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 0000 Xxxxx Xxxxxxxx Xxxxxx Xxxx., Xxxxx 000,
Xxxxx Xxxxx, Xxxxxxxxx 00000 ("AMED"), ALLIANCE HOME HEALTH, INC., an Oklahoma
corporation with its principal place of business at 0000 X. Xxxxx, Xxxxx 000,
Xxxxx, Xxxxxxxx 00000 ("Company") and UNIVERSITY CAPITAL CORP., an Oklahoma
corporation with its principal place of business at 0000 X. Xxxxx, Xxxxx 000,
Xxxxx, Xxxxxxxx 00000 ("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
Xxxxxx & Xxxxxxxxx, P.C., 0000 Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000 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
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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
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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
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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
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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.
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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
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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;
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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;
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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
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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
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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.
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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.
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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. Xxxxx Xxxx 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
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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, Xxxxx X. Xxxx 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.
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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.
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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
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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.
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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
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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:
--------------------------------
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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
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