceding
sentence."
(c) Amendment to Covenant Restricting Distributions. Upon the
effectiveness of this Amendment, Section 8.2.7 of the Loan Agreement shall be
amended by deleting such section in its entirety and replacing it as follows:
8.2.7 Distributions. Declare or make, or permit any Subsidiary of
such Borrower to declare or make, any Distributions; provided that
(i) any Borrower or any Subsidiary Guarantor may declare and/or make
Distributions to any Borrower, (ii) the Company may declare and make
Permitted Company Dividends and (iii) the Company may make Permitted
Stock Repurchases, and further provided that, for the avoidance of
doubt, any failure of Borrowers to comply with the provisions of
clause (iii) of the definition of "Permitted Company Dividends" at
any time after the making of any cash dividend otherwise permitted
under such definition and/or any failure of Borrowers to comply with
the provisions of clause (iii) of the definition of "Permitted Stock
Repurchase" at any time after the making of any share repurchase
otherwise permitted under such definition shall constitute a failure
to perform, keep and observe the terms of the covenants contained in
this Section 8.2.7 and therefore shall be an Event of Default under
Section 10.1.3.
2. Representations and Warranties. To induce Agent and Lenders to
enter into this Amendment, each Borrower represents and warrants to Lender that:
(a) All warranties and representations made to Agent and
Lenders under the Loan Agreement and the other Existing Loan Documents are true
and correct as to the date hereof.
(b) The execution and delivery by each Borrower of this
Amendment and the performance by each such Borrower of the transactions herein
contemplated (i) are and will be within its powers, (ii) have been authorized by
all necessary corporate actions and will not contravene any provision of the
certificate or articles of incorporation or bylaws or other similar corporate
governance documents of such Borrower, and (iii) are not and will not be in
contravention of any order of any court or other agency of government, of law or
any other indenture, agreement or undertaking to which such Borrower is a party
or by which the property of such Borrower is bound, or be in conflict with,
result in a breach of, or constitute (with due notice and/or lapse of time, if
applicable) a default under any such indenture, agreement or undertaking or
result in the imposition of any lien, charge or encumbrance of any nature on any
of the properties of such Borrower.
3
(c) This Amendment and any assignment, instrument, document or
agreement executed and delivered in connection herewith, will be valid and
binding on and enforceable against each Borrower in accordance with its
respective terms.
(d) Both prior and after giving effect to this Amendment, no
Default or Event of Default exists under the Loan Agreement or any of the other
Existing Loan Documents.
(e) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or other regulatory body is
required in connection with the due execution, delivery and performance by any
Borrower of this Amendment or the performance by such Borrower of the Loan
Agreement, as amended hereby.
(f) The name, office, and signature of the officer(s) of each
Borrower signing this Amendment have previously been certified to Agent in the
incumbency and signature certificates of such Borrower heretofore delivered to
Agent.
3. Collateral. To secure the prompt payment and performance to
Agent and Lenders of the Obligations and satisfaction by Borrowers of all
covenants and undertakings contained in the Loan Agreement and other Existing
Loan Documents, each Borrower hereby reconfirms the grant to Agent, for the
ratable benefit of Lenders, of a continuing security interest in and Lien upon
all of the Collateral owned by such Borrower, whether now owned or existing or
hereafter created, acquired or arising and wherever located, given to Agent by
such Borrower under the Existing Loan Documents and each Borrower hereby
confirms and agrees that all security interests and liens granted to Agent by
any one of them continue in full force and effect and shall continue to secure
the Obligations. All Collateral remains free and clear of any liens other than
liens in favor of Agent, except for Permitted Liens. Nothing herein contained is
intended to in any way impair or limit the validity, priority, and extent of
Agent's existing security interest in and liens upon the Collateral of any
Borrower.
4. Effectiveness Conditions. This Amendment shall be effective
upon the execution and delivery of this Amendment by all parties hereto and
payment by Borrowers of all fees and expenses of Agent (including legal
expenses) incurred in relation to the preparation and execution of this
Amendment.
5. Ratification of Existing Loan Documents. Except as expressly
set forth herein, all of the terms and conditions of the Loan Agreement and
Existing Loan Documents are hereby ratified and confirmed and continue unchanged
and in full force and effect. All references to the Loan Agreement shall mean
the Loan Agreement as modified by this Amendment.
