Exhibit 10.8(a)
EXECUTION
COPY
CONSENT AND FIRST AMENDMENT TO
CREDIT AGREEMENT
CONSENT AND FIRST AMENDMENT TO
CREDIT AGREEMENT (this “ Amendment ”), dated as
of July 29, 2007, among Addus HealthCare, Inc., an Illinois
corporation (“ Borrower ”), the other persons
signatory hereto as “Loan Parties”, FREEPORT FINANCIAL
LLC, a Delaware limited liability company (“ Agent
”) and the Lenders signatory hereto. Terms not defined herein
have the meanings given to them in the Credit Agreement (as
hereinafter defined).
RECITALS
A. Borrower, the Loan Parties, the
Lenders signatory thereto and Agent are party to that certain
Credit Agreement dated as of September 19, 2006 (as amended by
this Amendment, the “ Credit Agreement
”).
B. Borrower, the Loan Parties, the
Lenders and Agent are entering into this Amendment in connection
with (I) the acquisition by Addus HealthCare (Nevada), Inc., a
Delaware corporation (“ Addus Nevada ”), of
certain assets and intellectual property of SuCasa Personal Care,
LLC (“ SuCasa ”) and Desert PCA of Nevada LLC
(“ Desert ”, and, collectively with SuCasa, the
“ SuCasa Companies ”), for an aggregate purchase
price of not more than $3,500,000 (the “ SuCasa
Acquisition ”) and (II) the acquisition within ninety
(90) days of the First Amendment Effective Date (the “
Moore Acquisition ”) by the Borrower or a wholly-owned
Subsidiary of the Borrower of all of the shares of capital stock of
Moore Home Health Care, Inc., an Indiana corporation (“
Moore ”) for an aggregate purchase price not to exceed
$375,000.
C. Agent and Lenders are willing to
enter into this Amendment upon the terms and conditions set forth
below.
NOW THEREFORE, in consideration of
the matters set forth in the recitals and the covenants and
provisions herein set forth, and other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
AGREEMENT
Section 1. Definitions .
Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed thereto in the Credit
Agreement.
Section 2. Consent .
Agent and the Lenders hereby (A) consent to Addus Nevada
(i) entering into that certain Asset Purchase Agreement, dated
as of July 29, 2007, by and among Addus Nevada, the SuCasa
Companies, the Sellers’ Representative named therein (in such
capacity, the “ Sellers’ Representative ”)
and the Sellers set forth on Exhibit A thereto (the “
SuCasa Asset Purchase Agreement ”), that certain
promissory note in the original principal amount of $250,000, dated
as of July 29, 2007 (as the same may be amended or modified as
permitted by the Credit Agreement, the “ SuCasa Note
”), made by Addus Nevada in favor of Sellers’
Representative and such documents executed and delivered to the
SuCasa Companies
pursuant to the SuCasa Asset Purchase Agreement
(the “ SuCasa Acquisition Documents ”) and
(ii) consummating the SuCasa Acquisition on the First
Amendment Effective Date pursuant to the terms and conditions of
the SuCasa Acquisition Documents and this Amendment for an
aggregate purchase price not to exceed $1,750,000 in cash on the
First Amendment Effective Date and no more than an additional
$1,500,000 in cash following the First Amendment Effective Date to
be paid at the times and in the manner specified in the SuCasa
Asset Purchase Agreement provided that such payments shall not be
made in the event that any Default or Event of Default under any of
Sections 7.1 or 8.1(a) of the Credit Agreement has occurred
and is continuing or would result therefrom; (B) consent to
the Borrower or a wholly-owned Subsidiary of Borrower
(i) entering into documentation with respect to the Moore
Acquisition on terms and conditions satisfactory to the Agent (the
“ Moore Acquisition Documents ”); and
(ii) consummating the Moore Acquisition on or after the First
Amendment Effective Date for an aggregate purchase price not to
exceed $325,000 in cash on the closing date thereof pursuant to the
terms of the Moore Acquisition Documents plus certain deferred
purchase price owed to the sellers of Moore in an amount not to
exceed $50,000; and (C) agree that for purposes of calculating
any Excess Cash Flow prepayment amount that may be due in respect
of any Fiscal Year pursuant to Section 2.5(b) of the Credit
Agreement, (i) the unfinanced amount of the purchase price
paid in cash during such Fiscal Year for the Moore Acquisition and
(ii) the unfinanced installment payments made during such
Fiscal Year pursuant to the SuCasa Acquisition Documents shall be
deducted from the “Subtotal” determined as part of the
calculation for “Excess Cash Flow” set forth on
Schedule 2 to Annex E of the Credit Agreement prior to applying the
“Required Prepayment Percentage” set forth on such
Schedule.
Section 3. Amendment to the
Credit Agreement . As of the First Amendment Effective Date,
the Credit Agreement is hereby amended as follows:
3.1. Section 1.1 of the
Credit Agreement is hereby amended by adding the following new
definitions thereto:
Addus Nevada
means Addus HealthCare (Nevada),
Inc., a Delaware corporation.
