EXHIBIT 2.1
EXCHANGE AGREEMENT
BY
AND
AMONG
AMEDISYS SPECIALIZED MEDICAL SERVICES, INC.,
A LOUISIANA CORPORATION
AND
QUALITY HOME HEALTH CARE, INC.,
AN OKLAHOMA CORPORATION
AND
FRANCES UNGER
AND
JAMES UNGER
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (this "Agreement") is made effective as of May 1,
1998, by and between AMEDISYS, SPECIALIZED MEDICAL SERVICES, INC., a Louisiana
corporation, with its principal place of business at 3029 South Sherwood Forest
Blvd., Suite 300, Baton Rouge, Louisiana 70816 ("AMED") and QUALITY HOME HEALTH
CARE, INC., an Oklahoma corporation with its principal place of business at 110
West Maple, Stillwell, Oklahoma, 74960 (the "Company"), and FRANCES UNGER and
JAMES UNGER (collectively, the "Stockholders"). AMED, the Company and the
Stockholders are sometimes referred to collectively as the "Parties."
RECITALS
WHEREAS, AMED desires to exchange shares of its common stock for 100% of
the issued and outstanding capital stock of the Company ("Company Stock") from
the Stockholders as hereinafter provided and the Stockholders desire to effect
such exchange; and
NOW, THEREFORE, in consideration of the premises and the mutual promises
made herein, and in consideration of the representations, warranties, and
covenants contained herein, the Parties agree as follows:
1. Definitions. As used in this Agreement, the following terms have the
meanings indicated:
1.01. Closing: The consummation of the transactions contemplated by
this Agreement.
1.02. GAAP: Generally accepted accounting principles.
1.03. Health Care Laws: All federal, state and local laws, regulations
and ordinances related to the business of the Company including but not
limited to Medicaid, Medicare and regulations of the Health Care Finance
Administration.
1.04. Knowledge: means actual knowledge after reasonable investigation.
1.05. Material Adverse Effect: Any change in the financial condition or
operation of the business that would materially affect the Company's
business adversely, including, but not limited to, material changes to
management, business conditions, or financial condition.
1.06. Operating Licenses: Licenses, permits and registrations issued by
the appropriate state and federal agencies, which are necessary to the
operation of the Company's business. Such Operating Licenses are more
fully described in Schedule 3.11 hereto.
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2. Terms of Exchange. On the basis of the representations, warranties,
covenants, and agreements contained in this Agreement and subject to the terms
and conditions of this Agreement:
2.01. Transfer. The Stockholders shall assign, transfer and convey at
the Closing the Company Stock, representing 100% of the issued and outstanding
capital stock of the Company, to AMED. The Stockholders shall deliver, at
Closing, Stock Powers in the form attached hereto as Schedule 2.01, letters of
Non-distributive Intent attached hereto as Schedule 5.08 and any other documents
required by this Agreement.
2.02. Consideration. The purchase price of the Company Stock shall be
ONE HUNDRED THOUSAND AND NO/100 ($100,000.00) DOLLARS, to be paid as follows:
2.02.01 AMED will pay Stockholders EIGHTY THOUSAND AND NO/100
($80,000.00) DOLLARS cash at closing; and
2.02.02 AMED shall deliver, and the Stockholders shall be entitled to
receive, the number of shares of Amedisys, Inc. common stock
produced from a fraction, the numerator of which shall be TWENTY
THOUSAND AND NO/100 ($20,000.00) DOLLARS and the denominator of
which shall be the average of the last sales price for the ten
(10) trading days prior to the date of the Closing.
2.03. The Company Stock referred to in Section 2.01. and the
consideration to be paid by AMED referred to in Section 2.02. shall constitute
all of the consideration to be paid in connection with the transactions
contemplated by this Agreement.
2.04. If, for the twelve month period commencing May 1, 1998 and ending
April 30, 1999, the Company has averaged twenty-five (25) patient admits per
month (company-wide), then AMED shall pay to Frances Unger as additional
consideration for her stock, the amount of $12,500.00, payable by May 31, 1999.
Additionally, if for the twelve month period commencing May 1, 1999 and ending
April 30, 2000, the Company has averaged twenty-five (25) patient admits per
month (company-wide), then AMED shall pay to Frances Unger as additional
consideration for her stock, the amount of $12,500, payable by May 31, 2000.
2.05. The Closing. The Closing of the transactions contemplated by
this Agreement shall be on or before May 1, 1998, and shall be made effective on
May 1, 1998.
3. Representations and Warranties of the Company and the
Stockholders. The Company and the Stockholders hereby agree, represent, and
warrant to AMED, on the date of this Agreement and on the Closing Date, as
follows:
3.01. Organization and Qualification. The Company does not own any
interest in any other business enterprise or legal entity, except as disclosed
in Schedule 3.01. Schedule 3.01 also correctly
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sets forth as to the Company its state of incorporation, principal place of
business, and jurisdictions in which it is qualified to do business. The Company
is an Oklahoma corporation duly organized, validly existing, and in good
standing under the laws of its jurisdiction of incorporation, with all requisite
power and authority to conduct its business and is not in breach of, or in
default with respect to, any term of its Certificate of Incorporation, Bylaws or
other organizational documents, except where such breach would not have a
Material Adverse Effect. The Company has obtained all necessary consents,
authorizations, approvals, orders, licenses, certificates, and permits of and
from, and declarations and filings with, all federal, state, local, and other
governmental authorities and all courts and other tribunals, to own, lease,
license, and use its properties and assets and to carry on the business in which
it is now engaged and the business in which it contemplates engaging, except
where the failure to do so would not have a Material Adverse Effect. The Company
is duly qualified to transact the business in which it is engaged in every
jurisdiction in which its ownership, leasing, licensing, or use of property or
assets or the conduct of its business makes such qualification necessary, except
where the failure to do so would not have a Material Adverse Effect.
