Document:

Exhibit 10.3

 

CREDIT AGREEMENT

 

Dated as of October 31, 2013

 

among

 

FIRST CHOICE ER, LLC,

as the Borrower,

 

THE SUBSIDIARIES OF THE BORROWER IDENTIFIED HEREIN,

as the Guarantors,

 

FIFTH STREET FINANCE CORP.,

as Administrative Agent and L/C Arranger,

 

and

 

THE OTHER LENDERS PARTY HERETO

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I
    	
DEFINITIONS   AND ACCOUNTING TERMS
    	
1
    
	
1.01
    	
 
    	
Defined   Terms
    	
1
    
	
1.02
    	
 
    	
Other   Interpretive Provisions
    	
38
    
	
1.03
    	
 
    	
Accounting   Terms; Calculation of Financial Covenants on a Pro Forma Basis
    	
39
    
	
1.04
    	
 
    	
Rounding
    	
40
    
	
1.05
    	
 
    	
Times   of Day
    	
40
    
	
1.06
    	
 
    	
Letter   of Credit Amounts
    	
40
    
	
 
    	
 
    	
 
    
	
ARTICLE II
    	
THE   COMMITMENTS AND CREDIT EXTENSIONS
    	
40
    
	
2.01
    	
 
    	
Revolving   Loans and Term Loan
    	
40
    
	
2.02
    	
 
    	
Borrowings,   Conversions and Continuations of Loans
    	
41
    
	
2.03
    	
 
    	
Letters   of Credit
    	
42
    
	
2.04
    	
 
    	
[Reserved]
    	
43
    
	
2.05
    	
 
    	
Prepayments
    	
43
    
	
2.06
    	
 
    	
Termination   or Reduction of Aggregate Revolving Commitments
    	
46
    
	
2.07
    	
 
    	
Repayment   of Loans
    	
46
    
	
2.08
    	
 
    	
Interest
    	
47
    
	
2.09
    	
 
    	
Fees
    	
47
    
	
2.10
    	
 
    	
Computation   of Interest and Fees
    	
48
    
	
2.11
    	
 
    	
Evidence   of Debt
    	
48
    
	
2.12
    	
 
    	
Payments   Generally; Administrative Agent’s Clawback
    	
49
    
	
2.13
    	
 
    	
Sharing   of Payments by Lenders
    	
50
    
	
2.14
    	
 
    	
Reserved
    	
51
    
	
2.15
    	
 
    	
Defaulting   Lenders
    	
51
    
	
2.16
    	
 
    	
Tax   Reporting
    	
52
    
	
 
    	
 
    	
 
    
	
ARTICLE III
    	
TAXES,   YIELD PROTECTION AND ILLEGALITY
    	
52
    
	
3.01
    	
 
    	
Taxes
    	
52
    
	
3.02
    	
 
    	
Illegality
    	
56
    
	
3.03
    	
 
    	
Inability   to Determine Rates
    	
57
    
	
3.04
    	
 
    	
Increased   Costs
    	
57
    
	
3.05
    	
 
    	
Compensation   for Losses
    	
59
    
	
3.06
    	
 
    	
Mitigation   of Obligations; Replacement of Lenders
    	
59
    
	
3.07
    	
 
    	
Survival
    	
60
    
	
 
    	
 
    	
 
    
	
ARTICLE IV
    	
GUARANTY
    	
60
    
	
4.01
    	
 
    	
The   Guaranty
    	
60
    
	
4.02
    	
 
    	
Obligations   Unconditional
    	
60
    
	
4.03
    	
 
    	
Reinstatement
    	
61
    

 

i

 

	
4.04
    	
 
    	
Certain   Additional Waivers
    	
61
    
	
4.05
    	
 
    	
Remedies
    	
61
    
	
4.06
    	
 
    	
Rights   of Contribution
    	
62
    
	
4.07
    	
 
    	
Guarantee   of Payment; Continuing Guarantee
    	
62
    
	
4.08
    	
 
    	
Keepwell
    	
62
    
	
 
    	
 
    	
 
    
	
ARTICLE V
    	
CONDITIONS   PRECEDENT TO CREDIT EXTENSIONS
    	
62
    
	
5.01
    	
 
    	
Conditions   of Effectiveness
    	
62
    
	
5.02
    	
 
    	
Conditions   to all Credit Extensions
    	
65
    
	
5.03
    	
 
    	
Conditions   to Extension of Delayed Draw Term Loans
    	
66
    
	
 
    	
 
    	
 
    
	
ARTICLE VI
    	
REPRESENTATIONS   AND WARRANTIES
    	
67
    
	
6.01
    	
 
    	
Existence,   Qualification and Power
    	
67
    
	
6.02
    	
 
    	
Authorization;   No Contravention
    	
68
    
	
6.03
    	
 
    	
Governmental   Authorization; Other Consents
    	
68
    
	
6.04
    	
 
    	
Binding   Effect
    	
68
    
	
6.05
    	
 
    	
Financial   Statements; No Material Adverse Effect
    	
68
    
	
6.06
    	
 
    	
Litigation
    	
69
    
	
6.07
    	
 
    	
No   Default
    	
69
    
	
6.08
    	
 
    	
Ownership   of Property; Liens
    	
69
    
	
6.09
    	
 
    	
Environmental   Compliance
    	
70
    
	
6.10
    	
 
    	
Insurance
    	
71
    
	
6.11
    	
 
    	
Taxes
    	
71
    
	
6.12
    	
 
    	
ERISA   Compliance
    	
71
    
	
6.13
    	
 
    	
Subsidiaries
    	
72
    
	
6.14
    	
 
    	
Margin   Regulations; Investment Company Act
    	
72
    
	
6.15
    	
 
    	
Disclosure
    	
72
    
	
6.16
    	
 
    	
Compliance   with Laws
    	
73
    
	
6.17
    	
 
    	
Intellectual   Property; Licenses, Etc.
    	
73
    
	
6.18
    	
 
    	
Solvency
    	
74
    
	
6.19
    	
 
    	
Perfection   of Security Interests in the Collateral
    	
74
    
	
6.20
    	
 
    	
Business   Locations; Taxpayer Identification Number
    	
74
    
	
6.21
    	
 
    	
Reimbursement   from Medical Reimbursement Programs
    	
74
    
	
6.22
    	
 
    	
Licensing   and Accreditation
    	
74
    
	
6.23
    	
 
    	
OFAC
    	
75
    
	
6.24
    	
 
    	
Casualty, etc.
    	
75
    
	
 
    	
 
    	
 
    
	
ARTICLE VII   
    	
AFFIRMATIVE   COVENANTS
    	
75
    
	
7.01
    	
 
    	
Financial   Statements
    	
75
    
	
7.02
    	
 
    	
Certificates;   Other Information
    	
77
    
	
7.03
    	
 
    	
Notices
    	
79
    
	
7.04
    	
 
    	
Payment   of Taxes
    	
79
    

 

ii

 

	
7.05
    	
 
    	
Preservation   of Existence, Etc.
    	
80
    
	
7.06
    	
 
    	
Maintenance   of Properties
    	
80
    
	
7.07
    	
 
    	
Maintenance   of Insurance
    	
80
    
	
7.08
    	
 
    	
Compliance   with Laws
    	
80
    
	
7.09
    	
 
    	
Books   and Records
    	
81
    
	
7.10
    	
 
    	
Inspection   Rights
    	
81
    
	
7.11
    	
 
    	
Use   of Proceeds
    	
82
    
	
7.12
    	
 
    	
Holdings,   Additional Subsidiaries and non-Immaterial Subsidiaries
    	
82
    
	
7.13
    	
 
    	
Pledged   Assets
    	
83
    
	
7.14
    	
 
    	
Government   Receivables Accounts
    	
83
    
	
7.15
    	
 
    	
Cash   Collateral Accounts
    	
84
    
	
7.16
    	
 
    	
Reserved
    	
84
    
	
7.17
    	
 
    	
Interest   Rate Protection Agreements
    	
84
    
	
7.18
    	
 
    	
Sterling   Equity Reserve
    	
84
    
	
7.19
    	
 
    	
Compliance   with Environmental Laws
    	
84
    
	
7.20
    	
 
    	
Preparation   of Environmental Reports
    	
85
    
	
7.21
    	
 
    	
Further   Assurances
    	
85
    
	
7.22
    	
 
    	
Compliance   with Terms of Leaseholds
    	
85
    
	
7.23
    	
 
    	
Material   Contracts
    	
86
    
	
7.24
    	
 
    	
Conference   Calls
    	
86
    
	
7.25
    	
 
    	
Post-Closing   Covenants
    	
86
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII   
    	
NEGATIVE   COVENANTS
    	
87
    
	
8.01
    	
 
    	
Liens
    	
87
    
	
8.02
    	
 
    	
Investments
    	
88
    
	
8.03
    	
 
    	
Indebtedness
    	
89
    
	
8.04
    	
 
    	
Fundamental   Changes
    	
91
    
	
8.05
    	
 
    	
Dispositions
    	
91
    
	
8.06
    	
 
    	
Restricted   Payments
    	
92
    
	
8.07
    	
 
    	
Change   in Nature of Business
    	
92
    
	
8.08
    	
 
    	
Transactions   with Affiliates; Management Fees
    	
92
    
	
8.09
    	
 
    	
Burdensome   Agreements
    	
93
    
	
8.10
    	
 
    	
Use   of Proceeds
    	
93
    
	
8.11
    	
 
    	
Financial   Covenants
    	
93
    
	
8.12
    	
 
    	
Organization   Documents; Fiscal Year; Legal Name, State of Formation and Form of   Entity
    	
94
    
	
8.13
    	
 
    	
Ownership   of Subsidiaries
    	
95
    
	
8.14
    	
 
    	
Sale   Leasebacks
    	
95
    
	
8.15
    	
 
    	
Sanctions
    	
95
    
	
8.16
    	
 
    	
MPT   Documents and Transactions
    	
95
    
	
8.17
    	
 
    	
Permitted   Activities of Holdings
    	
96
    

 

iii

 

	
ARTICLE IX
    	
EVENTS   OF DEFAULT AND REMEDIES
    	
97
    
	
9.01
    	
 
    	
Events   of Default
    	
97
    
	
9.02
    	
 
    	
Remedies   Upon Event of Default
    	
100
    
	
9.03
    	
 
    	
Application   of Funds
    	
100
    
	
9.04
    	
 
    	
Right   to Cure Financial Covenant Defaults
    	
101
    
	
 
    	
 
    	
 
    
	
ARTICLE X
    	
ADMINISTRATIVE   AGENT
    	
102
    
	
10.01
    	
 
    	
Appointment   and Authority
    	
102
    
	
10.02
    	
 
    	
Rights   as a Lender
    	
102
    
	
10.03
    	
 
    	
Exculpatory   Provisions
    	
103
    
	
10.04
    	
 
    	
Reliance   by Administrative Agent
    	
104
    
	
10.05
    	
 
    	
Delegation   of Duties
    	
104
    
	
10.06
    	
 
    	
Resignation   of Administrative Agent
    	
104
    
	
10.07
    	
 
    	
Non-Reliance   on Administrative Agent and Other Lenders
    	
105
    
	
10.08
    	
 
    	
No   Other Duties; Etc.
    	
105
    
	
10.09
    	
 
    	
Administrative   Agent May File Proofs of Claim
    	
105
    
	
10.10
    	
 
    	
Collateral   and Guaranty Matters
    	
106
    
	
10.11
    	
 
    	
Secured   Cash Management Agreements and Secured Hedge Agreements
    	
107
    
	
 
    	
 
    	
 
    
	
ARTICLE XI
    	
MISCELLANEOUS
    	
107
    
	
11.01
    	
 
    	
Amendments, Etc.
    	
107
    
	
11.02
    	
 
    	
Notices;   Effectiveness; Electronic Communications
    	
109
    
	
11.03
    	
 
    	
No   Waiver; Cumulative Remedies; Enforcement
    	
111
    
	
11.04
    	
 
    	
Expenses;   Indemnity; Damage Waiver
    	
111
    
	
11.05
    	
 
    	
Payments   Set Aside
    	
113
    
	
11.06
    	
 
    	
Successors   and Assigns
    	
114
    
	
11.07
    	
 
    	
Treatment   of Certain Information; Confidentiality
    	
118
    
	
11.08
    	
 
    	
Right   of Setoff
    	
118
    
	
11.09
    	
 
    	
Interest   Rate Limitation
    	
119
    
	
11.10
    	
 
    	
Counterparts;   Integration; Effectiveness
    	
120
    
	
11.11
    	
 
    	
Survival   of Representations and Warranties
    	
120
    
	
11.12
    	
 
    	
Severability
    	
120
    
	
11.13
    	
 
    	
Replacement   of Lenders
    	
121
    
	
11.14
    	
 
    	
Governing   Law; Jurisdiction; Etc.
    	
121
    
	
11.15
    	
 
    	
Waiver   of Jury Trial
    	
122
    
	
11.16
    	
 
    	
No   Advisory or Fiduciary Responsibility
    	
122
    
	
11.17
    	
 
    	
Electronic   Execution of Assignments and Certain Other Documents
    	
123
    
	
11.18
    	
 
    	
Reserved
    	
123
    
	
11.19
    	
 
    	
Exclusion   from Representations and Warranties and Covenants
    	
123
    
	
11.20
    	
 
    	
USA   PATRIOT Act
    	
124
    
	
11.21
    	
 
    	
Notice   of Final Agreement
    	
124
    

 

iv

 

	
SCHEDULES
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
1.01A
    	
Competitors
    	
 
    
	
 
    	
1.01B
    	
Certain   Add-backs to Consolidated EBITDA
    	
 
    
	
 
    	
2.01
    	
Commitments   and Applicable Percentages
    	
 
    
	
 
    	
6.05(b)
    	
GAAP   Exceptions
    	
 
    
	
 
    	
6.13
    	
Subsidiaries
    	
 
    
	
 
    	
6.17
    	
IP   Rights
    	
 
    
	
 
    	
6.20-1
    	
Locations   of Real Property
    	
 
    
	
 
    	
6.20-2
    	
Location   of Chief Executive Office, Taxpayer Identification Number, Etc.
    	
 
    
	
 
    	
6.20-3
    	
Changes   in Legal Name, State of Formation and Structure\
    	
 
    
	
 
    	
7.23
    	
Material   Contracts
    	
 
    
	
 
    	
8.01
    	
Liens   Existing on the Closing Date
    	
 
    
	
 
    	
8.02
    	
Investments   Existing on the Closing Date
    	
 
    
	
 
    	
8.03
    	
Indebtedness   Existing on the Closing Date
    	
 
    
	
 
    	
11.02
    	
Administrative   Agent’s Office; Certain Addresses for Notices
    	
 
    
	
 
    	
 
    	
 
    
	
EXHIBITS
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
A
    	
Form of   Loan Notice
    	
 
    
	
 
    	
B
    	
[Reserved]
    	
 
    
	
 
    	
C
    	
Form of   Note
    	
 
    
	
 
    	
D
    	
Form of   Compliance Certificate
    	
 
    
	
 
    	
E
    	
Form of   Joinder Agreement
    	
 
    
	
 
    	
F-1
    	
Form of   Assignment and Assumption
    	
 
    
	
 
    	
F-2
    	
Form of   Administrative Questionnaire
    	
 
    
	
 
    	
G
    	
Forms   of U.S. Tax Compliance Certificates
    	
 
    
	
 
    	
H
    	
Form of   Perfection Certificate
    	
 
    
	
 
    	
I
    	
Form of   Closing Date Certificate
    	
 
    
	
 
    	
J
    	
Form of   Subordinated Intercompany Note
    	
 
    

 

i

 

CREDIT AGREEMENT

 

This CREDIT AGREEMENT is entered into as of October 31, 2013 among, FIRST CHOICE ER, LLC, a Texas limited liability company (the “Borrower”), the Guarantors (defined herein), the Lenders (defined herein) and FIFTH STREET FINANCE CORP. (“FSFC”), as Administrative Agent and L/C Arranger.

 

The Borrower has requested that the Lenders provide $250,000,000 in credit facilities for the purposes set forth herein, and the Lenders are willing to do so on the terms and conditions set forth herein.

 

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

 

ARTICLE I

 

DEFINITIONS AND ACCOUNTING TERMS

 

1.01                        Defined Terms.

 

As used in this Agreement, the following terms shall have the meanings set forth below:

 

“Acquisition” means, with respect to any Person, the acquisition by such Person, in a single transaction or in a series of related transactions, of either (a) all or any substantial portion of the property of, or a line of business or division of, another Person or (b) at least a majority of the Equity Interests of another Person entitled to vote for members of the board of directors or equivalent governing body of such Person, in each case whether or not involving a merger or consolidation with such other Person.

 

“Acquisition Consideration” means, with respect to any Acquisition, the aggregate cash and non-cash consideration for such Acquisition. The “Acquisition Consideration” for any Acquisition expressly includes Indebtedness assumed in such Acquisition and the good faith estimate by the Borrower of the maximum amount of any deferred purchase price obligations (including earn-out payments) incurred in connection with such Acquisition. The “Acquisition Consideration” for any Acquisition expressly excludes Equity Interests of the Borrower issued directly to the seller as consideration for such Acquisition and any proceeds of an Excluded Equity Issuance used to finance all or part of such Acquisition.

 

“Administrative Agent” means Fifth Street in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.

 

“Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 11.02 or such other address or account as the Administrative Agent may from time to time notify the Borrower and the Lenders.

 

“Administrative Questionnaire” means an Administrative Questionnaire in substantially the form of Exhibit F-2 or any other form approved by the Administrative Agent.

 

“Affiliate” means, as with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such Person.

 

 

“Aggregate Revolving Commitments” means the Revolving Commitments of all the Lenders. The amount of the Aggregate Revolving Commitments in effect on the Closing Date is TEN MILLION DOLLARS ($10,000,000).

 

“Agreement” means this Credit Agreement.

 

“Applicable Percentage” means with respect to any Lender at any time, (a) with respect to such Lender’s Revolving Commitment at any time, the percentage (carried out to the ninth decimal place) of the Aggregate Revolving Commitments represented by such Lender’s Revolving Commitment at such time, subject to adjustment as provided in Section 2.15; provided that if the commitment of each Lender to make Revolving Loans has been terminated pursuant to Section 9.02 or if the Aggregate Revolving Commitments have expired, then the Applicable Percentage of each Lender shall be determined based on the Applicable Percentage of such Lender most recently in effect, giving effect to any subsequent assignments, (b) with respect to such Lender’s portion of the outstanding Term Loan at any time, the percentage (carried out to the ninth decimal place) of the outstanding principal amount of the Term Loan held by such Lender at such time subject to adjustment as provided in Section 2.15; and (c) with respect to such Lender’s unused Delayed Draw Term Loan Commitment at any time, the percentage (carried out to the ninth decimal place) of the unused Delayed Draw Term Loan Commitments represented by such Lender’s unused Delayed Draw Term Loan Commitment at such time, subject to adjustment as provided in Section 2.15; provided that if the commitment of each Lender to make Delayed Draw Term Loans has been terminated pursuant to Section 9.02 or if the Delayed Draw Term Loan Commitments have expired, then the Applicable Percentage of each Lender shall be determined based on the Applicable Percentage of such Lender most recently in effect, giving effect to any subsequent assignments. The initial Applicable Percentage of each Lender is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto.

 

“Applicable Rate” means (a) with respect to LIBOR Rate Loans, 7.50% and (b) with respect to Base Rate Loans, 6.50%.

 

“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

 

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 11.06(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit F-1 or any other form (including electronic documentation generated by MarkitClear or other electronic platform) approved by the Administrative Agent.

 

“Attributable Indebtedness” means, with respect to any Person on any date, (a) in respect of any capital lease, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, (b) in respect of any Synthetic Lease Obligation (other than such a transaction directly and solely related to any MPT Facility), the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a capital lease, (c) in respect of any Securitization Transaction, the outstanding principal amount of such financing, after taking into account reserve accounts and making appropriate adjustments, as mutually agreed by the Administrative Agent and the Borrower in their respective reasonable judgment, and (d) in respect of any Sale and Leaseback Transaction (other than such a transaction directly and solely related to any MPT Facility), the present value (discounted in accordance with GAAP at the debt rate implied in the applicable lease) of the obligations of the lessee for rental payments during the term of such lease.

 

2

 

“Availability” means an amount equal to the difference of the Aggregate Revolving Commitments less the Total Revolving Outstandings.

 

“Availability Period” means, with respect to the Revolving Commitments, the period from and including the Closing Date to the earliest of (a) the Maturity Date, (b) the date of termination of the Aggregate Revolving Commitments pursuant to Section 2.06, and (c) the date of termination of the commitment of each Lender to make Revolving Loans.

 

“Base Rate” means, for any day, a rate per annum equal to the highest of (a) the rate last quoted by The Wall Street Journal as the “Prime Rate” in the United States or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by the Administrative Agent) or any similar release by the Federal Reserve Board (as determined by the Administrative Agent), (b) the sum of one half of one percent (0.50%) per annum and the Federal Funds Rate, and (c) the sum of (x) LIBOR (but for the avoidance of doubt, not less than one percent (1.00%) per annum), plus (y) the excess of the Applicable Rate for LIBOR Rate Loans over the Applicable Rate for Base Rate Loans, in each instance, as of such day. Any change in the Base Rate due to a change in any of the foregoing shall be effective on the effective date of such change in the “bank prime loan” rate, the Federal Funds Rate or LIBOR.

 

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

 

“Beneficiary” means any member of the MPT Group, as a third party beneficiary, for whose benefit Borrower is requesting L/C Arranger to arrange for a Letter of Credit.

 

“Borrower” has the meaning specified in the introductory paragraph hereto.

 

“Borrower Materials” has the meaning specified in Section 7.02.

 

“Borrowing” means a borrowing consisting of simultaneous Loans of the same Type and, in the case of LIBOR Rate Loans, having the same Interest Period made by each of the Lenders pursuant to Section 2.01.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located or in the State of New York and, if such day relates to any LIBOR Rate Loan or any Base Rate Loan bearing interest at a rate based on the LIBOR Rate, means any such day that is also a London Banking Day.

 

“Businesses” has the meaning specified in Section 6.09(a).

 

“Capital Expenditure Equity Issuance” means any Equity Issuance by (i) Holdings, the Net Cash Proceeds of which are contributed as a cash common equity contribution for use in accordance with clause (ii) of this definition, or (ii) the Borrower (so long as such Equity Issuance does not result in a Change of Control) the Net Cash Proceeds of which are used by the Borrower or any Subsidiary to directly finance 100% of capital expenditures provided that (a) at the time of such issuance (and immediately after giving effect thereto), no Event of Default has occurred and is continuing and (b) the Borrower notifies the Administrative Agent in writing prior to the receipt of such Net Cash Proceeds that such Net Cash Proceeds are designated for Consolidated Capital Expenditures.

 

3

 

“Cash Collateral Account” means a deposit account of one or more of the Loan Parties.

 

“Cash Equivalents” means, as at any date, (a) securities issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than twelve months from the date of acquisition, (b) Dollar denominated time deposits and certificates of deposit of (i) any Lender, (ii) any domestic commercial bank of recognized standing having capital and surplus in excess of $500,000,000 or (iii) any bank whose short-term commercial paper rating from S&P is at least A-1 or the equivalent thereof or from Moody’s is at least P-1 or the equivalent thereof (any such bank being an “Approved Bank”), in each case with maturities of not more than 270 days from the date of acquisition, (c) commercial paper and variable or fixed rate notes issued by any Approved Bank (or by the parent company thereof) or any variable rate notes issued by, or guaranteed by, any domestic corporation rated A-1 (or the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or better by Moody’s and maturing within six months of the date of acquisition, (d) repurchase agreements entered into by any Person with a bank or trust company (including any of the Lenders) or recognized securities dealer having capital and surplus in excess of $500,000,000 for direct obligations issued by or fully guaranteed by the United States in which such Person shall have a perfected first priority security interest (subject to no other Liens) and having, on the date of purchase thereof, a fair market value of at least 100% of the amount of the repurchase obligations and (e) investments, classified in accordance with GAAP as current assets, in money market investment programs registered under the Investment Company Act of 1940 which are administered by reputable financial institutions having capital of at least $500,000,000 and the portfolios of which are limited to Investments of the character described in the foregoing subdivisions (a) through (d).

 

“Cash Management Agreement” means any agreement to provide treasury or cash management services, including deposit accounts, overnight draft, credit cards, debit cards, p cards (including, purchasing cards and commercial cards), funds transfer, automated clearinghouse, zero balance accounts, returned check concentration, controlled disbursement, lockbox, account reconciliation and reporting and trade finance services and other cash management services.

 

“Cash Management Bank” means any Person in its capacity as a party to a Cash Management Agreement with the Borrower or any Subsidiary provided that (a) at the time such Person enters into such Cash Management Agreement, such Person is a Lender or an Affiliate of a Lender, or (b) such Cash Management Agreement exists on the Closing Date and such Person is a Lender or an Affiliate of a Lender on the Closing Date.

 

“CHAMPVA” means the Civilian Health and Medical Program of the Department of Veteran Affairs, a program of medical benefits covering retirees and dependents of former members of the armed services administered by the United States Department of Veteran Affairs, and all laws, rules, regulations, manuals, orders, guidelines or requirements pertaining to such program including (a) all Federal statutes (whether set forth in 38 U.S.C. §1713 or elsewhere) affecting such program; and (b) all rules, regulations (including 38 C.F.R. §§17.270-17.278), manuals, orders and administrative guidelines of all Governmental Authorities promulgated pursuant to or in connection with such program (whether or not having the force of law), in each case as the same may be amended, supplemented or otherwise modified from time to time.

 

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any Law, (b) any change in any Law or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (i) the Dodd

 

4

 

Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

 

“Change of Control” means an event or series of events by which:

 

(a)                 Sterling and its Controlled Investment Affiliates shall cease to own and control legally and beneficially (free and clear of all Liens, other than Liens in favor of the Administrative Agent for the benefit of the holders of Obligations), either directly or indirectly, Equity Interests of the Borrower representing more than 50% of the combined voting power of all Equity Interests entitled to vote for members of the board of directors or equivalent governing body of the Borrower on a fully diluted basis (taking into account all such securities that Sterling and its Controlled Investment Affiliates have the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”));

 

(b)                 Sterling and its Controlled Investment Affiliates shall cease to own and control legally and beneficially (free and clear of all Liens), either directly or indirectly, Equity Interests of Holdings representing more than 50% of the combined voting power of all Equity Interests entitled to vote for members of the board of directors or equivalent governing body of Holdings on a fully diluted basis (taking into account all such securities that Sterling and its Controlled Investment Affiliates have the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)); provided that this clause (b) shall not become operative until the earlier of (i) the date on which Holdings is formed and (ii) the Holdings Outside Date;

 

(c)                  Holdings shall cease to directly own and control legally and beneficially (free and clear of all Liens, other than Liens in favor of the Administrative Agent for the benefit of the holders of Obligations) Equity Interests of the Borrower representing 100% of the combined voting power of all Equity Interests entitled to vote for members of the board of directors or equivalent governing body of the Borrower on a fully diluted basis; provided that this clause (c) shall not become operative until the earlier of (i) the date on which Holdings is formed and (ii) the Holdings Outside Date; or

 

(d)                 Sterling and its Controlled Investment Affiliates shall cease to have the ability to elect (either through share ownership or contractual voting or proxy rights) a majority of the board of directors or equivalent governing body of the Borrower.

 

“Closing Date” means the date hereof.

 

“Closing Date Term Loan” has the meaning specified in Section 2.01(b).

 

“Closing Date Term Loan Commitment” means, as to each Lender, its obligation to make its portion of the Term Loan to the Borrower pursuant to Section 2.01(b), in the principal amount set forth opposite such Lender’s name on Schedule 2.01. The aggregate principal amount of the Term Loan Commitments of all of the Lenders as in effect on the Closing Date is SEVENTY-FIVE MILLION DOLLARS ($75,000,000).

 

5

 

“CMS” means the Centers for Medicare & Medicaid Services, the federal agency responsible for administering Medicare, Medicaid, SCHIP (State Children’s Health Insurance) and other federal health-related programs.

 

“Collateral” means a collective reference to all property with respect to which Liens in favor of the Administrative Agent, for the benefit of itself and the other holders of the Obligations, are purported to be granted pursuant to and in accordance with the terms of the Collateral Documents.

 

“Collateral Documents” means, collectively, the Security Agreement, each DACA, the Mortgages, the Perfection Certificate, each of the mortgages, collateral assignments, security agreements, pledge agreements, control agreements, or other similar agreements delivered to the Administrative Agent pursuant to Section 7.13, and each of the other agreements, instruments or documents that creates or purports to create a Lien in favor of the Administrative Agent for the benefit of the holders of the Obligations (or any subset thereof).

 

“Collection Account Agreement” has the meaning assigned to such term in the Security Agreement.

 

“Commitment” means, as to each Lender, the Revolving Commitment of such Lender, the Delayed Draw Term Loan Commitment of such Lender and/or the Term Loan Commitment of such Lender.

 

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. Section 1 et seq.).

 

“Competitor” means any Person (a “Direct Competitor”) whose principal source of revenue is the operation or management of a Medical Services Business and any Person who owns more than 50% of a Direct Competitor; provided that (i) each such Person is listed as a Direct Competitor on Schedule 1.01A as delivered to the Administrative Agent on the Closing Date (as updated from time to time by the Borrower to include other Persons that meet the criteria of a Competitor set forth in this definition), and (ii) any such update following the Closing Date shall not be effective until 3 days following the date on which the Administrative Agent receives such update.

 

“Compliance Certificate” means a certificate substantially in the form of Exhibit D.

 

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

 

“Consolidated Capital Expenditures” means, for any period, for the Borrower and its Subsidiaries (including the members of the MPT Group) on a consolidated basis, any expenditure in respect of the purchase or other acquisition of any fixed or capital asset (excluding normal replacements and maintenance which are properly charged to current operations).

 

“Consolidated Current Assets” means, at any date of determination, the total assets of the Borrower and its Subsidiaries (other than cash, Cash Equivalents, debt from Affiliates and deferred tax liabilities) which may be properly classified as current assets on a consolidated balance sheet of the Borrower and its Subsidiaries in accordance with GAAP.

 

“Consolidated Current Liabilities” means, at any date of determination, the total liabilities of the Borrower and its Subsidiaries (other than the current portion of any Loans and deferred tax liabilities) which may be properly classified as current liabilities on a consolidated balance sheet of the Borrower and its Subsidiaries in accordance with GAAP.

 

6

 

“Consolidated EBITDA” means, for any period, for Borrower and its Subsidiaries (including the MPT Group) on a consolidated basis, an amount equal to the sum of:

 

(a)                                 Consolidated Net Income for such period plus

 

(b)                                 without duplication, the following to the extent deducted in calculating such Consolidated Net Income:

 

(i)                                     Consolidated Interest Charges for such period,

 

(ii)                                  the provision for federal, state, local and foreign income and franchise taxes payable for such period,

 

(iii)                               depreciation and amortization expense for such period,

 

(iv)                      expenses incurred during such period to the extent the same have been reimbursed in cash during such period by a third party (other than the Borrower or any of its Subsidiaries) plus

 

(c)                                  the following to the extent deducted in calculating Consolidated Net Income for such period:

 

(i)                                     to the extent paid during such period (A) Management Fees to the extent such payments were permitted by Section 8.08(b), (B) Management Expenses in an aggregate amount not to exceed $750,000 during the term of this Agreement and (C) board fees,

 

(ii)                                  non-cash stock based compensation expense for such period,

 

(iii)                               non-cash losses for such period resulting from marking to market of Swap Contracts,

 

(iv)                              deferred loan costs for such period with respect to the Refinanced Credit Agreement,

 

(v)                                 preopening expenses incurred during such period in connection with (x) Facilities purchased or developed by any member of the MPT Group prior to the Closing Date in an aggregate amount not to exceed for each such Facility the amount set forth next to the name of such Facility on Schedule 1.01B, and (y) Facilities purchased or developed by any member of the MPT Group after the Closing Date in an aggregate amount not to exceed $250,000 per Facility,

 

(vi)                              fees and expenses incurred with respect to regulatory or strategic activities during such period, including any redesign of the physical plant in order to comply with state regulations, in an aggregate amount not to exceed $500,000 during the term of this Agreement,

 

(vii)                           litigation fees and expenses (other than malpractice claims) during such period, in an aggregate amount not to exceed $313,000 during the term of this Agreement,

 

(viii)                        executive recruitment and relocation fees and expenses for executives incurred during such period, in an aggregate amount not to exceed $500,000 during the term of this Agreement,

 

7

 

(ix)                              fees and expenses incurred during such period with respect to regulatory or strategic activities in order to do business in a new state during such period, including consultants fees, in an aggregate amount not to exceed $500,000 during the term of this Agreement,

 

(x)                                 fees and expenses incurred during such period (and owing to Persons that are not the Borrower or any of its Subsidiaries or any of their respective Affiliates) on Facility locations that will not be developed in an aggregate amount not to exceed $500,000 during the term of this Agreement,

 

(xi)                              lease expenses, writeoffs and other losses incurred during such period (and, in each case owing to Persons that are not the Borrower or any of its Subsidiaries or any of their respective Affiliates) in connection with (A) the former corporate headquarters located at 2624 Long Prairie Road, Flower Mound, Texas in an aggregate amount not to exceed $525,000 (or $0 with respect to any period ending after December 31, 2013) during the term of this Agreement, or (B) any other closings or relocations of Facilities during such period in an aggregate amount not to exceed $400,000 per Facility and $1,000,000 for all Facilities during the term of this Agreement,

 

(xii)                           fees, charges and expenses incurred during such period in connection with the consummation of the Transactions on or prior to the Closing Date not to exceed $450,000 in the aggregate during the term of this Agreement;

 

(xiii)                        fees and expenses incurred during such period (and owing to Persons that are not the Borrower or any of its Subsidiaries or any of their respective Affiliates) (A) in connection with the negotiation, execution and delivery of the MPT Documents, provided that such fees and expenses are paid within 150 days following June 7, 2013 or (B) to amend the MPT Documents in connection with the transactions contemplated by this Agreement, in the case of clause (A) and (B), taken together, in an aggregate amount not to exceed $350,000 during the term of this Agreement,

 

(xiv)                       fees, charges and expenses incurred during such period, to the extent paid in cash, in connection with the consummation of any Permitted Acquisitions (whether or not consummated) in an aggregate amount for all such Acquisitions not in excess of $250,000 in any fiscal year, and

 

(xv)                          costs, expenses and losses incurred during such period (which shall in no event include any period that ends after September 30, 2014) related to the termination of existing interest rate hedging arrangements in respect of the Refinanced Credit Agreement in an aggregate amount not to exceed $535,000, plus

 

(d)                                 any proceeds received by the Borrower and its Subsidiaries (including members of the MPT Group) during such period under any business interruption policy to the extent not included in calculating Consolidated Net Income, minus

 

(e)                                  to the extent included in calculating such Consolidated Net Income, non-cash gains for such period resulting from marking to market of Swap Contracts.

 

Notwithstanding the foregoing, with respect to any test period of twelve consecutive fiscal months of Borrower, (a) the aggregate amount of consolidated EBITDA (calculated in the same manner as Consolidated EBITDA) attributable to any Facility that has been operational for less than the full twelve consecutive fiscal month period but for more than one full month during such period, and which

 

8

 

continues to be operational as of the last day of such test period (each, a “Specified Facility”) shall be calculated by annualizing the Facility EBITDA (calculated in the same manner as Consolidated EBITDA) for the number of full months remaining in the test period (excluding the first full month) using the most recent financial statements required to be delivered by the Loan Parties to the Administrative Agent pursuant to Section 7.01 and (b) the aggregate amount of annualized consolidated EBITDA attributable to all Specified Facilities in any period of twelve consecutive fiscal months and calculated in the manner specified in foregoing clause (a) less all actual consolidated EBITDA (calculated in the same manner as Consolidated EBITDA) attributable to all Specified Facilities for such period of twelve consecutive fiscal months shall not exceed (i) for each period of twelve consecutive fiscal months of Borrower ending March 31, 2014, June 30, 2014 and September 30, 2014, respectively, 35% of the aggregate Consolidated EBITDA for such period, (ii) for the twelve consecutive fiscal months of Borrower ending December 31, 2014, 30% of the aggregate Consolidated EBITDA for such period and (iii) for any period of twelve consecutive fiscal months ending after December 31, 2014, 25% of the aggregate Consolidated EBITDA for such period.

 

Notwithstanding anything contained in the foregoing to the contrary, (i) Consolidated EBITDA of the Borrower and its Subsidiaries for the fiscal month ended October 31, 2012 shall be deemed to be $1,054,023, (ii) Consolidated EBITDA of the Borrower and its Subsidiaries for the fiscal month ended November 30, 2012 shall be deemed to be $959,119, (iii) Consolidated EBITDA of the Borrower and its Subsidiaries for the fiscal month ended December 31, 2012 shall be deemed to be $1,939,257, (iv) Consolidated EBITDA of the Borrower and its Subsidiaries for the fiscal month ended January 31, 2013 shall be deemed to be $1,790,768, (v) Consolidated EBITDA of the Borrower and its Subsidiaries for the fiscal month ended February 28, 2013 shall be deemed to be $694,155, (vi) Consolidated EBITDA of the Borrower and its Subsidiaries for the fiscal month ended March 31, 2013 shall be deemed to be $1,149,612, (vii) Consolidated EBITDA of the Borrower and its Subsidiaries for the fiscal month ended April 30, 2013 shall be deemed to be $957,969, (viii) Consolidated EBITDA of the Borrower and its Subsidiaries for the fiscal month ended May 31, 2013 shall be deemed to be $1,786,199, (ix) Consolidated EBITDA of the Borrower and its Subsidiaries for the fiscal month ended June 30, 2013 shall be deemed to be $928,025, (x) Consolidated EBITDA of the Borrower and its Subsidiaries for the fiscal month ended July 31, 2013 shall be deemed to be $553,258, (xi) Consolidated EBITDA of the Borrower and its Subsidiaries for the fiscal month ended August 31, 2013 shall be deemed to be $904,937, and (xii) Consolidated EBITDA of the Borrower and its Subsidiaries for the fiscal month ended September 30, 2013 shall be deemed to be $1,136,734. Consolidated EBITDA for the 12 months ending September 30, 2013 shall be deemed to be $17,006,053.

 

“Consolidated Funded Indebtedness” means Funded Indebtedness of the Borrower and its Subsidiaries (including the members of the MPT Group) on a consolidated basis.

 

“Consolidated Interest Charges” means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, an amount equal to the sum of (a) all interest, premium payments, debt discount, fees, charges and related expenses in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP, plus (b) the portion of rent expense with respect to such period under capital leases that is treated as interest in accordance with GAAP plus (c) the implied interest component of Synthetic Lease Obligations with respect to such period; provided that (i) for the period of twelve consecutive fiscal months ending March 31, 2014, Consolidated Interest Charges shall be deemed to be the actual Consolidated Interest Charges for the three consecutive fiscal months ending March 31, 2014 multiplied by 4, (ii) for the period of twelve consecutive fiscal months ending June 30, 2014, Consolidated Interest Charges shall be deemed to be the actual Consolidated Interest Charges for the six consecutive fiscal months ending June 30, 2014 multiplied by 2, and (iii) for the period of twelve consecutive fiscal months ending September 30, 2014, Consolidated Interest Charges shall be deemed to

 

9

 

be the actual Consolidated Interest Charges for the nine consecutive fiscal months ending September 30, 2014 multiplied by 4/3.

 

“Consolidated Interest Coverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated EBITDA for the period of the twelve consecutive fiscal months most recently ended to (b) cash Consolidated Interest Charges for the period of the twelve fiscal months most recently ended.

 

“Consolidated Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness as of such date to (b) Consolidated EBITDA for the period of the twelve fiscal months most recently ended.

 

“Consolidated Net Income” means, for any period, for the Borrower and its Subsidiaries (including the members of the MPT Group) on a consolidated basis, net income, including (i) all extraordinary losses and (ii) extraordinary gains not to exceed $1,000,000 for all periods.

 

“Contract Provider” means any Person who provides professional health care services under or pursuant to any contract or other arrangement with the Borrower or any Subsidiary or any employee, agent or subcontractor of such a Person.

 

“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

 

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling”, “Controlled” and “under common Control with” have meanings correlative thereto. Without limiting the generality of the foregoing, a Person shall be deemed to be Controlled by another Person if such other Person possesses, directly or indirectly, power to vote 10% or more of the securities having ordinary voting power for the election of directors, managing general partners or the equivalent.

 

“Controlled Investment Affiliate” shall mean, with respect to Sterling, any Person that is (i) organized by Sterling or an Affiliate of Sterling for the purpose of making equity or debt investments in one or more companies, (ii) controlled by, or is under common control with, Sterling and (iii) engaged in the business of making equity investments in the ordinary course of business. For purposes of this definition “control” means the power to direct or cause the direction of management and policies of a Person, whether by contract or otherwise.

 

“Credit Extension” means each of the following: (a) a Borrowing and (b) an issuance of a Letter of Credit arranged by the L/C Arranger.

 

“Cure Notice” has the meaning specified in Section 9.04.

 

“Cure Right” has the meaning specified in Section 9.04.

 

“DACA” has the meaning assigned to such term in Section 4(a)(iv) of the Security Agreement.

 

“Debt Issuance” means the issuance by the Borrower or any Subsidiary of any Indebtedness other than Indebtedness permitted under Section 8.03.

 

10

 

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

 

“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

 

“Default Rate” means (a) when used with respect to Obligations other than L/C Maintenance Fees, an interest rate equal to (i) the Base Rate plus (ii) the Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per annum; provided, however, that with respect to a LIBOR Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum and (b) when used with respect to L/C Maintenance Fees, a rate equal to the Applicable Rate for Revolving Loans that are LIBOR Rate Loans plus 2% per annum.

 

“Defaulting Lender” means, subject to Section 2.15(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent or any Lender any other amount required to be paid by it hereunder within two Business Days of the date when due, (b) has notified the Borrower, the Administrative Agent or the L/C Arranger in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above, and of the effective date of such status, shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.15(b)) as of the date established therefor by the Administrative Agent in a written notice of such determination, which shall be delivered by the Administrative Agent to the Borrower, the L/C Arranger and each Lender promptly following such determination.

 

“Delayed Draw Conditions” shall have the meaning set forth in Section 5.03.

 

11

 

“Delayed Draw Period” means the period after the Closing Date and ending on the Delayed Draw Term Loan Commitment Expiration Date which can be extended solely with the consent of each Lender providing such Delayed Draw Term Loan Commitment.

 

“Delayed Draw Term Loan” means a Delayed Draw Term Loan made by a Lender to the Borrower pursuant to Section 2.01(c).

 

“Delayed Draw Term Loan Commitment” means the commitment of a Lender to make or otherwise fund a Delayed Draw Term Loan and “Delayed Draw Term Loan Commitments” means such commitments of all Lenders in the aggregate. The amount of each Lender’s Delayed Draw Term Loan Commitment, if any, is set forth on Schedule 2.01 or in the applicable Assignment and Assumption, subject to any adjustment or reduction pursuant to the terms and conditions hereof. The aggregate amount of the Delayed Draw Term Loan Commitments as of the Closing Date is $165,000,000.

 

“Delayed Draw Term Loan Commitment Expiration Date” shall mean the eighteen month anniversary of the Closing Date.

 

“Delayed Draw Term Loan Exposure” means, with respect to any Lender, as of any date of determination, the outstanding principal amount of the Delayed Draw Term Loans of such Lender; provided, at any time prior to the making of the Delayed Draw Term Loans, the Delayed Draw Term Loan Exposure of any Lender shall be equal to such Lender’s Delayed Draw Term Loan Commitment.

 

“Designated Jurisdiction” means any country or territory to the extent that such country or territory itself is the subject of any Sanction.

 

“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition of any property by the Borrower or any Subsidiary, including any Sale and Leaseback Transaction and any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith, but excluding (a) the disposition of inventory in the ordinary course of business; (b)the disposition (including the trade-in) of machinery and equipment or abandonment of intellectual property, in each case no longer used or useful in the conduct of business of the Borrower and its Subsidiaries as determined by the Borrower in good faith; (c) the disposition of property to the Borrower or any Subsidiary; provided, that, subject to Section 8.16(c), if (i) the transferor of such property is a member of the Primary Group then the transferee thereof must be a member of the Primary Group and (ii) the transferor of such property is a member of the MPT Group then the transferee thereof must be a member of the MPT Group; (d) the disposition of accounts receivable in connection with the collection or compromise thereof; (e) licenses, sublicenses, leases or subleases granted to others not interfering in any material respect with the business of the Borrower and its Subsidiaries; (f) the sale or disposition of Cash Equivalents for fair market value; (g) any Recovery Event; and (h) to the extent constituting a Disposition, the bailment of assets to third party processors in the ordinary course of business to the extent title to such assets is not transferred to the applicable third party processor. For the avoidance of doubt, the issuance by any Person of its own Equity Interests shall not be deemed to be a Disposition.

 

“Dollar” and “$” mean lawful money of the United States.

 

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of any state of the United States or the District of Columbia.

 

12

 

“Eligible Assignee” means any Person that meets the requirements to be an assignee under Sections 11.06(b)(iii) and (v) (subject to such consents, if any, as may be required under Section 11.06(b)(iii)).

 

“Employee Equity Repurchase” has the meaning specified in Section 8.06.

 

“Environmental Laws” means any and all federal, state, local and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.

 

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

“Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

 

“Equity Issuance” means any issuance by the Borrower or any Subsidiary of its Equity Interests to any Person other than an Excluded Equity Issuance. The term “Equity Issuance” shall not be deemed to include any Disposition.

 

“ERISA” means the Employee Retirement Income Security Act of 1974.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with a Loan Party within the meaning of Section 414(b) or (c) of the Internal Revenue Code (and Sections 414(m) and (o) of the Internal Revenue Code for purposes of provisions relating to Section 412 of the Internal Revenue Code).

 

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan (other than a Multiemployer Plan); (b) the withdrawal of a Loan Party or any Subsidiary from a Multiple Employer Plan subject to Section 4063 of ERISA during a plan year in which such entity was a “substantial employer” (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by a Loan Party or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Pension Plan (other than a Multiemployer Plan) amendment as a termination under Section 4041 or 4041A of ERISA; (e) the institution by the PBGC of proceedings to terminate a Pension Plan (other than a Multiemployer Plan); (f) any event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or

 

13

 

the appointment of a trustee to administer, any Pension Plan (other than a Multiemployer Plan); (g) the determination that any Pension Plan is considered an at-risk plan or a plan in endangered or critical status within the meaning of Sections 430, 431 and 432 of the Internal Revenue Code or Sections 303, 304 and 305 of ERISA; or (h) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any Loan Party or any ERISA Affiliate.

 

“Event of Default” has the meaning specified in Section 9.01.

 

“Excess Cash Flow” shall mean, as calculated on an annual basis at the end of a fiscal year, the excess (if any), of:

 

(a)                                 the sum for such period (without duplication) of:

 

(i)                                     Consolidated EBITDA for such period, and

 

(ii)                                  the decrease, if any, in the Net Working Capital from the beginning to the end of such period, less

 

(b)                                 the sum for such period (without duplication and to the extent that the following amounts have not already been deducted in determining Consolidated EBITDA for such period) of:

 

(i)                                     Consolidated Interest Charges paid in cash,

 

(ii)                                  scheduled principal payments in accordance with Sections 2.07(c) and 2.07(d),

 

(iii)                               Taxes based on income and franchise taxes paid in cash by the Borrower and its Subsidiaries (including the members of the MPT Group),

 

(iv)                              Consolidated Capital Expenditures permitted to be made under this Agreement and paid in cash (and not financed other than with the proceeds of Loans),

 

(v)                                 fees, charges and expenses incurred during such period, to the extent paid in cash, in connection with the consummation of any Permitted Acquisitions (whether or not consummated) in an aggregate amount for all such Acquisitions not in excess of $250,000 in any fiscal year,

 

(vi)                              extraordinary and non-recurring items paid by the Borrower and its Subsidiaries (including the members of the MPT Group) in cash during such period up to $250,000 in the aggregate in any fiscal year,

 

(vii)                           (A) Management Fees to the extent paid in cash in accordance with Section 8.08(a) of this Agreement, and (B) Management Expenses to the extent paid in cash, in the case of each of clauses (A) and (B) during such period,

 

(viii)                        all other cash, cash charges and cash items, in each case to the extent added back to Consolidated Net Income in determining Consolidated EBITDA pursuant to clause (c) of the definition of Consolidated EBITDA,

 

14

 

(ix)                              any proceeds received by the Borrower and its Subsidiaries (including the members of the MPT Group) during the specified period under any business interruption policy, to the extent added in the determination of Consolidated EBITDA,

 

(x)                                 any Restricted Payments by the Borrower to third parties made in cash in accordance with Section 8.06, and

 

(xi)                              the increase, if any, in the Net Working Capital from the beginning to the end of such period.

 

For the avoidance of doubt, the calculation of Excess Cash Flow shall not include any items paid in cash during a period that are or have been added back to Consolidated Net Income or Consolidated EBITDA for the purpose of calculating Consolidated EBITDA during such period.

 

“Excluded Equity Issuance” means (a) any issuance of Equity Interests by the Borrower pursuant to the exercise of options or warrants; (b) any issuance of Equity Interests by the Borrower pursuant to the conversion of any debt securities to equity or the conversion of any class of equity securities to any other class of equity securities; (c) any issuance of options or warrants by the Borrower relating to its Equity Interests; (d) any issuance of Equity Interests by the Borrower as consideration for a Permitted Acquisition; (e) any issuance of Equity Interests by a Subsidiary to the Borrower or another Subsidiary; (f) any issuance of Equity Interests by the Borrower to (i) Sterling or any Controlled Investment Affiliate of Sterling or (ii) any other Person that owns Equity Interests of the Borrower on the Closing Date and to any Affiliate of any such Person; (g) any Capital Expenditures Equity Issuance; or (h) any issuance of Equity Interests by the Borrower the Net Cash Proceeds of which are used by the Borrower or any Subsidiary to directly finance Permitted Acquisitions, provided that (i) at the time of such issuance, no Event of Default has occurred and is continuing and (ii) such Permitted Acquisition is made within thirty (30) days of the receipt of such Net Cash Proceeds by the Borrower. Notwithstanding the foregoing, a Specified Equity Contribution shall not constitute an Excluded Equity Issuance.

 

“Excluded Property” has the meaning specified in the Security Agreement.

 

“Excluded Swap Obligation” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guaranty of such Guarantor of, or the grant under a Loan Document by such Guarantor of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act (determined after giving effect to Section 4.08 and all guarantees of such Guarantor’s Swap Obligations by other Loan Parties) at the time the Guaranty of such Guarantor, or grant by such Guarantor of a security interest, becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a Master Agreement governing more than one Swap Contract, such exclusion shall apply to only the portion of such Swap Obligation that is attributable to Swap Contracts for which such Guaranty or security interest is or becomes illegal.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to any Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect

 

15

 

to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 11.13) or (ii) such Lender changes its Lending Office, except in each case to the extent that, pursuant to Section 3.01(a)(ii) or (c), amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its Lending Office, (c) Taxes attributable to such Recipient’s failure to comply with Section 3.01(e) and (d) any U.S. federal withholding Taxes imposed pursuant to FATCA.

 

“Exclusion Event” means an event or related events resulting in the exclusion of the Borrower or any Subsidiary from participation in any Medical Reimbursement Programs.

 

“Existing Indebtedness” has the meaning specified in Section 5.01.

 

“Existing L/C Security Agreement” means the Security Agreement (Deposit Accounts-Specific), dated as of the Closing Date, between the Borrower and Bank of America, N.A.

 

“Existing MPT Documents” means, collectively, the MPT Master Funding Agreement, the MPT Master Lease, the MPT Security Agreement, each MPT Cost Overrun Guaranty, the MPT Master Lease Guaranty, each MPT Project Development Agreement, the MPT Environmental Indemnification Agreement and each other agreement, instrument, document and certificate relating to any of the foregoing, including all security agreements, pledges, mortgages, guarantees and other collateral documents and instruments securing or guarantying payment of any portion of the MPT Claim.

 

“Extraordinary Receipt” means any cash received by or paid to or for the account of any Person consisting of the proceeds of any extraordinary gains, tax refunds, pension plan reversions, proceeds of insurance (other than proceeds of business interruption insurance to the extent such proceeds constitute compensation for lost earnings), condemnation awards (and payments in lieu thereof), indemnity payments, any purchase price adjustments and any other cash received by or paid to or for the account of any Person not in the ordinary course of business; provided, however, that an Extraordinary Receipt shall not include (i) cash receipts from proceeds of insurance, condemnation awards (or payments in lieu thereof) or indemnity payments to the extent that such proceeds, awards or payments in respect of loss or damage to equipment, fixed assets or real property are applied (or in respect of which expenditures were previously incurred) to replace or repair the equipment, fixed assets or real property in respect of which such proceeds were received in accordance with the terms of Section 2.05(b)(ii), or (ii) the Net Cash Proceeds of any event specified in Section 2.05(b)(i), (ii), (iii), or (iv).

 

“Facilities” has the meaning specified in Section 6.09(a).

