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CONSENT AND AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT
This Consent and Amendment No. 2 to Second Amended and Restated Credit and Guaranty Agreement (this Amendment ), dated as of
May 24, 2016 (the Second Amendment Effective Date ), is entered into among FIFTH THIRD BANK, an Ohio banking corporation, as agent (in such capacity as agent, the Agent ) for itself and all other lenders
from time to time party to the Credit Agreement referred to below (the Lenders ), the LENDERS, ADDUS HEALTHCARE, INC., an Illinois corporation ( Addus Healthcare ), ADDUS HEALTHCARE (IDAHO),
INC., a Delaware corporation ( Addus Idaho ), ADDUS HEALTHCARE (INDIANA), INC., a Delaware corporation ( Addus Indiana ), ADDUS HEALTHCARE (NEVADA), INC., a Delaware corporation ( Addus
Nevada ), ADDUS HEALTHCARE (NEW JERSEY), INC., a Delaware corporation ( Addus New Jersey ), ADDUS HEALTHCARE (NORTH CAROLINA), INC., a Delaware corporation ( Addus North Carolina ),
BENEFITS ASSURANCE CO., INC., a Delaware corporation ( Benefits Assurance ), PHC ACQUISITION CORPORATION, a California corporation ( PHC Acquisition ), PROFESSIONAL RELIABLE NURSING SERVICE,
INC., a California corporation ( Professional Reliable ), ADDUS HEALTHCARE (SOUTH CAROLINA), INC., a Delaware corporation ( Addus South Carolina ), ADDUS HEALTHCARE (DELAWARE), INC., a Delaware
corporation ( Addus Delaware ), CURA PARTNERS, LLC, a Tennessee limited liability company ( Cura ), PRIORITY HOME HEALTH CARE, INC., an Ohio corporation ( Priority Home ), SOUTH
SHORE HOME HEALTH SERVICE INC., a New York corporation ( South Shore ; Addus Healthcare, Addus Idaho, Addus Indiana, Addus Nevada, Addus New Jersey, Addus North Carolina, Benefits Assurance, PHC Acquisition, Professional
Reliable, Addus South Carolina, Addus Delaware, Cura, Priority Home and South Shore are collectively referred to herein as the Borrowers and individually referred to herein, each as a Borrower ), and ADDUS
HOMECARE CORPORATION, a Delaware corporation ( Holdings ; Holdings and Borrowers are collectively referred to as the Credit Parties ).
W I T N E S S E T H:
Agent, Fifth Third Bank, as a Lender, Compass Bank, Bank of the West and Franklin Synergy Bank (collectively, the Existing Lenders ), Holdings and certain of the Borrowers are parties to that certain Second Amended and Restated
Credit and Guaranty Agreement, dated as of November 10, 2015 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the Credit Agreement );
WHEREAS, prior to this Amendment, Addus Healthcare purchased (the BestCare Asset Acquisition ) the Assets (as such term is
defined in the BestCare Purchase Agreement (as defined below)) and assumed the Assumed Liabilities (as such term is defined in the BestCare Purchase Agreement) in respect of the Business (as such term is defined in the BestCare Purchase Agreement)
of Five Points Healthcare of Virginia, LLC (d/b/a BestCare HomeCare), a Delaware limited liability company (the Seller ), pursuant to that certain Asset Purchase Agreement, effective as of November 9, 2015, by and among Addus
Healthcare, as purchaser, the Seller, and Five Points Healthcare, LLC, a Delaware limited liability company, as parent (the BestCare Purchase Agreement , together with any and all other instruments, documents and
agreements executed and/or delivered in connection therewith, the BestCare Purchase Documents ; a true, correct and complete copy of each of the BestCare Purchase Documents were
delivered to Agent prior to the date hereof);
WHEREAS, in order to consummate the BestCare Asset Acquisition, the Borrowers used the
proceeds of a Revolving Loan under the Credit Agreement to pay the cash outlay portion of the purchase price thereunder that was an amount equal to $4,115,026.00 (the BestCare Revolving Loan );
WHEREAS, the Borrowers and Holdings have requested that the Agent and the Existing Lenders (a) consent to the Borrowers ability to
borrow a Draw Term Loan in the amount equal to $3,000,000.00, the remaining Draw Term Loan amount available under the Credit Agreement, and apply the proceeds of such Draw Term Loan to prepay the outstanding Revolving Loans on account of the
BestCare Revolving Loan (as the proceeds of a Draw Term Loan are required under the Credit Agreement to be used in respect of Permitted Acquisitions) and (b) amend the Credit Agreement to, among other things, (i) increase the Revolving Credit
Commitment thereunder by $25,000,000, from $75,000,000 to $100,000,000, (ii) increase the Applicable Advance Multiple from a maximum of 3.25 to 1.0 to 3.75 to 1.0, (iii) increase the maximum Senior Leverage Ratio from 3.50 to 1.0 to 4.00 to 1.0 and
(iv) add Healthcare Financial Solutions, LLC as a Lender under the Credit Agreement;
WHEREAS, the Credit Parties wish, and Agent and the
Existing Lenders are willing, to give the requested consent and amend the Credit Agreement, subject to the terms and conditions of this Amendment; and
WHEREAS, this Amendment shall constitute one of the Loan Documents and these Recitals shall be construed as part of this Amendment.