3.02. Capitalization. The Stockholders own 2000 shares of the Company
Stock, which constitutes all of the outstanding capital stock of Company. The
Company Stock is not owned or held in violation of any preemptive right of any
other person or entity, is validly authorized, validly issued, fully paid and
non-assessable, and is owned of record and beneficially by the Stockholders. The
shares of Company Stock held by the Stockholders are free and clear of all
liens, security interests, pledges, charges, encumbrances, voting agreements,
and voting trusts. There is no commitment, plan, or arrangement to issue, and
no outstanding option, warrant, or other right calling for the issuance of, any
shares of capital stock of the Company or any security or other instrument
convertible into, exercisable for, or exchangeable for capital stock of the
Company. There is outstanding no security or other instrument convertible into
or exchangeable for capital stock of the Company.
3.03. Due Authorization; Third Party Consents. The Company has the
right, power, legal capacity, and authority to enter into and perform its
obligations under this Agreement and, except as set forth on Schedule 3.03 to
this Agreement, no approval or consent of any person other than the Company is
necessary in connection with the execution, delivery, or performance of this
Agreement. The execution, delivery, and performance of this Agreement by the
Company has been duly authorized by its board of directors and no other
corporate proceedings on the part of the Company are necessary to authorize this
Agreement or the consummation of the transactions contemplated hereby. This
Agreement constitutes a legal and binding obligation of the Company, and is
valid and enforceable against the Company in accordance with its terms except
that (i) the enforcement of certain rights and remedies created by this
Agreement is subject to bankruptcy, insolvency, reorganization, and similar laws
of general application affecting the rights and remedies of parties, (ii) the
enforceability of any particular provision of this Agreement under principles of
equity or the availability of equitable remedies, such as specific performance,
injunctive relief, waiver or other equitable remedies, is subject to the
discretion of courts of competent jurisdiction, and (iii) any court or
administrative body may refuse to enforce the choice of law provision of Section
9.12 of this Agreement.
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3.04. Litigation. Except as set forth in Schedule 3.04, there is not
any suit, action, arbitration, or legal, administrative, or other proceeding or
governmental investigation (formal or informal), pending or to the best of
Company's or Stockholders' Knowledge threatened (or any basis therefor known to
the Company or the Stockholders), with respect to the Company or the
Stockholders (as it relates to the business of the Company), including but not
limited to any action or claim under any federal, state, local or other
governmental act, rule, regulation, or any interpretations thereof, relating to
environmental matters or the protection of the safety and health of persons
connected with the Company's business (including but not limited to the
transportation, treatment, storage, recycling, disposal, or release into the
environment of hazardous or toxic materials or waste), or any basis on which any
proceeding or investigation against the Company or the Stockholders might
reasonably be undertaken or brought. The Company and the Stockholders have
informed AMED of, and upon request has furnished or made available to AMED
copies of all relevant court papers and other documents relating to, the matters
set forth in Schedule 3.04. Included in Schedule 3.04 is a list of all suits,
actions, arbitrations, or other proceedings or investigations in which the
Company has been involved during the five year period immediately preceding the
Closing. The Company is not presently engaged in any legal action to recover
monies due to the Company, for damages sustained by the Company, or amounts owed
to the Company, except as set forth on Schedule 3.04. During the five year
period immediately preceding the Closing, the Company has neither received nor
been a party to any written notice of violations, orders, claims, citations,
complaints, penalties, assessments, court, or other proceedings, administrative,
civil or criminal, at law or in equity, with respect to any Health Care Law. In
addition, to the Company's and Stockholders' Knowledge, the Company has neither
received nor been party to any written notice of violations, orders, claims,
citations, complaints, penalties, assessments, court, or other proceedings,
administrative, civil or criminal, at law or in equity, with respect to any
alleged violations of any other federal, state, or local environmental law,
regulation, ordinance, standard, permit, or order in connection with the conduct
of its business or otherwise during the past five years.
3.05. Employees. The Company does not have, or contribute to, any
pension, profit-sharing, option, other incentive plan, or other Employee Benefit
Plan (as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974), or has any obligation to or customary arrangement with employees for
bonuses, incentive compensation, vacations, severance pay, insurance, or other
benefits, except as set forth in Schedule 3.05. Schedule 3.05. contains a true
and correct statement of the names, relationship with the Company, present rates
of compensation (whether in the form of salary, bonuses, commissions, or other
supplemental compensation now or hereafter payable), and aggregate compensation
for the fiscal year ended December 31, 1997 of each Stockholders, and the three
highest paid employees of the Company. Since December 31, 1997, the Company has
not changed the rate of compensation of any of its stockholders, employees,
agents, dealers or distributors, except as disclosed in Schedule 3.05.
3.06. No Violation of Employee Contracts. To the Knowledge of the
Company or the Stockholders, no employee of the Company is in violation of any
term of any employment contract, non-competition agreement, or any other
contract or agreement or any restrictive covenant with, or
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any other common law obligation to, a former employer relating to the right of
any such employee to be employed by the Company because of the nature of the
business conducted by the Company or of the use of trade secrets or proprietary
information of others. There is neither pending nor, to the Knowledge of the
Company or the Stockholders, threatened, any actions, suits, proceedings, or
claims with respect to any contract, agreement, covenant, or obligation referred
to in the preceding sentence, except as listed in Schedule 3.04.
3.07. Insurance. Schedule 3.07 sets forth an accurate and complete
list and brief description of all policies of fire and extended coverage,
liability, and the forms of similar insurance or indemnity bonds held by the
Company. The Company is not in default with respect to any provisions of any
such policy or indemnity bond and has not failed to give any notice or present
any claim thereunder in due and timely fashion, which failure or failures to
give such notice or present such claim, individually or in the aggregate, could
have a Material Adverse Effect on the business of the Company. All such policies
and bonds are (i) in full force and effect, (ii) with insurance companies
believed by the Company and the Stockholders to be financially sound and
reputable, (iii) are sufficient for compliance by the Company with all
requirements of law and of all agreements and instruments to which the Company
is a party, (iv) provide that they will remain in full force and effect through
the respective dates set forth in Schedule 3.07, and (v) will not in any
significant respect be affected by, and will not terminate or lapse by reason
of, the transactions contemplated by this Agreement. Schedule 3.07 sets forth
an accurate and complete list of all accident or other liability claims received
by or known by the Company and the Stockholders for the three year period
immediately preceding the Closing, as well as a description of the status of
each such claim. Such claims are covered by one or more insurance policies set
forth in Schedule 3.07.