 

“FASB ASC” means the Accounting Standards Codification of the Financial Accounting Standards Board.

 

“FATCA” means Sections 1471 through 1474 of the Internal Revenue Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof.

 

“Federal Funds Rate” means, for any day, the interest rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as determined by the Administrative Agent in a commercially reasonable manner.

 

16

 

“Fee Letter” means the letter agreement dated October 31, 2013 between the Borrower and FSFC.

 

“Financial Covenant Default” has the meaning specified in Section 9.04.

 

“Flow Through Entity” means an entity that (a) for federal income tax purposes constitutes (i) a “partnership” (within the meaning the Internal Revenue Code) other than a “publicly traded partnership” (as defined in Section 7704 of the Internal Revenue Code) treated as a corporation under Section 7704(a) of the Internal Revenue Code, or (ii) any other business entity that is disregarded as an entity separate from its owners for U.S. federal income tax purposes (each of the entities described in the preceding clauses (i) and (ii) a “Federal Flow Though Entity”), and (b) for state and local jurisdictions is subject to treatment on a basis under applicable state or local income tax law substantially similar to a Federal Flow Through Entity.

 

“Foreign Lender” means (a) if the Borrower is a U.S. Person, a Lender that is not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender that is resident or organized under the Laws of a jurisdiction other than that in which the Borrower is resident for tax purposes. For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

 

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

 

“FRB” means the Board of Governors of the Federal Reserve System of the United States.

 

“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.

 

“Funded Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP (but excluding, in all cases, trade accounts payable in the ordinary course of business):

 

(a)                                 the outstanding principal amount of all obligations, whether current or long-term, for borrowed money (including the Obligations (other than obligations under Swap Contracts)) and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

 

(b)                                 all purchase money indebtedness;

 

(c)                                  the maximum amount available to be drawn under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

 

(d)                                 all obligations in respect of the deferred purchase price of property or services (including, for the avoidance of doubt, obligations consisting of earn-out payments in connection with any Acquisition);

 

(e)                                  the Attributable Indebtedness of capital leases, Sale and Leaseback Transactions, Synthetic Lease Obligations and Securitization Transactions;

 

(f)                                   without duplication, all Guarantees with respect to outstanding Funded Indebtedness of the types specified in clauses (a) through (e) above of another Person; and

 

17

 

(g)                                  all Funded Indebtedness of the types referred to in clauses (a) through (f) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or joint venturer, except to the extent that Funded Indebtedness is expressly made non-recourse to such Person;

 

provided that in any event obligations under any Swap Contract (including the Swap Termination Value thereof) shall not be deemed to constitute Funded Indebtedness. For purposes of clarification obligations under any operating lease do not constitute Funded Indebtedness.

 

“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board, or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

 

“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, bureau, board, commission, department, official, tribunal, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (whether international, supranational (such as the European Union or the European Central Bank), federal, state or local).

 

“Government Receivable” means any Receivable that is a Medicare Receivable, Medicaid Receivable or other government Receivable.

 

“Government Receivables Account” means any deposit account (within the meaning of the New York Uniform Commercial Code) or other account into which any payment under Government Receivables is directly paid by the Governmental Authority, but, for the avoidance of doubt, shall not include any other deposit account or other account into which such funds are subsequently transferred.

 

“Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

 

18

 

“Guarantors” means, collectively, (a) each Domestic Subsidiary identified as a “Guarantor” on the signature pages hereto, (b) each Person that joins as a Guarantor pursuant to Section 7.12 or otherwise, including Holdings, (c) with respect to (i) Obligations under any Secured Hedge Agreement, (ii) Obligations under any Secured Cash Management Agreement and (iii) any Swap Obligation of a Specified Loan Party (determined before giving effect to Sections 4.01 and 4.08) under the Guaranty any Swap Obligation of a Specified Loan Party (determined before giving effect to Sections 4.01 and 4.08) under the Guaranty, the Borrower, and (d) the successors and permitted assigns of the foregoing; provided that no MPT Operator shall be a Guarantor unless and to the extent permitted under the MPT Documents.

 

“Guaranty” means the Guaranty made by the Guarantors in favor of the Administrative Agent, the L/C Arranger, the Lenders, the Hedge Banks, the Cash Management Banks and the other holders of the Obligations pursuant to Article IV.

 

“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

 

“Hedge Bank” means any Person in its capacity as a party to a Swap Contract with the Borrower or any Subsidiary provided that (a) at the time such Person enters into such Swap Contract, such Person is a Lender or an Affiliate of a Lender, or (b) such Swap Contract exists on the Closing Date and such Person is a Lender or an Affiliate of a Lender on the Closing Date.

 

“HIPAA” means the Health Insurance Portability and Accountability Act of 1996 and the related regulations promulgated thereunder from time to time, including 45 CFR Parts 160, 162 and 164.

 

“HITECH Act” means the Health Information Technology for Economic and Clinical Health Act, which is part of the American Recovery and Reinvestment Act of 2009, and the related regulations promulgated from time to time thereunder.

 

“Holdings” has the meaning given to that term in Section 7.12(a).

 

“Holdings Outside Date” has the meaning given to that term in Section 7.12(a).

 

“IFRS” means international accounting standards within the meaning of IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements delivered under or referred to herein.

 

“Immaterial Subsidiary” means any Subsidiary that does not have (a) assets with a fair market value in excess of $100,000 and (b) revenues for the most recent period of the twelve fiscal months most recently ended for which the Borrower has delivered financial statements pursuant to Section 7.01(a) or (c) in excess of $100,000; provided that if, on any date, the Immaterial Subsidiaries, taken as a whole, have (a) assets with a fair market value in excess of $500,000 and (b) revenues for the most recent period of the twelve fiscal months most recently ended for which the Borrower has delivered financial statements pursuant to Section 7.01(a) or (c) in excess of $500,000, the Borrower shall (i) within 30 days following such date designate in writing to the Administrative Agent one or more of such Immaterial Subsidiaries as non-Immaterial Subsidiaries such that after giving effect to such designation each condition set forth in the proviso to this definition ceases to be true, and (ii) within the time periods specified therein, comply with the provisions of Sections 7.12 and 7.13 applicable to such Subsidiary. Notwithstanding the foregoing, (i) OpFree Licensing, LP, a Texas limited partnership (and any Subsidiary to which any of the intellectual property held by OpFree Licensing, LP on the Closing Date is transferred)

 

19

 

shall be deemed at all times not to be an Immaterial Subsidiary, (ii) for purposes of determining the non-Immaterial Subsidiaries as of the Closing Date, such determination will be made as of September 30, 2013, calculated based on financial statements meeting the requirements of the financial statements referred to in Section 7.01(c), (iii) the Borrower shall designate the non-Immaterial Subsidiaries as of September 30, 2013 in writing to the Administrative Agent not less than one (1) Business Day prior to the Closing Date, and (iv) the Borrower shall cause OpFree Licensing, LP, a Texas limited partnership, and such non-Immaterial Subsidiaries to be Loan Parties on and as of the Closing Date.

 

“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP (but excluding, in all cases, trade accounts payable in the ordinary course of business):

 

(a)                                 all obligations, whether current or long-term, for borrowed money (including Obligations hereunder) and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

 

(b)                                 all purchase money indebtedness;

 

(c)                                  the maximum amount available to be drawn under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

 

(d)                                 all obligations in respect of the deferred purchase price of property or services (including, for the avoidance of doubt, obligations consisting of earn-out payments in connection with any Acquisition);

 

(e)                                  the Attributable Indebtedness of capital leases, Synthetic Lease Obligations, Sale and Leaseback Transactions and Securitization Transactions;

 

(f)                                   the Swap Termination Value of any Swap Contract;

 

(g)                                  indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

 

(h)                                 all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment (other than Tax Distributions), in each case prior to the date that is 180 days following the Maturity Date in respect of any Equity Interests in such Person or any other Person, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends;

 

(i)                                     all Indebtedness of the types referred to in clauses (a) through (h) above and clause (j) below of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, except to the extent that such Indebtedness is expressly made non-recourse to such Person; and

 

(j)                                    without duplication, all Guarantees with respect to Indebtedness of the types specified in clauses (a) through (i) above of another Person.

 

20

 

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.

 

“Indemnitees” has the meaning specified in Section 11.04(b).

 

“Information” has the meaning specified in Section 11.07.

 

“Intercompany Indebtedness” means Indebtedness owing by a Loan Party to another Loan Party.

 

“Interest Payment Date” means the last day of each month and the Maturity Date.

 

“Interest Period” means, as to each LIBOR Rate Loan, the period commencing on the date such LIBOR Rate Loan is disbursed or converted to or continued as a LIBOR Rate Loan and ending on the date three months thereafter; provided that:

 

(a)                                 any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

 

(b)                                 any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and

 

(c)                                  no Interest Period shall extend beyond the Maturity Date.

 

“Interim Financial Statements” means the unaudited consolidated financial statements of the Borrower and its Subsidiaries for the fiscal quarter ending September 30, 2013, including balance sheets and statements of income or operations, shareholders’ equity and cash flows.

 

“Internal Revenue Code” means the Internal Revenue Code of 1986.

 

“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person in any other Person, whether by means of (a) the purchase or other acquisition of Equity Interests of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, or (c) an Acquisition. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

 

“IP Rights” has the meaning specified in Section 6.17.

 

“IRS” means the United States Internal Revenue Service.

 

“Issuing Bank” means ING Capital LLC, JPMorgan Chase Bank, Wells Fargo Bank, National Association, Bank of America, N.A. and/or any other issuing bank reasonably acceptable to the Borrower and Administrative Agent.

 

“Issuer Documents” means with respect to any Letter of Credit, the applicable Letter of Credit Application, and any other document, agreement and instrument entered into by the Issuing Bank or the

 

21

 

L/C Arranger and the Borrower (or any Subsidiary) or in favor of the Issuing Bank or the L/C Arranger and relating to such Letter of Credit.

 

“Joinder Agreement” means a joinder agreement substantially in the form of Exhibit E executed and delivered by a Domestic Subsidiary in accordance with the provisions of Section 7.12 or any other documents as the Administrative Agent shall reasonably request for such purpose

 

“L/C Arranger” means FSFC, its affiliates and/or its subsidiaries.

 

“L/C Limit” means $6,000,000; provided that the L/C Limit shall be increased automatically to $10,000,000 from and after the date on which (a) both the New MPT Documents are effective (including increasing the maximum aggregate amount funded by MPT thereunder by an additional $100,000,000) and the Borrower has cash on hand generated from operations in excess of $5,000,000 that (i) does not appear and would be required to appear as “restricted” on a consolidated balance sheet of the Borrower and its Subsidiaries prepared in accordance with GAAP and (ii) is not subject to a Lien (other than Liens of the type described in Sections 8.01(m) and (n)) and (b) the Administrative Agent has received an officer’s certificate executed by a Responsible Officer of the Borrower certifying that the conditions set forth in foregoing clause (a) have been satisfied.

 

“L/C Maintenance Fee” has the meaning given to such term in Section 2.03.

 

“L/C Notes” means, collectively, each of the notes, in each case in form and substance satisfactory to L/C Arranger in its sole and absolute discretion, executed by Borrower to the L/C Arranger pursuant to Section 2.03.

 

“Laws” means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

 

“Lenders” means each of the Persons identified as a “Lender” on the signature pages hereto, each other Person that becomes a “Lender” in accordance with this Agreement and their successors and assigns.

 

“Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent.

 

“Letter of Credit Application” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the applicable Issuing Bank and reasonably satisfactory to the Borrower.

 

“Letter of Credit Reimbursement Payment” means any payments, losses, damages, penalties, actions, judgments, suits, claims, costs and expenses (including all reasonable fees and expenses of counsel) of any kind or nature whatsoever that may be imposed on, incurred by, or asserted against the L/C Arranger in connection with any Letter of Credit being drawn upon, including any compensation paid to a Beneficiary for any damage sustained by such Beneficiary.

 

“Letter of Credit Termination Date” has the meaning given to such term in Section 2.03.

 

22

 

“Letter of Credit Usage” means, on any date of determination, the aggregate maximum amounts available to be drawn under all outstanding Letters of Credit, without regard to whether any conditions to drawing could then be met.

 

“Letters of Credit” means one or more irrevocable standby letters of credit in the aggregate face amounts of not more than the L/C Limit issued by an Issuing Bank for the benefit of a Beneficiary and any renewals thereof.

 

“LIBOR” means:

 

(a)                                 with respect to any LIBOR Rate Loan, the greater of (i) the quoted offered rate (expressed in a percentage) for three-month United States dollar deposits with leading banks in the London interbank market that appears as of 11:00 a.m. (London time) initially as of the Closing Date and thereafter on the first LIBOR Business Day of each Interest Period on the page of the Reuters Screen which displays an average British Bankers Association Interest Settlement Rate (such page currently being LIBOR01 page and formerly Telerate Page 3750), as determined by the Administrative Agent, and (ii) one percent (1.00%) per annum; and

 

(b)                                 for any interest calculation with respect to a Base Rate Loan on any date, the rate per annum equal to (i) the quoted offered rate (expressed as a percentage) for one-month United States dollar deposits with leading banks in the London interbank market that appears as of 11:00 a.m. (London time) on such date.

 

The establishment of LIBOR by the Administrative Agent shall be final and binding, absent manifest error.

 

“LIBOR Business Day” means a day upon which (i) United States dollar deposits may be dealt in on the London interbank markets and (ii) commercial banks and foreign exchange markets are open in London, England and in New York.

 

“LIBOR Rate” means LIBOR (determined pursuant to clause (a) of the definition of LIBOR) plus the Applicable Rate.

 

“LIBOR Rate Loan” means a Loan that bears interest at the LIBOR Rate determined in accordance with clause (a) of the definition of LIBOR.

 

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).

 

“Liquidity” means the sum of (a) all cash and Cash Equivalents of each member of the Primary Group that is a Loan Party on such date that (i) do not appear (or would not be required to appear) as “restricted” on a consolidated balance sheet of the Borrower and its Subsidiaries prepared in accordance with GAAP and (ii) are not subject to a Lien (other than Liens of the type described in Sections 8.01(m) and (n)) plus (b) Availability.

 

“Loan” means an extension of credit by a Lender to the Borrower under Article II in the form of a Revolving Loan, the Closing Date Term Loan or a Delayed Draw Term Loan.

 

23

 

“Loan Documents” means this Agreement, each Note, each Issuer Document, each Joinder Agreement, the Collateral Documents, each Collection Account Agreement, the MPT Intercreditor Agreement, the MPT Subordination Agreement, the Management Fee Subordination Agreement, the Subordinated Intercompany Note, and the Fee Letter.

 

“Loan Notice” means a notice of (a) a Borrowing of Revolving Loans, the Closing Date Term Loan or Delayed Draw Term Loans, (b) a conversion of Loans from one Type to the other, or (c) a continuation of LIBOR Rate Loans, in each case pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit A.

 

“Loan Parties” means, collectively, the Borrower, each member of the MPT Group (including each MPT Operator) and each Guarantor.

 

“London Banking Day” means any day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

 

“Management Agreement” means the Advisory Services Agreement dated as of September 30, 2011 among the Borrower and SFM.

 

“Management Expenses” means amounts paid by the Borrower to SFM to reimburse SFM for out-of-pocket costs and expenses pursuant to and in compliance with Section 3 of the Management Agreement.

 

“Management Fee” means the “Management Fee” payable pursuant to and in compliance with Section 5 of the Management Agreement.

 

“Management Fee Subordination Agreement” means the Management Fee Subordination Agreement dated as of the Closing Date among each party to the Management Agreement and the Administrative Agent.

 

“Master Agreement” has the meaning specified in the definition of “Swap Contract.”

 

“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, liabilities (actual or contingent) or financial condition of the Borrower and its Subsidiaries taken as a whole; (b) a material impairment of the rights and remedies of the Administrative Agent or any Lender under any Loan Document to which it is a party; (c) a material impairment of the ability of any Loan Party to perform its obligations under any Loan Document to which it is a party; or (d) a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party.

 

“Material Contract” means any agreement or contract to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or its Subsidiaries or any of their respective properties are bound or affected, the termination, revocation, expiration or material breach of which (without contemporaneous replacement) would reasonably be expected to have a Material Adverse Effect.

 

“Material Indebtedness” means any Indebtedness (other than Indebtedness arising under the Loan Documents and Indebtedness arising under Swap Contracts) having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount.

 

24

 

“Maturity Date” means October 31, 2018; provided, however, if such date is not a Business Day, the Maturity Date shall be the next preceding Business Day.

 

“Maximum Rate” has the meaning specified in Section 11.09.

 

“Medicaid” means that means-tested entitlement program under Title XIX of the Social Security Act, which provides federal grants to states for medical assistance based on specific eligibility criteria, as set forth at Section 1396, et seq. of Title 42 of the United States Code.

 

“Medicaid Provider Agreement” means an agreement entered into between a state agency or other such entity administering the Medicaid program and a health care provider or supplier, under which the health care provider or supplier is permitted to provide services for Medicaid patients in accordance with the terms of the agreement and Medicaid Regulations.

 

“Medicaid Receivable” means any Receivable with respect to which the obligor is a state acting through a state’s Medicaid agency that arises out of charges reimbursable to the Borrower or any Subsidiary under Medicaid.

 

“Medicaid Regulations” means, collectively, (a) all federal statutes (whether set forth in Title XIX of the Social Security Act or elsewhere) regulating the medical assistance program established by Title XIX of the Social Security Act; (b) all applicable provisions of all federal rules, regulations, manuals and orders of all Governmental Authorities promulgated pursuant to the statutes described in clause (a) above and all federal administrative, reimbursement and other guidelines of all Governmental Authorities having the force of law promulgated pursuant to the statutes described in clause (a) above; (c) all state statutes for medical assistance enacted in connection with the statutes and provisions described in clauses (a) and (b) above; and (d) all applicable provisions of all rules, regulations, manuals and orders of all Governmental Authorities promulgated pursuant to the statutes described in clause (c) above and all state administrative, reimbursement and other guidelines of all Governmental Authorities having the force of law promulgated pursuant to the statutes described in clause (b) above.

 

“Medical Management Fees” means fees paid by the Borrower to Conjugate Health Professional Association for providing medical services at the Facilities.

 

“Medical Reimbursement Programs” means a collective reference to the Medicare, Medicaid and TRICARE and CHAMPVA programs and any other health care program operated by or financed in whole or in part by any foreign or domestic federal, state or local government.

 

“Medical Services Business” means the operation or ownership by any Loan Party (other than Holdings) of emergency services facilities, urgent care facilities or hospitals.

 

“Medicare” means that government-sponsored entitlement program under Title XVIII of the Social Security Act, which provides for a health insurance system for eligible elderly and disabled individuals, as set forth at Section 1395, et seq. of Title 42 of the United States Code.

 

“Medicare Provider Agreement” means an agreement entered into between CMS (or other such entity administering the Medicare program on behalf of the CMS) and a health care provider or supplier, under which such health care provider or supplier is permitted to provide services for Medicare patients in accordance with the terms of the agreement and Medicare Regulations.

 

“Medicare Receivable” means any Receivable with respect to which the obligor is the United States that arises out of charges reimbursable to the Borrower or any Subsidiary under Medicare.

 

25

 

“Medicare Regulations” means, collectively, all federal statutes (whether set forth in Title XVIII of the Social Security Act or elsewhere) regulating the health insurance program for the aged and disabled established by Title XVIII of the Social Security Act and any successor statutes thereto; together with all applicable provisions of all rules, regulations, manuals and orders and administrative, reimbursement and other guidelines having the force of law of all Governmental Authorities (including CMS, the United States Department of Health and Human Services, or any person succeeding to the functions of any of the foregoing) promulgated pursuant to any of the foregoing having the force of law.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

 

“Mortgaged Property” means any real property that is owned by a Loan Party and is subject to a Mortgage.

 

“Mortgages” means the mortgages, deeds of trust or deeds to secure debt that purport to grant to the Administrative Agent, for the benefit of the holders of the Obligations, a security interest in the fee interests of any Loan Party in any real property.

 

“MPT” means (a) MPT Operating Partnership, L.P., (b) each of its Affiliates that is party to an MPT Document and (c) each of their respective successors.

 

“MPT Claim” means the “MPT Claim” as defined in the MPT Intercreditor Agreement.

 

“MPT Cost Overrun Guaranty” means, with respect to each MPT Facility, the Cost Overrun Guaranty in the form of Exhibit A to the MPT Master Funding Agreement given by the Borrower in favor of MPT.

 

“MPT Documents” means, collectively, the Existing MPT Documents and the New MPT Documents.

 

“MPT Environmental Indemnification Agreement” means the Environmental Indemnification Agreement dated as of June 7, 2013 by the Borrower, the MPT Operators party thereto and MPT.

 

“MPT Facility” means each free-standing emergency medical facility that is constructed or developed after June 7, 2013 in conjunction with the MPT Documents (including any capital addition to or expansion of any such facility).

 

“MPT Group” means all Subsidiaries that either (a) are MPT Operators or (b) own (directly or indirectly through Subsidiaries) Equity Interests in one or more MPT Operators.

 

“MPT Intercreditor Agreement” means the Intercreditor Agreement dated as of the Closing Date between MPT and the Administrative Agent.

 

“MPT Letter of Credit” means a Letter of Credit that satisfies the requirements of an MPT Project Development Agreement or the MPT Master Lease.

 

“MPT Master Funding Agreement” means the Master Funding and Development Agreement dated as of June 7, 2013 between MPT and the Borrower.

 

“MPT Master Lease” means the Master Lease Agreement dated as of June 7, 2013 among the affiliates of MPT identified therein and the MPT Operators party thereto.

 

26

 

“MPT Master Lease Guaranty” means the Guarantor Agreement dated as June 7, 2013 given by the Borrower for the benefit of MPT.

 

“MPT Maximum Funding Amount” has the meaning specified in Section 8.16(a).

 

“MPT Operator” means, as of any date, each Subsidiary of the Borrower that, as of such date, manages and operates an MPT Facility and that has joined and remains joined to the MPT Master Lease (or any master lease constituting a New MPT Document), in each case as a lessee thereunder.

 

“MPT Project Development Agreement” means, with respect to each MPT Facility, the Project Funding and Development Agreement executed by the Borrower, the applicable MPT Operator, the applicable third party developer and MPT in accordance with the MPT Documents.

 

“MPT Security Agreement” means the Security Agreement dated as of June 7, 2013 among MPT and the MPT Operators party thereto.

 

“MPT Senior Collateral” means “MPT Senior Collateral” as defined in the MPT Intercreditor Agreement.

 

“MPT Subordination Agreement” means the Subordination Agreement dated as of the Closing Date by and among the Borrower, MPT and the Administrative Agent.

 

“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which any Loan Party or any Subsidiary makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

 

“Multiple Employer Plan” means a Plan which has two or more contributing sponsors (including at least one Loan Party) at least two of whom are not under common control, as such a plan is described in Section 4064 of ERISA.

 

“Net Cash Proceeds” means the aggregate cash or Cash Equivalents proceeds received by the Borrower or any Subsidiary in respect of any Disposition, Recovery Event, Debt Issuance, Equity Issuance or Extraordinary Event net of (a) direct costs incurred in connection therewith (including legal, accounting and investment banking fees, and sales commissions), (b) taxes paid or payable as a result thereof and (c) in the case of any Disposition or any Recovery Event, the amount necessary to retire any Indebtedness secured by a Permitted Lien (ranking senior to any Lien of the Administrative Agent) on the related property; it being understood that “Net Cash Proceeds” shall include any cash or Cash Equivalents received upon the sale or other disposition of any non-cash consideration received by the Borrower or any Subsidiary in any Disposition, Recovery Event, Debt Issuance, Equity Issuance or Extraordinary Event.

 

“Net Working Capital” means, at any time, Consolidated Current Assets at such time minus Consolidated Current Liabilities at such time.

 

“New MPT Documents” means the agreements, instruments, documents and certificates, related to transactions entered into after the Closing Date relating to increasing the maximum aggregate amount funded by MPT thereunder by an additional $100,000,000 in the aggregate (thereby bringing the total amount permitted to be funded under the MPT Documents to $205,000,000); provided that (i) the New MPT Documents, taken as a whole, are no less favorable to the Borrower, any of its Subsidiaries, the Administrative Agent or any Lender than the Existing MPT Documents, taken as a whole, (ii) with respect to any New MPT Document for which there is a corresponding Existing MPT Document, such New MPT Document, taken as a whole, shall not be less favorable to the Borrower, any of its

 

27

 

Subsidiaries, the Administrative Agent or any Lender than the corresponding Existing MPT Document, taken as a whole, (iii) the New MPT Documents and the obligations under or in respect of the New MPT Documents shall be subject to the MPT Subordination Agreement and the MPT Intercreditor Agreement to at least the same extent as the Existing MPT Documents and the obligations under or in respect of the Existing MPT Documents, (iv) all of the proceeds of any new borrowing made under the New MPT Documents shall be used for the sole purpose of developing MPT Facilities, and (v) no Person that is not an obligor under the indebtedness evidenced or governed by the Existing MPT Documents shall be an obligor under the indebtedness evidenced or governed by the New MPT Documents.

 

“Non-Consenting Lender” means any Lender that does not approve any consent, waiver or amendment that (a) requires the approval of all Lenders or all affected Lenders in accordance with the terms of Section 11.01 and (b) has been approved by the Required Lenders.

 

“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.

 

“Note” has the meaning specified in Section 2.11(a).

 

“Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan, Letter of Credit, Secured Cash Management Agreement or Secured Hedge Agreement, in each case whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding; provided, that “Obligations” of a Guarantor shall exclude any Excluded Swap Obligations of such Guarantor.

 

“Obligor” has the meaning assigned to such term in the Security Agreement.

 

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.

 

“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

 

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

 

28

 

“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 3.06).

 

“Outstanding Amount” means with respect to any Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of any Loans occurring on such date.

 

“Participant” has the meaning specified in Section 11.06(d).

 

“Participant Register” has the meaning specified in Section 11.06(d).

 

“Patient” means, on any date, any natural person for whom any health care items or services have been provided or performed prior to such date by the Borrower or any Subsidiary (other than any such person with respect to whom the applicable obligor on the Receivable originated in connection therewith would not reasonably be expected to approve payment thereunder).

 

“Payment in Full” means the occurrence of (a) termination of the Aggregate Revolving Commitments and (b) payment in full in cash of all Obligations (other than (i) contingent indemnification obligations and (ii) obligations and liabilities then due and payable under Secured Cash Management Agreements and Secured Hedge Agreements as to which arrangements satisfactory to the applicable Cash Management Bank or Hedge Bank shall have been made) and the expiration or termination of all Letters of Credit (other than Letters of Credit as to which (i) a back to back letter of credit has been provided on terms and conditions and by such Persons satisfactory to the Administrative Agent and the L/C Arranger or (ii) such other arrangements satisfactory to the Administrative Agent and the L/C Arranger shall have been made).

 

“Payor” means any third party liable for payment for health care items or services provided or performed by the Borrower or any Subsidiary, including all private insurance companies, Blue Cross/ Blue Shield, Medicare, Medicaid, health maintenance organizations, preferred provider organizations, managed care systems, and alternative delivery systems.

 

“PBGC” means the Pension Benefit Guaranty Corporation.

 

“Pension Act” means the Pension Protection Act of 2006.

 

“Pension Funding Rules” means the rules of the Internal Revenue Code and ERISA regarding minimum required contributions (including any installment payment thereof) to Pension Plans and set forth in, with respect to plan years ending prior to the effective date of the Pension Act, Section 412 of the Internal Revenue Code and Section 302 of ERISA, each as in effect prior to the Pension Act and, thereafter, Section 412, 430, 431, 432 and 436 of the Internal Revenue Code and Sections 302, 303, 304 and 305 of ERISA.

 

“Pension Plan” means any employee pension benefit plan (including a Multiple Employer Plan or a Multiemployer Plan) that is maintained or is contributed to by any Loan Party and any ERISA Affiliate and is either covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Internal Revenue Code.

 

29

 

“Perfection Certificate” means a certificate in the form of Exhibit H or any other form approved by the Administrative Agent, as the same shall be supplemented from time to time by a Perfection Certificate Supplement or otherwise.

 

“Permitted Acquisition” means an Acquisition by (i) any Loan Party of all or substantially all of the assets, or of any business or division, of a target (the “Target”), which assets, business or division are located in the United States of America or (ii) any Loan Party of 100% of the Equity Interests of a Target organized under the laws of any State in the United States of America or the District of Columbia, in each instance, to the extent that each of the following conditions shall have been satisfied:

 

(a)                                 no Event of Default shall have occurred and be continuing or would result from such Acquisition;

 

(b)                                 the property acquired (or the property of the Person acquired) in such Acquisition is a Medical Services Business;

 

(c)                                  if such transaction involves the purchase of an interest in a partnership between any Loan Party as a general partner and entities unaffiliated with the Borrower as the other partners, such transaction shall be effected by having such equity interest acquired by a corporate holding company directly or indirectly wholly-owned by such Loan Party newly formed for the sole purpose of effecting such transaction;

 

(d)                                 with respect to any Acquisition in respect of which the aggregate Acquisition Consideration exceeds $1,000,000, Borrower shall have furnished to Administrative Agent and Lenders at least five (5) Business Days prior to the consummation of such Acquisition (i) an executed term sheet and/or commitment letter (setting forth in reasonable detail the terms and conditions of such Acquisition) and, at the request of Administrative Agent, such other information and documents that Administrative Agent may reasonably request, including, without limitation and to the extent available, drafts of the respective material agreements, documents or instruments pursuant to which such Acquisition is to be consummated (including, without limitation, any related management, non-compete, employment, option or other material agreements), any schedules to such agreements, documents or instruments and all other material ancillary agreements, instruments and documents to be executed or delivered in connection therewith, and executed counterparts thereof prior to closing and (ii) summary historical annual audited and quarterly unaudited financial statements of the target for the previous twelve (12) month period for which financial statements are available, and a forecasted balance sheet, income statement, and cash flows of the target for the forthcoming twelve (12) month period;

 

(e)                                  in the case of an Acquisition of the Equity Interests of another Person, the board of directors (or other comparable governing body) of such other Person shall have duly approved such Acquisition;

 

(f)                                   the Borrower shall have delivered to the Administrative Agent a Pro Forma Compliance Certificate demonstrating that the Borrower and its Subsidiaries would be in compliance with the financial covenants set forth in Section 8.11 recomputed as of the end of the period of the twelve fiscal months most recently ended for which the Borrower has delivered financial statements pursuant to Section 7.01(a) or (c) after giving effect to such Acquisition on a Pro Forma Basis;

 

(g)                                  the representations and warranties made by the Loan Parties in each Loan Document shall be true and correct in all material respects (except to the extent any such

 

30

 

representation or warranty is already qualified by materiality, in which case it shall be true and correct in all respects) at and as if made as of the date of such Acquisition (after giving effect thereto);

 

(h)                                 the Target shall have EBITDA (calculated in the same manner as Consolidated EBITDA, subject to pro forma adjustments acceptable to Administrative Agent) for the most recent twelve months to the Target ending immediately prior to the acquisition date for which financial statements are available, greater than zero;

 

(i)                                     Borrower and its Subsidiaries (including any new Subsidiary) shall execute and deliver the agreements, instruments and other documents required by Sections 7.12 and 7.13 and Administrative Agent shall have received, for the benefit of the holders of the Obligations, a collateral assignment of the seller’s representations, warranties and indemnities to Borrower or any of its Subsidiaries under any of the acquisition documents;

 

(j)                                    immediately after giving effect to such Acquisition, there shall be at least $5,000,000 of Availability;

 

(k)                                 the Acquisition Consideration for any Acquisition shall not exceed $5,000,000 (or, with respect to the acquisition of an urgent care business or division or the Equity Interests thereof, $500,000) and the Acquisition Consideration for all Acquisitions occurring during any fiscal year of the Borrower shall not exceed $10,000,000 (or, with respect to acquisitions of urgent care businesses or divisions or the Equity Interests thereof, $1,000,000); and

 

(l)                                     any portion of the Acquisition Consideration constituting earn-out payments shall be recognized as Indebtedness in accordance with GAAP.

 

“Permitted Liens” means, at any time, Liens in respect of property of the Borrower or any Subsidiary permitted to exist at such time pursuant to the terms of Section 8.01.

 

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

 

“Plan” means any employee benefit plan within the meaning of Section 3(3) of ERISA (including a Pension Plan), maintained for employees of any Loan Party or any Subsidiary or any such Plan to which any Loan Party or any Subsidiary is required to contribute on behalf of any of its employees.

 

“Platform” has the meaning specified in Section 7.02.

 

“Prepayment Premium” shall mean, with respect to any voluntary prepayment, or any mandatory prepayment under Section 2.05(b)(iii) or any other mandatory prepayment if the events giving rise to such mandatory prepayment constitute or result in an Event of Default, whether before or after an Event of Default (except as expressly provided herein) or upon acceleration of the Obligations, a prepayment premium equal to: (a) two percent (2.0%) of the amount prepaid if such prepayment occurs after the Closing Date and on or prior to the first anniversary of the Closing Date, (b) one percent (1.0%) of the amount prepaid if such prepayment occurs after the first anniversary of the Closing Date and on or prior to the second anniversary of the Closing Date, and (c) zero percent (0.0%) of the amount prepaid if such prepayment occurs on or after the second anniversary of the Closing Date; provided, that notwithstanding the foregoing, if any such prepayment occurs in connection with a Change of Control, the applicable Prepayment Premium shall only be: (a) one percent (1.0%) of the amount prepaid if such prepayment occurs after the Closing Date and on or prior to the second anniversary of the Closing Date, and (b) zero

 

31

 

percent (0.0%) of the amount prepaid if such prepayment occurs on or after the second anniversary of the Closing Date; provided further, that solely with respect to each Delayed Draw Term Loan, whether before or after an Event of Default (except as expressly provided herein) or upon acceleration of the Obligations, the applicable Prepayment Premium shall be equal to: (a) two percent (2.0%) of the amount prepaid if such prepayment occurs after the date such Delayed Draw Term Loan is made and on or prior to the first anniversary of the date such Delayed Draw Term Loan is made, (b) one percent (1.0%) of the amount prepaid if such prepayment occurs after the first anniversary of the date such Delayed Draw Term Loan is made and on or prior to the second anniversary of the date such Delayed Draw Term Loan is made, and (c) zero percent (0.0%) of the amount prepaid if such prepayment occurs on or after the second anniversary of the date such Delayed Draw Term Loan is made.

 

“Primary Facility” means, collectively, (a) those free-standing emergency medical facilities operated by any member of the Primary Group on or prior to the Closing Date and (b) any new free-standing emergency medical facilities or other Medical Services Business purchased or developed by any member of the Primary Group after the Closing Date; provided that such new facilities are not constructed or developed in conjunction with the MPT Master Funding Agreement and/or the New MPT Documents, as applicable.

 

“Primary Group” means the Borrower and its Subsidiaries other than any Subsidiary that is a member of the MPT Group.

 

“Pro Forma Basis” means, with respect to any transaction, that for purposes of calculating the financial covenants set forth in Section 8.11, such transaction shall be deemed to have occurred as of the first day of the most recent twelve fiscal month period preceding the date of such transaction for which the Borrower was required to deliver financial statements pursuant to Section 7.01(a) or (c). In connection with the foregoing, (a) with respect to any Disposition or Recovery Event, (i) income statement and cash flow statement items (whether positive or negative) attributable to the property disposed of shall be excluded to the extent relating to any period occurring prior to the date of such transaction and (ii) Indebtedness which is retired shall be excluded and deemed to have been retired as of the first day of the applicable period and (b) with respect to any Acquisition, (i) income statement and cash flow statement items attributable to the Person or property acquired shall be included to the extent relating to any period applicable in such calculations to the extent (A) such items are not otherwise included in such income statement and cash flow statement items for the Borrower and its Subsidiaries in accordance with GAAP or in accordance with any defined terms set forth in Section 1.01 and (B) such items are supported by financial statements or other information reasonably satisfactory to the Administrative Agent and (ii) any Indebtedness incurred or assumed by the Borrower or any Subsidiary (including the Person or property acquired) in connection with such transaction and any Indebtedness of the Person or property acquired which is not retired in connection with such transaction (A) shall be deemed to have been incurred as of the first day of the applicable period and (B) if such Indebtedness has a floating or formula rate, shall have an implied rate of interest for the applicable period for purposes of this definition determined by utilizing the rate which is or would be in effect with respect to such Indebtedness as at the relevant date of determination.

 

“Pro Forma Compliance Certificate” means a certificate of a Responsible Officer of the Borrower containing reasonably detailed calculations of the financial covenants set forth in Section 8.11 recomputed as of the end of the period of the twelve fiscal months most recently ended for which the Borrower has delivered financial statements pursuant to Section 7.01(a) or (c) after giving effect to the applicable transaction on a Pro Forma Basis.

 

“Public Lender” has the meaning specified in Section 7.02.

 

32

 

“Qualified ECP Guarantor” means at any time each Loan Party with total assets exceeding $10,000,000 or that qualifies at such time as an “eligible contract participant” under the Commodity Exchange Act and can another Person to qualify as an “eligible contract participant” at such time under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

“Real Property Security Documents” means with respect to the fee interest of any Loan Party in any real property:

 

(a)                                 a fully executed and notarized Mortgage encumbering the fee interest of such Loan Party in such real property;

 

(b)                                 if requested by the Administrative Agent in its sole discretion, maps or plats of an as-built survey of the sites of such real property certified to the Administrative Agent and the title insurance company issuing the policies referred to in clause (c) of this definition in a manner satisfactory to each of the Administrative Agent and such title insurance company, dated a date satisfactory to each of the Administrative Agent and such title insurance company by an independent professional licensed land surveyor, which maps or plats and the surveys on which they are based shall be sufficient to delete any standard printed survey exception contained in the applicable title policy and be made in accordance with the Minimum Standard Detail Requirements for Land Title Surveys jointly established and adopted by the American Land Title Association and the American Congress on Surveying and Mapping in 2011 with items 2, 3, 4, 6(b), 7(a), 7(b)(1), 7(c), 8, 9, 10, 11(a), 13, 14, 16,17, 18 and 19 on Table A thereof completed;

 

(c)                                  if requested by the Administrative Agent in its sole discretion, ALTA mortgagee title insurance policies issued by a title insurance company acceptable to the Administrative Agent with respect to such real property, assuring the Administrative Agent that the Mortgage covering such real property creates a valid and enforceable first priority mortgage lien on such real property, free and clear of all defects and encumbrances except Permitted Liens, which title insurance policies shall otherwise be in form and substance satisfactory to the Administrative Agent and shall include such endorsements as are requested by the Administrative Agent;

 

(d)                                 evidence as to (i) whether such real property is in an area designated by the Federal Emergency Management Agency as having special flood or mud slide hazards (a “Flood Hazard Property”) and (ii) if such real property is a Flood Hazard Property, (A) whether the community in which such real property is located is participating in the National Flood Insurance Program, (B) the applicable Loan Party’s written acknowledgment of receipt of written notification from the Administrative Agent (1) as to the fact that such real property is a Flood Hazard Property and (2) as to whether the community in which each such Flood Hazard Property is located is participating in the National Flood Insurance Program and (C) copies of insurance policies or certificates of insurance of the Borrower and its Subsidiaries evidencing flood insurance satisfactory to the Administrative Agent and naming the Administrative Agent and its successors and/or assigns as sole loss payee on behalf of the Lenders;

 

(e)                                  if requested by the Administrative Agent in its sole discretion, an environmental assessment report, as to such real property, in form and substance and from professional firms acceptable to the Administrative Agent;

 

(f)                                   if requested by the Administrative Agent in its sole discretion, evidence reasonably satisfactory to the Administrative Agent that such real property, and the uses of such real property, are in compliance in all material respects with all applicable zoning laws (the evidence submitted as to which should include the zoning designation made for such real

 

33

 

property, the permitted uses of such real property under such zoning designation and, if available, zoning requirements as to parking, lot size, ingress, egress and building setbacks); and

 

(g)                                  if requested by the Administrative Agent in its sole discretion, an opinion of legal counsel to the Loan Party granting the Mortgage on such real property, addressed to the Administrative Agent and each Lender, in form and substance reasonably acceptable to the Administrative Agent.

 

“Receivables” means all Patient accounts existing or hereafter created, any and all rights to receive payments due on such accounts from any Patient or Payor under or in respect of such account (including all insurance companies, Blue Cross/Blue Shield, Medicare, Medicaid and health maintenance organizations and any other Medical Reimbursement Programs), to the extent not evidenced by an instrument or chattel paper, and all proceeds of, or in any way derived from, any of the foregoing, whether directly or indirectly (including all interest, finance charges and other amounts payable by the obligor in respect thereof).

 

“Recipient” means the Administrative Agent, any Lender, the L/C Arranger or any other recipient of any payment to be made by or on account of any obligation of any Loan Party hereunder.

 

“Recovery Event” means any loss of, damage to or destruction of, or any condemnation or other taking for public use of, any property of the Borrower or any Subsidiary.

 

“Refinanced Credit Agreement” means the credit agreement among the Borrower, Bank of America, N.A. as Administrative Agent and the other parties thereto, dated as of April 17 2012 and amended by the first amendment dated January 4, 2013 and the second amendment dated June 7, 2013.

 

“Register” has the meaning specified in Section 11.06(c).

 

“Reimbursement Obligations” means Borrower’s obligation to reimburse the L/C Arranger for any Letter of Credit Reimbursement Payments.

 

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.

 

“Relevant Quarter” has the meaning specified in Section 9.04.

 

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the thirty-day notice period has been waived.

 

“Request for Credit Extension” means (a) with respect to a Borrowing, conversion or continuation of Loans, a Loan Notice, and (b) with respect to an L/C Credit Extension, a Letter of Credit Application.

 

“Required Lenders” means, at any time, Lenders having Total Credit Exposures representing more than 50% of the Total Credit Exposures of all Lenders. The Total Credit Exposure of any Defaulting Lender shall be disregarded in determining Required Lenders at any time.

 

“Required Revolving Lenders” means, at any time, Lenders having Revolving Credit Exposures representing more than 50% of the Revolving Credit Exposures of all Lenders.

 

34

 

“Responsible Officer” means the chief executive officer, president, chief financial officer, treasurer, assistant treasurer or controller of a Loan Party and, solely for purposes of the delivery of incumbency certificates, the secretary or any assistant secretary of a Loan Party and, solely for purposes of notices given pursuant to Article II, any other officer of the applicable Loan Party so designated by any of the foregoing officers in a notice to the Administrative Agent. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

 

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests of any Person, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of any such Equity Interests or on account of any return of capital to such Person’s stockholders, partners or members (or the equivalent Person thereof), or any option, warrant or other right to acquire any such dividend or other distribution or payment.

 

“Retained Rights” means, with respect to any Government Receivable, the rights of the Borrower or any Subsidiary granted by applicable law and regulations over such Government Receivable, including, without limitation, and as applicable, the collection thereof and discretion over the transfer thereof to any party (including the Administrative Agent) and to enforce the claim giving rise to such Government Receivable against such Governmental Authority, in the absence of a court order in the manner expressly contemplated by applicable state and federal law.

 

“Revolving Commitment” means, as to each Lender, its obligation to make Revolving Loans to the Borrower pursuant to Section 2.01, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as such amount may be adjusted from time to time in accordance with this Agreement.

 

“Revolving Credit Exposure” means, as to any Lender at any time, the aggregate principal amount at such time of its outstanding Revolving Loans.

 

“Revolving Loan” has the meaning specified in Section 2.01(a).

 

“S&P” means Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc. and any successor thereto.

 

“Sale and Leaseback Transaction” means, with respect to any Person, any arrangement, directly or indirectly, whereby such Person shall sell or transfer any property used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property being sold or transferred.

 

“Sanction(s)” means any international economic sanction administered or enforced by OFAC, the United Nations Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions authority.

 

“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

 

35

 

“Secured Cash Management Agreement” means any Cash Management Agreement that is entered into by and between the Borrower or any Subsidiary and any Cash Management Bank.

 

“Secured Hedge Agreement” means any Swap Contract permitted under Section 8.03 that is entered into by and between the Borrower or any Subsidiary and any Hedge Bank.

 

“Securitization Transaction” means, with respect to any Person, any financing transaction or series of financing transactions (including factoring arrangements) pursuant to which such Person or any Subsidiary of such Person may sell, convey or otherwise transfer, or grant a security interest in, accounts, payments, receivables, rights to future lease payments or residuals or similar rights to payment to a special purpose subsidiary or affiliate of such Person.

 

“Security Agreement” means the security and pledge agreement dated as of the Closing Date executed in favor of the Administrative Agent, for the benefit of the holders of the Obligations, by each of the Loan Parties.

 

“SFM” means Sterling Fund Management, LLC, a Delaware limited liability.

 

“Solvent” or “Solvency” means, with respect to any Person as of a particular date, that on such date (a) such Person is able to pay its debts and other liabilities, contingent obligations and other commitments as they mature in the ordinary course of business, (b) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature in the ordinary course of business, (c) such Person is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which such Person’s property would constitute unreasonably small capital, (d) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (e) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured and (f) such Person does not intend, in any transaction, to hinder, delay or defraud either present or future creditors or any other person to which such Person is or will become, through such transaction, indebted. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

“Specified Distributions” has the meaning specified in Section 8.06(e).

 

“Specified Equity Contribution” has the meaning specified in Section 9.04.

 

“Specified Loan Party” means any Loan Party that is not an “eligible contract participant” under the Commodity Exchange Act (determined prior to giving effect to Section 4.08).

 

“Sterling” means Sterling Capital Partners III, LP.

 

“Sterling Equity Reserve” has the meaning specified in Section 5.01.

 

“Subordinated Intercompany Note” means the Subordinated Intercompany Note in the form of Exhibit J hereto.

 

“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of Equity Interests having ordinary voting power for the election of directors or equivalent governing body (other than Equity Interests

 

36

 

having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.

 

“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

 

“Swap Obligation” means with respect to any Guarantor any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a (47) of the Commodity Exchange Act.

 

“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s) and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).

 

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

 

“Tax Distributions” means, for so long as the Borrower is a Flow Through Entity, distributions by the Borrower to owners of Equity Interests of Borrower pursuant to Section 4.2 of Borrower’s Limited Liability Company Agreement as in effect on the date hereof.

 

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

 

“Term Loan” means, collectively, the Closing Date Loan and the Delayed Draw Term Loans.

 

“Term Loan Commitment” means, as to each Lender, its Closing Date Term Loan Commitment and its Delayed Draw Term Loan Commitment.

 

37

 

“Term Loan Exposure” means, with respect to any Lender, as of any date of determination, the outstanding principal amount of the portion of the Term Loan made by such Lender; provided, at any time prior to the making of the Term Loan, the Term Loan Exposure of any Lender shall be equal to such Lender’s Term Loan Commitment.

 

“Threshold Amount” means, as of any date of determination, the greater of (a) $1,000,000 and (b) 5% of Consolidated EBITDA as of the end of the period of the twelve fiscal months most recently ended for which the Borrower has delivered financial statements pursuant to Section 7.01(a) or (c).

 

“Total Credit Exposure” means, as to any Lender at any time, the unused Revolving Commitments, Revolving Credit Exposure, Term Loan Exposure and Delayed Draw Term Loan Exposure of such Lender at such time.

 

“Total Revolving Outstandings” means the sum of (i) the aggregate Outstanding Amount of all Revolving Loans and (ii) all Letter of Credit Usage.

 

“Transactions” means the disbursement of the Closing Date Tern Loans pursuant hereto on the Closing Date and the repayment of certain existing Indebtedness of the Borrower.

 

“TRICARE” means the TRICARE Management Activity health care program of the United States Department of Defense Military Health System, as set forth in 10 U.S.C. Section 1071 et seq.

 

“Type” means, with respect to any Loan, its character as a Base Rate Loan or a LIBOR Rate Loan.

 

“United States” and “U.S.” mean the United States of America.

 

“U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Internal Revenue Code.

 

“U.S. Tax Compliance Certificate” has the meaning specified in Section 3.01(e)(ii)(B)(III).

 

“Wholly Owned Subsidiary” means any Person 100% of whose Equity Interests are at the time owned by the Borrower directly or indirectly through other Persons 100% of whose Equity Interests are at the time owned, directly or indirectly, by the Borrower.

 

1.02                        Other Interpretive Provisions.

 

With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

 

(a)                                 The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “hereto”, “herein,”

 

38

 

“hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all assets and properties, tangible and intangible, real and personal, including cash, securities, accounts and contract rights.

 

(b)                                 In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

 

(c)                                  Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

 

1.03                        Accounting Terms; Calculation of Financial Covenants on a Pro Forma Basis.

 

(a)                                 Generally. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, except as otherwise specifically prescribed herein. Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of the Borrower and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial liabilities shall be disregarded.

 

(b)                                 Changes in GAAP. If at any time any change in GAAP (including the adoption of IFRS) would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Loan Parties shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP. Without limiting the foregoing, leases shall continue to be classified and accounted for on a basis consistent with GAAP as in effect on the date of this Agreement, notwithstanding any change in GAAP relating thereto, unless the parties hereto shall enter into a mutually acceptable amendment addressing such changes, as provided for above.

 

(c)                                  Consolidation of Variable Interest Entities. All references herein to consolidated financial statements of the Borrower and its Subsidiaries or the Primary Group, as applicable, or to the determination of any amount for the Borrower and its Subsidiaries or the Primary Group, as applicable, on a consolidated basis or any similar reference shall, in each case, be deemed to include each variable interest entity that the Borrower is required to consolidate pursuant to FASB ASC 810 as if such variable interest entity were a Subsidiary as defined herein.

 

39

 

(d)                                 Calculation of Financial Covenants on a Pro Forma Basis. Notwithstanding the above, the parties hereto acknowledge and agree that all calculations of the financial covenants in Section 8.11 shall be made on a Pro Forma Basis with respect to any Acquisition, Disposition or Recovery Event occurring during the applicable period.

 

1.04                        Rounding.

 

Any financial ratios required to be maintained by the Loan Parties pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

 

1.05                        Times of Day.

 

Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

 

1.06                        Letter of Credit Amounts.

 

Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

 

ARTICLE II

 

THE COMMITMENTS AND CREDIT EXTENSIONS

 

2.01                        Revolving Loans and Term Loan.

 

(a)                                 Revolving Loans. Subject to the terms and conditions set forth herein, each Lender severally agrees to make loans (each such loan, a “Revolving Loan”) to the Borrower in Dollars from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of such Lender’s Revolving Commitment; provided, however, that after giving effect to any Borrowing of Revolving Loans, (i) the Total Revolving Outstandings shall not exceed the Aggregate Revolving Commitments, and (ii) the Revolving Credit Exposure of any Lender shall not exceed such Lender’s Revolving Commitment. Within the limits of each Lender’s Revolving Commitment, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.01, prepay under Section 2.05, and reborrow under this Section 2.01. Revolving Loans may be Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as further provided herein, provided, however, any Borrowing made on the Closing Date may consist of LIBOR Rate Loans only if (A) such Borrowing complies with the requirements of Section 2.02(a) and (B) the Borrower delivers to the Administrative Agent a letter agreement, in form and substance reasonably satisfactory to the Administrative Agent, executed by a Responsible Officer of the Borrower, that provides an indemnity for such Borrowing on substantially the same terms as Section 3.04.

 

(b)                                 Closing Date Term Loan. Subject to the terms and conditions set forth herein, each Lender severally agrees to make its portion of a term loan (the “Closing Date Term Loan”) to the Borrower in Dollars on the Closing Date in an amount not to exceed such Lender’s Closing Date Term

 

40

 

Loan Commitment. Amounts repaid on the Closing Date Term Loan may not be reborrowed. The Closing Date Term Loan may consist of Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as further provided herein, provided, however, the Borrowing made on the Closing Date may consist of LIBOR Rate Loans only if (A) such Borrowing complies with the requirements of Section 2.02(a) and (B) the Borrower delivers to the Administrative Agent a letter agreement, in form and substance reasonably satisfactory to the Administrative Agent, executed by a Responsible Officer of the Borrower, that provides an indemnity for such Borrowing on substantially the same terms as Section 3.04.

 

(c)                                  Delayed Draw Term Loan. Subject to the terms and conditions hereof and the satisfaction of the Delayed Draw Conditions, each Lender severally agrees to make, during the Delayed Draw Period, one or more Delayed Draw Term Loans to the Borrower in an aggregate amount not to exceed such Lender’s Delayed Draw Term Loan Commitment. Any amount borrowed under this Section 2.01(c) and subsequently repaid or prepaid may not be reborrowed and such amount borrowed from each Lender with a Delayed Draw Term Loan Commitment shall reduce such Lender’s Delayed Draw Term Loan Commitment in an equivalent amount. The Delayed Draw Term Loans may consist of Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as further provided herein. Each Lender’s Delayed Draw Term Loan Commitment shall expire on the Delayed Draw Term Loan Commitment Expiration Date.

