EXHIBIT 10.2
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT ("Agreement") made effective this 23rd day of
November, 2004, by and among LOUISIANA HEALTH CARE GROUP, LLC ("LHCG"), LHC
GROUP, LLC ("LHC Group"), and Xxxxx Xxxxxx, Xxxxxxxxxxx Xxxxxxxxxx, Xxxxx Xxxxx
and Xxxxx Xxxxxxx (each individually a "Shareholder" and collectively the
"Shareholders"). LHCG, LHC Group and the Shareholders are referred to,
collectively, herein as the "Parties".
RECITALS
The Parties are the sole shareholders of Hebert, Thibodeaux, Xxxxx and
Xxxxxxx Therapy Group, Inc. ("HTATTG"), with LHCG holding 51 shares of stock and
each other Shareholder owning the shares of stock as set forth opposite their
name in Section 1 below (the "Shares").
Pursuant to the terms of a written Shareholders' Agreement effective
May 1, 2004 by and among the Parties (the "Shareholders' Agreement")
acknowledged to be the current Shareholders' Agreement of HTATTG (a copy of
which is attached as Exhibit I), the Shareholders have options to convert their
Shares in HTATTG into equity in LHC Group (the "Conversion Right") upon the
occurrence of certain triggering events, including, but not limited to the
closing of a qualifying initial public offering involving the equity of LHC
Group.
The Parties wish to enter into this Agreement in order to set forth
their rights and obligations relating to the Conversion Rights in the event of a
Qualifying IPO.
THE PARTIES HEREBY AGREE TO THE FOLLOWING:
1. EXCHANGE. Upon the closing of a Qualifying IPO (as defined below), the
Shareholders shall transfer, convey and deliver to LHC Group all right,
title and interest hi the Shares in exchange for the following shares
of LHC Group common stock which shall be adjusted proportionately for
any and all stock splits occurring prior to the Qualifying IPO (the
"Restricted Securities"):
Pre-Split
HTATTG LHC Group
Shareholder Shares Shares
--------------------------------------------------
A. Xxxxx Xxxxxx 14.75 13,653
B. Xxxxxxxxxxx Xxxxxxxxxx 14.75 13,653
C. Xxxxx Xxxxx 7.25 6,711
D. Xxxxx Xxxxxxx 12.25 11,339
LHCG, a wholly owned subsidiary of LHC Group, will retain its holding
of 51.00 shares of the common stock of HTATTG.
2. ISSUANCE OF STOCK CERTIFICATES/STOCK RESTRICTIONS. On the closing date
of the Qualifying
IPO, LHC Group shall issue stock certificates to the Shareholders
evidencing their ownership interest in the Restricted Securities. The
Shareholders hereby acknowledge that the Restricted Securities will not
be registered under the Securities Act (as defined below). The
Shareholders also agree not to sell or transfer the Restricted
Securities for a period of at least one year following the closing date
of the Qualifying IPO. Further, the Shareholders agree to execute a
lock up agreement in a form agreed to by LHC Group and the underwriters
in the Qualifying IPO pursuant to which the Shareholders will agree not
to sell any of the Restricted Securities for a period of one year
following the closing date of the Qualifying IPO.
3. RETURN OF SHARES. On the closing date of the Qualifying IPO, the
Shareholders shall return to LHC Group any and all certificates or
other instruments evidencing their ownership of the Shares or any other
class of stock in HTATTG, and shall, at the option of LHC Group,
deliver such other evidence of the transfer of their interest to LHC
Group as is reasonably required by LHC Group.
4. REPRESENTATIONS.
a. each Shareholder represents and warrants to LHC Group that he
has not assigned, transferred or conveyed any interest in the
Shares to any affiliate or other third party, and that he owns
such Shares free and clear of any and all liens, mortgages,
charges, encumbrances, voting trust or other restrictions of
any kind;
b. each Shareholder represents that he has received no material
information regarding this investment in LHC Group other than
information that is generally available to the public. Each
shareholder further acknowledges and represents that he has
not made his decision to enter into this Agreement, or caused
any other Shareholder to enter into this Agreement, based in
whole or in part on any representations of LHC Group, its
officers, shareholders, attorneys, consultants or agents
regarding LHC Group or its future, or the investment;
c. each Shareholder is converting his Shares into the Restricted
Securities for his own account, with the intention of holding
the Restricted Securities for investment and with no present
intention of dividing or allowing others to participate in
this investment or of reselling or otherwise participating,
directly or indirectly, in a distribution of the Restricted
Securities; and each Shareholder further represents that he
will not make any sale, transfer, or other disposition of the
Restricted Securities without registration under the
Securities Act (as defined below) and similar state acts
unless an exemption from registration is available under the
Securities Act and similar state acts.
d. The current facts surrounding this investment do not satisfy
conditions under Rule 144 under the Securities Act that would
permit the undersigned to resell the Restricted Securities
under such Rule; even if satisfaction of the conditions under
Rule 144 should occur, the undersigned could resell the
Restricted Securities in
reliance upon the provisions of Rule 144 only in limited
amounts and in accordance with the other terms and conditions
of Rule 144; and in connection with any resale of the
Restricted Securities by the undersigned that Rule 144 does
not permit, the undersigned must comply with some other
registration exemption.
e. Each of the Shareholders acknowledges that by reason of his
business or financial experience or the business or financial
experience of his professional advisor(s), he has the capacity
to protect his own interests in connection with the receipt of
the Restricted Securities.
