EXHIBIT 10.55
STAFF BUILDERS, INC., et al
WITH
MELLON BANK, N.A.
___________________________
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
___________________________
SECTION 1. DEFINITIONS AND INTERPRETATION . . . . . . . . . . 3
1.1 Terms Defined. . . . . . . . . . . . . . . . . . . . 3
1.2 Accounting Principles. . . . . . . . . . . . . . . 11
SECTION 2. THE LOANS. . . . . . . . . . . . . . . . . . . . 11
2.1 Revolving Line of Credit - Description . . . . . . 11
2.2 Revolving Credit - Borrowing Base. . . . . . . . . 12
2.3 Revolving Credit - Termination by Borrowers. . . . 12
2.4 Collections, Disbursements and Borrowing
Availability . . . . . . . . . . . . . . . . . . . 13
2.5 Acquisition Line . . . . . . . . . . . . . . . . . 14
2.6 Interest . . . . . . . . . . . . . . . . . . . . . 15
2.7 Fees . . . . . . . . . . . . . . . . . . . . . . . 20
2.8 Capital Adequacy . . . . . . . . . . . . . . . . . 20
2.9 Payments . . . . . . . . . . . . . . . . . . . . . 21
2.10 Use of Proceeds. . . . . . . . . . . . . . . . . . 21
2.11 Nature of Liability. . . . . . . . . . . . . . . . 21
SECTION 3 - COLLATERAL . . . . . . . . . . . . . . . . . . . 21
3.1 Description. . . . . . . . . . . . . . . . . . . . 21
3.2 Lien Documents . . . . . . . . . . . . . . . . . . 22
3.3 Other Actions. . . . . . . . . . . . . . . . . . . 23
3.4 Searches . . . . . . . . . . . . . . . . . . . . . 23
3.5 Landlord's Waivers . . . . . . . . . . . . . . . . 23
3.6 Filing Security Agreement. . . . . . . . . . . . . 24
3.7 Power of Attorney. . . . . . . . . . . . . . . . . 24
3.8 Management Support Agreements and Fraud
Guarantees . . . . . . . . . . . . . . . . . . . . 24
3.9 Application of Collateral Proceeds . . . . . . . . 24
SECTION 4. CLOSING AND CONDITIONS PRECEDENT TO ADVANCES . . 24
4.1 Resolutions, Opinions, and Other Documents . . . . 24
4.2 Absence of Certain Events. . . . . . . . . . . . . 26
4.3 Warranties and Representations at Closing. . . . . 26
4.4 Compliance with this Agreement . . . . . . . . . . 26
4.5 Officer's Certificate. . . . . . . . . . . . . . . 26
4.6 Closing. . . . . . . . . . . . . . . . . . . . . . 26
4.7 Waiver of Rights . . . . . . . . . . . . . . . . . 26
SECTION 5. REPRESENTATIONS AND WARRANTIES . . . . . . . . . 27
5.1 Corporate Organization and Validity. . . . . . . . 27
5.2 Place of Business. . . . . . . . . . . . . . . . . 27
5.3 Pending Litigation . . . . . . . . . . . . . . . . 28
5.4 Title to Properties. . . . . . . . . . . . . . . . 28
5.5 Patents and Trademarks . . . . . . . . . . . . . . 28
5.6 Governmental Consent . . . . . . . . . . . . . . . 28
5.7 Taxes. . . . . . . . . . . . . . . . . . . . . . . 28
5.8 Financial Statements . . . . . . . . . . . . . . . 29
5.9 Full Disclosure. . . . . . . . . . . . . . . . . . 29
5.10 Subsidiaries and Affiliates. . . . . . . . . . . . 29
5.11 Guarantees, Contracts, etc.. . . . . . . . . . . . 29
5.12 Government Regulations, etc. . . . . . . . . . . . 30
5.13 Business Interruptions . . . . . . . . . . . . . . 31
5.14 Names. . . . . . . . . . . . . . . . . . . . . . . 31
5.15 Other Associations . . . . . . . . . . . . . . . . 31
5.16 Environmental Matters. . . . . . . . . . . . . . . 32
5.17 Regulation O . . . . . . . . . . . . . . . . . . . 32
5.18 Capital Stock. . . . . . . . . . . . . . . . . . . 32
5.19 Interrelationship of Borrowers . . . . . . . . . . 33
5.20 Solvency . . . . . . . . . . . . . . . . . . . . . 33
SECTION 6. BORROWERS' AFFIRMATIVE COVENANTS . . . . . . . . 33
6.1 Payment of Taxes and Claims. . . . . . . . . . . . 33
6.2 Maintenance of Properties, Collateral and
Corporate Existence. . . . . . . . . . . . . . . . 34
6.3 Places of Business . . . . . . . . . . . . . . . . 35
6.4 Business Conducted . . . . . . . . . . . . . . . . 36
6.5 Litigation . . . . . . . . . . . . . . . . . . . . 36
6.6 Issue Taxes. . . . . . . . . . . . . . . . . . . . 36
6.7 Bank Accounts. . . . . . . . . . . . . . . . . . . 36
6.8 Employee Benefit Plans . . . . . . . . . . . . . . 36
6.9 Submission of Collateral Documents . . . . . . . . 37
6.10 Other Governmental Contracts . . . . . . . . . . . 37
6.11 Warranties for Future Advances . . . . . . . . . . 37
6.12 Financial Covenants. . . . . . . . . . . . . . . . 38
6.13 Financial and Business Information . . . . . . . . 39
6.14 Officers' Certificates . . . . . . . . . . . . . . 41
6.15 Inspection . . . . . . . . . . . . . . . . . . . . 41
6.16 Tax Returns and Reports. . . . . . . . . . . . . . 42
6.17 Information to Participant . . . . . . . . . . . . 42
6.18 Material Adverse Developments. . . . . . . . . . . 42
SECTION 7. BORROWERS' NEGATIVE COVENANTS. . . . . . . . . . 42
7.1 Merger, Consolidation, Dissolution or Liquidation. 42
7.2 Acquisitions . . . . . . . . . . . . . . . . . . . 43
7.3 Liens and Encumbrances . . . . . . . . . . . . . . 43
7.4 Transactions With Affiliates or Subsidiaries . . . 44
7.5 Guarantees . . . . . . . . . . . . . . . . . . . . 44
7.6 Distributions, Redemptions and Other Indebtedness. 44
7.7 Loans and Investments. . . . . . . . . . . . . . . 45
7.8 Use of Lender's Name . . . . . . . . . . . . . . . 45
7.9 Change in Capital Stock. . . . . . . . . . . . . . 45
7.10 Miscellaneous Covenants. . . . . . . . . . . . . . 45
SECTION 8. DEFAULT. . . . . . . . . . . . . . . . . . . . . 46
8.1 Events of Default. . . . . . . . . . . . . . . . . 46
8.2 Rights and Remedies on Default . . . . . . . . . . 49
8.3 Nature of Remedies . . . . . . . . . . . . . . . . 50
8.4 Set-Off. . . . . . . . . . . . . . . . . . . . . . 51
8.5 CONFESSION OF JUDGMENT . . . . . . . . . . . . . . 51
SECTION 9. MISCELLANEOUS. . . . . . . . . . . . . . . . . . 51
9.1 Governing Law. . . . . . . . . . . . . . . . . . . 51
9.2 Integrated Agreement . . . . . . . . . . . . . . . 51
9.3 Waiver . . . . . . . . . . . . . . . . . . . . . . 52
9.4 Time . . . . . . . . . . . . . . . . . . . . . . . 52
9.5 Expenses of Lender . . . . . . . . . . . . . . . . 52
9.6 Brokerage. . . . . . . . . . . . . . . . . . . . . 53
9.7 Notices. . . . . . . . . . . . . . . . . . . . . . 53
9.8 Headings . . . . . . . . . . . . . . . . . . . . . 54
9.9 Survival . . . . . . . . . . . . . . . . . . . . . 54
9.10 Successors and Assigns . . . . . . . . . . . . . . 54
9.11 Duplicate Originals. . . . . . . . . . . . . . . . 55
9.12 Modification . . . . . . . . . . . . . . . . . . . 55
9.13 Signatories. . . . . . . . . . . . . . . . . . . . 55
9.14 Third Parties. . . . . . . . . . . . . . . . . . . 55
9.15 Discharge of Taxes, Borrowers's Obligations, Etc.. 55
9.16 Withholding and Other Tax Liabilities. . . . . . . 56
9.17 Consent to Jurisdiction. . . . . . . . . . . . . . 56
9.18 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . 56
9.19 Future Commitments . . . . . . . . . . . . . . . . 57
EXHIBIT LIST
Exhibit 5.1 -- Qualification to do Business
Exhibit 5.2 -- Places of Business
Exhibit 5.3 -- Litigation
Exhibit 5.4 -- Existing Liens and Claims
Exhibit 5.5 -- Patents, Copyrights, Trademarks,
Licenses,
Franchises, etc.
Exhibit 5.8 -- Tax Identification Numbers
Exhibit 5.10 -- Subsidiaries and Affiliates
Exhibit 5.11 -- Existing Guaranties, Investments and
Borrowings
Exhibit 5.12(b) -- Employee Benefit Plans
Exhibit 5.12(c) -- Borrowers' Certificates of Need, Third
Party Payor Contracts and Provider
Numbers
Exhibit 5.13 -- Business Interruptions
Exhibit 5.14 -- Names
Exhibit 5.15 -- Other Associations
Exhibit 5.16 -- Environmental Matters
Exhibit 5.18 -- Capital Stock; Warrants; Options
Exhibit 7.6 -- Distributions, Redemptions and other
Indebtedness
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
This Amended and Restated Loan and Security Agreement
("Agreement") dated as of this 8th day of January, 1997 among STAFF
BUILDERS, INC. ("Staff Builders, Inc."), a Delaware corporation
with a place of business at 0000 Xxxxxx Xxxxxx, Xxxx Xxxxxxx, X.X.
00000, the direct and indirect Subsidiaries of Staff Builders, Inc.
listed on the signature pages attached hereto, (all of the
foregoing severally a "Borrower" and jointly "Borrowers"), and
MELLON BANK, N.A. ("Lender").
BACKGROUND
A. On February 10, 1992, Borrowers entered into a certain
Loan and Security Agreement ("Loan Agreement"), and related
agreements and documents with Lender to reflect certain financing
arrangements between the parties.
B. On April 28, 1992, Borrowers and Lender entered into a
certain Letter Agreement to correct certain errors contained in the
original Loan Agreement.
C. On August 10, 1993, Borrowers and Lender entered into
that certain Amendment to Loan and Security Agreement, pursuant to
which the Maximum Revolving Credit Amount was raised to Twenty
Million Dollars ($20,000,000) and certain covenants were amended
(the "First Amendment").
D. On March 30, 1994, Borrowers and Lender entered into that
certain Second Amendment to Loan and Security Agreement, pursuant
to which the interest rate paid on the first Seven Million Dollars
in Advances was amended (the "Second Amendment").
E. On April 29, 1994, Borrowers and Lender entered into that
certain Third Amendment to Loan and Security Agreement, pursuant to
which the term was amended and certain covenants were amended (the
"Third Amendment").
F. On August 1, 1994, Borrowers and Lender entered into that
certain Fourth Amendment to Loan and Security Agreement, pursuant
to which the term was amended, the LIBOR rate added and certain
covenants were amended (the "Fourth Amendment").
G. On April 10, 1995, Borrowers and Lender entered into that
certain Fifth Amendment to Loan and Security Agreement, pursuant to
which certain financial covenants were amended (the "Fifth
Amendment").
H. On August 15, 1995, Borrowers and Lender entered into
that certain Sixth Amendment to Loan and Security Agreement,
pursuant to which certain financial covenants were amended (the
"Sixth Amendment").
I. On January 3, 1996, Borrowers and Lender entered into
that certain Seventh Amendment to Loan and Security Agreement
pursuant to which certain financial covenants were amended (the
"Seventh Amendment").
J. On July 30, 1996, Borrowers and Lender entered into that
certain Eighth Amendment to Loan and Security Agreement pursuant to
which certain Borrowers were added (the "Eighth Amendment").
K. On December 13, 1996, Borrowers and Lender entered into
that certain Ninth Amendment to Loan and Security Agreement
pursuant to which certain Borrowers were added (the "Ninth
Amendment").
L. For the purposes hereof, the Loan Agreement, the First
Amendment, the Second Amendment, the Third Amendment, the Fourth
Amendment, the Fifth Amendment, the Sixth Amendment, the Seventh
Amendment, the Eighth Amendment, the Ninth Amendment and all
agreements and documents executed pursuant thereto are sometimes
hereinafter collectively called the "Existing Financing
Agreements."
M. The Revolving Credit is outstanding and in effect on the
date hereof.
N. Borrowers and Lender desire to amend, restate and replace
the Existing Financing Agreements, to increase the Maximum
Revolving Credit Amount and the Acquisition Line and to further
modify certain terms and conditions of the Existing Financing
Agreements.
NOW, THEREFORE, with the foregoing background hereinafter
deemed incorporated by reference herein and made a part hereof, the
parties hereto, intending to be legally bound hereby, promise and
agree as follows:
SECTION 1. DEFINITIONS AND INTERPRETATION
1.1 Terms Defined: As used in this Agreement, the following
terms shall have the following respective meanings:
Account - Any right to payment for goods sold or leased
or for services rendered which is not evidenced by an instrument or
chattel paper, whether or not it has been earned by performance.
Acquisition Line - Section 2.5.
Advance(s) - Any monies advanced or credit extended to
Borrower by Lender under the Revolving Credit, including without
limitation, cash advances and the issuance of letters of credit,
and under the Acquisition Line.
Affiliate - Any entity (other than a Subsidiary), which
directly or indirectly through one or more intermediates controls
or is controlled by or is under common control with any Borrower.
Control may be by ownership, contract, or otherwise.
Book Net Worth - At any time, the amount by which all
assets of Borrowers, exceed all of Borrowers' Liabilities, as would
be shown on a consolidated balance sheet of Borrowers prepared as
of such date in accordance with GAAP.
Business Day - Any day other than a Saturday, Sunday or
legal holiday on which Lender is not open for business in
Philadelphia, PA.
Cash Flow Coverage Ratio - For the fiscal period, the
ratio of (a) the sum of (i) Net Income plus (ii) depreciation plus
(iii) amortization to (b) the sum of (i) the Unfunded Capital
Expenditures plus (ii) the long term indebtedness repaid plus (iii)
permitted stock repurchases actually purchased pursuant to Section
7.6(a) and the cash consideration for permitted acquisitions
actually paid pursuant to Section 7.2.
Closing - Section 4.6.
Closing Date - Section 4.6.
Collateral - Section 3.1.
Current Assets - At any time means all assets of
Borrowers that should be classified as current assets on a
consolidated balance sheet of Borrowers prepared in accordance with
GAAP.
Current Liabilities - At any time means all liabilities
of Borrowers that should be classified as current liabilities on a
consolidated balance sheet of Borrowers prepared in accordance with
GAAP except that it shall include the Loans.
Current Term - The Initial Term during the period of the
Initial Term, and any renewal or extended term during the term
thereof.
Default - An election by Lender to declare Borrowers in
default upon the occurrence of an Event of Default under Section 8
herein.
Distribution -
(1) Dividends or other distributions on capital stock of
any of the Borrowers; and
(2) The redemption, repurchase or acquisition of such
stock or of warrants, rights or other options to purchase such
stock other than for securities of any Borrower.
EBITDA - For any period, (a) the sum of the amounts for
such period of (i) Net Income, (ii) tax expense, (iii) interest
expense, (iv) amortization expense and (v) depreciation expense
less (b) the sum of (i) the amount of other income as shown on
Borrowers' financial statements under the line item "other expenses
[income]" and (ii) the amounts for such period of after-tax gains
on sales of fixed assets and other after-tax extraordinary gains
which are required to be shown, in accordance with GAAP, on
Borrowers' financial statements, to the extent included in Net
Income.
