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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
______________________________________________________________
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
or
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to ______________
Commission file number: 0-24260
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AMEDISYS, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 11-3131700
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(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
3029 S. Sherwood Forest Blvd., Ste. 300 Baton Rouge, LA 70816
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(Address of principal executive offices including zip code)
(225) 292-2031
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(Registrant's telephone number, including area code)
Indicate by check mark whether the issuer (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [_]
Number of shares of Common Stock outstanding as of September 30, 1998: 3,064,918
shares
1
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PART I.
FINANCIAL INFORMATION
---------------------
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<S> <C> <C>
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets as of September 30, 1998 and December 31, 1997........................ 3
Consolidated Statements of Operations for the Three and Nine Months
ended September 30, 1998 and 1997........................................................... 4
Consolidated Statements of Cash Flows for the Nine Months ended September 30, 1998
and 1997.................................................................................... 5
Notes to Consolidated Financial Statements........................................................ 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS............. 9
PART II.
OTHER INFORMATION
-----------------
ITEM 1. LEGAL PROCEEDINGS................................................................................. 12
ITEM 2. CHANGES IN SECURITIES............................................................................. 12
ITEM 3. DEFAULTS UPON SENIOR SECURITIES................................................................... 12
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS............................................... 12
ITEM 5. OTHER INFORMATION................................................................................. 13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.................................................................. 13
</TABLE>
2
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AMEDISYS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
(UNAUDITED, IN 000'S)
ASSETS SEPTEMBER 30, 1998 DECEMBER 31, 1997
CURRENT ASSETS:
CASH $ 0 $ 4,070
ACCOUNTS RECEIVABLE, NET OF ALLOWANCE FOR DOUBTFUL
ACCOUNTS OF $3,060 IN SEPTEMBER 1998
AND IN $1,617 IN DECEMBER 1997 1,243 9,630
PREPAID EXPENSES 933 247
OTHER CURRENT ASSETS 4,378 654
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TOTAL CURRENT ASSETS 6,555 14,601
NOTES RECEIVABLE FROM RELATED PARTIES 198 252
PROPERTY, PLANT AND EQUIPMENT, NET 6,533 4,785
OTHER ASSETS, NET 10,122 3,232
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TOTAL ASSETS $23,408 $22,870
======= =======
LIABILITIES
CURRENT LIABILITIES:
OUTSTANDING CHECKS IN EXCESS OF BANK BALANCE $ 3,056 $ 0
NOTES PAYABLE 2,457 5,806
CURRENT PORTION OF LONG-TERM DEBT 927 927
ACCOUNTS PAYABLE 2,406 1,338
ACCRUED EXPENSES:
PAYROLL AND PAYROLL TAXES 1,529 2,025
INSURANCE 793 521
OTHER 1,406 847
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TOTAL CURRENT LIABILITIES 12,575 11,464
LONG-TERM DEBT 4,977 3,129
OTHER LONG-TERM LIABILITIES 1,136 0
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TOTAL LIABILITIES 18,688 14,593
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MINORITY INTEREST 3 3
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STOCKHOLDERS' EQUITY
COMMON STOCK 3 3
PREFERRED STOCK 1 1
ADDITIONAL PAID-IN CAPITAL 12,006 7,092
TREASURY STOCK (25) (25)
STOCK SUBSCRIPTIONS RECEIVABLE (1) 0
RETAINED EARNINGS (DEFICIT) (7,267) 1,203
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TOTAL STOCKHOLDERS' EQUITY 4,717 8,274
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $23,408 $22,870
======= =======
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
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AMEDISYS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1998
AND 1997
(UNAUDITED, IN 000'S EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
---------------------------- ----------------------------
SEPTEMBER 98 SEPTEMBER 97 SEPTEMBER 98 SEPTEMBER 97
INCOME:
<S> <C> <C> <C> <C>
SERVICE REVENUE $ 6,216 $ 9,709 $ 21,896 $ 28,249
COST OF SERVICE REVENUE 4,382 4,646 12,729 14,750
-------- -------- -------- --------
GROSS MARGIN 1,834 5,063 9,167 13,499
-------- -------- -------- --------
GENERAL AND ADMINISTRATIVE EXPENSES:
SALARIES AND BENEFITS 4,159 2,916 12,524 7,801
OTHER (NOTE 5) 7,460 2,404 13,810 6,383
-------- -------- -------- --------
TOTAL GENERAL AND ADMINISTRATIVE EXPENSES 11,619 5,320 26,333 14,184
-------- -------- -------- --------
OPERATING INCOME (LOSS) (9,785) (257) (17,166) (685)
-------- -------- -------- --------
OTHER INCOME AND EXPENSE:
INTEREST INCOME 16 10 37 27
INTEREST EXPENSE (343) (224) (760) (615)
MISCELLANEOUS 91 1 115 74
-------- -------- -------- --------
TOTAL OTHER INCOME AND EXPENSES (236) (213) (608) (514)
-------- -------- -------- --------
INCOME (LOSS) BEFORE INCOME TAXES AND MINORITY INTEREST, AND
DISCONTINUED OPERATIONS (10,021) (470) (17,774) (1,199)
PROVISION (BENEFIT) FOR ESTIMATED INCOME TAXES (2,173) (183) (4,809) (443)
INCOME (LOSS) BEFORE MINORITY INTEREST AND -------- -------- -------- --------
DISCONTINUED OPERATIONS (7,848) (287) (12,965) (756)
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY 0 12 0 2
-------- -------- -------- --------
INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS (7,848) (275) (12,965) (754)
DISCONTINUED OPERATIONS (NOTE 8):
INCOME FROM DISCONTINUED OPERATIONS, NET OF INCOME TAX 475 500 1,168 1,652
GAIN ON DISPOSITION, NET OF INCOME TAX 3,327 --- 3,327 ---
-------- -------- -------- --------
TOTAL DISCONTINUED OPERATIONS 3,802 500 4,495 1,652
-------- -------- -------- --------
NET INCOME (LOSS) $ (4,045) $ 225 $ (8,470) $ 898
======== ======== ======== ========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 3,065 2,811 3,060 2,697
======== ======== ======== ========
NET INCOME (LOSS) PER COMMON SHARE BEFORE DISCONTINUED
OPERATIONS $ (2.56) $ (0.10) $ (4.24) $ (0.28)
INCOME FROM DISCONTINUED OPERATIONS, NET OF INCOME TAX 0.16 0.18 0.38 0.61
GAIN ON DISPOSITION, NET OF INCOME TAX 1.09 --- 1.09 ---
-------- -------- -------- --------
NET INCOME (LOSS) PER COMMON SHARE $ (1.32) $ 0.08 $ (2.77) $ (0.33)
======== ======== ======== ========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</TABLE>
4
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AMEDISYS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(UNAUDITED, IN 000'S)
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SEPTEMBER 1998 SEPTEMBER 1997
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME (LOSS) $(8,470) $ 898
ADJUSTMENTS TO RECONCILE NET INCOME TO NET
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION 4,806 866
PROVISION FOR BAD DEBTS 660 695
MINORITY INTEREST IN AFFILIATED COMPANY 0 (2)
(GAIN) LOSS ON DISPOSAL OF PROPERTY AND EQUIPMENT 2 (24)
(GAIN) ON SALE OF STAFFING DIVISION (5,041) 0
LOSS ON SALE OF MARKETABLE SECURITIES 0 3
CHANGES IN ASSETS AND LIABILITIES:
(INCREASE) DECREASE IN ACCOUNTS RECEIVABLE 3,494 (1,312)
(INCREASE) IN PREPAID EXPENSES (707) (226)
(INCREASE) IN OTHER CURRENT ASSETS (3,600) (80)
(INCREASE) IN OTHER ASSETS (804) (481)
INCREASE (DECREASE) IN ACCOUNTS PAYABLE 185 (395)
INCREASE IN ACCRUED EXPENSES 343 1,154
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NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (9,133) 1,096
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CASH FLOW FROM INVESTING ACTIVITIES:
PURCHASE OF FURNITURE, FIXTURES & EQUIPMENT (2,549) (958)
PROCEEDS FROM SALE OF FURNITURE, FIXTURES & EQUIPMENT 0 194
CASH PAID FOR ACQUISITIONS (2,005) (465)
(INCREASE) DECREASE IN NOTES RECEIVABLE FROM RELATED PARTIES 54 (55)
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NET CASH (USED IN) INVESTING ACTIVITIES (4,500) (1,284)
------- -------
CASH FLOW FROM FINANCING ACTIVITIES:
PROCEEDS FROM SALE OF STAFFING DIVISION 6,480 0
PURCHASE OF TREASURY STOCK 0 (25)
CASH RECEIVED IN ACQUISITIONS 317 0
NET INCREASE (DECREASE) IN BORROWINGS ON LINE OF CREDIT (3,349) 913
PAYMENTS ON NOTES PAYABLE (1,837) (733)
PROCEEDS FROM NOTES PAYABLE 1,643 1,742
INCREASE (DECREASE) IN NOTES PAYABLE TO RELATED PARTIES 0 (988)
INCREASE IN OUTSTANDING CHECKS IN EXCESS OF BANK BALANCE 3,056 0
PROCEEDS FROM COMMON STOCK 0 831
DECREASE IN STOCK SUBSCRIPTIONS 0 1
PROCEEDS FROM PREFERRED STOCK 3,253 0
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NET CASH PROVIDED BY FINANCING ACTIVITIES 9,563 1,741
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (4,070) 1,553
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 4,070 1,104
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 0 $ 2,657
======= =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
CASH PAYMENTS FOR:
INTEREST $ 772 $ 551
======= =======
INCOME TAXES $ 160 $ 22
======= =======
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING ACTIVITY (SEE NOTE 10 TO FINANCIAL STATEMENTS):
VALUE OF STOCK ISSUED IN EXCHANGE $ 894 $ 600
VALUE OF NOTE PAYABLE ISSUED IN EXCHANGE 1,575 100
CASH ACQUIRED IN EXCHANGE (317) 0
WORKING CAPITAL DEFICIT (SURPLUS) ACQUIRED NET OF CASH AND CASH EQUIVALENTS 3,553 (313)
FAIR VALUE OF PROPERTY, PLANT AND EQUIPMENT ACQUIRED (385) 0
FAIR VALUE OF OTHER ASSETS ACQUIRED (27) 0
LONG TERM DEBT ASSUMED 3,069 0
FAIR VALUE OF OTHER LIABILITIES ASSUMED 54 0
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NON CASH PORTION OF ACQUISITIONS 8,416 387
CASH PAYMENT FOR ACQUISITIONS 2,005 465
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GOODWILL RECORDED IN EXCHANGE $10,421 $ 852
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</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
5
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AMEDISYS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. ORGANIZATION
Amedisys, Inc. (the "Company") is a leading multi-regional provider of home
health nursing services, alternate-site infusion therapy, and ambulatory
surgery centers. The Company operates 37 offices within a network of
subsidiaries in the southern United States.
In the opinion of management of the Company, the accompanying unaudited
consolidated financial statements contain all adjustments (consisting of normal
recurring adjustments) necessary to present fairly the financial position at
September 30, 1998 and the results of operations for the three and nine months
and cash flows for the nine months ended September 30, 1998 and 1997. The
results of operations for the interim periods are not necessarily indicative of
operating results for the entire year end. These interim consolidated financial
statements should be read in conjunction with the Company's annual financial
statements and related notes in the Company's Form 10-K.
2. EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings Per
Share," which simplifies the computation of earnings per share (EPS). The
Company adopted SFAS No. 128 in the fourth quarter of 1997. SFAS No. 128
requires the restatement of prior years' EPS data; however, application of the
statement has no impact on the Company's prior years' EPS data.
Basic net income per share of common stock is calculated by dividing net
income applicable to common stock by the weighted-average number of common
shares outstanding during the year. Diluted net income per share is not
presented as stock options and convertible securities outstanding during the
periods presented were not dilutive.
3. RECENT ACCOUNTING PRONOUNCEMENTS
Accounting for Start-up Costs. During April 1998, the Accounting Standards
Executive Committee of the AICPA issued Statement of Position 98-5 ("SOP"),
"Reporting on the Costs of Start-Up Activities." The SOP requires costs of
start-up activities and organization costs to be expensed as incurred. The SOP
is effective for financial statements for fiscal years beginning after December
15, 1998. The Company elected to write off start-up costs in the fourth quarter
of 1997 in anticipation of the issuance of the SOP.
Accounting for Derivative Instruments and Hedging Activities. In June
1998, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 133 ("SFAS 133"), "Accounting for Derivative
Instruments and Hedging Activities." The Statement establishes accounting and
reporting standards requiring that every derivative instrument (including
certain derivative instruments embedded in other contracts) be recorded in the
balance sheet as either an asset or liability measured at its fair value. The
Statement requires that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge accounting criteria are met.
Special accounting for qualifying hedges allows a derivative's gains and losses
to offset related results on the hedged item in the income statement, and
requires that a company must formally document, designate, and assess the
effectiveness of transactions that receive hedge accounting. SFAS 133 is
effective for fiscal years beginning after June 15, 1999 and must be applied to
instruments issued, acquired, or substantively modified after December 31, 1997.
The Company does not expect the adoption of the accounting pronouncement to have
a material effect on its financial position or results of operations.
6
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4. RESTRUCTURING
The Company's business is significantly impacted by political, economic and
regulatory changes. During fiscal 1998, extensive changes to the Medicare
system of reimbursement were enacted in connection with the Balanced Budget Act
of 1997 (the "Budget Act"). The Budget Act calls for the implementation on
October 1, 2000, of a new Prospective Payment System (PPS) for Medicare payments
for home health services. Until PPS is implemented, the Balanced Budget Act
established an Interim Payment System (IPS), effective October 1, 1997, that
reimburses home health agencies the lesser of: (1) actual, reasonable costs, (2)
per-visit cost limits, or (3) newly implemented per-beneficiary cost limits.
The IPS program was announced April 1, 1998, but given effect retroactively to
October 1, 1997. The implementation of IPS for the Company's Medicare cost-
reimbursed nursing agencies has had and is expected to continue to have a
significant impact on the Company's current and future home health nursing
operations. IPS has also caused many home care agencies to go out of business or
has hindered their ability to afford external consulting services which has
greatly diminished the sales in our Home Health Care Management division.
In response to IPS, the company initiated a restructuring plan which
included implementing cost reduction programs and care delivery process
improvements, and identifying non-core business operations for sale. The cost
reduction plan included employee cutbacks and salary adjustments as well as
office consolidation initiatives. The Company has closed 4 home health care
nursing offices, 3 infusion therapy locations, and has consolidated 3 sites in
multi-site markets as part of its efforts. Additionally, the Company sold its
Staffing division in the third quarter (see note 8).
5. WRITEDOWN OF GOODWILL
Due to the estimated impact of IPS and with the Company's decision during
the third quarter of 1998 to close certain home health nursing offices of
Alliance, a subsidiary of the Company, the Company determined that an impairment
existed at September 30, 1998 with respect to the recorded goodwill amounts
associated with these offices. Accordingly, the Company recorded a charge of
$3.4 million during the third quarter to reduce the goodwill associated with
this acquisition. This charge is recorded in other general and administrative
expense in the accompanying unaudited consolidated statement of operations.
6. ACCRUED PAYROLL AND PAYROLL TAXES
The Company currently has an Employee Stock Ownership Plan ("ESOP")
relating to a subsidiary of the Company. At December 31, 1997, the Company had
accrued contributions of $705,000. These contributions were funded during the
second quarter of 1998 through the issuance of stock of the subsidiary.
7. PLACEMENT OF PREFERRED STOCK
In March, 1998, Amedisys completed a secondary phase of its private
placement of $.001 par value convertible preferred stock pursuant to Regulation
D of the Securities Act of 1933. The Company issued an additional 350,000
shares at $10 per share for gross proceeds of $3.5 million. The Company has
used the proceeds of this placement to fund synergistic acquisitions within the
South East and South Central regions of the U.S. in order to accelerate the
growth of its fully integrated network of outpatient health care services
including the Alternate Site Infusion Therapy division. These shares are
convertible into 774,356 shares of common stock which is equivalent to $4.625
per share.
8. DISCONTINUED OPERATIONS
Effective September 21, 1998, the Company sold certain assets, subject to
the assumption of certain liabilities, of its staffing division (consisting of
its wholly-owned subsidiaries of Amedisys Staffing Services, Inc., Amedisys
Nursing Services, Inc., and Amedisys Home Health, Inc.) to Nursefinders, Inc.
The purchase price of $7,200,000 consisted of $6,480,000 payable immediately
upon closing with the balance of $720,000 placed in an escrow account. The
assets being sold consist primarily of all accounts and notes receivable;
prepaid expenses;
7
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advances and deposits; on-site hardware and software; furniture, fixtures, and
leasehold improvements; office supplies; records and files; transferable
governmental licenses, permits, and authorizations; and rights in, to and under
specified licenses, contracts, leases, and agreements. The liabilities being
assumed are the trade accounts payable, accrued expenses, and other liabilities
as of the closing date. Amedisys has agreed to a five-year non-competition
covenant. The sale of the Staffing division resulted in a pre-tax gain of
$5,041,000. The Company filed a Current Report on Form 8-K with the SEC relating
to this disposition on October 5, 1998.
The Company has reflected the discontinued operations in the consolidated
statement of operations. Summarized financial information for the discontinued
operation is as follows (in 000's):
<TABLE>
<CAPTION>
Three months ended Nine months ended
------------------------------- -------------------------------
September 1998 September 1997 September 1998 September 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Service Revenue $ 3,812 $ 4,409 $ 12,607 $ 13,134
Income from discontinued operation before
provision for income taxes $ 720 $ 833 $ 1,770 $ 2,623
Income from discontinued operations, net
of income taxes $ 475 $ 500 $ 1,168 $ 1,652
</TABLE>
9. INCOME TAXES
The Company recorded a tax benefit of $2,173,000 and $4,809,000 for the
three and nine months ended September 30, 1998, as the Company anticipates
carrying back taxable losses to previous years in which the Company paid income
taxes or generating taxable income in future periods to offset the 1998 losses.
The Company recorded a tax benefit of 34% for the first two quarters of 1998.
The write down of goodwill recorded in the third quarter (Note 5), however, is
not deductible for tax purposes, resulting in a lower quarterly tax benefit.
Included in Other Current Assets at September 30, 1998 is a deferred tax asset
of $2,493,000 resulting from the year-to-date losses. The Company anticipates
carrying back taxable losses to previous years in which the Company paid income
taxes and generating taxable income in future periods to offset the year-to-date
losses.
10. SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING ACTIVITY
The following unaudited table presents (in 000's) a summary of the
acquisitions completed during each quarter of 1998 as presented in the
supplemental schedule to the consolidated cash flow statement.
<TABLE>
<CAPTION>
1/st/ Qtr 2/nd/ Qtr 3/rd/ Qtr
1998 1998 1998
Total Total Total Total
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<S> <C> <C> <C> <C>
Supplemental schedule of non-cash investing activity:
Value of stock issued in exchange $ 874 $ 20 $ 0 $ 894
Value of note payable issued in exchange 375 1,200 0 1,575
Cash acquired in exchange (123) (194) 0 (317)
Working capital deficit acquired net of cash and cash equivalents 3,272 281 0 3,553
Fair value of property, plant and equipment acquired (279) (98) 0 (385)
Fair value of other assets acquired (26) 1 0 (27)
Long term debt assumed 2,998 71 0 3,069
Fair value of other liabilities assumed 54 0 0 54
------- ------- ---- --------
Non cash portion of acquisitions 7,146 1,270 0 8,416
Cash payment for acquisition 1,905 100 0 2,005
------- ------- ---- --------
Goodwill recorded in exchange $ 9,051 $ 272 $ 0 $ 10,421
------- ------- ---- --------
</TABLE>
11. NOTES PAYABLE
Notes payable consist primarily of borrowings under revolving bank lines of
credit of $7,500,000 and $750,000, bearing interest at bank prime plus 1.5% and
bank prime plus 1%, respectively. The lines of credit are collateralized by 80%
of eligible receivables in outpatient surgery and infusion, 75% of eligible
receivables in home health care, and 80% of physician notes receivable. Eligible
receivables are defined principally as accounts that are aged less than 90 days
for outpatient surgery and infusion and 120 days for home health care. At
September 30, 1998, approximately $3.2 million was available based on eligible
receivables under the combined lines of credit. The line of credit is subject to
certain covenants, including a monthly borrowing base, a debt service coverage
ratio, and a leverage ratio. At December 31, 1997, March 31, 1998, June 30,
1998, and September 30, 1998, the Company was in default on the debt service
coverage ratio requirement of 1.1 : 1.0 due to the losses incurred in these
periods. This default was waived by the bank through December 27, 1998.
8
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12. AMOUNTS DUE MEDICARE
As of September 30, 1998, the Company estimated cost report payables due on
demand to Medicare of approximately $5 million which are netted in
Accounts Receivable. The Company is in the process of confirming the liability
and will be negotiating with Medicare for extended repayment. Although
management expects Medicare to agree to a revised payment plan, there is no
assurance at this time that the proposed terms will be accepted by Medicare.
13. RECENT DEVELOPMENTS
On November 2, 1998, Amedisys, Inc. signed a definitive agreement to
purchase certain assets, subject to the assumption of certain liabilities, of 83
home care offices including 35 provider numbers of Columbia/HCA Healthcare
Corporation located in Alabama, Georgia, Louisiana, North Carolina, Oklahoma and
Tennessee. The purchase price was $24,000,000 with a portion of the
consideration, $10,000,000, less certain liabilities, payable November 3, 1998
with the balance of $14,000,000 payable pursuant to a one-year promissory note
at the prime rate of Union Planter's Bank of Louisiana plus 0.75%. The assets
being purchased consist primarily of furniture, fixtures, and equipment; prepaid
expenses; advances and deposits; inventory; office supplies; records and files;
transferable governmental licenses and permits authorizations; and rights in, to
and under specified licenses, contracts, leases, and agreements. The
liabilities being assumed are the paid-time-off balances of the Columbia/HCA
employees and obligations arising on or subsequent to the closing dates under
the assumed contracts. The closing of the transaction will occur in two stages.
Assets located in Louisiana and Oklahoma were acquired November 16, 1998, and
the remaining assets will be acquired December 1, 1998. Columbia/HCA has agreed
that for a period of two years from the date of closing it will not compete with
the Company in the business of providing skilled intermittent home care services
in the counties/parishes currently served by the acquired offices. Such covenant
does not apply to a home health agency that is acquired as part of an
acquisition of a general acute care hospital, skilled nursing facility,
ambulatory surgical facility, physician practice management company or assisted
living facility.
On November 3, 1998, Amedisys, Inc. (the "Company") and CPII Acquisition
Corp. ("CPII") entered into an Asset Purchase Agreement whereby the Company sold
certain of the assets, subject to the assumption of certain liabilities, of its
proprietary software system (Analytical Medical Systems) and home health care
management division (Amedisys Resource Management) to CPII in exchange for
$11,000,000 cash consideration. The assets sold consisted primarily of deposits,
prepayments or prepaid expenses relating to the business; contracts; fixtures
and equipment; books and records; proprietary rights with respect to the home
health information system developed and used by the Company and its
subsidiaries; rights under warranties; and claims, causes of action, chooses in
action, rights of recovery and rights to set-off. The liabilities assumed were
those associated with the assumed contracts. The Company has also agreed to
provide limited support services to CPII for the period of one year from the
date of the agreement.