First Amendment
means that certain Consent and First
Amendment to Credit Agreement dated as of July 29, 2007 among
the Loan Parties, Agent and the Lenders.
First Amendment Effective
Date has the meaning set
forth in the First Amendment.
Moore has the meaning set forth in the Recitals to the
First Amendment.
Moore Acquisition
has the meaning set forth in the
Recitals to the First Amendment.
Moore Acquisition
Documents has the meaning
set forth in Section 2 of the First Amendment.
Reaffirmation of Collateral
Documents means the
Consent and Reaffirmation dated as of July 29, 2007 of the
Loan Parties signatory thereto, in respect of the Collateral
Documents.
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SuCasa Acquisition
has the meaning set forth in the
Recitals to the First Amendment.
SuCasa Acquisition
Documents has the meaning
set forth in Section 2 of the First Amendment.
SuCasa Asset Purchase
Agreement has the meaning
set forth in Section 2 of the First Amendment.
SuCasa Companies
has the meaning set forth in the
Recitals to the First Amendment.
SuCasa Note
has the meaning set forth in
Section 2 of the First Amendment.
3.2. Section 1.1 of the
Credit Agreement is further amended by amending the definition of
“EBITDA” by deleting the word “and” that
immediately precedes “(xiv)” and replacing it with
“,” and adding the following language immediately after
clause (xiv) therein:
“, and (xv) in connection
with calculating any monthly financial statements required by
Section 7.2(a) for any period which includes the month
of September, 2006, without duplication, the one-time charge of
$146,431 expensed pre closing in September 2006 in connection with
an audit conducted by the U.S. Department of
Labor;”
3.3. The proviso at the end of the
definition of “EBITDA” is amended and restated in its
entirety to read as follows:
“ provided , that,
notwithstanding anything to the contrary contained herein, for each
of the Fiscal Quarters listed below, EBITDA shall be deemed to be
the amount set forth below opposite such corresponding
period:
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EBITDA
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September 30, 2006
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$
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3,563,347
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1
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December 31, 2006
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$
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3,843,068
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March 31, 2006
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$
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3,062,914;
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Provided, further, that for any
period that includes the month of April, May, June or July of 2007,
EBITDA shall, without duplication, be increased with respect to the
assets acquired in connection with the SuCasa Acquisition by an
amount equal to $71,897 for each such month.”
3.4. Section 6.1 of the
Credit Agreement is hereby amended by deleting the
“and” at the end of clause (i) thereof,
deleting the “.” at the end of clause (j)
thereof and replacing it with “;” and by adding
the following new clauses (k), (l) and (m) :
“(k) Indebtedness in respect
of that certain 8% Junior Subordinated Promissory Note by Addus
Nevada payable to Glen Schlosser, as Seller’s Representative
(on behalf the Sellers (as defined in the SuCasa Asset Purchase
Agreement)), in the original principal amount of
$250,000;
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1
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This figure includes the one-time
charge of $146,431 expensed pre closing in September 2006 in
connection with an audit conducted by the U.S. Department of
Labor.
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“(l) Indebtedness for the
deferred purchase price in connection with the Moore Acquisition up
to $50,000; and
(m) Indebtedness consisting of
surety bonds issued to licensing authorities in connection in the
ordinary course of business in an aggregate amount for all such
surety bonds not to exceed $250,000 outstanding at any
time.”
3.5. Section 6.3 of the
Credit Agreement is hereby amended by deleting the
“and” at the end of clause (j) thereof,
deleting the “.” at the end of clause (k)
thereof and replacing it with “;” and by adding
the following new clauses (l) and (m) :
“(l) Addus Nevada may
consummate the SuCasa Acquisition as of the First Amendment
Effective Date pursuant to the SuCasa Acquisition Documents;
and
(m) Borrower or a wholly-owned
Subsidiary of Borrower may consummate the Moore Acquisition within
ninety (90) days of the First Amendment Effective Date
pursuant to the Moore Acquisition Documents and all applicable law,
provided that the Moore Acquisition Documents shall have been duly
authorized, executed and delivered by each of the respective
parties thereto and shall be in full force and effect and provided
further that the Agent shall have received a complete copy of the
fully executed Moore Acquisition Documents, certified by the
Borrower as being true, complete and correct.”
3.6. Clause (d) of
Section 6.6 of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:
“(d) acquire by purchase or
otherwise all or any part of the Stock, business or assets of any
other Person, provided that (i) Addus Nevada may consummate
the SuCasa Acquisition as of the First Amendment Effective Date
pursuant to the SuCasa Acquisition Documents; and
(ii) Borrower or a wholly-owned Subsidiary of Borrower may
consummate the Moore Acquisition on or after the First Amendment
Effective Date pursuant to the Moore Acquisition Documents and all
applicable law, provided that the Moore Acquisition