Document:

EX-10.1

 Exhibit 10.1 

REGIONAL MANAGEMENT CORP. 
 2015
LONG-TERM INCENTIVE PLAN 
 (As Amended and Restated) 

PERFORMANCE RESTRICTED STOCK UNIT AWARD AGREEMENT 

THIS PERFORMANCE RESTRICTED STOCK UNIT AWARD AGREEMENT (together with any Schedules attached hereto, the “Agreement”)
is made effective as of the date set forth on the signature page hereto (hereinafter called the “Date of Grant”), between Regional Management Corp., a Delaware corporation (hereinafter called the “Company”), and the
individual set forth on the signature page hereto (hereinafter called the “Participant”), pursuant to the Regional Management Corp. 2015 Long-Term Incentive Plan (as amended and restated) (the “Plan”), which Plan is
incorporated herein by reference and made a part of this Agreement. 
  

	1.	 Grant of Award. 

(a)        The Company hereby grants to the Participant an Award (the
“Award”) of Restricted Stock Units in the form of Performance Restricted Stock Units (“Performance Restricted Stock Units” or “PRSUs”), which Award represents a contingent right to acquire shares of
Common Stock (the “Shares”). Each PRSU is equivalent to one share of Common Stock for purposes of determining the number of shares of Common Stock subject to the Award. 

(b)        For the purposes herein, the Shares subject to the Award are units that will be
reflected in a book account maintained by the Company and that will be settled in shares of Common Stock if and only to the extent permitted under the Plan and this Agreement. Prior to issuance of any shares of Common Stock, the Award shall
represent an unsecured obligation of the Company, payable (if at all) only from the Company’s general assets. The Award is subject to the terms and conditions of the Plan and this Agreement, including the provisions set forth on the signature
page hereto and Schedule A, which is attached hereto and expressly made a part of this Agreement. 
  

	2.	 Definitions. 

In addition to other terms defined in the Agreement, whenever the following terms are used in this Agreement, they shall have the
meanings set forth below. Capitalized terms not otherwise defined herein shall have the same meanings as in the Plan. 

(a)    Cause. “Cause” shall mean a Participant’s termination of employment or service
resulting from the Participant’s (i) termination for “Cause” as defined under the Participant’s employment, change in control, consulting, or other similar agreement with the Company or an Affiliate, if any, or (ii) if
the Participant has not entered into any such agreement (or, if any such agreement does not define “Cause”), then “Cause” shall mean: (A) the Participant’s engagement in misconduct which is materially injurious to the
Company or its Affiliates, (B) the Participant’s continued refusal to substantially perform his or her duties to the Company, (C) the Participant’s repeated dishonesty in the performance of his or her duties to the Company,
(D) the Participant’s commission of an act or acts constituting any (x) fraud against, or misappropriation or embezzlement from, the Company or any of its Affiliates, (y) crime involving moral turpitude, or (z) offense that
could result in a jail sentence of at least one year, or (E) the Participant’s material breach of any confidentiality, non-solicitation, or non-competition
covenant entered into between the Participant and the Company. The determination of “Cause” shall be made by the 

 
Administrator and its determination shall be final and conclusive. Without in any way limiting the effect of the foregoing, for purposes of the Plan and this Agreement, a Participant’s
employment or service shall also be deemed to have terminated for Cause if, after the Participant’s employment or service has terminated, facts and circumstances are discovered that would have justified, in the opinion of the Administrator, a
termination for Cause. 
 (b)        Good Reason. “Good Reason” shall mean
(i) “Good Reason” as defined under the Participant’s employment, change in control, consulting, or other similar agreement with the Company or an Affiliate, if any, or (ii) if the Participant has not entered into any agreement
(or, if any such agreement does not define “Good Reason”), then a “Good Reason” shall mean any of the following without the Participant’s consent: a change caused by the Company in the Participant’s duties and
responsibilities which is materially inconsistent with the Participant’s position at the Company, or a material reduction in the Participant’s annual base salary (excluding any reduction in the Participant’s salary that is part of a
plan to reduce salaries of comparably situated employees of the Company generally); provided that, in any case, notwithstanding anything to the contrary in the foregoing subparts (i) or (ii), the Participant shall only have “Good
Reason” to terminate employment or service following the applicable entity’s failure to remedy the act which is alleged to constitute “Good Reason” within thirty (30) days following such entity’s receipt of written
notice from the Participant specifying such act, so long as such notice is provided within sixty (60) days after such event has first occurred. The determination of “Good Reason” shall be made by the Administrator and its
determination shall be final and conclusive. 
 (c)        Qualifying Termination.
“Qualifying Termination” shall mean the termination of employment or service (i) as a result of the Participant’s death, Disability, or Retirement, (ii) by the Company and its Affiliates without Cause, or (iii) by the
Participant with Good Reason. 
 (d)        Retirement. “Retirement” shall
have the meaning given in an employment, change in control, consulting, or other similar agreement, if any, to which the Participant is a party, or, if there is no such agreement (or if such agreement does not define “Retirement”), then
“Retirement” shall mean the termination of employment or service by the Participant on or after (i) the Participant’s attainment of age 65, or (ii) the Participant’s attainment of age 55 and completion of ten
(10) years of service. For this purpose, the Participant shall be credited with a year of service for each consecutive twelve-month period he or she is employed or in service during his or her period of employment or service with the
Company. Employment or service shall not be deemed to be terminated or interrupted by a leave of absence, sick leave or vacation granted to the Participant by the Company. The Administrator shall have authority to determine if a Retirement has
occurred. 
  

	3.	 Vesting; Forfeiture. 

(a)        The actual number of Shares, if any, that may be earned and vested during the
Performance Period, as set forth on the signature page hereto (the “Performance Period”), will be determined by the Administrator following the end of the Performance Period based on attainment of the performance goals, as set forth
on the signature page hereto and as provided in Schedule A (the “Performance Goals”); provided, however, that, except as otherwise provided in this Section 3, the Award shall not vest, in whole or in part, and the Participant
shall not be entitled to any Shares, unless the Participant remains employed or in service from the Date of Grant until the Vesting Date (as defined on the signature page hereto). The Administrator has authority to determine whether and to what
degree the Award shall be deemed earned and vested. 

  
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 (b)        If the Participant’s
employment or service with the Company is terminated during the Performance Period for any reason other than a Qualifying Termination (including but not limited to a termination for Cause), the Award shall immediately terminate and the Participant
shall have no rights with respect to the Award or the Shares underlying the Award. 

(c)        Notwithstanding Sections 3(a) and (b) herein, if the Participant’s
employment or service with the Company is terminated during the Performance Period due to a Qualifying Termination, then a pro-rata portion of the Award, determined as of the date of the Qualifying Termination
in accordance with the provisions of this Agreement, shall be eligible to be earned and vested based on attainment of the Performance Goals during the Performance Period as specified in this Agreement and Schedule A as if the Participant’s
employment or service had not terminated. 
 (d)        Notwithstanding Sections 3(a) and
(b) herein, in the event a Change of Control occurs during the Performance Period, the Award shall be deemed earned and vested as follows: 

(i)        To the extent that the successor or surviving company in the Change
of Control event does not assume or substitute for the Award (or in which the Company is the ultimate parent corporation and does not continue the Award) on substantially similar terms or with substantially equivalent economic benefits (as
determined by the Administrator) as Awards outstanding under the Plan immediately prior to the Change of Control event, the Award shall be deemed earned and vested to the extent of the attainment of the Performance Goals set forth on Schedule A,
calculated and determined as of (or as close in time as practicable to) the effective date of the Change of Control. 

(ii)        Further, in the event that the Award is substituted, assumed or
continued as provided in Section 3(d)(i) herein, the Award will be deemed earned to the extent of the attainment of the Performance Goals set forth on Schedule A, calculated and determined as of (or as close in time as practicable to) the
effective date of the Change of Control, and will convert to a time-based RSU which will vest, subject to continued employment or service, on the last day of the Performance Period; provided that, if the Participant’s employment or service is
terminated by the Company or an Affiliate without Cause or by the Participant with Good Reason within (A) six months before or (B) one year after the effective date of a Change of Control, then the Award, to the extent earned based on the
foregoing provisions of Section 3(d)(ii), shall be deemed vested as of the date of the Change of Control in the event subpart (A) herein applies or as of the date of the Participant’s termination of employment or service in the event
subpart (B) herein applies. 
  

