EXHIBIT 10.1
MODIFICATION AGREEMENT
THIS MODIFICATION AGREEMENT, dated effective as of October 1, 2001 (the
"Agreement"), is made by and between CARESOUTH HOME HEALTH SERVICES, INC., a
Georgia corporation ("CareSouth") and AMEDISYS, INC., a Delaware corporation
("Amedisys").
RECITALS
Amedisys and CareSouth are parties to that certain $1,234,034.85
Promissory Note, dated September 10, 1999, made by Amedisys and payable to the
order of CareSouth (as amended, modified, supplemented, extended, renewed or
replaced through the date hereof, the "Note"). Amedisys and CareSouth are also
parties to the First Amended and Restated Master Corporate Guaranty of Service
Agreement, dated as of September 1, 1999 (and as further amended, modified or
supplemented from time to time, the "MCGS Agreement"). Capitalized terms defined
in the Note or the MCGS Agreement shall have the same defined meanings when such
terms are used and undefined in this Agreement.
Pursuant to a proposal letter, dated September 14, 2001 (the
"Proposal"), CareSouth and Amedisys have agreed to modify the obligations of
Amedisys to CareSouth under the Note, subject to the terms of this Agreement.
Accordingly, for valuable consideration, the receipt and sufficiency of which
are acknowledged, CareSouth and Amedisys agree as follows:
AGREEMENT
1. Termination of Existing Agreements. On the date on which the conditions
to effectiveness of this Agreement are satisfied (the "Closing Date"), the MCGS
Agreement and each ASA shall be terminated and CareSouth, Amedisys and the
Affiliates shall have no further obligations to each other thereunder.
2. Amended License Agreement. On the Closing Date, CareSouth and Amedisys
shall enter into the Software License Agreement attached as Exhibit A to this
Agreement (as amended, modified or supplemented from time to time, the "Amended
License Agreement"). Each reference in any Loan Document (as defined in the
Note) to (a) the MCGS Agreement or any ASA shall be deemed to be a reference to
the Amended License Agreement and (b) the Loan Documents shall be deemed to
include a reference to the Amended License Agreement.
3. Acknowledgments. The Borrower acknowledges and agrees that the unpaid
balance of the Note is $742,520.66, and, except as modified hereby, Amedisys
ratifies and affirms its obligations thereunder.
4. Modification of Note.
(a) Paragraph 4 of the Note is deleted in its entirety, and amended
to read as follows:
"All payments received hereunder shall be applied first to the
payment of any expenses or charges payable hereunder or under any
other Loan Document, then to interest due and payable, and then
to the principal balance, or in such other order as the Lender
shall determine at its option. The Payment Schedule shall be as
follows: THIRTY-TWO (32) MONTHLY installments inclusive of a
Final Single Principal and Interest Payment. Monthly installments
in the amount of $25,000.00 (in immediately available funds)
shall be paid to the Lender commencing on October 31, 2001, and
continuing on the last business day of each succeeding calendar
month, through and including April 30, 2004 (or the last business
day of such calendar month), and on May 1, 2004, provided that on
such date there shall be a payment of all unpaid interest and all
remaining principal. As used herein, "business day" shall mean
days other than Saturday, Sunday or Federal holidays. The parties
hereto hereby further agree that failure to make payments due
hereunder shall not constitute an Event of Default (as herein
defined) provided that Borrower pays such amounts within 24 hours
after notice of such failure given by the Lender to Borrower."
(b) Section 5 of the Note shall be amended to include the following
language immediately after the word "Lender" and immediately preceding the
phrase "(the "Loan Documents")":
", including, without limitation, the Amended License Agreement,
and any notes, instruments or other documents evidencing,
governing, or executed in connection with, any obligation of
Borrower to any subsidiary or affiliate of Lender."