NOW, THEREFORE, for and in consideration of the premises and mutual agreements herein contained and for the purposes of setting forth the
terms and conditions of this Amendment, the parties, intending to be bound, hereby agree as follows:
Section 1 Definitions and
Reaffirmation of the Credit Agreement. All capitalized terms which are not defined herein shall have the same meanings as set forth in the Credit Agreement. Except as specifically set forth herein, the Credit Agreement shall remain in
full force and effect and its provisions shall be binding on the parties hereto.
Section 2 Consent. Notwithstanding the
provisions of (a) Section 5.7 of the Credit Agreement, the Agent and the Lenders hereby consent and agree that, with respect to the request by Borrowers for the Draw Term Loan made on the date hereof, the requirement
that the proceeds thereof be used to finance a Permitted Acquisition shall not be required, and (b) Section 3.1(e)(iii) of the Credit Agreement, the Agent and the Lenders hereby consent and agree that, with respect to
the request for the Draw Term Loan made on the date hereof, the requirement that the BestCare Asset Acquisition meet all of the applicable requirements, terms and conditions set forth in the definition of Permitted Acquisition shall not
be required, in each case so long as the proceeds of the Draw Term Loan made on the date hereof is applied to prepay the outstanding Revolving Loans. Each of Agent s and each Lender s consents as described in
the preceding sentence are given upon the condition of the satisfaction of the conditions set forth in Section 4 hereof and in reliance upon the representations and
warranties set forth in Section 7 below being true and correct.
Section 3 Amendment of the Credit
Agreement. The Credit Parties, Agent and the Lenders hereby agree to amend the Credit Agreement as of the date hereof as follows:
(a) Section 1.1 (Definitions). The following new definitions shall be added to
Section 1.1 of the Credit Agreement in the appropriate alphabetical order to read as follows:
Action shall mean the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.
Bail-In Legislation shall mean, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of
the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.
EEA Financial Institution shall mean (a) any credit institution or investment firm established in any EEA Member Country
which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in
an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
EEA Member Country shall mean any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
EEA Resolution Authority shall mean any public administrative authority or any Person entrusted with public administrative
authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
EU Bail-In Legislation Schedule shall mean the EU Bail-In Legislation Schedule published by the Loan Market Association (or
any successor Person), as in effect from time to time.
Second Amendment shall mean that certain Consent and Amendment
No. 2 to Second Amended and Restated Credit and Guaranty Agreement, dated as of the Second Amendment Effective Date, by and among the Borrowers, the other Credit Parties party thereto, the Agent, for the benefit of itself and the other Lenders, and
Second Amendment Effective Date shall mean May 24, 2016.
Write-Down and Conversion Powers shall mean with respect to any EEA Resolution Authority, the write-down and conversion
powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.
(b) Section 1.1 (Definitions). The following definitions in
Section 1.1 of the Credit Agreement shall be amended and restated to read as follows:
Advance Multiple means (i) from the Original Closing Date through December 31, 2009, 2.75 to 1.0, (ii) from January 1, 2010 through one Business Day immediately prior to the Second Amendment Effective Date, 3.25 to 1.0 and
(iii) for each date of determination thereafter, commencing with the Second Amendment Effective Date, the maximum permitted Senior Leverage Ratio, expressed as the quotient of such ratio, for the most recently specified test date set forth in
Section 6.22(a) as of or prior to such date of determination; provided that, in no event shall the Applicable Advance Multiple exceed 3.75 to 1.0.
Daily Floating LIBOR means, for each day, the rate of interest per annum rounded upwards (the Daily Floating
Rounding Adjustment ), if necessary, to the next 1/100 of 1% fixed by ICE Benchmark Administration Limited (or any successor thereto, or replacement thereof, approved by Agent, each an Alternate LIBOR Source ) at
approximately 11:00 a.m., London, England time (or the relevant time established by ICE Benchmark Administration Limited, an Alternate LIBOR Source, or Agent, as applicable), two (2) Business Days prior to such date of determination, relating to
quotations for the 1 month London InterBank Offered Rates on U.S. Dollar deposits, as displayed by Bloomberg LP (or any successor thereto or replacement thereof, as approved by Agent, each an Approved Bloomberg Successor ), or if
no longer displayed by Bloomberg LP (or any Approved Bloomberg Successor), such rate of interest per annum as shall be determined in good faith by Agent from such sources as it shall determine to be comparable to Bloomberg LP (or any Approved
Bloomberg Successor), all as determined by Agent in accordance with this Agreement and Agent s loan systems and procedures periodically in effect; provided that, notwithstanding the foregoing, in no event shall the Daily Floating LIBOR
percent (0%) as of any date (the Daily Floating LIBOR Minimum ); provided further that, at any time during which a Rate Management Agreement with Agent is then in effect
with respect to all or a portion of the Obligations, the Daily Floating LIBOR Minimum and the Daily Floating Rounding Adjustment shall all be disregarded and no longer of any force and effect with respect to such portion of the Obligations subject
to such Rate Management Agreement. For the avoidance of doubt, the Daily Floating LIBOR shall be determined, with respect to any Daily Floating LIBOR Loan, as of the first day of the beginning of the applicable 1 month interest period in which
such Daily Floating LIBOR Loan is made and the first day of each applicable one month interest period thereafter while such Daily Floating LIBOR Loan is outstanding, or such other day as determined by Agent in its sole discretion.
