Full Press Release Details
LOAN AND SECURITY AGREEMENT
FIFTH THIRD BANK, an Ohio banking corporation, as Agent
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME
A PARTY HERETO, as Lenders
HEALTHCARE, INC., an Illinois corporation,
ADDUS HEALTHCARE (IDAHO), INC., a Delaware corporation,
ADDUS HEALTHCARE (INDIANA), INC., a Delaware corporation,
ADDUS HEALTHCARE (NEVADA), INC., a Delaware corporation,
ADDUS HEALTHCARE (NEW JERSEY), INC., a Delaware corporation,
ADDUS HEALTHCARE (NORTH CAROLINA), INC.,
a Delaware corporation,
BENEFITS ASSURANCE CO., INC., a Delaware corporation,
FORT SMITH HOME HEALTH AGENCY, INC., an Arkansas corporation,
LITTLE ROCK HOME HEALTH AGENCY, INC., an Arkansas corporation,
LOWELL HOME HEALTH AGENCY, INC., an Arkansas corporation,
ACQUISITION CORPORATION, a California corporation,
PROFESSIONAL RELIABLE NURSING SERVICE, INC., a California
ADDUS HOMECARE CORPORATION, a Delaware corporation,
dated as of November 2, 2009
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| ARTICLE 1 | DEFINITIONS; INTERPRETATION | 1 | ||
| 1.01 | Defined Terms | 1 | ||
| 1.02 | Accounting Terms | 1 | ||
| 1.03 | Terms Defined in UCC | 2 | ||
| 1.04 | Other Definitional Provisions; Construction | 2 | ||
| 1.05 | References to Agreements, Enactments, Etc | 3 | ||
| ARTICLE 2 | LOANS | 3 | ||
| 2.01 | Revolving Loans | 3 | ||
| 2.02 | [Reserved] | 5 | ||
| 2.03 | Repayments | 5 | ||
| 2.04 | Notes | 6 | ||
| ARTICLE 3 | LETTERS OF CREDIT | 6 | ||
| 3.01 | General Terms | 6 | ||
| 3.02 | Requests for Letters of Credit | 7 | ||
| 3.03 | Obligations Absolute | 7 | ||
| 3.04 | Expiration Dates of Letters of Credit | 8 | ||
| 3.05 | Deposit Obligations of Borrowers | 8 | ||
| 3.06 | Participation | 8 | ||
| ARTICLE 4 | INTEREST, FEES AND CHARGES | 8 | ||
| 4.01 | Revolving Loan Interest Rate | 8 | ||
| 4.02 | [Reserved] | 9 | ||
| 4.03 | [Reserved | 9 | ||
| 4.04 | Default Interest; Calculation of Interest | 9 | ||
| 4.05 | Other LIBOR Provisions | 9 | ||
| 4.06 | Fees and Charges | 11 | ||
| 4.07 | Maximum Interest | 12 | ||
| 4.08 | Taxes | 12 | ||
| 4.09 | Currency | 13 | ||
| ARTICLE 5 | COLLATERAL | 14 | ||
| 5.01 | Grant of Security Interest to Agent | 14 | ||
| 5.02 | Other Security | 15 | ||
| 5.03 | Possessory Collateral | 16 | ||
| 5.04 | Electronic Chattel Paper | 16 | ||
| 5.05 | Letter-of-Credit Rights | 16 | ||
| 5.06 | Third-Party Collateral | 16 | ||
| 5.07 | Deposit Account | 16 | ||
| 5.08 | Insurance Proceeds | 17 |
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| ARTICLE 6 | PRESERVATION OF COLLATERAL AND PERFECTION OF SECURITY INTERESTS THEREIN | 17 | ||
| ARTICLE 7 | POSSESSION OF COLLATERAL AND RELATED MATTERS | 18 | ||
| ARTICLE 8 | ACCOUNT STATEMENTS | 18 | ||
| ARTICLE 9 | COLLATERAL, AVAILABILITY AND FINANCIAL REPORTS | 18 | ||
| 9.01 | Quarterly Management Report | 18 | ||
| 9.02 | Other Requested Reports | 19 | ||
| 9.03 | Financial Statements | 19 | ||
| 9.04 | Annual Business Plan and Projections | 19 | ||
| 9.05 | Public Reporting | 19 | ||
| 9.06 | Other Information | 20 | ||
| ARTICLE 10 | TERMINATION | 20 | ||
| ARTICLE 11 | REPRESENTATIONS AND WARRANTIES | 20 | ||
| 11.01 | Financial Statements and Other Information | 20 | ||
| 11.02 | Locations | 21 | ||
