-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RcKWfV4/x+p39R+pyNg6r1k8jKJz5iw/Xa13dHX8d0a7vzYsCZG+u54Cv7RmWfA+ k+ug3yQd+PCgIzoJclgB1g== 0000899243-98-000346.txt : 19980312 0000899243-98-000346.hdr.sgml : 19980312 ACCESSION NUMBER: 0000899243-98-000346 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 16 FILED AS OF DATE: 19980311 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMEDISYS INC CENTRAL INDEX KEY: 0000896262 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HOME HEALTH CARE SERVICES [8082] IRS NUMBER: 113131700 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-47763 FILM NUMBER: 98563795 BUSINESS ADDRESS: STREET 1: 3029 S SHERWOOD FOREST BLVD STE 300 CITY: BATON ROUGE STATE: LA ZIP: 70816 BUSINESS PHONE: 5042922031 MAIL ADDRESS: STREET 1: 3029 SOUTH SHERWOOD FOREST BLVD STREET 2: SUITE 300 CITY: BATON ROUGE STATE: LA ZIP: 70816 FORMER COMPANY: FORMER CONFORMED NAME: ANALYTICAL NURSING MANAGEMENT CORP DATE OF NAME CHANGE: 19940819 FORMER COMPANY: FORMER CONFORMED NAME: M&N CAPITAL CORP DATE OF NAME CHANGE: 19930125 S-3 1 FORM S-3 As filed with the Securities and Exchange Commission on March 11, 1998 Registration No. 333-____ ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ____________________________________ FORM S-3 Registration Statement Under the Securities Act of 1933 ______________________________ AMEDISYS, INC. (Exact name of Registrant as specified in its charter) DELAWARE 8082 11-3131700 (State or other jurisdiction (Primary Standard (I.R.S. Employer of incorporation or Industrial Classification Identification Number) organization) Code Number) 3029 S. SHERWOOD FOREST BLVD. WILLIAM F. BORNE, SUITE 300 CHIEF EXECUTIVE OFFICER BATON ROUGE, LOUISIANA 70816 AMEDISYS, INC. (504)292-2031 3029 S. SHERWOOD FOREST BLVD. (Address, including zip code, and SUITE 300 telephone number, including BATON ROUGE, LOUISIANA 70816 area code, of registrant's (504)292-2031 principal executive offices) (Name, address, including zip code, and telephone number, including area code, of agent for service) Copy To: THOMAS C. PRITCHARD BREWER & PRITCHARD, P.C. 1111 BAGBY, SUITE 2450 HOUSTON, TEXAS 77002 PHONE (713) 659-1744 ____________________________ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this Registration Statement becomes effective. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [_] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of earlier effective registration statement for the same offering. [_] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act number of the earlier effective registration statement for the same offering. [_] If the delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [_]
CALCULATION OF REGISTRATION FEE =========================================================================================================== Title of Each Class of Amount Proposed Proposed Securities To Be Being Maximum Maximum Amount of Registered Registered/(1)/ Offering Price Aggregate Registration - ----------------------------------------------------------------------------------------------------------- Resale of Shares Underlying Preferred Stock 1,621,622 $3.9375 $6,385,136.60 $1,934.70 - ----------------------------------------------------------------------------------------------------------- Resale of Share Underlying Warrants 113,514 $3.9375 $ 446,961.37 $ 135.43 =========================================================================================================== TOTAL 1,735,136 $3.9375 $6,832,098.00 $2,070.13 ===========================================================================================================
(1) Pursuant to Rule 416(a), this Registration Statement also covers an indeterminate number of shares of Common Stock issuable pursuant to adjustment provisions of the Preferred Stock Designation and the Warrant Agreement. (2) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c), based on prices the average of the high and low sale for the Common Stock, as reported by Nasdaq on March 9, 1998, or $3.9375 per share. ____________________________ THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. AMEDISYS, INC. RESALE OF 1,735,136 SHARES COMMON STOCK This Prospectus relates to the resale of 1,735,136 shares of common stock, par value $.001 per share (the "Common Stock"), of Amedisys, Inc., a Delaware corporation (the "Company"), which shares shall be offered from time to time by certain stockholders of the Company (the "Selling Stockholders"). These shares relate to the Company's private placement of its Series A Convertible Preferred Stock, par value $.001 per share (the "Preferred Stock"), that was completed on March 3, 1998 (the "Private Placement"). The 750,000 shares of Preferred Stock sold in the Private Placement are currently convertible into 1,621,622 shares of Common Stock, subject to adjustment, (the "Conversion Shares"). In addition, the placement agent in the Private Placement received warrants to purchase 52,500 shares of Preferred Stock (the "Placement Agent Warrants") which are currently convertible into 113,514 shares of Common Stock (the "Placement Agent Shares"). In connection with the Private Placement the Company agreed to register the resale of the Conversion Shares and the Placement Agent Shares (herein collectively referred to as the "Shares"). Pursuant to this Prospectus, the Shares may be offered by the Selling Stockholders, or by certain pledgees, donees, transferees or other successors in interest to the Selling Stockholders, from time to time on the Nasdaq National Market, in privately negotiated transactions, or by a combination of such methods of sale, at fixed prices that may be changed, at market prices prevailing at the time of sale, at prices relating to such prevailing market prices or at negotiated prices. The Selling Stockholders may effect such transactions by selling the Shares to or through broker-dealers, and such broker-dealers may receive compensation in the form of discounts, concessions or commissions from the Selling Stockholders or the purchasers of the Shares for whom such broker-dealers may act as agent or to whom they sell as principal or both (which compensation to a particular broker-dealer may be in excess of customary commissions). See "Selling Stockholders" and "Plan of Distribution." Other methods by which the Shares may be sold include, without limitation: (i) transactions which include cross or block trades or any other transaction permitted by the Nasdaq National Market, (ii) "at the market" to or through market makers or into an existing market for the Common Stock, (iii) in other ways not involving market makers or established trading markets, including direct sales to purchasers or sales effected through agents, (iv) through transactions in options or swaps of other derivatives (whether exchange-listed or otherwise), (v) through short sales, or (vi) any combination of any such methods of sale. The Selling Stockholders may also enter into option or other transactions with broker-dealers which require the delivery to such broker- dealers of the Common Stock offered hereby, which Common Stock such broker- dealers may resell pursuant to this Prospectus. None of the proceeds from the sale of the Shares by the Selling Stockholders will be received by the Company. However, the Company will receive up to $570,500 upon the exercise of the Placement Agent Warrants. The Company has agreed to bear certain expenses (other than any underwriting discounts and selling commissions and any fees and disbursements of counsel for the Selling Stockholders not specifically provided for by the parties), estimated to be approximately $20,000, in connection with the registration and sale of the Shares being offered by the Selling Stockholders. Pursuant to the registration rights agreements with the Selling Stockholders, the Company has agreed to indemnify the Selling Stockholders against certain liabilities, including certain liabilities under the Securities Act of 1933, as amended (the "Act") or will contribute to payments such Selling Stockholders or underwriters may be required to make in respect of certain losses, claims, damages or liabilities. The shares of Common Stock are quoted on the Nasdaq National Market under the symbol "AMED." On March 9, 1998, the last reported sales price of the Common Stock was $4.00 per share. ______________________________ AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" ON PAGE 5. ______________________________ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ___________________ The date of this Prospectus is March 11, 1998 INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. TABLE OF CONTENTS PAGE ---- Available Information 2 Incorporation of Certain Documents by Reference 3 The Company 3 Risk Factors 5 Selling Stockholders 9 Plan of Distribution 10 Legal Matters 10 Experts 10 NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THE PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE BUSINESS OR AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION IN THE PROSPECTUS IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE AS OF WHICH SUCH INFORMATION IS FURNISHED. AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith, files reports, proxy statements and other information with the Securities and Exchange Commission (the "SEC"). Such reports, proxy statements and other information are available for inspection and copying at the Public Reference Room of the SEC, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549; and at the Regional Offices of the SEC located at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and at 7 World Trade Center, New York, New York 10048. Copies of such material may be obtained from the Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission maintains a Web site on the Internet that contains reports, proxy and information statements and other information regarding issuers that file electronically with the Commission. The address of the site is http://www.sec.gov. Visitors to the site may access such information by searching the EDGAR data base on the site. The Company has filed with the SEC in Washington, D.C. a Registration Statement on Form S-3 (the "Registration Statement") under the Act with respect to the securities offered by this Prospectus. Certain of the information contained in the Registration Statement is omitted from this Prospectus, and reference is hereby made to the Registration Statement and exhibits and schedules relating thereto for further information with respect to the Company and the securities offered by this Prospectus. Statements contained herein concerning the provisions of any document are not necessarily complete and in each instance reference is made to the copy of the document filed as an exhibit or schedule to the Registration Statement. Each such statement is qualified in its entirety by this reference. The Registration Statement and the exhibits and schedules thereto are available for inspection at, and copies of such materials may be obtained upon payment of the fees prescribed therefor by the rules and regulations of the SEC, from the SEC, Public Reference Section, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. 2 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents, which have been filed by the Company with the Commission are incorporated herein by reference: 1. The Company's Annual Report on Form 10-K for the year ended December 31, 1996, as amended on Form 10-K/A dated April 16, 1997; 2. the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1997; 3. the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1997; 4. the Company's Proxy Statement dated July 16, 1997 regarding its Annual Stockholder's Meeting held on August 6, 1997; 5. the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1997, and 6. the Company's Proxy Statement dated January 21, 1998 regarding a Special Meeting held on February 12, 1998. All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and before the termination of the offering covered hereby will be deemed to be incorporated by reference in this Prospectus and to be a part hereof from the date of filing such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference in this Prospectus shall be deemed to be modified or superceded for purposes of this Prospectus to the extent that a statement contained in this Prospectus or any subsequently filed document that also is or is deemed to be incorporated by reference modifies or replaces such statement. The Company will provide, without charge upon oral or written request, to each person whom this Prospectus is delivered, a copy of any or all of the documents incorporated by reference, other than exhibits to such documents not specifically incorporated by reference above. In addition, a copy of the Company's most recent annual report to stockholders will be promptly furnished, without charge and on oral or written request, to such persons. Requests for such documents should be directed to the Company, 3029 South Sherwood Forest Boulevard, Suite 300, Baton Rouge, Louisiana 70816, attention: Barbara Carey. THE COMPANY GENERAL Amedisys, Inc., a Delaware corporation ("Company"), is a fully integrated provider of outpatient health services and operates in two basic industry segments: alternate-site provider services and management services operations. The Company's alternate-site provider segment includes the following services: alternate-site infusion therapy, ambulatory surgery centers and home health care. Its management services operations encompass: home health care management, software systems, staffing services, and physician support services. The Company operates 46 offices within a network of wholly owned subsidiaries in the South and South Eastern United States. The Company operates through the following subsidiaries: (i) its wholly- owned subsidiaries Amedisys Staffing Services, Inc.("ASS"), Amedisys Nursing Services, Inc., Amedisys Specialized Medical Services, Inc. ("ASM"), Amedisys Surgery Centers, L.C. ("ASC"); Alliance Home Health, Inc., Amedisys Management Services Organization, Inc.; Amedisys Home Health, Inc., Amedisys, Alternate- Site Infusion Therapy Services, Inc. ("AASI") Amedisys Durable Medical Equipment, Inc.; (ii) it's 60%-owned subsidiary Amedisys Physician Services, Inc., and 54%-owned subsidiary St. Lukes SurgiCenter; and (iii) the wholly- owned and partially-owned subsidiaries of ASS, ASM, and AASI, being Analytical Nursing Management Corporation of Texas, a wholly-owned subsidiary of ASS; MedAmerica, Inc. of Texas and MedAmerica, Inc., each an 80%-owned subsidiary of ASM, Hammond Surgical Care Center, L.C., a wholly owned subsidiary of ASC and Infusioncare Solutions, Inc. and PRN, Inc., each wholly-owned subsidiaries of AASI. 3 The Company was incorporated as M&N Capital Corp. ("M&N") in October 1992 under the laws of the state of New York. Analytical Nursing Management Corp., a Louisiana corporation, was formed in December 1992 ("ANMC"). In December 1993, M&N acquired all of the issued and outstanding shares of common stock of ANMC. In June 1994, M&N reincorporated in the state of Delaware under the name of Analytical Nursing Management Corp., and in August 1995, the Company changed its name to AMEDISYS, INC. References to the Company include references to its subsidiaries. The Company's principal executive offices are located at 3029 South Sherwood Forest Boulevard, Third Floor, Baton Rouge, Louisiana 70816, and its telephone number is (504) 292-2031. RECENT DEVELOPMENTS In January 1998, the Company acquired all of the issued and outstanding capital stock of Alliance Home Health, Inc. ("Alliance") in exchange for 194,286 shares of its Common Stock. Of the 194,286 shares of Company Common Stock issued to Alliance, 122,857 shares were placed in escrow as consideration for certain contingent liabilities which may be asserted against the former stockholder of Alliance if such claims are in excess of $500,000 (singularly and/or in aggregate). The escrow period shall terminate no later than December 31, 2003. The majority stockholder of Alliance entered into a three year employment agreement and two year non-competition and non-solicitation agreement with the Company. The acquisition of Alliance was not deemed to be "significant." Accordingly, the financial statements of Alliance will be consolidated with the Company's financial statements, and separate financial statements in a Current Report on Form 8-K were not filed with the SEC. Alliance is a home health business located in Tulsa, Oklahoma. In February 1998, the Company acquired all of the issued and outstanding capital stock of PRN, Inc. d/b/a/ Home IV Therapy ("PRN") in exchange for $430,000. The Company has agreed to pay additional consideration of up to $150,000 upon PRN reaching certain revenue goals ("Additional Consideration"). The Company has retained the right to offset certain indemnifiable liabilities against the Additional Consideration. The two majority stockholders of PRN entered into a two year non-competition and non-solicitation agreements with the Company. The acquisition of PRN was not deemed to be "significant," accordingly the financial statements of PRN will be consolidated with the Company's financial statements and separate financial statements in a Current Report on Form 8-K will not be filed with the SEC. PRN is a home infusion pharmacy business, which is based in San Antonio, Texas. In February 1998, the Company acquired all of the issued and outstanding capital stock of Infusioncare Solutions, Inc.("ICS") in exchange for aggregate consideration of $520,000, of which $395,000 was payable in cash at closing and $125,000 was payable pursuant to a two year promissory note. The Company has retained the right to offset certain indemnifiable liabilities against the sums payable pursuant to the promissory note. The majority stockholder of ICS entered into a two year non-competition and non-solicitation agreement with the Company. The acquisition of ICS was not deemed to be "significant," accordingly the financial statements of ICS will be consolidated with the Company's financial statements and separate financial statements in a Current Report on Form 8-K will not be filed with the SEC. ICS is a home health care and infusion business, which is based in Baton Rouge, Louisiana. In February 1998, the Company acquired substantially all of the assets of Precision Health Systems, L.L.C. ("PHS") in exchange for aggregate consideration of $1,000,000, of which $750,000 was payable in cash at closing and $250,000 was payable pursuant to a two year promissory note. The Company has retained the right to offset certain indemnifiable liabilities against the sums payable pursuant to the promissory note. The majority stockholder of PHS entered into a two year non-competition and non-solicitation agreement and a two year consulting agreement with the Company. The acquisition of PHS was not deemed to be "significant," accordingly the financial statements of PHS will be consolidated with the Company's financial statements and separate financial statements in a Current Report on Form 8-K will not be filed with the SEC. PHS is a home infusion business and ambulatory infusion center business, which is based in Baton Rouge, Louisiana. In March 1998, the Company completed a Private Placement of 750,000 shares of Preferred Stock to accredited investors at a purchase price of $10.00 per share in reliance upon an exemption from registration under the Act. In connection with the Private Placement, the placement agent was issued the Placement Agent Warrants to purchase 52,500 shares of Preferred Stock. The shares of Common Stock underlying the Preferred Stock and the shares of Common Stock underlying the Preferred Stock issuable upon exercise of the Placement Agent Warrants are the Shares the resale of which are being registered under the Act hereby. 4 RISK FACTORS An investment in the securities offered hereby involves a number of significant risks. In addition to the other information contained in this Prospectus, prospective investors should give careful consideration to the following factors. INCREASED WORKING CAPITAL NEEDS AND RISKS OF COLLECTION RELATING TO FEE-FOR- SERVICE REIMBURSEMENT PROGRAMS For the nine months ended September 30, 1997, approximately 53% of the Company's revenue was derived from private insurers and patients, 42% from Medicare and 5% from Medicaid. The portion of the Company's revenues attributable to management services provided in connection with fee-for-service agreements is expected to increase substantially. Management believes that competitive trends will continue to increase the number and percentage of the Company's fee-for-service agreements. Under fee-for-service agreements, the Company assumes the financial risks arising from changes in patient volume, payor mix and third party reimbursement rates. Fee-for-service arrangements also involve a credit risk related to services provided to uninsured individuals. In addition, fee-for-service contracts also have less favorable cash flow characteristics than traditional flat-rate contracts due to longer collection periods. Private and third party fee-for-service arrangements can result in longer collection cycles than government fee-for-service agreements. The Company has both types of contracts in its payor mix. The Company's working capital needs are generally a function of the acquisition of new contracts or the conversion of fixed fee contracts to fee-for-service contracts. As a result, the Company may require additional working capital in the event of significant growth. The Company may experience a net use of cash in its operating activities in future periods if the growth in fee-for-service contracts continues. The Company derives 42% of its revenues from the Medicare system. This system is undergoing changes mandated by the congressional Balanced Budget Act of 1997 which established the Interim Payment System ("IPS") for home health care. The IPS was effective for home health agencies ("HHAs") for cost reporting periods beginning on or after October 1, 1997. Under the previous system, HHAs were reimbursed their costs per visit up to a specified limit which was based on geographic region. In IPS HHAs will be reimbursed the lower of their actual cost, per visit limit or per beneficiary limit. The per beneficiary limits are 75% provider specific and based on 1994 cost reports. Cost limits are also based on the area where the patient resides and not the area of the HHA's office. Per beneficiary cost limits will not be specified by the federal government until April 1, 1998 and HHAs are at risk since agency specific reductions are not known until after the start of the cost reporting period. The anticipated range of reductions in cost limits is between 15% - 40%. The public and private sectors are experiencing increasing pressures to reduce health care costs and restrict reimbursement rates for medical services. Any change in reimbursement amounts or practices could materially adversely affect the operations of the Company. In addition, while the Company seeks to comply with applicable Medicare and Medicaid reimbursement regulations, there can be no assurance that the Company would be found to be in compliance in all respects with such regulations. CLASSIFICATION OF PHYSICIANS AND NURSES AS INDEPENDENT CONTRACTORS; POTENTIAL STATE AND FEDERAL TAX LIABILITY The Company contracts with physicians and nurses as independent contractors, rather than employees, to fulfill some of its supplemental staffing obligations. Therefore, the Company has not historically, and the Company does not currently, withhold federal or state income taxes, make federal or state unemployment tax payments or provide worker's compensation insurance with respect to such independent contractors. The payment of applicable taxes is regarded as the responsibility of such independent contractors. Management believes that classification of physicians and nurses as independent contractors is standard industry practice and proper for federal tax purposes. A contrary determination by federal taxing authorities or a change in existing law could materially adversely affect the Company and its operations. Most state taxing authorities either have not challenged or have accepted the classification of contract physicians and nurses as independent contractors. The Company's records for independent contractors have been reviewed by federal taxing authorities and no significant issues have been identified. The Company is currently under review by the Department of Labor. Management believes that the ultimate resolution of this review will not have a significant effect on the Company's financial position or results of operations. However, there are some states in which the independent contractor classification of physicians and nurses is or has been under administrative or judicial review. RISKS RELATED TO THE COMPANY'S ACQUISITION STRATEGY The Company also intends to grow significantly through the acquisition of additional outpatient health care and complimentary businesses. The Company expects to face competition for acquisition candidates, which may limit the number of acquisition opportunities and may lead to higher acquisition prices. There can be no assurance that the Company will be able to identify, acquire or manage profitably additional businesses or to integrate any acquired businesses into the Company without substantial costs, delays or other operational or financial problems. Further, acquisitions involve a number of risks, including possible adverse effects on the Company's operating results, diversion of management's attention, failure to retain key personnel of the acquired business and risks associated with unanticipated events or liabilities, some or all of which could have a material adverse effect on the Company's business, 5 financial condition and results of operations. RISKS RELATED TO ACQUISITION FINANCING The timing, size and success of the Company's acquisition efforts and the associated capital commitments cannot be readily predicted. The Company currently intends to finance future acquisitions by using shares of its Common Stock for a portion of the consideration to be paid. In the event that the Common Stock does not maintain a sufficient market value, or potential acquisition candidates are otherwise unwilling to accept Common Stock as part of the consideration for the sale of their businesses, the Company may be required to utilize more of its cash resources, if available, in order to initiate and maintain its acquisition program. If the Company does not have sufficient cash resources, its growth could be limited unless it is able to obtain additional equity or debt financing. DEPENDENCE ON MANAGEMENT The success of the Company is dependent upon its management, including the Company's Chief Executive Officer, William F. Borne, and President, James P. Cefaratti. The Company maintains key employee life insurance in the amount of $4.5 million on the life of Mr. Borne and has entered into an employment agreement with Mr. Borne. The loss to the Company of the services of Messrs. Borne and Cefaratti could materially adversely affect the Company's operations. ADVERSE EFFECT OF STATE LAWS REGARDING THE CORPORATE PRACTICE OF MEDICINE Business corporations are legally prohibited in many states from providing or holding themselves out as providers of medical care. While the Company has structured its operations to comply with the corporate practice of medicine laws of states in which it operates and will seek to structure its operations in the future to comply with the laws of any state in which it seeks to operate, there can be no assurance that, given varying and uncertain interpretations of such laws, the Company would be found to be in compliance with restrictions on the corporate practice of medicine in such states. A determination that the Company is in violation of applicable restrictions on the practice of medicine in any state in which it operates could have a materially adverse effect on the Company if the Company were unable to restructure its operations to comply with the requirements of such state. Such regulations may limit the states in which the Company can operate, thereby inhibiting future expansion of the Company into potential markets in other states. CORPORATE EXPOSURE TO PROFESSIONAL LIABILITIES Due to the nature of its business, the Company and certain physicians who provided services on its behalf may be the subject of medical malpractice claims, with the attendant risk of substantial damage awards. The most significant source of potential liability in this regard is the alleged negligence of nurses placed by the Company in home health care and supplemental staffing settings. In addition, the Company could be exposed to liability based on the negligence of physicians operating in the Company's outpatient surgery centers. To the extent such nurses or physicians were regarded as agents of the Company in the practice of medicine, the Company could be held liable for any medical negligence of such persons. In addition, the Company could be found in certain instances to have been negligent in performing its contract management services for hospital and clinics even if no agency relationship between the Company and such physician exists. There can be no assurance that a future claim or claims will not exceed the limits of available insurance coverage or that such coverage will continue to be available. POSSIBLE INSUFFICIENCY OF LIABILITY COVERAGE The Company maintains professional liability insurance; however, there can be no assurance that any such claims will not be made in the future in excess of the limits of such insurance, if any, or that any such claims, if successful and in excess of such limits, will not have a material adverse effect on the Company's assets and its ability to conduct its business. There can be no assurance that the Company will continue to maintain such insurance or that such insurance can be maintained at acceptable costs. The Company's insurance coverage currently includes medical malpractice, fire, property damage and general liability. There can be no assurance that any claim will be within the scope of the Company's coverage or that such claims will not exceed the Company's coverage. 6 POTENTIAL RESTRUCTURING OF HEALTHCARE DELIVERY SYSTEM THROUGH HEALTHCARE REFORM PROPOSALS President Clinton and members of Congress have made several proposals for reform of the nation's health care system, including proposals limiting payments under Medicaid and Medicare programs. Many of these proposals contain measures intended to control public and private spending on health care as well as to provide universal public access to the health care system. If enacted, such proposals are expected to result in a substantial restructuring of the health care delivery system. The Company cannot predict what health care reform legislation, if any, will be enacted. Significant changes in the nation's health care system are likely to have a substantial impact over time on the manner in which the Company conducts its business. Such changes could have a materially adverse effect on the results of operations of the Company. CHANGES IN HEALTH CARE REGULATIONS AND TECHNOLOGY There can be no assurance that the Company will not be adversely affected by future possible changes in medical and health regulations, the use, cost and availability of hospitals and other health care services and medical technological developments. REIMBURSEMENT BY THIRD PARTY PAYORS The Company is generally reimbursed by a variety of third-party payors, with outpatient surgery reimbursements coming primarily from insurance companies and patients, home care reimbursements coming primarily from Medicare and Medicaid, and supplemental staffing reimbursements coming primarily from hospitals and other institutions. Accordingly, the Company may be materially adversely affected in the event of future increased insurance premiums, increased insurance deductibles, unavailability of insurance, changes in policy exclusions covering specific types of disease or conditions or other changes in medical and health insurance. The Company typically receives payment between 15 and 120 days after rendering an invoice, although such period can be longer. Accordingly, the Company's cash flow may at times be insufficient to meet its accounts payable requirements. The Company at times has been required to borrow funds to meet its ongoing obligations and may be required to do so in the future, and the Company would be adversely affected if in the future it were unable either to borrow funds or to borrow funds on terms deemed favorable by management. COMPETITION The business in which the Company operates is highly competitive. The Company is in competition with hospitals, nursing homes, temporary employment companies and other businesses that provide home health care services, many of which are large and established companies with significantly greater resources than the Company. RELATIONSHIP WITH OTHER ORGANIZATIONS The development and growth of the Company's business depends to a significant extent on its ability to establish close working relationships with health maintenance organizations, preferred provider organizations, hospitals, clinics, nursing homes, physician groups, and other health care providers. Although the Company has established such relationships, there is no assurance that existing relationships will be successfully maintained and that additional relationships will be successfully developed and maintained in existing and future markets. FEDERAL AND STATE REGULATION As a provider of health care services, the Company is subject to laws and regulations administered by the various states. The Company is subject to certain federal laws and regulations as a result of the certification of its operations in the Medicare/Medicaid Program. Compliance with laws and regulations could increase the cost and time necessary to allow the Company to operate successfully and may affect the Company in other respects not presently foreseeable. Loss of certification in the Medicare/Medicaid Program could adversely affect the ability of the Company to effectively market its services. 7 DIVIDENDS NOT LIKELY The Company has never paid cash dividends on its Common Stock, and it is not anticipated that any will be paid in the foreseeable future. FUTURE SALES OF COMMON STOCK A substantial number of shares of Common Stock are currently tradeable, or eligible for trading pursuant to Rule 144 as promulgated under the Act, in the public market. Sales of Common Stock in the public market may have a depressive effect on prevailing market prices for the Common Stock. There is no assurance that the public market for the Common Stock will not be volatile, sporadic or limited. Accordingly, purchasers may not be able to resell shares of Common Stock at or above their respective purchase price, and a purchaser may not be able to liquidate his investment even at a loss without considerable delay. POSSIBLE ADVERSE EFFECT OF FUTURE ISSUANCES OF PREFERRED STOCK The Company's Certificate of Incorporation authorizes the issuance of 2,500,000 shares, par value $.001 per share, of "blank check" preferred stock with such designations, rights and preference as may be determined from time to time by the Board of Directors. Accordingly, the Board of Directors is empowered, without stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting, or other rights that could adversely affect the voting power or other rights of the holders of the Common Stock. In the event of issuance, the preferred stock could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of the Company. The Company has no present intention to issue any additional shares of its preferred stock. However, there can be no assurance that additional preferred stock will not be issued at some time in the future. STATUS OF PERSONS RESELLING COMMON STOCK Holders who subsequently resell shares of Common Stock to the public pursuant to this Prospectus may be deemed to be underwriters with respect to such shares for purposes of the Act with the result that they may be subject to certain statutory liabilities if the registration statement is defective. The Company has agreed to indemnify the Selling Stockholders regarding such liability. In addition, any profit on the sale of shares of Common Stock might be deemed underwriting discounts and commissions under the Act. See "Plan of Distribution." DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS This Prospectus contains certain statements that are "Forward Looking Statements" within the meaning of Section 27A of the Act and Section 21E of the Exchange Act. Those statements include, among other things, the discussions of the Company's operations, margins, profitability, liquidity and capital resources. Forward Looking Statements are included in this section under "Increased Working Capital Needs and Risks of Collection Relating to Fee-for- Service Reimbursement Programs," "Classification of Physicians and Nurses as Independent Contractors; Potential State and Federal Tax Liability," "Risks Related to the Company's Acquisition Strategy," " Risks Related to Acquisition Financing," "Dependence on Management," "Adverse Effect of State Laws Regarding the Corporate Practice of Medicine," "Corporate Exposure to Professional Liabilities," "Possible Insufficiency of Liability Coverage," "Potential Restructuring of Healthcare Delivery System through Healthcare Reform Proposals," "Changes in Health Care Regulations and Technology," "Reimbursement by Third Party Payors," and "Relationship with Other Organizations". Although the Company believes that the expectations reflected in Forward Looking Statements are reasonable, they can give no assurance that such expectations will prove to have been correct. Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of such plans or strategies, or projections involving anticipated revenues, expenses, earnings, levels of capital expenditures, liquidity or indebtedness or other aspects of operating results or financial position. All phases of the operations of the Company are subject to a number of uncertainties, risks and other influences, many of which are outside the control of the Company and any one of which, or a combination of which, could materially affect the results of the Company's operations and whether the Forward Looking Statements made by the Company ultimately prove to be accurate. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed in this "Risk Factors" section. 8 SELLING STOCKHOLDERS The following table sets forth certain information concerning each Selling Stockholder. Assuming that the Selling Stockholders offer all of their Shares, the Selling Stockholders will not have any beneficial ownership. The Shares are being registered to permit the Selling Stockholders and certain of their respective pledgees, donees, transferors, or other successors in interest to offer the shares for resale from time to time. See "Plan of Distribution." RESALE OF COMMON STOCK BY SELLING STOCKHOLDERS FOR SHARES TO BE ISSUED UPON CONVERSION OF PREFERRED STOCK ("P") AND SHARES TO BE ISSUED, AFTER CONVERSION OF PREFERRED STOCK, UPON EXERCISE OF WARRANTS ("W"),
SHARES AMOUNT SHARES BENEFICIALLY OFFERED BENEFICIALLY OWNED (ASSUMING ALL OWNED BEFORE SHARES IMMEDIATELY AFTER STOCKHOLDER RESALE/(1)(2)(3)/ SOLD)/(2)(3)(4)/ RESALE PERCENTAGE - ----------- ---------------- ------------------ ---------------- ---------- Bank Hofmann AG 21,622 21,622 P - - Bank Julius Baer & Co. Ltd. 216,216 216,216 P - - Bank Sarasin & Cie 43,243 43,243 P - - Clariden Bank 108,108 108,108 P - - Credit Lyonnaise (Schweiz) AG 86,486 86,486 P - - Cresvale Far East Limited Hong Kong 43,243 43,243 P - - Delphic Global Opportunities 64,865 64,865 P - - Rush & Co. 43,243 43,243 P - - Sigler & Co. 21,622 21,622 P - - Terra Healthy Living, Ltd. 821,622 821,622 P - - The Nominee of Chase Manhattan Bank New York 151,352 151,352 P - - Hudson Capital Partners, L.P. 113,514 113,514 W - -
