Document:

Amendment to Reducing Revolver Loan and other Loan Documents

 EXHIBIT 10.9 
  

							
	 	 	 	 	 	 	 Private Client Group

			
	 

  
  
	 	 	 	 Merrill Lynch Business
 Financial Services
Inc.
 222 North LaSalle Street
 17th Floor
 Chicago, Illinois 60601
 (312) 499-3110
 FAX: (312) 368-1387

				
	 	 	 	 	 	 	 October 29, 2004

  
 Dynacq Healthcare, Inc. 
 10304 Interstate 10 East, Suite 369 
 Houston, Texas 77029 
  
 Re: Amendment to Reducing Revolver and other Loan
Documents 
  
 This Letter Agreement will serve to confirm certain agreements
of Merrill Lynch Business Financial Services Inc. (“MLBFS”) and Dynacq Healthcare, Inc. (“Customer”) with respect to: (i) that certain WCMA REDUCING REVOLVER LOAN AND SECURITY AGREEMENT NO. 582-07L53 between MLBFS and
Customer (as amended, extended and as assumed by the Assumption Agreement of even date hereof between MLBFS, Customer and Guarantors), and (ii) all other agreements between MLBFS and Customer or any party who has guaranteed or provided collateral
for Customer’s obligations to MLBFS (a “Guarantor”) in connection therewith (collectively, the “Loan Documents”). Capitalized terms used herein and not defined herein shall have the meaning set forth in the Loan Documents.

  
 The Loan Documents are hereby amended as follows: 
  
 (a) The “Maturity Date” shall be amended to be February 28, 2005; 
  
 (b) Vista Community Medical Center, L.L.P. (successor to Vista Community Medical Center,
L.L.C.) must immediately execute a new Unconditional Guaranty, Security Agreement, Partners Certificate and Tenant Subordination in a form and on terms satisfactory to MLBFS in its discretion; 
  
 (c) Vista Land and Equipment, L.L.C. must immediately execute an amendment to the Deed of
Trust filed by MLBFS on the Real Properties (commonly known as 4301, 4301A and 4301B Vista Road, Pasadena, TX 77504), in recordable form, on terms and in a form acceptable to MLBFS in its discretion; 
  
 (d) Customer must immediately pay a re-documentation fee of $500.00, and upon demand, all
fees incurred by MLBFS to amend UCC filings on Customer and Business Guarantors and fees and expenses for title reports, title insurance, and recording fees related to the amendment of the Deed of Trust filed by MLBFS on the Real Properties and
MLBFS’ obtaining title insurance on the Real Properties; 
  
 (e) By November
10, 2004, MLBFS must have title insurance from a title company acceptable to it and on terms and with exceptions satisfactory to MLBFS to ensure MLBFS has a first and only mortgage on the Real Properties in a form and on terms acceptable to MLBFS in
its discretion; and 
  
 (f) By November 10, 2004, Customer must cause Vista
Healthcare, Inc., a Texas corporation (or any successor entity) to release any mortgage it has on the Real Properties in a form and on terms acceptable to MLBFS in its discretion, or provide a copy of a recorded release of such mortgage. 

 
 Except as expressly amended hereby, the Loan Documents shall continue in full force and
effect upon all of their terms and conditions. 
  
 By their execution of this
Letter Agreement, the below-named Guarantors hereby consent to the foregoing modifications to the Loan Documents, and hereby agree that the “Obligations” under their respective Unconditional Guaranty and/or agreements providing collateral
shall extend to and include the Obligations of Customer under the Loan Documents, as amended hereby. 

 Customer and said Guarantors acknowledge, warrant and agree, as a primary inducement to MLBFS to enter into this
Agreement, that: (a) no Default or Event of Default has occurred and is continuing under the Loan Documents (except as identified in the Notice of Default and Demand for Payment from MLBFS dated October 5, 2004); (b) each of the warranties of
Customer in the Loan Documents are true and correct as of the date hereof and shall be deemed remade as of the date hereof; (c) neither Customer nor any of said Guarantors have any claim against MLBFS or any of its affiliates arising out of or in
connection with the Loan Documents or any other matter whatsoever; and (d) neither Customer nor any of said Guarantors have any defense to payment of any amounts owing, or any right of counterclaim for any reason under, the Loan Documents.

  
 If Customer and the Guarantors do not execute and return the duplicate copy of
(i) this Letter Agreement and all the documents required by (b) and (c) above, and (ii) the Assumption Agreement between MLBFS, Customer and Guarantors on even date hereof, by November 2, 2004 then all of said amendments and agreements will, at the
sole option of MLBFS, be void. 
  
 Very truly yours, 
  

			
	Merrill Lynch Business Financial Services Inc.
		
	 By:
	 	 /s/ Tara Slomka

	 	 	 Tara Slomka

	 	 	 Assistant Vice President &

	 	 	 Senior Real Estate Closing Manager

	
	 Accepted:

	
	Dynacq Healthcare, Inc.
		
