EXHIBIT
10.2
AMENDMENT AND FOREBEARANCE AGREEMENT
This Agreement and Forebearance Agreement ("Agreement"), dated
as of June 25, 1999, is entered into by and among Staff Builders,
Inc., a Delaware corporation ("Staff Builders") and certain of the
direct and indirect subsidiaries of Staff builders listed on the
signature pages attached hereto (all of the foregoing each
individually, an HC "Borrower" and collectively, the "HC
borrowers"), and Mellon Bank, N.A. ("Lender").
BACKGROUND
A. The HC Borrowers and the ATC Group, as hereinafter
defined (collectively, for the purposes hereof, the "Borrowers")
and Lender entered into a certain Amended and Restated Loan and
Security Agreement, dated January 8, 1997, ("Existing Loan
Agreement") and related instruments, agreements, and documents
with Lender to reflect certain financing arrangements between the
parties. All capitalized terms used but not defined herein shall
have the meaning given to such terms in the Existing Loan
Agreement. The Existing Loan Agreement as amended, and all
other instruments, documents, and agreements related thereto or
executed in connection therewith, are sometimes referred to
herein collectively as the "Existing Loan Documents".
B. Borrowers and Lender entered into a certain First
Amendment to Amended and Restated Loan Security Agreement, dated
April 27, 1998, pursuant to which certain terms and provisions of
the Existing Loan Agreement were modified and certain subsidiaries
of Staff builders joined in the loan facilities as Co-Borrowers.
C. Borrowers and Lender entered into a certain Second
Amendment to Amended and Restated Loan and Security Agreement dated
June 30, 1998, pursuant to which certain terms and provisions of
the Existing Loan Agreement were modified and certain subsidiaries
of Staff Builders joined in the loan facilities as Co-Borrowers.
D. Lender advised Borrowers by letter, dated January 14,
1999, that certain Events of Default had occurred and continued
under the Existing Loan Agreement.
E. Pursuant to a letter from Lender to Borrowers dated March
26, 1999, ("March 26th Letter" certain terms and conditions
applicable to the making of advances under the Existing Loan
Agreement were modified.
One or more Events of Default continue to exist.
G. Notwithstanding such Events of Default, Borrowers have
requested that Lender agree, in consideration of the undertakings
and obligations of Borrowers set forth herein, to make certain
accommodations and to temporarily forbear from the exercise of
Lender's rights and remedies under the Existing Loan Documents.
Borrowers have (i) notified Lender that a plan has
been approved by the Board of Directors of Staff Builders to
separate its home healthcare business from its supplemental
staffing business and to create two separate, publicly traded
companies, one engaged exclusively in providing home healthcare
services and the other engaged exclusively in providing
supplemental staffing services (the "Spin-Off"), and (ii) have
requested that Lender temporarily forbear from exercising any
rights with respect to certain existing Events of Default to enable
Borrowers to implement such a plan.
H. Subject to the terms of this Agreement, and without waiving
any of Lender's rights and remedies (including without limitation
any consents of Lender to the Spin-Off required under the Existing
Loan Agreement), Lender and the ATC Group have entered into a
certain ATC Revolving Credit Loan and Security Agreement dated June
_, 1999 and related agreements and documents (collectively, the
"ATC Loan Documents") to reflect separated financing arrangements
from Lender for the ATC Group and Lender has agreed to make certain
other accommodations to the Borrowers.
NOW THEREFORE, with the foregoing Background deemed
incorporated by reference and for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, covenant and agree
as follows:
Acknowledgments and Confirmations:
a. Acknowledgment of Existing Defaults - Borrowers
represent and warrant that as of the date of this Agreement, the
Events of Default listed on Exhibit "A" attached hereto and made
part hereof ("Existing Defaults") have occurred under the Existing
Loan Documents and that no other Event(s) of Default, or event(s)
which, with the passage of time or giving of notice or both, would
constitute an Event of Default, are outstanding under the Existing
Loan Documents or this Agreement.