	4.	 Settlement of Award; Delivery of Shares. 

(a)        No certificate or certificates for Shares shall be issued at the time of grant of
the Award. A certificate or certificates for the Shares underlying the Award (or, in the case of uncertificated Shares, other written evidence of ownership in accordance with Applicable Law) shall be issued in the name of the Participant (or his or
her beneficiary) only in the event, and to the extent, that the Award has vested and been earned in accordance with the provisions of this Agreement, including Schedule A. Any Shares or other benefits payable pursuant to the Award shall (except as
otherwise provided in this Section 4(a) in the event of a Change of Control), upon vesting and earning of the Award, be distributed to the Participant (or his or her beneficiary) no earlier than the date of the first anniversary of the Vesting
Date, but in any event within 70 days following the first anniversary of the Vesting Date (such date of distribution, the “Settlement Date”); provided that, if the Participant’s employment is terminated due to

  
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Cause prior to the Settlement Date (for clarity, including but not limited to termination during the period between the Vesting Date and the Settlement Date), then the Award shall be forfeited in
its entirety and the Participant shall have no rights with respect to the Award or any Shares or other benefits underlying the Award. Notwithstanding the foregoing, the Settlement Date shall be determined as follows in the event of a Change of
Control: (a) any distributions as a result of a Change of Control as provided in Section 3(d)(i) or as provided in Section 3(d)(ii) due to a termination of employment not for Cause by the Company or an Affiliate or by the Participant
for Good Reason within six months before the Change of Control shall be paid within 70 days following the date of the Change of Control; (b) any distributions under Section 3(d)(ii) due to the termination of employment or service by the
Company or an Affiliate not for Cause or by the Participant for Good Reason within one year following a Change of Control shall be paid within 70 days following the Participant’s Termination Date; and (c) any distributions as a result of a
Change of Control as provided in Section 3(d)(ii) other than due to a termination of employment by the Company or an Affiliate not for Cause or by the Participant for Good Reason (that is, a distribution as a result of continued employment or
service until the end of the Performance Period) shall be paid within 70 days following the end of the Performance Period. If the 70-day period described in this Section 4(a) begins in one calendar year
and ends in another, the Participant (or his or her beneficiary) shall not have the right to designate the calendar year of the payment (except as otherwise provided below with respect to a delay in payments if the Participant is a “specified
employee”). Further, if calculation of the amount of the payment is not administratively practicable due to events beyond the control of the Participant (or his or her beneficiary), the payment will be treated as made within the applicable 70-day time period specified herein if the payment is made during the first taxable year of the Participant in which the calculation of the amount of the payment is administratively practicable or otherwise in
accordance with Code Section 409A. Notwithstanding the foregoing, if the Participant is or may be a “specified employee” (as defined under Code Section 409A), and the distribution is considered deferred compensation under Code
Section 409A, then such distribution if made due to separation from service shall be subject to delay as provided in Section 20 of the Plan (or any successor provision thereto). 

(b)        Except as otherwise provided in this Section 4(b), the Participant shall not
be deemed to be the holder of any Shares subject to the Award and shall not have any dividend rights, voting rights or other rights as a stockholder unless and until (and only to the extent that) the Award has vested and been earned and certificates
for such Shares have been issued to him or her (or, in the case of uncertificated shares, other written evidence of ownership in accordance with Applicable Law shall have been provided). As of any date that the Company pays an ordinary cash dividend
on its common stock, the Company shall credit to the Participant’s book account a dollar amount equal to (i) the per share cash dividend paid by the Company on its common stock on such date, multiplied by (ii) that number of Shares
equal to the number of Target PRSUs (“Target PRSUs”) set forth on the signature page hereto (a “Dividend Equivalent Right”). Any Dividend Equivalent Rights credited pursuant to the foregoing provisions of this
Section 4(b) shall be subject to the same vesting, earning, Performance Goals, payment, and other terms, conditions and restrictions as the Shares subject to the Award (and, for clarification, shall not be paid unless and until the
corresponding portion of the Shares subject to the Award have been earned, vested and settled); provided, however, that the amount of any Dividend Equivalent Rights that become earned, vested and entitled to settlement pursuant to the terms of this
Agreement and Schedule A shall be paid in cash. 
 (c)        Notwithstanding any other
provision of the Plan or this Agreement to the contrary, no Shares shall be distributable upon vesting of the Award prior to the completion of any registration or qualification of the Award or the Shares under any Applicable Law (including, but not
limited to, the requirements of the Securities Act) that the Administrator shall in its sole discretion determine to be necessary or advisable. 

  
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 (d)        The Company shall not be liable
to the Participant for damages relating to any delays in issuing the certificates to him or her (subject to any Code Section 409A requirements), any loss of the certificates, or any mistakes or errors in the issuance of the certificates or in
the certificates themselves. Notwithstanding the foregoing, the issuance of Shares may, in the Company’s discretion, be effected on a non-certificated basis, to the extent permitted under the Plan. 

(e)        The Award, if vested in accordance with the terms of this Agreement, shall be
payable in whole Shares. The total number of Shares that may be acquired upon vesting of the Award (or portion thereof) shall be rounded down to the nearest whole share. 
  

	5.	 No Right to Continued Employment or Service; No Right to Further Awards. 

Neither the Plan nor this Agreement nor any other action related to the Plan shall confer upon the Participant any right to continue
in the employ or service of the Company or interfere in any way with the right of the Company or an Affiliate to terminate the Participant’s employment or service at any time. Except as otherwise provided in the Plan or this Agreement, all
rights of the Participant with respect to the unvested portion of the Award shall terminate on the Participant’s Termination Date. The grant of the Award does not create any obligation to grant further awards. 

 

	6.	 Legend on Certificates. 

The Shares acquired upon vesting of the Award shall be subject to the rules, regulations and other requirements of the Securities and
Exchange Commission, any stock exchange upon which such Shares are listed and any other Applicable Law, and the Administrator may cause a legend or legends to be put on any certificates for such Shares to make appropriate reference to such
restrictions. 
  

	7.	 Transferability. 

The Award may not be assigned, alienated, pledged, attached, sold, or otherwise transferred or encumbered by the Participant otherwise
than by will or by the laws of descent and distribution, and any such purported assignment, alienation, pledge, attachment, sale, transfer, or encumbrance shall be void and unenforceable against the Company or any Affiliate; provided that the
designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer, or encumbrance. No such permitted transfer of the Award to heirs or legatees of the Participant shall be effective to bind the Company
unless the Administrator shall have been furnished with written notice thereof and a copy of such evidence as the Administrator may deem necessary to establish the validity of the transfer and the acceptance by the transferee or transferees of the
terms and conditions hereof. 
  

	8.	 Withholding; Tax Consequences. 

(a)        Prior to the delivery of a certificate or certificates for the Shares subject to
the Award (or other written evidence of ownership), the Participant may be required to pay to the Company or any Affiliate in cash the amount of any tax or other amount required by any governmental authority to be withheld and paid over by the
Company or an Affiliate to such authority for the account of the Participant. Notwithstanding the foregoing, the Company shall have the right and is hereby authorized to withhold (including from payroll or any other amounts payable to the
Participant), any applicable withholding taxes in respect of the Award, its vesting, or any payment or transfer under or with respect to the Award and to take such other action as may be necessary in the opinion of the Administrator to satisfy all
obligations for the payment of such withholding taxes. Without limiting the generality of the foregoing, to the extent 

  
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permitted by the Administrator, the Participant may satisfy, in whole or in part, the foregoing withholding liability by delivery of shares of Common Stock held by the Participant (which are
fully vested and not subject to any pledge or other security interest) or by having the Company withhold from the number of Shares otherwise deliverable to the Participant hereunder Shares with a Fair Market Value as of the date that the amount of
tax to be withheld is determined no greater than the aggregate amount of such withholding obligations based on the maximum statutory withholding rate in the Participant’s applicable jurisdiction for federal, state, local, and foreign income and
payroll tax purposes. The Participant further agrees to make adequate provision for any sums required to satisfy all applicable federal, state, local, and foreign tax withholding obligations of the Company which may arise in connection with the
Award. 
 (b)        The Participant acknowledges that the Company has made no warranties or
representations to the Participant with respect to the tax consequences (including but not limited to income tax consequences) with respect to the transactions contemplated by this Agreement, and the Participant is in no manner relying on the
Company or its representatives for an assessment of such tax consequences. The Participant acknowledges that there may be adverse tax consequences upon the grant or vesting of the Award and/or the acquisition or disposition of the Shares subject to
the Award and that he or she has been advised that he or she should consult with his or her own attorney, accountant, and/or tax advisor regarding the decision to enter into this Agreement and the consequences thereof. The Participant also
acknowledges that the Company has no responsibility to take or refrain from taking any actions in order to achieve a certain tax result for the Participant. 
  

