Document:

exv10w40

 

Exhibit 10.40

VISTACARE, INC.

CODE OF BUSINESS CONDUCT AND ETHICS

VistaCare’s mission:

     The passionate pursuit of excellence in nurturing the physical, spiritual and
emotional well-being of our patients and their families while being responsible
stewards of our human and financial resources.

     In pursuing our mission, we strive to achieve the highest business and
personal ethical standards as well as compliance with the laws and regulations
that apply to our business. Employees, officers, directors, volunteers and all
other company agents and representatives must act in conformity with the
principles expressed in this Code of Business Conduct and Ethics (the “Code”).
In addition, every supervisor and manager is responsible for helping employees
understand and comply with the Code.

     This Code is an overview of VistaCare’s principles of business conduct and
ethics; it is intended to set standards of conduct and is not a restatement of
VistaCare policies and procedures. This Code cannot and is not intended to
cover every applicable law or provide answers to all questions that might
arise; for that we must ultimately rely on each person’s good sense of what is
right, including a sense of when it is proper to seek guidance from others on
the appropriate course of conduct.

     It is the obligation of each and every director, officer and employee of
VistaCare to become familiar with the goals and policies of the company and
integrate them into every aspect of our business. VistaCare regards violation
of the law, company policies or this Code as a serious matter since violations
may put the company and employees at risk. Therefore, if you violate them, you
subject yourself to disciplinary action and possible dismissal. Those who work
with us, such as contractors, consultants, agents, volunteers, representatives
and suppliers, are also required to follow these standards. Certain violations
may be referred to legal authorities for investigation and civil or criminal
prosecution.

CONFLICTS OF INTEREST

     Directors, officers and employees of VistaCare have a duty of loyalty to
the company, and must therefore avoid any actual or apparent conflict of
interest with the company. A conflict of interest exists when your personal
interests are in conflict with VistaCare’s interests or when your personal
interests interfere with your ability to perform your duties and
responsibilities at work. Conflicts of interest also arise when an employee,
officer, or director, or a member of his or her family, receives improper
personal benefits as a result of his or her position in the company.

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     Specific situations that could be considered conflicts of interest
include:

	•	 	Accepting gifts and services from suppliers or
contractors

	•	 	Employment by or ownership of a business that
competes with VistaCare

	•	 	Use of company assets for personal purposes

	•	 	Selection of suppliers and persons seeking to do
business with the company based on any considerations other than
the best interests of the company

     Additionally, certain situations may create the appearance of a conflict
when it appears to persons outside the company that a conflict exists. In
these situations as well, you should apply the principles of this Code in
deciding how to correct the situation based on the company’s best interest.

     If a conflict of interest arises, employees and officers must immediately
report the circumstances to the General Counsel of the company. The Chief
Executive Officer and members of the Board of Directors must report any such
circumstances to the Corporate Governance Committee.

CORPORATE OPPORTUNITIES

     No director, officer or employee may: (a) take for himself or herself
personally opportunities that are discovered through the use of company
property, information or position; (b) use company property, information or
position for personal gain; or (c) compete with the company. Employees,
officers and directors owe a duty to the company to advance its legitimate
interests when the opportunity to do so arises.

USE OF INSIDE INFORMATION

     It is the company’s goal to protect shareholder investments through strict
enforcement of the prohibition against insider trading set forth in federal
securities laws and regulations. Insider trading generally refers to the
buying or selling of a security by a person who is aware of material non-public
information relating to the security.

     Three basic rules to follow:

	•	 	Don’t buy or sell securities while in possession of
material non-public information.

	•	 	Don’t pass such information on to others who may
buy or sell securities.

	•	 	If such information has been publicly disclosed,
allow sufficient time for the information to be disseminated
and absorbed by the marketplace before acting on it or passing
that information on to others.

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     The company has adopted a policy regarding securities trading that applies
to directors, officers and employees. This policy explains in detail the
company’s rules regarding securities trading and can be viewed on the company’s
intranet. All affected persons are required to read, understand and comply
with the trading policy.