The Company filed a Current Report on Form 8-K with the SEC for the above
transactions on November 10, 1998.
14. LIQUIDITY
The Company's principal capital requirements are for additional working
capital to fund growth of the Company. The Company recorded a net loss for the
nine months ended September 30, 1998 and had negative cash flow from operations.
The Company expects to have additional losses and negative cash flow amounts for
the remainder of 1998. This has negatively impacted the availability of the
Company's current financing sources and is expected to decrease the Company's
overall liquidity position. Management believes that with continued access to a
secured working capital finance relationship, the sale of non-core operations,
and persistent efforts to reduce future losses from home health care nursing
operations, the Company will have sufficient liquidity to meet its capital
requirements through December 31, 1998. There is no assurance that the Company
will be successful in accomplishing these goals and maintaining adequate
liquidity through 1998.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis provides information which management
believes is relevant to an assessment and understanding of the Company's results
of operations and financial condition. This discussion should be read in
conjunction with the Consolidated Financial Statements appearing in Item 1.
RESULTS OF OPERATIONS
Revenues. Net revenues decreased $3,493,000 or 36% and $6,353,000 or 22%
for the three and nine months ended September 30, 1998 as compared to the same
periods in 1997. Home Health Nursing division's net revenues decreased
$4,468,000 or 68% for the three months ended September 30, 1998 and $7,708,000
or 41% for the nine months ended September 30, 1998, as compared to the same
periods in 1997. This decrease was due to the reductions
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in Medicare reimbursement rates as a result of IPS and a reduction in visits. As
a result of the per-beneficiary limit, the Home Health Nursing division has
recorded additional charges to revenue throughout 1998. Visits for the three
month period ended September 30 decreased approximately 25% from 1997 to 1998.
For the nine month period ended September 30, visits decreased approximately 20%
from 1997 to 1998. In addition, revenues in the Home Health Care Management
division decreased $896,000 or 85% and $1,056,000 or 56% for the three and nine
months ended September 30, 1998. The reimbursement changes implemented as a
result of IPS have caused many home care agencies to go out of business or have
hindered their ability to afford external consulting services. Offsetting these
comparative decreases in net revenues were increases in revenues relating to the
acquisition of Care Medical & Mobility, a durable medical equipment company, in
August 1997 and the startup and acquisitions in the Alternative Site Infusion
Therapy division. Care Medical & Mobility recorded net revenues of $719,000 and
$1,852,000 for the three and nine month periods ending September 30, 1998 as
compared to $132,000 in the three and nine month periods ended September 30,
1997. Alternate Site Infusion Therapy recorded net revenues of $1,571,000 and
$2,981,000 for the three and nine month periods ending September 30, 1998. This
division began incurring start-up expenses in the 4th quarter of 1997.
Cost of Revenues. Although cost of revenues decreased by 6% and 14% for the
three and nine months ended September 30, 1998 as compared to the same periods
in 1997, cost of revenues as a percentage of net revenues increased for both
periods. Cost of revenues as a percentage of net revenues increased to 71% from
48% for the three month period ending September 30, 1998 as compared to the same
period in 1997 and 58% from 52% for the nine month period ended September 30,
1998 as compared to the same period in 1997. These increases in cost of revenue
are primarily attributed to the reduction in Medicare reimbursement,
specifically the per-beneficiary charges described above. Exclusive of these
charges, cost of revenue as a percentage of net revenues would have been 51% and
50% for the three and nine month periods ended September 30, 1998. These
percentages are comparable to the same periods in 1997.
General and Administrative Expenses ("G&A"). General and administrative
expenses increased by $6,299,000 or 118% and $12,149,000 or 86% for the three
and nine months ended September 30, 1998 as compared to the same periods in
1997. Included in G&A expenses for the three months ended September 30, 1998 is
a charge of $3.4 million to record an impairment in the recorded value of
goodwill relating to a home health care acquisition. An increase of $2,499,000
and $7,615,000 for the three and nine months ended September 30, 1998 is
directly attributable to additional personnel and related expenses to support
the startup of the Alternate Site Infusion Therapy division as well as the
Company's recent acquisitions and developments. Furthermore, G&A expenses
increased approximately $510,000 and $1,698,000 from the three and nine months
ended September 30, 1997 to 1998 due to expanded resources for marketing and
managed care as well as the additional of experienced, senior management.
Other Income and Expense. Other income and expense increased $23,000 and
$94,000 for the three and nine months ended September 30, 1998 from the same
periods in 1997 primarily due to additional interest expense incurred in 1998 as
compared to 1997.
Provision for Estimated Income Taxes. The Company recorded a tax benefit
related to continuing operations of $2,173,000 and $4,809,000 for the three and
nine months ended September 30, 1998.
Discontinued Operations. The Company disposed of its staffing division in
the third quarter of 1998. This disposition has been deemed a discontinued
operation. Income from discontinued operations, net of income tax, decreased
$25,000 or 5% for the three months ended September 30, 1998 from the same period
in 1997, and $484,000 or 29% for the nine months ended September 30, 1998 as
compared to the same period in 1997. On disposal, the Company recorded a gain
of $3,327,000 after income taxes.
Net Income (Loss). As a result of the reasons described above, the Company
had a net loss of ($4,045,000) for the three months ended September 30, 1998
compared with net income of $225,000 for the same period in 1997. For the nine
month period ending September 30, 1998, the Company recorded a net loss of
($8,470,000) as compared to net income of $898,000 for the same period in 1997.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal capital requirements are for additional working
capital to fund growth of the Company. The Company recorded a net loss for the
nine months ended September 30, 1998 and had negative cash flow from operations.
The Company expects to have additional losses and negative cash flow amounts for
the remainder of 1998. This has negatively impacted the availability of the
Company's current financing sources and is expected to decrease the Company's
overall liquidity position. Management believes that with continued access to a
secured working capital finance relationship, the sale of non-core operations,
and persistent efforts to reduce future losses from home health care nursing
operations, the Company will have sufficient liquidity to meet its capital
10
<PAGE>
requirements through December 31, 1998. There is no assurance that the Company
will be successful in accomplishing these goals and maintaining adequate
liquidity through 1998.
At September 30, 1998, the Company had current assets of $6,555,000 and
current liabilities of $12,575,000 resulting in a working capital deficit of
($6,020,000) as compared to working capital of $3,137,000 as of December 31,
1997. Working capital decreased by $9,157,000 primarily as a result of the net
losses for nine months ended September 30, 1998.
The Company's operating activities used $9,133,000 during the first nine
months of 1998, whereas such activities provided $1,096,000 in cash during the
first nine months of 1997. This increase in cash used in operating activities
is primarily attributable to net losses partially offset by a decrease in
accounts receivable. Net cash used in investing activities increased to
$4,500,000 from $1,284,000 for the nine months ending September 30, 1998 and
1997 respectively. Purchases of furniture, fixtures and equipment increased
$1,591,000 in addition to $2,005,000 used to purchase several acquisitions. Net
cash provided by financing activities increased to $9,563,000 from $1,741,000
for the nine months ending September 30, 1998 and 1997, respectively. This
change is due to the sale of the Staffing division in the third quarter of 1998
and proceeds from a private placement of preferred stock. The monies received
from this sale were used to fund operating losses.
Notes payable consist primarily of borrowing under revolving bank lines of
credit of $7,500,000 and $750,000, bearing interest at bank prime plus 1.5% and
bank prime plus 1%, respectively. The lines of credit are collateralized by 80%
of eligible receivables in outpatient surgery and infusion, 75% of eligible
receivables in home health care, and 80% of physician notes receivable.
Eligible receivables are defined principally as accounts that are aged less than
90 days for outpatient surgery and infusion and 120 days for home health care.
At September 30, 1998, approximately $3.2 million was available based on
eligible receivables under the combined lines of credit. The line of credit is
subject to certain covenants, including a monthly borrowing base, a debt service
coverage ratio, and a leverage ratio. At December 31, 1997, March 31, 1998,
June 30, 1998, and September 30, 1998, the Company was in default on the debt
service coverage ratio requirement of 1.1 : 1.0 due to the losses incurred in
these periods. This default was waived by the bank through December 27, 1998.
As of September 30, 1998, the Company estimated cost report payables due
on demand to Medicare of approximately $5 million which are netted in
Accounts Receivable. The Company is in the process of confirming the liability
and will be negotiating with Medicare for extended repayment. Although
management expects Medicare to agree to a revised payment plan, there is no
assurance at this time that the proposed term will be accepted by Medicare.
As described in Note 13 to the consolidated financial statements, the
Company acquired 83 homecare offices of Columbia/HCA Healthcare Corporation in
November 1998. The Company will need additional financing to fund the working
capital needs of this acquisition.
YEAR 2000 COMPLIANCE ISSUES
The Company is currently evaluating its entire operation as a result of
potential problems associated with Year 2000. A task force has been established
within the Company to evaluate all areas for compliance issues and develop
correction plans if necessary. Some internal areas and processes being evaluated
include initial charge entry through billing and collections; accounts payable
invoice receipt through processing and payment; bank processing of receipts and
disbursements; computer hardware and software functionality; and time and/or
date-sensitive office and medical equipment functionality. At present, the
Company does not anticipate any material disruption in its operations or
significant costs to be incurred to attain compliance. There can be no
assurance, however, that the Company will identify or adequately assess all
aspects of the business that may be affected. Due to this uncertainly, a
contingency plan will be developed as each area is evaluated to minimize any
negative impact to the Company. The Company is in the process of soliciting
information concerning the Year 2000 compliance status of its payors (including
the Medicare and Medicaid governmental programs), suppliers, and customers. In
the event that any of the Company's significant payors, suppliers, or customers
does not successfully and timely achieve Year 2000 compliance, the Company's
business and/or operations could be adversely affected.
11
<PAGE>
CORPORATE COMPLIANCE PROGRAM
The Company has recently begun to formalize a Corporate Compliance Program.
The increasing complexity of the health care industry has driven the Company to
adopt a program to assure that adequate systems are in place to facilitate
ethical and legal conduct. The laws and regulations affecting the industry and
reimbursement policies vary among each individual payer. In addition to these
regulations, the Company must adhere to the guidelines established by the Office
of Inspector General. Being accustomed to operating in a highly regulated
environment, the Company has a large number of policies, procedures, and
practices designed to ensure that the activities of the employees and the
Company as a whole are in full compliance with relevant laws, standards, and
federal reimbursement guidelines.
FORWARD LOOKING STATEMENTS
When included in the Quarterly Report on Form 10-Q or in documents
incorporated herein by reference, the words "expects", "intends", "anticipates",
"believes", "estimates", and analogous expressions are intended to identify
forward-looking statements. Such statements inherently are subject to a variety
of risks and uncertainties that could cause actual results to differ materially
from those projected. Such risk and uncertainties include, among others,
general economic and business conditions, current cash flows and operating
deficits, debt services needs, adverse changes in federal and state laws
relating to the health care industry, competition, regulatory initiatives and
compliance with governmental regulations, customer preferences and various other
matters, many of which are beyond the Company's control. Theses forward-looking
statements speak only as of the date of the Quarterly Report on Form 10-Q. The
Company expressly disclaims any obligation or undertaking to release publicly
any updates or any changes in the Company's expectations with regard thereto or
any changes in events, conditions or circumstances on which any statement is
based.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
Effective with the close of business on September 28, 1998, the Company's
common stock began trading on the OTC Bulletin Board under the ticker symbol
"AMED". This development resulted from non-compliance with the Nasdaq National
Market's net tangible asset requirement.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
At September 30, 1998, the Company was in default on the $7,500,000
revolving bank line of credit. The line of credit is collateralized by accounts
receivable and is subject to certain covenants, including a monthly borrowing
base, a debt service coverage ratio, and a leverage ratio. The Company was in
default on the debt service coverage ratio requirement of 1.1 : 1.0 due to the
losses incurred. This default was waived by the bank through December 27, 1998.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On August 12, 1998, the annual shareholders meeting of the Company was held
with the following seven items of business to be voted on:
Item 1. Election of five directors to serve until the next annual
meeting of the shareholders of the Company. The nominated individuals were
William F. Borne, CEO of Amedisys, Inc.; Ronald A. LaBorde, President and
CEO of Piccadilly Cafeterias; Jake L. Netterville, managing director of
Postlethwaite and Netterville, a public accounting firm; David R. Pitts,
President and CEO of Pitts Management Associates, Inc.; and David F.
Ricchiuti, Assistant Dean and Director of Research at Tulane University's
A.B. Freeman School of Business. These individuals were approved as a group
by shareholders, receiving 2,441,390 votes in favor, 52,225 votes against
and 4,300 votes abstained.
12
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Item 2. Proposed amendment to the Company's Certificate of
Incorporation increasing the number of authorized shares of common stock
from 10,000,000 to 30,000,000. This amendment was approved by the
shareholders, receiving 2,405,985 votes in favor, 87,510 votes against and
4,420 votes abstained.
Item 3. Proposed amendment to the Company's Certificate of
Incorporation increasing the number of authorized shares of preferred stock
from 2,500,000 to 5,000,000. This amendment was approved by the
shareholders, receiving 2,400,985 votes in favor, 92,980 votes against and
3,950 votes abstained.
Item 4. Proposed 1998 Employee Stock Option Plan. This plan was
approved by the shareholders, receiving 2,433,652 votes in favor, 57,613
votes against and 6,650 votes abstained.
Item 5. Proposed 1998 Directors Stock Option Plan. This plan was
approved by the shareholders, receiving 2,434,625 votes in favor, 58,640
votes against and 4,650 votes abstained.
Item 6. Proposed 1998 Employee Stock Option Plan. This plan was
approved by the shareholders, receiving 2,441,432 votes in favor, 51,833
votes against and 4,650 votes abstained.
Item 7. Reappointment of the Company's independent public accounting
firms of Arthur Andersen LLP and Hannis T. Bourgeois & Co., LLP. The
reappointment of the independent public accounting firms was approved by
the shareholders, receiving 2,491,390 votes in favor, 4,825 votes against
and 1,700 votes abstained.
ITEM 5. OTHER INFORMATION
In July 1998, the Company announced that 500,000 shares of its common stock
would be purchased by certain of its officers and directors. To date, this
transaction has not been consummated.
On August 8, 1998, the Company filed a Form S-8 Registration Statement with
the SEC in connection with an Employee Stock Purchase Plan which provides for
the issuance of up to 1,000,000 shares of its common stock, par value $.001 per
share.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit
No. Identification of Exhibit
- -------- -------------------------
10.1(1) --- Master Corporate Guaranty of Service Agreements between Care
South Home Health Services, Inc. and Amedisys, Inc. dated
November 2, 1998
27.1(2) --- Financial Data Schedule
(1) Filed herewith. An asterisk appearing in Exhibit 10.1 indicates information
which has been omitted and filed separately with the Securities and Exchange
Commission pursuant to a Confidentiality Treatment Request. Asterisks appear on
pages 2, 6, 17, 42 and 44 of the exhibit. Approximately four pages of text have
been omitted.
(2) Filed as an exhibit to the Quarterly Report for the period ended
September 30, 1998, Commission file number 0-24260 and incorporated herein by
reference.
(b) Report on Form 8-K
The Company filed a Current Report on Form 8-K with the SEC on July 23,
1998 in connection with the acquisition of Alliance Home Health, Inc. on January
1, 1998. Included in the filing were audited financial statements of Alliance
Home Health, Inc. for the years ended September 30, 1997 and 1996 in an audit
report dated June 17, 1998. The audited financial statements were comprised of
balance sheets, statements of operations and retained earnings, and statements
of cash flows. Pro forma financial information, required pursuant to Article 11
of Regulation S-X, was also included in the filing. The pro forma financial
information was comprised of a pro forma consolidated balance sheet as of
December 31, 1997, a pro forma consolidated statement of operations for the year
ended December 31, 1997, and explanatory notes.
13
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMEDISYS, INC.
By: /s/ MITCHEL G. MOREL
-----------------------------------
Mitchel G. Morel
Chief Financial Officer, Principal Financial and
Accounting Officer
DATE: December 30, 1998
14
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Exhibit 10.1
MASTER CORPORATE GUARANTY OF SERVICE AGREEMENTS
BETWEEN
CARESOUTH HOME HEALTH SERVICES, INC.
AND
AMEDISYS, INC.
* INDICATES INFORMATION WHICH HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIALITY TREATMENT
REQUEST. ASTERISKS APPEAR ON PAGES 2, 6, 17, 21, 42 AND 44 OF THIS EXHIBIT 10.1.
APPROXIMATELY FOUR PAGES OF TEXT HAVE BEEN OMITTED.
November 2, 1998
<PAGE>
TABLE OF CONTENTS
1 DEFINITIONS......................................................... 1
2 GUARANTY............................................................ 4
3 NATURE OF UNDERTAKING............................................... 4
4 DURATION OF UNDERTAKING; TERM....................................... 4
5 DEALINGS WITH AFFILIATES............................................ 5
6 RIGHTS AGAINST GUARANTOR............................................ 5
7 ELECTION OF REMEDIES................................................ 5
8 SUBSTITUTE PERFORMANCE.............................................. 6
9 CONFIDENTIALITY..................................................... 6
10 SUPPORT SERVICES.................................................... 6
11 CONSOLIDATED FEE STRUCTURE.......................................... *
12 TRANSITION MANAGEMENT AND IMPLEMENTATION SERVICES................... 10
13 TAXES............................................................... 10
14 REMEDIES............................................................ 11
15 GENERAL............................................................. 12
SIGNATURES.................................................................. 15
EXHIBIT A: DESCRIPTION OF AGENCIES................................... Annexed
EXHIBIT B: FORM OF ASA's............................................. Annexed
<PAGE>
STATE OF GEORGIA
COUNTY OF BIBB
MASTER CORPORATE GUARANTY OF SERVICE AGREEMENTS
THIS MASTER CORPORATE GUARANTY OF SERVICE AGREEMENTS ("Agreement" or
"Guaranty Agreement") is made and entered into as of the 2/nd/ day of November,
1998, by and between CARESOUTH HOME HEALTH SERVICES, INC. a Georgia corporation
(hereafter referred to as "CareSouth") and AMEDISYS, INC., a Delaware for-profit
corporation (hereinafter referred to as "Guarantor").
RECITALS:
WHEREAS, Amedisys, Inc. and a number of its Affiliates and subsidiaries
have entered into separate Agency Service Agreements (hereafter an "ASA" or
"ASA's") with CareSouth for the provision of professional services for home
health care agencies owned, operated or managed by Amedisys, Inc. and its
Affiliates (the "Agencies"), which services CareSouth also provides to other
third parties;
WHEREAS, CareSouth and Amedisys, Inc. have agreed to a pricing structure
for said ASA's and the rendering of services thereunder which relies on the
cumulative annual visit volume of all of the ASA's for Amedisys, Inc. and all of
its Affiliates and subsidiaries;
AND WHEREAS, Amedisys, Inc. agrees to act as Guarantor of each and every
separate ASA as an inducement to CareSouth to enter into the ASA's for each
Agency with Amedisys, Inc. and each of its Affiliates and subsidiaries,
respectively;
NOW, THEREFORE, in consideration of the promises contained herein, the
parties agree as follows:
1 DEFINITIONS. Unless otherwise expressly stated herein, the following terms
shall have these meanings ascribed to them below:
1.1 "Affiliate" of a person shall mean (a) any person or entity which
directly or indirectly, is in control of, is controlled by, or under
common control with, such person or entity or (b) any person who is a
director or officer (i) of such person or entity, (ii) of any
subsidiary of such person or entity or (iii) of any person or entity
described in clause (a) above. The Guarantor and CareSouth agree that
as of the Execution Date of this Agreement all of those entities
listed on Exhibit "A" annexed hereto are Affiliates of Guarantor. For
purposes of this definition, control of a person shall mean the power,
direct or indirect, (i) to vote 10% or more of the securities having
ordinary voting power for the election of directors of such persons or
entities, or the ability of a person or entity to appoint a majority
of the directors of such person or entity, or (ii) to direct or cause
the direction of the management and policies of such person or entity
whether by contract or otherwise; provided, however, in no event shall
any person or entity providing management or other similar services to
Customer or CareSouth be deemed to be an Affiliate of Customer or
CareSouth, as the case may be.
1.2 "Agency" shall mean any medicare-certified home health care agency
owned (in whole or in part) by, operated (in whole or in part) by, or
managed under contract (in whole or in part) by the Guarantor and/or
its Affiliates, including each Agency described and listed on Exhibit
"A", hereto. However, "Agency" shall not include businesses for the
rendering or delivery of ancillary health services such as home
infusion therapy, home medical equipment or supply, private-duty
nursing, or ambulatory or out-patient care facilities and services.
1.3 "Agreement" or "Guaranty Agreement" shall have the meaning set forth
in the preamble above.
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MASTER CORPORATE GUARANTY OF SERVICE AGREEMENTS
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1.4 "ASA" shall refer to the Agency Service Agreement in substantially the
form attached hereto as Exhibit "B" which Guarantor will cause or
shall have caused each of its Affiliates to execute in favor of
CareSouth with respect to each Agency.
1.5 "Breach" shall mean that event when a representation, warranty,
covenant, obligation (including payment of fees), or other provision
of this Agreement, or any instrument delivered pursuant to this
Agreement, will be deemed to have occurred if there is or has been (a)
any inaccuracy in or breach of, or any failure to perform or comply
with, such representation, warranty, covenant, obligation, or other
provision, or (b) any claim (by any Person) or other occurrence or
circumstance that is or was inconsistent with such representation,
warranty, covenant, obligation, or other provision, and the term
"Breach" means any such inaccuracy, breach, failure, claim,
occurrence, or circumstance.
1.6 "CareSouth" shall have the meaning set forth in the preamble above.
1.7 "Confidential Information" shall mean (i) with respect to Guarantor,
data and information relating to the Business of the Agency (which
does not rise to the status of a Trade Secret) which is or has been
disclosed to CareSouth or its Affiliates or of which CareSouth or its
Affiliates became aware as a result of its relationship with Guarantor
pursuant to this Agreement and which has value to Guarantor and its
Affiliates and is not generally known to its competitors; and (ii)
with respect to CareSouth, form and terms of this Agreement, the data
and information relating to its business (which does not rise to the
status of a Trade Secret) which is or has been disclosed to Guarantor
or its Affiliates or of which Guarantor or its Affiliates became aware
as a result of its relationship with CareSouth pursuant to this
Agreement and which has value to CareSouth and its Affiliates and is
not generally known to its competitors. Confidential Information
shall not include any data which has been voluntarily disclosed to the
public by Guarantor or CareSouth, as the case may be (except where
public disclosure has been made by Guarantor or CareSouth, as
applicable, without authorization) or that has been independently
developed and disclosed by others or that otherwise enters the public
domain through lawful means. The provisions of this Agreement
restricting the use of Confidential Information shall survive for a
period of two (2) years following termination or expiration of this
Agreement.
1.8 "Customer" shall mean collectively or individually the Obligor on any
respective ASA with respect to an Agency, whether Amedisys, Inc. or
any of its Affiliates.
1.9 "Day" shall mean a calendar day unless specifically designated
otherwise.
1.10 "Effective Date" shall mean the date upon which the parties mutually
agree the terms of this Agreement become legally binding, which date
shall be November 2, 1998.