| 11.03 | Loans by Borrowers | 21 | ||
| 11.04 | [Reserved] | 21 | ||
| 11.05 | Liens | 21 | ||
| 11.06 | Organization, Authority and No Conflict | 21 | ||
| 11.07 | Litigation | 22 | ||
| 11.08 | Compliance with Laws and Maintenance of Permits | 22 | ||
| 11.09 | Affiliate Transactions | 22 | ||
| 11.10 | Names and Trade Names | 23 | ||
| 11.11 | Equipment | 22 | ||
| 11.12 | Enforceability | 23 | ||
| 11.13 | Solvency | 23 | ||
| 11.14 | Indebtedness | 23 | ||
| 11.15 | Margin Security and Use of Proceeds | 23 | ||
| 11.16 | Parent, Subsidiaries | 23 | ||
| 11.17 | No Defaults | 24 | ||
| 11.18 | Employee Matters | 24 | ||
| 11.19 | Intellectual Property | 24 | ||
| 11.20 | Environmental Matters | 24 | ||
| 11.21 | ERISA Matters | 25 | ||
| 11.22 | Subordinated Debt | 25 | ||
| 11.23 | Investment Company Act | 25 | ||
| 11.24 | Compliance With Health Care Laws | 25 | ||
| ARTICLE 12 | AFFIRMATIVE COVENANTS | 27 | ||
| 12.01 | Maintenance of Records | 27 |
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| 12.02 | Notices | 27 | ||
| 12.03 | Compliance with Laws and Maintenance of Permits | 28 | ||
| 12.04 | Inspection, Audits and Appraisals | 29 | ||
| 12.05 | Insurance | 29 | ||
| 12.06 | Collateral | 30 | ||
| 12.07 | Use of Proceeds | 31 | ||
| 12.08 | Taxes | 31 | ||
| 12.09 | Intellectual Property | 31 | ||
| 12.10 | Checking Accounts and Cash Management Services | 31 | ||
| 12.11 | Government Contracts | 32 | ||
| 12.12 | Patriot Act, Bank Secrecy Act and Office of Foreign Assets Control | 32 | ||
| 12.13 | Seller Note Subordination Agreements | 33 | ||
| 12.14 | Health Care Law Matters | 33 | ||
| 12.15 | HIPAA | 33 | ||
| 12.16 | Management Agreements | 33 | ||
| ARTICLE 13 | NEGATIVE COVENANTS | 34 | ||
| 13.01 | Guaranties | 34 | ||
| 13.02 | Indebtedness | 34 | ||
| 13.03 | Liens | 35 | ||
| 13.04 | Mergers, Sales, Acquisitions, Subsidiaries and Other Transactions Outside the Ordinary Course of Business | 35 | ||
| 13.05 | Dividends and Distributions | 36 | ||
| 13.06 | Investments; Loans | 36 | ||
| 13.07 | Fundamental Changes, Line of Business | 37 | ||
| 13.08 | Equipment | 37 | ||
| 13.09 | Affiliate Transactions | 37 | ||
| 13.10 | Other Agreements | 37 | ||
| ARTICLE 14 | FINANCIAL COVENANTS | 38 | ||
| 14.01 | Fixed Charge Coverage | 38 | ||
| 14.02 | Senior Debt Leverage | 38 | ||
| 14.03 | Capital Expenditure Limitations | 38 | ||
| ARTICLE 15 | DEFAULT | 39 | ||
| 15.01 | Payment | 39 | ||
| 15.02 | Breach of this Agreement and the Other Agreements | 39 | ||
| 15.03 | Breaches of Other Obligations | 39 | ||
| 15.04 | Breach of Representations and Warranties | 39 | ||
| 15.05 | Collateral | 39 | ||
| 15.06 | Levy, Seizure or Attachment | 39 | ||
| 15.07 | Bankruptcy or Similar Proceedings | 39 | ||
| 15.08 | Appointment of Receiver | 40 |
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| 15.09 | Judgment | 40 | ||
| 15.10 | Default or Revocation of Guaranty | 40 | ||
| 15.11 | Criminal Proceedings | 40 | ||
| 15.12 | Change of Control | 40 | ||
| 15.13 | Subordinated Debt Documents | 41 | ||
| 15.14 | Health Care Defaults | 41 | ||
| ARTICLE 16 | REMEDIES UPON AN EVENT OF DEFAULT | 41 | ||
| ARTICLE 17 | CONDITIONS PRECEDENT | 42 | ||
| 17.01 | Conditions Precedent to Initial Loans | 42 | ||