ACCOUNTING PRACTICES

     VistaCare’s policy is to fully and fairly disclose the financial condition
of the company in compliance with applicable accounting principles, laws, rules
and regulations. All books and records of VistaCare shall be kept in such a
way as to fully and fairly reflect all company transactions.

CORPORATE DISCLOSURE STANDARDS

     VistaCare’s policy is to make full, fair, accurate, timely and
understandable disclosure in reports and documents that it files with, or
submits to, the Securities and Exchange Commission and in its other public
communications. All employees, officers and directors involved with such
disclosure must ensure that our corporate disclosure is made in accordance with
such standards. Only designated VistaCare representatives are authorized to
disclose to the public, whether through filings with or submissions to the SEC,
press releases, interviews or otherwise, significant news and information about
VistaCare. Each affected person shall comply with any additional policies and
procedures that may be adopted from time to time in that regard.

FAIR DEALING

     Each director, officer and employee shall endeavor to deal fairly and in
good faith with VistaCare customers, shareholders, employees, suppliers,
regulators, business partners, competitors and others. No director, officer or
employee shall take unfair advantage of anyone through manipulation,
concealment, abuse of privileged or confidential information,
misrepresentation, fraudulent behavior or any other unfair dealing practice.

CONFIDENTIALITY

     Our information and business data, and the security of that information
and data, is important to our success. We must safeguard confidential
information against improper disclosure. All directors, officers and employees
should maintain the confidentiality of information entrusted to them by the
company. As a condition of employment, all VistaCare employees are required to
enter into a confidentiality agreement with the company.

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PATIENT PRIVACY

     VistaCare receives health and other information about patients and their
families. All medical records and information regarding patients and patient
families is to be treated as confidential.

     VistaCare has adopted policies and procedures regarding confidentiality of
health information in compliance with federal and state law. All affected
persons are required to comply with these policies.

COMPLIANCE WITH LAWS AND REGULATIONS

     VistaCare takes a proactive stance on compliance with all applicable laws,
rules and regulations.

     1. VistaCare’s commitment to comply with all Federal, State and private
insurer standards:

Eligibility for and election of the hospice benefit

     VistaCare provides complete and accurate information to patients about the
palliative nature of hospice care, the Medicare Hospice Benefit and eligibility
requirements. VistaCare ensures that the patients who elect the Medicare or
Medicaid Hospice Benefit meet eligibility requirements and continue to be
eligible while under the care of VistaCare.

Fraud and Abuse

     VistaCare will not provide to or accept gifts, services or any form of
remuneration from potential patients or referral sources. VistaCare will not
knowingly employ or contract with any person or entity, or knowingly receive
certifications and/or orders from any physician, who has been excluded from the
Medicare or Medicaid programs.

Medicare, Medicaid and state hospice regulations

     All persons are required to comply with VistaCare’s policies and
procedures regarding Medicare, Medicaid and state hospice regulations

     2. Work-place policies and applicable laws and regulations:

Equal Employment Opportunity

     VistaCare provides equal employment opportunities to all applicants and
equal advancement opportunities to all employees without regard to race, color,
religion,

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gender, national origin, age, disability, or veteran status. In addition,
VistaCare complies with applicable federal, state and local laws governing
nondiscrimination in employment in every location in which it has operations.

Unlawful Harassment

     VistaCare is committed to a policy of prohibiting any personnel from
engaging in any unlawful or sexual harassment of other personnel, job
applicants, or patients. Any personnel violating this policy may be subject to
immediate termination. If personnel feel they have been unlawfully or sexually
harassed, they must notify the appropriate person as provided by company
policies and procedures as soon as reasonably possible.

     VistaCare will not tolerate sexual harassment or any other unlawful
harassment and complaints of harassment will be promptly investigated. Any
employee who engages in any form of sexual harassment or other unlawful
harassment will be subject to disciplinary action, up to and including
discharge. Supervisors and managers have a special obligation under the law to
report all possible sexual harassment or other unlawful harassment as provided
by company policies and procedures even if they have not received a complaint.