- ------------------- (1) The Selling Stockholders have sole voting and sole investment power with respect to all Shares owned. (2) Calculated using the current conversion rate for the Preferred Stock of 2.162 shares of Common Stock for each share of Preferred Stock, subject to adjustment. (3) Ownership is determined in accordance with Rule 13d-3 under the Exchange Act. The actual number of Shares beneficially owned and offered for sale hereunder is subject to adjustment and could be materially more than the estimated account indicated depending upon factors which cannot be predicted by the Company at this time. (4) Assumes the sale of all Shares offered hereby to persons who are not affiliates of the Selling Stockholders. PLAN OF DISTRIBUTION Pursuant to this Prospectus, the Selling Stockholders, or by certain pledgees, donees, transferees or other successors in interest to the Selling Stockholders, may sell Shares from time to time in transactions on the Nasdaq National Market from time to time, in privately-negotiated transactions or by a combination of such methods of sale, at fixed prices which may be changed, at market prices prevailing at the time of sale, at prices related to such prevailing 9 market prices or at negotiated prices. The Selling Stockholders may effect such transactions by selling the Shares to or through broker-dealers, and such broker-dealers may receive compensation in the form of discounts, concessions or commissions from the Selling Stockholders or the purchasers of the Shares for whom such broker-dealers may act as agent or to whom they sell as principal, or both (which compensation to a particular broker-dealer might be in excess of customary commissions). Other methods by which the Shares may be sold include, without limitation: (i) transactions which involve cross or block trades or any other transaction permitted by the Nasdaq National Market, (ii) "at the market" to or through market makers or into an existing market for the Common Stock, (iii) in other ways not involving market makers or established trading markets, including direct sales to purchasers or sales effected through agents, (iv) through transactions in options or swaps or other derivatives (whether exchange-listed or otherwise), (v) through short sales, or (vi) any combination of any other such methods of sale. The Selling Stockholders may also enter into option or other transaction with broker-dealers which require the delivery to such broker- dealers of the Common stock offered hereby which Common Stock such broker-dealer may resell pursuant to this Prospectus. The Selling Stockholders and any broker-dealers who act in connection with the sale of Shares hereunder may be deemed to be "underwriters" as that term is defined under the Act, and any commissions received by them and profit on any resale of the Shares as principal may be deemed to be underwriting discounts and commissions under the Act. Pursuant to the registration rights agreements with the Selling Stockholders, the Company has agreed to indemnify the Selling Stockholders against certain liabilities, including certain liabilities under the Act, or to contribute to payments such Selling Stockholders or underwriters are required to make in respect of certain losses, claims, damages or liabilities. LEGAL MATTERS The legality of the securities offered hereby will be passed on for the Company by Brewer & Pritchard, P.C., Houston, Texas. EXPERTS The consolidated financial statements of the Company and its subsidiaries incorporated by reference herein have been audited by Arthur Andersen LLP and Hannis T. Bourgeois & Co., L.L.P., independent certified public accountants, as set forth in their reports incorporated by reference herein in reliance given upon the authority of those firms as experts in accounting and auditing in giving said reports. The single jointly signed auditor's report is considered to be the equivalent of two separately signed auditor's reports. Thus, each firm represents that it has complied with generally accepted auditing standards and is in a position that would justify being the only signatory of the report. 10 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION SEC registration fee $ 2,070.13 Legal Fees and Expenses 10,000.00 Accounting Fees and Expenses 5,000.00 Miscellaneous $ 2,929.87 ---------- Total $20,000.00 ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS Article XI of the Certificate of Incorporation of the Company provides for indemnification of officers, directors, agents and employees of the Company as follows: (a) The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner in which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. (b) The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. (c) To the extent that a director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of this Article, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. (d) Any indemnification under subsections (a) and (b) of this Article (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in subsections (a) and (b) of this Article. Such determination shall be made (1) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (2) if such quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (3) by the stockholders. II-1 (e) Expenses (including attorneys' fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized by this Article. Such expenses (including attorneys' fees) incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. (f) The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this Article shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. (g) The Corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under this Article. (h) For purposes of this Article references to "the Corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had the power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this Article with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued. (i) The indemnification and advancement of expenses provided by, or granted pursuant to, this Article shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. The foregoing discussion of the Company's Certificate of Incorporation, and of the Delaware General Corporation Law is not intended to be exhaustive and is qualified in its entirety by such Certificate of Incorporation and statutes, respectively. ITEM 16. EXHIBITS EXHIBIT NO. IDENTIFICATION OF EXHIBIT - ----------- ------------------------- 2.1(1) - Acquisition Agreement dated December 20, 1993 between the Company and M & N Capital Corp. 2.2(3) - Plan of Merger dated August 3, 1994 between M & N Capital Corp. and the Company 2.3(4) - Certificate of Merger dated August 3, 1994 between M & N Capital Corp. and the Company 2.4(7) - Acquisition Agreement dated August 1,1997 between the Company and Allgood Medical Services, Inc. 2.5(7) - Exchange Agreement dated January 1, 1998 between the Company and Alliance Home Health, Inc. and University Capital Corp. dated December 10, 1997. 2.6(7) - Stock Purchase Agreement by and among Amedisys, Alternate-Site Infusion Therapy Services, Inc., PRN, Inc. d/b/a Home IV Therapy, Joseph W. Stephens, and Terry I. Stevens dated February 23, 1998. 2.7(7) - Agreement to Purchase by and between Amedisys, Alternate-Site Infusion Therapy Services, Inc. and Precision Health Systems, L.L.C. dated February 27, 1998. 2.8(7) - Promissory note in the amount of $250,000 to Precision Health Solutions, L.L.C. in connection with the purchase of the company. 2.9(7) - Stock Purchase Agreement by and among Amedisys, Alternate-Site Infusion Therapy Services, Inc., Infusioncare Solutions, Inc. and Daniel D. Brown dated February 27,1998. II-2 2.10(7) - Promissory note in the amount of $125,000 to Daniel D. Brown in connection with the purchase of the company. 3.1(4) - Certificate of Incorporation 3.2(4) - Bylaws 3.3(7) - Certificate of Designation for the Series A Preferred Stock 4.1(4) - Common Stock Specimen 4.2(7) - Preferred Stock Specimen 4.3(7) - Form of Placement Agent's Warrant Agreement 5.1(7) - Opinion regarding Legality 10.1(4) - Master Note with Union Planter's Bank of Louisiana 10.2(4) - Merrill Lynch Term Working Capital Management Account 10.3(5) - Promissory Note with Deposit Guaranty National Bank 10.4(7) - Amended and Restated Stock Option Plan 10.5(7) - Registration Rights Agreement 21.1(7) - List of Subsidiaries 23.1(7) - Consent of Counsel (contained in Exhibit 5.1) 23.2(7) - Consents of Arthur Andersen, LLP and Hannis T. Bourgeois & Co., L.L.P., independent public accountants - --------------- (1) Previously filed as an exhibit to the Current Report on Form 8-K dated December 20, 1993. (2) Previously filed as an exhibit to the Current Report on Form 8-K dated February 14, 1994. (3) Previously filed as an exhibit to the Current Report on Form 8-K dated August 11, 1994. (4) Previously filed as an exhibit to the Annual Report on Form 10-KSB for the year ended December 31, 1994. (5) Previously filed as an exhibit to the Current Report on Form 8-K dated June 30, 1995. (6) Previously filed as an exhibit to the Registration Statement on Form S-1 (333-8329) dated July 18, 1996. (7) Filed herewith. ITEM 17. UNDERTAKINGS (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: i. To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; ii. To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and iii. To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. provided, however, that paragraphs (1) (i) and (1) (ii) do not apply if the information required to be included II-3 in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or Section 15 (d) of the Exchange Act that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Act, each filing of the registrant's annual report pursuant to Section 13 (a) or 15 (d) of the Exchange Act that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Baton Rouge, State of Louisiana, on the 11th day of March, 1998. AMEDISYS, INC. By /s/ WILLIAM F. BORNE ----------------------------------------- WILLIAM F. BORNE, Chief Executive Officer ____________________________ Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated: Signature Title Date - --------- ----- ---- //s// WILLIAM F. BORNE Chief Executive Officer March 11, 1998 - ----------------------------- and Director (Principal WILLIAM F. BORNE Executive Officer) //s// JAMES P. CEFARATTI President and Chief Operating March 11, 1998 - ----------------------------- Officer JAMES P. CEFARATTI //s// MITCHEL G. MOREL Chief Financial Officer March 11, 1998 - ----------------------------- (Principal Financial MITCHEL G. MOREL and Accounting Officer) //s// JAKE L. NETERVILLE, CPA Director March 11, 1998 - ----------------------------- JAKE L. NETERVILLE, CPA //s// WILLIAM M. HESSION, JR. Director March 11, 1998 - ----------------------------- WILLIAM M. HESSION, JR. //s// KARL A. LEBLANC, M.D. Director March 11, 1998 - ----------------------------- KARL A. LEBLANC, M.D. //s// ALAN J. OSTROWE, M.D. Director March 11, 1998 - ----------------------------- ALAN J. OSTROWE, M.D. //s// DAVID R. PITTS Director March 11, 1998 - ----------------------------- DAVID R. PITTS //s// RONALD A.. LABORDE Director March 11, 1998 - ----------------------------- RONALD A. LABORDE //s// PETER F. RICCHIUTI Director March 11, 1998 - ----------------------------- PETER F. RICCHIUTI //s// S. F. HARTLEY, D.P.M. Director March 11, 1998 - ----------------------------- S. F. HARTLEY, D.P.M. EX-2.4 2 EXHIBIT 2.4 EXHIBIT 2.4 ASSET PURCHASE AGREEMENT BY AND AMONG AMEDISYS, INC., AND ALLGOOD MEDICAL SERVICES, INC., A LOUISIANA CORPORATION DOING BUSINESS AS CARE MEDICAL AND MOBILITY EQUIPMENT COMPANY TABLE OF CONTENTS Page ---- I. Definitions 1 1.01 Assets 1 1.02 Closing 2 1.03 Common Stock 2 1.04 GAAP 2 1.05 Inventory and Accounts Receivable 2 1.06 Accounts Payable 2 1.07 Liabilities 3 1.08 Material Adverse Effect 3 1.09 Seller's Business 3 1.10 Seller's Knowledge 3 II. Agreement to Sell and Purchase 3 2.01 The Closing 3 III. Purchase Price 3 3.01 Payment by Purchaser 3 3.02 Promissory Note 4 3.03 Delivery of Certificate 4 3.04 Consideration 4 IV. Assumption of Liabilities 4 V. Representations and Warranties of the Seller 4 5.01 Ownership 4 5.02 Valid Existence 4 5.03 Due Authorization; Consent of Third Parties 4 5.04 Use of Assets 5 5.05 Absence of Liens 5 5.06 Litigation 5 5.07 Employment Contracts 6 5.08 Insurance 6 5.09 Contracts, Agreements and Instruments 6 5.10 Compliance with Law; Taxes 7 5.11 Permits and Licenses 7 5.12 Employees 8 5.13 No violation of Contracts 8 5.14 Hazardous Materials 8 5.15 Interests in Competitors 8 5.16 Financial Condition 8 i 5.17 Changes or Events 9 5.18 No Defaults 10 5.19 Liabilities 11 5.20 No Prohibited Payments 11 5.21 Seller's Capital Stock 11 5.22 Non-Distributive Intent 11 5.23 Completeness of Disclosure 11 VI. Representations and Warranties of Purchaser 12 6.01 Organization 12 6.02 Due Authorization; Third Party Consents 12 6.03 No Violation 12 6.04 Capitalization 12 6.05 Financial Condition 13 6.06 Continuity of Business 13 6.07 Completeness of Disclosure 13 VII. Conditions to Obligations of Purchaser 13 7.01 Accuracy of Representations and Compliance with Conditions 13 7.02 Closing Documents 13 7.03 Review of Proceedings 14 7.04 Legal Action 14 7.05 No Governmental Action 14 7.06 Contractual Consents Needed 15 7.07 Other Agreements 15 7.08 Non-Distributive Intent 15 7.09 Non-Competition and Non-Solicitation Agreement 15 7.10 Board and Shareholder Approval 15 VIII. Conditions to Obligations of Seller 15 8.01 Accuracy of Representations and Compliance with Conditions 15 8.02 Other Closing Documents 15 8.03 Review of Proceedings 16 8.04 Legal Action 16 8.05 No Governmental Action 16 8.06 Contractual Consents Needed 16 8.07 Other Agreements 16 8.08 Board Approval 17 8.09 Employment Agreements 17 IX. Covenants and Agreements of Seller 17 9.01 Public Statements 17 9.02 Consents Without any Condition 17 9.03 Access 17 ii 9.04 Conduct of Business 17 9.05 Notice of Changes 17 X. Covenants and Agreements of Purchaser 17 10.01 Public Statements 17 10.02 Consents Without any Condition 18 10.03 Conduct of Business 18 10.04 Notice of Changes 18 XI. Miscellaneous 18 11.01 Brokerage of Other Fees 18 11.02 Further Actions 18 11.03 Availability of Equitable Remedies 18 11.04 Survival 19 11.05 Modification 19 11.06 Notices 19 11.07 Waiver 19 11.08 Binding Effect 20 11.09 No Third-Party Beneficiaries 20 11.10 Separability 20 11.11 Headings 20 11.12 Counterparts, Governing Law 20 11.13 Indemnification 20 11.14 Indemnification Procedures 20 Witness Signatures 21 List of Schedules 22 iii ASSET PURCHASE AGREEMENT THIS ASSET PURCHASE AGREEMENT (this "Agreement') is made effective as of August 1, 1997, by and between AMEDISYS, INC., a Delaware corporation, with its principal place of business at 3029 South Sherwood Forest Blvd., Suite 300, Baton Rouge, Louisiana 70816 ("Purchaser") and ALLGOOD MEDICAL SERVICES, INC., a Louisiana corporation doing business as, CARE MEDICAL AND MOBILITY EQUIPMENT COMPANY, a Louisiana corporation with its principal place of business at 1207 N. Causeway Boulevard, Metairie, Louisiana 70001 ( collectively "Seller"). RECITALS A. Seller conducts a health care services business located at 1207 N. Causeway Blvd, Metarie, Lousiana, 70001 and ________________________, Jackson, Mississippi. B. Purchaser desires to buy and Seller desires to sell Seller's assets pursuant to the terms and conditions of this Agreement. C. The parties expect that this Agreement will further advance their respective business objectives, including, without limitation, integration of the business operations of Seller with the business operations of Purchaser, including, without limitation, the expansion of Purchaser's "one-stop" approach to offering health care services, and to better capitalize both businesses in order to more effectively compete in the marketplace. 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. Assets: The assets to be sold and transferred by Seller to Purchaser pursuant to this Agreement consist of the assets more specifically detailed in Schedule 1.01 of this Agreement, plus any other assets and rights pertaining to Seller's Business as reflected on the balance sheet of Seller prepared as of July 31, 1997, (the "Balance Sheet"); however, specifically excluded from the assets sold are cash, checking, savings, and Merrill Lynch Accounts at July 31, 1997 ("Assets"). The Assets shall include, but not be limited to, the following (irrespective if they are set forth on Schedule 1.01): a. All furniture, fixtures, equipment, leasehold improvements and supplies of Seller located at and used by Seller in the operation of Seller's Business owned by Seller at the address stated above, which are further identified in and by the books and records of Seller; b. All merchandise inventory owned and/or acquired through Seller's Business or otherwise located at the address stated above as of the Closing; c. All outstanding accounts receivable of Seller, as of the Closing, together with all evidence of the indebtedness owed to Seller arising out of Seller's Business; d. Seller's right to use the name "Care Medical & Mobility" any d/b/a or other name utilized to market its service and products, and all trademarks, trade names, signage, marketing symbols and logos; e. All patient lists of present of present or former patients, all mailing lists, all business records relating to the operations of Seller's Business (including all records relating to patients), and all telephone numbers and listings used by Seller in Seller's Business, and all intangibles and other rights and privileges of Seller currently used in Seller's Business; f. A leasehold interest in the premises occupied by Seller's Business at Metarie, Louisiana and Jackson, Mississippi, as evidenced by the Lease Agreement included as Schedule 1.0l.f to this Agreement; g. The goodwill and going concern value of Seller and all licenses and permits of or per taining to Seller's Business; h. The benefits of all amounts previously paid by Seller for advertising, design fees, rent, services, or interest relating to Seller's Business or the Assets, to the extent that they extend or are to be performed after the Closing; i. All of Seller's rights contemplated in this Agreement and the documents described in Schedule 5.09, and the rights given therein; j. Seller's rights under all contracts, including all leases and non- competition agreements relating to Seller's Business; k. All technical outlines and records (including all plans, drawings, diagrams, notes, reports, memoranda, and other similar documents), and any and all know-how and software and other technology, including all contracts, licenses, authorizations, permits, and other documents necessary for Seller's Business; and l. All trade secrets, inventions, patents, copyrights, trade names, business names, trade marks, and other intangible assets used by Seller for Seller's Business. 1.02. Closing: The consummation of the transactions contemplated by this Agreement. 1.03. Common Stock: The $.001 par value per share voting common stock of Purchaser. 1.04. GAAP: Generally accepted accounting principles. -2- 1.05. Inventory and Accounts Receivable. All inventory and accounts receivable of the Seller, including Seller's interest in equipment which has been expensed but not capitalized, more fully described in Schedule 1.05. 1.06 Accounts Payable. All accounts payable, including but not limited to, trade payables and account payables more fully described in Schedule 1.06. 1.07 Liabilities: Those liabilities of Seller to be assumed by Purchaser pursuant to this Agreement, which consist of those liabilities of Seller specifically disclosed on Schedule 1.07. Purchaser shall not assume any liabilities, contingent or certain, of Seller unless incurred and disclosed in the manner provided in this paragraph 1.07. In addition, Purchaser is not assuming (i) any expenses, liabilities, or obligations of Seller arising out of the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby (nor may Seller pay any of such expenses out of the Assets), (ii) any liabilities or obligations of Seller relating to federal, state, or local income for the period through the closing or other taxes attributable to the transactions contemplated hereby or the conduct of the Seller's Business, except for any accrued sales tax attributable to this asset acquisition, or (iii) any obligation of Seller to pay a fee to any agent, broker, or finder. 1.08. Material Adverse Effect: Any change in the financial condition or operation of the business that would materially effect the Seller's Business adversely, including, but not limited to, material changes to management, business conditions, or financial standing. 1.09. Seller's Business: The health care services business and such other related activities as carried on by Seller at 1207 N. Causeway Boulevard, Metairie, Louisiana 70001, and at _______, Jackson, Mississippi prior to the Closing. 1.10. Seller's Knowledge. As used in this agreement "Seller's Knowledge" shall mean the actual, current knowledge of either Alan or Sheila Allgood as of the date of execution and delivery of this Agreement. 2. Agreement to Sell and Purchase. Subject to the terms and conditions of this Agreement, Purchaser agrees to purchase, and the Seller agrees to sell, transfer, convey, assign, and deliver to Purchaser at Closing, the Assets, free and clear of all liabilities, liens, conditions, and encumbrances, except those liabilities listed in Schedule 1.07. 2.01. The Closing. The Closing of the transactions contemplated by this Agreement shall be effective August 1, 1997. 3. Purchase Price. The purchase price in consideration of the sale, transfer, conveyance, assignment, and delivery of the Assets to Purchaser, subject to the terms and conditions of this Agreement, shall be One Million and Two Hundred Thousand Dollars ($1,200,000), less certain amounts the parties may agree to, to be paid Seller at Closing by the Purchaser as follows: -3- 3.01. Payment by Purchaser. The payment by Purchaser of the cash amount of Five Hundred Thousand Dollars ($500,000) to be delivered in the form of a cashiers check or wire transfer as instructed by the Seller, to be paid to Seller at Closing less (i) accounts receivable less than $325,000 on July 31, 1997 and (ii) accounts payable greater than $40,000 at July 31, 1997. 3.02. Promissory Note. The delivery and execution of a promissory note, in the form attached as Schedule 3.02, in the principal amount of One Hundred Thousand Dollars ($100,000) payable to the order of Seller. 3.03 Delivery of Certificate. The delivery of certificates registered in the name of Seller for the number of shares of Purchaser's Common Stock with a value of Six Hundred Thousand Dollars ($600,000), such value and number of shares to be calculated using the average of the last sale price quoted to the public as stated in the Wall Street Journal for the thirty (30) days preceding the Closing date, to be delivered to Seller at Closing. 3.04 Consideration. The consideration to be paid pursuant to paragraphs 3.01-3.03 herein shall constitute all the consideration to be paid by Purchaser in connection with the transactions contemplated by this Agreement. 4. Assumption of Liabilities. In connection with the purchase of the Assets hereunder, Purchaser hereby specifically assumes only those Liabilities of Seller specifically disclosed on Schedule 1.07. Purchaser shall not assume any liabilities, contingent or certain, of Seller except pursuant to the provisions of Section 1.07 and this Section 4 of this Agreement. 5. Representations and Warranties of the Seller. Seller hereby agrees, represents, and warrants to Purchaser, on the date of this Agreement and on the Closing Date, as follows: 5.01. Ownership. Seller is the beneficial owner of the Assets and has good and marketable title to and the absolute right to sell, assign, and transfer the Assets to Purchaser, free and clear of any interests, security interest, claims, liens, pledges, penalties, charges, encumbrances, buy-sell agreements, or other rights of any party whatsoever of every kind and character except those items listed in Schedule 1.07. Upon delivery of and payment of the purchase price in accordance with this Agreement, good and marketable title thereto shall be delivered to Purchaser, free and clear of any interest, security interest, claims, liens, pledges, penalties, charges, encumbrances, buy-sell agreements, or other rights of any party whatsoever. 5.02. Valid Existence. Seller is duly organized, validly existing, and in good standing under the laws of the State of Louisiana and has full power and authority (including all licenses, franchises, permits, and other authorizations that are legally required) to own its properties and to engage in the business and activities now conducted by it. Seller is in good standing in each jurisdiction in which, it conducts business the failure to be so qualified will have a Material Adverse Effect. -4- 5.03. Due Authorization; Consent of Third Parties. Seller has the right, power, legal capacity, and authority to enter into and perform Seller's obligations under this Agreement and, except as set forth on Schedule 5.03 to this Agreement, no approval or consent of any person other than the Seller is necessary in connection with the execution, delivery, or performance of this Agreement and the conduct of the Seller's business after the closing by Purchaser. This Agreement constitutes a legal and binding obligation of the Seller, and is valid and enforceable against the Seller 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, and (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. 5.04. Use of Assets. All of the Assets are located at 1207 N. Causeway Boulevard, Metairie, Louisiana 70001 and ___________________ Jackson, Mississippi. Seller has had no other business address within the three years prior to the Closing, except as stated on Schedule 5.04. The value of the Assets reflect the true and correct amount, in all material respects, of the value reflected in the Seller's Last Balance Sheet. To the best of Seller's Knowledge, the furniture, fixtures, improvements, leaseholds, inventory, equipment and other Assets of Seller are in good operating condition and repair, reasonable wear and tear excepted. The Assets are being utilized by Seller in conformity with all applicable federal, local and state health care related and imposed rules, regulations, laws, statutes, and permits ("Health Care Laws"), and to the best of Seller's Knowledge all other federal, state and local rules, regulations, laws, statutes and permits. Accounts and notes receivable reflected in the amount of $232,000 are good and collectible, in each case at the aggregate recorded amounts thereof without right of recourse, defense, deduction, return of goods or services, counterclaim, offset, or setoff on the part of the obligor by July 31, 1998. 5.05. Absence of Liens. The Assets are free and clear of restrictions on or conditions to transfer or assignment, and are free and clear of liens, pledges, charges, encumbrances, equities, claims, conditions, or restrictions, except for (i) those restrictions, conditions or liens disclosed in Schedule 5.05 to this Agreement; and (ii) any lien for current taxes not yet due and payable. 5.06. Litigation. Except as set forth in Schedule 5.06, there is not any suit, action, arbitration, or legal, administrative, or other proceeding or governmental investigation, pending or to the best of Seller's Knowledge threatened (in the form of threats made to representatives of Seller), against or affecting Seller or any of the Assets, 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 Seller'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 Seller might reasonably be undertaken or brought. The Seller has informed Purchaser of, and upon request has furnished or made available to Purchaser copies of all relevant court papers and other documents relating to, the matters set forth in Schedule 5.06. Included in Schedule 5.06 is a list of all suits, actions, arbitrations, or other -5- proceedings or investigations in which Seller has been involved during the five year period immediately preceding the Closing. Seller is not in default with respect to any order, writ, injunction, or decree of any Health Care Law. In addition, to Seller's Knowledge, it is not in violation of any other federal, state, local law, rule or regulation, or foreign court, department, agency, or instrumentality. The Seller is not presently engaged in any legal action to recover monies due to the Seller, for damages sustained by the Seller, or amounts owed to the Seller. During the five year period immediately preceding the Closing, the Seller 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 Seller's Knowledge it 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. 5.07. Employment Contracts. Schedule 5.07 to this Agreement is a list of all of Seller's employment contracts, collective bargaining agreements, royalty agreements and pension, bonus, profit sharing, or other agreements providing for employee remuneration or benefits, and all consulting, commission and fee agreements with independent contractors. Seller shall be solely responsible for any withdrawal or other liability which may be imposed in connection with any pension, profit sharing, or other employee benefit plan of Seller. A list of all commissions, and consulting and other fees due or to become due and owing are set forth on Schedule 5.07. A complete copy of each of the agreements listed on Schedule 5.07 has been provided to Purchaser. In addition, at the closing of this Agreement all of Seller's employees shall be enrolled in a medical program similar or substantially similar to the medical program of all employees. 5.08 Insurance. Schedule 5.08 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 Seller. Seller 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 materially adversely affect the Assets. All such policies and bonds are (i) in full force and effect, (ii) with insurance companies believed by Seller to be financially sound and reputable, (iii) are sufficient for compliance by Seller with all requirements of law and of all agreements and instruments to which Seller is a party, (iv) provide that they will remain in full force and effect through the respective dates set forth in Schedule 5.08, 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 5.08 sets forth an accurate and complete list of all accident or other liability claims received by or known by Seller 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 5.08. -6- 5.09. Contracts, Agreements and Instruments. Schedule 5.09 accurately and completely sets forth the information required to be contained therein. Seller has furnished to Purchaser: 5.09.01. The Articles of Incorporation, Bylaws and other organizational documents of Seller and all amendments thereto, as presently in effect, certified by the president of Seller; 509.02. True and correct copies of all material contracts, agreements and other instruments referred to in Schedule 5.09; 5.09.03. True and correct written descriptions of all service, material supply, distribution, agency, financing or other arrangements or understandings referred to in Schedule 5.09. 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 Seller, 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 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 Seller, 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. Seller 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. 5.10. Compliance With Law; Taxes. Seller has complied with, and is not in violation of any (i) term or provision of its Articles 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) to the best of Seller's knowledge, foreign, United States, state or local statutes, laws, rules, or regulations. Seller has timely filed all federal, state, and local tax returns required to be filed and all such returns are complete and correct. The Seller has made timely payment of all such taxes when due and payable and has paid all interest, penalties, deficiencies, and assessments, if any, levied or assessed against it. Seller has duly withheld, collected, and timely paid to the proper governmental authorities all taxes required to be withheld and collected by it. There are no agreements for extension of the time of assessment of payment of any taxes of Seller. No waiver of any statute of limitations has been executed by the Seller. There are no examinations by the Internal Revenue Service of Seller presently in process and the tax returns of Seller for any year(s) -7- open to such examination. All accrued but unpaid federal, state, and local income and other taxes of Seller for the period ended as of the Closing and all prior periods will be paid by Seller. Any sales tax imposed as a result of this transaction will be paid by Purchaser to Seller for remittance to the appropriate taxing authority. 5.11. Permits and Licenses. Seller 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 Seller's business as now being conducted by it are as set forth in Schedule 5.11. Except as set forth in Schedule 5.11, no royalties, commissions, or fees are payable by Seller to any person by reason of the ownership or use of any intangible property. Seller is the sole and exclusive owner of all of the Assets, does not use any of the Assets by the consent of any other person and is not required to and does not make any payments to others with respect thereto. Except as set forth in Schedule 6.11, there are no material licenses, sub-licenses, or agreements relating to the use of any intangible property now in effect, and Seller has no knowledge that any intangible property is being infringed by others. Except as listed in Schedule 5.06, no claim that would have a Material Adverse Effect on the business of the Seller is pending or, to the knowledge of Seller, threatened, or has been made since Seller's inception to the effect that, nor does Seller have any knowledge that the operation of Seller's Business or any method, process, part, or material that Seller employs, conflicts in any material way with, or infringes in any material way upon any rights of the type enumerated above, owned by others. 5.12. Employees. Schedule 5.12 is a list of the names of all employees of Seller, stating the amounts or rates of compensation payable to each. 5.13. No Violation of Employee Contracts. No employee of Seller 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 any other common law obligation to, a former employer relating to the right of any such employee to be employed by Seller because of the nature of the business conducted by Seller or of the use of trade secrets or proprietary information of others. There is neither pending nor, to the knowledge of Seller, 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 5.06. 5.14. Hazardous Materials. The Seller is not in the business of possession, transportation, or disposal of hazardous materials. If and to the extent that Seller's Business has involved the possession, transportation, or disposal of hazardous materials, to the best of Seller's Knowledge the Seller 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, Seller with respect to the period prior to the Closing. To the best knowledge of Seller, no employee of Seller has been exposed to hazardous materials such that exposure could cause damage to such employee. 5.15. Interest in Competitors. Except as set forth in Schedule 5.15 to this Agreement, no shareholder, officer, director, or employee of Seller, nor any spouse or child of any shareholder, -8- officer, director, or any employee with authority to enter into contracts on behalf of Seller, has any direct or indirect interest in any competitor, supplier, or customer of Seller or in any person from whom or to whom Seller leases any real or personal property, or in any other person with whom Seller is doing business. 5.16. Financial Condition. Seller has delivered to Purchaser true and correct copies of the following: the audited balance sheet, statement of income and statement of cash flows of Seller for the fiscal years ended December 31, 1996 and 1995; and an unaudited balance sheet ("Seller's Last Balance Sheet"), statement of income and statement of cash flows for the seven months endedJuly 31, 1997 ("Seller's Last Balance Sheet Date"). Each such balance sheet presents fairly the financial condition, assets and liabilities of Seller as of its date; each such statement of income presents fairly the results of operations of Seller 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 5.16 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 Seller. 5.17. Changes or Events. Except as set forth in Schedule 5.17, since Seller's Last Balance Sheet Date, none of the following has occurred: 5.17.01 Any material transaction by Seller not in the ordinary course of business involving amounts in excess of $20,000; 5.17.02. Any material capital expenditure by Seller involving amounts in excess of $20,000; 5.17.03. 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 Seller, including relationships with suppliers or customers, that, when considered individually or in the aggregate, might reasonably be expected to have a Material Adverse Effect; 5.17.04. The destruction of, damage to, or loss of any asset of Seller (regardless of whether covered by insurance) that, when considered individually or in the aggregate, might reasonably be expected to have a Material Adverse Effect; 5.17.05 Any labor disputes that, when considered individually or in the aggregate, might reasonably be expected to have a Material Adverse Effect; 5.17.06. Except as listed on Schedule 5.17.06, there have been no change in accounting methods or practices (including, without limitation, any change in depreciation or amortization policies or rates) by Seller, except for any such changes as were required by law; -9- 5.17.07. Other than in the ordinary course of business, any increase in the salary or other compensation payable or to become payable by Seller to any employee, or the declaration, payment, or commitment or obligation of any kind for the payment by Seller of a bonus or other additional salary or compensation to any such person; 5.17.08. The material amendment or termination of any material contract, agreement, or license to which Seller is a party, except in the ordinary course of business; 5.17.09. Any loan by Seller to any person or entity, or the guaranteeing by Seller of any loan other than loans made in the ordinary course of business; 5.17.10 Any mortgage, pledge, or other encumbrance of any asset of Seller except in the ordinary course of business; 5.17.11 The waiver or release of any right or claim of Seller, except in the ordinary course of business; 5.17.12. Any other events or conditions of any character within the knowledge of Seller that, when considered individually or in the aggregate, have or might reasonably be expected to have a Material Adverse Effect; 5.17.13. Any loss or, to the knowledge of Seller, any threatened loss of any permit, license, qualification, special charter or certificate of authority held or enjoyed or formerly held or enjoyed by Seller which loss has had or upon occurrence might reasonably be expected to have a Material Adverse Effect; 5.17.14. To the knowledge of Seller, any statute, regulation, order, ordinance or other law the adoption or rescission of which might reasonably be expected to have a Material Adverse Effect; 5.17.15 Any failure on the part of Seller to operate its business in the ordinar 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; 5.17.16. Any action taken or omitted to be taken by Seller which would cause (after lapse of time, notice or both) the breach, default, or acceleration of any right, contract, commitment, or other obligation of Seller; or 5.17.17. Any agreement by Seller to do any of the things described in the preceding clauses 5.17.01 through 5.17.16. -10- 5.18. No Defaults. Except as set forth in Schedule 5.18, 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 Seller 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 Articles of Incorporation or Bylaws of Seller or of any lease, license, promissory note, conditional sales contract, commitment, indenture, mortgage, deed of trust, or other agreement, instrument, or arrangement to which Seller is a party or by which Seller or the Assets is 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 Seller; (iv) the creation or imposition of any lien, charge, or encumbrance on any of the 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 Seller is subject. 5.19. Liabilities. No liabilities of Seller will be assumed by or transferred to Purchaser pursuant to the transactions contemplated by this Agreement, nor will any of the Assets to be acquired by Purchaser pursuant to this Agreement be subject to any pre-Closing liabilities, nor will Purchaser otherwise be liable for any liabilities of Seller, except those liabilities provided for in Section 4 of this Agreement and those listed in Schedule 1.07, and the Seller shall take no action prior to Closing that would increase the amount of any of the liabilities provided for in Section 4. The amounts payable with respect to Liabilities listed on Schedule 1.07 to this Agreement are the maximum amounts payable with respect to such Liabilities. 5.20. No Prohibited Payments. Neither Seller nor any employee, or agent of Seller, has made or authorized any payment of funds of Seller or on behalf of Seller prohibited by law and no funds of seller have been set aside to be used for any payment prohibited by law. 5.21. Seller's Capital Stock. Alan J. Allgood and Shelia P. Allgood (collectively the "Stockholders"), in the aggregate, own 100% of the issued and outstanding capital stock of Seller (the "Seller's Stock"). The Seller's 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 Seller's Stock held by each Stockholder is held free and clear of all liens, security interests, pledges, charges, encumbrances, voting agreements, and voting trusts. There is outstanding no security or other instrument convertible into or exchangeable for capital stock of Seller. 5.22 Non-Distributive Intent. Seller and/or the Stockholders are receiving the shares of Purchaser'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 Seller nor any Stockholder 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 Seller and the -11- Stockholders further acknowledge and agree that such shares shall be restricted from resale for a period of 12 months after the Closing date. By virtue of their position, Seller and each Stockholder have access to the kind of financial and other information about Purchaser as would be contained in a registration statement filed under the Act, including reports filed pursuant to the Securities Exchange Act of 1934 as set forth in Schedule 6.05. Seller and each Stockholder understand 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. 5.23. Completeness of Disclosure. No representation or warranty and no Schedule, Exhibit, or certificate prepared by Seller pursuant hereto and no statement made or other document prepared by Seller and furnished to Purchaser by Seller 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. 6. Representations and Warranties of Purchaser. Purchaser hereby agrees, represents, and warrants to Seller, on the date of this Agreement and on the Closing Date, as follows: 6.01. Organization. Purchaser is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and authorized to do business in the State of Louisiana and 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. 6.02. Due Authorization; Third Party Consents. Purchaser 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 6.02 to this Agreement, no approval or consent of any person other than the Purchaser is necessary in connection with the execution, delivery, or performance of this Agreement. The execution, delivery, and performance of this Agreement by the Purchaser has been duly authorized by its board of directors and no other corporate proceedings on the part of Purchaser are necessary to authorize this Agreement or the consummation of the transactions contemplated hereby. This Agreement constitutes a legal and binding obligation of the Purchaser, and is valid and enforceable against the Purchaser 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 12.12 of this Agreement. 6.03. 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 Purchaser 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, -12- would be a default, breach, or violation of the Certificate of Incorporation or Bylaws of Purchaser or of any lease, license, promissory note, conditional sales contract, commitment, indenture, mortgage, deed of trust, or other agreement, instrument, or arrangement to which Purchaser is a party or by which Purchaser or the property of Purchaser 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 Purchaser is subject. 6.04. Capitalization. The authorized capital stock of Purchaser includes 10,00,000 shares of Common Stock, of which 2,585,000 shares are outstanding as of March 31,1997 and 499,581 shares are reserved to be issued upon exercise of outstanding options and warrants. Each of such outstanding shares of Purchaser's Common Stock is validly authorized, validly issued, fully paid, and nonassessable, has not been issued and is not owned or held in violation of any preemptive right of any stockholder. 6.05. Financial Condition. Purchaser (i) has delivered to Seller true and correct copies of is Form 10-K for the fiscal year ended December 31, 1996 ("Form 10-K") and (ii) has delivered its Form 10-Q for the three months ended March 31, 1997 ("Form 10-Q"). The Form 10-K and Form 10-Q present fairly the financial condition, assets, liabilities, and stockholders' equity of Purchaser as of its date; each such statement of income and statement of retained earnings presents fairly the results of operations of Purchaser for the period indicated; and each such statement of changes in financial position presents fairly the information purported to be shown therein. The financial statements referred to in this Section 6.05 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 Purchaser. 6.06. Continuity of Business. It is the present intent of Purchaser not to dispose of any significant portion of its or Seller's Assets, except in the ordinary course of business or to eliminate any duplicative facilities or excess capacity. 6.07. Completeness of Disclosure. No representation or warranty and no Schedule, Exhibit, or certificate prepared by Purchaser pursuant hereto and no statement made or other document prepared by Purchaser and furnished to Seller by Purchaser 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. 7. Conditions to Obligations of Purchaser. The obligations of Purchaser under this Agreement are subject, at the option of Purchaser, to the following conditions: 7.01. Accuracy of Representations and Compliance With Conditions. All representations and warranties of Seller 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 Seller. As of the Closing, Seller shall have performed and complied with all covenants and agreements and satisfied all conditions required to be performed and complied with by Seller at or before such time by this Agreement. -13- 7.02. Closing Documents. In connection with the Closing, Seller shall deliver to Purchaser the following items: 7.02.01. Bills of sale, endorsements, assignments, drafts, checks, and other instruments of transfer in form and substance reasonably satisfactory to Purchaser and its counsel in order to transfer all right, title and interest in the Assets to Purchaser; 7.02.02. Original evidences of title or ownership of the Assets, including drafts, warehouse receipts and licenses; 7.02.03. Original data and records relating to the Assets; 7.02.04. Evidence (including, if applicable, the delivery of duly executed UCC-3 Termination Statements) reasonably satisfactory to Purchaser and its counsel, of the satisfaction and discharge by Seller of all existing liens, claims, and encumbrances upon or affecting the Assets; and 7.02.05. Such other instruments and documents in form and content reasonably satisfactory to counsel for Purchaser, as may be necessary or appropriate to (i) effectively transfer and assign to and vest in Purchaser good and marketable title to the Assets and/or to consummate more effectively the transactions contemplated hereby and (ii) in order to enable Purchaser to determine whether the conditions to Seller's obligations under this Agreement have been met and otherwise to carry out the provisions of this Agreement. 7.03. 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 Purchaser, and Seller shall have furnished such counsel for Purchaser such documents as such counsel may have reasonably requested for the purpose of enabling them to pass upon such matters. 7.04. 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 5.06. 7.05. 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 Purchaser: 7.05.01. Makes any of the transactions contemplated by this Agreement illegal; -14- 7.05.02. Results in a delay which affects the ability of Purchaser to consummate any of the transactions contemplated by this Agreement; 7.05.03. Requires the divestiture by Purchaser of a material portion of the business of either Purchaser taken as a whole, or of Seller taken as a whole; and 7.05.04. Otherwise prohibits, restricts, or delays consummation of any of the transactions contemplated by this Agreement or impairs the contemplated benefits to Purchaser of the transactions contemplated by this Agreement. 7.06. 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. 7.07. 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. 7.08. Non-Distributive Intent. Purchaser shall have received from the Seller and the Stockholders executed letters of non-distributive intent, substantially in the form of Schedule 7.08. 7.09. Non-Competition and Non-Solicitation Agreement. Alan J. Allgood and Shelia P. Allgood shall have entered into the non-competition and non- solicitation agreement in the form attached hereto as Schedule 7.09. 7.10. Board and Shareholder Approval. The Board of Directors and shareholders of Seller shall have approved the transactions contemplated herein. 8. Conditions to Obligations of Seller. The obligations of Seller under this Agreement are subject, at the option of Seller, to the following conditions: 8.01. Accuracy of Representations and Compliance With Conditions. All representations and warranties of Purchaser contained in this Agreement shall be accurate when made and shall be accurate as of the Closing as though such representations and warranties were then made by -15- Purchaser. As of the Closing, Purchaser 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. 8.02. Other Closing Documents. Purchaser shall have delivered to Seller, at or prior to the Closing, such other documents as Seller may reasonably request in order to enable Seller to determine whether the conditions to its obligations under this Agreement have been met and otherwise to carry out the provisions of this Agreement. 8.03. 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 Seller and Purchaser 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. 8.04. 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. 8.05. 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 Seller: 8.05.01. Makes any of the transactions contemplated by this Agreement illegal; 8.05.02. Results in a delay which affects the ability of Seller to consummate any of the transactions contemplated by this Agreement; 8.05.03. Requires the divestiture by the Seller or the Stockholders of any of the shares of Purchaser's Common Stock; 8.05.04. Imposes material limitations on the ability of the Seller 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 Purchaser; or 8.05.05 Otherwise prohibits, restricts, or delays consummation of any of the transactions contemplated by this Agreement or impairs the contemplated benefits to Seller or the Stockholders of the transactions contemplated by this Agreement. -16- 8.06. 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. 8.07. 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. 8.08. Board Approval. The Board of Directors of Purchaser shall have approved the transactions contemplated herein. 8.09. Employment Agreements. On or before Closing, Shelia P. Allgood and Alan J. Allgood shall each enter into an employment agreement in the form attached hereto as Exhibit 8.09. 9. Covenants and Agreements of Seller. Seller covenants and agrees as follows: 9.01. Public Statements. Before Seller 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, Seller shall cooperate with Purchaser, shall furnish drafts of all documents or proposed oral statements to Purchaser for comment, and shall not release any such information without the written consent of Purchaser. Nothing contained herein shall prevent Seller from furnishing any information to any governmental authority if required to do so by law, with the exception of consents more fully described in 8.06 of this Agreement. 