| 17.02 | Conditions Precedent to All Loans | 44 | ||
| ARTICLE 18 | AGENT | 45 | ||
| 18.01 | Appointment of Agent | 45 | ||
| 18.02 | Nature of Duties of Agent | 45 | ||
| 18.03 | Lack of Reliance on Agent | 46 | ||
| 18.04 | Certain Rights of Agent | 46 | ||
| 18.05 | Reliance by Agent | 46 | ||
| 18.06 | Indemnification of Agent | 47 | ||
| 18.07 | Agent in its Individual Capacity | 47 | ||
| 18.08 | Holders of Notes | 47 | ||
| 18.09 | Successor Agent | 47 | ||
| 18.10 | Collateral Matters | 48 | ||
| 18.11 | Actions with Respect to Defaults | 49 | ||
| 18.12 | Delivery of Information | 49 | ||
| 18.13 | Demand | 50 | ||
| 18.14 | Notice of Default | 50 | ||
| ARTICLE 19 | MISCELLANEOUS | 50 | ||
| 19.01 | Settlements, Distributions and Apportionment of Payments | 50 | ||
| 19.02 | Joint and Several Liability | 51 | ||
| 19.03 | Assignability | 54 | ||
| 19.04 | Amendments, Etc. | 57 | ||
| 19.05 | Nonliability of Agent and Lenders | 58 | ||
| 19.06 | Releases; Indemnification | 58 | ||
| 19.07 | Notice | 59 | ||
| 19.08 | Choice of Governing Law; Construction; Forum Selection | 60 | ||
| 19.09 | Headings of Subdivisions | 60 | ||
| 19.10 | Power of Attorney | 60 | ||
| 19.11 | Confidentiality | 60 | ||
| 19.12 | Brokerage Fees | 61 | ||
| 19.13 | Limitation of Actions | 61 | ||
| 19.14 | Liability | 62 |
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| 19.15 | Counterparts | 62 | ||
| 19.16 | Electronic Submissions | 62 | ||
| 19.17 | Waiver of Jury Trial; Other Waivers | 63 | ||
| 19.18 | Appointment of Borrower Representative | 64 | ||
| 19.19 | Patriot Act | 64 |
| ANNEX I | - DEFINED TERMS | |
| EXHIBIT A | - COMPLIANCE CERTIFICATE | |
| EXHIBIT B | - JOINDER AGREEMENT | |
| EXHIBIT C | - FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT | |
| EXHIBIT D | - BUSINESS ASSOCIATE AGREEMENT | |
| EXHIBIT E | - NOTICE OF BORROWING |
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time, this
Agreement ) made this 2nd day of November, 2009 by and among FIFTH THIRD BANK, an Ohio banking corporation (in its individual capacity, including its successors and assigns, Fifth Third ), as agent (in such
capacity as agent, Agent ) for itself and all other lenders from time to time a party hereto ( Lenders ), having an office at 222 S. Riverside Plaza, 30th Floor, Chicago, Illinois 60606, all other 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 ), FORT SMITH HOME HEALTH AGENCY, INC., an Arkansas corporation ( Fort
Smith ), LITTLE ROCK HOME HEALTH AGENCY, INC., an Arkansas corporation ( Little Rock ), LOWELL HOME HEALTH AGENCY, INC., an Arkansas corporation ( Lowell ), PHC ACQUISITION CORPORATION, a
California corporation ( PHC Acquisition ), PROFESSIONAL RELIABLE NURSING SERVICE, INC., a California corporation ( Professional Reliable ), and ADDUS HOMECARE CORPORATION, a Delaware corporation
( Holdings ), each having its principal place of business at 2401 S. Plum Grove Road, Palatine, Illinois 60067 (Addus Healthcare, Addus Idaho, Addus Indiana, Addus Nevada, Addus New Jersey, Addus North Carolina, Benefits Assurance,
Fort Smith, Little Rock, Lowell, PHC Acquisition and Professional Reliable are collectively referred to as Borrowers , and Holdings is referred to as a Guarantor).