Drug and Alcohol Abuse

     VistaCare’s goal is to maintain a work environment that is safe for our
employees, patients, visitors and others having business with us, and an
environment that is conducive to high work standards. To this end, VistaCare
prohibits the unlawful manufacture, distribution, dispensation, possession,
sale or use of narcotics, illegal drugs, drug paraphernalia or alcohol in the
workplace or while engaged in company business. It is also against company
policy for an employee to report to work under the influence of drugs or
alcohol. Further, such conduct is prohibited during non-work time to the
extent that, in the company’s opinion, it impairs an employee’s ability to
perform on the job or threatens the reputation or integrity of VistaCare.

The Environment

     The company requires its operations to be in compliance with all national,
regional, and local regulations relating to the environment, such as those
affecting air emissions, water purity and waste disposal. Compliance with
legal requirements is only a minimum standard. All employees are expected to
be alert to environmental issues.

HEALTH AND SAFETY

     VistaCare is committed to providing safe and healthful working conditions
for its employees, contractors and visitors. The company will conduct its
operations in a manner that protects human health and the quality of life.

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     The company recognizes that the responsibilities for safe and healthful
working conditions are shared in the following ways:

1. The company will establish and implement health and safety programs
and provide the safeguards required to ensure safe and healthful
conditions;

2. Supervisors and managers will create an environment where employees
have genuine concern for safety and all operations are performed with the
utmost regard for the safety and health of all personnel involved; and

3. All employees are expected to conduct their work in a safe manner and
comply with all health and safety programs, policies, procedures and
laws.

     No employee may bring a firearm, weapon or explosive substance into the
workplace.

WAIVERS OF THE CODE OF BUSINESS CONDUCT AND ETHICS

     Any waiver of this Code with respect to an employee who is not an
executive officer or director of the company may be granted only by the
company’s CEO.

     Any waiver of this Code with respect to an executive officer or director
of the company may be granted only by a committee of independent members of the
company’s Board of Directors.

REPORTING OF POSSIBLE ISSUES

     Every director, officer and employee has a duty to adhere to this Code and
all existing company policies, and to report to the company any suspected
violations in accordance with applicable procedures.

Questions

     An employee who has a question regarding the applicability or
interpretation of this Code should contact the company’s General Counsel,
either in person, in writing, or by telephone at 480-648-8721 or by fax at
480-648-4555.

Reporting of Violations

     If an employee knows of a violation or possible violation of this Code,
the employee must immediately report it to his or her supervisor, another
managerial employee, a human resources representative or the General Counsel.
Any manager or human resources representative receiving such a report must
immediately advise the General Counsel at 480-648-8721 or by fax at
480-648-4555. Written reports should be

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addressed to VistaCare, Inc., 4800 N. Scottsdale Road, Suite 5000, Scottsdale,
AZ 85251 and marked “CONFIDENTIAL – TO BE OPENED BY THE GENERAL COUNSEL.”

     There shall be no reprisals for good faith reporting of actual or possible
violations.

     Although it is strongly preferred that the caller identify himself or
herself, a call may be made anonymously by stating at the outset that the
caller prefers to remain unidentified but wishes to report a violation or
discuss or inquire about the Code.

Investigations of Reports of Violations

     All reports of allegations of violations will be promptly investigated by
the company and will be treated confidentially to the extent consistent with
the company’s interests and its legal obligations. The General Counsel will
determine the appropriate nature of the investigation.

     Employees are expected to cooperate in the investigation of alleged
violations. It the result of the investigation indicates that corrective
action is required, the company will decide what steps it should take,
including, when appropriate, legal proceedings to rectify the problem and avoid
the likelihood of its recurrence.

Discipline for Violations

     Disciplinary action may be taken for:

1. Authorization or participation in actions that violate the Code.

2. Failure to report a violation of the Code.

3. Refusal to cooperate in the investigation of a possible violation.

4. Failure by a violator’s supervisors(s) to detect and report a
violation, if such failure reflects inadequate supervision.