Effective Net Worth - The sum of (i) Book Net Worth
excluding intangible assets as that term would be defined under
GAAP and (ii) subordinated indebtedness.
ERISA - The Employee Retirement Income Security Act of
1974, as the same may be amended, from time to time.
Event of Default - Section 8.1.
Expenses - Section 9.5.
GAAP - Generally accepted accounting principles applied
in a manner consistent with the most recent audited consolidated
financial statements of Borrowers furnished to Lender under Section
5 herein.
Good Business Days - Any Business Day when banks in
Philadelphia, Pennsylvania, New York, New York and London, England
are open for business.
Hazardous Substance - Section 5.16.
Initial Term - Section 2.1(c).
Liabilities - All liabilities of every kind of Borrowers
as would be shown on a consolidated balance sheet of Borrowers
prepared in accordance with GAAP.
LIBOR Based Rate - (i) with respect to Advances
outstanding under the Revolving Credit, the LIBOR Rate plus two
percent (2.00%) per annum, and (ii) with respect to Advances under
the Acquisition Line, the LIBOR Rate plus two and three-quarters
percent (2.75%) percent per annum.
Provided however, upon receipt of Borrowers' annual audited
financial statements required pursuant to Section 6.13(a), if (a)
No Event of Default has occurred or would occur after the giving of
notice, the passage of time, or both, (b) Borrowers have maintained
a minimum average excess availability of Five Million Dollars
($5,000,000) under the Borrowing Base for the thirty (30) days
prior to and on the date of receipt of such financial statements
and (c) Borrowers have complied with the following financial
requirements during the prior fiscal year as shown on such
financial statements, then the LIBOR Based Rate with respect to the
Revolving Credit shall be reduced to the following levels,
effective within ten (10) days of Lender's receipt of such
financial statements:
Borrower maintains during
the prior fiscal year: LIBOR Based Rate
Ratio of Total Funded LIBOR Rate plus two and a
Indebtedness to EBITDA quarter percent (2.25%)
of greater than or per annum
equal to 3.50 to 1.0
Ratio of Total Funded LIBOR Rate plus two percent
Indebtedness to EBITDA (2.00%) per annum
of less than 3.50 to 1.0
but greater than or equal
to 2.25 to 1.0
Ratio of Total Funded LIBOR Rate plus one and
Indebtedness to EBITDA three-quarters percent
of less than 2.25 to 1.0 (1.75%) per annum
but greater than or equal
to 1.50 to 1.0
Ratio of Total Funded LIBOR Rate plus one and a
Indebtedness to EBITDA half percent (1.50%) per
of less than 1.50 to 1.0 annum
LIBOR Based Loan - Any Advance under the Revolving Credit
on which interest accrues at the LIBOR Based Rate and any Advance
under the Acquisition Line on which interest accrues at the LIBOR
Based Rate.
LIBOR Interest Period - Section 2.6.
LIBOR Rate - An annual rate of interest determined by
Lender as being the rate available to Lender at approximately
11:00 a.m. London time in the London Interbank Market, as
referenced by Reuters Screen "LIBO", in accordance with the usual
practice in such market, for the LIBOR Interest Period elected by
Borrower, in effect two Good Business Days prior to the funding
date for a requested LIBOR Based Loan (including those requested in
connection with the conversion of a portion of the Revolving Credit
subject to the Prime Rate Option to a LIBOR Based Loan in
accordance with Section 2.6 hereof), or for a LIBOR Based Loan
which Borrower has elected to continue as a LIBOR Based Loan beyond
the expiration of the then current LIBOR Interest Period with
respect thereto, for deposits of dollars in amounts equal (as
nearly as may be estimated) to the amount of the LIBOR Based Loan
which shall then be loaned by the Lender to Borrower as of the time
of such determination, as such rate may be adjusted by the reserve
percentage applicable during the LIBOR Interest Period in effect
(or if more than one such percentage shall be applicable, the daily
average of such percentages for those days in such LIBOR Interest
Period during which any such percentage shall be so applicable)
under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including without
limitation, any emergency, supplemental or other marginal reserve
requirement) for the Lender with respect to liabilities or assets
consisting of or including "Eurocurrency Liabilities" as such term
is defined in Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time, having a term equal
to such LIBOR Interest Period ("Eurocurrency Reserve Requirement").
Such adjustment shall be effectuated by calculating, and the LIBOR
Rate shall be equal to, the quotient of (i) the offered rate
divided by (ii) one minus the Eurocurrency Reserve Requirement.
Libor Rate Option - Section 2.6.
Lien - Any interest in Property securing an obligation
owed to, or a claim by, a Person other than the owner of the
Property, whether such interest is based on the common law, statute
or contract, and including, but not limited to, the security
interest or lien arising from a mortgage, encumbrance, pledge,
conditional sale or trust receipt or a lease, consignment or
bailment for security purposes. The term "Lien" shall include
reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases and other title
exceptions and encumbrances affecting Property other than those
which would not materially interfere with Borrowers' use of the
Property or would not materially detract from the value of the
Property. For the purposes of this Agreement, Borrowers shall be
deemed to be the owners of any Property which they have acquired or
hold subject to a conditional sale agreement or other arrangement
pursuant to which title to the Property has been retained by or
vested in some other Person for security purposes.
Loan Documents - This Agreement, the Revolving Credit
Note, Collateral Pledge Agreements the Lockbox Agreement and each
other document, instrument or agreement required to be delivered
hereby, as amended from time to time.
Loans - All advances and extensions of credit under the
Revolving Credit.
Material Adverse Effect - A material adverse effect on
the business, Property, financial condition or results of
operations of Staff Builders alone, or all the Borrowers as a
whole, or the ability of Staff Builders alone, or all of Borrowers
as a whole, to perform under this Agreement, or of any other
Borrower alone where the effect on such Borrower is due to events
that Lender reasonably believes are likely to have or cause a
similar material adverse effect on the business, Property,
financial condition or results of operations of Staff Builders or
the other Borrowers as a whole, or the ability of Staff Builders or
the other Borrowers as a whole to perform under this Agreement.
Maximum Revolving Credit Amount - Section 2.1(a).
Net Income - The net income after taxes of Borrowers, as
such would appear on a consolidated profit and loss statement of
Borrowers, prepared in accordance with GAAP.
Obligations - All existing and future liabilities of
Borrowers to Lender, including, without limitation, indebtedness
evidenced under the Revolving Credit Note issued pursuant hereto,
the Loans, repayment of cash advances, reimbursement obligations
with respect to letters of credit, all fees and charges owing by
Borrowers, and all other liabilities and obligations of every kind
or nature whatsoever of Borrowers to Lender, whether hereunder or
otherwise, whether now existing or hereafter incurred, joint or
several, matured or unmatured, direct or indirect, primary or
secondary, related or unrelated, due or to become due, including,
but not limited to, any extensions, modifications, substitutions,
increases and renewals thereof, and substitutions therefor; the
payment of all amounts advanced by Lender to preserve, protect,
defend, and enforce its rights hereunder and in the Collateral in
accordance with the terms of this Agreement; and the payment of all
Expenses incurred by Lender in connection therewith.
Person - An individual, partnership, corporation, trust,
unincorporated association or organization, joint venture or any
other entity.
Prime Based Loan - Any Advance under the Revolving Credit
or Acquisition Line on which interest accrues at the Prime Based
Rate.
Prime Based Rate - (i) with respect to Advances
outstanding under the Revolving Credit, the Lender's Prime Rate per
annum, and (ii) with respect to Advances under the Acquisition
Line, the Lender's Prime Rate plus three-quarters of one percent
(.75%) per annum.
Prime Based Rate Option - Section 2.6.
Prime Rate - Section 2.6.
Property - Any interest of any Borrower in any kind of
property or asset, whether real, personal or mixed, or tangible or
intangible.
Qualified Accounts - All Accounts of a Borrower meeting
all the following specifications: (i) it is lawfully and solely
owned by such Borrower and subject to no Lien, or other assignment,
and such Borrower has the right of assignment thereof and the power
to grant a security interest therein; (ii) it is a valid and
enforceable Account, arising from the rendition of health care or
temporary personnel services actually rendered by a Borrower in the
ordinary course of its business; (iii) it is due and owing from a
Qualified Payor that has been approved by Lender under a Qualified
Payor Contract acceptable to Lender (or in the case of home health
care or private duty services provided to an individual where the
contract is with the individual and not the Qualified Payor, it is
due and owing from such individual but is subject to reimbursement
by a Qualified Payor) and is not outstanding more than one-hundred
twenty (120) days from the Friday of the week in which the services
are performed; (iv) it is not subject to any defense, set-off,
counterclaim, deduction, discount, credit, chargeback, allowance or
adjustment of any kind (provided that only the portion of the
Account which is subject to any such defense, set-off,
counterclaim, deduction, discount, credit, chargeback, allowance or
adjustment shall not be deemed a Qualified Account); (v) it is not
subject to any limitations which would make payment by a Qualified
Payor conditional; (vi) the Qualified Payor is not a Subsidiary or
Affiliate of any Borrower; (vii) no notice of the bankruptcy,
receivership, reorganization or insolvency of the Qualified Payor
has been received by any Borrower; (viii) it is not an Account from
a Qualified Payor having its principal place of business or
executive office outside the United States; (ix) no Borrower has
received any note, trade acceptance, draft or other instrument with
respect to or in payment of the Account; (x) there has been no
material adverse change in the Qualified Payor's financial
condition since the date of Lender's approval of such Qualified
Payor; (xi) not more than fifty (50%) percent of the aggregate
Accounts from the Qualified Payor obligated on the Account are
outstanding more than one hundred and twenty (120) days past their
invoice date; (xii) the aggregate of Accounts from the Qualified
Payor does not exceed such percentage of Borrowers' total Accounts
as may be established by Lender from time to time; (xiii) it meets
such other specifications and requirements as may be established by
Lender from time to time. Under no circumstances will Lender
advance against any Account or portion of any Account to the extent
such Account or portion thereof is payable by an individual
recipient of services unless such obligation is subject to
reimbursement by a Qualified Payor. No Account arising from
services provided by any Borrower as part of a joint venture
between such Borrower and any Person shall be a Qualified Account.
In the event of any dispute concerning the foregoing criteria as to
whether an Account is, or has ceased to be, a Qualified Account,
the decision of Lender in the exercise of its sole discretion,
shall control.
Qualified Payor - Any of the following Persons obligated
on any Account: (i) the Health Care Finance Administration of the
Department of Health and Human Services administering the Federal
Medicare program; (ii) any federal, state or county government
entity administering any Medicaid program; (iii) any commercial
payor acceptable to Lender in Lender's sole discretion; and (iv)
any hospital, other managed care payor or Person (excluding
individuals) acceptable to Lender in Lender's sole discretion.
Qualified Payor Contract - Any written agreement, between
any Borrower and any Qualified Payor, who agrees to pay for health
care or temporary personnel services rendered on behalf of such
Borrower.
Revolving Credit - Section 2.1(a).
Revolving Credit Borrowing Base - Section 2.2.
Revolving Credit Note - Section 2.1(b).
Senior Debt - All Liabilities less subordinated
indebtedness.
Staff Builders - Staff Builders, Inc., a Delaware
corporation.
Subsidiary - Any corporation more than fifty (50%)
percent of whose voting stock is legally and beneficially owned by
any of the Borrowers or owned by a corporation more than fifty
(50%) percent of whose voting stock is legally and beneficially
owned by any of the Borrowers.
Support Agreements - Section 3.8.
Total Funded Indebtedness - All indebtedness including,
but not limited to (i) all amounts outstanding under the Revolving
Credit, (ii) long term indebtedness, (iii) capital leases, (iv)
subordinated indebtedness, (v) mortgages and (vi) all other
indebtedness, except for trade debt, accrued expenses and deferred
expenses.
UCC - Uniform Commercial Code.
Unfunded Capital Expenditures - Any expenditure that
would be classified as a capital expenditure on a consolidated
statement of cash flows of Borrowers prepared in accordance with
GAAP.
Working Capital - At any time, the amount by which the
Current Assets of Borrowers exceed the Current Liabilities of
Borrowers, as would be shown on a consolidated balance sheet
prepared as of such date in accordance with GAAP.
1.2 Accounting Principles: Where the character or amount of
any asset or liability or item of income or expense is required to
be determined or any consolidation or other accounting computation
is required to be made for the purposes of this Agreement, this
shall be done in accordance with GAAP, to the extent applicable,
except where such principles are inconsistent with the requirements
of this Agreement.
SECTION 2. THE LOANS
2.1 Revolving Line of Credit - Description:
(a) (i) Lender hereby establishes for the benefit of
Borrowers a Revolving Line of Credit ("Revolving Credit") which
shall include cash sums advanced and other credit extended by
Lender to or for the benefit of Borrowers from time to time
hereunder up to the maximum principal sum of Fifty Million Dollars
($50,000,000) ("Maximum Revolving Credit Amount") at any one time
outstanding, depending upon the requests of Borrowers, and the
availability of Borrowers' Qualified Accounts, and, based upon the
Revolving Credit Borrowing Base, or on such other basis as Lender
may determine in its sole discretion. The outstanding balance
under the Revolving Credit may fluctuate from time to time, to be
reduced by repayments made by Borrowers, and to be increased by
future advances and extensions of credit which may be made by
Lender to or for the benefit of Borrowers. For the purposes of
this Agreement, any determination as to whether there is
availability within the Revolving Credit Borrowing Base for
advances or extensions of credit shall be determined by Lender in
accordance with the provisions of Section 2.2 hereof and shall be
final and binding upon Borrowers. Subject to availability under
the Revolving Credit Borrowing Base, the fulfillment of any other
conditions to borrowing contained in this Agreement and the absence
of a continuing Event of Default or any event which with the giving
of notice or passage of time or both would become an Event of
Default, Borrowers may borrow, repay and reborrow from time to time
during the Current Term. Lender shall have the right to establish
reserves against the Revolving Credit Borrowing Base in such
amounts and with respect to such matters as Lender in its sole
discretion, deems appropriate, including, but not limited to, a
cumulative reserve in the amount of $100,000.00 for each day the
monthly accounts receivable aging required by Section 6.13(a)(iii)
is late.
(ii) As part of the Revolving Credit and subject to
all of its terms and conditions, Lender shall extend Borrowers
credit in the form of standby letters of credit up to a maximum
aggregate amount of One Million ($1,000,000.00) Dollars outstanding
at any one time. No letter of credit will be issued with an expiry
date later than the earlier of: (A) one year after the issuance
date, or (B) the end of the Current Term. Borrowers shall execute
from time to time all letter of credit agreements and other
documents required by Lender for such purposes.
(b) At Closing, Borrowers shall execute and deliver a
promissory note to Lender in form and substance acceptable to
Lender (the "Revolving Credit Note") to evidence its unconditional
obligation to repay Lender for loans, advances, and extensions of
credit made under the Revolving Credit, with interest as herein and
therein provided. Each borrowing and extension of credit under the
Revolving Credit shall be deemed evidenced by the Revolving Credit
Note, which is deemed incorporated herein by reference and made
part hereof.
(c) The term ("Initial Term") of the Revolving Credit
shall expire on July 31, 2000. On such date, all Obligations of
Borrowers to Lender of every kind whatsoever in connection with the
Revolving Credit, unless sooner accelerated by Lender in accordance
with Section 8 below, shall be due and payable in full and after
which date no further advances or extensions of credit shall be
available from Lender.
