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EXHIBIT 10.1
LOAN MODIFICATION AGREEMENT
BY AND BETWEEN
AMEDISYS, INC.
AND
COLUMBIA/HCA HEALTHCARE CORPORATION
This LOAN MODIFICATION AGREEMENT (this "Agreement") is effective as of
September 30, 1999 by and between AMEDISYS, INC., a Delaware corporation
("Borrower"), and COLUMBIA/HCA HEALTHCARE CORPORATION, a Delaware corporation
("Lender").
W I T N E S S E T H:
WHEREAS, Borrower and Lender are parties to that certain Asset Purchase
Agreement dated November 2, 1998 (the "Asset Purchase Agreement"), pursuant to
which Borrower purchased certain assets of certain affiliates of Lender;
WHEREAS, Borrower and Lender are parties to that certain Credit
Agreement dated November 16, 1998 (the "Credit Agreement"), pursuant to which
Lender agreed to accept a promissory note as payment of a portion of the
purchase price under the Asset Purchase Agreement;
WHEREAS, pursuant to that certain Note dated December 1, 1998 (the
"Note"), Borrower promised to pay to the order of Lender the principal sum of
Fourteen Million Five Thousand Nine Hundred Eighty-Three and 27/100 Dollars,
plus interest, on the dates, at the rates per annum, and in the amounts provided
in the Credit Agreement;
WHEREAS, pursuant to that certain Consent and Waiver Agreement entered
into by Borrower and Lender on August 26, 1999, Lender consented to the sale of
certain assets of certain subsidiaries of Borrower and granted Borrower a
limited waiver of certain provisions of the Credit Agreement that were
applicable to such proposed sales; and
WHEREAS, Borrower is willing to agree to repay to Lender certain
payments that were misdirected to Borrower and to grant Lender a full and
complete release of claims Borrower may have under the Asset Purchase Agreement
or the transactions or documents contemplated therein or related thereto, as
more fully described in this Agreement, and Lender is willing to agree to amend
certain provisions of the Credit Agreement.
NOW, THEREFORE, for and in consideration of the premises and agreements
contained herein and other good and valuable consideration, the receipt and
adequacy of which are hereby forever acknowledged and confessed, the parties
agree as follows:
I. DEFINED TERMS. Unless otherwise defined herein, all terms used
herein that are defined in the Credit Agreement shall have the same meaning
herein as therein defined.
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II. COVENANTS OF BORROWER.
2.1 REPAYMENT OF MISDIRECTED FUNDS. Borrower acknowledges that, since
the closing of the transaction described in the Asset Purchase Agreement, funds
which were due and payable to Lender, have been misdirected and paid to
Borrower. The current balance of such funds is $4,700,000.00 (the "Misdirected
Funds"). As of the effective date hereof, Borrower shall deliver to Lender a
promissory note, substantially in the form attached hereto as Exhibit A,
pursuant to which Borrower shall repay all the Misdirected Funds that remain due
and payable to Lender. Any unpaid balance under such note shall be due and
payable to Lender on the earlier of: (i) three (3) business days after
Borrower's receipt of payment from the Medicare program in an amount equal to
the Misdirected Funds, or (ii) March 31, 2000.
2.2 DELIVERY OF STOCK CERTIFICATES. Borrower acknowledges that certain
stock certificates that were pledged to Lender to secure payment of the Note
have not been delivered to Lender, and Borrower agrees to deliver possession of
such certificates to Lender at the time of execution of this Agreement.
2.3 COMPLETE AND GENERAL RELEASE. In consideration of Lender's
agreement to amend the Credit Agreement as set forth in this Agreement, Borrower
hereby presently, generally, fully, finally, and forever, releases, acquits, and
discharges Lender and its affiliates from any and all theories of recovery of
whatsoever nature, whether known or now unknown, or recognized by the law of any
jurisdiction, including, but not limited to, actions, causes of action, demands,
liabilities, suits, and judgments, whether arising in equity or under the common
law or any contract or any statute, and from any and all elements of relief or
recovery of whatsoever nature, whether known or now unknown, recognized by the
law of any jurisdiction, including, but not limited to, actual damages of every
description, such as economic loss, any other item of loss or injury, statutory
or any other type of damages whatsoever, attorney's fees, prejudgment or post
judgment or other interest, equitable relief, and lost income, directly or
indirectly arising from or in connection with the Asset Purchase Agreement and
the transactions and agreements contemplated therein or related thereto,
including, but not limited to, claims arising from representations and
warranties in the Asset Purchase Agreement and claims relating to the Allocation
of Purchase Price or the Final Purchase Price Adjustment. Notwithstanding the
foregoing, this release does not apply to (i) any action, cause of action,
demand, liability, suit or judgment brought by a third party against Borrower
that is based in whole or in part upon the acts or omissions of Lender or its
affiliates, or (ii) any claim that Borrower may have against Lender for breach
of Section 2.10 or 12.7(d) of the Asset Purchase Agreement.