3.08. Contracts, Agreements and Instruments. Schedule 3.08 accurately
and completely sets forth the information required to be contained therein. The
Company has furnished to AMED:
3.08.01. The Certificate of Incorporation, Bylaws and other
organizational documents of the Company and all amendments
thereto, as presently in effect, certified by the president of
the Company;
3.08.02. True and correct copies of all material contracts,
agreements and other instruments referred to in Schedule 3.08;
3.08.03. True and correct written descriptions of all service, material
supply, distribution, agency, financing or other arrangements
or understandings referred to in Schedule 3.08 involving an
obligation on the part of the Company in excess of $5,000.
Except for matters which, in the aggregate, would not have a Material Adverse
Effect or are otherwise disclosed in the Agreement, to the Knowledge of the
Company and the Stockholders, no other party to any such contract, agreement,
instrument, leases, or license is now in violation or breach of, or in default
with respect to complying with, any material provision thereof, and each such
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contract, agreement, instrument, lease, or license contained in the Schedules
hereto is in full force and effect and is the legal, valid, and binding
obligation of the parties thereto and is enforceable as to them in accordance
with its terms. Each such service, supply, distribution, agency, financing, or
other arrangement or understanding contained in the Schedules hereto is a valid
and continuing arrangement or understanding, except for matters which, in the
aggregate, would not have a Material Adverse Effect; neither the Company, the
Stockholders, nor any other party to any such arrangement or understanding has
given notice of termination or taken any action inconsistent with the
continuance of such arrangement or understanding, except for matters which, in
the aggregate, would not have a Material Adverse Effect; and the execution,
delivery, and performance of this Agreement will not prejudice any such
arrangement or understanding in any way contained in the Schedules hereto,
except for matters which, in the aggregate, would not have a Material Adverse
Effect. The Company is not a member of a customer or user organization or of a
trade association which relationship would be materially affected by the
execution and performance of this Agreement.
3.09. Compliance With Laws. The Company has complied with, and is not
in violation of any (i) term or provision of its Certificate of Incorporation or
Bylaws; or (ii) to the Company's and the Stockholders' Knowledge, term or
provision of any applicable judgment, decree, order, statute, injunction, rule,
ordinance; (iii) to the Company's and the Stockholders' Knowledge, any Health
Care Law; or (iv) or the Company's and the Stockholders' Knowledge, foreign,
United States, state or local statutes, laws, rules, or regulations.
3.10. Financial Condition. The Company has delivered to AMED true and
correct copies of the following: the balance sheet ("the Company's Last Balance
Sheet") dated as of December 31, 1997 ("the Company's Last Balance Sheet Date"),
and a statement of income, statement of cash flows and consolidated statement of
the Company for the twelve month period ended December 31, 1997, 1996 and 1995.
Each such balance sheet presents fairly the financial condition, assets and
liabilities of the Company as of its date; each such statement of income
presents fairly the results of operations of the Company for the period
indicated; and each statement of cash flows presents fairly the information
purported to be shown therein. The financial statements referred to in this
Section 3.10 have been prepared in accordance with GAAP consistently applied
throughout the periods involved, are correct and complete in all material
respects, and are in accordance with the books and records of the Company. The
Stockholders shall have the right to amend Company's income taxes for the years
1994, 1995, and 1996, in accordance with IRS Code Section 45, related to Indian
Employment Credit.
3.11. Permits and Licenses. The Company has all permits, licenses, and
other similar authorizations necessary for the conduct of its business as now
being conducted by it, and it is not in default in any respect under any such
permits, licenses, or authorizations. All permits, licenses, and other similar
authorizations necessary for the conduct of the Company's business as now being
conducted by it are as set forth in Schedule 3.11. Except as set forth in
Schedule 3.11, no royalties, commissions, or fees are payable by the Company to
any person by reason of the ownership or use of any intangible property. The
Company is the sole and exclusive owner of all of its assets, does not use any
of its assets by the consent of any other person and is not required to and does
not make
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any payments to others with respect thereto. Except as set forth in Schedule
3.11, there are no material licenses, sub-licenses, or agreements relating to
the use of any intangible property now in effect, and the Company and the
Stockholders have no Knowledge that any intangible property is being infringed
by others. Except as listed in Schedule 3.04, no claim that would have a
Material Adverse Effect on the business of the Company is pending or, to the
Knowledge of the Company, threatened, or has been made since the Company's
inception to the effect that, nor does the Company have any Knowledge that the
operation of the Company's business or any method, process, part, or material
that the Company employs, conflicts in any material way with, or infringes in
any material way upon any rights of the type enumerated above, owned by others.
3.12. Properties. The Company has good and marketable title to all
properties and assets used in its business or owned by it (except such real and
other property and assets as are held pursuant to leases or licenses described
in Schedule 3.12), free and clear of all liens, mortgages, security interests,
pledges, charges, and encumbrances (except such as are disclosed in Schedule
3.12 or disclosed on the Company Last Balance Sheet).
3.12.01. Attached as Schedule 3.12 is a true and complete list of all
properties and assets owned, leased, or licensed by the Company
having an individual or aggregate value of $5,000 or more,
including with respect to such properties and assets leased or
licensed by the Company, a description of such lease or license.
