----

----

----

|                                                                             |
|-----------------------------------------------------------------------------|
|                                                                             |  |  |  |  |  |
| ARTICLE I DEFINITIONS; CERTAIN RULES OF CONSTRUCTION                        |   | 2 |  |
|                                                                        |   |   |   |   |
|                                                                        | Section 1.01 | Definitions |   | 2 |  |
|                                                                        | Section 1.02 | Additional Defined Terms |   | 14 |  |
|                                                                        | Section 1.03 | Certain Matters of Construction |   | 16 |  |
|                                                                        |   |   |   |   |
| ARTICLE II THE MERGER                                                       |   | 16 |  |
|                                                                        |   |   |   |   |
|                                                                        | Section 2.01 | Merger |   | 16 |  |
|                                                                        | Section 2.02 | Closing; Effective Time |   | 16 |  |
|                                                                        | Section 2.03 | Governance Documents |   | 16 |  |
|                                                                        | Section 2.04 | Directors and Officers |   | 17 |  |
|                                                                        | Section 2.05 | Conversion of Series A Preferred Stock |   | 17 |  |
|                                                                        | Section 2.06 | Conversion of Common Stock |   | 17 |  |
|                                                                        | Section 2.07 | Conversion of Options |   | 17 |  |
|                                                                        | Section 2.08 | Conversion of the Warrants |   | 18 |  |
|                                                                        | Section 2.09 | No Further Rights; Company Action |   | 18 |  |
|                                                                        | Section 2.10 | Buyer Closing Payments |   | 18 |  |
|                                                                        | Section 2.11 | Distribution of Distributed Assets |   | 19 |  |
|                                                                        | Section 2.12 | Closing Cash Merger Consideration Adjustment |   | 19 |  |
|                                                                        | Section 2.13 | Escrow |   | 23 |  |
|                                                                        | Section 2.14 | Withholding |   | 23 |  |
|                                                                        | Section 2.15 | Treatment of Dissenting Shares |   | 23 |  |
|                                                                        | Section 2.16 | Lost Certificates |   | 23 |  |
|                                                                        |   |   |   |   |
| ARTICLE III REPRESENTATIONS AND WARRANTIES REGARDING THE ACQUIRED COMPANIES |   | 23 |  |
|                                                                        |   |   |   |   |
|                                                                        | Section 3.01 | Organization |   | 24 |  |
|                                                                        | Section 3.02 | Power and Authorization |   | 24 |  |
|                                                                        | Section 3.03 | Authorization of Governmental Authorities |   | 24 |  |
|                                                                        | Section 3.04 | Noncontravention |   | 24 |  |
|                                                                        | Section 3.05 | Capitalization of the Acquired Companies |   | 25 |  |
|                                                                        | Section 3.06 | Financial Matters |   | 25 |  |
|                                                                        | Section 3.07 | Absence of Certain Developments |   | 26 |  |
|                                                                        | Section 3.08 | Debt; Guarantees |   | 28 |  |
|                                                                        | Section 3.09 | Assets |   | 28 |  |
|                                                                        | Section 3.10 | Shared Services and Assets |   | 28 |  |
|                                                                        | Section 3.11 | Real Property |   | 28 |  |
|                                                                        |   |   |   |   |
|                                                                        |   |   |
|                                                                        |   |   |   |   |
|                                                                        |   |   |   |   |
|                                                                        |   |   |   |   |
|                                                                        |   |   |   |   |
|                                                                        | Section 3.12 | Intellectual Property |   | 29 |  |
|                                                                        | Section 3.13 | Legal Compliance; Illegal Payments; Permits |   | 30 |  |