 

2.02                        Borrowings, Conversions and Continuations of Loans.

 

(a)                                 Each Borrowing, each conversion of Loans from one Type to the other, and each continuation of LIBOR Rate Loans shall be made upon the Borrower’s irrevocable notice to the Administrative Agent, which may be given initially by telephone. Each such notice must be received by the Administrative Agent not later than 12:00 p.m. (noon) (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of, LIBOR Rate Loans or of any conversion of LIBOR Rate Loans to Base Rate Loans, and (ii) on the requested date of any Borrowing of Base Rate Loans. Each telephonic notice by the Borrower pursuant to this Section 2.02(a) must be confirmed promptly by delivery to the Administrative Agent of a written Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower. Each Borrowing of, conversion to or continuation of LIBOR Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Except as provided in Sections 2.03(c) and 2.04(c), each Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each Loan Notice (whether telephonic or written) shall specify (i) whether the Borrower is requesting a Borrowing, a conversion of Loans from one Type to the other, or a continuation of LIBOR Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, and (iv) the Type of Loans to be borrowed or to which existing Loans are to be converted. If the Borrower fails to specify a Type of a Loan in a Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Loans shall be made as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable LIBOR Rate Loans.

 

(b)                                 Following receipt of a Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Applicable Percentage of the applicable Loans, and if no timely notice of a conversion or continuation is provided by the Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans described in the preceding subsection. In the case of a Borrowing, each Lender shall make the amount of its Loan available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 1:00 p.m. on the Business Day specified in the applicable Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 5.02 (and, if such Borrowing is the initial Credit Extension,

 

41

 

Section 5.01), the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrower on the books of FSFC with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower.

 

(c)                                  During the existence of an Event of Default, the Required Lenders may demand that any or all of the then outstanding LIBOR Rate Loans be converted immediately to Base Rate Loans.

 

(d)                                 The Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Interest Period for LIBOR Rate Loans upon determination of such interest rate. At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Borrower and the Lenders of any change in the Prime Rate used in determining the Base Rate promptly following the public announcement of such change.

 

(e)                                  After giving effect to all Borrowings, all conversions of Loans from one Type to the other, and all continuations of Loans as the same Type, there shall not be more than ten (10) Interest Periods in effect.

 

2.03                        Letters of Credit.

 

(a)                                 Generally. The L/C Arranger may, from time to time and in each instance in L/C Arranger’s sole and absolute discretion, arrange for the issuance or renewal of Letters of Credit by an Issuing Bank. Borrower’s obligations with respect to Reimbursement Obligations and L/C Maintenance Fees shall be evidenced by one or more L/C Notes. The Letters of Credit will secure certain obligations of Borrower to the applicable Beneficiary. Borrower shall honor its obligation to pay any and all amounts that are secured by the Letters of Credit in the ordinary course of Borrower’s business such that no amounts under the Letters of Credit are drawn. If L/C Arranger makes any Letter of Credit Reimbursement Payment, Borrower shall reimburse L/C Arranger in respect of such Letter of Credit Reimbursement Payment by paying to L/C Arranger an amount equal to such Letter of Credit Reimbursement Payment not later than 11:00 a.m., New York time, on (i) the Business Day that Borrower receives notice of such Letter of Credit Reimbursement Payment, if such notice is received prior to 10:00 a.m., New York time, or (ii) the Business Day immediately following the day that Borrower receives such notice, if such notice is not received prior to such time. If Borrower fails to make such payment when due, the full amount of such unpaid Letter of Credit Reimbursement Payment shall accrue interest at the interest rate (including the Default Rate, if applicable) for Revolving Loans. Borrower’s obligation to reimburse L/C Arranger for any Letter of Credit Reimbursement Payment shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit, or any term or provision therein, or (ii) any other event or circumstance whatsoever that might, but for the provisions of this Section 2.03, constitute a legal or equitable discharge of Borrower’s obligations hereunder or under any agreement or obligation to the Beneficiary. L/C Arranger shall have no liability or responsibility to Borrower by reason of or in connection with the Letters of Credit or L/C Arranger’s failure to make any payment thereunder or perform any of its obligations thereunder.

 

(b)                                 L/C Maintenance Fee. Borrower agrees to pay L/C Arranger a fee (the “L/C Maintenance Fee”) (which fee shall be retained by L/C Arranger and not shared with Administrative Agent or any Lender) equal to the Applicable Rate for Revolving Loan that are LIBOR Rate Loans per annum of the Letter of Credit Usage, plus any and all fees and charges required to be paid by L/C Arranger to the applicable Issuing Bank in connection with the Letters of Credit. The L/C Maintenance Fee shall be

 

42

 

payable in arrears in cash commencing on October 31, 2013 and continuing on each Interest Payment Date thereafter until such time as all Letters of Credit are permanently terminated as determined by L/C Arranger in its reasonable discretion (such date being referred to herein as the “Letter of Credit Termination Date”).

 

(c)                                  Obligation to Provide Cash Collateral Upon Certain Events. Upon the sooner to occur of (i) the Maturity Date and (ii) the occurrence of any Event of Default, in each case upon the written request of L/C Arranger, Borrower shall immediately deposit cash into a segregated non-interest bearing Cash Collateral Account or Cash Collateral Accounts maintained with a depository institution acceptable to L/C Arranger in its reasonable discretion, under the dominion and control of the Administrative Agent, for the benefit of L/C Arranger, in an amount equal to one hundred five percent (105%) of the Letter of Credit Usage. Such deposit shall be held as collateral for any obligations of Borrower under this Section 2.03. Borrower hereby grants a security interest to the Administrative Agent for the benefit of L/C Arranger in such Cash Collateral Account and in any cash or financial assets (as defined in the Code) or other property held therein. The cash collateral maintained in such segregated collateral account, less any amounts previously paid to L/C Arranger from such account or then owing to L/C Arranger under this Section 2.03, shall be promptly remitted to Borrower on the Letter of Credit Termination Date.

 

2.04                        [Reserved].

 

2.05                        Prepayments.

 

(a)                                 Voluntary Prepayments of Loans.

 

(i)                                     Revolving Loans. The Borrower may, upon notice from the Borrower to the Administrative Agent, at any time or from time to time voluntarily prepay Revolving Loans in whole or in part without premium or penalty; provided that (A) such notice must be received by the Administrative Agent not later than 11:00 a.m. (1) three Business Days prior to any date of prepayment of LIBOR Rate Loans and (2) on the date of prepayment of Base Rate Loans; (B) any such prepayment of LIBOR Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof (or, if less, the entire principal amount thereof then outstanding); and (C) any prepayment of Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof (or, if less, the entire principal amount thereof then outstanding). Each such notice shall specify the date and amount of such prepayment and the Type(s) of Loans to be prepaid. The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s Applicable Percentage of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Any prepayment of a LIBOR Rate Loan shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 3.05. Subject to Section 2.15, each such prepayment shall be applied to the Loans of the Lenders in accordance with their respective Applicable Percentages.

 

(ii)                                  Term Loan. The Borrower may, upon notice from the Borrower to the Administrative Agent, at any time or from time to time voluntarily prepay the Term Loan in whole or in part together with the applicable Prepayment Premium; provided that (A) such notice must be received by the Administrative Agent not later than 11:00 a.m. (1) three Business Days prior to any date of prepayment of LIBOR Rate Loans and (2) on the date of prepayment of Base Rate Loans; (B) any such prepayment of LIBOR Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof (or, if less, the entire principal amount thereof then outstanding); (C) any prepayment of Base Rate Loans shall be in a principal

 

43

 

amount of $500,000 or a whole multiple of $100,000 in excess thereof (or, if less, the entire principal amount thereof then outstanding); and (D) any prepayment of the Term Loan shall be applied in the inverse order of maturity with respect to the remaining amortization payments. Each such notice shall specify the date and amount of such prepayment and the Type(s) of Loans to be prepaid. The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s Applicable Percentage of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Any prepayment of a LIBOR Rate Loan shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 3.05. On the date of any voluntary prepayment of any Term Loan pursuant to this Section 2.05(a)(ii), the Borrower shall pay to the Administrative Agent, for the benefit of the Lenders, whether before or after an Event of Default, the applicable Prepayment Premium. Subject to Section 2.15, each such prepayment shall be applied to the Loans of the Lenders in accordance with their respective Applicable Percentages.

 

(b)                                 Mandatory Prepayments of Loans.

 

(i)                                     Revolving Commitments. If for any reason the Total Revolving Outstandings at any time exceed the Aggregate Revolving Commitments then in effect, the Borrower shall immediately prepay Revolving Loans in an aggregate amount equal to such excess.

 

(ii)                                  Dispositions and Recovery Events. The Borrower shall prepay the Loans as hereafter provided in an aggregate amount equal to 100% of the Net Cash Proceeds of any Dispositions or Recovery Event of the Borrower or any of its Subsidiaries to the extent (A) such Net Cash Proceeds are not reinvested in property that is useful in the business of the Primary Group within 180 days of the date of such Disposition or Recovery Event (it being understood that such prepayment shall be due immediately upon the expiration of such 180 day period) and (B) the aggregate amount of such Net Cash Proceeds that are not so reinvested exceeds $250,000 in any fiscal year of the Borrower; provided that the Borrower shall have no right to reinvest any such Net Cash Proceeds and shall instead prepay the Loans as provided above if any Event of Default exists at the time of such proposed reinvestment or would result therefrom.

 

(iii)                               Debt Issuances. Within two (2) Business Days of the receipt by the Borrower or any Subsidiary of the Net Cash Proceeds of any Debt Issuance, the Borrower shall prepay the Loans as hereafter provided in an aggregate amount equal to 100% of such Net Cash Proceeds.

 

(iv)                              Equity Issuances. Within two (2) Business Day of the receipt by the Borrower or any Subsidiary of the Net Cash Proceeds of any Equity Issuance, the Borrower shall prepay the Loans in an aggregate amount equal to (a) 100% of such Net Cash Proceeds to the extent Consolidated EBITDA as of the last day of the immediately preceding period of twelve (12) consecutive months is less than or equal to $30,000,000 and (b) 0.00% of such Net Cash Proceeds to the extent Consolidated EBITDA as of the last day of the immediately preceding period of twelve (12) consecutive months is greater than $30,000,000.

 

(v)                                 Extraordinary Receipts. Within two (2) Business days following receipt by Borrower or any of its Subsidiaries of the proceeds of any Extraordinary Receipts, the Borrower shall prepay the Loans in an aggregate amount equal to 100% of such Net Cash Proceeds; provided that the provisions of this clause (v) shall (a) not apply until such time as such aggregate Net Cash Proceeds exceed $1,000,000, and (b) once the condition in clause (a) of this proviso has been satisfied, shall apply only with respect to the Net Cash Proceeds in excess of such amount.

 

44

 

(vi)                              Excess Cash Flow. Commencing with the fiscal year ending December 31, 2014, no later than ten (10) Business Days after the date on which the Borrower’s annual audited financial statements for such fiscal year are required to be delivered pursuant to Section 7.01(a), (i) to the extent that the Consolidated Leverage Ratio of the Borrower and its Subsidiaries (including the members of the MPT Group) as of the last day of such fiscal year is greater than or equal to 3.00:1.00, the Borrower shall prepay the Obligations in an amount equal to (A) 50% of Excess Cash Flow for such fiscal year less (B) optional prepayments of the Term Loans actually made during such fiscal year or optional prepayments of the Revolving Loans to the extent of a corresponding permanent commitment reduction during such fiscal year, and (ii) to the extent that the Consolidated Leverage Ratio of the Borrower and its Subsidiaries (including the members of the MPT Group) as of the last day of such fiscal year is less than 3.00:1.00, the Borrower shall prepay the Obligations in an amount equal to (A) 25% of Excess Cash Flow for such fiscal year less (B) optional prepayments of the Term Loans actually made during such fiscal year or optional prepayments of the Revolving Loans to the extent of a corresponding permanent commitment reduction during such fiscal year. Any such prepayment shall be applied in accordance with subsection (ix) of this Section. Any such prepayment shall be accompanied by a certificate signed by the Borrower’s chief financial officer certifying in reasonable detail the manner in which Excess Cash Flow and the resulting prepayment were calculated, which certificate shall be in form and substance reasonably satisfactory to the Administrative Agent.

 

(vii)                           Option to Decline Prepayment. Notwithstanding anything to the contrary herein, any mandatory prepayment pursuant to Section 2.05(b) may be declined in whole or in part by any Lender without prejudice to such Lender’s rights hereunder to accept or decline any future payments in respect of any mandatory prepayment. If a Lender chooses not to accept payment in respect of a mandatory prepayment, in whole or in part, such declined proceeds shall be retained by the Borrower.

 

(viii)                        Application of Mandatory Prepayments. All amounts required to be paid pursuant to this Section 2.05(b) shall be applied as follows:

 

(A)                               first, to the payment of all fees, and all expenses specified in Section 11.04(a), to the full extent thereof;

 

(B)                               second, to the payment of any accrued interest at the Default Rate, if any;

 

(C)                               third, to the payment of any accrued interest (other than Default Rate interest);

 

(D)                               fourth, to the payment of the Prepayment Premium, if any, on any Loan;

 

(E)                                fifth, except in connection with any mandatory prepayment declined pursuant to Section 2.05(b)(vii), to prepay Term Loans on a pro rata basis (in accordance with the respective outstanding principal amounts thereof) and shall be further applied pro rata to reduce the remaining scheduled installments of principal of the Closing Date Term Loans and Delayed Draw Term Loans, in each case in inverse order of maturity;

 

(F)                                 sixth, to prepay the Revolving Loans to the full extent thereof (with no corresponding reduction in the Revolving Commitments);

 

45

 

(G)                               seventh, to prepay outstanding reimbursement obligations with respect to Letters of Credit (with no corresponding reduction in the Revolving Loan Commitments); and

 

(H)                              eighth, to further permanently reduce the Revolving Commitments to the full extent thereof.

 

Within the parameters of the applications set forth above, prepayments shall be applied first to Base Rate Loans and then to LIBOR Rate Loans in direct order of Interest Period maturities. All prepayments under this Section 2.05(b) shall be subject to Section 3.05, and shall be accompanied by interest on the principal amount prepaid through the date of prepayment, plus the applicable Prepayment Premium, if any.

 

2.06                        Termination or Reduction of Aggregate Revolving Commitments.

 

The Borrower may, upon notice to the Administrative Agent, terminate the Aggregate Revolving Commitments or unused portion of the Delayed Draw Term Loan Commitments, or from time to time permanently reduce the Aggregate Revolving Commitments; provided that (i) any such notice shall be received by the Administrative Agent not later than 11:00 a.m. five Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $5,000,000 or any whole multiple of $1,000,000 in excess thereof, (iii) the Borrower shall not terminate or reduce the Aggregate Revolving Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Revolving Outstandings would exceed the Aggregate Revolving Commitments and (iv) if, after giving effect to any reduction of the Aggregate Revolving Commitments or the L/C Limit exceeds the amount of the Aggregate Revolving Commitments, such sublimit shall be automatically reduced by the amount of such excess. The Administrative Agent will promptly notify the Lenders of any such notice of termination or reduction of the Aggregate Revolving Commitments. Any reduction of the Aggregate Revolving Commitments shall be applied to the Revolving Commitment of each Lender according to its Applicable Percentage thereof. All fees accrued until the effective date of any termination of the Aggregate Revolving Commitments shall be paid on the effective date of such termination.

 

2.07                        Repayment of Loans.

 

(a)                                 Revolving Loans. The Borrower shall repay to the Lenders on the Maturity Date the aggregate principal amount of all Revolving Loans outstanding on such date.

 

(b)                                 [Reserved].

 

(c)                                  Closing Date Term Loan. The original principal amount of the Closing Date Term Loan shall be repaid in consecutive quarterly installments on the last day of each fiscal quarter (as such installments may hereafter be adjusted as a result of prepayments made pursuant to Section 2.05), in an amount equal to (i) $468,750 for each fiscal quarter commencing with the fiscal quarter ending December 31, 2015 and ending with the fiscal quarter ending December, 2016 and (ii) $937,500 for each fiscal quarter thereafter, in each case, unless accelerated sooner pursuant to Section 9.02. The Borrower shall repay the outstanding principal amount of the Term Loan in full on the Maturity Date, unless accelerated sooner pursuant to Section 9.02.

 

(d)                                 Delayed Draw Term Loans. The original principal amount of each separate Credit Extension of Delayed Draw Term Loans shall be repaid in consecutive quarterly installments on the last day of each fiscal quarter (as such installments may hereafter be adjusted as a result of prepayments made

 

46

 

pursuant to Section 2.05), in an amount equal to (i) (x) (A) the aggregate original principal amount of each separate Credit Extension of Delayed Draw Term Loans multiplied by (B) 2.5%, divided by (y) 4 for each fiscal quarter commencing with the fiscal quarter ending December 31, 2015 and ending with the fiscal quarter ending December 31, 2016 and (ii) (x) (A) the aggregate original principal amount of each separate Credit Extension of Delayed Draw Term Loans multiplied by (B) 5.0%, divided by (y) 4 for each fiscal quarter thereafter, in each case, unless accelerated sooner pursuant to Section 9.02. The Borrower shall repay the outstanding principal amount of all Delayed Draw Term Loans in full on the Maturity Date, unless accelerated sooner pursuant to Section 9.02.

 

2.08                        Interest.

 

(a)                                 Subject to the provisions of subsection (b) below, (i) each LIBOR Rate Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the LIBOR Rate for such Interest Period plus the Applicable Rate; and (ii) each Base Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate.

 

(b)                                 Upon the occurrence and during the continuance of an Event of Default, (x) automatically with respect to any Event of Default under Section 9.01(a), 9.01(f) or 9.01(g), and (y) with respect to any other Event of Default, at the election of the Administrative Agent or the Required Lenders by written notice to the Borrower, in each case, the principal amount of all Loans outstanding and, to the extent permitted by applicable law, any interest payments on the Loans or any fees or other amounts owed hereunder, shall thereafter bear interest (including post-petition interest in any proceeding under the Bankruptcy Code of the United States or other applicable bankruptcy laws) payable on demand at a rate that is 2.00% per annum in excess of the interest rate otherwise payable hereunder with respect to the applicable Loans (or, in the case of any such fees and other amounts, at a rate which is 2.00% per annum in excess of the interest rate otherwise payable hereunder for Base Rate Loans); provided, that in the case of LIBOR Rate Loans, upon the expiration of the Interest Period in effect at the time any such increase in interest rate is effective such LIBOR Rate Loans shall thereupon become Base Rate Loans and shall thereafter bear interest payable upon demand at a rate which is 2.00% per annum in excess of the interest rate otherwise payable hereunder for Base Rate Loans. Payment or acceptance of the increased rates of interest provided for in this Section 2.08(b) is not a permitted alternative to timely payment and shall not constitute a waiver of any Default or Event of Default or otherwise prejudice or limit any rights or remedies of the Administrative Agent or any Lender.

 

(c)                                  Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

 

2.09                        Fees.

 

In addition to certain fees described in Section 2.03:

 

(a)                                 The Borrower agrees to pay to the Administrative Agent the fees set forth in the Fee Letter.

 

(b)                                 The Borrower shall pay to Administrative Agent for the benefit of each Lender with a Revolving Commitment on (i) the last day of each calendar month (or if such day is not a Business Day on the next succeeding Business Day), (ii) the Maturity Date, and (iii) the date on which the Revolving Commitments expire or are terminated, a commitment fee equal to 0.50% per annum on the

 

47

 

daily unused amount of the Revolving Commitment of such Lender during such calendar month (or other period commencing on the Closing Date or ending with the Maturity Date or the date on which the Revolving Commitments shall expire or be terminated).

 

(c)                                  The Borrower shall pay to the Administrative Agent for the benefit of Lenders with a Delayed Draw Term Loan Commitment based on their pro rata share thereof a delayed draw term loan facility advisory fee in an amount equal to 1.0% of the principal amount of each borrowing of the Delayed Draw Term Loan, payable on or before the date of such borrowing, which fee shall be deemed fully earned as of the Closing Date.

 

(d)                                 The Borrower shall pay to the Administrative Agent for the benefit of each Lender with a Delayed Draw Term Loan Commitment on (i) the last day of each calendar month (or if such day is not a Business Day on the next succeeding Business Day), (ii) the Maturity Date, and (iii) the date on which the Delayed Draw Term Loan Commitments expire or are terminated, a commitment fee equal to 0.50% per annum on the daily unused amount of the Delayed Draw Term Loan Commitment of such Lender during such calendar month (or other period commencing on the Closing Date or ending with the Maturity Date or the date on which the Delayed Draw Term Loan Commitments shall expire or be terminated.

 

(e)                                  The Borrower shall pay to the Lenders such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified. Such fees shall not be refundable for any reason whatsoever. Except as otherwise provided herein, such fees shall be fully earned when paid.

 

Notwithstanding anything to the contrary in this Section 2.09, in no event shall any sum payable under this Section 2.09 (to the extent, if any, constituting interest under applicable laws), together with all other amounts constituting interest under applicable Laws and payable in connection with this Agreement evidenced hereby, exceed the amount of interest computed at the Maximum Rate.

 

2.10                        Computation of Interest and Fees.

 

All computations of interest for Base Rate Loans (including Base Rate Loans determined by reference to the LIBOR Rate) shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year). Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.12(a), bear interest for one day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

 

2.11                        Evidence of Debt.

 

(a)                                 The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrower and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any

 

48

 

Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a promissory note, which shall evidence such Lender’s Loans in addition to such accounts or records. Each such promissory note shall be in the form of Exhibit C (a “Note”). Each Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.

 

(b)                                 [Reserved].

 

2.12                        Payments Generally; Administrative Agent’s Clawback.

 

(a)                                 General. All payments to be made by the Borrower shall be made free and clear of and without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in Dollars and in immediately available funds not later than 2:00 p.m. on the date specified herein. The Administrative Agent will promptly distribute to each Lender its Applicable Percentage (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office. All payments received by the Administrative Agent after 2:00 p.m. shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.

 

(b)                                 Funding by Lenders; Presumption by Administrative Agent. (i) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing of LIBOR Rate Loans (or, in the case of any Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such Borrowing) that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02 (or, in the case of a Borrowing of Base Rate Loans, that such Lender has made such share available in accordance with and at the time required by Section 2.02) and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in immediately available funds with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing, and (B) in the case of a payment to be made by the Borrower, the interest rate applicable to Base Rate Loans. If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

 

(ii)                                  Payments by Borrower; Presumptions by Administrative Agent. Unless the Administrative Agent shall have received notice from the Borrower prior to the time at which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the

 

49

 

Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender, in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

 

A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this subsection (b) shall be conclusive, absent manifest error.

 

(c)                                  Failure to Satisfy Conditions Precedent. If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II, and such funds are not made available to the Borrower by the Administrative Agent because the conditions to the applicable Credit Extension set forth in Article V are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.

 

(d)                                 Obligations of Lenders Several. The obligations of the Lenders hereunder to make Loans and to make payments pursuant to Section 11.04(c) are several and not joint. The failure of any Lender to make any Loan or to make any payment under Section 11.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan or to make its payment under Section 11.04(c).

 

(e)                                  Funding Source. Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

 

2.13                        Sharing of Payments by Lenders.

 

If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of the Loans made by it resulting in such Lender’s receiving payment of a proportion of the aggregate amount of such Loans or participations and accrued interest thereon greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them, provided that:

 

(i)                                     if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

 

(ii)                                  the provisions of this Section shall not be construed to apply to (A) any payment made by or on behalf of the Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), or (B) any payment obtained by a Lender as consideration for the assignment of or sale

 

50

 

of a participation in any of its Loans to any assignee or participant, other than an assignment to the Borrower or any Subsidiary (as to which the provisions of this Section shall apply).

 

Each Loan Party consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Loan Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Loan Party in the amount of such participation.

 

2.14                        Reserved.

 

2.15                        Defaulting Lenders.

 

(a)                                 Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law:

 

(i)                                     Waivers and Amendments. Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of “Required Lenders” and Section 11.01.

 

(ii)                                  Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article IX or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 11.08 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, [reserved]; third, [reserved]; fourth, as the Borrower may request (so long as no Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement; sixth, to the payment of any amounts owing to the Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made at a time when the conditions set forth in Section 5.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of such Defaulting Lender until such time as all Loans are held by the Lenders pro rata in accordance with the Commitments hereunder without giving effect to Section 2.15(a)(iv). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post cash collateral pursuant to this Section 2.15(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

 

51

 

(iii)                               Certain Fees.

 

(A)                               No Defaulting Lender shall be entitled to receive any fee payable under Section 2.09(a) for any period during which that Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).

 

(B)                               [Reserved].

 

(C)                               [Reserved].

 

(b)                                 [Reserved].

 

(c)                                  [Reserved].

 

(d)                                 Defaulting Lender Cure. If the Borrower and the Administrative Agent agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans to be held on a pro rata basis by the Lenders in accordance with their Applicable Percentages (without giving effect to Section 2.15(b)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

 

2.16                        Tax Reporting. Borrower and Lenders agree (i) that the Term Loan is debt for U.S. federal income tax purposes, (ii) that the issue price of the Term Loan equals [face/principal amount](1), (iii) that the Term Loan is not governed by the rules set out in Treasury Regulations Section 1.1275-4, and (iv) not to file any tax return, report or declaration inconsistent with the foregoing clauses. The inclusion of this Section 2.16 is not an admission by any Lender that it is subject to United States taxation.

 

ARTICLE III

 

TAXES, YIELD PROTECTION AND ILLEGALITY

 

3.01                        Taxes.

 

(a)                                 Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes.

 

(i)                                     Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable Laws. If any applicable Laws (as determined in the good faith discretion of the Administrative Agent) require the deduction or withholding of any Tax from any such payment by the Administrative Agent or a Loan Party, then the Administrative Agent or such Loan Party shall be entitled to make such deduction or withholding, upon the basis of the information and documentation to be delivered pursuant to subsection (e) below.

 

(1)                                 NTD: Language to be confirmed.

 

52

 

(ii)                                  If any Loan Party or the Administrative Agent shall be required by the Internal Revenue Code to withhold or deduct any Taxes, including both United States Federal backup withholding and withholding taxes, from any payment, then (A) the Administrative Agent shall withhold or make such deductions as are determined by the Administrative Agent to be required based upon the information and documentation it has received pursuant to subsection (e) below, (B) the Administrative Agent shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with the Internal Revenue Code, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the applicable Loan Party shall be increased as necessary so that after any required withholding or the making of all required deductions (including deductions applicable to additional sums payable under this Section 3.01) the applicable Recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.

 

(iii)                               If any Loan Party or the Administrative Agent shall be required by any applicable Laws other than the Internal Revenue Code to withhold or deduct any Taxes from any payment, then (A) such Loan Party or the Administrative Agent, as required by such Laws, shall withhold or make such deductions as are determined by it to be required based upon the information and documentation it has received pursuant to subsection (e) below, (B) such Loan Party or the Administrative Agent, to the extent required by such Laws, shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with such Laws, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the applicable Loan Party shall be increased as necessary so that after any required withholding or the making of all required deductions (including deductions applicable to additional sums payable under this Section 3.01) the applicable Recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.

 

(b)                                 Payment of Other Taxes by the Borrower. Without limiting the provisions of subsection (a) above, the Loan Parties shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.

 

(c)                                  Tax Indemnifications.

 

(i)                                     Each of the Loan Parties shall, and does hereby, jointly and severally indemnify each Recipient, and shall make payment in respect thereof within ten days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 3.01) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error. Each of the Loan Parties shall, and does hereby, jointly and severally indemnify the Administrative Agent, and shall make payment in respect thereof within ten days after demand therefor, for any amount which a Lender for any reason fails to pay indefeasibly to the Administrative Agent as required pursuant to Section 3.01(c)(ii) below.

 

(ii)                                  Each Lender shall, and does hereby, severally indemnify, and shall make payment in respect thereof within ten days after demand therefor, (A) the Administrative Agent

 

53

 

against any Indemnified Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (B) the Administrative Agent and the Loan Parties, as applicable, against any Taxes attributable to such Lender’s failure to comply with the provisions of Section 11.06(d) relating to the maintenance of a Participant Register and (C) the Administrative Agent and the Loan Parties, as applicable, against any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent or a Loan Party in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender, as the case may be, under this Agreement or any other Loan Document against any amount due to the Administrative Agent under this clause (ii).

 

(d)                                 Evidence of Payments. Upon request by the Borrower or the Administrative Agent, as the case may be, after any payment of Taxes by the Borrower or by the Administrative Agent to a Governmental Authority as provided in this Section 3.01, the Borrower shall deliver to the Administrative Agent or the Administrative Agent shall deliver to the Borrower, as the case may be, the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return required by Laws to report such payment or other evidence of such payment reasonably satisfactory to the Borrower or the Administrative Agent, as the case may be.

 

(e)                                  Status of Lenders; Tax Documentation.

 

(i)                                     Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 3.01(e)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

 

(ii)                                  Without limiting the generality of the foregoing, in the event that the Borrower is a U.S. Person,

 

(A)                               any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;

 

54

 

(B)                               any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:

 

(1)                                 in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed originals of IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

 

(2)                                 executed originals of IRS Form W-8ECI;

 

(3)                                 in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Internal Revenue Code, (x) a certificate substantially in the form of Exhibit H-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Internal Revenue Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Internal Revenue Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of IRS Form W-8BEN; or

 

(4)                                 to the extent a Foreign Lender is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a U.S. Tax Compliance Certificate substantially in the form of Exhibit H-2 or Exhibit H-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit H-4 on behalf of each such direct and indirect partner;

 

(C)                               any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and

 

55

 

(D)                               if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Internal Revenue Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Internal Revenue Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

(iii)                               Each Lender agrees that if any form or certification it previously delivered pursuant to this Section 3.01 expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.

 

(f)                                   Treatment of Certain Refunds. Unless required by applicable Laws, at no time shall the Administrative Agent have any obligation to file for or otherwise pursue on behalf of a Lender, or have any obligation to pay to any Lender, any refund of Taxes withheld or deducted from funds paid for the account of such Lender, as the case may be. If any Recipient determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified by any Loan Party or with respect to which any Loan Party has paid additional amounts pursuant to this Section 3.01, it shall pay to the Loan Party an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by a Loan Party under this Section 3.01 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) incurred by such Recipient, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Loan Party, upon the request of the Recipient, agrees to repay the amount paid over to the Loan Party (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Recipient in the event the Recipient is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this subsection, in no event will the applicable Recipient be required to pay any amount to the Loan Party pursuant to this subsection the payment of which would place the Recipient in a less favorable net after-Tax position than such Recipient would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid. This subsection shall not be construed to require any Recipient to make available its tax returns (or any other information relating to its taxes that it deems confidential) to any Loan Party or any other Person.

 

(g)                                  Survival. Each party’s obligations under this Section 3.01 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender and Payment in Full.

 

3.02                        Illegality.

 

If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Loans whose interest is determined by reference to the LIBOR Rate, or to determine or charge interest rates based upon the LIBOR Rate, or any Governmental Authority has imposed material restrictions on

 

56

 

the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, (a) any obligation of such Lender to make or continue LIBOR Rate Loans or to convert Base Rate Loans to LIBOR Rate Loans shall be suspended and (b) if such notice asserts the illegality of such Lender making or maintaining Base Rate Loans the interest rate on which is determined by reference to the LIBOR Rate component of the Base Rate, the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the LIBOR Rate component of the Base Rate, in each case until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, (x) the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all of such Lender’s LIBOR Rate Loans to Base Rate Loans (the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the LIBOR Rate component of the Base Rate), either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such LIBOR Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such LIBOR Rate Loans and (y) if such notice asserts the illegality of such Lender determining or charging interest rates based upon the LIBOR Rate, the Administrative Agent shall during the period of such suspension compute the Base Rate applicable to such Lender without reference to the LIBOR Rate component thereof until the Administrative Agent is advised in writing by such Lender that it is no longer illegal for such Lender to determine or charge interest rates based upon the LIBOR Rate. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted.

 

3.03                        Inability to Determine Rates.

 

If the Required Lenders determine that for any reason in connection with any request for a LIBOR Rate Loan or a conversion to or continuation thereof that (a) Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and Interest Period of such LIBOR Rate Loan, (b) adequate and reasonable means do not exist for determining the LIBOR Base Rate for any requested Interest Period with respect to a proposed LIBOR Rate Loan or in connection with an existing or proposed Base Rate Loan or (c) the LIBOR Base Rate for any requested Interest Period with respect to a proposed LIBOR Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, the Administrative Agent will promptly notify the Borrower and each Lender. Thereafter, (x) the obligation of the Lenders to make or maintain LIBOR Rate Loans shall be suspended and (y) in the event of a determination described in the preceding sentence with respect to the LIBOR Rate component of the Base Rate, the utilization of the LIBOR Rate component in determining the Base Rate shall be suspended, in each case until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of LIBOR Rate Loans or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans in the amount specified therein.

 

3.04                        Increased Costs.

 

(a)                                 Increased Costs Generally. If any Change in Law shall:

 

(i)                                     impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in the LIBOR Rate);

 

57

 

(ii)                                  subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

 

(iii)                               impose on any Lender or the London interbank market any other condition, cost or expense affecting this Agreement or LIBOR Rate Loans made by such Lender or participation therein;

 

and the result of any of the foregoing shall be to increase the cost to such Lender of making, converting to, continuing or maintaining any Loan the interest on which is determined by reference to the LIBOR Rate (or of maintaining its obligation to make any such Loan), or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or any other amount) then, upon request of such Lender, the Borrower will pay to such Lender, as the case may be, such additional amount or amounts as will compensate such Lender, for such additional costs incurred or reduction suffered.

 

(b)                                 Capital Requirements. If any Lender determines that any Change in Law affecting such Lender or any Lending Office of such Lender or such Lender’s holding company, if any, regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by such Lender, to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender, as the case may be, such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

 

(c)                                  Certificates for Reimbursement. A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in subsection (a) or (b) of this Section and delivered to the Borrower shall be conclusive absent manifest error. The Borrower shall pay such Lender, the amount shown as due on any such certificate within 10 days after receipt thereof.

 

(d)                                 Delay in Requests. Failure or delay on the part of any Lender to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of such Lender’s right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than six months prior to the date that such Lender, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the six month period referred to above shall be extended to include the period of retroactive effect thereof).

 

58

 

3.05                        Compensation for Losses.

 

Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:

 

(a)                                 any continuation, conversion, payment or prepayment of any LIBOR Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);

 

(b)                                 any failure by the Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any LIBOR Rate Loan on the date or in the amount notified by the Borrower; or

 

(c)                                  any assignment of a LIBOR Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower pursuant to Section 11.13;

 

including any loss or expense arising from the liquidation or redeployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained. The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.

 

For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each LIBOR Rate Loan made by it at the LIBOR Base Rate used in determining the LIBOR Rate for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such LIBOR Rate Loan was in fact so funded.

 

3.06                        Mitigation of Obligations; Replacement of Lenders.

 

(a)                                 Designation of a Different Lending Office. If any Lender requests compensation under Section 3.04, or the Borrower is required to pay any Indemnified Taxes or additional amount to any Lender, or any Governmental Authority for the account of any Lender pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section 3.02, then at the request of the Borrower such Lender shall use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in the future, or eliminate the need for the notice pursuant to Section 3.02, as applicable, and (ii) in each case, would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

 

(b)                                 Replacement of Lenders. If any Lender requests compensation under Section 3.04, or if the Borrower is required to pay any Indemnified Taxes or additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01 and, in each case, such Lender has declined or is unable to designate a different lending office in accordance with Section 3.06(a), the Borrower may replace such Lender in accordance with Section 11.13.

 

59

 

3.07                        Survival.

 

All of the Loan Parties’ obligations under this Article III shall survive Payment in Full and resignation of the Administrative Agent.

 

ARTICLE IV

 

GUARANTY

 

4.01                        The Guaranty.

 

Each of the Guarantors hereby jointly and severally guarantees to the Administrative Agent, the Lenders, the Hedge Banks, the Cash Management Banks and each other holder of the Obligations as hereinafter provided, as primary obligor and not as surety, the prompt payment of the Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) strictly in accordance with the terms thereof. The Guarantors hereby further agree that if any of the Obligations is not paid in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise), the Guarantors will, jointly and severally, promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Obligations, the same will be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) in accordance with the terms of such extension or renewal.

 

Notwithstanding any provision to the contrary contained herein or in any other of the Loan Documents or the other documents relating to the Obligations, (i) the obligations of each Guarantor under this Agreement and the other Loan Documents shall not exceed an aggregate amount equal to the largest amount that would not render such obligations subject to avoidance under applicable Debtor Relief Laws, (ii) the Obligations guaranteed under Section 4.01 shall at no time include any Excluded Swap Obligations.

 

4.02                        Obligations Unconditional.

 

The obligations of the Guarantors under Section 4.01 are joint and several, absolute and unconditional, irrespective of the value, genuineness, validity, regularity or enforceability of any of the Loan Documents or other documents relating to the Obligations, or any substitution, release, impairment or exchange of any other guarantee of or security for any of the Obligations, and, to the fullest extent permitted by applicable Law, irrespective of any other circumstance whatsoever which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, it being the intent of this Section 4.02 that the obligations of the Guarantors hereunder shall be absolute and unconditional under any and all circumstances. Each Guarantor agrees that such Guarantor shall have no right of subrogation, indemnity, reimbursement or contribution against the Borrower or any other Guarantor for amounts paid under this Article IV until such time as the Obligations have been paid in full and the Commitments have expired or terminated. Without limiting the generality of the foregoing, it is agreed that, to the fullest extent permitted by Law, the occurrence of any one or more of the following shall not alter or impair the liability of any Guarantor hereunder, which shall remain absolute and unconditional as described above:

 

(a)                                 at any time or from time to time, without notice to any Guarantor, the time for any performance of or compliance with any of the Obligations shall be extended, or such performance or compliance shall be waived;

 

60

 

(b)                                 any of the acts mentioned in any of the provisions of any of the Loan Documents or any other document relating to the Obligations shall be done or omitted;

 

(c)                                  the maturity of any of the Obligations shall be accelerated, or any of the Obligations shall be modified, supplemented or amended in any respect, or any right under any of the Loan Documents or any other document relating to the Obligations shall be waived or any other guarantee of any of the Obligations or any security therefor shall be released, impaired or exchanged in whole or in part or otherwise dealt with;

 

(d)                                 any Lien granted to, or in favor of, the Administrative Agent or any other holder of the Obligations as security for any of the Obligations shall fail to attach or be perfected; or

 

(e)                                  any of the Obligations shall be determined to be void or voidable (including for the benefit of any creditor of any Guarantor) or shall be subordinated to the claims of any Person (including any creditor of any Guarantor).

 

With respect to its obligations hereunder, each Guarantor hereby expressly waives diligence, presentment, demand of payment, protest and all notices whatsoever and any requirement that the Administrative Agent or any other holder of the Obligations exhaust any right, power or remedy or proceed against any Person under any of the Loan Documents or any other document relating to the Obligations or against any other Person under any other guarantee of, or security for, any of the Obligations.

 

4.03                        Reinstatement.

 

The obligations of each Guarantor under this Article IV shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of any Person in respect of the Obligations is rescinded or must be otherwise restored by any holder of any of the Obligations, whether as a result of any Debtor Relief Law or otherwise, and each Guarantor agrees that it will indemnify the Administrative Agent and each other holder of the Obligations on demand for all reasonable costs and expenses (including the fees, charges and disbursements of counsel) incurred by the Administrative Agent or such holder of the Obligations in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any Debtor Relief Law.

 

4.04                        Certain Additional Waivers.

 

Each Guarantor agrees that such Guarantor shall have no right of recourse to security for the Obligations, except through the exercise of rights of subrogation pursuant to Section 4.02 and through the exercise of rights of contribution pursuant to Section 4.06.

 

4.05                        Remedies.

 

The Guarantors agree that, to the fullest extent permitted by Law, as between the Guarantors, on the one hand, and the Administrative Agent and the other holders of the Obligations, on the other hand, the Obligations may be declared to be forthwith due and payable as specified in Section 9.02 (and shall be deemed to have become automatically due and payable in the circumstances specified in Section 9.02) for purposes of Section 4.01 notwithstanding any stay, injunction or other prohibition preventing such declaration (or preventing the Obligations from becoming automatically due and payable) as against any other Person and that, in the event of such declaration (or the Obligations being deemed to have become automatically due and payable), the Obligations (whether or not due and payable by any other Person)

 

61

 

shall forthwith become due and payable by the Guarantors for purposes of Section 4.01. The Guarantors acknowledge and agree that their obligations hereunder are secured in accordance with the terms of the Collateral Documents and that the holders of the Obligations may exercise their remedies thereunder in accordance with the terms thereof.

 

4.06                        Rights of Contribution.

 

The Guarantors agree among themselves that, in connection with payments made hereunder, each Guarantor shall have contribution rights against the other Guarantors as permitted under applicable law. Such contribution rights shall be subordinate and subject in right of payment to the obligations of such Guarantors under the Loan Documents and no Guarantor shall exercise such rights of contribution until the Obligations have been paid in full and the Commitments have terminated.

 

4.07                        Guarantee of Payment; Continuing Guarantee.

 

The guarantee in this Article IV is a guaranty of payment and not of collection, is a continuing guarantee, and shall apply to the Obligations whenever arising.

 

4.08                        Keepwell.

 

Each Loan Party that is a Qualified ECP Guarantor at the time the Guaranty in this Article IV by any Loan Party that is not then an “eligible contract participant” under the Commodity Exchange Act (a “Specified Loan Party”) or the grant of a security interest under the Loan Documents by any such Specified Loan Party, in either case, becomes effective with respect to any Swap Obligation, hereby jointly and severally, absolutely, unconditionally and irrevocably undertakes to provide such funds or other support to each Specified Loan Party with respect to such Swap Obligation as may be needed by such Specified Loan Party from time to time to honor all of its obligations under this Guaranty and the other Loan Documents in respect of such Swap Obligation (but, in each case, only up to the maximum amount of such liability that can be hereby incurred without rendering such Qualified ECP Guarantor’s obligations and undertakings under this Article IV voidable under applicable Debtor Relief Laws, and not for any greater amount). The obligations and undertakings of each Qualified ECP Guarantor under this Section 4.08 shall remain in full force and effect until the Obligations have been indefeasibly paid and performed in full. Each Loan Party intends this Section 4.08 to constitute, and this Section 4.08 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each Specified Loan Party for all purposes of the Commodity Exchange Act.

 

ARTICLE V

 

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

5.01                        Conditions of Effectiveness.

 

This Agreement shall be effective upon satisfaction of the following conditions precedent in each case in a manner satisfactory to the Administrative Agent and each Lender:

 

(a)                                 Loan Documents. Receipt by the Administrative Agent of executed counterparts of this Agreement and the other Loan Documents, each properly executed by a Responsible Officer of the signing Loan Party and, in the case of this Agreement, by each Lender (and, in the case of the Management Fee Subordination Agreement, by each party to the Management Agreement).

 

62

 

(b)                                 Opinions of Counsel. Receipt by the Administrative Agent of favorable opinions of legal counsel to the Loan Parties, addressed to the Administrative Agent and each Lender, dated as of the Closing Date.

 

(c)                                  Organization Documents, Resolutions, Etc. Receipt by the Administrative Agent of the following:

 

(i)                                     copies of the Organization Documents of each Loan Party certified to be true and complete as of a recent date by the appropriate Governmental Authority of the state or other jurisdiction of its incorporation or organization, where applicable, and certified by a secretary or assistant secretary of such Loan Party to be true and correct as of the Closing Date;

 

(ii)                                  such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agent may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Loan Party is a party; and

 

(iii)                               such documents and certifications as the Administrative Agent may reasonably require to evidence that each Loan Party is duly organized or formed, and that each Loan Party is validly existing, in good standing and qualified to engage in business in (x) its jurisdiction of formation and (y) each other jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, except, in the case of this clause (y), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

 

(d)                                 A Note executed by the Borrower in favor of each Lender requesting a Note;

 

(e)                                  Personal Property Collateral. Receipt by the Administrative Agent of the following:

 

(i)                                     searches of Uniform Commercial Code filings in the jurisdiction of formation of each Loan Party and each other jurisdiction deemed appropriate by the Administrative Agent;

 

(ii)                                  all certificates, if any, evidencing any certificated Equity Interests pledged to the Administrative Agent pursuant to the Security Agreement, together with duly executed in blank, undated stock powers attached thereto;

 

(iii)                                   searches of ownership of, and Liens on, United States registered intellectual property of each Loan Party in the appropriate governmental offices; and

 

(iv)                              duly executed notices of grant of security interest in the form required by the Security Agreement as are necessary, in the Administrative Agent’s discretion, to perfect the Administrative Agent’s security interest in the United States registered intellectual property of the Loan Parties.

 

(f)                                   [Reserved].

 

63

 

(g)                                  Availability. On the Closing Date, after giving effect to the Credit Extensions on the Closing Date, Availability shall not be less than $9,400,000.

 

(h)                                 Consolidated EBITDA. As of September 30, 2013, the Loan Parties shall have consolidated EBITDA (determined in the same manner as Consolidated EBITDA) of not less than $16,500,000.

 

(i)                                     Material Adverse Effect. Since December 31, 2012, there shall have been no change which has had or could reasonably be expected to have a Material Adverse Effect.

 

(j)                                    [Reserved].

 

(k)                                 Solvency Certificate. Receipt by the Administrative Agent of a certificate from the chief executive officer or chief financial officer of the Borrower as to the Solvency of the Loan Parties on a consolidated basis after giving effect to the Credit Extensions on the Closing Date and the use of the proceeds thereof.

 

(l)                                     Management Agreement.

 

(i)                                     The payment of the Management Fee shall be subordinated to the Obligations in a manner and to an extent satisfactory to the Administrative Agent pursuant to the Management Fee Subordination Agreement.

 

(ii)                                  The Administrative Agent shall have received a copy of the Management Agreement certified by a Responsible Officer of the Borrower as true and complete as of the Closing Date.

 

(m)                             Closing Certificate. Receipt by the Administrative Agent of a certificate in the form of Exhibit I signed by a Responsible Officer of the Borrower dated as of the Closing Date certifying as to the matters set forth therein.

 

(n)                                 Preferred Equity Interests. All preferred stock of the Borrower outstanding on the Closing Date shall not require or permit any cash payments ((other than Tax Distributions) prior to the date that is 181 days after the Maturity Date).

 

(o)                                 Sterling Equity Reserve. Sterling shall have agreed to reserve $30 million (less any equity contributions made by Sterling or its Controlled Investment Affiliates to the Borrower after April 17, 2012 for future potential equity contributions in the Borrower which in any case will be made upon terms and conditions that are acceptable to Sterling in its sole discretion (the “Sterling Equity Reserve”)).

 

(p)                                 Refinance of Existing Indebtedness. The Borrower and its Subsidiaries shall have repaid all outstanding Indebtedness (other than Indebtedness permitted under Section 8.03) (the “Existing Indebtedness”) and terminated all commitments to extend credit with respect to the Existing Indebtedness, and all Liens securing the Existing Indebtedness and all guaranties and other credit enhancements with respect to the Existing Debt shall have been released.

 

(q)                                 Fees. Receipt by the Administrative Agent and the Lenders of any fees required to be paid on or before the Closing Date.

 

64

 

(r)                                    Attorney Costs. Unless waived by the Administrative Agent, the Borrower shall have paid all reasonable fees, charges and disbursements of counsel to the Administrative Agent (directly to such counsel if requested by the Administrative Agent) to the extent invoiced prior to or on the Closing Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrower and the Administrative Agent).

 

(s)                                   Amendments to Existing MPT Documents. Receipt by the Administrative Agent of fully executed amendments, in form and substance satisfactory to the Administrative Agent, to the Existing MPT Documents to the extent necessary or otherwise reasonably requested by the Administrative Agent to give effect to the transactions contemplated by the Loan Documents (including to permit each member of the MPT Group to grant security interests in its assets, in each case as and to the extent provided in the Loan Documents).

 

(t)                                    Other Documents. The Administrative Agent shall have received such other documents, certificates, information or legal opinions as the Administrative Agent or the Required Lenders may reasonably request, all in form and substance reasonably satisfactory to the Administrative Agent or the Required Lenders.

 

Without limiting the generality of the provisions of the last paragraph of Section 10.03, for purposes of determining compliance with the conditions specified in this Section 5.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

 

5.02                        Conditions to all Credit Extensions.

 

The obligation of each Lender to honor any Request for Credit Extension (other than a Loan Notice requesting only a conversion of Loans to the other Type or a continuation of LIBOR Rate Loans) is subject to the following conditions precedent:

 

(a)                                 (i) on the Closing Date, the representations and warranties of each Loan Party contained in Article VI or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct in all material respects (except to the extent any such representation or warranty is already qualified by materiality, in which case it shall be true and correct in all respects) on and as of the Closing Date, and (ii) on the date of any other Credit Extension, the representations and warranties of each Loan Party contained in Article VI or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct in all material respects (except to the extent any such representation or warranty is already qualified by materiality, in which case it shall be true and correct in all respects) on and as of the date of such Credit Extension, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects (except to the extent any such representation or warranty is already qualified by materiality, in which case it shall be true and correct in all respects) as of such earlier date.

 

(b)                                 No Default shall exist or would result from such proposed Credit Extension or from the application of the proceeds thereof.

 

65

 

(c)                                  The Administrative Agent shall have received a Request for Credit Extension in accordance with the requirements hereof.

 

Each Request for Credit Extension (other than a Loan Notice requesting only a conversion of Loans to the other Type or a continuation of LIBOR Rate Loans) submitted by the Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 5.02 have been satisfied on and as of the date of the applicable Credit Extension.

 

5.03                        Conditions to Extension of Delayed Draw Term Loans.

 

In addition to the satisfaction of the foregoing conditions contained in Section 5.02 above, prior to making any Delayed Draw Term Loan during the Delayed Draw Period, the Borrower shall have satisfied each of the following conditions precedent (collectively, the “Delayed Draw Conditions”):

 

(a)                                 Subject to the restrictions set forth in Section 7.11(c), the proceeds of the Delayed Draw Term Loans may be used solely to make (i) Specified Distributions and (ii) Consolidated Capital Expenditures solely with respect to Primary Facilities, in the case of each of clause (i) and (ii) as and to the extent permitted under this Agreement.

 

(b)                                 The Borrower shall have delivered to the Administrative Agent a Compliance Certificate demonstrating that, on a pro forma basis after giving pro forma effect to the contemplated Delayed Draw Term Loan (and any other Delayed Draw Term Loan theretofore made or contemplated to be made on such date), the Consolidated Leverage Ratio of the Borrower and its Subsidiaries (including the members of the MPT Group) calculated as of the last day of the most recently completed twelve consecutive month period with respect to which the Administrative Agent has received financial statements pursuant to Section 7.01(c) does not exceed the maximum Consolidated Leverage Ratio of the Borrower and its Subsidiaries (including the members of the MPT Group) permitted under Section 8.11(a) at such time, less 0.25; provided however, that if such Delayed Draw Term Loan is requested prior to the first measurement period for any financial covenant set forth in Section 8.11, compliance with this clause (b) shall be determined as of the compliance levels for such financial covenants first measurement period were in effect.

 

(c)                                  Subject to the satisfaction of the other conditions set forth in this Section 5.03 and in Section 5.02:

 

(i)                                     to the extent that Consolidated EBITDA, calculated for the most recently completed twelve consecutive month period with respect to which the Administrative Agent has received financial statements pursuant to Section 7.01(c), is less than or equal to $30,000,000, the Borrower shall be entitled to request Delayed Draw Term Loans in an aggregate principal amount not to exceed the lesser of (x) the aggregate unused portion of the Delayed Draw Term Loan Commitments and (y) an amount that, if added to Consolidated Funded Indebtedness as of the last day of such twelve consecutive month period, would not cause the Consolidated Leverage Ratio as of the last day of such twelve consecutive month period to exceed 4.00:1.00 on a pro forma basis; and

 

(ii)                                  to the extent that Consolidated EBITDA, calculated for the most recently completed twelve consecutive month period with respect to which the Administrative Agent has received financial statements pursuant to Section 7.01(c), is greater than $30,000,000, the Borrower shall be entitled to request Delayed Draw Term Loans in aggregate principal amount not to exceed the lesser of (x) the aggregate unused portion of

 

66

 

the Delayed Draw Term Loan Commitments and (y) an amount that, if added to Consolidated Funded Indebtedness as of the last day of such twelve consecutive month period, would not cause the Consolidated Leverage Ratio as of the last day of such twelve consecutive month period to exceed 4.50:1.00 on a pro forma basis;

 

(d)                                 the average daily patient per day calculated for the Facilities, taken as a whole but excluding any Facility that has opened to the public less than three (3) months prior to the date of measurement, is not less than eight (8) per Facility for the most recent fiscal quarter;

 

(e)                                  since the enactment of Texas House Bill 1357, there has not been a change in Texas Law or any other legislative proposal or legislation which would restrict the Borrower from performing and billing for emergency room procedures as emergency room procedures in a manner that could reasonably be expected to be materially adverse to the interests of the Borrower or any Subsidiary thereof or the Administrative Agent, L/C Arranger or any Lender;

 

(f)                                   since December 31, 2012, there has not been a material decrease in commercial payor reimbursement from BCBS TX or for Multiplan;

 

(g)                                  on the date on which any Delayed Draw Term Loan is made, the representations and warranties of each Loan Party contained in Article VI or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct in all material respects (except to the extent any such representation or warranty is already qualified by materiality, in which case it shall be true and correct in all respects) on and as of such date;

 

(h)                                 a Change of Control shall not have occurred; provided that, for purposes of this Section 5.03(h), the reference to 50% in clause (a) of the definition of Change of Control shall be deemed to be a reference to 60%; and

 

(i)                                     delivery of an officer’s certificate by a Responsible Officer of Company certifying compliance with each of the conditions set forth in Section 5.02 and this Section 5.03.