2.2 Revolving Credit - Borrowing Base: Subject to the terms
and conditions of this Agreement, Advances under the Revolving
Credit shall be considered against and shall at no time exceed up
to the lesser of (i) seventy-five percent (75%) of Borrowers'
Qualified Accounts due from a Qualified Payor or (ii) The Maximum
Revolving Credit Amount less the outstanding principal balance
under the Acquisition Line ("Borrowing Base").
2.3 Revolving Credit - Termination by Borrowers: Borrowers
may, at any time prior to the end of the Initial Term of the
Revolving Credit and on not less than ninety (90) days prior
written notice to Lender, terminate the Revolving Credit: provided,
however, that on the termination date:
(a) Borrowers satisfy all outstanding Obligations and
cause all outstanding letters of credit to be released and returned
to Lender or deposit with Lender cash collateral in sufficient
amounts to cover all such outstanding letters of credit, and
(b) Borrowers also pay to Lender a prepayment fee
("Termination Fee") equal to the appropriate amount designated on
the following schedule:
Year of Initial Term
In Which Prepayment Occurs Termination Fee
From date hereof until 12/31/97 $500,000
1/1/98 to 12/31/98 $300,000
1/1/99 to 12/31/99 $250,000
1/1/00 to 7/31/00 $0
Provided, however, that in the event Borrowers give notice of
termination within 90 days of (i) Borrowers' receipt of a statement
from Lender under Section 2.8 (Capital Adequacy) that an amount is
due to Lender, other than with respect to Letters of Credit issued
by Lender, or (ii) Lender's reduction of the advance rate used by
Lender to determine the Revolving Credit Borrowing Base to sixty
(60%) percent or less without a corresponding deterioration in the
Accounts and provided that no Event of Default has occurred and is
continuing, then Borrowers may terminate this Agreement as provided
in this Section 2.3 without payment of the Termination Fee.
2.4 Collections, Disbursements and Borrowing Availability:
(a) Borrowers shall maintain a lockbox account(s)
("Lender's Lockbox") with Lender and a depository account(s)
("Lender's Cash Collateral Account") with Lender subject to the
provisions of this subparagraph, and shall execute a lockbox
agreement ("Lockbox Agreement") in form and substance acceptable to
Lender, and such other agreements related thereto as Lender may
require. Unless otherwise prohibited by applicable law, all
collections of Accounts shall be paid directly from Qualified
Payors into Lender's Lockbox from which funds shall be transferred
to Lender's Cash Collateral Account, and from which funds shall be
applied by Lender, daily, to reduce the outstanding indebtedness
under the Revolving Credit with future advances and extensions of
credit to be made by Lender under the conditions set forth in this
Section 2. Those collections which, by applicable law, must be
paid directly to Borrowers, shall be sent to a lockbox exclusively
under Borrowers' control ("Borrowers' Lockbox"). Such remittances
shall be deposited by Borrowers, if not prohibited by applicable
law, directly into Lender's Cash Collateral Account or, if so
prohibited then into a depository account ("Borrowers' Cash
Collateral Account") established with Lender. Such remittances
made by wire transfer shall be wired directly into Borrowers' Cash
Collateral Account. All proceeds in Borrowers' Cash Collateral
Account shall be automatically transferred, at the direction of
Borrowers, on a daily basis, to Lenders' Cash Collateral Account.
In the event that proceeds of other Collateral are received by
Borrowers, such collections shall be held in trust for the benefit
of Lender and remitted, in the form received, to Lender for deposit
in Lender's Cash Collateral Account immediately upon receipt by
Borrowers. All funds transferred from Lender's Cash Collateral
Account shall, upon application to Borrowers' indebtedness to
Lender, reduce the Revolving Credit loan balance, but for the
purpose of calculating interest, shall be subject to a one (1) day
clearance period. Interest shall be calculated to reflect such
clearance period on the last day of the month based on the average
daily cleared collections in Lender's Cash Collateral Account for
such month. Borrower shall have no right of access to or
withdrawal from the Lender's Lockbox or Lender's Cash Collateral
Account.
(b) Cash advances made by Lender under the Revolving
Credit shall be made available to Staff Builders, Inc. by crediting
such proceeds to the operating account of Staff Builders, Inc. with
Lender. Advances will be made available to Borrowers on any
Business Day after a telephonic request on behalf of any Borrower
to Lender (made before 11:00 A.M. Philadelphia time) on such
Business Day. If requested by Lender, at its option, Borrowers
will confirm such request, in writing, within one (1) Business Day
of any such telephonic request. Lender reserves its right to
require Staff Builders on behalf of Borrowers to provide a
borrowing base certificate contemporaneously with each loan
request. Lender may rely upon any and all telephonic and written
requests purported to be made by any of the Borrowers through any
of its authorized officers which have been authorized in writing by
such Borrower for such purpose to Lender.
(c) Lender may, in its sole discretion, charge the
operating account of any or all of the Borrowers with Lender for
all of Borrowers' Obligations to Lender as they become due from
time to time under this Agreement including without limitation,
interest, principal, fees and reimbursement of Expenses. Lender
may further charge the Revolving Credit, at Lender's option, for
any and all of Borrowers' Obligations to Lender as they become due
from time to time.
2.5 Acquisition Line:
(a) Lender hereby establishes for the benefit of
Borrowers an Acquisition Line (the "Acquisition Line") to be used
by Borrowers from time to time to finance the intangible portion of
acquisitions by Borrowers up to the maximum principal sum of
Fifteen Million Dollars ($15,000,000) at any one time outstanding.
Each requested Advance under the Acquisition Line is subject to
Bank's approval, must be made at least 30 days prior to the date of
the requested approval and must be accompanied by the following
(all in form and substance acceptable to the Bank):
(i) Historical and projected financial information
regarding the company to be acquired;
(ii) A proforma opening balance sheet of company to
be acquired;
(iii) A statement of the sources and use of cash;
(iv) The draft acquisition agreement or term sheet
for the acquisition; and
(v) All other documents and information Lender may
request.
(b) Each company to be acquired in connection with an
Acquisition Loan must be in the same general business as the
Borrowers.
(c) Each Acquisition Loan shall be fully amortized over
12-48 months depending on the acquisition as determined by Lender
in its sole discretion.
(d) At no time shall the sum of the principal balance of
Advances outstanding under the Acquisition Line and the Revolving
Credit exceed the Maximum Revolving Credit Amount.
2.6 Interest:
(a) Revolving Credit: Interest on outstanding Advances
under the Revolving Credit (including without limitation,
Borrower's obligation to reimburse Lender for payments on letters
of credit) shall be calculated at the Prime Rate Option or the
LIBOR Rate Option.
(b) Acquisition Line: Interest on outstanding Advances
under the Acquisition Line shall be calculated at the Prime Rate
Option or the LIBOR Rate Option.
(c) Prime Rate Option:
(i) All or a portion of the unpaid principal balance
of cash Advances under the Revolving Credit, unless subject to the
LIBOR Rate Option, shall bear interest, subject to the terms
hereof, and
(ii) all or a portion of the unpaid principal
balance of the Acquisition Line, unless subject to the LIBOR Rate
Option, shall bear interest, subject to the terms hereof, at the
Prime Based Rate ("Prime Based Rate Option"). Changes in the Prime
Rate shall become effective on the same day as Lender announces a
change in its Prime Rate. Interest on Prime Based Loans shall be
due and payable in arrears on the first day of each calendar month.
(d) LIBOR Rate Option:
(i) All or a portion of the unpaid principal balance
of Advances under the Revolving Credit and/or all or a portion of
the unpaid principal balance of Advances under the Acquisition
Line, may, at Borrower's option, provided no Event of Default then
exists, bear interest at the LIBOR Based Rate ("LIBOR Rate
Option"). Each Advance to bear interest at the LIBOR Based Rate
must be for a minimum loan amount of one million dollars
($1,000,000) and/or a multiple of one million dollars
($1,000,000).
(ii) LIBOR Based Loans shall be selected for a
period of either a one (1), two (2) or three (3) months' duration,
as the Borrower may elect, during which the LIBOR Based Rate is
applicable ("LIBOR Interest Period"); provided, however, that (A)
if the LIBOR Interest Period would otherwise end on a day which
shall not be a Good Business Day, such LIBOR Interest Period shall
be extended to the next succeeding Good Business Day, unless such
Good Business Day falls in another calendar month, in which case
such LIBOR Interest Period shall end on the next preceding Good
Business Day subject to clause (C) below; (B) interest shall accrue
from and including the first day of each LIBOR Interest Period to,
but excluding the day on which any LIBOR Interest Period expires;
and (C) with respect to any LIBOR Interest Period which begins on
the last Good Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar
month at the end of such LIBOR Interest Period), the LIBOR Interest
Period shall end on the last Good Business Day of a calendar month.
Interest on a LIBOR Based Loan shall be due and payable in arrears
on the first day of each calendar month commencing the first full
month following the date hereof. No LIBOR Interest Period with
respect to any of the Loans may end after the Initial Term.
Subject to all of the terms and conditions applicable to a request
that all or a portion of new Advance under the Revolving Credit or
that all or a portion of new Advance under the Acquisition Line be
a LIBOR Based Loan, Borrower may extend a LIBOR Based Loan as of
the last day of the LIBOR Interest Period to a new LIBOR Based Loan
or may convert all or a portion of the Revolving Credit Loans
subject to the Prime Rate Option to a LIBOR Based Loan. If the
Borrower fails to notify the Lender of the LIBOR Interest Period
for a subsequent LIBOR Based Loan at least three Good Business Days
prior to the last day of the then current LIBOR Interest Period of
an outstanding LIBOR Based Loan, then such outstanding LIBOR Based
Loan shall become a loan subject to the Prime Rate Option at the
end of the current LIBOR Interest Period for such outstanding LIBOR
Based Loan and shall accrue interest in accordance with
Section 2.6(c) above.
(iii) Notwithstanding the foregoing, at no time may
Borrowers have outstanding more than three (3) LIBOR Based Loans.
(iv) The LIBOR Rate may be automatically adjusted
by Lender on a prospective basis to take into account the
additional or increased cost of maintaining any necessary reserves
for Eurodollar deposits or increased costs due to changes in
applicable law or regulation or the interpretation thereof
occurring subsequent to the commencement of the then applicable
LIBOR Interest Period, including but not limited to changes in tax
laws (except changes of general applicability in corporate income
tax laws as they affect financial institutions) and changes in the
reserve requirements imposed by the Board of Governors of the
Federal Reserve System (or any successor) that increase the cost to
Lender of funding the LIBOR Based Loan. Lender shall promptly give
the Borrower notice of such a determination and adjustment, which
determination shall be conclusive as to the correctness of the fact
and the amount of such adjustment.
(v) In the event that the Borrower shall have
requested the LIBOR Rate Option in accordance with Section 2.6(d)
and Lender shall have reasonably determined that Eurodollar
deposits equal to the amount of the principal of the requested
LIBOR Based Loan and for the LIBOR Interest Period specified are
unavailable, impractical or unlawful, or that the rate based on the
LIBOR Rate will not adequately and fairly reflect the cost of the
LIBOR Based Rate applicable to the specified LIBOR Interest Period,
of making or maintaining the principal amount of the requested
LIBOR Based Loan specified by the Borrower during the LIBOR
Interest Period specified, or that by reason of circumstances
affecting Eurodollar markets, adequate and reasonable means do not
exist for ascertaining the rate based on the LIBOR Rate applicable
to the specified LIBOR Interest Period, Lender shall promptly give
notice of such determination to the Borrower that the rate based on
the LIBOR Rate is not available. A determination by Lender
hereunder shall be prima facie evidence of the correctness of the
fact and amount of such additional costs or unavailability. Upon
such a determination, (A) the right of Borrower to select, convert
to, or maintain a LIBOR Based Loan at the rate based on the LIBOR
Rate shall be suspended until Lender shall have notified the
Borrower that such conditions shall have ceased to exist, (B)
Lender shall use its best efforts to offer to Borrower a
replacement index at a rate with a margin that gives Lender a
comparable yield to the LIBOR Rate Option, and (C) the Loans
subject to the requested LIBOR Rate Option shall accrue interest in
accordance with Section 2.6(c) above.
(vi) In the event that, as a result of any changes
in applicable law or regulation or the interpretation thereof, it
becomes unlawful for Lender to maintain Eurodollar liabilities
sufficient to fund any LIBOR Based Loan subject to the LIBOR Based
Rate, then Lender shall immediately notify Borrowers thereof and
Lender's obligations to make, convert to, or maintain a LIBOR Based
Loan at the LIBOR Based Rate shall be suspended until such time as
Lender may again cause the LIBOR Based Rate to be applicable to any
LIBOR Based Loans of the Revolving Credit Loans subject to the
LIBOR Based Rate shall accrue interest in accordance with Section
2.6(c) above. Promptly after becoming aware that it is no longer
unlawful for Lender to maintain such Eurodollar liabilities, Lender
shall notify Borrower thereof and such suspension shall cease to
exist.
(vii) Indemnity/Loss of Margin: Borrower shall
indemnify, defend and hold harmless Lender against any and all
loss, liability, cost or expense Lender may sustain or incur as a
consequence of (i) any failure of Borrower to obtain, convert or
extend any LIBOR Based Loan after notice thereof has been given to
Lender or (ii) any payment, prepayment, termination or conversion
of a LIBOR Based Loan made for any reason on a date other than the
last day of the applicable LIBOR Interest Period. Borrower shall
pay the full amount thereof to Lender, on demand by Lender.
(viii) In the event that any present or future
law, rule, regulation, treaty or official directive or the
interpretation or application thereof by any central bank, monetary
authority or governmental authority, or the compliance with any
guideline or request of any central bank, monetary authority or
governmental authority (whether or not having the force of law)
imposes, modifies or deems applicable any deposit insurance,
reserve, special deposit, or other similar requirement with respect
to deposits in or for the account of, or loans or advances or
commitment to make loans or advances by, Lender and the result of
any of the foregoing is to increase the costs of Lender, reduce the
income receivable by or return on equity of Lender or impose any
expense upon Lender with respect to any advances or extensions of
credit or commitments to make advances or extensions of credit
under this Agreement, Lender shall so notify Borrowers in writing.
Upon notice from Lender, Borrowers agree to pay Lender the amount
of such increase in cost, reduction in income, reduced return on
equity or capital, or additional expense after presentation by
Lender of a statement concerning such increase in cost, reduction
in income, reduced return on equity or capital, or additional
expense. Such statement shall set forth a brief explanation of the
amount and Lender's calculation of the amount (in determining such
amount Lender may use any reasonable averaging and attribution
methods), which statement shall be conclusively deemed correct
absent manifest error.
(e) Calculation of Interest: Interest shall be computed
daily for the actual number of days elapsed, but calculated on the
basis of a year of 360 days. The interest rate shall change on the
same day as Lender's Prime Rate may change from time to time.
Interest shall be payable monthly, in arrears, on the first day of
each calendar month.
(f) Default Rate: After the occurrence and during the
continuance of an Event of Default hereunder, interest shall accrue
on the outstanding principal balance of the Loans at a per annum
rate equal to two (2%) percent in excess of the contract rate.
(g) Post Judgment Interest: Despite the entry of a
judgment or judgments against any Borrower with respect to any of
the Obligations, such Obligations will continue to earn interest at
the applicable rate as set forth in Section 2.6.
(h) Applicable Interest Limitations: In no contingency
or event whatsoever shall the aggregate of all amounts deemed
interest hereunder and charged and collected pursuant to the terms
of the Agreement exceed the highest rate permissible under any law
which a court of competent jurisdiction shall, in a final
determination, deem applicable hereto. In the event that such
court determines Lender has charged or received interest hereunder
in excess of the highest applicable rate, Lender shall promptly
refund such excess interest to the Borrowers and such rate shall
automatically be reduced to the maximum rate permitted by law.