	9.	 Compliance with Applicable Law. 

Upon the acquisition of any Shares pursuant to the vesting of the Award, the Participant will make or enter into such written
representations, warranties, and agreements as the Administrator may reasonably request in order to comply with Applicable Law or with the Plan or this Agreement. Notwithstanding any other provision in the Plan or this Agreement to the contrary, the
Company shall not be obligated to issue, deliver or transfer Shares, to make any other distribution of benefits, or to take any other action, unless such delivery, distribution, or action is in compliance with Applicable Law (including but not
limited to the requirements of the Securities Act). 
  

	10.	 Notices. 

Any notice necessary under this Agreement shall be addressed to the Company in care of its Secretary at the principal executive office
of the Company and to the Participant at the address appearing in the personnel or business records of the Company for the Participant or to either party at such other address as either party hereto may hereafter designate in writing to the other.
Any such notice shall be deemed effective upon receipt thereof by the addressee. 
  

	11.	 Governing Law. 

This Agreement shall be governed by and construed in accordance with the laws of the state of Delaware without regard to conflicts of
laws, and in accordance with applicable federal laws of the United States. Any and all disputes between the Participant or any person claiming through him or her and the Company or any Affiliate relating to the Plan or this Agreement shall be
brought only in the state courts of Greenville, South Carolina, or the United States District Court for the District of South Carolina, Greenville division, as appropriate. 

  
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	12.	 Award Subject to Plan. 

By entering into this Agreement, the Participant agrees and acknowledges that the Participant has received and read a copy of the Plan
and Plan prospectus. The Participant acknowledges and agrees that the Award is subject to the Plan. The terms and provisions of the Plan, as they may be amended from time to time, are hereby incorporated herein by reference. In the event of a
conflict between any express term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail, unless the Administrator determines otherwise. 

 

	13.	 Signature in Counterparts. 

This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. 
  

	14.	 Amendment; Waiver; Superseding Effect. 

This Agreement may be modified or amended as provided in the Plan. The waiver by the Company of a breach of any provision of this
Agreement by the Participant shall not operate or be construed as a waiver of any subsequent breach by the Participant. The Agreement supersedes any statements, representations, or agreements of the Company with respect to the grant of the Award or
any related rights, and the Participant hereby waives any rights or claims related to any such statements, representations, or agreements. 
  

	15.	 Recoupment and Forfeiture. 

As a condition to receiving the Award, the Participant agrees that he or she shall abide by the Company’s Compensation Recoupment
Policy and Stock Ownership and Retention Policy (including but not limited to such policy’s stock retention requirements) and/or other policies adopted by the Company or an Affiliate, each as in effect from time to time and to the extent
applicable to the Participant. Further, the Participant shall be subject to such compensation recovery, recoupment, forfeiture, or other similar provisions as may apply under Applicable Law. 

 

	16.	 Administration. 

The authority to construe and interpret this Agreement and the Plan, and to administer all aspects of the Plan, shall be vested in the
Administrator, and the Administrator shall have all powers with respect to this Agreement as are provided in the Plan, including but not limited to the sole authority to determine whether and to what degree the Award is earned and vested. Any
interpretation of this Agreement by the Administrator and any decision made by it with respect to this Agreement is final and binding. 
  

	17.	 Severability. 

The provisions of this Agreement are severable and if any one or more provisions shall be held illegal or invalid for any reason, such
illegality or invalidity shall not affect the remaining parts of this Agreement, and the Agreement shall be construed and enforced as if the illegal or invalid provision had not been included. 

  
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	18.	 Right of Offset. 

Notwithstanding any other provision of the Plan or this Agreement, the Company may at any time (subject to any Code Section 409A
considerations) reduce the amount of any payment or benefit otherwise payable to or on behalf of the Participant by the amount of any obligation of the Participant to the Company or an Affiliate that is or becomes due and payable, and by entering
into this Agreement, the Participant shall be deemed to have consented to such reduction. 
  

	19.	 Electronic Delivery and Acceptance. 

The Company may, in its sole discretion, elect to deliver the Agreement, the Plan, the Plan prospectus, Company annual reports,
stockholder communications, and any other documents related to current or future participation in the Plan by electronic means. By entering into this Agreement, the Participant hereby consents to receive such documents by electronic delivery and
agrees to participate in the Plan through an online or electronic system established and maintained by the Company or a third party designated by the Company. The Participant’s online or electronic acceptance of the Agreement constitutes the
Participant’s agreement to the Agreement’s terms and the Participant’s acknowledgement that he or she has received the documents described above. 

[Signature Page to Follow] 

  
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 SIGNATURE PAGE TO 

PERFORMANCE RESTRICTED STOCK UNIT AWARD AGREEMENT 

IN WITNESS WHEREOF, the parties have caused this Agreement to be effective as of the Date of Grant specified below. 

 

			
	Date of Grant:	  	[                    ]
		
	Performance Period:	  	[                    ]
		
	Vesting Date:	  	[                    ]
		
	Number of Target PRSUs:	  	 The target number of PRSUs for the Performance Period for the Participant is set forth beneath the Participant’s signature to
this Agreement (the “Target PRSUs”). Notwithstanding the foregoing, in the event that the Participant’s employment or service with the Company is terminated due to a Qualifying Termination, then a
pro-rata portion of the Target PRSUs may be earned and vested in accordance with this Agreement. The pro-rata portion that may be earned and vested shall be determined
by multiplying the total number of the Target PRSUs by a fraction, the numerator of which is the number of calendar days from the first day of the Performance Period through the date of the Qualifying Termination, and the denominator of which is the
total number of calendar days in the Performance Period. Following a Qualifying Termination, the use of the term “Target PRSUs” shall mean the pro-rata portion of the Target PRSUs as determined
pursuant to the immediately preceding sentence.

		
	Performance Goals:	  	 [                    ],
as described in Schedule A

		
	Target PRSUs Earned:	  	 The actual number of Shares, if any, subject to the Award that may be earned shall be determined based on the attainment of the
Performance Goals specified in Schedule A, as determined by the Administrator following the end of the Performance Period; provided, however, that, except as provided in the Plan or the Agreement (for instance, with respect to a Qualifying
Termination), no Shares shall vest and be issuable to the Participant unless the Participant is continuously employed by or in service with the Company from the Date of Grant until the Vesting Date and the provisions of Schedule A are met. The
Participant is eligible to earn from 0% to [        ]% of the Target PRSUs based on attainment of the
[                    ] for the Performance Period as determined in accordance with Schedule A to the
Agreement.

  
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 SIGNATURE PAGE TO 

PERFORMANCE RESTRICTED STOCK UNIT AWARD AGREEMENT 
  

					
		  	 One share of the Company’s stock will be issued for each PRSU that is earned and vested in accordance with this
Agreement, including Schedule A.

		
		  	Participant:
		
		  	  

		  	Printed Name: [                    ]
		
		  	Target PRSUs: [                    ]
		
		  	Regional Management Corp.
			
		  	By:	 	  

		  	Name:
		  	Its:

  
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 Schedule A 

REGIONAL MANAGEMENT CORP. 
 2015
LONG-TERM INCENTIVE PLAN 
 (As Amended and Restated) 

PERFORMANCE RESTRICTED STOCK UNIT AWARD AGREEMENT 

Schedule A sets forth the performance goals (the “Performance Goals”) and certain other terms and conditions for
the performance-based and service-based Performance Restricted Stock Unit Award (the “Award”) under the Regional Management Corp. 2015 Long-Term Incentive Plan (as amended and restated) (the “Plan”), evidenced by
the Performance Restricted Stock Unit Award Agreement (the “Agreement”) to which Schedule A is attached. Capitalized terms not expressly defined in this Schedule A but defined in the Plan or the Agreement shall have the same
definitions as in the Plan and/or the Agreement, as applicable. 
  