----

|                                                                 |
|-----------------------------------------------------------------|
|                                                                 |  |  |  |  |  |
|                                                            | Section 3.14 | Tax Matters |   | 30 |  |
|                                                            | Section 3.15 | Employee Benefit Plans |   | 32 |  |
|                                                            | Section 3.16 | Environmental Matters |   | 34 |  |
|                                                            | Section 3.17 | Contracts |   | 34 |  |
|                                                            | Section 3.18 | Related Party Transactions |   | 36 |  |
|                                                            | Section 3.19 | Labor Matters |   | 36 |  |
|                                                            | Section 3.20 | Litigation; Governmental Orders |   | 36 |  |
|                                                            | Section 3.21 | Insurance |   | 37 |  |
|                                                            | Section 3.22 | Healthcare Matters |   | 37 |  |
|                                                            | Section 3.23 | No Brokers |   | 39 |  |
|                                                            | Section 3.24 | Payors and Suppliers |   | 39 |  |
|                                                            | Section 3.25 | Disclosure |   | 39 |  |
|                                                            |   |   |   |   |
| ARTICLE IV REPRESENTATIONS AND WARRANTIES REGARDING THE SELLERS |   | 39 |  |
|                                                            |   |   |   |   |
|                                                            | Section 4.01 | Power and Authorization; Enforceability |   | 39 |  |
|                                                            | Section 4.02 | Authorization of Governmental Authorities |   | 39 |  |
|                                                            | Section 4.03 | Noncontravention |   | 39 |  |
|                                                            | Section 4.04 | Title |   | 39 |  |
|                                                            | Section 4.05 | No Brokers |   | 40 |  |
|                                                            | Section 4.06 | Organization |   | 40 |  |
|                                                            |   |   |   |   |
| ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BUYER PARTIES   |   | 40 |  |
|                                                            |   |   |   |   |
|                                                            | Section 5.01 | Organization |   | 40 |  |
|                                                            | Section 5.02 | Power and Authorization |   | 40 |  |
|                                                            | Section 5.03 | Authorization of Governmental Authorities |   | 40 |  |
|                                                            | Section 5.04 | Noncontravention |   | 40 |  |
|                                                            | Section 5.05 | No Brokers |   | 40 |  |
|                                                            |   |   |   |   |
| ARTICLE VI COVENANTS OF THE PARTIES                             |   | 41 |  |
|                                                            |   |   |   |   |
|                                                            | Section 6.01 | Expenses |   | 41 |  |
|                                                            | Section 6.02 | Publicity |   | 41 |  |
|                                                            | Section 6.03 | Further Assurances |   | 41 |  |
|                                                            | Section 6.04 | Closing |   | 41 |  |
|                                                            | Section 6.05 | Operation of the Business |   | 41 |  |
|                                                            | Section 6.06 | Notices and Consents |   | 41 |  |
|                                                            | Section 6.07 | Buyer’s Access to Premises; Information |   | 42 |  |
|                                                            |   |   |   |   |
|                                                            |   |   |   |   |
|                                                            |   |   |   |   |
|                                                            |   |   |   |   |
|                                                            |   |   |   |   |
|                                                            |   |   |   |   |
|                                                            |   |   |   |   |
|                                                            |   |   |   |   |
|                                                            |   |   |   |   |

----

|                                |
|--------------------------------|
|                                |  |  |  |  |  |
|                           | Section 6.08 | Notice of Developments |   | 42 |  |
|                           | Section 6.09 | Exclusivity |   | 42 |  |
|                           | Section 6.10 | Confidentiality |   | 43 |  |
|                           | Section 6.11 | Noncompetition; Nonsolicitation |   | 43 |  |
|                           | Section 6.12 | Stockholder Approval |   | 45 |  |
|                           | Section 6.13 | Director and Officer Insurance |   | 46 |  |
|                           | Section 6.14 | Employee Matters |   | 46 |  |
|                           | Section 6.15 | Principal Stockholders’ Release |   | 47 |  |
|                           | Section 6.16 | 280G Matters |   | 48 |  |
|                           | Section 6.17 | Name Change |   | 48 |  |
|                           | Section 6.18 | Shared Assets |   | 48 |  |
|                           | Section 6.19 | Tax Information |   | 48 |  |
|                           | Section 6.20 | Sublease |   | 49 |  |
|                           | Section 6.21 | Transition Services Agreement |   | 49 |  |
|                           |   |   |   |   |
| ARTICLE VII CLOSING CONDITIONS |   | 49 |  |
|                           |   |   |   |   |
|                           | Section 7.01 | Conditions to the Obligations of the Buyer and the Merger Sub to Effect the Closing |   | 49 |  |
|                           | Section 7.02 | Conditions to the Sellers’ Obligations at the Closing |   | 51 |  |
|                           |   |   |   |   |
| ARTICLE VIII TERMINATION       |   | 51 |  |
|                           |   |   |   |   |
|                           | Section 8.01 | Termination of Agreement |   | 51 |  |
|                           | Section 8.02 | Effect of Termination |   | 52 |  |
|                           |   |   |   |   |
| ARTICLE IX INDEMNIFICATION     |   | 53 |  |
|                           |   |   |   |   |
|                           | Section 9.01 | Indemnification by the Sellers |   | 53 |  |
|                           | Section 9.02 | Indemnification by the Buyer Parties |   | 55 |  |
|                           | Section 9.03 | Time for Claims; Notice of Claims |   | 55 |  |
|                           | Section 9.04 | Third Party Claims |   | 56 |  |
|                           | Section 9.05 | Indemnification Exclusive Remedy |   | 57 |  |
|                           | Section 9.06 | Remedies Cumulative |   | 57 |  |
|                           | Section 9.07 | Certain Damages; Materiality |   | 58 |  |
|                           | Section 9.08 | No Circular Recovery |   | 58 |  |
|                           | Section 9.09 | Manner of Payment |   | 58 |  |
|                           |   |   |   |   |
| ARTICLE X TAX MATTERS          |   | 58 |  |
|                           |   |   |   |   |
|                           | Section 10.01 | Tax Returns |   | 58 |  |
|                           | Section 10.02 | Straddle Period |   | 59 |  |
|                           | Section 10.03 | Transaction Deductions |   | 59 |  |
|                           |   |   |   |   |
|                           |   |   |   |   |
|                           |   |   |   |   |
|                           |   |   |   |   |
|                           |   |   |   |   |
|                           |   |   |   |   |