 

Each Request for Credit Extension submitted by the Borrower shall be deemed to be a representation and warranty that the conditions specified in Section 5.02 and this Section 5.03 have been satisfied on and as of the date of the applicable Credit Extension.

 

ARTICLE VI

 

REPRESENTATIONS AND WARRANTIES

 

The Loan Parties represent and warrant to the Administrative Agent and the Lenders that:

 

6.01                        Existence, Qualification and Power.

 

The Borrower and each of its Subsidiaries (a) is duly organized or formed, validly existing and, as applicable, in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party, and (c) is duly qualified and is licensed and, as applicable, in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license; except in each

 

67

 

case referred to in clause (b)(i) or (c), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

 

6.02                        Authorization; No Contravention.

 

The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is party have been duly authorized by all necessary corporate or other organizational action, and do not (a) contravene the terms of any of such Person’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien (other than Liens created under the Loan Documents) under, or require any payment to be made under (i) any Contractual Obligation to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries, (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject, or (iii) the MPT Master Lease; or (c) violate any Law.

 

6.03                        Governmental Authorization; Other Consents.

 

No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with (a) the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document or the transactions contemplated hereby or thereby, (b) the grant by any Loan Party of the Liens purported to be granted by it pursuant to the Collateral Documents, (c) the perfection or maintenance of the Liens created under the Collateral Documents (including the first priority nature thereof, subject to Permitted Liens) other than (i) those that have already been obtained and are in full force and effect and (ii) filings and recordings with respect to the Collateral to be made, or otherwise delivered to the Administrative Agent for filing and/or recordation on the Closing Date, or (d) the giving of guaranties by the Guarantors pursuant to Article IV.

 

6.04                        Binding Effect.

 

Each Loan Document has been duly executed and delivered by each Loan Party that is party thereto. Each Loan Document constitutes a legal, valid and binding obligation of each Loan Party thereto, enforceable against such Loan Party that is party thereto in accordance with its terms.

 

6.05                        Financial Statements; No Material Adverse Effect.

 

(a)                                 [Reserved];

 

(b)                                 The Interim Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein or set forth on Schedule 6.05(b); (ii) fairly present in all material respects the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments; and (iii) show all material indebtedness and other liabilities, direct or contingent, of the Borrower and its Subsidiaries as of the date thereof, including liabilities for taxes, material commitments and Indebtedness.

 

(c)                                  From the date of the Interim Financial Statements to and including the Closing Date, there has been no Disposition or any Recovery Event of any material part of the business or property of the Borrower and its Subsidiaries, taken as a whole, and no purchase or other acquisition by any of them of any business or property (including any Equity Interests of any other Person) material in relation to the

 

68

 

consolidated financial condition of the Borrower and its Subsidiaries, taken as a whole, in each case, which is not reflected in the foregoing financial statements or in the notes thereto and has not otherwise been disclosed in writing to the Lenders on or prior to the Closing Date.

 

(d)                                 The financial statements delivered pursuant to Section 7.01(a) and (c) have been prepared in accordance with GAAP (except as may otherwise be permitted under Section 7.01(a) and (c)) and present fairly (on the basis disclosed in the footnotes to such financial statements) in all material respects the consolidated and consolidating financial condition, results of operations and cash flows of the Borrower and its Subsidiaries or the Primary Group, as applicable, as of the dates thereof and for the periods covered thereby.

 

(e)                                  Since December 31, 2012, there has been no event or circumstance that has had or could reasonably be expected to have a Material Adverse Effect.

 

6.06                        Litigation. There are no actions, suits, investigations, criminal prosecutions, civil investigative demands, imposition of criminal or civil penalties, proceedings, claims or disputes pending or, to the knowledge of the Responsible Officers of the Loan Parties after due and diligent investigation or threatened, at law, in equity, in arbitration or before any Governmental Authority, by or against the Borrower or any Subsidiary or against any of their properties, revenues, officers or other member of their management that (a) purport to affect or pertain to this Agreement or any other Loan Document or any of the transactions contemplated hereby or (b) could reasonably be expected to have a Material Adverse Effect.

 

6.07                        No Default.

 

(a)                                 Neither the Borrower nor any Subsidiary is in default under or with respect to any Contractual Obligation that could reasonably be expected to have a Material Adverse Effect.

 

(b)                                 No Default has occurred and is continuing.

 

(c)                                  No “Event of Default” (or any similar term) with respect to the Borrower or any Subsidiary has occurred and is continuing under or with respect to any MPT Document.

 

(d)                                 No material breach of any MPT Document by the Borrower or any Subsidiary thereof party thereto has occurred and is continuing that would permit any counterparty to such MPT Document, whether by the terms of such document, applicable law or otherwise, to terminate such MPT Document or cease to be obligated to perform or observe its obligations thereunder.

 

6.08                        Ownership of Property; Liens.

 

(a)                                 Each Loan Party and each of its Subsidiaries has good record and marketable title in fee simple to, or valid leasehold interests in, all real property necessary or used in the ordinary conduct of its business, except for such defects in title as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The property of the Borrower and its Subsidiaries is not subject to any Liens other than Permitted Liens.

 

(b)                                 The Mortgages executed and delivered after the Closing Date will be, effective to create in favor of the Administrative Agent (for the benefit of the holders of Obligations) a legal, valid and enforceable first priority Lien on all of the applicable Loan Parties’ right, title and interest in and to the Mortgaged Property (as such term is defined in the applicable Mortgage) thereunder and the proceeds thereof, and when such Mortgages are filed or recorded in the proper real estate filing or recording

 

69

 

offices, and all relevant mortgage taxes and recording charges are duly paid, the Administrative Agent (for the benefit of holders of Obligations) shall have a perfected first priority Lien on, and security interest in, all right, title, and interest of the applicable Loan Parties in such Mortgaged Property and, to the extent applicable, the proceeds thereof, in each case prior and superior in right to the Lien of any other person, except for Permitted Liens.

 

6.09                        Environmental Compliance.

 

Except in each case as could not reasonably be expected to have a Material Adverse Effect:

 

(a)                                 Each of the facilities and real properties owned, leased or operated by the Borrower or any Subsidiary (collectively the “Facilities” and each a “Facility”) and all operations at the Facilities are in compliance with all applicable Environmental Laws, and there is no violation of any Environmental Law with respect to the Facilities or the businesses operated by the Borrower and its Subsidiaries at such time (the “Businesses”), and there are no conditions relating to the Facilities or the Businesses that would reasonably be expected to give rise to liability under any applicable Environmental Laws.

 

(b)                                 None of the Facilities contains, or has previously contained, any Hazardous Materials at, on or under the Facilities in amounts or concentrations that constitute or constituted a violation of, or could give rise to liability under, Environmental Laws.

 

(c)                                  Neither the Borrower nor any Subsidiary has received any written or verbal notice of, or inquiry from any Governmental Authority regarding, any violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws with regard to any of the Facilities or any of the Businesses, nor does any Responsible Officer of any Loan Party have knowledge or reason to believe that any such notice will be received or is being threatened.

 

(d)                                 Hazardous Materials have not been transported or disposed of from the Facilities, or generated, treated, stored or disposed of at, on or under any of the Facilities or any other location, in each case by or on behalf of the Borrower or any Subsidiary in violation of, or in a manner that would be reasonably likely to give rise to liability under, any applicable Environmental Law.

 

(e)                                  No judicial proceeding or governmental or administrative action is pending or, to the knowledge of the Responsible Officers of the Loan Parties, threatened, under any Environmental Law to which the Borrower or any Subsidiary is or will be named as a party, nor are there any consent decrees or other decrees, consent orders, administrative orders or other orders, or other administrative or judicial requirements outstanding under any Environmental Law with respect to the Borrower, any Subsidiary, the Facilities or the Businesses.

 

(f)                                   There has been no release or threat of release of Hazardous Materials at or from the Facilities, or arising from or related to the operations (including disposal) of the Borrower or any Subsidiary in connection with the Facilities or otherwise in connection with the Businesses, in violation of or in amounts or in a manner that could give rise to liability under Environmental Laws.

 

70

 

6.10                        Insurance.

 

(a)                                 The properties of the Borrower and its Subsidiaries are insured with financially sound and reputable insurance companies that are not Affiliates of the Borrower, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in businesses similar to those engaged in by the Borrower and its Subsidiaries and owning properties similar to those owned by the Borrower and its Subsidiaries.

 

(b)                                 The Borrower and its Subsidiaries maintain, if available, fully paid flood hazard insurance on all real property that is located in a special flood hazard area and that constitutes Collateral, on such terms and in such amounts as required by The National Flood Insurance Reform Act of 1994 or as otherwise required by the Administrative Agent.

 

6.11                        Taxes.

 

The Borrower and its Subsidiaries have filed all federal and state income tax and all other material tax returns and reports required to be filed, and have paid all federal and state income taxes and all other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP. There is no proposed tax assessment against the Borrower or any Subsidiary that would, if made, have a Material Adverse Effect. Neither the Borrower nor any Subsidiary is party to any tax sharing agreement.

 

6.12                        ERISA Compliance.

 

(a)                                 Each Plan (other than a Multiemployer Plan) is in compliance in all material respects with the applicable provisions of ERISA, the Internal Revenue Code and other Federal or state laws. Each Pension Plan (other than a Multiemployer Plan) that is intended to be a qualified plan under Section 401(a) of the Internal Revenue Code has received a favorable determination letter or opinion letter from the Internal Revenue Service to the effect that the form of such Plan is qualified under Section 401(a) of the Internal Revenue Code, or an application for such a letter is currently being processed by the Internal Revenue Service. To the knowledge of the Responsible Officers of the Loan Parties, nothing has occurred that would reasonably be expected to prevent or cause the loss of such tax-qualified status.

 

(b)                                 There are no pending or, to the knowledge of the Responsible Officers of the Loan Parties, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan (other than a Multiemployer Plan) that could reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan (other than a Multiemployer Plan) that has resulted or could reasonably be expected to result in a Material Adverse Effect.

 

(c)                                  Except as would not reasonably be expected to cause a Material Adverse Effect (i) no ERISA Event has occurred, and neither any Loan Party nor any ERISA Affiliate is aware of any fact, event or circumstance that could reasonably be expected to constitute or result in an ERISA Event; (ii) each Loan Party and each ERISA Affiliate has met all applicable requirements under the Pension Funding Rules in respect of each Pension Plan, and no waiver of the minimum funding standards under the Pension Funding Rules has been applied for or obtained with respect to any Pension Plan (other than a Multiemployer Plan); (iii) as of the most recent valuation date for any Pension Plan (other than a Multiemployer Plan), the funding target attainment percentage (as defined in Section 430(d)(2) of the Internal Revenue Code) is 60% or higher and neither any Loan Party nor any ERISA Affiliate knows of

 

71

 

any facts or circumstances that could reasonably be expected to cause the funding target attainment percentage for any such plan to drop below 60% as of the most recent valuation date; (iv) neither any Loan Party nor any ERISA Affiliate has engaged in a transaction that could reasonably be expected to be subject to Section 4069 or Section 4212(c) of ERISA; (v) no Pension Plan (other than a Multiemployer Plan) has been terminated by the plan administrator thereof nor by the PBGC, and no event or circumstance has occurred or exists that could reasonably be expected to cause the PBGC to institute proceedings under Title IV of ERISA to terminate any Pension Plan (other than a Multiemployer Plan); and (vi) no Multiemployer Plan is in “endangered status” or “critical status” within the meaning of Section 432 of the Code or Section 305 of ERISA, or is or is expect to be insolvent or in reorganization within the meaning of Title IV of ERISA.

 

6.13                        Subsidiaries.

 

Set forth on Schedule 6.13 is a complete and accurate list as of the Closing Date of each Subsidiary, together with (a) jurisdiction of incorporation or organization and (b) percentage of outstanding shares of each class owned (directly or indirectly) by the Borrower or any Subsidiary. The outstanding Equity Interests of each Subsidiary are validly issued, fully paid and, to the extent applicable, non-assessable and are owned by a Loan Party free and clear of all Liens except those created under the Collateral Documents and, as of the Closing Date, in the amounts specified on Schedule 6.13.

 

6.14                        Margin Regulations; Investment Company Act.

 

(a)                                 The Borrower is not engaged and will not engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock. Following the application of the proceeds of each Borrowing or drawing under each Letter of Credit, not more than 25% of the value of the assets (either of the Borrower only or of the Borrower and its Subsidiaries on a consolidated basis) subject to the provisions of Section 8.01 or Section 8.05 or subject to any restriction contained in any agreement or instrument between the Borrower and any Lender or any Affiliate of any Lender relating to Indebtedness and within the scope of Section 9.01(e) will be margin stock.

 

(b)                                 None of the Borrower, any Person Controlling the Borrower, or any Subsidiary is or is required to be registered as an “investment company” under the Investment Company Act of 1940.

 

6.15                        Disclosure.

 

Each Loan Party has disclosed to the Administrative Agent and the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, individually or in the aggregate, that could reasonably be expected to result in a Material Adverse Effect. No report, financial statement, certificate or other information furnished (whether in writing or orally) by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Loan Document (in each case, as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, the Loan Parties represent only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time prepared.

 

72

 

6.16                        Compliance with Laws.

 

Each of the Borrower and its Subsidiaries and, to the knowledge of the Responsible Officers of the Loan Parties, each Contract Provider, is in compliance with all Laws (including, without limitation, Medicare Regulations, Medicaid Regulations, HIPAA, HITECH Act, 42 U.S.C. Section 1320a-7b, 42 U.S.C. Section 1395nn, the civil False Claims Act (31 U.S.C. § 3729 et seq.), the Public Health Service Act (42 U.S.C. §§ 201 et seq.) and the United States Food Drug and Cosmetic Act (21 U.S.C. §§ 301 et seq.)) except in such instances in which (x) such Law is being contested in good faith by appropriate proceedings diligently conducted or (y) the failure to comply with such Law would not reasonably be expected to have a Material Adverse Effect. Without limiting the generality of the foregoing:

 

(a)                                 none of the Borrower, any Subsidiary and, to the knowledge of the Responsible Officers of the Loan Parties, any Contract Provider or any individual employed by the Borrower or any Subsidiary could reasonably be expected to have criminal culpability or be subject to sanction relating to the Medicare Regulations, Medicaid Regulations, HIPAA, the HITECH Act, or any federal or state anti-kickback, false claim, fraud and abuse or self-referral laws or to be excluded from participation in any Medical Reimbursement Program for corporate or individual actions or failures to act known to the Responsible Officers of the Loan Parties where such sanction, culpability or exclusion would reasonably be expected to result in a Material Adverse Effect;

 

(b)                                 current coding and billing policies, arrangements, protocols and instructions of the Borrower and each Subsidiary comply with requirements of Payors and are administered by properly trained personnel, except where any such failure to comply has not resulted or would not reasonably be expected to result in a Material Adverse Effect; and

 

(c)                                  except for exceptions to the following that would not reasonably be expected to result in a Material Adverse Effect, neither the Borrower nor any of its Subsidiaries are a party to any corporate integrity agreements, monitoring agreements, consent decrees, settlement orders, or similar assessments with or imposed by any Governmental Authority under any Law.

 

6.17                        Intellectual Property; Licenses, Etc.

 

The Borrower and its Subsidiaries own, or possess the right to use, all of the trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other intellectual property rights (collectively, “IP Rights”) that are reasonably necessary for the operation of their respective businesses. Set forth on Schedule 6.17 is a list of (i) all IP Rights registered or pending registration with the United States Copyright Office or the United States Patent and Trademark Office that as of the Closing Date a Loan Party owns and (ii) all licenses of IP Rights registered with the United States Copyright Office or the United States Patent and Trademark Office as of the Closing Date. Except for such claims and infringements that could not reasonably be expected to have a Material Adverse Effect, no claim has been asserted and is pending by any Person challenging or questioning the use of any IP Rights or the validity or effectiveness of any IP Rights, nor does any Responsible Officer of any Loan Party know of any such claim, and, to the knowledge of the Responsible Officers of the Loan Parties, the use of any IP Rights by the Borrower or any Subsidiary, the granting of a right or a license in respect of any IP Rights from the Borrower or any Subsidiary or any slogan or other advertising device, product, process, method, substance, part or other material now employed, or now contemplated to be employed, by the Borrower or any Subsidiary does not infringe on any rights of any other Person. As of the Closing Date, none of the IP Rights owned by any Loan Party is subject to any licensing agreement or similar arrangement except as set forth on Schedule 6.17.

 

73

 

6.18                        Solvency.

 

The Loan Parties are Solvent on a consolidated basis.

 

6.19                        Perfection of Security Interests in the Collateral.

 

The Collateral Documents create valid security interests in, and Liens on, the Collateral purported to be covered thereby, which security interests and Liens are currently perfected security interests and Liens, prior to all other Liens other than Permitted Liens.

 

6.20                        Business Locations; Taxpayer Identification Number.

 

Set forth on Schedule 6.20-1 is a list of all real property located in the United States that is owned or leased by any Loan Party as of the Closing Date (identifying whether such real property is owned or leased and which Loan Party owns or leases such real property) other than such leased real property locations where the fair market value of Collateral located thereon is less than $100,000. Set forth on Schedule 6.20-2 is the chief executive office, U.S. taxpayer identification number and organizational identification number of each Loan Party as of the Closing Date. No Loan Party is organized in more than one state. The exact legal name and state of organization of each Loan Party as of the Closing Date is as set forth on the signature pages hereto. Except as set forth on Schedule 6.20-3, no Loan Party has during the five years preceding the Closing Date (i) changed its legal name, (ii) changed its state of formation, or (iii) been party to a merger, consolidation or other change in structure.

 

6.21                        Reimbursement from Medical Reimbursement Programs.

 

The Receivables of the Borrower and each Subsidiary have been adjusted in all material respects to reflect the requirements of all Laws and written reimbursement policies of any applicable Payor (including Medicare, Medicaid, Blue Cross/Blue Shield, private insurance companies, health maintenance organizations, preferred provider organizations, alternative delivery systems, managed care systems, government contracting agencies and other third party payors). Without limitation the generality of the foregoing:

 

(a)                                 Receivables of the Borrower and each Subsidiary relating to any Payor do not exceed amounts such Person is entitled to receive under any capitation arrangement, fee schedule, discount formula, cost-based reimbursement or other adjustment or limitation to its usual charges, in each case to the extent it would not reasonably be expected to have a Material Adverse Effect; and

 

(b)                                 there is no pending or, to the knowledge of the Responsible Officers of the Loan Parties, threatened, recoupment or penalty action or other adverse action against any of the Borrower or any Subsidiary under Medicare, Medicaid or any other Payor program, which would reasonably be expected to result in a Material Adverse Effect.

 

6.22                        Licensing and Accreditation.

 

Except to the extent it would not reasonably be expected to have a Material Adverse Effect, each of the Borrower and its Subsidiaries and each Contract Provider has, to the extent applicable: (a) obtained (or been duly assigned) all required certificates of need or determinations of need as required by the relevant state Governmental Authority for the acquisition, construction, expansion of, investment in or operation of its businesses as currently operated, (b) obtained and maintains in good standing all required licenses, permits, authorizations, registrations and approvals of each Governmental Authority necessary to

 

74

 

the conduct of its business, including without limitation a license to provide the professional services provided by such Person; (c) to the extent prudent and customary in the industry in which it is engaged, obtained and maintains accreditation from all generally recognized accrediting agencies; (d) entered into and maintains in good standing its Medicare Provider Agreements and Medicaid Provider Agreements; and (e) ensured that all such required licenses or restricted certifications and accreditations are in full force and effect on the date hereof and have not been revoked or suspended or otherwise limited.

 

6.23                        OFAC.

 

No Loan Party nor, to the knowledge of any Loan Party, any Related Party, (a) is currently the subject of any Sanctions, (b) is located, organized or residing in any Designated Jurisdiction or (c) is or has been (within the previous five (5) years) engaged in any transaction with any Person who is now or was then the subject of Sanctions or who is located, organized or residing in any Designated Jurisdiction. No Loan, nor the proceeds from any Loan, has been used, directly or indirectly, to lend, contribute, provide or has otherwise made available to fund any activity or business in any Designated Jurisdiction or to fund any activity or business of any Person located, organized or residing in any Designated Jurisdiction or who is the subject of any Sanctions, or in any other manner that will result in any violation by any Person (including any Lender or the Administrative Agent) of Sanctions.

 

6.24                        Casualty, etc.

 

Neither the businesses nor the properties of any Loan Party or any of its Subsidiaries are affected by any fire, explosion, accident, strike, lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of the public enemy or other casualty (whether or not covered by insurance), condemnation or eminent domain proceeding that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

ARTICLE VII

 

AFFIRMATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, the Loan Parties shall and shall cause each Subsidiary thereof to:

 

7.01                        Financial Statements.

 

Deliver to the Administrative Agent, in form and detail reasonably satisfactory to the Administrative Agent:

 

(a)                                 as soon as available, but in any event within one hundred twenty days after the end of each fiscal year of the Borrower:

 

(i)                                     a consolidated and consolidating balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal year, and the related consolidated and consolidating statements of income or operations, changes in equityholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, and in the case of such consolidated statements audited and accompanied by a report and opinion of an independent certified public accountant of nationally recognized standing reasonably acceptable to the Administrative Agent, which report and opinion

 

75

 

shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit, and in the case of such consolidating statements certified by the chief executive officer, chief financial officer, treasurer or controller of the Borrower to the effect that such statements are fairly stated in all material respects when considered in relation to the consolidated financial statements of the Borrower and its Subsidiaries; and

 

(ii)                                  a consolidated and consolidating balance sheet of the Primary Group as at the end of such fiscal year, and the related consolidated and consolidating statements of income or operations, changes in equityholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, and in the case of such consolidated statements certified by the chief executive officer, chief financial officer, treasurer or controller of the Borrower as fairly presenting in all material respects the financial condition, results of operations, equityholders’ equity and cash flows of the Borrower and its Subsidiaries in accordance with GAAP, and in the case of such consolidating statements certified by the chief executive officer, chief financial officer, treasurer or controller of the Borrower to the effect that such statements are fairly stated in all material respects when considered in relation to the consolidated financial statements of the Borrower and its Subsidiaries;

 

(b)                                 [reserved]; and

 

(c)                                  as soon as available, but in any event within thirty (30) days after the end of each of month of each fiscal year of the Borrower (commencing with the fiscal month ended October 31, 2013):

 

(i)                                     (A) a consolidated and consolidating balance sheet of the Borrower and its Subsidiaries as of the end of such month, (B) the related consolidated and consolidating statements of income or operations, shareholders’ equity and cash flows for such month and for the portion of the Borrower’s fiscal year than ended setting forth in each case in comparative form for the corresponding month of the previous fiscal year and the corresponding portion of the previous fiscal year, (C) a report detailing the amount of Government Receivables received by the Obligors, if any, both for such month and for the year to date, and (D) a report detailing the Borrower and its Subsidiaries’ patient volume and revenue by payor, all in reasonable detail and duly certified by the chief executive officer, chief financial officer, treasurer or controller of the Borrower to the effect that such statements are fairly stated in all material respects when considered in relation to the consolidated financial statements of the Borrower and its Subsidiaries; provided that, without limiting the foregoing requirements, such financial statements and reports shall contain at least the information contained in the August 2013 reporting package delivered to the Administrative Agent prior to the Closing Date; and

 

(ii)                                  (A) a consolidated and consolidating balance sheet of the Primary Group as of the end of such month, (B) the related consolidated and consolidating statements of income or operations, shareholders’ equity and cash flows for such month and for the portion of the Borrower’s fiscal year than ended setting forth in each case in comparative form for the corresponding month of the previous fiscal year and the corresponding portion of the previous fiscal year, (C) a report detailing the amount of Government Receivables received by the Obligors, if any, both for such month and for the year to

 

76

 

date, and (D) a report detailing the Borrower and its Subsidiaries’ patient volume and revenue by payor, all in reasonable detail and duly certified by the chief executive officer, chief financial officer, treasurer or controller of the Borrower to the effect that such statements are fairly stated in all material respects when considered in relation to the consolidated financial statements of the Borrower and its Subsidiaries;

 

(d)                                 as soon as available, but in any event within thirty (30) days after the end of each fiscal year of the Borrower, forecasts prepared by management of the Borrower, in form satisfactory to the Administrative Agent, of consolidated balance sheets and statements of income or operations and cash flows of the Borrower and its Subsidiaries and of the Primary Group in each case on a monthly basis for the immediately following fiscal year (including the fiscal year in which the Maturity Date occurs).

 

As to any information contained in materials furnished pursuant to Section 7.02(d), the Borrower shall not be separately required to furnish such information under clause (a) or (c) above, but the foregoing shall not be in derogation of the obligation of the Borrower to furnish the information and materials described in clauses (a) and (c) above at the times specified therein.

 

7.02                        Certificates; Other Information.

 

Deliver to the Administrative Agent, in form and detail reasonably satisfactory to the Administrative Agent:

 

(a)                                 concurrently with the delivery of the financial statements referred to in Section 7.01(a), a certificate of its independent certified public accountants certifying such financial statements and stating that in making the examination necessary therefor no knowledge was obtained of any Event of Default under the financial covenants set forth herein or, if any such Event of Default shall exist, stating the nature and status of such event;

 

(b)                                 concurrently with the delivery of the financial statements referred to in Sections 7.01(a) and (c) a duly completed Compliance Certificate signed by the chief executive officer, chief financial officer, treasurer or controller of the Borrower (which delivery may, unless the Administrative Agent, or a Lender requests executed originals, be by electronic communication including fax or email and shall be deemed to be an original authentic counterpart thereof for all purposes);

 

(c)                                  promptly after the same are available, copies of each annual report, proxy or financial statement or other report or communication sent to the equityholders of the Borrower or any Subsidiary, and copies of all annual, regular, periodic and special reports and registration statements which the Borrower or any Subsidiary may file or be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934, and not otherwise required to be delivered to the Administrative Agent pursuant hereto;

 

(d)                                 [Reserved];

 

(e)                                  promptly after any request by the Administrative Agent or any Lender, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of any Loan Party or any Subsidiary thereof by independent accountants in connection with the accounts or books of any Loan Party or any of its Subsidiaries, or any audit of any of them;

 

77

 

(f)                                   promptly, and in any event within five Business Days after receipt thereof by the Borrower or any Subsidiary, to the extent disclosure thereof is not prohibited by applicable Law or applicable Governmental Authority, copies of each notice or other correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning any investigation or possible investigation or other inquiry by such agency regarding financial or other operational results of the Borrower or any Subsidiary;

 

(g)                                  promptly, such additional information regarding the business, financial, legal or corporate affairs of the Borrower or any Subsidiary, or compliance with the terms of the Loan Documents, as the Administrative Agent may from time to time reasonably request and that is available to the Borrower or such Subsidiary;

 

(h)                                 as soon as available, but in any event within 30 days after the end of each fiscal year of the Borrower, a report summarizing the insurance coverage (specifying type, amount and carrier) in effect for each Loan Party and its Subsidiaries and containing such additional information as the Administrative Agent, or any Lender through the Administrative Agent, may reasonably specify; and

 

(i)                                     promptly after the assertion or occurrence thereof, notice of any action or proceeding against or of any noncompliance by any Loan Party or any of its Subsidiaries with any Environmental Law or Environmental Permit that could (i) reasonably be expected to have a Material Adverse Effect or (ii) cause any property described in the Mortgages to be subject to any restrictions on ownership, occupancy, use or transferability under any Environmental Law.

 

Documents required to be delivered pursuant to Section 7.01(a) or (c) or Section 7.02(d) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at the website address listed on Schedule 11.02; or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website, if any, to which the Administrative Agent has access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that: (i) the Borrower shall deliver paper copies of such documents to the Administrative Agent upon its request the Borrower to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent and (ii) the Borrower shall notify the Administrative Agent (by facsimile or electronic mail) of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. The Administrative Agent shall have no obligation to request the delivery of or to maintain paper copies of the documents referred to above.

 

The Borrower hereby acknowledges that (a) the Administrative Agent may, but shall not be obligated to, make available to the Lenders or the L/C Arranger materials and/or information provided by or on behalf of the Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on Debt Domain, IntraLinks, Syndtrak or another similar electronic system (the “Platform”) and (b) certain of the Lenders (each a “Public Lender”) may have personnel who do not wish to receive material non-public information with respect to the Borrower or its Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons’ securities. The Borrower hereby agrees that so long as the Borrower is the issuer of any outstanding debt or equity securities that are registered or issued pursuant to a private offering or is actively contemplating issuing any such securities (w) all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking

 

78

 

Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the Administrative Agent, the L/C Arranger and the Lenders to treat such Borrower Materials as not containing any material non-public information with respect to the Borrower or its securities for purposes of United States federal and state securities laws (provided, however, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 11.07); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Side Information;” and (z) the Administrative Agent shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Side Information”. Notwithstanding the foregoing, the Borrower shall be under no obligation to mark any Borrower Materials “PUBLIC.”

 

7.03                        Notices.

 

Promptly notify the Administrative Agent and each Lender of, to the extent permitted by applicable Law or applicable Governmental Authority:

 

(a)                                 the occurrence of any Default;

 

(b)                                 any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect;

 

(c)                                  any material change in accounting policies or financial reporting practices by the Borrower or any Subsidiary;

 

(d)                                 (i) the institution of any investigation, review or proceeding against the Borrower or any Subsidiary to suspend, revoke or terminate (or that could reasonably be expected to result in the suspension, revocation or termination of) any Medicaid Provider Agreement or Medicare Provider Agreement, (ii) the institution of any investigation, review or proceeding against the Borrower or any Subsidiary that could reasonably be expected to result in an Exclusion Event or (iii) any notice of loss or threatened loss of any material accreditation, healthcare license, permit, registration, certificate, authorization or certification, or loss of participation under any Medical Reimbursement Program; and

 

(e)                                  Any notice of default (however termed) or any other material notice received by or on behalf of the Borrower or any of its Subsidiaries with respect to any MPT Document.

 

Each notice pursuant to this Section 7.03 shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto. Each notice pursuant to Section 7.03(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached.

 

7.04                        Payment of Taxes.

 

Pay and discharge as the same shall become due and payable all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by the Borrower or such Subsidiary.

 

79

 

7.05                        Preservation of Existence, Etc.

 

(a)                                 Preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization except in a transaction permitted by Section 8.04 or 8.05; (b) take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business, except to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) preserve or renew all of its registered patents, trademarks, trade names and service marks, the non-preservation or non-renewal of which could reasonably be expected to have a Material Adverse Effect.

 

7.06                        Maintenance of Properties.

 

(a)                                 Maintain, preserve and protect all of its material properties and equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted.

 

(b)                                 Make all necessary repairs thereto and renewals and replacements thereof, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

 

(c)                                  Use the standard of care typical in the industry in the operation and maintenance of its facilities.

 

7.07                        Maintenance of Insurance.

 

(a)                                 Maintain with financially sound and reputable insurance companies that are not Affiliates of the Borrower, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business and owning similar properties in localities where the Borrower or the applicable Subsidiary operates, of such types and in such amounts as are customarily carried under similar circumstances by such other Persons.

 

(b)                                 Without limiting the foregoing, (i) maintain, if available, fully paid flood hazard insurance on all real property that is located in a special flood hazard area and that constitutes Collateral, on such terms and in such amounts as required by The National Flood Insurance Reform Act of 1994 or as otherwise required by the Administrative Agent, (ii) furnish to the Administrative Agent evidence of the renewal (and payment of renewal premiums therefor) of all such policies prior to the expiration or lapse thereof, and (iii) furnish to the Administrative Agent prompt written notice of any redesignation of any such improved real property into or out of a special flood hazard area.

 

(c)                                  Cause the Administrative Agent and its successors and/or assigns to be named as lender’s loss payee or mortgagee as its interest may appear, and/or additional insured with respect to any such insurance providing liability coverage or coverage in respect of any Collateral, and cause each provider of any such insurance to agree, by endorsement upon the policy or policies issued by it or by independent instruments furnished to the Administrative Agent, that it will give the Administrative Agent thirty days (or such lesser amount as the Administrative Agent may agree) prior written notice before any such policy or policies shall be altered or canceled.

 

7.08                        Compliance with Laws.

 

(a)                                 Except to the extent the failure to do so would not reasonably be expected to result in a Material Adverse Effect, (i) comply with all Laws (including Titles XVIII and XIX of the Social Security Act, Medicare Regulations and Medicaid Regulations) and all restrictions and requirements imposed by any Governmental Authority and take all reasonable action to cause each Contract Provider to comply

 

80

 

with all Laws, including all laws, rules and regulations of Governmental Authorities pertaining to the licensing and conduct of professionals and other health care providers; (ii) obtain and maintain, and take all reasonable action to cause each Contract Provider to obtain and maintain, all licenses, permits, certifications, registrations and approvals of all applicable Governmental Authorities as are required for the conduct of its business as currently conducted and herein contemplated (including professional licenses, certificates or determinations of need, Medicare Provider Agreements and Medicaid Provider Agreements); (iii) ensure, and take all reasonable action to cause each Contract Provider to ensure, that coding and billing policies, arrangements, protocols and instructions will comply with all Laws and all reimbursement requirements under Medicare, Medicaid and other Medical Reimbursement Programs and Payors and will be administered by properly trained personnel; (iv) ensure that medical director compensation arrangements and other arrangements with referring physicians, if any, will comply with all Laws including applicable state and federal self-referral and anti-kickback laws, including 42 U.S.C. Section 1320a-7b(1)-(b)(2), 42 U.S.C. Section 1395nn; and (v) implement, and use commercially reasonable efforts to cause each Contract Provider to implement, policies that are consistent with the regulations implementing the privacy requirements of the Administrative Simplification subtitle of HIPAA set forth at 45 CFR Parts 160, 162 and 164 and the HITECH Act on or before the date on which such regulations become applicable to such Person.

 

(b)                                 Maintain a compliance program which is reasonably designed to provide effective internal controls that promote adherence to and prevent and detect material violations of Laws, including any Medicaid Regulations and Medicare Regulations and which includes the reasonable implementation of internal audits and monitoring on a regular basis to monitor compliance with the compliance program and with Laws.

 

7.09                        Books and Records.

 

(a)                                 Maintain proper books of record and account with entries that are full, true and correct in all material respects in conformity with GAAP consistently applied with respect to all financial transactions and matters involving the assets and business of the Borrower or such Subsidiary, as the case maybe.

 

(b)                                 Maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over the Borrower or such Subsidiary, as the case may be.

 

7.10                        Inspection Rights.

 

(a)                                 Permit representatives and independent contractors of the Administrative Agent to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at the expense of the Borrower and at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Borrower; provided, that (i) absent an Event of Default, the Borrower shall be required to pay for only one such visit and/or inspection by the Administrative Agent in any fiscal year of the Borrower and (ii) when an Event of Default exists the Administrative Agent (or any of its respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and without advance notice. Each Lender shall be permitted to have representatives or independent contractors of such Lender accompany the Administrative Agent on any visit described in this clause (a) at the sole cost of such Lender.

 

81

 

(b)                                 If requested by the Administrative Agent in its sole discretion, permit the Administrative Agent, and its representatives, upon reasonable advance notice to the Borrower, to conduct an annual audit of the Collateral at the expense of the Borrower; provided, however, unless an Event of Default exists, the Administrative Agent shall not conduct such audit more frequently than once in any 12 month period.

 

(c)                                  If requested by the Administrative Agent in its sole discretion, promptly deliver to the Administrative Agent (a) asset appraisal reports with respect to all of the real and personal property owned by the Borrower and its Subsidiaries, and (b) a written audit of the accounts receivable, inventory, payables, controls and systems of the Borrower and its Subsidiaries; provided, however, unless an Event of Default exists, the Administrative Agent shall not conduct such appraisal or audit more frequently than once in any 12 month period.

 

7.11                        Use of Proceeds.

 

(a)                                 Use the proceeds of the Revolving Loans solely for working capital, Consolidated Capital Expenditures solely with respect to Primary Facilities, Permitted Acquisitions and other general corporate purposes not in contravention of any Law or of any Loan Document, provided that no Letter of Credit other than each MPT Letter of Credit may support or secure any obligations under, or finance any capital expenditures contemplated by, the MPT Documents.

 

(b)                                 Use the proceeds of the Closing Date Term Loan solely to refinance Existing Indebtedness, for working capital and for Consolidated Capital Expenditures solely with respect to Primary Facilities, provided that the proceeds of the Term Loan may not, directly or indirectly, support or secure any obligations under, or finance any capital expenditures contemplated by, any of the MPT Documents.

 

(c)                                  Use the proceeds of the Delayed Draw Term Loan solely to fund Specified Distributions and for Consolidated Capital Expenditures solely with respect to Primary Facilities, provided that the proceeds of the Delayed Draw Term Loans may not, directly or indirectly, support or secure any obligations under, or finance any capital expenditures contemplated by, the MPT Documents.

 

7.12                        Holdings, Additional Subsidiaries and non-Immaterial Subsidiaries.

 

(a)                                 Within forty-five (45) days following the Closing Date (or such later date as the Administrative Agent may agree to it in its sole discretion) (such date, the “Holdings Outside Date”), cause (i) a new limited liability company or corporation to be organized in a U.S. State, and pursuant to organizational documents, in each case reasonably acceptable to the Administrative Agent (such entity, “Holdings”), (ii) Holdings to become and at all times thereafter remain the direct owner of 100% of the Equity Interests of the Borrower, (iii) Holdings to become and at all times remain a party to this Agreement by executing a joinder agreement in form and substance reasonably satisfactory to the Administrative Agent, (iv) Holdings to become a Guarantor by executing and delivering to the Administrative Agent a Joinder Agreement or such other documents as the Administrative Agent shall reasonably request for such purpose, and (v) Holdings to deliver to the Administrative Agent documents of the types referred to in Sections 5.01(c) and (d) and favorable opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to in clause (i)), all in form, content and scope reasonably satisfactory to the Administrative Agent.

 

(b)                                 Within thirty (30) days (or such later date as the Administrative Agent may agree in its sole discretion) after (a) any Person becomes a Domestic Subsidiary, including any member of the MPT

 

82

 

Group (in each case, other than any Immaterial Subsidiary) or (b) any Domestic Subsidiary ceases to be an Immaterial Subsidiary, cause such Person to (i) except in the case of any MPT Operator that is not permitted under the MPT Documents to become a Guarantor, become a Guarantor by executing and delivering to the Administrative Agent a Joinder Agreement or such other documents as the Administrative Agent shall reasonably request for such purpose, and (ii) deliver to the Administrative Agent documents of the types referred to in Sections 5.01(c) and (d) and favorable opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to in clause (i)), all in form, content and scope reasonably satisfactory to the Administrative Agent.

 

7.13                        Pledged Assets.

 

(a)                                 Equity Interests. Cause (i) 100% of the issued and outstanding Equity Interests of the Borrower and each Domestic Subsidiary (other than any Immaterial Subsidiary) directly or indirectly owned by any Loan Party and (ii) 66% (or such greater percentage that, due to a change in an applicable Law after the date hereof, (A) could not reasonably be expected to cause the undistributed earnings of such Foreign Subsidiary as determined for United States federal income tax purposes to be treated as a deemed dividend to such Foreign Subsidiary’s United States parent and (B) could not reasonably be expected to cause any material adverse tax consequences) of the issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding Equity Interests not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) in each Foreign Subsidiary (other than any Immaterial Subsidiary) directly owned by any Loan Party in each case to be subject at all times to a first priority, perfected Lien in favor of the Administrative Agent, for the benefit of the holders of the Obligations, to secure the Obligations pursuant to the Collateral Documents (subject to Permitted Liens), and, in connection with the foregoing, deliver (or cause to be delivered) to the Administrative Agent such other documentation as the Administrative Agent may request including, any filings and deliveries to perfect such Liens, Organization Documents, resolutions and favorable opinions of counsel all in form, content and scope reasonably satisfactory to the Administrative Agent.

 

(b)                                 Other Property. Cause all property (other than Excluded Property) of each Loan Party to be subject at all times to first priority (subject to Permitted Liens), perfected and, in the case of real property, perfected and enforceable Liens in favor of the Administrative Agent, for the benefit of the holders of the Obligations, to secure the Obligations pursuant to the Collateral Documents (subject to Permitted Liens) and, in connection with the foregoing, deliver to the Administrative Agent such other documentation as the Administrative Agent may reasonably request including filings and deliveries necessary to perfect such Liens, Organization Documents, resolutions, Real Property Security Documents and favorable opinions of counsel to such Person, all in form, content and scope reasonably satisfactory to the Administrative Agent.

 

7.14                        Government Receivables Accounts.

 

With respect to Government Receivables originated by any Loan Party, (a) establish Government Receivables Accounts with respect to the receipt and processing of payments in respect of such Government Receivables in compliance with Section 4(a)(iv) of the Security Agreement, (b) instruct each obligor to make all payments in respect of such Government Receivables directly to a Government Receivables Account (and use commercially reasonable efforts to cause such payments to be made by electronic funds transfer) in accordance with Section 4(a)(v) of the Security Agreement, (c) if an obligor in respect of such Government Receivables fails to comply with such instructions, promptly and in any event with five Business Days transfer any payment received from an obligor in respect of such Government Receivables to a Government Receivables Account and (d) cause each Government

 

83

 

Receivables Account to contain only payments made in respect of Government Receivables and the proceeds thereof.

 

7.15                        Cash Collateral Accounts.

 

Cause each of the Loan Parties to maintain all Cash Collateral Accounts with a commercial bank located in the United States, which has executed and delivered a deposit account control agreement among such commercial bank, the applicable Loan Party and the Administrative Agent for the benefit of the Administrative Agent or any other holder of Obligations pursuant to the terms of the Security Agreement.

 

7.16                        Reserved.

 

7.17                        Interest Rate Protection Agreements.

 

(a)                                 Within ninety days after the Closing Date, the Borrower shall enter into and thereafter maintain interest rate protection agreements (protecting against fluctuations in interest rates) having a term of at least three years from the Closing Date, establishing a fixed or maximum interest rate of 10.5% per annum for an aggregate notional amount equal to at least 50% of the aggregate principal amount of all Term Loans then outstanding.

 

(b)                                 Within the period commencing on December 31, 2014 and ending ninety days thereafter, the Borrower shall enter into and thereafter maintain interest rate protection agreements (protecting against fluctuations in interest rates) having a term of at least three years from the Closing Date, establishing a fixed or maximum interest rate of 10.5% per annum for an aggregate notional amount equal to at least 50% of (i) the aggregate principal amount of all Term Loans then outstanding minus (ii) the aggregate principal amount of the Term Loans in respect of which interest rate protection agreements (protecting against fluctuations in interest rates) have been entered into and maintained pursuant to Section 7.17(a).

 

7.18                        Sterling Equity Reserve.

 

Until the date that Consolidated EBITDA, calculated for the most recently completed twelve consecutive month period with respect to which the Administrative Agent has received financial statements pursuant to Section 7.01(c), is greater than $30,000,000, (i) cause Sterling to maintain the Sterling Equity Reserve and (ii) request an equity contribution from Sterling under the Sterling Equity Reserve at any time that Liquidity is less than $5 million in an amount equal to the lesser of (a) an amount sufficient to cause Liquidity to equal or exceed $5 million and (b) the amount of the Sterling Equity Reserve then in effect.

 

7.19                        Compliance with Environmental Laws.

 

Use and operate all of its and their properties in material compliance with all applicable Environmental Laws and Environmental Permits; obtain and renew all Environmental Permits necessary for its operations and properties; and, subject to the terms of any lease or operating agreement to which Borrower or any Subsidiary is a party, conduct any investigation, study, sampling and testing, and undertake any cleanup, response or other corrective action if and as required by Environmental Law to address Hazardous Materials at, on, under or emanating from any of the properties owned, leased or operated by it; provided, however, that neither the Borrower nor any of its Subsidiaries shall be required to undertake any such action to the extent that its obligation to do so is being contested in good faith and

 

84

 

by proper proceedings and appropriate reserves are being maintained with respect to such circumstances in accordance with GAAP.

 

7.20                        Preparation of Environmental Reports.

 

At the request of the Administrative Agent or the Required Lenders from time to time following the occurrence and during the continuation of an Event of Default , provide to the Lenders within 60 days after such request or such longer period, if any, as the Administrative Agent shall agree to in its sole discretion, at the expense of the Borrower, an environmental site assessment report for any properties owned, leased or operated by it (subject to the terms of any lease or operating agreement as to which the counterparty is not the Borrower, any Subsidiary thereof or any of their respective Affiliates) described in such request, prepared by an environmental consulting firm acceptable to the Administrative Agent, indicating the presence or absence of Hazardous Materials and the estimated cost of any compliance, response or other corrective action required under Law or by any Governmental Authority with competent jurisdiction to address any Hazardous Materials on such properties; without limiting the generality of the foregoing, if the Administrative Agent determines at any time that a material risk exists that any such report will not be provided within the time referred to above, the Administrative Agent may retain an environmental consulting firm to prepare such report at the expense of the Borrower, and the Borrower hereby grants and agrees to cause any Subsidiary that owns or leases any property described in such request to grant at the time of such request to the Administrative Agent, the Lenders, such firm and any agents or representatives thereof an irrevocable non-exclusive license, subject to the rights of tenants or necessary consent of landlords, to enter onto their respective properties to undertake such an assessment.

 

7.21                        Further Assurances.

 

Promptly upon request by the Administrative Agent, or any Lender through the Administrative Agent, (a) correct any material defect or error that may be discovered in any Loan Document or in the execution, acknowledgment, filing or recordation thereof, and (b) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, certificates, assurances and other instruments as the Administrative Agent, or any Lender through the Administrative Agent, may reasonably require from time to time in order to (i) carry out more effectively the purposes of the Loan Documents, (ii) to the fullest extent permitted by applicable law, subject any Loan Party’s or any of its Subsidiaries’ properties, assets, rights or interests to the Liens now or hereafter intended to be covered by any of the Collateral Documents, (iii) perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and any of the Liens intended to be created thereunder and (iv) assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively unto the Administrative Agent or any other holder of Obligations the rights granted or now or hereafter intended to be granted to the Administrative Agent or any other holder of Obligations under any Loan Document or under any other instrument executed in connection with any Loan Document to which any Loan Party or any of its Subsidiaries is or is to be a party, and cause each of its Subsidiaries to do so.

 

7.22                        Compliance with Terms of Leaseholds.

 

Make all payments and otherwise perform all obligations in respect of all leases of real property to which the Borrower or any of its Subsidiaries is a party, keep such leases in full force and effect and not allow such leases to lapse or be terminated or any rights to renew such leases to be forfeited or cancelled, notify the Administrative Agent of any default by any party with respect to such leases and cooperate with the Administrative Agent in all respects to cure any such default, and cause each of its Subsidiaries to do so, except, in any case, where the failure to do so, either individually or in the aggregate, could not be reasonably likely to have a Material Adverse Effect.

 

85

 

7.23                        Material Contracts.

 

Perform and observe all the terms and provisions of each Material Contract to be performed or observed by it, maintain each such Material Contract in full force and effect, enforce each such Material Contract in accordance with its terms, take all such action to such end as may be from time to time requested by the Administrative Agent and, upon request of the Administrative Agent, make to each other party to each such Material Contract such demands and requests for information and reports or for action as any Loan Party or any of its Subsidiaries is entitled to make under such Material Contract, and cause each of its Subsidiaries to do so.

 

7.24                        Conference Calls.

 

Upon request by the Administrative Agent, unless and until any Delayed Draw Term Loan has been made, cause the chief financial officer of the Borrower to have a monthly conference call with the Administrative Agent at a mutually agreed time and date; provided such date shall be not later than five days following the date on which the Administrative Agent requests such conference call.

 

7.25                        Post-Closing Covenants.

 

(a)                                 Within 45 days after the Closing Date (or with respect to any Primary Facility of the type described in clause (b) of the definition thereof, within 45 days after the purchase or development thereof), (i) use commercially reasonable efforts to obtain estoppel letters, consents and waivers, in each case in form and substance reasonably satisfactory to the Administrative Agent, with respect to the location of every Primary Facility and (ii) obtain estoppel letters, consents and waivers, in the case of each of clauses (i) and (ii) in form and substance reasonably satisfactory to the Administrative Agent, with respect to the location of the chief executive office of each Loan Party.

 

(b)                                 Comply with the requirements of Section 4(a)(iv) of the Security Agreement within the time periods set forth therein.

 

(c)                                  Within 45 days after the Closing Date (or such longer period as the Administrative Agent may agree to in its sole discretion), deliver to the Administrative Agent each of the items specified in clauses (a)-(g) of the definition of Real Property Security Documents with respect to the property located at 2710 Western Center Boulevard, Fort Worth, Texas 76131 (it being agreed that for purposes of such definition this Section 7.25 shall constitute a request by the Administrative Agent for the delivery or provision of such documents).

 

(d)                                 Within 30 days after the Closing Date (or such longer period as the Administrative Agent may agree to in its sole discretion), deliver to the Administrative Agent, in form and substance reasonably satisfactory to the Administrative Agent, duly executed originals of deposit account control agreements with respect to each Deposit Account (except for Deposit Accounts into which Government Receivables are deposited by payors to the extent applicable Law and regulations prohibit the Administrative Agent from obtaining control over such Deposit Accounts) held by any Loan Party as are necessary for the purpose of obtaining and maintaining control with respect to each such Deposit Account.

 

(e)                                  Within 5 Business Days after the Closing Date (or such longer period as the Administrative Agent may agree to in its sole discretion), deliver to the Administrative Agent, copies of insurance policies or certificates of insurance of the Loan Parties evidencing liability and casualty insurance meeting the requirements set forth in the Loan Documents and otherwise in form and substance satisfactory to the Administrative Agent.

 

86

 

ARTICLE VIII

 

NEGATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, no Loan Party (other than Holdings, except with respect to Section 8.17 only) shall, nor shall it permit any Subsidiary thereof to, directly or indirectly:

 

8.01                        Liens.

 

Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than the following:

 

(a)                                 Liens pursuant to any Loan Document;

 

(b)                                 Liens existing on the date hereof and listed on Schedule 8.01 and any renewals or extensions thereof, provided that (i) the property covered thereby is not changed, (ii) the amount secured or benefited thereby is not increased except as contemplated by Section 8.03(b), (iii) the direct or any contingent obligor with respect thereto is not changed, and (iv) any renewal or extension of the obligations secured or benefited thereby is permitted by Section 8.03(b);

 

(c)                                  Liens (other than Liens imposed under ERISA) for taxes, assessments or governmental charges or levies not yet due or which are being contested in good faith and by appropriate proceedings diligently conducted (which proceedings have the effect of preventing the forfeiture or sale of the property or assets subject to any such Lien), if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;

 

(d)                                 Liens of landlords, carriers, warehousemen, mechanics, materialmen and repairmen and other like Liens arising in the ordinary course of business, provided that such Liens secure only amounts not overdue for more than sixty days or, if overdue for more than sixty days, are being contested in good faith by appropriate proceedings diligently conducted (which proceedings have the effect of preventing the forfeiture or sale of the property or assets subject to any such Lien) for which adequate reserves determined in accordance with GAAP have been established;

 

(e)                                  pledges or deposits in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other social security legislation, other than any Lien imposed by ERISA;

 

(f)                                   deposits to secure the performance of bids, trade contracts, licenses and leases (other than Indebtedness), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

 

(g)                                  easements, rights-of-way, restrictions and other similar encumbrances affecting real property which, in the aggregate, are not substantial in amount, and which do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the applicable Person;

 

(h)                                 Liens securing judgments for the payment of money (or appeal or other surety bonds relating to such judgments) not constituting an Event of Default under Section 9.01(h);

 

87

 

(i)                                     Liens securing Indebtedness permitted under Section 8.03(e); provided that (i) such Liens do not at any time encumber any property other than the property financed by such Indebtedness, and (ii) such Liens attach to such property concurrently with or within ninety days after the acquisition thereof;

 

(j)                                    licenses, sublicenses, leases or subleases granted to others not interfering in any material respect with the business of the Borrower or any Subsidiary;

 

(k)                                 any interest of title of a lessor under, and Liens arising from precautionary UCC financing statements (or equivalent filings, registrations or agreements in foreign jurisdictions) relating to, leases permitted by this Agreement;

 

(l)                                     Liens deemed to exist in connection with Investments in repurchase agreements permitted under Section 8.02;

 

(m)                             normal and customary rights of setoff upon deposits of cash in favor of banks or other depository institutions; provided that such setoff rights do not apply with respect to Indebtedness;

 

(n)                                 Liens of a collection bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection;

 

(o)                                 to the extent constituting a Lien, Retained Rights;

 

(p)                                 Liens arising on any real property as a result of any eminent domain, condemnation or similar proceeding being commenced with respect to such real property;

 

(q)                                 Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;

 

(r)                                    Liens granted by any MPT Operator on the MPT Senior Collateral to secure the MPT Claim, provided that prior to such MPT Operator granting such Lien MPT and each MPT Operator shall have entered into the MPT Intercreditor Agreement with the Administrative Agent;

 

(s)                                   Liens granted by the Borrower in favor of Bank of America, N.A. pursuant to the Existing L/C Security Agreement as in effect on the Closing Date in the Deposit Accounts (as defined therein as of the Closing Date), subject to the limitations contained therein, securing Indebtedness permitted under Section 8.03(l); and

 

(t)                                    other Liens securing liabilities (other than Indebtedness) in an amount not to exceed $1,000,000 in the aggregate at any time outstanding.