b. Confirmation of Indebtedness - Borrowers confirm and
acknowledge that as of the close of business on June 23, 1999, the
outstanding principal amount representing working capital advances
to the Home Healthcare Division Borrowing Group (as defined in the
March 261 Letter) is $17,563,280.50, and the outstanding principal
amount representing working capital advances to the ATC Borrowing
Group (as defined in the March 26th letter) is $13,524,657.38, all
of which amounts are owing without defense, setoff, claim,
counterclaim or deduction of any nature. Borrowers further confirm
and acknowledge that the principal sum of $8,416,666.72 is
outstanding on the Acquisition Line, which also is owing without
defense, setoff, claim, counterclaim or deduction of any nature.
c. Confirmation of Collateral - Borrowers hereby confirm
and agree that all security interests and liens granted to Lender
continue unimpaired and in full force and effect and shall continue
to cover and secure the Obligations of Borrowers to Lender under
the Existing Loan Documents and the ATC Loan Documents. All
ollateral remains free and clear of all liens other than those in
favor of Lender. Nothing contained herein is intended to in any way
impair or limit the validity, priority or extent of Lender's
security interest in and liens upon the Collateral. Without
limiting the foregoing, the HC Borrowers acknowledge and agree that
their existing and future intercompany obligations to the ATC Group
have been and are collaterally assigned to Lender and that Lender's
liens on the Collateral of the HC Borrowers secure and shall secure
such assigned claims.
2. Forbearance:
▇. ▇▇▇▇▇ of Forbearance - Subject to the terms and
conditions, and satisfaction of the Effectiveness Conditions (as
defined below) of this Agreement, through the Termination Date (as
defined below), Lender shall forbear from taking any action or
exercising any rights or remedies under the Existing Loan Documents
and ATC Loan Documents against any Borrower, any Borrower's
property, or the Collateral, because of the Existing Defaults. On
the Termination Date, notwithstanding any provision in the Existing
Loan Documents or the ATC Loan Documents, all forbearance with
respect to the Existing Defaults shall cease and, thereupon, Lender
may, in its discretion, and apart from its rights as a result of
any new Event of Default, accelerate all Obligations under the
Existing Loan Documents and/or the ATC Loan Documents and/or
exercise at any time any and all available rights and remedies
against Borrowers, Borrowers' property, Guarantors, and the
Collateral. The Termination Date shall be the date that is the
earlier to occur of. @ the occurrence of an Event of Default under
the Existing Loan Documents and/or the ATC Loan Documents, other
than the Existing Defaults, (including without limitation the
occurrence of any breach or default of any covenant or obligation
under this Agreement) or (ii) July 9, 1999.
b. Preservation of Rights - By agreeing to forbear from
the exercise of its rights and remedies until the Termination Date,
Lender does not waive any of the Existing Defaults. All Existing
Defaults are expressly preserved, subject to the terms of this
Agreement. The granting of the forbearance hereunder shall not be
deemed a waiver of Lender's rights and remedies or constitute a
course of conduct or dealing on behalf of Lender. Subject only to
the forbearance described herein, and notwithstanding any provision
in the Existing Loan Documents or the ATC Loan Documents, Lender
specifically reserves all rights and remedies, including, without
limitation, Lender's right to declare all Obligations of Borrowers
to Lender under the Existing Loan Documents and/or the ATC Loan
Documents to be immediately due and payable on the Termination
Date.
3. Conditions to Advances: Borrowers acknowledge that Lender
has no present obligation to provide additional advances to
Borrowers as a result of the Existing Defaults. Notwithstanding the
foregoing, Lender is willing to make additional advances to
Borrowers under the following conditions:
a. In lieu of the Revolving Line of Credit established by
Lender pursuant to Section 2.1 of the Existing Loan Agreement, and
subject to paragraph 2 above, Borrowers shall have two separate
Revolving Lines of Credit (collectively, the "Revolving Credit") to
provide for separate loan facilities and advances to (i) the HC
Borrowers (which are part of the home healthcare business of Staff
Builders) and (ii) ATC Healthcare Services, Inc. and its
subsidiaries ("ATC Group"). Notwithstanding the foregoing, all
Borrowers shall continue to be obligated for all Loans advanced to
the HC Borrowers and the ATC Group, respectively, and for the
outstanding principal balance of the Acquisition Line. Borrowers
confirm that the deferred monthly payments on the Acquisition Line
due April 1, May 1 and June 1, 1999 shall continue to be deferred
and the payment scheduled to be made on July 1, 1999 shall also be
deferred (in each case, so long as the forbearance described herein
exists) and, in each case, shall be due on the Termination Date.