5. Retaliation against an individual for reporting a possible violation.

     The nature of any disciplinary action taken will depend on the nature of
the violation and the circumstances involved. When appropriate, the
disciplinary action may include dismissal. Any disciplinary action will be
reviewed and approved by the employee’s supervisor, the Human Resources
Department and the General Counsel.

Acknowledgement of Receipt of Code

     The company requires that all employees, officers and directors sign an
Acknowledgement of Receipt confirming that they have received, read and
understand

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the Code, that they will comply with it and that they understand conduct
violating the Code may result in disciplinary action.

     In addition, persons subject to the Code may be asked periodically to
certify that since their previous certification they have complied with the
Code and have no knowledge of any violation that has not been appropriately
reported.

ADDITIONAL INFORMATION

EMPLOYEE HOTLINE

IN SITUATIONS WHERE YOU DO NOT WANT TO USE THE NORMAL CHANNELS OF
COMMUNICATION, YOU CAN CALL 1-866-872-6498 (TOLL FREE IN THE U.S.) Or
480-648-8646.

The employee hotline will connect you with the company’s General Counsel, who
will respond to your questions or collect information and initiate appropriate
follow-up action. All calls will be handled in a confidential manner and, if
you wish, you will not need to identify yourself. If you call at times other
than 8:00 a.m. to 5:30 p.m. (MST) or if the General Counsel is unavailable, you
can leave a confidential voicemail message.

OTHER RESOURCES

If you wish to register any complaints directly to the Audit Committee of the
Board of Directors regarding accounting, internal accounting controls or
auditing matters, or if you wish to deliver an anonymous submission of concerns
regarding questionable accounting or auditing matters, you may write to the
chairman of the Audit Committee at the address published on the company’s
website.

If you wish to make any concerns known to the directors of VistaCare, Inc. who
are not members of VistaCare management, you may directly contact these
directors by writing to them at the addresses published on the company’s
website.

8exv10w41

 

Exhibit 10.41

MANAGEMENT AGREEMENT

     THIS MANAGEMENT AGREEMENT (the “Agreement”), made as of the 17th day of
May, 2004, is entered into by VistaCare, Inc., a Delaware corporation with its
principal place of business at 4800 N. Scottsdale Road, Suite 5000, Scottsdale,
Arizona 85251 (the “Company”), and Kris Jamsa, an individual residing at 7867
E. Visao Dr., Scottsdale, Arizona 85262 (the “Executive”).

Recitals:

     WHEREAS, the Executive is an executive officer of the Company; and

     WHEREAS, the Company and the Executive wish to provide for certain
payments and benefits to the Executive in the event the Executive’s employment
by the Company is terminated under certain circumstances.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto agree as follows:

     1. Definitions. As used in this Agreement the following terms shall have
the following respective meanings:

          (a) “Board” means the Board of Directors of the Company.

          (b) “Cause” shall mean: (i) the Executive’s willful failure to attempt in
good faith to follow the legal written directions of the Board or the Chief
Executive Officer (the “CEO”), which is not cured within ten (10) days
following receipt by the Executive of written notice from the Board or the CEO
specifying the details thereof, (ii) the Executive’s conviction of a felony
(other than a felony involving a traffic violation or as a result of vicarious
liability), (iii) the Executive’s commission of an act constituting fraud,
embezzlement, larceny or theft with regard to the Company that is of a material
nature (other than good faith expense account reimbursement disputes) or (iv)
willful misconduct by the Executive with regard to the Company that has a
material adverse effect on the Company. For purposes of this definition, no
act, or failure to act, on the Executive’s part shall be considered “willful”
unless done or omitted to be done by him not in good faith and without
reasonable belief that his action or omission was in the best interests of the
Company.

          (c) “Change in Control” means (i) the acquisition by a person, party or a
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended) of outstanding capital stock of the Company
representing more than 50% of the combined voting power of all voting
securities of the Company entitled to vote generally in the election of
directors, excluding acquisitions from the Company, (ii) a change of a majority
of the Board, without the approval or consent of the members of the Board
before such change, (iii)

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the acquisition of the Company by means of a reorganization, merger,
consolidation, recapitalization or asset sale, unless the owners of the capital
stock of the Company immediately before such transaction continue to own, in
substantially the same proportions as before such transaction, capital stock of
the acquiring or succeeding entity representing more than 50% of the combined
voting power of all voting securities of such acquiring or succeeding entity
entitled to vote generally in the election of directors, or (iv) the approval
of a liquidation or dissolution of the Company.

