Exhibit 10.9
Execution Copy
MANAGEMENT CONSULTING
AGREEMENT dated as of
September 19, 2006, between ADDUS HEALTHCARE, INC. , an
Illinois corporation (the “ Company ”) and
EOS MANAGEMENT, INC ., a Delaware corporation (the “
Consultant ”).
The Company desires to avail itself,
from and after the date hereof, of the management, advisory and
corporate structuring expertise of the Consultant. The Consultant
is willing to make such services, advice and expertise available to
the Company on the terms and conditions set forth
herein.
NOW, THEREFORE
, for good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as
follows:
Section 1. Engagement
.
The Company hereby engages the
Consultant, and the Consultant hereby accepts such engagement, upon
the terms and conditions set forth herein.
Section 2. Term
.
The Consultant hereby agrees to
provide the Services for the period (the “ Term
”) commencing on the date hereof and ending on the later of
(i) the fifth anniversary of the date hereof or (ii) the
date on which the Consultant or any Affiliates thereof no longer
own, directly or indirectly, any Equity Securities (as defined in
Addus Holding Corporation’s (“ Holdings ”)
Restated Certificate of Incorporation dated as of the date hereof,
as it may be amended, restated or otherwise supplemented from time
to time (the “ Charter ”)) totaling five percent
(5%) of the issued and outstanding Equity Securities of
Holdings (on a fully diluted basis); provided, however ,
that upon the first to occur of (x) the consummation of a Sale
of the Corporation (as defined in the Charter) in which the
Contingent Payment Recipients receive the full amount of the
Contingent Payments to which they are entitled pursuant to the
terms and conditions of the Contingent Payment Agreement (in each
case as defined in the Contingent Payment Agreement), or (y) a
QIPO (as defined in the Charter), the Company shall have the option
to terminate this Agreement prior to the expiration of the Term for
an amount equal to the aggregate amount of all remaining Management
Fees that would have been payable to the Consultant had the
Agreement continued in effect through the fifth anniversary of the
date hereof.
Section 3. Management
Consulting Services .
During the Term, the Consultant
shall advise the Company concerning any proposed financial
transactions, acquisitions and other senior management matters
related to the business, administration and policies of the
Company, as the Company shall specifically and reasonably request
by written notice to the Consultant, which notice shall specify the
services requested by the Company and shall include all background
material necessary for the Consultant to complete such services
(collectively, the “ Services ”). The Services
shall, in the reasonable discretion of the Consultant, be rendered
by the Consultant in person, by telephone or other suitable
communication. The Consultant shall be free of domination or
control by the Company over the manner and time of rendering the
Services hereunder, and the Company shall have no right to dictate
or direct the details of the Services rendered hereunder. Without
limitation of the
foregoing, the Consultant shall, in its sole
discretion, determine the one or more individuals (if any) employed
or engaged by the Consultant (or one or more Affiliates thereof)
who shall perform, for and on behalf of the Consultant, the
Services to be performed by the Consultant hereunder. The
Consultant shall (i) use its reasonable efforts to deal
effectively with all matters which are the subject of the Services
to be rendered by it hereunder and (ii) endeavor to further,
by performance of the Services to be rendered by it hereunder, the
policies and objectives of the Company. Pending receipt of written
notice pursuant to the first sentence of this Section 3
, the Consultant shall make itself available on a consulting basis
to provide the Services contemplated herein.
Section 4. Relationships
.
(a) The Consultant shall perform all
Services that are contemplated to be performed by it hereunder as
an independent contractor to the Company. No party hereto is an
employee, agent or other representative of any other party hereto,
and no party hereto has the authority to act for or to bind any
other party hereto without the prior written consent of such other
party. No employee of any party hereto shall be deemed to be an
employee of any other party hereto. Nothing in this Agreement shall
constitute or be construed as constituting or establishing any
partnership or joint venture among or between all or any of the
parties hereto for any purpose whatsoever.
(b) This Agreement shall in no way
prohibit or limit the Consultant or any of its Affiliates from
engaging in any other activities (including activities which might
be in competition with the Company or any of its
Subsidiaries).
(c) This Agreement shall in no way
prohibit or limit the Company or any of its Affiliates from
engaging one or more Persons other than the Consultant to advise
the Company concerning any proposed financial transactions,
acquisitions or other senior management matters related to the
business, administration and policies of the Company.
Section 5. Consultant Fees
.
(a) Management Fee . The
Company shall pay the Consultant an annual fee of $350,000 (the
“ Management Fee ”), payable quarterly in
advance on each January 1, April 1, July 1
and October 1 (beginning October 1, 2006) during the Term
and on the last day of the Term (or, in each case, if such date is
not a Business Day, the next Business Day), in consideration for
the Services performed by the Consultant during the Term. If
payment of the Management Fee, or any portion thereof, is
prohibited under the terms and conditions of the Credit Agreement,
the payment of such amount shall be deferred (whereupon, interest
shall accrue on a daily basis on such deferred amount, until paid,
at the rate of eight percent (8%) per annum) until the first
Business Day on which the payment of such deferred amount, together
with the accrued but unpaid interest thereon, shall not be
prohibited under the Credit Agreement (in which case the payment of
such deferred amount, together with accrued but unpaid interest
thereon, shall become due and payable on such date).