	 	1.	 Vesting Terms of Target PRSUs: 

(a)        Subject to the terms of the Agreement and the Plan, the number of PRSUs that are
eligible to be earned shall be based on the [                    ] for the Performance Period (set forth on the Signature Page above) as
described in Section 1 herein; provided that (except as otherwise provided in the Agreement or the Plan) the Participant is employed by or in service with the Company on the Vesting Date and has been continuously employed or in service since
the Date of Grant. Specifically, if the [                    ] during the Performance Period is: 

(i)    Below [        ] (the “Threshold
Value”), then the applicable payout percentage (the “Applicable Payout Percentage”) shall equal 0.0%; 

(ii)    Equal to [        ] (that is, the Threshold
Value), then the Applicable Payout Percentage shall equal [        ]%; 

(iii)    Equal to [        ] (the “Target
Value”), then the Applicable Payout Percentage shall equal 100% (i.e., yielding Shares equal to the Target PRSUs); 

(iv)    Equal to or greater than [        ] (the
“Maximum Value”), then the Applicable Payout Percentage shall equal [        ]%; 

(v)    Equal to an amount greater than the Threshold Value and less than the Target Value, then
the Applicable Payout Percentage shall be determined on the basis of straight-line interpolation between [        ]% and 100%; or 

(vi)    Equal to an amount greater than the Target Value and less than the Maximum Value, then the
Applicable Payout Percentage shall be determined on the basis of straight-line interpolation between 100% and [        ]%. 

(b)        For clarity, no PRSUs shall be earned pursuant to the Award if the
[                    ] is less than [        ], and the maximum number of PRSUs earned pursuant
to this Award Agreement shall be [        ]% of the Target PRSUs. 

  
 A-1 

 (c)        [In addition to the foregoing
[                    ] requirements, the PRSUs (including any Dividend Equivalents related to the Award) shall not vest or be earned in whole
or in part, without regard to the [                    ] performance, unless the Administrator determines that the
[                    ] for the Performance Period is at least
[                    ].] 

(d)        As soon as practicable after the end of the Performance Period, the Administrator
shall certify the level of achievement of [                    ] for the Performance Period and determine the extent to which the PRSUs have
been earned, based on the number of Target PRSUs multiplied by the Applicable Payout Percentage. No Award shall be payable until the Administrator determines the extent, if any, to which the Performance Goals were met. The Company’s calculation
of [                    ] [and
                    ] for the Performance Period shall be conclusive and binding. 

An illustration of the above mechanism for determining the Applicable Payout Percentage at various
[                    ] values achieved during the Performance Period is as follows. The following is an illustration only and is not intended
to, and does not constitute, any representation regarding future Company performance or the extent, if any, to which the PRSUs may become vested and earned. 
  

							
	[                    
]	  	[           
         ]	  	[           
         ]	  	Applicable Payout
Percentage
	
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	 	2.	 Definitions: 

  
 A-2ex_333317.htm

 

 

Exhibit 10.21

 

PURCHASE AND SALE AGREEMENT 

 

This Purchase and Sale Agreement (this “Agreement”) is dated June 11, 2021 and is entered into by and between NHC/OP, L.P. (“NHC”) and Norman C. McRae (“McRae”) and McRae Investment Company, LLC, a Tennessee limited liability company (“McRae Investment”)(McRae and McRae Investment sometimes collectively referred to as the “Sellers”). NHC and Sellers may be referred to together as the “Parties” or the “Partners” or separately as a “Party” or a “Partner.”

 

RECITALS

 

	A.	
			Caris Healthcare, LP is a Tennessee Limited Partnership (“Caris”) that operates hospice agencies in multiple states (the “Business”).

			
	 	
			 

			
	B.	
			As of entry into this Agreement, Caris is owned as follows:

			
	 	
			 

			
	 	
			NHC - 74.6% (Limited Partnership Interest)

			
	 	
			McRae - 17.4% (Limited Partnership Interest) (“McRae LP Interest”)

			
	 	
			McRae Investment - 7.0% (Limited Partnership Interest) (“McRae Investment LP Interest”)

			
	 	
			National Hospice, Inc. - 1% (General Partnership Interest)

			
	 	
			 

			
	 	
			The Partnership Interest of a Party is its “Partnership Interest”.

			
	 	
			 

			
	C.	
			Caris is the fee simple owner of the real property located at 10651 Coward Mill Rd, Knoxville, TN 37931 and 2140 East Andrew Johnson Highway, Greeneville, TN 37745 (the “Real Property”). Caris also owns certain personal property and equipment used to conduct the Business (the “Personal Property”).

			
	 	
			 

			
	D.	
			National Hospice, Inc. (“NH”) is a Tennessee corporation owned 50% by Seller and 50% by NHC. NH owns 1% of Caris and serves as its sole general partner.

			
	 	
			 

			
	E.	
			McRae Investment is owned by McRae, his wife and trusts established by them for their family.

			
	 	
			 

			
	F.	
			The Parties have come to an agreement whereby Sellers will sell and NHC will purchase Sellers’ entire equity interest in Caris which consists of: (i) McRae’s17.4% limited partnership interest in Caris (the “McRae LP Interest”), (ii) McRae Investment’s 7.0% limited partnership interest in Caris (the “McRae Investment LP Interest”), and (iii) McRae’s 50% stock ownership interest in NH (the “Stock”).

			

        

1

 

 

AGREEMENTS

 

In consideration of the mutual promises herein contained, and for the payment of the Purchase Price and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:

 

	 	
			1.

				
			Summary of Transaction.  As set out in the Recitals, NHC, and Sellers currently own 100% of the limited partnership interests in Caris, and NHC and McRae currently own 100% of the issued and outstanding stock of NH, which is the sole general partner of Caris. Pursuant to the terms of this Agreement, NHC will purchase from Sellers the McRae LP Interest and the McRae Investment LP Interest, along with the Stock from McRae (the “Transaction”). Upon closing of the Transaction, NHC will own one hundred percent (100%) of the limited partnership interests in Caris and 100% of the issued and outstanding shares of NH. Sellers will take all steps necessary to ensure NHC has 100% ownership in Caris and NH at Closing.

			

 

	 	
			2.

				
			Purchase and Sale. Upon and subject to the terms and conditions of this Agreement, at the Closing, (a) McRae shall sell, assign, transfer, convey, and deliver to NHC, and NHC shall purchase and acquire from McRae, all of McRae’s McRae LP Interest in Caris and McRae’s Stock in NH and (b) McRae Investment shall sell, assign, transfer, convey and deliver to NHC, and NHC shall purchase and acquire from McRae Investment all of McRae Investment’s McRae Investment LP Interest in Caris, for the aggregate purchase price of Thirty-Eight Million Nine Hundred Forty-Five Thousand Three Hundred Eighty-Six and No/100 Dollars ($38,945,386.00) (the “Purchase Price”). The Purchase Price will be paid in cash at Closing subject to the Escrow Fund as set forth in Section 8 hereinbelow. The Purchase Price will be paid to Sellers and will be allocated as reflected on Exhibit A attached and incorporated herein by this reference, and the Parties agree to use such allocation in their respective tax filings and for the future tax filings of Caris and NH.

			

 

	 	
			3.

				
			Due Diligence.  NHC shall have a due diligence period beginning April 27, 2021 (the date upon which the LOI for the Transaction was agreed to and accepted by the Parties) and continuing through June 10, 2021 (the “Due Diligence Period”). During the Due Diligence Period, NHC shall have the opportunity to satisfy itself as to any and all aspects of the Transaction, including, but not limited to, reviewing the books, financial documents, operating contracts, leases, and tax returns of Caris and NH, as well as applicable licensure information, laws and regulations. Sellers shall cooperate to cause Caris and NH to make all such due diligence materials available to NHC that are not otherwise already available to NHC. NHC shall have access to Caris employees for purposes of interviews and/or to obtain relevant information and/or documents. NHC shall be permitted during the Due Diligence Period to satisfy itself as to all regulatory and compliance matters related to the Transaction, including, without limitation, the transfer of any licensure and/or governmental permits or other notices required for or as a result of the Transaction. NHC shall have access at reasonable times to the Caris Real Property for inspection and survey. NHC shall be permitted to terminate this Agreement upon written notice for any reason during the Due Diligence Period. These rights of NHC are in addition to the rights it possesses to inspect and have information of all aspects of Caris, NH and the Business by virtue of currently being a Partner in Caris, a shareholder in NH, and having its representatives serve on the board of directors of NH.