All such properties and assets owned by the Company are reflected
on the Company Last Balance Sheet. All properties and assets
owned, leased, or licensed by the Company are in good and usable
condition (reasonable wear and tear, which is not such as to have
a Material Adverse Effect on the operation of the business of the
Company, excepted). Both parties agree and acknowledge that the
four (4) company automobiles will become the property of
Stockholders, who will assume any liabilities associated
therewith, prior to the Closing;
3.12.02. The properties and assets owned, leased, or licensed by the
Company constitute all such properties and assets which are
necessary to the business of the Company as presently conducted
or as it contemplates conducting;
3.12.03. No real property owned, leased or licensed by the Company lies in
an area which is, to the Knowledge of the Company or any
Stockholders, or will be subjected to zoning, use or building
code restrictions which would prohibit, and no stated facts
relating to the actions or inaction of another person or entity
of his or its ownership, licensing, leasing, or use of any real
or personal property exists or will exist which would prevent,
the continued effective ownership, leasing, licensing or use of
such real property in the business in which the Company is now
engaged or the business in which it contemplates engaging; and
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3.12.04. All accounts and notes receivable reflected on the Company's Last
Balance Sheet, and arising since the Company's Last Balance Sheet
Date, have been collected, or are and will be good and
collectible, in each case at the aggregate amount of at least
eighty (80%) percent of the recorded amounts thereof without
right of recourse, defense, deduction, return of goods,
counterclaim, offset, or setoff on the part of the obligor, and,
if not collected, can reasonably be anticipated to be paid within
90 days of the date incurred. Those receivables which are
Medicare reimbursables are warranted at the Medicare
reimbursement rate. The Stockholders shall have the right to
appeal all Medicare reimbursement denials in coordination with
Company. Company shall give Stockholders notice of any such
denial within three (3) days of Company's receipt of notice
thereof. The right of Stockholders to appeal said denials shall
cease on December 31, 1998.
3.13. Hazardous Materials. Except as disclosed on Schedule 3.13, the
Company is not in the business of possession, transportation, or disposal of
hazardous materials. If and to the extent that the Company's business has
involved the possession, transportation, or disposal of hazardous materials, to
the best of the Company's and the Stockholders' Knowledge the Company has
complied with any and all applicable laws, ordinances, rules, and regulations
and has not and will not be the basis of any claim or proceeding against, or any
liability of, the Company with respect to the period prior to the Closing. To
the Knowledge of the Company and the Stockholders, no employee of the Company
has been exposed to hazardous materials such that exposure could cause damage to
such employee.
3.14. Interest in Competitors. Except as set forth in Schedule 3.14
to this Agreement, no shareholder, officer, director, or employee of the
Company, nor any spouse or child of any shareholder, officer, director, or any
employee with authority to enter into contracts on behalf of the Company, has
any direct or indirect interest in any competitor, supplier, or customer of the
Company or in any person from whom or to whom the Company leases any real or
personal property, or in any other person with whom the Company is doing
business.
3.15. Tax and Other Liabilities. The Company does not have any present
liability of any nature, accrued or contingent, including, without limitation,
liabilities for federal, state, local, or foreign taxes and liabilities to
customers or suppliers, which could have a Material Adverse Effect upon the
Company, other than the following:
i. Liabilities for which full provision has been made on the
Company's Last Balance Sheet as of the Company's Last Balance
Sheet Date; and
ii. Other liabilities arising since the Company's Last Balance Sheet
Date and prior to the Closing in the ordinary course of business
which are not inconsistent with the representations and
warranties of the Company or any other provision of this
Agreement.
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Without limiting the generality of the foregoing, the amounts set forth as
provisions for taxes on the Company's Last Balance Sheet are sufficient for all
accrued and unpaid taxes of the Company, whether or not due and payable and
whether or not disputed, under tax laws, as in effect on the Company's Last
Balance Sheet Date or now in effect, for the period ended on such date and for
all fiscal years prior thereto. The Company has filed all applicable tax
returns required to be filed by it or has obtained applicable extensions and are
not delinquent with respect to such extensions; have paid (or have established
on the Company's Last Balance Sheet a reserve for) all taxes, assessments, and
other governmental charges payable or remittable by it or levied upon it or its
properties, assets, income, or franchises, which are due and payable and have
delivered to the Company a true and correct copy of any report as to adjustments
received by the Company from any taxing authority during the past five years and
a statement as to any litigation, governmental or other proceeding (formal or
informal), or investigation pending.
3.16. Changes or Events. Except as set forth in Schedule 3.16, since
the Company's Last Balance Sheet Date, none of the following has occurred:
3.16.01. Any material transaction by the Company not in the ordinary
course of business involving amounts in excess of $5,000;
3.16.02. Any material capital expenditure by the Company involving
amounts in excess of $5,000;
3.16.03. Other than in the ordinary course of business, any changes in
the condition (financial or otherwise), liabilities, assets,
or business or in any business relationships of the Company,
including relationships with suppliers or customers, that,
when considered individually or in the aggregate, might
reasonably be expected to have a Material Adverse Effect;
3.16.04. The destruction of, damage to, or loss of any asset of the
Company (regardless of whether covered by insurance) that,
when considered individually or in the aggregate, might
reasonably be expected to have a Material Adverse Effect;
3.16.05. Any labor disputes that, when considered individually or in
the aggregate, might reasonably be expected to have a Material
Adverse Effect;
3.16.06. Except as listed on Schedule 3.16., there have been no changes
in accounting methods or practices (including, without
limitation, any change in depreciation or amortization
policies or rates) by the Company, except for any such changes
as were required by law;
3.16.07. Other than in the ordinary course of business, any increase in
the salary or other compensation payable or to become payable
by the Company to any employee, or the declaration, payment,
or commitment or obligation of any kind for
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the payment by the Company of a bonus or other additional
salary or compensation to any such person;
3.16.08. The material amendment or termination of any material
contract, agreement, or license to which the Company is a
party, except in the ordinary course of business;
3.16.09. Any loan by the Company to any person or entity, or the
guaranteeing by the Company of any loan other than loans made
in the ordinary course of business;
3.16.10. Any mortgage, pledge, or other encumbrance of any asset of the
Company except in the ordinary course of business;
3.16.11. The waiver or release of any right or claim of the Company,
except in the ordinary course of business;
3.16.12. Any loss or, to the Knowledge of the Company or the
Stockholders, any threatened loss of any permit, license,
qualification, special charter or certificate of authority
held or enjoyed or formerly held or enjoyed by the Company
which loss has had or upon occurrence might reasonably be
expected to have a Material Adverse Effect;
3.16.13. To the Knowledge of the Company and the Stockholders, any
statute, regulation, order, ordinance or other law the
adoption or rescission of which might reasonably be expected
to have a Material Adverse Effect;
3.16.14. Any failure on the part of the Company to operate its business
in the ordinary course and consistent with past practices so
as to preserve its business organization intact, to retain the
services of its employees and to preserve its goodwill and
relationships with suppliers, creditors, customers, and others
having business relationships with it;
3.16.15. To the Knowledge of the Company and the Stockholders, any
action taken or omitted to be taken by the Company which would
cause (after lapse of time, notice or both) the breach,
default, or acceleration of any right, contract, commitment,
or other obligation of the Company which would have a Material
Adverse Effect; or
3.16.16. Any agreement by the Company to do any of the things described
in the preceding clauses 3.16.01 through 3.16.15.