 

8.02                        Investments.

 

Make any Investments, except:

 

(a)                                 Investments in the form of cash or Cash Equivalents;

 

(b)                                 Investments outstanding on the Closing Date and set forth in Schedule 8.02;

 

(c)                                  Investments in any Person that is a Loan Party prior to giving effect to such Investment, provided that Investments by members of the Primary Group in members of the MPT

 

88

 

Group shall be limited to (i) each MPT Cost Overrun Guaranty and the MPT Master Lease Guaranty permitted by Section 8.03, (ii) each MPT Letter of Credit and (iii) other Investments in an aggregate amount not to exceed $1,000,000 at any time outstanding;

 

(d)                                 Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss;

 

(e)                                  Guarantees permitted by Section 8.03;

 

(f)                                   Permitted Acquisitions; provided that the acquisition previously identified in writing by the Borrower to the Administrative Agent prior to the Closing Date shall be deemed a Permitted Acquisition provided that it satisfies each of the criteria set forth in the definition of Permitted Acquisition other than in clause (h) thereof;

 

(g)                                  loans and advances to employees of the Borrower or any Subsidiary for reimbursable expenses in the ordinary course of business not to exceed $500,000 in the aggregate at any time outstanding;

 

(h)                                 Investments consisting of the non-cash portion of consideration received in connection with Dispositions permitted pursuant to Section 8.05;

 

(i)                                     Investments consisting of non-cash loans made by the Borrower to officers, directors and employees of the Borrower or any Subsidiary which are used by such Persons to purchase simultaneously Equity Interests of the Borrower;

 

(j)                                    Investments consisting of Swap Contracts permitted by Section 8.03;

 

(k)                                 to the extent constituting Investments, the issuance of Letters of Credit for the account of, or to support or secure obligations of, members of the Primary Group; and

 

(l)                                     Investments of a nature not contemplated in the foregoing clauses in an amount not to exceed $500,000 in the aggregate measured as of the date of incurrence thereof.

 

8.03                        Indebtedness.

 

Create, incur, assume or suffer to exist any Indebtedness, except:

 

(a)                                 Indebtedness under the Loan Documents;

 

(b)                                 Indebtedness outstanding on the date hereof and set forth in Schedule 8.03 and any refinancings, refundings, renewals and extensions thereof; provided that (i) the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing, refunding, renewal or extension and by an amount equal to any existing commitments unutilized thereunder, (ii) the material terms taken as a whole of such refinancing, refunding, renewal or extension are not materially less favorable to the Borrower and its Subsidiaries than the terms of the Indebtedness being refinanced, refunded, renewed or extended, (iii) if the Indebtedness so refinanced, refunded, renewed or extended was unsecured, the refinancing, refunding, renewing

 

89

 

or extending Indebtedness shall be unsecured, (iv) if the Indebtedness so refinanced, refunded, renewed or extended was secured by a junior Lien to the Lien securing the Obligations, then the refinancing, refunding, renewing or extending Indebtedness shall be unsecured or secured by a junior Lien to the Lien securing the Obligations, and (v) if the Indebtedness so refinanced, refunded, renewed or extended was subordinated to the Obligations or any other obligations junior to or subordinated to the Obligations, such refinancing, refunding, renewing, or extending Indebtedness shall be subordinated to the Obligations or other obligations junior to at least the same extent;

 

(c)                                  intercompany Indebtedness permitted under Section 8.02;

 

(d)                                 obligations (contingent or otherwise) existing or arising under any Swap Contract, provided that (i) such obligations are (or were) entered into by such Person in the ordinary course of business for the purpose of directly mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by such Person, or changes in the value of securities issued by such Person, and not for purposes of speculation or taking a “market view;” and (ii) such Swap Contract does not contain any provision exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party;

 

(e)                                  purchase money Indebtedness (including obligations in respect of capital leases and Synthetic Lease Obligations) hereafter incurred to finance the purchase of fixed assets, and renewals, refinancings and extensions thereof, provided that (i) the aggregate outstanding principal amount of all such Indebtedness shall not exceed $5,000,000 at any one time outstanding; and (ii) such Indebtedness when incurred shall not exceed the purchase price of the asset(s) financed;

 

(f)                                   Guarantees with respect to Indebtedness permitted under this Section 8.03 provided that no member of the Primary Group (other than the Borrower pursuant to each MPT Cost Overrun Guaranty and the MPT Master Lease Guaranty) shall provide a Guarantee of any Indebtedness under the MPT Documents; provided further that the Guarantee by the Borrower pursuant to the MPT Master Lease Guaranty shall be permitted only if such Guarantee is subject to the MPT Subordination Agreement;

 

(g)                                  Indebtedness which may be deemed to exist pursuant to any performance, surety, statutory, appeal bonds or similar obligations incurred in the ordinary course of business;

 

(h)                                 Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument, in each case, drawn against insufficient funds in the ordinary course of business, provided, that such Indebtedness is extinguished within 5 Business Days of its incurrence;

 

(i)                                     Indebtedness incurred in favor of insurance companies (or their financing affiliates) in connection with financing of insurance premiums; provided that the total of all such Indebtedness shall not exceed the aggregate amount of such unpaid insurance premiums;

 

(j)                                    subject to compliance with Section 8.06(d), the issuance by the Borrower or any Subsidiary of Indebtedness as payment for all or a portion of any Employee Equity Repurchase, provided that (i) such Indebtedness is subordinated to the Obligations in a manner and to an extent reasonably acceptable to the Administrative Agent and (ii) the aggregate principal amount of such Indebtedness shall not exceed $5,000,000 at any time;

 

90

 

(k)                                 Indebtedness incurred by the members of the MPT Group under the MPT Documents in an aggregate amount not to exceed the MPT Maximum Funding Amount;

 

(l)                                     Indebtedness of the Borrower to Bank of America, N.A. under the Existing L/C Security Agreement, as in effect on the Closing Date, securing Indebtedness (as defined therein, as such definition is in effect on the Closing Date) in an aggregate amount not to exceed $300,000; and

 

(m)                             other Indebtedness not specified above, provided, that the principal amount of such Indebtedness does not exceed $500,000 in the aggregate at any time outstanding.

 

8.04                        Fundamental Changes.

 

Merge, dissolve, liquidate or consolidate with or into another Person, except that so long as no Event of Default exists or would result therefrom, (a) the Borrower may merge or consolidate with any of its Subsidiaries provided that (i) the Borrower is the continuing or surviving Person and (ii) such Subsidiary is not an MPT Operator, (b) any Subsidiary may merge or consolidate with any other Subsidiary provided that (i) if a Loan Party is a party to such transaction, the continuing or surviving Person is a Loan Party and (ii) no member of the MPT Group shall merge or consolidate with any Subsidiary that is a member of the Primary Group unless, subject to Section 8.16(c), (e) and (f) such merger or consolidation is pursuant to a “Property Substitution” under Article XXXIV of the MPT Master Lease, (c) subject to clause (a) above, the Borrower or any Subsidiary may merge with any other Person in connection with a Permitted Acquisition provided that if the Borrower or another Loan Party is a party thereto then the Borrower or such Loan Party is the continuing or surviving Person and (d) any Subsidiary may dissolve, liquidate or wind up its affairs at any time; provided that such dissolution, liquidation or winding up, as applicable, (i) could not reasonably be expected to have a Material Adverse Effect, (ii) would not result in any property that constitutes MPT Senior Collateral being distributed or otherwise transferred to any member of the Primary Group, and (iii) no Event of Default exists immediately prior to such dissolution, liquidation or winding up, as applicable, or would result therefrom.

 

8.05                        Dispositions.

 

Make any Disposition other than:

 

(a)                                 subject to Section 8.16(c), (e) and (f), the transfer of a Primary Facility to a member of the MPT Group pursuant to a “Property Substitution” under Article XXXIV of the MPT Master Lease; and

 

(b)                                 any other Disposition provided that (i) 80% of the consideration paid in connection therewith shall be cash or Cash Equivalents paid contemporaneous with consummation of the transaction and the total consideration shall be in an amount not less than the fair market value of the property disposed of, (ii) if such transaction is a Sale and Leaseback Transaction, such transaction is not prohibited by the terms of Section 8.14, (iii) no Default or Event of Default has occurred and is continuing or will be caused by such Disposition, (iv) such transaction does not involve the sale or other disposition of a minority equity interest in any Subsidiary, such transaction is not prohibited by the terms of Section 8.13, (v) such transaction does not involve a sale or other disposition of receivables other than receivables owned by or attributable to other property concurrently being disposed of in a transaction otherwise permitted under this Section 8.05 and (vi) the aggregate net book value of all of the assets sold or otherwise disposed of by the Borrower and its Subsidiaries in all such transactions in any fiscal year of the Borrower shall not exceed $1,000,000.

 

91

 

8.06                        Restricted Payments.

 

Declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except:

 

(a)                                 each Subsidiary may declare and make Restricted Payments to Loan Parties that own Equity Interests in such Subsidiary, ratably according to their respective holdings of the type of Equity Interest in respect of which such Restricted Payment is being made;

 

(b)                                 the Borrower and each Subsidiary may declare and make dividend payments or other distributions payable solely in common Equity Interests of such Person;

 

(c)                                  the Borrower may declare and make Tax Distributions with respect to any period for which the Borrower is a Flow Through Entity;

 

(d)                                 the repurchase by the Borrower of Equity Interests in the Borrower held by a former officer, director or employee provided that (i) no Default or Event of Default then exists or would result therefrom, (ii) the Loan Parties would be in compliance with the financial covenants set forth in Section 8.11 recomputed as of the end of the period of the twelve fiscal months most recently ended for which the Borrower has delivered financial statements pursuant to Section 7.01(a) or (c) after giving effect to such repurchase on a Pro Forma Basis and (iii) the aggregate principal amount of all such repurchases shall not exceed $5,000,000 (the “Employee Equity Repurchases”); and

 

(e)                                  subject to compliance with the Delayed Draw Conditions, the Borrower may distribute the proceeds of the Delayed Draw Term Loans to owners of its Equity Interests, ratably in accordance with their ownership thereof (such distributions, the “Specified Distributions”); provided that such Specified Distributions are made within two Business Days of the date on which the Delayed Draw Term Loans are made.

 

8.07                        Change in Nature of Business.

 

Engage in any line of business other than Medical Services Businesses.

 

8.08                        Transactions with Affiliates; Management Fees.

 

(a)                                 Enter into or permit to exist any transaction or series of transactions with any officer, director or Affiliate of such Person other than (i) transactions among Loan Parties, (ii) intercompany transactions expressly permitted by Section 8.02, Section 8.03, Section 8.04, Section 8.05 or Section 8.06, (iii) normal and reasonable compensation and reimbursement of expenses of officers and directors, (iv) payment of the Management Fee, Management Expenses and Medical Management Fees in each case to the extent permitted by Section 8.08(b), and (v) except as otherwise specifically limited in this Agreement, other transactions which are entered into in the ordinary course of such Person’s business on terms and conditions substantially as favorable to such Person as would be obtainable by it in a comparable arms-length transaction with a Person other than an officer, director or Affiliate.

 

(b)                                 Pay any management, consulting or similar fee to any Affiliate or to any manager, director, officer or employee of the Borrower or any Subsidiary except that the Borrower may pay: (i) Management Expenses, (ii) Medical Management Fees, and (iii) the Management Fees; provided that (A) the aggregate amount of Management Fees paid during any fiscal year shall not exceed the sum of (1) $500,000 plus (2) the amount of any increase in the Management Fee on each January 1 pursuant to

 

92

 

Section 5.1 of the Management Agreement as in effect on the date hereof plus (3) any accrued Management Fees permitted to be paid pursuant to clause (b)(iii), and (B) no Event of Default shall have occurred and be continuing at the time of such payment or would result therefrom; provided further that any Management Fees that are not paid when due as a result of the existence of an Event of Default may accrue during such time and be paid upon the cure or waiver in writing of such Event of Default so long as no other Event of Default then exists or would be caused by such payment.

 

(c)                                  Amend, modify or change the Management Agreement in a manner materially adverse to the Borrower and its Subsidiaries (including any amendment, modification or change that increases the amount of, or that accelerates the timing for payment of, the Management Fee, Management Expenses or any other amount payable thereunder).

 

8.09                        Burdensome Agreements.

 

Enter into, or permit to exist, any Contractual Obligation that (a) encumbers or restricts the ability of any such Person to (i) make Restricted Payments to any Loan Party, (ii) pay any Indebtedness or other obligation owed to any Loan Party, (iii) make loans or advances to any Loan Party, (iv) transfer any of its property to any Loan Party, (v) pledge its property pursuant to the Loan Documents or any renewals, refinancings, exchanges, refundings or extension thereof or (vi) act as a Loan Party pursuant to the Loan Documents or any renewals, refinancings, exchanges, refundings or extension thereof, except (in respect of any of the matters referred to in clauses (i)-(v) above) for (1) this Agreement and the other Loan Documents, (2) any document or instrument governing Indebtedness incurred pursuant to Section 8.03(e), provided that any such restriction contained therein relates only to the asset or assets constructed or acquired in connection therewith, (3) any Permitted Lien or any document or instrument governing any Permitted Lien, provided that any such restriction contained therein relates only to the asset or assets subject to such Permitted Lien, (4) customary restrictions and conditions contained in any agreement relating to the sale of any property permitted under Section 8.05 pending the consummation of such sale or (5) the MPT Documents (and amendments thereto not prohibited by Section 8.16(a)), provided that any such restriction contained therein relates only to the Borrower or any Subsidiary party to the MPT Documents or (b) requires the grant of any security for any obligation if such property is given as security for the Obligations.

 

8.10                        Use of Proceeds.

 

Use the proceeds of any Credit Extension, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose.

 

8.11                        Financial Covenants.

 

(a)                                 Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio, as of the last day of any period of twelve consecutive fiscal months of Borrower ending on the date set forth in the table below, to exceed the ratio set forth opposite such date in the table below:

 

	
Date
    	
 
    	
Consolidated Leverage Ratio
    
	
March 31,   2014
    	
 
    	
5.25 to 1.0
    
	
June 30,   2014
    	
 
    	
5.25 to 1.0
    
	
September 30,   2014
    	
 
    	
5.25 to 1.0
    
	
December 31,   2014
    	
 
    	
5.00 to 1.0
    
	
March 31,   2015
    	
 
    	
5.00 to 1.0
    

 

93

 

	
Date
    	
 
    	
Consolidated Leverage Ratio
    	
 
    
	
June 30, 2015
    	
 
    	
5.00 to 1.0
    	
 
    
	
September 30, 2015
    	
 
    	
4.75 to 1.0
    	
 
    
	
December 31, 2015
    	
 
    	
4.50 to 1.0
    	
 
    
	
March 31, 2016
    	
 
    	
4.25 to 1.0
    	
 
    
	
June 30, 2016
    	
 
    	
4.00 to 1.0
    	
 
    
	
September 30, 2016
    	
 
    	
3.75 to 1.0
    	
 
    
	
December 31, 2016 and thereafter
    	
 
    	
3.50 to 1.0
    	
 
    

 

(b)              Consolidated Interest Charge Coverage Ratio. Permit the Consolidated Interest Charge Coverage Ratio, as of the last day of any period of twelve consecutive fiscal months of Borrower ending on the date set forth in the table below, to exceed the ratio set forth opposite such date in the table below:

 

	
Date
    	
 
    	
Consolidated Interest Charge
   Coverage Ratio
    	
 
    
	
March 31, 2014
    	
 
    	
2.50 to 1.0
    	
 
    
	
June 30, 2014
    	
 
    	
2.75 to 1.0
    	
 
    
	
September 30, 2014
    	
 
    	
2.75 to 1.0
    	
 
    
	
December 31, 2014
    	
 
    	
3.00 to 1.0
    	
 
    
	
March 31, 2015
    	
 
    	
3.00 to 1.0
    	
 
    
	
June 30, 2015
    	
 
    	
3.25 to 1.0
    	
 
    
	
September 30, 2015
    	
 
    	
3.25 to 1.0
    	
 
    
	
December 31, 2015 and thereafter
    	
 
    	
3.50 to 1.0
    	
 
    

 

(c)               Consolidated Capital Expenditures. Permit Consolidated Capital Expenditures (other than Consolidated Capital Expenditures to the extent financed with (i) Capital Expenditure Equity Issuances or (ii) the proceeds of Delayed Draw Term Loans) to exceed for any fiscal year of the Borrower the amount set forth next to such fiscal year in the table below:

 

	
Fiscal Year Ending
    	
 
    	
Consolidated Interest Charge
   Coverage Ratio
    	
 
    
	
December 31, 2014
    	
 
    	
$
    	
25,000,000
    	
 
    
	
December 31, 2015 and thereafter
    	
 
    	
$
    	
15,000,000
    	
 
    

 

; provided that if the aggregate amount of Consolidated Capital Expenditures made in any fiscal year commencing with the fiscal year ending December 31, 2014 shall be less than the maximum amount of Consolidated Capital Expenditures otherwise permitted under this Section 8.11 for such fiscal year (before giving effect to any carryover), then an amount of such shortfall not exceeding 75% of such maximum amount may be added to the amount of Consolidated Capital Expenditures permitted under this Section 8.11 for the immediately succeeding (bot not any other) fiscal year.

 

8.12     Organization Documents; Fiscal Year; Legal Name, State of Formation and Form of Entity.

 

(a)                            Amend, modify or change its Organization Documents in a manner materially adverse to the Lenders.

 

(b)                            Change its fiscal year or its fiscal quarter.

 

94

 

(c)                                  Without providing concurrent written notice to the Administrative Agent (or such lesser period as the Administrative Agent may agree), change its name, state of formation, form of organization, chief executive office, U.S. taxpayer identification number or organizational identification number.

 

8.13                        Ownership of Subsidiaries.

 

Notwithstanding any other provisions of this Agreement to the contrary, (a) permit any Person (other than the Borrower or any Wholly Owned Subsidiary) to directly or indirectly own any Equity Interests of any Subsidiary, except (i) any Person whose primary business is the operation of hospitals in the local area where such Subsidiary operates a Facility and (ii) to qualify directors where required by applicable Law or to satisfy other requirements of applicable Law with respect to the ownership of Equity Interests of Foreign Subsidiaries, or (b) permit any Subsidiary to issue or have outstanding any shares of preferred Equity Interests.

 

8.14                        Sale Leasebacks.

 

Enter into any Sale and Leaseback Transaction (other than with respect to the MPT Facilities and the property located at 3016 Marina Bay Drive, League City, Texas 77573) unless after giving effect to such Sale and Leaseback Transaction the aggregate fair market value (determined at the time of such Sale and Leaseback Transaction) of all property covered by all Sale and Leaseback Transactions permitted hereunder does not exceed $6.0 million at any one time; provided that if a Sale and Leaseback Transaction with respect to the property located at 3016 Marina Bay Drive, League City, Texas 77573 is not consummated on or before March 31, 2014, the Borrower and its Subsidiaries shall deliver to the Administrative Agent within 30 days thereafter (or such longer period as the Administrative Agent shall agree to in its sole discretion) each of the items specified in clauses (a) through (g) of the definition of Real Property Security Documents.

 

8.15                        Sanctions.

 

Permit any Loan or the proceeds of any Loan, directly or indirectly, (a) to be lent, contributed or otherwise made available to fund any activity or business in any Designated Jurisdiction; (b) to fund any activity or business of any Person located, organized or residing in any Designated Jurisdiction or who is the subject of any Sanctions; or (c) in any other manner that will result in any violation by any Person (including any Lender, Administrative Agent or L/C Arranger) of any Sanctions.

 

8.16                        MPT Documents and Transactions.

 

(a)                                 Amend or modify or waive any of the requirements of any of the MPT Documents in a manner that (i) increases the maximum aggregate amount funded, or permitted to be funded, by MPT or any other Person thereunder to an amount greater than $205,000,000 (the “MPT Maximum Funding Amount”), (ii) increases the maximum amount of each MPT Letter of Credit required thereunder or the maximum number of MPT Letters of Credit required thereunder, or (iii) is not permitted by the MPT Intercreditor Agreement or the MPT Subordination Agreement, as applicable;

 

(b)                                 make any optional prepayment (including by way of depositing money or securities with respect thereto before due for the purposes of paying when due) of any of the obligations of the Borrower and its Subsidiaries under the MPT Documents or make any other payment of any of the obligations of the Borrower and its Subsidiaries under the MPT Documents in violation of the MPT Intercreditor Agreement or the MPT Subordination Agreement, as applicable;

 

95

 

(c)                                  transfer, directly or indirectly, any Primary Facility to a member of the MPT Group, provided that the Primary Group may transfer up to three Primary Facilities to the MPT Group during the term of this Agreement pursuant to a “Property Substitution” under Article XXXIV of the MPT Master Lease so long as (i) no Default shall have occurred and be continuing at the time of such transfer and (ii) after giving effect to such transfer on a Pro Forma Basis, the Loan Parties would be in compliance with the financial covenants set forth in Section 8.11 recomputed as of the end of the period of the twelve fiscal months most recently ended for which the Borrower has delivered financial statements pursuant to Section 7.01(a) or (c);

 

(d)                                 permit any member of the Primary Group to become a member of the MPT Group, provided that a member of the Primary Group may become a member of the MPT Group pursuant to a “Property Substitution” under Article XXXIV of the MPT Master Lease subject to Section 8.16(c), (e) and (f);

 

(e)                                  permit any member of the Primary Group other than the Borrower to own any Equity Interest of any member of the MPT Group;

 

(f)                                   permit any member of the MPT Group to own any Equity Interest of any member of the Primary Group;

 

(g)                                  (i) amend or modify the definition of Property Substitution (or any defined term used therein) under the MPT Master Lease, or (ii) or otherwise amend, modify, or waive any of the requirements of any of the following provisions of the MPT Master Lease: Article X (to the extent relating, directly or indirectly, to the financing of capital additions), Article XXXIV or Article XXXV (to the extent requiring non-disturbance protections in respect of the Encumbrances (as defined in the MPT Master Lease);

 

(h)                                 amend, modify, or waive any provision of the MPT Cost Overrun Guaranty, including any change that would result in any increase in the Construction Period Maximum Liability (as defined in the MPT Cost Overrun Guaranty); or

 

(i)                                     permit any party to any of the New MPT Documents or any other Person to fail to comply with any of the requirements contained in the proviso to the definition of the New MPT Documents.

 

8.17                        Permitted Activities of Holdings. From and after the date of formation or organization thereof, Holdings shall not (a) incur, directly or indirectly, any Indebtedness or any other obligation or liability whatsoever other than the Indebtedness and obligations under this Agreement and the other Loan Documents; (b) create or suffer to exist any Lien upon any property or assets now owned or hereafter acquired, leased or licensed by it other than the Liens created by the Collateral Documents; (c) engage in any business or activity or own any assets other than (i) holding 100% of the Equity Interests of the Borrower, and (ii) performing its obligations and activities incidental thereto under the Loan Document; (d) consolidate with or merge with or into, or convey, transfer, lease or license any portion of its assets to, any Person; (e) sell or otherwise dispose of any Equity Interests of any of its Subsidiaries; (f) create or acquire any Subsidiary or make or own any Investment in any Person other than the Borrower; or (g) fail to hold itself out to the public as a legal entity separate and distinct from all other Persons.

 

8.18                        Existing L/C Security Agreement. (i) Amend or modify or waive any of the provisions of the Existing L/C Security Agreement without the prior written consent of the Administrative Agent in its sole discretion, (ii) deposit any amount in any Deposit Account (as defined in the Existing L/C Security Agreement) in excess of the minimum amount required to be maintained therein under the terms of the

 

96

 

Existing L/C Security Agreement as in effect on the date hereof, or (iii) cause or permit any of the Deposit Accounts (as defined in the Existing L/C Security Agreement) not to be a deposit account (as defined in the New York Uniform Commercial Code.

 

ARTICLE IX

 

EVENTS OF DEFAULT AND REMEDIES

 

9.01                        Events of Default.

 

Any of the following shall constitute an Event of Default:

 

(a)                                 Non-Payment. Any Loan Party fails to pay (i) when and as required to be paid herein, any amount of principal of any Loan or any L/C Obligation, or (ii) within three Business Days after the same becomes due, any interest on any Loan or on any L/C Obligation, or any fee due hereunder, or (iii) within five Business Days after the same becomes due, any other amount payable hereunder or under any other Loan Document; or

 

(b)                                 Specific Covenants.

 

(i)                                     Any Loan Party fails to perform or observe any term, covenant or agreement contained in any of Section 7.01 and such failure continues for five days; or

 

(ii)                                  Any Loan Party fails to perform or observe any term, covenant or agreement contained in any of Section 7.03(a), 7.05(a), 7.10, 7.11, 7.12, 7.13(a), 7.18 (other than as a result of the full amount of the Sterling Equity Reserve being contributed to the Borrower), or 7.25 and Article VIII; or

 

(c)                                  Other Defaults. Any Loan Party fails to perform or observe any other covenant or agreement (not specified in subsection (a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continues for thirty days; or

 

(d)                                 Representations and Warranties. Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of any Loan Party herein, in any other Loan Document, or in any document delivered in connection herewith or therewith shall be incorrect or misleading in any material respect when made or deemed made; or

 

(e)                                  Cross-Default. (i) The Borrower or any Subsidiary fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Material Indebtedness; (ii) the Borrower or any Subsidiary fails to observe or perform any other agreement or condition relating to any Material Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of such Material Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause, with the giving of notice or the passage of time if required, such Material Indebtedness to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Material Indebtedness to be made, prior to its stated maturity; or (iii) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from (A) any event of default under such Swap Contract as to which the Borrower or any Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event (as so defined)

 

97

 

under such Swap Contract as to which the Borrower or any Subsidiary is an Affected Party (as so defined) and, in either event, the Swap Termination Value owed by the Borrower or such Subsidiary as a result thereof is greater than the Threshold Amount; or

 

(f)                                   Insolvency Proceedings, Etc. The Borrower or any Subsidiary institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for sixty calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for sixty calendar days, or an order for relief is entered in any such proceeding; or

 

(g)                                  Inability to Pay Debts; Attachment. (i) The Borrower or any Subsidiary becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person and is not released, vacated or fully bonded within thirty days after its issue or levy; or

 

(h)                                 Judgments. There is entered against the Borrower or any Subsidiary (i) one or more final judgments or orders for the payment of money in an aggregate amount (as to all such judgments or orders) exceeding the Threshold Amount (to the extent not covered by independent third-party insurance as to which the insurer has been notified of the claim and does not dispute coverage), or (ii) any one or more non-monetary final judgments that have or could reasonably be expected to have a Material Adverse Effect and, in either case, (A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is a period of ten consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect; or

 

(i)                                     ERISA. (i) An ERISA Event occurs which has resulted or could reasonably be expected to result in liability of one or more Loan Parties under Title IV of ERISA in an aggregate amount in excess of the Threshold Amount, or (ii) one or more Loan Parties or any Subsidiary fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or

 

(j)                                    Invalidity of Loan Documents. Any Loan Document at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder or satisfaction in full of all the Obligations, fails to become or ceases to be in full force and effect or fails or ceases to give the Administrative Agent any material part of the Liens purported to be created thereby; or any Loan Party contests in any manner the validity or enforceability of any Loan Document; or any Loan Party denies that it has any or further liability or obligation under any Loan Document, or purports to revoke, terminate or rescind any Loan Document; or

 

(k)                                 Invalidity of MPT Intercreditor Agreement or MPT Subordination Agreement. Any provision of the MPT Intercreditor Agreement or the MPT Subordination Agreement shall, in whole or in part, terminate, cease to be effective or cease to be legally valid, binding and enforceable (other than a termination at the direction of the Administrative Agent); or

 

98

 

(l)                                     Change of Control. There occurs any Change of Control; or

 

(m)                             Exclusion Event. There occurs an Exclusion Event which has had or would reasonably be expect to have a Material Adverse Effect; or

 

(n)                                 Sterling Equity Reserve. The Sterling Equity Reserve is not established or is terminated or Sterling fails to make an equity contribution from the Sterling Equity Reserve to the Borrower within twenty (20) days after request by the Borrower for such equity contribution pursuant to Section 7.18, in each case other than as a result of the full amount of the Sterling Equity Reserve being contributed to the Borrower; provided, however, that on the date that Consolidated EBITDA, calculated for the most recently completed twelve consecutive month period with respect to which the Administrative Agent has received financial statements pursuant to Section 7.01(c), is equal to or greater than $30,000,000, the Sterling Equity Reserve may be terminated and equity contributions from the Sterling Equity Reserve will no longer be required; or

 

(o)                                 Subordination. (i) The subordination provisions of the documents evidencing or governing any subordinated Indebtedness (the “Subordinated Provisions”) shall, in whole or in part, terminate, cease to be effective or cease to be legally valid, binding and enforceable against any holder of applicable subordinated Indebtedness; or (ii) the Borrower or any other Loan Party shall, directly or indirectly, disavow or contest in any manner (A) the effectiveness, validity or enforceability of any of the Subordinated Provisions, (B) that the Subordinated Provisions exist for the benefit of the Administrative Agent, the Lenders or (C) that all payments of principal of or premium and interest on the applicable subordinated Indebtedness, or realized from the liquidation of any property of any Loan Party, shall be subject to any of the Subordinated Provisions; or

 

(p)                                 MPT Documents. The occurrence of an “Event of Default” (or any similar term) under, and as defined in, any of the MPT Documents; or

 

(q)                                 DACAs and Collection Account Agreements. (i) any DACA or Collection Account Agreement for any reason, other than a partial or full release in accordance with the terms thereof, ceases to be in full force and effect or is declared to be null and void, or any Loan Party terminates or denies that it has any further liability under any DACA or Collection Account Agreement to which it is party, or gives notice to such effect, or amends, waives, rescinds, revokes or terminates the instructions given in the applicable DACA or Collection Account Agreement; [or (ii) any Loan Party exercises its rights under applicable Law (in whole or in part) to terminate, rescind or otherwise fail to comply with any of the requirements contained in Section 4(a)(iv) of the Security Agreement, including any failure to (A) transfer funds to a deposit account subject to a DACA, (B) comply with instructions originated by the Administrative Agent with respect to funds maintained in such deposit account (regardless of whether such failure to comply is permitted under the applicable DACA), or (C) enter into or maintain in effect a DACA or a Collection Account Agreement](2).

 

(2)                                 Proposed deletion subject to internal PR discussion.

 

99

 

9.02                        Remedies Upon Event of Default.

 

If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:

 

(a)                                 declare the commitment of each Lender to make Loans (including the Delayed Draw Term Loan Commitments) to be terminated, whereupon such commitments and obligation shall be terminated;

 

(b)                                 declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower; and

 

(c)                                  exercise on behalf of itself, the Lenders and the L/C Arranger all rights and remedies available to it, the Lenders and the L/C Arranger under the Loan Documents or applicable Law or at equity;

 

provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the United States, the obligation of each Lender to make Loans shall automatically terminate and the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, in each case without further act of the Administrative Agent or any Lender.

 

9.03                        Application of Funds.

 

After the exercise of remedies provided for in Section 9.02 (or after the Loans have automatically become immediately due and payable as set forth in the proviso to Section 9.02), any amounts received on account of the Obligations, subject to the provisions of Sections 2.14 and 2.15, shall be applied by the Administrative Agent in the following order:

 

First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Article III) payable to the Administrative Agent in its capacity as such;

 

Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal and interest, but including L/C Maintenance Fees) payable to the Lenders and the L/C Arranger (including fees, charges and disbursements of counsel to the respective Lenders and the L/C Arranger) arising under the Loan Documents and amounts payable under Article III, ratably among them in proportion to the respective amounts described in this clause Second payable to them;

 

Third, to payment of that portion of the Obligations constituting accrued and unpaid interest on the Loans and other Obligations arising under the Loan Documents, ratably among the Lenders and the L/C Arranger in proportion to the respective amounts described in this clause Third payable to them;

 

Fourth, to (a) payment of that portion of the Obligations constituting unpaid principal of the Loans, (b) payment of Obligations then owing under any Secured Hedge Agreements, and (c) payment of Obligations then owing under any Secured Cash Management Agreements, ratably

 

100

 

among the Lenders, the Hedge Banks and the Cash Management Banks in proportion to the respective amounts described in this clause Fourth held by them; and

 

Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the Borrower or as otherwise required by Law.

 

Excluded Swap Obligations with respect to any Guarantor shall not be paid with amounts received from such Guarantor or its assets, but appropriate adjustments shall be made with respect to payments from other Loan Parties to preserve the allocation of Obligations otherwise set forth above in this Section.

 

Notwithstanding the foregoing, Obligations arising under Secured Cash Management Agreements and Secured Hedge Agreements shall be excluded from the application described above if the Administrative Agent has not received a Secured Party Designation Notice, together with such supporting documentation as the Administrative Agent may request, from the applicable Cash Management Bank or Hedge Bank, as the case may be. Each Cash Management Bank or Hedge Bank not a party to this Agreement that has given the notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted the appointment of the Administrative Agent pursuant to the terms of Article X for itself and its Affiliates as if a “Lender” party hereto.

 

9.04                        Right to Cure Financial Covenant Defaults.

 

In the event that the Loan Parties fail to comply with Section 8.11(a) and/or Section 8.11(b) (each, a “Financial Covenant Default”) as of the end of any fiscal quarter of the Borrower (a “Relevant Quarter”), then the Borrower shall have the right to cure such Financial Covenant Default (the “Cure Right”) with the Net Cash Proceeds of an Equity Issuance to Sterling or any of its Controlled Investment Affiliates (consisting solely of common stock of the Borrower or other Equity Interests having terms reasonably acceptable to Administrative Agent) (a “Specified Equity Contribution”) in each case during the period of ten (10) Business Days following the date of delivery of the Compliance Certificate for such Relevant Quarter and treating the amount of the Net Cash Proceeds of such Equity Issuance as Consolidated EBITDA for such Relevant Quarter, provided that:

 

(a)                                    the Borrower shall deliver to the Administrative Agent a written notice of its intent to exercise its Cure Right with respect to any Financial Covenant Default (a “Cure Notice”) concurrent with the delivery by the Borrower to the Administrative Agent of the Compliance Certificate for such Relevant Quarter;

 

(b)                                 the Specified Equity Contribution may be treated as Consolidated EBITDA for such Relevant Quarter and any subsequent period that includes such Relevant Quarter solely to the extent necessary to cure the relevant Financial Covenant Default, and all Specified Equity Contributions shall be disregarded for purposes of the calculation of Consolidated EBITDA for all other purposes, including calculating basket levels, pricing and other items governed by reference to Consolidated EBITDA;

 

(c)                                  the Borrower shall have the right to exercise the Cure Right not more than one time during the term of this Credit Agreement;

 

(d)                                 the amount of any Specified Equity Contribution will be no greater than the amount required to cause Borrower to cure the relevant Financial Covenant Default;

 

101

 

(e)                                  the amount of any Specified Equity Contribution may be treated as Consolidated EBITDA for such Relevant Quarter only to the extent such Specified Equity Contribution does not exceed 20% of Consolidated EBITDA for the applicable period (calculated prior to giving effect to such Specified Equity Contribution; and

 

(f)                                   the Borrower shall prepay the Loans in an aggregate amount equal to 100% of such Specified Equity Contribution treated as Consolidated EBITDA for such Relevant Quarter in accordance with Section 2.05(b)(iv); and

 

(g)                                  any Loan prepaid with the proceeds of Specified Equity Contributions shall be deemed outstanding for purposes of determining compliance with the covenants set forth in Section 8.11 for the Relevant Quarter and the next three fiscal quarters thereafter.

 

ARTICLE X

 

ADMINISTRATIVE AGENT

 

10.01                 Appointment and Authority.

 

Each of the Lenders and the L/C Arranger hereby irrevocably appoints FSFC to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders, and the L/C Arranger and no Loan Party shall have rights as a third party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

 

The Administrative Agent shall also act as the “collateral agent” under the Loan Documents, and each of the Lenders (in its capacities as a Lender, potential Hedge Banks and potential Cash Management Banks) and the L/C Arranger hereby irrevocably appoints and authorizes the Administrative Agent to act as the agent of such Lender and the L/C Arranger for purposes of acquiring, holding and enforcing any and all Liens on Collateral, together with such powers and discretion as are reasonably incidental thereto. In this connection, the Administrative Agent, as “collateral agent” and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to Section 10.05 for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the Administrative Agent), shall be entitled to the benefits of all provisions of this Article X and Article XI (including Section 11.04(c), as though such co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under the Loan Documents as if set forth in full herein with respect thereto.

 

10.02                 Rights as a Lender.

 

The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own

 

102

 

securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

 

10.03                 Exculpatory Provisions.

 

The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Administrative Agent:

 

(a)                                 shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

 

(b)                                 shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law; and

 

(c)                                  shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to any Loan Party or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

 

The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 11.01 and 9.02) or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given in writing to the Administrative Agent by a Loan Party, a Lender, or the L/C Arranger.

 

The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Collateral Documents, (v) the value or the sufficiency of any Collateral, or (vi) the satisfaction of any condition set forth in Article V or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

 

103

 

10.04                 Reliance by Administrative Agent.

 

The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan that by its terms must be fulfilled to the satisfaction of a Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender unless the Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Loan. The Administrative Agent may consult with legal counsel (who may be counsel for the Loan Parties), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

 

10.05                 Delegation of Duties.

 

The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

 

10.06                 Resignation of Administrative Agent.

 

(a)                                 The Administrative Agent may at any time give notice of its resignation to the Lenders, the L/C Arranger and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “Resignation Effective Date”), then the retiring Administrative Agent may (but shall not be obligated to) on behalf of the Lenders and the L/C Arranger, appoint a successor Administrative Agent meeting the qualifications set forth above. Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.

 

(b)                                 [Reserved].

 

(c)                                  With effect from the Resignation Effective Date (as applicable) (i) the retiring or removed Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or the L/C Arranger under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor

 

104

 

Administrative Agent is appointed) and (ii) except for any indemnity payments or other amounts then owed to the retiring Administrative Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and the L/C Arranger directly, until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided for above. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Administrative Agent (other than as provided in Section 3.01(g) and other than any rights to indemnity payments or other amounts owed to the retiring Administrative Agent as of the Resignation Effective Date), and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article and Section 10.04 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

 

10.07                 Non-Reliance on Administrative Agent and Other Lenders.

 

Each Lender and the L/C Arranger acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and the L/C Arranger also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

 

10.08                 No Other Duties; Etc.

 

Anything herein to the contrary notwithstanding, none of the bookrunners, arrangers, syndication agents, documentation agents or co-agents shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or the L/C Arranger hereunder.

 

10.09                 Administrative Agent May File Proofs of Claim.

 

In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:

 

(a)                                 to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the L/C Arranger, and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the L/C Arranger, and the Administrative Agent and their respective agents and counsel and all other amounts due the

 

105

 

Lenders, the L/C Arranger, and the Administrative Agent under Sections 2.03(h) and (i), 2.09 and 11.04) allowed in such judicial proceeding; and

 

(b)                                 to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and the L/C Arranger to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the L/C Arranger, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.09 and 11.04.

 

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or the L/C Arranger any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or the L/C Arranger to authorize the Administrative Agent to vote in respect of the claim of any Lender or the L/C Arranger in any such proceeding.

 

10.10                 Collateral and Guaranty Matters.

 

Without limiting the provisions of Section 10.09, each of the Lenders (including in its capacities as a potential Cash Management Bank and a potential Hedge Bank) and the L/C Arranger irrevocably authorize the Administrative Agent, at its option and in its discretion,

 

(a)                                 to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (i) upon Payment in Full, (ii) that is sold or otherwise disposed of as part of or in connection with any sale or other disposition permitted hereunder or under any other Loan Document or any Recovery Event or (iii) as approved in accordance with Section 11.01;

 

(b)                                 to subordinate any Lien on any property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such property that is permitted by Section 8.01(i);

 

(c)                                  to release any Guarantor from its obligations under the Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted under the Loan Documents; and

 

(d)                                 to enter into and perform its obligation under the MPT Intercreditor Agreement and the MPT Subordination Agreement.

 

Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under the Guaranty, pursuant to this Section 10.10.

 

The Administrative Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Administrative Agent’s Lien thereon, or any certificate prepared by

 

106

 

any Loan Party in connection therewith, nor shall the Administrative Agent be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral.

 

10.11                 Secured Cash Management Agreements and Secured Hedge Agreements.

 

No Cash Management Bank or Hedge Bank that obtains the benefit of the provisions of Section 9.03, the Guaranty or any Collateral by virtue of the provisions hereof or any Collateral Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) (or to notice of or to consent to any amendment, waiver or modification of the provisions hereof or of the Guaranty or any Collateral Document) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents. Notwithstanding any other provision of this Article X to the contrary, the Administrative Agent shall not be required to verify the amount of the payment of, or that other satisfactory arrangements have been made with respect to, Obligations arising under Secured Cash Management Agreements and Secured Hedge Agreements except to the extent expressly provided herein and unless the Administrative Agent has received written notice of such Obligations, together with such supporting documentation as the Administrative Agent may request, from the applicable Cash Management Bank or Hedge Bank, as the case may be. The Administrative Agent shall not be required to verify the amount of the payment of, or that other satisfactory arrangements have been made with respect to, Obligations arising under Secured Cash Management Agreements and Secured Hedge Agreements in the case of a Maturity Date.

 

ARTICLE XI

 

MISCELLANEOUS

 

11.01                 Amendments, Etc.

 

No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by any Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders and the applicable Loan Party, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that

 

(a)                                 no such amendment, waiver or consent (however characterized) shall:

 

(i)                                     extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 9.02) without the written consent of such Lender (it being understood and agreed that a waiver of any condition precedent set forth in Section 5.02 or Section 5.03 or of any Default is not considered an extension or increase in Commitments of any Lender);

 

(ii)                                  postpone any date fixed by this Agreement or any other Loan Document for any payment (excluding mandatory prepayments) of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any other Loan Document without the written consent of each Lender entitled to receive such payment or whose Commitments are to be reduced;

 

(iii)                               reduce the principal of, or the rate of interest specified herein on, any Loan, or (subject to clause (i) of the final proviso to this Section 11.01) any fees or other amounts payable hereunder or under any other Loan Document without the written consent of each Lender entitled to receive such amount; provided, however, that only the

 

107

 

consent of the Required Lenders shall be necessary (A) to amend the definition of “Default Rate” or to waive any obligation of the Borrower to pay interest or L/C Maintenance Fees at the Default Rate or (B) to amend any financial covenant hereunder (or any defined term used therein) even if the effect of such amendment would be to reduce the rate of interest on any Loan or to reduce any fee payable hereunder;

 

(iv)                              (A) change Section 9.03 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender directly affected thereby or (B) the order of application of any reduction in the Commitments or any prepayment of Loans from the application thereof set forth in the applicable provisions of Article II without the prior consent of each Lender directly affected thereby;

 

(v)                                 change any provision of this Section 11.01 or the definition of “Required Lenders” or “Required Revolving Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender directly affected thereby;

 

(vi)                              release all or substantially all of the Collateral without the written consent of each Lender;

 

(vii)                           release the Borrower without the consent of each Lender, or, except in connection with a transaction permitted under Section 8.04 or Section 8.05, all or substantially all of the value of the Guaranty without the written consent of each Lender, except to the extent such release is permitted pursuant to Section 10.10 (in which case such release may be made by the Administrative Agent acting alone);

 

(viii)                        change Section 11.06 in a manner that would add any restriction on the ability of a Lender to make an assignment without the written consent of each Lender directly affected thereby; or

 

(b)                                 prior to the termination of the Revolving Commitments, unless also signed by Required Revolving Lenders, no such amendment, waiver or consent shall, (i) waive any Default for purposes of Section 5.02(b), (ii) amend, change, waive, discharge or terminate Sections 5.02 or 9.01 in a manner adverse to such Lenders or (iii) amend, change, waive, discharge or terminate Section 8.11 (or any defined term used therein) or this Section 11.01(b); or

 

(c)                                  unless also signed by Lenders (other than Defaulting Lenders) holding in the aggregate at least a majority of the Outstanding Amount of the Term Loan, no such amendment, waiver or consent shall (i) amend, change, waive, discharge or terminate Section 2.05(b)(vi) so as to alter the manner of application of proceeds of any mandatory prepayment required by Section 2.05(b)(ii), (iii), (iv) or (v) hereof (other than to allow the proceeds of such mandatory prepayments to be applied ratably with other term loans under this Agreement) or (ii) amend, change, waive, discharge or terminate this Section 11.01(c) (other than to provide other term loan Lenders with proportional rights under this Section 11.01(c));

 

(d)                                 unless also signed by the L/C Arranger, no amendment, waiver or consent shall affect the rights or duties of the L/C Arranger under this Agreement or any Issuer Document relating to any Letter of Credit issued or to be issued by any Issuing Bank;

 

(e)                                  [reserved]; and

 

108

 

(f)                                   unless also signed by the Administrative Agent, no amendment, waiver or consent shall affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document;

 

provided, however, that notwithstanding anything to the contrary herein, (i) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto, (ii) no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders), except that (A) the Commitment of such Lender may not be increased or extended without the consent of such Lender and (B) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender disproportionately adversely relative to other affected Lenders shall require the consent of such Defaulting Lender, (iii) each Lender is entitled to vote as such Lender sees fit on any bankruptcy reorganization plan or on any out-of-court restructuring plan that affects the Loans, and each Lender acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code of the United States supersedes the unanimous consent provisions set forth herein and (iv) the Required Lenders and the Required Revolving Lenders shall determine whether or not to allow a Loan Party to use cash collateral in the context of a bankruptcy or insolvency proceeding and such determination shall be binding on all of the Lenders.

 

11.02                 Notices; Effectiveness; Electronic Communications.

 

(a)                                 Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

 

(i)                                     if to any Loan Party, the Administrative Agent or the L/C Arranger, to the address, facsimile number, electronic mail address or telephone number specified for such Person on Schedule 11.02; and

 

(ii)                                  if to any other Lender, to the address, facsimile number, electronic mail address or telephone number specified in its Administrative Questionnaire (including, as appropriate, notices delivered solely to the Person designated by a Lender on its Administrative Questionnaire then in effect for the delivery of notices that may contain material non-public information relating to the Borrower).

 

Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices and other communications sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices and other communications delivered through electronic communications to the extent provided in subsection (b) below, shall be effective as provided in such subsection (b).

 

(b)                                 Electronic Communications. Notices and other communications to the Lenders and the L/C Arranger hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or the L/C Arranger pursuant to Article II if

 

109

 

such Lender or the L/C Arranger, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent, the L/C Arranger or the Borrower may each, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.

 

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement) and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii), if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice, email or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.

 

(c)                                  The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to any Loan Party, any Lender, the L/C Arranger or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of any Loan Party’s or the Administrative Agent’s transmission of Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to any Loan Party, any Lender, the L/C Arranger or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).

 

(d)                                 Change of Address, Etc. Each Loan Party, the Administrative Agent and the L/C Arranger may change its address, facsimile or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender may change its address, facsimile or telephone number for notices and other communications hereunder by notice to each Loan Party, the Administrative Agent and the L/C Arranger. In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, facsimile number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender.

 

(e)                                  Reliance by Administrative Agent, L/C Arranger and Lenders. The Administrative Agent, the L/C Arranger and the Lenders shall be entitled to rely and act upon any notices (including telephonic or electronic Loan Notices and Letter of Credit Applications) purportedly given by or on behalf of any Loan Party even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Loan Parties

 

110

 

shall indemnify the Administrative Agent, the L/C Arranger, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of a Loan Party. All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

 

11.03                 No Waiver; Cumulative Remedies; Enforcement.

 

No failure by any Lender, the L/C Arranger or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or under any other Loan Document (including the imposition of the Default Rate) preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided and provided under each other Loan Document are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 9.02 for the benefit of all the Lenders and the L/C Arranger; provided, however, that the foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) the L/C Arranger from exercising the rights and remedies that inure to its benefit (solely in its capacity as L/C Arranger) hereunder and under the other Loan Documents, (c) any Lender from exercising setoff rights in accordance with Section 11.08 (subject to the terms of Section 2.13), or (d) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any Debtor Relief Law; and provided further, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 9.02 and (ii) in addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and subject to Section 2.13, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.

 

11.04                 Expenses; Indemnity; Damage Waiver.

 

(a)                                 Costs and Expenses. The Loan Parties shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of one counsel for the Administrative Agent plus any necessary local or regulatory counsel) in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents, (ii) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for the Administrative Agent) in connection with any amendments, modifications or waivers of the provisions of this Agreement or any other Loan Document (whether or not the transactions contemplated thereby shall be consummated), (iii) all reasonable out-of-pocket expenses incurred by the L/C Arranger in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iv) all out-of-pocket expenses incurred by the Administrative Agent, any Lender or the L/C Arranger (including the fees, charges and disbursements of any counsel for the Administrative Agent, any Lender

 

111

 

or the L/C Arranger) in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made hereunder or Letters of Credit issued by any Issuing Bank, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.

 

(b)                                 Indemnification by the Loan Parties. The Loan Parties shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender, each Issuing Bank, and the L/C Arranger, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee) incurred by any Indemnitee or asserted against any Indemnitee by any Person (including any Loan Party) other than such Indemnitee and its Related Parties arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder, the consummation of the transactions contemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents (including in respect of any matters addressed in Section 3.01), (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the applicable Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any Subsidiary, or any Environmental Liability related in any way to the Borrower or any Subsidiary, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by any Loan Party, and regardless of whether any Indemnitee is a party thereto, IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF THE INDEMNITEE; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee, (y) result from a claim brought by any Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction or (z) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from a dispute solely among Indemnitees and (in the case of this clause (z) not involving any action or inaction by the Borrower or any Subsidiary and not relating to any action or inaction of such Indemnitee in its capacity as Administrative Agent or L/C Arranger); provided, further, that in the case of any such claim, investigation, litigation or proceeding brought by any Loan Party against an Indemnitee or by an Indemnitee against any Loan Party, neither the Loan Parties nor any such Indemnitee shall have any obligation to pay any amounts in respect of such dispute until a final and nonappealable judgment is rendered by a court of competent jurisdiction. Without limiting the provisions of Section 3.01(c), this Section 11.04(b) shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

 

(c)                                  Reimbursement by Lenders. To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), the L/C Arranger or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the L/C Arranger or such Related Party, as the case may be, such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought based on each

 

112

 

Lender’s share of the Total Credit Exposure at such time) of such unpaid amount (including any such unpaid amount in respect of a claim asserted by such Lender), such payment to be made severally among them based on such Lenders’ Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought), provided, further that, the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent), the L/C Arranger in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) or the L/C Arranger in connection with such capacity. The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.12(d).

 

(d)                                 Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable law, no Loan Party shall assert, and each Loan Party hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed to such unintended recipients by such Indemnitee through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from (i) the gross negligence or willful misconduct of such Indemnitee as determined by a final and nonappealable judgment of a court of competent jurisdiction, (ii) a claim brought by any Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction or (z) a dispute solely among Indemnitees and (in the case of this clause (z) not involving any action or inaction by the Borrower or any Subsidiary and not relating to any action or inaction of such Indemnitee in its capacity as Administrative Agent or L/C Arranger, as determined by a final and nonappealable judgment of a court of competent jurisdiction).

 

(e)                                  Payments. All amounts due under this Section shall be payable not later than ten Business Days after demand therefor.

 

(f)                                   Survival. The agreements in this Section and the indemnity provisions of Section 11.02(e) shall survive the resignation of the Administrative Agent and the L/C Arranger, the replacement of any Lender and Payment in Full.

 

11.05                 Payments Set Aside.

 

To the extent that any payment by or on behalf of any Loan Party is made to the Administrative Agent, the L/C Arranger or any Lender, or the Administrative Agent, the L/C Arranger or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent, the L/C Arranger or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender and the L/C Arranger severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect. The obligations of the Lenders and the L/C Arranger under clause

 

113

 

(b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.

 

11.06                 Successors and Assigns.

 

(a)                                 Successors and Assigns Generally. The provisions of this Agreement and the other Loan Documents shall be binding upon and inure to the benefit of the parties hereto and thereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder or thereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in accordance with the provisions of subsection (d) of this Section or (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection (f) of this Section (and, subject to the last sentence of this Section 11.06(b), any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the L/C Arranger and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b)                                 Assignments by Lenders. Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement and the other Loan Documents (including all or a portion of its Commitment and the Loans at the time owing to it); provided that any such assignment shall be subject to the following conditions:

 

(i)                                     Minimum Amounts.