6. Amendment as Loan Document. Borrowers hereby acknowledge and
agree that this Amendment constitutes a "Loan Document" under the Loan
Agreement. Accordingly, it shall be an Event of Default under the Loan Agreement
if (i) any representation or warranty made by Borrowers under or in connection
with this Amendment shall have been untrue, false or misleading in any material
respect when made, or (ii) Borrowers shall fail to perform or observe any term,
covenant or agreement contained in this Amendment.
7. Reaffirmation by Guarantors. Each Subsidiary Guarantor
acknowledges and agrees that the execution, delivery and performance of this
Amendment by Agent, Lenders and Borrowers, and the carrying out of the
provisions hereof and the consummation of all
4
transactions contemplated hereunder, including without limitation the amendments
to the Loan Agreement provided for hereunder, shall not affect or in any way
diminish or modify the obligations of each of them under the Subsidiary Guaranty
and Surety Agreement executed by Subsidiary Guarantors as of June 13, 2002 or
any other Existing Loan Document to which such Subsidiary Guarantor is a party,
and each Subsidiary Guarantor acknowledges and affirms its obligations under the
Subsidiary Guaranty and Surety Agreement and the other Existing Loan Documents.
8. Governing Law. THIS AMENDMENT HAS BEEN NEGOTIATED, EXECUTED
AND DELIVERED AT AND SHALL BE DEEMED TO HAVE BEEN MADE IN NEW YORK. THIS
AMENDMENT, AND ALL MATTERS ARISING OUT OF OR RELATING TO THE LOAN AGREEMENT, ANY
OTHER EXISTING LOAN DOCUMENT, AND/OR THIS AMENDMENT, SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
ITS OTHERWISE APPLICABLE CONFLICTS OF LAWS RULES.
9. Waiver of Jury Trial. EACH BORROWER AND EACH SUBSIDIARY
GUARANTOR WAIVES THE RIGHT TO TRIAL BY JURY (WHICH EACH LENDER AND AGENT HEREBY
ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING
OUT OF OR RELATED TO ANY OF THIS AMENDMENT. EACH BORROWER AND EACH SUBSIDIARY
GUARANTOR WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVER WITH
ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
10. Successors and Assigns. This Amendment, along with each of the
Existing Loan Documents, shall be binding upon and shall benefit Agent, Lenders,
Borrowers and Subsidiary Guarantors and their respective successors and
permitted assigns (as and if permitted under the Loan Agreement).
11. Counterparts. This Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
and such counterparts together shall constitute one and the same respective
agreement. Signature by facsimile shall bind the parties hereto.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
[SIGNATURES ON FOLLOWING PAGE]
5
IN WITNESS WHEREOF, the parties have executed this Fifth Amendment to
Loan and Security Agreement the day and year first written above.
BORROWERS:
----------
GENTIVA HEALTH SERVICES, INC.
By:
------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
GENTIVA HEALTH SERVICES HOLDING CORP.
Gentiva CareCentrix, INC.
Gentiva CareCentrix (Area One) Corp.
Gentiva CareCentrix (Area Two) Corp.
Gentiva CareCentrix (Area Three) Corp.
Gentiva Certified HealthCare Corp.
GENTIVA HEALTH Services (Certified), Inc.
GENTIVA HEALTH SERVICES IPA, INC.
GENTIVA HEALTH Services (USA), Inc.
Gentiva Services of New York, Inc.
New York Healthcare Services, Inc.
OHS Service Corp.
QC-Medi New York, Inc.
Quality Care - USA, Inc.
Quality Managed Care, Inc.
By:
------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Treasurer
SUBSIDIARY GUARANTORS:
---------------------
Commonwealth Home Care, Inc.
Xxxxxxxx Home Health Care, Inc.
PartnersFirst Management, Inc.
Quantum Care Network, Inc.
Quantum Health Resources, Inc.
The I.V. Clinic, Inc.
The I.V. Clinic II, Inc.
The I.V. Clinic III, Inc.
By:
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Treasurer
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
[Subsidiary Guarantors Signature Page to Fifth Amendment
to June 2002 Loan Agreement]
S-1
6
AGENT:
-----
FLEET CAPITAL CORPORATION,
as Agent
By:
--------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
LENDERS:
-------
FLEET CAPITAL CORPORATION
By:
------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
SIEMENS FINANCIAL SERVICES, INC.
By:
------------------------------
Name:
Title:
HFG HEALTHCO-5 LLC
By:
------------------------------
Name:
Title:
[Agent and Lenders Signature Page to Fifth Amendment
to June 2002 Loan Agreement]
S-2
7