(c) The first sentence of paragraph 10 of the Note, entitled "Remedies
upon Default", is deleted in its entirety and replaced with the following:
"Whenever there occurs a default or event of default under this
Note (a) the entire balance outstanding hereunder and under other
obligations of any Obligor, or any subsidiary or Affiliate of any
Obligor, to Lender, or any Affiliate or subsidiary of Lender,
become immediately due and payable and any obligation of Lender
to permit further borrowing under this Note shall immediately
cease and terminate, (b) to the extent permitted by law, the Rate
of Interest on the unpaid principal shall be increased at the
Lender's discretion up to the maximum rate allowed by law, or if
none, 20% per annum (the "Default Rate") and (c) within 90 days
after the date Lender gives notice to Borrower of the occurrence
of an event of default hereunder, and provided that written
demand has been
made by Lender, Borrower shall validly authorize, and immediately
thereafter validly issue, in one or more tranches, to one or more
third party institutional investors, for the benefit and account
of the Lender, that number of duly authorized, fully paid and
nonassessable shares of the Series A Convertible Preferred Stock
of the Borrower, par value $.001 per share (the "Series A
Preferred Stock") that shall have a value, in the aggregate,
equal to the total amount payable upon acceleration under clause
(a) hereof, with cash amounts received by Borrower (net of
selling expenses, underwriting discounts and related costs) from
such investors to be paid to Lender and applied by Lender to the
satisfaction of all obligations due to Lender or its affiliates
and subsidiaries from Borrower and its subsidiaries and
affiliates. Such application shall be deemed satisfaction of such
obligations to Lender and its affiliates and subsidiaries only to
the extent of such value received and so applied. If such amounts
paid to Lender by Borrower exceed the total obligations due from
Borrower and its affiliates and subsidiaries to Lender and its
affiliates and subsidiaries, then Lender shall return the excess
to Borrower within ten (10) days after Lender receives notice of
such overpayment from Borrower. To the extent that Borrower fails
to issue Series A Preferred Stock as of the end of such 90 day
period in accordance with the foregoing terms, or otherwise
satisfy its obligations to Lender and its affiliates and
subsidiaries, then, on the last day of such period, Borrower
shall validly authorize, and immediately thereafter begin to
validly issue, to Lender or its designee, in one or more
tranches, that number of duly authorized, fully paid and
nonassessable shares of the Series A Preferred Stock that shall
have a value, in the aggregate, equal to the total amount payable
upon acceleration under clause (a) hereof and a per share value
equal to the price per share of the Common Stock on the date that
such Series A Preferred Stock is issued to Lender, less 25% of
such per share price, in accordance with the terms of the
Certificate of Designations and the Registration Rights
Agreement, each of which shall be in the form attached hereto as
Exhibits B and C, respectively. Lender agrees that within 90 days
after such issuance, it shall give Borrower notice of its
election to either (1) sell its shares of Series A Preferred
Stock (or the shares of Common Stock into which such shares of
Series A Preferred Stock are convertible) or (2) retain the
shares of Series A Preferred Stock or the Common Stock into which
such Series A Preferred Stock is convertible. Cash amounts
received upon transfer or sale by the Lender (net of selling
expenses, underwriting discounts and related costs) of such
Series A Preferred Stock (or the Common Stock into
which it is convertible), or the value (on an as-converted to
Common Stock basis) of any shares retained as provided in clause
(2) above, shall be applied by the Lender against amounts due
hereunder. Such application shall be deemed satisfaction of such
obligations to Lender and its affiliates and subsidiaries only to
the extent of such value received and so applied. Notwithstanding
the length of any period specified herein, and regardless of the
election made by Lender hereunder, Borrower agrees to continue to
issue, and Lender retains its right to require such additional
issuances of, Series A Preferred Stock, until such time as the
aggregate amount of cash received by Lender, or the value of such
issued shares of Series A Preferred Stock, as applicable in
clause (2) above, equals the value of all obligations due to
Lender and its affiliates and subsidiaries from Borrower and its
affiliates and subsidiaries, all in accordance with the terms
hereof (such terms to include, but not be limited to, the 25%
discount with respect to per share pricing). If the value
received by Lender exceeds the total obligations due from
Borrower and its affiliates and subsidiaries to Lender and its
affiliates and subsidiaries, then Lender shall return the excess
to Borrower within ten (10) days after Lender receives notice of
such overpayment from Borrower. Borrower further agrees that it
(a) shall appropriately and timely file the Certificate of
Designations with the Secretary of State of the State of
Delaware, and shall file such certificates of amendment to same
as Lender deems necessary in the exercise of its reasonable
discretion; (b) shall obtain all requisite approvals from its
shareholders, including, without limitation, the holders of the
Series A Preferred Stock; (c) shall at all times reserve and keep
available out of its authorized shares of Common Stock (as
defined in the certificate of incorporation of the Borrower),
solely for the purpose of issue or delivery upon conversion of
the Series A Preferred Stock, the maximum number of shares of
Common Stock that may be issuable or deliverable upon such
conversion, and shall issue such shares of Common Stock in
accordance with the terms of its certificate of incorporation and
the Registration Rights Agreement; and (d) obtain and provide to
Lender an opinion of counsel (who shall be satisfactory to
Lender) to the effect that the shares of Series A Preferred Stock
shall be duly authorized and validly issued, fully paid and
nonassessable."