2.7 Fees:
(a) Upon execution of this Agreement, Borrowers shall
unconditionally pay to Lender a non-refundable facility fee
("Facility Fee") of Three Hundred Thousand Dollars ($300,000).
(b) So long as the Revolving Credit is outstanding and
has not been terminated, and the Obligations are not satisfied in
full, Borrowers shall unconditionally pay to Lender a fee ("Usage
Fee") equal to .375% percent per annum of the daily unused portion
of the Revolving Credit, which fee shall be computed on a monthly
basis in arrears and shall be due and payable on the first day of
each month commencing on the first day of the first full month
after Closing.
(c) So long as the Revolving Credit has not been
terminated pursuant to the terms hereof, and the Obligations are
not satisfied in full, Borrowers shall unconditionally pay to
Lender a non-refundable monthly collateral management fee
("Collateral Management Fee") of $7,083.33, payable monthly, in
advance, beginning on the Closing Date and thereafter, on the first
day of each successive month.
(d) Borrowers shall pay to Lender on demand, letter of
credit fees equal to 2.00% per annum ("Letter of Credit Fee") of
the face amount of each letter of credit issued pursuant to Section
2.1(a)(ii) hereof. Borrowers shall also pay all of Lender's
standard charges for the issuance, amendment, extension and
cancellation of such letters of credit.
2.8 Capital Adequacy: If any present or future law,
governmental rule, regulation, policy, guideline, directive or
similar requirement (whether or not having the force of law)
imposes, modifies, or deems applicable any additional capital
adequacy, capital maintenance or similar requirement which affects
the manner in which Lender allocates capital resources to its
commitments (including any commitments hereunder), and as a result
thereof, in the opinion of Lender, the rate of return on Lender's
capital with regard to the Revolving Credit is reduced to a level
below that which Lender could have achieved but for such
circumstances, then in such case and upon notice from Lender to
Borrowers, from time to time, Borrowers shall pay Lender on demand
such additional amount or amounts as shall compensate Lender for
such reduction in Lender's rate of return. Such notice shall
contain the statement of Lender with regard to any such amount or
amounts which shall, in the absence of manifest error, be binding
upon Borrowers. In determining such amount, Lender may use any
method of averaging and attribution that it deems applicable, in
its sole discretion.
2.9 Payments: Except to the extent otherwise set forth in
this Agreement, or as may be otherwise designated by Lender in
writing, all payments of principal and of interest on the Revolving
Credit, the Collateral Management Fee, the Facility Fee, the Usage
Fee, Letter of Credit Fees, the Termination Fee, all other charges
and any other obligations of Borrowers hereunder, shall be made to
Lender at Mellon Bank Center, 1735 Market Street, Philadelphia,
Pennsylvania, in lawful currency of the United States and in
immediately available funds. Any and all payments received by
Lender may be applied to the Obligations in such order as Lender
may determine.
2.10 Use of Proceeds: The proceeds of Lender's advances
under the Revolving Credit shall be used for working capital.
2.11 Nature of Liability: All Obligations of Borrowers are
expressly agreed by each of them to be joint and several.
SECTION 3 - COLLATERAL
3.1 Description: As security for the payment of the
Obligations, and satisfaction by Borrowers of all covenants and
undertakings contained in this Agreement and the other Loan
Documents, each Borrower hereby assigns and grants to Lender a
continuing first (other than as described in Section 5.4 hereof)
lien on and security interest in, upon and to the following
Property (the "Collateral"):
(a) Accounts, Contract Rights, Etc. - All of such
Borrower's now owned and hereafter acquired or arising accounts,
accounts receivable, notes receivable, contract rights, chattel
paper, documents (including documents of title), instruments,
invoices;
(b) Inventory - All of such Borrower's now owned or
hereafter acquired inventory of every nature and kind, wherever
located;
(c) General Intangibles - All of such Borrower's now
owned and hereafter acquired or arising general intangibles of
every kind and description, including, but not limited, to all
existing and future customer lists, choses in action, claims,
books, records, patents and patent applications, copyrights, trade-
marks, tradenames, tradestyles, trademark applications, blueprints,
drawings, designs and plans, trade secrets, contracts, licenses,
license agreements, franchises, franchise agreements, formulae, tax
and any other types of refunds, returned and unearned insurance
premiums, rights and claims under insurance policies including
without limitation, credit insurance policies, and computer
information, software, records, data;
(d) Equipment - All of such Borrower's now owned and
hereafter acquired equipment, including without limitation,
machinery, vehicles, furniture and fixtures, wherever located, and
all replacements, parts, accessories, substitutions and additions
thereto;
(e) Deposit Accounts - All of such Borrower's now
existing and hereafter acquired or arising deposit accounts of
every nature, wherever located, and all documents and records
associated therewith;
(f) Property in Lender's Possession - All Property of
such Borrower, now or hereafter in Lender's possession;
(g) Stock - All stock of each Borrower other than Staff
Builders, of every kind and nature.
(h) Proceeds - The proceeds (including, without
limitation, insurance proceeds) of all of the foregoing.
3.2 Lien Documents: At Closing and thereafter as Lender
reasonably deems necessary, Borrowers shall execute and deliver to
Lender, or have executed and delivered (all in form and substance
satisfactory to Lender):
(a) Financing Statements - Financing statements pursuant
to the UCC, which Lender may file in any jurisdiction where any
Collateral is or may be located and in any other jurisdiction that
Lender deems appropriate; and
(b) Stock Pledge Agreements with Stock Certificates and
Blank Stock Powers - Stock pledge agreements covering the stock
described in Section 3.1(g) above accompanied by delivery of
original stock certificates representing all stock of every kind
and nature of each Borrower other than Staff Builders, together
with stock powers, duly executed in blank by each Borrower for the
stock of any other Borrower which it owns.
(c) Other Agreements - Any other agreements, documents,
instruments and writings required to evidence, perfect or protect
Lender's lien and security interest in the Collateral required
hereunder or as Lender may request from time to time.
3.3 Other Actions: In addition to the foregoing, Borrowers
shall do anything further that may be lawfully and reasonably
required by Lender to secure Lender and effectuate the intentions
and objects of this Agreement, including, but not limited to, the
execution and delivery of lockbox agreements, continuation
statements, amendments to financing statements, security
agreements, contracts and any other documents required hereunder.
At Lender's request, Borrowers shall also immediately deliver to
Lender all items for which Lender must receive possession to obtain
a perfected security interest, including without limitation, all
notes, stock certificates, other certificates and documents of
title, chattel paper, warehouse receipts, instruments, and any
other similar instruments constituting Collateral.
3.4 Searches: Lender shall, prior to or at Closing, and
thereafter as Lender may determine from time to time at Borrowers'
expense, obtain the following searches (the results of which are to
be consistent with the warranties made by Borrowers in this
Agreement):
(a) UCC searches with the Secretary of State and local
filing office of each state where any Borrower maintains its
executive offices, a place of business, or assets;
(b) Judgment, federal tax lien and corporate tax lien
searches, in each county of each state searched under subparagraph
(a) above.
Borrowers shall, prior to or at Closing and at their
expense, obtain and deliver to Lender good standing certificates
showing each Borrower to be in good standing in its state of
incorporation and in each other state in which it is doing and
presently intends to do business for which qualification is
required, except where the failure to be so qualified or in good
standing does not have a Material Adverse Effect.
3.5 Landlord's Waivers: Within 270 days of Closing,
Borrowers will cause the owner of the premises occupied by or to
be occupied by Staff Builders to execute and deliver to Lender an
instrument, in form and substance satisfactory to Lender, under
which such owner(s) agrees to allow Lender to remain on such
premises to dispose of or deal with any Collateral located thereon.
Nothing herein shall require Borrower to reach any settlement with
such owner(s) in the current dispute between Staff Builders and
such owner(s).
3.6 Filing Security Agreement: A carbon, photographic or
other reproduction or other copy of this Agreement or of a
financing statement is sufficient as and may be filed in lieu of a
financing statement.
3.7 Power of Attorney: Each of the officers of Lender is
hereby irrevocably made, constituted and appointed the true and
lawful attorney for each of the Borrowers (without requiring any of
them to act as such) with full power of substitution to do the
following: (1) endorse the name of any Borrower upon any and all
checks, drafts, money orders and other instruments for the payment
of monies that are payable to any Borrower and constitute
collections on such Borrowers' Accounts; (2) execute in the name of
any Borrower any financing statements, schedules, assignments,
instruments, documents and statements that any Borrower is
obligated to give Lender hereunder; and (3) do such other and
further acts and deeds in the name of Borrowers that Lender may
reasonably deem necessary or desirable to enforce any Account or
other Collateral or perfect Lender's security interest or lien in
the Collateral.
3.8 Management Support Agreements and Fraud Guarantees: A
management support agreement and fraud guarantee ("Support
Agreement"), each in favor of and in form and substance acceptable
to Lender shall be executed and delivered to Lender by Xxxxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx and Xxxx Xxxxx.
3.9 Application of Collateral Proceeds. Except to the extent
otherwise agreed by Lender in writing, all collections and proceeds
of Collateral at any time and from time to time generated from the
Collateral which may at any time be received by any Borrower are to
be held in trust for Lender and immediately paid to Lender for
application to the Obligations.
SECTION 4. CLOSING AND CONDITIONS PRECEDENT TO ADVANCES
Closing is subject to the following conditions precedent (all
documents to be in form and substance satisfactory to Lender and
Lender's counsel):
4.1 Resolutions, Opinions, and Other Documents: Borrowers
shall have delivered to Lender the following:
(a) this Agreement and the Revolving Credit Note all
properly executed by each Borrower;
(b) each Loan Document required to be executed by
Borrowers or by any other Person under any provision of this
Agreement or any related agreement;
(c) certified copies of (i) resolutions of each
Borrower's board of directors authorizing the execution and
performance of this Agreement, the Revolving Credit Note to be
issued hereunder and each document required to be delivered by any
Section hereof and (ii) each Borrower's Certificate of
Incorporation and by-laws;
(d) an incumbency certificate for each Borrower;
(e) a good standing certificate for each Borrower;
(f) a written opinion of Borrowers' independent counsel
addressed to Lender;
(g) such financial statements, reports, certifications
and other operational information required to be delivered
hereunder, including without limitation an initial borrowing base
certificate calculating the Revolving Credit Borrowing Base;
(h) updated projections, on a monthly and consolidated
basis, for the first twelve (12) months after Closing, including
profit and loss statements, cash flow statements and balance
sheets.
(i) certification by the chief financial officer of
Staff Builders on behalf of Borrowers that there has not occurred
any material adverse change, since November 30, 1991, in the
operations, condition (financial or otherwise) and business
prospects of Staff Builders or of Borrowers as a whole;
(j) payment of the Facility Fee and Collateral
Management Fee;
(k) all documents and agreements required with respect
to the Collateral, including without limitation, financing state-
ments;
(l) evidence that all of Borrowers' obligations on its
existing line of credit with Citicorp have been satisfied and all
liens related thereto have been terminated;
(m) executed Support Agreements;
(n) evidence that after all Closing payments, costs, and
expenditures, and other then current expenditures (including
without limitation, unfunded but accrued gross payroll), all
initial advances under the Revolving Credit, Borrowers have a
minimum borrowing availability of Four Million ($4,000,000.00)
Dollars under the Revolving Credit Borrowing Base which shall be
confirmed by Lender's Pre-Closing field examination;
4.2 Absence of Certain Events: At the Closing Date, no Event
of Default hereunder shall have occurred and be continuing, and no
event shall have occurred and be continuing which, with the passage
of time, or the giving of notice, or both, would constitute an
Event of Default hereunder.
4.3 Warranties and Representations at Closing: The
warranties and representations contained in Section 5 as well as
any other Section of this Agreement shall be true and correct on
the Closing Date with the same effect as though made on and as of
that date.
4.4 Compliance with this Agreement: Borrowers shall have
performed and complied with all agreements, covenants and
conditions contained herein which are required to be performed or
complied with by Borrowers before or at the Closing Date,
including, without limitation, the provisions of Section 6 hereof.
4.5 Officer's Certificate: Staff Builders shall provide
Lender with an officer's certificate signed by its chief executive
officer certifying that all conditions to Closing contained in this
Agreement have been fulfilled.
4.6 Closing: Subject to the conditions of this Section, the
Loans shall be made available on such date (the "Closing Date") and
at such time as may be mutually agreeable to the parties
contemporaneously with the execution hereof (the "Closing") at such
place as may be requested by Lender.
4.7 Waiver of Rights: By completing the Closing hereunder,
or by making advances hereunder, Lender does not thereby waive a
breach of any warranty or representation made by Borrowers
hereunder or any agreement, document, or instrument delivered to
Lender or otherwise referred to herein, and all of Lender's claims
and rights resulting from any breach or misrepresentation by
Borrowers are specifically reserved by Lender.
SECTION 5. REPRESENTATIONS AND WARRANTIES
Borrowers warrant and represent to Lender that:
5.1 Corporate Organization and Validity:
(a) Except as set forth on Exhibit "5.1", each of the
Borrowers is a corporation duly organized and to the best of Staff
Builders' knowledge is validly existing under the laws of its state
of incorporation, is duly qualified, is in good standing and has
lawful power and authority to engage in business in each state
where the nature and extent of its business requires qualification,
except where the failure to be so qualified or in good standing
does not have a Material Adverse Effect. A list of all states and
other jurisdictions where Borrowers are qualified to do business is
attached hereto as Exhibit "5.1" and made a part hereof.
(b) The making and performance of this Agreement and
each Loan Document required by any Section hereof will not violate
any law, government rule or regulation, or the charter, minutes or
bylaw provisions of any of the Borrowers or violate or result in a
default (immediately or with the passage of time) under any con-
tract, agreement or instrument to which any of the Borrowers is a
party, or by which they are bound, except for violations or
defaults which would not have a Material Adverse Effect. None of
the Borrowers is in violation of any term of any agreement or
instrument to which it is a party or by which it may be bound or of
its charter, minutes or its bylaws, except for violations which
would not have a Material Adverse Effect.
(c) Each of the Borrowers has all requisite corporate
power and authority to enter into and perform this Agreement and to
incur the obligations herein provided for, and has taken all proper
and necessary corporate action to authorize the execution, delivery
and performance of this Agreement, and the other Loan Documents.
(d) This Agreement, the Revolving Credit Note to be
issued hereunder, and all other Loan Documents, when delivered,
will be valid and binding upon Borrowers and enforceable in accord-
ance with their respective terms.
5.2 Place of Business: The only places of business of each
of the Borrowers, and the place where they keep and intend to keep
their Property and records concerning their Property, are at the
addresses listed in Exhibit "5.2" attached hereto and made part
hereof.
5.3 Pending Litigation: Except as set forth on Exhibit "5.3"
attached hereto and made part hereof, there are no judgments or
judicial or administrative orders or proceedings pending, or to the
knowledge of any of the Borrowers, threatened against or affecting
any of the Borrowers in any court or before any governmental
authority or arbitration board or tribunal. None of the Borrowers
is in default with respect to any order of any court, governmental
authority, regulatory agency or arbitration board or tribunal.
5.4 Title to Properties: Each Borrower has exclusive title
to all Property it purports to own in fee simple (or its equivalent
under applicable law) free from Liens and free from the claims of
any other Person, except for (i) those Liens set forth on Exhibit
"5.4" attached hereto and made part hereof, (ii) Liens of the type
permitted in section 7.3, and (iii) Liens to be released or
discharged contemporaneously with the Closing.
5.5 Patents and Trademarks: Each Borrower owns or has the
unconditional right to use all the patents, patent applications,
trademarks, trademark applications, service marks, trade names,and
copyrights, that are material for the present and planned future
conduct of its business, without any known conflict with the rights
of others. A list of all such patents, patent applications, trade-
marks, trademark applications and copyrights owned or otherwise
possessed by Borrowers (indicating the nature of each Borrower's
interest) is attached hereto as Exhibit "5.5", and made a part
hereof. No Borrower is in default of any obligation or undertaking
with respect to such Property or rights.