			

 

2

 

 

	 	
			4.

				
			Balance Sheet Distribution.   At Closing, in addition to his portion of the Purchase Price, McRae will also receive (a) a balance sheet cash distribution of 17.4% of the Caris book balance of cash as of 11:59 p.m. the day prior to Closing; (b) 50% of the NH book balance of cash as of 11:59 p.m. the day prior to Closing; and (b) 71.3% of an additional $1,298, 263.00 of cash from the Caris balance sheet in exchange for his interest in any other assets (non-cash) on the balance sheet at the time of Closing. At the Closing, in addition to its portion of the Purchase Price, McRae Investment will also receive (a) a balance sheet cash distribution of 7.0% of the Caris book balance of cash as of 11:59 p.m. the day prior to Closing; and (b) 28.7% of an additional $1,298,263.00 of cash from the Caris balance sheet in exchange for its interest in any other assets (non-cash) on the balance sheet at the time of Closing.

			

 

	 	
			5.

				
			Representations and Warranties. Sellers, shall, jointly and severally, and hereby do represent and warrant to NHC, as follows, all of which, except the representations in Section 5a, the first sentence of Section 5b, , and Section 5m which survive for the longest period permitted by the applicable statute of limitations, shall survive for a period of twenty-four (24) months after the date of Closing and are material to this Agreement:

			

 

	 	
			a.

				
			McRae is the sole legal and beneficial owner and holder of the McRae LP Interest and the Stock free and clear of any and all liens, other than those liens and transfer restrictions set forth in the entity documents for Caris and NH. McRae Investment is the sole legal and beneficial owner and holder of the McRae Investment LP Interest free and clear of any and all liens, other than those liens and transfer restrictions set forth in the entity documents for Caris. At Closing, NHC will receive good and valid title to the McRae LP Interest, the McRae Investment LP Interest and the Stock free and clear of any liens. Except for the McRae LP Interest, the McRae Investment LP Interest and the Stock, neither Seller has, and immediately following Closing will not have any statutory or contractual pre-emptive rights, co-sale rights, rights to first refusal or similar rights to acquire any partnership interest in Caris or stock of NH. Sellers represent that neither McRae nor McRae Investment has assigned any of the McRae LP Interest, the McRae Investment LP Interest or the Stock, directly or indirectly, in whole or in part, to any party

			

	 	
			b.

				
			Each Seller has the power and authority to enter into this Agreement and to convey title to the McRae LP Interest, the McRae Investment LP Interest and Stock, as applicable, without the consent of any other person or entity other than the Partners of Caris and/or shareholders of NH, as the case may be. The execution, delivery and performance of this Agreement and each other agreement to which each Seller will be a party does not to his or its actual knowledge (a) violate or conflict with the charter, bylaws or any shareholder agreement of NH or the certificate of limited partnership or limited partnership agreement of Caris, or (b) conflict with, result in breach of any of the provisions of, constitute a default (or any event which would with the passage of time or the giving of notice or both, constitute a default) under, result in a violation, termination, amendment, suspension, modification, abandonment or acceleration of payment (or right to terminate) or require a consent under any material contract or material permit or license that is binding upon or enforceable against Sellers.

			

 

3

 

 

	 	
			c.

				
			To Sellers’ actual knowledge without investigation, Caris and NH are both properly organized and in good standing in their respective states of organization and all states in which they operate or conduct Business.

			

	 	
			d.

				
			To Sellers’ actual knowledge without investigation, any subsidiary of Caris is wholly owned by Caris and Caris owns all of the outstanding ownership interests of any such subsidiaries.

			

	 	
			e.

				
			To Sellers’ actual knowledge without investigation, all tax returns required to be filed by Caris, NH and any of their subsidiaries have been duly filed, and, based solely on financial statements provided to Sellers and NHC officers from the Caris staff and the Caris accountants, Caris, NH and/or their subsidiaries, as the case may be, have paid or adequately provided for any and all taxes shown by such returns to be due and payable.

			

	 	
			f.

				
			To Sellers’ actual knowledge without investigation and based solely on and qualified to not include any matters of non-compliance identified on any quarterly “corporate compliance plan and results” report provided to Sellers and NHC officers from Caris staff (the “Compliance Reports”), there are no suits, governmental proceedings, audits, investigations, formal or informal inquiries, or litigations pending or, threatened against Caris, NH, any subsidiary, or against or involving the Real Property or the Business, other than a “threat to sue” letter dated August 17, 2020, for the Greeneville location reflected in due diligence materials reviewed by NHC.

			

	 	
			g.

				
			To Sellers’ actual knowledge without investigation, the building and all improvements on the Real Property, including, without limitation, HVAC, roof, parking areas, windows, doors and means of ingress/egress are in a good and workman like condition, reasonable wear and tear excepted. To Sellers’ actual knowledge without investigation, the Real Property is properly zoned for its use and is in compliance with all federal, state, and local laws and regulations.

			

	 	
			h.

				
			Sellers have not received any notice of condemnation and has no actual knowledge of any pending or impending condemnation proceedings that may affect the Real Property.

			

	 	
			i.

				
			(1) Neither Sellers nor, to Sellers’ actual knowledge without investigation, Caris has received any written notices of (i) any material claims against the Real Property, (ii) any violation of any laws, ordinances or other governmental regulations applicable to the Real Property, including, without limitation, any local zoning regulations or subdivision regulations; and (2) to Sellers’ actual knowledge without investigation, to the extent that any improvements have been made to the Real Property or any work performed with respect to the Real Property, all lienors in connection with said improvements or work have been or will be paid in full when due.

			

 

4

 

 

	 	
			j.

				
			To Sellers’ actual knowledge without investigation, with respect to the Real Property, there are no known violations of any restrictive covenant, nor are there any active cases involving boundary disputes with adjoining property owners or property line encroachments.

			

	 	
			k.

				
			To Sellers’ actual knowledge without investigation and based solely on and qualified to not include any matters of non-compliance identified on any of the Compliance Reports, (i) Caris is in compliance with all rules, laws and regulations relating to the use, treatment, storage and disposal of toxic substances and protection of health or the environment (“Environmental Laws”) which are applicable to its Business and the Real Property; (ii) Caris has received no notice from any governmental authority or third party of an asserted claim under Environmental Laws; (iii) Caris will not be required to make future material capital expenditures to comply with Environmental Laws; and (iv) no portion of the Real Property which is owned, leased or occupied by Caris has been designated as a Superfund site pursuant to the Comprehensive Response, Compensation, and Liability Act of 1980, as amended or is subject to a “Brownsfield” type agreement, or otherwise designated as a contaminated site under applicable state or local law.

			

	 	
			l.

				
			To Sellers’ actual knowledge without investigation, Caris and/or its subsidiaries are properly licensed to conduct its Business in any and all states in which they operate, and to Sellers’ actual knowledge without investigation and based solely on and qualified not to include any matters of non-compliance identified on any of the Compliance Reports, Caris and/or its subsidiaries are compliant with all applicable laws, rules, and regulations related to the operation of its Business.

			

	 	
			m.

				
			Sellers represent that they are solvent and have made adequate provision for payment of their debts to the extent same could materially impact this Transaction.

			

	 	
			n.

				
			Based solely on matters disclosed in the Compliance Reports, Sellers have no actual knowledge of any current, pending, or potential Government Claims or Loss (as such term is defined in Section 8 hereinbelow) against Caris or NH, but has made no investigation to verify same.

			

	 	
			o.

				
			To Sellers’ actual knowledge without investigation and based solely on and qualified to not include any matters of non-compliance identified on any of the Compliance Reports, Caris is not in any material breach or violation of any lease agreement or payor agreement to which it is a party.

			

 

5

 

 

	 	
			p.