2.4 Acknowledgment of Default. The parties hereby acknowledge that as
of the date of this Agreement, certain accounts payable of Borrower are greater
than 90 days past the invoice or billing date and are not being contested by
Borrower ("Execution Date AP Delinquency"). Consequently, Borrower is not in
compliance with the terms of Section 8.01(b) of the Credit Agreement and
Borrower's noncompliance with such terms constitutes an Event of Default as set
forth in Section 9.01(c) of the Credit Agreement. Lender hereby agrees to waive
such Event of
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Default based on the Execution Date AP Delinquency and Lender shall not exercise
the remedies available to it as a result of such Event of Default based on the
Execution Date AP Delinquency under the provisions of Section 9.02 of the Credit
Agreement. Lender's acknowledgment of default and agreement not to exercise
certain remedies is limited specifically to the nature and scope described
herein. Nothing contained herein shall constitute a waiver or release of any
other rights or remedies available to Lender.
III. AMENDMENTS TO THE CREDIT AGREEMENT.
3.1 Section 1.02 of the Credit Agreement is hereby amended as follows:
(x) by deleting the definition of the term "Final Maturity Date" and replacing
such definition with the following: "shall mean the earlier to occur of (i) July
31, 2004, and (ii) the date that the Note is mandatorily prepayable in full
pursuant to Section 3.03(b)"; (y) by deleting the definition of the term "Loan"
and replacing such definition with the following: "shall mean the loan made by
Lender as provided for in Section 2.01 and any subsequent loan made by Lender to
Borrower."; and (z) by deleting the words "the Closing Date" in the third and
fourth lines of the definition of "Material Adverse Effect" and replacing such
words with "June 30, 1999".
3.2 Section 3.01(c) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following provision:
(c) Interest Accrual. From the date the Loan is made through
January 31, 2001, the Loan shall accrue daily interest at the rate
provided in Section 3.01(a) of this Agreement, which shall compound
and, without further action or documentation, be added to the principal
of the Note and be due and payable quarterly on each January 31, April
30, July 31, and October 31. Commencing on February 1, 2001, interest
shall accrue daily on the unpaid principal of the Loan, as increased
pursuant to the preceding sentence, up to and including the Final
Maturity Date. As more fully described in Section 3.02 of this
Agreement, payments of interest shall commence April 30, 2001.
3.3 Section 3.02 of the Credit Agreement is hereby deleted in its
entirety and replaced with the following provision:
Section 3.02 Repayment of Loan. Borrower shall make quarterly
payments of principal as set forth below, together with accrued
interest, on each January 31, April 30, July 31 and October 31,
commencing April 30, 2001, and continuing until the Final Maturity Date
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when all unpaid principal and accrued interest shall be due in a single
payment. The quarterly payments of principal shall be in the following
amounts:
Date Amount
April 30, 2001 $ 700,000
July 31, 2001 710,000
October 31,2001 730,000
January 31, 2002 740,000
April 30, 2002 760,000
July 31, 2002 780,000
October 31, 2002 790,000
January 31, 2003 810,000
April 30, 2003 830,000
July 31, 2003 850,000
October 31, 2003 860,000
January 31, 2004 880,000
April 30, 2004 900,000
July 31, 2004 all principal remaining unpaid.
3.4 Section 3.03(b) of the Credit Agreement is hereby amended by
numbering the text of the existing subsection as 3.03(b)(i) and adding the
following as subsection 3.03(b)(ii);
(ii) Within thirty (30) days after the end of each fiscal year
which ends after October 1, 1999, and prior to July 30, 2004, Borrower
shall calculate "Excess Cash Flow" in accordance with Schedule 8.01 of
this Agreement and shall, within forty-five (45) days after the end of
such fiscal year, pay Fifty Percent (50%) of the amount of the Excess
Cash Flow so calculated to Lender as payment on the Note, to be applied
to the principal in inverse order of maturity. If, however, the Excess
Cash Flow for any fiscal year exceeds $10,000,000, then Borrower shall
pay Eighty Percent (80%) of the amount by which it exceeds $10,000,000
to Lender as such a prepayment.