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3.17. No Defaults. Except as set forth in Schedule 3.17, the consummation of
the transactions contemplated by this Agreement will not result in or constitute
any of the following: (i) a breach of any term or provision of any other
agreement of the Company that will not be waived or released at Closing; (ii) a
default or an event that will not be waived or released at Closing, and that,
with notice or lapse of time or both, would be a default, breach, or violation
of the Certificate of Incorporation or Bylaws of the Company or of any lease,
license, promissory note, conditional sales contract, commitment, indenture,
mortgage, deed of trust, or other agreement, instrument, or arrangement to which
the Company is a party or by which the Company or its assets are bound; (iii) an
event that will not be waived or released at Closing and that would permit any
party to terminate any agreement or to accelerate the maturity of any
indebtedness or other obligation of the Company; (iv) the creation or imposition
of any lien, charge, or encumbrance on any of the Company's assets; or (v) a
violation of any law or any rule or regulation of any administrative agency or
governmental body unrelated to the business or profession of health care and any
profession related to health care, of any order, writ, injunction or decree of
any court, administrative agency or governmental body to which the Company is
subject. Stockholders shall not be responsible for any liability associated with
approvals required by any administrative or governmental body related to change
of ownership or control.
3.18. No Prohibited Payments. Neither the Company nor any employee, or
agent of the Company, has made or authorized any payment of funds of the Company
or on behalf of the Company prohibited by law and no funds of the Company have
been set aside to be used for any payment prohibited by law.
3.19. Non-Distributive Intent. The Stockholders are receiving the shares of
AMED's Common Stock to be issued hereunder to them for their own account (and
not for the account of others) for investment and not with a view to the
distribution thereof. Neither the Company nor any Stockholders will sell or
otherwise dispose of such shares without registration under the Securities Act
of 1933, as amended (the "Act"), or an exemption therefrom, and the certificate
or certificates representing such shares will contain a legend to the foregoing
effect. The Company and the Stockholders further acknowledge and agree that
unless the resale of the shares is registered under the Act, such resale must be
made pursuant to Rule 144 under the Act. Each Stockholder understands that they
may not sell or otherwise dispose of such shares in the absence of either a
registration statement under the Act or an exemption from the registration
provisions of the Act.
3.20. Completeness of Disclosure. No representation or warranty and no
Schedule, Exhibit, or certificate prepared by the Company pursuant hereto and no
statement made or other document prepared by the Company and furnished to AMED
by the Company contains any untrue statement of a material fact or omits or will
omit any material fact necessary in order to make the statements contained
therein not misleading.
4. Representations and Warranties of AMED. AMED hereby agrees,
represents, and warrants to the Stockholders, on the date of this Agreement and
on the Closing Date, as follows:
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4.01. Organization. AMED is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Louisiana and
authorized to carry on business in every other jurisdiction in which its
ownership, leasing, licensing, or use of property or assets or the conduct of it
business makes such qualification necessary, except where the failure to do so
would not have a Material Adverse Effect.
4.02. Due Authorization; Third Party Consents. AMED has the right, power,
legal capacity, and authority to enter into and perform its obligations under
this Agreement and, except as set forth on Schedule 4.02 to this Agreement, no
approval or consent of any person other than AMED is necessary in connection
with the execution, delivery, or performance of this Agreement. The execution,
delivery, and performance of this Agreement by AMED has been duly authorized by
its board of directors and no other corporate proceedings on the part of AMED
are necessary to authorize this Agreement or the consummation of the
transactions contemplated hereby. This Agreement constitutes a legal and
binding obligation of AMED, and is valid and enforceable against AMED in
accordance with its terms except that (i) the enforcement of certain rights and
remedies created by this Agreement is subject to bankruptcy, insolvency,
reorganization, and similar laws of general application affecting the rights and
remedies of parties, (ii) the enforceability of any partic ular provision of
this Agreement under principles of equity or the availability of equitable
remedies, such as specific performance, injunctive relief, waiver or other
equitable remedies, is subject to the discretion of courts of competent
jurisdiction, and (iii) any court or administrative body may refuse to enforce
the choice of law provision of Section 9.12 of this Agreement.
4.03. No Violation. The consummation of the transactions contemplated by
this Agreement will not result in or constitute any of the following: (i) a
breach of any term or provision of any other agreement of AMED that will not be
waived or released at Closing; (ii) a default or an event that will not be
waived or released at Closing and that, with notice or lapse of time or both,
would be a default, breach, or violation of the Certificate of Incorporation or
Bylaws of AMED or of any lease, license, promissory note, conditional sales
contract, commitment, indenture, mortgage, deed of trust, or other agreement,
instrument, or arrangement to which AMED is a party or by which AMED or the
property of AMED is bound; or (iii) a violation of any law or any rule or
regulation of any administrative agency or governmental body or any order, writ,
injunction, or decree of any court, administrative agency or governmental body
to which AMED is subject.
4.04. Compliance With Laws. To the best of its knowledge AMED has complied
with, and is not in violation of any (i) term or provision of its Certificate of
Incorporation or Bylaws; (ii) term or provision of any applicable judgment,
decree, order, statute, injunction, rule, ordinance; (iii) any Health Care Law;
or (iv) foreign, United States, state or local statutes, laws, rules, or
regulations.