1.11 "Governmental Regulations" shall mean any and all federal, state and
local laws, statutes, rules, regulations, orders, and ordinances
relating to the Business of the Agency, applicable to the Agency or to
which the Agency is subject.
1.12 "Liabilities" or "Liability" shall mean without limitation, all
liabilities, indebtedness, and obligations of Amedisys, Inc. and/or
any of its Affiliates to CareSouth, whether direct or indirect,
absolute or contingent, joint or several, secured or unsecured, due or
not due,
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MASTER CORPORATE GUARANTY OF SERVICE AGREEMENTS
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contractual or tortious, liquidated or unliquidated, arising by
operation of law or otherwise, now or hereafter existing, or held or
to be held by CareSouth for its own account or as agent for another or
others, whether created directly, indirectly, or acquired by
assignment or otherwise, including but not limited to all extensions
or renewals thereof, and all sums payable under or by virtue thereof,
including without limitation, all amounts of principal and interest,
all expenses (including reasonable attorney's fees and cost of
collection) incurred in the collection thereof or the enforcement of
rights thereunder (including without limitation, any liability arising
from failure to comply with state or federal laws, rules, whether
arising in the ordinary course of business or otherwise.
1.13 "Obligor" shall collectively and individually mean, Amedisys, Inc. and
each of its Affiliates and Agencies which enter into ASA's in favor of
CareSouth.
1.14 "Private Duty Visits" shall mean a patient visit (excluding "Visits"),
or an episode of personal contact, or one single encounter with a
patient, rendered by the staff of one or more of Obligor's Agencies,
or others under arrangement with the Obligor's Agencies where that
patient visit is billable (but without respect to whether Obligor or
the Agency is ultimately reimbursed or paid, in whole or in part for
said visit), excluding, however, any Visits as defined at Section 1.21
hereof.
1.15 "Provided Services" shall have the same meaning as "Provided Services"
in each respective ASA.
1.16 "Software System" shall mean the software and software modules and
functions described in each ASA.
1.17 "Term" shall mean the full term of this Agreement, including the
Initial Term and any extensions or additional Terms.
1.18 "Transition Period" shall mean that period from November 2, 1998
through February 28, 1999 during which time CareSouth and Guarantor,
and each of its Affiliates with respect to an Agency, shall jointly
engage in transition management and implementation activity to enable
CareSouth to perform in accordance with the terms and conditions of
each ASA.
1.19 "Total Cumulative Annual Visits" shall be determined in each month of
this Agreement for Visits under any ASA with CareSouth by (a) adding
the Total Cumulative Annual Visit volume experience Contract Year-to-
date (based on a single Contract Year) and dividing by the number of
months of experience; and (b) multiplying the foregoing result by 12;
provided, however, that the initial contract year shall mean November
2, 1998 through December 31, 1999. For purposes of this definition,
"Contract Year" or "CY" shall mean from January 1 through December 31
of a given year, except where specifically provided otherwise.
1.20 "Trade Secrets" shall mean information related to the business of the
disclosing party or its Affiliates which (a) derives economic value,
actual or potential, from not being generally known to or readily
ascertainable by other persons who can obtain economic value from its
disclosure or use; and (b) is the subject of efforts by the disclosing
party or its Affiliates that are reasonable under the circumstances to
maintain its secrecy or confidentiality, including without limitation
(1) marking any information reduced to tangible form clearly and
conspicuously with a legend identifying its confidential or
proprietary nature; (2) identifying
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MASTER CORPORATE GUARANTY OF SERVICE AGREEMENTS
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any oral presentation or communication as confidential immediately
before, during or after such oral presentation or communication, or
(3) otherwise treating such information as confidential. Assuming the
criteria in clauses (a) and (b) above are met, Trade Secrets includes,
but is not limited to, technical and nontechnical data related to the
designs, programs, devices, methods, techniques, drawings, processes,
inventions, finances, actual or potential Guarantors and suppliers,
research, development, existing and future products, and employees of
the disclosing party and its affiliates. Trade Secrets also includes
information which has been disclosed to CareSouth or Guarantor or its
respective Affiliates by a third party which CareSouth or Guarantor or
its respective Affiliates, as the case may be, is obligated to treat
as confidential. The provisions of this Agreement restricting the use
of Trade Secrets shall survive termination or expiration of this
Agreement for so long as is permitted by the Delaware Uniform Trade
Secrets Act, 6 Del. C. (S)(S) 2001 to 2009.
1.21 "Visit" shall mean a patient visit (excluding Private-Duty Visits), or
an episode of personal contact, or one single encounter with a
patient, rendered by the staff of one or more of Obligor's Agencies,
or others under arrangement with the Obligor's Agencies, where that
Visit is billable (but without respect to whether Obligor or the
Agency is ultimately reimbursed or paid, in whole or in part for said
visit), including: (i) for the purpose of providing Medicare or
Medicaid covered "home health services" as defined in 42 C.F.R.
Section 409.40 et. seq. or as defined by the Medicare "Home Health
Agency Manual", HIM-11 Section 218.1; or (ii) for the purpose of
providing covered home health services as defined in other applicable
Medicare or Medicaid manuals and general instructions, now or
hereafter adopted or as amended or recodified from time to time or any
substitute or successor statutes or regulations.
2 GUARANTY. The Guarantor absolutely and unconditionally guarantees to
CareSouth and its Affiliates the full, faithful and prompt payment by
itself and each of its Affiliates under the ASA's, individually and
collectively, together with interest thereon, as well as full compliance
with each and every obligation under the terms each ASA and documents
executed by the any Affiliate or any Agency in connection with an ASA, and
compliance by Guarantor and its Affiliates with the requirement to execute
an ASA (and related agreements) now and hereafter during the Term hereof,
in the same manner and with like effect as if the Guarantor were a
principal party to such ASA, including but not limited to, all costs and
expenses, including attorney's fees, incurred by CareSouth connection with
the collection of Fees pursuant to each ASA or other obligation of the
Affiliate or Agency to CareSouth or its Affiliates. CareSouth absolutely
and unconditionally guarantees to Customer performance of its obligations
under each ASA. There are no conditions precedent to the enforceability of
this Agreement after its Effective Date.
3 NATURE OF UNDERTAKING. The liability of the Guarantor under this Guaranty
Agreement shall be absolute, continuing, irrevocable, and unconditional.
The Guarantor intends to guaranty, at all times, the payment or performance
of all of the obligations due to CareSouth under each respective ASA. The
undertakings of Guarantor hereunder are independent of the Liabilities and
Obligations of any Affiliate or Agency and a separate action or actions for
payment, damages or performance may be brought or prosecuted against
Guarantor, whether or not an action is brought against the Affiliate or
Agency or to realize upon the security for the Liabilities and/or
obligations, whether or not Affiliate or Agency is joined in any such
action or actions, and whether or not notice is given or demand is made
upon the Affiliate or Agency. No payments made upon the obligations due to
CareSouth shall be held to discharge or diminish the liability of the
Guarantor for any and all remaining or succeeding
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obligations due to CareSouth. All obligations which the Guarantor
undertakes to pay hereunder shall be paid in lawful money of the United
States of America.
4 DURATION OF UNDERTAKING; TERM. This Guaranty Agreement shall take effect
upon receipt by CareSouth without the necessity of any acceptance by
CareSouth, and shall continue in full force and effect until payment in
full to CareSouth of the any and all amounts, including both fees, and
reimbursable expenses, principal and interest, which is due, or may become
due, to CareSouth under any of the ASA's, individually or collectively,
shall have been made and payment or performance in full or all obligations
due to CareSouth by Obligors under the terms of any ASA shall have been
made and payment or performance in full of all obligations due to the
CareSouth by the Guarantor under the terms of this Guaranty Agreement shall
have been made (the "Term"). In the event that Guarantor intends to sell to
a third party all or substantially all of its assets associated with
Obligor's collective home health care agency activities, upon written
notice to CareSouth of Guarantor's intent to sell the same, the parties
(including the proposed Purchaser(s)) shall negotiate in good faith for an
early termination of this Agreement and of each ASA in a fashion which will
equitably compensate and benefit the parties by protecting their economic
benefits and commitments relating to, or arising out of, the delivery
and/or receipt of performance hereunder for each contract's Term.
5 DEALINGS WITH AFFILIATES. The Guarantor authorizes CareSouth to deal with
the Agencies and Affiliates and their sureties, endorsers, and other
guarantors, in any manner in which CareSouth sees fit in connection with
any obligations or indebtedness of the Agencies and/or Affiliates under the
ASA's to CareSouth without any further consent or authorization from the
Guarantor being necessary. Specifically, but without limiting the power of
CareSouth, CareSouth may extend the time for payment of any indebtedness
one or more of the Agencies and/or Affiliates; CareSouth may release or
agree not to sue any Agency or Affiliate or their sureties, endorsers, or
other guarantors on any terms CareSouth chooses; Consistent with the terms
of the ASA's CareSouth may sue or fail to sue the Agency or Affiliate upon
any overdue indebtedness or may realize or neglect to realize upon any
collateral held in connection therewith; all of the foregoing without the
necessity of any consent from the Guarantor and without affecting the
Guarantor's Liability under this Guaranty Agreement.
6 RIGHTS AGAINST GUARANTOR. Except to the extent that CareSouth is required
to give notice of default to the Guarantor pursuant to any ASA or
hereunder, the Guarantor hereby expressly waives presentment, protest,
demand, or notice of any kind, including notice of nonpayment of any of
Affiliate's or Agencies' indebtedness or of any collateral thereto and
notice of any action or nonaction on the part of any Affiliate or Agency,
the Guarantor, or any surety, endorser, or other guarantor. Upon the
occurrence of any default under the terms of any of the ASA's, individually
or collectively, and a failure by the respective Obligor to cure the same
within any applicable notice period, CareSouth shall then and there be
entitled to immediate payment by the Guarantor of the full amount of the
indebtedness and obligations due to CareSouth or its Affiliates under the
ASA, and CareSouth shall, in the CareSouth's sole discretion, have the
right to proceed first and directly against the Guarantor to collect such
amount under this Guaranty Agreement without first proceeding against the
Agency or Affiliate, or any surety, endorser, or other guarantor and
without foreclosing upon or selling or otherwise disposing of any
collateral CareSouth may have as security for any of the Affiliate's or
Agency's indebtedness. Failure of CareSouth assert its rights immediately
to payment or so to proceed shall not relieve the Guarantor of the
Guarantor's obligations under this Guaranty Agreement or in any sense
constitute a waiver. CareSouth shall have the right to demand and collect
from the Guarantor all or any portion of the Affiliates' or Agencies'
indebtedness and obligations guaranteed hereunder and failure of CareSouth
at any time to demand from the Guarantor or to proceed to collect
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from the Guarantor the full amount of such indebtedness from the Guarantor
shall not preclude CareSouth from later demanding or proceeding to collect
from the Guarantor any remaining indebtedness covered by this Guaranty
Agreement. In any action or suit against the Guarantor to enforce this
Guaranty Agreement, CareSouth, should it prevail, shall be entitled to
recover from the Guarantor, in addition to costs and disbursements allowed
by law, reasonable attorneys' fees, charges and interest outstanding for
CareSouth's attorney's fees in such action or suit.
7 ELECTION OF REMEDIES. Upon the occurrence of a default under the terms of
any of the ASA's and a failure by the respective Affiliate or Agency or the
Guarantor to cure the same within any applicable notice period, CareSouth
may elect to enforce this Guaranty Agreement, proceed against any
collateral held or pursue any other available remedy in any order or manner
as the CareSouth may, in the CareSouth's sole discretion, elect. If
CareSouth elects to sell or otherwise dispose of any collateral and if the
amount realized by CareSouth upon such sale or disposition is insufficient
to fully satisfy the obligations and indebtedness guaranteed in this
Guaranty Agreement, CareSouth shall be entitled to recover the deficiency
from the Guarantor even if CareSouth could not recover such deficiency from
the Affiliate or Agency.
8 SUBSTITUTE PERFORMANCE. CareSouth hereby agrees to accept performance by
the Guarantor of any obligation of the Affiliate or Agency pursuant to any
ASA, and prior to any default, prior to the lapse of any period for the
cure of default, or subsequent to default (but not otherwise than as
required by reason of such default) as if such performance were tendered by
the Affiliate or Agency.
9 CONFIDENTIALITY. CareSouth agrees to treat all records and other
Confidential Information of Customer confidentially and CareSouth on behalf
of itself and its employees agrees to keep confidential Customer's
Confidential Information (as defined herein). Customer on behalf of itself
and its employees agrees to keep all information with respect to the
CareSouth's Software System, Confidential Information (as defined herein)
and Trade Secrets confidential; provided, however, that if either party is
required to produce any such Confidential Information or Trade Secrets,
where applicable, by order of any government agency or other regulatory
body it may, upon not less than five (5) days (unless the applicable law or
Governmental Regulations require a more expedited response in which case
the notice shall be reasonable under the circumstances) written notice to
the other party, release the required information.
10 SUPPORT SERVICES. During the Term of this Agreement, CareSouth shall
maintain a satellite office in Baton Rouge, Louisiana for purposes of
providing a liaison between Customer and CareSouth and to perform billing
functions for Customer's Agencies in Louisiana, Texas, and Oklahoma as well
as possible future business in said region. With respect to the billing
functions described above, if at the end of nine (9) months from the
effective date of this Agreement and thereafter, CareSouth has met the
performance criteria for the billing requirements contained in the ASAs as
reasonably determined by Amedisys, CareSouth may upon ninety (90) days
written notice to Amedisys elect to cease only the billing functions in the
satellite office, but shall in all events maintain the liaison activities
with respect to said office.
11 CONSOLIDATED FEE STRUCTURE*
12 TRANSITION MANAGEMENT AND IMPLEMENTATION SERVICES. CareSouth shall provide
such transition management and implementation services during the
Transition Period as set forth in Exhibit E annexed hereto. The Obligors
shall cooperate in good faith to provide CareSouth and its employees and
representatives sufficient information, communication, input and assistance
as may
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be required for CareSouth to prepare for, deliver, and implement transition
management and implementation services.
13 TAXES. Guarantor shall, in addition to the other amounts payable under this
Agreement, pay all taxes, federal, state, or otherwise, however designated,
which are levied or imposed by reason of the license or purchase of
software under this Agreement. Without limiting the foregoing, Guarantor
shall promptly pay to CareSouth an amount equal to any such items actually
paid or required to be collected or paid by CareSouth.
14 REMEDIES.
14.1 Upon the failure of Guarantor to fulfill its duty to pay all
Liabilities and perform and satisfy all obligations as required
hereunder (a "Default"), CareSouth shall have all of the remedies of a
creditor and, to the extent applicable, of a secured party, under all
applicable law, and without limiting the generality of the foregoing,
CareSouth may, at its option and without notice or demand: (a) declare
any past Liability due and payable at once; (b) take possession of any
collateral pledged by Obligor or Guarantor wherever located, and sell,
resell, assign, transfer and deliver all or any part of said
collateral of Obligor or Guarantor at any public or private sale or
otherwise dispose of any or all of the collateral in its then
condition, for cash or on credit or for future delivery, and in
connection therewith CareSouth may impose reasonable conditions upon
any such sale, and CareSouth, unless prohibited by law the provisions
of which cannot be waived, may purchase all or any part of said
collateral to be sold, free from and discharged of all trusts, claims,
rights or redemption and equities of Obligor or Guarantor whatsoever;
and (c) set-off against any or all liabilities of Guarantor all money
owed by CareSouth or any of its agents or affiliates in any capacity
to Guarantor whether or not due, and also set-off against all other
Liabilities of Guarantor to CareSouth all money owed by CareSouth in
any capacity to Guarantor, and if exercised by CareSouth, CareSouth
shall be deemed to have exercised such right of set-off and to have
made a charge against any such money immediately upon the occurrence
of such default although made or entered on the books subsequent
thereto.
14.2 In addition, in the event of Default hereunder, CareSouth may (in
addition to any rights or remedies granted it by law or by other
provisions of this Agreement) take one or more of the following
actions at CareSouth's option: (a) Terminate this Agreement or any
given ASA, without prejudice to any right or claim by CareSouth for
the arrears of fees, if any, or for damages on account of any other
Breach of this Agreement, and declare the Fee payments (including any
unaccrued minimum monthly fees for the remaining Term) for the entire
Term of this Agreement, or any given ASA to be immediately due and
payable; (b) CareSouth may terminate any Obligor's rights under the
ASA and the Licensing Agreement and any other agreement between
CareSouth and Obligor; or (c) CareSouth may exercise any and all other
rights accorded to it by law or under this Agreement which are not
inconsistent with the above. Notwithstanding anything to the contrary
herein, termination or expiration of any ASA shall not release
Guarantor and/or Obligor from its obligation to pay any sum which may
be due and owing to CareSouth for services rendered under this
Agreement or any ASA prior to termination or expiration, and such
obligations shall survive termination or expiration.
14.3 All of the rights accorded to CareSouth in Section 14 or in any other
section of this Agreement in case of Breach or default by Guarantor or
any Obligor shall be cumulative. None of them shall be construed or
deemed to be an election by CareSouth that diminishes,
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extinguishes or bars any other legal remedy or right provided in this
Agreement. Furthermore, no right, power, or remedy conferred upon or
reserved to CareSouth hereunder is intended to be exclusive of any
other right, power, or remedy, but each and every such right, power,
and remedy shall be cumulative and concurrent and shall be in addition
to any other right, power, and remedy given hereunder, or now or
hereafter existing at law, in equity, by contract, or by statute.
Failure to exercise any right given herein or by law to CareSouth
shall not be construed as a waiver of any such right. CareSouth shall
be under no obligation to mitigate its damages hereunder. It is agreed
by Customer that the rights accorded to CareSouth herein are intended
solely as liquidated damages payable to CareSouth in event of default
by Customer, it being agreed by both parties that the actual damage
that would be suffered by CareSouth in case of default by Customer
would be difficult to accurately ascertain and the measure of damages
contained herein is a reasonable estimate of said damages.
15 GENERAL.
15.1 Notices. All notices, consents, invoices, approvals and the like
required under any of the provisions of this Agreement shall be in
writing and shall be deemed to have been given (a) if personally
delivered, upon receipt, (b) if sent by overnight courier (such as
Federal Express), upon delivery to the addressee, or (c) or by
facsimile at the numbers listed below, or (d) if sent by U.S. Mail
registered or certified, return receipt requested, with sufficient
postage affixed thereto, three days after being mailed, addressed as
follows:
(i) If to CareSouth to:
CareSouth Home Health Services, Inc.
577 Mulberry Street, 12/th/ Floor
Macon, Georgia 31201
ATTN.: Ronald B. Conners, PhD., President/CEO
Facsimile: (912) 752-0752
with a copy to:
Rick W. Griffin, Esq., General Counsel
CareSouth Home Health Services, Inc.
577 Mulberry Street, 12/th/ Floor
Macon, Georgia 31201
FAX: (912) 752-0785
(ii) If to Guarantor to:
William F. Borne
Chairman of the Board and CEO
Amedisys, Inc.
3029 South Sherwood Forest Blvd
Suite 250
Baton Rouge, LA 70816
Facsimile: (504) 292-8163
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with a copy to:
Michael D. Lutgring, Esq.
General Counsel
Amedisys, Inc.
3029 South Sherwood Forest Blvd
Suite 250
Baton Rouge, LA 70816
Facsimile: (504) 292-8163
or to such other address as such party shall specify in writing to the
other party hereto.
15.2 Amendment; Entire Agreement. This Agreement may be modified or
amended only by a writing executed by the parties hereto. This
Agreement and any and all instruments and documents to be delivered
hereunder constitute the entire agreement and understanding between
the parties hereto with respect to the transactions contemplated
herein, and supersedes all prior understandings, agreements or prior
versions of this Agreement between the parties relating to the subject
matter hereof, except where noted herein.
15.3 Binding Effect. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto, their respective heirs,
successors and assigns.
15.4 Controlling Law: Jurisdiction. This Agreement shall be construed and
enforced in accordance with the laws of the State of Delaware.
15.5 Time of Essence. TIME IS THE ESSENCE in the performance of this
Agreement by each party hereto.
15.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of
which, when taken together, shall constitute one and the same
instrument.
15.7 Construction. Should any provision of this Agreement require judicial
interpretation, the parties hereto agree that the court interpreting
or construing the same shall not apply a presumption that the terms
hereof shall be more strictly construed against one party by reason of
the rule of construction that a document is to be more strictly
construed against the party who itself or through its agents prepared
the same, it being agreed that the parties hereto and their respective
agents have participated in the preparation hereof.
15.8 Dispute Resolution. Any material dispute between the parties arising
under this Agreement which is not resolved by good faith negotiation
(including, without limitation, any issues concerning whether dispute
may be submitted by either party to mediation or is subject to
mediation) shall first be submitted to non-binding mediation in
Birmingham, Alabama. Completion of said mediation shall be a
condition precedent and jurisdictional prerequisite to any civil or
Court action or other proceeding involving any dispute arising under
or relating to this Agreement. The costs of mediation shall be borne
equally by the parties.
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15.9 Partial Invalidity. Wherever possible, each provision hereof shall be
interpreted in such manner as to be effective and valid under
applicable law, but in case any one or more of the provisions
contained herein shall, for any reason, be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provisions of this
Agreement, and this Agreement shall be construed as if such invalid,
illegal, or unenforceable provision or provisions had never been
contained herein unless the deletion of such provision or provisions
would result in such a material change as to cause completion of the
transactions contemplated hereby to be unreasonable.
15.10 Third Party Beneficiaries. Nothing in this Agreement will be
construed to give any person other than the parties hereto any legal
or equitable right, remedy, or claim under or with respect to this
Agreement.
15.11 Status of Relationship. It is understood and agreed that the parties
to this Agreement are independent contractors and nothing herein shall
be construed to establish a partnership or joint venture relationship
between the parties. Each party has sole responsibility for the
payment of each of its employee's wages, payroll taxes and benefits.
By virtue hereof, neither party assumes, directly or by implication,
the debts, obligations, taxes or liabilities of the other party.
15.12 Authority and Approvals. The parties hereto agree and stipulate that
the undersigned have the authority to bind their principals without
further action or notice whatsoever.
15.13 Cost of Enforcement. The parties hereto agree that in the event
either party is required to bring an action to enforce the terms of
this Agreement, the prevailing party shall be entitled to reasonable
costs associated therewith, including reasonable attorney's fees.
IN WITNESS WHEREOF, the parties hereto have signed this agreement the date
and year first written above by their duly authorized representative.
[Signatures on following page]
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MASTER CORPORATE GUARANTY OF SERVICE AGREEMENTS
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For CareSouth: CARESOUTH HOME HEALTH SERVICES, INC.
By: //s//Ronald B. Conners
Ronald B. Conners, PhD., President/CEO
Attest: //s// Rick W. Griffin
Rick W. Griffin, Secretary
[Corporate Seal]
For Guarantor: AMEDISYS, INC.