(b) Transaction Fee . Upon
consummation of the transactions contemplated by that certain Stock
Purchase Agreement dated as of September 19, 2006, by and
among Addus
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Holding Corporation, a Delaware corporation,
Addus Management Corporation, a Delaware corporation, Addus
Acquisition Corporation, a Delaware corporation, the Company, W.
Andrew Wright, III, as the Sellers’ Representatives and
certain Sellers listed therein, (as it may be amended, restated or
otherwise supplemented from time-to-time, the “ Purchase
Agreement ”), and in consideration of the services
performed by the Consultant in connection with such transactions
and the financing thereof, including, without limitation,
(i) provision of standard investment banking services,
(ii) finding sources of equity capital for such transactions
and negotiating such equity financing, (iii) finding sources
of debt capital for such transactions and negotiating such debt
financing and (iv) negotiating the terms and condition of the
Purchase Agreement, the Company shall pay the Consultant a
transaction fee of $1,500,000.00.
(c) Expenses . The Company
shall promptly pay (or reimburse) the Consultant for reasonable
documented out-of-pocket expenses of the Consultant’s
members, officers and employees in connection with the Services
performed hereunder. All out-of-pocket expenses incurred by the
Consultant solely in connection with the Consultant’s
provision of Services pursuant to the terms of this Agreement shall
be for the account of, and at the expense of, the
Company.
Section 6. Indemnification
.
(a) In addition to all rights and
remedies available to any Indemnified Person (as defined herein) at
law or in equity, the Company shall indemnify the Consultant, and
its respective Affiliates, stockholders, officers, directors,
employees, agents, representatives, counsel, successors and
permitted assigns (collectively, the “ Indemnified
Persons ”) and save and hold each of them harmless
against and pay on behalf of or reimburse each of them as and when
incurred for any Loss which any such Indemnified Person may suffer,
sustain or become subject to, as a result of, in connection with,
relating or incidental to or by virtue of: (i) any material
non-fulfillment or breach by the Company of any covenant or
agreement under this Agreement; (ii) the performance by the
Consultant of the Services; or (iii) the execution, delivery
and performance by the Company or the Consultant of this
Agreement.
(b) Notwithstanding the foregoing,
upon a judicial determination or a determination in an arbitration
proceeding which is final and no longer appealable that the act or
omission giving rise to the indemnification of an Indemnified
Person pursuant to this Section 6 resulted primarily
out of or was based primarily upon the Indemnified Person’s
gross negligence, fraud or willful misconduct (unless such action
or omission was based upon the Indemnified Person’s reliance
in good faith upon any of the representations, warranties,
covenants or agreements made by the Company herein), the Company
shall not be responsible for any Loss sought to be indemnified in
connection therewith, and the Company shall be entitled to recover
from the Indemnified Person all such amounts previously paid in
full or partial satisfaction of such indemnity with interest
thereon at a rate of ten percent (10%), together with all costs and
expenses of the Company reasonably incurred in effecting such
recovery, if any.
(c) If any action, suit, proceeding
or investigation (each, a “ Claim ”) is
commenced, as to which an Indemnified Person proposes to demand
indemnification, it shall give prompt written notice thereof to the
Company; provided, however , that no delay on the part of an
Indemnified Person in notifying the Company shall relieve the
Company from any liability
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hereunder, unless (and then solely to the
extent) the Company is actually prejudiced or damaged in any manner
by such delay. Such notice shall be accompanied by copies of all
relevant documentation with respect to such Claim, including,
without limitation, any summons, complaint or other pleading which
may have been served, any written demand or any other document or
instrument directly relating thereto. If the Company shall
acknowledge, in a writing delivered to the Indemnified Persons,
that the Company is obligated to indemnify, defend and hold
harmless the Indemnified Persons under the terms of their
indemnification obligations hereunder in connection with a
particular Claim, then the Company shall have the right to assume
the defense of such Claim at its own expense and by its own
counsel, which counsel shall be reasonably satisfactory to the
Indemnified Persons; provided , however , that the
Company shall not have the right to assume the defense of such
Claim, notwithstanding the giving of such written acknowledgment,
if (i) the Claim seeks only an injunction or other equitable
relief; (ii) the Indemnified Persons shall have been advised
by counsel that there are one or more legal or equitable defenses
available to them which are different from or in addition to those
available to the Company, and, in the reasonable opinion of the
Indemnified Persons, counsel for the Company could not adequately
represent the interests of the Indemnified Persons because such
interests could be in conflict with those of the Company; or
(iii) such Claim involves, or could have a material effect on,
any material matter beyond the scope of the indemnification
obligation of the Company. If the Company elects to assume the
defense of any such Claim (under circumstances in which the proviso
in the preceding sentence is not applicable), the Company shall
consult with Indemnified Persons and the Indemnified Persons may
participate in such defen
