Exhibit 10.1
AMENDMENT TO THE OPERATING AGREEMENT OF
ST. XXXXXX EXTENDED CARE HOSPITAL, L.L.C.
This Amendment to the Operating Agreement of St. Xxxxxx Extended Care
Hospital, LLC, (dated April 15, 2004 and hereinafter referred to as the
"Original Operating Agreement") shall be effective as of November 9, 2005
("Effective Date").
BACKGROUND
The Company's members desire to amend the Original Operating Agreement to
reflect that as a result of its merger with LHC Group, LLC, LHC Group, Inc. is
now serving as Manager of St. Xxxxxx Extended Care Hospital, LLC ("the
Company").
The Company's Members desire to amend the Original Operating Agreement's
calculation of the Company and Manager's Earnings Before Interest, Taxes,
Depreciation and Amortization valuation "EBITDA" as it relates to the conversion
options of the members.
Accordingly, the Company's Members hereby amend the Original Operating
Agreement as of the Effective Date as follows:
1. Amendment to Section 4.1(a). Section 4.1(a) of the Original Operating
Agreement is hereby amended to provide for LHC Group, Inc.'s status as manager
of the Company. Hereafter section 4.1(a) shall read as follows:
4.1 MANAGERS
(a) THE BUSINESS OF THE COMPANY SHALL BE MANAGED BY ONE OR MORE MANAGERS,
WHO MAY, BUT NEED NOT, BE MEMBERS, AND WHO SHALL BE A MANDATORY OF THE
COMPANY FOR ALL MATTERS IN THE ORDINARY COURSE OF BUSINESS. LHC GROUP,
INC. SHALL BE THE MANAGER OF THE COMPANY, AND APPEARS HEREIN TO ACCEPT
SAID APPOINTMENT. TO THE EXTENT AUTHORIZED BY THIS AGREEMENT, THE
MANAGER SHALL HAVE FULL, EXCLUSIVE AND COMPLETE DISCRETION, CONTROL,
POWER, AND AUTHORITY IN THE MANAGEMENT OF THE COMPANY'S AFFAIRS. THE
MANAGER SHALL HAVE FULL POWER AND AUTHORITY TO UNDERTAKE ANY ACTIVITY
DESCRIBED IN THIS ARTICLE AND TO EXECUTE AND DELIVER ON BEHALF OF THE
COMPANY SUCH DOCUMENTS OR INSTRUMENTS WHICH THE MANAGER DEEMS
APPROPRIATE IN THE CONDUCT OF THE COMPANY'S BUSINESS. NO PERSON, FIRM
OR CORPORATION DEALING WITH THE COMPANY SHALL BE REQUIRED TO INQUIRE
INTO THE AUTHORITY OF THE MANAGER TO TAKE ANY ACTION OR MAKE ANY
DECISION
2. Amendment to Section 6.15(b). Section 6.15(b) of the Original Operating
Agreement is hereby amended to provide for the calculation of the Company
and Manager's EBITDA valuation based upon the previous 12 month period
financial statements ending prior to the effective date of the exercise of
the conversion option. Hereafter section 6.15(b) shall read as follows:
Amendment Operating Agreement
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(b) IN THE EVENT THAT ANY MEMBER EXERCISES THE CONVERSION OPTION, THE
MEMBER SHALL HAVE THE RIGHT TO EXCHANGE THE UNITS IN THE COMPANY FOR
MANAGER UNITS IN ACCORDANCE WITH THE FOLLOWING FORMULA:
THE NUMBER OF UNITS OF MANAGER DUE EACH EXERCISING MEMBER SHALL
BE THE PRODUCT OF (I) THE EXERCISING MEMBER'S MEMBERSHIP INTEREST IN
THE COMPANY; (II) THE TOTAL ISSUED AND OUTSTANDING UNITS OF MANAGER AS
OF THE DATE OF THE NOTICE AND (III) A FRACTION, THE NUMERATOR OF WHICH
IS THE COMPANY'S EBITDA AND DENOMINATOR OF WHICH IS MANAGER'S EBITDA.