          (d) “Confidential Information” means all trade secrets and other
information of a business, financial, marketing, technical or other nature
pertaining to the Company or any of its subsidiaries or affiliates, including
information of others that the Company or any of its subsidiaries or affiliates
has agreed to keep confidential; provided, that Confidential Information shall
not include any information that has entered or enters the public domain
through no fault of the Executive, was known by the Executive prior to the
Executive’s affiliation with or employment by the Company or which the
Executive is required to disclose by legal process.

          (e) “Disability” means the failure of the Executive, due to physical or
mental disability, to perform the services reasonably contemplated by his
position for a period of either (i) ninety (90) consecutive days or (ii) one
hundred twenty (120) days, whether or not consecutive, during any 360-day
period.

          (f) “Good Reason” means any of the following events (unless consented to
by the Executive in writing): (i) a material diminution in the Executive’s
duties, responsibilities or the assignment to the Executive of duties or
responsibilities that are inconsistent in a material and adverse way with his
then position; (ii) a reduction in the Executive’s base salary; (iii) a
requirement by the Company that the Executive’s principal place of work be
moved to a location more than thirty-five (35) miles away from Scottsdale,
Arizona; or (iv) a change in the Executive’s title to a lesser title.

          (g) “Per-Share Equity Value” means (i) the total amount of cash and the
fair market value of all other property paid directly or indirectly by an
acquiror to the Company and/or its equity security holders in connection with
a Sale of the Company, divided by (ii) the total number of outstanding shares
of the Company’s Class A Common Stock, $.01 par value per share (the “Common
Stock”), immediately before the closing of a Sale of the Company transaction,
assuming the conversion of all shares of capital stock convertible into the
Company and the exercise of all warrants, options and other rights to purchase
the Common Stock. The value of any securities issuable in connection with a
Sale of the Company (whether debt or equity) freely tradable in an established
public market will be determined on the basis of the last closing price in such
market five (5) days prior to the consummation of the Sale of the Company (the
“Valuation Date”), and the value of securities not freely tradable (or having
no established market) or other property will be the fair market value of such
securities or other property on such Valuation Date as determined in good faith
by the Board.

          (h) “Sale of the Company” means (i) the acquisition by a person, party or
a group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended) of outstanding capital stock of the Company
representing more than 50% of

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the combined voting power of all voting securities of the Company entitled to
vote generally in the election of directors, excluding acquisitions from the
Company, or (ii) the acquisition of the Company by means of a reorganization,
merger, consolidation, recapitalization or asset sale, unless the owners of the
capital stock of the Company immediately before such transaction continue to
own, in substantially the same proportions as before such transaction, capital
stock of the acquiring or succeeding entity representing more than 50% of the
combined voting power of all voting securities of such acquiring or succeeding
entity entitled to vote generally in the election of directors.

     2. Employment At-Will Acknowledgement. The Executive acknowledges and
agrees that his employment by the Company is “at-will” and as such may be
terminated by the Company at any time, with or without cause, subject to the
provisions of this Agreement.

     3. Compensation Upon Termination of Employment Prior to Change in Control.
If prior to a Change in Control the Executive’s employment by the Company is
terminated by the Company for any reason other than Cause or the Executive’s
death or Disability or is terminated by the Executive for Good Reason, the
Company shall:

          (a) pay to the Executive within five (5) days after the date of his
employment termination all accrued but unpaid salary, bonus and vacation pay,
if any;

          (b) continue to pay to the Executive his then current salary in bi-weekly
installments for twelve (12) months after the date of his employment
termination;

          (c) continue to provide the Executive for twelve (12) months after the
date of his employment termination with the health and life insurance benefits
he would have received had his employment by the Company not terminated or
substantially the equivalent coverage (or the full value thereof in cash); and

          (d) promptly reimburse the Executive for any and all legal fees and
expenses incurred by him to enforce the provisions of this Agreement.