By: //s// William F. Borne
William F. Borne, CEO
Attest: //s// Michael Lutgring
Michael Lutgring, Secretary
[Corporate Seal]
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<PAGE>
EXHIBIT A TO MASTER CORPORATE GUARANTY AGREEMENT
EXHIBIT A
DESCRIPTION OF THE AGENCIES
<TABLE>
<CAPTION>
AGENCY STATUS ADDRESS CITY ST ZIP
CONTACT PHONE FAX HOSPITAL PROV #
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Columbia Homecare Selma Parent 1792 Highway 14 East Selma AL 36701
Karan Hollis 334-875-4663 334-875-3654 Columbia Four Rivers Medical Center 01-7320
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Columbia Homecare Demopolis Branch 1060 Bailey Drive Demopolis AL 36732
Ann Rasberry 334-269-5030 334-289-8828 Columbia Four Rivers Medical Center 01-7320
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Columbia Homecare Huntsville Parent 2905 Westcorp Blvd., Suite 119 Huntsville AL 35805
Kate Jones 205-539-4453 205-533-4166 Columbia Medical Center of Huntsville 01-7039
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Columbia Homecare Regional Parent 474 S. Court Street, Suite 120 Montgomery AL 36104
Sue Hall 334-832-4663 334-265-2880 Columbia Regional Medical Center 01-7319
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Healthfield Services of Middle Georgia Parent 2490 Riverside Drive Macon GA 31204
September Carter 912-743-5769 912-741-0939 Columbia Coliseum Medical Centers 11-7093
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Clinical Arts Home Care Services, Inc. Parent 9144 Hwy. 278 East Covington GA 30014
Betty Belcher 770-787-1796 770-787-6743 Columbia Northlake Regional Medical Center 11-7065
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Central Home Health Care Parent 8483 Hospital Drive Douglasville GA 30134
Brenda Sutton 770-942-1609 770-942-2632 Columbia Parkway Medical Center 11-7050
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Central Home Health Care Branch 150 Carnegie Place, Suite 102 Fayetteville GA 30214
Pam Huffman 770-719-9155 770-719-2441 Columbia Parkway Medical Center 11-7050
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Central Home Health Care Branch 519 Forest Parkway, Suite 100 Forest Park GA 30050
Margaret Davis 404-361-1118 404-361-0688 Columbia West Paces Medical Center 11-7039B
- ----------------------------------------------------------------------------------------------------------------------------------
Central Home Health Care Branch 12 Felton Place, Suite E Cartersville GA 30120
Sharon Oxford 770-382-4702 770-382-5347 Columbia West Paces Medical Center 11-7039B
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Central Home Health Care Branch 1000 Hurricane Shoals Rd., Gwinnett/ GA 30043
Bldg. C, Suite 100 Lawrenceville
Pam Smith 770-995-7802 770-995-8019 Dunwoody Medical Center 11-7026
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Central Home Health Care Branch 495 Winn Way, Suite 100 Decatur GA 30030
Kathy Collier 404-296-0805 404-296-7215 Dunwoody Medical Center 11-7026
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Tugaloo Home Health Agency Parent 11929 Augusta Road Lavonia GA 30553
Ruthanne Irvin 706-356-8480 706-356-4594 Lanier Park Hospital 11-7036
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Tugaloo Home Health Agency Branch 8000 Rock Quarry Road Ext. Toccoa GA 30577
Barbara Lambert 706-886-5442 706-886-7300 Lanier Park Hospital 11-7036
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Tugaloo Home Health Agency Branch 1048 North Main Street Clayton GA 30525
Martha Oakley 706-782-4982 706-782-7357 Lanier Park Hospital 11-7036
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Tugaloo Home Health Agency Sub-Unit 1856-14 Thompson Bridge Road Gainesville GA 30501
Lou Haynes 770-532-2013 770-532-4177 Lanier Park Hospital 11-7305
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North Georgia Home Health Agency Parent 1875 Fant Drive Ft. Oglethorpe GA 30742
Elizabeth Robinson 706-861-5940 706-861-1237 Redmond Regional Medical Center 11-7028
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North Georgia Home Health Agency Branch 600 South Commerce Street Summerville GA 30747
Kathy Daniel 706-857-7433 706-857-5184 Redmond Regional Medical Center 11-7028
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North Georgia Home Health Agency Branch 610 South Glenwood Avenue Dalton GA 30721
Tracy Hooper 706-226-1170 706-226-2103 Redmond Regional Medical Center 11-7028
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</TABLE>
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EXHIBIT A TO MASTER CORPORATE GUARANTY AGREEMENT
<TABLE>
<CAPTION>
AGENCY STATUS ADDRESS CITY ST ZIP
CONTACT PHONE FAX HOSPITAL PROV #
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Coosa Valley Home Health Parent 1 State Mutual Drive, Suite 102 Rome GA 30165
Renee Webb 706-291-8867 706-235-6514 Redmond Regional Medical Ctr. 11-7041
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Coosa Valley Home Health Branch 401 N. Main Street, P.O. Box 226 Cedartown GA 30125
Glenda Swafford 770-748-9318 770-748-9898 Redmond Regional Medical Ctr. 11-7041
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Amedisys Parent 202 Rue Iberville #101 Lafayette LA 70506
Keith Guirdry 318-234-0988 318-234-1079
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Columbia Homecare Acadiana Parent 3849 I-49 Service Road South Opelousas LA 70570
Bridgette McDowell 318-942-1514 318-942-1204 Columbia Doctors' Hospital of Opelousas 19-7263
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia Homecare Dauterive Parent 117 Iberia Street New Iberia LA 70560
Sherri Robarge 318-365-0540 318-365-9531 Dauterive Hospital 19-7459
- ----------------------------------------------------------------------------------------------------------------------------------
Amedisys Parent 5309 Bayou Rapides Road Alexandria LA 71306
Ann Roberson 318-442-3100 318-445-4407
- ----------------------------------------------------------------------------------------------------------------------------------
Amedisys Parent 10473 Old Hammond, Ste 200 Baton Rouge LA 70816
Mike Ginn 504-201-9022 504-2010822
- ----------------------------------------------------------------------------------------------------------------------------------
Amedisys/Precision Parent 10473 Old Hammond, Ste 100 Baton Rouge LA 70816
Valerie Banker 504-928-2183 504-928-2155
- ----------------------------------------------------------------------------------------------------------------------------------
Amedisys Branch 1201 Derek St. # 2 Hammond LA 70403
Ann Thomas 504-542-6946 504-542-7358
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Amedisys Branch 107 North Theard St. Covington LA 70433
Ann Thomas 504-867-9320 504-867-9326
- ----------------------------------------------------------------------------------------------------------------------------------
Amedisys Parent 748 Bayou Pines East, #A Lake Charles LA 70601
Deloris Parnell 318-436-7044 318-436-7046
- ----------------------------------------------------------------------------------------------------------------------------------
Amedisys Parent 4327 Sterlington Rd Monroe LA 71203
Martez Robinson 318-324-0681 318-324-1014
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia Homecare Northwest Parent 816 Benton Road Bossier City LA 71111
Steve Peters 318-742-4026 318-742-4273 Columbia Springhill Medical Center 19-7226
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia Homecare Northwest Branch 1110 B Doctors Drive Springhill LA 71075
Steve Peters 318-539-1017 318-539-1057 Columbia Springhill Medical Center 19-7226
- ----------------------------------------------------------------------------------------------------------------------------------
Tulane Home Health Parent 1440 Canal Street, Suite 1191 New Orleans LA 70112
Susan Pate 504-587-2190 504-585-7161 Tulane University Hospital and Clinic 19-7143
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia Lakeland Homecare Branch 6010 Bullard, Suite 204 New Orleans LA 70128
Sue Clites 504-244-1689 504-243-2492 Lakeland Medical Center 19-7046
- ----------------------------------------------------------------------------------------------------------------------------------
Amedisys Branch 502 Rue Desante, #101 La Place LA 70068
Janice Williams 504-651-4663 504-651-7468
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia Homecare North Carolina Parent 1101 Weaver Dairy Road Chapel Hill NC 27514
Linda Sutherin 919-929-7149 919-929-1610 Raleigh Community Hospital 34-7030
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia Homecare North Carolina Parent 3400 Wake Forest Rd. Raleigh NC 27609
Christine Davila 919-954-3005 919-954-3052 Raleigh Community Hospital 34-7188
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia Homecare Oklahoma Southwestern Parent 1930 N.W. Ferris, Suite 9 Lawton OK 73506
Lee Fite, RN 580-353-3332 580-353-4840 Columbia Southwestern Medical Center 37-7053
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia Homecare Oklahoma Parent 1418 E. 71st Street, Suite D Tulsa OK 74136
Cheryl Lacey 918-599-1600 918-631-8026 Columbia Tulsa Regional Medical Center 37-7210
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia Homecare Oklahoma Parent 204 West Blue Starr Drive Claremore OK 74017
Cherry Kelley 918-341-9255 918-342-4520 Columbia Wagoner Hospital 37-7180
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE>
EXHIBIT A TO MASTER CORPORATE GUARANTY AGREEMENT
<TABLE>
<CAPTION>
AGENCY STATUS ADDRESS CITY ST ZIP
CONTACT PHONE FAX HOSPITAL PROV #
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Columbia Homecare Oklahoma Branch 430 South Wilson Vinita OK 74301
Terri Higgins 918-256-7593 918-256-3498 Columbia Wagoner Hospital 37-7180
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia Homecare Oklahoma-West Parent 7508 N. Broadway Ext., Suite 110 OK City OK 73116
Jim Garner 405-842-7608 405-848-5135 Columbia Edmond Medical Center 37-7032
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia Homecare Oklahoma-West Branch 601 W. 3rd, P.O. Box 762 Elk City OK 73648
Velta Morlan 405-225-0413 405-225-5625 Columbia Edmond Medical Center 37-7032
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia Homecare Oklahoma-West Branch 221 W. Main, P.O. Box 374 Hydro OK 73048
LaQuita Harris, RN, BSN 405-774-1152 405-774-0260 Columbia Edmond Medical Center 37-7032
- ----------------------------------------------------------------------------------------------------------------------------------
Amedisys Parent 500 Monta Vista, Ste 4B Ada OK 74820
Barbra Buck 580-436-0551 580-436-1470
- ----------------------------------------------------------------------------------------------------------------------------------
Amedisys Parent 4870 S. Lewis Ave., Suite 120 Tulsa OK 74105
Marilyn Hooper 918-744-4733 918-744-5421
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia Hospice Oklahoma Branch 5807 S. Garnett, Suite E Tulsa OK 74146
Bill Westmoreland 918-249-8111 918-249-9106 Freestanding N/A
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia Homecare Oklahoma Branch P.O. Box 707 Hominy OK 74035
Nancy Ray 918-885-6231 918-885-6233 Columbia Tulsa Regional Medical Center 37-7210
- ----------------------------------------------------------------------------------------------------------------------------------
Amedisys Parent 309 Main Street Gore OK 74435
Stephanie Six 918-489-5474 918-489-5475
- ----------------------------------------------------------------------------------------------------------------------------------
Amedisys Branch 110 W Maple Stillwell OK 74960
Ava Brannon 918-696-4666 918-696-6302
- ----------------------------------------------------------------------------------------------------------------------------------
Amedisys Branch 3233 S. Muskogee Tahlequah OK 74464
Francis Unger 918-456-8056 918-456-8092
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia Homecare Hendersonville Parent 130 Imperial Blvd. Hendersonville TN 37075
Amy Corso, RN 615-824-6060 615-264-0814 Columbia Hendersonville Hospital 44-7206
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia Homecare Carthage Branch 132 Gordonsville Hwy. Carthage TN 37030
Pam Ross, RN 615-735-1630 615-735-9863 Columbia Hendersonville Hospital 44-7206
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia Homecare Portland Branch 121 Village Drive, Suite 201 Portland TN 37148
Betsy Napier, RN 615-325-0131 615-325-4261 Columbia Hendersonville Hospital 44-7206
- ----------------------------------------------------------------------------------------------------------------------------------
Superior Home Health Care Parent 2528 Wesley Street, Suite 1 Johnson City TN 37601
of East Tennessee
Teresa Bolling 423-952-2340 423-952-2313 Columbia Indian Path Medical Center 44-7422
- ----------------------------------------------------------------------------------------------------------------------------------
Superior Home Health Care Branch 1241 Volunteer Parkway, Bristol TN 37621
of East Tennessee 400 Executive Park
Betty Elswick 423-968-2004 423-968-2209 Columbia Indian Path Medical Center 44-7422
- ----------------------------------------------------------------------------------------------------------------------------------
Superior Home Health Care Branch 1920 Brookside Drive, Suite 2 Kingsport TN 37660
of East Tennessee
Betty Elswick 423-392-5188 423-392-5185 Columbia Indian Path Medical Center 44-7422
- ----------------------------------------------------------------------------------------------------------------------------------
Superior Home Health Care Branch 103 E. Jackson Street, Suite 200 Gate City VA 24251
of East Tennessee
D.D. Miller 423-386-2200 423-392-5185 Columbia Indian Path Medical Center 44-7422
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia Homecare Tennessee Parent 6080 Shallowford Rd., Suite 109 Chattanooga TN 37421
Mary Hogg 423-490-1100 423-490-1111 Columbia Parkridge Medical Center 44-7156
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia Homecare Tennessee Branch 744 Tell Street, P.O. Box 1309 Athens TN 37303
Beth Free 423-744-8404 423-744-3590 Columbia Parkridge Medical Center 44-7156
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia Homecare Tennessee Branch 520 Copper Country Plaza 64E, Ducktown TN 37326
P.O. Box 10
Cindy Ritchie 423-496-3369 423-496-5912 Columbia Parkridge Medical Center 44-7156
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia Homecare Tennessee Branch 159 Omni Drive McMinnville TN 37110
Hershey Glenn 615-473-6627 423-622-0516 Columbia Parkridge Medical Center 44-7156
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE>
EXHIBIT A TO MASTER CORPORATE GUARANTY AGREEMENT
<TABLE>
<CAPTION>
AGENCY STATUS ADDRESS CITY ST ZIP
CONTACT PHONE FAX HOSPITAL PROV #
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Columbia Homecare Tennessee Branch 7971 Rhea County Highway Dayton TN 37321
Mary Gadd 423-775-5263 423-775-7062 Columbia Parkridge Medical Center 44-7156
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia Homecare Tennessee Branch P.O. Box 190, Pikeville Pikeville TN 37367
Clinic Basement
Peggy Taylor 423-447-6841 423-267-9839 Columbia Parkridge Medical Center 44-7156
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia Homecare Tennessee Branch 1019 Elm Avenue South Pittsburg TN 37380
Wilma Martin 423-837-0923 423-837-0921 Columbia Parkridge Medical Center 44-7156
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia Homecare Tennessee Parent 118 North Jefferson Street Winchester TN 37398
Sherry Taylor 931-962-4663 931-962-4251 Columbia Southern Tennessee Medical Center 44-7238
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia Homecare Dickson Parent 117 Hwy. 70 East Dickson TN 37055
Susan Brink 615-441-1365 615-446-8109 Horizon Medical Center 44-7437
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia Homecare Ashland Branch 108 South Main Street, Suite 7 Ashland City TN 37015
Donna Mixon 615-792-7760 615-792-7476 Horizon Medical Center 44-7437
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia Homecare Livingston Parent 315 Oak Street Livingston TN 38570
Barbara Winningham 931-823-2050 931-823-1338 Livingston Regional Hospital 44-7260
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia Homecare Southern Hills Parent 230 Cumberland Bend, Suite D Nashville TN 37228
Judy Anthony 615-313-7400 615-313-7410 Southern Hills Medical Center 44-7121
- ----------------------------------------------------------------------------------------------------------------------------------
Amedisys Parent 2300 Hwy 365 Nederland TX 77627
Nancy Thain 409-729-6308 409-721-6299
- ----------------------------------------------------------------------------------------------------------------------------------
Amedisys Parent 3000 Weslayan St. #305 Houston TX 77027
Jennifer O'Brien 713-877-8801 713-621-2042
- ----------------------------------------------------------------------------------------------------------------------------------
Amedisys Parent 2505 Turtle Creek, #150 Dallas TX 75219
Janice Green 214-520-8732 214-520-8253
- ----------------------------------------------------------------------------------------------------------------------------------
Amedisys Parent 1800 Judson Rd. #500 Longview TX 75605
Pam Poppy 903-753-1850 903-753-0152
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE>
EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
EXHIBIT B
FORM OF ASA's
=================================================
AGENCY SERVICE AGREEMENT
BETWEEN
CARESOUTH HOME HEALTH SERVICES, INC.
AND
A HOME HEALTH CO, INC.
=================================================
A HOME HEALTH AGENCY; PROVIDER NOS. 99-99999
LOCATED IN CITY, STATE
November 2, 1998
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<PAGE>
EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<C> <S> <C>
RECITALS................................................................ 1
DEFINITIONS............................................................. 1
OBLIGATIONS OF CARESOUTH AND CUSTOMER................................... 4
2.1 Engagement of CareSouth; Authority................................ 4
2.2 Appointment....................................................... 4
2.3 Services To Be Performed by CareSouth/Customer's Obligations...... 5
2.4 Duty of Care...................................................... 5
2.5 Indemnification................................................... 6
2.6 Confidentiality................................................... 7
2.7 Data Ownership.................................................... 8
2.8 Transition Upon Termination....................................... 8
FEES AND PAYMENT; TERM.................................................. *
SOFTWARE LICENSE........................................................ 9
4.1 License........................................................... 9
4.2 Software Maintenance and Support.................................. 10
COMPUTER EQUIPMENT...................................................... 10
5.1 Computer Facility of CareSouth.................................... 10
5.2 Computer Facility of Customer..................................... 10
5.3 Telecommunications and Other Recurring Charges.................... 10
GENERAL................................................................. 10
6.1 Customer Default.................................................. 10
6.2 CareSouth Default................................................. 11
6.3 Conditions Precedent to CareSouth's Obligations................... 12
6.4 Limitation of Warranties and Remedies............................. 12
6.5 Notices........................................................... 13
6.7 Time of Essence................................................... 14
6.8 Counterparts...................................................... 14
6.9 Construction...................................................... 14
6.10 Dispute Resolution................................................ 14
6.11 Partial Invalidity................................................ 15
6.12 Third Party Beneficiaries......................................... 15
6.13 Assignment........................................................ 15
6.14 Access to Books and Records....................................... 15
6.15 Status of Relationship............................................ 16
6.16 Authority and Approvals........................................... 16
SIGNATURES........................................................................... 19
EXHIBIT A: LIST OF AGENCIES
EXHIBIT B-1: PROVIDED SERVICES
EXHIBIT B-2: CUSTOMER'S RESPONSIBILITY AND OBLIGATIONS
EXHIBIT C: FORM OF LICENSING AGREEMENT
EXHIBIT D: FORM OF SOFTWARE MAINTENANCE AND SUPPORT AGREEMENT
EXHIBIT E: TRANSITION MANAGEMENT AND IMPLEMENTATION
</TABLE>
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<PAGE>
STATE OF GEORGIA
COUNTY OF BIBB
AGENCY SERVICE AGREEMENT
(HOME HEALTH AGENCY)
THIS SERVICE AGREEMENT ("Agreement") is made and entered into as of the
______ day of _______________, 1998, by and between CARESOUTH HOME HEALTH
SERVICES, INC. a Georgia corporation (hereafter referred to as "CareSouth") and
_________________________, INC (hereinafter referred to as "Customer").
RECITALS
WHEREAS, Customer currently, or intends in the future, to own and operate
Medicare-certified home health agencies (hereafter individually an "Agency" and
collectively "The Agencies"); and
WHEREAS, CareSouth has a system of computer programs (the "Software
System") designed to provide billing, payroll, collections, and cost reporting
data processing services for the Agencies, which services CareSouth also
provides to other third parties; and
WHEREAS, Customer desires to obtain a license of CareSouth's Software
System, and to receive from CareSouth billing, payroll, collections, and cost
reporting data processing services for home health care agencies;
NOW, THEREFORE, in consideration of the promises contained herein, the
parties agree as follows:
1 DEFINITIONS. Unless otherwise expressly stated herein, the following terms
shall have these meanings ascribed to them below:
1.1 "Effective Date" shall mean the date upon which the parties mutually agree
the terms of this Agreement become legally binding, which date shall be
November 2, 1998, but it is contemplated that delivery of Provided
Services shall begin on November 16, 1998.
1.2 "Affiliate" of a person shall mean (a) any person or entity which directly
or indirectly, is in control of, is controlled by, or under common control
with, such person or entity or (b) any person who is a director or officer
(i) of such person or entity, (ii) of any subsidiary of such person or
entity or (iii) of any person or entity described in clause (a) above. For
purposes of this definition, control of a person shall mean the power,
direct or indirect, (i) to vote 10% or more of the securities having
ordinary voting power for the election of directors of such persons or
entities, or the ability of a person or entity to appoint a majority of the
directors of such person or entity, or (ii) to direct or cause the
direction of the management and policies of such person or entity whether
by contract or otherwise; provided, however, in no event shall any person
or entity providing management or other similar services to Customer or
CareSouth be deemed to be an Affiliate of Customer or CareSouth, as the
case may be.
1.3 "Agency" shall mean the medicare-certified home health care agency owned
(in whole or in part) by, operated (in whole or in part) by, or managed
under contract which Agency is described and listed on Exhibit "A", hereto.
However, "Agency" shall not include businesses for the rendering or
delivery of ancillary health services such as home infusion therapy, home
medical equipment or supply, or ambulatory or out-patient care facilities
and services.
1.4 "Agreement" shall have the meaning set forth in the preamble above.
1.5 "Breach" shall mean that event when a representation, warranty, covenant,
obligation (including payment of fees), or other provision of this
Agreement or any instrument delivered pursuant to this Agreement will be
deemed to have occurred if there is or has been (a) any inaccuracy in or
breach of, or any failure to perform or comply with, such representation,
warranty, covenant, obligation, or other provision, or (b) any claim (by
any Person) or other occurrence or circumstance that is or was inconsistent
with such representation, warranty, covenant, obligation, or other
provision, and the term "Breach" means any such inaccuracy, breach,
failure, claim, occurrence, or circumstance.
1.6 "CareSouth" shall have the meaning set forth in the preamble above.
1.7 "Conditions of Participation" or "COPs" shall mean the Medicare Conditions
of Participation for Home Health Agencies now set forth at 42 C.F.R. (S)(S)
484.1, et seq., as amended or recodified from time to time or any
substitute or successor regulations.
1.8 "Confidential Information" shall mean (i) with respect to Customer, data
and information relating to the Business of the Agency (which does not rise
to the status of a Trade Secret) which is or has been disclosed to
CareSouth or its Affiliates or of which CareSouth or its Affiliates became
aware as a result of its relationship with Customer pursuant to this
Agreement and which has value to Customer and its Affiliates and is not
generally known to its competitors; and (ii) with respect to CareSouth,
form and terms of this Agreement, the data and information relating to its
business (which does not rise to the status of a Trade Secret) which is or
has been disclosed to Customer or its Affiliates or of which Customer or
its Affiliates became aware as a result of its relationship with CareSouth
pursuant to this Agreement and which has value to CareSouth and its
Affiliates and is not generally known to its competitors. Confidential
Information shall not include any data which has been voluntarily disclosed
to the public by Customer or CareSouth, as the case may be (except where
public disclosure has been made by Customer or CareSouth, as applicable,
without authorization) or that has been independently developed and
disclosed by others or that otherwise enters the public domain through
lawful means. The provisions of this Agreement restricting the use of
Confidential Information shall survive for a period of two (2) years
following termination or expiration of this Agreement.