9.02. Consents Without any Condition. Seller shall not make any agreement or understanding with a third party not in the ordinary course of business without approval in writing by Purchaser. 9.03. Access. Seller will afford the officers, counsel, agents, investment bankers, accountants, and other representatives of Purchaser, free and full access to the plans, properties, books, and records of Seller; will permit them to make extracts from and copies of such books and records; and will from time to time furnish Purchaser with such additional financial and operating data and other information as to the financial condition, results of operations, business, properties, assets, liabilities, or future prospects of Seller as Purchaser from time to time may request. Seller will also cause the public accountants of Seller to make available to Purchaser and its public accountants the work papers relating to the audits of Seller. -17- 9.04. Conduct of Business. Seller will conduct its affairs so that at the Closing, no representation or warranty of Seller will be inaccurate, no covenant or agreement of Seller will be breached, and no condition in this Agreement will remain unfulfilled by reason of the actions or omissions of Seller. 9.05. Notice of Changes. Until the Closing or the earlier rightful termination of this Agreement, Seller will immediately advise Purchaser in a detailed written notice of any fact or occurrence or any pending or threatened occurrence of which any of them obtains knowledge and which (if existing and known at the date of the execution of this Agreement) would have been required to be set forth or disclosed in or pursuant to this Agreement or an exhibit or schedule hereto, which (if existing and known at any time prior to or at the Closing) would make the performance by any party of a covenant contained in this Agreement impossible or make such performance materially more difficult than in the absence of such fact or occurrence, or which (if existing and known at the time of the Closing) would cause a condition to any party's obligations under this Agreement not to be fully satisfied. 10. Covenants and Agreements of Purchaser. Purchaser covenants and agrees as follows: 10.01. Public Statements. Before Purchaser 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, Purchaser shall cooperate with Seller, shall furnish drafts of all documents or proposed oral statements to Seller for comments, and shall not release any such information without the written consent of Seller. Nothing contained herein shall prevent Purchaser from furnishing any information to any governmental authority if required to do so by law. In the event Purchaser and Seller have not completed the terms of this Agreement, both Purchaser and Seller shall not disclose any information concerning this Agreement to any third party, except as more fully described in Section 10.01 of this Agreement. 10.02. Consents Without any Condition. Purchaser shall not make any agreement or understanding with a third party not in the ordinary course of business not approved in writing by Seller. 10.03. Conduct of Business. Purchaser will conduct its affairs so that at the Closing no representation or warranty of Purchaser will be inaccurate, no covenant or agreement of Purchaser will be breached, and no condition in this Agreement will remain unfulfilled by reason of the actions or omissions of Purchaser. 10.04. Notice of Changes. Until the Closing or the earlier rightful termination of this Agreement, Purchaser will immediately advise Seller in a detailed written notice of any fact or occurrence or any pending or threatened occurrence of which it obtains knowledge and which (if existing and known at the date of the execution of this Agreement) would have been required to be set forth or disclosed in or pursuant to this Agreement or an exhibit or schedule hereto, which (if existing and known at any time prior to or at the Closing) would make the performance by any party of a covenant contained in this Agreement impossible or make such performance materially more -18- difficult than in the absence of such fact or occurrence, or which (if existing and known at the time of the Closing) would cause a condition to any party's obligations under this Agreement not to be fully satisfied. 11. Miscellaneous. 11.01. 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 Purchaser agrees to pay for the preparation of the necessary transfer documents to accomplish the transactions herein. 11.02. 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. 11.03. 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. 11.04. Survival. The covenants, agreements, representations, and warranties contained in or made pursuant to this Agreement shall survive for a period of 15 months from the Closing date, irrespective of any investigation made by or on behalf of any party (the "Survival Date"). No claim for indemnification may be brought pursuant to this Section 11.04 unless asserted by written notice as provided herein by the party claiming indemnification on or before the Survival Date. 11.05. 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. 11.06. 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 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 -19- 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. 11.07. 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. 11.08. 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. 11.09. 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. 11.10. Separability. 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. 11.11. 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. 11.12. 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. 11.13. Indemnification. Seller and Stockholders shall, indemnify, defend and hold harmless Purchaser 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 misstatement or omission from any representation by, or any breach of warranty, covenant or agreement of, Seller or the Stockholders contained herein. Purchaser shall, indemnify, defend and hold harmless Seller and each of its officers, directors, agents and affiliates and the Stockholders from and against any Damages, resulting from, arising out of, based upon or occasioned by any misstatement or omission from any representation by, or any breach of warranty, covenant or agreement of, Purchaser contained herein. 11.14. Indemnification Procedures. Promptly after receipt by Purchaser, on the one hand, or Seller on the other hand (in any such case, the "Indemnitee"), of notice of any action, suit, -20- 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 11.13, 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 a 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 11.14. 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 11.14. 11.15 Right to Sell-Off. Purchaser shall have the right to set off any damages against any of the consideration paid by Purchaser pursuant to Sections 3.02 and 3.03 hereof. -21- IN WITNESS WHEREOF, the parties have duly executed this Agreement effective as of the date written in the preamble of this Agreement. AMEDISYS, INC. By: ________________________________________ Name: Title: ALLGOOD MEDICAL SERVICES, INC. By: ____________________________________ Name: Title: -22- LIST OF SCHEDULES Schedule No. Schedule Description - ------ -------------------- 1.01 List of Assets 1.01.f Lease Agreement 1.05 Inventory 1.06 Inventory Payables 1.07 Assumed Liabilities 3.02 Promissory Note 3.05 Asset Allocations 5.03 Seller Required Consents 5.04 Condition of Assets 5.05 Liens and Encumbrances 5.06 Litigation 5.07 Seller's Employment Contracts 5.08 Insurance 5.09 Material Contracts, etc. 5.11 Permits and Licenses 5.12 Employees 5.15 Competitors 5.17 Changes or Events 5.18 Defaults, etc. 6.02 Purchaser Required Consents 7.08 Non-Distributive Intent Letters 7.09 Non-Competition and Non-Solicitation Agreement 8.09 Allgood Employment Agreements -23- EX-2.5 3 EXHIBIT 2.5 EXHIBIT 2.5 EXCHANGE AGREEMENT BY AND AMONG AMEDISYS, INC., ALLIANCE HOME HEALTH, INC. AND UNIVERSITY CAPITAL CORP. EXCHANGE AGREEMENT THIS EXCHANGE AGREEMENT (this "Agreement") is made effective as of December ___, 1997, by and between AMEDISYS, INC., a Delaware corporation, with its principal place of business at 3029 South Sherwood Forest Blvd., Suite 300, Baton Rouge, Louisiana 70816 ("AMED"), ALLIANCE HOME HEALTH, INC., an Oklahoma corporation with its principal place of business at 4870 S. Lewis, Suite 120, Tulsa, Oklahoma 74105 ("Company") and UNIVERSITY CAPITAL CORP., an Oklahoma corporation with its principal place of business at 4870 S. Lewis, Suite 120, Tulsa, Oklahoma 74105 ("Stockholder"). AMED, the Company and the Stockholder 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 Stockholder as hereinafter provided and the Stockholder desires 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. Medicare Liabilities: Any and all claims, losses, liabilities, obligations, costs, expenses, fines, penalties, damages or judgments of any kind or nature whatsoever assessed by Medicare for Cost Provider Numbers _____ and _____ for the fiscal years ending August 31, 1995; 1996 and 1997; and September 30, 1995; 1996 and 1997, respectively. 1.07. Medicare Cost Reporting Letter: A letter from Medicare detailing the Medicare Liabilities. 1.08. 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. 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 Stockholder 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 Stockholder shall deliver at Closing a Stock Power in the form attached hereto as Schedule 2.01, a letter of Non- distributive Intent attached hereto as Schedule 5.06, and any other documents required by this Agreement. 2.02. Consideration. AMED shall deliver and the Stockholder shall be entitled to receive 278,571 shares of Amed common stock, of which ______ shares will be placed in escrow as collateral for the indemnification provisions set forth in Section 9.13, pursuant to the Escrow Agreement attached hereto as Schedule 2.02. 2.03. Total Consideration. 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. The Closing. The Closing of the transactions contemplated by this Agreement shall be on or before December ___, 1997, at the law offices of Brewer & Pritchard, P.C., 1111 Bagby, Suite 2450, Houston, Texas 77002 or such other locations as mutually agreed. 3. Representations and Warranties of the Company and the Stockholder. The Company and the Stockholder hereby agree, represent, and warrant to AMED, on the date of this Agreement, 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 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 -2- 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 Stockholder owns ____ 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 Stockholder. The shares of Company Stock held by the Stockholder 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 and the Stockholder have 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 and the Stockholder is necessary in connection with the execu tion, delivery, or performance of this Agreement. The execution, delivery, and performance of this Agreement by the Company and the Stockholder have been duly authorized by its board of directors and no other corporate proceedings on the part of the Company or the Stockholder 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 the Stockholder, and is valid and enforceable against the Company and the Stockholder 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. 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 Stockholder's Knowledge threatened (or any basis therefor known to the Company or the Stockholder), with respect to the Company or the Stockholder (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 -3- 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 Stockholder might reasonably be undertaken or brought. The Company and the Stockholder 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 except for routine regulatory inquiries or claims which would not have a material Adverse Effect. In addition, to the Company's and Stockholder's 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, 1996 of each Stockholder, and the three highest paid employees of the Company. As of November 30, 1997, the rate of compensation of any of its Stockholder, employees, agents, dealers or distributors, is disclosed in Schedule 3.05. 3.06. No Violation of Employee Contracts. 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 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 Stockholder, 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 -4- 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 Stockholder 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 Stockholder for the three year period immediately preceding the Closing, involving claims in excess of $10,000 per claim, 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 in excess of $20,000 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 $20,000. 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 Stockholder, 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 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 Schedule 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 Stockholder, 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 -5- 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 Schedule hereto, except for matters which, in the aggregate, would not have a Material Adverse Effect. 3.09. Compliance With Laws. The Company has complied with, and is not in violation of any term or provision of its Certificate of Incorporation or Bylaws. To the Company's and the Stockholder's Knowledge, the Company has complied with and is not in violation of any of the (i) terms or provisions of any applicable judgment, decree, order, statute, injunction, rule, ordinance, or (ii) any Health Care Law, or (iii) foreign, United States, state or local statutes, laws, rules, or regulations, except for any variance that would not have a Material adverse Effect. 3.10. Financial Condition. The Company has delivered to AMED true and correct copies of the following: audited financial statements of the Company for the fiscal year ended September 30, 1995, unaudited financial statements of the Company for the fiscal year ended September 30, 1996, unaudited financial statements of the Company for the fiscal year ended September 30, 1997 and the unaudited balance sheet ("the Company's Last Balance Sheet") dated as of October 31, 1997 ("the Company's Last Balance Sheet Date"), all of which are set forth in Schedule 3.10. 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. 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 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 Stockholder 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. -6- 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's 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 $20,000 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's Last Balance Sheet. All properties and assets owned, leased, or licensed by the Company that are necessary to the Company's business 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); 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 Stockholder, or will be subjected to zoning, use or building code restrictions which would prohibit 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 3.12.04. All accounts and notes receivable, net of reserve for bad debt, reflected on the Company's Last Balance Sheet, and arising since the Last Balance Sheet Date, have been collected, or are and will be good and collectible, in each case at the aggregate 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. 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 Stockholder's 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 -7- prior to the Closing. To the Knowledge of the Company and the Stockholder, no employee of the Company has been exposed to hazardous materials in the course of employment with the Company such that exposure could cause liability to the Company. 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 Last Balance Sheet as of the Company's Last Balance Sheet Date, in accordance with GAAP, 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's or any other provision of this Agreement. 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 $20,000; -8- 3.16.02. Any material capital expenditure by the Company involving amounts in excess of $20,000; 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 or if it has no Material Adverse Effect, 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 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 other events or conditions of any character within the Knowledge of the Company and the Stockholder that, when considered individually or in the aggregate, have or might reasonably be expected to have a Material Adverse Effect; -9- 3.16.13. Any loss or, to the Knowledge of the Company or the Stockholder, 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; 3.16.14. 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. Any agreement by the Company to do any of the things described in the preceding clauses 3.16.01 through 3.16.14. 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 or Stockholder 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 or Stockholder is a party or by which the Company or Stockholder 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 or Stockholder; (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 or Stockholder is subject. 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 Stockholder is 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. The Stockholder will not 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 Stockholder further acknowledges and agrees that unless the resale of the shares is registered under the Act, such resale must be made -10- pursuant to Rule 144 under the Act. The Stockholder understands that it 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 or Stockholder pursuant hereto and no statement made or other document prepared by the Company or Stockholder and furnished to AMED by the Company or Stockholder 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, except where such instance would not have a Material Adverse Effect. 4. Representations and Warranties of AMED. AMED hereby agrees, represents, and warrants to the Stockholder, on the date of this Agreement and on the Closing Date, as follows: 4.01. Organization. AMED is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and authorized to carry on business in the State of Louisiana and 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 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 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. 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 -11- 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. Capitalization. The authorized capital stock of AMED includes 10,000,000 shares of Common Stock, of which 2,734,549 shares are outstanding as of June 30,1997 and 499,581 shares are reserved to be issued upon exercise of outstanding options and warrants. Each of such outstanding shares of AMED's Common Stock is validly authorized, validly issued, fully paid, and nonassessable, has not been issued and is not owned or held in violation of any preemptive right of any stockholder. 4.05. Compliance With Laws. AMED has complied with, and is not in violation of any term or provision of, its Certificate of Incorporation or Bylaws. To its Knowledge, Amed has complied with and is not in violation of any (i) term or provision of any applicable judgment, decree, order, statute, injunction, rule, ordinance; (ii) any Health Care Law; or (iii) foreign, United States, state or local statutes, laws, rules, or regulations. 4.06. Financial Condition. AMED has delivered to the Company and Stockholder, and the Company and Stockholder acknowledges receipt of and have read and understand a copy of its Form 10-K for the fiscal year ended December 31, 1996 ("Form 10-K"), its proxy statement dated July 16, 1997 and its Form 10-Q for the nine months ended September 30, 1997 ("Form 10-Q"). The Form 10-K and Form 10-Q present fairly the financial condition, assets, liabilities, and stockholders' equity of AMED as of its date; each such statement of income and statement of retained earnings presents fairly the results of operations of AMED for the period indicated; and each such statement of changes in financial position presents fairly the information purported to be shown therein. The financial statements referred to in this Section 4.06 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 AMED. 4.07. Reports. Since September 30, 1997, AMED has filed all forms, reports and documents with the Securities and Exchange Commission (the "Commission") required to be filed by it pursuant to the federal securities laws and Commission rules and regulations thereunder, and all such forms, reports and documents filed with the Commission have complied in all material respects with all applicable requirements of the federal securities laws and the Commission rules and regulations promulgated thereunder. 4.08. AMED Stock. All of the shares of AMED common stock to be issued to the Stockholder 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. AMED has notified Nasdaq of the issuance of its common stock hereunder to Stockholder. -12- 4.09. 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 or Stockholder 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, except where such instance would not have a Material Adverse Effect. 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. Other Closing Documents. Company and the Stockholder 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. 5.02. 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. 5.03. 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: 5.03.01. Makes any of the transactions contemplated by this Agreement illegal; 5.03.02. Results in a delay which affects the ability of AMED to consummate any of the transactions contemplated by this Agreement; 5.03.03. 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 5.03.04. 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. 5.04. 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. -13- 5.05. 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. 5.06. Non-Distributive Intent. AMED shall have received from the Company and the Stockholder executed letters of non-distributive intent, substantially in the form of Schedule 5.06. 5.07. Non-Competition and Non-Solicitation Agreement. Kevin Webb shall have entered into the non-competition and non-solicitation agreement in the form attached hereto as Schedule 5.07. 5.08. Board and Shareholder Approval. The Board of Directors and Stockholders of the Company shall have approved the transactions contemplated herein. 5.09. Legal Opinion. AMED shall have received the opinion of Tilly & Associates, dated the Closing Date, in the form of Schedule 5.09 attached hereto. 5.10. Release. Stockholder shall have executed the release as set forth in Schedule 5.10. 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. 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. 6.02. 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. 6.03 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: 6.03.01. Makes any of the transactions contemplated by this Agreement illegal; 6.03.02. Results in a delay which affects the ability of the Company to consummate any of the -14- transactions contemplated by this Agreement; 6.03.03. Requires the divestiture by the Company or the Stockholder of any of the shares of AMED's Common Stock; 6.03.04. Imposes material limitations on the ability of the Company or the Stockholder 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 6.03.05. Otherwise prohibits, restricts, or delays consummation of any of the transactions contemplated by this Agreement or impairs the contemplated benefits to the Company or the Stockholder of the transactions contemplated by this Agreement. 6.04. 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. 6.05. 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. 6.06. Board Approval. The Board of Directors of AMED shall have approved the transactions contemplated herein. 6.07. Employment Agreements. On or before Closing, Kevin M. Webb shall enter into an employment agreement in the form attached hereto as Schedule 6.07. 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. -15- 7.02. Consents Without any Condition. The Company shall not make any agreement or understanding with a third party not in the ordinary course of business without approval in writing by AMED. 7.03. Access. The Company will afford the officers, counsel, agents, investment bankers, accountants, and other representatives of AMED, free and full access to the plans, properties, books, and records of the Company; will permit them to make extracts from and copies of such books and records; and will from time to time furnish AMED with such additional financial and operating data and other information as to the financial condition, results of operations, business, properties, assets, liabilities, or future prospects of the Company as AMED from time to time may request. The Company will also cause the public accountants of the Company to make available to AMED and its public accountants the work papers relating to the financial statements of the Company. 7.04. Conduct of Business. The Company will use its best efforts to conduct its affairs so that at the Closing, no representation or warranty of the Company will be inaccurate, no covenant or agreement of the Company will be breached, and no condition in this Agreement will remain unfulfilled by reason of the actions or omissions of the Company. 7.05. Notice of Changes. Until the Closing or the earlier rightful termination of this Agreement, the Company will immediately advise AMED in a detailed written notice of any fact or occurrence or any pending or threatened occurrence of which any of them obtains knowledge and which (if existing and known at the date of the execution of this Agreement) would have been required to be set forth or disclosed in or pursuant to this Agreement or an exhibit or schedule hereto, which (if existing and known at any time prior to or at the Closing) would make the performance by any party of a covenant contained in this Agreement impossible or make such performance materially more difficult than in the absence of such fact or occurrence, or which (if existing and known at the time of the Closing) would cause a condition to any party's obligations under this Agreement not to be fully satisfied. 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 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. 8.02. Consents Without any Condition. AMED shall not make any agreement or understanding with a third party not in the ordinary course of business not approved in writing by the Company. -16- 8.03. Conduct of Business. AMED will conduct its affairs so that at the Closing no representation or warranty of AMED will be inaccurate, no covenant or agreement of AMED will be breached, and no condition in this Agreement will remain unfulfilled by reason of the actions or omissions of AMED. 8.04. Notice of Changes. Until the Closing or the earlier rightful termination of this Agreement, AMED will immediately advise the Company in a detailed written notice of any fact or occurrence or any pending or threatened occurrence of which it obtains knowledge and which (if existing and known at the date of the execution of this Agreement) would have been required to be set forth or disclosed in or pursuant to this Agreement or an exhibit or schedule hereto, which (if existing and known at any time prior to or at the Closing) would make the performance by any party of a covenant contained in this Agreement impossible or make such performance materially more difficult than in the absence of such fact or occurrence, or which (if existing and known at the time of the Closing) would cause a condition to any party's obligations under this Agreement not to be fully satisfied. 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 until AMED is in receipt of the final Medicare Cost Reporting Letter, irrespective of any investigation made by or on behalf of any party (the "Survival -17- 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 the most nearly comparable method if mailed from or to a location outside of the United States), or delivered by hand or telecopy 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) and if given by hand or telecopy, shall be deemed given upon delivery or as of the date of the telecopy date of receipt, 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. Separability. 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. -18- 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 Texas without giving effect to conflict of laws and any action or proceedings must be brought in Dallas County, Texas. 9.13. Indemnification by the Stockholder. The Stockholder 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: (i) Medicare Liabilities in excess of $950,000, and (ii) any misstatement or omission from any representation by, or any breach of warranty, covenant or agreement of, the Company or the Stockholder contained herein ("Other Liabilities") in excess of $20,000. 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 -19- 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. Right to Set-Off. AMED shall have the right to set off Damages against the consideration placed in escrow pursuant to the terms of the Escrow Agreement set forth in Exhibit 2.02 hereof. 9.16. Other Indemnification Provisions. The foregoing indemnification provisions under this Section 9 are in addition to any statutory, equitable or common law remedy any party may have for breach of representation, warranty or covenant. IN WITNESS WHEREOF, the parties have duly executed this Agreement effective as of the date written in the preamble of this Agreement. AMEDISYS, INC. By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- UNIVERSITY CAPITAL CORP. By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- STOCKHOLDER: ---------------------------------------- Name: ----------------------------------- Address: -------------------------------- -20- LIST OF SCHEDULES Schedule No. Schedule Description - ------------ -------------------- 2.01 Stock Power 2.02 Escrow Agreement 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 3.10 Financial Statements and Balance Sheets 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 5.06 Letters of Non-Distributive Intent 5.07 Non-Compete and Non-Solicitation Agreement 5.09 Legal Opinion of Tilly & Associates 5.10 Release 6.07 Employment Agreement -21- EX-2.6 4 EXHIBIT 2.6 EXHIBIT 2.6 STOCK PURCHASE AGREEMENT BY AND AMONG AMEDISYS ALTERNATE-SITE INFUSION THERAPY SERVICES, INC., A LOUISIANA CORPORATION AND PRN, INC. D/B/A HOME IV THERAPY AND JOSEPH W. STEVENS AND TERRY I. STEVENS STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT (this "Agreement') is made effective as of ________, 1998, by and between AMEDISYS ALTERNATE-SITE INFUSION THERAPY 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 PRN, INC. D/B/A/ HOME IV THERAPY, a Texas corporation with its principal place of business at 4115 Medical Drive, Suite 105, San Antonio, Texas 78229 (The "Company"), Joseph W. Stevens and Terry I. Stevens (collectively, the "Stockholders"). AMED, the Company and the Stockholders are sometimes referred to collectively as the "Parties." RECITALS WHEREAS, AMED desires to purchase 100% of the issued and outstanding capital stock of the Company ("Company Stock") from the Stockholders as hereinafter provided and the Stockholders desires to effect such purchase; 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. 1.07. 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. 2. Terms of Purchase. 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 a Stock Power in the form attached hereto as Schedule 2.01, and any other documents required by this Agreement. 2.02. Purchase Price. At Closing AMED shall deliver and the Stockholders shall be entitled to receive FOUR HUNDRED THIRTY THOUSAND AND NO/100 ($430,000.00) DOLLARS, by wire transfer of immediately available funds, the receipt and adequacy of which are hereby acknowledged by the Stockholders. 2.03. Additional Consideration. AMED will pay additional consideration in the amount of ONE HUNDRED FIFTY THOUSAND AND NO/100 ($150,000.00) DOLLARS, subject to the terms and conditions of Appendix "A", which is incorporated herein by this reference. Amedisys, Inc. agrees to guarantee this payment. 2.04. The Company Stock referred to in Section 2.01. and the consideration to be paid by AMED referred to in Section 2.02. and 2.03. shall constitute all of the consideration to be paid in connection with the transactions contemplated by this Agreement. 2.05. The Closing. The Closing of the transactions contemplated by this Agreement shall be on or before February 27, 1998, at the AMED offices, 3029 S. Sherwood Forest Blvd., Suite 300, Baton Rouge, Louisiana. 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 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 a Texas 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, 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. -2- 3.02. Capitalization. The Stockholders own one hundred (100%) percent of the issued and outstanding shares of Common Stock of the Company, which constitutes all of the outstanding capital stock of Company. Except as set forth in Schedule 3.02, 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 9.11 of this Agreement. 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's 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 have 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 -3- 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's 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 have 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 calendar 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. No current or prior employee or Stockholder of the Company has any employment agreement with the Company. To the knowledge of the Company and 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 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 -4- of the Company. All such policies and bonds (i) are in full force and effect, (ii) are 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 material 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 material service, 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 per year. Except for matters which, in the aggregate, would not have a Material Adverse Effect or are otherwise disclosed in the Schedules attached hereto or 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 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 Company and to the Knowledge of the Stockholders the other parties thereto and is enforceable as to them in accordance with its terms. Neither the Company, the Stockholders, nor to the knowledge of the Stockholders has any other party to any such contract listed in Schedule 3.08 given notice of termination or taken any action inconsistent with the continuance of such contract, agreement, instrument, lease, or license, except for matters which, in the aggregate, would not have a Material Adverse Effect; and the Company's execution, delivery, and performance of this Agreement will not violate any such contract, agreement, instrument, lease, or license 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. -5- 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's Knowledge term or provision of any applicable judgment, decree, order, statute, injunction, rule, ordinance; (iii) to the Company's and the Stockholders's Knowledge any Health Care Law; or (iv) or the Company's and the Stockholders's Knowledge, foreign, United States, state or local statutes, laws, rules, or regulations, except for violations which would not have a Material Adverse Effect. 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 as supplemented in Schedule 3.10, and an income statement and consolidated statement of the Company for the twelve month period ended June 30, 1997, 1996 and 1995. Except for the absence of notes and subject to normal year-end adjustments, in the case of interim statements, which adjustments will not result in any Material Adverse Effects, 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, fairly present the financial condition of the Company for the periods indicated in all material respects, and are in accordance with the books and records of the Company. 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, except for the absence of which would not have a Material Adverse Effect. Such permits, licenses, and other similar authorizations of the Company 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 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 of the Company now in effect, and the Company and the Stockholders have no Knowledge that, any intangible property of the Company 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 valid 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 -6- interests, pledges, charges, and encumbrances (except for liens for current taxes not yet due and except such as are disclosed in Schedule 3.12 or disclosed on the Company's 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 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); 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. 3.12.03. All accounts and notes receivable reflected on the Company Last Balance Sheet, and arising since the Company's Last Balance Sheet Date, have been collected, or are and will be good and valid, in each case at the aggregate 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 120 days of the date incurred. 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. 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 or director of the Company, nor any spouse or child of any shareholder, officer or director with authority to enter into contracts on behalf of the Company, has any direct or indirect interest (excepting stockholdings of securities of publicly held and traded companies) 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, of the type required to be reflected on a balance sheet or in appropriate footnotes prepared in accordance with GAAP, including, without limitation, liabilities for federal, -7- 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 Last Balance Sheet as of the Company Last Balance Sheet Date; and ii. Other liabilities arising since the Company 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. Without limiting the generality of the foregoing, the amounts set forth as provisions for taxes on the Company 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 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 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 AMED 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. 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; -8- 3.16.06. Except as listed on Schedule 3.16.06, 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 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 other events or conditions of any character within the Knowledge of the Company and the Stockholders that, when considered individually or in the aggregate, have or might reasonably be expected to have a Material Adverse Effect; 3.16.13. 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; 3.16.14. To the Knowledge of the Company and the Stockholders, since December 31, 1997, no statute, regulation, order, ordinance or other law has been adopted or rescinded which is reasonably expected to have a Material Adverse Effect; 3.16.15. Any material 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; -9- 3.16.16. 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 3.16.17. Any agreement by the Company to do any of the things described in the preceding clauses 3.16.01 through 3.16.16. 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, or any order, writ, injunction or decree of any court, administrative agency or governmental body to which the Company is subject. 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. Completeness of Disclosure. No representation or warranty in this Agreement and no Appendix, 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: 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 the State of Texas and 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. -10- 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 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 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 9.11 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. Completeness of Disclosure. No representation or warranty in this Agreement 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. 4.05 Investment Intent. AMED is acquiring the Company Stock for its own account and not with a view to distribution within the meaning of Section 2(11) of the Securities Act of 1933, as amended. AMED confirms that the Company and the Stockholders have made available to AMED and its representatives and agents the opportunity to ask questions of the officers and management employees of the Company and to acquire such additional information about the business and financial condition of the Company as AMED has requested, and all such information has been received, or represented to have been received. 5. Conditions to Obligations of AMED. The obligations of AMED under this Agreement are subject, at the option of AMED, to the following conditions: -11- 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; 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. 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, -12- 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-Competition and Non-Solicitation Agreement. Joseph W. Stevens and Terry I. Stevens shall have entered into the non-competition and non- solicitation agreement in the form attached hereto as Schedule 5.08. 5.09. Board and Shareholder Approval. The Board of Directors and shareholders of the Company shall have approved the transactions contemplated herein. 5.10. Legal Opinion. AMED shall have received the opinion of Cox & Smith, Incorporated, dated the Closing Date, in the form of Schedule 5.10 attached hereto. 5.11. Releases. AMED shall have received the releases from the Stockholders and employees in the form set forth in Schedule 5.11 6. Conditions to Obligations of The Company and the Stockholders. The obligations of the Company and the Stockholders under this Agreement are subject, at the option of the Company and the Stockholders, 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, 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 -13- 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. Otherwise prohibits, restricts, or delays consummation of any of the transactions 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 Bank Debt Release. At Closing, AMED will satisfy the Company debt to Frost National Bank, thereby releasing the Stockholders of their personal guarantee of said debt. -14- 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. 7.02. Consents Without any Condition. The Company shall not make any agreement or understanding with a third party not in the ordinary course of business without approval in writing by AMED. 7.03. Access. With reasonable prior notice, the Company will afford the officers, counsel, agents, investment bankers, accountants, and other representatives of AMED, free and full access to the plans, properties, books, and records of the Company; will permit them to make, at AMED's expense, extracts from and copies of such books and records; and will from time to time furnish AMED with such additional financial and operating data and other information as to the financial condition, results of operations, business, properties, assets, liabilities, or future prospects of the Company as AMED from time to time may reasonably request. The Company will also cause the public accountants of the Company to make available to AMED and its public accountants the work papers relating to the audits of the Company. 7.04. Conduct of Business. The Company will use its reasonable best efforts to conduct its affairs so that at the Closing, no representation or warranty of the Company will be inaccurate, no covenant or agreement of the Company will be breached, and no condition in this Agreement will remain unfulfilled by reason of the actions or omissions of the Company. 7.05. Notice of Changes. Until the Closing or the earlier rightful termination of this Agreement, the Company will immediately advise AMED in a detailed written notice of any fact or occurrence or any pending or threatened occurrence of which any of them obtains knowledge and which (if existing and known at the date of the execution of this Agreement) would have been required to be set forth or disclosed in or pursuant to this Agreement or an exhibit or schedule hereto, which (if existing and known at any time prior to or at the Closing) would make the performance by any party of a covenant contained in this Agreement impossible or make such performance materially more difficult than in the absence of such fact or occurrence, or which (if existing and known at the time of the Closing) would cause a condition to any party's obligations under this Agreement not to be fully satisfied. 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 -15- in public dissemination thereof, AMED shall cooperate with the Company, shall furnish drafts of 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. 8.02. Consents Without any Condition. AMED shall not make any agreement or understanding with a third party not in the ordinary course of business not approved in writing by the Company. 8.03. Conduct of Business. AMED will conduct its affairs so that at the Closing no representation or warranty of AMED will be inaccurate, no covenant or agreement of AMED will be breached, and no condition in this Agreement will remain unfulfilled by reason of the actions or omissions of AMED. 8.04. Notice of Changes. Until the Closing or the earlier rightful termination of this Agreement, AMED will immediately advise the Company in a detailed written notice of any fact or occurrence or any pending or threatened occurrence of which it obtains knowledge and which (if existing and known at the date of the execution of this Agreement) would have been required to be set forth or disclosed in or pursuant to this Agreement or an exhibit or schedule hereto, which (if existing and known at any time prior to or at the Closing) would make the performance by any party of a covenant contained in this Agreement impossible or make such performance materially more difficult than in the absence of such fact or occurrence, or which (if existing and known at the time of the Closing) would cause a condition to any party's obligations under this Agreement not to be fully satisfied. 