3.5 Section 8.01 (c) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following provision:
(c) Debt to finance working capital of the Agencies or to refinance
the existing National Century Financial Enterprises accounts receivable
financing, provided that such debt is secured solely by the accounts
receivable of the Agencies, and there is no further recourse to
Borrower or any of its Subsidiaries (either direct or indirect by
virtue of any guarantee, general partnership participation, or any
commitment which constitutes Debt), that the term of such debt exceeds
the term of the Indebtedness, and that the terms, covenants and
conditions of such debt shall not place the Borrower or its
Subsidiaries in violation of any term or covenant contained herein;
3.6 Section 8.01(d) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following provision:
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(d) Debt, in an aggregate amount of not more than $500,000, to
complete capital expenditures, including capital leases, permitted by
Section 8.03(f) hereof;
3.7 Section 8.01(e) of the Credit Agreement is hereby amended by
replacing the "." at the end of such Section with a ";".
3.8 The following provisions are hereby added to the Credit Agreement
as Sections 8.01(f) and 8.01(g):
(f) Debt, which is issued prior to January 1, 2001, so long as (i)
such Debt is unsecured, is fully subordinated to the Indebtedness, and
requires no principal payments prior to the repayment in full of the
Indebtedness; and (ii) the proceeds of such Debt are used solely for
(x) operating and working capital needs or (y) acquisitions of other
businesses or business opportunities or capital expenditures permitted
by Section 8.03(g) of this Agreement; and
(g) Debt, which is issued on or after January 1, 2001, so long as
(i) such Debt is unsecured, is fully subordinated to the Indebtedness,
and requires no principal payments prior to the repayment in full of
the Indebtedness; and (ii) the proceeds of such Debt are used solely
for repayment of the Indebtedness.
3.9 Section 8.03(e) is hereby amended by replacing the "." at the end
of such Section with a ";".
3.10 Section 8.03(f) is hereby deleted in its entirety and replaced
with the following provision:
(f) capital expenditures, including capital leases, for routine
replacement of equipment in an aggregate amount not to exceed $500,000;
and
3.11 Section 8.03(g) is hereby deleted in its entirety and the
following provisions are hereby added as Sections 8.03(g) and 8.03(h):
(g) capital expenditures or the acquisition of other businesses and
business opportunities after October 1, 1999, and prior to April 1,
2001, in an aggregate maximum amount of $5,000,000.00, but in any
fiscal year not more than the "Cash Available for Acquisitions" as
calculated by the method shown in the example set forth on Schedule
8.03 attached hereto; and
(h) capital expenditures or the acquisition of other businesses or
business opportunities after March 31, 2001, in an aggregate amount not
to exceed the aggregate Excess Cash Flow calculated in accordance with
Schedule 8.01 to this Agreement, less amounts required to be prepaid on
the Note pursuant to Section
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3.03(b)(ii) of this Agreement, which expenditure or acquisition may be
made only after the payments required by Section 3.03(b)(ii) are made.
IV. MISCELLANEOUS.
4.1 EFFECT OF THIS AGREEMENT. Except as expressly stated herein, (a)
the Credit Agreement, the Note, and the Asset Purchase Agreement are and shall
be unchanged and remain in full force and effect, and (b) this Agreement shall
not constitute a waiver of any Default or Events of Default or a waiver of the
right of Lender to insist upon compliance with any term, covenant, condition, or
provision of the Credit Agreement (as amended hereby), the Note, or the Asset
Purchase Agreement. Except as specifically stated herein, the execution and
delivery of this Agreement shall in no way release, diminish, impair, reduce or
otherwise affect the respective obligations and liabilities of the parties under
the Credit Agreement, the Note, or the Asset Purchase Agreement, all of which
shall continue in full force and effect.
4.2 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original document and all of
which shall constitute one instrument.
4.3 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed in multiple originals, effective as of the date and year first above
written.