4.05. AMED Stock. All of the shares of Amedisys, Inc. common stock to be
issued to the Stockholders hereunder will, upon delivery, be duly authorized and
validly issued, fully paid and non-assessable and issued in compliance with
federal and state securities laws, free and clear of all liens charges,
restrictions, mortgages, security interests or claims of any kind, except those
restrictions regarding transfer pursuant to Rule 144 of the Act.
13
4.06. Completeness of Disclosure. No representation or warranty and no
Schedule, Exhibit, or certificate prepared by AMED pursuant hereto and no
statement made or other document prepared by AMED and furnished to the Company
by AMED contains any untrue statement of a material fact or omits or will omit
any material fact necessary in order to make the statements contained therein
not misleading.
5. Conditions to Obligations of AMED. The obligations of AMED under this
Agreement are subject, at the option of AMED, to the following conditions:
5.01. Accuracy of Representations and Compliance With Conditions. All
representations and warranties of Company or the Stockholders contained in this
Agreement shall be accurate when made and, in addition, shall be materially
accurate as of the Closing as though such representations and warranties were
then made by Company or such Stockholders on the part of Company or any
Stockholders. As of the Closing, the Company and the Stockholders shall have
performed and complied with all covenants and agreements and satisfied all
conditions required to be performed and complied with by any of them at or
before such time by this Agreement and AMED shall have received certificates
signed by the Stockholders dated the date of the Closing to that effect,
substantially in the form of Schedule 5.01.
5.02. Other Closing Documents. Company and the Stockholders shall have
delivered to AMED at or prior to the Closing such other documents as AMED may
reasonably request in order to enable AMED to determine whether the conditions
to their obligations under this Agreement have been met and otherwise to carry
out the provisions of this Agreement.
5.03. Review of Proceedings. All actions, proceedings, instruments, and
documents required to carry out this Agreement, or any agreement incidental
thereto and all other related legal matters shall be subject to the reasonable
approval of counsel to AMED, and the Company shall have furnished such counsel
for AMED such documents as such counsel may have reasonably requested for the
purpose of enabling them to pass upon such matters.
5.04. Legal Action. There shall not have been instituted or threatened any
legal proceeding relating to, or seeking to prohibit or otherwise challenging
the consummation of, the transactions contemplated by this Agreement or related
agreements or to obtain substantial damages with respect thereto, except as
listed in Schedule 3.04.
5.05. No Governmental Action. There shall not have been any action taken,
or any law, rule, regulation, order, or decree proposed, promulgated, enacted,
entered, enforced, or deemed applicable to the transactions contemplated by this
Agreement by any federal, state, local, or other governmental authority or by
any court or other tribunal, including the entry of a preliminary or permanent
injunction, which, in the reasonable judgment of AMED:
5.05.01. Makes any of the transactions contemplated by this Agreement
illegal;
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5.05.02. Results in a delay which affects the ability of AMED to
consummate any of the transactions contemplated by this Agreement;
5.05.03. Requires the divestiture by AMED of a material portion of the
business of either AMED taken as a whole, or of the Company taken
as a whole; and
5.05.04. Otherwise prohibits, restricts, or delays consummation of any of
the transactions contemplated by this Agreement or impairs the
contemplated benefits to AMED of the transactions contemplated by
this Agreement.
5.06. Contractual Consents Needed. The parties to this Agreement shall have
obtained at or prior to the Closing all consents required for the consummation
of the transactions contemplated by this Agreement from any party to any
contract, agreement, instrument, lease, license, arrangement, or understanding
to which any of them or any subsidiary is a party, or to which any of their
respective businesses, properties, or assets are subject, except where the
failure would not have a Material Adverse Effect.
5.07. Other Agreements. Agreements set forth as exhibits or schedules to
this Agreement shall have been duly authorized, executed, and delivered by the
parties thereto at or prior to the Closing, shall be in full force and effect,
valid and binding upon the parties thereto, and enforceable by them in
accordance with their terms at the Closing, and no party thereto at any time
from the execution thereof until immediately after the Closing shall have been
in violation of or in default in complying with any material provision thereof.
5.08. Non-Distributive Intent. AMED shall have received from the Company
and the Stockholders executed letters of non-distributive intent, substantially
in the form of Schedule 5.08.
5.09. Non-Competition and Non-Solicitation Agreement. Stockholders shall
have entered into the non-competition and non-solicitation agreement in the form
attached hereto as Schedule 5.09.
5.10. Board and Shareholder Approval. The Board of Directors and
shareholders of the Company shall have approved the transactions contemplated
herein.
5.11. Legal Opinion. AMED shall have received the opinion of Rosenstein,
Fist & Rinsold, dated __________________, in the form of Schedule 5.11 attached
hereto.
6. Conditions to Obligations of The Company. The obligations of the
Company under this Agreement are subject, at the option of the Company, to the
following conditions:
6.01. Accuracy of Representations and Compliance With Conditions. All
representations and warranties of AMED contained in this Agreement shall be
accurate when made and, in addition,
15
shall be materially accurate as of the Closing as though such representations
and warranties were then made by AMED on the part of AMED. As of the Closing,
AMED shall have performed and complied with all covenants and agreements and
satisfied all conditions required to be performed and complied with at or before
such time by this Agreement and the Company shall have received certificates
signed by the officers of AMED dated the date of the Closing to that effect,
substantially in the form of Schedule 6.01.
6.02. Other Closing Documents. AMED shall have delivered to the Company, at
or prior to the Closing, such other documents as the Company may reasonably
request in order to enable the Company to determine whether the conditions to
its obligations under this Agreement have been met and otherwise to carry out
the provisions of this Agreement.
6.03. Review of Proceedings. All actions, proceedings, instruments, and
documents required to carry out this Agreement, or any agreement incidental
thereto and all other related legal matters shall be subject to the reasonable
approval of counsel to the Company and AMED shall have furnished such counsel
such documents as such counsel may have reasonably requested for the purpose of
enabling them to pass upon such matters.
