ITEM 1.01 - ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On September 10, 2008, MBF Healthcare Acquisition Corp. ("MBF"), Critical
Homecare Solutions Holdings, Inc. ("CHS") and Kohlberg Investors V, L.P. (the
"Seller's Representative") entered into Amendment No. 5 (the "Amendment") to the
Stock Purchase Agreement, dated February 6, 2008 (the "Stock Purchase
Agreement"), by and among MBF, CHS and the Sellers' Representative and the other
stockholders of CHS (each, together with the Sellers' Representative, a "Seller"
and collectively the "Sellers"), as previously amended to date.
Pursuant to the Amendment, the expenses of CHS were increased by
$12.0 million, thereby decreasing the cash amount paid to the Sellers at the
closing of the acquisition by $12.0 million. Exhibit D to the Stock Purchase
Agreement was also replaced with a subscription agreement executed by the
Sellers pursuant to which, at the closing of the acquisition, MBF will issue
shares of unregistered common stock to the Sellers for the purpose of raising
not less than $55.0 million in connection with the acquisition and up to an
additional $13.2 million to fund the conversion of dissenting stockholders'
shares if the acquisition is consummated.
The Amendment also provided for a subscription agreement (the "Subscription
Agreement") and a letter agreement (the "Letter Agreement") from MBF Healthcare
Partners, L.P. ("MBF LP") to MBF, each dated September 10, 2008, pursuant to
which, at the closing of the acquisition, MBF will issue shares of unregistered
common stock to MBF LP for the purpose of raising not less than $30.4 million,
substantially all of which will be used to finance a portion of the
consideration required to acquire CHS and up to an additional $8.0 million to
fund the conversion of dissenting stockholders' shares if the acquisition is
consummated. A copy of the Subscription Agreement and the Letter Agreement are
filed as Exhibits 10.1 and 10.2 hereto respectively and are incorporated herein
by this reference.
The Amendment also established an earn-out provision for the Sellers as
follows: after the conclusion of each of the five successive twelve-month
periods beginning January 1, 2009 and ending December 31, 2013 and within thirty
(30) days of MBF's filing of its annual report on Form 10-K with the SEC, MBF
shall pay to the Sellers and the Optionholders (as such term is defined in the
Stock Purchase Agreement) (i) twenty-five percent (25%) of CHS' EBITDA in excess
of $52.5 million if paid in cash or (ii) thirty-three and one third percent
(331/3%) of CHS' EBITDA in excess of $52.5 million if paid in MBF common stock
calculated at the average closing sales price of MBF's common stock for the ten
consecutive trading days prior to the delivery of MBF's common stock for a given
earn-out period; provided that the maximum earn-out paid for all such earn-out
periods (whether paid in cash, MBF common stock or any combination thereof)
shall not exceed $12.0 million in the aggregate. MBF is granted the sole and
absolute discretion to determine whether to pay the earn-out in cash or MBF
common stock.
Finally, the Amendment provided for the issuance of 6,036 Preferred Shares by
CHS to Kohlberg Investors V, L.P., Kohlberg TE Investors V, L.P., Kohlberg
Offshore Investors V, L.P., Kohlberg Partners V, L.P. and SAC in exchange for
$6.036 million paid by such entities to CHS and to revise the number of
Preferred Shares to be acquired by MBF in the transaction. The $6.036 million
paid for the Preferred Shares is considered Acquisition Costs in the purchase
price adjustment provisions, is included as Acquisition Costs in the estimated
purchase price adjustments presented on page 3 and will be repaid in full, plus
the amount of any accrued and unpaid interest thereon at the closing date of the
acquisition, by MBF to the preferred shareholders as part of the purchase price.
The foregoing description is qualified in its entirety by reference to the
Amendment, which is filed as Exhibit 2.1 hereto and incorporated herein by this
reference.
Additional Information and Where to Find It.
On September 11, 2008, MBF filed an amended preliminary proxy statement
concerning the proposed transaction, which is subject to review by the
Securities and Exchange Commission (SEC). MBF stockholders and other interested
persons are urged to read the proxy statement and other relevant materials when
they become available as they will contain important information about MBF, CHS
and the proposed transaction. Such persons
can also read MBF's final prospectus dated April 17, 2007, for a description of
the security holdings of the MBF officers and directors and their respective
interests in the successful consummation of the proposed transaction. The
definitive proxy statement will be mailed to stockholders as of a record date to
be established for voting on the proposed transaction. MBF stockholders will be
able to obtain a free copy of the definitive proxy statement through the SEC's
internet website (http://www.sec.gov). Copies of the proxy statement can also be
obtained, without charge, by directing a request to MBF Healthcare Acquisition
Corp., 121 Alhambra Plaza, Suite 1100, Coral Gables, FL 33134.
Participants in Solicitation.
MBF and its directors and executive officers and CHS and its directors and
executive officers may be deemed to be participants in the solicitation of
proxies from the holders of MBF stock in respect of the proposed transaction.
Investors may obtain additional information regarding the interest of such
participants by reading the definitive proxy statement relating to the proposed
transaction and MBF's Annual Report on Form 10-K for its fiscal year ended
December 31, 2007 when they become available.
Forward Looking Statements
Any statements contained in this press release that do not describe
historical facts may constitute forward-looking statements as that term is
defined by the United States Private Securities Litigation Reform Act of 1995.
Any such forward-looking statements contained herein are based on current
expectations, but are subject to a number of risks and uncertainties that may
cause actual results to differ materially from expectations such as material
adverse events affecting MBF and CHS, their ability to complete a business
combination and those other risks and uncertainties detailed in their filings
with the SEC. MBF and CHS caution readers not to place undue reliance upon any
forward-looking statements, which speak only as of the date made. MBFand CHS do
not undertake or accept any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statement to reflect any change in
their expectations or any change in events, conditions or circumstances on which
any such statement is based.
ITEM 9.01. Financial Statements and Exhibits
d) Exhibits
Exhibit No. Description
2.1 Amendment No 5. to the Stock Purchase Agreement
10.1 Subscription Agreement, dated September 10, 2008, by and between MBF
LP and MBF
10.2 Letter Agreement, dated September 10, 2008, by and between MBF LP and
MBF
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