Exhibit 10.8(c)
EXECUTION
COPY
CONSENT AND THIRD AMENDMENT TO
CREDIT AGREEMENT
CONSENT AND THIRD AMENDMENT TO
CREDIT AGREEMENT (this “ Amendment ”), dated as
of November 13, 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
that certain Consent and First Amendment to Credit Agreement dated
as of July 29, 2007, that certain Consent and Second Amendment
to Credit Agreement dated as of October 15, 2007 and as
further amended, restated or otherwise modified including 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 (the “ Vegas Valley
Acquisition ”) by Addus HealthCare (Nevada), Inc., a
Delaware corporation and a wholly-owned Subsidiary of the Borrower
(“ Addus Nevada ”), of substantially all of the
assets of Vegas Valley Personal Care, LLC, a Nevada limited
liability company (“ Vegas Valley ”) for an
aggregate purchase price not to exceed $1,550,000 and (II) the
acquisition (the “ Greater Vegas Acquisition ”
and, together with the Vegas Valley Acquisition, the “
Vegas Acquisitions ”)) by Addus Nevada of
substantially all of the assets of Greater Vegas Personal Care,
LLC, a Nevada limited liability company (“ Greater
Vegas ”) for an aggregate purchase price not to exceed
$1,550,000.
C. Agent, Lenders and the Loan
Parties 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 consent to Addus Nevada
(i) entering into (v) that certain Asset Purchase
Agreement, dated as of even date herewith (the “ Greater
Vegas Purchase Agreement ”), by and between Addus Nevada,
Greater Vegas, Fabiana Alfaro and Ema Gomez Mitchell, (w) that
certain Asset Purchase Agreement, dated as of even date herewith
(the “ Vegas Valley Purchase Agreement ”), by
and between Addus Nevada, Vegas
Valley and Ema Gomez Mitchell, (x) that
certain Consulting Agreement, dated as of even date herewith (the
“ Vegas Consulting Agreement ”), by and between
Addus Nevada and Ema Gomez Mitchell, (y) the Vegas Earn Out
Agreement and (z) the other agreements, instruments and
documents for the purpose of consummating the Vegas Acquisitions in
each case on terms and conditions satisfactory to the Agent (the
“ Vegas Acquisition Documents ”, it being agreed
that the forms of the Greater Vegas Purchase Agreement, the Vegas
Valley Purchase Agreement, the Vegas Consulting Agreement, the
Vegas Earn Out Agreement and such other agreements, instruments and
documents provided to the Agent on November 12, 2007 are
satisfactory to the Agent); (ii) consummating the Vegas Valley
Acquisition on the Third Amendment Effective Date for an aggregate
purchase price not to exceed $950,000 paid in cash on the closing
date thereof pursuant to the terms of the Vegas Acquisition
Documents, plus a deferred purchase price in an amount not to
exceed $600,000 paid to Vegas Valley pursuant to the Vegas Earn Out
Agreement; and (iii) consummating the Greater Vegas
Acquisition on the Third Amendment Effective Date for an aggregate
purchase price not to exceed $950,000 paid in cash on the closing
date thereof pursuant to the terms of the Vegas Acquisition
Documents, plus a deferred purchase price in an amount not to
exceed $600,000 paid to Greater Vegas pursuant to the Vegas Earn
Out Agreement; provided that in each case such deferred purchase
price shall not be paid 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
or the Borrower does not have the minimum Borrowing Availability
required by Section 6.17 of the Credit Agreement after
giving effect to such payment.
Section 3. Amendment to the
Credit Agreement . As of the Third 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:
Greater Vegas
has the meaning set forth in the
Recitals to the Third Amendment.
Greater Vegas
Acquisition has the
meaning set forth in the Recitals to the Third
Amendment.
Medicaid Investigation
means the matters which were the
subject of the investigation pursuant to (i) the Search
Warrant, dated as of April 10, 2007, issued by the State of
Nevada to any Peace Officer in the County of Clark related to Vegas
Valley and (ii) the Search Warrant, dated as of April 10,
2007, issued by the State of Nevada to any Peace Officer in the
County of Clark related to the Greater Vegas.
Third Amendment
means that certain Consent and Third
Amendment to Credit Agreement dated as of November 13, 2007
among the Loan Parties, Agent and the Lenders.
Third Amendment Effective
Date has the meaning set
forth in the Third Amendment.
Third Amendment Reaffirmation of
Collateral Documents means the Consent and Reaffirmation (Third
Amendment) dated as of November 13, 2007 of the Loan Parties
signatory thereto, in respect of the Collateral
Documents.
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Vegas Acquisition
Documents has the meaning
set forth in Section 2 of the Third Amendment.
Vegas Acquisitions
has the meaning set forth in the
Recitals to the Third Amendment.
Vegas Earn Out
Agreement means that
certain Earn Out Agreement dated as of November 13, 2007 by
and between Addus HealthCare (Nevada), Inc., Fabiana Alfaro, Ema
Gomez Mitchell, Vegas Valley and Greater Vegas.
Vegas Valley
has the meaning set forth in the
Recitals to the Third Amendment.