6.04. Legal Action. There shall not have been instituted or threatened any
legal proceeding relating to, or seeking to prohibit or otherwise challenging
the consummation of, the transactions contemplated by this Agreement or related
agreements set forth as an exhibit hereto, or to obtain substantial damages with
respect thereto.
6.05. No Governmental Action. There shall not have been any action taken,
or any law, rule, regulation, order, or decree proposed, promulgated, enacted,
entered, enforced, or deemed applicable to the transactions contemplated by this
Agreement by any federal, state, local, or other governmental authority or by
any court or other tribunal, including the entry of a preliminary or permanent
injunction, which, in the reasonable judgment of the Company:
6.05.01. Makes any of the transactions contemplated by this Agreement
illegal;
6.05.02. Results in a delay which affects the ability of the Company to
consummate any of the transactions contemplated by this Agreement;
6.05.03. Requires the divestiture by the Company or the Stockholders of
any of the shares of AMED's Common Stock;
6.05.04. Imposes material limitations on the ability of the Company or the
Stockholders to effectively exercise full rights of ownership of
the shares of Common Stock including the right to vote the shares
on all matters properly presented to the Stockholders of AMED; or
6.05.05. Otherwise prohibits, restricts, or delays consummation of any of
the transactions
16
contemplated by this Agreement or impairs the contemplated
benefits to the Company or the Stockholders of the transactions
contemplated by this Agreement.
6.06. Contractual Consents Needed. The Parties to this Agreement shall have
obtained at or prior to the Closing all consents required for the consummation
of the transactions contemplated by this Agreement from any party to any
contract, agreement, instrument, lease, license, arrangement, or understanding
to which any of them or any subsidiary is a party, or to which any of their
respective businesses, properties, or assets are subject, except where the
failure would not have a Material Adverse Effect.
6.07. Other Agreements. Agreements set forth as exhibits or schedules to
this Agreement shall have been duly authorized, executed, and delivered by the
Parties thereto at or prior to the Closing, shall be in full force, valid and
binding upon the Parties thereto, and enforceable by them in accordance with
their terms at the Closing, and no party thereto at any time from the execution
thereof until immediately after the Closing shall have been in violation of or
in default in complying with any material provision thereof.
6.08. Board Approval. The Board of Directors of AMED shall have approved
the transactions contemplated herein.
6.09. Employment Agreements. On or before Closing, Frances Unger shall
enter into an employment agreement in the form attached hereto as Schedule 6.09.
6.10. 1997 Company Medicare Cost Report. AMED shall allow the
Stockholders, and the Stockholders shall have the authority on behalf of the
Company, to prepare and submit Company's 1997 year-end Medicare Cost Report.
7. Covenants and Agreements of the Company. The Company covenants and
agrees as follows:
7.01. Public Statements. Before the Company shall release any information
concerning this Agreement or the transactions contemplated by this Agreement
which is intended for or may result in public dissemination thereof, the Company
shall cooperate with AMED, shall furnish drafts of all documents or proposed
oral statements to AMED for comment, and shall not release any such information
without the written consent of AMED. Nothing contained herein shall prevent the
Company from furnishing any information to any governmental authority if
required to do so by law, with the exception of consents more fully described in
7.06 of this Agreement.
8. Covenants and Agreements of AMED. AMED covenants and agrees as
follows:
8.01. Public Statements. Before AMED shall release any information
concerning this Agreement or the transactions contemplated by this Agreement
which is intended for or may result in public dissemination thereof, AMED shall
cooperate with the Company, shall furnish drafts of
17
all documents or proposed oral statements to the Company for comments, and shall
not release any such information without the written consent of the Company.
Nothing contained herein shall prevent AMED from furnishing any information to
any governmental authority if required to do so by law. In the event AMED and
the Company have not completed the terms of this Agreement, both AMED and the
Company shall not disclose any information concerning this Agreement to any
third party, except as more fully described in Section 8.01 of this Agreement.
9. Miscellaneous.
9.01. Brokerage and Other Fees. The parties agree that there are no
brokerage arrangements or fee obligations, in writing or otherwise, with respect
to the transactions set forth in this Agreement. Each party shall be
responsible for the fees of their respective professionals (including, without
limitation, legal and accounting fees) engaged to assist in the preparation,
negotiation and counseling with respect, and relating, to this Agreement and
consummation of the transactions contemplated herein, as well as their
respective out-of-pocket expenses except AMED agrees to pay for the preparation
of the necessary transfer documents to accomplish the transactions herein.
9.02. Further Actions. At any time and from time to time, the parties
agree, at their expense, to take such actions and to execute and deliver such
documents as may be reasonably necessary to effectuate the purposes of this
Agreement.
9.03. Availability of Equitable Remedies. Since a breach of the provisions
of this Agreement could not adequately be compensated by money damages, the
parties shall be entitled before, and only before, Closing, in addition to any
other right or remedy available to them, to an injunction restraining such
breach or a threatened breach and to specific performance of any such provision
of this Agreement; and in either case, no bond or other security shall be
required in connection therewith, and the parties hereby consent to the issuance
of such an injunction and to the ordering of specific performance.
9.04. Survival. The covenants, agreements, representations, and warranties
contained in or made pursuant to this Agreement shall survive for fifteen (15)
months after the date of the Closing (the "Survival Date"). No claim for
indemnification may be brought pursuant to this Section 9.04 unless asserted by
written notice as provided herein by the party claiming indemnification on or
before the Survival Date.
9.05. Modification. The Agreement and the schedules and exhibits hereto set
forth the entire understanding of the parties with respect to the subject matter
hereof supersede all existing agreements among them concerning such subject
matter, and may be modified only by a written instrument duly executed by the
Parties.
9.06. Notices. Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be mailed by certified mail,
return receipt requested (or by
18
the most nearly comparable method if mailed from or to a location outside of the
United States), or delivered against receipt to the party to whom it is to be
given at the address of such party set forth in the preamble or signature pages
to this Agreement. Any notice or other communication given by certified mail (or
by such comparable method) shall be deemed given at the time of mailing (or
comparable act), except for a notice changing a party's address, which will be
deemed given at the time of receipt thereof.