W I T N E S S E T H:
WHEREAS, Borrowers may, from time to time, request Loans from Agent and Lenders, and the parties wish to provide for the terms and conditions upon which such Loans or other financial
accommodations, if made by Agent and Lenders, shall be made;
NOW, THEREFORE, in consideration of any Loan (including
any Loan by renewal or extension) hereafter made to a Borrower by Agent and/or Lenders, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by Borrowers, the parties agree as follows:
DEFINITIONS; INTERPRETATION.
1.01 Defined Terms. For the purposes of this Agreement, capitalized words and phrases shall have the meanings set forth in Annex I attached hereto and made a part hereof.
1.02 Accounting Terms. Any accounting terms used in this Agreement which are not specifically defined herein
shall have the meanings customarily given them in accordance
with GAAP. Calculations and determinations of financial and accounting terms used and not otherwise specifically defined hereunder and the preparation of financial statements to be furnished to
Agent and the Lenders pursuant hereto shall be made and prepared, both as to classification of items and as to amount, in accordance with GAAP as used in the preparation of the financial statements of the Credit Parties on the date of this
Agreement. If any changes in accounting principles or practices from those used in the preparation of the financial statements are hereafter occasioned by the promulgation of rules, regulations, pronouncements and opinions by or required by the
Financial Accounting Standards Board or the American Institute of Certified Public Accountants (or any successor thereto or agencies with similar functions), which results in a material change in the method of accounting in the financial statements
required to be furnished to Agent and the Lenders hereunder or in the calculation of financial covenants, standards or terms contained in this Agreement, the parties hereto agree to enter into good faith negotiations to amend such provisions so as
equitably to reflect such changes to the end that the criteria for evaluating the financial condition and performance of the Credit Parties will be the same after such changes as they were before such changes; and, if the parties fail to agree on
the amendment of such provisions, the Credit Parties will furnish financial statements in accordance with such changes but shall provide calculations for all financial covenants, perform all financial covenants and otherwise observe all financial
standards and terms in accordance with applicable accounting principles and practices in effect immediately prior to such changes.
1.03 Terms Defined in UCC. The terms Account , Account Debtor , Certificated Security , Chattel Paper , Commercial Tort Claims , Deposit
Accounts , Documents , Electronic Chattel Paper , Equipment , Financial Asset , Fixture , General Intangibles , Goods , Health-Care-Insurance Receivables ,
Instrument , Inventory , Investment Property , Letter-of-Credit Right , Payment Intangible , Proceeds , Security , Securities Account , Security
Entitlement , Software , Supporting Obligation , Tangible Chattel Paper and Uncertificated Security shall have the meanings assigned to such terms in the UCC. All other capitalized words and phrases
used herein and not otherwise specifically defined shall have the respective meanings assigned to such terms in the UCC, to the extent the same are used or defined therein.
1.04 Other Definitional Provisions; Construction. Whenever the context so requires, the neuter gender includes
the masculine and feminine, the singular includes the plural, and vice versa. The words hereof , herein and hereunder and words of similar import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement, and references to Article, Section, Subsection, Annex, Schedule, Exhibit and like references are references to this Agreement unless otherwise specified. The word including shall
mean including, without limitation . An Event of Default shall continue or be continuing until such Event of Default has been waived in accordance with Section 19.04 hereof. References in this Agreement
to any party shall include such party s successors and permitted assigns. References to any Section shall be a reference to such Section of this Agreement unless otherwise stated. To the extent any of the provisions of the Other
Agreements are inconsistent with the terms of this Agreement, the provisions of this Agreement shall govern. This Agreement and the Other Agreements are the result of negotiations among and have been reviewed by counsel to the Lenders, the Credit
Parties and any other parties thereto, are product of all parties and, accordingly, they shall not be construed against Agent or Lenders.
1.05 References to Agreements, Enactments, Etc. Unless
otherwise expressly provided herein, (i) references to agreements (including this Agreement) and other contractual instruments shall be deemed to include all subsequent amendments and other modifications thereto, but only to the extent such
amendments, restatements, supplements and other modifications are not prohibited by the terms of this Agreement or any Other Agreement, and (ii) references to any statute or regulation shall be construed as including all statutory and
regulatory provisions amending, replacing, supplementing or interpreting such statute or regulation.