9. Miscellaneous. 9.01. Brokerage and Other Fees. Each party shall be responsible for the fees of their respective brokers and/or 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. Without limiting the terms and provisions of Section 10 hereof, 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 -16- 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. 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. 9.05. Notices. Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be delivered by personal delivery or by overnight delivery or mailed by certified mail, return receipt requested (or by 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. 9.06. 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. 9.07. 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. 9.08. 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. 9.09. Separability. 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. 9.10. 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. 9.11. 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 Texas without giving effect to conflict of laws. -17- 9.12. 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 reasonable fees and disbursements of counsel, accountants, experts and other consultants (collectively, "Damages"), resulting from, arising out of, or based upon any misstatement or omission from any representation by, or any breach of warranty, covenant or agreement of the Company or the Stockholders contained herein ("Other Liabilities") in excess of $12,500; provided, however, notwithstanding anything contained herein to the contrary, the term "Damages" shall not include expenses, losses, costs, deficiencies, liabilities, taxes, penalties, fines, liens and damages (i) to the extent of any proceeds received by such party from any insurance policies with respect thereto, (ii) to the extent of any net tax benefits realized by such party and (iii) to the extent of any indemnities or recoveries from third parties. 9.13. Indemnification by AMED. AMED shall indemnify, defend and hold harmless the Stockholders, the Company, and each of its officers, directors, agents and affiliates from and against any Damages resulting from, arising out of, based upon or occasioned by any misstatement or omission from any representations by, or any breach of warranty, covenant or agreement of, AMED contained herein. 9.14. Indemnification Procedures. Promptly after receipt by the party seeking indemnification hereunder (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 9.12 or 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 to compromise or defend, at its own expense and by counsel approved by Indemnitee (which approval shall not be unreasonably withheld), any such matter involving the asserted liability of the Indemnitee; provided, that any compromise entered into without the consent of Indemnitee (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 (excluding the 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 in the defense of such asserted liability; provided that Indemnitor shall not be obligated to indemnify Indemnitee for the cost of Indemnitee's participation in such defense, including Indemnitee's attorney's fees, unless both the Indemnitee and the Indemnitor are named as parties and the Indemnitee shall in good faith determine the representation -18- of both parties by the same counsel would be inappropriate due to actual or potential conflicting interest between them; provided, however, that in no event shall the Indemnitor be obligated to assume the expense of more than one such separate counsel in connection with Damages arising out of the same claim or cause of action. 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. Exclusivity. Except for the injunctive relief provided in Schedule 5.08 and off-set provision of Section 9.18 the indemnification provisions of this Section 9 shall be the exclusive remedy for claims by AMED or its representatives under this Agreement. Neither AMED or its representatives shall be able to avoid the limitations expressly set forth in this Section 9 by electing to pursue another remedy (other than claims based upon actual fraud). The parties hereto hereby waive any provision of law to the extent it would limit or restrict their agreement set forth in this section 9.15. 9.16. Survival of Representations and Warranties. Except as set forth in the second sentence of this Section 9.16, each of the representations and warranties made by the Company and the Stockholders pursuant to this Agreement shall survive for a period of twelve (12) months after the Closing, and upon expiration of such period, such representations and warranties shall expire. The representations and warranties made by the Company and the Stockholders to the extent relating to (i) Medicaid and Medicare shall survive for a period of twenty-four (24) months after the Closing and (ii) taxes and the Company's Defined Benefit Pension Plans shall survive for the applicable statute of limitations period, and shall thereafter expire. No claim for the recovery of Damages may be asserted by AMED or any of its representatives against the Stockholders after such representation and warranty shall expire. 9.17. Limitations on Indemnification. The aggregate liability of the Stockholders for indemnification claims under Section 9.12 shall not exceed $430,000. 9.18. Right of Off-Set. If AMED reasonably believes it is entitled to indemnification under this Agreement, the amount of such Damages shall first be credited and off-set against the last amount to be repaid which are due and owing to the Stockholders pursuant to the terms of Section 2.03 and Appendix A hereto and written notice of such off-set shall be given to the Stockholders. In the event the off-set is disputed by the Stockholders, such dispute shall be governed by the provisions of Section 10. If it is ultimately determined that such off-set was improper, AMED shall immediately pay the Stockholders the amount due and owing plus interest of 15% on such amount from the date such payment was originally due until the date payment is made. 10. Arbitration 10.1 Arbitration Procedures. Any and every dispute of any nature whatsoever that may arise between the parties hereto, whether sounding in contract, statute, tort, fraud, misrepresentation, -19- discrimination or any other legal theory, or breach of this Agreement, or any schedule, certificate or other document delivered by any party hereto or thereto, or those arising under any federal, state or local law, regulation or ordinance, shall be determined by binding arbitration in accordance with the then-current commercial arbitration rules of the American Arbitration Association ("AAA"), to the extent such rules do no conflict with the provision of this Section 10. The arbitration shall be conducted by a single neutral arbitrator. The parties shall endeavor to select neutral arbitrators by mutual agreement. If such agreement cannot be reached within thirty (30) calendar days after a dispute has arisen which is to be decided by arbitration, any party of the parties jointly shall request AAA to submit to each party an identical panel of fifteen (15) persons. Alternate strikes shall be made to the panel, commencing with the party bringing the claim, until the name of one (1) person remains. The parties may, however, by mutual agreement, request AAA to submit additional panels of possible arbitrators. The arbitrator shall have the power to determine all matters incident to the conduct of the arbitration, including without limitation all procedural and evidentiary matters and the scheduling of any hearing. The award made by the arbitrator shall be governed by the United States Arbitration Act, 9 U.S.C. (S)(S) 1-16, and judgment upon the award rendered by the arbitrator(s) may be entered by any court having jurisdiction thereof. Unless otherwise agreed by the parties, the arbitration shall be held in San Antonio, Texas. 10.2 Provision applicable to claims for injunctive relief. Except as set forth in Section 9.18 and Schedule 5.08, the agreement of the parties hereto is to submit all disputes to binding arbitration. In the event injunctive relief is sought, the parties agree that Commercial Arbitration Rule 13 (as amended November 1, 1993, or its subsequent equivalent) shall not apply, and instead, a single arbitrator shall be appointed within one business day after the filing of the demand or submission. Such arbitrator shall then preside over the application for injunctive relief and all other disputes then arising under this agreement. The arbitrator appointed under this paragraph 10.2 shall be appointed by JAMS Endispute, San Antonio, Texas ("JAMS"), in the following manner: the case administrator for the AAA shall contact JAMS immediately on receipt of the demand for arbitration containing the claim for injunctive relief. The case administrator shall provider JAMS with the names of the parties to, and a copy of, this agreement. From its then current list of qualified, licensed, but non-practicing attorneys who are former, sitting trial judges, the San Antonio national account manager (or equivalent position) of JAMS shall appoint one such individual as the arbitrator to preside over the application for injunctive relief and all other disputes between the parties. Except in the unlikely event of an actual conflict of interest under the Rules of Professional Conduct or Code of Judicial Conduct, neither party shall have any right to strike or object to the appointment of any person so selected. The parties expressly agree and desire that the selection of an arbitrator hereunder shall be effected within one business day of any application for injunctive relief and agree that such application shall then be considered at least as expeditiously as would be the case in the District Courts for Bexar County. The parties further agree that any injunctive relief granted by the arbitrator shall be separately enforceable in the District Court for Bexar County, to the same extent as would be the case for a final award of the arbitrator. 10.3 EACH OF THE PARTIES TO THIS AGREEMENT WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY DISPUTE OF ANY NATURE WHATSOEVER THAT MAY ARISE BETWEEN THEM, RELATING TO OR INVOLVING, IN ANY WAY THE CONSTRUCTION, -20- PERFORMANCE OR BREACH OF THIS AGREEMENT OR ANY OTHER AGREEMENT BETWEEN THE PARTIES CONTEMPLATED HEREBY, THE PROVISIONS OF ANY FEDERAL, STATE OR LOCAL LAW, REGULATION OR ORDINANCE NOTWITHSTANDING. By execution of this Agreement, each of the parties hereto acknowledges and agrees that such party has had an opportunity to consult with legal counsel and that such party knowingly and voluntarily waives any right to a trial by jury of any dispute pertaining to or relating in any way to the transactions contemplated by this Agreement, the provisions of any federal, state or local law, regulation or ordinance notwithstanding. -21- IN WITNESS WHEREOF, the parties have duly executed this Agreement effective as of the date written in the preamble of this Agreement. AMEDISYS Alternate Site Infusion Therapy Services, Inc. By: ------------------------------------------ Name: ---------------------------------------- Title: --------------------------------------- PRN, Inc. By: ------------------------------------------ Name: ---------------------------------------- Title: --------------------------------------- Stockholders: --------------------------------------------- Name: ---------------------------------------- Address: ------------------------------------- --------------------------------------------- Name: ---------------------------------------- Address: ------------------------------------- The undersigned hereby exercutes this Agreement solely for purposes of guaranteeing the obligation of AMED under Section 2.03 and Appendix A. AMEDISYS, INC. By: --------------------------------------- -22- APPENDIX "A" AMED will pay to the Stockholders as additional consideration ONE HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($150,000.00), subject to adjustment as hereinafter provided, plus interest as described herein. The payments due hereunder shall bear interest at a rate of 9.5% per annum, and shall be calculated based upon the remaining principal due, or which could become due, hereunder. There shall be eight installment payments of principal plus accrued interest, such payments being made on or before the thirtieth day following the end of each calendar quarter beginning March 31, 1998 and ending December 31, 1999. The calendar quarters are March 31/st/, June 30/th/, September 30/th/ and December 31/st/ and each installment payment shall relate to the ended quarter immediately preceding such payment. The principal portion of each installment payment to be made hereunder shall be equal to $150,000.00 multiplied by the Percentage (as hereinafter defined) for the calendar quarter to which such payment relates. The Percentage for a calendar quarter shall be equal to (i) the PRN Quarterly Revenue (as hereinafter defined) for such quarter (ii) divided by $1,062,500 ($625,000 x 2 years x 85%). In no event shall the aggregate principal paid with respect to all installment payments made hereunder exceed $150,000.00. Interest shall be computed on the basis of a 365 day year and the interest due shall be calculated based upon the outstanding principal balance as of the date of such payment (i.e., $150,000.00 minus the aggregate principal portions of all previous installment payments made hereunder). Privilege is reserved to prepay, all, or any portion of the unpaid principal balance, at any time, without penalty; provided, however, that any partial prepayment shall be applied first to accrued and unpaid interest and then to the principal balance. Matured unpaid principal and interest shall bear interest at a rate equal to the lesser of (i) 18% per annum, or (ii) the maximum rate allowed by applicable statute. In the event that default be made in the payment of principal or interest, or otherwise, hereunder, and the amount owed hereunder is not subject to a bonafide dispute between AMED and the Stockholders, the Stockholders may at their option declare the entire principal balance (i.e., $150,000 minus the aggregate principal portions of all previous installment payments made hereunder) and accrued interest owing heron immediately due and payable. Failure to exercise this option shall not constitute a waiver of the right to exercise the same the same in the even of any subsequent default. For purposes of this Appendix A, the term Quarterly PRN Revenue shall mean all PRN Revenue relating to such calendar quarter. The term PRN Revenue shall mean the aggregate amount of gross revenue (adjusted for contractual allowances) calculated in accordance with GAAP of the Company, AMED or any other affiliate or subsidiary or AMED to the extent such revenue relates to (i) operations of the Company from January 1, 1998 to the Closing Date (ii) patients of the Company as of or after the Closing Date or (iii) any of the referral sources of the Company set forth on Exhibit A-1 attached hereto. -23- On or before thirty days after the end of each calendar quarter during the term hereof, AMED shall deliver to the Stockholders a report calculating the Quarterly PRN Revenue for the immediately preceding quarter. Upon reasonable notice, the Stockholders shall have the right to examine the books and records of the Company and AMED or any other affiliate or subsidiary of AMED (to the extent such company generates revenues properly included in PRN Revenue) for the purpose of confirming the calculation of the Quarterly PRN Revenue amount reported by AMED and AMED shall cooperate in such review. -24- 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 3.10 Financial Condition 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 5.08 Non-Compete and Non-Solicitation Agreement 5.10 Legal Opinion of Cox & Smith, Incorporated 5.11 Releases -25- EX-2.7 5 EXHIBIT 2.7 EXHIBIT 2.7 ASSET PURCHASE AGREEMENT BY AND BETWEEN AMEDISYS ALTERNATE-SITE INFUSION THERAPY SERVICES, INC. AS PURCHASER, AND PRECISION HEALTH SYSTEMS, L.L.C., AS SELLER DATED AS OF FEBRUARY 1, 1998 ASSET PURCHASE AGREEMENT THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered into and made effective as of the 1/st/ day of February, 1998, by and between AMEDISYS ALTERNATE-SITE INFUSION THERAPY SERVICES, INC., a Louisiana corporation, with its principal place of business at 3029 South Sherwood Forest Blvd., Suite 300, Baton Rouge, Louisiana 70816 (hereinafter referred to as "Purchaser") and PRECISION HEALTH SYSTEMS, L.L.C., a Louisiana limited liability company having its principal place of business at 10473 Old Hammond Highway, Baton Rouge, Louisiana 70816 (hereinafter referred to as "Seller"). RECITALS WHEREAS, Seller conducts a home health care and infusion business which provides services to non-Medicare and non-Medicaid patients and whose offices are located at 10473 Old Hammond Highway, Baton Rouge, Louisiana; WHEREAS, Purchaser desires to buy and Seller desires to sell all or substantially all of the assets of Seller's business enterprise; and WHEREAS, the parties expect that this Agreement will further advance their respective business objectives, including without limitation, integration of the business operations of Seller with the business operations of Purchaser in order for Purchaser to more effectively compete in the marketplace. NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows: 1. Definitions. As used in this Agreement, the following terms have the meanings indicated: 1.01 Assets: The assets to be sold and transferred by Seller to Purchaser pursuant to this Agreement consisting of the assets owned by Seller as of the Closing that are described in clauses (a) - (l) below and that are more specifically detailed in Schedule 1.01 of this Agreement, plus any other assets and rights pertaining to Seller's Business as reflected on the balance sheet of Seller prepared as of January 31, 1998, subject to payments and receipts within the ordinary course of business between January 31, 1998 and the date of the Closing, (the "Balance Sheet"); provided however, the Excluded Assets are specifically excluded from the assets to be sold under this Agreement: a) All furniture, fixtures, equipment, leasehold improvements and supplies of Seller located at and used by Seller in the operation of Seller's Business at the address stated above, which are further identified in and by the books and records of Seller; -2- b) All inventory owned by Seller and used by Seller in the operation of Seller's Business at the address stated above as of the Closing; c) All outstanding accounts receivable of Seller, as of the Closing, together with all other indebtedness owed to Seller arising out of Seller's Business; d) Seller's right to use the name "Precision Health Systems", any d/b/a or other name utilized to market its service and products, and all trademarks, trade names, signage, marketing symbols and logos; e) All of Seller's current patient lists of present or former patients, all of Seller's mailing lists, all business records relating to the operations of Seller's Business (including all records relating to patients), and all telephone numbers and listings used by Seller in Seller's Business, and all intangibles and other rights and privileges of Seller currently used in Seller's Business; f) Seller's leasehold interest in the premises occupied by Seller in Baton Rouge, Louisiana, in accordance with the Sublease Agreement described in Schedule 1.01 to this Agreement; g) The goodwill and going concern value of Seller and all provider numbers, licenses and permits of or pertaining to Seller's Business; h) The benefits of all amounts previously paid by Seller for advertising, design fees, rent services, or interest relating to Seller's Business or the Assets, to the extent that they extend or are to be performed after the Closing; i) All of Seller's rights under the agreements described in Schedule 5.08 (other than those described in Section 5.08.01), and the rights given therein; j) Seller's rights under all other contracts, including all leases and non-competition agreements relating to Seller's Business; k) All technical outlines and records (including all plans, drawings, diagrams, notes, reports, memoranda, and other similar documents), and any and all know-how and software and other technology, including all contracts, licenses, authorizations, permits, and other documents necessary for Seller's Business that are owned by Seller; and l) All trade secrets, inventions, patents, copyrights, trade names, business names, trademarks, and other intangible assets used by Seller for Seller's Business that are owned by Seller. 1.02 Closing. The consummation of the transactions contemplated by this Agreement. 1.03 Excluded Assets. The assets of Seller which are not to be sold and transferred to Purchaser pursuant to this Agreement and which consist of the following: organizational documents of Seller, insurance policies providing coverage to Seller -3- and all rights under such policies, Seller's tax identification number, Seller's depositary accounts and the agreements between Seller and Seller's bank(s) (subject to the reconciliation of cash balances of accounts described in Section 11.02(b)), and any prepaid taxes by Seller. 1.04 GAAP. Generally accepted accounting principles. 1.06 Inventory and Accounts Receivable. All inventory and accounts receivable of the Seller as of the Closing, including Seller's interest in equipment which has been expensed but not capitalized, more fully described in Schedule 1.06. 1.07 Accounts Payable. All accounts payable of the Seller as of the Closing, including but not limited to, trade payables and account payables more fully described in Schedule 1.07. 1.08 Liabilities. Those liabilities of Seller to be assumed by Purchaser at the Closing pursuant to this Agreement, which consist of those liabilities of Seller specifically disclosed on Schedule 1.08. Purchaser shall also assume the obligations of Seller accruing after the Closing Date on the contracts and agreements comprising a part of the Assets, as disclosed on Schedule 1.08. Purchaser shall not assume any other liabilities, contingent or certain, of Seller unless incurred and disclosed in the manner provided in this Section 1.08. Without limiting the foregoing, Purchaser is not assuming (i) any expenses, liabilities, or obligations of Seller arising out of the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby which are unpaid at the Closing, (nor may Seller pay any of such expenses out of the Assets), except for its payment as provided in Section 3.03, (ii) any liabilities or obligations of Seller relating to federal, state, or local income for the period through the Closing or other taxes attributable to the transactions contemplated hereby or the conduct of Seller's Business except for the sales taxes shown on the Seller's Last Balance Sheet and the sales taxes, if any, attributable to this transaction, (iii) any obligation of Seller to pay a fee to any agent, broker, or finder relating to this transaction, or (iv) the specific liabilities of Seller for accrued medical director's fees and accrued management expenses. 1.09 Material Adverse Effect. Any change in the financial condition of Seller or operation of its business that would materially effect the Seller's Business adversely, including, but not limited to, material changes to its business condition or financial condition. 1.10 Permitted Encumbrances. As to each of the following, for which no enforcement, collection, execution, levy or foreclosure proceeding shall have been commenced: (a) liens for taxes, assessments and governmental charges or levies not yet due and payable or which are being contested in good faith which are not in excess of $5,000.00 in the aggregate; (b) encumbrances imposed by law, such as materialmen's, mechanics', carriers', workmen's and repairmen's liens and other similar liens arising in the ordinary course of business securing obligations that are -4- being contested in good faith or are not overdue for a period of more than 30 days provided that they are not in excess of $5,000.00 in the case of a single property or $10,000.00 in the aggregate at any time or which are being contested in good faith; (c) pledges or deposits to secure obligations under workers' compensation laws or similar legislation or to secure public or statutory obligations; (d) minor survey exceptions, reciprocal easement agreements and other customary encumbrances on title to real property that (i) were not incurred in connection with any indebtedness, (ii) do not render title to the property encumbered thereby unmarketable and (iii) do not, individually or in the aggregate, materially adversely affect the value or use of such property for its current purposes. 1.11 Purchaser's Knowledge. The actual knowledge of Purchaser's officers and directors after reasonable inquiry. 1.12 Seller's Business. The home health care and infusion business which provides services to non-Medicare and non-Medicaid patients as presently carried on by Seller at Seller's address stated above. 1.10 Seller's Knowledge. The actual knowledge of Seller's member, Daniel D. Brown and the administrator of Seller's other member after reasonable inquiry. 2. Agreement to Purchase and Sell. Subject to the terms and conditions of this Agreement, Purchaser agrees to purchase from Seller, and Seller agrees to sell, transfer, convey, assign, and deliver to Purchaser, at the Closing, the Assets, free and clear of all liens, claims, liabilities, restrictions on transfer and encumbrances, except (i) those liabilities listed in Schedule 1.08, (ii) Permitted Encumbrances (iii) the restrictions set forth in the agreements and contracts identified in Schedule 1.01, copies of which are attached thereto; (iv) the consents required but not obtained identified in Schedule 5.03 and (v) liens, claims and liabilities accruing after the Closing. 2.01 The Closing. The Closing of the transactions contemplated by this Agreement shall occur on February 27, 1998, to be effective on the 1/st/ day of February, 1998. 3. Purchase Price. The purchase price for the sale, transfer, conveyance, assignment, and delivery of the Assets to Purchaser, subject to the terms and conditions of this Agreement, shall be ONE MILLION AND NO/100 ($1,000,000.00) DOLLARS, to be paid to Seller at the Closing by the Purchaser as follows: 3.01 SEVEN HUNDRED FIFTY THOUSAND AND NO/100 ($750,000.00) DOLLARS, cash in hand; and 3.02 Purchaser will deliver and execute a promissory note ("Promissory Note"), the form of which is attached hereto as Schedule 3.02, payable to the order of Seller, for the principal amount of TWO HUNDRED FIFTY THOUSAND AND NO/100 ($250,000.00) DOLLARS. The Promissory Note shall bear interest from February 27, 1998 until paid on the unpaid principal balance at a per annum interest rate equal to the prime interest rate designated in the Wall Street Journal plus one percentage -5- point, adjusted on an annual basis, and shall be payable, principal plus interest, in twenty-four (24) equal monthly installments. The Promissory Note shall be solidarily guaranteed by Amedisys, Inc. (the "Guarantor"), shall provide for acceleration of the entire principal balance in the event of default by Purchaser in the payment of any installment thereunder or under this Agreement and shall provide for the payment of the reasonable attorney fees incurred by Seller in the collection thereof. 3.03 In addition to the Purchase Price, Purchaser will pay Seller, at the Closing, TWENTY THOUSAND AND NO/100 ($20,000.00) DOLLARS to defray certain expenses incurred by Seller in association with this transaction. 3.04 The consideration to be paid pursuant to the provisions of this Section 3 and the Liabilities to be assumed by Purchaser pursuant to Section 4 shall constitute all the consideration to be paid by Purchaser in connection with the purchase of the Assets contemplated by this Agreement. 4. Assumption of Liabilities. In connection with the purchase of the Assets hereunder, Purchaser shall specifically assume at Closing the Liabilities and Permitted Encumbrances. Purchaser shall not assume any other liabilities, contingent or certain, of Seller. 5. Representations and Warranties of Seller. Seller hereby represents and warrants to Purchaser, as of the date of this Agreement (unless another date is expressly provided in this Section 5) that the statements contained in this Section 5 are correct and complete: 5.01 Ownership. Seller is the beneficial owner of the Assets and has good and marketable title to, and/or a valid leasehold interest in, and the right to sell, assign, and transfer the Assets to Purchaser, free and clear of any security interest, claims, liens, pledges, penalties, charges, restrictions on transfer, encumbrances whatsoever of every kind and character, other than (i) Permitted Encumbrances; (ii) the restrictions set forth in the agreements and contracts identified in Schedule 1.01, copies of which are attached thereto; (iii) the consents required but not obtained identified in Schedule 5.03; and (iv) those accruing after the Closing . Upon delivery of and payment of the Purchase Price in accordance with this Agreement and obtaining the consents described on Schedule 5.03, good and marketable title to, or valid leasehold interest in, the Assets, shall be delivered to Purchaser, free and clear of any security interest, claims, liens, pledges, penalties, charges, encumbrances, whatsoever, other than the liabilities set forth in Schedule 1.08, the Permitted Encumbrances, the restrictions set forth in the agreements and contracts identified in Schedule 1.01, copies of which are attached thereto, and those accruing after the Closing. 5.02 Valid Existence. Seller is duly organized, validly exiting, and in good standing as a limited liability company under the laws of the State of Louisiana and has full power and authority (including all licenses, franchises, permits, and other authorizations that are legally required) to own the Assets, its properties and to engage in the business and activities now conducted by it. Seller is in good standing in each jurisdiction in which it conducts business. -6- 5.03 Due Authorization: Consent of Third Parties. Seller has the right, power, legal capacity and authority to enter into and perform Seller's obligations under this Agreement and, no approval or consent of any person other than the Seller is necessary in connection with the execution, delivery, or performance of this Agreement by the Seller, except for the consents set forth in Schedule 5.03. This Agreement constitutes a legal and binding obligation of the Seller, and is valid and enforceable against the Seller 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, and (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. 5.04 Use of Assets. All of the Assets which are tangible personal property are located at the above stated address of Seller and are free and clear from defects, are maintained in accordance with normal industry practice and are in good operating condition and repair, normal wear and tear excepted. Seller has had no other business address within the three years prior to the Closing. The Assets are being utilized by Seller in conformity with all applicable federal, local and state health care related and imposed rules, regulations, laws, statutes, and permits ("Health Care Laws") applicable to Seller, and to the best of Seller's Knowledge all other federal, state and local rules, regulations, laws, statutes and permits, except where failure to so conform will not have a Material Adverse Effect. 5.05 Reserved. 5.06 Litigation. Except as described on Schedule 5.06, there is not any suit, action, arbitration, or legal, administrative, or other proceeding or governmental investigation pending or, to the best of Seller's Knowledge, threatened (in the form of threats made to representatives of Seller), against or affecting Seller or any of the Assets or other assets of Seller, 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 Seller'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 Seller might reasonably be undertaken or brought. The Seller has informed Purchaser of, and upon request has furnished or made available to Purchaser, copies of all relevant court papers and other documents relating to, the matters set forth in this Section. Seller has described on Schedule 5.06 all suits, actions, arbitrations, or other proceedings or investigations in which Seller has been a party to during the five year period immediately preceding the Closing. Except as described on Schedule 5.06, Seller is not in default with respect to any order, writ, injunction, or decree of any Health Care Law. In addition, to -7- Seller's Knowledge, it is not in violation of any other federal, state, local law, rule or regulation, or foreign court, department, agency, or instrumentality. Except as set forth on Schedule 5.06, Seller is not presently engaged in any legal action to recover monies due to the Seller, for damages sustained by the Seller, or amounts owed to the Seller. During the five year period immediately preceding the Closing, except as described on Schedule 5.06, Seller 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 Seller's Knowledge, except as described on Schedule 5.06, it 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. 5.07 Insurance. Schedule 5.07 contains 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 Seller. Seller 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 materially adversely affect the Assets. All such policies and bonds are (i) in full force and effect, (ii) with insurance companies believed by Seller to be financially sound and reputable, (iii) are sufficient for compliance by Seller with all requirements of law and of all agreements and instruments to which Seller is a party, and (iv) 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 5.07 contains an accurate and complete list of all accident or other liability claims received by or known by Seller for the three year period immediately preceding the Closing, as well as a description of the status of each such claim. Such claims which remain outstanding are covered by one or more insurance policies set forth in this Section. 5.08 Contracts, Agreements and Instruments. Schedule 5.08 contains a list of the following, copies of which have been heretofore furnished by Seller to Purchaser, which acknowledges receipt thereof: 5.08.01 The Articles of Organization, Operating Agreement and other organizational documents of Seller and all amendments thereto, as presently in effect, certified by a member of Seller; 5.08.02 True and correct copies of all material contracts, agreements and other instruments to which Seller is a party; 5.08.03 True and correct written descriptions of all verbal material contracts and/or agreements to which Seller is party. -8- Except for matters which, in the aggregate, would not have a Material Adverse Effect or are otherwise disclosed in the Agreement, Seller is not, and to the best of Seller's Knowledge, no other party to any such contract, agreement, instrument, lease, or license is now in violation or breach of, or in default with respect to complying with, any material provision thereof, and each such contract, agreement, instrument, lease, or license by which Seller is presently engaged 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, except that (i) the enforcement of certain rights and remedies created thereby is subject to bankruptcy, insolvency, reorganization, and similar laws of general application affecting the rights and remedies of parties, and (ii) the enforceability of any particular provision thereof 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. Each such service, supply, distribution, agency, financing, or other arrangement, contract or understanding is a valid and continuing arrangement, contract or understanding, except for matters which, in the aggregate, will not have a Material Adverse Effect; neither Seller, nor any other party to any such arrangement, contract or understanding has given notice of termination or taken any action inconsistent with the continuance of such arrangement, contract or understanding, except for matters which, in the aggregate, will not have a Material Adverse Effect; and, subject to obtaining the consents described on Schedule 5.03, the execution, delivery, and performance of this Agreement will not prejudice any such arrangement, contract or understanding in any way, except for matters which, in the aggregate, will not have a Material Adverse Effect. 5.09 Compliance With Law: Taxes. Seller has complied with, and is not in violation of any (i) term or provision of its Articles of Organization or Operating Agreement; (ii) term or provision of any applicable judgment, decree, order, statute, injunction, rule, ordinance known to it; (iii) any Health Care Law; or (iv) to the best of Seller's Knowledge, foreign, United States, state or local statutes, laws, rules, or regulations except where such non- compliance or violation will not have a Material Adverse Effect. Seller has timely filed all federal, state, and local tax returns required to be filed and all such returns are complete and correct. Except as described on Schedule 5.06, the Seller has made timely payment of all such taxes when due and payable and has paid all interest, penalties, deficiencies, and assessments, if any, levied or assessed against it. Except as described on Schedule 5.06, Seller has duly withheld, collected, and timely paid to the proper governmental authorities all taxes required to be withheld and collected by it. There are no agreements for extension of the time of assessment of payment of any taxes of Seller, except as otherwise disclosed by Seller. No waiver of any statute of limitations has been executed by the Seller. There are no examinations by the Internal Revenue Service of Seller presently in process of the tax returns of Seller for any year(s) open to such examination. 5.10 Permits and Licenses. Seller 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. No royalties, commissions, or fees are payable by Seller to any person by reason of the ownership or use of any intangible property, except as set forth in the contracts described on Schedule 5.08. There are no material licenses, -9- sub-licenses, or agreements relating to the use by Seller of any intangible property now in effect, except as set forth in the contracts described on Schedule 5.08, and Seller has no knowledge that any intangible property is being infringed by others. No claim that will have a Material Adverse Effect on the business of the Seller is pending or, to the best of Seller's Knowledge, threatened, that the operation of Seller's Business or any method, process, part, or material that Seller employs, conflicts in any material way with, or infringes in any material way upon any rights of the type enumerated above, owned by others. 5.11 Employees. Schedule 5.11 is a list of the names of all employees of Seller, stating the amounts or rates of compensation payable to each, the employee benefits enjoyed by each, and whether or not each respective employee has executed an employment agreement with Seller. 5.12 No Violation of Employee Contracts. Seller is not, and to the best of Seller's Knowledge, no employee of Seller 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 any other common law obligation to, a former employer of such employee relating to the right of any such employee to be employed by Seller because of the nature of the business conducted by Seller or of the use of trade secrets or proprietary information of others. There is no pending nor, to the best of Seller's Knowledge, threatened, any actions, suits, proceedings, or claims with respect to any contract, agreement, covenant, or obligation referred to in the preceding sentence. 5.13 Hazardous Materials. The Seller is not in the business of possession, transportation, or disposal of hazardous materials. If and to the extent that Seller's Business has involved the possession, transportation, or disposal of hazardous materials, to Seller's Knowledge, the Seller 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, Seller with respect to the period prior to the Closing. To the best of Seller's Knowledge, no employee of Seller has been exposed to hazardous materials during the period of employment by Seller such that exposure could cause damage to such employee. 5.14 Interest in Competitors. To Seller's Knowledge, except as disclosed on Schedule 5.14, Daniel D. Brown has no direct or indirect ownership interest in any competitor, supplier, or customer of Seller or in any person from whom or to whom Seller leases any real or personal property, or in any other person with whom Seller is doing business. 5.15 Financial Condition. Seller has delivered to Purchaser true and correct copies of the following: the unaudited balance sheet and income statement of Seller for the fiscal year ended December 31, 1997; and an unaudited balance sheet ("Seller's Last Balance Sheet"), and income statement for the one month ended January 31, 1998 ("Seller's Last Balance Sheet Date"). Each such balance sheet presents fairly in all material respects the financial condition, assets and liabilities of Seller as of its date; -10- and, except for unrecorded revenue, each such statement of income presents fairly in all material respects the results of operations of Seller for the period indicated. The financial statements referred to in this section have been prepared in accordance with the books and records of Seller. 5.16 Changes or Events. Since Seller's Last Balance Sheet Date, except as described on Schedule 5.16, none of the following has occurred: 5.16.01 Any material transaction by Seller not in the ordinary course of business involving amounts in excess of $5,000; 5.16.02 Any material capital expenditure by Seller involving amounts in excess of $5,000; 5.16.03 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 Seller, including relationships with suppliers or customers, that, when considered individually or in the aggregate, are reasonably expected to have a Material Adverse Effect; 5.16.04 The destruction of, damage to, or loss of any asset of Seller (regardless of whether covered by insurance) that, when considered individually or in the aggregate, are reasonably expected to have a Material Adverse Effect; 5.16.05 Any labor disputes that, when considered individually or in the aggregate, are reasonably expected to have a Material Adverse Effect; 5.16.06 There have been no change in accounting methods or practices (including, without limitation, any change in depreciation or amortization policies or rates) by Seller, except for any such changes as were required by law; 5.16.07 Other than in the ordinary course of business and payments to the pharmacist employed by Seller in the amount of $4,000.00, any increase in the salary or other compensation payable or to become payable by Seller to any employee, or the declaration, payment, or commitment or obligation of any kind for the payment by Seller of a bonus or other additional salary or compensation to any such person; 5.16.08 The material amendment or termination of any material contract, agreement, or license to which Seller is a party, except in the ordinary course of business; 5.16.09 Any loan by Seller to any person or entity, or the guaranteeing by Seller of any loan other than loans made in the ordinary course of business; -11- 5.16.10 Any mortgage, pledge, or other encumbrance of any asset of Seller except in the ordinary course of business; 5.16.11 The waiver or release of any right or claim of Seller, except in the ordinary course of business; 5.16.12 Reserved; 5.16.13 Any loss or, to the knowledge of Seller, any threatened loss of any permit, license, qualification, special charter or certificate of authority held or enjoyed by Seller which loss has had or upon occurrence is reasonably expected to have a Material Adverse Effect; 5.16.14 To Seller's Knowledge, any statute, regulation, order, ordinance or other law the adoption or rescission of which is reasonably expected to have a Material Adverse Effect; 5.16.15 Except such matters undertaken in consultation with Purchaser, any failure on the part of Seller 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; 5.16.16 Any action taken or omitted to be taken by Seller which would cause (after lapse of time, notice or both) the breach, default, or acceleration of any right, contract, commitment, or other obligation of Seller; or 5.16.17 Any agreement by Seller to do any of the things described in the preceding clauses in this section. 5.17 No Defaults. Subject to obtaining the consents described on Schedule 5.03, 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 to which Seller is a party that will not be waived or released at the Closing; (ii) a default or an event that will not be waived or released at the Closing, and that, with notice or lapse of time or both, would be a default, breach, or violation of the Articles of Organization or Operating Agreement of Seller or of any lease, license, promissory note, conditional sales contract, commitment, indenture, mortgage, deed of trust, or other agreement, instrument, or arrangement to which Seller is a party or by which Seller or its assets is 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 Seller; (iv) the creation or imposition of any lien, charge, or encumbrance on any of the 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 -12- 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 Seller is subject. 5.18 Liabilities. No liabilities of Seller will be assumed by or transferred to Purchaser pursuant to the transactions contemplated by this Agreement, except as provided in Section 1.08, those listed in Schedule 1.08, or as provided in Section 4, nor will any of the Assets to be acquired by Purchaser pursuant to this Agreement be subject to any pre-Closing liabilities, nor will Purchaser otherwise be liable for any other liabilities of Seller. 