EXHIBIT 10.1
\ ELEVENTH
AMENDMENT AND WAIVER, dated as of October 15, 2007 (the
"Eleventh Amendment"),
to the Amended and Restated Loan and Security Agreement,
dated as of November 7, 2002 (as amended by Amendment No. 1, dated
as of January
23, 2003, the Waiver
and Second Amendment,
dated as of February
28, 2003, the
Waiver, Consent
and Third Amendment, dated as of June 12, 2003, the Fourth
Amendment, dated
January 12, 2004, the Waiver and Fifth Amendment, dated as of
January 13, 2005, the
Sixth Amendment,
dated as of April 22,
2005, the Waiver
and Seventh
Amendment,
dated as of July
15, 2005, the Waiver and Eighth
Amendment, dated as of
October 14, 2005, the Ninth Amendment, dated as of
November 7, 2005 and the Consent and Tenth Amendment, dated as of June 7, 2006,
the "Loan Agreement"),
among ATC FUNDING, LLC, a limited liability company
organized under
the laws of the State of Delaware ("ATC Funding"), ATC
HEALTHCARE SERVICES,
INC., a corporation
organized under the laws of the State
of Georgia ("ATC
Healthcare"),
ATC STAFFING
SERVICES, INC., a corporation
organized under the
laws of the State of
New York ("ATC
Stafing"),
CRITICAL
NURSING SOLUTIONS,
INC., a corporation organized under the laws of the State of
Delaware ("CNS"),
PHARMACY RESERVES,
INC., a corporation
organized under
the
laws of the State of Delaware ("Pharmacy Reserves"), APPLIED MANAGEMENT
SOLUTIONS, INC., a corporation organized under the laws of the
State of Delaware
("AMS"; AMS,
ATC Funding, ATC Staffing, CNS, Pharmacy Reserves and ATC
Healthcare, each
a "Borrower" and together, jointly and severally, the
"Borrowers", and ATC
Healthcare
in its capacity as primary servicer, the
"Primary
Servicer"), and
ATC HEALTHCARE, INC., a Delaware corporation
("Parent"), HFG
HEALTHCO-4 LLC, a Delaware limited liability company (together
with its successors
and assigns, "HF-4"), in its capacity as a Lender (as
hereinafter defined),
HEALTHCARE FINANCE
GROUP, INC., a
Delaware
corporation
(together with its successors and assigns, "HFG"), in its capacity as a Lender
(HF-4 and HFG, in such capacity, each a "Lender" and together,
severally and not
jointly, the
"Lenders"),
HFG HEALTHCO-4 LLC, in its capacity as agent and
collateral agent for the Lenders (in such capacity, together with
its successors
and assigns, the "Agent"), and HEALTHCARE FINANCE GROUP, INC. in
its capacity as
a program manager (in
such capacity,
together with its successors and assigns,
"Program Manager"). Terms not otherwise defined in this Eleventh
Amendment shall
have the meanings set forth in the Loan Agreement.
HF-4
has delivered to the Parent a notice to exercise HFG's put right
under
that certain
Warrant to Purchase
53,763 Shares Class A Common Stock of ATC
Healthcare Inc., dated July 12, 2002 (as amended by Amendment No. 1
thereto, the
"Warrant") issued
to HF-4 for a purchase price of $100,000, payable in
immediately available funds (the "Put Price").
The
Borrowers have requested that HFG (a) increase the Revolving
Commitment
to $16,000,000,
(b) make a term loan in the initial principal amount of
$2,274,766, which
shall be utilized, among other purposes to repay all
outstanding
Overadvances, and to
pay the Put Price to HF-4 and cancelling the
Warrant, and to pay
certain fees and expenses relating to this Eleventh
Amendment, (c) reduce
the interest rate
chargeable on the
Revolving Loan and
make certain other adjustments and modifications under the Loan Agreement,
(d)
waive compliance with certain financial covenants for the fiscal
quarters ending
February 28,
2007, May 31, 2007 and August 31, 2007, and (e) extend the
Scheduled Maturity
Date until
November 7, 2010. HFG is willing to make such
amendments,
modifications and
adjustments to the Loan Agreement, subject and
pursuant to the terms and conditions set forth herein.