(d) Paragraph 16 of the Note, entitled "Arbitration," shall be deleted
in its entirety and replaced with the following:
"16. Collection Costs and Expenses. In the event that either
party resorts to legal action to enforce the terms and provisions
of
this Note, the prevailing party shall be entitled to recover the
actual and demonstrable costs of such action so incurred,
including, without limitation, reasonable attorney's fees."
(e) Each reference in any Loan Document to (a) the MCGS Agreement and
each ASA shall be deemed to be a reference to the Amended License Agreement, (b)
the Note shall be deemed a reference to the Note as modified hereby and (c) to
the Loan Documents shall be deemed to include a reference to this Agreement.
5. Modification of Loan Documents. Each reference in any Loan Document to
any Loan Document shall be deemed a reference to such Loan Document as modified
hereby.
6. Representations and Warranties. Each party hereby represents and
warrants that:
(a) Such party (a) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or
formation; (b) has the power and authority to own its assets and to transact the
business in which it is now engaged or in which it is proposed to be engaged;
and (c) is duly qualified as a foreign corporation or limited liability
corporation and in good standing under the laws of each other jurisdiction in
which such qualification is required.
(b) Such party's execution, delivery and performance of this Agreement
have been duly authorized by all necessary corporate actions and do not and will
not (a) require any consent or approval of, or filing or registration with, any
governmental agency or authority or such party's stockholders; (b) contravene
its certificate of incorporation or bylaws; (c) result in a breach of or
constitute a default under any agreement or instrument to which such party is a
party or by which it or its properties may be bound or affected; or (d) cause
such party to be in default under any law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award applicable to it.
(c) This Agreement is such party's legal, valid and binding obligation,
enforceable against such party in accordance with its terms.
(d) All factual and financial information, if any, (taken as a whole)
previously furnished to the other party in connection with this Agreement by
such party and each of such party's Affiliate is true and accurate in all
material respects on the date on which such information is dated, certified or
furnished, and is not, and will not be, incomplete by omitting to state any fact
necessary to make such information (taken as a whole) not misleading at such
time in light of the circumstances under which such information was provided.
7. Conditions Precedent. Amedisys shall deliver to CareSouth or CareSouth
shall have received, not later than October 9, 2001, the following, each in form
and substance satisfactory to CareSouth, as conditions precedent to the
effectiveness of this Agreement, the termination of the MCGS Agreement and each
ASA, and to the obligation of CareSouth to enter into the Amended License
Agreement:
(a) This Agreement, executed by Amedisys;
(b) Payments of all amounts due on the Closing Date, including, without
limitation, any amounts in arrears under the terms of any Loan Document
(including, without limitation, the MCGS Agreement) as set forth on Schedule A
attached hereto and made a part hereof;
(c) To the extent required, resolutions of the Board of Directors of
Amedisys authorizing the execution of this Agreement and the Amended License
Agreement, provided, however, that CareSouth shall also be required to provide
Amedisys with any such resolutions, as required;
(d) Certificates of good standing for the states of formation or
incorporation of Amedisys and each Affiliate, together with certificates of
qualification for each jurisdiction in which such certificate is required as to
Amedisys and each Affiliate, provided that the same need not be provided within
10 days after the Closing Date; and
(e) Opinion(s) of counsel to Amedisys and each of its Affiliate in form
and substance satisfactory to counsel for CareSouth (provided that such opinion
need not be presented to CareSouth until the issuance of the Series A Preferred
Stock as provided herein).
8. Fees and Expenses. Each party shall bear its own attorneys' fees and
other expenses incurred in connection with the execution and delivery of this
Agreement.