5.6 Governmental Consent: Neither the nature of any Borrower
or of its business or Property, nor any relationship between any or
all Borrowers and any other Person, nor any circumstance affecting
each Borrower in connection with the issuance or delivery of the
Revolving Credit Note, is such as to require a consent, approval or
authorization of, or filing (other than filing of UCC-1 financing
statements), registration or qualification with, any governmental
authority on the part of Borrowers in conjunction with the exe-
cution and delivery of this Agreement or the issuance or delivery
of the Revolving Credit Note, or other Loan Documents.
5.7 Taxes: All tax returns required to be filed by any
Borrower in any jurisdiction have in fact been filed, and all
taxes, assessments, fees and other governmental charges upon
Borrowers, or upon any of its Property, income or franchises, which
are due and payable have been paid, except for those taxes being
contested in good faith with due diligence by appropriate
proceedings for which appropriate reserves have been maintained
under GAAP. None of the Borrowers are aware of any proposed
additional tax assessment or tax to be assessed against or
applicable to any of the Borrowers.
5.8 Financial Statements: The fiscal year of each of the
Borrowers ends on the last day of February. Each Borrower's
federal tax identification number is listed on Exhibit "5.8"
attached hereto and made a part hereof.
5.9 Full Disclosure: Neither the financial statements
referred to in Section 5.8, nor this Agreement or related
agreements and documents or any written statement furnished by
Borrowers to Lender in connection with the negotiation of the Loans
and contained in any financial statements or documents relating to
the Collateral contain any untrue statement of a material fact or
omit a material fact necessary to make the statements contained
therein or herein not misleading. There is
no fact known to any officer of any of the Borrowers which any of
the Borrowers have not disclosed to Lender in writing, which
materially affects adversely or may materially affect adversely all
or any of the Borrowers' Property, business or financial condition
or the ability of Borrowers to perform this Agreement.
5.10 Subsidiaries and Affiliates: All Subsidiaries and
Affiliates of Borrowers are listed on Exhibit 5.10.
5.11 Guarantees, Contracts, etc.:
(a) None of the Borrowers owns or holds any equity or
long term debt investments in, have any outstanding advances to,
have any outstanding guarantees for the obligations of, or have any
outstanding borrowings from, any Person other than a Borrower or a
Subsidiary of a Borrower, except as described in Exhibit "5.11",
attached hereto and made part hereof.
(b) No Borrower is a party to any contract or agreement,
or subject to any charter or other corporate restriction, which has
a Material Adverse Effect.
(c) Except as otherwise specifically provided in this
Agreement, none of the Borrowers has agreed or consented to cause
or permit any of its Property whether now owned or hereafter
acquired to be subject in the future (upon the happening of a
contingency or otherwise) to a Lien not permitted by this
Agreement, other than Liens that are being released or discharged
contemporaneously with the Closing.
5.12 Government Regulations, etc.:
(a) The use of the proceeds of the Loans and Borrowers'
issuance of the Revolving Credit Note, will not directly or
indirectly violate or result in a violation of the Securities Act
of 1933 or the Securities Exchange Act of 1934, as amended, or any
regulations issued pursuant thereto, including, without limitation,
Regulations U, T, G and X of the Board of Governors of the Federal
Reserve System, 12 C.F.R., Chapter II. No Borrower owns or intends
to carry or purchase any "margin security" within the meaning of
said Regulations.
(b) To the best of Borrowers' knowledge, except as
disclosed on Exhibit 5.12(b), (i) each Employee Benefit Plan, as
defined in Section 3(3) of ERISA, (other than a multi-employer plan
described in Section 3(37) of ERISA) maintained by a Borrower or in
which any Borrower is a participating employer has been maintained
in all material respects in accordance with its terms and with
applicable law, and (ii) each such Employee Benefit Plan which is
intended to be tax-qualified currently satisfies to the extent
required by applicable law, and for all years subsequent to the
establishment of such Plan and with respect to which Borrowers'
income tax returns are open to audit, has satisfied, the
requirements of Section 401(a) of the Code, except that if any
such requirement has not been satisfied, the failure to satisfy
such requirements has not had, and in the future will not have, a
Material Adverse Effect (assuming the continued conduct of the
Borrowers' business is substantially consistent with past
practice), (iii) no such Employee Benefit Plan has engaged in or
been involved in a non-exempt Prohibited Transaction (as defined in
ERISA) under ERISA or the Internal Revenue Code, and (iv) no such
Employee Benefit Plan has been terminated, which termination would
have a Material Adverse Effect. Borrowers or any member of a
Controlled Group (as defined in ERISA) including Borrowers, have
not received notice of a claim asserted against Borrowers or other
members of the Controlled Group for withdrawal liability (as
defined in the Multiemployer Pension Plan Amendments Act of 1980,
as amended) with respect to any multiemployer pension plan.
Borrowers have timely made all contributions when due with respect
to any multiemployer pension plan in which any of them participate
and, no event has occurred triggering a claim against Borrowers or
any member of a Controlled Group including Borrowers for withdrawal
liability with respect to any multi-employer pension plan. All
Employee Benefit Plans maintained by and multi-employer plans
contributed to by any Borrower are listed on Exhibit 5.12(b)
attached hereto and made a part hereof.
(c) No Borrower is in violation of any applicable
material statute, regulation or ordinance of the United States of
America, or of any state, city, town, municipality, county or of
any other jurisdiction, or of any agency thereof, (including
without limitation, environmental laws and regulations) and all
Borrowers possess all material licenses, permits and governmental
approvals needed to operate their business, except where such
violation or failure to possess would not have a Material Adverse
Effect. Each Borrower has obtained and currently has all
certificates of need and Medicare and Medicaid provider numbers as
are necessary to operate its business. A list of each Borrower's
certificates of need, Qualified Payor Contracts, and provider
numbers are listed on Exhibit 5.12(c). All cost reports required
to be filed with Qualified Payors have been filed.
(d) Borrowers are current with all reports and documents
required to be filed with any state or federal securities
commission or similar agency and is in full compliance in all
material respects with all applicable rules and regulations of such
commissions.
5.13 Business Interruptions: To the best of Staff Builders'
knowledge, within five (5) years prior to the date hereof, neither
the business, Property or operations of any of the Borrowers have
been materially and adversely affected in any way by any casualty,
strike, lockout, combination of workers, order of the United States
of America, or any state or local government, or any political
subdivision or agency thereof, directed against any of the
Borrowers. There are no pending or, to the Borrowers' knowledge,
threatened labor disputes, strikes, lockouts or similar occurrences
or grievances against the business being operated by any of the
Borrowers, other than disputes with individual employees, except as
set forth on Exhibit "5.13".
5.14 Names: Since July 6, 1988, except as provided in Exhibit
"5.14" none of the Borrowers have conducted business under or used
any other names (whether corporate or assumed) except for their
present corporate names. Each Borrower is the sole owner of its
name, other than Staff Builders, Inc., a Delaware corporation, and
Staff Builders, Inc., a New York corporation which share the same
name, and other than licenses of the name Staff Builders and other
names to franchisees, and any and all business done and all
invoices represent sales and business of each respective Borrower
conducted in such Borrowers' name.
5.15 Other Associations: None of the Borrowers is engaged in
any joint venture or partnership with any other Person or is a
party to any franchise agreement or other arrangement except as
listed on Exhibit 5.15 attached hereto and made part hereof.
5.16 Environmental Matters: None of the Borrowers has
knowledge, except as disclosed on Exhibit "5.16" attached hereto
and made part hereof:
(a) of the presence of any Hazardous Substances on any
of the real property on which the Collateral is located, or
(b) of any on-site spills, releases, discharges,
disposal or storage of Hazardous Substances that have occurred or
are presently occurring on any of such real property, or
(c) of any spills, releases, discharges or disposal of
Hazardous Substances that have occurred, are presently occurring
off such real properties or as a result of the activities of any of
the Borrowers, or
(d) of any notice, summons, citation or other
communication sent to any Borrower from any state or federal agency
concerning any intentional or unintentional action or conduct,
inaction or omission, past or present which is or may be in
violation of any state or federal environmental law, rule or
regulation.
As used herein, the term "Hazardous Substances" means any
substances defined or designated as hazardous or toxic waste,
hazardous or toxic material, hazardous or toxic substance or
similar term, by any environmental statute, rule or regulation of
any governmental entity presently in effect and applicable to such
real property.
5.17 Regulation O: No director, executive officer or
principal shareholder of any of the Borrowers is a director,
executive officer or principal shareholder of Lender. For the
purposes hereof the terms "director" (when used with reference to
Lender), "executive officer" and "principal shareholder" have the
respective meanings assigned thereto in Regulation O issued by the
Board of Governors of the Federal Reserve System.
5.18 Capital Stock: The authorized and outstanding capital
stock of each of the Borrowers is as set forth on Exhibit "5.18"
attached hereto and made part hereof. To the best of Borrowers'
knowledge, all of the capital stock of each of the Borrowers has
been duly and validly authorized and issued and is fully paid and
nonassessable and has been sold and delivered to the holders
thereof in compliance with, or under valid exemption from, all
Federal and state laws and the rules and regulations of all
regulatory bodies thereof governing the sale and delivery of
securities. Except as provided in Exhibit 5.18, there are no
subscriptions warrants, options, calls, commitments, rights or
agreements by which any of the Borrowers or any of the shareholders
of any of the Borrowers are bound relating to the issuance,
transfer, voting or redemption of shares of its capital stock or
any pre-emptive rights held by any Person with respect to the
pre-emptive rights held by any party with respect to the shares of
capital stock of any Borrower. Except as provided in Schedule
5.18, no Borrower has issued and currently has outstanding any
securities convertible into or exchangeable for shares of its
capital stock or any options, warrants or other rights to acquire
such shares or securities convertible into or exchangeable for such
shares.
5.19 Interrelationship of Borrowers: Borrowers have common
corporate purposes and interrelated business operations which
compliment each other. The creation and implementation of the
Revolving Credit will provide direct and indirect benefit, economic
and otherwise, to all Borrowers regardless of which particular
Borrower may receive from time to time advances from Lender under
the Revolving Credit.
5.20 Solvency: Each Borrower is able to pay its debts as they
become due, has sufficient capital to carry on its business
operations, and presently owns property having a fair salable value
which is greater than the amount required to pay all of such
Borrower's debts as they become due.
SECTION 6. BORROWERS' AFFIRMATIVE COVENANTS
Borrowers covenant that until all of Borrowers' Obligations to
Lender are paid and satisfied in full and the Revolving Credit has
been terminated:
6.1 Payment of Taxes and Claims: Borrowers shall pay, before
they become delinquent,
(a) all taxes, assessments and governmental charges or
levies imposed upon any of them or upon the Collateral, and
(b) all claims or demands of materialmen, mechanics,
carriers, warehousemen, landlords and other like Persons, which, if
unpaid, might result in the imposition of a Lien upon its Property;
Provided, however, that Borrowers shall not be required
to pay any such tax, assessment, charge, levy , claim or demand if
the amount, applicability or validity thereof shall at the time be
contested in good faith and by appropriate proceedings by
Borrowers, and if Borrowers shall have set aside on its books
adequate reserves in respect thereof, if so required in accordance
with GAAP; which deferment of payment is permissible so long as
Borrowers' title to, and its right to use, the Collateral are not
materially adversely affected thereby and Lender's lien and
priority on the Collateral are not materially and adversely
affected, altered or impaired thereby.
6.2 Maintenance of Properties, Collateral and Corporate
Existence:
(a) Property: Each of the Borrowers shall maintain its
Property in good condition in all material respects and make all
renewals, replacements, additions, betterments and improvements
thereto in the ordinary course of such Borrowers' business, as
Borrowers deem reasonably necessary in good faith in the exercise
of its business judgment, and will pay and discharge when due the
cost of repairs and maintenance to its Property.
(b) Insurance: Borrowers shall maintain insurance on all
insurable tangible Collateral against fire, flood, casualty and
such other hazards as may be reasonably acceptable to Lender in
such amounts, with such deductibles and with such insurers as may
be acceptable to Lender in its reasonable judgment. The policies
of all such casualty insurance shall contain standard Lender's Loss
Payable Clauses issued in favor of Lender under which all losses
thereunder shall be paid to Lender as Lender's interest may appear.
Such policies shall expressly provide that the requisite insurance
cannot be altered or canceled without thirty (30) days prior
written notice to Lender and shall insure Lender notwithstanding
the act or neglect of Borrowers. At or prior to Closing, Borrowers
shall furnish Lender with duplicate original policies of insurance
or such other evidence of insurance as Lender may reasonably
require. In the event Borrowers fail to procure or cause to be
procured any such insurance or to timely pay or cause to be paid
the premium(s) on any such insurance, Lender may do so for
Borrowers, but Borrowers shall continue to be liable for the same.
Each of the Borrowers hereby appoints Lender as such Borrowers'
attorney-in-fact, exercisable at Lender's option, upon the
occurrence and continuation of an Event of Default to endorse any
check which may be payable to Borrowers in order to collect the
proceeds of such insurance and any amount or amounts collected by
Lender pursuant to the provisions of this paragraph may be applied
by Lender to any liabilities owing by Borrowers to Lender or to
repair, reconstruct or replace the loss of or damage to Collateral
as Lender in its sole judgment may from time to time determine.
(c) Public and Products Liability Insurance: Borrowers
shall maintain, and shall deliver to Lender upon Lender's request
evidence of, general liability and professional liability
insurance in such amounts as is customary for companies in the same
or similar businesses located in the same or similar area.
(d) Financial Records: Borrowers shall keep current and
accurate books of records and accounts in which full and correct
entries will be made of all of its business transactions, and will
reflect in their consolidated financial statements adequate
accruals and appropriations to reserves, all in accordance with
GAAP. Borrowers shall backup its records of accounts daily, and
its entire computer system weekly, and shall store such weekly
information at a secure off-site facility acceptable to Lender.
(e) Corporate Existence and Rights: Borrowers shall do
(or cause to be done) all things necessary to preserve and keep in
full force and effect their existence, good standing, rights and
franchises, provided however, that any Borrower (other than Staff
Builders) or Subsidiary of any Borrower may merge into another
Borrower or dissolve and distribute its assets to another Borrower.
(f) Compliance with Law: No Borrower shall be in
violation of any laws, ordinances, governmental rules and
regulations to which it is subject, and will not fail to obtain any
licenses, permits, franchises or other governmental authorizations,
necessary to the ownership of its Property or to the conduct of its
businesses, which violation or failure to obtain would Materially
Adversely Affect the business, prospects, Property or financial
condition of Staff Builders or Borrowers collectively or the
ability of Staff Builders or Borrowers as a whole to perform under
this Agreement.
(g) Updated Qualified Payor Information: The
certificates of need, provider numbers and Qualified Payor
Contracts listed on Exhibit 5.12(c) shall not be amended, altered,
suspended, terminated, or made provisional, in any material way,
without prior written notice to Lender. Borrowers shall
immediately notify Lender in writing of any Borrower's application
for any new certificates of need, and any new provider numbers and
Qualified Payor Contracts.
(h) Collection of Accounts: Each of the Borrowers shall
continue to collect their Accounts in the ordinary course of their
business subject to the provisions hereof.
6.3 Places of Business: Each of the Borrowers shall give
thirty (30) days prior written notice to Lender of any change in
the location of any of their respective places of business (other
than a move of any office other than the corporate office to a
location within the same county), of the places where their records
concerning their Accounts are kept, of the places where the Col-
lateral is kept, or of the establishment of any new, or the
discontinuance of any, existing places of businesses.