	 By:
	 	 /s/ Philip Chan

	 Printed Name: Philip Chan

	 Title: Vice President - Finance

	
	 Approved and Agreed:

	
	Vista Healthcare, Inc.
		
	 By:
	 	 /s/ Philip Chan

	 Printed Name: Philip Chan

	 Title: President

	
	Vista Land and Equipment, L.L.C.
		
	 By:
	 	 Doctors Practice Management, Inc., Manager

	
	 Printed Name: /s/ Philip Chan Philip Chan

	 Title: President

			
	Doctors Practice Management, Inc.
		
	 By:
	 	 /s/ Philip Chan

	 Printed Name: Philip Chan

	 Title: President

  
 Vista Community Medical Center, LLP
(successor to Vista Community Medical Center L.L.C) 
  

			
	 By:
	 	 Doctors Practice Management, Inc., Its General Partner

	
	 Printed Name: /s/ Philip Chan Philip Chan

	 Title: President

	
	Ambulatory Infusion Therapy Specialist, Inc.
		
	 By:
	 	 /s/ Connie Hudec

	 Printed Name: Connie Hudec

	 Title: President

	
	Surgi+Group, Inc.
		
	 By:
	 	 /s/ Philip Chan

	 Printed Name: Philip Chan

	 Title: PresidentForm of Indemnification Agreement with various officers and directors

 EXHIBIT 10.10 
  

					
	 	 	 	 	         Private Client Group

			
	

	 	 	 	         Merrill Lynch Business
         Financial Services Inc.
         222 North LaSalle Street
         17th Floor
         Chicago, Illinois 60601
         (312) 499-3110
         FAX: (312) 368-1387

			
	 	 	 	 	         October 29, 2004

  
 Mr. Phillip Chan 
 Dynacq Healthcare, Inc. 
 10304 Interstate 10 East 
 Suite 369 
 Houston, Texas 77029 
  
 Re: Assumption Agreement 
  
 Reference is hereby made to: 
  
 (a) that certain WCMA REDUCING REVOLVER LOAN AND SECURITY AGREEMENT NO. 582-07L53 (as such agreement is from time to
time amended, extended or restated “Reducing Revolver”) between MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC. (“MLBFS”) and DYNACQ INTERNATIONAL, INC., a corporation formerly organized under the laws of the State
of Nevada (“Original Customer”); 
  
 (b) all other
agreements between MLBFS and Original Customer in connection therewith; and 
  
 (c) all agreements for the benefit of MLBFS pursuant to which a person or entity has either guaranteed, or provided collateral for, Original Customer’s Reducing Revolver and other Obligations to MLBFS including
without limitation each of Vista Healthcare, Inc., Vista Land and Equipment, L.L.C., Doctors Practice Management, Inc., Vista Community Medical Center, LLP (successor to Vista Community Medical Center L.L.C.), Ambulatory Infusion Therapy Specialist,
Inc., and Surgi+Group, Inc. (each such person or entity, a “Guarantor” and collectively, the “Guarantors”). 
  
 All such agreements, as previously amended, or amended from time to time, restated and/or extended, are hereafter collectively called the “Loan Documents”.
Capitalized terms used herein and not defined herein shall have the meaning set forth in the Loan Documents. 
  
 The undersigned, DYNACQ HEALTHCARE, INC., represents and warrants that as of November 14, 2003, it is a corporation organized and existing under the laws of the State of Delaware (“New Customer”, New
Customer and the Guarantors shall collectively be referred to as “Obligors”). New Customer hereby represents and warrants to MLBFS that New Customer has assumed all of the business, properties and obligations of Original Customer as of
November 14, 2003 through a merger with Original Customer in which New Customer is the surviving entity. In connection therewith, Obligors have agreed to confirm in writing to MLBFS the assumption of the Obligations, Reducing Revolver and other Loan
Documents which occurred by operation of law on November 14, 2003. Accordingly, effective as of November 14, 2003, the Obligors represent and warrant, as follows: 
  
 (1) New Customer agrees that it has assumed and does hereby assume all Obligations, covenants and warranties of Original Customer under the
Loan Documents in the same manner and with the same effect as if such Obligations, covenants and warranties were originally Obligations, covenants and warranties of New Customer. Guarantors each consent and agree to the assumption set forth herein,
and agree that the Unconditional Guaranty, Security Agreement or other documents executed by each such Guarantor shall extend to and be deemed an unconditional guaranty of, and grant of security interest to MLBFS in the Collateral securing the
Obligations of both Original Customer and New Customer, jointly and severally, in the same manner and with the same effect as if New Customer and Original Customer were originally jointly and severally named as the “Customer” under the
Loan Documents and in such Unconditional Guaranty, Security Agreement or other document. 