9. Waiver. In consideration of the parties entering into this Agreement,
each party hereto and each of its subsidiaries and Affiliates agrees that it has
no defenses, affirmative or otherwise, rights of setoff, rights of recoupment,
claims, counterclaims, actions or causes of action of any kind or nature
whatsoever against the other party or any subsidiary or Affiliate of such other
party or any past, present or future agent, attorney, legal representative,
predecessor-in-interest, Affiliate, successor, assign, employee, director or
officer of such other party or any subsidiary or Affiliate of the other party,
directly or indirectly, arising out of, based upon, or in any manner connected
with, any transaction, event, circumstance, action, failure to act, or
occurrence of any sort or type, whether known or unknown, which occurred,
existed, was taken, permitted, or began prior to the execution of this Agreement
and accrued, existed, was taken, permitted or begun in accordance with, pursuant
to, or by virtue of the terms or conditions of the MCGS Agreement or any ASA, or
which directly or indirectly relate to or arise out of or in any manner are
connected with the MCGS Agreement or any ASA. TO THE EXTENT ANY SUCH DEFENSES,
AFFIRMATIVE OR OTHERWISE, RIGHTS OF SETOFF, RIGHTS OF RECOUPMENT, CLAIMS,
COUNTERCLAIMS, ACTIONS OR CAUSES OF ACTION EXIST OR EXTEND, SUCH DEFENSES,
RIGHTS, CLAIMS, COUNTERCLAIMS, ACTIONS AND CAUSES OF ACTION ARE HEREBY FOREVER
WAIVED, DISCHARGED AND RELEASED BY EACH PARTY AND EACH OF ITS SUBSIDIARIES AND
AFFILIATES. The foregoing waiver shall have effect provided that no Event of
Default shall occur with respect to the obligations of the Borrower hereunder
prior to March 1, 2002; upon the occurrence of such Event of Default with
respect to the obligations of the Borrower hereunder prior to March 1, 2002, the
Lender shall not be deemed to have made the waiver set forth in this Section 13.
10. Counterparts. This Agreement may be executed by the parties in any
combination, in one or more counterparts, all of which together shall constitute
but one and the same instrument.
11. Notices. Notwithstanding anything to the contrary contained in the Note
or any other Loan Document, facsimile is an acceptable form of notice, provided
that any such facsimile received before 5 PM Eastern Standard Time on a given
day shall be deemed to be received on that business day, while if received after
such time, such facsimile shall be deemed to be received on the next succeeding
business day. Notwithstanding anything to the contrary contained in the Note or
the other Loan Documents, notices shall be provided as follows:
If to CareSouth, to:
CareSouth Home Health Services, Inc.
Augusta Corporate Centre
0000 Xxxxxxxxx Xxxxxxx
Xxxxxxxx 000, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Chief Executive Officer
Fax: (000) 000-0000
with a copy to:
X.X. Xxxxxx
Managing Partner
Capitol Partners
0000 Xxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
If to Amedisys, to:
Amedisys, Inc.
00000 Xxxx Xxxx
Xxxxx 000
Xxxxx Xxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Chairman of the Board and CEO
Fax: (000) 000-0000
with a copy to:
Amedisys, Inc.
00000 Xxxx Xxxx
Xxxxx 000
Xxxxx Xxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Fax: (___) ____-______
12. Time of the Essence. Time is of the essence with respect to all
obligations of Amedisys to CareSouth in this Agreement, under the Note and under
all other Loan Documents.
13. Governing Law. This Agreement shall be governed by the laws of the State
of Delaware, without reference to conflict of laws principles.
[SIGNATURES ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized representatives on the day and year
first written above.
AMEDISYS:
AMEDISYS, INC., a Delaware corporation
By: /s/ XXXXXXX X. XXXXX
---------------------------------
Name: Xxxxxxx X. Xxxxx
---------------------------------
Title: CEO
--------------------------------
CARESOUTH:
CARESOUTH HOME HEALTH SERVICES, INC.,
a Georgia corporation
By: /s/ XXXX X. XXXXXXX
----------------------------------
Name: Xxxx X. Xxxxxxx
--------------------------------
Title: CEO
-------------------------------