6.4 Business Conducted: Each of the Borrowers shall continue
in the business presently operated by them using their best efforts
to maintain their customers and goodwill, provided however, that
any Borrower (other than Staff Builders) or a Subsidiary of any
Borrower may merge into another Borrower or dissolve and distribute
its assets to another Borrower. None of the Borrowers shall
engage, directly or indirectly, in any line of business substan-
tially different from the business conducted by it immediately
prior to the Closing Date, or engage in business or lines of
business which are not reasonably related thereto. No Subsidiary
which is not a Borrower shall conduct any business.
6.5 Litigation: Borrowers shall give prompt written notice
to Lender of any litigation pending, or to their knowledge
threatened or affecting Borrowers or any of them if the amount
claimed is more than $50,000.00 unless fully covered by insurance
less a deductible not to exceed $25,000.00.
6.6 Issue Taxes: Borrowers shall pay all taxes (other than
taxes based upon or measured by Lender's income or revenues or any
personal property tax), if any, in connection with the issuance of
the Revolving Credit Note, and the recording of any Lien documents.
The obligations of Borrowers under this Section 6.6 shall survive
the payment of Borrowers' indebtedness hereunder and the termi-
nation of this Agreement.
6.7 Bank Accounts: Each of the Borrowers shall maintain
their major depository and disbursement account(s) with Lender and
shall notify Lender, in writing, prior to opening any account(s)
subsequent to the Closing Date at any bank or financial institution
other than Lender.
6.8 Employee Benefit Plans: Each Borrower will (a) fund all
its Employee Benefit Plans in a manner that will satisfy the
minimum funding standards of Section 302 of ERISA, or will promptly
satisfy any accumulated funding deficiency that arises under
Section 302 of ERISA, (b) furnish Lender, promptly after the filing
of the same, with copies of all annual reports (Form 5500) or other
material statements filed with the United States Department of
Labor, the Pension Benefit Guaranty Corporation ("PBGC") or the
Internal Revenue Service ("IRS") with respect to all Employee
Benefit Plans that are defined benefit plans, or which any of the
Borrowers, or any material notices, any member of a Controlled
Group, may receive from the United States Department of Labor, the
IRS or the PBGC, with respect to all such Employee Benefit Plans,
and (c) promptly advise Lender of the occurrence of any Reportable
Event (as defined in Section 4043 of ERISA other than the type of
event with respect to which the PBGC has waived the 30-day notice
requirement of Section 4043 of ERISA) or non-exempt Prohibited
Transaction with respect to any such Employee Benefit Plan(s) and
the action which Borrowers proposes to take with respect thereto.
Borrowers will make all contributions when due with respect to any
multi-employer pension plan in which any of them participates and
will promptly advise Lender (i) upon its receipt of notice of the
assertion against any of the Borrowers of a claim for withdrawal
liability, (ii) upon the occurrence of any event which, to the best
of Borrowers' knowledge, would trigger the assertion of a claim for
withdrawal liability against Borrowers, and (iii) upon the
occurrence of any event which, to the best of Borrowers' knowledge,
would place Borrowers in a Controlled Group (other than those
Controlled Groups in which any of the Borrowers is a member as of
the Closing Date) as a result of which any member (including any of
the Borrowers) thereof may be subject to a claim for withdrawal
liability, whether liquidated or contingent which would result in
a Material Adverse Effect.
6.9 Submission of Collateral Documents: Borrowers will, on
demand of Lender, make available to Lender copies of proof of the
satisfactory performance of services that gave rise to an Account,
a copy of the invoice for each Account and copies of any written
contract or order from which an Account arose. Borrowers shall
promptly notify Lender if an Account becomes evidenced or secured
by an instrument or chattel paper and upon request of Lender, will
promptly deliver any such instrument or chattel paper to Lender.
6.10 Other Governmental Contracts: Borrowers will
immediately notify Lender if any Account arises out of contracts
with the United States or any department, agency or instrumentality
thereof other than the Health Care Finance Administration, and to
the extent permitted under applicable law will execute any
instruments and take any steps required by Lender so that all
monies due and to become due under such contract shall be assigned
to Lender and notice thereof given to and acknowledged by the
appropriate government agency or authority under the Federal
Assignment of Claims Act.
6.11 Warranties for Future Advances: Each request by any of
the Borrowers for an advance under the Revolving Credit in any form
following the Closing Date shall constitute an automatic
representation and warranty by Borrowers to the effect that:
(a) No Event of Default, or event or condition which
with the giving of notice or passage of time, or both, would
constitute an Event of Default, then exists;
(b) Each advance is within and complies with the terms
and conditions of this Agreement; and
(c) Each representation and warranty set forth in
Section 5 of this Agreement is then true and correct in all
material respects, as though made on the funding date for such
advance, except for changes otherwise permitted by this Agreement
or which are consented to by Lender in writing.
6.12 Financial Covenants: Borrowers shall maintain and comply
with the following financial covenants:
(a) Unfunded Capital Expenditures: Borrowers shall not
expend for Unfunded Capital Expenditures more than $1,227,132 for
the seven months ending September 30, 1996.
(b) Effective Net Worth: Borrowers shall have and
maintain Effective Net Worth of not less than $8,436,062 at
September 30, 1996.
(c) Ratio of Senior Debt to Effective Net Worth:
Borrowers shall have and maintain a ratio of Senior Debt to
Effective Net Worth of not more than 8.83 to 1.00 at September 30,
1996.
(d) Net Income: Borrowers shall have and maintain a
minimum Net Income of $2,143,479 for the seven months ending
September 30, 1996.
(e) Book Net Worth: Borrowers shall have and maintain a
Book Net Worth of not less than the following amounts with respect
to the corresponding period:
Amount Period
$58,000,000 At the date hereof through
February 27, 1998;
The greater of (i) the February 28, 1998 and as of the
actual Book Net Worth as last day of each fiscal year
of such date or (ii) the thereafter (each respective year
covenant amount of Book end covenant amount to be
Net Worth as of the last maintained through the next to
day of the immediately last day of the following fiscal
preceding fiscal year plus year.
$2,000,000.
The covenant amount of Book Net Worth shall be increased by the
amount of net proceeds of any sale of capital stock, options or
warrants at the time of such sale and shall be decreased by any
permitted repurchases of common stock at the time of such
repurchase.
(f) Senior Debt to Book Net Worth Ratio: Borrowers shall
have and maintain a ratio of Senior Debt to Book Net Worth of not
more than 2.00 to 1.00 at the date hereof and at all times
thereafter.
(g) Cash Flow Coverage Ratio: Borrowers shall have and
maintain a Cash Flow Coverage Ratio of not less than 1.05 to 1.00
for fiscal year ending February 28, 1997; 1.05 to 1.00 for fiscal
year ending February 28, 1998; 1.25 to 1.00 for fiscal year ending
February 28, 1999; 1.35 to 1.00 for fiscal year ending February 29,
2000.
6.13 Financial and Business Information: So long as
Borrowers are indebted to Lender and the Revolving Credit has not
been terminated, Borrowers shall deliver to Lender the following:
(a) Financial Statements and Collateral Reports - in
addition to such other data, reports, statements and information,
financial or otherwise, as are already prepared in the ordinary
course of Borrowers' business, as Lender may request, Borrowers
shall provide the following: (i) a borrowing base certificate in
a form acceptable to Lender on the first Business Day of each week,
or more frequently as Lender may request, which shall include, but
not be limited to, a report of sales, credits issued and
collections received; (ii) reports of sales, collections,
adjustments and all other information pertaining to Accounts, on
the first Business Day of each week (iii) monthly accounts
receivable and payable aging schedules within twenty (20) days of
the end of each calendar month, including reports of sales, credits
issued, collections received and the amount of credit insurance for
such accounts; (iv) internally prepared monthly financial state-
ments for Borrowers on a consolidated basis, certified by Staff
Builders' chief financial officer within forty-five (45) days of
the end of each calendar month; (v) annual projections, profit and
loss statements, balance sheets and cash flow reports on a
consolidated basis (presented on a monthly basis) for the
succeeding fiscal year within thirty (30) days before the end of
each of Borrowers' fiscal years; (vi) annual certified financial
statements for Borrowers from their independent certified public
accountants on a consolidated basis, acceptable to Lender within
ninety (90) days after the end of each of Borrowers' fiscal years;
and (vii) an annual management letter prepared by Borrowers'
independent certified public accountants and acceptable to Lender,
within ninety (90) days after the end of each of Borrowers' fiscal
years. Annual statements shall set forth in comparative form
figures for the corresponding periods in the prior fiscal year.
All financial statements shall include a consolidated balance sheet
and statement of consolidated operations and consolidated cash
flows and shall be prepared in accordance with GAAP;
(b) Medicare and Medicaid Audit - promptly upon receipt,
Borrowers' medicare and medicaid audit which shall be in substance
satisfactory to Lender in Lender's sole discretion;
(c) Notice of Event of Default - promptly upon becoming
aware of the existence of any condition or event which constitutes
an Event of Default under this Agreement, or which with the passage
of time or the giving of notice, or both, would become an Event of
Default hereunder, a written notice specifying the nature and
period of existence thereof and what action Borrowers is taking
(and proposes to take) with respect thereto;
(d) Notice of Claimed Default - promptly upon receipt by
Borrowers, a copy of any notice of default given to Borrowers by
any creditor for borrowed money of Borrowers other than Lender;
(e) Securities and Other Reports - promptly upon its
becoming available, one copy of each financial statement, report,
notice or proxy statement sent by Borrowers to stockholders, and,
a copy of each regular or periodic report, (including without
limitation all 10-K and 10-Q reports), registration statement, or
prospectus in respect thereof filed by Borrowers with any
securities exchange or with any federal or state securities and ex-
change commissions or any successor agency.
6.14 Officers' Certificates: Within forty-five (45) days of
the end of each month and along with the set of financial
statements delivered to Lender at the end of each fiscal year
pursuant to Section 6.13(a) hereof, Borrowers shall deliver to
Lender a certificate from Borrowers, executed on their behalf by
Staff Builders Chief Financial Officer in form and substance
reasonably satisfactory to Lender setting forth:
(a) Covenant Compliance - the information (including
detailed calculations) required in order to establish whether
Borrowers are in compliance with the requirements of Sections 6 and
7 as of the end of the period covered by the financial statements
then being furnished and any exhibits appended to such financial
statements under Section 6.13; and
(b) Event of Default - that the signer has reviewed the
relevant terms of this Agreement, and has made (or caused to be
made under his supervision) a review of the transactions and
conditions of Borrowers from the beginning of the accounting period
covered by the income statements being delivered therewith to the
date of the certificate, and that such review has not disclosed the
existence during such period of any condition or event which
constitutes an Event of Default or which is then, or with the
passage of time or giving of notice, or both, would become an Event
of Default hereunder, and if any such condition or event existed
during such period or now exists, specifying the nature and period
of existence thereof and what action Borrowers have taken or
proposes to take with respect thereto.
6.15 Inspection: So long as Borrowers are indebted to
Lender, each of the Borrowers will permit any of Lender's officers
or other representatives to visit and inspect any of the Collateral
of Borrowers, to examine and audit all of Borrowers' books of
account, records, reports and other papers, to make copies and
extracts therefrom and to discuss its affairs, finances and
accounts with its officers, employees and independent public
accountants. All costs incurred by Lender as a result of its
normal quarterly field examinations and inspections shall be
covered by the Collateral Management Fee. All costs exceeding the
usual costs incurred in connection with a normal quarterly field
examination of Borrowers as well as all costs relating to other
visits and inspections which are deemed necessary by Lender, in its
sole discretion, shall be paid for by Borrowers.
6.16 Tax Returns and Reports: At Lender's request from time
to time, Borrowers shall promptly furnish Lender with copies of the
annual federal and state income tax returns of Borrowers. Borrowers
further agree that if requested by Lender, it shall promptly
furnish Lender with copies of all reports filed with any federal,
state or local governmental authority or agency, board or
commission.
6.17 Information to Participant: Lender may divulge to any
participant or unless prohibited by applicable law, prospective
participant it may obtain in the Loans, or any portion thereof, all
information in its possession concerning Borrowers, their Property
and financial condition, and furnish to such participant copies of
reports, financial statements, projections, certificates, and
documents obtained under any provision of this Agreement, or
related agreements and documents.
6.18 Material Adverse Developments: Each of the Borrowers
agree that promptly upon becoming aware of any development or other
information outside the ordinary course of business (excluding
matters of a general economic, financial or political nature) which
would have a Material Adverse Effect, or of Lender's failure to
perform any of its obligations to Borrowers under this Agreement it
shall give to Lender telephonic or telegraphic notice specifying
the nature of such development or information and such anticipated
effect. In addition, such verbal communication shall be confirmed
by written notice thereof to Lender on the same day such verbal
communication is made.
SECTION 7. BORROWERS' NEGATIVE COVENANTS:
Borrowers covenant that until all of Borrowers' liabilities
and obligations to Lender are paid and satisfied in full and the
Revolving Credit has been terminated, that without Lender's prior
consent:
7.1 Merger, Consolidation, Dissolution or Liquidation:
(a) None of the Borrowers shall sell, lease, license,
transfer or otherwise dispose of its Property, other than (i)
inventory sold in the ordinary course of such Borrower's business,
(ii) obsolete equipment office furniture or vehicles, (iii) to
another Borrower, (iv) equipment or office furniture or vehicles
with a value of less than $5,000.00, and (v) the sublease of office
space, and the sale of a franchise consistent with Borrowers'
current business practices.
(b) None of the Borrowers shall merge or consolidate
with any other Person, or commence a dissolution or liquidation,
provided, however, that any Borrower (other than Staff Builders) or
Subsidiary of any Borrower may merge into another Borrower or
dissolve and distribute its assets to another Borrower.
(c) None of the Borrowers shall permit their names to be
changed without at least thirty (30) days prior written notice to
Lender.
7.2 Acquisitions: Neither Borrowers nor any Subsidiaries
shall acquire all or a material portion of the stock, securities or
assets of any Person in any transaction or in any series of related
transactions or enter into any sale or leaseback transaction
without prior written approval of Lender. Provided, however, if,
after giving effect to the potential acquisition, (i) No Event of
Default has occurred or would occur with the giving of notice, the
passage of time, or both, and (ii) Borrowers have a minimum excess
availability of $10,000,000 for a period of thirty (30) days prior
to and on the date of such acquisition, and (iii) there are no
outstanding Advances under the Acquisition Line, Borrowers may
acquire all or a material portion of the stock, securities or
assets of any Person in any transaction or in any series of related
transactions or enter into any sale or leaseback transaction for an
amount not to exceed Three Million Dollars ($3,000,000) in the
aggregate for all transactions during any fiscal year minus the
amount paid by Borrowers in connection with permitted redemptions
of common stock made during such fiscal year as provided in Section
7.6.
7.3 Liens and Encumbrances: None of the Borrowers or
Subsidiaries shall (i) cause or permit or (ii) agree or consent to
cause or permit in the future (upon the happening of a contingency
or otherwise), its Property (including, without limitation, the
Collateral), whether now owned or hereafter acquired, to be subject
to a Lien except:
(a) Liens securing taxes, assessments or governmental
charges or levies or the claims or demands of materialmen,
repairmen, mechanics, carriers, warehousemen, landlords, and other
like persons, provided the payment thereof is not at the time re-
quired by Section 6.1;
(b) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance, social security and other like laws and in
connection with leases or trade contracts;
(c) Existing liens described in Section 5.4 and on
Exhibit "5.4" hereto; and
(d) Other Liens expressly permitted by this Agreement.
(e) Liens being released or discharged contemporaneously
with the Closing.
(f) Purchase money security interests or capital leases
of equipment, office furniture, or vehicles.
(g) Any attachment or judgment lien for a period of
thirty (30) days.