     4. Compensation Upon Termination of Employment After Change in Control.
If within two (2) years following a Change in Control the Executive’s
employment by the Company is terminated by the Company for any reason other
than Cause or the Executive’s death or Disability or is terminated by the
Executive for Good Reason, the Company shall:

          (a) pay to the Executive within five (5) days after the date of his
employment termination all accrued but unpaid salary, bonus and vacation pay,
if any;

          (b) pay to the Executive within thirty (30) days after the date of his
employment termination a lump sum amount equal to two (2) times his then
current annual salary;

          (c) continue to provide the Executive for two (2) years after the date of
his employment termination with the health and life insurance benefits he would
have received had

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his employment by the Company not terminated or substantially the equivalent
coverage (or the full value thereof in cash); and

          (d) promptly reimburse the Executive for any and all legal fees and
expenses incurred by him to enforce the provisions of this Agreement.

     5. Acceleration of Option Vesting. If the Executive’s employment is
terminated and he is entitled to payments and benefits contemplated by Section
4, the vesting of all options granted by the Company to the Executive to
purchase shares of the Company’s capital stock shall be accelerated in full.

     6. Transaction Fee. (a) If there is a Sale of the Company prior to
December 31, 2006, the Executive shall be entitled to a fee (a “Transaction
Fee”) equal to the amount specified in the table below corresponding to the
date on which such transaction closes; provided, however, that no Transaction
Fee shall be payable if the Executive is not employed by the Company on the
closing date of such transaction.

	 	 	 	 	 
	1/1/04 – 12/31/04
	 	$	600,000	 
	1/1/05 – 12/31/05
	 	$	400,000	 
	1/1/06 – 12/31/06
	 	$	200,000	 

          (b) If the terms of a transaction constituting a Sale of the Company
provide for escrowed, contingent or installment payments, the portion of the
Transaction Fee relating to such payments shall be paid if and when such
payments are actually received by the security holders and/or the Company.

          (c) The Transaction Fee shall be payable in the same form and in the same
proportion as the consideration received by the Company and/or its security
holders in connection with the Sale of the Company.

     7. Confidentiality. (a) The Executive will not at any time, directly or
indirectly, disclose or divulge, except as required in connection with the
performance of the Executive’s duties for the Company, any Confidential
Information acquired by the Executive during or in connection with the
Executive’s affiliation with or employment by the Company.

          (b) The Executive shall make no use whatsoever, directly or indirectly, of
any Confidential Information, except as required in connection with the
performance of the Executive’s duties for the Company.

          (c) Upon the Company’s request at any time and for any reason, the
Executive shall immediately deliver to the Company all materials (including all
copies) in the Executive’s possession which contain or relate to Confidential
Information.

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     8. Non-competition and Non-solicitation. The Executive agrees that prior
to the termination of the Executive’s employment with the Company for whatever
reason, and thereafter for two years:

          (a) the Executive will not directly or indirectly, individually or as a
consultant to, or employee, officer, director, stockholder, partner or other
owner of or participant in any business entity other than the Company, engage
in or assist any other person to engage in the business of providing hospice
services in competition with the Company or any of its subsidiaries; and

          (b) the Executive will not directly or indirectly, individually or as a
consultant to, or employee, officer, director, stockholder, partner or other
owner of or participant in any business entity other than the Company, solicit
or hire from the Company or any of its subsidiaries or affiliates, or otherwise
materially interfere with the business relationship of the Company or any of
its subsidiaries or affiliates with, (i) any person who is, or was within the
six-month period immediately prior to the termination of the Executive’s
employment with the Company, employed by or associated with the Company or any
of its subsidiaries or affiliates or (ii) any person or entity who is, or was
within the six-month period immediately prior to the termination of the
Executive’s employment with the Company, a patient referral source for the
Company or any of its subsidiaries or affiliates.