5.19 No Prohibited Payments. Neither Seller nor any employee or agent of Seller has made or authorized any payment of funds of Seller or on behalf of Seller prohibited by law and no funds of Seller have been set aside to be used for any payment prohibited by law. 5.20 Completeness of Disclosure. No representation or warranty by Seller in this Agreement including the Schedules, Exhibits, and certificates prepared by Seller incorporated herein, contains any untrue statement of a material fact or omits any material fact necessary in order to make the statements contained herein not misleading. 6. Representations and Warranties of Purchaser and Guarantor. Purchaser, and with respect to Sections 6.05, 6.06 and 6.07, Guarantor, hereby represents and warrants to Seller, as of the date of this Agreement, that the statements contained in this Section 6 are correct and complete: 6.01 Organization. Purchaser is a corporation duly organized, validly existing, and in good standing under the laws of the State of Louisiana and is authorized to do business in every other 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. Purchaser is a wholly owned subsidiary of Guarantor. 6.02 Due Authorization: Third Party Consents. Purchaser has the right, power, legal capacity, and authority to enter into and perform its obligations under this Agreement and, except as otherwise set forth herein, no approval or consent of any person other than the Purchaser is necessary in connection with the execution, delivery, or performance of this Agreement. The execution, delivery, and performance of this Agreement by the Purchaser has been duly authorized by its board of directors and no other corporate proceedings on the part of Purchaser are necessary to authorize this Agreement or the consummation of the transactions contemplated hereby. This Agreement constitutes a legal and binding obligation of the Purchaser, and is valid and enforceable against the Purchaser 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, and (ii) the enforceability of any -13- 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. 6.03 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 Purchaser that will not be waived or released at the Closing; (ii) a default or an event that will not be waived or released at the 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 Purchaser or of any lease, license, promissory note, conditional sales contract, commitment, indenture, mortgage, deed of trust, or other agreement, instrument, or arrangement to which Purchaser is a party or by which Purchaser or the property of Purchaser 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 Purchaser is subject. 6.04 Completeness of Disclosure. No representation or warranty and no Schedule, Exhibit, or certificate incorporated herein and prepared by Purchaser pursuant hereto and no statement made or other document prepared by Purchaser and furnished to Seller by Purchaser 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. 6.05 Organization of Guarantor. Guarantor is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and is authorized to do 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. 6.06 Due Authorization: Third Party Consents. Guarantor has the right, power, legal capacity, and authority to enter into and perform its obligations under this Agreement and, except as otherwise set forth herein, no approval or consent of any person other than the Guarantor is necessary in connection with the execution, delivery, or performance of this Agreement. The execution, delivery, and performance of this Agreement by the Guarantor has been duly authorized by its board of directors and no other corporate proceedings on the part of Guarantor are necessary to authorize this Agreement or the consummation of the transactions contemplated hereby. This Agreement constitutes a legal and binding obligation of the Guarantor, and is valid and enforceable against the Guarantor 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, and (ii) the enforceability of any particular provision of this Agreement under principles of equity or the availability -14- of equitable remedies, such as specific performance, injunctive relief, waiver or other equitable remedies, is subject to the discretion of courts of competent jurisdiction. 6.07 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 Guarantor that will not be waived or released at the Closing; (ii) a default or an event that will not be waived or released at the 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 Guarantor or of any lease, license, promissory note, conditional sales contract, commitment, indenture, mortgage, deed of trust, or other agreement, instrument, or arrangement to which Guarantor is a party or by which Guarantor or the property of Guarantor 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 Guarantor is subject. 7. Conditions to Obligations of Purchaser. The obligations of Purchaser under this Agreement are subject, at the option of Purchaser, to the satisfaction of the following conditions: 7.01 Accuracy of Representations and Compliance With Conditions. All representations and warranties of Seller 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 Seller, other than such representations and warranties that are made as to another date. As of the Closing, Seller shall have performed and complied with all covenants and agreements and satisfied all conditions required to be performed and complied with by Seller at or before such time by this Agreement. 7.02 Closing Documents. In connection with the Closing, Seller shall deliver to Purchaser the following items: 7.02.01 Bills of sale, endorsements, assignments, drafts, checks, and other instruments of transfer in form and substance consistent with this Agreement and mutually satisfactory to Purchaser and Seller in order to transfer all right, title and interest of Seller in the Assets to Purchaser; 7.02.02 To the extent applicable, original evidences of title or ownership of the Assets, including drafts, warehouse receipts and licenses; 7.02.03 Evidence (including, if applicable, the delivery of duly executed UCC-3 Termination Statements) reasonably satisfactory to Purchaser and its counsel, of the satisfaction and discharge by Seller of all existing liens, claims, and encumbrances upon or affecting the Assets; and 7.02.04 Such other instruments and documents in form and content consistent with the terms of this Agreement and mutually satisfactory to Seller and -15- Purchaser, as may be necessary or appropriate to (i) effectively transfer and assign to and vest in Purchaser good and marketable title to the Assets and/or to consummate more effectively the transactions contemplated hereby and (ii) in order to enable Purchaser to determine whether the conditions to Seller's obligations under this Agreement have been met and otherwise to carry out the provisions of this Agreement. 7.03 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 Purchaser, and Seller shall have furnished such counsel for Purchaser such documents as such counsel may have reasonably requested for the purpose of enabling them to pass upon such matters. 7.04 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. 7.05 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 Purchaser: 7.05.01 Makes any of the transactions contemplated by this Agreement illegal; 7.05.02 Results in a delay which affects the ability of Purchaser to consummate any of the transactions contemplated by this Agreement; 7.05.03 Requires the divestiture by Purchaser of a material portion of the business of either Purchaser taken as a whole, or of Seller taken as a whole; and 7.05.04 Otherwise prohibits, restricts, or delays consummation of any of the transactions contemplated by this Agreement or impairs the contemplated benefits to Purchaser of the transactions contemplated by this Agreement. 7.06 Contractual Consents Needed. Except for the consents described in Schedule 5.03, 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 either of them is a party, or to which any of their respective businesses, properties, or assets are subject, except where the failure to obtain the same would not have a Material Adverse Effect on such party. -16- 7.07 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. 7.08 Member Approval. The members of Seller shall have approved the transactions contemplated herein. 7.09 Legal Opinion. Seller shall have obtained a legal opinion from the law firm of Kantrow, Spaht, Weaver & Blitzer in the form shown in Schedule 7.09. 7.10 Public Statements. Before Seller shall execute or administer a press release or public announcement related to consummation of this transaction, Seller shall cooperate with Purchaser, shall furnish drafts of all documents or proposed oral statements to Purchaser for comment, and shall not release any such information without the written consent of Purchaser. Nothing contained herein shall prevent Seller from furnishing any information to any governmental authority if required to do so by law. 8. Conditions to Obligations of Seller. The obligations of Seller under this Agreement are subject, at the option of Seller, to the satisfaction of the following conditions: 8.01 Accuracy of Representations and Compliance With Conditions. All representations and warranties of Purchaser contained in this Agreement shall be accurate when and shall be accurate as of the Closing as though such representations and warranties were then made by Purchaser, other than such representations and warranties as are made as to another date. As of the Closing, Purchaser 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. 8.02 Other Closing Documents. Purchaser shall have delivered to Seller, at or prior to the Closing, such other documents as Seller may reasonably request in order to enable Seller to determine whether the conditions to its obligations under this Agreement have been met and otherwise to carry out the provisions of this Agreement. 8.03 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 Seller and Purchaser 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. -17- 8.04 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. 8.05 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 Seller: 8.05.01 Makes any of the transactions contemplated by this Agreement illegal; 8.05.02 Results in a delay which affects the ability of Seller to consummate any of the transactions contemplated by this Agreement; 8.05.03 Otherwise prohibits, restricts, or delays consummation of any of the transactions contemplated by this Agreement or impairs the contemplated benefits to Seller or the Stockholders of the transactions contemplated by this Agreement. 8.06 Contractual Consents Needed. The parties to this Agreement shall have obtained at or prior to the Closing the consents described on Schedule 5.01 and all other 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 either of them 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. 8.07 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. 8.08 Board Approval. The Boards of Directors of Purchaser and Guarantor shall have approved the transactions contemplated herein and certified copies of authroizing resolutions shall have been delivered to Seller. 9. Covenants and Agreements of Purchaser. Purchaser covenants and agrees as follows: -18- 9.01 Payment of Sales Taxes. Any sales tax incurred as a result of this transaction will be paid by Purchaser to Seller at the Closing for remittance to the appropriate taxing authority. 9.02 Post Closing Covenants. On and after the Closing, Purchaser agrees to maintain in confidence and not to disclose, except in accordance with and as permitted by applicable laws and regulations, the records of the patients to whom Seller provided services. 9.03 Employment Matters. On or prior to the Closing, Purchaser shall offer employment to all of Seller's employees, other than Kim Arceneaux, on such terms and providing such health and other benefits as Purchaser has previously advised Seller. 9.04 Collection of Receivables. Purchaser shall use it best good faith efforts to collect all outstanding receivables of Seller, as detailed in Schedule 1.01, in a timely and efficient manner. 9.05 Release of Daniel D. Brown. Subsequent to closing, Purchaser shall ensure that Daniel D. Brown is released from any personal contract or agreement guarantees which are active with respect to Seller's business. 9.06 Information Accessibility. Upon prior reasonable notice and at reasonable times, Seller shall be allowed access to those business records transferred herein. 10. Covenants and Agreements of Seller. Seller covenants and agrees as follows: 10.01 Payment of Taxes. Except City sales taxes in the amount shown on Seller's Last Balance Sheet, all accrued but unpaid federal, state, and local income and other taxes of Seller for the period ended as of the Closing and all prior periods will be paid by Seller. 10.02 Post-Closing Consents. Seller agrees to use its best good faith effort to secure and/or assist Purchaser in securing post-Closing third party consents material to the ongoing operation of Seller's Business. 11. Miscellaneous. 11.01 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 Purchaser agrees to pay for the preparation of the necessary transfer documents to accomplish the transactions herein. -19- 11.02 Further Actions. (a) 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. (b) Purchaser and Seller shall reconcile Seller's depositary accounts as of the effective date of the Closing, and for the period thereafter through the date of the Closing, and upon completion thereof, Seller shall pay to Purchaser the balance of said accounts. 11.03 Reserved. 11.04 Survival. The representations, and warranties contained in or made pursuant to this Agreement by the Parties hereto shall survive for a period of 24 months from the date of the Closing, irrespective of any investigation made by or on behalf of any party (the "Survival Date"). No claim for indemnification or otherwise may be brought by a party hereto against another party hereto unless asserted by written notice as provided herein by the party claiming indemnification or otherwise on or before the Survival Date. 11.05 Entire Agreement; 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 between them concerning such subject matter, and may be modified only by a written instrument duly executed by the parties. 11.06 Notices. Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by courier service, by telecopy (confirmed by telephone within twenty-four (24) hours following receipt thereof), or by registered or certified mail, (postage prepaid, return receipt requested) to the respective parties at the following address (or at such other address for a party as shall be specified in a notice given in accordance with this Section 11.06: (a) If to Seller: Precision Health Systems, L.L.C. 10474 Old Hammond Highway, Suite 101 Baton Rouge, Louisiana 70816 Attention: Danny D. Brown Telecopy: (50) 927-7205 Telephone: (504) 927-7688 -20- with copy to: Kantrow, Spaht, Weaver & Blitzer (A Professional Law Corporation) Suite 300, City Plaza 445 North Boulevard P.O. Box 2997 Baton Rouge, Louisiana 70821-2997 Attention: Lee C. Kantrow Telecopy: (504) 343-0637 Telephone: (504) 383-4703 (b) If to Purchaser: Amedisys Alternate-Site Infusion Therapy Services, Inc. 3029 S. Sherwood Forest Blvd. Suite 300 Baton Rouge, Louisiana 70816 Attention: Stephen Taglianetti Telecopy: (504) 292-8163 Telephone: (504) 292-2031 11.07 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. 11.08 Binding Effect. The provisions of this Agreement shall be binding upon and inure to the benefit of each party's respective successors and assigns; provided, however, any such assignment by Purchaser shall not release Purchaser of any of its obligations under this Agreement. 11.09 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. 11.10 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. -21- 11.11 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. 11.12 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. 11.13 Indemnification. Subject to the limitations set forth in Sections 11.14 and 11.15 hereof, Seller shall indemnify, defend and hold harmless Purchaser and each of its officers, directors, agents and affiliates from and against any damage, loss, claim, liability, cost or expense incurred by Purchaser, including fees and disbursements of counsel, accountants, experts and other consultants reasonably and necessarily incurred by Purchaser, net of any tax benefit to which Purchaser is entitled and net of any and all amounts to which Purchaser is entitled to from insurance, guarantees, indemnities, and contractual and legal rights by, from or against other persons, firms or entities (collectively, "Damages"), resulting from, arising out of, based upon or occasioned by the inaccuracy of any warranty or any representation made by Seller in this Agreement, or any breach of any covenant or agreement of Seller contained herein. Purchaser shall indemnify, defend and hold harmless Seller and each of its members, officers, directors, agents and affiliates from and against any Damages, resulting from, arising out of, based upon or occasioned by the inaccuracy of any warranty or representation made by the Purchaser herein, or any breach of any covenant or agreement of Purchaser contained herein. 11.14 Limitations on Indemnification and Other Claims. The maximum amount of Damages for which Seller shall be responsible under this Agreement, whether pursuant to a claim for indemnification or otherwise, shall not exceed the unpaid principal balance of the Promissory Note, such maximum amount to be reduced by principal payments made by the Purchaser or the Guarantor on the Promissory Note and by amounts offset against the unpaid principal balance of the Promissory Note in the manner permitted by this Agreement. Such right of offset shall be the exclusive remedy of the Purchaser, and all other persons entitled to indemnity against the Seller pursuant to Section 11.13 above, for Damages under this Agreement and otherwise. It is understood and agreed that Seller shall have no liability to return any part of the cash portion of the Purchase Price or any payments of principal or interest on the Promissory Note received by it or otherwise pay any amount of Damages (except pursuant to the right of offset as permitted by this Agreement). The right of offset permitted in this Agreement shall be exercised first against accrued but unpaid interest and then against the unpaid principal installments of the Promissory Note in the inverse order of their maturity. 11.15 Right of Off-Set. If Purchaser reasonably believes it is entitled to indemnification under this Agreement, it shall be entitled to the right of offset against amounts owing by it under the Promissory Note in accordance with the following terms and -22- provisions: Purchaser shall promptly notify Seller of the matter for which it seeks indemnification and shall specify in reasonable detail the facts and circumstances thereof and a good faith estimate of the Damages occasioned thereby. Seller shall have ten (10) days from the receipt of Purchaser's notice in which to cure the circumstance giving rise to the Damages and provide evidence of such cure to the Purchaser. If the circumstance is not cured within the ten day period, Purchaser shall have the immediate right to deposit the monthly payment due and payable pursuant to the Promissory Note into an escrow account at a bank mutually acceptable to the parties to be held and invested pursuant to a mutually agreeable escrow agreement. Monthly payments into said escrow account shall continue until the amount of the Damages specified in Purchaser's notice is equal to the balance of said escrow account, at which time payments to Seller under the Promissory Note shall resume as originally contemplated. In the event the Purchaser's claim for indemnification is disputed by Seller, such dispute shall be resolved by the provisions of Section 9.15. If it is ultimately determined that Purchaser's claim for indemnification was improper, the escrowed funds and earnings thereon shall be distributed to Seller. If it is ultimately determined that Purchaser's claim for indemnification was proper, the escrowed funds and earnings thereon shall be distributed to Purchaser. 11.16 Arbitration Procedures. Any and every dispute of any nature whatsoever that may arise between the parties hereto, whether sounding in contract, statute, tort, fraud, misrepresentation, discrimination or any other legal theory, or breach of this Agreement, or any schedule, certificate or other document delivered by any party hereto or thereto, or those arising under any federal, state or local law, regulation or ordinance, shall be subject to the limitations of Section 11.14 and shall be determined by binding arbitration in accordance with the then-current commercial arbitration rules of the American Arbitration Association ("AAA"), to the extent such rules do no conflict with the provision of this Section 11. The arbitration shall be conducted by a single neutral arbitrator. The parties shall endeavor to select a neutral arbitrator by mutual agreement. If such agreement cannot be reached within thirty (30) calendar days after a dispute has arisen which is to be decided by arbitration, any party or the parties jointly shall request AAA to submit to each party an identical panel of fifteen (15) persons. Alternate strikes shall be made to the panel, commencing with the party bringing the claim, until the name of one (1) person remains. The parties may, however, by mutual agreement, request AAA to submit additional panels of possible arbitrators. The arbitrator shall have the power to determine all matters incident to the conduct of the arbitration, including without limitation all procedural and evidentiary matters and the scheduling of any hearing. The award made by the arbitrator shall be governed by the United States Arbitration Act, 9 U.S.C. (S)(S) 1-16, and judgment upon the award rendered by the arbitrator(s) may be entered by any court having jurisdiction thereof. Unless otherwise agreed by the parties, the arbitration shall be held in Baton Rouge, Louisiana. 11.17 Provision applicable to claims for injunctive relief. This agreement to arbitrate shall specifically include, without limitation, an application for injunctive relief under Section 11. In the event injunctive relief is sought, the parties agree that Commercial -23- Arbitration Rule 13 (as amended November 1, 1993, or its subsequent equivalent) shall not apply, and instead, a single arbitrator shall be appointed within one business day after the filing of the demand or submission. Such arbitrator shall then preside over the application for injunctive relief and all other disputes then arising under this Agreement. The arbitrator appointed under this paragraph 10(b) shall be appointed by JAMS Endispute, Baton Rouge, Louisiana ("JAMS"), in the following manner: the case administrator for the AAA shall contact JAMS immediately on receipt of the demand for arbitration containing the claim for injunctive relief. The case administrator shall provider JAMS with the names of the parties to, and a copy of, this agreement. From its then current list of qualified, licensed, but non-practicing attorneys who are former, sitting trial judges, the Baton Rouge national account manager (or equivalent position) of JAMS shall appoint one such individual as the arbitrator to preside over the application for injunctive relief and all other disputes between the parties. Except in the unlikely event of an actual conflict of interest under the Rules of Professional Conduct or Code of Judicial Conduct, neither party shall have any right to strike or object to the appointment of any person so selected. The parties expressly agree and desire that the selection of an arbitrator hereunder shall be effected within one business day of any application for injunctive relief and agree that such application shall then be considered at least as expeditiously as would be the case in the District Courts for East Baton Rouge Parish. The parties further agree that any injunctive relief granted by the arbitrator shall be separately enforceable in the District Court for East Baton Rouge Parish, to the same extent as would be the case for a final award of the arbitrator. -24- IN WITNESS WHEREOF, the parties have duly executed this Agreement effective as of the date written in the preamble of this Agreement. AMEDISYS ALTERNATE-SITE INFUSION THERAPY SERVICES, INC. By: ________________________________________ Stephen Taglianetti, President AMEDISYS, INC. By:_________________________________________ Print Name:__________________________________ Title:_______________________________________ PRECISION HEALTH SYSTEMS, L.L.C. By: ________________________________________ Daniel D. Brown, Member -25- SCHEDULES OF SELLER TO ASSET PURCHASE AGREEMENT (THE "ASSET PURCHASE AGREEMENT") BY AND BETWEEN AMEDISYS ALTERNATE-SITE INFUSION THERAPY SERVICES, INC. (THE "PURCHASER") AND PRECISION HEALTH SYSTEMS, L.L.C (THE "SELLER") DATED AS OF FEBRUARY ____, 1998 NOTE: Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to them in the Asset Purchase Agreement. Matters disclosed under any Schedule hereof shall be deemed incorporated into matters disclosed under any other Schedule hereof to the extent applicable. -26- EX-2.8 6 EXHIBIT 2.8 EXHIBIT 2.8 THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND IS TRANSFERRABLE ONLY UPON COMPLIANCE WITH OR AN EXEMPTION FROM ALL APPLICABLE SECURITIES AND OTHER LAWS. PROMISSORY NOTE $250,000 Baton Rouge, Louisiana February 27, 1998 FOR VALUE RECEIVED, the undersigned, AMEDISYS ALTERNATE-SITE INFUSION THERAPY SERVICES, INC. a Louisiana corporation ("Maker"), hereby promises to pay to the order of PRECISION HEALTH SYSTEMS, LLC ("Payee"), at Baton Rouge, Louisiana, the principal sum of Two Hundred Fifty Thousand and no/100 Dollars ($250,000), in lawful money of the United States of America, which shall be legal tender, in payment of all debts and dues, public and private, at the time of payment, bearing interest and payable as provided herein. Interest on the unpaid balance of this Note shall accrue from the date hereof at a rate per annum equal to 9.5% from the date hereof to February 27, 1999, and thereafter at the prime interest rate designated in the Wall Street Journal on the anniversary date hereof, plus one percentage point; provided, however, that such interest shall not exceed the Maximum Rate as hereinafter defined. All past-due principal and interest shall bear interest at the maximum rate permitted by applicable law. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The principal amount of and accrued interest on this Note shall be due and payable in twenty-four (24) equal monthly installments, the first installment of which is due on March 27, 1998, and a like amount on the same day of each month thereafter. The monthly installments through February 27, 1999, shall be in the amount of $11,478.62 each, with the amount thereafter to be adopted on the basis of the changes in the interest rate as provided above. This Note may be prepaid in whole or in part, at any time and from time to time, without premium or penalty. If any payment of principal of or interest on this Note shall become due on a Saturday, Sunday or any other day on which national banks are not open for business, such payment shall be made on the next succeeding business day. An event of default means default by the Maker (i) in the payment of any installment of the principal of, and interest on, the Note when due, whatever the reason for such event of default and whether it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any Court or any order, rule or regulation of any administrative governmental body or (ii) in the performance of its obligations under the Asset Purchase Agreement dated as of February 1, 1998, between Payee and Maker ("The Asset Purchase Agreement")("Event of Default"). Page 1 of 3 If an Event of Default shall occur and be continuing, the Payee of subsequent holders may, at its option, declare the unpaid principal amount of this Note immediately due and payable. The indebtedness of the Maker hereunder is solidarily guaranteed by Amedisys, Inc. pursuant to a Guaranty Agreement having the same date hereof. Notwithstanding anything to the contrary in this Note or any other agreement entered into in connection herewith, whether now existing or hereafter arising and whether written or oral, it is agreed that the aggregate of all interest and any other charges constituting interest, or adjudicated as constituting interest, and contracted for, chargeable or receivable under this Note or otherwise in connection with this loan transaction, shall under no circumstances exceed the Maximum Rate. In the event the maturity of this Note is accelerated by reason of an Event of Default under this Note, other agreement entered into in connection herewith or therewith, by voluntary prepayment by Maker or otherwise, then earned interest may never include more than the Maximum Rate. If from any circumstance any holder of this Note shall ever receive interest or any other charges constituting interest, or adjudicated as constituting interest, the amount, if any, which would exceed the Maximum Rate shall be applied to the reduction of the principal amount owing on this Note, and not to the payment of interest; or if such excessive interest exceeds the unpaid balance of principal hereof, the amount of such excessive interest that exceeds the unpaid balance of principal hereof shall be refunded to Maker. In determining whether or not the interest paid or payable exceeds the Maximum Rate, to the extent permitted by applicable law (i) any nonprincipal payment shall be characterized as an expense, fee or premium rather than as interest; and (ii) all interest at any time contracted for, charged, received or preserved in connection herewith shall be amortized, prorated, allocated and spread in equal parts during the period of the full stated term of this Note. The term "Maximum Rate" shall mean the maximum rate of interest allowed by applicable federal or state law. Except as provided herein, Maker and any sureties, guarantors and endorsers of this Note jointly and severally waive demand, presentment, notice of nonpayment or dishonor, notice of intent to accelerate, notice of acceleration, diligence in collecting, grace, notice and protest, and consent to all extensions without notice for any period or periods of time and partial payments, before or after maturity, without prejudice to the holder. The holder shall similarly have the right to deal in any way, at any time, with one or more of the foregoing parties without notice to any other party, and to grant any such party any extensions of time for payment of any of said indebtedness, or to grant any other indulgences or forbearance whatsoever, without notice to any other party and without in any way affecting the personal liability of any party hereunder. If any efforts are made to collect or enforce this Note or any installment due hereunder, the undersigned agrees to pay all collection costs and fees, including reasonable attorney's fees. This Note shall be construed and enforced under and in accordance with the laws of the State of Louisiana. Page 2 of 3 This Note is subject to off-set as provided in the Asset Purchase Agreement. Timely payment in escrow as permitted by, and in accordance with, the terms of the Asset Purchase Agreement shall constitute payments under this Note. IN WITNESS WHEREOF, Maker has duly executed this Note as of the day and year first above written. AMEDISYS ALTERNATE-SITE INFUSION THERAPY SERVICES, INC. By ------------------------------------------ ------------------------------------------ Page 3 of 3 EX-2.9 7 EXHIBIT 2.9 EXHIBIT 2.9 STOCK PURCHASE AGREEMENT BY AND AMONG AMEDISYS, ALTERNATE-SITE INFUSION THERAPY SERVICES, INC., A LOUISIANA CORPORATION, AS PURCHASER, AND INFUSIONCARE SOLUTIONS, INC. A LOUISIANA CORPORATION, AS COMPANY, AND DANIEL D. BROWN, AS SELLER DATED AS OF FEBRUARY 1, 1998 STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT (this "Agreement') is made effective as of February 1, 1998, by and among AMEDISYS ALTERNATE-SITE INFUSION THERAPY SERVICES, INC., a Louisiana corporation ("AMED" or "Purchaser"), with its principal place of business at 3029 South Sherwood Forest Blvd., Suite 300, Baton Rouge, Louisiana 70816, INFUSIONCARE SOLUTIONS, INC., a Louisiana corporation (the "Company"), with its principal place of business at 10473 Old Hammond Highway, Baton Rouge, Louisiana 70816, and DANIEL D. BROWN (the "Stockholder" or the "Seller"), with his principal place of business at 10473 Old Hammond Highway, Baton Rouge, Louisiana 70816. AMED, the Company and the Stockholder are sometimes referred to collectively as the "Parties" and singly, a "Party". RECITALS WHEREAS, AMED desires to purchase 100% of the issued and outstanding capital stock of the Company ("Company Stock") from the Stockholder as hereinafter provided; and WHEREAS, the Stockholder desires to sell the Company Stock to AMED as hereinafter provided. WHEREAS the parties expect that this Agreement will further advance their respective business objectives, including without limitation, integration of the business operations of the Company with the business operations of Purchaser in order for Purchaser to more effectively compete in the marketplace. NOW, THEREFORE, in consideration of the premises and the mutual promises made herein, and in accordance with 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 health care related laws, regulations and ordinances including but not limited to Medicaid, Medicare and regulations of the Health Care Finance Administration. 1.04 Knowledge: With respect to a Party, the actual knowledge of such Party, its officers and directors, after reasonable inquiry. 1.05 Material Adverse Effect: Any change in the financial condition of the Company or the operation of its business that would materially affect the Company's business adversely, including, but not limited to, material adverse changes to its business condition or financial condition. 1.06 Operating Licenses: In the case of the Company or AMED, as the case may be, the licenses, permits and registrations issued by the appropriate state and federal agencies which are necessary to the operation of its business. Such Operating Licenses are more fully described in Schedule 3.11 hereto for the Company. 1.07 Prime: The prime interest rate as designated daily by The Wall Street Journal. 1.08 Permitted Encumbrances: As to each of the following, for which no enforcement, collection, execution, levy or foreclosure proceeding shall have been commenced: (a) liens for taxes, assessments and governmental charges or levies not yet due and payable or which are being contested in good faith which are not in excess of $5,000.00 in the aggregate; (b) encumbrances imposed by law, such as materialmen's, mechanics', carriers', workmen's and repairmen's liens and other similar liens arising in the ordinary course of business securing obligations that are being contested in good faith or are not overdue for a period of more than 30 days provided that they are not in excess of $5,000.00 in the case of a single property $10,000.00 in the aggregate at any time or which are being contested in good faith; (c) pledges or deposits to secure obligations under workers' compensation laws or similar legislation or to secure public or statutory obligations; (d) minor survey exceptions, reciprocal easement agreements and other customary encumbrances on title to real property that (i) were not incurred in connection with any indebtedness, (ii) do not render title to the property encumbered thereby unmarketable and (iii) do not, individually or in the aggregate, materially adversely affect the value or use of such property for its current purposes. 2. Terms of Stock Purchase. 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 Stockholder 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 Stockholder shall deliver at Closing a Stock Power in the form attached hereto as Schedule 2.01 and any other documents required by this Agreement. 2.02 Purchase Price. AMED shall deliver and the Stockholder shall be entitled to receive at the Closing from AMED in consideration of the sale and transfer of the Company Stock, the sum of FIVE HUNDRED THOUSAND AND NO/100 ($500,000.00) DOLLARS (the "Purchase Price") the adequacy of which is hereby acknowledged by the Stockholder, payable as follows: (a) THREE HUNDRED SEVENTY FIVE THOUSAND AND NO/100 ($375,000.00) DOLLARS, cash in hand; and (b) for the balance of the Purchase Price, AMED will execute and deliver a promissory note (the "Promissory Note") in the principal amount of ONE HUNDRED TWENTY FIVE THOUSAND AND NO/100 ($125,000.00) DOLLARS, payable to the order of the Stockholder in twenty-four -2- equal monthly payments of principal plus interest, bearing interest from February 27, 1998 until paid on the unpaid principal balance at the rate of Prime plus one (1%) percentage point. The Promissory Note shall be solidarily guaranteed by Amedisys, Inc. (the "Guarantor"), shall provide for acceleration of the entire principal balance in the event of default by Purchaser in the payment of any installment thereunder or under this Agreement and shall provide for the payment of the reasonable attorney fees incurred by Seller in the collection thereof. 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. 2.03 Reserved. 2.04. The Closing. The Closing of the transactions contemplated by this Agreement shall be on February 27, 1998, to be effective February 1, 1998 at the AMED offices, 3029 S. Sherwood Forest Blvd., Suite 300, Baton Rouge, Louisiana, to be effective on the 1/st/ day of February, 1998. 3. Representations and Warranties of the Company and the Stockholder. The Company and the Stockholder hereby represent and warrant to AMED, as of the date of this Agreement (unless another date is specified in this Section 3) that the statements contained in this Section 3 are correct and complete: 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 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 a Louisiana 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 Articles of Incorporation, Bylaws or other organizational documents. Except for the consents required but not obtained identified in Schedule 3.03, 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, 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 its 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 Stockholder owns 5,000 shares of the Company Common 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 Stockholder. The shares of Company Stock held by the Stockholder 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 -3- 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 and Stockholder have the right, power, legal capacity, and authority to enter into and perform their respective 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 the Seller, and is valid and enforceable against the Company and the Seller 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 9.11 of this Agreement. 3.04. Litigation. Except as described in Schedule 3.04, there is not any suit, action, arbitration, or legal, administrative, or other proceeding or governmental investigation pending or, to the best of Company's or Stockholder's Knowledge, threatened (in the form of threats made to representatives of the Company or the Stockholder), with respect to the Company or the Stockholder (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 Stockholder might reasonably be undertaken or brought. The Company and the Stockholder 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 a party to 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, against the Company or Stockholder, with respect to any Health Care Law. In addition, to the Company's and the Stockholder's Knowledge, the Company has neither received nor been party to any written -4- 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 have 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 Stockholder, and the three highest paid employees of the Company. Since December 31, 1997, the Company has not changed the rate of compensation of the Stockholder or any of its employees, agents, dealers or distributors, except as disclosed in Schedule 3.05. 3.06. No Violation of Employee Contracts. The Company is not, and to the best of Company's and Stockholder's Knowledge, 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 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 Stockholder, 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, will have a Material Adverse Effect. All such policies and bonds are (i) in full force and effect, (ii) with insurance companies believed by the Company and the Stockholder 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 Stockholder 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. -5- 3.08. Contracts, Agreements and Instruments. Schedule 3.08 contains a list of the following, copies of which have been heretofore furnished by Seller to Purchaser, which acknowledges receipt thereof: 3.08.01. The Articles 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, and other agreements to which Company is a party; 3.08.03. True and correct written descriptions of all verbal material contracts and/or agreements to which Company or Seller is a party. Except for matters which, in the aggregate, would not have a Material Adverse Effect or are otherwise disclosed in the Agreement, the Company is not, and to the best of the Company's and the Stockholder's Knowledge, no other party to any such contract, agreement, instrument, lease, or license is now in violation or breach of, or in default with respect to complying with, any material provision thereof, and each such contract, agreement, instrument, lease, or license by which the Company is presently engaged 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, except that (i) the enforcement of certain rights and remedies created thereby is subject to bankruptcy, insolvency, reorganization, and similar laws of general application affecting the rights and remedies of parties, and (ii) the enforceability of any particular provision thereof 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. Each such service, supply, distribution, agency, financing, or other arrangement, contract or understanding is a valid and continuing arrangement, contract or understanding, except for matters which, in the aggregate, will not have a Material Adverse Effect; neither the Stockholder, nor any other party to any such arrangement, contract or understanding has given notice of termination or taken any action inconsistent with the continuance of such arrangement, contract or understanding, except for matters which, in the aggregate, will not have a Material Adverse Effect; and, subject to obtaining the consents described on Schedule 3.03, the execution, delivery, and performance of this Agreement will not prejudice any such arrangement, contract or understanding in any way, except for matters which, in the aggregate, will not have a Material Adverse Effect. 3.09. Compliance With Laws. The Company has complied with, and is not in violation of any (i) term or provision of its Articles of Incorporation or Bylaws; or (ii) to the Company's and the Stockholder's Knowledge term or provision of any applicable judgment, decree, order, statute, injunction, rule, ordinance; (iii) to the Company's and the Stockholder's Knowledge any Health Care Law; or (iv) or the Company's and the Stockholder's Knowledge, foreign, United States, state or local statutes, laws, rules, or regulations, in each case, except as described on the Schedules hereto or where such non-compliance or violation will not have a Material Adverse Effect. -6- 3.10. Financial Condition. The Company has delivered to AMED true and correct copies of the following: the unaudited balance sheet of the Company ("the Company's Last Balance Sheet") dated as of January 31, 1998 ("the Company's Last Balance Sheet Date"), and an unaudited balance sheet and income statement of the Company for the twelve month period ended December 31, 1997, 1996 and 1995. Each such balance sheet presents fairly in all material respects the financial condition, assets and liabilities of the Company as of its date; and each such statement of income presents fairly in all material respects the results of operations of the Company for the period indicated. The financial statements referred to in this Section have been prepared in accordance with the books and records of the Company. 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 and, except as disclosed in this Agreement and the Schedules hereto, does not use any of its assets by the consent of any other person and is not required to and does not make 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 of its intangible property now in effect, and the Company and the Stockholder 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 threatened alleging 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 owned by it and used in its business (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's Last Balance Sheet) other than Permitted Encumbrances. 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's Last Balance Sheet. All properties and assets owned, leased, or licensed by the Company are in good and usable condition (reasonable wear and tear excepted); 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 -7- of the Company as presently conducted; 3.12.03. To the Knowledge of the Company or the Stockholder, no real property owned, leased or licensed by the Company lies in an area which is, 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 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; and 3.12.04. All accounts and notes receivable reflected on the Company's Last Balance Sheet, and arising since the Last Balance Sheet Date, arise from services or products provided by the Company and have been collected, or are valid, subject to the Company's reserve therefor as reflected on the Company's Last Balance Sheet and adjustments consistent with the Company's past practices. 