1.9 "Day" shall mean a calendar day unless specifically designated otherwise.
1.10 "Force Majeur" means any cause beyond the reasonable control of a party,
including but not limited to an act of God, act or omission of civil or
military authorities of a state or nation, fire, strike, flood, riot, war,
delay of transportation, or inability due to any of these causes to provide
or obtain necessary labor, materials, or facilities.
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EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
1.11 "Governmental Regulations" shall mean any and all federal, state and local
laws, statutes, rules, regulations, orders, and ordinances relating to the
Business of the Agency, applicable to the Agency or to which the Agency is
subject, including without limitation the Conditions of Participation and
the Manuals.
1.12 "MCGS Agreement" shall mean that certain Master Corporate Guaranty of
Service Agreements dated November 2, 1998, and any amendments thereto, by
and between CareSouth and Amedisys, Inc.
1.13 "Private Duty Visits" shall mean a patient visit (excluding Visits), or an
episode of personal contact, or one single encounter with a patient,
rendered by the staff of one or more of Obligor's Agencies, or others under
arrangement with the Obligor's Agencies where that patient visit is
billable (but without respect to whether Obligor or the Agency is
ultimately reimbursed or paid, in whole or in part for said visit),
excluding, however, any Visits as defined at Section 1.18 hereof.
1.14 "Software System" shall mean the software and software modules and function
described in Exhibit "C" annexed hereto.
1.15 "Term" shall mean the full term of this Agreement, including the Initial
Term and any extensions or additional Terms.
1.16 "Transition Period" shall mean that period from November 2, 1998 through
February 28, 1999, during which time CareSouth and Customer shall jointly
engage in Transition Management and Implementation activity (as further
described in Exhibit "E" annexed hereto) to enable CareSouth to perform in
accordance with the terms and conditions of this Agreement.
1.17 "Trade Secrets" shall mean information related to the business of the
disclosing party or its Affiliates which (a) derives economic value, actual
or potential, from not being generally known to or readily ascertainable by
other persons who can obtain economic value from its disclosure or use; and
(b) is the subject of efforts by the disclosing party or its Affiliates
that are reasonable under the circumstances to maintain its secrecy or
confidentiality, including without limitation (1) marking any information
reduced to tangible form clearly and conspicuously with a legend
identifying its confidential or proprietary nature; (2) identifying any
oral presentation or communication as confidential immediately before,
during or after such oral presentation or communication, or (3) otherwise
treating such information as confidential. Assuming the criteria in
clauses (a) and (b) above are met, Trade Secrets includes, but is not
limited to, technical and nontechnical data related to the designs,
programs, devices, methods, techniques, drawings, processes, inventions,
finances, actual or potential customers and suppliers, research,
development, existing and future products, and employees of the disclosing
party and its affiliates. Trade Secrets also includes information which
has been disclosed to CareSouth or Customer or its respective Affiliates by
a third party which CareSouth or Customer or its respective Affiliates, as
the case may be, is obligated to treat as confidential. The provisions of
this Agreement restricting the use of Trade Secrets shall survive
termination or expiration of this Agreement for so long as is permitted by
the Delaware Uniform Trade Secrets Act, 6 Del. C. (S)(S) 2001 to 2009.
1.18 "Visit" shall mean a patient visit (excluding Private-Duty Visits), or an
episode of personal contact, or one single encounter with a patient,
rendered by the staff of one or more of Obligor's Agencies, or others under
arrangement with the Obligor's Agencies, where that Visit is billable (but
without respect to whether Obligor or the Agency is ultimately reimbursed
or paid, in whole or in part for said visit), including but without
limitation: (i) for the purpose of providing Medicare or Medicaid covered
"home health services" as defined in 42 C.F.R. Section 409.40 et. seq. or
as defined by the Medicare "Home Health Agency Manual", HIM-11 Section
218.1; or (ii) for the purpose of providing covered home health services as
defined in other applicable Medicare or Medicaid manuals and general
instructions, now or hereafter adopted or as amended or recodified from
time to time or any substitute or successor statutes or regulations.
2 OBLIGATIONS OF CARESOUTH AND CUSTOMER
2.1 Engagement of CareSouth; Authority. Subject to the terms and
conditions of this Agreement, the Customer hereby engages
CareSouth to provide the below-described services (hereafter the
"Provided Services") for Customer's Agency, and CareSouth hereby
accepts such engagement by the Customer. Notwithstanding the
provision of such Provided Services by CareSouth to the Customer,
the ultimate responsibility for authority over the governance,
management, and operations of Customer's Agency and Customer's
business shall remain at all times with the Customer and
Customer's executive management team, including responsibility and
authority for determining and monitoring the Agency and
CareSouth's performance under this Agreement for compliance with
(a) the policies and procedures adopted by the Customer with
respect to the Agency from time to time; and (b) all applicable
Governmental Regulations, including, without limitation the
Conditions of Participation. Customer assumes full responsibility
for maintaining Agency's own records of patient services and
historical financial records actually received from CareSouth
under this Agreement and for documenting the continuing need and
cost effectiveness of the Services provided under this Agreement.
2.2 Appointment. CareSouth shall keep the data records of the activity of
Customer in the operation of the Agency for each of the Provided Services,
consistent with the requirements set forth herein. CareSouth warrants and
represents that its services for Customer shall be in accordance with the
customary industry standards, and enable compliance by the Agency with
respect to record-keeping with all presently existing applicable
Governmental Regulations.
2.3 Services To Be Performed by CareSouth/Customer's Obligations.
2.3.1 CareSouth shall perform the services as set forth in Exhibit
"B-1", attached hereto, (collectively referred to herein as the
"Provided Services") which will include:
2.3.1.1 Professional Services of billing (inclusive of claims submission),
cost reporting services, payroll, and collections; and
2.3.1.3 Software License and Software Maintenance and Support.
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EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
2.3.2 The Customer's obligations and responsibilities shall include those
responsibilities as set forth in Exhibit "B-2" attached hereto, and
shall include, but without limitation, good faith cooperation with
CareSouth in providing the access, data, and information, necessary
for CareSouth to perform in accordance with the terms and conditions
of this Agreement.
2.3.3 It is understood that for the Service Agreement to succeed, the
Customer and Customer's employees should acquire a knowledge of the
Licensed Software and should make efficient training available to all
of Customer's representatives to enable the proper use of the
Software Systems, reporting mechanisms, and transmission of data and
records to CareSouth. CareSouth shall provide, without additional
fees to Customer, during the Transition Period the types and
frequency of training for Customer's employees of the Agency as set
forth in Exhibit "B-1"; provided, however, such training shall
include be limited to those modules or versions of the Software
installed during the Transition Period, and said training shall be
provided at CareSouth's Augusta, Georgia center, or such other remote
locations as reasonably requested by Customer, and furnished with
adequate computers and classroom space at Customer's expense. After
the lapse of the Transition Period, all training shall be provided
solely at CareSouth's Augusta, Georgia center and no additional fees
shall be charged by CareSouth for said training; provided, however,
Customer shall bear its own costs and expenses with respect to its
employees being trained.
2.3.4 Additionally, the Customer shall provide suitable hardware equipment
and maintenance and repairs and replacements for equipment of the
Customer used on the Customer's premises for the capture,
communication and transmission to and receipt by CareSouth of data
and other information hereunder. The Customer shall be solely
responsible for all communications equipment and telephone line costs
between Customer and CareSouth's data processing center, inclusive
with one-time site preparation and installation cost and monthly
recurring costs, which amounts and communication costs are not
included in the fees paid to CareSouth hereunder.
2.3.5 CareSouth shall provide for the Agency those Software Maintenance and
Support services as outlined in Section 4.2 hereof.
2.4 Duty of Care. CareSouth shall not be liable for damage, loss of data,
delays and errors occurring by reason of circumstances beyond its
reasonable control or force majeur. CareSouth shall use reasonable care to
minimize the likelihood of all damage, loss of data, delays, and errors
resulting from an uncontrollable event, and should such damage, loss of
data, delays or errors occur, CareSouth shall use its best efforts to
mitigate the effects of such occurrence.
2.5 Indemnification.
2.5.1 Customer shall indemnify and hold harmless CareSouth and its
Affiliates (including their directors, officers, employees, and
agents, individually and collectively) from and against any and all
claims, liabilities, damages, fines, penalties, taxes, costs and
expenses, including reasonable attorneys' fees and expenses, court
costs, and costs of settlement, which any such party may suffer,
sustain or become subject to as a result of the negligent, willful,
or reckless conduct or willful failure to act (including, without
limitation, misrepresentation, fraud, willful misconduct) of
Customer, or its directors, officers, employees or agents in the
operation of the Agency's business or the performance of Customer's
obligations hereunder by reason of Customer's and its Agency's
participation in the Medicare or Medicaid program, or by reason of
the application of Governmental Regulations.
2.5.2 CareSouth shall indemnify, defend, and hold harmless Customer
(including its directors, officers, employees and agents,
individually and collectively) from and against any and all claims,
liabilities, damages, fines, penalties, taxes, costs and expenses,
including reasonable attorneys' fees and expenses, court costs and
costs of settlement, which any such party may suffer, sustain or
become subject to as a result of the negligent, willful, or reckless
conduct or willful failure to act (including, without limitation,
misrepresentation, fraud, willful misconduct) of CareSouth, or its
directors, officers, employees or agents in the performance of
CareSouth's obligations hereunder.
2.5.3 Notice of Claim for Indemnification. If any person or entity has
reason to believe that he, she, or it has suffered or incurred (or
has a reasonable belief that he, she, or it will suffer or incur) any
loss (an "Indemnity Loss") subject to indemnity hereunder, such
person or entity shall so notify the indemnifying party promptly in
writing describing such loss or expense, the amount thereof, if
known, and the method of computation of such Indemnity Loss, all with
reasonable particularity. If the nature of the Indemnity Loss set
forth in the notice does not involve any third party claim, and if
the indemnifying party does not respond to the indemnified party in
writing contesting the existence or amount of any Indemnity Loss
within sixty (60) days after delivery of such notice, then such
indemnifying party shall be obligated to pay, in cash or certified
funds, the amount of the Indemnity Loss set forth in such notice to
the indemnified party.
2.5.4 Defense of Third Party Claims. If the nature of the Indemnity Loss
set forth in the notice involves any claim, suit, or proceeding that
is made or instituted against an indemnified party which, if
prosecuted successfully, would be a matter for which the indemnified
party is entitled to indemnification under this Agreement (a "Third
Party Claim"), the obligations and liabilities of the parties
hereunder with respect to such Third Party Claim shall be subject to
the following terms and conditions:
2.5.4.1 The indemnified party shall give the indemnifying party
written notice of any such claim promptly after receipt by
the indemnified party of actual notice thereof, and the
indemnifying party will undertake the defense thereof by
representatives of its own choosing reasonably acceptable to
the indemnified party. The assumption of the defense of any
such claim by the indemnifying party shall be an
acknowledgment by the indemnifying party of its obligation
to indemnify the indemnified party with respect to such
claim hereunder. If, however, the indemnifying party fails
or refuses to undertake the defense of such claim within ten
(10) days after written notice of such claim has been given
to the indemnifying party by the indemnified party, the
indemnified party shall have the right to undertake the
defense, compromise and settlement of such claim with
counsel of its own choosing. In the circumstances described
in the preceding sentence, the indemnified party shall,
promptly upon its assumption of the defense of such claim,
make an indemnification claim as specified above.
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<PAGE>
EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
2.5.4.2 The indemnifying party and indemnified party shall cooperate
with each other in all reasonably respects in connection with
the defense of any Third Party Claim, including making
available records relating to such claim and furnishing,
without expense to the indemnifying party, management
employees of the indemnified party as may be reasonably
necessary for the preparation of the defense of any such
claim or for testimony as witness in any proceeding relating
to such claim.
2.5.5 Settlement of Third Party Claims. No settlement of a Third Party
Claim involving the asserted liability of indemnifying party under
this Section 2.5 shall be made without the prior written consent by
or on behalf of indemnifying party, which consent shall not be
unreasonably withheld or delayed. Consent shall be presumed in the
case of settlements of $20,000 or less where the indemnifying party
has not responded within ten (10) business days of notice of a
proposed settlement. In the event of any dispute regarding the
reasonableness of a proposed settlement, the party that will
ultimately bear the larger financial loss resulting from such
settlement shall make the final determination in respect thereto,
which determination shall be final and binding on all involved
parties.
2.5.6 Survival. The obligations of the parties under this Section 2.5
shall survive termination or expiration of this Agreement.
2.6 Confidentiality. CareSouth agrees to treat all records and other
Confidential Information of Customer confidentially and CareSouth on behalf
of itself and its employees agrees to keep confidential Customer's
Confidential Information (as defined herein). Customer on behalf of itself
and its employees agrees to keep all information with respect to
CareSouth's Software and system, Confidential Information (as defined
herein)and Trade Secrets confidential; provided, however, that if either
party is required to produce any such Confidential Information or Trade
Secrets, where applicable, by order of any government agency or other
regulatory body it may, upon not less than five (5) days (unless the
applicable law or Governmental Regulations require a more expedited
response in which case the notice shall be reasonable under the
circumstances) written notice to the other party, release the required
information.
2.7 Data Ownership. CareSouth agrees that all records, data, files, and other
data received, computed, developed, used, and/or stored pursuant to this
Agreement are the exclusive property of Customer and that all such records
and other data shall be furnished without additional charge, except for
actual processing costs, to Customer in the then customary format and
medium available machine readable form immediately upon termination of this
Agreement for any reason whatsoever. Furthermore, upon Customer's request
at any time or times while this Agreement is in effect, CareSouth shall
immediately deliver to Customer at Customer's sole expense, any or all of
the data and records held by CareSouth pursuant to this Agreement, in the
machine readable form in the then customary format and medium.
2.8 Transition Upon Termination. In the event this Agreement terminates for
any reason, the parties will, in good faith, cooperate to transition the
delivery of services so as not to disrupt the operation of the Agency.
3 FEES AND PAYMENT; TERM.*
3.3 Term. This Agreement shall extend for a five (5) year term commencing upon
the Effective Date.
3.4 Taxes. Customer shall, in addition to the other amounts payable under this
Agreement, pay all taxes, federal, state, or otherwise, however designated,
which are levied or imposed by reason of the license or purchase of
software under this Agreement. Without limiting the foregoing, Customer
shall promptly pay to CareSouth an amount equal to any such items actually
paid or required to be collected or paid by CareSouth. *
4 SOFTWARE LICENSE.
4.1 License. CareSouth will grant to Customer, and Customer accepts from
CareSouth, a non-exclusive and non-transferable license to use the Software
System (the "License"), in accordance with the terms and conditions of a
separate Licensing Agreement in the form attached hereto as Exhibit "C",
which License shall expire without further action by CareSouth upon any
termination of this Agreement or Termination of the MCGS Agreement.
Customer acknowledges that it has enjoyed full and complete access to
inspect, test and review the Software System and has independently
determined that the Software System is acceptable to Customer and will meet
the specifications and requirements of this Agreement.
4.2 Software Maintenance and Support. CareSouth will provide Customer with
those Software Maintenance and Support Services for the Software System as
described in the form of the Software Maintenance and Support Agreement
attached hereto as Exhibit "D", which Support Agreement shall expire
without further action by CareSouth upon any termination of this Agreement
or Termination of the MCGS Agreement.
5 COMPUTER EQUIPMENT.
5.1 Computer Facility of CareSouth. CareSouth shall provide the necessary
computer equipment and other office equipment necessary to perform the
contemplated services at CareSouth's data processing centers. CareSouth
represents that the equipment configuration for CareSouth's data processing
operations for the benefit of Customer is adequate for the necessary
processing and for the software systems initially contemplated hereunder.
5.2 Computer Facility of Customer. Customer shall maintain its own computer
equipment hardware and related software in the Agencies (and all branch
offices thereof) meeting the minimum requirements provided by CareSouth to
Customer, which are necessary prerequisites for CareSouth's performance
hereunder.
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EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
5.3 Telecommunications and Other Recurring Charges. Customer shall provide the
necessary telecommunications and other wide area network ("WAN")
communication links between Customer's Agencies and/or Agency branch
offices, and CareSouth's data processing facilities, and Customer shall
also be solely responsible for all costs associated with the installation
and monthly maintenance of said communication facilities and link between
Customer and CareSouth during the term of this Agreement.
6 GENERAL.
6.1 Customer Default.
6.1.1 In the event the Customer shall become twenty (20) days in arrears in
the payment of fees due or otherwise commit a Breach of the terms of
this Agreement, CareSouth may issue a written notice of its intent to
terminate this Agreement, or treat said failure as a Breach of this
Agreement, if the default or breach is not cured within thirty (30)
days of the date of notice (the "Notice and Cure Period"). In the
event that payment (in full of all delinquent amounts or invoices,
plus any interest, late fees or other accrued charges), or where
applicable, full and complete cure of the Breach by Customer not
fully completed during the Notice and Cure Period, then CareSouth may
treat said failure as a "Default" hereunder, and shall be entitled to
cumulatively elect one or more of its remedies available at law or
under this Agreement; provided, however, that in the event that
Customer cannot reasonably cure the Breach within said thirty (30)
day period, Customer shall submit to CareSouth a plan to cure said
Breach and, in good faith, diligently act to cure said Breach within
a time reasonably acceptable to CareSouth.
6.1.2 In case of Customer's Default in this Agreement, CareSouth may (in
addition to any rights or remedies granted it by law or by other
provisions of this Agreement) take one or more of the following
actions at CareSouth's option if the Customer shall Default in
payment of the Fees or Breach this Agreement and fail to cure: (a)
Terminate this Agreement, without prejudice to any right or claim by
CareSouth for the arrears of fees, if any, or for damages on account
of any other Breach of this Agreement, (b) CareSouth may terminate
Customer's rights under this Agreement and the Licensing Agreement
and any other agreement between CareSouth and Customer (or its
Affiliates) pursuant to the terms herein and in the Licensing
Agreement; or (c) CareSouth may exercise any and all other rights
accorded to it by law or under this Agreement which are not
inconsistent with the above. Notwithstanding anything to the contract
herein, termination or expiration of this Agreement shall not release
Customer from its obligation to pay any sum which may be due and
owing to CareSouth for services rendered under this Agreement prior
to termination or expiration, and such obligations shall survive
termination or expiration.
6.1.3 All of the rights accorded to CareSouth in section 6.1 or in any
other section of this Agreement in case of Breach or default by
Customer shall be cumulative. None of them shall be construed or
deemed to be an election by the CareSouth that diminishes,
extinguishes or bars any other legal remedy or right provided in this
Agreement. Furthermore, no right, power, or remedy conferred upon or
reserved to CareSouth hereunder is intended to be exclusive of any
other right, power, or remedy, but each and every such right, power,
and remedy shall be cumulative and concurrent and shall be in
addition to any other right, power, and remedy given hereunder, or
now or hereafter existing at law, in equity, by contract, or by
statute. Failure to exercise any right given herein or by law to
CareSouth shall not be construed as a waiver of any such right.
6.2 CareSouth Default.
6.2.1 In the event CareSouth commits or permits a material Breach of this
Agreement, the Customer may, upon written notice to CareSouth, cancel
and terminate this Agreement provided (a) such notice specifies the
nature of the claimed Breach, and (b) CareSouth is given a reasonable
time of not less than thirty (30) days (the "Notice and Cure Period")
to remedy the Breach reasonably satisfactory to Customer, within such
thirty (30) day period unless the breach or default is of such a
nature that the same cannot reasonably be cured within the thirty
(30) day period. In the event that said breach is of such a nature
that it cannot reasonably be cured within said thirty (30) day
period, CareSouth shall submit a plan to cure said breach and, in
good faith, diligently act to cure said breach within a time
reasonably acceptable to Customer. Should CareSouth fail to cure said
breach (including a breach to be cured pursuant to a plan for cure),
then Customer may treat said failure as a "Default" hereunder, and
shall be entitled to cumulatively elect one or more of its remedies
available at law or under this Agreement.
6.2.2 In case of CareSouth's Default under this Agreement, Customer may (in
addition to any rights or remedies granted it by law or by other
provisions of this Agreement) take one or more of the following
actions at Customer's option if CareSouth shall Default under this
Agreement and fail to cure: (a) Terminate this Agreement, without
prejudice to any right or claim by Customer damages on account of any
Breach of this Agreement; (b) immediately obtain from CareSouth
access to Customer's Data in the then customary format and medium and
machine readable form; or (c) Customer may exercise any and all other
rights accorded to it by law or under this Agreement which are not
inconsistent with the above.
6.2.3 All of the rights accorded to Customer in section 6.2 or in any other
section of this Agreement in case of Breach or default by CareSouth
shall be cumulative. None of them shall be construed or deemed to be
an election by the Customer that diminishes, extinguishes or bars any
other legal remedy or right provided in this Agreement. Furthermore,
no right, power, or remedy conferred upon or reserved to Customer
hereunder is intended to be exclusive of any other right, power, or
remedy, but each and every such right, power, and remedy shall be
cumulative and concurrent and shall be in addition to any other
right, power, and remedy given hereunder, or now or hereafter
existing at law, in equity, by contract, or by statute. Failure to
exercise any right given herein or by law to Customer shall not be
construed as a waiver of any such right.
6.3 Conditions Precedent to CareSouth's Obligations. The following are the
conditions precedent to CareSouth's obligation to perform in accordance
with this Agreement: (a) Execution of Amedisys, Inc. of the MCGS Agreement
on or before the date hereof; (b) Execution by Customer of the Software
License Agreement in the form attached hereto as Exhibit C; and (c)
Execution by Customer of the Software Maintenance and Support Agreement in
the form attached hereto as Exhibit D.
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EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
6.4 Limitation of Warranties and Remedies. (a) The parties contemplate that
their cooperation in this Agreement shall provide the Customer with access
to computerized system for the Provided Services but it is not the parties'
intent that CareSouth assume the Customer's risks in this regard, or
otherwise be the Customer's insurer or guarantor in this regard.
Accordingly, IN NO EVENT SHALL CARESOUTH BE LIABLE FOR SPECIAL INCIDENTAL
OR CONSEQUENTIAL DAMAGES EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES; and (b) No direct damages shall be assessed against CareSouth
when any delay or Breach on its part is caused (directly or indirectly) by
the failure of the Customer to furnish instructions, information, accurate
data or input required of the Customer by CareSouth, the failure of any
utility or communications company to furnish services or for any other
reasons beyond the control of CareSouth or caused by a Force Majeur.
6.5 Notices. All notices, consents, invoices, approvals and the like required
under any of the provisions of this Agreement shall be in writing and shall
be deemed to have been given (a) if personally delivered, upon receipt, (b)
if sent by overnight courier (such as Federal Express), upon delivery to
the addressee, or (c) or by facsimile at the numbers listed below, or (d)
if sent by U.S. Mail registered or certified, return receipt requested,
with sufficient postage affixed thereto, three days after being mailed,
addressed as follows:
(i) If to CareSouth to:
CareSouth Home Health Services, Inc.
577 Mulberry Street, Suite 1200
Macon, Georgia 31201
ATTN.: Ronald B. Conners, PhD., President/CEO
Facsimile: (912) 752-0752
with a copy to:
Rick W. Griffin, Esq., General Counsel
CareSouth Home Health Services, Inc.