     9. Remedies. Without limiting the remedies available to the Company, the
Executive acknowledges that a breach of any of the covenants contained in
Sections 7 and 8 herein could result in irreparable injury to the Company for
which there might be no adequate remedy at law, and that, in the event of such
a breach or threat thereof, the Company shall be entitled to obtain a temporary
restraining order and/or a preliminary injunction and a permanent injunction
restraining the Executive from engaging in any activities prohibited by
Sections 7 and 8 herein or such other equitable relief as may be required to
enforce specifically any of the covenants of Sections 7 and 8 herein. The
foregoing provisions of Sections 7 and 8 herein shall survive the termination
of this Agreement and shall continue thereafter in full force and effect in
accordance with the terms of Sections 7 and 8 herein for the periods of time
contemplated thereby.

     10. Release. It shall be a condition of the Company’s obligation to make
the payments and provide the benefits contemplated by Sections 3 and 4 that the
Executive execute and deliver to the Company a release in form and substance
satisfactory to the Company pursuant to which the Executive unconditionally and
irrevocably waives, relinquishes and forever releases and discharges the
Company and its officers, directors, shareholders, employees, agents,
subsidiaries, affiliates, predecessors, successors and assigns (collectively,
the “Company Indemnitees”) from any and all claims, duties, causes of actions,
demands, obligations, liabilities, rights, damages (including business,
punitive or exemplary damages) of any kind or nature whether existing or
contingent, then known or unknown, asserted or unasserted, whether in law,
equity and administrative proceeding that the Executive then has or ever had
against the Company Indemnitees since the beginning of the world through the
date thereof including, but not limited to, any and all matters related in any
way to the Executive’s employment with or separation from the Company, as well
as claims under the Employee Retirement Income Security

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Act of 1974, Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Americans with Disabilities Act, any
claim based on state anti-discrimination laws, any claim for wrongful
discharge, and any alleged violation of public policy, contract or tort law, or
any other federal, state, or local law; provided, however, that such release
shall not apply to the terms and conditions of this Agreement, which shall
remain valid and enforceable.

     11. Arbitration. In the case of any dispute under this Agreement, the
Executive may initiate binding arbitration in Phoenix, Arizona, before the
American Arbitration Association by serving a notice to arbitrate upon the
Company or, at the Executive’s election, institute judicial proceedings, in
either case within 90 days of the effective date of his termination or, if
later, his receipt of notice of termination, or such longer period as may be
reasonably necessary for the Executive to take such action if illness or
incapacity should impair his taking such action within the 90-day period. The
Company shall not have the right to initiate binding arbitration, and agrees
that upon the initiation of binding arbitration by Executive pursuant to this
Section 11 the Company shall cause to be dismissed any judicial proceedings it
has brought against the Executive relating to this Agreement. The Company
authorizes the Executive from time to time to retain counsel of his choice to
represent the Executive in connection with any and all actions, proceedings,
and/or arbitration, whether by or against the Company or any director, officer,
shareholder, or other person affiliated with the Company, which may affect
Executive’s rights under this Agreement. The Company agrees (i) to pay the
fees and expenses of such counsel, (ii) to pay the cost of such arbitration
and/or judicial proceeding, and (iii) to pay interest to the Executive on all
amounts owed to the Executive under this Agreement during any period of time
that such amounts are withheld pending arbitration and/or judicial proceedings.
Such interest will be at the base rate as announced from time to time by
Healthcare Business Credit Corporation, or its successor.

     12. Binding on Successors. If the Company is at any time before or after
a Change in Control merged or consolidated into or with any other corporation
or other entity (whether or not the Company is the surviving entity), or if
substantially all of the assets thereof are transferred to another corporation
or other entity, the provisions of this Agreement will be binding upon and
inure to the benefit of the corporation or other entity resulting from such
merger or consolidation or the acquirer of such assets, and this Section 12
will apply in the event of any subsequent merger or consolidation or transfer
of assets. In the event of any such merger, consolidation or sale of assets,
references to the Company in this Agreement shall unless the context suggests
otherwise be deemed to include the entity resulting from such merger or
consolidation or the acquirer of such assets of the Company.