2.01 Revolving Loans. Subject to the terms and conditions of this Agreement, during the Term, each Lender, severally and not jointly, agrees to make its Pro Rata Share of
revolving loans and advances (the Revolving Loans ) requested by Borrower Representative up to such Lender s Revolving Loan Commitment so long as after giving effect to such Revolving Loans, the sum of the aggregate unpaid
principal balance of the Revolving Loans and the Letter of Credit Obligations does not exceed the Borrowing Base; provided, that the Borrowing Base shall in no event exceed Fifty Million and No/100 Dollars ($50,000,000.00) (the
Maximum Revolving Loan Limit ) except as such amount may be increased or, following the occurrence of an Event of Default, decreased by Requisite Lenders, in Requisite Lenders sole discretion.
The aggregate unpaid principal balance of the Revolving Loans shall not at any time exceed the lesser of the (i) Borrowing Base minus
the Letter of Credit Obligations and (ii) the Maximum Revolving Loan Limit minus the Letter of Credit Obligations. If at any time the outstanding Revolving Loans exceed either the Borrowing Base or the Maximum Revolving Loan Limit, in each case
minus the Letter of Credit Obligations, Borrowers shall immediately, and without the necessity of demand by Agent, pay to Agent such amount as may be necessary to eliminate such excess and Agent shall apply such payment to the Revolving Loans in
such order as Agent shall determine in its sole discretion.
Subject to the terms and conditions of this Agreement, Revolving
Loans shall be made against the Borrowing Base. The Borrowing Base shall be determined by Agent based on the most recent Notice of Borrowing delivered to Agent in accordance with this Agreement and such other information as may be available to
Neither Agent nor any Lender shall be responsible for any failure by any other Lender to perform its obligations to
make Revolving Loans hereunder, and the failure of any Lender to make its Pro Rata Share of any Revolving Loan hereunder shall not relieve any other Lender of its obligation, if any, to make its Pro Rata Share of any Revolving Loans hereunder.
If Borrower Representative makes a request for a Revolving Loan as provided herein Agent, at its option and in its sole
discretion, shall do either of the following:
(a) advance the amount of the proposed Revolving Loan to Borrower
Representative disproportionately (a Disproportionate Advance ) out of Agent s own funds on behalf of Lenders, which advance shall be made on the same day as Borrower Representative s request therefor with respect to
Floating Rate Loans if the Borrower Representative notifies Agent of such request by 1:00 P.M. (Chicago time) on such day, and request settlement in accordance with Section 19.01 hereof such that upon such settlement each Lender s
share of the outstanding Revolving Loans (including, without limitation, the amount of any Disproportionate Advance) equals its Pro Rata Share; or
(b) notify each Lender by telecopy, electronic mail or other similar form of
teletransmission of the proposed advance on the same day Agent is notified or deemed notified by Borrower Representative of Borrower Representative s request for an advance pursuant to this Section 2.01. Each Lender shall remit, to the
demand deposit account designated by Borrower Representative (i) with respect to Floating Rate Loans, at or prior to 3:00 P.M., Chicago time, on the date of notification, if such notification is made before 1:00 P.M., Chicago time, or 10:00
A.M., Chicago time, on the Business Day immediately succeeding the date of such notification, if such notification is made after 1:00 P.M., Chicago time, and (ii) with respect to LIBOR Rate Loans, at or prior to 10:30 A.M., Chicago time, on the
date such LIBOR Rate Loans are to be advanced, immediately available funds in an amount equal to such Lender s Pro Rata Share of such proposed advance.
If and to the extent that a Lender does not settle with Agent as required under this Agreement (a Defaulting Lender ), Borrowers and such Defaulting Lender severally agree to repay to
Agent forthwith on demand such amount required to be paid by such Defaulting Lender to Agent, together with interest thereon, for each day from the date such amount is made available to a Borrower until the date such amount is repaid to Agent
(x) in the case of a Defaulting Lender at the rate published by the Federal Reserve Bank of New York on the next succeeding Business Day as the Federal Funds Rate or if no such rate is published for any Business Day, at the average
rate quoted for such day for such transactions from three (3) federal funds brokers of recognized standing selected by Agent, and (y) in the case of Borrowers, at the interest rate applicable at such time for such Loans; provided,
that Borrowers obligation to repay such advance to Agent shall not relieve such Defaulting Lender of its liability to Agent for failure to settle as provided in this Agreement.
Each Borrower hereby authorizes Agent, in its sole discretion, to charge any of such Borrower s accounts or advance Revolving Loans to
make any payments or principal, interest, fees, costs or expenses required to be made under this Agreement or the Other Agreements.
A request for a Revolving Loan shall be made or shall be deemed to be made, each in the following manner: the Borrower Representative on behalf of the Borrower requesting such Revolving Loan shall give Agent same-day notice, no later than