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Accordingly, in
consideration
of the foregoing and for other good and
valuable
consideration, the
receipt and sufficiency of which hereby are
acknowledged, and
subject to fulfillment of the conditions set forth below, the
parties hereto agree as follows:
SECTION 1 AMENDMENTS TO LOAN AGREEMENT
Effective as of the Eleventh Amendment Effective Date, the parties
hereto
agree to amend the Loan Agreement as follows:
Subsection 1.1
Section
1.02(a) of the Loan
Agreement is hereby amended
by (i) deleting the figure "$15,000,000" appearing on the second line
thereof,
and (ii) substituting therefor the figure "$16,000,000".
Subsection 1.2
Section
1.05(c) of the Loan
Agreement is hereby amended
by (i) deleting the figure "0.50%" appearing on the second line
thereof, and
(ii) substituting
therefor the figure "0.75%". Section 1.05(e) of the Loan
Agreement is hereby amended by deleting such clause in its
entirety.
Subsection 1.3
Sections
1.07 through 1.13 of
the Loan Agreement are
hereby amended
by (i) deleting such sections in their entirety, and (ii)
substituting therefor the following:
ss. 1.07 Term Loan.
(a) The Term
Loan. On the Eleventh Amendment
Effective Date, HFG hereby agrees to make a term loan (as it may be
reduced
pursuant to the terms
set forth herein,
the "Term Loan") in the initial
principal amount of $2,274,766 (such amount, the "Term Loan
Commitment").
(b) Use of Proceeds.
Effective as of the Eleventh Amendment Effective
Date, the Borrowers
hereby instruct the Lenders, and the Lenders hereby
agree, to utilize proceeds of the Term Loan, as follows:
(i) such amount as is necessary to repay in full all Overadvances
outstanding;
(ii) $412,500 to the
Agent in payment of the renegotiation fee with
respect to this Eleventh Amendment;
(iii) $100,000 to HF-4 in payment of the Put Price;
(iv) $104,766 to the Agent for the benefit of the Lenders,
in payment
of default interest
accrued and unpaid on the Revolving Loan for
the period from March 1, 2007 until May 31, 2007;
(v) $50,000
to the Agent in voluntary prepayment of the Special
Renewal Fee that is scheduled under Section 6.07(a) to be
payable
on November 7, 2007 (and which the Borrowers have agreed to pay
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on October 15, 2007 in partial consideration of the willingness
of the Agent to enter into this Eleventh Amendment); and
(vi) $180,000 to the Agent in payment of the Extension Fee.
(c) Acknowledgment.
The Borrowers and the
Parent hereby
acknowledge
and
agree that the fees and payments being paid on the date hereof
pursuant
to
Section 1.07(b) are fully earned and payable as of the Eleventh
Amendment Effective Date.
(d) Consent and Agreement to the Put. The Parent hereby consents and
agrees to the put by HF-4 of the Warrant and, by payment of the Put
Price
pursuant Section
1.07(b) above, and the Parent hereby purchases all of the
Warrant from HF-4 and hereby further cancels and terminates the Warrant
in
all
respects.
ss. 1.08 Prepayments
(a) Issuances and Sales. The Borrowers shall (at
the
Program Manager's discretion following notice of receipt thereof)
prepay the Term Loan in an amount to be mutually agreed upon by the Agent
and
the Borrowers
prior to the
consummation
of any of the
below-listed
transactions (or
such other amount reasonably satisfactory to and
determined by the Agent, but not in any event to exceed 50% of the
cash net
proceeds received; the
listed actions below may separately require consent
of
the Lenders
pursuant to the provisions of Exhibits IV and V hereof)
from: (i) the issuance of any Debt or equity interests of the
Parent or any
of
the Borrowers, and
(ii) the sale,
transfer or other disposition of any
asset, business or property of the Parent or any Borrower,
any tax refund,
payments on Debt or other notes outstanding or any other payments of any
nature whatsoever received outside the ordinary course of
business.