 (2) Without limiting the foregoing, Obligors agree that: (a) all amounts owed by Original Customer to MLBFS under the
Loan Documents are now owed by New Customer to MLBFS as New Customer’s direct and primary Obligations, which amounts are guaranteed and collateralized by the Guarantors pursuant to the Loan Documents; (b) such amounts will be paid to MLBFS with
interest in the manner and at the time or times specified in the Loan Documents; (c) New Customer now solely owns all property heretofore owned by Original Customer and included in the definition of Collateral under the Reducing Revolver, and all
such property is subject to the liens and security interests of MLBFS; and (d) subject to the terms of the Loan Documents, New Customer hereby grants to MLBFS a continuing first lien and security interest upon all other property included in the
definition of Collateral now owned or hereafter acquired by New Customer. All references in the Loan Documents to “Customer” shall hereafter be deemed references to New Customer. All notices to “Customer” under the Loan Documents
shall be sent solely to New Customer at the address set forth above, or at such other address as may hereafter be specified in a written notice to MLBFS, and MLBFS shall attempt, but not be required, to send a copy of all such notices to the
attention of Holly A. Hubenak, Deputy General Counsel, at Customer’s address. The Loan Documents are hereby amended to reflect the assumption described herein and add thereto the covenants, warranties and agreements of Obligors included in this
Letter Agreement. Except as expressly amended hereby, the Loan Documents shall continue in full force and effect upon all of their terms and conditions. 
  
 Obligors shall indemnify, defend and hold MLBFS harmless from and against any and all losses, liabilities, cost and expenses (including reasonable attorneys’ fees
and expenses) arising out of or related to the assumption of the Loan Documents pursuant hereto, or any claim of Original Customer or anyone claiming through or under Original Customer with respect to the Loan Documents or the Collateral, any fees
paid to MLBFS in connection the Loan Documents or any of the transactions contemplated thereby, excluding, however, from said indemnity, any such claim, liabilities, cost and expenses arising directly out of the willful wrongful act or active gross
negligence of MLBFS. 
  
 Obligors further represent and warrant to MLBFS that: (a)
no Default or Event of Default has occurred and is continuing under any of the Loan Documents except for the Events of Default described in the Notice of Default and Demand for payment from MLBFS dated October 5, 2004; (b) no Obligor has any defense
to payment of any amounts owing, or any right of claim or counterclaim against MLBFS for any reason under, the Loan Documents; (c) the execution, delivery and performance by Obligors of this Assumption Agreement and each other document required to
be executed by any Obligor or any other entity or person in connection herewith: (i) has been duly authorized by all requisite action, (ii) does not and will not violate or conflict with any law or other governmental requirement, or any of the
agreements, instruments or documents which formed or govern Obligors, and (iii) does not and will not breach or violate any of the provisions of, and will not result in a default by any Obligor under any other agreement, instrument or document to
which it is a party or by which it or its properties are bound. 
  
 Subject to the
terms and conditions hereof and the Amendment to Reducing Revolver and other Loan Documents of even date hereof, MLBFS hereby consents to the assumption by New Customer of the Obligations of Original Customer under the Reducing Revolver described in
the Loan Documents and the change from Vista Community to an “LLP” from an “LLC”, without waiving any provision of the Loan Documents. 
  
 Notwithstanding the foregoing, Obligors must execute and return the duplicate copy of this Assumption Agreement by November 2, 2004. 
  
 Very truly yours, 
  

			
	Merrill Lynch Business Financial Services Inc.
		
	 By
	 	 /s/ Tara E. Slomka

	 	 	 Tara E. Slomka

	 	 	 Assistant Vice President &

	 	 	 Senior Real Estate Closing Manager

			
	Agreed by New Customer:
	
	Dynacq Healthcare, Inc.
		
	 By:
	 	 /s/ Philip Chan

	 Printed Name: Philip Chan

	 Title: Vice President - Finance

	
	Agreed by Guarantors:
	
	Vista Healthcare, Inc.
		
	 By:
	 	 /s/ Philip Chan

	 Printed Name: Philip Chan

	 Title: President

	
	Vista Land and Equipment, L.L.C.
		
	 By:
	 	 Doctors Practice Management, Inc., Manager

	
	 Printed Name: /s/ Philip Chan Philip Chan

	 Title: President

	
	Doctors Practice Management, Inc.
		
	 By:
	 	 /s/ Philip Chan

	 Printed Name: Philip Chan

	 Title: President

 Vista Community Medical Center, LLP (successor to Vista Community Medical Center L.L.C) 
  

			
	 By:
	 	 Doctors Practice Management, Inc., Its General Partner

	
	 Printed Name: /s/ Philip Chan / Philip Chan

	 Title: President

	
	Ambulatory Infusion Therapy Specialist, Inc.
		
	 By:
	 	 /s/ Connie Hudec

	 Printed Name: Connie Hudec

	 Title: President

	
	Surgi+Group, Inc.
		
	 By:
	 	 /s/ Philip Chan

	 Printed Name: Philip Chan

	 Title: President

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