BORROWER: AMEDISYS, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Executive Officer
Date: November 15, 1999
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LENDER: COLUMBIA/HCA HEALTHCARE CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇
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Title: Vice President
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Date: November 15, 1999
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EXHIBIT A
NOTE
$4,700,000.00 November 12, 1999
FOR VALUE RECEIVED, AMEDISYS, INC., a Delaware corporation (the
"Borrower") hereby promises to pay to the order of COLUMBIA/HCA HEALTHCARE
CORPORATION (the "Lender"), the principal sum of Four Million Seven Hundred
Thousand Dollars ($4,700,000.00) in lawful money of the United States of America
and in immediately available funds, on the dates and in the principal amounts
provided in the Loan Modification Agreement dated November 12, 1999, between the
Borrower and Lender ("Loan Modification Agreement").
This Note is the Note referred to in the Loan Modification Agreement
and evidences the Loan made by the Lender thereunder and under the Credit
Agreement dated November 16, 1998, between the Borrower and Lender ("Credit
Agreement"). Capitalized terms used in this Note have the respective meanings
assigned to them in the Credit Agreement.
This Note is issued pursuant to the Loan Modification Agreement and is
entitled to the benefits provided for therein and in the Credit Agreement. This
note is subject to the terms and conditions specified in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF DELAWARE.
AMEDISYS, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chief Executive Officer
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SCHEDULE 8.01
Calculation of Excess Cash Flow
Net Income
Plus non-cash amortization of goodwill
Plus loss on sale or disposition of assets
Less non-cash amortization of deferred revenue
Less mandatory repayments of principal
Less gain on sale or disposition of assets
Equals: Excess Cash Flow
Note: All amounts to be calculated in accordance with Generally Accepted
Accounting Principals
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SCHEDULE 8.03
Capital Expenditure Limitation of Section 8.03(g)
1) Acquisitions or capital expenditures shall be permitted up to $5,000,000
through March 31, 2001, subject to meeting two tests: A) Current Ratio
Test, and B) Minimum Cash Test
A) Current Ratio Test: Subject to the provisions of 8.03 (f), no acquisitions
shall be made unless the last quarter's current ratio and the pro-forma
current ratio to reflect the acquisition is greater than 1.0. Current Ratio
shall be defined as Current Assets less Current Liabilities as determined
in accordance with Generally Accepted Accounting Principals.
B) Minimum Cash Test: Borrower shall measure quarterly its level of cash and
cash equivalents (as determined in accordance with Generally Accepted
Accounting Principals ("Cash). The Minimum Cash Test shall measure Cash,
less a) $5,000,000 minus b) the cumulative amount of capital expenditures
and acquisitions made pursuant to section 8.03(g), with the result of such
calculation being "Available Operating Cash." To the extent that Available
Operating Cash for the most recent quarter ended and proforma for a
proposed acquisition or capital expenditure is greater than the Cash
Threshold set forth for such quarter below, then Amedisys shall be
permitted to make such acquisition or capital expenditure (subject to the
$5,000,000 aggregate limitation).
Cash Threshold Amounts:
For the quarter ended -> 12/31/99 3/31/00 6/30/00 9/30/00 12/31/00 3/31/01
-------- ------- ------- ------- -------- -------
The Cash Threshold Amount shall be -> 21,350 19,050 16,750 14,450 12,150 12,150
Example:
12/31/99 3/31/00 6/30/00 9/30/00 12/31/00 Total
-------- ------- ------- ------- -------- -------
Cash at beginning of quarter na 23,850 20,273 18,273 16,773
Acquisitions during quarter na (1,000) (1,000) (1,000) (2,000) (5,000)
Other changes in cash (hypothetical
operating losses) na (2,577) (1,000) (500) (500) (4,577)
-------- ------- ------- ------- --------
Ending Cash 28,850 20,273 18,273 16,773 14,273
Calculation of Minimum Cash Test for
this Example:
12/31/99 3/31/00 6/30/00 9/30/00 12/31/00 3/31/01
-------- ------- ------- ------- -------- -------
Cash (A) 23,850 20,273 18,273 16,773 14,273
Less Unused Acquisition Basket (5,000) (4,000) (3,000) (2,000) --
-------- ------- ------- ------- -------
Available Operating Cash (B) 18,850 16,273 15,273 14,773 14,273
CASH THRESHOLD (C) (DEFINED NUMBER) 21,350 19,050 16,750 14,450 12,150 12,150
Difference between Cash and Cash
Threshold (A) - (C) 2,500 1,223 1,523 2,323 2,123
* Availability for Acquisitions -> 2,500 1,223 1,523 2,000 --
* Explanation of Availability for Acquisitions
a) If B > C, then acquisitions up to the Unused Acquisition Basket may be made
b) If B < C, then acquisitions up to the Difference between Cash and the Cash
Threshold may be made