 

(A)                               in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment under any credit facility provided hereunder and/or the Loans at the time owing to it (in each case with respect to any credit facility provided hereunder) or contemporaneous assignments to related Approved Funds that equal at least the amount specified in paragraph (b)(i)(B) of this Section in the aggregate or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

 

(B)                               in any case not described in subsection (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $2,500,000 (in the aggregate for the Commitments and Loans in respect of the revolving credit facility provided hereunder and the term loan facility provided hereunder subject to such assignment), unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed).

 

(ii)                                  Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement

 

114

 

with respect to the Loans or the Commitment assigned, except that this clause (ii) shall not prohibit any Lender from assigning all or a portion of its rights and obligations among the revolving credit facility provided hereunder and any separate revolving credit or term loan facilities provided pursuant to the last paragraph of Section 11.01 on a non-pro rata basis;

 

(iii)                               Required Consents. No consent shall be required for any assignment except to the extent required by subsection (b)(i)(B) of this Section and, in addition:

 

(A)                               the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (1) an Event of Default has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within five (5) Business Days after having received notice thereof and provided further, that, without limiting the consultation rights provided for in the Fee Letter, the Borrower’s consent shall not be required during the primary syndication of the credit facility provided herein;

 

(B)                               the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of (1) any unfunded Term Loan Commitment or any Revolving Commitment if such assignment is to a Person that is not a Lender with a Commitment in respect of the applicable credit facility, an Affiliate of such Lender or an Approved Fund with respect to such Lender or (2) any Term Loan to a Person that is not a Lender, an Affiliate of a Lender or an Approved Fund; and

 

(C)                               the consent of the L/C Arranger shall be required for any assignment in respect of the revolving credit facility provided hereunder.

 

(iv)                              Assignment and Assumption. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount of $3,500; provided, however, that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

 

(v)                                 No Assignment to Certain Persons. No such assignment shall be made (A) to the Borrower or any of the Borrower’s Affiliates or Subsidiaries, (B) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B), or (C) to a natural person.

 

(vi)                              Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, the L/C

 

115

 

Arranger or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata share of all Loans in accordance with its Applicable Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

 

(vii)                           Assignee is not a Competitor. Unless an Event of Default has occurred and is continuing (in which case this clause (vii) shall not apply to such assignment), each assignee represents and warrants to the Borrower that, as of the date on which such assignment was entered into, such assignee is not a Competitor.

 

Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05 and 11.04 with respect to facts and circumstances occurring prior to the effective date of such assignment); provided, that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender. Upon request, the Borrower (at its expense) shall execute and deliver a Note to the assignee Lender. Notwithstanding anything to the contrary herein, any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection (d) of this Section.

 

(c)                                  Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrower (and such agency being solely for tax purposes), shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it (or the equivalent thereof in electronic form) and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts (and stated interest) of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

 

(d)                                 Participations. Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural person, a Defaulting Lender or the Borrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) the Borrower, the Administrative Agent, the Lenders and the L/C Arranger shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and (iv) unless an Event of Default has occurred and is continuing (in which case this clause (iv) shall not apply to such participation), such Participant represents and warrants to the Borrower that such assignee is not a

 

116

 

Competitor. For the avoidance of doubt, each Lender shall be responsible for the indemnity under Section 11.04(c) without regard to the existence of any participation.

 

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 11.01 that affects such Participant. The Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section (it being understood that the documentation required under Section 3.01(e) shall be delivered to the Lender who sells the participation) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Sections 3.06 and 11.13 as if it were an assignee under paragraph (b) of this Section and (B) shall not be entitled to receive any greater payment under Sections 3.01 or 3.04, with respect to any participation, than the Lender from whom it acquired the applicable participation would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. Each Lender that sells a participation agrees, at the Borrower’s request and expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of Section 3.06 with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.08 as though it were a Lender; provided that such Participant agrees to be subject to Section 2.13 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

 

(e)                                  Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

 

(f)                                   The Loan Parties acknowledge and agree that on or at any time following the Closing Date, the Administrative Agent, the L/C Arranger and the Lenders may execute an agreement pursuant to which the Administrative Agent, L/C Arranger and Lenders may agree, as between themselves, to (among other things) certain voting arrangements relative to matters requiring the approval of Lenders, to the priority and application of payments and proceeds of Collateral, and to certain pricing arrangements. The rights and duties of the Administrative Agent, L/C Arranger and the Lenders with respect to such matters may be subject to such agreement. Anything to the contrary contained herein notwithstanding, to the extent such agreement is executed, any Person that is to become a party to this Agreement as a Lender

 

117

 

shall be required to join the agreement described in this Section 11.06(f) on terms (including with respect to its priority vis a vis other Lenders, to payments and proceeds of Collateral, and pricing arrangements) and conditions satisfactory to the Administrative Agent as a condition to such Person becoming a party to this Agreement as a Lender.

 

11.07                 Treatment of Certain Information; Confidentiality.

 

Each of the Administrative Agent, the Lenders and the L/C Arranger agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates, its funding and financing sources, and to its Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights and obligations under this Agreement or (ii) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to the Borrower and its obligations, this Agreement or payments hereunder, (g) on a confidential basis to (i) any rating agency in connection with rating the Borrower or its Subsidiaries or the credit facilities provided hereunder or (ii) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers or other market identifiers with respect to the credit facilities provided hereunder, (h) with the consent of the Borrower or (i) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, any Lender, the L/C Arranger or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrower. For purposes of this Section, “Information” means all information received from the Borrower or any Subsidiary relating to the Borrower or any Subsidiary or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender or the L/C Arranger on a nonconfidential basis prior to disclosure by the Borrower or any Subsidiary, provided that, in the case of information received from the Borrower or any Subsidiary after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

 

Each of the Administrative Agent, the Lenders and the L/C Arranger acknowledges that (a) the Information may include material non-public information concerning the Borrower or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable Law, including United States federal and state securities Laws; provided that the foregoing shall in no way affect the obligations of the Borrower under the last paragraph of Section 7.02.

 

11.08                 Right of Setoff.

 

If an Event of Default shall have occurred and be continuing and the Administrative Agent or Lenders are exercising remedies pursuant to Section 9.02, each Lender, the L/C Arranger and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent

 

118

 

permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, the L/C Arranger or any such Affiliate to or for the credit or the account of any Loan Party against any and all of the obligations of such Loan Party now or hereafter existing under this Agreement or any other Loan Document to such Lender or the L/C Arranger or their respective Affiliates, irrespective of whether or not such Lender, the L/C Arranger or such Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations of such Loan Party may be contingent or unmatured or are owed to a branch, office or Affiliate of such Lender or the L/C Arranger different from the branch, office or Affiliate holding such deposit or obligated on such indebtedness; provided that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.15 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the L/C Arranger and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender, the L/C Arranger and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, the L/C Arranger or their respective Affiliates may have. Each Lender and the L/C Arranger agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application. Notwithstanding the provisions of this Section 11.08, if at any time any Lender, the L/C Arranger or any of their respective Affiliates maintains one or more deposit accounts for the Borrower or any other Loan Party into which Medicare and/or Medicaid receivables are deposited, such Person shall waive the right of setoff set forth herein.

 

11.09                 Interest Rate Limitation.

 

Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

 

It is the intention of the parties to comply with applicable usury Law. The parties agree that the total amount of interest contracted for, charged, collected or received by the Administrative Agent and the Lenders under this Agreement shall not exceed the Maximum Rate. To the extent, if any, that Chapter 303 of the Texas Finance Code (the “TX Code”) is relevant for purposes of determining the Maximum Rate, the parties elect to determine the Maximum Rate under the TX Code pursuant to the “weekly ceiling” from time to time in effect, as referred to and defined in § 303.001-303.016 of the TX Code; subject, however, to any right the Lenders subsequently may have under applicable Law to change the method of determining the Maximum Rate. Notwithstanding any contrary provisions contained herein, (a) the Maximum Rate shall be calculated on the basis of the actual number of days elapsed over a year of 365 or 366 days, as the case may be; (b) in determining whether the interest hereunder exceeds interest at the Maximum Rate, the total amount of interest shall be spread throughout the entire term of this Agreement until its payment in full; (c) if at any time the interest rate chargeable under this Agreement would exceed the Maximum Rate, thereby causing the interest payable under this Agreement to be limited

 

119

 

to the Maximum Rate, then any subsequent reductions in the interest rate(s) shall not reduce the rate of interest charged under this Agreement below the Maximum Rate until the total amount of interest accrued from and after the date of this Agreement equals the amount of interest which would have accrued if the interest rate(s) had at all times been in effect; (d) if the Administrative Agent or any Lender ever charges or receives anything of value which is deemed to be interest under applicable Texas Law, and if the occurrence of any event, including acceleration of maturity of obligations owing to the Lenders, should cause such interest to exceed the maximum lawful amount, any amount which exceeds interest at the Maximum Rate shall be applied to the reduction of the unpaid principal balance under this Agreement or any other indebtedness owed to the Lenders by the Borrower, and if this Agreement and such other indebtedness are paid in full, any remaining excess shall be paid to the Borrower; and (e) Chapter 346 of the TX Code shall not be applicable to this Agreement or the Obligations outstanding hereunder.

 

11.10                 Counterparts; Integration; Effectiveness.

 

This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent or the L/C Arranger, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 5.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic imaging means (e.g., “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this Agreement.

 

11.11                 Survival of Representations and Warranties.

 

All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent, L/C Arranger, and each Lender, regardless of any investigation made by the Administrative Agent, L/C Arranger, or any Lender or on their behalf and notwithstanding that the Administrative Agent, L/C Arranger, or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

 

11.12                 Severability.

 

If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Without limiting the foregoing provisions of this Section 11.12, if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by the Administrative Agent or the L/C Arranger, as applicable, then such provisions shall be deemed to be in effect only to the extent not so limited.

 

120

 

11.13                 Replacement of Lenders.

 

If the Borrower is entitled to replace a Lender pursuant to the provisions of Section 3.06, or if any Lender is a Defaulting Lender or a Non-Consenting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 11.06), all of its interests, rights (other than its existing rights to payments pursuant to Sections 3.01 and 3.04) and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:

 

(a)                                 the Borrower shall have paid to the Administrative Agent the assignment fee (if any) specified in Section 11.06(b);

 

(b)                                 such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees, the Prepayment Premium, if any, and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.05) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);

 

(c)                                  in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01, such assignment will result in a reduction in such compensation or payments thereafter;

 

(d)                                 such assignment does not conflict with applicable Laws; and

 

(e)                                  in the case of an assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent.

 

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

 

11.14                 Governing Law; Jurisdiction; Etc.

 

(a)                                 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT (EXCEPT, AS TO ANY OTHER LOAN DOCUMENT, AS EXPRESSLY SET FORTH THEREIN) AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAW OF THE STATE OF NEW YORK.

 

(b)                                 SUBMISSION TO JURISDICTION. EACH LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER, THE L/C ARRANGER, OR ANY RELATED PARTY OF THE FOREGOING IN ANY WAY RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM

 

121

 

OTHER THAN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION, LITIGATION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION, LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ARRANGER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(c)                                  WAIVER OF VENUE. EACH LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

(d)                                 SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.02. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

11.15                 Waiver of Jury Trial.

 

EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

11.16                 No Advisory or Fiduciary Responsibility.

 

In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), each of the Loan Parties acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (i) (A) the

 

122

 

arranging and other services regarding this Agreement provided by the Administrative Agent and the Lenders are arm’s-length commercial transactions between the Loan Parties and their respective Affiliates, on the one hand, and the Administrative Agent, L/C Arranger, and the Lenders, on the other hand, (B) each of the Loan Parties has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) each of the Loan Parties is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) the Administrative Agent, L/C Arranger, and the Lenders each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Loan Parties or any of their respective Affiliates, or any other Person and (B) neither the Administrative Agent, the L/C Arranger nor any Lender has any obligation to the Loan Parties or any of their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Administrative Agent, L/C Arranger, the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Loan Parties and their respective Affiliates, and neither the Administrative Agent, L/C Arranger, nor any Lender has any obligation to disclose any of such interests to the Loan Parties and their respective Affiliates. To the fullest extent permitted by Law, each of the Loan Parties hereby waives and releases any claims that it may have against the Administrative Agent, L/C Arranger, or any Lender with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

 

11.17                 Electronic Execution of Assignments and Certain Other Documents.

 

The words “execute” “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption or in any amendment or other modification hereof (including waivers and consents) shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Administrative Agent or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

 

11.18                 Reserved.

 

11.19                 Exclusion from Representations and Warranties and Covenants. Notwithstanding anything herein or in any other Loan Document to the contrary, if the Borrower or any Subsidiary is subject to any investigation, review or proceeding by any Governmental Authority and the Borrower or such Subsidiary is prohibited by applicable Law from disclosing the existence of such investigation, review or proceeding to the Administrative Agent, L/C Arranger or any Lender, then:

 

(a)                                 the Borrower or such Subsidiary shall not be obligated to disclose the existence or substance of such investigation, review or proceeding to the Administrative Agent, L/C Arranger or any Lender, solely to the extent that disclosure thereof to such Person is so limited by such applicable Laws; and

 

(b)                                 except as set forth in clause (a), such investigation, review or proceeding shall not be excluded from (i) the representations and warranties contained in Article VI, in any other Loan Document or in any document furnished at any time under or in connection with this Agreement or any other Loan Document, (ii) the covenants or agreements of the Borrower or any Subsidiary thereof in any Loan

 

123

 

Document or in any document furnished at any time under or in connection with this Agreement or any other Loan Document, or (iii) the Defaults or Events of Default.

 

11.20                 USA PATRIOT Act.

 

Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Loan Parties that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Loan Parties, which information includes the name and address of the Loan Parties and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Loan Parties in accordance with the Act. The Loan Parties shall, promptly following a request by the Administrative Agent or any Lender, provide all documentation and other information that the Administrative Agent or such Lender requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the Act.

 

11.21                 Notice of Final Agreement.

 

THIS WRITTEN AGREEMENT AND THE LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

[END]

 

124

 

Witness the due execution hereof by the respective duly authorized officers of the undersigned as of the date first written above.

 

	
 
    	
BORROWER:
    
	
 
    	
 
    
	
 
    	
 
    	
FIRST CHOICE ER, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Tim Fielding
    
	
 
    	
 
    	
Name:
    	
Tim Fielding
    
	
 
    	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
GUARANTORS:
    
	
 
    	
 
    
	
 
    	
 
    	
AJNH MEDICAL CENTER LLC,
    
	
 
    	
 
    	
BASSWOOD MEDICAL CENTER LLC,
    
	
 
    	
 
    	
COPPERWOOD MEDICAL CENTER LLC,
    
	
 
    	
 
    	
EAGLES NEST MEDICAL CENTER LLC,
    
	
 
    	
 
    	
ECC MANAGEMENT, LLC,
    
	
 
    	
 
    	
FM CROSSING MEDICAL CENTER LLC,
    
	
 
    	
 
    	
KATY ER CENTER LLC,
    
	
 
    	
 
    	
KINGWOOD MEDICAL CENTER LLC,
    
	
 
    	
 
    	
KUYKENDAHL MEDICAL CENTER LLC,
    
	
 
    	
 
    	
LEAGUE CITY MEDICAL CENTER LLC,
    
	
 
    	
 
    	
LOUETTA MEDICAL CENTER LLC,
    
	
 
    	
 
    	
MID-COLLIN COUNTY MEDICAL CENTER LLC,
    
	
 
    	
 
    	
NORTH POWERS MEDICAL CENTER LLC,
    
	
 
    	
 
    	
PEARLAND PARKWAY MEDICAL CENTER LLC,
    
	
 
    	
 
    	
PFLUGERVILLE MEDICAL CENTER LLC,
    
	
 
    	
 
    	
PLANO ERCARE CENTER LLC,
    
	
 
    	
 
    	
SSH MEDICAL CENTER LLC,
    
	
 
    	
 
    	
STERLING RIDGE MEDICAL CENTER LLC,
    
	
 
    	
 
    	
WC MEDICAL CENTER LLC
    
	
 
    	
 
    
	
 
    	
 
    	
By: FIRST CHOICE ER, LLC, sole member of each of the companies listed   above
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Tim Fielding
    
	
 
    	
 
    	
Name:
    	
Tim Fielding
    
	
 
    	
 
    	
Title:
    	
Chief Financial Officer
    

 

[Signature Page to Credit Agreement]

 

 

	
 
    	
GUARANTORS CONTINUED:
    
	
 
    	
 
    
	
 
    	
 
    	
OPFREE LICENSING LP,
    
	
 
    	
 
    	
OPFREE RE INVESTMENTS, LTD.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By: ECC MANAGEMENT, LLC, general partner of each of the companies   listed above
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By: FIRST CHOICE ER, LLC its sole member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Tim Fielding
    
	
 
    	
 
    	
Name:
    	
Tim Fielding
    
	
 
    	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
NON-GUARANTOR LOAN PARTIES:
    
	
 
    	
 
    
	
 
    	
 
    	
AUSTIN BRODIE MEDICAL CENTER LLC,
    
	
 
    	
 
    	
LITTLE ELM FM 423 MEDICAL CENTER LLC,
    
	
 
    	
 
    	
SAN ANTONIO NACOGDOCHES MEDICAL CENTER LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By: FIRST CHOICE ER, LLC, sole member of each of the companies listed   above
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Tim Fielding
    
	
 
    	
 
    	
Name:
    	
Tim Fielding
    
	
 
    	
 
    	
Title:
    	
Chief Financial Officer
    

 

[Signature Page to Credit Agreement]

 

 

	
 
    	
ADMINISTRATIVE AGENT AND L/C ARRANGER:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
FIFTH STREET FINANCE CORP.,
    
	
 
    	
a Delaware corporation
    
	
 
    	
 
    
	
 
    	
By: 
    	
Fifth Street Management LLC,
    
	
 
    	
 
    	
a Delaware limited liability company,
    
	
 
    	
 
    	
its Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
BY:
    	
/s/ Ivelin M. Dimitrov
    
	
 
    	
 
    	
 
    	
Name: Ivelin M. Dimitrov
    
	
 
    	
 
    	
 
    	
Title: Chief Investment Officer
    
	
 
    	
 
    
	
 
    	
LENDER:
    
	
 
    	
 
    
	
 
    	
FIFTH STREET FINANCE CORP., a Delaware corporation
    

 

	
 
    	
By:
    	
Fifth Street Management LLC,
    
	
 
    	
 
    	
a Delaware limited liability company,
    
	
 
    	
 
    	
its Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
BY:
    	
/s/ Ivelin M. Dimitrov
    
	
 
    	
 
    	
Name:
    	
Ivelin M. Dimitrov
    
	
 
    	
 
    	
Title:
    	
Chief Investment Officer
    

 

[Signature Page to Credit Agreement]

 

 

Schedule 1.01

 

Competitors

 

	
Name
    	
 
    	
Address/Location
    	
 
    	
City
    	
 
    	
State
    	
 
    	
ZIP
    
	
AKRON   GENERAL HEALTH & WELLNESS CENTER- GREEN
    	
 
    	
1940   TOWN PARK BOULEVARD
    	
 
    	
UNIONTOWN
    	
 
    	
OH
    	
 
    	
44685
    
	
AKRON   GENERAL HEALTH & WELLNESS CENTER- NORTH
    	
 
    	
4300   ALLEN ROAD
    	
 
    	
STOW
    	
 
    	
OH
    	
 
    	
44224
    
	
AKRON   GENERAL HEALTH & WELLNESS CENTER- WEST
    	
 
    	
4125   MEDINA ROAD
    	
 
    	
AKRON
    	
 
    	
OH
    	
 
    	
44333
    
	
Altus   Emergency Center- Baytown
    	
 
    	
1404   West Baker Road
    	
 
    	
Baytown
    	
 
    	
TX
    	
 
    	
77521
    
	
Altus   Emergency Center- Lake Jackson (2014)
    	
 
    	
200   Oak Street
    	
 
    	
Lake   Jackson
    	
 
    	
TX
    	
 
    	
77566
    
	
Altus   Emergency Center- Lumberton
    	
 
    	
137   North LHS Drive
    	
 
    	
Lumberton
    	
 
    	
TX
    	
 
    	
77657
    
	
AMERICA’S   ER
    	
 
    	
Farm   to Market Road 2978 & Egypt Lane
    	
 
    	
MAGNOLIA
    	
 
    	
TX
    	
 
    	
77354
    
	
AOK   Emergency Room
    	
 
    	
9180   KATY FREEWAY SUITE 150
    	
 
    	
HOUSTON
    	
 
    	
TX
    	
 
    	
77055
    
	
Austin   Emergency Center
    	
 
    	
4015   South Lamar
    	
 
    	
Austin
    	
 
    	
TX
    	
 
    	
78704
    
	
Austin   Emergency Center
    	
 
    	
3563   Far West
    	
 
    	
Austin
    	
 
    	
TX
    	
 
    	
78731
    
	
BANNER   NORTH COLORADO EMERGENCY CARE
    	
 
    	
2000   70TH AVE
    	
 
    	
GREELEY
    	
 
    	
CO
    	
 
    	
80634
    
	
BELLAIRE   EMERGENCY CENTER
    	
 
    	
6030   SOUTH RICE AVENUE, SUITE C
    	
 
    	
HOUSTON
    	
 
    	
TX
    	
 
    	
77081
    
	
BELLAIRE   ER
    	
 
    	
5302   BELLAIRE BOULEVARD
    	
 
    	
BELLAIRE
    	
 
    	
TX
    	
 
    	
77401
    
	
CEDAR   PARK EMERGENCY CENTER
    	
 
    	
3620   E. WHITESTONE BLVD
    	
 
    	
CEDAR   PARK
    	
 
    	
TX
    	
 
    	
78613
    
	
CENTURA-CASTLE   ROCK ADVENTIST HEALTH CAMPUS
    	
 
    	
2350   MEADOWS BLVD
    	
 
    	
CASTLE   ROCK
    	
 
    	
CO
    	
 
    	
80109
    
	
CENTURA-ST.   ANTHONY BRECKENDRIDGE CCEC
    	
 
    	
555   S PARK AVE - PLAZA II
    	
 
    	
BRECKENRIDGE
    	
 
    	
CO
    	
 
    	
80424
    
	
CENTURA-ST.   ANTHONY COPPER MOUNTAIN CLINIC
    	
 
    	
860   COPPER RD
    	
 
    	
FRISCO
    	
 
    	
CO
    	
 
    	
80443
    
	
CENTURA-ST.   ANTHONY KEYSTONE MEDICAL CLINIC
    	
 
    	
1252   COUNTY ROAD 8
    	
 
    	
KEYSTONE
    	
 
    	
CO
    	
 
    	
80435
    

 

 

	
CENTURA-ST.   ANTHONY NORTH MEDICAL PAVILION
    	
 
    	
400   W. 144TH AVENUE
    	
 
    	
WESTMINSTER
    	
 
    	
CO
    	
 
    	
80023
    
	
Christus   Health- Alon Town Centre
    	
 
    	
11503   NW Military Hwy
    	
 
    	
San   Antonio
    	
 
    	
TX
    	
 
    	
78230
    
	
Christus   Health-Creekside
    	
 
    	
244   Creekside Way
    	
 
    	
New   Braunfels
    	
 
    	
TX
    	
 
    	
78130
    
	
COMPLETE   EMERGENCY CARE I LLC
    	
 
    	
10628   CULEBRA ROAD SUITE 200
    	
 
    	
SAN   ANTONIO
    	
 
    	
TX
    	
 
    	
78251
    
	
COMPLETE   EMERGENCY CARE I LLC
    	
 
    	
655   Redd Road, Suite 201
    	
 
    	
EL   PASO
    	
 
    	
TX
    	
 
    	
79912
    
	
CONROE   EMERGENCY CENTER
    	
 
    	
3251   IH 45 NORTH
    	
 
    	
CONROE
    	
 
    	
TX
    	
 
    	
77304
    
	
CRESTED   BUTTE MEDICAL CENTER
    	
 
    	
12   SNOWMASS ROAD
    	
 
    	
CRESTED   BUTTE
    	
 
    	
CO
    	
 
    	
81225
    
	
CYPRESS   CREEK ER
    	
 
    	
837   Cypress Creek Parkway, Suite 111
    	
 
    	
HOUSTON
    	
 
    	
TX
    	
 
    	
77090
    
	
DENVER   HEALTH EAST GRAND
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
COMMUNITY   CLINIC AND
    	
 
    	
145   PARSENN ROAD
    	
 
    	
WINTER   PARK
    	
 
    	
CO
    	
 
    	
80482
    
	
EMERGENCY   CENTER
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
DILEY   RIDGE MEDICAL CENTER- FSED
    	
 
    	
7911   DILEY ROAD
    	
 
    	
CANAL   WINCHESTER
    	
 
    	
OH
    	
 
    	
43110
    
	
E-CARE   EMERGENCY CENTER
    	
 
    	
2810   HARDIN BOULEVARD
    	
 
    	
MCKINNEY
    	
 
    	
TX
    	
 
    	
75070
    
	
E-CARE   EMERGENCY CENTER
    	
 
    	
8950   NORTH TARRANT PARKWAY
    	
 
    	
NORTH   RICHLAND HILLS
    	
 
    	
TX
    	
 
    	
76182
    
	
E-CARE   EMERGENCY CENTER
    	
 
    	
16151   ELDORADO PARKWAY
    	
 
    	
FRISCO
    	
 
    	
TX
    	
 
    	
75035
    
	
ELITE   CARE EMERGENCY CENTER
    	
 
    	
[Coming   Soon]
    	
 
    	
Houston
    	
 
    	
TX
    	
 
    	
 
    
	
ELITE   CARE EMERGENCY CENTER
    	
 
    	
[Coming   Soon]
    	
 
    	
Dallas/Fort   Worth
    	
 
    	
TX
    	
 
    	
 
    
	
ELITE   CARE EMERGENCY CENTER
    	
 
    	
[Coming   Soon]
    	
 
    	
Houston
    	
 
    	
TX
    	
 
    	
 
    
	
ELITE   CARE EMERGENCY CENTER
    	
 
    	
[Coming   Soon]
    	
 
    	
San   Antonio
    	
 
    	
TX
    	
 
    	
 
    
	
ELITE   CARE EMERGENCY CENTER
    	
 
    	
[Coming   Soon]
    	
 
    	
Houston
    	
 
    	
TX
    	
 
    	
 
    
	
ELITE   CARE EMERGENCY CENTER
    	
 
    	
720   N Denton Tap Road
    	
 
    	
Coppell
    	
 
    	
TX
    	
 
    	
75019
    
	
ELITE   CARE EMERGENCY CENTER
    	
 
    	
[Coming   Soon]
    	
 
    	
Houston
    	
 
    	
TX
    	
 
    	
 
    
	
ELITE   CARE EMERGENCY CENTER
    	
 
    	
[Coming   Soon]
    	
 
    	
San   Antonio
    	
 
    	
TX
    	
 
    	
 
    
	
ELITE   CARE EMERGENCY CENTER
    	
 
    	
4780   SH 121
    	
 
    	
The   Colony
    	
 
    	
TX
    	
 
    	
75056
    
	
ELITE   CARE EMERGENCY CENTER
    	
 
    	
[Coming   Soon]
    	
 
    	
Dallas/Fort   Worth
    	
 
    	
TX
    	
 
    	
 
    
	
ELITE   CARE EMERGENCY CENTER
    	
 
    	
[Coming   Soon]
    	
 
    	
Houston
    	
 
    	
TX
    	
 
    	
 
    
	
ELITE   CARE EMERGENCY CENTER
    	
 
    	
1712   U.S. 287
    	
 
    	
Mansfield
    	
 
    	
TX
    	
 
    	
76063
    
	
ELITE   CARE EMERGENCY CENTER
    	
 
    	
2530   GULF FREEWAY SOUTH
    	
 
    	
LEAGUE   CITY
    	
 
    	
TX
    	
 
    	
77573
    

 

 

	
ELITE   CARE EMERGENCY CENTER
    	
 
    	
2500   RICE BOULEVARD
    	
 
    	
HOUSTON
    	
 
    	
TX
    	
 
    	
77005
    
	
ELITE   CARE EMERGENCY CENTER
    	
 
    	
13402   SAN PEDRO AVENUE
    	
 
    	
SAN   ANTONIO
    	
 
    	
TX
    	
 
    	
78216
    
	
ELITE   CARE EMERGENCY CENTER
    	
 
    	
8703   BANDERA ROAD
    	
 
    	
SAN   ANTONIO
    	
 
    	
TX
    	
 
    	
78250
    
	
Emergency   Hospital of Texas
    	
 
    	
111   Emergency Drive
    	
 
    	
Livingston
    	
 
    	
TX
    	
 
    	
77351
    
	
Emergency   Hospital of Texas (DOW Emergency)
    	
 
    	
15119   Wallisville Road
    	
 
    	
Houston
    	
 
    	
TX
    	
 
    	
77049
    
	
EMERGICARE
    	
 
    	
2409   FALCON PASS SUITE 100
    	
 
    	
HOUSTON
    	
 
    	
TX
    	
 
    	
77062
    
	
Emerus   24 Hour Emergency Room
    	
 
    	
16000   Southwest Fwy
    	
 
    	
Sugar   Land
    	
 
    	
TX
    	
 
    	
77479
    
	
Emerus   24 Hour Emergency Room
    	
 
    	
24727   Tomball Parkway
    	
 
    	
Tomball
    	
 
    	
TX
    	
 
    	
77375
    
	
Emerus   24 Hour Emergency Room
    	
 
    	
6045   Alma Road
    	
 
    	
McKinney
    	
 
    	
TX
    	
 
    	
75070
    
	
Emerus/Baptist   Emergency Hospital- San Antonio Overlook Parkway
    	
 
    	
25615   N US Highway 281
    	
 
    	
San   Antonio
    	
 
    	
TX
    	
 
    	
78258
    
	
Emerus/Baptist   Emergency Hospital- San Antonio San Pedro/Thousand Oaks
    	
 
    	
16088   San Pedro Avenue
    	
 
    	
San   Antonio
    	
 
    	
TX
    	
 
    	
78232
    
	
Emerus/Baptist   Emergency Hospital- San Antonio Schertz
    	
 
    	
16977   I-35 N
    	
 
    	
Schertz
    	
 
    	
TX
    	
 
    	
78154
    
	
Emerus/Baptist   Emergency Hospital- San Antonio Westover Hills
    	
 
    	
10811   Town Center Drive
    	
 
    	
San   Antonio
    	
 
    	
TX
    	
 
    	
78251
    
	
Emerus/Baptist   Emergency Hospital- San Antonio-Hausman
    	
 
    	
8230   N 1604 W
    	
 
    	
San   Antonio
    	
 
    	
TX
    	
 
    	
78249
    
	
Emerus/Baylor   Emergency Hospital- Burleson
    	
 
    	
12500   S. Freeway
    	
 
    	
Burleson
    	
 
    	
TX
    	
 
    	
76028
    
	
Emerus/Baylor   Emergency Hospital- Colleyville
    	
 
    	
Colleyville   Blvd & Church St
    	
 
    	
Colleyville
    	
 
    	
TX
    	
 
    	
76034
    
	
Emerus/Baylor   Emergency Hospital- Coppell- Pending
    	
 
    	
761   N Denton Tap Road
    	
 
    	
Coppell
    	
 
    	
TX
    	
 
    	
75019
    
	
Emerus/Baylor   Emergency Hospital- Keller
    	
 
    	
620   S. Main Street
    	
 
    	
Keller
    	
 
    	
TX
    	
 
    	
76248
    
	
Emerus/Baylor   Emergency Hospital- Mansfield
    	
 
    	
1776   N. U.S. 287
    	
 
    	
Mansfield
    	
 
    	
TX
    	
 
    	
76063
    
	
Emerus/Baylor   Emergency Hospital- Murphy
    	
 
    	
511   FM 544
    	
 
    	
Murphy
    	
 
    	
TX
    	
 
    	
75094
    
	
Emerus/Baylor   Emergency Hospital- Rockwall
    	
 
    	
1975   Alpha
    	
 
    	
Rockwall
    	
 
    	
TX
    	
 
    	
75087
    

 

 

	
Emerus/Baylor   Emergency Medical Center- Aubrey
    	
 
    	
26791   Highway 380
    	
 
    	
Aubrey
    	
 
    	
TX
    	
 
    	
76227
    
	
Emerus/Methodist   Emergency Care Center
    	
 
    	
1635   S Voss Rd Houston
    	
 
    	
Houston
    	
 
    	
TX
    	
 
    	
77057
    
	
Emerus/Scott &   White
    	
 
    	
900   East Whitestone Blvd
    	
 
    	
Cedar   Park
    	
 
    	
TX
    	
 
    	
78613
    
	
EMH   AVON EMERGENCY CARE CENTER
    	
 
    	
1997   HEALTHWAY DRIVE
    	
 
    	
AVON
    	
 
    	
OH
    	
 
    	
44011
    
	
ER   CENTERS OF AMERICA
    	
 
    	
6006   Camp Bowie Blvd
    	
 
    	
FORT   WORTH
    	
 
    	
TX
    	
 
    	
76116
    
	
ER   CENTERS OF AMERICA
    	
 
    	
6501   PRESTON ROAD
    	
 
    	
PLANO
    	
 
    	
TX
    	
 
    	
75024
    
	
ER   CENTERS OF AMERICA
    	
 
    	
2700   E. ELDORADO PARKWAY
    	
 
    	
LITTLE   ELM
    	
 
    	
TX
    	
 
    	
75068
    
	
ETMC   Regional Healthcare System
    	
 
    	
S   Broadway Ave at W Grande Blvd
    	
 
    	
Tyler
    	
 
    	
TX
    	
 
    	
75703
    
	
ETMC   Regional Healthcare System
    	
 
    	
100   Municipal Drive
    	
 
    	
Gun   Barrel City
    	
 
    	
TX
    	
 
    	
75156
    
	
GRACE   ER
    	
 
    	
400   West Grand Parkway South
    	
 
    	
Katy
    	
 
    	
TX
    	
 
    	
77494
    
	
GRACE   ER
    	
 
    	
10900   Gulf Freeway
    	
 
    	
Houston
    	
 
    	
TX
    	
 
    	
77034
    
	
HCA-   HEALTHONE-MEDICAL
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CENTER   OF AURORA-CENTENNIAL MEDICAL PLAZA
    	
 
    	
14200   E ARAPAHOE ROAD
    	
 
    	
CENTENNIAL
    	
 
    	
CO
    	
 
    	
80112
    
	
HCA-   HEALTHONE-N SUBURBAN NORTHEAST ER
    	
 
    	
12793   HOLLY STREET
    	
 
    	
THORNTON
    	
 
    	
CO
    	
 
    	
80602
    
	
HCA_HEALTHONE-   SADDLE ROCK ER
    	
 
    	
7500   South Gartrell Road
    	
 
    	
AURORA
    	
 
    	
CO
    	
 
    	
80016
    
	
HCA-   HEALTHONE-SOUTHWEST ER- SWEDISH
    	
 
    	
6196   S. AMMONS WAY
    	
 
    	
LITTLETON
    	
 
    	
CO
    	
 
    	
80123
    
	
HCA   North Texas- Burleson (April 2014)
    	
 
    	
1461   SW Wilshire Blvd
    	
 
    	
Burleson
    	
 
    	
TX
    	
 
    	
76028
    
	
HCA   North Texas- Plano (Coit & 121) (Q1 2014)
    	
 
    	
 
    	
 
    	
Plano
    	
 
    	
TX
    	
 
    	
75025
    
	
HCA-Arlington-   Grand Prairie Emergency Center
    	
 
    	
5203   Lake Ridge Parkway
    	
 
    	
Grand   Prairie
    	
 
    	
TX
    	
 
    	
75052
    
	
HCA-Clear   Lake Regional-Alvin Emergency Center
    	
 
    	
301   Medic Lane
    	
 
    	
Alvin
    	
 
    	
TX
    	
 
    	
77511
    
	
HCA-ER   at Alliance
    	
 
    	
3101   North Tarrant Parkway
    	
 
    	
FORT   WORTH
    	
 
    	
TX
    	
 
    	
76177
    
	
HCA-Flower   Mound 24 Hour Emergency Center
    	
 
    	
4351   Long Prairie Rd.
    	
 
    	
Flower   Mound
    	
 
    	
TX
    	
 
    	
75028
    

 

 

	
HCA-HealthOne   Emergency Care
    	
 
    	
10970   Shadow Creek Parkway
    	
 
    	
Pearland
    	
 
    	
TX
    	
 
    	
77584
    
	
HCA-HealthOne   Emergency Care
    	
 
    	
9711   N. Sam Houston Pkwy East
    	
 
    	
Humble
    	
 
    	
TX
    	
 
    	
77396
    
	
HCA-HealthOne   Emergency Care
    	
 
    	
5510   West Grand Pkwy. S
    	
 
    	
Richmond
    	
 
    	
TX
    	
 
    	
77406
    
	
HCA-HealthOne   Emergency Care
    	
 
    	
6002   Fairmont Parkway
    	
 
    	
Pasadena
    	
 
    	
TX
    	
 
    	
77505
    
	
HCA-Methodist   Boerne Emergency Center
    	
 
    	
134   Menger Springs
    	
 
    	
Boeme
    	
 
    	
TX
    	
 
    	
78006
    
	
HCA-St.   David’s - Emergency Center- Cedar Park
    	
 
    	
 
    	
 
    	
Cedar   Park
    	
 
    	
TX
    	
 
    	
 
    
	
HCA-St.   David’s -Emergency Center- Bastrop
    	
 
    	
3201   HWY 71 East
    	
 
    	
Bastrop
    	
 
    	
TX
    	
 
    	
78602
    
	
HCA-St.   David’s -Emergency Center- Bee Cave
    	
 
    	
12813   Galleria Circle
    	
 
    	
Bee   Cave
    	
 
    	
TX
    	
 
    	
78738
    
	
HCA-St.   David’s-Emergency Center- Pflugerville
    	
 
    	
18917   Limestone Commercial Dr
    	
 
    	
Pflugerville
    	
 
    	
TX
    	
 
    	
78660
    
	
HIGHLAND   PARK EMERGENCY ROOM
    	
 
    	
5150   LEMMON AVENUE
    	
 
    	
DALLAS
    	
 
    	
TX
    	
 
    	
75209
    
	
HMHP-   ST. ELIZABETH EMERGENCY & DIAGNOSTIC CENTER
    	
 
    	
6252   MAHONING AVENUE
    	
 
    	
AUSTINTOWN
    	
 
    	
OH
    	
 
    	
44515
    
	
HMHP-   ST. JOSEPH EMERGENCY & DIAGNOSTIC CENTER
    	
 
    	
476   SOUTH MAIN STREET
    	
 
    	
ANDOVER
    	
 
    	
OH
    	
 
    	
44003
    
	
HUBER   EMERGENCY HEALTH
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CENTER   (KETTERING HEALTH NETWORK AFFILIATE)
    	
 
    	
8701   OLD TROY PIKE
    	
 
    	
HUBER   HEIGHTS
    	
 
    	
OH
    	
 
    	
45429
    
	
KATY   EMERGENCY
    	
 
    	
24433   KATY FREEWAY
    	
 
    	
KATY
    	
 
    	
TX
    	
 
    	
77493
    
	
LEGACY   ER
    	
 
    	
1310   W Exchange Pkwy
    	
 
    	
Allen
    	
 
    	
TX
    	
 
    	
75013
    
	
LEGACY   ER
    	
 
    	
9205   LEGACY DRIVE
    	
 
    	
FRISCO
    	
 
    	
TX
    	
 
    	
75034
    
	
MEMORIAL   EMERGENCY CENTER
    	
 
    	
14520   MEMORIAL DRIVE SUITE 22
    	
 
    	
HOUSTON
    	
 
    	
TX
    	
 
    	
77079
    
	
MEMORIAL   HEALTH SYSTEM- FREESTANDING ED-BELPRE MEDICAL CAMPUS
    	
 
    	
FARSON   STREET
    	
 
    	
BELPRE
    	
 
    	
OH
    	
 
    	
45714
    
	
MEMORIAL   HEIGHTS EMERGENCY CENTER
    	
 
    	
4000   WASHINGTON AVENUE, SUITE 100
    	
 
    	
HOUSTON
    	
 
    	
TX
    	
 
    	
77007
    
	
Memorial   Hermann-24 Hour Emergency Care- FSER
    	
 
    	
9950   Woodlands Pkwy
    	
 
    	
Spring
    	
 
    	
TX
    	
 
    	
77382
    

 

 

	
MERCY   FREESTANDING EMERGENCY ROOM
    	
 
    	
12473   ECKEL JUNCTION ROAD
    	
 
    	
PERRYSBURG
    	
 
    	
OH
    	
 
    	
43551
    
	
MERCY   HEALTH’S FREESTANDING
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
EMERGENCY   ROOM- HARRISON MEDICAL CENTER
    	
 
    	
10450   NEW HAVEN ROAD
    	
 
    	
HARRISON
    	
 
    	
OH
    	
 
    	
45030
    
	
MERCY   HEALTH’S FREESTANDING EMERGENCY ROOM- MT. ORAB MERCY HEALTH’S FREESTANDING
    	
 
    	
154   HEALTH PARTNERS CIRCLE
    	
 
    	
MT.   ORAB
    	
 
    	
OH
    	
 
    	
45154
    
	
EMERGENCY   ROOM- ROOKWOOD MEDICAL CENTER
    	
 
    	
4100   EDWARDS ROAD
    	
 
    	
NORWOOD
    	
 
    	
OH
    	
 
    	
45208
    
	
Methodist   Hospital System-Emergency Care Center Kirby
    	
 
    	
2615   Southwest Freeway
    	
 
    	
Houston
    	
 
    	
TX
    	
 
    	
77098
    
	
Methodist   Hospital System- FSER- Pearland
    	
 
    	
11525   BROADWAY
    	
 
    	
PEARLAND
    	
 
    	
TX
    	
 
    	
77584
    
	
MIAMI   VALLEY HOSPITAL-
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
JAMESTOWN   EMERGENCY CENTER
    	
 
    	
4940   COTTONVILLE ROAD
    	
 
    	
JAMESTOWN
    	
 
    	
OH
    	
 
    	
45335
    
	
NEIGHBORS   EMERGENCY CENTER
    	
 
    	
11130   Broadway
    	
 
    	
Pearland
    	
 
    	
TX
    	
 
    	
77584
    
	
NEIGHBORS   EMERGENCY CENTER
    	
 
    	
7215   Fairmont Pkwy
    	
 
    	
Pasadena
    	
 
    	
TX
    	
 
    	
77505
    
	
NEIGHBORS   EMERGENCY CENTER
    	
 
    	
1120   KINGWOOD DRIVE, SUITE 100
    	
 
    	
KINGWOOD
    	
 
    	
TX
    	
 
    	
77339
    
	
NEIGHBORS   EMERGENCY CENTER
    	
 
    	
6051   GARTH ROAD, SUITE 100
    	
 
    	
BAYTOWN
    	
 
    	
TX
    	
 
    	
77521
    
	
NEIGHBORS   EMERGENCY CENTER
    	
 
    	
1801   E. 51st Street
    	
 
    	
Austin
    	
 
    	
TX
    	
 
    	
78723
    
	
NEIGHBORS   EMERGENCY CENTER
    	
 
    	
6030   S. RICE AVENUE
    	
 
    	
HOUSTON
    	
 
    	
TX
    	
 
    	
77081
    
	
NEIGHBORS   EMERGENCY CENTER/Oakbend Medical Ctr-Grand Parkway
    	
 
    	
7830   West Grand Parkway South
    	
 
    	
Richmond
    	
 
    	
TX
    	
 
    	
 
    
	
NEIGHBORS   EMERGENCY CENTER
    	
 
    	
 
    	
 
    	
Beaumont
    	
 
    	
TX
    	
 
    	
 
    
	
North   Cypress Emergency Room-Fry Road Campus (Hwy 290)
    	
 
    	
26271   Northwest Freeway
    	
 
    	
Cypress
    	
 
    	
TX
    	
 
    	
 
    
	
North   Cypress Emergency Room- Willowbrook Campus (249/Tomball Pkwy)
    	
 
    	
22475   Tomball Parkway
    	
 
    	
Houston
    	
 
    	
TX
    	
 
    	
 
    
	
NORTH   PEORIA EMERGENCY CENTER
    	
 
    	
26900   N. LAKE PLEASANT PARKWAY
    	
 
    	
PEORIA
    	
 
    	
AZ
    	
 
    	
85383
    

 

 

	
OHIOHEALTH-   EMERGENCY CARE- WESTERVILLE MEDICAL CAMPUS
    	
 
    	
300   POLARIS PARKWAY
    	
 
    	
WESTERVILLE
    	
 
    	
OH
    	
 
    	
43082
    
	
PARKVIEW-   PUEBLO WEST
    	
 
    	
899   E. INDUSTRIAL BLVD
    	
 
    	
PUEBLO   WEST
    	
 
    	
CO
    	
 
    	
81007
    
	
PHYSICIANS   ER (OPTIMUM ER)
    	
 
    	
4524   RESEARCH FOREST DRIVE
    	
 
    	
THE   WOODLANDS
    	
 
    	
TX
    	
 
    	
77381
    
	
PHYSICIANS   ER CONROE
    	
 
    	
4019   INTERSTATE 45 NORTH
    	
 
    	
CONROE
    	
 
    	
TX
    	
 
    	
77304
    
	
PHYSICIANS   ER- Huntsville (Mid 2013)
    	
 
    	
504   I-45 South
    	
 
    	
Huntsville
    	
 
    	
TX
    	
 
    	
77340
    
	
PHYSICIANS   ER- Lake Area
    	
 
    	
18057   Highway 105 West
    	
 
    	
Montgomery
    	
 
    	
TX
    	
 
    	
77356
    
	
PHYSICIANS   ER- Wallisville
    	
 
    	
6191   East Sam Houston Pkwy
    	
 
    	
Houston
    	
 
    	
TX
    	
 
    	
77049
    
	
PREFERRED   EMERGENCY ROOM
    	
 
    	
8901   FM 1960 BYPASS RD STE 105
    	
 
    	
HUMBLE
    	
 
    	
TX
    	
 
    	
77338
    
	
PRIORITY   EMERGENCY ROOM - KATY
    	
 
    	
23114   SEVEN MEADOWS PARKWAY
    	
 
    	
KATY
    	
 
    	
TX
    	
 
    	
77494
    
	
PRIORITY   EMERGENCY ROOM - THE WOODLANDS LLC
    	
 
    	
3759   FM 1488
    	
 
    	
THE   WOODLANDS
    	
 
    	
TX
    	
 
    	
77382
    
	
RIVER   OAKS EMERGENCY CENTER
    	
 
    	
2320   SOUTH SHEPHERD
    	
 
    	
HOUSTON
    	
 
    	
TX
    	
 
    	
77019
    
	
SACRED   HEART EMERGENCY CENTER
    	
 
    	
9774   KATY FREEWAY, SUITE 500
    	
 
    	
HOUSTON
    	
 
    	
TX
    	
 
    	
77055
    
	
SPHIER   EMERGENCY ROOM
    	
 
    	
8721   Highway 6
    	
 
    	
Missouri   City
    	
 
    	
TX
    	
 
    	
 
    
	
SPHIER   EMERGENCY ROOM
    	
 
    	
1560   SOUTH MASON ROAD, SUITE E
    	
 
    	
KATY
    	
 
    	
TX
    	
 
    	
77450
    
	
SPHIER   EMERGENCY ROOM
    	
 
    	
1408   CAMPBELL DRIVE
    	
 
    	
IRONTON
    	
 
    	
OH
    	
 
    	
45638
    
	
St.   Joseph Regional Health Center- Bryan Emergency Center
    	
 
    	
2801   Franciscan Drive
    	
 
    	
Bryan
    	
 
    	
TX
    	
 
    	
 
    
	
St.   Joseph Regional Health Center- College Station Emergency Center
    	
 
    	
4411   Hwy 6 South
    	
 
    	
College   Station
    	
 
    	
TX
    	
 
    	
 
    
	
St.   Luke’s Episcopal Health System- Community Emergency Center- Pearland
    	
 
    	
11713   Shadow Creek Parkway
    	
 
    	
Pearland
    	
 
    	
TX
    	
 
    	
 
    
	
St.   Luke’s Episcopal Health System- Community Emergency Center- Holcombe
    	
 
    	
2727   West Holcombe Blvd
    	
 
    	
Houston
    	
 
    	
TX
    	
 
    	
 
    
	
St.   Luke’s Episcopal Health System- Community Emergency Center-San Felipe
    	
 
    	
6363   San Felipe St
    	
 
    	
Houston
    	
 
    	
TX
    	
 
    	
 
    

 

 

	
ST.   MICHAEL S EMERGENCY ROOM
    	
 
    	
9000   WESTHEIMER
    	
 
    	
HOUSTON
    	
 
    	
TX
    	
 
    	
77063
    
	
ST.   MICHAEL S EMERGENCY ROOM
    	
 
    	
16062   SOUTHWEST FREEWAY
    	
 
    	
SUGAR   LAND
    	
 
    	
TX
    	
 
    	
77479
    
	
ST.   MICHAEL S EMERGENCY ROOM
    	
 
    	
26226   I-45 NORTH
    	
 
    	
SPRING
    	
 
    	
TX
    	
 
    	
77086
    
	
SUMMA   HEALTH CENTER AT LAKE MEDINA
    	
 
    	
3780   MEDINA ROAD
    	
 
    	
MEDINA
    	
 
    	
OH
    	
 
    	
44256
    
	
SUMMA   HEALTH CENTER EMERGENCY ROOM AT GREEN
    	
 
    	
1825   FRANKS PARKWAY
    	
 
    	
UNIONTOWN
    	
 
    	
OH
    	
 
    	
44685
    
	
SW   GENERAL- BRUNSWICK MEDICAL CENTER & ER
    	
 
    	
4065   CENTER ROAD
    	
 
    	
BRUNSWICK
    	
 
    	
OH
    	
 
    	
44212
    
	
TELLURIDE   MEDICAL CENTER
    	
 
    	
500   W PACIFIC AVE
    	
 
    	
TELLURIDE
    	
 
    	
CO
    	
 
    	
81435
    
	
Tenet   Health Network- Lake Pointe- Forney
    	
 
    	
757   E. State Highway 80
    	
 
    	
Forney
    	
 
    	
TX
    	
 
    	
 
    
	
Tenet   Health Network- Lake Pointe- Wylie
    	
 
    	
2300   FM 544
    	
 
    	
Wylie
    	
 
    	
TX
    	
 
    	
 
    
	
Tenet   Health Network-Cy-Fair Emergency & Imaging- at 290
    	
 
    	
27126   Highway 290
    	
 
    	
Cypress
    	
 
    	
TX
    	
 
    	
 
    
	
Tenet   Health Network-Cy-Fair Emergency & Imaging- at Barker Cypress
    	
 
    	
7015   Barker Cypress
    	
 
    	
Cypress
    	
 
    	
TX
    	
 
    	
 
    
	
TEXAS   EMERGENCY CARE CENTER - ATASCOCITA
    	
 
    	
19143   WEST LAKE HOUSTON PARKWAY
    	
 
    	
HUMBLE
    	
 
    	
TX
    	
 
    	
77346
    
	
TEXAS   EMERGENCY CARE CENTER - CYPRESS
    	
 
    	
17255   SPRING CYPRESS ROAD SUITE A
    	
 
    	
CYPRESS
    	
 
    	
TX
    	
 
    	
77429
    
	
TEXAS   EMERGENCY CARE CENTER - PEARLAND
    	
 
    	
3115   DIXIE FARM ROAD, SUITE 107
    	
 
    	
PEARLAND
    	
 
    	
TX
    	
 
    	
77581
    
	
THE   EMERGENCY ROOM AT KATY MAIN STREET
    	
 
    	
25765   KATY FREEWAY
    	
 
    	
KATY
    	
 
    	
TX
    	
 
    	
77494
    
	
THR-   Burleson (has 24/7 Stand Alone ER)
    	
 
    	
2750   SW Wilshire Blvd
    	
 
    	
Burleson
    	
 
    	
TX
    	
 
    	
 
    
	
THR-   NORTH ROCKWALL ER
    	
 
    	
2265   N. LAKESHORE DRIVE
    	
 
    	
ROCKWALL
    	
 
    	
TX
    	
 
    	
75087
    
	
TRIHEALTH-   BETHESDA ARROW SPRINGS
    	
 
    	
100   ARROWS SPRINGS BLVD
    	
 
    	
LEBANON
    	
 
    	
OH
    	
 
    	
45036
    
	
TRIHEALTH-   GOOD SAMARITAN- WESTERN RIDGE
    	
 
    	
6949   GOOD SAMARITAN DRIVE
    	
 
    	
CINCINNATI
    	
 
    	
OH
    	
 
    	
45247
    

 

 

	
Trinity   Healthcare Network 2920 ER LLC
    	
 
    	
6225   FM 2920, SUITE 150
    	
 
    	
SPRING
    	
 
    	
TX
    	
 
    	
77379
    
	
UNIVERSITY   OF COLORADO- GREELEY EMERGENCY CENTER
    	
 
    	
6906   10TH STREET
    	
 
    	
GREELEY
    	
 
    	
CO
    	
 
    	
80634
    
	
WEST   VALLEY EMERGENCY CENTER
    	
 
    	
525   S. WATSON ROAD
    	
 
    	
BUCKEYE
    	
 
    	
AZ
    	
 
    	
85326
    
	
WOODLANDS   EMERGENCY CENTER
    	
 
    	
10710   KUYKENDAHL
    	
 
    	
THE   WOODLANDS
    	
 
    	
TX
    	
 
    	
77381
    

 

 

Schedule 1.01B

 

Certain Add-Backs to Consolidated EBITDA

 

Pre-Opening Expenses:

 

	
 
    	
 
    	
Expenses as of 9/30/13 for the
    	
 
    
	
Facility
    	
 
    	
consecutive 12-month period then ended
    	
 
    
	
Austin Arboretum
    	
 
    	
$
    	
275,398.13
    	
 
    
	
Colorado Springs Powers
    	
 
    	
$
    	
467,712.43
    	
 
    
	
Flower Mound
    	
 
    	
$
    	
230,164.10
    	
 
    
	
Katy
    	
 
    	
$
    	
303,700.40
    	
 
    
	
Total
    	
 
    	
$
    	
1,276,975.06
    	
 
    

 

 

Schedule 2.01

 

Commitments and Applicable Percentages

 

	
 
    	
 
    	
Revolving
    	
 
    	
Revolving
    	
 
    	
Term Loan
    	
 
    	
Term Loan
    	
 
    	
Delayed Draw Term
    	
 
    	
Delayed Draw Term
    	
 
    
	
 
    	
 
    	
Commitment
    	
 
    	
Commitment
    	
 
    	
Commitment
    	
 
    	
Commitment
    	
 
    	
Loan Commitment
    	
 
    	
Loan Commitment
    	
 
    
	
Lender
    	
 
    	
Amount
    	
 
    	
Percentage
    	
 
    	
Amount
    	
 
    	
Percentage
    	
 
    	
Amount
    	
 
    	
Percentage
    	
 
    
	
Fifth   Street Finance Corp.
    	