5. SETTLEMENT AND COMPROMISE.
a. The Parties acknowledge and agree that, effective as of the
closing date of the Qualifying IPO, the terms of this
Agreement shall serve as a full and complete settlement and
compromise of any and all claims, demands, liens, lawsuits,
actions, causes of action, debts, costs, rights, liabilities,
damages, costs and expenses arising out of, related to, or in
any way connected with the Shareholders' ownership of the
Shares and the Parties' relationship under the Shareholders'
Agreement, provided that nothing in this Agreement shall
release any party of their obligations set forth in this
Agreement.
b. The Parties further acknowledge and agree that, effective as
of the date of this Agreement, the terms of this Agreement
shall serve in lieu of, and supersede in their entirety the
terms of the Shareholders' Agreement with regard to the
Conversion Rights notwithstanding any provision to the
contrary contained therein. The Shareholders hereby release
LHC Group, HTATTG and their officers, directors and affiliates
from any and all claims, demands, liens, lawsuits, actions,
causes of action, debts, costs, rights, liabilities, damages,
costs and expenses relating to or arising out of the
Conversion Rights excluding claims relating to the obligation
of LHC Group to issue the Restricted Securities required by
Section 1 hereof upon a Qualifying IPO.
6. CONDITION PRECEDENT. The Parties' obligations under this Agreement are
specifically conditioned upon the closing of a Qualifying IPO involving
the equity of LHC Group. A "Qualifying IPO" means the sale by LHC Group
or its successor of shares of its common stock in a firm commitment
underwritten public offering pursuant to a registration statement under
the Securities Act of 1933, as amended (the "Securities Act") at a
total public offering price per share (prior to underwriters'
commissions and expenses) of not less than $10 (appropriately adjusted
for any stock split, dividend, combination or other recapitalization)
and which results in aggregate cash proceeds to LHC Group of not less
than $25 million (the "Qualifying IPO")
7. INDEMNIFICATION. Each Shareholder agrees to severally protect, defend,
reimburse, pay, indemnify, release, dismiss, discharge and forever hold
harmless LHC Group, its
Exchange Agreement 3 November 2004
successors and assigns, in respect of any and all losses, claims,
demands, liens, lawsuits, actions, causes of action, debts, costs,
rights, liabilities, damages, costs and expenses, whether known or
unknown, arising out of, related to, or in any way connected with their
ownership of the Shares, the Parties relationship under the
Shareholders' Agreement, or the representations made by the
Shareholders herein.
8. CLOSING DATE RELEASE. In consideration for the receipt of the
Restricted Securities, each Shareholder agrees that on the Closing Date
of the Qualifying IPO he will execute a general release of LHC Group
and HTATTG pursuant to which he agrees to release LHC Group, HTATTG and
their officers, directors and affiliates from any and all claims,
demands, liens, lawsuits, actions, causes of action, debts, costs,
rights, liabilities, damages, costs and expenses arising out of,
related to, or in any way connected with his ownership of the Shares,
the Conversion Rights and the Parties' relationship under the
Shareholders' Agreement.
9. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the respective Parties hereto, their legal representatives,
successors and assigns.
10. ENTIRE AGREEMENT. This Agreement supersedes all agreements previously
made between the Parties hereto relating to its subject matter.
11. GOVERNING LAW. This Agreement shall be construed in accordance with and
governed by the laws of the State of Louisiana.
12. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of
which together shall be one and the same instrument.
[Signatures continued on next page]
Exchange Agreement 4 November 2004
IN WITNESS WHEREOF, the Parties have signed this Agreement on the date
first written above.
WITNESSES LHC GROUP, LLC
/s/ Xxxx Xxxxxxx BY: /s/ Xxxxx X. Xxxxx
------------------------ -------------------------------
Xxxxx X. Xxxxx, Manager
/s/ Xxxx Xxxxxx
------------------------ LOUISIANA HEALTH CARE GROUP, LLC
BY: LHC GROUP, LLC
BY: /s/ Xxxxx X. Xxxxx
-------------------------------
Xxxxx X. Xxxxx, Manager
SHAREHOLDERS
/s/ Xxxxx Xxxxxx
-----------------------------------
Xxxxx Xxxxxx
/s/ Xxxxxxxxxxx Xxxxxxxxxx
-----------------------------------
Xxxxxxxxxxx Xxxxxxxxxx
/s/ Xxxxx Xxxxx
-----------------------------------
Xxxxx Xxxxx
/s/ Xxxxx Xxxxxx
-----------------------------------
Xxxxx Xxxxxx
/s/ Xxxxx Xxxxxxx
-----------------------------------
Xxxxx Xxxxxxx
/s/ Xxxxxxx X. XxxXxxxxx
-----------------------------
Xxxxxxx X. XxxXxxxxx
Notary
Exchange Agreement 5 November 2004
EXHIBIT I
Exchange Agreement 6 November 2004
VII-50
XXXXXX AND XXXXXXXXXX PHYSICAL THERAPY, INC.