(b) Excess Cash Flow.
Concurrently with each
delivery of
quarterly
financial statements
pursuant to clause (j)(iii) of Exhibit IV hereto, the
Borrower shall make a
prepayment in respect
of the Term Loan equal to the
Excess Cash Flow Payment, if any.
(c) Application of
Payments. All
prepayments of the
Term Loan under
this
Section 1.08 shall be applied to the
unpaid principal
installments
with
respect to the Term Loan in inverse order of maturity, and shall be
accompanied by all
accrued and unpaid
interest on the portion of the Term
Loan
being prepaid to the date of prepayment and all costs and fees
associated with
such prepayment. So long as no Event of Default is
continuing, no Early
Termination
Fee shall be
payable with respect to
prepayments made
pursuant to Sections 1 .08(a)(i) and 1.08(b) hereof.
Amounts prepaid pursuant to this Section 1.08 may not be
reborrowed.
ss. 1.09 Intentionally Omitted.
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ss. 1.10 Amortization of Term Loan. The Borrowers shall, until
payment
in
full of the Term Loan and subject to early prepayment and payment as
provided herein, pay to the Agent on behalf of the Lenders, an
amount equal
to
(i) $10,476.60,
on each of the
initial ten Interest Payment Dates
following the Eleventh Amendment Effective Date, plus (ii)
$55,555.56, on
the
Interest Payment Date
occurring on April 1,
2008 and on each Interest
Payment Date
thereafter, plus (iii)
$60,000 on the Interest Payment Dates
occurring on October 1, 2008 and October 1, 2009 (items (i), (ii)
and (iii)
collectively, the
"Monthly Amortization Amount"), plus (iv) $50,000 on
November 7, 2007,
which amounts shall be applied towards the reduction of
the
outstanding principal amount of the Term Loan. Amounts paid
pursuant to
this
Section 1.10 may not be reborrowed. On the Maturity Date, the
remaining principal
amount of the Term Loan shall become, without further
action by any Person, immediately due and payable together with all
accrued
interest thereon and
any fees, premiums,
charges or costs
provided for
hereunder with respect thereto.
ss. 1.11 Intentionally Omitted.
ss. 1.12 Interest and Default Interest. (a) Interest. The Borrowers
shall pay interest on the average daily outstanding principal
amount of the
Term
Loan during the prior Month on (i) each Interest Payment Date and
(ii)
the
Maturity Date (whether by acceleration or otherwise), in each case, at
an
interest rate per annum equal to LIBOR plus the Applicable Margin, in
each
case, as in effect for the applicable Interest Period.
(b) Default
Interest. Notwithstanding anything to the contrary
contained herein, while any Event of Default is continuing,
interest on the
Term
Loan shall be payable on demand at a rate per annum equal to 2.50% in
excess of the rate then otherwise applicable to the Term Loan.
ss. 1.13 Intentionally Omitted.