Vegas Valley
Acquisition has the
meaning set forth in the Recitals to the Third
Amendment.
3.2. Section 1.1 of the
Credit Agreement is further amended by amending and restating the
proviso at the end of the definition of “EBITDA” 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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December 31, 2006
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$
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4,331,076
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March 31, 2007
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$
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3,574,099
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June 30, 2007
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$
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3,690,092
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Provided, further, that (i) for
any period that includes the month of July of 2007, EBITDA shall,
without duplication, be increased with respect to the assets
acquired in connection with the SuCasa Acquisition, the Silver
State Acquisition and the Vegas Acquisitions by an amount equal to
$246,500 for such month, (ii) for any period that includes the
month of August or September of 2007, EBITDA shall, without
duplication, be increased with respect to the assets acquired in
connection with the Silver State Acquisition and the Vegas
Acquisitions by an amount equal to $180,000 for each such month and
(iii) for any period that includes the month of October of
2007 to be increased with respect to the assets acquired in the
Vegas Acquisitions by an amount equal to $117,000 for such
month.”
3.3. Section 2.1(a)(v)
of the Credit Agreement is hereby amended and restated in its
entirety and replaced with the following new
Section 2.1(a)(v) :
(v) Borrower shall repay the Term
Loans through periodic payments on the dates and in the amounts
indicated below (“ Scheduled Installments ”),
and in any event the entire remaining principal balance shall be
repaid on the Commitment Termination Date.
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Term Loan
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Scheduled Installment
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December 31, 2007
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$
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1,140,000
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March 31, 2008
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$
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1,140,000
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June 30, 2008
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$
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1,140,000
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September 30, 2008
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$
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1,140,000
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December 31, 2008
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$
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1,535,000
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March 31, 2009
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$
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1,535,000
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June 30, 2009
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$
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1,535,000
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September 30, 2009
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$
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1,535,000
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December 31, 2009
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$
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1,930,000
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March 31, 2010
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$
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1,930,000
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June 30, 2010
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$
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1,930,000
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September 30, 2010
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$
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1,930,000
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December 31, 2010
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$
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2,325,000
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March 31, 2011
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$
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2,325,000
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June 30, 2011
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$
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2,325,000
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September 19, 2011
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$
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25,805,000
or the outstanding
principal balance
of Term Loans
outstanding on
such date
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The above scheduled installment
amounts reflect the incurrence by the Borrower of the Delayed Draw
Term Loans funded on the Third Amendment Effective Date and shall
thereafter be increased in the manner set forth on Annex B to the
Second Amendment to the extent any further Delayed Draw Term Loans
are funded. The final installment payment shall in all events equal
the entire remaining principal balance of the Term Loan (including
any remaining principal balance of such Delayed Draw Term Loans).
Amounts borrowed under this Section 2.1(a) and repaid
may not be reborrowed.
At the request of the applicable
Lender, the Term Loans shall be evidenced by promissory notes
substantially in the form of Exhibit 2.1(a) (as amended,
modified, extended, substituted or replaced from time to time, each
a “ Term Note ” and, collectively, the “
Term Notes ”), and Borrower shall execute and deliver
a Term Note to each such Term Lender. Each Term Note shall
represent the obligation of Borrower to pay the amount of the
applicable Term Lender’s Term Loan Commitment, together with
interest thereon.”
3.4. Section 5.12 of the
Credit Agreement is hereby amended by adding the following new
paragraph (d) thereto:
“(d) In connection with the
businesses acquired in the Vegas Acquisitions, the Borrower and its
Subsidiaries shall use the new healthcare provider number obtained
by the Borrower
4
after the Second Amendment Effective Date and
prior to the Third Amendment Effective Date. For purposes of
clarification, neither Borrower nor any Subsidiary of the Borrower
shall acquire or otherwise utilize any healthcare provider number
used by Vegas Valley or Greater Vegas.”
3.5. Section 6.1 of the
Credit Agreement is hereby amended by deleting the
“and” at the end of clause (m) thereof,
deleting the “.” at the end of clause (n)
thereof and replacing it with “; and” and by
adding the following new clause (o) :
“(o) Indebtedness in respect
of the Vegas Earn Out Agreements.”
3.6. Section 6.3 of the
Credit Agreement is hereby amended by deleting the
“and” at the end of clause (m) thereof,
deleting the “.” at the end of clause (n)
thereof and replacing it with “; and” and by
adding the following new clause (o) :
“(o) Borrower or a
wholly-owned Subsidiary of Borrower may consummate the Vegas Valley
Acquisition and the Greater Vegas Acquisition as of the Third
Amendment Effective Date pursuant to the Vegas Acquisition
Documents.”
3.7. Clause (d) of
Section 6.6 of the Credit Agreement is hereby amended
by deleting the “and” before clause (iii) thereof
and adding the following new language immediately at the end
thereof:
“and (iv) Borrower or a
wholly-owned Subsidiary of Borrower may consummate the Vegas Valley
Acquisition and the Greater Vegas Acquisition on the Third
Amendment Effective Date pursuant to the Vegas Acquisition
Documents and all applicable law, provided that the V