SHAREHOLDERS' AGREEMENT
THIS AGREEMENT is entered into this 29th day of April, 2004, and is
effective as of the 1st day of May, 2004 (the "Effective Date") by and between
Louisiana Health Care Group, LLC, Xxxxx X. Xxxxxx, Xxxxxxxxxxx X. Xxxxxxxxxx,
Xxxxx X. Xxxxxxx and Xxxxx X. Xxxxx (hereinafter separately referred to as
"Shareholder" and together as "Shareholders"), and Xxxxxx and Xxxxxxxxxx
Physical Therapy, Inc., a corporation organized and existing under the laws of
the State of Louisiana, (hereinafter referred to as the "Corporation").
WITNESSETH:
WHEREAS, the Corporation presently has authorized One Hundred (100)
shares of common stock, One Hundred (100) of which are presently issued and
outstanding;
WHEREAS, the Shareholders own all of the outstanding shares of the
Corporation;
WHEREAS, the individual interest of each shareholder in the Corporation
is as follows:
NUMBER OF
NAME SHARES
---- ------
Louisiana Health Care Group, LLC 51.00
Xxxxx X. Xxxxxx 14.75
Xxxxxxxxxxx X. Xxxxxxxxxx 14.75
Xxxxx X. Xxxxxxx 12.25
Xxxxx X. Xxxxx 7.25
WHEREAS, each Shareholder is presently employed by the Corporation;
WHEREAS, the parties have jointly negotiated the terms of this
Agreement and intend this Agreement to have effect from and after the Effective
Date noted above;
WHEREAS, the Shareholders believe that it is in the best interests of
the Shareholders and the Corporation to make provision for the terms governing
their relationships, and the future disposition of the shares of the
Corporation.
NOW, THEREFORE, in consideration of the employment of each Shareholder
by the Corporation, and the premises and mutual covenants and agreements
contained in this Agreement, and in order to consummate the purchase and sale of
the stock aforementioned, and to set forth the terms, rights and
responsibilities governing their relationships, it is hereby agreed as follows:
I.
DIRECTORS AND OFFICERS
1.1 For so long as this Agreement remains in effect, each Shareholder
agrees to vote all of such Shareholder's shares of common stock of the
Corporation entitled to vote which may now or hereafter be owned or
held of record by such Shareholder, or as to which such Shareholder now
or hereafter has voting power, and otherwise exert their best efforts
at all times in good faith, to effectuate the election of the following
candidates as Directors:
Directors
----------
Xxxxx X. Xxxxx
Xxxxxxx Xxxx
1.2 For so long as this Agreement remains in effect, each Shareholder
agrees to cause the elected directors to vote, and otherwise exert
their best efforts at all times in good faith, to effectuate the
election of the following candidates for office:
President: Xxxxx X. Xxxxx
Secretary-Treasurer: Xxxxxxxxxxx Xxxxxxxxxx
1.3 Each Shareholder in his capacity as Shareholder and Director, hereby
grants to, and is deemed to have executed in favor of, all of the other
Shareholders and Directors, an irrevocable proxy to vote, or to give
written consent with respect to, all the voting equity securities owned
by the grantor of the proxy (i) for the election of the officers and
board of directors as designated herein, (ii) against any amendment or
restatement of the Corporation's articles of incorporation, (iii)
against any amendment or restatement of the Corporation's bylaws, (iv)
against any increase in the number of directors, (v) against the
issuance of any stock or securities, or any subscriptions, warrants,
options or other rights for same, and (vi) against the termination of
the Corporation's Management Agreement with LHC Group, LLC or its
successors.
1.4 The shareholders agree to use their best efforts, in good faith, to
attend all meetings, to vote and act harmoniously, and to elect all
members of the Board and officers annually.
II.
RESTRICTIONS ON TRANSFER OF SHARES
2.1 RESTRICTION ON SHARES. So long as all the Shareholders are alive, each
shall not transfer or encumber, in any manner, the shares of the
Corporation which he now owns or may hereafter acquire, except as
follows:
A. SALE, TRANSFER OR ENCUMBRANCE OF SHARES. Any Shareholder who desires to
sell, transfer or encumber all or any part of his shares shall first
offer such shares for sale to the Corporation, and thereafter to the
other Shareholders who are parties to this Agreement at the same price
and on the same terms offered by a bonafide prospective purchaser, or
transferee, as the case may be. Within thirty (30) days of receipt of a
written offer, the Corporation shall have the right to purchase the
entirety of the shares thus offered or any lesser portion thereof for a
price in proportion to the offering price based on the number of shares
it agrees to purchase. In the event that the Corporation does not
purchase the entirety of the shares thus offered, the other
Shareholders may purchase the shares not so accepted, and in such case
shall be ratable to the respective holdings of such other Shareholders,
but if any such Shareholder, entitled to purchase shares, fails to
accept the offer, either in whole or in part, the other Shareholders
may purchase the shares not so accepted. If such other Shareholders
fail to purchase the shares within ten (10) days after written notice
from the selling Shareholder that the Corporation has refused the offer
of shares, the restrictions upon such shares, imposed by this
paragraph, shall automatically terminate at the end of thirty (30) days
from the date of the notice.