b. Home Healthcare Group Revolving Line of Credit
i. The HC Borrowers shall have a Revolving Line of
Credit ("Home Healthcare Group Revolving Credit") which shall
include cash sums advanced and other credit extended by Lender to
or for the benefit of the HC Borrowers from time to time hereunder
up to the maximum principal sum of Fifteen Million Nine Hundred
Thousand ($15,900,000) ("Home Healthcare Group Maximum Revolving
Credit Amount") at one time outstanding, depending upon the request
of all such Borrowers and the availability of such Borrowers'
Qualified Accounts, and based upon the Revolving Credit Borrowing
Base for the Home Healthcare Group.
ii. The outstanding balance under the Home
Healthcare Group Revolving Credit may fluctuate from time to time,
to be reduced by repayments made by the HC Borrowers and to be
increased by future advances and extensions of credit which may be
made by Lender to or for the benefit of the HC Borrowers. For the
purposes to this Agreement, any determination as to whether there
is availability within the Revolving Credit Borrowing Base for the
HC Borrowers shall be determined by Lender in its sole discretion,
and such determination shall be final and binding upon Borrowers.
iii. Subject to availability under the Revolving
Credit Borrowing Base for the HC Borrowers, the fulfillment of any
other conditions to borrowing contained in this Agreement or the
Existing Loan Documents and the absence of an Event of Default
(other than the Existing Defaults) or any event, which, with the
giving of notice or passage of time or both, would become an Event
of Default, the HC Borrowers may borrow, repay, and re-borrow from
time to time prior to the Termination Date. Lender shall continue
to have the right to establish reserves against the Revolving
Credit Borrowing Base for the HC Borrowers in such amounts with
respect to such matters as Lender in its sole discretion, deems
appropriate.
iv. The advance percentage in the Borrowing Base
with respect to the Home Healthcare Group Revolving Credit is
increased from 75% to 80% until the earlier of (1) the Termination
Date or (2) receipt by Borrowers or Lender of a tax refund
referenced in paragraph 5e below.
v. All Loans and advances under the Home Healthcare
Group Revolving Credit shall be subject to the terms and conditions
of the Existing Loan Documents, except as expressly modified by
this Agreement.
c. ATC Group Revolving Line of Credit - The ATC Group
shall have 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 the members of the ATC Group from
time to time hereunder up to the maximum principal sum of Seventeen
Million Five Hundred Thousand Dollars ($17,500,000) which limit,
apart from any other rights of Lender hereunder, shall be
automatically reduced to $14,500,000 on the Termination Date
('Maximum Revolving Credit Amount") at any one time outstanding,
pursuant to the terms and conditions of the ATC Loan Documents.
Notwithstanding the foregoing, Lender shall permit the ATC Group,
until the Termination Date, to have an overadvance of $3,000,000
and shall permit the proceeds of such overadvance, at the option of
the ATC Group, to be loaned to the HC Borrowers.
d. The interest rate applicable to the Home Healthcare
Group Revolving Credit for the HC Borrowers shall continue to be
the Prime Rate plus two (2) percentage points. The interest rate
applicable to the Acquisition Line shall continue to be the Prime
Rate plus two and three-quarters (2-3/4) percentage points. The
Collateral Management Fee applicable to the HC Borrowers shall be
$8,000 per month.
4. Covenants:
a. Borrowers covenant that on and after the date of
execution of this Agreement and until the Obligations are
indefeasibly paid and satisfied in full except as expressly
modified hereby, the HC Borrowers shall continue to observe and
maintain compliance with all covenants, representations and
warranties arising in this Agreement and the Existing Loan
Documents and the ATC Group shall observe and perform all covenants
and undertakings contained in the ATC Loan Agreement.
b. In order to induce Lender to enter into this
Agreement, the HC Borrowers further covenant and agree that:
i. No Capital Expenditures will hereafter be
incurred by them.