577 Mulberry Street, Suite 1200
Macon, Georgia 31201
FAX: (912) 752-0785
(ii) If to Guarantor to:
William F. Borne
Chairman of the Board and CEO
Amedisys, Inc.
3029 South Sherwood Forest Blvd
Suite 250
Baton Rouge, LA 70816
Facsimile: (504) 292-8163
with a copy to:
Michael D. Lutgring, Esq.
General Counsel
Amedisys, Inc.
3029 South Sherwood Forest Blvd
Suite 250
Baton Rouge, LA 70816
Facsimile: (504) 292-8163
(ii) If to Customer to:
William F. Borne
Chairman of the Board and CEO
Amedisys, Inc.
3029 South Sherwood Forest Blvd
Suite 250
Baton Rouge, LA 70816
Facsimile: (504) 292-8163
with a copy to:
Michael D. Lutgring, Esq.
General Counsel
Amedisys, Inc.
3029 South Sherwood Forest Blvd
Suite 250
Baton Rouge, LA 70816
Facsimile: (504) 292-8163
or to such other address as such party shall specify in writing to the other
party hereto.
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EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
6.6 Controlling Law: Jurisdiction. This Agreement shall be
construed and enforced in accordance with the laws of the State
of Delaware.
6.7 Time of Essence. TIME IS THE ESSENCE in the performance of this
Agreement by each party hereto.
6.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all
of which, when taken together, shall constitute one and the same
instrument.
6.9 Construction. Should any provision of this Agreement require
judicial interpretation, the parties hereto agree that the court
interpreting or construing the same shall not apply a
presumption that the terms hereof shall be more strictly
construed against one party by reason of the rule of
construction that a document is to be more strictly construed
against the party who itself or through its agents prepared the
same, it being agreed that the parties hereto and their
respective agents have participated in the preparation hereof.
6.10 Dispute Resolution. Any material dispute between the parties
arising under this Agreement which is not resolved by good faith
negotiation (including, without limitation, any issues
concerning whether dispute may be submitted by either party to
mediation or is subject to mediation) shall first be submitted
to non-binding mediation in Birmingham, Alabama. Completion of
said mediation shall be a condition precedent and jurisdictional
prerequisite to any civil or Court action or other proceeding
involving any dispute arising under or relating to this
Agreement. The costs of mediation shall be borne equally by the
parties.
6.11 Partial Invalidity. Wherever possible, each provision hereof
shall be interpreted in such manner as to be effective and valid
under applicable law, but in case any one or more of the
provisions contained herein shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any
other provisions of this Agreement, and this Agreement shall be
construed as if such invalid, illegal, or unenforceable
provision or provisions had never been contained herein unless
the deletion of such provision or provisions would result in
such a material change as to cause completion of the
transactions contemplated hereby to be unreasonable.
6.12 Third Party Beneficiaries. Nothing in this Agreement will be
construed to give any person other than the parties hereto any
legal or equitable right, remedy, or claim under or with respect
to this Agreement.
6.13 Assignment. Neither party may assign or delegate any of its
rights or obligations under this Agreement to any other person,
firm or corporation without the express written consent of the
other party which consent will not be unreasonably withheld or
delayed; provided, however, that (a) Customer may assign all of
its rights and obligations under this Agreement (but excepting
the separate License Agreement), upon written notice to
CareSouth, to any wholly-owned or majority controlled Affiliate
or parent of Customer or any entity controlling or under common
control of Customer which acquires an Agency or Agencies,
pursuant to a corporate reorganization or lease; and, (b)
CareSouth may assign all of its rights and obligations under
this Agreement, upon written notice to Customer to any wholly-
owned or majority controlled Affiliate or parent of CareSouth or
any entity controlling or under common control of CareSouth, or
to a third party which purchases of all, or substantially all,
of the assets of CareSouth, or which acquires control of
CareSouth, as applicable, or pursuant to a merger, consolidation
or other similar transaction, so long as said Purchaser or
Affiliate or other entity assumes and agrees to be bound by the
terms of this Agreement. This Agreement shall inure to the
benefit of and be binding upon the legal representatives,
permitted assigns and successors of the parties hereto.
6.14 Access to Books and Records.
6.14.1 For a period of five (5) years following the last date CareSouth
furnishes Provided Services pursuant to this Agreement,
CareSouth shall make available upon written request of the
Secretary of the United States Department of Health and Human
Services, the United States Comptroller General and their duly
authorized representatives, all contracts, books, documents and
records of CareSouth to the extent required by 42 U.S.C. Section
1395x(v)(1)(i) (as amended or recodified from time to time or
any substitute or successor statute) and lawful regulations
promulgated thereunder.
6.14.2 If CareSouth carries out any of its duties under this
Agreement through a subcontract with a value of
$10,000.00 or more over a twelve (12) month period with
a related organization, such subcontract shall contain a
clause to the effect that until four (4) years after the
furnishing of such services pursuant to such
subcontract, such related organization shall make
available, upon written request of the Secretary of the
United States Department of Health and Human Services,
the United States Comptroller General or any of their
duly authorized representatives, the sub-contract and
the books, documents and records of such organization to
the extent required by 42 U.S.C. Section 1395x (v)(1)(i)
(as amended or recodified from time to time or any
substitute or successor statute) and lawful regulations
promulgated thereunder.
6.15 Status of Relationship. It is understood and agreed that the
parties to this Agreement are independent contractors and
nothing herein shall be construed to establish a partnership or
joint venture relationship between the parties. Each party has
sole responsibility for the payment of each of its employee's
wages, payroll taxes and benefits. By virtue hereof, neither
party assumes, directly or by implication, the debts,
obligations, taxes or liabilities of the other party.
6.16 Authority and Approvals. The parties hereto agree and stipulate
that the undersigned have the authority to bind their principals
without further action or notice whatsoever. Whenever any party
is requested under this Agreement to give its approval to a
matter, such approval shall not be unreasonably withheld or
delayed. If a party shall desire the approval of another party
to any matter, such party may give written notice to the other
party that it requests such approval, specifying in the notice
the matter as to which the approval is requested and reasonable
detail respecting the matter. A good faith attempt
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EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
to verbally communicate the contents of the notice shall be
required prior to the expiration of the Notice Period (as
hereinafter defined). If the other party shall not respond
negatively in writing to the notice within five (5) business
days ("Notice Period") after receipt and verbal notification
(unless some other period for response is specified in this
Agreement) such other party shall be deemed to have approved the
matter referred to in the notice. Any provision in this
Agreement to the contrary notwithstanding, in emergency
situations on approval sought and given in any manner reasonable
under the circumstances shall be effective.
IN WITNESS WHEREOF, the parties hereto have signed this agreement the
date and year first written above by their duly authorized representative.
[Signatures Continue on Next Page]
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EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
CareSouth: CARESOUTH HOME HEALTH SERVICES, INC.
By:
__________________________________
Ronald B. Conners, PhD.
President/CEO
Attest:
__________________________________
Rick W. Griffin
Secretary
[Corporate Seal]
Customer: A HOME HEALTH CO, INC.
By:
__________________________________
William F. Borne, CEO
Attest:
___________________________________
,Secretary
[Corporate Seal]
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EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
EXHIBIT A
LIST OF AGENCIES
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EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
EXHIBIT B-1
PROVIDED SERVICES
SUMMARY: CareSouth will provide the following five services to Customer's Agency
1 Payroll Processing
2 Billing Services
3 Collection Services
4 Cost Reporting Services
5 Software Maintenance and Support
according to the following Description of Services.
DESCRIPTION OF SERVICES:
1 PAYROLL PROCESSING
1.1 Process time and attendance data for all Customer's home health
agencies on a bi-weekly schedule.
1.2 Arrange for overnight delivery of completed payroll checks to
Customer's agencies.
1.3 Prepare and submit all Federal and State withholding deposits.
1.4 Prepare and submit all quarterly and annual payroll reports to Federal
and State Revenue Departments and Departments of Labor.
1.5 Prepare and submit W-2 forms and related Federal and State reporting.
1.6 CareSouth will prepare and complete the payroll account reconciliation
on a monthly basis.
1.7 No provisions are available for preparation of manual payroll checks.
SYSTEM REQUIREMENTS AND CONDITIONS PRECEDENT TO CARESOUTH'S PAYROLL PROCESSING
1.8 Agency is responsible for entering, verifying and confirming the
accuracy of transmitted information through the use of electronic
signatures.
1.9 Add/change/delete information required for next payroll cycle
must be available three (3) business days prior to payroll in which
the change will be effective.
1.10 Paper checks will be forwarded to each agency by overnight delivery
on the Friday of payroll week for distribution after 2:00PM that day.
2 BILLING SERVICES
2.1 Send bills on a bi-monthly billing cycle, three (3) days following the
close using either EMC or manual methods, depending on payor.
2.2 For EMC claims:
2.2.1 Pull held bills from transmission
2.2.2 Transmit held bills when released by agency
2.2.3 Balance transmission totals
2.2.4 Transmit claims
2.2.5 Transmit majority of Medicare and Medicaid claims electronically
2.3 For manual claims:
2.3.1 Prepare private insurance and other funding source claims
2.3.2 Timely submission of manual claims through required agency back-up
2.3.3 Review and forward claim to payor
2.3.4 Bill patient co-insurance monthly
2.4 Adjustment Bills:
2.4.1 Prepare adjusted bill or rebill
2.4.2 Submit adjusted bill to payor
2.4.3 Post adjustments to patient account
2.5 Reporting:
2.5.1 Deliver attached visit reports by sixth (6/th/) business day following
close
2.5.2 Create a file to forward billing/revenue data to Customer's Agency
3 COLLECTION SERVICES
3.1 Maintain A/R file
3.2 Perform follow-up/collection on all accounts
3.3 For patient portions of bills, send out three (3) bills, then refer to
collection
3.4 For payor portions of bills, agree on process by payor
3.5 Prepare and process bad debt adjustments
3.6 Analyze and correct rejected claims
3.7 Prepare and analyze A/R aging reports to be used for follow-up
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EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
3.8 Post payments to A/R
3.9 Prepare Medicare Credit Balance Reports on a quarterly basis
4 COST REPORTING SERVICES
4.1 Prepare monthly PIP reports for PIP providers (sample attached)
4.2 Prepare quarterly PIP reports for non-PIP providers
4.3 Prepare yearly Medicare cost reports (excluding home office) for all
certified providers, based upon Customer/Agency supplied data
5 SOFTWARE MAINTENANCE AND SUPPORT
5.1 Provide Help Desk services to include telephone support and remote
trouble analysis for software.
5.2 Provide updates to the software in response to changes in regulations
as mandated by federal and state agencies.
5.3 Provide assistance to field personnel on administrative related issues
in accordance with client's policy and procedures.
5.4 Provide analysis reports detailing client staff performance, e.g.,
training, procedure, and staff proficiencies.
5.5 Provide initial and periodic application training at Augusta Support
Services location. In addition, provide instructors to conduct
training at client designated locations, where volume justifies.
5.6 Provide web-based access to instructional materials (provided the
client is connected to the CareSouth frame relay network).
5.7 Publish client's HTML formatted policies and procedures on CareSouth
web servers if the client must be connected to the CareSouth frame
5.8 Provide other services as specified in Software License Agreement and
in Software maintenance and Support Agreement.
Exhibit B-1 Continues on Attached Pages reflecting Form of Monthly PIP Report
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EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
8/31/985:25 PM
Form Approved
OMB #0938-0217
Run Date
31-Aug-98
HOME HEALTH AGENCY
RATE REVIEW
<TABLE>
<CAPTION>
Check One:
<S> <C> <C> <C> <C> <C>
____ Cost Per Visit Interim Rate Review
x P.I.P. Rate Review Quarter(s)
____ ___________
Provider Name: PROVIDER NAME
_____________ _______________ ___________
Provider #: 00-0000 B/C #: FYE: 31-DEC-98
_____________ ___________ _________
Provider Telephone #:
___ ________________
Period Form: 01-Jan-98 to 31-Dec-98
_____________ _______________ ___________
_______________________________________________________________________________________________________
Certification By Officer of
Home Health Agency
_______________________________________________________________________________________________________
I hereby certify that I have examined the following schedules of the Home
Health Agency Rate Review and the accompanying Financial Statements or trial
balance for the above mentioned fiscal period; and that to the best of my
knowledge and belief they are true and correct.
Signature ____________________________________________________________________________________
Title _____________________________________________________________________________________
Date _____________________________________________________________________________________
Telephone Number __________________________________________________________________
Note: Effective with cost reporting period beginning July 1, 1986, cost
limits will be subject to an aggregate basis rather than a per
discipline limit application. The method that was used to calculate
these limits was on the aggregate basis.
</TABLE>
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EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
8/31/985:25 PM
<TABLE>
<CAPTION>
Page 1 of 5 Contracted Allocation Allowable
Provider # 00-0000 & Consult. Other Total Allowable of General Costs after
_______ Salaries Services Costs Costs Reclasses Adjustments Costs Serv. Costs Costfinding
Description (1) (2) (3) (4) (5) (6) (7) (8) (9)
- ------------ -------- ---------- ----- ----- --------- ----------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
A. GENERAL SERVICE COSTS
1. Interest &
Amortization xxxxxxxx xxxxxxxxxx 0 0 0 0 0 xxxxxxxxxx xxxxxxxxxxx
2. INSURANCE xxxxxxxx xxxxxxxxxx 0 0 0 0 0 xxxxxxxxxx xxxxxxxxxxx
3. DEPRECIATION &
LEASES xxxxxxxx xxxxxxxxxx 0 0 0 0 0 xxxxxxxxxx xxxxxxxxxxx
4. PLANT OPERATION 0 xxxxxxxxxx 0 0 0 0 0 xxxxxxxxxx xxxxxxxxxxx
5. TRANSPORTATION xxxxxxxx xxxxxxxxxx 0 0 0 0 0 xxxxxxxxxx xxxxxxxxxxx
6. ADMIN & GEN'L 0 0 0 0 0 0 0 xxxxxxxxxx xxxxxxxxxxx
7. BAD DEBTS 0 0 0 0 0 0 0 xxxxxxxxxx xxxxxxxxxxx
- ------------ -------- ---------- ----- ----- --------- ----------- -------- ----------- -----------
a. Sub-total 0 0 0 0 0 0 0 0 0
B. REIMBURSABLE COSTS
8. Skilled Nursing 0 0 0 0 0 0 0 0 0
9. Physical Therapy 0 0 0 0 0 0 0 0 0
10. Speech Therapy 0 0 0 0 0 0 0 0 0
11. Occup. Therapy 0 0 0 0 0 0 0 0 0
12. Med. Soc. Wkr. 0 0 0 0 0 0 0 0 0
13. H.H. Aide 0 0 0 0 0 0 0 0 0
14. Med Appliances 0 xxxxxxxxxx 0 0 0 0 0 0 0
15. D.M.E. xxxxxxxx xxxxxxxxxx 0 0 0 0 0 0 0
16. Med. Supplies xxxxxxxx xxxxxxxxxx 0 0 0 0 0 0 0
17. Other 0 0 0 0 0 0 0 0 0
- ------------ -------- ---------- ----- ----- --------- ----------- -------- ----------- -----------
b. Sub-total 0 0 0 0 0 0 0 0 0
C. NON-REIMBURSABLE COSTS
18. Homemaker serv./Pers
Care Serv. 0 0 0 0 0 0 0 0 0
19. Marketing 0 0 0 0 0 0 0 0 0
20. Other 0 0 0 0 0 0 0 0 0
21. Private Duty Nursing 0 0 0 0 0 0 0 0 0
22. Clinic 0 0 0 0 0 0 0 0 0
23. Health Promotion 0 0 0 0 0 0 0 0 0
24. Day Care 0 0 0 0 0 0 0 0 0
25. Home Del. Meals 0 0 0 0 0 0 0 0 0
26. Hospice 0 0 0 0 0 0 0 0 0
27. Other 0 0 0 0 0 0 0 0 0
- ------------ -------- ---------- ----- ----- --------- ----------- -------- ----------- -----------
c. Sub-total 0 0 0 0 0 0 0 0 0
- ------------ -------- ---------- ----- ----- --------- ----------- -------- ----------- -----------
D. TOTAL COSTS 0 0 0 0 0 0 0 0 0
Unit Cost Multiplier (col 7, line a, divided by, lines b & c) 0.000000
==========
</TABLE>
F:\WP51\AMEDISYS\CARESOU\GUA2.wpd: October 23, 1998 (9:52AM)
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PAGE 31
WARNING! THIS DOCUMENT CONFIDENTIAL. DO NOT COPY. SEE PROVISIONS AT (P)1.7.
<PAGE>
EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
<TABLE>
<CAPTION>
8/31/98 5:25 PM
Urban Rural
Page 2 of 5 MEDICARE VISITS MEDICARE COSTS Part A & B Part A & B
Provider # 00-0000 Total Avg. Cost Urban Rural Urban Rural Medicare Medicare
------- Visit Per Visit Part A & B Part A & B Part A & B Part A & B Costs Costs
Description (10) (11) (12) (13) (14) (15) (16) (17) (18)
- --------------- --------- ----- --------- ----------- ----------- ------ ---------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
E. COSTS
1. Skilled Nursing 0 $0.00 0 0 0 0 0 0 0
2. Physical Therapy 0 $0.00 0 0 0 0 0 0 0
3. Speech Therapy 0 $0.00 0 0 0 0 0 0 0
4. Occup. Therapy 0 $0.00 0 0 0 0 0 0 0
5. Med. Soc. Wkr 0 $0.00 0 0 0 0 0 0 0
6. H.H. Aide 0 $0.00 0 0 0 0 0 0 0
- --------------- --------- ----- --------- ----------- ----------- ------ ---------- ---------- ----------- ---------
7e. Total 0 xxxxxxxxx 0 0 0 0 0 0 0
- --------------- --------- ----- --------- ----------- ----------- ------ ---------- ---------- ----------- ---------
8e. Avg. Cost/Visit (line 7e, col 17, divided by, line 7e, cols 12 & 13) $0.00
Urban Rural
F. COST LIMITS_______________ Cost Limits __________ ___________ Cost Limits Medicare Costs Per Cost Limits
1. Skilled Nursing xxxxx $0.00 0 0 - 0 0 0 0
2. Physical Therapy xxxxx $0.00 0 0 - 0 0 0 0
3. Speech Therapy xxxxx $0.00 0 0 - 0 0 0 0
4. Occup. Therapy xxxxx $0.00 0 0 - 0 0 0 0
5. Med. Soc. Wkr xxxxx $0.00 0 0 - 0 0 0 0
6. H.H. Aide xxxxx $0.00 0 0 - 0 0 0 0
- --------------- --------- ----- --------- ----------- ----------- ------ ---------- ---------- ----------- ---------
7f. Total xxxxx xxxxxxxxx 0 0 0 0 0 0
- --------------- --------- ----- --------- ----------- ----------- ------ ---------- ---------- ----------- ---------
8f. Avg. Cost/Visit (line 7f, col 17, divided by, line 7f, cols 12 & 13) $0.00
G. CHARGES __________________ *Chrg/Visit _________ ___________ ______ __________ MEDICARE VISIT CHARGES
1. Skilled Nursing xxxxx $0.00 0 0 0 0 0 0 0
2. Physical Therapy xxxxx $0.00 0 0 0 0 0 0 0
3. Speech Therapy xxxxx $0.00 0 0 0 0 0 0 0
4. Occup. Therapy xxxxx $0.00 0 0 0 0 0 0 0
5. Med. Soc. Wkr xxxxx $0.00 0 0 0 0 0 0 0
6. H.H. Aide xxxxx $0.00 0 0 0 0 0 0 0
- --------------- --------- ----- --------- ----------- ----------- ------ ---------- ---------- ----------- ---------
7g. Total xxxxx xxxxxxxxx 0 0 0 0 0 0 0
- --------------- --------- ----- --------- ----------- ----------- ------ ---------- ---------- ----------- ---------
8g. Avg. Charge Limit (line 7g, col 17, divided by, line 7g, cols 12 & 13) $0.00 $0.00
Total C/C
H. SUPPLIES & EQUIP. Charge ratio Medicare S & E Charges Medicare S & E Costs
1. DME Rented 0 0 0 0
2. DME Sold 0 0 0 0
3. Total DME (lns 1&2) 0 0.000000 0 0 0 0 0 0 0
4. Medical Supplies 0 0.000000 0 0 0 0 0 0 0
- --------------- --------- ----- --------- ----------- ----------- ------ ---------- ---------- ----------- ---------
4h. Total
(lns 3&4) 0 xxxxxxxxx 0 0 0 0 0 0 0
* If the charge structure has changed during the period of this report.
</TABLE>
F:\WP51\AMEDISYS\CARESOU\GUA2.wpd: October 23, 1998 (9:52AM)
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PAGE 32
WARNING! THIS DOCUMENT CONFIDENTIAL. DO NOT COPY. SEE PROVISIONS AT (P)1.7.
<PAGE>
EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
8/31/98 5:25 PM
indicate the weighted average and submit weighted average calculation.
<TABLE>
<CAPTION>
REVISED 4/17/89
Page 3 of 5
Provider # 00-0000
-------
<S> <C>
(19)
I. Effect of Prior Audit Adjustments
From latest settled cost report FY: through Amounts
--------------- -------------- --------
1. Allowable Costs "As Filed" (HCFA-1728) Wkst C, Pt. II, lines 1 through 6 (costs) col. 2 0
2. Plus Wkst C, Pt. II, lines 15 through 17 (costs) col. 2 0
3. Filed Allowable Costs (lns 1&2) 0
4. Allowable Costs "As Settled" (HCFA-1728) Wkst C, Pt. II, lines 1 through 6 (costs) col. 2 0
5. Plus Wkst C, Pt. II, lines 15 through 17 (costs) col. 2 0
6. Settled Allowable Costs (lns 4&5) 0
7. Audit Effect % [100% - (ln 6 divided by ln 3)] 0.0000
</TABLE>
F:\WP51\AMEDISYS\CARESOU\GUA2.wpd: October 23, 1998 (9:52AM)
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PAGE 33
WARNING! THIS DOCUMENT CONFIDENTIAL. DO NOT COPY. SEE PROVISIONS AT (P)1.7.
<PAGE>
EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
8/31/985:25 PM
<TABLE>
<CAPTION>
J. Lower of Medicare Costs, Cost Limits, Charges (20) (21)
Urban Rural
Medicare Medicare
Costs Costs
-------- ---------
<S> <C> <C>
1. Medicare Costs (Part E. Line 7e, Col. 17) 0 0
3. Medicare Medical Supplies (Sec. H, line 4, Col. 17) 0 0
4. Total Medicare Costs (Lines 1 & 2 & 3) 0 0
5. Audit Effect (Sec. I, ln 7, Col. 21 x Sec. J, ln 4) 0 0
6. Adjusted Medicare Cost (Line 4 - Line 5) 0
7. Medicare Cost Limits (Part F, Line f, Col. 17) 0 0
9. Medicare Medical Supplies (Line 3 Above) 0 0
10. Total Supplies & Equipment (Lines 8 & 9 Above) 0 0
11. Audit Effect (Sec. I, ln 7, col. 21 x Part J, ln 10) 0 0
12. Adjusted Supplies & Equipment (Lines 10 - 11 Above) 0 0
13. Adj. Medicare Cost Limits & Supp & Equip (Lines 7 + 12) 0
14. Total Medicare Charges (Sec. G, ln 7g, Col. 17 plus
Part H, Ln h, Cols. 12 & 13 & 14) 0
15. Lower of: Sec J, Ln 6, 13 or 14 0
15a. Sum of Line 15 0
16. Avg. Per Visit Rate (Sec. J, line 15 dividend by Part E,
line 7e, cols. 12 & 13) 0.00
17. Visits per Unduplicated Medicare Patient 0
17a. Estimated Average Cost per Beneficiary -
18. Medicare Cost per Patient Limit -
18a. Excess of Cost Over Beneficiary Limit -
18b. Estimated Number Of Medicare Patients 0
19. Total Medicare Beneficiary Cost Limit 0
20. Lower of Cost, Cost Limits, Beneficiary Cost Limits 0
21. Medicare Contractuals Expense 0
22. Medicare Loss -
</TABLE>
F:\WP51\AMEDISYS\CARESOU\GUA2.wpd: October 23, 1998 (9:52AM)
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PAGE 34
WARNING! THIS DOCUMENT CONFIDENTIAL. DO NOT COPY. SEE PROVISIONS AT (P)1.7.