2.2 REVERSION OF STOCK UPON TERMINATION OF EMPLOYMENT. Upon the termination
of employment with the Corporation of a Shareholder, all the shares
held by said Shareholder shall revert to the Corporation, automatically
and immediately, effective upon the date the employment terminates.
Within ninety (90) days of the effective date of termination of
employment, the Corporation shall tender to the terminated Shareholder
an amount equal to the product of the book value of the Corporation and
the percentage of stock held by the terminated Shareholder (calculated
based upon the then issued and outstanding stock of the Corporation),
as of the effective date of termination of employment.
2.3 OPTION TO PURCHASE STOCK ON DEATH OR TERMINATION OF EMPLOYMENT. Upon
the death of a Shareholder, or upon the termination of employment of a
Shareholder by the Corporation the remaining Shareholders shall have
the option to purchase all the shares of stock of the Corporation owned
by the deceased or terminating Shareholder, upon the following terms:
A. RIGHT TO PURCHASE. The right to purchase in such case shall be
ratable to the respective holdings of the remaining
Shareholders, but if any such Shareholder fails to exercise
his option, either in whole or in part, the other Shareholders
may purchase such shares. The option to purchase the shares of
the decedent shall be exercised by serving written notice on
the representative of the succession of the decedent or the
terminating employee ("Transferror") within fifteen (15) days
after the qualification of such representative or the
termination of employment. In the event the remaining
Shareholders fail to purchase all the stock of the deceased or
terminating Shareholder, the Corporation may elect to purchase
the remaining stock.
B. PURCHASE PRICE. The purchase price shall be determined
according to Section 2.4 of this Agreement.
C. CLOSING. The closing of such purchase and sale shall take
place at the offices of the Corporation, on a date selected by
the Corporation, upon five (5) days notice to the Transferror,
which date shall not be more than one hundred eighty (180)
days from the date of the qualification of the Transferror or
the termination of employment and not less than thirty (30)
days following such date.
D. PAYMENT OF PURCHASE PRICE. In the event of the death of a
Shareholder, if the Shareholder is subject to an insurance
"buy-out" arrangement with the Corporation, the rights to
purchase the decedent's stock shall be exercisable only by the
Corporation and the Purchase Price shall be paid in full
within thirty (30) days of receipt of the proceeds by the
Corporation. Otherwise, and in the event a Shareholder's
employment is terminated, the purchase price shall be payable
as follows:
i. Ten (10%) percent to be paid in cash; and
ii. Ninety (90%) percent to be represented by a
promissory note executed by the purchasing
Shareholders, or the Corporation, as the case may be,
payable in one hundred twenty (120) equal monthly
installments, such note to be secured by the stock
and payable with interest thereon at a rate which
shall be established at the time of closing, and
which shall equal the average of the real estate
mortgage rate of interest charged by three (3) banks
with offices in Xxxxxxxxx Xxxxx Parish selected by
the Board of Directors of the Corporation.
E. SECURITY. Whenever a Shareholder purchases shares of capital
stock under this Agreement, such purchaser, unless he shall
have paid the entire purchase price in cash, shall, following
the delivery of the purchased stock, pledge the stock to the
Seller with a reservation of dividend and voting rights in
favor of the purchasing Shareholder, and deliver the
certificates of stock issued to the purchasing Shareholder to
the Seller as security for the payment of the unpaid purchase
price; and such capital stock shall be so held until the
entire purchase price shall be paid. Upon full payment of the
purchase price, the stock shall be returned to the purchasing
Shareholder.
F. FAILURE TO EXERCISE OPTION. Upon the failure of the surviving
Shareholders and/or the Corporation to exercise the option to
purchase all the shares of stock of the Corporation owned by
the decedent within one hundred eighty (180) days of his
death, the restrictions imposed in this paragraph shall
terminate.
2.4 PURCHASE PRICE. The price for each share of capital stock to be sold
under paragraph 2 of this Agreement shall be as follows:
A. In the event of death, the product of the equity interest of
the Shareholder, as of
the date of death, and the amount specified in the latest
executed Certificate of Agreed Value.