				
			To Sellers’ actual knowledge without investigation and based solely on and qualified to not include any matters of non-compliance identified on any of the Compliance Reports, Caris and its Business are being operated compliant with all applicable health care laws and regulations in all material respects. To Sellers’ actual knowledge without investigation and based solely on and qualified to not include any matters of non-compliance identified on any of the Compliance Reports, Caris and its Business is and has been in compliance and in good standing in all material respects with all federal health care programs, health maintenance organizations, preferred provider organizations, health benefit plans, health insurance plans and other third party reimbursement and payment programs in which Caris is a participating provider and all state health care programs (collectively “Payment Programs”). To Sellers’ actual knowledge and without investigation and based solely on and qualified to not include any matters of non-compliance identified on any of the Compliance Reports, there are no pending or threatened terminations, cancellations, suspensions, amendments, changes or modifications to the participation by Caris in any Payment Program

			

	 	
			q.

				
			To the actual knowledge of Sellers without investigation and based solely on and qualified to not include any matters of non-compliance identified on any of the Compliance Reports, Caris is not in violation or breach of any contract or agreement to which it is a party in any material respect.

			

	 	
			r.

				
			To the actual knowledge of Sellers without investigation and based solely on financial statements provided to Seller and NHC officers from the Caris staff and the Caris accountants, Caris does not have any liabilities or obligations of any nature whatsoever, due or to become due, accrued, absolute, contingent or otherwise, except for liabilities and obligations reflected or reserved against in Caris’ audited December 31, 2021 balance sheet or the April 30, 2021 unaudited balance sheet and for current liabilities incurred in Caris’ ordinary course of business since April 30, 2021.

			

	 	
			s.

				
			There are no contracts, transactions, indebtedness, payable, receivable, or other arrangement between Caris, NH, on the one hand, and either of the Sellers or any of either Sellers’ affiliates, on the other hand, in each case other than bona fide employment arrangements.

			

 

	 	
			6.

				
			Contingencies. The Closing is contingent upon (a) satisfactory completion of all due diligence and expiration of the Due Diligence Period, unless sooner waived by NHC; and (b) evidence and opinions satisfactory to NHC that the Transaction will meet and not violate any and all applicable federal and/or state laws and will meet all regulatory healthcare and other compliance requirements, and (c) delivery by NHC and Sellers of the deliverables set forth below.

			

 

	 	
			7.

				
			Closing. The consummation of the transaction contemplated by this Agreement (the “Closing”) will occur on or before June 11, 2021.

			

 

	 	a.	At the Closing, Sellers must deliver the following to NHC:
	 	 	 
	 	 	i.	An executed assignment(s) from Sellers of their respective LP Interest , and any and all of their interest in the Business and Personal Property to NHC (the “Partnership Assignments”), in forms substantially as shown on collective Exhibit “B.”

 

6

 

 

	 	 	ii.	An executed lost stock certificate affidavit (as needed), assignment, stock power and/or properly endorsed stock certificate(s) from McRae for McRae’s Stock ownership interest in NH in a form substantially as shown on Exhibit “C.”
	 	 	iii.	An executed non-compete and non-solicitation agreement on a form substantially as shown on Exhibit “D” executed by Sellers.
	 	 	iv.	An executed Release from each of the Sellers on a form substantially as shown on Exhibit “E.”
	 	 	v.	An executed certificate of the Sellers, dated as of the Closing Date, certifying that the representations and warranties of Sellers set forth in Section 5 above are true and correct in all material respects as of the Closing Date (or if such representations and warranties expressly relate to a specific date, such representations and warranties shall be true and correct as of such date).
	 	 	vi.	A resolution and approval from each of Caris NH, and McRae Investment authorizing entry into this Agreement and the Transactions contemplated by this Agreement, executed by Sellers.
	 	 	vii.	An executed resignation letter from McRae resigning from any employment and/or office or directorship of Caris and NH and evidencing an immediate termination of all compensation and benefits, except as may otherwise be specified in this Agreement.
	 	 	viii.	An executed settlement statement or funds flow statement.
	 	 	ix.	Any other document reasonably requested by NHC consistent with the terms hereof.
	 	 	 	 
	 	b.	At the Closing, NHC must deliver to Sellers:
	 	 	 	 
	 	 	i.	The Partnership Assignments from Sellers executed by NHC.
	 	 	ii.	The non-compete and non-solicitation agreements referred to in Section 7(a)(iii) above executed by NHC.
	 	 	iii.	The Release referenced to in Section 7 (a)(iv) above executed by NHC.
	 	 	iv.	The resolution and approval from each of Caris and NH referred to in Section 7(a)(vi) above executed by NHC and officers of NHC.
	 	 	v.	The Purchase Price and all other amounts required to be paid by NHC in immediately-available funds in lawful money of the United States of America.
	 	 	vi.	An executed settlement statement or funds flow statement.
	 	 	vii.	Any other document reasonably requested by Sellers consistent with the terms hereof.
	 	 	 	 
	 	c.	The parties agree to coordinate the Closing through document exchange without the need to meet in a single location. Except as otherwise specified by Section 12(d) hereinbelow, all costs, expenses and attorney fees associated with this Agreement and the Closing shall be paid by the party that incurred the said cost, attorney’s fees and/or expense.

 

7

 

 

	 	
			8.

				
			Escrow Fund.   

			

 

	a.	
			 

				
			At the Closing, Three Million Dollars ($3,000,000.00) of the Purchase Price (the “Escrow Fund”) will be deposited with Pinnacle Bank, with offices in Knoxville, Tennessee, as escrow agent under a separate escrow agreement to be attached as Exhibit “E” to this Agreement. $2,139,000.00 of the Escrow Fund is McRae’s pro rata portion of the Escrow Fund, and $861,000.00 of the Escrow Fund is McRae Investment’s pro rata portion of the Escrow Fund. The Sellers shall have the right to determine the investment strategy of the Escrow Fund; provided, however, it must be commercially reasonable and comply with the “prudent person” standard. The Escrow Fund shall be available for a period of twenty-four (24) months following Closing (the “Escrow Fund Term”) to compensate NHC for Sellers’ 24.9% portion of (i) any government stimulus money received by Caris because of the COVID-19 pandemic that is recouped, subject to recoupment, or claimed by the government (a “Government Claim”); and/or (ii) any and all losses (whether or not involving a third-party claim) not fully covered by insurance that are paid, incurred, sustained or accrued by NHC or Caris as a result of (a) any breach or violation of, or inaccuracy in, any representation or warranty in this Agreement, or a breach of this Agreement by Sellers, in any material respect, and/or (b) Sellers’ 24.9% portion of any liability of Caris unknown to the Parties at Closing or actually known by Sellers at Closing but undisclosed to NHC (any claim under (ii)(a) or (b) is a “Loss”).

			

 

	b.	
			 

				
			In the event NHC becomes aware of a Government Claim or Loss during the Escrow Fund Term, a sufficient amount of the Escrow Fund to resolve the Government Claim or Loss (up to the total in the Escrow Fund) shall be held in the Escrow Fund until the Government Claim or Loss is resolved (an “Escrow Hold”). NHC will give the Sellers, reasonably prompt notice of any Government Claim or alleged Loss, at which time Sellers may investigate the Government Claim and/or alleged Loss and, as appropriate, participate in any defense (defense costs of Sellers shall be paid from the Escrow Fund). NHC may not make any claim against the Escrow Fund unless and until the aggregate Losses or Government Claim paid, incurred, sustained and/or accrued (anticipated or to be paid, incurred, sustained, or accrued) exceeds Two Hundred Thousand Dollars ($200,000.00).

			

 

	c.	
			 

				
			Any funds in the Escrow Fund not subject to an Escrow Hold will be distributed 71.3% to McRae and 28.7% to McRae Investment, one-third (1/3) of the then available balance on the day twelve (12) months after Closing; one-half (1/2) of the then available balance in said percentages to McRae and to McRae Investment on the day eighteen (18) months after Closing; and any remaining funds shall be distributed in said percentages to McRae and to McRae Investment on the day twenty-four (24) months after Closing. Any funds in the Escrow Fund subject to an Escrow Hold will be so held until the subject of the hold is paid or resolved. Any funds then remaining in the Escrow Fund shall be, at that time, released in said percentages to McRae and to McRae Investment.

			

 

8

 

 

	 	
			9.