ii. The HC Borrowers will provide Lender with weekly
cash flow projections (by Thursday of each week) showing the
subsequent week's projected receipts, disbursements, borrowing
availability and line usage. A condition of the forbearance
contained herein is that such projections show positive
availability and borrowings under the line limit applicable to
them.
iii. The HC Borrowers shall maintain positive
borrowing availability at all times under the Borrowing Base for
the Home Healthcare Borrowing Group Credit.
iv. The HC Borrowers will not pay any obligations
not shown on the foregoing projections.
c. No later than July 30, 1999, Borrowers shall file a
federal income tax return form 1139 for fiscal year ending February
28, 1999, accompanied by fully executed IRS Form 2848 - Power of
Attorney and Declaration of Representative authorizing Blank Rome
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP (on behalf of Lender) to receive any tax
refund checks payable to Borrowers.
5. Effectiveness Conditions: Lender's undertakings hereunder
are subject to satisfactory completion, as determined by Lender in
its sole discretion, (all documents to be in form and substance
satisfactory to Lender) and its counsel of the following conditions
("Effectiveness Conditions"):
a. Execution and delivery by Borrowers of this Agreement
and any other agreements, instruments and documents as Lender
reasonably deems necessary to effectuate the transactions
contemplated herein;
b. Delivery by Borrowers of corporate actions
authorizing the execution and delivery of this Agreement and
performance of the transactions contemplated hereby;
c. Lender shall have obtained (at Borrowers'
expense) updated UCC, tax and judgment searches confirming
Lender's first priority security interest in the Collateral.
d. Within five (5) days after the date of this Agreement,
Borrowers shall have retained a consultant, acceptable to Lender,
in its sole discretion, to provide financial and strategic advice,
to validate Borrowers' projections, and to analyze, inter alia, the
viability of each Borrower's business, profitability, ability to
meet its current and long term obligations to the federal and state
governments, on capital lease obligations and with respect to notes
payable, the effect on the business, properties, assets, financial
condition, results of operations or prospects of each Borrower of
any monetary or non-monetary obligations resulting from the Year
2000 Problem, and the effect on each Borrower of the scheduled bank
amortization under the terms and conditions of the proposed
Spin-Off. Any final written report provided to Borrowers by such
consultant should at the same time be provided to Lender.
e. Borrowers shall have paid to Lender a $50,000
forbearance fee.
f. The HC Borrowers shall have a positive availability
of not less than $500,000 under the Borrowing Base for the Home
Healthcare Group Revolving Credit.
g. Execution and delivery by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
▇▇▇▇ of a management support agreement and fraud guarantee, each in
favor of and in form and substance acceptable to Lender
6. Representations and Warranties: Borrowers warrant an
represent to Lender that:
a. Prior Representations - By execution of this
Agreement, each Borrower reconfirms that all warranties and
representations made to Lender under the Existing Loan Documents
and restates such warranties and representations as of the date
hereof all of which shall be deemed continuing until all of the
Obligations are paid and satisfied in full. Attached hereto are
updated schedules to the Existing Loan Agreement in connection with
such restated warranties and representations.
b. Authorization - The execution and delivery by each
Borrower of this Agreement and the performance by each Borrower of
the transactions herein contemplated (i) are and will be within
their powers, (ii) has been authorized by all necessary corporate
action, and (iii) are not and will not be in contravention of any
order of court or other agency of government, of law or of any
indenture, agreement or undertaking to which any Borrower is a
party or by which the property of any Borrower is bound, or be in
conflict with, result in a breach of or constitute (with due notice
and/or lapse of time) a default under any such indenture, agreement
or undertaking, or result in the imposition of any lien, charge or
encumbrance of any nature on any of the properties of any Borrower.
c. Valid, Binding and Enforceable - This Agreement and
any assignment or other instrument, document or agreement executed
and delivered in connection herewith, will be valid, binding and
enforceable against each Borrower in accordance with their
respective terms.
d. Year 2000 - Each Borrower has reviewed the areas
within its business and operations which could be adversely
affected by, and have developed or are developing a program to
address on a timely basis the risk that certain computer
applications used by such Borrower may be unable to recognize and
perform properly date-sensitive functions involving dates prior to
and after December 31, 1999 (the "Year 2000 Problem"). The Year
2000 Problem will not result, and is not reasonably expected to
result, in any material adverse effect on the business, properties,
assets, financial condition, results of operations or prospects of
any Borrower or the ability of any Borrower to duly and punctually
pay or perform their obligations hereunder and under this Agreement
or the Existing Loan Documents.