9.07. Waiver. Any waiver by any party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of that provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term
of this Agreement on one or more occasions will not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing
and, in the case of a corporate party, be authorized by a resolution of the
Board of Directors or by an officer of the waiving party.
9.08. Binding Effect. The provisions of this Agreement shall be binding
upon and inure to the benefit of each party's respective successors, assigns,
heirs, and personal representatives.
9.09. No Third-Party Beneficiaries. This Agreement does not create, and
shall not be construed as creating, any rights enforceable by any person not a
party to this Agreement.
9.10. Severability. If any provision of this Agreement is invalid, illegal,
or unenforceable, the balance of this Agreement shall remain in effect, and if
any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances.
9.11. Headings. The headings of this Agreement are solely for convenience
of reference and shall be given no effect in the construction or interpretation
of this Agreement.
9.12. Counterparts, Governing Law. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. It shall be
governed by and construed in accordance with the laws of the State of Louisiana
without giving effect to conflict of laws.
9.13. Indemnification by the Stockholders. The Stockholders shall,
indemnify, defend and hold harmless AMED and each of its officers, directors,
agents and affiliates from and against any damage, loss, claim, liability, cost
or expense, including fees and disbursements of counsel, accountants, experts
and other consultants (collectively, "Damages"), resulting from, arising out of,
based upon or occasioned by any fraudulent misstatement or fraudulent omission
from any representation by, or any breach of warranty, covenant or agreement
of, the Company or the Stockholders contained herein. The Stockholders'
indemnification liability for damage, loss, claim, liability, cost or expense
incurred by AMED and provided for hereunder shall be limited to an amount equal
to Fifty Thousand ($50,000) Dollars.
19
9.14. Indemnification Procedures. Promptly after receipt by AMED (the
"Indemnitee"), of notice of any action, suit, proceeding, audit, claim or
potential claim (any of which is hereinafter individually referred to as a
"Circumstance"), which could give rise to a right to indemnification for damages
pursuant to Section 9.13, the Indemnitee shall give the party who may become
obligated to provide indemnification hereunder (the "Indemnitor") written notice
describing the Circumstance in reasonable detail; provided, that failure of an
Indemnitee to give such notice to the Indemnitor shall not relieve the
Indemnitor from any of its indemnification obligations hereunder unless (and
then only to the extent) that the failure to give such notice prejudices the
defense of the Circumstance by the Indemnitee. Such Indemnitor shall have the
right, at its option and upon its acknowledgment to the Indemnitee of
Indemnitor's liability to indemnify Indemnitee in respect of such asserted
liability, to compromise or defend, at its own expense and by its own counsel,
any such matter involving the asserted liability of the Indemnitee; provided,
that any such compromise (i) shall include as an unconditional term thereof, the
giving by the claimant or the plaintiff to such Indemnitee of a release from all
liability in respect of such claim and (ii) shall not result in the imposition
on the Indemnitee of any remedy other than monetary damages to be paid in full
by the Indemnitor pursuant to this Section 9.14. If any indemnitor shall
undertake to compromise or defend any such asserted liability, it shall promptly
notify the Indemnitee of its intention to do so, and the Indemnitee agrees to,
and to cause its own independent counsel to, cooperate fully with the Indemnitor
and its counsel in the compromise of, or defense against, any such asserted
liability. All reasonable out-of-pocket costs and expenses incurred by the
Indemnitee in connection with such cooperation (including, without limitation,
the reasonable fees and expenses of the Indemnitee's own independent counsel)
shall be borne by the Indemnitor. In any event, the Indemnitee shall have the
right to participate with its own counsel (the reasonable fees and expenses of
which will be borne by Indemnitor) in the defense of such asserted liability;
provided that if with respect to a Circumstance, Indemnitor shall have
acknowledged Indemnitor's liability to indemnify Indemnitee if and to the extent
of any loss arising out of such Circumstance and Indemnitor shall be diligently
defending such matter, Indemnitor shall not be obligated to indemnify Indemnitee
for the cost of Indemnitee's participation in such defense, including
Indemnitee's attorney's fees. Under no circumstances shall the Indemnitee
compromise any such asserted liability without the written consent of the
Indemnitor (which consent shall not be unreasonably withheld), unless the
Indemnitor shall have failed or refused to undertake the defense of any such
asserted liability after a reasonable period of time has elapsed following the
notice of a Circumstance received by such Indemnitor pursuant to this Section
9.14.
9.15. Other Indemnification Provisions. The foregoing indemnification
provisions under this Section 9 are in addition to, and not in derogation of,
any statutory, equitable or common law remedy any party may have for breach of
representation, warranty or covenant.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement effective
as of the date written in the preamble of this Agreement.
AMEDISYS SPECIALIZED MEDICAL
SERVICES, INC.
By: /s/ MICHAEL McMAUDE
-------------------------
Michael A. McMaude, President
QUALITY HOME HEALTH CARE, INC.
By: /s/ FRANCES UNGER
---------------------------
Name: FRANCES UNGER
------------------------
Title: ADMINISTRATOR
-----------------------
/s/ FRANCES UNGER
------------------------------
FRANCES UNGER
/s/JAMES UNGER
------------------------------
JAMES UNGER
21
LIST OF SCHEDULES
Schedule No. Schedule Description
- ------------ --------------------
2.01 Stock Power
3.01 Organization and Qualification
3.03 Authorizations and Third Party Consents
3.04 Litigation
3.05 Employees and Compensation
3.07 Insurance
3.08 Contracts, Agreements and Instruments
3.11 Permits and Licenses
3.12 Properties
3.13 Hazardous Materials
3.14 Interest in Competitors
3.16 Changes or Events
3.17 Defaults
4.02 Authorizations and Third Party Consents
5.08 Letters of Non-Distributive Intent
5.09 Non-Compete and Non-Solicitation Agreement
5.11 Legal Opinion of Rosenstein, Fist & Rinsold
6.09 Employment Agreement
22