Earnout Agreement

EARNOUT AGREEMENT


THIS EARNOUT AGREEMENT is made and entered into this the 30th day of June, 1997, by and among Renal Care Group, Inc., a Delaware corporation ("RCG"), RCG Mississippi, Inc., a Delaware corporation and subsidiary of RCG ("RCG Miss."), Kidney Care, Inc., a Mississippi nonprofit corporation ("KCI"), and John D. Bower, M.D., the John D. Bower, M.D. Grantor Retained Annuity Trust, David McNamara and the MEL, Inc. Employee Stock Ownership Plan (collectively, "MEL Shareholders").


WHEREAS, RCG and KCI entered into an Amended and Restated Transfer Agreement dated November 14, 1995 ("Transfer Agreement");


WHEREAS, RCG and Medical Enterprises, Ltd. ("MEL") entered into an Agreement and Plan of Merger dated November 15, 1995 ("Merger Agreement") pursuant to which MEL merged into RCG Miss. (the "Merger");


WHEREAS, both the Transfer Agreement and the Merger Agreement provide, in part, for the payment by RCG to KCI and the MEL Shareholders of an aggregate amount up to $7,000,000 based upon the amount of 1996 and 1997 earnings of the renal dialysis centers formerly owned by KCI ("Earnout");


WHEREAS, RCG, KCI, and the MEL Shareholders have agreed upon the amount and terms of payment of the Earnout and desire to document their agreement herein;


NOW THEREFORE, FOR AND IN CONSIDERATION, of the foregoing, the parties agree as follows:


1. Amount of Earnout. RCG hereby agrees to pay to KCI and the MEL Shareholders an aggregate amount equal to Five Million Seven Hundred Thousand Dollars ($5,700,000) as adjusted in Section 2 hereof, in full satisfaction of its obligation to pay the Earnout pursuant to Section 2.3 of the Transfer Agreement and Section 2.3 of the Merger Agreement.


2. Adjustments to Earnout. Prior to the payment of the Earnout, the parties hereto agree to adjust the Earnout as shown on Exhibit A. Pursuant to Exhibit A, the amount of the Earnout allocable to KCI will be (i) reduced by $164,726.14 as an agreed upon adjustment for certain accounts ...