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Subordinated Long-Term Debt
3 Months Ended
Sep. 30, 2011
Subordinated Long-Term Debt [Abstract] 
Subordinated Long-Term Debt

Note 9. – Subordinated Long-Term Debt

Subordinated long-term debt consisted of the following:

 

     September 30,     June 30,  
     2011     2011  

Carmichael's

    $ 2,497      $ 2,497   

Less current maturities

      (300 )      (300 ) 
  

 

 

    

 

 

  
   $ 2,197      $ 2,197   
  

 

 

    

 

 

  

 

Carmichael Notes – On April 22, 2008, SunLink Scripts Rx, LLC (formerly known as SunLink Homecare Services, LLC) entered into a $3,000 promissory note agreement with an interest rate of 8% with the former owners of Carmichael as part of the acquisition purchase price (the "Carmichael Purchase Note"). The Carmichael Purchase Note is payable in semi-annual installments of $150, which began on April 22, 2009, with the remaining balance of $1,200 due April 22, 2015. Interest is payable in arrears semi-annually on the six and twelve-month anniversary of the issuance of the note. The Carmichael Purchase Note is guaranteed by SunLink Health Systems, Inc. The note and the guarantee are subordinate to the Credit Facility.

On April 12, 2011, an amendment to the Carmichael Note ("Carmichael Note Amendment") was entered into under which SunLink has the option to issue subordinated promissory notes to the former owners of Carmichael in payment of up to two semi-annual payments of principal and interest due under the Carmichael Note (the "PIK Notes" and together with the Purchase Note the "Carmichael Notes"). The notes bear an interest rate of 8% and are due on April 22, 2015. A PIK Note for $247 was issued on April 22, 2011 for the principal and interest payment that would have been due on April 22, 2011. A PIK Note for $252 was issued on October 22, 2011 for the principal and interest payment that would have been due on October 22, 2011.

Under the terms of the Credit Facility (see Note 8), if SunLink is in violation of certain terms and conditions of such facility, the Company cannot make principal payments due under the Carmichael Notes without permission of the agent for the lenders of the Credit Facility.