7. Default:
a. In addition to each of the Events of Default set forth
in the Existing Loan Documents, the (i) failure of any Borrower to
comply with its representations, warranties, covenants or other
undertakings under this Agreement, or (ii) occurrence or
institution (and continuance) of any action or proceeding which may
materially adversely affect any Borrower's ability to perform under
this Agreement as applicable, shall be an Event of Default under
this Agreement, the Existing Loan Documents, and ATC Loan Documents
and upon the occurrence of any such event or condition of Lender's
undertakings under this Agreement may without notice to Borrowers,
immediately terminate and all Obligations declared due and payable
immediately; and
b. The occurrence of any Event of Default, other than the
Existing Defaults, under any of the Existing Loan Documents, and/or
ATC Loan Documents or any other reason for the Termination Date shall
be considered an Event of Default under all of the Existing Loan
Documents and ATC Loan Documents and upon such Event of Default,
Lender may, without notice to any Borrowers, immediately terminate
Lender's undertakings under this Agreement and declare all
Obligations of the HC Borrowers and/or ATC Group due and payable
immediately.
8. Further Assurances: Upon execution of this Agreement, and
thereafter, each Borrower shall take all action requested by
Lenders to effectuate the terms and intent of this Agreement and
the Existing Loan Documents and in assuring continued, effective
and proper perfection of the liens and security interests in the
Collateral.
9. Integrated Agreement: This Agreement shall be deemed
incorporated into and made a part of the Existing Loan Documents.
Except as expressly set forth herein, all of the terms, conditions
and agreements of the Existing Loan Agreement, and other Existing
Loan Documents are ratified and confirmed. The Existing Loan
Documents, the ATC Loan Documents and this Agreement 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 control.
10. Non-Waiver: No omission or delay by either Lender in
exercising any right or power under this Agreement, or the Existing
Loan Documents, the ATC Loan Documents or any related agreement
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 will be valid unless in writing and then
only to the extent specified. Lender's rights and remedies are
cumulative and concurrent and may be pursued singly, successively
or together, and by each Lender together or separately.
11. Headings: The headings of any paragraph of this Agreement
are for convenience only and shall not be used to interpret any
provision of this Agreement.
12. Survival: All warranties, representations and covenants
made by any Borrower herein, or in any agreement referred to herein
or on any certificate, document or other instrument delivered by
them or on their behalf under this Agreement, shall be considered
to have been relied upon by Lender. All statements in any such
certificate or other instrument shall constitute warranties and
representations by Borrowers hereunder. All warranties,
representations, and covenants made by any Borrower hereunder or
under any other agreement or instrument shall be deemed continuing
until the Obligations are indefeasibly paid and satisfied in full.
13. Successors and Assigns: This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each
of the parties hereto. No delegation by any Borrower of any duty or
obligation of performance may be made or is intended to be made to
Lender. No rights are intended to be created hereunder or under any
related instruments, documents or agreements for the benefit of any
third party donee, creditor, incidental beneficiary or affiliate of
any Borrower.
14. Governing Law : This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of
Pennsylvania. The provisions of this Agreement 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.
15. Right of Setoff- In addition to all liens upon and rights
of setoff against the money, securities or other property of any
Borrower given to Lender by law, Lender shall have, with respect to
each Borrower's obligations to Lender whether the Existing Loan
Documents or otherwise and to the extent permitted by law, a
contractual possessory security interest in and a right of setoff
against, and each Borrower hereby assignees, conveys, delivers,
pledges and transfers to Lender all of such Borrower's right, title
and interest in and to, all deposits, moneys, securities and other
property of such Borrower now or hereafter in the possession of or
on deposit with Lender whether held in a general or special account
or deposit, whether held jointly with someone else, or whether held
for safekeeping or otherwise, excluding, however, all ▇▇▇, ▇▇▇▇▇,
and trust accounts. Every such security interest and right of
setoff may be exercised without demand upon or notice to any
Borrower.