     13. Withholding. All payments required to be made by the Company
hereunder to the Executive or his dependents, beneficiaries, or estate will be
subject to the withholding of such amounts relating to tax and/or other payroll
deductions as may be required by law.

     14. No Duty to Mitigate. There shall be no requirement on the part of the
Executive to seek other employment or otherwise mitigate damages in order to be
entitled to the full amount of any payments and benefits to which the Executive
is entitled under this Agreement, and the amount of such payments and benefits
shall not be reduced by any compensation or benefits received by the Executive
from other employment.

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     15. No Contract of Employment. Nothing contained in this Agreement shall
be construed as a contract of employment between the Company and the Executive,
or as a right of the Executive to continue in the employ of the Company, or as
a limitation of the right of the Company to discharge the Executive with or
without Cause; provided that the Executive shall have the right to receive upon
termination of his employment the payments and benefits provided in this
Agreement.

     16. No Other Severance. Payments made by the Company pursuant to this
Agreement shall be in lieu of severance payments, if any, which might otherwise
be available to the Executive.

     17. Successors and Assigns. The provisions of this Agreement, shall be
binding upon and shall inure to the benefit of the Executive, his executors,
administrators, legal representatives, and assigns, and the Company and its
successors.

     18. No Set-off. The Company shall have no right of set-off or
counterclaims, in respect of any claim, debt, or obligation, against any
payments to the Executive, his dependents, beneficiaries, or estate provided
for in this Agreement.

     19. Assignment. No right or interest to or in any payments shall be
assignable by the Executive; provided, however, that this provision shall not
preclude him from designating one or more beneficiaries to receive any amount
that may be payable after his death and shall not preclude the legal
representative of his estate from assigning any right hereunder to the person
or persons entitled thereto under his will or, in the case of intestacy, to the
person or persons entitled thereto under the laws of intestacy applicable to
his estate. The term “beneficiaries” as used in this Agreement shall mean a
beneficiary or beneficiaries so designated to receive any such amount, or if no
beneficiary has been so designated, the legal representative of the Executive’s
estate. No right, benefit, or interest hereunder, shall be subject to
anticipation, alienation, sale, assignment, encumbrance, charge, pledge,
hypothecation, or set-off in respect of any claim, debt, or obligation, or to
execution, attachment, levy, or similar process, or assignment by operation of
law. Any attempt, voluntary or involuntary, to effect any action specified in
the immediately preceding sentence shall, to the full extent permitted by law,
be null, void, and of no effect.

     20. Notices. All notices required or permitted under this Agreement shall
be in writing and shall be deemed effective upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail,
postage prepaid, addressed to the other party at the address shown above, or at
such other address or addresses as either party shall designate to the other in
accordance with this Section 20.

     21. Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes all prior agreements and understandings,
whether written or oral, relating to the subject matter of this Agreement,
including without limitation that certain letter agreement between the Company
and the Executive dated March 30, 2004.

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     22. Amendment. This Agreement may be amended or modified only by a
written instrument executed by both the Company and the Executive.

     23. Governing Law. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of Arizona.

     24. Miscellaneous.

          24.1 No delay or omission by the Company in exercising any right under
this Agreement shall operate as a waiver of that or any other right. A waiver
or consent given by the Company on any one occasion shall be effective only in
that instance and shall not be construed as a bar or waiver of any right on any
other occasion.

          24.2 The captions of the sections of this Agreement are for convenience of
reference only and in no way define, limit or affect the scope or substance of
any section of this Agreement.

          24.3 In case any provision of this Agreement shall be invalid, illegal or
otherwise unenforceable, the validity, legality and enforceability of the
remaining provisions shall in no way be affected or impaired thereby.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year set forth above.

	 	 	 
	

	 	VISTACARE, INC.
	 
	 	 
	

	 	By:                                                                     
	 
	 	 
	

	 	Title:                                                                   
	 
	 	 
	

	 	                                                                            
	

	 	Kris Jamsa

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