EBITDA means, with reference to any period, without duplication, Net Income for such period plus the sum of all
amounts deducted in arriving at such Net Income amount in respect of (a) Interest Expense for such period, (b) federal, state, and local income taxes for such period, (c) [reserved], (d) depreciation of fixed assets and
amortization of intangible assets for such period, (e) non-recurring fees, costs and expenses for such period incurred in connection with entering into this Agreement, the other Loan Documents and the transactions contemplated thereby on the
Second Restatement Closing Date in an aggregate amount not to exceed $1,100,000, (f) all other extraordinary or non-recurring expenses and losses for such period in an amount reasonably acceptable to Agent, (g) non-recurring due diligence
costs and expenses for such period incurred in connection with closed Acquisitions permitted under this Agreement, (h) non-cash charges (or minus non-cash gains), including non-cash equity based compensation expenses, for such period,
(i) negative adjustments (or minus positive adjustments) to contingent consideration recognized in connection with Acquisitions permitted under this Agreement, and (j) stock-based compensation expense recognized on the issuance of
stock-based incentives issued to directors and employees of the Credit Parties for such period; provided that, notwithstanding anything to the contrary contained herein, EBITDA shall be deemed to be (x) $7,339,082.00 for the fiscal
quarter of the Credit Parties ended March 31, 2016, (y) $6,566,257.00 for the fiscal quarter of the Credit Parties ended December 31, 2015, (z) $7,189,671.00 for the fiscal quarter of the Credit Parties ended September 30, 2015, and
(aa) $8,121,860.00 for the fiscal quarter of the Credit Parties ended June 30, 2015. With respect to any period during which any Permitted Acquisition has occurred after the Second Amendment Effective Date, for purposes of determining
financial covenants set forth in Section 6.22 and calculating the Leverage Limit, EBITDA shall be calculated with respect to such period on a pro forma basis (provided, that any pro forma
adjustments included therein shall have been supported by a Subject QofE Report (as defined below) and approved by the Agent, in its sole discretion) using the historical audited financial statements of any business so acquired, to the extent
supported by a quality of earnings report prepared by a third party reasonably acceptable to the Agent (which quality of earnings report was received and deemed acceptable by the Agent in its reasonable discretion prior to the consummation of such
Permitted Acquisition (such quality of earnings report, a Subject QofE Report ) and the financial statements of the Credit Parties and their Subsidiaries which shall be reformulated as if such Permitted Acquisition, and any
Indebtedness incurred or repaid in connection therewith, had been consummated or incurred or repaid at the beginning of such period (and assuming that any such incurred Indebtedness bears interest during any portion of the applicable measurement
period prior to the relevant acquisition at the rate which is or would have been in effect with respect to such Indebtedness as at the relevant date of determination).
Fee Letter means, individually and collectively, (a) that certain fee letter agreement, dated as of the Second Restatement
Closing Date, among Fifth Third and the Credit Parties, and (b) that certain fee letter agreement, dated as of the Second Amendment Effective Date, among Fifth Third and the Credit Parties, in each case entered into pursuant to Section 2.13(c).
LIBOR means, for an Interest Period for a Borrowing of Eurodollar Loans, the rate of interest per annum rounded upwards
(the LIBOR Rounding Adjustment ), if necessary, to the next 1/100 of 1% fixed by ICE Benchmark Administration Limited (or any successor thereto, or replacement thereof, approved by Agent, each an Alternate LIBOR
Source ) at approximately 11:00 a.m., London, England time (or the relevant time established by ICE Benchmark Administration Limited, an Alternate LIBOR Source, or Agent, as applicable), two (2) Business Days prior to such date of
determination, relating to quotations for the applicable 1 month, 2 month or 3 month London InterBank Offered Rates on U.S. Dollar deposits, as displayed by Bloomberg LP (or any successor thereto or replacement thereof, as approved by Agent, each an
Approved Bloomberg Successor ), or if no longer displayed by Bloomberg LP (or any Approved Bloomberg Successor), such rate of interest per annum as shall be determined in good faith by Agent from such sources as it shall determine