 
    	
$
    	
10,000,000
    	
 
    	
100.000000000
    	
%
    	
$
    	
75,000,000
    	
 
    	
100.000000000
    	
%
    	
$
    	
165,000,000
    	
 
    	
100.000000000
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Totals:
    	
 
    	
$
    	
10,000,000
    	
 
    	
100.000000000
    	
%
    	
$
    	
75,000,000
    	
 
    	
100.000000000
    	
%
    	
$
    	
165,000,000
    	
 
    	
100.000000000
    	
%
    

 

 

Schedule 6.05(b)

 

Financial Statements

 

None.

 

 

Schedule 6.13

 

Subsidiaries

 

	
NAME OF ENTITY
    	
 
    	
JURISDICTION OF
   ORGANIZATION
    	
 
    	
OWNERSHIP
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
AJNH   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Allen   Bethany Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Alvin   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Anthem   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Arvada   Ralston Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Austin   Brodie Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Basswood   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Bella Terra Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Briar   Forest-Eldridge Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Briargate   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Broomfield   Huron Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Cedar   Hill Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Center   Street DP Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Chandler   Germann Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Chandler   Ocotillo Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Colleyville   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Colonial   Lakes Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Colorado   Conjugate, P.C.
    	
 
    	
CO
    	
 
    	
100% James M. Muzzarelli, M.D.
    
	
Colorado   Springs Meadowgrass Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Commerce   City Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Conjugate   Health PLLC
    	
 
    	
TX
    	
 
    	
100% James M. Muzzarelli, M.D.
    
	
Conroe   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Copperwood   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Culebra-Tezel Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Denver   West Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Eagles   Nest Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
East   Pflugerville Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
ECC   Management, LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Falcon   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
FCER   Management, LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Firestone   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
First   Choice AIV Holding LLC
    	
 
    	
DE
    	
 
    	
100% First Choice ER, LLC
    
	
FM   Crossing Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Fountain   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Friendswood   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Frisco   Preston Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Garland   Shiloh Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Gilbert   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Gleannloch   Farms Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Glendale   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Goodyear   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Green   Valley Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Haslet   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    

 

 

	
NAME OF ENTITY
    	
 
    	
JURISDICTION OF
   ORGANIZATION
    	
 
    	
OWNERSHIP
    
	
Katy   ER Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Kingwood   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
KPTC   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Kuykendahl   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
La Porte Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Lakewood   Forest Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
League   City Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Lewisville   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Little   Elm FM 423 Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Littleton-Bowles   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Louetta   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Mansfield   Walnut Creek Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Matlock   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Mesquite   Town East Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Mid-Collin   County Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
North   Dallas Tollway Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
North   Powers Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
OPFree   Licensing LP
    	
 
    	
TX
    	
 
    	
1% (GP) ECC Management, LLC
   99% (LP) First Choice ER, LLC
    
	
OpFree   RE Investments, Ltd.
    	
 
    	
TX
    	
 
    	
1% (GP) ECC Management, LLC
   99% (LP) First Choice ER, LLC
    
	
OpFree,   LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Parker-Lincoln   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Pearland   518 Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Pearland   Parkway Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Pearland   Sunrise Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Pflugerville   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Phoenix   Mountain Parkway Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Plano   ERCare Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Richardson   Mimosa Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
San   Antonio Nacogdoches Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Sienna   Plantation Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
South   Green Oaks Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Spanish   Oaks Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
SSH   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Sterling   Ridge Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Surprise   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Tallyn’s   Reach Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Texas   City Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Thornton   136th Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Wadsworth-Belleview   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Waterside   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
WC   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
WCB   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Westwood   Village Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Wilderness-Hardy   Oak Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    
	
Wylie   Medical Center LLC
    	
 
    	
TX
    	
 
    	
100% First Choice ER, LLC
    

 

 

Schedule 6.17

 

IP Rights

 

Registrations:

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
File
    	
 
    	
Serial
    	
 
    	
Registration
    	
 
    	
Registration
    	
 
    
	
Company
    	
 
    	
Type
    	
 
    	
Mark
    	
 
    	
Date
    	
 
    	
Number
    	
 
    	
Date
    	
 
    	
Number
    	
 
    
	
OpFree Licensing LP
    	
 
    	
Trademark
    	
 
    	
FIRST   CHOICE EMERGENCY ROOM & Design
    	
 
    	
5/26/05
    	
 
    	
 
    	
78/638,181
    	
 
    	
2/24/09
    	
 
    	
3,581,689
    	
 
    
	
OpFree Licensing LP
    	
 
    	
Trademark
    	
 
    	
FIRST   CHOICE EMERGENCY ROOM...IT’S ABOUT TIME
    	
 
    	
6/24/05
    	
 
    	
 
    	
78/657,596
    	
 
    	
5/13/08
    	
 
    	
3,428,203
    	
 
    
	
OpFree Licensing LP
    	
 
    	
Trademark
    	
 
    	
REAL   ER. REAL FAST.
    	
 
    	
7/3/12
    	
 
    	
 
    	
85/668,099
    	
 
    	
3/26/13
    	
 
    	
4,308,259
    	
 
    

 

Pending Applications:

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
File
    	
 
    	
Serial
    	
 
    	
Published for
    	
 
    
	
Company
    	
 
    	
Type
    	
 
    	
Mark
    	
 
    	
Date
    	
 
    	
Number
    	
 
    	
Opposition Date
    	
 
    
	
OpFree Licensing LP
    	
 
    	
Trademark   Application
    	
 
    	
WHAMBULANCE!
    	
 
    	
10/25/12
    	
 
    	
85/763,253
    	
 
    	
11/12/13
    	
 
    

 

 

Schedule 6.20-1

 

Locations of Real Property

 

	
Property Address
    	
 
    	
Company Name
    	
 
    	
Owned orLeased
    
	
2624   Long Prairie Rd.
   Flower Mound, TX 75022
    	
 
    	
OpFree   RE Investments, Ltd.
    	
 
    	
Owned
    
	
2710   Western Center Blvd.
   Fort Worth, TX 76131
    	
 
    	
OpFree   RE Investments, Ltd.
    	
 
    	
Owned
    
	
3016   Marina Bay
   League City, TX 77573
    	
 
    	
League   City Medical Center LLC
    	
 
    	
Owned
    
	
2941   S. Lake Vista, Suite 200,
   Lewisville, TX 75067
    	
 
    	
First   Choice ER, LLC
    	
 
    	
Leased
    
	
2401   Preston Rd., Ste D
   Plano, TX 75093
    	
 
    	
Plano ERCare Center, L.P.
   (now Plano ERCare Center LLC)
    	
 
    	
Leased
    
	
211   E FM 544, Ste 401
   Murphy, TX 75094
    	
 
    	
Mid-Collin   County Medical Center, Ltd.
   (now Mid-Collin County Medical Center LLC)
    	
 
    	
Leased
    
	
2612   Long Prairie Rd.
   Flower Mound, TX 75022
    	
 
    	
ECC   Management, LLC
    	
 
    	
Leased
    
	
10333   Kuykendahl, Ste B
   The Woodlands, TX 77382
    	
 
    	
Sterling   Ridge Medical Center, Ltd.
   (now Sterling Ridge Medical Center LLC)
    	
 
    	
Leased
    
	
21301   Kuykendahl, Ste A
   Spring, TX 77379
    	
 
    	
Kuykendahl   Medical Center, Ltd.
   (now Kuykendahl Medical Center LLC)
    	
 
    	
Leased
    
	
5324 Atascocita Rd., Ste T
   Humble, TX 77346
    	
 
    	
Eagles   Nest Medical Center, Ltd.
   (now Eagles Nest Medical Center LLC)
    	
 
    	
Leased
    
	
1851   Pearland Pkwy, Ste Z
   Pearland, TX 77581
    	
 
    	
Pearland   Parkway Medical Center, Ltd.
   (now Pearland Parkway Medical Center LLC)
    	
 
    	
Leased
    
	
10130   Louetta Rd., Ste L
   Houston, TX 77070
    	
 
    	
Louetta   Medical Center, Ltd.
   (now Louetta Medical Center LLC)
    	
 
    	
Leased
    
	
3033   Marina Bay Dr., Ste 100
   League City, TX 77573
    	
 
    	
SSH   Medical Center, Ltd. d/b/a First Choice Emergency Room
   (now SSH Medical Center LLC)
    	
 
    	
Leased
    
	
2158   Northpark Dr.
   Houston, TX 77339
    	
 
    	
Kingwood   Medical Center, Ltd. d/b/a First Choice Emergency Room
   (now Kingwood Medical Center LLC)
    	
 
    	
Leased
    

 

 

	
9740   Barker Cypress, Ste 108
   Houston, TX 77433
    	
 
    	
Copperwood   Medical Center, Ltd. d/b/a
   First Choice Emergency Room
   (now Copperwood Medical Center LLC)
    	
 
    	
Leased
    
	
15100   FM Rd 1825
   Pflugerville, TX 78660
    	
 
    	
Pflugerville   Medical Center, Ltd. d/b/a
   First Choice Emergency Room
   (now Pflugerville Medical Center LLC)
    	
 
    	
Leased
    
	
10407   Jollyville Rd.
   Austin, TX 78759
    	
 
    	
AJNH   Medical Center LLC
    	
 
    	
Leased
    
	
5401   Basswood Rd.
   Fort Worth, TX 76137
    	
 
    	
Basswood   Medical Center LLC
    	
 
    	
Leased
    
	
2650   Flower Mound Rd.
   Flower Mound, TX 75028
    	
 
    	
FM   Crossing Medical Center LLC
    	
 
    	
Leased
    
	
1510   S. Mason Rd.
   Katy, TX 77450
    	
 
    	
Katy   ER Center LLC
    	
 
    	
Leased
    
	
2770   N. Powers Blvd.
   Colorado Springs, CO 80922
    	
 
    	
North   Powers Medical Center LLC
    	
 
    	
Leased
    
	
9312   Brodie Ln.
   Austin, TX 78749
    	
 
    	
Austin   Brodie Medical Center LLC
    	
 
    	
Leased
    
	
2800   Little Elm Pkwy.
   Little Elm, TX 75068
    	
 
    	
Little   Elm FM 423 Medical Center LLC
    	
 
    	
Leased
    
	
13434   Nacogdoches Rd.
   San Antonio, TX 78217
    	
 
    	
San   Antonio Nacogdoches Medical Center LLC
    	
 
    	
Leased
    

 

 

Schedule 6.20-2

 

Location of Chief Executive Office; Taxpayer Identification Number, Etc.

 

Chief Executive Office

2941 S. Lake Vista, Suite 200,

Lewisville, TX 75067

 

Taxpayer and Organizational Identification Numbers

 

	
NAME OF ENTITY
    	
 
    	
STATE FILE NO.
    	
 
    	
FEIN
    
	
First   Choice ER, LLC
    	
 
    	
801388991
    	
 
    	
27-5348156
    
	
AJNH   Medical Center LLC
    	
 
    	
801566924
    	
 
    	
36-4729524
    
	
Austin   Brodie Medical Center LLC
    	
 
    	
801786539
    	
 
    	
61-1713294
    
	
Basswood   Medical Center LLC
    	
 
    	
801564359
    	
 
    	
80-0800093
    
	
Copperwood   Medical Center LLC
    	
 
    	
801633857
    	
 
    	
84-1697403
    
	
Eagles   Nest Medical Center LLC
    	
 
    	
801633806
    	
 
    	
04-3847518
    
	
ECC   Management, LLC
    	
 
    	
800424150
    	
 
    	
16-1711879
    
	
FM   Crossing Medical Center LLC
    	
 
    	
801564334
    	
 
    	
80-0802669
    
	
Katy   ER Center LLC
    	
 
    	
801564371
    	
 
    	
45-2583773
    
	
Kingwood   Medical Center LLC
    	
 
    	
801633883
    	
 
    	
80-0684495
    
	
Kuykendahl   Medical Center LLC
    	
 
    	
801633748
    	
 
    	
34-2028269
    
	
League   City Medical Center LLC
    	
 
    	
801807235
    	
 
    	
36-4766358
    
	
Little   Elm FM 423 Medical Center LLC
    	
 
    	
801759714
    	
 
    	
61-1709134
    
	
Louetta   Medical Center LLC
    	
 
    	
801633861
    	
 
    	
74-3178584
    
	
Mid-Collin   County Medical Center LLC
    	
 
    	
801633855
    	
 
    	
80-0523843
    
	
North   Powers Medical Center LLC
    	
 
    	
801564357
    	
 
    	
35-2441856
    
	
OPFree   Licensing LP
    	
 
    	
800462559
    	
 
    	
01-0831027
    
	
OpFree   RE Investments, Ltd.
    	
 
    	
800446975
    	
 
    	
06-1740727
    
	
Pearland   Parkway Medical Center LLC
    	
 
    	
801633753
    	
 
    	
51-0576704
    
	
Pflugerville   Medical Center LLC
    	
 
    	
801633780
    	
 
    	
45-2552050
    
	
Plano   ERCare Center LLC
    	
 
    	
801633882
    	
 
    	
90-0249092
    
	
San   Antonio Nacogdoches Medical Center LLC
    	
 
    	
801807178
    	
 
    	
80-0937326
    
	
SSH   Medical Center LLC
    	
 
    	
801633762
    	
 
    	
77-0666943
    
	
Sterling   Ridge Medical Center LLC
    	
 
    	
801633831
    	
 
    	
16-1711883
    
	
WC   Medical Center LLC
    	
 
    	
801633859
    	
 
    	
56-2673665
    

 

 

Schedule 6.20-3

 

Changes in Legal Name, State of Formation and Structure

 

Mergers, Consolidations and Changes in Structure:

 

Acquisition of First Choice ER, LLC and its subsidiaries by First Choice AIV Holding LLC pursuant to that certain Securities Purchase Agreement dated as of September 30, 2011 by and among First Choice AN Holding LLC, as the purchaser, First Choice ER, LLC and Dr. Jacob J. Novak and L. Richard Covert, as the sellers.

 

Changes of Legal Names:

 

	
NAME OF ENTITY
    	
 
    	
FORMER NAME
    	
 
    	
DATE OF CHANGE
    
	
Copperwood   Medical Center LLC
    	
 
    	
Copperwood   Medical Center, Ltd.
    	
 
    	
July 31,   2012
    
	
Eagles   Nest Medical Center LLC
    	
 
    	
Eagles   Nest Medical Center, Ltd.
    	
 
    	
July 31,   2012
    
	
Kingwood   Medical Center LLC
    	
 
    	
Kingwood   Medical Center, Ltd.
    	
 
    	
July 31,   2012
    
	
Kuykendahl   Medical Center LLC
    	
 
    	
Kuykendahl   Medical Center, Ltd.
    	
 
    	
July 31,   2012
    
	
Louetta   Medical Center LLC
    	
 
    	
Louetta   Medical Center, Ltd.
    	
 
    	
July 31,   2012
    
	
Mid-Collin   County Medical Center LLC
    	
 
    	
Mid-Collin   County Medical Center, Ltd.
    	
 
    	
July 31,   2012
    
	
OPFree   Licensing LP
    	
 
    	
OpFree   Licensing, Ltd.
    	
 
    	
June 6,   2012
    
	
Pearland   Parkway Medical Center LLC
    	
 
    	
Pearland   Parkway Medical Center, Ltd.
    	
 
    	
July 31,   2012
    
	
Pflugerville   Medical Center LLC
    	
 
    	
Pflugerville   Medical Center, Ltd.
    	
 
    	
July 31,   2012
    
	
Plano   ERCare Center LLC
    	
 
    	
Plano   ERCare Center, LP
    	
 
    	
July 31,   2012
    
	
SSH   Medical Center LLC
    	
 
    	
SSH   Medical Center, Ltd.
    	
 
    	
July 31,   2012
    
	
Sterling   Ridge Medical Center LLC
    	
 
    	
Sterling   Ridge Medical Center, Ltd.
    	
 
    	
July 31,   2012
    
	
WC   Medical Center LLC
    	
 
    	
WC   Medical Center, Ltd.
    	
 
    	
July 31,   2012
    

 

 

Schedule 8.01

 

Liens Existing on the Closing Date

 

2624 Long Prairie Road, Flower Mound, TX

 

1.                                      All leases, grants, exceptions or reservations of coal, lignite, oil, gas and other minerals, together with all rights, privileges, and immunities relating thereto, appearing in the Public Records whether listed herein or not. There may be leases, grants, exceptions or reservations of mineral interest that are not listed.

 

2.                                      Restrictive covenants recorded in Cabinet T, Page 187 Plat Records, Denton County, Texas, Volume 4144, Page 695 and Volume 4200, Page 164, Real Property Records of Denton County, Texas.

 

3.                                      Reservation of undivided interest in oil, gas and other minerals as set forth in Warranty Deed, dated February 2, 1951, recorded February 3, 1951, in Volume 367, Page 354 of the Official Records of Denton County, Texas.

 

4.                                      Reservation of undivided interest in oil, gas and other minerals as set forth in Warranty Deed, dated May 4, 1951, recorded May 8, 1951, in Volume 370, Page 196 of the Official Records of Denton County, Texas.

 

5.                                      Covenants, conditions, obligations, restrictions, easements, charges and liens as set forth in that certain Declaration of Protective Covenants for Chaparral Cove Office Park Flower Mound, Texas, dated July 6, 1998, recorded July 31, 1998, in Volume 4144, Page 695, as amended by that certain First Amendment to Declaration of Protective Covenants for Chaparral Cove Office Park Flower Mound, Texas, dated October 19, 1998, recorded October 28, 1998, in Volume 4200, Page 164, all in the Real Property Records of Denton County, Texas.

 

2710 Western Center Boulevard, Fort Worth, TX

 

1.                                      All leases, grants, exceptions or reservations of coal, lignite, oil, gas and other minerals, together with all rights, privileges, and immunities relating thereto, appearing in the Public Records whether listed herein or not. There may be leases, grants, exceptions or reservations of mineral interest that are not listed.

 

2.                                      Restrictive covenants recorded in Cabinet A, Slide 11504 and Cabinet A, Slide 12025 Plat Records, Tarrant County, Texas, and under Clerk’s File No. D207231979, Deed Records of Tarrant County, Texas.

 

3.                                      Memorandum of Oil, Gas and Lease, dated June 8, 2004, by and between Heatley Properties, Inc., as Lessor, and Antero Resources I, LP, as Lessee, recorded June 28, 2004, under Clerk’s File No. D204199888 of the Official Records of Tarrant County, Texas.

 

 

4.                                      Memorandum of Oil, Gas and Lease, dated July 2, 2004, by and between TRBP Limited, as Lessor, and Antero Resources I, LP, as Lessee, recorded July 16, 2004, under Clerk’s File No. D204223158 of the Official Records of Tarrant County, Texas.

 

5.                                      Reservation of all oil, gas, hydrocarbons and minerals as set forth in that Special Warranty Deed, dated March 10, 2006, recorded March 15, 2006, under Clerk’s File No. D206076410 of the Official Records of Tarrant County, Texas.

 

6.                                      Reservation of all oil, gas, and other minerals and mineral rights as set forth in that Special Warranty Deed with Vendor’s Lien, dated July 11, 2007, recorded July 17, 2007, under Clerk’s File No. D207249243 of the Official Records of Tarrant County, Texas.

 

 

Schedule 8.02

 

Investments Existing on the Closing Date

 

1.                      The Borrower advances funds to Thomas S. Hall, as Chief Executive Officer of the Borrower, to pay for a corporate apartment. The amount of this advance is to be deducted from any bonus payable by the Borrower to Thomas S. Hall. The balance owed by Thomas S. Hall to the Borrower as of September 30, 2013 is $21,033.

 

2.                      The Borrower advanced funds to Thomas S. Hall, as Chief Executive Officer of the Borrower, to purchase equity interests.  The balance owed by Thomas S. Hall to the Borrower as of September 30, 2013 is $150,000.

 

3.                      The Borrower and ECC Management, LLC own the Equity Interests that they are listed as owning in Schedule 6.13.

 

 

Schedule 8.03

 

Indebtedness Existing on the Closing Date

 

None.

 

 

Schedule 11.02

 

Certain Addresses for Notices

 

1.                                      LOAN PARTIES:

 

All Borrowers and Guarantors:

 

First Choice ER, LLC

2941 S. Lake Vista, Suite 200

Lewisville, TX 75067

Telephone: (972) 899-6158

Attn: Tim Fielding, Chief Financial Officer

 

AND

 

Sterling Partners

1033 Skokie Blvd., Suite 600

Northbrook, IL 60062

Attn: Office of General Counsel

 

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

 

DLA Piper LLP (US)

1251 Avenue of the Americas

New York, NY 10020

Attn: Gregory Ruback, Esq.

Telephone: (212) 335-4752

Facsimile: (212) 884-8682

 

2.                                      ADMINISTRATIVE AGENT:

 

For payments and Requests for Credit Extensions:

Fifth Street Finance Corp., as Administrative Agent

10 Bank Street, 12th Floor

White Plains, NY 10606

Attention: General Counsel

Telephone: (914) 286-6800

Facsimile: (914) 328-4214

 

Wiring Instructions:

U.S. Bank, N.A.

60 Livingston Avenue

St. Paul, MN 55107-2292

ABA: 091000022

DDA: 1047-9061-7831

Ref: Fifth Street Finance Corp. #145762-703

 

 

For all other notices:

Fifth Street Finance Corp., as Administrative Agent

10 Bank Street, 12th Floor

White Plains, NY 10606

Attention: General Counsel

Telephone: (914) 286-6800

Facsimile: (914) 328-4214

 

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

Proskauer Rose LLP

One International Place

Boston, MA 02110

Attention: Gary J. Creem, Esq.

Telephone: (617) 526-9637

Facsimile: (617) 526-9600

Electronic Mail: gcreem@proskauer.comExhibit 10.4

 

MASTER FUNDING AND DEVELOPMENT AGREEMENT

 

BETWEEN

 

MPT OPERATING PARTNERSHIP, L.P.

 

(“MPT”)

 

AND

 

FIRST CHOICE ER, LLC

 

(“FIRSTCHOICE”)

 

DATED AS OF JUNE 11, 2013

 

 

	
ARTICLE I DEFINED TERMS
    	
2
    
	
 
    	
 
    
	
1.1.
    	
Certain   Defined Terms
    	
2
    
	
1.2.
    	
Interpretation;   Terms Generally
    	
9
    
	
 
    	
 
    	
 
    
	
ARTICLE II FUNDING AND   DEVELOPMENT
    	
9
    
	
 
    	
 
    
	
2.1.
    	
Funding   and Development
    	
9
    
	
2.2.
    	
Selection   of Real Properties
    	
10
    
	
2.3.
    	
Commitment   Fee
    	
10
    
	
 
    	
 
    	
 
    
	
ARTICLE III PURCHASE AND   SALE OF ASSETS; PURCHASE PRICE
    	
11
    
	
 
    	
 
    
	
3.1.
    	
Purchase   and Sale of Assets
    	
11
    
	
3.2.
    	
No   Assumption of Liabilities
    	
12
    
	
3.3.
    	
Project   Purchase Price
    	
12
    
	
3.4.
    	
Taxes,   Rentals, Utilities
    	
12
    
	
 
    	
 
    	
 
    
	
ARTICLE IV REPRESENTATIONS,   WARRANTIES AND COVENANTS OF THE FIRSTCHOICE PARTIES
    	
13
    
	
 
    	
 
    
	
4.1.
    	
Organization
    	
13
    
	
4.2.
    	
Authorization;   Enforcement
    	
13
    
	
4.3.
    	
Absence   of Conflicts
    	
14
    
	
4.4.
    	
Consents   and Approvals
    	
14
    
	
4.5.
    	
Financial   Statements
    	
14
    
	
4.6.
    	
No   Undisclosed Liabilities; Guaranties
    	
15
    
	
4.7.
    	
Absence   of Changes
    	
15
    
	
4.8.
    	
Reserved
    	
15
    
	
4.9.
    	
Taxes
    	
15
    
	
4.10.
    	
Litigation
    	
16
    
	
4.11.
    	
Contracts,   Obligations and Commitments
    	
16
    
	
4.12.
    	
Permits
    	
17
    
	
4.13.
    	
Compliance   with Law
    	
17
    
	
4.14.
    	
Brokers
    	
17
    
	
4.15.
    	
Agreements   with Affiliates and Certain Other Persons
    	
17
    
	
4.16.
    	
Patriot   Act Compliance
    	
17
    
	
4.17.
    	
Representations   Complete
    	
18
    
	
 
    	
 
    	
 
    
	
ARTICLE V REPRESENTATIONS   AND WARRANTIES BY MPT
    	
18
    
	
 
    	
 
    
	
5.1.
    	
Organization
    	
18
    
	
5.2.
    	
Authorization;   Enforcement, Absence of Conflicts
    	
18
    

 

i

 

	
5.3.
    	
Binding   Agreement
    	
19
    
	
5.4.
    	
Litigation
    	
19
    
	
5.5.
    	
Brokers
    	
19
    
	
5.6.
    	
Compliance   with Law
    	
19
    
	
5.7.
    	
Patriot   Act Compliance
    	
19
    
	
5.8.
    	
Representations   Complete
    	
20
    
	
 
    	
 
    	
 
    
	
ARTICLE VI PRE-CLOSING   COVENANTS
    	
20
    
	
 
    	
 
    
	
6.1.
    	
No   Shop
    	
20
    
	
6.2.
    	
Access;   Confidentiality
    	
20
    
	
6.3.
    	
Schedule   Updates
    	
21
    
	
6.4.
    	
Conduct   of Business by FirstChoice Parties
    	
22
    
	
6.5.
    	
Cooperation
    	
23
    
	
6.6.
    	
Regulatory   and other Authorizations, Notices and Consents
    	
23
    
	
6.7.
    	
Mutual   Covenants
    	
23
    
	
 
    	
 
    	
 
    
	
ARTICLE VII CLOSING   CONDITIONS
    	
23
    
	
 
    	
 
    
	
7.1.
    	
Conditions   to the Obligations of FirstChoice
    	
23
    
	
7.2.
    	
Conditions   to the Obligations of MPT
    	
24
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII CLOSINGS
    	
25
    
	
 
    	
 
    
	
8.1.
    	
Applicable   Closing Dates
    	
25
    
	
8.2.
    	
FirstChoice   Parties’ Closing Date Deliverables
    	
26
    
	
8.3.
    	
MPT   Parties’ Closing Date Deliverables
    	
28
    
	
 
    	
 
    	
 
    
	
ARTICLE IX TERMINATION
    	
28
    
	
 
    	
 
    
	
9.1.
    	
Termination
    	
28
    
	
9.2.
    	
Notice   and Effect
    	
29
    
	
 
    	
 
    	
 
    
	
ARTICLE X CERTAIN POST-CLOSING   COVENANTS
    	
29
    
	
 
    	
 
    
	
10.1.
    	
HIPAA   Compliance
    	
29
    
	
10.2.
    	
Post-Closing   Access to Information
    	
29
    
	
10.3.
    	
Real   Estate Contract Indemnification
    	
29
    
	
10.4.
    	
Joinder   of New Projects
    	
30
    
	
 
    	
 
    	
 
    
	
ARTICLE XI INDEMNIFICATION
    	
30
    
	
 
    	
 
    
	
11.1.
    	
FirstChoice   Parties’ Agreement to Indemnify
    	
30
    
	
11.2.
    	
MPT’s   Agreement to Indemnify
    	
31
    
	
11.3.
    	
Notification   and Defense of Claims
    	
32
    
	
11.4.
    	
Investigations
    	
33
    

 

ii

 

	
11.5.
    	
Exclusive   Remedy
    	
33
    
	
 
    	
 
    	
 
    
	
ARTICLE XII DISPUTE   RESOLUTION
    	
33
    
	
 
    	
 
    
	
12.1.
    	
Governing   Law
    	
33
    
	
12.2.
    	
Jurisdiction   and Venue
    	
34
    
	
12.3.
    	
Waiver   of Jury Trial
    	
34
    
	
 
    	
 
    	
 
    
	
ARTICLE XIII MISCELLANEOUS
    	
35
    
	
 
    	
 
    
	
13.1.
    	
Assignment
    	
35
    
	
13.2.
    	
Notice
    	
35
    
	
13.3.
    	
Calculation   of Time Period
    	
36
    
	
13.4.
    	
Captions
    	
36
    
	
13.5.
    	
Entire   Agreement; Modification
    	
36
    
	
13.6.
    	
Schedules   and Exhibits
    	
37
    
	
13.7.
    	
Further   Assurances
    	
37
    
	
13.8.
    	
Counterparts
    	
37
    
	
13.9.
    	
Expenses
    	
37
    
	
13.10.
    	
Public   Announcements
    	
37
    
	
13.11.
    	
Right   to Specific Performance
    	
38
    
	
13.12.
    	
Binding   Effect; No-Third Party Beneficiaries
    	
38
    
	
13.13.
    	
Construction
    	
38
    
	
13.14.
    	
Joint   and Several Obligations
    	
38
    

 

iii

 

Note: Material has been omitted from this agreement pursuant to a request for confidential treatment and such material has been filed separately with the Securities and Exchange Commission. Material omitted has been replaced with a bracketed asterisk (“[*]”).

 

MASTER FUNDING AND DEVELOPMENT AGREEMENT

 

THIS MASTER FUNDING AND DEVELOPMENT AGREEMENT (this “Agreement”) is made and entered into as of June 11, 2013 by and between MPT OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (“MPT”); and FIRST CHOICE ER, LLC, a Texas limited liability company (“FirstChoice”).

 

W I T N E S S E T H:

 

WHEREAS, FirstChoice is in the business of owning, operating and managing freestanding emergency room facilities (such business together with all related activities incident thereto, the “Business”);

 

WHEREAS, FirstChoice and MPT are parties to that certain Letter of Intent dated as of October 17, 2012 (the “Letter of Intent”);

 

WHEREAS, the Parties intend that this Agreement shall address the future acquisition, funding, development and leasing of New Projects (as herein defined);

 

WHEREAS, the parties desire to provide for (a) the acquisition by affiliates of MPT (each, an “MPT Lessor”) of each Real Property (as herein defined) from the applicable Unrelated Seller (as herein defined); (b) the addition of each Real Property and the to-be constructed Improvements (as defined herein) to the Master Lease (as herein defined) and the leasing of the same to affiliates of FirstChoice (each, a “FirstChoice Lessee”) thereunder; (c) the funding and development of each New Project (as herein defined) pursuant to a Project Development Agreement (as herein defined), with the applicable MPT Lessor having the responsibility to provide the funding for, and the applicable FirstChoice Lessee and any applicable developer (each, a “Developer”) being responsible for the oversight and supervision of, the development and construction of the to-be constructed Improvements necessary for the operation of each Facility (as herein defined), in each case upon the terms and conditions hereafter set forth;

 

WHEREAS, it is the desire and intent of the parties that all obligations of FirstChoice and the other FirstChoice Parties (as herein defined) under and in accordance with this Agreement, on the one hand, and the obligations of the FirstChoice Parties under the Master Lease, the Project Development Agreements and the other FirstChoice Instruments (as herein defined) and any and all other instruments and agreements now or hereafter executed by FirstChoice and other FirstChoice Parties in connection with any of the foregoing, on the other hand, shall be cross-defaulted, cross-guaranteed and cross-collateralized; and

 

WHEREAS, as security for certain obligations under the Master Lease, the Project Development Agreements and the other agreements entered into in connection therewith, FirstChoice has agreed to guarantee certain of such obligations pursuant to the Guaranty (as herein defined).

 

1

 

NOW, THEREFORE, in consideration of the promises and mutual agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

ARTICLE I

 

DEFINED TERMS

 

1.1.                            Certain Defined Terms. Capitalized terms used herein shall have the respective meanings ascribed to them in this Section 1.1.

 

“Affiliate” means with respect to any Person (a) any Person that, directly or indirectly, controls or is controlled by or is under common control with such Person, (b) any other Person that owns, beneficially, directly or indirectly, 10% or more of the outstanding capital stock, shares or equity interests of such Person, or (c) any officer, director, employee, partner, member, manager or trustee of such Person or any Person controlling, controlled by or under common control with such Person (excluding trustees and persons serving in similar capacities who are not otherwise an Affiliate of such Person). For the purposes of this definition, “control” (including the correlative meanings of the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, through the ownership of voting securities or otherwise.

 

“Agreement” has the meaning set forth in the preamble to this Agreement.

 

“Applicable Closing” has the meaning set forth in Section 8.1.

 

“Applicable Closing Date” has the meaning set forth in Section 8.1.

 

“Assets” shall have the meaning set forth in Section 3.1.

 

“Balance Sheets” has the meaning set forth in Section 4.5.

 

“BOA” means Bank of America, N.A.

 

“Business” has the meaning set forth in the recitals hereof.

 

“Business Day” means any day, other than a Saturday or Sunday, that is neither a legal holiday observed by the federal government of the United States, nor a day on which banking institutions in New York, New York are authorized or required by law, regulation or executive order to close.

 

“Claim” has the meaning set forth in Section 4.11(a).

 

“Closing Costs” shall mean the actual out-of-pocket costs and expenses incurred by FirstChoice, MPT and/or their respective Affiliates in connection with the acquisition of each Real Property, including without limitation, transfer taxes, title and survey costs, escrow fees,

 

2

 

attorneys’ fees, brokerage commissions and fees of third party consultants, provided that any of the foregoing included in the definition of Pursuit Costs shall not be included.

 

“Commitment Fee” has the meaning set forth in Section 2.3.

 

“Commitment Period” has the meaning set forth in Section 2.2.

 

“Confidentiality Agreement” has the meaning set forth in Section 6.2(b).

 

“Cost Overrun Guaranty” means, in connection with each New Project, that certain Cost Overrun Guaranty in the form of Exhibit A to be executed by FirstChoice in favor of MPT and the applicable MPT Lessor guaranteeing the matters described therein, as the same may be modified, amended or restated from time to time.

 

“Developer” has the meaning set forth in the recitals hereof.

 

“Development Contracts” has the meaning set forth in Section 4.11(a).

 

“Direct Sale Alternative” has the meaning set forth in Section 3.1.

 

“Earnest Money Deposits” means all deposits of earnest money made by any FirstChoice Party under or pursuant to the Real Estate Contracts.

 

“Equity Constituents” means, with respect to any Person, as applicable, the members, general or limited partners, shareholders, stockholders or other Persons, however designated, who are the owners of the issued and outstanding equity or ownership interests of such Person.

 

“Excluded Liabilities” has the meaning set forth in Section 3.2.

 

“Exclusivity Exception” has the meaning set forth in Section 2.1.

 

“Expense Deposit” has the meaning set forth in Section 13.9.

 

“Facility” or “Facilities” means the free-standing emergency care facility to be constructed and operated on each Real Property.

 

“Final Approval Information” has the meaning set forth in Section 2.2(b).

 

“Final Closing” has the meaning set forth in Section 8.1.

 

“Financial Statements” has the meaning set forth in Section 4.5.

 

“FirstChoice” has the meaning set forth in the preamble hereof.

 

“FirstChoice Buyer” means the buyer under the Real Estate Contracts.

 

“FirstChoice Damages” has the meaning set forth in Section 11.2(a).

 

“FirstChoice Indemnified Parties” has the meaning set forth in Section 11.2(a).

 

3

 

“FirstChoice Indemnity Period” has the meaning set forth in Section 11.2(b).

 

“FirstChoice Instruments” means this Agreement, the Master Lease, the Project Development Agreement, as well as all documents, agreements and instruments executed by FirstChoice or any other FirstChoice Party which are necessary to give effect thereto.

 

“FirstChoice Lessees” has the meaning set forth in the recitals hereof.

 

“FirstChoice Parties” means FirstChoice, FirstChoice Buyer and the FirstChoice Lessees.

 

“First Closing” means the first Applicable Closing under this Agreement.

 

“Fixtures” means all permanently affixed equipment, machinery, fixtures, and other items of real property, including all components thereof, now and hereafter located in, on or used in connection with, and permanently affixed to or incorporated into the Improvements, including, without limitation, all furnaces, boilers, heaters, electrical equipment, heating, plumbing, lighting, ventilating, refrigerating, incineration, air and water pollution control, waste disposal, air-cooling and air-conditioning systems and apparatus, sprinkler systems and fire and theft protection equipment, and built-in vacuum, cable transmission, oxygen and similar systems, all of which, to the greatest extent permitted by law, are hereby deemed by the parties to constitute real estate, together with all replacements, modifications, alterations and additions thereto.

 

“GAAP” means United States generally accepted accounting principles as in effect from time to time. Any accounting term used herein and not specifically defined herein shall be construed in accordance with GAAP.

 

“Governing Documents” means, with respect to any Person, as applicable, such Person’s charter, articles or certificate of incorporation, formation or organization, bylaws or other documents or instruments which establish and/or set forth the rules, procedures and rights with respect to such Person’s governance, including, without limitation, any stockholders, limited liability company, operating or partnership agreement related to such Person, in each case as amended, restated, supplemented and/or modified and in effect as of the relevant date.

 

“Governmental Body” means any United States federal, state or local government, political subdivision, governmental, regulatory or administrative authority, instrumentality, agency body or commission, court, tribunal or judicial or arbitral body, in each case of competent jurisdiction, including the Securities and Exchange Commission.

 

“Guaranty” means that certain Guaranty in the form of Exhibit B, to be executed by FirstChoice in favor of the MPT Parties guaranteeing the matters described therein, as the same may be modified, amended or restated from time to time.

 

“HIPAA” has the meaning set forth in Section 10.1.

 

“Improvements” means, with respect to each Real Property, all buildings, improvements, structures and Fixtures located or to be constructed thereon, including, without limitation, landscaping, parking lots and structures, roads, drainage and all above ground and underground

 

4

 

utility structures, equipment systems and other so-called “infrastructure” improvements and any appurtenances thereto.

 

“Indebtedness” of any Person means, without duplication, (a) all liabilities and obligations, contingent or otherwise, of any such Person: (i) in respect of borrowed money (whether secured or unsecured), (ii) under conditional sale or other title retention agreements relating to property or services purchased and/or sold by such Person, (iii) evidenced by bonds, notes, debentures or similar instruments, (iv) for the payment of money relating to a capitalized lease obligation, (v) evidenced by a letter of credit or a reimbursement obligation of such Person with respect to any letter of credit, (vi) pursuant to any guarantee, or (vii) secured by (or for which the holder of such obligation has an existing right, contingent or otherwise, to be secured by) a Lien on the assets or property of such Person, and (b) all liabilities and obligations of others of the kind described in the preceding clause (a) and otherwise that (i) such Person is responsible or liable for, directly or indirectly, as obligor, guarantor, surety or otherwise, or (ii) which are secured by a Lien on any of the assets or property of such Person.

 

“Indemnified Party” has the meaning set forth in Section 11.3(a).

 

“Indemnifying Party” has the meaning set forth in Section 11.3(a).

 

“Intercreditor Agreement” means that certain Intercreditor Agreement, dated as of the date of the First Closing, between the existing MPT Parties and BOA, as Administrative Agent for itself and other lenders, relating to FirstChoice and its subsidiaries, as the same may be modified, amended or restated from time to time.

 

“Joinder Agreement” has the meaning set forth in Section 10.4.

 

“Knowledge,” “to the knowledge” “best knowledge of” or similar words or phrases means, with respect to any Person, such Person’s actual knowledge of a particular fact or matter if (a Person’s “Knowledge Group”), (a) in the case of FirstChoice, the then acting President and Chief Executive Officer, Chief Financial Officer, Chief Development Officer or Vice President of Strategic Initiatives has actual knowledge of such fact or matter, or in the case of MPT, R. Steven Hammer, Executive Vice President and CFO, or Emmett McLean, Executive Vice President and COO, has actual knowledge of such fact or matter; or (b) any of such Person’s Knowledge Group would be expected to discover or otherwise become aware of such fact or matter after conducting a reasonably diligent inquiry.

 

“Knowledge Group” has the meaning set forth in the definition of Knowledge.

 

“Law” means any federal, state or local statute, law, rule, regulation, ordinance, order, code, policy or rule of common law, now or hereafter in effect, and in each case as amended, and any judicial or administrative interpretation thereof by a Governmental Body or otherwise, including, without limitation, any judicial or administrative order, consent, writ, decree, determination or judgment.

 

“Letter of Intent” has the meaning set forth in the recitals hereof.

 

5

 

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, charge or deposit arrangement, lien (statutory or otherwise) or preference, security interest, restriction or other encumbrance of any kind or nature whatsoever.

 

“Management Agreement” means any property management agreement or similar agreement whereby a Person is engaged to provide management services with respect to a Facility.

 

“Master Lease” means that certain Master Lease Agreement in substantially the same form as attached hereto as Exhibit C, to be executed by and among the MPT Lessors and the FirstChoice Lessees, as the same may be modified, amended or restated from time to time.

 

“Material Adverse Effect” means, with respect to any Person, any change, event(s), occurrence(s) or effect(s), whether direct or indirect, that, both before and after giving effect to the transactions contemplated by this Agreement, reasonably would be expected to, individually or in the aggregate, have a material adverse effect on (a) the business, properties, results of operations, assets, revenue, income, prospects or condition (financial or otherwise) of, or the ability to timely satisfy the obligations or liabilities (whether absolute or contingent) of such Person, or (b) the ability of such Person to perform its obligations under, and/or consummate the transactions contemplated by, this Agreement within the time period specified herein. For avoidance of doubt and without limiting the generality of the foregoing, any adverse effect on a Person that results, or that reasonably would be expected to result, in damages or costs in excess of Five Hundred Thousand and No/100 Dollars ($500,000.00) shall constitute a Material Adverse Effect with respect to such Person.

 

“Material Contracts” has the meaning set forth in Section 4.11(b).

 

“Maximum Funding Amount” has the meaning set forth in Section 2.1.

 

“MPT Indemnified Parties” has the meaning set forth in Section 11.1(a).

 

“MPT Guaranty” means that certain Guaranty in the form of Exhibit D, to be executed by MPT in favor of FirstChoice guaranteeing the MPT Lessors’ funding obligations with respect to the New Projects, as the same may be modified, amended or restated from time to time.

 

“MPT Lessors” has the meaning set forth in the recitals hereof.

 

“MPT Parties” means MPT and the MPT Lessors.

 

“MPT Party Damages” has the meaning set forth in Section 11.1(a).

 

“MPT Party Indemnity Period” has the meaning set forth in Section 11.1(b).

 

“New Closing Certificate” has the meaning set forth in Section 7.2(m).

 

“New Party” has the meaning set forth in Section 10.4.

 

6

 

“New Project” means the acquisition and development of a Real Property as a new Facility in accordance with the terms of this Agreement and the applicable Project Development Agreement.

 

“Non-Permissible Assignee” has the meaning set forth in Section 13.1.

 

“OFAC” has the meaning set forth in Section 4.14(a).

 

“Ordinary Course of Business” means, with respect to any Person, any action that is consistent with the fundamental business model of such Person.

 

“Partial Assignment” has the meaning set forth in Section 3.1.

 

“Patriot Act” has the meaning set forth in Section 4.14(a).

 

“Permitted Exceptions” has the meaning ascribed thereto in the applicable Real Estate Contract with respect to each Real Property.

 

“Permits” has the meaning set forth in Section 4.12.

 

“Person” means an individual, a corporation, a limited liability company, a general or limited partnership, an unincorporated association, a joint venture, a Governmental Body or another entity or group.

 

“Project Development Agreement” means, in connection with each New Project, a Project Funding and Development Agreement in substantially the form attached hereto as Exhibit E, to be executed by and among FirstChoice and the applicable Developer, MPT Lessor and FirstChoice Lessee.

 

“Project Purchase Price” has the meaning set forth in Section 3.3.

 

“Pursuit Costs” means, with respect to each Target Property or New Project, the actual and reasonable out-of-pocket costs and expenses incurred by FirstChoice, MPT and/or their respective Affiliates to identify and select a Target Property that is acquired by MPT in accordance with this Agreement, to negotiate a Real Estate Contract therefor and to perform due diligence, including without limitation, title and survey costs, attorneys’ fees and fees of third party consultants. Pursuit Costs shall not include any of the foregoing costs relating to any Target Property that is not acquired by MPT.

 

“Real Estate Contract” means, in connection with each New Project, a Purchase and Sale Agreement to be executed with an Unrelated Seller for the acquisition of the applicable Real Property and to be delivered to MPT as part of the Final Approval Information.

 

“Real Property” or “Real Properties” means any parcel of real property (including land, improvements and appurtenances) relating to any New Project which is approved in accordance with Section 2.4 and becomes subject to a Real Estate Contract.

 

7

 

“Special Purpose Entity” means an entity which (a) exists solely for the purpose of leasing all or any portion of a particular Real Property and conducting the operation of a Facility thereon, (b) conducts business only in its own name or under the name “FirstChoice”, (c) does not engage in any business other than the leasing of all or any portion of a particular Real Property and the operation of a Facility with ancillary healthcare or other services or businesses provided thereon, (d) does not hold, directly or indirectly, any ownership interest (legal or equitable) in any entity or any real or personal property other than the leasehold interest which it owns in a particular Real Property and the other assets incident to the operation of a Facility thereon, (e) does not have any debt other than as permitted by the Master Lease or arising in the Ordinary Course of Business and does not guarantee or otherwise obligate itself with respect to the debts of any other Person except as contemplated herein, (f) has its own separate books, records, accounts and financial statements (with no commingling of funds or assets), except the financial statements of the individual FirstChoice Lessees may be consolidated (g) holds itself out as being a company separate and apart from any other entity and (h) maintains all entity formalities independent of any other entity.

 

“Subordination Agreement” means that certain Subordination Agreement, dated as of the date of the First Closing, among the existing MPT Parties, BOA, as Administrative Agent for itself and other lenders, and FirstChoice, as the same may be modified, amended or restated from time to time.

 

“Subsidiary” means, with respect to any Person, any Person of which fifty percent (50%) or more of the total voting power of the voting securities is beneficially owned or controlled (as defined in the definition of “Affiliate” above), directly or indirectly, by such Person.

 

“Target Property” has the meaning set forth in Section 2.2.

 

“Target Property Notice” has the meaning set forth in Section 2.2.

 

“Taxes” means any and all taxes (including, without limitation, all roll-back taxes), charges, fees, levies or other assessments, including, without limitation, any and all income, gross receipts, excise, real and personal property (including leaseholds and interests in leaseholds), sales, use, occupation, transfer, license, ad valorem, gains, profits, gift, minimum estimated, alternative minimum, social security, unemployment, disability, premium, recapture, credit, payroll, withholding, severance, stamp, capital stock, value added leasing, franchise and other taxes or similar charges of any kind including any interest and penalties on or additions thereto or attributable to any failure to comply with any requirement regarding any Tax Return (as hereinafter defined) and including any amendment or extension thereof.

 

“Tax Return” means any return, declaration, filing, report, claim for refund or information return or other statement relating to Taxes (whether filed with or submitted to, or required to be filed with or submitted to, any Governmental Body), including any schedule or attachment thereto.

 

“Termination Date” has the meaning set forth in Section 9.1.

 

“Third Party Claim” has the meaning set forth in Section 11.3(b).

 

8

 

“Title Company” has the meaning ascribed thereto in the applicable Real Estate Contract with respect to each Real Property.

 

“Unrelated Seller” means, in connection with each New Project, the “Seller” under and as defined in the applicable Real Estate Contract.

 

“Unrelated Seller Claim” has the meaning set forth in Section 10.3.

 

“Unrelated Seller Damages” has the meaning set forth in Section 10.3.

 

“Warranties” means all warranties, representations and guaranties with respect to any of the Assets, whether express or implied.

 

1.2.                            Interpretation; Terms Generally. The definitions set forth in Section 1.1 and elsewhere in this Agreement shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. Unless otherwise indicated, the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The words “herein”, “hereof and “hereunder” and words of similar import shall be deemed to refer to this Agreement (including the Schedules and Exhibits) in its entirety and not to any part hereof, unless the context shall otherwise require. All references herein to parties, Articles, Sections, Schedules and Exhibits shall be deemed to refer to parties, Articles, Sections and Schedules of, and Exhibits to, this Agreement, unless the context shall otherwise require. Unless the context shall otherwise require, any references to any agreement or other instrument or statute or regulation are to it as amended and supplemented from time to time (and, in the case of a statute or regulation, to any corresponding provisions of successor statutes or regulations). Any reference in this Agreement to a “day” or number of “days” that does not refer explicitly to a “Business Day” or “Business Days” shall be interpreted as a reference to a calendar day or number of calendar days. If any action or notice is to be taken or given on or by a particular calendar day, and such calendar day is not a Business Day, then such action or notice shall be deferred until, or may be taken or given on, the next Business Day.

 

ARTICLE II

 

FUNDING AND DEVELOPMENT

 

2.1.                            Funding and Development. Based upon the representations and warranties set forth herein, and subject to the terms and conditions hereof, MPT shall cause the MPT Lessors to fund all hard and soft costs (including the Project Purchase Price, Closing Costs and Pursuit Costs for the Assets and any items with respect to which FirstChoice is responsible pursuant to Section 3.4) relating to the construction of the Improvements relating to up to twenty-five (25) Facilities with a maximum aggregate funding of $100,000,000.00 (the “Maximum Funding Amount”). All funding will be pursuant to the terms of the applicable Project Development Agreement and construction of each Facility shall be completed within approximately fifteen (15) months after the Applicable Closing Date. During the Commitment Period, MPT shall have the sole and exclusive right to finance the acquisition and development of real property for the Business (excluding the leasing of already constructed real property); provided, however, that

 

9

 

(a) if after receiving a Target Property Notice or Final Approval Information MPT rejects or is deemed to have rejected a proposed Target Property; or (b) if the owner of a potential Target Property demands to retain development responsibilities and such requirement is verified to the reasonable satisfaction of MPT, then, in either case, FirstChoice shall be permitted to seek and obtain financing relating thereto from other Persons (the “Exclusivity Exception”).

 

2.2.                            Selection of Real Properties.

 

(a)                                 From the date hereof until the first to occur of (i) December 11, 2014, (ii)the Applicable Closing Date of a Real Property that upon disbursement of the proceeds of the Development Budget (as defined in the form of Project Development Agreement) therefor, the Maximum Funding Amount will have been disbursed, or (iii) the Termination Date (the “Commitment Period”), FirstChoice shall have the right to select parcels of real property for New Projects (each, a “Target Property”). FirstChoice shall provide written notice to MPT identifying each Target Property, together with the information described in the schedule attached hereto as Schedule 2.2(a) (each, an “Initial Target Property Notice”). Within ten (10) Business Days after MPT’s receipt of each Initial Target Property Notice, MPT shall have the right to initially approve or reject such Target Property, which approval shall not be unreasonably withheld or conditioned. If MPT shall fail to initially approve or reject any Target Property within said ten (10) Business Day period, MPT shall be deemed to have rejected such Target Property. FirstChoice Buyer shall have the right to enter into a Real Estate Contract in accordance with subsection (b) below, so long as MPT’s approval is a condition precedent to FirstChoice Buyer’s obligation to acquire the Target Property (which condition precedent may be waived by FirstChoice Buyer if MPT rejects or is deemed to have rejected such Target Property) or FirstChoice Buyer otherwise has the unilateral right to terminate a Real Estate Contract for no consideration.