<PAGE>
EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
8/31/985:25 PM
Page 4 of 5
Provider # 00-0000
--------
K. Adjustment to Bi-Weekly P.I.P. Payments (P.I.P. Providers Only)
1. Number of bi-weekly periods included in this report:
0.00
2. Revised P.I.P. Payments-(Part J, line 15 divided by
Part K, line 1) 0
3. Current P.I.P. Payments 0
4. Adjustment to P.I.P. Payments (line 2 - 3) 0
====
L. Calculation of Lump Sum Adjustment-(P.I.P. Providers Only)
1. Date of last P.I.P. Payment: 01/00/00
2. # of P.I.P. Payments made to date 0.00
3. Revised Bi-Weekly P.I.P. Payments (Part K, line 2) 0
4. Medicare Liability to Date (line 2 x 3) 0
5. Amount Received thru date on line 1 0
6. Interim Lump Sum Adj. Due Provider/(Program) line 4-5 0
7. Less: Applicable % Reduction 0.00% 0
8. Net Lump Sum Adj. Due Provider/(Program) line 6 - 7 0
====
9.
10.
F:\WP51\AMEDISYS\CARESOU\GUA2.wpd: October 23, 1998 (9:52AM)
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PAGE 35
WARNING! THIS DOCUMENT CONFIDENTIAL. DO NOT COPY. SEE PROVISIONS AT (P)1.7.
<PAGE>
EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
PROVIDER NAME 8/31985:25 PM
FISCAL PERIOD
PROVIDER # 00-0000
FISCAL PERIOD BEG. 1/1/98
FISCAL PERIOD END. 12/31/98
VISITS
<TABLE>
<CAPTION>
OCT-97 NOV-97 DEC-97 JAN-98 FEB-98 MAR-98 APR-98 MAY-98 JUN-98 JUL-98 AUG-98 SEP-98 YTD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TOTAL SN 0 0 0 0 0 0 0 0 0 0 0 0 0
PT 0 0 0 0 0 0 0 0 0 0 0 0 0
ST 0 0 0 0 0 0 0 0 0 0 0 0 0
OT 0 0 0 0 0 0 0 0 0 0 0 0 0
MSW 0 0 0 0 0 0 0 0 0 0 0 0 0
HHA 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0
CHECK 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
URBAN MEDICARE PART A & B OCT-97 NOV-97 DEC-97 JAN-98 FEB-98 MAR-98 APR-98 MAY-98 JUN-98 JUL-98 AUG-98 SEP-98 YTD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SN 0 0 0 0 0 0 0 0 0 0 0 0 0
PT 0 0 0 0 0 0 0 0 0 0 0 0 0
ST 0 0 0 0 0 0 0 0 0 0 0 0 0
OT 0 0 0 0 0 0 0 0 0 0 0 0 0
MSW 0 0 0 0 0 0 0 0 0 0 0 0 0
HHA 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
RURAL MEDICARE PART A & B OCT-97 NOV-97 DEC-97 JAN-98 FEB-98 MAR-98 APR-98 MAY-98 JUN-98 JUL-98 AUG-98 SEP-98 YTD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SN 0 0 0 0 0 0 0 0 0 0 0 0 0
PT 0 0 0 0 0 0 0 0 0 0 0 0 0
ST 0 0 0 0 0 0 0 0 0 0 0 0 0
OT 0 0 0 0 0 0 0 0 0 0 0 0 0
MSW 0 0 0 0 0 0 0 0 0 0 0 0 0
HHA 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
MEDICAID OCT-97 NOV-97 DEC-97 JAN-98 FEB-98 MAR-98 APR-98 MAY-98 JUN-98 JUL-98 AUG-98 SEP-98 YTD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SN 0 0 0 0 0 0 0 0 0 0 0 0 0
PT 0 0 0 0 0 0 0 0 0 0 0 0 0
ST 0 0 0 0 0 0 0 0 0 0 0 0 0
OT 0 0 0 0 0 0 0 0 0 0 0 0 0
MSW 0 0 0 0 0 0 0 0 0 0 0 0 0
HHA 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
OTHER OCT-97 NOV-97 DEC-97 JAN-98 FEB-98 MAR-98 APR-98 MAY-98 JUN-98 JUL-98 AUG-98 SEP-98 YTD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SN 0 0 0 0 0 0 0 0 0 0 0 0 0
PT 0 0 0 0 0 0 0 0 0 0 0 0 0
ST 0 0 0 0 0 0 0 0 0 0 0 0 0
OT 0 0 0 0 0 0 0 0 0 0 0 0 0
MSW 0 0 0 0 0 0 0 0 0 0 0 0 0
HHA 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0
</TABLE>
F:\WP51\AMEDISYS\CARESOU\GUA2.wpd: October 23, 1998 (9:52AM)
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PAGE 36
WARNING! THIS DOCUMENT CONFIDENTIAL. DO NOT COPY. SEE PROVISIONS AT (P)1.7.
<PAGE>
EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
8/31/985:25 PM
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SN 0 0 0 0 0 0 0 0 0 0 0 0 0
PT 0 0 0 0 0 0 0 0 0 0 0 0 0
ST 0 0 0 0 0 0 0 0 0 0 0 0 0
OT 0 0 0 0 0 0 0 0 0 0 0 0 0
MSW 0 0 0 0 0 0 0 0 0 0 0 0 0
HHA 0 0 0 0 0 0 0 0 0 0 0 0 0
</TABLE>
F:\WP51\AMEDISYS\CARESOU\GUA2.wpd: October 23, 1998 (9:52AM)
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PAGE 37
WARNING! THIS DOCUMENT CONFIDENTIAL. DO NOT COPY. SEE PROVISIONS AT (P)1.7.
<PAGE>
EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
8/31/985:25 PM
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 0 0 0 0 0 0 0 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
CURRENT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
VISITS PER MEDICARE
UNDUP. PATIENTS 0.00
ACTUAL 1 MO. UTILIZATION
FOR MARCH
MEDICARE COST SHIFT (PARTIAL) 0 0 0 0 0 0 0 0 0 0 0 0 0
MEDICARE COST SHIFT (FULL) 0 0 0 0 0 0 0 0 0 0 0 0 0
MEDICAL SUPPLY CHARGES
MEDICARE URBAN 0 0 0 0 0 0 0 0 0 0 0 0 0
MEDICARE RURAL 0 0 0 0 0 0 0 0 0 0 0 0 0
MEDICAID 0 0 0 0 0 0 0 0 0 0 0 0 0
INDIGENT 0 0 0 0 0 0 0 0 0 0 0 0 0
OTHER 0 0 0 0 0 0 0 0 0 0 0 0 0
TOTAL 0 0 0 0 0 0 0 0 0 0 0 0 0
MEDICARE BENEFICIARY
COST LIMIT 0.00
</TABLE>
<TABLE>
<CAPTION>
MEDICARE COST LIMITS URBAN RURAL
<S> <C> <C>
SN $0.00 $0.00
PT $0.00 $0.00
SP $0.00 $0.00
OT $0.00 $0.00
MSS $0.00 $0.00
HHA $0.00 $0.00
MEDICAID REIMBURSEMENT
PER VISIT
SN $0.00
PT $0.00
SP $0.00
OT $0.00
MSS $0.00
HHA $0.00
MEDICAID REIMBURSEMENT
MEDICAL SUPPLIES
PERCENTAGE OF CHARGES 0%
</TABLE>
<TABLE>
<CAPTION>
DISCIPLINE CHARGE RATE PER VISIT
MEDICARE MEDICAID OTHER INDIGENT
<S> <C> <C> <C> <C>
SN $0.00 $0.00 $0.00 $0.00
PT $0.00 $0.00 $0.00 $0.00
SP $0.00 $0.00 $0.00 $0.00
OT $0.00 $0.00 $0.00 $0.00
MSS $0.00 $0.00 $0.00 $0.00
HHA $0.00 $0.00 $0.00 $0.00
</TABLE>
(TO COMPUTE THE CHARGE RATES PER VISIT, DIVIDE TOTAL CHARGES BY DISCIPLINE BY
THE TOTAL DISCIPLINE VISITS. SKILLED NURSING CHARGES WILL DIFFER EACH MONTH
SINCE THE FIRST VISIT IS BILLED AT A HIGHER RATE THAN SUBSEQUENT SN VISITS.)
<TABLE>
<CAPTION>
CONTRACTUALS OCT-97 NOV-97 DEC-97 JAN-98 FEB-98 MAR-98 APR-98 MAY-98 JUN-98 JUL-98 AUG-98 SEP-98 YTD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PRIVATE/OTHER 0 0 0 0 0 0 0 0 0 0 0 0 0
PERSONAL CARE SERVICES 0 0 0 0 0 0 0 0 0 0 0 0 0
MEDICARE PRIOR YEAR 0 0 0 0 0 0 0 0 0 0 0 0 0
MEDICAID PRIOR YEAR 0 0 0 0 0 0 0 0 0 0 0 0 0
OTHER PRIOR YEAR 0 0 0 0 0 0 0 0 0 0 0 0 0
INDIGENT OTHER YEAR 0 0 0 0 0 0 0 0 0 0 0 0 0
CHARGES
PERSONAL CARE SERVICES 0 0 0 0 0 0 0 0 0 0 0 0 0
NON PATIENT REVENUE 0 0 0 0 0 0 0 0 0 0 0 0 0
MEDICARE LATE CHARGES 0 0 0 0 0 0 0 0 0 0 0 0 0
MEDICAID LATE CHARGES 0 0 0 0 0 0 0 0 0 0 0 0 0
OTHER LATE CHARGES 0 0 0 0 0 0 0 0 0 0 0 0 0
INDIGENT LATE CHARGES 0 0 0 0 0 0 0 0 0 0 0 0 0
</TABLE>
F:\WP51\AMEDISYS\CARESOU\GUA2.wpd: October 23, 1998 (9:52AM)
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PAGE 38
WARNING! THIS DOCUMENT CONFIDENTIAL. DO NOT COPY. SEE PROVISIONS AT (P)1.7.
<PAGE>
EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
MARCH 1, 1998-SEPTEMBER 30, 1998
EXPENSE WORKSHEET
PROVIDER NAME
<TABLE>
<CAPTION>
8/31/98 5:25 PM
MAR-97 BUDGETED
PERIOD PERIOD PERIOD PERIOD PERIOD PERIOD PERIOD PERIOD PERIOD PERIOD PERIOD PERIOD PERIOD EXPENSES
EXPENSES PER TRIAL BALANCE 1 2 3 4 5 6 7 8 9 10 11 12 13 FYE 1998
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ACCOUNTING - S & W -
PATIENT ACCOUNTING - S & W -
MANAGEMENT & SUPERVISION -
S & W -
MANAGEMENT & SUPERVISION -
BENEFITS -
MANAGEMENT & SUPERVISION -
MILEAGE -
MANAGEMENT & SUPERVISION -
LEASE / RENTAL -
MANAGEMENT & SUPERVISION -
OTHER AUTO -
MANAGEMENT & SUPERVISION -
OTHER -
SNC - S & W -
SNC - BENEFITS -
SNC - CONTRACT LABOR -
SNC - MILEAGE -
SNC - LEASE / RENTAL -
SNC - OTHER AUTO -
SNC - OTHER -
PT - S & W -
PT - BENEFITS -
PT - CONTRACT LABOR -
PT - MILEAGE -
PT - LEASE / RENTAL -
PT - OTHER AUTO -
PT - OTHER -
SP - S & W -
SP - BENEFITS -
SP - CONTRACT LABOR -
SP - MILEAGE -
SP - LEASE / RENTAL -
SP - OTHER AUTO -
SP - OTHER -
OT - S & W -
OT - BENEFITS -
OT - CONTRACT LABOR -
OT - MILEAGE -
OT - LEASE / RENTAL -
OT - OTHER AUTO -
OT - OTHER -
MSW - S & W -
MSW - BENEFITS -
MSW - CONTRACT LABOR -
MSW - MILEAGE -
MSW - LEASE / RENTAL -
MSW - OTHER AUTO -
MSW - OTHER -
HHA - S & W -
HHA - BENEFITS -
HHA - CONTRACT LABOR -
HHA - MILEAGE -
HHA - LEASE / RENTAL -
HHA - OTHER AUTO -
HHA - OTHER -
MEDICAL SUPPLIES -
SALARIES -
MEDICAL SUPPLIES -
CHARGEABLE -
DRUG SUPPLIES -
MEDICAL SUPPLIES -
NONCHARGEABLE -
NURSING SUPPLIES -
CLERICAL - S & W -
CLERICAL - BENEFITS -
MARKETING - S & W -
MARKETING - BENEFITS -
MARKETING -
CONTRACT LABOR -
MARKETING - MILEAGE -
MARKETING -
LEASE / RENTAL -
MARKETING - OTHER AUTO -
MARKETING - OTHER -
PERSONAL CARE SERVICES -
S & W -
PERSONAL CARE SERVICES -
BENEFITS -
PERSONAL CARE SERVICES -
CONTRACT LABOR -
PERSONAL CARE SERVICES -
MILEAGE -
PERSONAL CARE SERVICES -
LEASE / RENTAL -
PERSONAL CARE SERVICES -
OTHER AUTO -
PERSONAL CARE SERVICES -
OTHER -
</TABLE>
F:\WP51\AMEDISYS\CARESOU\GUA2.wpd: October 23, 1998 (9:52AM)
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PAGE 39
WARNING! THIS DOCUMENT CONFIDENTIAL. DO NOT COPY. SEE PROVISIONS AT (P)1.7.
<PAGE>
EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
EXHIBIT B-2
CUSTOMER'S RESPONSIBILITY AND OBLIGATIONS
1 Billing
1.1 Customer will provide all written backup documentation and support for
data necessary for CareSouth to accomplish billing tasks and
procedures.
1.2 Customer will provide such additional materials, data, information,
backup and support as may be reasonably determined by CareSouth to be
necessary for proper billing for all rendered services by the Agency,
both on an ongoing basis and in all initial implementation and
transition periods.
2 Customer shall be responsible for the determination of proper
financial classifications of each patient and each patient visit.
3 Customer shall be responsible for establishing and entering all data
and patient data into all software modules which are part and parcel
of the ASA and the separate Software Licensing Agreement contemplated
herein (hereinafter "Database Build").
4 With respect to payroll, Customers shall be responsible for
maintaining all human resource functions, including but not limited to
an up-to-date and accurate employee roster, all functions and
procedures for hiring, licensing, employment, selection, and clearance
of all employees for the Agency.
5 With respect to payroll and payroll processing, the Customer shall be
responsible for providing audited and approved computer generated
listing of days worked and hours to be paid for each employee.
6 Customer will be responsible for all processing, intake, discharge and
transfer of patients, including but not limited to the maintenance of
all data and patient information concerning the same, and for
maintaining such data in a current and up-to-date status.
7 Customer shall be responsible for maintaining appropriate Agency
office verification of patient insurance to insure the preparation and
timely delivery of data for all claims processing.
8 Customer shall be responsible for input and keying ("Database Build")
for all patient forms and reports, and also for verification of the
accuracy of such input in Database Build, along with the maintenance
of all recaps, backup of patient records and data, and the maintenance
of said data integrity at the Agency level.
9 Customer shall be responsible for communicating, keying and inputting
("Database Build") in a timely fashion all expense data in order to
allow CareSouth to complete the monthly Periodic Interim Payment
Report ("PIP Report") for delivery to Customer.
10 Customer shall be responsible for providing CareSouth all necessary
cost reporting, data and information in order to enable CareSouth to
timely complete the Cost Reports, and customer shall be solely
responsible for all general and customary accounting services and
audits of data and supporting data for the Cost Report.
11 Customer shall be responsible for handling and processing all cash
receipts at the Agency level, and CareSouth shall not be obliged to
receive, or account for, any payments of cash at the Agency level from
third party payors or patients.
12 Customer shall provide bad-debt write-off procedures that will be used
by CareSouth's patient accounts collections and billing staff for
Customer's patient accounts.
13 Customer/Agency is responsible for entering, verifying and confirming
the accuracy of transmitted information through the use of electronic
signatures.
14 Customer/Agency will make available to CareSouth add/change/delete
information required for next payroll cycle must be available three
(3) business days prior to payroll in which the change will be
effective.
15 Customer/Agency will cause paper checks (or other negotiable
instruments or forms of paper payment) will be forwarded to each
agency by overnight delivery on the Friday of payroll week for
distribution after 2:00PM that day.
16 Customer will undertake, and cause to be performed those tasks
associated with Transition Management and Implementation Services as
indicated at Exhibit "E" to the ASA.
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<PAGE>
EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
EXHIBIT C
FORM OF LICENSING AGREEMENT
SOFTWARE LICENSE AGREEMENT
THIS SOFTWARE LICENSE AGREEMENT (hereafter "Agreement") by and between
CARESOUTH HOME HEALTH SERVICES, INC. (hereinafter "Licensor"), and A HOME HEALTH
CO., INC. (the "Licensee") and AMEDISYS, INC. as Guarantor (the "Guarantor").
RECITALS:
WHEREAS, Licensee currently, or intends in the future, to own and
operate Medicare-certified home health agencies (hereafter individually an
"Agency" and collectively "The Agencies"); and
WHEREAS, Licensor has DOS-based as well as Windows-based computer
programs (the "Software") designed to provide billing, payroll, collections, and
cost reporting data processing services for the Agencies, which services
Licensor also provides to other third parties; and
WHEREAS, Licensee has executed that certain Service Agreement for its
Agency of even date herewith (hereafter "ASA"), and Licensee desires to obtain a
non-exclusive, non-transferrable license of the Software;
NOW, THEREFORE, in consideration of the promises contained herein, the
parties agree as follows:
1 LICENSE. In accordance with the terms herein, Licensor
grants to Licensee, and Licensee accepts from Licensor, a
non-exclusive and non-transferable license to use the
current version of the Windows-based and the DOS-based
versions of Licensor's Software for the term decided
herein. A description of the Software System is attached as
Schedule A.
The Software shall be used only on equipment and at location(s)
identified in Schedule B as Licensor's "Agency Office Locations". Use
of the Software may be subsequently transferred to Agency Office
Locations maintained by Licensee at other locations, provided (1) the
total number of Agency Office Locations at which the Software is used
by Licensee does not exceed the number of Agency Office Locations
specified in Schedule B, and (2) Licensee provides Licensor with
written notice sixty (60) days before such transfer. The Software
shall be used only for the processing of Licensee's own business,
which shall include servicing and maintaining records on behalf of its
wholly-owned Home Health Agency. Licensee shall not: (1) permit any
third party to use the Software, (2) use the Software in the operation
of a service bureau, or (3) allow access to the licensed Software
through terminals located outside Licensee's business premises. A
license may be temporarily transferred to back-up equipment if the
particular scheduled equipment is inoperative for more than 48 hours.
2 COPIES. The license(s) granted herein include(s) the
right to copy the Software in non- printed, machine
readable form in whole or in part as necessary for
Licensee's own business use. In order to protect Licensor's
trade secret and copyrights in the Software, Licensee
agrees to reproduce and incorporate Licensor's trade secret
or copyright notice in any copies, modifications or partial
copies. Licensee shall maintain no more than one copy of
the object code for the Software for each Agency Office
Location at any time.
3 PRICE, PAYMENT, AND TERM. Licensee shall make payment to
Licensor for the Software license pursuant to the fees and
payment terms set forth in Schedule C. This License shall
extend for a limited term of five (5) years (the "Term"),
provided, however, that after the first year of this
Agreement the same may be terminated by either party upon
ninety (90) days written notice to the other.
4 RESERVED.
5 INTENT TO COOPERATE. Both Licensor and Licensee
acknowledge that successful implementation of the Software
pursuant to this License Agreement shall require their full
and mutual good faith cooperation, and Licensee
acknowledges that it shall timely fulfill its
responsibilities, including but not limited to those set
forth below.
6 TITLE TO SOFTWARE SYSTEMS AND CONFIDENTIALITY. The
Software and all programs developed hereunder and all
copies thereof are proprietary to Licensor and title
thereto remains in Licensor. All applicable rights to
patents, copyrights, trademarks and trade secrets in the
Software or any modifications made by Licensee or by
Licensee's request are and shall remain in Licensor.
Licensee shall not sell, transfer, publish, disclose,
display or otherwise make available the Software or copies
thereof to others. Licensee agrees to secure and protect
each module, software product, documentation and copies
thereof in a manner consistent with the maintenance of
Licensor's rights therein and to take appropriate action by
instruction or agreement with its employees who are
permitted access to each program or software product to
satisfy its obligations hereunder. All copies and
modifications made by the Licensee of the Software and
other programs developed hereunder, including translations,
compilations, partial copies with modifications and updated
works, are the property of Licensor. Violation of any
provision of this paragraph shall be the basis for
immediate termination of this License Agreement.
7 ACCEPTANCE. The Software shall be deemed to have been
accepted by Licensee upon execution hereof, and Licensee
hereby acknowledges andagrees that it is fully familiar
with the Software and has enjoyed unlimited and full access
to test, examine, and review the Software, and further that
Licensee accepts the Software and its current functionality
as meeting the requirements hereunder. Licensee shall not
make any claim against Licensor alleging that the Software
hereunder is not suitable or does not operate in accordance
with Licensor's intended use.
8 USE AND TRAINING. Licensee shall limit the use of the
Software to its employees who have been appropriately
trained. Licensor shall make training for the Software to
its employees who have been appropriately trained. Licensor
shall make training for the Software available to Licensee
pursuant to its standard training procedures as set forth
in Schedule D.
9 WARRANTY.
9.1 LICENSOR MAKES AND LICENSEE RECEIVED NO WARRANTY EXPRESS OR
IMPLIED AND THERE ARE EXPRESSLY EXCLUDED ALL WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
LICENSOR SHALL HAVE NO LIABILITY WITH RESPECT TO ITS
OBLIGATIONS UNDER THIS AGREEMENT FOR CONSEQUENTIAL,
EXEMPLARY, OR INCIDENTAL DAMAGES EVEN IF IT HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
9.2 Correction for difficulties or defects traceable to
Licensee's errors or systems changes shall be billed at
Licensor's standard time and material charges.
9.3 Licensee agrees that Licensor's liability arising out of
contract, negligence, strict liability in tort or warranty
shall not exceed any amounts payable by Licensee for the
Software identified above.