B. In the event of a termination of employment the product of the
value of equity interest of the Shareholder and the value of
the Corporation as determined by the Corporation's public
accounting firm. For purposes of ascertaining the value of the
Corporation, the following shall be observed:
i. No allowance shall be made for good will;
ii. All accounts payable shall be taken at face amount,
less discounts deductible therefrom, unless in the
opinion of the Corporation's accountant, a reserve is
necessary;
iii. All furniture and fixtures and equipment are to be
computed at the depreciated value appearing on the
books of the Corporation;
iv. Inventory or supplies shall be computed at cost or
market value, whichever is lower;
v. All unpaid and accrued federal, state, city and
municipal taxes, including, but not limited to,
sales, payroll, unemployment insurance, excise,
franchise and income, shall be deducted as
liabilities. The Federal Income Surtax Exemption and
State Income Tax Exemption shall be prorated for the
fiscal year involved. If the Corporation is treated
as an "S" corporation on the valuation date, state
and federal taxes shall be accrued as if the
Corporation was not an "S" corporation;
vi. Death proceeds of insurance held by the Corporation,
if any, insuring the life of a deceased Shareholder
whose stock is being valued for purchase under this
Agreement, shall not be included in the valuation to
the extent such proceeds exceed the unpaid premiums
and cash value on the policy of the insured
Shareholder;
vii. The date of determination of the stock value
("Valuation Date") shall be the last day of the month
immediately preceding the making of the Transferror's
offer, or the termination of the Shareholder's
employment.
viii. Contractual obligations of the Corporation,
contingent or otherwise, under non-qualified
"Deferred Compensation Agreements", "Salary
Continuation Agreements", or other such agreements
shall be fully valued as a liability of the
Corporation without discount for interest or any
contingency, including the termination of employment
of any contracting employee, which might reduce or
terminate the Corporation's obligation under such
agreement, unless such a contingency as to a
contractual obligation occurred before or on the date
of valuation, in which event, the
resulting reduction or termination in value of the
Corporation's liability shall be considered;
C. The cost of determination of such purchase price shall be paid
by the Corporation;
2.5 ENDORSEMENT OF STOCK CERTIFICATE. All certificates for shares of the
Corporation shall be endorsed with a statement indicating that transfer
of the shares represented by the certificate are subject to
restrictions contained in this Shareholders' Agreement.
2.6 VALUE OF PURCHASE PRICE FOR TAX PURPOSES. It is understood that the
Purchase Price, determined as set forth hereinabove, shall be the value
of the purchased shares for all tax purposes. In the event such value
is later increased by any federal or state taxing authority, any tax
liability resulting from such increase shall be borne by the parties
equally.
2.7 DEADLOCK. If any Shareholder becomes dissatisfied with the other
Shareholders, the operation of the Corporation, or otherwise, the
dissatisfied Shareholder shall have the right to deliver to the other
Shareholders in identical form a written offer setting forth the price
and other terms at which the offering Shareholder both:
A. Irrevocably offers to sell all, but not less than all, his
interest in the Corporation to the other Shareholders, or
B. Irrevocably offers to buy all, but not less than all, the
other Shareholders' interest in the Corporation.
i. Within fifteen (15) days after the offering
Shareholder delivers said offer to the other
Shareholders, the other Shareholders must accept
either the offer to sell or the offer to buy by
delivery of a written acceptance of either the offer
to sell or the offer to buy. Should the decision of
the other Shareholders to buy or sell not be
unanimous, each Shareholder who dissents from the
majority decision shall have the right to join with
the offering Shareholder to sell his interest to, or
to buy the interests of, the remaining other
Shareholders, as the case may be. If the other
Shareholders fail to deliver said notice of
acceptance within such thirty (30) day period, the
offering Shareholder shall elect which offer has been
accepted and shall give notice of such election to
the other Shareholders within ten (10) days after
such thirty (30) day period.
ii. Any offer, acceptance or notice of election under
this Agreement shall be deemed to be duly delivered
when delivered in person or when mailed by certified
mail, postage prepaid, addressed to the appropriate
recipient thereof at his last known address as shown
on the books of the Corporation.
iii. If there shall be more than one Shareholder
purchasing pursuant to this section, each of such
purchasing Shareholders shall be entitled to purchase
such proportionate part of the Corporation's
interests, being sold pursuant to this, as the
percentage interest then owned by him bears to the
total percentage interest then owned by all of the
Shareholders who shall desire to purchase part of the
Corporation's interests being sold, or such greater
part of the Corporation's interests being sold as
shall be agreed upon by all the Shareholders who
shall desire to purchase part of the Corporation's
interests being sold pursuant thereto.
iv. The closing of any purchase and sale under this
section shall be held at the principal office of the
Corporation (or such other place as may be agreed
upon by the offering Shareholder and the other
Shareholders), within ninety (90) days after delivery
of the initial offer to the other Shareholders. At
the closing, the amount of the purchase price shall
be paid in cash, or otherwise as specified in the
initial offer, against delivery of all documents
necessary to transfer all of the selling
Shareholder(s)' interests.
2.8 INDEBTEDNESS OF A SHAREHOLDER. In the event that there is a purchase
and sale of shares of stock or interest therein, pursuant to the
provisions herein above, and there is any indebtedness owed by the
selling Shareholder or his estate to any party to this Agreement, then,
notwithstanding the said provisions relating to the payment of the
purchase price, any amount to be paid for the stock being purchased
shall be applied first to reduce and satisfy any indebtedness owed by
the selling Shareholder or his estate to any party under this
Agreement.
2.9 DEFAULT. In the event of a default in any payment as provided for in
Paragraph 2.3 herein above, the Seller shall deliver to the surviving
or remaining Shareholders that portion of the shares of the purchasing
Shareholder equal to the ratio that the amount paid bears to the total
purchase price, and shall retain the balance of such shares. The estate
or the Seller, whichever the case may be, shall retain the portion of
the purchase price received and shall have a claim against the
surviving or remaining Shareholders for the difference between the
value of the shares as of the date of purchase and the value thereof as
of the date of default. No other claim for damages shall be available
to the estate or the Seller.