16. Waiver of Jury Trial: Each Borrower and Lender hereby
waives any and all rights any of them may have to a jury trial in
connection with any litigation commenced by or against any of the
parties to this Agreement with respect to rights and obligations of
the parties hereto under this Agreement or under the Existing Loan
Documents.
17. Exclusive Jurisdiction: Each Borrower and Lender each
irrevocably consent to the exclusive jurisdiction of the Courts of
Common Pleas located within the Eastern District 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 the Existing Loan Documents. Each Borrower
irrevocably agrees to service of process by certified mail return
receipt requested to the address currently contained in Lender's
records.
18. Release and Indemnification: In order to induce Lender
to enter into this Agreement, each Borrower does hereby agree as
follows:
a. Release - Each Borrower hereby fully, finally and
forever acquits, quitclaims, releases and discharges Lender and its
officers, directors, employees, agents, successors and assigns of
and from any and all obligations, claims, liabilities, damages,
demands, debts, liens, deficiencies or cause or causes of action
to, of or for the benefit (whether directly or indirectly) of any
Borrower, at law or in equity, known or unknown, contingent or
otherwise, whether asserted or unasserted, whether now known or
hereafter discovered, whether statutory, in contract or in tort, as
well as any other kind or character of action now held, owned or
possessed (whether directly or indirectly) by any Borrower on
account of, arising out of, related to or concerning, whether
directly or indirectly, proximately or remotely (i) the Obligations
of Borrowers, (ii) the Existing Loan Documents, (iii) the
negotiation, review, preparation or documentation of this Agreement
or any other documents or agreements executed in connection
therewith (collectively, the "Forbearance Documents"), (iv) the
administration of the Forbearance Documents, (v) the enforcement,
protection or preservation of Lender's rights under the Forbearance
Documents, and/or (vi) any action or inaction by Lender in
connection with any of the foregoing (the "Released Claims").
b. Covenant Not to Litigate - In addition to the release
contained above, and not in limitation thereof, each Borrower does
hereby agree that it will never prosecute, nor voluntarily aid in
the prosecution of, any action or proceeding relating to the
Released Claims, whether by claim, counterclaim or otherwise.
c. Transfer of Claims - If, and to the extent that, any
of the Released Claims are, for any reason whatsoever, not fully,
finally and forever released and discharged pursuant to the terms
above, each Borrower does hereby absolutely and unconditionally
grant, sell, bargain, transfer, assign and convey to Lender all of
the Released Claims and any proceeds, settlements and distributions
relating thereto.
d. Indemnification - Each Borrower expressly agrees to
indemnify and hold harmless Lender and its officers, directors,
employees, agents, successors and assigns, of and from any and all
obligations, losses, claims, damages, liabilities, demands, debts,
liens, costs and expenses of Lender and its officers, directors,
employees, agents, successors and assigns that may be asserted by,
or may arise out of, whether directly or indirectly, proximately or
remotely, any investigation, litigation, or other proceedings
initiated, undertaken or joined in by any Borrower or any other
third party (including, without limitation, any employee, agent,
personal representative, heir, executor, successor or assign of any
Borrower) in connection with (i) the Obligations of Borrowers, (ii)
the Existing Loan Documents and ATC Loan Documents, (iii) the
negotiation, review, preparation or documentation of this Agreement
or any other documents or agreements executed in connection
therewith (collectively, the "Forbearance Documents"), (iv) the
administration of the Forbearance Documents, (v) the enforcement,
protection or preservation of Lender's rights under the Forbearance
Documents, and/or (vi) any action or inaction by Lender in
connection with any of the foregoing, unless such claim results
from any action or conduct of Lender which constitutes (1) a breach
of its obligations under this Agreement or the Existing Loan
Documents and ATC Loan Documents, (2) willful misconduct or (3)
gross negligence.
e. Each Borrower acknowledges that the foregoing is
intended to be a general release with respect to the matters
described therein. Each Borrower expressly acknowledges and agrees
that the waivers and releases contained in this Agreement shall not
be considered as an admission of and/or the existence of any claims
of such Borrower against Lender. Each Borrower further acknowledges
that, to the extent that any such claims may exist, they are of a
speculative nature so as to be incapable of objective valuation and
that, to the extent that any such claims may exist and may have
value, such value would constitute primarily "nuisance" value or
"leverage" value in adversarial proceedings between each Borrower
and Lender. In any event, each Borrower hereby acknowledges and
agrees that the value to such Borrower of this Agreement and of the
covenants and agreements on the part of Lender contained in this
Agreement substantially and materially exceeds any and all value of
any kind or nature whatsoever of any claims or liabilities waived
or released by such Borrower hereunder.