7.4 Transactions With Affiliates or Subsidiaries:
(a) None of the Borrowers shall enter into any
transaction, including, without limitation, the purchase, sale, or
exchange of Property, or the loaning or giving of funds to or with
any Subsidiary or Affiliate (including without limitation another
Borrower) except in the ordinary course of and pursuant to the
reasonable requirements of such Borrower's business and to the
extent expressly approved pursuant to this Agreement except for
compensation to and the granting of stock options or issuance of
stock to employees not expressly prohibited by any other section of
this Agreement.
(b) None of the Borrowers shall create or acquire any
Subsidiary without Lender's prior written consent (except by merger
with an existing Subsidiary).
7.5 Guarantees: Excepting the endorsement in the ordinary
course of business of negotiable instruments for deposit or
collection, none of the Borrowers or Subsidiaries shall become or
be liable, directly or indirectly, primary or secondary, matured or
contingent, in any manner, whether as guarantor, surety,
accommodation maker, or otherwise, for the existing or future
indebtedness of any kind of any Person except existing guarantees.
7.6 Distributions, Redemptions and Other Indebtedness: None
of the Borrowers shall other than in connection with the Closing:
(a) Declare or pay or make any forms of Distribution to its
shareholders, their successors and assigns. Provided, however, if,
after giving effect to the potential Distribution, (i) No Event of
Default has occurred or would occur with the giving of notice, the
passage of time, or both, and (ii) Borrowers have a minimum excess
availability of $10,000,000 for a period of thirty (30) days prior
to and on the date of such Distribution and (iii) there are no
outstanding Advances under the Acquisition Line, Borrowers may make
annual redemptions of common stock not to exceed Three Million
Dollars ($3,000,000) in the aggregate for each fiscal year minus
the amount paid by Borrowers in connection with permitted
acquisitions made during such fiscal year as provided in Section
7.2;
(b) make any payments on any existing or future indebtedness
for borrowed money to any Person other than a Borrower (including
subordinated indebtedness) except for payments to the holders of
the indebtedness listed on Exhibit 7.6 in accordance with the
existing terms of such indebtedness; or
(c) hereafter borrow money from any Person other than Lender
or, if in the ordinary course, another Borrower.
7.7 Loans and Investments: None of the Borrowers shall make
or have outstanding loans, advances, or extensions of credit to, or
capital contributions or investments in, any Person other than
another Borrower in the ordinary course of such Borrower's
business, or ownership of an inactive Subsidiary, including without
limitation, any officers and directors of any Borrower.
7.8 Use of Lender's Name: Borrowers shall not use Lender's
name (or the name of any of Lender's affiliates) in connection with
any of their business operations, provided that Borrowers may
disclose to third parties that Borrowers have a deposit and
borrowing relationship with Lender. Nothing herein contained is
intended to permit or authorize Borrowers to make any contract on
behalf of Lender.
7.9 Change in Capital Stock: There shall occur no change in
the ownership of any of the capital stock of any of the Borrowers,
except with respect to the stock of Staff Builders or with respect
to any merger by any Borrower (other than Staff Builders) or a
Subsidiary of any Borrower into another Borrower or the dissolution
and distribution of the assets of any Borrower or Subsidiary of any
Borrower to a Borrower.
7.10 Miscellaneous Covenants:
(a) None of the Borrowers shall become or be a party to
any contract or agreement which would breach this Agreement, or
breach, any other instrument, agreement or document to which any of
the Borrowers are a party or by which they are or may be bound
which breach would have a Material Adverse Effect.
(b) None of the Borrowers shall carry or purchase any
"margin security" within the meaning of Regulations U, G, T or X of
the Board of Governors of the Federal Reserve System, 12 C.F.R.,
Chapter II.
SECTION 8. DEFAULT
8.1 Events of Default: Each of the following events shall
constitute an event of default ("Event of Default") and Lender
shall thereupon have the option to declare Borrowers in default
under this Agreement, and all other existing and future agreements
of any kind (related or unrelated) with Lender, and declare all
Obligations, of Borrowers to Lender, whether joint or several,
matured or contingent, related or unrelated, due or to become due,
(including, without limitation, liabilities on the Revolving
Credit) immediately due and payable including, but not limited to,
accrued and unpaid interest, outstanding principal, Expenses,
advances to protect Lender's position and all of Lender's rights
hereunder and thereunder, all without demand, notice, presentment
or protest or further action of any kind (it also being understood
that the occurrence of any of the Events of Default set forth in
subparagraphs (j), (k) or (l) shall automatically place Borrowers
in default and cause an acceleration of Borrowers' indebtedness to
Lender):
(a) Payments - if any of the Borrowers fails to make any
payment of principal or interest under the Loans when such payment
is due and payable, or if at any time the outstanding principal
balance of the Revolving Credit exceeds the Revolving Credit
Borrowing Base or the Maximum Revolving Credit Amount; or
(b) Other Charges - if any of the Borrowers fails to pay
any other charges, fees or other monetary obligations owing to
Lender arising out of or incurred in connection with this Agreement
when such payment is due and payable; or
(c) Particular Covenant Defaults - if any of the
Borrowers fails to perform or observe any covenant, condition or
undertaking contained in this Agreement and such failure with
respect to sections 6.2(a), (e) and (g) and 6.6 only, continues for
more than 30 days after an executive officer of Borrowers obtains
knowledge thereof; or
(d) Financial Information - if any statement, report,
financial statement, or certificate made or delivered by any of the
Borrowers or any of its officers, employees or agents, to Lender is
not true and correct, in all material respects when made; or
(e) Uninsured Loss - if there shall occur any uninsured
damage to or loss, theft, or destruction of a material portion of
the Collateral; or
(f) Warranties or Representations - if any warranty,
representation or other statement by or on behalf of any of the
Borrowers contained in this Agreement, or in any other Loan Docu-
ment, or in any other existing or future agreement between any of
the Borrowers and Lender, is false, erroneous, or misleading in any
material respect when made; or
(g) Agreements with Others - if any of the Borrowers
shall default beyond any grace period under any agreement with any
other creditor for borrowed money (including the subordinated
indebtedness) of any of the Borrowers, if as a result of such
default the holder of such Borrowers' obligations declares or is
permitted to declare any such obligation of such Borrower to become
due prior to its maturity date or prior to its regularly scheduled
date of payment; or
(h) Other Agreements with Lender - if any of the
Borrowers breaches or violates any material term of, or if a
default or an Event of Default, occurs under, any other existing or
future agreement (related or unrelated) between any of the
Borrowers and Lender (subject to any applicable grace or cure
period which may be contained in any such other agreement); or
(i) Judgments - if any final judgment or judgments (in
the aggregate) for the payment of money in excess of $50,000.00
shall be rendered by any court of record against any of the
Borrowers unless satisfied or discharged within 30 days thereof; or
(j) Assignment for Benefit of Creditors, etc. - if any of
the Borrowers makes an assignment for the benefit of creditors
generally, offers a composition or extension to creditors, or makes
or sends notice of an intended bulk sale of any business or assets
now or hereafter conducted by any of the Borrowers; or
(k) Bankruptcy, Dissolution, etc. - upon the
commencement of any action for the dissolution or liquidation of
any of the Borrowers, except as expressly permitted by this
Agreement, or the commencement of any proceeding to avoid any
transaction entered into by any of the Borrowers, or the
commencement of any case or proceeding for reorganization or
liquidation of any of the Borrowers' debts under the Bankruptcy
Code or any other state or federal law, now or hereafter enacted
for the relief of debtors, whether instituted by or against any of
the Borrowers except with respect to an involuntary petition which
is dismissed within 60 days; or
(l) Receiver - upon the application for the appointment
of a receiver, liquidator, custodian, trustee or similar official
or fiduciary for any of the Borrowers or for any of the Borrowers'
Property; or
(m) Execution Process, etc. - the issuance of any
execution or distraint process against any of the Borrowers, or any
of their Property; or
(n) Tax Liens - if a notice of a Lien, levy or
assessment is filed of record with respect to any or all of any
Borrower's assets by the United States government, or any
department, agency or instrumentality thereof, or by any state,
county, municipal or other government agency, or if any taxes or
debts owing at any time hereafter to any one or more of such
entities becomes a Lien, whether xxxxxx or otherwise, upon any or
all of any Borrower's assets except with respect to liens for
state, county and municipal taxes only, which do not exceed
$5,000.00 in the aggregate with all other such liens; or
(o) Termination of Business - if any Borrower is
enjoined, restrained or in any way prevented by court order or
administrative proceeding from continuing to conduct, or any
Borrower otherwise ceases to conduct, all or a material part of its
business affairs except as permitted hereunder the results of which
would have a Material Adverse Effect; or
(p) Pension Benefits, etc. - if any of the Borrowers
fails to comply with ERISA, with the result that grounds exist for
the PBGC to commence proceedings to appoint a trustee under ERISA
to administer Borrowers' employee benefit plans or to allow the
Pension Benefit Guaranty Corporation to institute proceedings to
appoint a trustee to administer such plan(s), or to permit the
entry of a Lien to secure any deficiency or claim; or
(q) Support Agreements - if any Support Agreement shall
for any reason cease to be in full force and effect and if the
reason is due to the death, disability or termination of employment
of one of the parties to such Support Agreement after 90 days has
elapsed and Lender has sent Borrower notice of such event, or a
default shall otherwise occur under such Support Agreement; or
(r) Sale of Stock - if the stock of any of the Borrowers
other than Staff Builders is sold or otherwise transferred other
than in connection with a permitted merger; or
(s) Investigations - any indication or evidence received
by Lender that any of the Borrowers may have directly or indirectly
been engaged in any type of activity which, in Lender's discretion
might result in the forfeiture of any material Property to any
governmental entity, federal, state or local; or
(t) Change in Management - if Xxxxxxx Xxxxxxxx, Xxxxx
Xxxxxxxx or Xxxx Xxxxx shall cease to have an active role in the
management of Borrowers or such individuals collectively shall
cease to exercise management control over Borrowers after 90 days
has elapsed and Lender has sent Borrower notice of such event.
8.2 Rights and Remedies on Default:
(a) In addition to all other rights, options and
remedies granted to Lender under this Agreement, Lender may, upon
or at any time after the occurrence of an Event of Default,
terminate the Revolving Credit, cease making advances or extensions
of credit thereunder, and exercise all other rights granted to it
hereunder and all rights under the UCC and any other applicable law
or in equity, and under all Loan Documents permitted to be
exercised after the occurrence of an Event of Default, including
the following rights and remedies (which list is given by way of
example and is not intended to be an exhaustive list of all such
rights and remedies):
(i) The right to take possession of, send notices
regarding and collect directly, the Collateral, with or without
judicial process (including without limitation the right to notify
the United States postal authorities to redirect mail addressed to
any Borrower to an address designated by Lender);
(ii) By its own means or with judicial assistance,
enter any of the Borrowers' premises and take possession of the
Collateral, or render it unusable, or dispose of the Collateral on
such premises in compliance with subsection (b), below, without any
liability for rent, storage, utilities or other sums, and Borrowers
shall not resist or interfere with such action;
(iii) Require any of the Borrowers at Borrowers'
expense to assemble all or any part of the Collateral (other than
real estate or fixtures) and make it available to Lender at any
place designated by Lender;
(iv) The right to reduce the Maximum Revolving
Credit Amount, Revolving Credit Borrowing Base or any portion
thereof or the advance rates or to modify the terms and conditions
upon which Lender is willing to consider making advances under the
Revolving Credit or to take additional reserves in the Revolving
Credit Borrowing Base for any reason; and
(v) Require Borrowers to deliver cash collateral to
Lender in an amount equal to the undrawn amount of all outstanding
Letters of Credit issued by Lender hereunder.
(b) Each of the Borrowers acknowledge that any
Borrower's failure to cause all collections of Accounts to be paid
directly to a lockbox and/or deposited into a cash collateral
account as specified herein in Section 2.4, will result in the
dissipation of Lender's Collateral and other irreparable harm to
Lender for which money damages could not adequately compensate
Lender. In the event of such a breach, Lender shall be entitled,
in addition to all other rights and remedies which Lender may have
at law or equity, to have an injunction issued by any court of
Lender's choosing, enjoining and restraining Borrowers and any
agents and employees thereof, from continuing such breach.
(c) Each of the Borrowers hereby agrees that a notice
received by it at least seven (7) days before the time of any
intended public sale or of the time after which any private sale or
other disposition of the Collateral is to be made after the
occurrence of an Event of Default hereunder, shall be deemed to be
reasonable notice of such sale or other disposition. If permitted
by applicable law, any perishable inventory or Collateral which
threatens to speedily decline in value or which is sold on a
recognized market may be sold immediately by Lender without prior
notice to Borrowers after the occurrence of an Event of Default
hereunder. Borrowers covenant and agree not to interfere with or
impose any obstacle to Lender's exercise of its rights and remedies
with respect to the Collateral, after the occurrence of an Event of
Default hereunder.
8.3 Nature of Remedies: After the occurrence of an Event of
Default Lender shall have the right to proceed against all or any
portion of the Collateral in any order and may apply such
Collateral to the liabilities and obligations of Borrowers to
Lender in any order. All rights and remedies granted Lender
hereunder and under any agreement referred to herein, or otherwise
available at law or in equity, shall be deemed concurrent and
cumulative, and not alternative remedies, and Lender may proceed
with any number of remedies at the same time until the Loans, and
all other existing and future liabilities and obligations of
Borrowers to Lender, are satisfied in full. The exercise of any
one right or remedy shall not be deemed a waiver or release of any
other right or remedy, and Lender, upon the occurrence of an Event
of Default, may proceed against Borrowers, and/or the Collateral,
at any time, under any agreement, with any available remedy and in
any order. Notwithstanding the foregoing, Lender may, at any time
in its sole discretion, relinquish or abandon any Collateral,
interest therein, or portion thereof, for any reason whatsoever.
8.4 Set-Off: If any bank account of any of the Borrowers
with Lender or with any participant is attached or otherwise liened
or levied upon by any third party, Lender (and any participant)
need not await the running of any applicable grace period
hereunder, but Lender (and such participant as agent for Lender)
shall have and be deemed to have the immediate right of set-off and
may apply the funds or amount thus set-off against any of the
Borrowers' liabilities hereunder.
8.5 CONFESSION OF JUDGMENT: EACH OF THE BORROWERS, TO THE
EXTENT PERMITTED BY LAW, EMPOWERS ANY ATTORNEY OF ANY COURT OF
RECORD IN THE UNITED STATES OR ELSEWHERE TO, AFTER THE OCCURRENCE
AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT HEREUNDER, APPEAR
IN ANY AND ALL ACTIONS WHICH MAY BE BROUGHT TO ENFORCE ANY AND ALL
OBLIGATIONS HEREUNDER AND CONFESS JUDGMENT AGAINST ALL OR ANY ONE
OR MORE OF THEM FOR ALL OR ANY PART OF ITS OR THEIR OBLIGATIONS,
INCLUDING, WITHOUT LIMITATION, ALL PRINCIPAL, INTEREST, COSTS,
EXPENSES AND REASONABLE COUNSEL FEES OF TEN (10%) PERCENT OF ALL
AMOUNTS THEN OWED. SUCH AUTHORITY SHALL NOT BE EXHAUSTED BY ONE
EXERCISE HEREOF BUT JUDGMENT MAY BE CONFESSED AS AFORESAID FROM
TIME TO TIME AS ANY SUM AND/OR COSTS, EXPENSES AND REASONABLE
COUNSEL FEES SHALL BE DUE. EACH OF THE BORROWERS WAIVES ALL RELIEF
FROM ALL APPRAISEMENT OR EXEMPTION LAWS NOW IN FORCE OR HEREAFTER
ENACTED.