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 Stockholder's Knowledge the Company has complied with any and all applicable laws, ordinances, rules, and regulations with respect to the period prior to the Closing. To the best of Company's and Stockholder's Knowledge, no employee of the Company has been exposed to hazardous materials during the period of employment by Company 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, the Seller has no direct or indirect ownership 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, for the period prior to the date hereof, including, without limitation, liabilities for federal, state, local, or foreign taxes and liabilities to customers or suppliers, which will 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 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. -8- 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 owed by the Company, whether or not due and payable prior to or after such date 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 is not delinquent with respect to such extensions; has paid (or has 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 on or prior to the date hereof and has 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. Other than the assignment by the Company of its Agreement for Consulting Services dated as of February 1, 1997, with 164083 Canada, Inc., the Purchaser hereby acknowledging that said agreement for consulting services has been assigned by the Company and that the Company has no intent therein, 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, are reasonably 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, are reasonably expected to have a Material Adverse Effect; 3.16.05. Any labor disputes that, when considered individually or in the aggregate, are reasonably expected to have a Material Adverse Effect; 3.16.06. Except as listed on Schedule 3.16.06, 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; -9- 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 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. Reserved. 3.16.13. Any loss or, to the Knowledge of the Company or the Stockholder, 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 is reasonably expected to have a Material Adverse Effect; 3.16.14. To the Knowledge of the Company and the Stockholder, the adoption or recession of any statute, regulation, order, ordinance or other law wich are reasonably expected to have a Material Adverse Effect; 3.16.15. Except for such matters undertaken in consultation with AMED 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; 3.16.16. 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 will have a Material Adverse Effect; or 3.16.17. Any agreement by the Company to do any of the things described in -10- the preceding clauses 3.16.01 through 3.16.16. 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 Articles 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. 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. 3.20. Completeness of Disclosure. No representation or warranty by Company or Stockholder in this Agreement, including the Schedules, Exhibits, and certificates incorporated herein and prepared by the Company or Stockholder contains any untrue statement of a material fact or omits any material fact necessary in order to make the statements contained herein not misleading. 4. Representations and Warranties of AMED. AMED, and with respect to Sections 4.06, 4.07 and 4.08, Guarantor, hereby represents and warrants to the Seller, as of the date of this Agreement, that the statements contained in this Section 4 are correct and complete: 4.01. Organization. AMED is a corporation duly organized, validly existing, and in good standing under the laws of the State of Louisiana and is authorized to carry on business in the State of Louisiana and in every other 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. 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, 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 -11- 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, or (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. 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 Articles 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. 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. 4.05 Investment Purpose, Etc. (a) Purchaser is acquiring the Company Stock solely for the purpose of investment and not with a view to, or for offer or sale in connection with, any distribution thereof. Purchaser is aware and understand that the Company Stock has not been registered under the Securities Act or under the securities laws of any state, that any transfer of the Company Stock by Purchaser shall be restricted under the provision of the Securities Act and such state laws, and that the certificates representing the Company Stock will bear legends to such effect. Purchaser possesses such knowledge and experience in financial and business matters generally and with respect to the business of the Company so as to enable it to evaluate the risks and merits of its purchase of the Company Stock. (b) Purchaser is an "accredited investor" within the meaning of Rule 501(a) of Regulation D promulgated under the Securities Act. 4.06 Organization of Guarantor. Guarantor is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and is authorized to do 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. -12- 4.07 Due Authorization: Third Party Consents. Guarantor has the right, power, legal capacity, and authority to enter into and perform its obligations under this Agreement and, except as otherwise set forth herein, no approval or consent of any person other than the Guarantor is necessary in connection with the execution, delivery, or performance of this Agreement. The execution, delivery, and performance of this Agreement by the Guarantor has been duly authorized by its board of directors and no other corporate proceedings on the part of Guarantor are necessary to authorize this Agreement or the consummation of the transactions contemplated hereby. This Agreement constitutes a legal and binding obligation of the Guarantor, and is valid and enforceable against the Guarantor 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, and (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. 4.08 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 Guarantor that will not be waived or released at the Closing; (ii) a default or an event that will not be waived or released at the 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 Guarantor or of any lease, license, promissory note, conditional sales contract, commitment, indenture, mortgage, deed of trust, or other agreement, instrument, or arrangement to which Guarantor is a party or by which Guarantor or the property of Guarantor 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 Guarantor is subject. 5. Conditions to Obligations of AMED. The obligations of AMED under this Agreement are subject, at the option of AMED, to the satisfaction of the following conditions: 5.01. Accuracy of Representations and Compliance With Conditions. All representations and warranties of Company or the Stockholder 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 Stockholder on the part of Company or any Stockholder. As of the Closing, the Company and the Stockholder 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. 5.02. Other Closing Documents. In connection with the Closing, Seller shall deliver to Purchaser such other instruments of transfer in form and substance consistent with this Agreement and mutually satisfactory to Purchaser and Seller in order to transfer all rights, title and interest of Seller in the Company Stock to Purchaser; 5.03. Review of Proceedings. All actions, proceedings, instruments, and documents -13- 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; 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. Except for the consents described in Schedule 3.03, 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-Competition and Non-Solicitation Agreement. Daniel D. Brown shall have entered into the non-competition and non-solicitation agreement in the form attached hereto as -14- Schedule 5.08. 5.09 Board and Shareholder Approval. The Board of Directors and shareholders of the Company shall have approved the transactions contemplated herein. 5.10 Legal Opinion. Company shall have received the opinion of Kantrow, Spaht, Weaver & Blitzer, dated the Closing Date, in the form of Schedule 5.10 attached hereto. 5.11 Public Statements. Before Seller shall execute or administer a press release or public announcement related to consummation of this transaction, Seller shall cooperate with Purchaser, shall furnish drafts of all documents or proposed oral statements to Purchaser for comment, and shall not release any such information without the written consent of Purchaser. Nothing contained herein shall prevent Seller from furnishing any information to any governmental authority if required to do so by law. 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, 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. 6.02. Other Closing Documents. AMED shall have delivered to the Company and the Stockholder, at or prior to the Closing, such other documents as the Company and the Stockholder may reasonably request in order to enable the Company and the Stockholder 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 the Stockholder 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 -15- 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 and the Stockholder: 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 and the Stockholder to consummate any of the transactions contemplated by this Agreement; 6.05.03 Otherwise prohibits, restricts, or delays consummation of any of the transactions contemplated by this Agreement or impairs the contemplated benefits to the Company or the Stockholder 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 is a party, or to which any of their respective businesses, properties, or assets are subject, except where the failure to obtain any such consent would not have a Material Adverse Effect on such Party. 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 and the Guarantor shall have approved the transactions contemplated herein and certified copies of the authorizing resolutions shall have been delivered to Seller. 7. Covenants and Agreements of AMED. AMED covenants and agrees as follows: 7.01 Post-Closing Covenants. On and after the Closing, Purchaser agrees to maintain in confidence and not to disclose, except in accordance with and as permitted by applicable laws and regulations, the records of the patients to whom the Company provided services. 7.02 Release of Stockholder. Subsequent to closing, Purchaser shall ensure that Stockholder is released from any personal contract or agreement guarantees which are active with respect to Seller's business. 7.03 Information Accessibility. Upon prior reasonable notice and at reasonable times, Seller shall be allowed access to those business records transferred herein. -16- 8. Reserved. 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. Survival. The representations and warranties contained in or made pursuant to this Agreement by the Company, Seller and Purchaser shall survive the Closing for a period of 24 months thereafter (the date which is 24 months after the Closing Date, the "Survival Date"). No claim for indemnification or otherwise may be brought by Purchaser, Seller or the Company against the other unless asserted by written notice as provided herein by the party making such claim for indemnification or otherwise on or before the Survival Date. 9.04. Entire Agreement; 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. 9.05. Notices. Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by courier service, by telecopy (confirmed by telephone within twenty-four (24) hours following receipt thereof), or by registered or certified mail, (postage prepaid, return receipt requested) to the respective parties at the following address (or at such other address for a party as shall be specified in a notice given in accordance with this Section 9.05: (a) If to Seller: Danny D. Brown 10474 Old Hammond Highway, Suite 101 Baton Rouge, Louisiana 70816 Telecopy: (504) 927-7205 Telephone: (504) 927-7688 -17- with copy to: Kantrow, Spaht, Weaver & Blitzer (A Professional Law Corporation) Suite 300, City Plaza 445 North Boulevard P.O. Box 2997 Baton Rouge, Louisiana 70821-2997 Attention: Lee C. Kantrow Telecopy: (504) 343-0637 Telephone: (504) 383-4703 (b) If to Purchaser: Amedisys Alternate-Site Infusion Therapy Services, Inc. 3029 S. Sherwood Forest Blvd. Suite 300 Baton Rouge, Louisiana 70816 Attention: Stephen Taglianetti Telecopy: (504) 292-8163 Telephone: (504) 292-2031 9.06. 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. 9.07. Binding Effect. The provisions of this Agreement shall be binding upon and inure to the benefit of each Party's respective successors and assigns representatives. 9.08. 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. 9.09. Separability. 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. -18- 9.10. 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. 9.11. 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. 9.12 Indemnification. Subject to the limitations set forth in Sections 9.13 and 9.14 hereof, Seller shall indemnify, defend and hold harmless Purchaser and each of its officers, directors, agents and affiliates from and against any damage, loss, claim, liability, cost or expense incurred by Purchaser, including fees and disbursements of counsel, accountants, experts and other consultants reasonably and necessarily incurred by Purchaser, net of any tax benefit to which Purchaser is entitled and net of any and all amounts to which Purchaser is entitled to from insurance, guarantees, indemnities, and contractual and legal rights by, from or against other persons, firms or entities (collectively, "Damages"), resulting from, arising out of, based upon or occasioned by the inaccuracy of any warranty or any representation made by Company or Seller in this Agreement, or any breach of any covenant or agreement of Company or Seller contained herein. Purchaser shall indemnify, defend and hold harmless Seller from and against any Damages, resulting from, arising out of, based upon or occasioned by the inaccuracy of any warranty or representation made by the Purchaser herein, or any breach of any covenant or agreement of Purchaser contained herein. 9.13 Limitations on Indemnification and Other Claims. The maximum amount of Damages for which Seller shall be responsible under this Agreement, whether pursuant to a claim for indemnification or otherwise, shall not exceed the unpaid principal balance of the Promissory Note, such maximum amount to be reduced by principal payments made by the Purchaser or the Guarantor on the Promissory Note and by amounts offset against the unpaid principal balance of the Promissory Note in the manner permitted by this Agreement. Such right of offset shall be the exclusive remedy of the Purchaser, and all other persons entitled to indemnity against the Seller pursuant to Section 9.12 above, for Damages under this Agreement and otherwise. It is understood and agreed that Seller shall have no liability to return any part of the cash portion of the Purchase Price or any payments of principal or interest on the Promissory Note received by it or otherwise pay any amount of Damages (except pursuant to the right of offset as permitted by this Agreement). The right of offset permitted in this Agreement shall be exercised first against accrued but unpaid interest and then against the unpaid principal installments of the Promissory Note in the inverse order of their maturity. 9.14 Right of Off-Set. If Purchaser reasonably believes it is entitled to indemnification under this Agreement, it shall be entitled to the right of offset against amounts owing by it under the Promissory Note in accordance with the following terms and provisions: Purchaser shall promptly notify Seller of the matter for which it seeks indemnification and shall specify in reasonable detail the facts and circumstances thereof and a good faith estimate of the Damages occasioned thereby. Seller shall have ten (10) days from the receipt of Purchaser's notice in which to cure the circumstance giving rise to the Damages and provide evidence of such cure to the Purchaser. If the -19- circumstance is not cured within the ten day period, Purchaser shall have the immediate right to deposit the monthly payment due and payable pursuant to the Promissory Note into an escrow account at a bank mutually acceptable to the parties to be held and invested pursuant to a mutually agreeable escrow agreement. Monthly payments into said escrow account shall continue until the amount of the Damages specified in Purchaser's notice is equal to the balance of said escrow account, at which time payments to Seller under the Promissory Note shall resume as originally contemplated. In the event the Purchaser's claim for indemnification is disputed by Seller, such dispute shall be resolved by the provisions of Section 9.15. If it is ultimately determined that Purchaser's claim for indemnification was improper, the escrowed funds and earnings thereon shall be distributed to Seller. If it is ultimately determined that Purchaser's claim for indemnification was proper, the escrowed funds and earnings thereon shall be distributed to Purchaser. 9.15 Arbitration Procedures. Any and every dispute of any nature whatsoever that may arise between the parties hereto, whether sounding in contract, statute, tort, fraud, misrepresentation, discrimination or any other legal theory, or breach of this Agreement, or any schedule, certificate or other document delivered by any party hereto or thereto, or those arising under any federal, state or local law, regulation or ordinance, shall be determined by binding arbitration in accordance with the then-current commercial arbitration rules of the American Arbitration Association ("AAA"), to the extent such rules do no conflict with the provision of this Section 9. The arbitration shall be conducted by a single neutral arbitrator. The parties shall endeavor to select neutral arbitrators by mutual agreement. If such agreement cannot be reached within thirty (30) calendar days after a dispute has arisen which is to be decided by arbitration, any party of the parties jointly shall request AAA to submit to each party an identical panel of fifteen (15) persons. Alternate strikes shall be made to the panel, commencing with the party bringing the claim, until the name of one (1) person remains. The parties may, however, by mutual agreement, request AAA to submit additional panels of possible arbitrators. The arbitrator shall have the power to determine all matters incident to the conduct of the arbitration, including without limitation all procedural and evidentiary matters and the scheduling of any hearing. The award made by the arbitrator shall be governed by the United States Arbitration Act, 9 U.S.C. (S)(S) 1-16, and judgment upon the award rendered by the arbitrator(s) may be entered by any court having jurisdiction thereof. Unless otherwise agreed by the parties, the arbitration shall be held in Baton Rouge, Louisiana. 9.16 Provision applicable to claims for injunctive relief. This agreement to arbitrate shall specifically include, without limitation, an application for injunctive relief under Section 9. In the event injunctive relief is sought, the parties agree that Commercial Arbitration Rule 13 (as amended November 1, 1993, or its subsequent equivalent) shall not apply, and instead, a single arbitrator shall be appointed within one business day after the filing of the demand or submission. Such arbitrator shall then preside over the application for injunctive relief and all other disputes then arising under this agreement. The arbitrator appointed under this paragraph shall be appointed by JAMS Endispute, Baton Rouge, Louisiana ("JAMS"), in the following manner: the case administrator for the AAA shall contact JAMS immediately on receipt of the demand for arbitration containing the claim for injunctive relief. The case administrator shall provider JAMS with the names of the parties to, and a copy of, this agreement. From its then current list of qualified, licensed, but non- practicing attorneys who are former, sitting trial judges, the Baton Rouge national account manager (or -20- equivalent position) of JAMS shall appoint one such individual as the arbitrator to preside over the application for injunctive relief and all other disputes between the parties. Except in the unlikely event of an actual conflict of interest under the Rules of Professional Conduct or Code of Judicial Conduct, neither party shall have any right to strike or object to the appointment of any person so selected. The parties expressly agree and desire that the selection of an arbitrator hereunder shall be effected within one business day of any application for injunctive relief and agree that such application shall then be considered at least as expeditiously as would be the case in the District Courts for East Baton Rouge Parish. The parties further agree that any injunctive relief granted by the arbitrator shall be separately enforceable in the District Court for East Baton Rouge Parish, to the same extent as would be the case for a final award of the arbitrator. IN WITNESS WHEREOF, the parties have duly executed this Agreement effective as of the date written in the preamble of this Agreement. AMEDISYS ALTERNATE-SITE INFUSION AMEDISYS, INC. THERAPY SERVICES, INC. By: By: ----------------------------------- --------------------------------- Stephen Taglianetti, President Name: ------------------------------- Title: ------------------------------ INFUSIONCARE SOLUTIONS, INC. By: ---------------------------------- ------------------------------- Daniel D. Brown, President Daniel Brown, Stockholder -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 5.08 Non-Compete and Non-Solicitation Agreements 5.10 Legal Opinion of Kantrow, Spaht, Weaver & Blitzer -22- EX-2.10 8 EXHIBIT 2.10 EXHIBIT 2.10 THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND IS TRANSFERRABLE ONLY UPON COMPLIANCE WITH OR AN EXEMPTION FROM ALL APPLICABLE SECURITIES AND OTHER LAWS. PROMISSORY NOTE $125,000.00 Baton Rouge, Louisiana February 27, 1998 FOR VALUE RECEIVED, the undersigned, AMEDISYS ALTERNATE-SITE INFUSION THERAPY SERVICES, INC. a Louisiana corporation ("Maker"), hereby promises to pay to the order of DANIEL D. BROWN ("Payee"), at Baton Rouge, Louisiana, the principal sum of One Hundred Twenty Five Thousand and no/100 Dollars ($125,000.00), in lawful money of the United States of America, which shall be legal tender, in payment of all debts and dues, public and private, at the time of payment, bearing interest and payable as provided herein. Interest on the unpaid balance of this Note shall accrue from the date hereof at a rate per annum equal to 9.5% from the date hereof to February 27, 1999, and thereafter at the prime interest rate designated in the Wall Street Journal on the anniversary date hereof, plus one percentage point; provided, however, that such interest shall not exceed the Maximum Rate as hereinafter defined. All past-due principal and interest shall bear interest at the maximum rate permitted by applicable law. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The principal amount of and accrued interest on this Note shall be due and payable in twenty-four (24) equal monthly installments, the first installment of which is due on March 27, 1998, and a like amount on the same day of each month thereafter. The monthly installments through February 27, 1999, shall be in the amount of $5,739.31 each, with the amount thereafter to be adopted on the basis of the changes in the interest rate as provided above. This Note may be prepaid in whole or in part, at any time and from time to time, without premium or penalty. If any payment of principal of or interest on this Note shall become due on a Saturday, Sunday or any other day on which national banks are not open for business, such payment shall be made on the next succeeding business day. An event of default means default by the Maker (i) in the payment of any installment of the principal of, and interest on, the Note when due, whatever the reason for such event of default and whether it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any Court or any order, rule or regulation of any administrative governmental body or (ii) in the performance of its obligations under the Stock Purchase Agreement dated as of February 1, 1998, between Payee and Maker ("The Stock Purchase Agreement")("Event of Default"). Page 1 of 3 If an Event of Default shall occur and be continuing, the Payee of subsequent holders may, at its option, declare the unpaid principal amount of this Note immediately due and payable. The indebtedness of the Maker hereunder is solidarily guaranteed by Amedisys, Inc. pursuant to a Guaranty Agreement having the same date hereof. Notwithstanding anything to the contrary in this Note or any other agreement entered into in connection herewith, whether now existing or hereafter arising and whether written or oral, it is agreed that the aggregate of all interest and any other charges constituting interest, or adjudicated as constituting interest, and contracted for, chargeable or receivable under this Note or otherwise in connection with this loan transaction, shall under no circumstances exceed the Maximum Rate. In the event the maturity of this Note is accelerated by reason of an Event of Default under this Note, other agreement entered into in connection herewith or therewith, by voluntary prepayment by Maker or otherwise, then earned interest may never include more than the Maximum Rate. If from any circumstance any holder of this Note shall ever receive interest or any other charges constituting interest, or adjudicated as constituting interest, the amount, if any, which would exceed the Maximum Rate shall be applied to the reduction of the principal amount owing on this Note, and not to the payment of interest; or if such excessive interest exceeds the unpaid balance of principal hereof, the amount of such excessive interest that exceeds the unpaid balance of principal hereof shall be refunded to Maker. In determining whether or not the interest paid or payable exceeds the Maximum Rate, to the extent permitted by applicable law (i) any nonprincipal payment shall be characterized as an expense, fee or premium rather than as interest; and (ii) all interest at any time contracted for, charged, received or preserved in connection herewith shall be amortized, prorated, allocated and spread in equal parts during the period of the full stated term of this Note. The term "Maximum Rate" shall mean the maximum rate of interest allowed by applicable federal or state law. Except as provided herein, Maker and any sureties, guarantors and endorsers of this Note jointly and severally waive demand, presentment, notice of nonpayment or dishonor, notice of intent to accelerate, notice of acceleration, diligence in collecting, grace, notice and protest, and consent to all extensions without notice for any period or periods of time and partial payments, before or after maturity, without prejudice to the holder. The holder shall similarly have the right to deal in any way, at any time, with one or more of the foregoing parties without notice to any other party, and to grant any such party any extensions of time for payment of any of said indebtedness, or to grant any other indulgences or forbearance whatsoever, without notice to any other party and without in any way affecting the personal liability of any party hereunder. If any efforts are made to collect or enforce this Note or any installment due hereunder, the undersigned agrees to pay all collection costs and fees, including reasonable attorney's fees. This Note shall be construed and enforced under and in accordance with the laws of the State of Louisiana. Page 2 of 3 This Note is subject to off-set as provided in the Stock Purchase Agreement. Timely payment in escrow as permitted by, and in accordance with, the terms of the Stock Purchase Agreement shall constitute payments under this Note. IN WITNESS WHEREOF, Maker has duly executed this Note as of the day and year first above written. AMEDISYS ALTERNATE-SITE INFUSION THERAPY SERVICES, INC. By -------------------------------------------- -------------------------------------------- Page 3 of 3 EX-3.3 9 EXHIBIT 3.3 EXHIBIT 3.3 CERTIFICATE OF AMEDISYS, INC. I, the undersigned, JAMES P. CEFARATTI, as President of AMEDISYS, INC., a corporation organized and existing under the laws of the State of Delaware (hereinafter referred to as the "Corporation") hereby certify and affirm the following: 1. The name of the Corporation is AMEDISYS, INC. 2. The Board of Directors, pursuant to Section 151 of the Delaware General Corporation laws adopted a resolution establishing the Designation, Preferences Limitations, and relative Rights of the Series A Preferred Stock, Callable, Convertible Series as set forth on Exhibit "A" attached hereto. 3. The foregoing resolution was adopted by the Board of Directors in accordance with (S)151 of the Delaware General Corporation Laws and shall become effective and constitutes an amendment to the Corporation's Certificate of Incorporation upon the proper filing of this instrument with the Delaware Secretary of State. 4. Shareholder approval is not required pursuant to the Delaware General Corporation Laws. IN WITNESS WHEREOF, the undersigned has execute this Certificate of AMEDISYS, INC., this 22nd day of December, 1997. AMEDISYS, INC., a Delaware Corporation By:_____________________________ JAMES P. CEFARATTI, President I CERTIFY, that JAMES P. CEFARATTI, personally known to me to be the same persons whose names are subscribed to the foregoing instrument, this day personally prepared before me as the President of AMEDISYS, INC., and he acknowledged that he has executed the foregoing instrument fully and voluntarily for the use and purpose therein expressed. SWORN TO AND SUBSCRIBED before me this 22nd day of December, 1997. My Commission Expires: _______________________________ NOTARY PUBLIC, STATE OF FLORIDA Print Name:____________________ Commission No.:________________ CERTIFICATE OF ADOPTION OF RESOLUTIONS OF THE BOARD OF DIRECTORS OF AMEDYSIS, INC. AMENDING THE AMEDYSIS, INC. CERTIFICATE OF INCORPORATION TO PROVIDE FOR THE DESIGNATION, PREFERENCES, RIGHTS, QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS THEREOF, OF THE SERIES A PREFERRED STOCK, CONVERTIBLE SERIES ------------------------ AMEDYSIS, INC., a Delaware corporation (the "Corporation"), hereby certifies that pursuant to the authority vested in the Board of Directors of the Corporation by the provisions of its Certificate of Incorporation, and by the provisions of The General Corporation Law of the State of Delaware, the Board of Directors adopted the following resolution: RESOLVED, there is hereby created a series of preferred stock, $.001 par value, of the Corporation, consisting of 1,000,000 shares of the authorized, but unissued preferred stock and designated the "Series A Preferred Stock" (hereinafter referred to as the "Series A"); and that to the extent that the terms, relative rights, preferences, qualifications and limitations of the Series A are not fixed and determined by the Articles of Incorporation of the Corporation, as amended, they hereby are fixed and determined as follows: SECTION 1. DIVIDENDS. (a) Dividends. From and after the date of issuance of any shares of Series A, the holders of the Series A shall be entitled to receive in cash, when and as declared by the Board of Directors, preferential dividends in such amount as to be determined by the Board of Directors. (b) Preference of Dividends. In the event that dividends which are declared shall not have been fully paid or set apart for payment on all shares of Series A, the amount of the deficiency (without interest) shall be fully paid before any dividends shall be declared or paid on any shares of Common Stock or any other equity security which is junior to the Series A. If any dividends are paid on any of the Series A at any time in an aggregate amount less than the total dividends then accumulated and payable on all shares of Series A entitled to dividends then outstanding, the amount to be distributed shall be paid on each series of Series A entitled to dividends in the proportion that the dividends then accumulated and payable on each such series bear to the total dividends accumulated and payable on all outstanding shares of Series A entitled to dividends. (c) Date of Payment. In any case where the due date for the payment of dividends on the Series A shall be on a day on which banking institutions are authorized or obligated by law to close, the payment of dividends need not be made on such date, but may be made on the next succeeding day which is not a day on which banking institutions are authorized or obligated by law to close, with the same force and effect as if made on the date of such payment, and dividends shall accrue and be paid for the period through and including the date of payment. SECTION 2. PRIORITY. All shares of the Series A shall rank on a parity with each other and shall be preferred to the Common Stock of the Corporation, and any other class of stock of the Corporation, as to payment of dividends and the distribution of assets upon the liquidation, dissolution or winding up of the Corporation. The Corporation shall have the right to create other classes of preferred stock which shall rank below the Series A without the consent of the holders of the Series A. SECTION 3. VOLUNTARY CONVERSION RIGHTS. (a) Voluntary Conversion. Each holder of Series A shall have the right at any time, at the holder's option, to convert all or any portion of such holder's shares of Series A into fully paid and non-assessable full shares of Common Stock of the corporation at the Conversion Price, determined as hereinafter provided, in effect at the time of conversion, each share of the Series A being taken at $10.00 per share for the purposes of such conversion. The initial Conversion Price is equal to the product of 88% of the average closing sale price of the Common Stock for the fifteen days immediately prior to the initial closing of the sale of the Series A (the "Initial Conversion Price"). The Initial Conversion Price shall be adjusted as provided below in Section 5 (the Initial Conversion Price, and the Conversion Price as thereafter then adjusted, shall be referred to as the "Conversion Price"). Upon each adjustment of the Conversion Price, the holders of the Series A shall thereafter be entitled to receive upon conversion, at the Conversion Price, resulting from such adjustments, the number of shares of Common Stock obtained by multiplying $10.00 times the number of shares of Series A being converted and divide such amount by the Conversion Price, as then adjusted. (b) Method of Conversion. In order to convert shares of the Series A into Common stock, the holder thereof shall surrender the certificate or certificates therefor, duly endorsed in blank at the principal office of the Corporation or its transfer agent, if any, or at such other office or offices, located in the United States as the Board of Directors may designate, and give written notice to the Corporation at said office that he elects to convert said shares. Shares of the Series A shall be deemed to have been converted as of the date (hereinafter called the "Conversion Date") of receipt by the Corporation of the surrender of such shares for conversion as provided above, and the person or persons entitled to receive the Common Stock issuable on such date. As soon as practicable on or after the Conversion Date, the Corporation will deliver to the address of the holders who submitted the Series A for conversion, a certificate or certificates for the number of full share of Common Stock issuable upon such conversion, together with cash in lieu of any fraction of a share, as hereinafter provided, to the person or persons entitled to receive the same. SECTION 4. AUTOMATIC CONVERSION. The Series A shall be automatically converted into shares of Common Stock at such time as the average of the closing sale price of the Common Stock as listed on the National Association of Securities Dealers Automated Quotation System ("NASDAQ"), the New York Stock Exchange ("NYSE"), the American Stock Exchange ("ASE") or wherever the Company's Common Stock then trades, is at least 135% of the Initial Conversion Price for fifteen (15) consecutive trading days. Upon such occurrences the Company shall provide written notice of automatic conversion to all holders. The holders shall deliver to the address of such holder, a certificate or certificates for full number of full shares of Common Stock issuable upon such automatic conversion, together with cash in lieu of any fraction of a share. SECTION 5. ANTI-DILUTION ADJUSTMENTS. The Conversion Price shall be adjusted as follows: (a) Amendment to the Certificate of Incorporation. In the case of any amendment to the Certificate of Incorporation of the Corporation to change the designation of the Common stock or the rights, privileges, restrictions or conditions in respect to the Common Stock or division of the Common stock, the Series A shall be adjusted so as to provide that upon conversion thereof the registered holder shall receive, in lieu of shares of Common Stock theretofore issuable upon such conversion, the kind and amount of shares, other securities, money and property receivable upon such designation, change or division by such holder issuable upon such conversion had the conversion occurred immediately prior to such designation, change or division. The Series A shall be deemed thereafter to provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 5. The provisions of this Subsection 5(a) shall apply in the same manner to successive reclassifications, changes, consolidations and mergers. (b) Stock Splits; Stock Dividends. If the Corporation shall at any time subdivide its outstanding shares of Common Stock into a greater number of shares of Common Stock, or declare a dividend or make any other distribution upon the Common Stock payable in shares of Common Stock, the Conversion Price in effect immediately prior to such subdivision or dividend or other distribution shall be proportionately reduced, and conversely, in case the outstanding shares of Common Stock shall be combined into a smaller number of shares of Common Stock, the Conversion Price in effect immediately prior to such combination shall be proportionately increased. 2 (c) Reorganization or Reclassification. If any capital reorganization or reclassification of the capital stock of the Corporation, or any consolidation or merger of the Corporation with another corporation or entity, or the sale of all or substantially all of the Corporation's assets to another corporation or other entity shall be effected in such a way that holders of shares of Common Stock shall be entitled to receive stocks, securities, other evidence of equity ownership or assets with respect to or in exchange for shares of Common Stock, then, as a condition of such reorganization, reclassification, consolidation, merger or sale (except as otherwise provided below in this Subsection 5(c), lawful and adequate provisions shall be made whereby the holders shall thereafter have the right to receive upon the basis and upon the terms and conditions specified herein, such shares of stock, securities, other evidence of equity ownership or assets as may be issued or payable with respect to or in exchange for a number of outstanding shares of such Common Stock equal to the number of shares of Common Stock immediately theretofore purchasable and receivable upon the conversion of Series A had such reorganization, reclassification, consolidation, merger or sale not taken place, and in any such case appropriate provisions shall be made with respect to the rights and interests of the holders to the end that the provisions hereof (including, without limitation, provisions for adjustments of the Conversion Price and of the number of shares of Common Stock receivable upon the conversion of Series A) shall thereafter be applicable, as nearly as may be, in relation to any shares of stock, securities, other evidence of equity ownership or assets thereafter deliverable upon the exercise hereof (including an immediate adjustment, by reason of such consolidation or merger, of the Conversion Price to the value for the Common Stock reflected by the terms of such consolidation or merger if the value so reflected is less than the Conversion Price in effect immediately prior to such consolidation or merger). Subject to the terms of the Series A, in the event of a merger or consolidation of the Corporation with or into another corporation or other entity as a result of which the number of shares of Common Stock of the surviving corporation or other entity issuable to holders of Common Stock of the Corporation, is greater or lesser than the number of shares of Common Stock of the Corporation outstanding immediately prior to such merger or consolidation, then the Conversion Price in effect immediately prior to such merger or consolidation shall be adjusted in the same manner as though there were a subdivision or combination of the outstanding shares of Common Stock of the Corporation. The Corporation shall not effect any such consolidation, merger or sale, unless, prior to the consummation thereof, the successor corporation (if other than the Corporation) resulting from such consolidation or merger or the corporation purchasing such assets shall assume by written instrument executed and mailed or delivered to the holders, the obligation to deliver to such holders such shares of stock, securities, other evidence of equity ownership or assets as, in accordance with the foregoing provisions, such holders may be entitled to receive or otherwise acquire. If a purchase, tender or exchange offer is made to and accepted by the holders of more than fifty (50%) percent of the outstanding shares of Common Stock of the Corporation, the Corporation shall not effect any consolidation, merger or sale with the person having made such offer or with any affiliate of such person, unless prior to the consummation of such consolidation, merger or sale the holders of Series A shall have been given a reasonable opportunity to then elect to receive upon the conversion of Series A, the amount of stock, securities, other evidence of equity ownership or assets then issuable with respect to the number of shares of Common Stock of the Corporation in accordance with such offer. (d) Change of Control. In case the Corporation shall, at any time prior to conversion of the shares of Series A, consolidate or merge with any other corporation or transfer all or substantially all of its assets to any other corporation, then the Corporation shall, as a condition precedent to such transaction, cause effective provision to be made so that the holder hereof upon the exercise of this Series A after the effective date of such transaction shall be entitled to receive the kind and amount of shares, evidences of indebtedness and/or other securities or property receivable on such transaction by a holder of the number of shares of Common Stock as to which each share of Series A was convertible immediately prior to such transaction (without giving effect to any restriction upon such exercise); and, in any such case, appropriate provision shall be made with respect to the rights and interest of the holders of Series A to the end that the provisions of the Series A shall thereafter be applicable (as nearly as may be practicable) with respect to any shares, evidences of indebtedness or other securities or assets hereafter deliverable upon conversion of the Series A. Upon the occurrence of any event described in this Section 5(c), the holders of the Series A Preferred Stock shall have the right to convert into shares of Common Stock immediately prior to the change of control at a price equal to the lesser of (i) the Conversion Price or (ii) the price per share of Common Stock payable in the change of control transaction. (e) Registration Rights. The Conversion Price may be adjusted in accordance with the provisions of that 3 certain registration Rights Agreement by and between the Company and the holders thereof executed in connection with the initial issuance of the Series A. (f) Adjustment to Conversion Price. The term "Conversion Price" as used herein shall mean the Conversion Price specified in this certificate, until the occurrence of an event stated in Section 5 and thereafter shall mean said price, as adjusted from time to time herein. (g) Record of Conversion Price. Whenever the shares of Common Stock or other types of securities or assets receivable upon conversion of the Series A shall be adjusted as provided in this Section 5, the Corporation shall forthwith obtain and file with its corporate records a certificate or letter from a firm of independent public accountants of recognized standing setting forth the computation and the adjusted number of shares of Common Stock or other securities or assets resulting from such adjustments, and a copy of such certificate or letter shall be mailed to the holders hereof. Any such certificate or letter shall be conclusive evidence as to the correctness of the adjustment or adjustments referred to therein and shall be available for inspection by any holders of the Series A on any day during normal business hours. (h) Notice. In case: (i) the Corporation shall declare a dividend (or any other distribution) on its Common Stock payable in Common Stock of the Corporation; or (ii) the Corporation shall declare a dividend (or any other distribution) on its Common Stock payable in cash of the Corporation; or (iii) any reclassification of Common Stock or any consolidation, merger, conveyance of the property of the Corporation as an entirety, or substantially as an entirety, dissolution, liquidation or winding up shall be effected by the Corporation; then the Corporation shall mail, or cause to be mailed by the Corporation's transfer agent, if any, for the Series A and to the holders of record of the outstanding shares of the Series A, at least thirty (30) days, but not more than sixty (60) days, prior to the applicable record date hereinafter specified, a notice stating (A) the date on which a record is to be taken for the purpose of such dividend, distribution or rights, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution or rights, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution or right are to be determined, or (B) the date on which such reclassification, consolidation, merger, conveyance, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange the certificates representing their shares of Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, conveyance, dissolution, liquidation or winding up. SECTION 6. RESERVATION OF SHARES OF COMMON STOCK. (a) Reservation of Shares. The Corporation shall at all times reserve and keep available, out of its authorized but unissued Common Stock, for the purpose of effecting the conversion of the shares of the Series A, the full number of shares of Common Stock then deliverable upon the conversion of all shares of the Series A, then outstanding. If shares of the Common Stock of the Corporation are listed on any securities exchange, the Corporation shall make application for the listing thereon, on notice of issuance, of the shares of Common Stock deliverable upon the conversion of the outstanding shares of the Series A and shall use its best efforts to effect such listing. (b) Fractional Shares. No fractional shares of Common Stock are to be issued upon conversion. The Corporation shall pay a cash adjustment out of surplus in respect to any fraction of a share which would otherwise be issuable, in an amount equal to the fair market value of the Common Stock which shall be the same fraction of the last 4 price per share at which the Common Stock was sold on any principal stock exchange on which such stock is then listed or admitted to trading, prior to the opening of business on the conversion date, or if no sale of such stock takes place on such day on such exchange, the average of the closing bid and asked prices on such day as officially quoted on such exchange, or if such stock shall not at the time be listed or admitted to trading on any stock exchange, the average of the last bid and asked prices for such stock on such day in the over-the-counter market as reported on NASDAQ prior to the opening of business on the conversion date, or, if the Common Stock is not then included in NASDAQ, as furnished by the National Quotation Bureau, Inc. or if such firm is not at the time engaged in the business of reporting such prices, as furnished by any firm then engaged in such business or by any member of the National Association of Securities Dealers, Inc. selected by the Corporation. If the Common Stock is not then publicly traded, fair market value shall be determined in good faith by the Corporation's Board of Directors. (c) Transfer Taxes. The Corporation will pay any and all transfer taxes that may be payable in respect of the issue or delivery of shares of Common Stock on conversion of shares of the Series A pursuant hereto. The Corporation shall not, however, be required to pay any tax which may be payable in respect of transfer involved in the issue and delivery of shares of Common Stock in a name other than that in which the shares of the Series A so converted were registered, and no such issue or delivery shall be made unless and until the person requesting such issue has paid to the Corporation the amount of any such tax, or has established, to the satisfaction of the Corporation, that such tax has been paid. (d) Common Stock. For the purpose of this Section, the term "Common Stock" shall include any stock of any class of the Corporation which has no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, and which is not subject redemption by the Corporation. Shares of Common Stock shall be only such shares which have no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation and which are not subject to redemption by the Corporation; provided that if at any time there shall be more than one such resulting class, the shares of each such class then so issuable shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassification. (e) Status of Common Stock. All Common Stock that may be issued upon conversion of the Series A will, upon issuance, be duly issued, fully paid and non-assessable and free from all taxes, liens and charges with respect to the issuance thereof. SECTION 7. VOTING (a) Voting. The holders of the Series A shall be entitled to vote, on all matters in which holders of Common Stock are entitled to vote, voting together with the Common Stock without regard to class. The holders of the Series A shall have the number of votes that they would have had assuming conversion of the Series A into Common Stock as of the record date for the meeting of the Corporation's holders of Common Stock. The holders of the Series A shall be entitled to receive all communications sent by the Corporation to the holders of Common Stock. Except as provided in Section 7(c) or by Delaware law, holders of shares of the Series A shall not be entitled to vote as a separate class. (b) No Cumulative Voting. The holders of shares of the Series A shall not have the right of cumulative voting in an election of directors. (c) Voting as a Separate Class. The Corporation shall not, without the consent (given by vote at a meeting called for that purpose) of the holders of two-thirds of the shares of the Series A then outstanding, voting as a separate class: (i) create, authorize or issue any stock ranking equal to or senior to the Series A as to dividends, distributions or liquidation, or any obligation or security 5 convertible into shares of any such senior stock; or (ii) amend, alter, change, or repeal any of the express terms of the Series A. SECTION 8. LIQUIDATION. (a) Liquidation Preference. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation (hereinafter collectively called "liquidation"), before any amount shall be paid to or set aside for, or any assets shall be distributed among, the holders of shares of Common Stock or any other equity security of the Corporation, each holder of a share of the Series A shall be entitled to receive out of the assets of the Corporation or the proceeds thereof a preferential payment in an amount equal to $10.00 per share, plus the amount of accrued and unpaid dividends on such share, if any, and no more. (b) Proportional Rights. In the event the amount available for distribution as liquidation preference payments to holders of the Series A and any other stock ranking on a parity therewith is insufficient to pay the full amount of their respective preferences, such amount shall be divided among and paid to such holders ratably in proportion to the respective amounts which would be payable to such holders if their respective liquidation preferences were to be paid in full. (c) Insufficient Funds. In the event any liquidation preference payment to be made on the shares of the Series A shall amount in the aggregate to less than $10.00 per share plus accrued and unpaid dividends, the Corporation in its discretion may require the surrender of certificates for shares of the Series A and issue a replacement certificate or certificates, or it may require the certificates evidencing the shares in respect of which such payments are to be made to be presented to the Corporation, or its agent, for notation thereon of the amounts of the liquidation preference payments made in respect of such shares. In the event a certificate for shares of the Series A on which payment of one or more partial liquidation preferences has been made is presented for exchange or transfer shall bear an appropriate notation as to the aggregate amount of liquidation preference payments theretofore made in respect thereof. (d) Merger or Sale. Neither the consolidation or merger of the Corporation with or into any other corporation or corporations, nor the sale or transfer by the Corporation of all or any part of its assets, shall be deemed to be a liquidation of the Corporation for the purposes of this Section 9. SECTION 9. REPLACEMENT CERTIFICATES. (a) Mutilated Certificate. If any mutilated certificate of Series A is surrendered to the Corporation, the Corporation shall execute and deliver in exchange therefor a new certificate for Series A of like tenor and principal amount, bearing a number not contemporaneously outstanding. (b) Destroyed, Lost or Stolen Certificate. If there is delivered to the Corporation (i) evidence to its reasonable satisfaction of the destruction, loss or theft of any certificate of Series A and (ii) such reasonable security or indemnity as may be required by it to save it harmless, then, in the absence of notice to the Corporation that such certificate of Series A has been acquired by a bona fide purchaser, the Corporation shall execute and deliver in lieu of any such destroyed, lost or stolen certificate of Series A, a new certificate of Series A of like tenor and principal amount and bearing a number not contemporaneously outstanding. (c) Status of New Certificate. Upon the issuance of any new certificate of Series A under this Section 10, the Corporation may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses connected therewith. Every new certificate of Series A issued pursuant to this Section 10 in lieu of any destroyed, lost or stolen certificate of Series A, shall constitute an original additional contractual obligation of the Corporation, whether or not the destroyed, lost or stolen certificate of Series A shall be at any time enforceable by anyone. A new certificate for Series A delivered pursuant to this Section 10 shall be so dated neither gain nor loss in interest shall result from such exchange. The provisions of this Section 10 are 6 exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen certificate of Series A. 7 EX-4.2 10 EXHIBIT 4.2 NUMBER SHARES AMEDISYS, INC. SERIES A PREFERRED STOCK CONVERTIBLE SERIES THIS CERTIFIES THAT ___________________________________________ is the owner of ______________________________________ fully paid and non-assessable Shares transferable only on the books of the Corporation by the holder hereof in person or by duly authorized Attorney upon surrender of this Certificate properly endorsed. IN WITNESS WHEREOF, the said Corporation has caused this Certificate to be signed by its duly authorized officers and to be sealed with the Seal of the Corporation. Dated _____________________________ William F. Borne [SEAL] THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED AT ANY TIME WHATSOEVER EXCEPT UPON REGISTRATION OR UPON DELIVERY TO THE CORPORATION OF AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION OR ITS COUNSEL THAT REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER, OR THE SUBMISSION TO THE CORPORATION OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE CORPORATION TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED, APPLICABLE STATE SECURITIES LAWS OR ANY RULE OR REGULATION PROMULGATED THEREUNDER. THE TERMS, RELATIVE RIGHTS, PREFERENCES, QUALIFICATIONS, AND LIMITATIONS OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE GOVERNED BY THE CERTIFICATE OF DESIGNATION OF THE SERIES A PREFERRED STOCK, CONVERTIBLE SERIES, ON FILE WITH THE SECRETARY OF STATE OF DELAWARE. THE CORPORATION WILL FURNISH TO THE HOLDER OF THIS CERTIFICATE, WITHOUT CHARGE UPON WRITTEN REQUEST TO THE CORPORATION AT ITS PRINCIPAL PLACE OF BUSINESS OR REGISTERED OFFICE, A COPY OF THE CERTIFICATE OF DESIGNATION. The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations. Additional abbreviations may also be used though not in the list. TEN COM - as tenants in common UNIF GIFT MIN ACT - _________________ Custodian ____________ (Minor) TEN ENT - as tenants by the entireties under Uniform Gifts to Minors Act ________________________ (State) JT TEN - as joint tenants with right of survivorship and not as tenants in common PLEASE INSERT SOCIAL SECURITY OR OTHER For value received, the undersigned hereby sells, assigns and transfers unto IDENTIFYING NUMBER OF ASSIGNEE _____________________________________________________________________________ [ ] PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE __________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________ Shares represented by the within Certificate, and hereby irrevocably constitutes and appoints ___________________________ ____________________________________________________________________________________ Attorney to transfer the said Shares on the books of the within-named Corporation with full power of substitution in the premises. Dated, _______________________________ In Presence of ______________________________________________________________ ____________________________________________________ NOTICE: The signature to this assignment must correspond with the name as written upon the face of the certificate in every particular without alteration or enlargement, or any change whatever.
EX-4.3 11 EXHIBIT 4.3 EXHIBIT 4.3 WARRANT AGREEMENT dated as of December 29, 1997 between Amedisys, Inc., a Delaware corporation (the "Company"), and Hudson Capital Partners, L.P. (hereinafter referred to as the "Placement Agent"). W I T N E S S E T H: WHEREAS, the Company proposes to issue to the Placement Agent warrants (the "Warrants") to purchase up to 56,000 (as such number may be adjusted from time to time pursuant to Article 8 of this Agreement) shares (the "Shares") of preferred stock, par value $.001 per share (the "Preferred Shares"), of the Company; and WHEREAS, the Placement Agent has agreed, pursuant to the placement agent agreement (the "Placement Agent Agreement") dated as of December 8, 1997 between the Placement Agent and the Company, to act as the placement agent in connection with the Company's proposed private offering (the "Private Placement") of up to 80 Units (the "Units"), each Unit consisting of 10,000 Preferred Shares, at an offering price of $100,000 per Unit; and WHEREAS, the Warrants issued pursuant to this Agreement are being issued by the Company to the Placement Agent and/or to its designees, in consideration for, and as part of the Placement Agent's compensation in connection with, the Placement Agent acting as the placement agent pursuant to the Placement Agent Agreement; NOW, THEREFORE, in consideration of the premises, the agreements herein set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Grant. The Placement Agent, and/or its designees are hereby granted the right to purchase, at any time from December 29, 1997 until 5:00 P.M., New York time, on December 29, 2002 (the "Warrant Exercise Term"), up to 56,000 fully-paid and non-assessable Shares (700 Shares for each Unit sold (and such pro rata number of shares for each partial Unit sold) in the Private Placement) at an initial exercise price (subject to adjustment as provided in Article 8 hereof) of $10.00 per Share. The terms, preferrences, privileges and rights of the Preferred Shares are as set forth in the Confidential Private Term Sheet dated December 8, 1997. 2. Warrant Certificates. The warrant certificates delivered and to be delivered pursuant to this Agreement (the "Warrant Certificates") shall be in the form set forth in Exhibit A attached hereto and made a part hereof, with such appropriate insertions, omissions, substitutions and other variations as required or permitted by this Agreement. 3. Exercise of Warrant. The Warrants initially are exercisable at a price of $10.00 per Share, payable in cash or by check to the order of the Company, or any combination thereof, subject to adjustment as provided in Article 7 hereof. Upon surrender of the Warrant Certificate with the annexed Form of Election to Purchase duly executed, together with payment of the Exercise Price (as hereinafter defined) for the Shares purchased, at the Company's principal offices (currently located at 3029 S. Sherwood Forest Blvd., Suite 300, Baton Rouge, Louisiana 70816) the registered holder of a Warrant Certificate ("Holder" or "Holders") shall be entitled to receive a certificate or certificates for the Shares so purchased. The purchase rights represented by each Warrant Certificate are exercisable at the option of the Holder thereof, in whole or in part (but not as to fractional Shares). In the case of the purchase of less than all the Shares purchasable -2- under any Warrant Certificate, the Company shall cancel said Warrant Certificate upon the surrender thereof and shall execute and deliver a new Warrant Certificate of like tenor for the balance of the Shares purchasable thereunder. In the event that the Shares automatically convert into shares of Common Stock (the "Conversion Shares"), par value $.001 per share of the Company (the "Common Shares"), upon exercise of the Warrants as provided for in this Section 3, the Holder of a Warrant Certificate shall be entitled to receive a certificate or certificates for the number of Conversion Shares issuable upon exercise of the Shares so purchased. 4. Issuance of Certificates. Upon the exercise of the Warrants, the issuance of certificates for the Shares or Conversion Shares, as the case may be, purchased shall be made forthwith (and in any event within three (3) business days thereafter) without charge to the Holder thereof including, without limitation, any tax which may be payable in respect of the issuance thereof, and such certificates shall be issued in the name of, or in such names as may be directed by, the Holder thereof; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any such certificates in a name other than that of the Holder and the Company shall not be required to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. The Warrant Certificates and the certificates representing the Shares and/or Conversion Shares shall be executed on behalf of the Company by the manual or facsimile signature of the present or any future Chairman or Vice Chairman of the Board of Directors, Chief Executive Officer or President or Vice President of the Company under its corporate seal -3- reproduced thereon, attested to by the manual or facsimile signature of the present or any future Secretary or Assistant Secretary of the Company. Warrant Certificates shall be dated the date of execution by the Company upon initial issuance, division, exchange, substitution or transfer. Upon exercise, in part or in whole, of the Warrants, certificates representing the Shares or Conversion Shares, as the case may be, shall bear a legend substantially similar to the following: "The securities represented by this certificate have not been registered for purposes of public distribution under the Securities Act of 1933, as amended (the "Act"), and may not be offered or sold except (i) pursuant to an effective regis tration statement under the Act, (ii) to the extent applicable, pursuant to Rule 144 under the Act (or any similar rule under such Act relating to the disposition of securities), or (iii) upon the delivery by the holder to the Company of an opinion of counsel, reasonably satisfactory to counsel to the Company, stating that an exemption from registration under such Act is available." 5. Price. 5.1. Initial and Adjusted Exercise Price. The initial exercise price of each Warrant shall be $10.00 per Share (or per the number of Conversion Shares issuable upon exercise of one Share). 5.2. Exercise Price. The term "Exercise Price" herein shall mean the initial exercise price or the adjusted exercise price, depending upon the context. 6. Registration Rights. 6.1. Registration Under the Securities Act of 1933; Restriction on Transfer. None of the Warrants, Shares or Conversion Shares have been registered for purposes of public distribution under the Securities Act of 1933, as amended (the "Act"). The Holders agree not to sell, transfer, pledge, hypothecate or otherwise dispose of any of the Shares or -4- Conversion Shares pursuant to a registration statement or otherwise until 120 days following the final closing date of the Private Placement. 6.2. Registrable Securities. As used herein the term "Registrable Security" means each of the Conversion Shares and any Common Shares issued upon any stock split or stock dividend in respect of such Shares; provided, however, that with respect to any particular Registrable Security, such security shall cease to be a Registrable Security when, as of the date of determination, (i) it has been effectively registered under the Act and disposed of pursuant thereto, (ii) registration under the Act is no longer required for the subsequent public distribution of such security or (iii) it has ceased to be outstanding. The term "Registrable Securities" means any and/or all of the securities falling within the foregoing definition of a "Registrable Security." In the event of any merger, reorganization, consolidation, recapitalization or other change in corporate structure affecting the Common Shares, such adjustment shall be made in the definition of "Registrable Security" as is appropriate in order to prevent any dilution or enlargement of the rights granted pursuant to this Article 6. 6.3. Piggyback Registration. If, at any time during the five years following the final closing date of the Private Placement, the Company proposes to prepare and file one or more registration statements (including in connection with an initial public offering of its securities) or post-effective amendments thereto covering equity or debt securities of the Company, or any such securities of the Company held by its shareholders (in any such case, other than in connection with a merger, acquisition or pursuant to Form S-8 or successor form), (for purposes of this Article 6, collectively, the "Registration Statement"), it will give written notice of its intention to do so by registered mail ("Notice"), at least thirty (30) days prior to the filing of each such Registration Statement, to all holders of the Registrable Securities. Upon the written -5- request of such a holder (a "Requesting Holder"), made within twenty (20) days after receipt of the Notice, that the Company include any of the Requesting Holder's Registrable Securities in the proposed Registration Statement, the Company shall, as to each such Requesting Holder, use its best efforts to effect the registration under the Act of the Registrable Securities which it has been so requested to register ("Piggyback Registration"), at the Company's sole cost and expense and at no cost or expense to the Requesting Holders (except as provided in Section 6.5(b) hereof); provided, however, that if, in the written opinion of the Company's managing underwriter, if any, for such offering, the inclusion of all or a portion of the Registrable Securities requested to be registered, when added to the securities being registered by the Company or the selling shareholder(s), will exceed the maximum amount of the Company's securities which can be marketed (i) at a price reasonably related to their then current market value, or (ii) without otherwise materially adversely affecting the entire offering, then the Company may exclude from such offering all or a portion of the Registrable Securities which it has been requested to register. If securities are proposed to be offered for sale pursuant to such Registration Statement by other security holders of the Company and the total number of securities to be offered by the Requesting Holders and such other selling security holders is required to be reduced pursuant to a request from the managing underwriter (which request shall be made only for the reasons and in the manner set forth above) the aggregate number of Registrable Securities to be offered by Requesting Holders pursuant to such Registration Statement shall equal the number which bears the same ratio to the maximum number of securities that the underwriter believes may be included for all the selling security holders (including the Requesting Holders) as the original number of Registrable Securities proposed to -6- be sold by the Requesting Holders bears to the total original number of securities proposed to be offered by the Requesting Holders and the other selling security holders. If, subsequent to exercise of the demand registration right referred to in Section 6.4 below, any Registrable Securities requested to be included in a Piggyback Registration are not so included because of the operation of the proviso of the first paragraph of this Section 6.3, then the holders of such excluded Registrable Securities shall have the right to require the Company, at its expense, to prepare and file another Registration Statement under the Act covering such Registrable Securities, provided that, if the underwriter so requests, such Registrable Securities shall not be sold until the expiration of 120 days from the effective date of the offering that gave rise to the piggyback registration rights that are the subject of this Section 6.3. 6.4 Demand Registration. (a) At any time following the initial closing date of the Private Placement, any "Majority Holder" (as such term is defined in Section 6.4(c) below) of the Registrable Securities shall have the right (which right is in addition to the piggyback registration rights provided for under Section 6.3 hereof), exercisable by written notice to the Company (the "Demand Registration Request"), to have the Company prepare and file with the Securities and Exchange Commission (the "Commission"), on one occasion, at the sole expense of the Company (except as provided in Section 6.5(b) hereof), a Registration Statement and such other documents, including a prospectus, as may be necessary (in the opinion of both counsel for the -7- Company and counsel for such Majority Holder), in order to comply with the provisions of the Act, so as to permit a public offering and sale of the Registrable Securities by the holders thereof. The Company shall use its best efforts to cause the Registration Statement to become effective under the Act, so as to permit a public offering and sale of the Registrable Securities by the holders thereof. Once effective, the Company will use its best efforts to maintain the effectiveness of the Registration Statement until the earlier of (i) the date that all of the Registrable Securities have been sold or (ii) the date that the holders of the Registrable Securities receive an opinion of counsel to the Company that all of the Registrable Securities may be freely traded (without limitation or restriction as to quantity or timing and without registration under the Act) under rule 144(k) promulgated under the Act or otherwise. (b) The Company covenants and agrees to give written notice of any Demand Registration Request to all holders of the Registrable Securities within ten (10) business days from the date of the Company's receipt of any such Demand Registration Request. After receiving notice from the Company as provided in this Section 6.4(b), holders of Registrable Securities may request the Company to include their Registrable Securities in the Registration Statement to be filed pursuant to Section 6.4(a) hereof by notifying the Company of their decision to have such securities included within ten (10) days of their receipt of the Company's notice. Any Demand Registration Request by a Majority Holder shall be binding on all other Holders, whether or not such Holders include their Registrable Securities. (c) The term "Majority Holder" as used in Section 6.4 hereof shall mean any holder or any combination of holders of Registrable Securities, if included in such holders' Registrable Securities are that aggregate number of Common Shares (including Common Shares already issued and Common Shares issuable upon conversion of Shares outstanding and -8- upon conversion of Shares issuable pursuant to the exercise of outstanding Warrants) as would constitute a majority of the aggregate number of Conversion Shares (including Shares or Conversion Shares already issued and Shares or Conversion Shares issuable pursuant to the exercise of outstanding Warrants) included in all the Registrable Securities. 6.5. Covenants of the Company With Respect to Registration. The Company covenants and agrees as follows: (a) In connection with any registration under Section 6.4 hereof, the Company shall file the Registration Statement as expeditiously as possible, but in any event no later than thirty (30) business days following receipt of any demand therefor, shall use its best efforts to have any such Registration Statement declared effective at the earliest possible time, and shall furnish each holder of Registrable Securities such number of prospectuses as shall reasonably be requested. (b) The Company shall pay all costs, fees and expenses (other than underwriting fees, discounts and nonaccountable expense allowance applicable to the Registrable Securities and the fees and expenses of counsel retained by the holders of Registrable Securities) in connection with all Registration Statements filed pursuant to Sections 6.3 and 6.4(a) hereof including, without limitation, the Company's legal and accounting fees, printing expenses, and blue sky fees and expenses. (c) The Company will take all necessary action which may be required in qualifying or registering the Registrable Securities included in the Registration Statement for offering and sale under the securities or blue sky laws of such states as are reasonably requested by the holders of such securities. -9- (d) The Company hereby agrees to indemnify any holder of the Registrable Securities to be sold pursuant to any Registration Statement and any underwriter or person deemed to be an underwriter under the Act and each person, if any, who controls such holder or underwriter or person deemed to be an underwriter within the meaning of Section 15 of the Act or Section 20(a) of the Securities Exchange Act of 1934, as amended ("Exchange Act"), against all loss, claim, damage, expense or liability (including all expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which any of them may become subject under the Act, the Exchange Act or otherwise, arising from such registration statement to the same extent and with the same effect as the provisions pursuant to which the Company has agreed to indemnify the Placement Agent as set forth in Section 11 of the Placement Agent Agreement and to provide for just and equitable contribution as set forth in Section 11 of the Placement Agent Agreement. (e) Any holder of Registrable Securities to be sold pursuant to a registration statement, and such Holder's successors and assigns, shall severally, and not jointly, indemnify, the Company, its officers and directors and each person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, against all loss, claim, damage or expense or liability (including all expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which they may become subject under the Act, the Exchange Act or otherwise, arising from information furnished by or on behalf of such holder, or such Holder's successors or assigns, for specific inclusion in such Registration Statement to the same extent and with the same effect as the provisions pursuant to which the Placement Agent has agreed to indemnify the Company as set -10- forth in Section 11 of the Placement Agent Agreement and to provide for just and equitable contribution as set forth in Section 11 of the Placement Agent Agreement. (f) Nothing contained in this Agreement shall be construed as requiring any Holder to exercise the Warrants held by such Holder prior to the initial filing of any registration statement or the effectiveness thereof. (g) If the Company shall fail to comply with the provisions of this Article 6, the Company shall, in addition to any other equitable or other relief available to the holders of Registrable Securities, be liable for any or all incidental, special and consequential damages sustained by the holders of Registrable Securities, requesting registration of their Registrable Securities. (h) The Company shall promptly deliver copies of all correspondence between the Commission and the Company, its counsel or auditors and all memoranda relating to discussions with the Commission or its staff with respect to the Registration Statement to each holder of Registrable Securities included for such registration in such Registration Statement pursuant to Section 6.3 hereof or Section 6.4 hereof requesting such correspondence and memoranda and to the managing underwriter, if any, of the offering in connection with which such Holder's Registrable Securities are being registered and shall permit each holder of Registrable Securities and such underwriter to do such reasonable investigation, upon reasonable advance notice, with respect to information contained in or omitted from the Registration Statement as it deems reasonably necessary to comply with applicable securities laws or rules of the National Association of Securities Dealers, Inc. Such investigation shall include access to books, records and properties and opportunities to discuss the business of the Company with its officers and independent auditors, all to such -11- reasonable extent and at such reasonable times and as often as any such holder of Registrable Securities or underwriter shall reasonably request. 7. Exchange and Replacement of Warrant Certificates. Each Warrant Certificate is exchangeable without expense, upon the surrender thereof by the registered Holder at the principal executive office of the Company, for a new Warrant Certificate of like tenor and date representing in the aggregate the right to purchase the same number of securities in such denominations as shall be designated by the Holder thereof at the time of such surrender. Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of any Warrant Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it, and reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of the Warrant Certificate, if mutilated, the Company will make and deliver a new Warrant Certificate of like tenor, in lieu thereof. 8. Elimination of Fractional Interests. The Company shall not be required to issue certificates representing fractions of Shares, nor shall it be required to issue scrip or pay cash in lieu of fractional interests, it being the intent of the parties that all fractional interests shall be eliminated by rounding any fraction up to the nearest whole number of Shares. 9. Reservation and Listing of Securities. The Company shall at all times reserve and keep available out of its authorized Preferred Shares, solely for the purpose of issuance upon the exercise of the Warrants, such number of Preferred Shares as shall be issuable upon the exercise thereof. The Company -12- covenants and agrees that, upon exercise of the Warrants and payment of the Exercise Price therefor, all Shares issuable upon such exercise shall be duly and validly issued, fully paid, non-assessable and not subject to the preemptive rights of any shareholder. For as long as the Warrants shall be outstanding, the Company shall use its best efforts to cause all Common Shares issuable upon conversion of the Shares issuable upon the exercise of the Warrants to be listed on or quoted by NASDAQ or listed on such national securities exchange, in the event the Common Shares are listed on a national securities exchange. 10. Notices to Warrant Holders. Nothing contained in this Agreement shall be construed as conferring upon the Holder or Holders the right to vote or to consent or to receive notice as a shareholder in respect of any meetings of shareholders for the election of directors or any other matter, or as having any rights whatsoever as a shareholder of the Company. If, however, at any time prior to the expiration of the Warrants and their exercise, any of the following events shall occur: (a) the Company shall take a record of the holders of its Common Shares or Preferred Shares for the purpose of entitling them to receive a dividend or distribution payable otherwise than in cash, or a cash dividend or distribution payable otherwise than out of current or retained earnings, as indicated by the accounting treatment of such dividend or distribution on the books of the Company; or (b) the Company shall offer to all the holders of its Common Shares or Preferred Shares any additional shares of capital stock of the Company or securities convertible into or exchangeable for shares of capital stock of the Company, or any option, right or warrant to subscribe therefor; or -13- (c) a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation or merger) or a sale of all or substantially all of its property, assets and business as an entirety shall be proposed; or (d) reclassification or change of the outstanding Common Shares or Preferred Shares (other than a change in par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), consolidation of the Company with, or merger of the Company into, another corporation (other than a consolidation or merger in which the Company is the surviving corporation and which does not result in any reclassification or change of the outstanding Common Shares, except a change as a result of a subdivision or combination of such shares or a change in par value, as aforesaid), or a sale or conveyance to another corporation of the property of the Company as an entirety is proposed; or (e) The Company or an affiliate of the Company shall propose to issue any rights to subscribe for Common Shares or any other securities of the Company or of such affiliate to all the shareholders of the Company; then, in any one or more of said events, the Company shall give written notice to the Holder or Holders of such event at least twenty (20) days prior to the date fixed as a record date or the date of closing the transfer books for the determination of the shareholders entitled to such dividend, distribution, convertible or exchangeable securities or subscription rights, options or warrants, or entitled to vote on such proposed dissolution, liquidation, winding up or sale. Such notice shall specify such record date or the date of closing the transfer books, as the case may be. Failure to -14- give such notice or any defect therein shall not affect the validity of any action taken in connection with the declaration or payment of any such dividend or distribution, or the issuance of any convertible or exchangeable securities or subscription rights, options or warrants, or any proposed dissolution, liquidation, winding up or sale. 11. Notices. All notices, requests, consents and other communications hereunder shall be in writing and shall be deemed to have been duly made when delivered, or mailed by registered or certified mail, return receipt requested: (a) If to a registered Holder of the Warrants, to the address of such Holder as shown on the books of the Company; or (b) If to the Company, to the address set forth in Section 3 of this Agreement or to such other address as the Company may designate by notice to the Holders. 12. Supplements and Amendments. The Company and the Placement Agent may from time to time supplement or amend this Agreement without the approval of any Holders of Warrant Certificates in order to cure any ambiguity, to correct or supplement any provision contained herein which may be defective or inconsistent with any provisions herein, or to make any other provisions in regard to matters or questions arising hereunder which the Company and the Placement Agent may deem necessary or desirable and which the Company and the Placement Agent deem not to adversely affect the interests of the Holders of Warrant Certificates. -15- 13. Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company and the Holders inure to the benefit of their respective successors and assigns hereunder. 14. Termination. This Agreement shall terminate at the close of business on December 29, 2005. Notwithstanding the foregoing, this Agreement will terminate on any earlier date when all Warrants have been exercised and all the Shares issuable upon exercise of the Warrants have been resold to the public; provided, however, that the provisions of Section 6 shall survive any termination pursuant to this Section 15 until the close of business on December 29, 2008. 15. Governing Law. This Agreement and each Warrant Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be construed in accordance with the laws of said State, except to the extent that the Delaware General Corporation Law mandatorily applies. 16. Benefits of This Agreement. Nothing in this Agreement shall be construed to give to any person or corporation other than the Company and the Placement Agent and any other registered holder or holders of the Warrant Certificates, Warrants or the Shares any legal or equitable right, remedy or claim under this Agreement; and this Agreement shall be for the sole and exclusive benefit of the Company and the Placement Agent and any other holder or holders of the Warrant Certificates, Warrants or the Shares. -16- 17. Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, as of the day and year first above written. AMEDISYS, INC. By: ------------------------------------ Name: Title: Attest: - ------------------------- HUDSON CAPITAL PARTNERS, L.P. By: HCP Management Corp., General Partner By: ------------------------------------ Name: Title: -17- EXHIBIT A THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED FOR PURPOSES OF PUBLIC DISTRIBUTION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT (i) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (ii) TO THE EXTENT APPLICABLE, PURSUANT TO RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) UPON THE DELIVERY BY THE HOLDER TO THE COMPANY OF AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR THE COMPANY, STATING THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE. THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN. EXERCISABLE ON OR BEFORE 5:00 P.M., NEW YORK TIME, _________, 2002 No. W- _______ Warrants WARRANT CERTIFICATE This Warrant Certificate certifies that _______________ ____________ or registered assigns, is the registered holder of _______ Warrants to purchase, at any time from _______, 1997 until 5:00 P.M. New York City time on ________, 2002 ("Expiration Date"), up to _____ fully-paid and non-assessable shares ("Shares") of the preferred stock, par value $.001 per share (the "Preferred Shares"), of Amedisys, Inc., a Delaware corporation (the "Company"), at the initial exercise price, subject to adjustment in certain events (the "Exercise Price"), of $10.00 per Share upon surrender of this Warrant Certificate and payment of the Exercise Price at an office or agency of the Company, but subject to the conditions set forth herein and in the warrant agreement dated as of ____________, 1997 between the Company and Hudson Capital Partners, L.P. (the "Warrant Agreement"). Payment of the Exercise Price may be made in cash, or by certified or official bank check in New York Clearing House funds payable to the order of the Company, or any combination thereof. No Warrant may be exercised after 5:00 P.M., New York City time, on the Expiration Date, at which time all Warrants evidenced hereby, unless exercised prior thereto, shall thereafter be void. The Warrants evidenced by this Warrant Certificate are part of a duly authorized issue of Warrants issued pursuant to the Warrant Agreement, which Warrant Agreement is hereby incorporated by reference in and made a part of this instrument and is hereby referred to in a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the Company and the holders (the words "holders" or "holder" meaning the registered holders or registered holder) of the Warrants. Upon due presentment for registration of transfer of this Warrant Certificate at an office or agency of the Company, a new Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this Warrant Certificate, subject to the limitations provided herein and in the Warrant Agreement, without any charge except for any tax, or other governmental charge imposed in connection therewith. Upon the exercise of less than all of the Warrants evidenced by this Certificate, the Company shall forthwith issue to the holder hereof a new Warrant Certificate representing such number of unexercised Warrants. The Company may deem and treat the registered holder(s) hereof as the absolute owner(s) of this Warrant Certificate (notwithstanding any notation of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, and of any distribution to the holder(s) hereof, and for all other purposes, and the Company shall not be affected by any notice to the contrary. All terms used in this Warrant Certificate which are defined in the Warrant Agreement shall have the meanings assigned to them in the Warrant Agreement. IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly executed under its corporate seal. Dated: ___________, 1997 AMEDISYS, INC. By: -------------------------------------- Name: Title: Attest: - ----------------------------- [FORM OF ELECTION TO PURCHASE] The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, to purchase _________ Preferred Shares and herewith tenders in payment for such securities cash or a certified or official bank check payable in New York Clearing House Funds to the order of Amedisys, Inc. in the amount of $ , all in accordance with the terms hereof. The undersigned requests that a certificate for such securities be registered in the name of , whose address is __________________, and that such Certificate be delivered to __________________, whose address is _____________. Dated: Signature: ----------------------------------- (Signature must conform in all respects to name of holder as specified on the face of the Warrant Certificate.) ________________________________ ________________________________ (Insert Social Security or Other Identifying Number of Holder) [FORM OF ASSIGNMENT] (To be executed by the registered holder if such holder desires to transfer the Warrant Certificate.) FOR VALUE RECEIVED ---------------------------------------------- hereby sells, assigns and transfers unto - -------------------------------------------------------------------------- (Please print name and address of transferee) this Warrant Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint _______________, Attorney, to transfer the within Warrant Certificate on the books of the within-named Company, with full power of substitution. Dated: Signature: -------------------------------------- (Signature must conform in all respects to name of holder as specified on the face of the Warrant Certificate) _______________________________ _______________________________ (Insert Social Security or Other Identifying Number of Assignee) EX-5.1 12 EXHIBIT 5.1 EXHIBIT 5.1 March 10, 1998 Mr. William Borne Amedisys, Inc. 3029 S. Sherwood Forest Blvd., Suite 300 Baton Rouge, Louisiana 70816 Dear Mr. Borne: As counsel for Amedisys, Inc., a Delaware corporation ("Company"), you have requested our firm to render this opinion in connection with the Registration Statement of the Company on Form S-3 filed under the Securities Act of 1933, as amended ("Act"), with the Securities and Exchange Commission relating to the registration of the resale of (i) 1,621,622 shares of Common Stock issuable upon conversion of series A preferred stock ("Preferred Stock"), and (ii) 113,514 shares of Common Stock underlying Preferred Stock pursuant to currently exercisable warrants ("Placement Agent Warrants"). We are familiar with the registration statement and the registration contemplated thereby. In giving this opinion, we have reviewed the registration statement and such other documents and certificates of public officials and of officers of the Company with respect to the accuracy of the factual matters contained therein as we have felt necessary or appropriate in order to render the opinions expressed herein. In making our examination, we have assumed the genuineness of all signatures, the authenticity of all documents presented to us as originals, the conformity to original documents of all documents presented to us as copies thereof, and the authenticity of the original documents from which any such copies were made, which assumptions we have not independently verified. Based upon all the foregoing, we are of the opinion that: 1. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. 2. The shares of Preferred Stock underlying the Placement Agent Warrants to be issued upon exercise of such Placement Agent Warrants are validly authorized and, upon exercise of the Warrants in accordance with their terms, will be validly issued, fully paid and nonassessable. Mr. William Borne March 10, 1998 Page 2 3. The shares of Common Stock underlying the Preferred Stock to be issued upon conversion of such Preferred Stock are validly authorized and, upon conversion of the Preferred Stock in accordance with their terms, will be validly issued, fully paid and nonassessable. We consent to the use in the registration statement of the reference to Brewer & Pritchard, P.C. under the heading "Legal Matters." This opinion is conditioned upon the registration statement being declared effective and upon compliance by the Company with all applicable provisions of the Act and such state securities rules, regulations and laws as may be applicable. Very truly yours, BREWER & PRITCHARD, P.C. EX-10.4 13 EXHIBIT 10.4 EXHIBIT 10.4 AMEDISYS, INC. AMENDED AND RESTATED STOCK OPTION PLAN 1. ADOPTION AND PURPOSE AMEDISYS, INC., f/k/a Analytical Nursing Management Corporation, a Delaware corporation (the "Company"), adopted its Statutory Stock Option Plan for Employees ("Plan") effective May 5, 1994. The Company hereby amends and restates the Plan in its entirety, effective August 6, 1997 as hereinafter set forth, subject to stockholder approval. The purpose of the Plan is to foster and promote the financial success of the Company and materially increase stockholder value by enabling eligible key employees and others to participate in the long-term growth and financial success of the Company. The Plan is intended to provide "incentive stock options" within the meaning of that term under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), as well as non-qualified stock options. Any proceeds of cash or property received by the Company for the sale of AMEDISYS, INC. common stock, $.001 par value (the "Common Stock") pursuant to Options granted under this Plan will be used for general corporate purposes. 2. ADMINISTRATION 2.1 The Plan shall be administered by a committee (the "Compensation Committee") appointed by the Board of Directors of the Company (the "Board") and composed of at least two Board members. The Compensation Committee shall meet the plan administration requirements described under Rule 16b-3(c)(2) promulgated under the Securities Exchange Act of 1934, as amended ("Exchange Act"), or any similar rule which may subsequently be in effect. Any vacancy on the Compensation Committee shall be filled by the Board. 2.2 Subject to the express provisions of the Plan, the Compensation Committee shall have the sole and complete authority to (i) determine key employees and others to whom awards hereunder shall be granted, (ii make awards in such form and amounts as it shall determine, (ii impose such limitations and conditions upon such awards as it shall deem appropriate, (iv interpret the Plan, prescribe, amend and rescind rules and regulations relating to it, (v) determine the terms and provisions of the respective participants' agreements (which need not be identical), and (vi make such other determinations as it deems necessary or advisable for the administration of the Plan. The decisions of the Compensation Committee on matters within their jurisdiction under the Plan shall be conclusive and binding on the Company and all other persons. No members of the Board or the Compensation Committee shall be liable for any action taken or determination made in good faith. 2.3 All expenses associated with the Plan shall be paid by the Company or its Subsidiaries. 3. DEFINITIONS 3.1 "Cause" when used in connection with the termination of a Participant's employment with the Company, shall mean the termination of the Participant's employment by the Company by reason of (i) the conviction of the Participant of a crime involving moral turpitude by a court of competent jurisdiction as to which no further appeal can be taken; (ii) the proven commission by the Participant of an act of fraud upon the Company; (iii) the willful and proven misappropriation of any funds or property of the Company by the Participant; (iv) the willful, continued and unreasonable failure by the Participant to perform duties assigned to him and agreed to by him; (v) the knowing engagement by the Participant in any direct, material conflict of interest with the Company without compliance with the Company's conflict of interest policy, if any, then in effect; (vi) the knowing engagement by the Participant, without the written approval of the Board of Directors of the Company, in any activity which competes with the business of the Company or which would result in a material injury to the Company; or (vii) the knowing engagement in any activity which would constitute a material violation of the provisions of the Company's insider trading policy or business ethics policy, if any, then in effect. 3.2 "Change in Control" shall mean the occurrence of any of the following events: (i) any Person becomes, after the effective date of this Plan, the "beneficial owner" (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company representing 30% or more of the combined voting power of the Company's then outstanding securities, unless the Board (as constituted immediately prior to such Change in Control) determines in its sole absolute discretion that no Change in Control has occurred; (ii) Individuals who constitute the Board on the effective date of the Plan cease, for any reason, to constitute at least a majority of the Board of Directors; provided, however, that any person becoming a director subsequent to the effective date of the Plan who was nominated for election by at least 66-2/3% of the Board as constituted on the effective date of the Plan (other than the nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Board of Directors, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of this Plan, considered a member of the Board as constituted on the effective date of the Plan; or (iii) the Board of Directors determines in its sole and absolute discretion that there has been a Change in Control of the Company. 3.3 "Consultant" shall mean any person who is engaged by the Company or any parent or Subsidiary of the Company to render consulting services and is compensated for such consulting services. 3.4 "Continuous Service" shall mean the absence of any interruption or termination of employment with or service to the Company or any parent or Subsidiary of the Company that now exists or hereinafter is organized or acquires the Company for a period of 12 months. Continuous Service shall not be considered interrupted in the case of sick leave, military leave or any other leave of absence approved by the Company provided that such interruption shall not be longer than 90 consecutive days. 3.5 "Eligible Employee" shall mean an Employee that has provided continuous service to the Company or to any parent or Subsidiary of the Company that now exists or hereafter is organized or acquires the Company. 3.6 "Employee" shall mean any person employed on an hourly or salaried basis by the Company or any parent or Subsidiary of the Company that now exists or hereafter is organized or acquires the Company. 3.7 The "Fair Market Value" of a share of Common Stock on any date shall be (i) the closing sales price on the immediately preceding business day of a share of Common Stock as reported on the principal securities exchange on which shares of Common Stock are then listed or admitted to trading or (ii) if not so reported, the average of the closing bid and asked prices for a share of Common Stock on the immediately preceding business day as quoted on the National Association of Securities Dealers Automated Quotation System ("Nasdaq") or (iii) if not quoted on Nasdaq, the average of the closing bid and asked prices for a share of Common Stock as quoted by the National Quotation Bureau's "Pink Sheets" or the National Association of Securities Dealers' OTC Bulletin Board System. If the price of a share of Common Stock shall not be so reported, the Fair Market Value of a share of -2- Common Stock shall be determined by the Compensation Committee in its absolute discretion. In no event shall the Fair Market Value of any share of Common Stock be less than its par value. 3.8 "Incentive Stock Option" shall mean an Option which is an "incentive stock option" within the meaning of Section 422 of the Code and which is identified as an Incentive Stock Option in the agreement by which it is evidenced. 3.9 "Non-Qualified Stock Option" shall mean an Option which is not an Incentive Stock Option and which is identified as a Non-Qualified Stock Option in the agreement by which it is evidenced. 3.10 "Option" shall mean an Option to purchase shares of Common Stock of the Company granted pursuant to this Plan. Each Option shall be identified either as an Incentive Stock Option or a Non-Qualified Stock Option in the agreement by which it is evidenced. 3.11 "Subsidiary" shall mean a corporation (other than the Company) in which the Company directly or indirectly controls 50% or more of the combined voting power of all stock of that corporation. 4. ELIGIBILITY The Compensation Committee may grant Options to purchase Common Stock under this Plan to Eligible Employees of the Company or its Subsidiaries, as well as to non-employee directors and Consultants. Employees of the Company, as well as non-employee directors and Consultants who are granted Options pursuant to this Plan shall be referred to as "Participants." The Compensation Committee shall determine, within the provisions of the Plan, those persons to whom, and the times at which, Options shall be granted. In making such determinations, the Compensation Committee may take into account the nature of the services rendered by such person, his or her present and potential contributions to the Company's success, and such other factors as the Compensation Committee in its discretion shall deem relevant. Grants may be made to the same individual on more than one occasion. 5. GRANTING OF OPTIONS 5.1 Powers of the Compensation Committee. The Compensation Committee shall determine, in accordance with the provisions of the Plan, the duration of each Option, the exercise price of each Option, the time or times within which (during the term of the Option) all or portions of each Option may be exercised, and whether cash, Common Stock, or other property may be accepted in full or partial payment upon exercise of an Option. 5.2 Number of Options. As soon as practicable after the date an individual is determined to be eligible under Section 4 hereof, the Compensation Committee may, in its discretion, grant to such person a number of Options determined by the Compensation Committee. 6. COMMON STOCK Each Option granted under the Plan shall be convertible into one share of Common Stock, unless adjusted in accordance with the provisions of Section 8 hereof. Options may be granted for a number of shares not to exceed, in the aggregate, 1,000,000 shares of Common Stock, subject to adjustment pursuant to Section 8 hereof. For purposes of calculating the maximum number of shares of Common Stock that may be issued under the Plan, (i) all the shares issued (including the shares, if any, withheld for tax withholding requirements) shall be counted when cash is used as full payment for shares issued upon the exercise of an Option, and (ii) shares tendered by a Participant as payment for shares issued upon exercise of an Option shall be available for issuance under the Plan. Upon the exercise of an Option, the Company may deliver either authorized but unissued shares, treasury shares, or any combination thereof. In the event that any Option granted under the -3- Plan expires unexercised, or is surrendered by a Participant for cancellation, or is terminated or ceases to be exercisable for any other reason without having been fully exercised, the Common Stock subject to such Option shall again become available for new Options to be granted under the Plan to any eligible person (including the holder of such former Option) at an exercise price determined in accordance with Section 7.2 hereof, which price may then be greater or less than the exercise price of such former Option. No fractional shares of Common Stock shall be issued, and the Compensation Committee shall determine the manner in which fractional share value shall be treated. 7. REQUIRED TERMS AND CONDITIONS OF OPTIONS 7.1 Award of Options. The Compensation Committee may, from time to time and subject to the provisions of the Plan and such other terms and conditions as the Compensation Committee may prescribe, grant to any Participant in the Plan one or more Incentive Stock Options or Non- Qualified Stock Options to purchase for cash or shares the number of shares of Common Stock allotted by the Compensation Committee. However, subject to the provisions of Sections 7.4 and 7.5, Incentive Stock Options may be granted only to Eligible Employees. The date an Option is granted shall mean the date selected by the Compensation Committee as of which the Compensation Committee allots a specific number of shares to a Participant pursuant to the Plan. 7.2 Exercise Price. The exercise price of any Non-Qualified Stock Option granted under the Plan shall be such price as the Compensation Committee shall determine on the date on which such Non-Qualified Stock Option is granted; provided, that such price may not be less than 85% of the Fair Market Value of a share of Common Stock on the date the Option is granted. Except as provided in Section 7.4 hereof, the exercise price of any Incentive Stock Option granted under the Plan shall be not less than 100% of the Fair Market Value of a share of Common Stock on the date on which such Incentive Stock Option is granted. 7.3 Term and Exercise. Each Option shall be exercisable on such date or dates, during such period and for such number of shares of Common Stock as shall be determined by the Compensation Committee on the day on which such Option is granted and set forth in the agreement evidencing the Option; provided, however, that (A) no Option shall be exercisable after the expiration of 10 years from the date such Option was granted, and (B) no Incentive Stock Option granted to a 10% shareholder as set forth in Section 7.4 hereof shall be exercisable after the expiration of five years from the date such Incentive Stock Option was granted, and, provided, further, that each Option shall be subject to earlier termination, expiration or cancellation as provided in the Plan. Each Option shall be exercisable in whole or in part with respect to whole shares of Common Stock. The partial exercise of an Option shall not cause the expiration, termination or cancellation of the remaining portion thereof. On the partial exercise of an Option, the agreement evidencing such Option shall be returned to the Participant exercising such Option together with the delivery of the certificates described in Section 7.7 hereof. 7.4 Ten Percent Shareholder. Notwithstanding anything to the contrary in this Plan, Incentive Stock Options may not be granted to any owner of 10% or more of the total combined voting power of the Company and its Subsidiaries unless (i) the exercise price is at least 110% of the Fair Market Value of a share of Common Stock on the date the Option is granted, and (ii) the Option by its terms is not exercisable after the expiration of five years from the date such Incentive Stock Option is granted. 7.5 Maximum Amount of Option Grant. To the extent that the aggregate Fair Market Value (determined on the date the Option is granted) of Common Stock subject to Incentive Stock Options exercisable for the first time by a Participant during any calendar year exceeds $100,000, such Options shall be treated as Non-Qualified Stock Options. -4- 7.6 Method of Exercise. An Option shall be exercised by delivering notice to the Company's principal office, to the attention of its Secretary, no fewer than five business days in advance of the effective date of the proposed exercise. Such notice shall be accompanied by the agreement evidencing the Option, shall specify the number of shares of Common Stock with respect to which the Option is being exercised and the effective date of the proposed exercise, and shall be signed by the Participant. The Participant may withdraw such notice at any time prior to the close of business on the business day immediately preceding the effective date of the proposed exercise, in which case such agreement shall be returned to the Participant. Payment for shares of Common Stock purchased upon the exercise of an Option shall be made on the effective date of such exercise either (i) in cash, by certified check, bank cashier's check or wire transfer or (ii) subject to the approval of the Compensation Committee, in shares of Common Stock owned by the Participant and valued at their Fair Market Value on the effective date of such exercise, or partly in shares of Common Stock with the balance in cash, by certified check, bank cashier's check or wire transfer. Any payment in shares of Common Stock shall be effected by the delivery of such shares to the Secretary of the Company, duly endorsed in blank or accompanied by stock powers duly executed in blank, together with any other documents and evidences as the Secretary of the Company shall require from time to time. 7.7 Delivery of Stock Certificates. Certificates for shares of Common Stock purchased on the exercise of an Option shall be issued in the name of the Participant and delivered to the Participant as soon as practicable following the effective date on which the Option is exercised; provided, however, that such delivery shall be effected for all purposes when the stock transfer agent of the Company shall have deposited such certificates in the United States mail, addressed to the Participant. 8. ADJUSTMENTS 8.1 The aggregate number or type of shares of Common Stock with respect to which Options may be granted hereunder, the number or type of shares of Common Stock subject to each outstanding Option, and the exercise price per share for each such Option may all be appropriately adjusted, as the Compensation Committee may determine, for any increase or decrease in the number of shares of issued Common Stock resulting from a subdivision or consolidation of shares whether through reorganization, recapitalization, consolidation, payment of a share dividend, or other similar increase or decrease. 8.2 Subject to any required action by the stockholders, if the Company shall be a party to a transaction involving a sale of substantially all its assets, a merger, or a consolidation, any Option granted hereunder shall pertain to and apply to the securities to which a holder of Common Stock would be entitled to receive as a result of such transaction; provided, however, that all unexercised Options under the Plan may be cancelled by the Company as of the effective date of any such transaction by giving notice to the holders of such Options of its intention to do so, and by permitting the exercise of such Options during the 30-day period immediately after the date such notice is given. 8.3 In the case of dissolution of the Company, every Option outstanding hereunder shall terminate; provided, however, that each Option holder shall have 30 days' prior written notice of such event, during which time he shall have a right to exercise his partly or wholly unexercised Options. 8.4 On the basis of information known to the Company, the Compensation Committee shall make all determinations under this Section 8, including whether a transaction involves a sale of substantially all the Company's assets; and all such determinations shall be conclusive and binding on the Company and all other persons. 8.5 Upon the occurrence of a Change in Control, the Compensation Committee (as constituted immediately prior to the Change in Control) shall determine, in its absolute discretion, whether each -5- Option granted under the Plan and outstanding at such time shall become fully and immediately exercisable and shall remain exercisable until its expiration, termination or cancellation pursuant to the terms of the Plan or whether each such Option shall continue to vest according to its terms. 9. OPTION AGREEMENTS Each award of Options shall be evidenced by a written agreement, executed by the Participant and the Company, which shall contain such restrictions, terms and conditions as the Compensation Committee may require in accordance with the provisions of this Plan. Option agreements need not be identical. The certificates evidencing the shares of Common Stock acquired upon exercise of an Option may bear a legend referring to the terms and conditions contained in the respective Option agreement and the Plan, and the Company may place a stop transfer order with its transfer agent against the transfer of such shares. If requested to do so by the Compensation Committee at the time of exercise of an Option, each Participant shall execute a certificate indicating that he is purchasing the Common Stock under such Option for investment and not with any present intention to sell the same. 10. LEGAL AND OTHER REQUIREMENTS 10.1 The Company shall be under no obligation to effect the registration pursuant to the Securities Act of 1933, as amended, of any shares of Common Stock to be issued hereunder or to effect similar compliance under any state laws. Notwithstanding anything herein to the contrary, the Company shall not be obligated to cause to be issued or delivered any certificates evidencing shares of Common Stock pursuant to the Plan unless and until the Company is advised by its counsel that the issuance and delivery of such certificates is in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange on which shares of Common Stock are traded. The Compensation Committee may require, as a condition of the issuance and delivery of certificates evidencing shares of Common Stock pursuant to the terms hereof, that the recipient of such shares make such covenants, agreements and representations, and that such certificates bear such legends, as the Compensation Committee, in its sole discretion, deems necessary or desirable. The exercise of any Option granted hereunder shall only be effective at such time as counsel to the Company shall have determined that the issuance and delivery of shares of Common Stock pursuant to such exercise is in compliance with all applicable laws, regulations of governmental authorities and the requirements of any securities exchange on which shares of Common Stock are traded. The Company may, in its sole discretion, defer the effectiveness of any exercise of an Option granted hereunder in order to allow the issuance of shares of Common Stock pursuant thereto to be made pursuant to registration or an exemption from registration or other methods for compliance available under federal or state securities laws. The Company shall inform the Participant in writing of its decision to defer the effectiveness of the exercise of an Option granted hereunder. During the period that the effectiveness of the exercise of an Option has been deferred, the Participant may, by written notice, withdraw such exercise and obtain the refund of any amount paid with respect thereto. 10.2 With respect to persons subject to Section 16 of the Securities Exchange Act of 1934, as amended ("Exchange Act"), transactions under this Plan are intended to comply with all applicable conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent any provisions of the Plan or action by the Compensation Committee fails to so comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Compensation Committee. Moreover, in the event the Plan does not include a provision required by Rule 16b-3 to be stated therein, such provision (other than one relating to eligibility requirements, or the price and amount of Options) shall be deemed automatically to be incorporated by reference into the Plan insofar as Participants subject to Section 16 are concerned. The Compensation Committee may at any time impose any limitations upon the exercise, delivery and payment of any Option which, in the Compensation Committee's -6- discretion, are necessary in order to comply with Section 16(b) and the rules and regulations thereunder. 10.3 A Participant shall have no rights as a stockholder with respect to any shares covered by an Option, or exercised by him, until the date of delivery of a stock certificate to him for such shares. No adjustment, other than pursuant to Section 8 hereof, shall be made for dividends or other rights for which the record date is prior to the date such stock certificate is delivered. 11. NON-TRANSFERABILITY During the lifetime of a Participant, any Option granted to him shall be exercisable only by him or by his guardian or legal representative. No Option shall be assignable or transferable, except by will, by the laws of descent and distribution, or pursuant to certain domestic relations orders. The granting of an Option shall impose no obligation upon the holder thereof to exercise such Option or right. 12. NO CONTRACT OF EMPLOYMENT The adoption of this Plan or the grant of any Option shall not be construed as giving a Participant the right to continued employment with the Company or any Subsidiary of the Company. Furthermore, the Company or any Subsidiary of the Company may at any time dismiss a Participant from employment, free from any liability or claim under the Plan, unless otherwise expressly provided in the Plan or any Option agreement. 13. EFFECT OF TERMINATION OF EMPLOYMENT 13.1 If the employment or consulting, service or similar relationship of a Participant with the Company shall terminate for any reason other than Cause, "permanent and total disability" (within the meaning of Section 22(e)(3) of the Code) or the death of the Participant (a) Options granted to such Participant, to the extent that they were exercisable at the time of such termination, shall remain exercisable until the expiration of one month after such termination, on which date they shall expire, and (b) Options granted to such Participant, to the extent that they were not exercisable at the time of such termination, shall expire at the close of business on the date of such termination; provided, however, that no Option shall be exercisable after the expiration of its term. 13.2 If the employment or consulting, service or similar relationship of a Participant with the Company shall terminate on account of the "permanent and total disability" (within the meaning of Section 22(e)(3) of the Code) or the death of the Participant (a) Options granted to such Participant, to the extent that they were exercisable at the time of such termination, shall remain exercisable until the expiration of one year after such termination, on which date they shall expire, and (b) Options granted to such Participant, to the extent that they were not exercisable at the time of such termination, shall expire at the close of business on the date of such termination; provided, however, that no Option shall be exercisable after the expiration of its term. 13.3 In the event of the termination of a Participant's employment or other relationship for Cause, all outstanding Options granted to such Participant shall expire at the commencement of business on the date of such termination. 14. INDEMNIFICATION OF COMPENSATION COMMITTEE In addition to such other rights of indemnification as they may have as members of the Board or the Compensation Committee, the members of the Compensation Committee shall be indemnified by the Company against the reasonable expenses, including attorneys' fees actually and necessarily incurred in connection with the defense of any action, suit or proceeding (or in connection with any appeal therein), to which they or any -7- of them may be a party by reason of any action taken or failure to act under or in connection with the Plan or any Option granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such Compensation Committee member is liable for gross negligence or misconduct in the performance of his duties; provided that within 60 days after institution of any such action, suit or proceeding a Compensation Committee member shall in writing offer the Company the opportunity, at its own expense, to handle and defend the same. 15. WITHHOLDING TAXES Whenever the Company proposes or is required to issue or transfer shares of Common Stock under the Plan, the Company shall have the right to require the Participant to remit to the Company an amount sufficient to satisfy any federal, state and/or local withholding tax requirements prior to the delivery of any certificate or certificates for such shares. Alternatively, the Company may issue or transfer such shares of Common Stock net of the number of shares sufficient to satisfy the withholding tax requirements. For withholding tax purposes, the shares of Common Stock shall be valued on the date the withholding obligation is incurred. 16. NEWLY ELIGIBLE EMPLOYEES Except as otherwise provided herein, the Compensation Committee shall be entitled to make such rules, regulations, determinations and awards as it deems appropriate in respect of any employee who becomes eligible to participate in the Plan. 17. TERMINATION AND AMENDMENT OF PLAN The Board of Directors may at any time suspend or discontinue the Plan or revise or amend it in any respect whatsoever, provided, however, that without approval of the holders of a majority of the outstanding shares of Common Stock present in person or by proxy at an annual or special meeting of stockholders, no revision or amendments shall (i) increase the number of shares of Common Stock that may be issued under the Plan, except as provided in Section 8 hereof, (ii) materially increase the benefits accruing to individuals holding Options granted pursuant to the Plan or (iii) materially modify the requirements as to eligibility for participation in the Plan. 18. GENDER AND NUMBER Except when otherwise indicated by the context, words in the masculine gender when used in the Plan shall include the feminine gender and vice versa, and the singular shall include the plural and the plural shall include the singular. 19. GOVERNING LAW The Plan, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of Delaware. 20. EFFECTIVE DATE OF PLAN The effective date of the Plan is August 6, 1997. The Plan, each amendment to the Plan, and each Option granted under the Plan is conditioned on and shall be of no force or effect until approval of the Plan and each amendment of the Plan by the holders of a majority of the shares of Common Stock of the Company. -8- EX-10.5 14 EXHIBIT 10.5 EXHIBIT 10.5 REGISTRATION RIGHTS AGREEMENT AGREEMENT, dated as of the ____ day of December 1997, between the person whose name and address appears on the signature page hereto (individually, a "Holder" or, collectively with the holders of the Units issued in the Offering, each as defined below, the "Holders") and Amedisys, Inc., a Delaware corporation having its principal executive office at 3029 S. Sherwood Forest Blvd., Suite 300, Baton Rouge, Louisiana 70816 (the "Company"). WHEREAS, simultaneously or in connection with the execution and delivery of this Agreement, the Holders are purchasing from the Company in a private offering (the "Offering") pursuant to a Confidential Private Term Sheet (the "Term Sheet") an aggregate of up to eighty (80) units (the "Units") each Unit consisting of ten thousand (10,000) shares (the "Preferred Shares") of convertible preferred stock, par value $.001 per share, of the Company; WHEREAS, each of the Preferred Shares is convertible into a number of shares of common stock, par value $.001 per share, of the Company (the "Conversion Shares") equal to the face value of the Preferred Shares ($10.00) divided by 88% (the "Conversion Factor") of the average closing sale price of the Common Stock for the 15 trading days immediately prior to an initial closing of the Offering. WHEREAS, the Company desires to grant to the Holder the registration rights set forth herein with respect to the Conversion Shares; NOW, THEREFORE, the parties hereto mutually agree as follows: 1. REGISTRABLE SECURITIES. As used herein the term "Registrable Security" means each of the shares of Common Stock, Conversion Shares; provided, however, that with respect to any particular Registrable Security, such security shall cease to be a Registrable Security when, as of the date of determination, (i) it has been effectively registered under the Securities Act of 1933, as amended (the "Securities Act"), and disposed of pursuant thereto, (ii) registration under the Securities Act is no longer required for the immediate public distribution of such security, or (iii) it has ceased to be outstanding. In the event of any merger, reorganization, consolidation, recapitalization or other change in corporate structure affecting the Common Stock, such adjustment shall be made in the definition of "Registrable Security" as is appropriate in order to prevent any dilution or enlargement of the rights granted pursuant to this Article 1. 2. AUTOMATIC REGISTRATION. (a) The Company shall prepare and file with the Commission, within 30 days following the final closing of the Offering (the "Final Closing"), at the sole expense of the Company, in respect of all holders of Registrable Securities, a Registration Statement so as to permit a public offering and sale of the Registrable Securities. The Company shall use its best efforts to cause the Registration Statement to become effective within four months following the Final Closing. (b) If the Registration Statement is not declared effective by the Commission within four months following the Final Closing, then, commencing on the first day of the fifth month following the Final Closing, the Conversion Factor (as defined in the Term Sheet) shall decrease by .5% on the first day of each month that any of the Registrable Securities continue not to be publicly tradeable pursuant to an effective Registration Statement under the Act (e.g., the Conversion Factor will decrease to 87.5% and 87% on the first day of the fifth and sixth month, respectively, following the Final Closing) and the Company will continue to use its best efforts to cause the Commission to declare the effectiveness of the Registration Statement as to permit the public trading of the Registrable Securities pursuant thereto. (c) Once effective, the Company will be required to maintain the effectiveness of the Registration Statement until the earlier of (i) the date that all of the Registrable Securities have been sold or (ii) the date that all holders of Registrable Securities receive an opinion of counsel to the Company that all of the Registrable Securities may be freely traded without registration under the Securities Act, under Rule 144(k) promulgated under the Securities Act or otherwise. 3. COVENANTS OF THE COMPANY WITH RESPECT TO REGISTRATION. The Company covenants and agrees as follows: (a) If any stop order shall be issued by the Commission in connection with the Registration Statement or, following its effectiveness, the Company will use its best efforts to obtain the removal of such order. Following the effective date of a Registration Statement, the Company shall, upon the request of the Holder, forthwith supply such reasonable number of copies of the Registration Statement, preliminary prospectus and prospectus meeting the requirements of the Act, and other documents necessary or incidental to the public offering of the Registrable Securities, as shall be reasonably requested by the Holder to permit the Holder to make a public distribution of the Holder's Registrable Securities. The obligations of the Company hereunder with respect to the Holder's Registrable Securities are expressly conditioned on the Holder's furnishing to the Company such appropriate information concerning the Holder, the Holder's Registrable Securities and the terms of the Holder's offering of such Registrable Securities as the Company may reasonably request. (b) The Company shall pay all costs, fees and expenses in connection with all Registration Statements filed pursuant to Article 2 hereof including, without limitation, the Company's legal and accounting fees, printing expenses, and blue sky fees and expenses; provided, however, that the Holder shall be solely responsible for the fees of any counsel retained by the Holder in connection with such registration and any transfer taxes or underwriting discounts, commissions or fees applicable to the Registrable Securities sold by the Holder pursuant thereto. -2- (c) The Company will use reasonable efforts to qualify or register the Registrable Securities included in a Registration Statement for offering and sale under the securities or blue sky laws of such states as are requested by the holders of such securities, provided that the Company shall not be obligated to execute or file any general consent to service of process or to qualify as a foreign corporation to do business under the laws of any such jurisdiction. (d) Nothing contained in this Agreement shall be construed as requiring any Holder to convert its Preferred Shares prior to the initial filing of any Registration Statement or the effectiveness thereof. 4. ADDITIONAL TERMS. (a) The Company shall indemnify and hold harmless the Holder and each underwriter, within the meaning of the Securities Act, who may purchase from or sell for the Holder, any Registrable Securities, from and against any and all losses, claims, damages and liabilities caused by any untrue statement of a material fact contained in the Registration Statement, any other registration statement filed by the Company under the Securities Act, any post-effective amendment to such registration statements, or any prospectus included therein or caused by any omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission based upon information furnished or required to be furnished in writing to the Company by any Holder or underwriter expressly for use therein, which indemnification shall include each person, if any, who controls either the Holder or underwriter within the meaning of the Securities Act and each officer, director, employee and agent of the Holder and underwriter; provided, however, that the indemnification in this Section 5(a) with respect to any prospectus shall not inure to the benefit of the Holder or underwriter (or to the benefit of any person controlling the Holder or underwriter) on account of any such loss, claim, damage or liability arising from the sale of Registrable Securities by the Holder or underwriter, if a copy of a subsequent prospectus correcting the untrue statement or omission in such earlier prospectus was provided to the Holder or underwriter by the Company prior to the subject sale and the subsequent Prospectus was not delivered or sent by the Holder or underwriter to the purchaser prior to such sale. (b) If for any reason the indemnification provided for in the preceding section is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, claim, damage, liability or expense referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by the indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits received by the indemnified party and the indemnifying party, but also the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations. (c) Neither the filing of a Registration Statement by the Company pursuant to this Agreement nor the making of any request for prospectuses by the Holder shall -3- impose upon the Holder any obligation to sell the Holder's Registrable Securities, except as may be required in accordance with Section 2 hereof. (d) The Holder, upon receipt of notice from the Company that an event has occurred which requires a post-effective amendment to the Registration Statement or a supplement to the prospectus included therein, shall promptly discontinue the sale of Registrable Securities until the Holder receives a copy of a supplemented or amended prospectus from the Company, which the Company shall provide as soon as practicable after such notice. (e) If the Company fails to keep the Registration Statement referred to in Article 2 above continuously effective during the requisite period, then the Company shall use its best efforts to promptly update the Registration Statement or file a new registration statement covering the Registrable Securities remaining unsold, subject to the terms and provisions hereof. 5. PROHIBITION ON SALES. The Holders agree that they will not sell, transfer, pledge, hypothecate or otherwise dispose of the Preferred Shares or Conversion Shares pursuant to the Registration Statement or otherwise until 120 days following the Final Closing. The Company agrees to provide to each Holder written notice of the date of the Final Closing within 60 days following the Final Closing. 6. GOVERNING LAW. (a) The Registrable Securities will be, if and when issued, delivered in New York. This Agreement shall be deemed to have been made and delivered in the State of New York and shall be governed as to validity, interpretation, construction, effect and in all other respects by the internal substantive laws of the State of New York, without giving effect to the choice of law rules thereof. (b) The Company and the Holder each (a) agrees that any legal suit, action or proceeding arising out of or relating to this Agreement shall be instituted exclusively in New York State Supreme Court, County of New York, or in the United States District Court for the Southern District of New York, (b) waives any objection which the Company or such Holder may have now or hereafter to the venue of any such suit, action or proceeding, and (c) irrevocably consents to the jurisdiction of the New York State Supreme Court, County of New York and the United States District Court for the Southern District of New York in any such suit, action or proceeding. The Company and the Holder each further agrees to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding in the New York State Supreme Court, County of New York or in the United States District Court for the Southern District of New York and agrees that service of process upon the Company or the Holder mailed by certified mail to their respective addresses shall be deemed in every respect effective service of process upon the Company or the Holder, as the case may be, in any suit, action or proceeding. Each of the Company and the Holder waived trial by jury in any action to enforce the Holder's rights hereunder. -4- 7. AMENDMENT. This Agreement may only be amended by a written instrument executed by the Company and the Holder. 8. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof. 9. EXECUTION IN COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same document. 10. NOTICES. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed duly given when delivered by hand or mailed by registered or certified mail, postage prepaid, return receipt requested, as follows: If to the Holder, to his or her address set forth on the signature page of this Agreement. If to the Company, to the address set forth on the first page of this Agreement. 11. BINDING EFFECT; BENEFITS. The Holder may not assign his or her rights hereunder. This Agreement shall inure to the benefit of, and be binding upon, the parties hereto and their respective heirs, legal representatives and successors. Nothing herein contained, express or implied, is intended to confer upon any person other than the parties hereto and their respective heirs, legal representatives and successors, any rights or remedies under or by reason of this Agreement. 12. HEADINGS. The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the meaning or interpretation of any of the terms or provisions of this Agreement. 13. SEVERABILITY. Any provision of this Agreement which is held by a court of competent jurisdiction to be prohibited or unenforceable in any jurisdiction(s) shall be, as to such jurisdiction(s), ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. -5- IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto as of the date first above written. AMEDISYS, INC. By: ------------------------------------------- Name: Title: HOLDER: --------------------------------------- -6- EX-21.1 15 EXHIBIT 21.1 EXHIBIT 21.1 LIST OF SUBSIDIARIES 1. Amedisys Staffing Services, Inc. 2. Amedisys Nursing Services, Inc. 2. Amedisys Specialized Medical Services, Inc. 4. Amedisys Surgery Centers, L.C. 3. Alliance Home Health, Inc. 6. Amedisys Management Services Organization, Inc. 4. Amedisys Home Health, Inc. 8. Amedisys, Alternate-Site Infusion Therapy Services, Inc. 5. Amedisys Durable Medical Equipment, Inc. 10. Amedisys Physician Services, Inc. 11. Analytical Nursing Management Corporation of Texas 12. MedAmerica, Inc. of Texas 13. MedAmerica, Inc. 13. Hammond Surgical Care Center, L.C. 15. Infusioncare Solutions, Inc. 16. PRN, Inc. 17. St. Luke's SurgiCenter EX-23.2 16 EXHIBIT 23.2 EXHIBIT 23.2 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this registration statement on Form S-3 of our report dated March 18, 1997 included in Amedisys, Inc.'s Form 10-K for the year ended December 31, 1996. ARTHUR ANDERSEN LLP HANNIS T. BOURGEOIS & CO., LLP New Orleans, Louisiana March 10, 1998 -----END PRIVACY-ENHANCED MESSAGE-----