III.
ISSUANCE OF ADDITIONAL STOCK
3.1 No additional capital stock of this Corporation shall hereafter be
authorized, and no additional authorized capital stock of this
Corporation shall hereafter be issued, without the unanimous consent of
all the Shareholders.
IV.
NON-COMPETITION
5.1 NON-COMPETITION. In consideration of the issuance of stock in the
Corporation and the mutual obligations assumed under this Agreement by
each Shareholder and by the Corporation, each Shareholder agrees that
except as may be specifically agreed to in writing by the Corporation,
for throughout the term of this Agreement and during a period of two
(2) years following its termination, he shall not carry on or engage or
participate in any business the same as or in competition with the
Corporation within Xxxxxxxxx Xxxxx Parish. The phrase "the business of
the Corporation" means provision of physical therapy, occupational
therapy and/or cardiac rehabilitation services. The phrase "carry on or
engage or participate in a business the same as or in competition with
the Corporation" shall include but not be limited to, the doing, by the
Shareholder, of any of the following listed acts:
A. carrying on or engaging in any such business as a principal,
or on his own account, or solely or jointly with others, or as
a director, officer, agent, employee, consultant or partner
(general or limited) or stockholder or holder of any
partnership interest (general or limited) or holder of any
equity interest or membership interest of any entity,
including a sole proprietorship, corporation, partnership,
limited partnership or limited liability company; or
B. as agent or principal carrying on or engaging in any
activities or negotiations with respect to the acquisition or
the disposition of any such business; or
C. giving advice to any other person, firm, association or
corporation engaging in any such business; or
D. lending or allowing his name or reputation to be used in any
such business; or
E. allowing his skill, knowledge, experience or reputation to be
used in any such business; or
F. calling upon any person or entity to which the Corporation has
heretofore provided, is currently providing or has heretofore
been negotiating for the provision of physical therapy,
occupational therapy or cardiac rehabilitation services, for
the purpose of soliciting, diverting, enticing away the
business of such person or entity, or otherwise disrupting the
previously established or future relationship between such
person and the Corporation; or
G. hiring, offering to hire, or employing, or entering into
business with, whether as a joint venture, partnership,
corporation or otherwise, or offering or agreeing to do any of
the foregoing with any employees of the Corporation within
Xxxxxxxxx Xxxxx Parish.
5.2 ENFORCEMENT. It is the desire and intent of the parties that the
provisions of this Article V shall be enforced to the fullest extent
permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, to the extent
that the covenant hereunder shall be adjudicated to be invalid or
unenforceable in any one such jurisdiction, this Article V shall be
deemed amended to delete therefrom or reform the portion thus
adjudicated to be invalid or unenforceable, such deletion or
reformation to apply only with respect to the operation of this Article
in the particular jurisdiction in which such adjudication is made.
Moreover, each provision of this Agreement is intended to be severable;
and in the event that any one or more of the provisions contained in
this Agreement shall for any reason be adjudicated to be invalid or
unenforceable in any jurisdiction, the same shall not affect the
validity and enforceability of any other provisions of this Agreement
in that jurisdiction, but this Agreement shall be construed in such
jurisdiction as if such invalid or unenforceable provision had never
been contained therein. The parties agree that upon the breach or
threatened breach of any covenant of this Agreement, the Corporation
would suffer irreparable harm for which it would have no adequate
remedy at law and would, therefore, be entitled to injunctive relief
against any such breach or threatened breach as well as whatever other
remedies may be available to it.
VI.
TERMINATION
6.1 TERMINATION OF AGREEMENT. This Agreement shall terminate upon the
occurrence of one of the following events:
A. The written agreement of the parties hereto or their permitted
successors in interest to that effect;
B. The bankruptcy, receivership, liquidation or dissolution of
the Corporation;
C. The disposal of all the shares of stock of any Shareholder
during his lifetime or by his succession representative or
estate upon his death, as to such retiring or deceased
Shareholder only, or
D. All of the issued and outstanding stock of the Corporation
becoming owned by a single Shareholder of the Corporation.
E. The Corporation or any of its officers, directors, or any
shareholder is:
(i) convicted of a felony relating to (i) federal or
state health care program fraud or abuse; or (ii) the
neglect or abuse of a patient; or
(ii) excluded or debarred from participation in the
Medicare or Medicaid programs.
VII.
OPERATIONS
7.1 LHC Group, LLC shall manage the operations of the Corporation pursuant
to a Management Services Agreement, and the Corporation should become
fully integrated with LHC Group's operations and collaborate with its
affiliates to maximize efficiency and profitability. Accordingly, the
Shareholders unanimously agree that the Corporation shall enter into a
Management Services Agreement with LHC Group, LLC conferring upon it
the authority and power to manage the day-to-day operations of the
Corporation and further providing it with the authority and powers
customarily conferred upon a Manager of a limited liability company.