9.4 Licensee agrees that Licensee's sole remedy and recourse
from inoperability of or defects in, (whether substantial
or insubstantial, partial or entire) the Windows-based
Software Products licensed to Licensee hereunder shall be
the Licensee's right to receive a substitute license to
Licensor's pre-October 1, 1998 Windows and DOS- based
products, and Licensee will accept said substitution
notwithstanding any limitations in the functionality,
features or functions of such substitute Software Product,
and notwithstanding any other hardware or software
differences in requirements or pre-requisites for the
installation and operation of such substitute Software
Products on Licensee's systems. In addition, Licensor may
elect in its reasonable discretion to effect the
substitution of Software Products outlined above if
Licensor determines that there exists such inoperabilities
or defects which may affect the function of the Windows
based Software Products.
10 INDEMNITY. To the extent that licensor is the sole
proximate cause of a claim as hereinafter described,
Licensor at its own expense will defend any action brought
against Licensee to the extent that it is based on a claim
that any software system used within the scope of this
License Agreement infringes any patents, copyrights,
license or other property right, provided that Licensor is
immediately notified in writing of such claim; provided,
however, that Licensor shall have no obligation to
indemnify Licensee with respect to any claim or action
accruing or arising from, or related to, the Software in
the form in which it existed on November 15, 1998 or prior
thereto. Licensor shall have the right to control the
defense of all such claims, lawsuits and other proceedings.
In no event shall Licensee settle any such claim, lawsuits
or proceeding without Licensor's prior approval.
If, as a result of any claim of infringement against any patent,
copyright, license or other property right, Licensor is enjoined from
using the Software, or if Licensor believes that the Software is
likely to become the subject of a claim of infringement, Licensor at
its option and expense may procure the right for Licensee to continue
to use the Software, or replace or modify the Software so as to make
it non-infringing. The foregoing states the entire liability of
Licensor with respect to infringement of any copyrights or patents by
the Software of any parts thereof.
11 TERMINATION.
11.1 Licensor shall have the right upon thirty (30) days written
notice to Licensee to terminate this agreement and
license(s) granted herein:
11.1.1 In the event that Licensee, its officers or employees
violates any material provision of this License Agreement;
or
11.1.2 In the event Licensee (i) terminates or suspends its
business; (ii) becomes subject to any bankruptcy or
insolvency proceeding under Federal or state statute or
(iii) becomes insolvent or becomes subject to direct
control by a trustee, receiver or similar authority; or
11.1.3 Any breach or default under ASA, or the termination of the
ASA; or
11.1.4 Any assignment or transfer, or attempt to transfer or
assign, in whole or in part the ASA, whether or not
assignment thereof is approved, or consented to by,
Licensor or its Affiliates.
11.2 In the event of termination by reason of the above and the
failure of Licensee to cure or correct withing a reasonable
time the above described condition giving rise to
termination to the reasonable satisfaction of Licensor,
Licensor shall have the right, at any time, thereafter take
possession of the Software and documentation and all copies
wherever located, without demand or notice. Within ten
(10) days after termination of the license(s), Licensee
will return to Licensor the Software in the form provided
by Licensor or as modified by the Licensee, or upon request
by Licensor destroy the Software and all copies, and
certify in writing that they have been destroyed.
Termination under this paragraph shall not relieve Licensee
of its obligations regarding confidentiality of the
Software and Licensees obligation not to use the Software,
or sell the Software to third parties pursuant to paragraph
6 hereof.
11.3 Without limiting any of the above provisions, in the event
of termination as a result of one party's failure to comply
with any of its obligations under this Licensee Agreement,
the non-complying party shall continue to be obligated for
any past obligations due. Termination of the license(s)
shall be in addition to and not in lieu of any equitable
remedies available to the parties hereunder.
12 TAXES. Licensee shall, in addition to the other amounts
payable under this License Agreement, pay all sales and
other taxes, federal, state, or otherwise, however
designated, which are levied or imposed by reason of the
transactions contemplated by this License Agreement.
Without limiting the foregoing, Licensee shall promptly pay
to Licensor an amount equal to any such items actually
paid, or required to be collected or paid by Licensor.
13 HARDWARE REQUIREMENTS. Licensee shall make available for
the Software implementation, at each location listed in
Schedule B, computer equipment and software configurations
approved by Licensor as adequate for such implementation at
such location.
14 LICENSED LOCATIONS. Use of the Software by the Licensee
at any location other than those described above in
paragraph 1 (and Schedule "B") shall be the basis for
immediate termination of this License Agreement.
Termination of the License Agreement shall be in addition
to and not in lieu of any equitable remedies available to
Licensor.
15 DELIVERY AND INSTALLATION. The System shall be delivered
and installed at each Agency Office Location upon a time
and date mutually acceptable to Licensor and Licensee.
16 CUSTOM MODIFICATION. Any custom modifications to the
Software requested by Licensee and accepted by Licensor,
shall be undertaken by Licensor at its then current time
and materials charges. For each custom modification
requested, Licensee shall provide written specifications to
Licensor, which shall be mutually agreed upon prior to
acceptance by Licensor and prior to commencement of such
custom modification effort.
17 GENERAL.
17.1 Each party acknowledges that it has read this Agreement,
understands it, and agrees to be bound by its terms, and
further agrees that this is the complete and exclusive
statement of the Agreement between the parties, which
supersedes and merges all prior proposals, understandings
and all other agreements, oral and written, between the
parties relating to this Agreement. This Agreement may not
be modified or altered except by written instrument duly
executed by both parties.
17.2 Dates or times by which either party is required to make
performance under this license shall be postponed
automatically to the extent that said party is prevented
from meeting them by causes beyond its reasonable control.
17.3 This Agreement and performance hereunder shall be governed
by the laws of the State of Delaware.
17.4 If any provision of this Agreement is invalid under any
applicable statute or rule of law, it is to that extent to
be deemed omitted.
17.5 Licensee may not assign or sub-license, without the prior
written consent of the other, its rights, duties or
obligations under this Agreement to any person or entity in
whole or in part.
17.6 The prevailing party shall have the right to collect from
the other party its reasonable expenses incurred in
enforcing this Agreement including reasonable attorney's
fees.
17.7 The waiver or failure of either party to exercise in any
respect any right provided for herein shall not be deemed a
waiver of any further right hereunder.
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<PAGE>
EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
17.8 Any material dispute between the parties arising under this
Agreement which is not resolved by good faith negotiation
(including, without limitation, any issues concerning
whether dispute may be submitted by either party to
mediation or is subject to mediation) shall first be
submitted to non-binding mediation in Birmingham, Alabama.
Completion of said mediation shall be a condition precedent
and jurisdictional prerequisite to any civil or Court
action or other proceeding involving any dispute arising
under or relating to this Agreement. The costs of
mediation shall be borne equally by the parties.
18 GUARANTY. Guarantor unconditionally guarantees to
Licensor the full and faithful performance of Customer
including payment as if this document were executed by
Guarantor itself.
IN WITNESS WHEREOF, the parties hereto have signed this agreement the
date and year first written above by their duly authorized representative.
[Signatures Continue on Next Page]
LICENSOR:
CARESOUTH HOME HEALTH SERVICES, INC.
By:________________________________
________________________________
________________________________
Title:
Date:
LICENSEE:
A HOME HEALTH SERVICES, INC.
By:________________________________
________________________________
________________________________
Title:
Date:
GUARANTOR:
AMEDISYS, INC.
By:________________________________
________________________________
________________________________
Title:
Date:
SCHEDULE "A"
SCHEDULED SOFTWARE
The CareSouth Home Care System, is a comprehensive medical software system. It
is designed to accommodate multiple payor reimbursement schedules, decrease
collection turnaround time and provide accurate reports in an easily understood
format.
The System modules provide required components to operate a Home Health Care
Agency. Patient data is captured to complete the 485, 486 and 487. The
scheduling module will allow patient visits to be scheduled via agent or
patient. Other visit types can be incorporated into the schedule. Bills can be
submitted electronically on demand. Bills can be provided on a variety of
formats. Accounting provides interfaces from billing to General Ledger.
Accounting provides the ability to collect, document and report revenue.
Statistics module provides the ability to report and analyze various agency
data. Inventory module allows management of inventory at agency, agent and
patient levels. The file maintenance allows add, edit, deletion and printing of
records.
Advantages of the CareSouth system include:
.Single entry system
.Integration of payroll and general ledger with accounting systems
.Detailed multifaceted reporting systems
.On-line inventory control
The software modules include:
.Patient Forms & Reports
.485, 486, and 487
.Aide Assignment
.Discharge Summaries
.Medication Sheets
.Lab Work Reports
.On-Call List
.Recertification Report
.Team Case Conference Form
.Scheduling
.Patient and Agent Schedules
.Lab Work Scheduling
.Home Health Aide Supervisory Schedule
.Billing
.Electronic Billing
.HCFA 1500
.UB 92
.Patient Itemized Statement
.Accounting
.Patient Ledger
.Claims Register
.AR Journal
.Cash Receipts Register
.Account History
.Aging Reports
.Statistics
.Payor
.Diagnosis
.Physician
.Revenue
.Referral
.Disaster Plan
.Inventory
.Suggested Reorder Point
.Physical Inventory Sheet
.Inventory Status
.Accurate Inventory of Supplies
.File Maintenance
.Patients
.Payors
.Drugs
.Event Tracking
.ICD-9
.Agent Data - Total Human Resource Program
.Managed Care
.ReadinessEvent/Authorization Tracking
.Flexible Service Bill Rates for Multiple Payors
.Flexible Supply Bill Rates for Multiple Payors
.Integration
.Payroll and General Ledger will upload to Accounting
Systems
.Support
.On-site Training
.Training Manual
SCHEDULE "B"
AGENCY LOCATION
SCHEDULE "C"
AND PAYMENT TERMS
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<PAGE>
EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
EXHIBIT D
FORM OF SOFTWARE MAINTENANCE AND SUPPORT AGREEMENT
SOFTWARE MAINTENANCE AND
SUPPORT AGREEMENT
THIS SOFTWARE MAINTENANCE AND SUPPORT AGREEMENT (hereafter
"Agreement") by and between CARESOUTH HOME HEALTH SERVICES, INC. (hereinafter
"Licensor") having its principal place of business at 577 Mulberry Street, Suite
1200, Macon, Georgia, and A HOME HEALTH CO., INC. (hereinafter "Licensee" or
Customer") having its principal place of business at
, and AMEDISYS, INC. as Guarantor (the "Guarantor").
RECITALS:
WHEREAS, Licensor has licensed certain DOS-based and Windows-based
computer programs (the "Software") designed to provide billing, payroll,
collections, and cost reporting data processing services for the Agencies, which
services Licensor also provides to other third parties; and
WHEREAS, Licensee has executed that certain Service Agreement for its
Agency of even date herewith (hereafter "ASA"), and Licensee has executed that
certain Software License Agreement and the Licensee as Customer wishes to have
Licensor perform software maintenance services on the licensed systems pursuant
to the following terms and conditions:
NOW, THEREFORE, in consideration of the promises contained herein, the
parties agree as follows:
19 SOFTWARE SYSTEMS COVERED. The software covered in this
Agreement is the Licensor's Software modules and component
licensed by Customer, as more fully described in the
Software License Agreement and in the Software Schedule
annexed hereto as "Exhibit A" (hereafter the "Scheduled
Software"). During the term of this Agreement, Licensor
shall supply the Customer and Customer shall promptly
supply Licensor with any updates or modifications to the
Scheduled Software which are not charged for as options.
20 CORRECTION OR REPLACEMENT. During the term of this Agreement,
to the extent that Licensor through changes or modification
to the Software (where made after November 2, 1998), causes
the Software to become non-functional or otherwise
significantly negatively effects the use of the Software by
Customer, Licensor shall promptly correct or replace the
Software to eliminate the non functionality or negative
effect. Notification of Licensor of any non-functioning or
negative effect shall be in accordance with the
notification procedures described hereunder.
21 CUSTOMER SUPPORT. The Customer agrees to provide Licensor with
data dumps, as requested, and with sufficient support and
test time on the Customer's computer system to duplicate
the problem, certify that the problem is with Licensor's
Scheduled Software, and certify that the problem has been
corrected.
22 CUSTOMER RESPONSIBILITY. The Customer shall inform Licensor in
writing of any modifications made by the Customer to the
Software. Licensor shall not be responsible for
maintaining Customer modified portions of the Software or
for maintaining portions of the Software affected by
Customer modified portions of the Software. Corrections
for difficulties or defects traceable to the Customer's
errors or systems changes shall be billed at Licensor's
standard time and material charges. The Software shall be
deemed to have been accepted by Licensee upon execution
hereof, and Licensee hereby acknowledges and agrees that it
is fully familiar with the Software and has enjoyed
unlimited and full access to test, examine, and review the
Software, and further that Licensee accepts the Software
and its current functionality as meeting the requirements
hereunder.
23 TELECOMMUNICATIONS. The Customer shall install and maintain for
the duration of this Agreement, a modem and associated
dial-up telephone line. The Customer shall pay for
installation, maintenance and use of such equipment and
associated telephone line use charges. Licensor, at it
option, shall use this modem and telephone line in
connection with error correction.
24 TERM. The term of this Agreement shall continue for a period of
five (5) years, provided, however, after the first year of
this agreement, the same may be terminated by either party
upon ninety (90) days written notice to the other.
25 PRICE AND PAYMENT. Customer shall pay to Licensor the monthly
maintenance fee designated for each item of Scheduled
Software in Software Schedule annexed hereto upon the terms
provided in Schedule "B" annexed hereto. The maintenance
fee shall be payable monthly in advance.
26 TRAVEL EXPENSES. The Customer shall reimburse Licensor for any
reasonable out-of- pocket expenses incurred at the
Customer's request, including travel to and from the
Customer site, lodging, meals, telephone and shipping, as
may be necessary in connection with the duties performed
under this Agreement by Licensor.
27 HELP DESK REMOTE TELEPHONE SUPPORT LINE. Licensor shall provide
telephone access to Customer and its employees for the
answering of questions and inquiries concerning the
Scheduled Software, and its installation, operations, and
use. The Telephone Help desk shall be adequately manned
and shall be open for calls during normal business hours
EDT or EST five days a week.
28 TITLE TO SOFTWARE SYSTEMS AND CONFIDENTIALITY. Any changes,
additions, and enhancements in the form of new or partial
programs or documentation as may be provided under this
Agreement, by either Licensor or Customer, shall remain
proprietary to Licensor. The License Agreement referred to
above shall include under its proprietary restrictions any
such additional programming and documentation provided
under this Agreement.
The Software or any improvements, modifications or changes to the
Software provided hereunder by Licensor or Customer and all copies
thereof are proprietary to Licensor and title thereto remains in
Licensor. All applicable rights to patents, copyrights, trademarks,
and trade secrets in the Software and the improvements, modifications
and changes thereto are and shall remain in Licensor. The Customer
shall not sell, transfer, publish, disclose, display or otherwise make
available the Software or improvements, modifications or changes
thereto or copies thereof to others. The Customer agrees to secure
and protect each program, software product and copies thereof in a
manner consistent with the maintenance of Licensor's rights therein
and to take appropriate action by instruction or agreement with its
employees who are permitted access to each program or software product
to satisfy its obligations hereunder. All copies of the Software or
improvements, modifications or changes thereto made by the Customer
including translations, compilations, partial copies with
modifications and updated works are the property of Licensor. In
addition, Customer and/or Guarantor shall promptly notify Licensor of
, and promptly supply to Licensor (in a medium reasonably requested by
Licensor) any changes, modifications, or updates made to any of the
scheduled the Software or Software Systems.
Violation of any material provision hereof shall be the basis for
termination of this Software Maintenance Agreement upon written notice
of said termination and after reasonable notice to cure any actions,
or inaction, which have caused said termination. Termination of this
Agreement shall be in addition to and not in lieu of any equitable
remedies available to either party.
29 EXCLUSION OF LIABILITY. LICENSOR MAKES AND CUSTOMER RECEIVED NO
WARRANTY EXPRESS OR IMPLIED AND THERE IS EXPRESSLY EXCLUDED
ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE. LICENSOR SHALL HAVE NO LIABILITY WITH
RESPECT TO ITS OBLIGATIONS UNDER THIS AGREEMENT FOR
CONSEQUENTIAL, EXEMPLARY, OR INCIDENTAL DAMAGES EVEN IF IT
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
30 TERMINATION. In the event of termination of the Software
License Agreement referred to above, all past due
maintenance fees or charges payable for the term of this
Agreement shall become due and payable and Licensor's
obligations under this Agreement shall immediately end.
Licensor is also obligated to not use or sell the Software
pursuant to paragraph 10 hereof and this provision shall
survive termination.
31 TAXES. Customer shall, in addition to the other amounts payable
under this Agreement, pay all sales and other taxes,
national, state, or otherwise, however designated, which
are levied or imposed by reason of the transactions
contemplated by this Agreement. Without limiting the
foregoing, Customer shall promptly pay to Licensor an
amount equal to any such items actually paid, or required
to be collected or paid by Licensor.
32 GENERAL.
32.1 Each party acknowledges that it has read this Agreement,
understands it, and agrees to be bound by its terms and
further agrees that it is the complete and exclusive
statement of the Agreement between the parties, which
supersedes and merges all prior proposals, understandings
and all other agreements, oral and written, between the
parties relating to this Agreement. This Agreement may not
be modified or altered except by a written instrument duly
executed by both parties.
32.2 This Agreement and performance hereunder shall be governed
by and construed in accordance with the laws of the State
of Delaware. Any and all proceedings relating to the
subject matter hereof shall be maintained in the courts of
the State of Delaware or the Federal District Courts
sitting in Delaware, which courts shall have exclusive
jurisdiction for such purpose.
32.3 If any provision of this Agreement shall be held to be
invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall in no
way be affected or impaired thereby.
32.4 Customer may not assign without the prior written consent
of the other, its rights, duties or obligations under this
Agreement to any person or entity, in whole or in part.
32.5 The waiver or failure of either party to exercise in any
respect any right provided for herein shall not be deemed a
waiver of any further right hereunder.
32.6 The prevailing party shall have the right to collect from
the other party its reasonable expenses incurred in
enforcing this Agreement, including reasonable attorneys'
fees.
32.7 Any material dispute between the parties arising under this
Agreement which is not resolved by good faith negotiation
(including, without limitation, any issues concerning
whether dispute may be submitted by either party to
mediation or is subject to mediation) shall first be
submitted to non-binding mediation in Birmingham, Alabama.
Completion of said mediation shall be a condition precedent
and jurisdictional prerequisite to any civil or Court
action or other proceeding involving any dispute arising
under or relating to this Agreement. The costs of
mediation shall be borne equally by the parties.
33 GUARANTY. Guarantor unconditionally guarantees to Licensor the
full and faithful performance of Customer including payment
as if this document were executed by Guarantor itself.
IN WITNESS WHEREOF, the parties hereto have signed this agreement the
date and year first written above by their duly authorized representative.
LICENSOR:
CARESOUTH HOME HEALTH SERVICES, INC.
By: ____________________________________
Title: ____________________________________
Date: ____________________________________
LICENSEE:
A HOME HEALTH SERVICES, INC.
By: ____________________________________
Title: ____________________________________
Date: ____________________________________
GUARANTOR:
AMEDISYS, INC.
By: ____________________________________
Title: ____________________________________
Date: ____________________________________
SCHEDULE "A"
SCHEDULED SOFTWARE
The CareSouth Home Care System, is a comprehensive medical software system. It
is designed to accommodate multiple payor reimbursement schedules, decrease
collection turnaround time and provide accurate reports in an easily understood
format.
The System modules provide required components to operate a Home Health Care
Agency. Patient data is captured to complete the 485, 486 and 487. The
scheduling module will allow patient visits to be scheduled via agent or
patient. Other visit types can be incorporated into the schedule. Bills can be
submitted electronically on demand. Bills can be provided on a variety of
formats. Accounting provides interfaces from billing to General Ledger.
Accounting provides the ability to collect, document and report revenue.
Statistics module provides the ability to report and analyze various agency
data. Inventory module allows management of inventory at agency, agent and
patient levels. The file maintenance allows add, edit, deletion and printing of
records.
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<PAGE>
EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
Advantages of the CareSouth system include:
.Single entry system
.Integration of payroll and general ledger with accounting systems
.Detailed multifaceted reporting systems
.On-line inventory control
The software modules include:
.Patient Forms & Reports
.485, 486, and 487
.Aide Assignment
.Discharge Summaries
.Medication Sheets
.Lab Work Reports
.On-Call List
.Recertification Report
.Team Case Conference Form
.Scheduling
.Patient and Agent Schedules
.Lab Work Scheduling
.Home Health Aide Supervisory Schedule
.Billing
.Electronic Billing
.HCFA 1500
.UB 92
.Patient Itemized Statement
.Accounting
.Patient Ledger
.Claims Register
.AR Journal
.Cash Receipts Register
.Account History
.Aging Reports
.Statistics
.Payor
.Diagnosis
.Physician
.Revenue
.Referral
.Disaster Plan
.Inventory
.Suggested Reorder Point
.Physical Inventory Sheet
.Inventory Status
.Accurate Inventory of Supplies
.File Maintenance
.Patients
.Payors
.Drugs
.Event Tracking
.ICD-9
.Agent Data - Total Human Resource Program
.Managed Care
.ReadinessEvent/Authorization Tracking
.Flexible Service Bill Rates for Multiple Payors
.Flexible Supply Bill Rates for Multiple Payors
.Integration
.Payroll and General Ledger will upload to Accounting Systems
.Support
.On-site Training
.Training Manual
SCHEDULE "B"
Fees and Payment Terms
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EXHIBIT B TO MASTER CORPORATE GUARANTY AGREEMENT
EXHIBIT E
TRANSITION MANAGEMENT AND IMPLEMENTATION SERVICES
1 CareSouth will provide a survey of all physical Agency locations and
branch offices and prepare a report in preparation for the
installation of computer hardware and software; provided, however,
that CareSouth's obligations shall not include acquisition of Hardware
or Software, physical site preparation, electrical supply or
communications costs, which costs and services shall all be provided
solely by the Obligor and Customer. In addition, CareSouth will
install the CareSouth Software on Hardware equipment which meets the
minimum specifications and requirements on Hardware systems for each
physical Agency site location where Customer provides the equipment to
be delivered to Augusta, GA at a location approved by CareSouth, and
organize redelivery of the equipment to the proper Agency location
designated by Customer, and install, setup, configure and test the
equipment and CareSouth Software at the Agency location (Workstation
Setup"); provided, however, that Customer, and Guarantor agree to pay
the Expenses associated with said Workstation Setup not to exceed
$4,000.00 per physical location for such Workstation Setup.
2 CareSouth shall prepare training of Customer staff for use of the new
CareSouth software computer system, at locations mutually agreed to by
and between the parties; provided, however, that Amedisys shall be
obliged to rent appropriate training facilities, space and equipment
to permit the effective training of its employees by CareSouth and its
representatives, and Amedisys and obligor shall also be responsible
for all transport, lodging, room and board of its employees during any
such training sessions at locations mutually selected by the parties.
It is understood that subsequent to the Transition Period, CareSouth
shall make available, periodically, at its Augusta, AG location
training programs for CareSouth's Software System.
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