THE EXERCISING MEMBER'S MEMBERSHIP INTEREST IN THE COMPANY SHALL BE DETERMINED
IN ACCORDANCE WITH SECTION 5.1(B). THE COMPANY'S AND MANAGER'S EBITDA SHALL BE
DETERMINED AS THE EARNINGS BEFORE INTEREST, TAXES AND DEPRECIATION FROM THE
COMPANY'S FINANCIAL STATEMENTS AND MANAGER'S CONSOLIDATED FINANCIAL STATEMENTS
FOR THE TWELVE (12) MONTH PERIOD ENDING ON THE LAST DAY OF THE CALENDAR MONTH
PRIOR TO THE EFFECTIVE DATE OF THE EXERCISE OF THE CONVERSION OPTION.
FOR THE PURPOSES OF ILLUSTRATION, THE FOLLOWING EXAMPLE OF HOW THE NUMBER OF
UNITS TO BE CONVERTED WILL BE CALCULATED IS PROVIDED:
EBITDA ISSUED MEMBER'S CONVERTED
12 MONTHS PROPORTION UNITS HOLDINGS UNITS
COMPANY $ 1,285,000 = 0.0767 X 8,350,000 X 0.1% = 640.5 UNITS
----------- -----------
MANAGER $ 16,751,000
THE PARTIES UNDERSTAND THAT THE FOREGOING EXAMPLE IS FOR PURPOSES OF
ILLUSTRATION ONLY AND IS NOT INDICATIVE OF CURRENT OR FUTURE OPERATIONS OR
PERFORMANCE OF THE COMPANY.
3. Conforming Amendment to Section 6.16(b). Section 6.16(b) of the Original
Operating Agreement is hereby amended to change the reference to the fiscal year
end EBITDA in the illustrative example to read "12 months" in conformance with
the amended formula in Section 6.15 (b). Hereafter section 6.16(b) shall read as
follows:
"(b) IN THE EVENT THAT ANY MEMBER EXERCISES THE REDEMPTION OPTION, THE
MEMBER SHALL HAVE THE RIGHT TO SELL HIS HOLDINGS OF UNITS IN THE
COMPANY TO MANAGER IN ACCORDANCE WITH THE FOLLOWING FORMULA:
THE SALES PRICE DUE EACH EXERCISING MEMBER SHALL BE THE PRODUCT OF
(I) THE EXERCISING MEMBER'S POTENTIAL HOLDINGS OF UNITS IN THE MANAGER
CALCULATED AS IF THE CONVERSION OPTION SET FORTH IN SECTION 6.15 HAD
BEEN EXERCISED; AND (II) THE AVERAGE CLOSING PRICE OF MANAGER'S UNITS
OR SHARES FOR THE 30 DAYS PRECEDING THE DATE OF THE MEMBER'S EXERCISE
OF THE REDEMPTION OPTION.
FOR THE PURPOSES OF ILLUSTRATION, THE FOLLOWING EXAMPLE OF HOW THE NUMBER
OF UNITS TO
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BE CONVERTED WILL BE CALCULATED IS PROVIDED:
EBITDA ISSUED MEMBER'S CONVERTED
12 MONTHS PROPORTION UNITS HOLDINGS UNITS
COMPANY $ 1,285,000 = 0.0767 X 8,350,000 X 0.1% = 640.5 UNITS
----------- -----------
MANAGER $ 16,751,000
CONVERSION 30 DAY AVE. PROCEEDS
OPTION UNITS CLOSING PRICE
640.5 X $28.50 = $18,254
-------
THE PARTIES UNDERSTAND THAT THE FOREGOING EXAMPLE IS FOR PURPOSES OF
ILLUSTRATION ONLY AND IS NOT INDICATIVE OF CURRENT OR FUTURE OPERATIONS OR
PERFORMANCE OF THE COMPANY."
4. By executing a copy of this Amendment, each of the members consents to the
entry of LHC Group, Inc. as Manager of the Company, as well as to the
revision of the EBITDA valuation as it related to the conversion options of
the members, and each waives any right that he/she/it may have had under
the Original Operating Agreement.