----

|                          |
|--------------------------|
|                          |  |  |  |  |  |
|                     | Section 10.04 | Tax Sharing Agreements |   | 60 |  |
|                     | Section 10.05 | Certain Taxes and Fees |   | 61 |  |
|                     | Section 10.06 | Cooperation on Tax Matters |   | 61 |  |
|                     | Section 10.07 | Indemnification Payments |   | 61 |  |
|                     |   |   |   |   |
| ARTICLE XI MISCELLANEOUS |   | 61 |  |
|                     |   |   |   |   |
|                     | Section 11.01 | Sellers’ Representative |   | 61 |  |
|                     | Section 11.02 | Notices |   | 63 |  |
|                     | Section 11.03 | Succession and Assignment; No Third-Party Beneficiaries |   | 64 |  |
|                     | Section 11.04 | Amendments and Waivers |   | 64 |  |
|                     | Section 11.05 | Entire Agreement |   | 64 |  |
|                     | Section 11.06 | Counterparts; Facsimile Signature |   | 64 |  |
|                     | Section 11.07 | Severability |   | 64 |  |
|                     | Section 11.08 | Governing Law |   | 65 |  |
|                     | Section 11.09 | Jurisdiction; Venue; Service of Process |   | 65 |  |
|                     | Section 11.10 | Specific Performance |   | 65 |  |
|                     | Section 11.11 | Waiver of Jury Trial |   | 65 |  |
|                     | Section 11.12 | Schedules |   | 66 |  |

|           |
|-----------|
|           |  |
| Exhibit A | Form of Escrow Agreement |
| Exhibit B | Form of Letter of Transmittal |
| Exhibit C | Form of Transition Services Agreement |
| Exhibit D | Allocation Schedule |

----

----

----

----

----

----

----

----

----

----

----

----

----

----

|                                              |
|----------------------------------------------|
|                                              |  |
| Term                                         | Section |
| 2014 Balance Sheet                           | Section 3.06(a) |
| 2014 Balance Sheet Date                      | Section 3.06(a) |
| 280G                                         | Section 6.16 |
| 280G Approval                                | Section 6.16 |
| Accounting Firm                              | Section 2.12(e) |
| Agreement                                    | Preamble |
| Allocation Schedule                          | Section 3.05(a) |
| Assets                                       | Section 3.09(a) |
| Audited Financials                           | Section 3.06(a) |
| Breach Notice                                | Section 6.11(d) |
| Business Employees                           | Section 6.14(a) |
| Buyer                                        | Preamble |
| Buyer Fundamental Representations            | Section 9.02(b) |
| Buyer Indemnified Person                     | Section 9.01(a) |
| Buyer Parties                                | Preamble |
| Buyer Savings Plan                           | Section 6.14(c) |
| Buyer’s Plans                          | Section 6.14(a) |
| Capitol Partners                             | Preamble |
| Capitol Partners I                           | Preamble |
| Capitol Partners II                          | Preamble |
| Capitol Partners III                         | Preamble |
| Certificate of Merger                        | Section 2.02 |
| Closing                                      | Section 2.02 |
| Company                                      | Preamble |
| Company Plan                                 | Section 3.15(a) |
| Company Registrations                        | Section 3.12(c) |
| Company’s 401(k) Plan                  | Section 6.14(b) |
| Confidential Information                     | Section 6.10(b) |
| Designated Equityholder Option Consideration | Section 2.07 |
|                                         |   |