19. Advice of Counsel: Each Borrower acknowledges that it has
been represented by counsel in connection with the execution and
delivery of this Agreement and that the terms and conditions of
this Agreement are the result of negotiation between the parties
hereto. Each Borrower further acknowledges that it has knowingly
(a) waived its right to (i) be heard prior to the entry of a
judgment by confession and under that, upon such entry, such
judgment shall become a lien on all real property of such Borrower
in the county where such judgment is entered; (ii) trial by jury;
and (iii) certain other rights as set forth in detail above; and
(b) consented to relief from the automatic stay. Each Borrower
acknowledges that such waivers and consents constitute a material
inducement for Lender to enter into this Agreement and it has been
fully advised of the consequences of such provisions by its
counsel.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the undersigned parties have executed
this Agreement the day and year first above written.
LENDER:
Mellon Bank, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
BORROWERS:
Staff Builders, Inc.
a Delaware corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Home Care, Inc.,
a Delaware corporation
S.B. Assured Home Care, Inc.
a Delaware corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Services Corporation,
a Pennsylvania corporation
S.B.H.F., Inc.
a New York Corporation
Careco, Inc.,
a Massachusetts corporation
S.B.P.P., Inc.,
a Delaware corporation
Ethicare Certified Services, Inc.,
a New York corporation
Staff Builders, Inc.
a New York corporation
Home Health Care, Inc.,
a Maryland corporation
Staff Builders Home Health Care, Inc.
a Delware corporation
Medvisit, Inc.,
a North Carolina corporation
Staff Builders International, Inc.
a New York corporation
Personnel Industries, Inc.
a Maryland corporation
Staff Builders Prescription Services, Inc.,
a Colorado corporation
Professional Detail Services, Inc.,
a New York corporation
Staff Builders Prescription Services, Inc.
a Florida corporation
A Reliable Homemaker of ▇▇▇▇▇▇ -
St. Lucie County, Inc.,
a Florida corporation
Staff Builders Services, Inc.
a New York corporation
St Lucie Home Health Agency. Inc.
a Florida Corporation
Tender Loving Care Private Patient Company, Inc.,
a Florida Corporation
T.L.C. Home Health Care, Inc.
a Florida corporation
T.L.C. Medicare Services of Broward, Inc.,
a Florida corporation
T.L.C. Medicare Services of Dade, Inc.,
a Florida corporation
T.L.C. Midwest, Inc.,
a Delaware corporation
Tender Loving Care Health Care Services,
Inc.,
a Connecticut corporation
Tender Loving Care Home Care Services,
Inc.,
a New York corporation
U.S. Ethicare Corporation, Inc.
a Delaware corportion
U.S. Ethicare Albany Corporation
a New York corporation
U.S. Ethicare Chautaugua Corporation
a New York corporation
U.S. Ethicare Eire Corporation
a New York corporation
U.S. Ethicare Niagara Corporation
a New York corporation
U.S. Ethicare Onondaga Corporation
a New York corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: On behalf of and as CEO of each of the
foregoing borrowers
Attest: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Exec. V.P. of each of the foregoing Borrowers
ATC Healthcare Services
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: CEO
Attest: ▇▇▇▇ ▇. ▇▇▇▇▇
ATC Staffing Services, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: CEO
Attest: ▇▇▇▇ ▇. ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: On behalf of and as CEO of each of the
foregoing Borrowers
Attest: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Exec. V.P. of each of the foregoing Borrowers
ATC Healthcare Services
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: CEO
Attest: ▇▇▇▇ ▇. ▇▇▇▇▇
ATC Staffing Services, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: CEO
Attest: ▇▇▇▇ ▇. ▇▇▇▇▇