(Signatures on the Following Pages)
Amendment Operating Agreement
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IN WITNESS WHEREOF, in multiple originals, the undersigned have executed
this Amendment effective as of the Effective Date of this Amendment.
MEMBERS:
LOUISIANA HEALTH CARE GROUP, LLC
By: LHC Group, Inc, Manager
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Xxxxx X. Xxxxx, President
MANAGER:
LHC GROUP, INC
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Xxxxx X. Xxxxx, President
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IN WITNESS WHEREOF, in multiple originals, the undersigned have executed
this Amendment effective as of the Effective Date of this Amendment.
/s/ Xxxxx Xxx
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XXXXX XXX
Amendment Operating Agreement
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IN WITNESS WHEREOF, in multiple originals, the undersigned have executed
this Amendment effective as of the Effective Date of this Amendment.
/s/ Xxxx X. Xxxxxx
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XXXX X. XXXXXX
Amendment Operating Agreement
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IN WITNESS WHEREOF, in multiple originals, the undersigned have executed
this Amendment effective as of the Effective Date of this Amendment.
/s/ Xxxxxx Xxxxxxxx
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XXXXXX XXXXXXXX
Amendment Operating Agreement
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IN WITNESS WHEREOF, in multiple originals, the undersigned have executed
this Amendment effective as of the Effective Date of this Amendment.
/s/ Xxxxxxx Xxxxxxx
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XXXXXXX XXXXXXX
Amendment Operating Agreement
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November 4, 2005
IN WITNESS WHEREOF, in multiple originals, the undersigned have executed
this Amendment effective as of the Effective Date of this Amendment.
/s/ Xxxx Xxxxxxxx
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XXXX XXXXXXXX
Amendment Operating Agreement
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IN WITNESS WHEREOF, in multiple originals, the undersigned have executed
this Amendment effective as of the Effective Date of this Amendment.
/s/ Xx Xxxxxxxxx
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XX XXXXXXXXX
Amendment Operating Agreement
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November 4, 2005
IN WITNESS WHEREOF, in multiple originals, the undersigned have executed
this Amendment effective as of the Effective Date of this Amendment.
/s/ Xxxxxx Xxxxx
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XXXXXX XXXXX
Amendment Operating Agreement
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IN WITNESS WHEREOF, in multiple originals, the undersigned have executed
this Amendment effective as of the Effective Date of this Amendment.
/s/ Xxxxxxx Xxxxxx
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XXXXXXX XXXXXX
Amendment Operating Agreement
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November 4, 2005
IN WITNESS WHEREOF, in multiple originals, the undersigned have executed
this Amendment effective as of the Effective Date of this Amendment.
/s/ Xxxx Xxxxxxxxx
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XXXX XXXXXXXXX
Amendment Operating Agreement
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IN WITNESS WHEREOF, in multiple originals, the undersigned have executed
this Amendment effective as of the Effective Date of this Amendment.
/s/ Xxxxx Xxxxxx
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XXXXX XXXXXX
Amendment Operating Agreement
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November 4, 2005
IN WITNESS WHEREOF, in multiple originals, the undersigned have executed
this Amendment effective as of the Effective Date of this Amendment.
/s/ Xxxxxx Xxxxx
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XXXXXX XXXXX
Amendment Operating Agreement
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IN WITNESS WHEREOF, in multiple originals, the undersigned have executed
this Amendment effective as of the Effective Date of this Amendment.
/s/ Xxxxx Xxxxxxxx
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XXXXX XXXXXXXX
Amendment Operating Agreement
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IN WITNESS WHEREOF, in multiple originals, the undersigned have executed
this Amendment effective as of the Effective Date of this Amendment.
/s/ Xxxxx Xxxxxxxxxx
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XXXXX XXXXXXXXXX
Amendment Operating Agreement
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IN WITNESS WHEREOF, in multiple originals, the undersigned have executed
this Amendment effective as of the Effective Date of this Amendment.
/s/ Xxxxxxx Xxxxxx
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XXXXXXX XXXXXX
Amendment Operating Agreement
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