7.2 The Shareholders unanimously agree that the Corporation should embark
on a path of growth to expand services into surrounding communities in
Southwest Louisiana including but not limited to Lake Arthur, Crowley,
and Lake Xxxxxxx, doing business in markets outside of Xxxx Xxxxx
Parish as Louisiana Physical Therapy, an affiliate of Louisiana Health
Care Group, LLC. In furtherance of this goal, the Shareholders agree
that LHC Group marketing personnel based in Jennings shall be allocated
to promote the Corporation's services in proportion to the
Corporation's Net Revenues compared to those of Xxxx Xxxxx Home Health,
and Louisiana Hospice and Palliative Care of Xxxxxxxx.
7.3 Unless otherwise agreed to by a two-thirds majority of the
Shareholders, the Shareholders agree that the Corporation shall
distribute to the Shareholders any Net Income in excess of the
foreseeable needs of the Corporation within 60 days of the end of each
calendar quarter.
7.4 The Corporation's books and records shall be kept on the accrual basis
of accounting.
VIII.
CONVERSION OPTION
8.1 In the event that LHC Group, LLC is sold, merged or otherwise acquired,
or if it undertakes an initial public offering (collectively referred
to herein as "Sale Event"), each shareholder of Xxxxxx & Xxxxxxxxxx
Physical Therapy, Inc. shall have the option to: (i) exchange its
holdings of stock in the Corporation to LHC Group, LLC Membership Units
at a value proportionate to the earnings of Corporation in relation to
all other LHC Group, LLC operations or (ii) to sell its holdings of
Stock in the Corporation to Louisiana Health Care Group, LLC at a price
determined as the product of: (i) the Shareholder's percentage holdings
of stock in the Corporation, and (ii) FIVE HUNDRED PERCENT (500%) of
the Company's Earnings Before Interest, Taxes, Depreciation and
Amortization (EBITDA) for the twelve calendar month period ending on
the last day of the last calendar month prior to the event giving rise
to the valuation. LHC Group, LLC shall give each Shareholder no less
than ten (10) days written notice of the pendency of a
Sale event, and the Shareholder shall have an additional ten (10) days
to exercise this Conversion Option.
8.2 In the event that the Shareholder elects to exercise the first
alternative option, LHC Group, LLC agrees to complete the conversion of
the Shareholder's stock to LHC Group Units and to issue the Units
within thirty (30) days of receipt of notice of the exercise. The
proportionate number of Units to be issued shall be calculated as the
percentage holding of stock of the Shareholder multiplied by the
product of (i) the total issued and outstanding Units of LHC Group, LLC
as of the date of the notice and (ii) a fraction, the numerator of
which is the Corporation's EBITDA and denominator of which is LHC
Group, LLC's EBITDA. As a conditions precedent to the issuance of the
Units by LHC Group, LLC, the Shareholder will: (i) execute a written
consent to the Sale Event; and (ii) execute a counterpart to the
Operating Agreement. The Units issued to the Shareholder shall be
subject to all terms, conditions and restrictions contained in the
Operating Agreement. The Shareholder shall be bound by the terms and
conditions of the Sale Event in respect to the Units issued to it by
LHC Group, LLC.
8.3 In the event that the Shareholder elects to exercise the second
alternative option, LHC Group, LLC agrees to pay the purchase price by
delivery of an unsecured, non-negotiable promissory note in the amount
of the purchase price, with LHC Group, LLC as maker, payable in twenty
equal quarterly installments, commencing ninety days after the
effective date of the transfer, with interest at the prime rate
published in the Wall Street Journal on the date of the transfer
without prepayment penalties. The note shall contain a subordination
clause subordinating the note to all other debts of LHC Group, LLC. At
its sole option and discretion, LHC Group, LLC may pay all or part of
the purchase price in cash at the time of the transfer.
8.4 This Conversion Option shall terminate upon the earlier to occur of:
A. The termination of this Agreement;
B. The disposal of all the shares of stock of any Shareholder
during his lifetime or by his succession representative or
estate upon his death, as to such retiring or deceased
Shareholder only; or
C. Upon the withdrawal of Louisiana Health Care Group, LLC as a
shareholder of the Corporation.
8.6 The parties acknowledge and agree that it is their intention for this
Conversion Option to operate only so long as the Sale Event actually
occurs and closes. In the event that the Sale Event does not occur as
scheduled, the exchange performed under the option shall automatically
and immediately be rescinded, without any requirement of notice by
either party, and Shareholder shall surrender any Units received and,
likewise shall have returned to him the stock tendered for conversion,
or the stock shall be returned and the purchase price shall be returned
or promissory note cancelled, as the case may be.
8.5 LHC Group, LLC, the sole Member and Manager of Louisiana Health Care
Group, LLC, intervenes in this Shareholders' Agreement to acknowledge
and agree to the terms of this Conversion Option and to ratify such
terms.
IX.