SECTION 9. MISCELLANEOUS
9.1 Governing Law: This Agreement, and all related
agreements and documents shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania,
without regard to its otherwise applicable principles of conflicts
of laws. The provisions of this Agreement and other agreements and
documents referred to herein are to be deemed severable, and the
invalidity or unenforceability of any provision shall not affect or
impair the remaining provisions which shall continue in full force
and effect.
9.2 Integrated Agreement: The Revolving Credit Note, this
Agreement, and all other Loan Documents shall be construed as
integrated and complementary of each other, and as augmenting and
not restricting Lender's rights, remedies and security. If, after
applying the foregoing, an inconsistency still exists, the
provisions of this Agreement shall constitute an amendment thereto
and shall control.
9.3 Waiver:
(a) No omission or delay by Lender in exercising any
right or power under this Agreement or any other Loan Document will
impair such right or power or be construed to be a waiver of any
default, or Event of Default or an acquiescence therein, and any
single or partial exercise of any such right or power will not
preclude other or further exercise thereof or the exercise of any
other right, and no waiver of Lender's rights hereunder will be
valid unless in writing and signed by Lender, and then only to the
extent specified.
(b) Borrowers release Lender, its officers, employees
and agents, of and from any claims for loss or damage resulting
from acts or conduct of any or all of them arising through the date
hereof, unless caused by wilful misconduct or gross negligence.
9.4 Time:
(a) Whenever Borrowers shall be required to make any
payment, or perform any act on a Saturday, Sunday or a legal
holiday under the Laws of the Commonwealth of Pennsylvania or such
other jurisdiction where Borrowers may be required to make any
payment or perform any act, such payment may be made, or such act
may be performed, on the next succeeding Business Day.
(b) Time is of the essence in Borrowers' performance
under all provisions of this Agreement and all other Loan
Documents.
9.5 Expenses of Lender:
(a) At Closing and from time to time thereafter,
Borrowers will pay, on demand, all accrued and unpaid expenses
(including the fees and expenses of legal counsel for Lender)
relating to this Agreement, and all related agreements and
documents, including, without limitation, expenses incurred in the
analysis, negotiation, preparation, closing, administration, audit
and enforcement of this Agreement, and all related agreements and
documents, the enforcement, protection and defense of the rights of
Lender in connection with the Revolving Credit, the Collateral or
otherwise hereunder, including the right to take possession of any
Collateral and the proceeds thereof and to hold, collect, prepare
for sale, sell and dispose of any Collateral, and any reasonable
expenses relating to extensions, amendments, waivers or consents
pursuant to the provisions hereof, or any related agreements and
documents or relating to agreements with other creditors, or
termination of this Agreement (collectively, the "Expenses").
(b) Expenses shall also include but not be limited to
(i) cost of reproducing this Agreement and related agreements and
documents; (ii) filing and recording fees; and (iii) searches.
9.6 Brokerage: Except as otherwise provided herein, this
transaction was brought about and entered into by Lender and
Borrowers acting as principals and without any brokers, agents or
finders being the effective procuring cause hereof, except Ha-Lo
Investment Associates, Inc. has asserted that it is acting as a
broker on behalf of Staff Builders and is entitled to receive a fee
from Staff Builders, which fee, if any, will be paid by Borrowers.
Borrowers represent that they have not committed Lender to the
payment of any brokerage fee, commission or charge in connection
with this transaction. If any such claim is made on Lender by any
broker, finder or agent or other person, Borrowers will indemnify,
defend and save Lender harmless against such claim and further will
defend any action or actions to recover on such claim, at
Borrowers' own cost and expense, including Lender's counsel fees.
Borrowers further agree that until any such claim or demand is
adjudicated in Lender's favor, the amount demanded shall be deemed
a liability of Borrowers under this Agreement, secured by the
Collateral.
9.7 Notices:
(a) Any notices or consents required or permitted by
this Agreement shall be in writing and shall be deemed given if
delivered in person, sent by telegram (with messenger service
specified) or sent by nationally recognized overnight courier
service, or sent by certified or registered mail postage prepaid,
return receipt requested, as follows, unless such address is
changed by written notice hereunder:
If to Lender to: Mellon Bank, X.X.
Xxxxxx Bank Center
Asset Based Lending Dept.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxxxx,
Assistant Vice President
With copies to: Blank, Rome, Xxxxxxx & XxXxxxxx
0000 Xxxx Xxxx Xxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxx, XX, Esquire
If to Borrowers: Xxxxxxx Xxxxxxxx
Chairman and Chief Executive Officer
Staff Builders, Inc.
0000 Xxxxxx Xxxxxx
Xxxx Xxxxxxx, XX 00000
With copies to: Xxxxx X. Xxxxxxx, Esquire
Xxxxxxxx & O'Neil
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
(b) All notices sent by Lender or Borrowers shall be
deemed to be given when so received.
(c) All notices and deliveries received by Lender from
Staff Builders shall be deemed to have been received from all
Borrowers and all notices received by Staff Builders shall be
deemed to have been received by all Borrowers.
9.8 Headings: The headings of any paragraph or Section of
this Agreement are for convenience only and shall not be used to
interpret any provision of this Agreement.
9.9 Survival: All warranties, representations, and covenants
made by Borrowers herein, or in any other Loan Document or on any
certificate, document or other instrument delivered by it or on its
behalf under this Agreement, shall be considered to have been
relied upon by Lender, and shall survive the delivery to Lender of
the Revolving Credit Note, regardless of any investigation made by
Lender or on its behalf. All statements made by Borrower in any
Loan Document such certificate or other instrument prepared and/or
delivered for the benefit of Lender shall constitute warranties and
representations by Borrowers hereunder. Except as otherwise
expressly provided herein, all covenants made by Borrowers
hereunder or under any other agreement or instrument shall be
deemed continuing until all liabilities and obligations of
Borrowers to Lender are satisfied in full.
9.10 Successors and Assigns: This Agreement shall inure to
the benefit of and be binding upon the successors and permitted
assigns of each of the parties. Lender may participate any or all
of its rights or obligations hereunder with notice to, but without
consent of Borrowers to any commercial lender, financial
institution, or other entity not engaged in the same business as
Borrowers. Except as expressly provided herein, Borrowers may not
transfer, assign or delegate any of its duties or obligations
hereunder. Lender may assign the Revolving Note, this Agreement
and other Loan Documents to another financial institution as Lender
in its discretion may determine.
9.11 Duplicate Originals: Two or more duplicate originals of
this Agreement may be signed by the parties, each of which shall be
an original but all of which together shall constitute one and the
same instrument.
9.12 Modification: No modification hereof or any agreement
referred to herein shall be binding or enforceable unless in
writing and signed on behalf of the party against whom enforcement
is sought.
9.13 Signatories: Each individual signatory hereto represents
and warrants that he is duly authorized to execute this Agreement
on behalf of his principal and that he executes the Agreement in
such capacity and not as a party.
9.14 Third Parties: No rights are intended to be created
hereunder, or under any related agreements or documents for the
benefit of any third party donee, creditor or incidental bene-
ficiary of Borrowers. Nothing contained in this Agreement shall be
construed as a delegation to Lender of Borrowers' duty of
performance, including, without limitation Borrowers' duties under
any account or contract in which Lender has a security interest.
9.15 Discharge of Taxes, Borrowers's Obligations, Etc.:
Lender, in its discretion, shall have the right at any time, and
from time to time, if Borrowers fail to do so, after reasonable
notice, to (a) obtain insurance covering any of the Collateral as
required hereunder (b) pay for the performance of any of Borrowers'
obligations hereunder, (c) discharge taxes, liens, security
interests or other encumbrances at any time levied or placed on any
of the Collateral in violation of this Agreement unless Borrowers
are in good faith with due diligence by appropriate proceedings
contesting such taxes, liens, etc., and (d) pay for the maintenance
and preservation of any of the Collateral. Expenses and advances
by Lender under this paragraph shall be deemed advances under the
Revolving Credit, bear interest at the same rate applied to the
Revolving Credit, until reimbursed to Lender and shall be secured
by the Collateral. Such payments and advances made by Lender shall
not be construed as a waiver by Lender of an Event of Default under
this Agreement.
9.16 Withholding and Other Tax Liabilities: Lender shall have
the right to refuse to make any advances from time to time unless
Borrowers shall, at Lender's request, have given to Lender
evidence, reasonably satisfactory to Lender, that Borrowers have
properly deposited or paid, as required by applicable law, all
withholding taxes and all federal, state, city, county or other
taxes due up to and including the date of the loan. Until all of
Borrowers' liabilities and obligations to Lender have been paid in
full, Lender shall be entitled to continue to hold any and all of
the Collateral until Borrowers have given to Lender evidence,
reasonably satisfactory to Lender, that Borrowers have properly de-
posited or paid, as required by law, all federal withholding taxes
due up to and including the date of such expiration or termination.
Copies of deposit slips showing payment shall likewise constitute
satisfactory evidence for such purpose. In the event that any
lien, assessment or tax liability against Borrowers shall arise in
favor of any taxing authority, whether or not notice thereof shall
be filed or recorded as may be required by law, Lender shall have
the right (but shall not be obligated, nor shall Lender hereby
assume the duty) upon reasonable prior notice to Borrowers to pay
any such lien, assessment or tax liability by virtue of which such
charge shall have arisen; provided, however, that Lender shall not
pay any such tax, assessment or lien if the amount, applicability
or validity thereof is being contested in good faith and by
appropriate proceedings by Borrowers and further provided that by
Borrowers' title to and its right to use, the Collateral are not
materially adversely affected and Lender's lien and priority in the
Collateral are not adversely affected, altered or impaired thereby.
In order to pay any such lien, assessment or tax liability, Lender
shall not be obliged to wait until said lien, assessment or tax
liability is filed before taking such action as hereinabove set
forth. Any sum or sums which Lender shall have paid for the
discharge of any such lien shall be added to the Revolving Credit
and shall be paid by Borrowers to Lender with interest thereon,
upon demand, and Lender shall be subrogated to all rights of such
taxing authority against Borrowers.
9.17 Consent to Jurisdiction: Each of the Borrowers
irrevocably consents to the jurisdiction of the Courts of Common
Pleas of Philadelphia, Commonwealth of Pennsylvania or the United
States District Court for the Eastern District of Pennsylvania in
any and all actions and proceedings whether arising hereunder or
under any other agreement or undertaking and irrevocably agrees to
service of process as set forth in Section 9.7 hereof, to the
address of Borrowers set forth herein.
9.18 WAIVER OF JURY TRIAL: EACH OF THE BORROWERS HEREBY
WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A JURY TRIAL IN CONNECTION
WITH ANY LITIGATION COMMENCED BY OR AGAINST LENDER WITH RESPECT TO
RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO.
9.19 Future Commitments: Except as expressly set forth in
this Agreement, Lender has made no agreement or commitment to lend
money or extend credit to Borrowers, or any of them, and has made
no agreement or commitment to Borrowers, or any of them, to modify
or consider any modification of any nature whatsoever of the terms
of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Amended
and Restated Loan and Security Agreement the day and year first
written above.
LENDER:
MELLON BANK, N.A.
By: /s/ Xxxxxxx Xxxxxxxxxx, Assistant Vice President_
BORROWERS:
STAFF BUILDERS, INC. (DE) THE BERGALL CORPORATION (MA)
By: /s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
Attest: /s/ Xxxxx Silver Attest: /s/ Xxxxx Silver
CARECO, INC. (MA) T.L.C. MEDICARE SERVICES, INC.
(DE)
By: /s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
Attest: /s/ Xxxxx Silver Attest: /s/ Xxxxx Silver
T.L.C. MIDWEST INC. (DE) TENDER LOVING CARE HEALTH CARE
SERVICES, INC. (CT)
By: /s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
Attest: /s/ Xxxxx Silver Attest: /s/ Xxxxx Silver
LOVING HOME CARE, INC. (NY) HOME HEALTH CARE, INC. (MD)
By: /s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
Attest: /s/ Xxxxx Silver Attest: /s/ Xxxxx Silver
PERSONNEL INDUSTRIES, INC. (MD) T.L.C. HOME HEALTH CARE, INC.
(FL)
By: /s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
Attest: /s/ Xxxxx Silver Attest: /s/ Xxxxx Silver
T.L.C. MEDICARE SERVICES OF T.L.C. MEDICARE SERVICES OF
DADE, INC. (FL) BROWARD, INC. (FL)
By: /s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
Attest: /s/ Xxxxx Silver Attest: /s/ Xxxxx Silver
TENDER LOVING CARE PRIVATE TENDER LOVING CARE HOME CARE
PATIENT COMPANY, INC. (FL) SERVICES, INC. (NY)
By: /s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
Attest: /s/ Xxxxx Silver Attest: /s/ Xxxxx Silver
U.S. ETHICARE ALBANY CORPORATION U.S. ETHICARE CHAUTAUQUA
(NY) CORPORATION (NY)
By: /s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
Attest: /s/ Xxxxx Silver Attest: /s/ Xxxxx Silver
U.S. ETHICARE ERIE CORPORATION U.S. ETHICARE NIAGARA
(NY) CORPORATION (NY)
By: /s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
Attest: /s/ Xxxxx Silver Attest: /s/ Xxxxx Silver
U.S. ETHICARE ONONDAGA ETHICARE CERTIFIED SERVICES,
CORPORATION (NY) INC. (NY)
By: /s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
Attest: /s/ Xxxxx Silver Attest: /s/ Xxxxx Silver
STAFF BUILDERS BUFFALO, INC. (NY) STAFF BUILDERS, INC. (NY)
By: /s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
Attest: /s/ Xxxxx Silver Attest: /s/ Xxxxx Silver
S.B.H.F. INC. (NY) STAFF BUILDERS SERVICES, INC.
(NY)
By: /s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
Attest: /s/ Xxxxx Silver Attest: /s/ Xxxxx Silver
STAFF BUILDERS HOME HEALTH U.S. ETHICARE CORPORATION (DE)
CARE, INC. (DE)
By: /s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
Attest: /s/ Xxxxx Silver Attest: /s/ Xxxxx Silver
STAFF BUILDERS INTERNATIONAL, STAFF BUILDERS PERSONNEL
INC. (NY) SERVICES, INC.(NY)
By: /s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
Attest: /s/ Xxxxx Silver Attest: /s/ Xxxxx Silver
PROFESSIONAL DETAIL SERVICE, A RELIABLE HOMEMAKER OF
INC. (NY) XXXXXX-ST. LUCIE COUNTY,
INC. (FL)
By: /s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
Attest: /s/ Xxxxx Silver Attest: /s/ Xxxxx Silver
ST. LUCIE HOME HEALTH AMERICAN HOMECARE MANAGEMENT
AGENCY, INC. (FL) CORP. (DE)
By: /s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
Attest: /s/ Xxxxx Silver Attest: /s/ Xxxxx Silver
XXXXXX XXXXXXXX SERVICES CORP. ATC HEALTHCARE SERVICES INC.
(PA) (GA)
By: /s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
Attest: /s/ Xxxxx Silver Attest: /s/ Xxxxx Silver
XXXXXX XXXXXXXX HOME CARE, INC. ATC STAFFING SERVICES, INC.
(DE) (GA)
By: /s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
Attest: /s/ Xxxxx Silver Attest: /s/ Xxxxx Silver
ADULTCARE, INC. (FL.) ATC NURSING SERVICES OF TEXAS,
INC. (TX)
By: /s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
Attest: /s/ Xxxxx Silver Attest: /s/ Xxxxx Silver
S.B. ASSURED HOME CARE, INC. STAFF BUILDERS PRESCRIPTION
(DE) SERVICES, INC. (FL)
By: /s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
Attest: /s/ Xxxxx Silver Attest: /s/ Xxxxx Silver
MEDVISIT, INC. (NC)
By: /s/ Xxxx Xxxxx
Attest: /s/ Xxxxx Silver