----

|                                                  |
|--------------------------------------------------|
|                                                  |  |
|                                             |   |
|                                             |   |
| DGCL                                             | Recitals |
| Dissenting Shares                                | Section 2.15 |
| Dispute Submission Notice                        | Section 2.12(e) |
| Draft Tax Returns                                | Section 2.12(c) |
| Effective Time                                   | Section 2.02 |
| Estimated Closing Balance Sheet                  | Section 2.12(a) |
| Estimated Closing Statement                      | Section 2.12(a) |
|                                             |   |
| Estimated Working Capital                        | Section 2.12(a) |
| Exclusivity Period                               | Section 6.11(d) |
| False Claims Act Representation                  | Section 9.01(b) |
| Final Closing Balance Sheet                      | Section 2.12(e) |
| Final Closing Statement                          | Section 2.12(e) |
| Final Closing Tax Amount                         | Section 2.12(e) |
| Financials                                       | Section 3.06(c) |
| General Healthcare Representations               | Section 9.01(b) |
| Inbound IP Contracts                             | Section 3.12(d) |
| Indemnity Escrow Sub-Account                     | Section 2.10(e) |
| IP Contracts                                     | Section 3.12(d) |
| LCS Business                                     | Section 6.11(d) |
| Labor Organization                               | Section 3.17(a)(viii) |
| liability Policies                               | Section 3.21 |
| Losses                                           | Section 9.01(a) |
| Material Company Contract                        | Section 3.17(b) |
| Material Payors                                  | Section 3.24 |
| Medicare                                         | Definition of “Government Program” |
| Medicaid                                         | Definition of “Government Program” |
| Merger                                           | Recitals |
| Non-Designated Equityholder Option Consideration | Section 2.07 |
| Outbound IP Contracts                            | Section 3.12(d) |
| Principal Stockholder Consents                   | Recitals |
| Pro Forma Financials                             | Section 3.06(c) |
| Proposed Final Closing Balance Sheet             | Section 2.12(b) |
| Proposed Final Closing Statement                 | Section 2.12(b) |
| Real Property                                    | Section 3.11 |
| Real Property Leases                             | Section 3.11 |
| Restricted Area                                  | Section 6.11(a) |
| Restricted Period                                | Section 6.11(a) |
| Scheduled Intellectual Property Rights           | Section 3.12(c) |
| Section 280G                                     | Section 6.16 |
| Seller Indemnified Person                        | Section 9.02(a) |
| Sellers’ Representative                    | Preamble |
| Shared Assets                                    | Section 3.10(b) |
| Shared Services                                  | Section 3.10(a) |
| Specified Representations                        | Section 9.01(b) |
| Spinco                                           | Section 2.11 |
| Staffing Agency                                  | Section 3.19(c) |
| Stark Law                                        | Definition of “Healthcare Laws” |
| Straddle Period                                  | Section 10.02 |
| Stockholder Loan Borrowers                       | Definition of “Stockholder Loans” |

----

|                                    |
|------------------------------------|
|                                    |  |
| Surviving Corporation              | Section 2.01 |
|                               |   |
| Tax Escrow Sub-Account             | Section 2.10(e) |
| Tax Information                    | Section 2.12(a) |
| Tax Proceeding                     | Section 10.03(c) |
| Termination Date                   | Section 8.01 |
| Third Party Claim                  | Section 9.04(a) |
| Trade Secrets                      | Section 6.10(b) |
| Transfer Taxes                     | Section 10.05 |
| Unaudited Financials               | Section 3.06(b) |
| Warrant Consideration              | Section 2.08 |
| Working Capital Escrow Sub-Account | Section 2.10(e) |

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

----

|            |                                                                                                                                                                                    |
|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| THE BUYER: | ADVANCED HOMECARE MANAGEMENT INC. d/b/a ENCOMPASS HOME HEALTH & HOSPICE By:  /s/ April Anthony     Name:  April Anthony Title:  Vice President |

|             |                                                                                                                                  |
|-------------|----------------------------------------------------------------------------------------------------------------------------------|
| MERGER SUB: | EHH MERGER SUB CORPORATION By: /s/ April Anthony     Name:  April Anthony Title:  Vice President |

|              |                                                                                                                                                     |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|
| THE COMPANY: | CARESOUTH HEALTH SYSTEM, INC. By:  /s/ John M. Southern     Name:  John M. Southern Title:  Chief Financial Officer |

|                                    |                                                                                       |
|------------------------------------|---------------------------------------------------------------------------------------|
| THE SELLERS’ REPRESENTATIVE: | CAPITOL PARTNERS, L.L.C., solely in its capacity as the Sellers’ Representative |

----

----

----