				
			Non-Competition and Non-Solicitation Agreement. Each Seller will enter (i) a non-compete agreement preventing Sellers from competing with Caris or NHC for a period of three (3) years following Closing; and (ii) a non-solicitation agreement prohibiting solicitation of Caris employees or its patients/customers/providers for a period of three (3) years following Closing in the form substantially as shown on Exhibit “D,” which may be extended for two (2) additional one (1) year terms. A reasonable portion of the Purchase Price agreed to by Sellers and NHC may be allocated to these agreements at NHC’s election.

			

 

	 	
			10.

				
			Broker Fees. No Party has used or engaged a broker. As such, each Party represents and warrants to the other that no brokerage fees are owed to any broker, and each shall indemnify and hold the other Party harmless from and against same.

			

 

	 	
			11.

				
			Indemnification. 

			

 

a. Subject to the conditions and provisions of this Section 11, Sellers hereby, jointly and severally, agree to indemnify, defend, and hold harmless NHC, its affiliates, directors, officers, managers, shareholders, employees, subsidiaries, parent companies, successors and assigns, from and against and in respect of all claims asserted against, resulting to, imposed upon, or incurred by, NHC or Caris after Closing (whether such claims are by, against, or related to NHC, Caris, NH, Sellers, or any other person, including, without limitation, a governmental entity), directly or indirectly, by reason of or resulting from any breach of any representation or warranty in this Agreement in any material respect, noncompliance with conditions or other agreements given or made by Sellers in this Agreement or in any document furnished by Sellers pursuant to this Agreement, or any act of fraud or intentional, willful or grossly negligent misconduct of Sellers; provided, however, that with respect to the representations and warranties in Section 5 and elsewhere in this Agreement, such indemnity shall be limited to recovery by NHC from the Escrow Fund during the Escrow Fund Term so long as it is available in accordance with the terms of Section 8 above, but no further or otherwise, and further provided that the representations and warranties in Section 5a, the first sentence of Section 5b and Section 5m shall not be limited.

 

b. Subject to the conditions and provisions of this Section 11, NHC hereby agrees to indemnify, defend, and hold harmless Sellers and their affiliates, heirs, personal representatives, successors and assigns, from and against and in respect of all claims asserted against, resulting to, imposed upon, or incurred by Sellers after Closing (whether such claims are by, against, or related to NHC, Caris, NH, Sellers or any other person, including, without limitation, a governmental entity), directly or indirectly, by reason of or resulting from any noncompliance with conditions or other agreements given or made by NHC in this Agreement or in any document furnished by NHC pursuant to this Agreement, any act of fraud or intentional, willful or grossly negligent misconduct of NHC, or the operations and Business of Caris and NH after Closing.

 

9

 

 

	 	
			12.

				
			Arbitration. Except for a claim to enforce an arbitration award, or for injunctive relief, all disputes, claims, or controversies arising from or relating to this Agreement or the relationships resulting from this Agreement, whether now or hereafter arising, and whether sounding in tort, contract, or otherwise, shall be resolved by binding arbitration under the Commercial Arbitration Rules and mediation procedures of the American Health Law Association (“AHLA”). The arbitration may be initiated by any party by filing a claim for arbitration with the AHLA or comparable association should AHLA be unwilling or unable to participate in the Arbitration. Any arbitration shall be conducted in Knoxville, Tennessee. The decision in writing of the arbitrator shall be final and binding on the parties and shall include reasons supporting the award. The arbitrator shall have the power to award any relief that could be awarded by a court of competent jurisdiction. The award rendered by the arbitrator shall be final and binding and may be entered by any court of competent jurisdiction. The rules of arbitration shall be the most recent version of the Commercial Arbitration Rules of the AHLA. The law of the State of Tennessee shall control. The arbitrator shall identify the prevailing and the non-prevailing party and the non-prevailing party shall be responsible for the prevailing party’s reasonable expenses and attorney fees associated with the arbitration. All documents, briefs, and filings shall, to the fullest extent possible under law, be kept confidential, except as otherwise required by law or in an enforcement proceeding in a court of competent jurisdiction.

			

 

	 	
			13.

				
			Miscellaneous.

			

 

	 	a.	
			COBRA Payments. NHC or Caris shall reimburse McRae in an amount equal to COBRA health insurance payments actually incurred by Seller for a period up to eighteen (18) months following Closing. To the extent McRae incurs such COBRA expense, McRae shall submit same as incurred, which will then be reimbursed to McRae within thirty (30) days.

			
	 	 	
			 

			
	 	b.	
			Further Assurances. Sellers and NHC hereby agree to execute such further instruments or take such further action as may reasonably be required to effectuate the transactions contemplated by this Agreement. The obligations in this paragraph shall survive Closing.

			
	 	 	
			 

			
	 	c.	
			Counterparts. This Agreement may be executed in one or more counterparts and, notwithstanding that all of the parties did not execute the same counterpart, each of such counterparts shall, for all purposes, be deemed to be an original, and all of such counterparts shall constitute one and the same instrument binding on all of the parties hereto. It shall not be necessary that all parties sign the same counterpart. The parties intend that any facsimile or electronic copy of a signature to this Agreement will have the effect of an original and it is not necessary to confirm facsimile execution or electronic mail delivery by delivery of the original that was transmitted by facsimile or electronic mail.

			
	 	 	
			 

			
	 	d.	
			Expenses. Except as otherwise expressly provided in this Agreement, each of the Parties shall bear its own fees, costs, and expenses (including legal, accounting, consulting, and investment advisory fees and expenses) incurred in connection with this Agreement and the other documents executed in connection with this Agreement (collectively, the “Transaction Documents”), and the transactions contemplated hereby and thereby. Notwithstanding the foregoing, if NHC terminates this Agreement during the Due Diligence Period for any reason other than a misrepresentation of material fact under this Agreement as to a matter not otherwise known to NHC, then NHC will reimburse and pay to Seller Seller’s reasonable attorney fees associated with the LOI and this Agreement in an amount not to exceed Seven Thousand Five Hundred Dollars ($7,500.00).

			

 

10

 

 

	 	e.	
			Assignment. Neither this Agreement nor any rights, obligations, liabilities, covenants, duties or responsibilities hereunder, may be assigned by any party, in whole or in part, without the prior written consent of the other parties, which consent may be withheld for any reason, except that NHC may assign its rights to an affiliate of NHC without Sellers’ approval. Any assignment in violation of the foregoing shall be deemed automatically void. No assignment by a party of this Agreement shall relieve such party of any of its obligations, liabilities, covenants, duties, or responsibilities hereunder.

			
	 	 	
			 

			
	 	f.	
			Preparation of Agreement. The Partners and their respective counsel, if so chosen, participated in the preparation of this Agreement. In the event of any ambiguity in this Agreement, no presumption shall arise based on the identity of the draftsman of this Agreement.

			
	 	 	
			 

			
	 	g.	
			Notices. All notices and communications which are required or may be given to a party hereunder shall be in writing and shall be deemed to have been duly given upon the earliest of: (i) if sent by U.S. certified mail, postage prepaid, return receipt requested, three (3) days after being deposited in the United States mail, addressed as requested by the terms of this Agreement, (ii) if personally delivered, then the date of such personal delivery, and (iii) if by Federal Express overnight delivery (or other reputable overnight delivery service), the date of delivery shown on the notice of delivery:

			

     

If to NHC:

 

NHC/OP, L.P.

100 E. Vine St.

Murfreesboro, TN 37130

Attention: Steve Flatt

Email: sflatt@nhccare.com

 

with a copy (which shall not constitute notice or constructive notice) to:

 

National Healthcare Corporation

100 E. Vine Street

Murfreesboro, TN 37130

Josh A. McCreary, General Counsel

Email: josh.mccreary@nhccare.com

 

11

 

 

If to Sellers:

 

Mr. Norman C. McRae

1924 Oakleigh Way

Knoxville, TN 37919

nmcrae1962@comcast.net

Email: mccrae1228@comcast.net

 

with a copy (which shall not constitute notice or constructive notice) to:

 

Mr. David W. Long

Long, Ragsdale & Waters, P.C.

1111 N. Northshore Dr., Suite S-700

Knoxville, TN 37919

Email: dlong@lrwlaw.com

 

The parties may change the addresses and email addresses to which such communications are to be addressed by giving written notice to the other parties in the manner provided in this subsection.