MISCELLANEOUS
9.1 SHAREHOLDERS' RIGHTS OF CONTRIBUTION. If for any reason, a Shareholder
sustains any liabilities or is required to pay any losses arising out
of, or directly connected with, the Corporation, or the execution of
any agreements or guarantees in connection with the Corporation's
operations, which are in excess of his, her or its proportionate
holdings of shares in the Corporation, the other Shareholders shall
promptly reimburse the affected Shareholder this excess, so that each
and every Shareholder of the Corporation will then have paid its
proportionate share of such losses to the full extent of its holdings
of shares in the Corporation.
9.2 GOVERNING LAW. This Agreement, and all transactions contemplated
hereby, shall be governed by, construed and enforced in accordance with
the laws of the State of Louisiana.
9.3 RECORDS AND ACCOUNTS. Each business enterprise of the Corporation shall
maintain its own records and books of accounts, separate and apart from
any other business enterprise of the Corporation.
9.4 AMENDMENTS; MODIFICATION. This Agreement may be amended, modified, or
altered only by execution of a written agreement authorized by
corporate resolution and signed by all the parties hereto.
9.5 NOTICES. Any and all notices, designations, consents, offers,
acceptances, or any other communication provided for herein, shall be
given in writing by United States certified mail addressed, in the case
of the Shareholders, to his address appearing in the records of the
Corporation, or to his residence, or to such other address as may be
designated by him, and, in the case of the Corporation, to the
principal office of the corporation, and shall be considered to have
been delivered on the 5th day following the date stamped by the post
office.
9.6 SEVERABILITY. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions
hereof and the Agreement shall be construed in all respects as if such
invalid or unenforceable provision had been omitted.
9.7 BINDING EFFECT. This Agreement shall bind and, unless inconsistent with
its provisions, shall inure to the benefit of the Executor,
Administrator or Succession Representative, and the heirs and permitted
assigns of each of the Shareholders.
9.8 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of
the parties with respect to the matters addressed herein. This
Agreement shall not be construed or interpreted as a contract of
employment. This Agreement supersedes any prior Agreement of the
parties.
THUS DONE AND SIGNED, in Jennings, Louisiana on the day and year first
above written.
WITNESSES "SHAREHOLDERS"
/s/ Xxxx Xxxxx /s/ Xxxxx X. Xxxxxx
------------------------------ --------------------------------
Xxxxx X. Xxxxxx
/s/ /s/ Xxxxxxxxxxx X. Xxxxxxxxxx
------------------------------ --------------------------------
Xxxxxxxxxxx X. Xxxxxxxxxx
"INTERVENOR"
LHC GROUP, LLC
BY: /s/ Xxxxx X. Xxxxx /s/ Xxxxx X. Xxxxxxx
--------------------------- -------------------------------
Xxxxx X. Xxxxx, Manager Xxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxx
-------------------------------
Xxxxx X. Xxxxx
"CORPORATION"
XXXXXXX AND XXXXXXXXXX LOUISIANA HEALTH CARE
PHYSICAL THERAPY, INC. GROUP, LLC
BY: LHC GROUP, LLC, Manager
BY: /s/ Xxxxxxxxxxx X. Xxxxxxxxxx BY: /s/ Xxxxx X. Xxxxx
------------------------------ ---------------------------
Xxxxxxxxxxx Xxxxxxxxxx, Secretary-Treasurer Xxxxx X. Xxxxx, Manager
/s/ X. X. XxxXxxxxx
-----------------------------
Notary
CERTIFICATE OF AGREED VALUE
WHEREAS, Louisiana Health Care Group, LLC, Xxxxx X. Xxxxxx, Xxxxxxxxxxx
X. Xxxxxxxxxx, Xxxxx X. Xxxxxxx and Xxxxx X. Xxxxx, (hereinafter referred to as
"Shareholders"), own all of the outstanding shares of Xxxxxx & Thibodeaux
Physical Therapy, Inc., a Louisiana corporation, (hereinafter referred to as
"Corporation"), and
WHEREAS, Shareholders and Corporation have executed an Agreement
containing certain restrictions and obligations on the shares of stock of said
Corporation,
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements contained in this Agreement, it is hereby agreed by the
undersigned as follows:
1. Value. Pursuant to Paragraphs 2.3 and 2.4 of said Agreement for the
purposes therein stated, for the current calendar year and continuing until a
new Certificate is executed by the parties hereto, the value of the shares of
said Corporation is hereby agreed to be_______________ DOLLARS ($_______) per
share.
THUS DONE AND SIGNED, on this the___day of____________, 200__, and
effective the_____day of_____________, 200__ in Jennings, Louisiana.
SHAREHOLDERS XXXXXX AND THIBODEAUX PHYSICAL THERAPY, INC.
"CORPORATION"
BY:
-------------------------- ---------------------------------------
Xxxxx X. Xxxxxx Xxxxxxxxxxx Xxxxxxxxxx, Sect-Treasurer
-------------------------- LOUISIANA HEALTH CARE GROUP, LLC
Xxxxxxxxxxx X. Xxxxxxxxxx Shareholder
BY: LHC GROUP, LLC, Manager
BY:
-------------------------- -------------------------------------
Xxxxx X. Xxxxxxx Xxxxx X. Xxxxx, Manager
--------------------------
Xxxxx X. Xxxxx