Subsection 1.4 Section 3.02 of
the Loan Agreement is hereby amended by
(i) adding the following new proviso at the end of the
first paragraph of
such
Section, and (ii) deleting the second paragraph of such
Section:
;
provided, however that
distributions under this Section 3.02 are subject
to
the provisions of 3.03A. In furtherance of the foregoing,
while amounts
received by the Agent
for the benefit
of the Lenders pursuant to this
Section 3.02 shall be
paid to HF-4 and HFG as their respective interests
may
appear provided,
that if the amount of
any distributions
to be made
pursuant to this Section 3.02 will be insufficient to satisfy in full (i)
all
amounts then due and
owing to HF-4, then
the Agent first shall pay to
HF-4
all Collections with
respect to the Revolving Loan Senior Collateral
until the amounts
then due and owing to
HF-4 have been paid in full, and
only
then pay any excess
amounts (together with collections and other
amounts with respect to the Term Loan Senior Collateral) to HFG until the
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amounts then due and
owing to HFG have
been paid in full, and (ii) all
amounts then due and
owing to HFG, then the
Agent first shall pay
to HFG
all
collections with
respect to the Term Loan Senior Collateral until the
amounts then due and owing to HFG have been paid in full, and only
then pay
any
excess amounts (together with Collections with respect to the
Revolving
Loan
Senior Collateral)
to HF-4 until the
amounts then due and owing to
HF-4
have been paid in full
Subsection 1.5 Section 3.03 of the Loan Agreement
is hereby amended
by
(i) deleting such section in its entirety, and (ii) substituting therefor the
following:
ss. 3.03A. Distribution of Funds at the Maturity Date or Upon an
Event
of
Default. At the
Maturity Date or upon the occurrence and during the
continuance of an
Event of Default,
subject to the rights and remedies of
the
Agent and the Lenders
pursuant to Sections 3.03A and 4.02 hereof, the
Agent shall distribute any and all Collections and other
distributions from
the
Collateral as follows:
FIRST, to the Agent and the Lenders, an amount
in
cash equal to any and all accrued fees and collection costs as set
forth
in
Sections 1.05, 1.12
and 6.05, until such
amount has been paid in full;
SECOND, from the
Revolving Loan Senior
Collateral,
to the Agent for
the
benefit of HF-4, an amount in cash equal to all accrued and unpaid
interest
on
the Revolving Loan (at the rates established under Section 1.05) until
such
amount has been paid in full; THIRD, from the Revolving Loan Senior
Collateral, to the
Agent for the benefit of HF-4, an amount in cash equal
to
the principal amount of the Revolving Loan, until such amount is
paid in
full; FOURTH, from the
Revolving Loan Senior Collateral, to the Agent for
the
benefit of the Revolving Lenders, an amount in cash equal to the
payment of any other Lender Debt due and payable to the
Revolving Lenders
on
such date, until such amount has been paid in full; FIFTH, from the
Term
Loan
Senior Collateral,
to the Agent for the
benefit of HFG, an amount in
cash
equal to all
accrued and unpaid interest on the Term Loan (at the
rates established
under Section 1.12) until such amount
has been paid in
full; SIXTH,
from the Term Loan
Senior Collateral,
to the Agent for
the
benefit of HFG, an amount in cash equal to the principal amount of
the Term
Loan, until such amount is paid in full; SEVENTH, from the Term
Loan Senior
Collateral, to the
Agent for the benefit of the Term Lenders, an amount in
cash
equal to the payment
of any other Lender
Debt due and payable to the
Term
Lenders on such date, until such amount has been paid in full;
EIGHTH,
from
the Revolving Loan Senior Collateral, to the Agent for the benefit
of
the
Term Lenders,
an amount in cash equal to the payment of any other
Lender Debt due and
payable to the Term
Lenders on such date,
until such
amount has been paid in full; NINTH, from the Term Loan Senior
Collateral,
to
the Agent for the benefit of the Revolving Lenders, an amount in cash
equal to the payment
of any other Lender Debt due and payable to the
Revolving Lenders on
such date, until such
amount has been paid
in full;
and
TENTH, to the Borrower
Representative on behalf of the Borrowers, all
remaining amounts of Collections.
ss. 3 .03B.
Distribution Protocols Between the Agent and the Lenders.
The
Borrowers, the Agent and the Lenders intend the distribution
provisions
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set
forth in this Article III to be consistent in all respects with the
priorities and other terms set forth in the Intercreditor
Agreement. If any
term
of this Article III is inconsistent with any term of any such
separate
agreement, the
terms of such separate agreement shall control. In
furtherance thereof, the parties hereto agree that:
(i) funds that the Term Lender receives that are clearly
identified as
Collections or
proceeds with respect to Revolving Loan
Senior Collateral
shall promptly be turned over to the Agent for
distribution to the
Revolving Lenders until such amounts have been
paid in full; and
(ii) funds that the Agent or the Revolving Lender receives that
are clearly identified
as proceeds
with respect to Term
Loan Senior
Collateral shall
promptly be turned over to