 

	 	g.	
			Entire Agreement. This Agreement and the other Transaction Documents collectively constitute the entire agreement between the parties pertaining to the subject matter hereof and thereof and, except as may be otherwise provided in this Agreement, supersede all prior agreements, understandings, negotiations and discussions, whether written or oral, of the parties pertaining to the subject matter hereof or thereof. There are no representations, warranties or other agreements between the parties relating to the subject matter of this Agreement except as specifically set forth in this Agreement and the Transaction Documents and neither party has relied on any representations, warranties, or other agreements not set forth in this Agreement or the other Transaction Documents. No party shall be bound by or liable for any alleged representation, warranty, promise, inducement, statement of intention or other agreement not so set forth.

			
	 	 	
			 

			
	 	h.	
			Successors and Permitted Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their successors and permitted assigns.

			
	 	 	
			 

			
	 	i.	
			Parties in Interest. Notwithstanding anything contained in this Agreement to the contrary, nothing in this Agreement, express or implied, is intended to confer to any person other than the Parties any rights, remedies, obligations, or liabilities under or by reason of this Agreement.

			
	 	 	
			 

			
	 	j.	
			Waiver; Rights Cumulative. Any of the terms, covenants, representations, warranties, or conditions hereof may be waived only by a written instrument executed by or on behalf of the party waiving compliance. No course of dealing on the part of a party, or its officers, directors, members, managers, employees, agents, or other representatives, nor any failure by a party to exercise any of its rights under this Agreement shall operate as a waiver thereof or affect in any way the right of such party at a later time to enforce the performance of such provision. No waiver by a party of any condition, or any breach of any term, covenant, representation, or warranty contained in this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such condition or breach or a waiver of any other condition or of any breach of any other term, covenant, representation, or warranty. The rights of the parties under this Agreement shall be cumulative, and the exercise or partial exercise of any such right shall not preclude the exercise of any other right.

			

 

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	k.	 	Waiver of Right to Trial by Jury. With respect to any matter where arbitration is not required, each party hereby waives, to the fullest extent permitted by applicable Law, any right it may have to a trial by jury in respect of any action, suit or other Proceeding arising out of or relating to this Agreement, the other Transaction Documents or any transaction contemplated hereby or thereby.
	 	 	 
	l.	 	Severability. If any term or other provision of this Agreement is invalid, illegal, or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal, or incapable of being enforced, the applicable parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions and other agreements contemplated hereby are fulfilled to the fullest extent possible, and if despite such good faith negotiations, the applicable parties are unable to agree to such modification, such parties request that a court of competent jurisdiction modify the offending provisions of this Agreement so as to effect the original intent of the parties as closely as possible in a lawful manner to the end that the transactions and other agreements contemplated hereby are fulfilled to the fullest extent possible.
	 	 	 
	m.	 	Time is of the Essence. With respect to all dates and time periods in this Agreement, time is of the essence. If the date specified in this Agreement for giving any notice or taking any action is not a Business Day (or if the period during which any notice is required to be given or any action taken expires on a date which is not a Business Day), then the date for giving such notice or taking such action (or the expiration date of such period during which notice is required to be given or action taken) shall be the next day which is a Business Day. As used in this Section, “Business Day” means any day other than a Saturday or Sunday or Federal Holiday.
	 	 	 
	n.	 	No Registration. The Parties acknowledge and agree that the Partnership Interests and Stock have not been registered under the Securities Act of 1933, as amended, or under the securities law of any state and to their actual knowledge without investigation have been issued under exemption that depends, in part, on the intent of the owners not to sell or transfer such interests in any manner not permitted by such laws. Such interests may not be further sold, transferred, pledged, or hypothecated, except in compliance with the Act and any other laws or regulations that may be applicable.

 

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	o.	 	Amendment/Waiver of Partnership Agreement. The assignment of the McRae LP Interest and of the McRae Investment LP Interest as contemplated by this Agreement is permitted pursuant to Tennessee Code Annotated §61-2-702. The Parties acknowledge and agree that to the extent any term or condition in the Caris Healthcare, L.P. Limited Partnership Agreement, as amended, the Certificate of Limited Partnership of Caris or the Charter, as amended, bylaws or any shareholder agreement of NH conflicts with the terms of this Agreement and the Transaction contemplated in this Agreement, such provisions shall be and hereby are amended to the extent necessary or appropriate to carry out the terms of this Agreement. The Parties waive any and all rights to notice regarding same. Notwithstanding the foregoing, in the event that the Transactions contemplated hereby do not fully close (regardless of the reason for such failure), the full and complete terms and conditions of the said partnership agreement and the corporate documents of NH as the same existed immediately prior to the execution hereof shall be reinstated and shall continue in full force and effect.
	 	 	 
	p.	 	Name Assignment. Sellers claim no individual rights in or to the name “Caris Healthcare,” “Caris,” or similar derivative, but at Closing will assign, without warranty, any right, title, or interest he may have in or to such name.
	 	 	 
	q.	 	Continuation of Partnership. The Parties acknowledge and agree that NHC may continue Caris and the Business following Closing without dissolution. After the Closing, NHC agrees that, regardless of whether it continues Caris and the Business without dissolution, (i) it shall continue to maintain and cause Caris to continue to maintain Caris’ books and records in substantially the same manner after the Closing Date, for the tax year of the sale, that Caris has historically, (ii) shall not make and shall cause Caris not to make a tax election that could result in a material tax burden to Sellers that would not exist if the election had not been made, and (iii) shall cause Caris to use an interim closing of the books method on the Closing Date for purposes of allocations to Sellers for the year of close.
	 	 	 
	r.	 	Survival. The representations, warranties, and covenants (including but not limited to post-closing indemnity obligations) in this Agreement and all terms that by necessity survive Closing, shall survive after Closing or for a specific period of time set forth herein.
	 	 	 
	s.	 	Public/SEC Filings. NHC shall be permitted to make any and all notice and/or public filings regarding the Transaction and this Agreement required or appropriate as a publicly traded company without prior approval from Sellers.

 

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	t.	 	Governing Law and Venue.  This Agreement, the application and interpretation hereof, and all disputes arising in connection herewith, shall be governed exclusively by its terms and by the laws of the State of Tennessee, without regard to conflicts of law principles. Subject to Section 12 above, each Party agrees that jurisdiction and venue for any action arising from or relating to this Agreement, the transactions contemplated by this agreement or any other document executed in connection herewith, including matters concerning validity, construction, performance, or enforcement, shall be exclusively brought in the Court of Chancery of the State of Tennessee in and for Knox County or, if the Court of Chancery lacks subject matter jurisdiction, in another court of the State of Tennessee, County of Knox, or in the United States District Court for the Eastern District of Tennessee (provided, however, a final judgment in any such action shall be conclusive and enforced in other jurisdictions) and further agree that service of process may be made in any matter permitted by law. Each Party stipulates and agrees that it is subject to personal jurisdiction in Tennessee and irrevocably waives any objection based on forum non conveniens with respect to any such court, and irrevocably waives any objection to venue of any such court. This paragraph is intended to fix the location of potential litigation between the Parties and does not create any causes of action or waive any defenses or immunities to suit.

   

 

[Signatures to Follow]

 

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EXECUTED to be effective as of the date first above written although not necessarily executed on such date.

 

 

	 	
			NHC:

			 

			NHC/OP, L.P.,

			a Delaware limited partnership

			 

			By:         NHC/Delaware, Inc.

			a Delaware corporation

			Its General Partner

			 

			 

			By:         /s/ R. M. Ussery                               

			Name:         R. M. Ussery                                

			Title:         V.P.                                                   

			 

			 

			SELLERS:

			 

			 

			 

			/s/ Norman C. McRae                                                   

			Norman C. McRae

			 

			 

			 

			 

			McRAE INVESTMENT COMPANY, LLC

			 

			 

			 

			By:   /s/ Norman C. McRae                                          

			Norman C. McRae, Manager

			

 

 

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EXHIBIT “A”

 

PURCHASE PRICE ALLOCATION

 

17

 

 

EXHIBIT “B”

 

PARTNERSHIP ASSIGNMENT

 

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EXHIBIT “C”

 

STOCK ASSIGNMENT/ STOCK POWER

 

19

 

 

EXHIBIT “D”

 

NON-COMPETITION AND NON-SOLICITATION AGREEMENT

 

20

 

 

EXHIBIT “E”

 

ESCROW AGREEMENT

 

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