1
[MELLON BUSINESS CREDIT LETTERHEAD]
EXHIBIT 10.41
August 20, 1999
Staff Builders, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chairman and
Chief Executive Officer
Dear ▇▇▇▇▇:
Reference is hereby made to that certain Amendment and Forbearance
Agreement, dated June 25, 1999, 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 thereto
(all of the foregoing each individually, a "Borrower" and collectively, the
"Borrowers") and Mellon Bank, N.A. ("Mellon") (as previously amended,
"Forbearance Agreement"). Capitalized terms used but not expressly defined in
this letter shall have the meanings given to such terms in the Forbearance
Agreement.
This letter is in response to your request that Mellon consider
granting a further forbearance under the Forbearance Agreement.
Notwithstanding anything to the contrary contained in the Forbearance
Agreement, all references to the "Termination Date" contained in the Forbearance
Agreement shall be deemed to mean the date that is the earlier to occur of (i)
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) September 10, 1999.
The extension of the Termination Date set forth above is expressly
conditioned upon your timely acceptance of this letter and the following:
1. The line limit of the Revolving Credit borrowings
outstanding at any one time as part of the Home Healthcare
Group Revolving Credit shall be increased from $15,250,000 to
$16,500,000 as of August 23, 1999 and shall reduce to
$15,500,000 as of August 24, 1999 and shall further reduce to
$15,250,000 as of August 31, 1999. No overformula advances
shall be permitted during this period.
2. During this extended forbearance period, no offsets will be
taken by any governmental entity other than an aggregate
offset of $250,000 against PIP payments otherwise to be paid
to you in September 1999.
3. Mellon shall receive your revised business plan, which is
to include further cuts of operating expenses and acceleration
of accounts receivable collection efforts, by August 24, 1999.
2
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Staff Builders, Inc.
August 20, 1999
Page 2
4. Mellon shall have received the June 1999 financial
statements of ATC and the consolidated and consolidating June
1999 financial statements of Staff Builders, Inc. by August
25, 1999.
5. Mellon shall have received the reconciliation of the July
31, 1999 ATC accounts receivable aging to Mellon Business
Credit's collateral records by August 25, 1999.
6. The line limit of the Revolving Credit borrowings
outstanding at any one time as part of the ATC Revolving
Credit shall be increased from $16,750,000 to $17,500,000 as
of August 23, 1999 and shall decrease to $17,250,000 as of
August 31, 1999 and shall further decrease to $16,750,000 as
of September 10, 1999. Mellon shall permit overformula
advances for the ATC Borrowers under the ATC Loan Agreement to
be outstanding up to $3,000,000 until September 10, 1999.
7. A Purchase Agreement (under terms acceptable to Mellon) for
the sale of Chelsea Computer Consultants to MSX International
Engineering Services, Inc. must be executed by all parties no
later than August 27, 1999.
8. The Borrowers shall have paid to Lender upon execution of
this agreement a $35,000 forbearance fee.
By agreeing to extend the Termination Date, Mellon does not waive any
of the Existing Defaults or any breach or violation of the Forbearance
Agreement. Moreover, the extension of the forbearance period shall not be deemed
a waiver of Mellon's rights and remedies or constitute a course of conduct or
dealing on behalf of Mellon. Nothing contained herein is, in any way, intended
to obligate or create any duty on the part of Mellon's rights and options are
expressly preserved.
3
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Staff Builders, Inc.
August 20, 1999
Page 3
Please acknowledge and return a copy of this letter to us to confirm
your agreement. By acceptance of the terms and conditions of this letter,
Borrowers represent and warrant that there is no current violation or default of
any undertaking or covenant on their part under the Forbearance Agreement. If
Mellon does not receive a signed counterpart of this letter from Borrowers by
August 23, 1999 at 11:00 a.m., then the terms and conditions of this letter
shall be deemed of no force and effect.
This letter may be signed and exchange in counterparts, all of which
when taken together shall constitute one and the same agreement. Signature by
facsimile will also bind the parties hereto.
Very truly yours,
MELLON BANK, N.A.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ V.P.
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
Acknowledged and Agreed to:
STAFF BUILDERS, INC.
(for itself and on behalf of all HC
Borrowers and ATC Borrowers)
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chairman of the Board and Chief Executive Officer
cc: ▇▇▇▇▇ ▇▇▇▇▇▇, Esquire
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esquire
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