 

(b)                                 In connection with each Target Property that has been initially approved by MPT, if a Real Estate Contract has not previously been entered into, FirstChoice shall (i) use its commercially reasonable efforts to cause the applicable FirstChoice Buyer to enter a Real Estate Contract for the purchase thereof, and (ii) shall provide MPT promptly with the additional information (the “Final Approval Information”) described in the schedule attached hereto as Schedule 2.2(b). Within ten (10) Business Days after receipt of the Final Approval Information, MPT shall have the right to determine, which determination shall not be unreasonably withheld or conditioned, if it desires to acquire the Target Party. If MPT shall fail to finally approve or reject such Target Property within said ten (10) Business Day period, then MPT shall be deemed to have rejected such Target Property; provided, however, that if MPT rejects or is deemed to have rejected a Target Property, FirstChoice Buyer, at its option, may proceed to acquire the Target Property with other funds. Provided that MPT approves the Final Approval Information, MPT and FirstChoice shall endeavor in good faith to close such acquisition subject to the terms and conditions of this Agreement and the applicable Real Estate Contract.

 

2.3.                            Commitment Fee. In addition to any other amounts required to be paid by FirstChoice hereunder, at the First Closing, FirstChoice shall pay to MPT or its designee a commitment fee in the amount of Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00) (the “Commitment Fee”), which Commitment Fee shall be deemed fully earned and nonrefundable if

 

10

 

the First Closing occurs. Notwithstanding the foregoing, FirstChoice’s payment of the Commitment Fee shall be deferred solely to the extent necessary for FirstChoice to remain in compliance with the provisions of ASC 840-40-55 and FirstChoice shall make monthly payments of the Commitment Fee to MPT on the first (1) day of each month after the First Closing, provided that the Commitment Fee shall be paid in full no later than the date of Completion (as defined in the applicable Project Development Agreement) of the first New Project. Contemporaneously with each payment, FirstChoice shall deliver to MPT a written explanation of the payment amount and the current calculation of the payment limitations under ASC 840-40-55, which explanation shall be in such detail as reasonably necessary for MPT to confirm the prevailing payment limitation.

 

ARTICLE III

 

PURCHASE AND SALE OF ASSETS; PURCHASE PRICE

 

3.1.                            Purchase and Sale of Assets. Based upon the representations and warranties of FirstChoice as set forth herein, and subject to the terms and conditions hereof, at each Applicable Closing, the applicable MPT Lessor shall acquire from the Unrelated Seller, free and clear of all Liens other than the Permitted Exceptions, the following assets (collectively, the “Assets”):

 

(a)                                 the applicable Real Property;

 

(b)                                 to the extent assignable, all rights in all intangible property relating exclusively to such Real Property, including, but not limited to, zoning rights, Permits and indemnification or similar rights and all Warranties affecting or inuring to the benefit of such Real Property or the owner thereof (including, without limitation, any indemnification or similar rights and Warranties related to such Real Property);

 

(c)                                  all right, title and interest in and to any site plans, surveys, soil and substrata studies, architectural drawings, plans and specifications, inspection reports, engineering and environmental plans and studies, title reports, floor plans, landscape plans and other plans relating to such Real Property; and

 

(d)                                 all right, title and interest in and to all causes of action, claims and rights in litigation (or which could result in litigation against any party) pertaining or relating to such Real Property (including, without limitation, any causes of action, claims or rights in litigation or other rights related to or arising under any purchase contracts respecting the Real Property).

 

The parties acknowledge and agree that, in connection with each Applicable Closing, the FirstChoice Buyer shall assign to the MPT Lessor the right to acquire the Real Property subject to the applicable Real Estate Contract from the Unrelated Seller (and MPT Lessor shall assume no other obligations thereunder) (each, a “Partial Assignment”), and such MPT Lessor shall acquire the Real Property from such Unrelated Seller subject to the terms and conditions of the applicable Real Estate Contract. Alternatively, upon the mutual agreement of the parties, the FirstChoice Buyer shall acquire the Real Property from the applicable Unrelated Seller and then

 

11

 

convey such Real Property and the other Assets to the applicable MPT Lessor (the “Direct Sale Alternative”).

 

3.2.                            No Assumption of Liabilities. Notwithstanding anything in this Agreement to the contrary other than Section 6.2(a) below, no MPT Lessor shall assume or agree to pay, satisfy, discharge or perform, or shall be deemed by virtue of the execution and delivery of this Agreement or any other document delivered at the Applicable Closing pursuant to this Agreement, or as a result of the consummation of the transactions contemplated by this Agreement or such other document, to have assumed, or to have agreed to pay, satisfy, discharge or perform, or shall be liable for, any liability, obligation, contract or Indebtedness of any of the FirstChoice Parties, any Unrelated Seller or any other Person, whether primary or secondary, direct or indirect, including, without limitation, any liability or obligation relating to the ownership, use or operation of any of the Assets prior to the Applicable Closing, any liability or obligation arising out of or related to any breach, default, tort or similar act committed by any FirstChoice Party, any Unrelated Seller, or any Affiliate of any FirstChoice Party or Unrelated Seller, or for any failure of any FirstChoice Party, any Unrelated Seller, or any Affiliate of any FirstChoice Party or Unrelated Seller, to perform any covenant or obligation for or during any period prior to the Applicable Closing, and any liability arising out of the ownership and operation of the Assets by any Unrelated Seller, any FirstChoice Party or any other Person prior to the Applicable Closing (collectively, the “Excluded Liabilities”); provided, however, that the foregoing shall not limit MPT’s indemnification obligations under Section 6.2(a) below.

 

3.3.                            Project Purchase Price. The purchase price for each Real Property and the other Assets related thereto, shall be the purchase price reflected in the applicable Real Estate Contract or as otherwise agreed by the parties, subject to prorations, credits and adjustments as provided therein (each a “Project Purchase Price”). Subject to the terms and conditions hereof, at each Applicable Closing, the applicable MPT Lessor shall pay the Project Purchase Price (less any applicable Earnest Money Deposit) to the Unrelated Seller (or to the applicable FirstChoice Party in connection with a Direct Sale Alternative) as specified in the applicable Real Estate Contract, the applicable MPT Lessor shall reimburse FirstChoice or its designee in an amount equal to the applicable Earnest Money Deposit and the applicable MPT Lessor shall pay all Closing Costs and Pursuit Costs (either by reimbursing FirstChoice or paying the applicable person to whom such Closing Costs or Pursuit Costs are owed).

 

3.4.                            Taxes, Rentals, Utilities. The parties acknowledge that, to the extent the applicable Real Estate Contract imposes any obligation to pay such items on the purchaser, all utility charges and all real and personal property Taxes related to the applicable Real Property shall be included in the Development Budget (as defined in the applicable Project Development Agreement) for such Real Property.

 

12

 

ARTICLE IV

 

REPRESENTATIONS, WARRANTIES AND

COVENANTS OF THE FIRSTCHOICE PARTIES

 

With the understanding that MPT shall rely hereon, and as a material inducement to MPT to enter into this Agreement, FirstChoice hereby represents, warrants and covenants to MPT as of the date hereof and as of the Applicable Closing Date, as follows:

 

4.1.                            Organization. FirstChoice is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Texas and is qualified to do business in every jurisdiction where such qualification is necessary. Each other existing FirstChoice Party is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Texas and is qualified to do business in every jurisdiction where such qualification is necessary. Each existing FirstChoice Lessee is, and has at all times since its organization been, a Special Purpose Entity. Schedule 4.1(a) sets forth the ownership of each existing FirstChoice Party and, except as set forth therein, no other Person has, and no such FirstChoice Party has offered to any Person, any equity interest in any FirstChoice Party or any option, warrant or other right to acquire the same. Schedule 4.1(b) contains a list of all direct and indirect Subsidiaries of FirstChoice.

 

4.2.                            Authorization; Enforcement. Each existing FirstChoice Party has the requisite corporate or limited liability company power and authority (a) to conduct its business as it is now being conducted and as proposed to be conducted, (b) to execute, deliver and carry out the terms of this Agreement, all documents and agreements necessary to give effect to the provisions of this Agreement, including the Master Lease and any Project Development Agreement, and to consummate the transactions contemplated hereby and thereby, to the extent such FirstChoice Party is a signatory thereto, and (c) to execute, deliver and carry out the terms of each Real Estate Contract to which it is a party and all documents and agreements necessary to give effect to the provisions of such Real Estate Contract, and to consummate the transactions contemplated thereby. All actions required to be taken by any existing FirstChoice Party (i) to authorize the execution, delivery and performance of this Agreement, the Master Lease, the Project Development Agreement, as well as all documents, agreements and instruments executed by any of the existing FirstChoice Parties which are necessary to give effect thereto (collectively, the “FirstChoice Instruments”) and all transactions contemplated hereby and thereby, and (ii) to authorize the execution, delivery and performance of such Real Estate Contract and all other documents, agreements and instruments executed by any FirstChoice Party which are necessary to give effect thereto, have been or shall be duly and properly taken or obtained in accordance and in yet compliance with such FirstChoice Party’s Governing Documents. FirstChoice has delivered to MPT true and correct copies of each existing FirstChoice Party’s Governing Documents. No other action on the part of any existing FirstChoice Party or any of such FirstChoice Party’s directors, managers or Equity Constituents is necessary to authorize the execution, delivery and performance of this Agreement, the other FirstChoice Instruments, the Real Estate Contracts (upon approval thereof in accordance with this Agreement) and all transactions contemplated hereby and thereby. This Agreement, all other FirstChoice Instruments to which any FirstChoice Party will become a party hereunder and each Real Estate

 

13

 

Contract to which any FirstChoice Party will become a party shall constitute the valid and legally binding obligations of such FirstChoice Party, and are and will be enforceable against such FirstChoice Party in accordance with the respective terms hereof or thereof, except as enforceability may be restricted, limited or delayed by applicable bankruptcy, insolvency or other similar laws affecting creditors’ rights generally and except as enforceability may be subject to and limited by general principles of equity (regardless of whether considered in a proceeding in equity or at law).

 

4.3.                            Absence of Conflicts. Each existing FirstChoice Party’s execution, delivery and performance of this Agreement and the other FirstChoice Instruments to which such FirstChoice Party will become a party, and each Real Estate Contract to which such FirstChoice Party is a party, and the consummation of the transactions contemplated hereby and thereby will not, with or without the giving of notice and/or the passage of time: (a) violate or conflict with any provision of such FirstChoice Party’s Governing Documents; (b) violate or conflict with any provision of any Law to which such FirstChoice Party or any of its Equity Constituents is subject; (c) violate or conflict with any judgment, order, writ or decree of any court applicable to such FirstChoice Party; (d) result in or cause the creation of a Lien on any portion of any of the Real Properties or any of the other Assets, except as contemplated hereunder; or (e) result in the breach or termination of any provision of, or create rights of acceleration or constitute a default under, the terms of any indenture, mortgage, deed of trust, contract, agreement or other instrument to which such FirstChoice Party is a party.

 

4.4.                            Consents and Approvals. Except as set forth on Schedule 4.4, and except as may be required for the development, construction, use and occupancy of the Real Properties, no license, permit, qualification, order, consent, authorization, approval or waiver of, or registration, declaration or filing with, or notification to, any Governmental Body or other Person is required to be made or obtained, which has not been made or obtained, by or with respect to any existing FirstChoice Party in connection with the execution, delivery and performance of this Agreement, the other FirstChoice Instruments, or the Real Estate Contracts or the consummation of the transactions contemplated hereby or thereby.

 

4.5.                            Financial Statements. Prior to execution of this Agreement, FirstChoice has delivered to MPT the audited balance sheets and audited statement of income and cash flows of FirstChoice for the fiscal year 2011 and the unaudited balance sheets and unaudited statement of income and cash flows for FirstChoice for the fiscal year 2012 (collectively, the “Annual Financial Statements”). Schedule 4.5 sets forth (a) the unaudited balance sheet of FirstChoice on a consolidated basis for the most recent fiscal quarter (the aforementioned balance sheets being herein referred to, collectively, as the “Balance Sheets”), and (b) the unaudited statement of income and cash flows of FirstChoice on a consolidated basis for the most recent fiscal quarter (the financial statements described in this sentence, together with the Annual Financial Statements are referred to, collectively, as the “Financial Statements”). Except as set forth on Schedule 4.5, the Financial Statements have been prepared in accordance with GAAP, are based on the books, records and accounts of FirstChoice and fairly present the financial condition and results of operations, cash flows and members’ equity of FirstChoice as of the respective dates thereof and for the respective periods indicated therein, except (i) that the unaudited interim statements do not include complete note (including footnote) disclosure as required by GAAP;

 

14

 

and (ii) that the unaudited interim statements are subject to normal, year-end adjustments which are not, and will not be, material in amount or effect, either individually or in the aggregate.

 

4.6.                            No Undisclosed Liabilities; Guaranties. Except as set forth on Schedule 4.6(a), other than any liabilities and obligations under this Agreement and the other FirstChoice Instruments, no existing FirstChoice Party has any material liability or obligation (other than obligations to consummate the transactions contemplated by this Agreement), whether absolute, accrued, contingent or otherwise, including any potential future liability arising out of acts or omissions which have already occurred, which is not fully and accurately reflected or reserved against in the Balance Sheets, except for liabilities or obligations that may have arisen in the Ordinary Course of Business since the latest date of the Financial Statements (none of which results from, arises out of, relates to, is in the nature of, or was caused by any breach of contract, breach of warranty, tort, infringement or violation of law), and to the Knowledge of each existing FirstChoice Party no fact, condition or circumstance could form the basis of any Claim in respect of any such material liability or obligation. Schedule 4.6(b) sets forth a list of all Guaranties entered into by each existing FirstChoice Party, true and correct copies of which have been delivered to MPT.

 

4.7.                            Absence of Changes. Except as set forth on Schedule 4.7 and except as contemplated by this Agreement, since the date of the latest Financial Statements, each existing FirstChoice Party has:

 

(a)                                 preserved its legal existence and retained its business organization intact;

 

(b)                                 conducted its business only in the Ordinary Course of Business;

 

(c)                                  complied in all material respects with all applicable Laws;

 

(d)                                 not suffered any change, event or circumstance which has had, or would be reasonably expected to have, a Material Adverse Effect; and

 

(e)                                  not agreed or offered, whether in writing or otherwise, to take, and no existing FirstChoice Party or any of their respective members, managers or officers have authorized the taking of, any action described in subsection (d) above.

 

4.8.                            Reserved.

 

4.9.                            Taxes. Each existing FirstChoice Party has filed or caused to be filed all Tax Returns of such FirstChoice Party which have become due (taking into account valid extensions of time to file) prior to the date of this Agreement, except where the failure to file would not have a Material Adverse Effect on such FirstChoice Party or prevent or impede the consummation of the transactions contemplated hereby or under the FirstChoice Instruments. Such Tax Returns are accurate and complete in all material respects, and each existing FirstChoice Party has paid or caused to be paid all Taxes for the periods covered thereby, whether or not shown to be due on such Tax Returns, except where the failure to file would not have a Material Adverse Effect on such FirstChoice Party or prevent or impede the consummation of the transactions contemplated hereby or under the FirstChoice Instruments.

 

15

 

4.10.                     Litigation. Except as set forth on Schedule 4.10, there is no dispute, suit, action, proceeding, inquiry or investigation (a “Claim”) against or involving any existing FirstChoice Party or, to the Knowledge of FirstChoice, threatened, which would have a Material Adverse Effect (including, without limitation any suit, action, proceeding or investigation pursuant to Title 11 of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Family and Medical Leave Act of 1993, or any other Law regulating employment) or prevent or impede the consummation of the transactions contemplated hereby or by the FirstChoice Instruments, and no existing FirstChoice Party has Knowledge of any fact, condition or circumstance which reasonably could be expected to form the basis of any such Claim which would have a Material Adverse Effect.

 

4.11.                     Contracts, Obligations and Commitments.

 

(a)                                 Schedule 4.11(a)(i) sets forth a list of all contracts and agreements entered into by any FirstChoice Party or any Affiliates of any FirstChoice Party relating to (i) the acquisition of any current Target Property and (ii)the design, development and construction of the Improvements relating to such Target Property (including, without limitation, any contracts and agreements with architects, engineers, design professionals, developers, general contractors or development escrows or other similar agreements) (collectively the “Development Contracts”). Except as set forth on Schedule 4.11(a)(ii), (A) the Development Contracts are free and clear of all Liens and are assignable by the applicable FirstChoice Parties (or alternatively, the existing FirstChoice Parties may grant a first priority security interest therein to the MPT Parties), (B) the Development Contracts are legally valid, binding and enforceable in accordance with their respective terms (except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’ rights generally and by general equitable principles, regardless of whether enforcement is sought in a proceeding at law or in equity); (C) each of the Development Contracts is in full force and effect; (D) to the Knowledge of FirstChoice, there are no defaults by any party to the Development Contracts; (E) no existing FirstChoice Party has received notice of any default, offset, counterclaim or defense claimed by any other party under any Development Contract; and (F) to the Knowledge of FirstChoice, no condition or event has occurred which with the passage of time or the giving of notice or both would constitute a default or breach under the terms of any Development Contract.

 

(b)                                 The existing FirstChoice Parties have delivered to MPT complete and correct copies of all written contractual agreements to which any existing FirstChoice Party is a party relating to indebtedness secured by, or which purports to be secured by, any of the assets of such FirstChoice Party thereunder (collectively, the “Material Contracts”). Except as set forth on Schedule 4.11(b), (i) each of the Material Contracts is legally valid, binding and enforceable against the parties thereto in accordance with its respective terms (except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’ rights generally and by general equitable principles, regardless of whether enforcement is sought in a proceeding at law or in equity); (ii) each of the Material Contracts is in full force and effect; (iii) to the Knowledge of FirstChoice, there are no defaults by any party to the Material Contracts; (iv) no existing FirstChoice Party has received notice of any default, offset, counterclaim or defense under any Material Contract; and (v) to the Knowledge of FirstChoice,

 

16

 

no condition or event has occurred which with the passage of time or the giving of notice or both would constitute a default or breach under the terms of any Material Contract.

 

4.12.                     Permits. The existing FirstChoice Parties have all licenses, permits, certificates of need and other authorizations of Governmental Bodies that are required for the operation of the Business as currently conducted (collectively, the “Permits”). Except as set forth on Schedule 4.12, the Permits are in full force and effect and the applicable FirstChoice Parties may grant a first priority security interest therein to the MPT Parties, subject to all applicable laws.

 

4.13.                     Compliance with Law. FirstChoice and the other existing FirstChoice Parties are in compliance in all material respects with every applicable Law, including, without limitation, as applicable, Chapter 254 of the Texas Health and Safety Code and Chapter 131 of the Texas Administrative Code, and any other Law governing the construction, licensure, or operation of freestanding emergency medical care facilities, and every order, writ, and decree of every Governmental Body in connection with the ownership, conduct, operation and maintenance of the Business and their respective ownership and use of their assets, and, to the Knowledge of each existing FirstChoice Party, no event has occurred or circumstance exists which (without notice or lapse of time) would result in any material noncompliance with any such Law order, writ or decree.

 

4.14.                     Brokers. Except as set forth on Schedule 4.14, no Person is or will be entitled to any brokerage, finder’s or other fee, commission or payment in connection with or as a result of the transactions contemplated by this Agreement based upon arrangements made by or on behalf of any existing FirstChoice Party or any Unrelated Seller, and MPT shall not be liable or obligated to pay any of such amounts to such Person unless and until the applicable Real Property is acquired.

 

4.15.                     Agreements with Affiliates and Certain Other Persons. Schedule 4.14(a) sets forth a list of all agreements relating to the acquisition, financing, development, construction, operation or management of the Facilities or otherwise relating to the transactions contemplated in this Agreement that have been entered into by each existing FirstChoice Party with any Person that is an Affiliate of any existing FirstChoice Party (including, without limitation, any officer, director, employee, partner, member, manager or trustee of such FirstChoice Party or any other Affiliate of such FirstChoice Party). Schedule 4.14(b) sets forth a list of all agreements entered into by any officer, director, employee, partner, member, manager or trustee of each existing FirstChoice Party or any other Affiliate of such existing FirstChoice Party, on the one hand, with any vendor, supplier, seller, contractor or service provider of any existing FirstChoice Party, on the other hand.

 

4.16.                     Patriot Act Compliance.

 

(a)                                 Each existing FirstChoice Party has complied in all material respects with the International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001, which comprises Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “Patriot Act”) and the regulations promulgated thereunder, and the rules and regulations administered by the U.S. Treasury

 

17

 

Department’s Office of Foreign Assets Control (“OFAC”), to the extent the same are applicable to such FirstChoice Parties.

 

(b)                                 No existing FirstChoice Party is included on the List of Specially Designated Nationals and Blocked Persons maintained by the OFAC, or is a resident in, or organized or chartered under the laws of, (i) a jurisdiction that has been designated by the U.S. Secretary of the Treasury under Section 311 or 312 of the Patriot Act as warranting special measures due to money laundering concerns or (ii) any foreign country that has been designated as non-cooperative with international anti-money laundering principles or procedures by an intergovernmental group or organization, such as the Financial Action Task Force on Money Laundering, of which the United States is a member and with which designation the United States representative to the group or organization continues to concur.

 

4.17.                     Representations Complete. The representations and warranties made or to be made by FirstChoice and each other existing FirstChoice Party in this Agreement or in any FirstChoice Instrument and the statements made in or information contained on any Schedules or certificates furnished by FirstChoice or any other FirstChoice Party pursuant to this Agreement do not contain and, subject to Section 6.3, will not contain, as of their respective dates and as of the Applicable Closing Dates, any untrue statement of a material fact, nor do they omit or will they omit, as of their respective dates or, subject to Section 6.3, as of such Applicable Closing Dates, to state any material fact necessary to make the statements contained herein or therein, in the light of the circumstances under which they were made, not misleading.

 

ARTICLE V

 

REPRESENTATIONS AND WARRANTIES BY MPT

 

MPT hereby represents and warrants to FirstChoice as of the date hereof and as of the Applicable Closing Date, as follows:

 

5.1.                             Organization. MPT is a limited partnership duly organized, validly existing and in good standing under the laws of the State of Delaware and is qualified to do business in every jurisdiction where such qualification is necessary. Each other existing MPT Party is a limited liability company or limited partnership duly organized, validly existing and in good standing under the laws of the State of Delaware and is qualified to do business in every jurisdiction where such qualification is necessary.

 

5.2.                     Authorization; Enforcement, Absence of Conflicts. Each existing MPT Party has the requisite power and authority to execute, deliver and carry out the terms of this Agreement, all documents and agreements necessary to give effect to the provisions of this Agreement, including the Master Lease and any Project Development Agreement, to which it is a signatory, and to consummate the transactions contemplated hereby and thereby, and to conduct its businesses as now being conducted and as proposed to be conducted. All actions required to be taken by each existing MPT Party to authorize the execution, delivery and performance of this Agreement, all documents executed by it which are necessary to give effect to this Agreement and all transactions contemplated hereby and thereby, have been or shall be duly and properly taken or obtained. No other action on the part of any existing MPT Party is necessary to

 

18

 

authorize the execution, delivery and performance of this Agreement, all documents necessary to give effect to this Agreement and all transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby will not, with or without the giving of notice and/or the passage of time: (a) violate or conflict with any provision of the Governing Documents of any existing MPT Party; (b) violate any provision of law, statute, rule or regulation to which any existing MPT Party is subject; (c) violate or conflict with any judgment, order, writ or decree of any court applicable to any existing MPT Party; (d) violate or conflict with any law or regulation applicable to any MPT Party; or (e) result in the breach or termination of any provision of, or create rights of acceleration or constitute a default under, the terms of any debt or obligation to which any existing MPT Party is a party or by which any existing MPT Party is bound.

 

5.3.                            Binding Agreement. This Agreement and all agreements to which each existing MPT Party will become a party hereunder are and will constitute the valid and legally binding obligations of such MPT Party, and are and will be enforceable against such MPT Party in accordance with the respective terms hereof or thereof, except as enforceability may be restricted, limited or delayed by applicable bankruptcy, insolvency or other laws affecting creditors’ rights generally and except as enforceability may be subject to and limited by general principles of equity (regardless of whether considered in a proceeding in equity or at law).

 

5.4.                            Litigation. There is no Claim pending or, to the Knowledge of MPT, against or involving any existing MPT Party or, to the Knowledge of MPT, threatened, which would have a Material Adverse Effect or prevent or impede the consummation of the transactions contemplated hereby, and MPT has no Knowledge of any fact, condition or circumstance which reasonably could be expected to form the basis of any such Claim which would have a Material Adverse Effect.

 

5.5.                            Brokers. Other than commissions or other fees payable to employees or independent contractors of any existing MPT Party for which such MPT Parties shall be responsible, no Person is or will be entitled to any brokerage, finder’s or other fee, commission or payment in connection with or as a result of the transactions contemplated by this Agreement based upon arrangements made by or on behalf of MPT or any other existing MPT Party.

 

5.6.                            Compliance with Law. MPT and the other existing MPT Parties are in compliance in all material respects with every applicable Law, order, writ or decree, and to the Knowledge of MPT, no event has occurred or circumstance exists which (without notice or lapse of time) would result in any material noncompliance with any such Law, order, writ or decree which would have a Material Adverse Effect.

 

5.7.                            Patriot Act Compliance.

 

(a)                                 Each existing MPT Party has complied in all material respects with the Patriot Act and regulations promulgated thereunder, and the rules and regulations administered by OFAC, to the extent the same are applicable to such MPT Parties.

 

(b)                                 No existing MPT Party is included on the List of Specially Designated Nationals and Blocked Persons maintained by the OFAC, or is a resident in, or organized or chartered

 

19

 

under the laws of, (i) a jurisdiction that has been designated by the U.S. Secretary of the Treasury under Section 311 or 312 of the Patriot Act as warranting special measures due to money laundering concerns or (ii) any foreign country that has been designated as non-cooperative with international anti-money laundering principles or procedures by an intergovernmental group or organization, such as the Financial Action Task Force on Money Laundering, of which the United States is a member and with which designation the United States representative to the group or organization continues to concur.

 

5.8.                            Representations Complete. The representations and warranties made or to be made by MPT and each other existing MPT Party in this Agreement or in any related agreement and the statements made in or information contained on any Schedules or certificates furnished by MPT or any other MPT Party pursuant to this Agreement do not contain and will not contain, as of their respective dates and as of the Applicable Closing Dates, any untrue statement of a material fact, nor do they omit or will they omit, as of their respective dates or as of such Applicable Closing Dates, to state any material fact necessary to make the statements contained herein or therein, in the light of the circumstances under which they were made, not misleading.

 

ARTICLE VI

 

PRE-CLOSING COVENANTS

 

From and after the execution of this Agreement until the earlier of (a) the Final Closing Date (as herein defined) or (b) the expiration of the Commitment Period, the applicable party shall observe the following covenants:

 

6.1.                    No Shop. During the Commitment Period, subject to the Exclusivity Exception, neither FirstChoice nor any of its Subsidiaries or any of their respective officers, directors, managers, Equity Constituents, agents or representatives, shall directly or indirectly, initiate contact with, respond to, solicit or encourage any inquiries, proposals or offers by, participate in any discussions or negotiations with, enter into any agreement with, disclose any information concerning the FirstChoice Parties or the properties, books or records of such FirstChoice Parties to, or otherwise assist, facilitate or encourage, any Person in connection with any possible proposal regarding the financing, acquisition and construction of New Projects during the Commitment Period. FirstChoice shall notify MPT immediately if any discussions or negotiations are sought to be initiated, any inquiry or proposal is made, or any such information is requested. Notwithstanding the foregoing, FirstChoice and its Affiliates shall be permitted to solicit and participate in proposals, discussions or negotiations with, or enter into an agreement with, other Persons regarding the financing, acquisition and construction of new Facilities from and after the expiration of the Commitment Period.

 

6.2.                            Access; Confidentiality.

 

(a)                                 Between the date hereof until the expiration of the Commitment Period (it being understood that the access provisions hereof shall no longer remain effective with respect to Assets and Unrelated Sellers for which an Applicable Closing shall have occurred), each existing FirstChoice Party shall (A) afford MPT and its authorized representatives reasonable access to such FirstChoice Parties and to all books, records, offices and other facilities of such FirstChoice

 

20

 

Parties; (B) permit MPT and its authorized representatives to make such inspections and to make copies of such books and records as they may reasonably require, in each case subject to compliance with applicable confidentiality requirements; (C) furnish MPT and its authorized representatives with such financial and operating data and other information related to the Real Properties, the Business, and such FirstChoice Parties as the MPT Parties may from time to time reasonably request; and (D) use their commercially reasonable efforts to cause all Unrelated Sellers to permit the existing MPT Parties and their authorized representatives (including their designated engineers, architects, surveyors and/or consultants), upon reasonable notice to enter into and upon all or any portion of any of the Real Properties in order to investigate and assess, as such MPT Parties deem necessary or appropriate in their sole and absolute discretion, the Real Properties and to complete their due diligence review with respect to the satisfaction all of the conditions set forth in Section 7.2. The existing FirstChoice Parties shall cooperate, and shall use commercially reasonable efforts to cause the Unrelated Sellers to cooperate, with the existing MPT Parties and their authorized representatives in conducting such investigations, and shall provide (or use commercially reasonable efforts to cause the Unrelated Sellers to provide) to such MPT Parties and their authorized representatives all information maintained by such FirstChoice Parties or provided by the Unrelated Sellers to such FirstChoice Parties and related to their due diligence review and other matters referenced above. MPT shall indemnify, defend and hold harmless the existing FirstChoice Parties from and against all demands, claims, losses, damages, costs and expenses asserted against or incurred by such FirstChoice Parties or any of them arising out of or resulting from any physical damage to the applicable Real Properties caused by any of the MPT Parties’ or their respective consultants’ or agents’ inspections thereof.

 

(b)                                 The provisions of the Confidentiality Agreement dated as of July 13, 2012 (the “Confidentiality Agreement”) shall remain binding and in full force and effect until the Completion of the Real Property that is the subject of the Final Closing. The information contained herein, in the Schedules or delivered to MPT or its authorized representatives pursuant hereto shall be subject to the Confidentiality Agreement as Information (as defined and subject to the exceptions contained therein) until the Closing and, for that purpose and to that extent, the terms of the Confidentiality Agreement are incorporated herein by reference.

 

6.3.                            Schedule Updates. From the date of this Agreement until the expiration of the Commitment Period, the existing MPT Parties, on the one hand, and the existing FirstChoice Parties on the other hand, shall immediately advise the other in writing of any additions or changes to any Schedule, or the need to provide additional Schedules, to reflect any deficiencies or inaccuracies in the applicable representations, warranties or Schedules or to reflect circumstances or matters which occur after the date of this Agreement which, if existing prior to such date, would have been required to be described on such Schedule; provided, however, that no additions or changes made to any Schedule by any party to correct deficiencies or inaccuracies on such Schedule shall be deemed to cure any breach or inaccuracy of a representation or warranty, covenant or agreement or to satisfy any condition unless otherwise agreed to in writing by the other party, but provided further, however, that an addition or change made to any Schedule by any Party to reflect circumstances or matters which occur after the date of this Agreement shall be deemed to cure a breach or inaccuracy of a representation or warranty, covenant or agreement, but shall not be deemed to satisfy any condition unless agreed

 

21

 

to in writing by the other party, which agreement shall not be unreasonably withheld, conditioned or delayed.

 

6.4.                            Conduct of Business by FirstChoice Parties. Each existing FirstChoice Party covenants and agrees that, during the period from the date hereof until the earlier of (i) the Final Closing Date or (ii) the expiration of the Commitment Period, unless MPT shall otherwise agree in writing, such FirstChoice Party shall conduct its businesses only in, and it shall not take any action except in, the Ordinary Course of Business and in compliance in all material respects with all applicable laws and regulations. Further, no existing FirstChoice Party shall do or propose to do, directly or indirectly, any of the following without the prior written consent of MPT, which consent shall not be unreasonably withheld, conditioned or delayed:

 

(a)                                 amend, repeal or otherwise change in any material way the Governing Documents of any FirstChoice Lessee, except for an amendment or other change (i) that would not materially adversely affect such FirstChoice Lessee’s ability to perform its obligations under the Master Lease or other FirstChoice Instruments, or (ii) is effected in connection with a transaction that is otherwise permitted by this Agreement or the Master Lease (provided that it would not materially adversely affect such FirstChoice Lessee’s ability to perform its obligations under the Master Lease or other FirstChoice Instruments);

 

(b)                                 fail to perform its material obligations in all respects under agreements to which it is a party relating to or respecting any of the Real Properties, including any Real Estate Contracts;

 

(c)                                  reduce the coverage of, fail to timely renew or pay the premiums on or cancel any insurance policy relating to any of the Real Properties;

 

(d)                                 cause to lapse or fail to renew any material license and certification necessary to conduct the Business of any of the Real Properties;

 

(e)                                  fail to timely make all required material filings (or to obtain applicable extensions) with Governmental Bodies relating to any of the Real Properties;

 

(f)                                   create, assume, or permit to exist any Lien upon any of the Real Properties, other than those presently in existence or being contested by the applicable FirstChoice Parties in accordance with the Master Lease;

 

(g)                                  except as otherwise expressly permitted herein, enter into or agree to enter into any lease, option, agreement or other arrangement granting any rights with respect to the Assets or the development or construction of any Improvements, including, without limitation entering into any construction contracts or any agreements with a contractor or subcontractor, but excluding contracts with third party consultants relating to due diligence;

 

(h)                                 terminate or modify in any respect any Real Estate Contract after MPT has notified FirstChoice that it desires to acquire the Target Property pursuant to Section 2.2(b) above, or any Development Contract or Material Contract relating to any of the Real Properties; or

 

22

 

(i)                                     take, agree or offer, in writing or otherwise, to take, any of the actions described in Sections 6.4(a) through (h) above, or any action which would make any of the representations or warranties of FirstChoice contained in this Agreement untrue, incorrect or incomplete in any material respect or prevent FirstChoice from performing or cause any other FirstChoice Parties not to perform their respective covenants hereunder, in each case, such that the conditions set forth in Sections 7.2(a) or 7.2(b), as the case may be, would not be satisfied.

 

6.5.                            Cooperation. From the date hereof until the earlier of (a) the Final Closing Date or (b) the expiration of the Commitment Period, (i) upon request from MPT, each existing FirstChoice Party shall confer on a reasonably frequent basis with one or more representatives of MPT to report material matters respecting the transactions contemplated hereby including any and all material developments with any Unrelated Seller with respect to any Real Estate Contract and (ii) MPT and FirstChoice shall promptly provide the other or their counsel with copies of all filings made by such party with any Governmental Body in connection with this Agreement and the transactions contemplated hereby.

 

6.6.                            Regulatory and other Authorizations, Notices and Consents.

 

(a)                                 Each party shall use all commercially reasonable efforts to obtain all authorizations, consents, orders and approvals of all Governmental Bodies and other Persons that may be or become necessary for its execution and delivery of, and the performance of its obligations pursuant to, this Agreement and each such party will cooperate fully with the other parties in promptly seeking to obtain all such authorizations, consents, orders and approvals.

 

(b)                                 The existing MPT Parties shall cooperate and use commercially reasonable efforts to assist the existing FirstChoice Parties in giving such notices and obtaining such consents and estoppel certificates; provided, however, that such MPT Parties shall have no obligation to give any guarantee or other consideration of any nature in connection with any such notice, consent or estoppel certificate.

 

6.7.                            Mutual Covenants. The parties shall use their good faith reasonable efforts to satisfy the conditions to the closing of the transactions contemplated hereby. Without limiting the generality of the foregoing, the respective parties shall execute and/or deliver, or use their respective good faith reasonable efforts to cause to be executed and/or delivered at Applicable Closing, the documents contemplated to be executed and/or delivered by them hereunder.

 

ARTICLE VII

 

CLOSING CONDITIONS

 

7.1.                            Conditions to the Obligations of FirstChoice. The obligations of the existing FirstChoice Parties to effect the transactions contemplated hereby with respect to each Applicable Closing shall be further subject to the fulfillment of the following conditions, any one or more of which may be waived by FirstChoice:

 

(a)                                 all of the representations and warranties of the existing MPT Parties set forth in this Agreement shall be true and correct in all material respects when made and as of the

 

23

 

Applicable Closing Date as if made on such Applicable Closing Date, subject to updates under Section 6.3;

 

(b)                                 the existing MPT Parties shall have delivered, performed, observed and complied in all material respects with all of the items, instruments, documents, covenants, agreements and conditions required by this Agreement to be delivered, performed, observed and complied with by it prior to, or as of, the Applicable Closing; and

 

(c)                                  the applicable MPT Parties shall have executed, where applicable, and delivered to FirstChoice the documents referenced in Section 8.3.

 

7.2.                            Conditions to the Obligations of MPT. The obligations of the existing MPT Parties to effect the transactions contemplated hereby, with respect to each Applicable Closing, shall be further subject to the fulfillment of the following conditions, any one or more of which may be waived by MPT:

 

(a)                                 all of the representations and warranties of the existing FirstChoice Parties set forth in this Agreement shall be true and correct in all material respects when made and as of the Applicable Closing Date as if made on the Applicable Closing Date, subject to updates under Section 6.3;

 

(b)                                 the existing FirstChoice Parties shall have delivered, performed, observed and complied in all material respects with all of the items, instruments, documents, covenants, agreements and conditions required by this Agreement to be delivered, performed, observed and complied with by them prior to, or as of, such Applicable Closing;

 

(c)                                  no existing FirstChoice Party shall have suffered any change, event or circumstance which has had, or could have, a Material Adverse Effect;

 

(d)                                 the existing MPT Parties shall have satisfactorily completed their due diligence investigations of the Assets in accordance with the time periods established in this Agreement and shall be satisfied with the results of such investigations in their sole discretion;

 

(e)                                  all necessary approvals, consents and estoppel certificates of third parties to the validity and effectiveness of the transactions contemplated hereby have been obtained;

 

(f)                                   no portion of the Assets relating to the applicable Real Property shall have been damaged or destroyed by fire or casualty;

 

(g)                                the existing MPT Parties shall have received copies of all permits, licenses, certificates of need and other approvals of Governmental Bodies received or obtained by the FirstChoice Parties required for the construction and development of Improvements that customarily would have been issued or given prior to the Applicable Closing considering the current stage of the development of such Improvements;

 

24

 

(h)                                 no condemnation, eminent domain or similar proceedings shall have been commenced or threatened in writing with respect to any material portion of the applicable Real Property;

 

(i)                                     the existing FirstChoice Parties shall have executed where applicable, and delivered to MPT the documents referenced in Section 8.2;

 

(j)                                    there shall not have been instituted by any creditor of any existing FirstChoice Party or any Unrelated Seller, any Governmental Body or any other Person, any suit, action or proceeding which would affect the Assets or seek to restrain, enjoin or invalidate the transactions contemplated by this Agreement;

 

(k)                                 subject to the requirements under Section 38.14 of the Master Lease, and to the extent then applicable, the existing FirstChoice Lessees or FirstChoice (at FirstChoice’s option) shall have obtained, or cause to be obtained, a letter of credit securing the obligations of such FirstChoice Lessees under the Master Lease, in a form and from a financial institution acceptable to MPT in its reasonable discretion, as more fully described in the Master Lease;

 

(l)                                     FirstChoice shall have executed and delivered the applicable Cost Overrun Guaranty and the Guaranty (it being understood that, with respect to all Applicable Closings following the First Closing, delivery of the Guaranty shall not be required);

 

(m)                             to the extent the acquisition of any of the Real Properties has already been closed at the time of the Applicable Closing, no “Event of Default” shall have occurred under the Master Lease or the other Project Development Agreements and no event, condition or circumstance shall have occurred that with notice or the passage of time would constitute such an Event of Default, and the FirstChoice Parties shall have delivered a certificate to that effect in form and substance satisfactory to MPT (the “New Closing Certificate”);

 

(n)                                 the existing MPT Parties shall have agreed upon the terms of the Intercreditor Agreement, as determined in MPT’s sole discretion; and

 

(o)                                 the transaction contemplated by the applicable Real Estate Contract shall have closed.

 

ARTICLE VIII

 

CLOSINGS

 

8.1.                            Applicable Closing Dates. The closing of the purchase and sale of each Real Property and other Assets related thereto pursuant to this Agreement (each an “Applicable Closing”) shall be handled through escrow deliveries to the applicable Title Company on the date required for closing pursuant to the applicable Real Estate Contract for such Real Property and other Assets (the actual date of each Applicable Closing being herein referred to as the “Applicable Closing Date”). The date of the final Applicable Closing of any Real Property and other Assets related thereto hereunder shall be referred to as the “Final Closing.”

 

25

 

8.2.                            FirstChoice Parties’ Closing Date Deliverables. On the Applicable Closing Date for a particular Real Property, in addition to all documents and agreements to be delivered by the Unrelated Seller under the applicable Real Estate Contract, FirstChoice shall deliver, or cause to be delivered, to the applicable MPT Parties the following:

 

(a)                                 an Assignment and Assumption Agreement to effect the Partial Assignment with respect to the applicable Real Estate Contract, in form and substance mutually satisfactory to the parties (it being understood that, with respect to any Real Property acquired utilizing the Direct Sale Alternative, this delivery shall not be required but additional deliveries shall be required as described below);

 

(b)                                 a Joinder Agreement;

 

(c)                                  a certified copy of the resolutions of the governing body of each applicable existing FirstChoice Party dated prior to the Applicable Closing Date and authorizing such FirstChoice Party’s execution, delivery and performance of this Agreement and all other documents to be executed in connection herewith;

 

(d)                                 certificates of existence and good standing of each existing FirstChoice Party and the applicable Developer from the appropriate Governmental Body, along with certificates of good standing and foreign qualification of each existing FirstChoice Lessee and such Developer from the Secretary of State of the state in which the applicable Real Property is located, if applicable, in each case dated the most recent practical date prior to the Applicable Closing Date;

 

(e)                                  a certificate from each existing FirstChoice Party dated the Applicable Closing Date to the effect that all of the representations and warranties of such FirstChoice Party contained in this Agreement, as such representations and warranties may have been updated under Section 6.3 above, remain in all material respects true and correct as of the Applicable Closing Date as if made on such date and that such FirstChoice Party has performed and satisfied in all material respects all covenants and conditions required by this Agreement to be performed or satisfied by such FirstChoice Party on or prior to such Applicable Closing;

 

(f)                                   the Master Lease, together with a Memorandum of Lease Agreement, in form and substance mutually satisfactory to the parties (it being understood that, with respect to all Applicable Closings following the First Closing, this delivery shall be limited to an amendment of the Master Lease and an amendment of the Memorandum of Lease Agreement, each for the purpose of including the legal description of the applicable Real Property);

 

(g)                                  a Project Development Agreement for such Real Property;

 

(h)                                 a Cost Overrun Guaranty for such New Project;

 

(i)                                     the Guaranty (it being understood that, with respect to all Applicable Closings following the First Closing, this delivery shall not be required);

 

(j)                                    an Assignment of Rents and Leases in form and substance mutually satisfactory to the parties (it being understood that, with respect to all Applicable Closings following the First

 

26

 

Closing, this delivery shall be limited to an amendment of such Assignment of Rents and Leases for the purpose of including the legal description of the applicable Real Property or the applicable assignees thereunder);

 

(k)                                 an executed Security Agreement in form and substance mutually satisfactory to the parties (it being understood that, with respect to all Applicable Closings following the First Closing, this delivery shall be limited to an amendment of the Security Agreement for the purpose of including the legal description of the applicable Real Property and the secured parties thereunder);

 

(l)                                     a Noncompete Agreement by FirstChoice in form and substance mutually satisfactory to the parties (it being understood that, with respect to all Applicable Closings following the First Closing, this delivery shall not be required);

 

(m)                             a Management Subordination Agreement in form and substance mutually satisfactory to the parties; provided, however, that to the extent the parties acknowledge that no Management Agreement exists at the time of the First Closing or other Applicable Closings, this condition shall be waived until such time as a Management Agreement exists;

 

(n)                                 the Intercreditor Agreement (it being understood that, with respect to all Applicable Closings following the First Closing, this delivery shall be joinders to the Intercreditor Agreement in form mutually agreeable to the parties);

 

(o)                                   the Subordination Agreement (it being understood that, with respect to all Applicable Closings following the First Closing, this delivery shall be joinders to the Subordination Agreement in form mutually agreeable to the parties);

 

(p)                                 if applicable, Lien waiver affidavits and certifications in form and substance acceptable to MPT and the Title Company from all contractors, subcontractors and other third parties who performed work on or supplied materials and/or labor to or for the Real Property and verifying that all work, supplies, materials and labor have been paid in full and there are no liens on the Real Property nor any potential liens on the Real Property;

 

(q)                                 the New Closing Certificate; and

 

(r)                                    such other instruments and documents consistent with the terms of this Agreement as MPT reasonably deems necessary to effect the transactions contemplated hereby.

 

It is understood and agreed that, in the event of any exercise of the Direct Sale Alternative, in addition the deliveries required hereinabove, the applicable FirstChoice Party shall execute and deliver to the applicable MPT Party deed, bill of sale and such other documents, instruments, affidavits and waivers as required to be delivered by the Unrelated Seller under the applicable Real Estate Contract, in substantially the same form as required under the applicable Real Estate Contract.

 

27

 

8.3.                            MPT Parties’ Closing Date Deliverables. On the Applicable Closing Date, the existing MPT Parties shall deliver or cause to be delivered to the existing FirstChoice Parties the following:

 

(a)                                 an Assignment and Assumption Agreement to effect the Partial Assignment with respect to the applicable Real Estate Contract, in form and substance mutually satisfactory to the parties;

 

(b)                                 a Joinder Agreement;

 

(c)                                  the applicable MPT Guaranty with respect to such New Project;

 

(d)                                 certificates of existence and good standing of MPT and each MPT Lessor from the Delaware Secretary of State of the State of Delaware, dated the most recent practical date prior to the Applicable Closing Date;

 

(e)                                  certificates of good standing and foreign qualification of each MPT Lessor from the Secretary of State of the state in which the applicable Real Property is located, dated the most recent practical date prior to the Applicable Closing Date;

 

(f)                                   a certified copy of the resolutions of the governing body of MPT and each MPT Lessor dated prior to the Applicable Closing Date and authorizing such MPT Lessors’ execution, delivery and performance of this Agreement and all other documents to be executed in connection herewith;

 

(g)                                  a certificate dated the Applicable Closing Date signed by MPT and the applicable MPT Lessor to the effect that all of the representations and warranties of such MPT Lessor contained in the Agreement, as such representations and warranties may have been updated under Section 6.3 above, remain in all material respects true and correct as of the Closing Date as if made on such date and that such MPT Lessor has performed and satisfied in all material respects all covenants and conditions required by this Agreement to be performed or satisfied by such MPT Lessor on or prior to the Applicable Closing; and

 

(h)                                 all other documents identified in Section 8.2 above to which any new or existing MPT Party is a party.

 

ARTICLE IX

 

TERMINATION

 

9.1.                            Termination. Notwithstanding anything to the contrary in this Agreement and in addition to any termination rights provided for elsewhere in this Agreement, the obligations of the parties hereunder may be terminated and the transactions contemplated hereby abandoned at any time prior to an Applicable Closing: (a) by mutual written consent of the parties; (b) by FirstChoice if (i) the conditions set forth in Section 7.1 shall not have been satisfied with respect to any Applicable Closing on or before December 31, 2014, or (ii) MPT shall have rejected and not acquired at least five (5) Target Properties proposed by FirstChoice, or (c) by MPT if the

 

28

 

conditions set forth in Section 7.2 shall not have been satisfied with respect to any Applicable Closing on or before December 31, 2014 (the date of any such termination under subsection (a), (b) or (c) being referred to herein as the “Termination Date”).

 

9.2.                            Notice and Effect. In the event of the termination of this Agreement pursuant to this Article IX, the party terminating this Agreement shall give prompt written notice thereof to the parties, and the transactions contemplated hereby relating to a Real Property that has not yet been acquired that shall be abandoned without further action by any party. Notwithstanding any statement contained in this Agreement to the contrary, termination of this Agreement shall not relieve any party from liability for any breach or violation of this Agreement.

 

ARTICLE X

 

CERTAIN POST-CLOSING COVENANTS

 

10.1.                     HIPAA Compliance. Each of the Facilities shall, upon the applicable Operational Date (as defined in the applicable Project Development Agreement), comply with the standards for privacy of individually-identifiable health information which were promulgated pursuant to the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”).

 

10.2.                     Post-Closing Access to Information. The parties acknowledge that, subsequent to an Applicable Closing, each may need access to the Assets subject to such Applicable Closing and to information, documents or computer data in the control or possession of the other for purposes of concluding the transactions contemplated herein and for audits, investigations, compliance with governmental requirements, regulations and requests, the prosecution or defense of third party claims. Accordingly, the parties agree that upon prior reasonable notice and during regular business hours they will make available to the other and their agents, independent auditors and/or governmental entities such documents and information as may be available relating to such Assets and will permit the other to make copies of such documents and information at the requesting party’s expense, provided that none of the foregoing will interfere with the operation of the Business.

 

10.3.                     Real Estate Contract Indemnification. The parties acknowledge that there may be indemnification rights and claims against the Unrelated Sellers pursuant to the terms of the Real Estate Contracts. In the event that any such indemnification right or claim under a Real Estate Contract (an “Unrelated Seller Claim”) shall arise or accrue in favor of any FirstChoice Party at any time hereafter with respect to or affecting any of the Assets or otherwise resulting in any demands, claims, actions, losses, damages, liabilities, penalties, Taxes, costs and expenses (including, without limitation, reasonable attorneys’ and accountants’ fees, settlement costs, arbitration costs and any reasonable other expenses for investigating or defending any action or threatened action) (collectively, “Unrelated Seller Damages”), FirstChoice shall, after notification to MPT, (a) promptly notify the applicable Unrelated Seller of the Unrelated Seller Claim (including all material facts related thereto) and make a claim for indemnity against such Unrelated Seller with respect thereto pursuant to the terms of the applicable Real Estate Contract; (b) promptly notify MPT of any and all material communications, notices or other information, whether written or oral, any of the FirstChoice Parties receives with respect to such Unrelated Seller Claim; (c) coordinate with MPT in the exercise of all of the FirstChoice Parties’ rights

 

29

 

with respect to such Unrelated Seller Claim (including, without limitation, the selection, engagement and/or approval of counsel) it being understood and agreed that no FirstChoice Party shall take any action with respect to any such Unrelated Seller Claim (except for those actions set forth in clauses (a) and (b) above) without the MPT’s prior written consent; (d) account for any amounts received by any FirstChoice Party in respect of any such Unrelated Seller Claim; and (e) not take or agree to take any action which would conflict with its obligations to the MPT Parties with respect to such Unrelated Seller Claim pursuant to this Section 10.3 or which would otherwise adversely affect any rights of the MPT Parties with respect to such Unrelated Seller Claim. MPT shall reasonably cooperate with the FirstChoice Parties in connection with any Unrelated Seller Claims, which cooperation shall be at FirstChoice’s sole cost and expense. The provisions of this Section 10.3 shall be in addition to any rights or remedies of the MPT Parties provided in Article XIII hereof, and shall survive any termination of this Agreement for a period concurrent with the survival period of any indemnification obligations of the respective Unrelated Sellers under the Real Estate Contracts.

 

10.4.                     Joinder of New Projects. In connection with each New Project, the parties shall add such New Project to this Agreement upon the following terms and conditions:

 

(a)                                 a new MPT Lessor and a new FirstChoice Lessee shall be joined to this Agreement (each, a “New Party”);

 

(b)                                 the existing MPT Parties and FirstChoice Parties, and each New Party shall execute a Joinder Agreement in form to be mutually agreed upon by the parties (each, a “Joinder Agreement”), which shall provide, among other things, that the acquisition, funding and development of the applicable Real Property is subject to the representations, warranties, covenants, conditions and deliveries as set forth in this Agreement; it being further understood and agreed, however, that any such New Parties shall not be required to reaffirm or satisfy the representations, warranties, covenants and conditions with respect to any previously closed Real Property, and all representations, warranties, covenants and conditions relating to any such New Party shall not apply with respect to any previously closed Real Property.

 

ARTICLE XI

 

INDEMNIFICATION

 

11.1.                     FirstChoice Parties’ Agreement to Indemnify.

 

(a)                                 Subject to the limitations set forth in this Article XI, the existing FirstChoice Parties, jointly and severally, shall indemnify, defend and hold harmless MPT, the other existing MPT Parties, their Affiliates and their respective officers, managers, members, (general and limited) partners, shareholders, employees, agents and representatives (collectively, the “MPT Indemnified Parties”) from and against all demands, claims, actions, losses, damages, liabilities, penalties, taxes, costs and expenses (including, without limitation, attorneys’ and accountants’ fees, settlement costs, arbitration costs and any reasonable other expenses for investigating or defending any action or threatened action) asserted against or incurred by the MPT Indemnified Parties or any of them arising out of or in connection with or resulting from (i) any breach of, misrepresentation associated with or failure to perform under any covenant, representation,

 

30

 

warranty or agreement under this Agreement, the FirstChoice Instruments, or the other agreements contemplated hereby or thereby on the part of the existing FirstChoice Parties; (ii) any claims asserted against or damages suffered by the MPT Indemnified Parties as a result of any breach by any existing FirstChoice Party of its representations, warranties, covenants or obligations under this Agreement; or (iii) any Excluded Liabilities (collectively, “MPT Party Damages”); provided, however, that (A) MPT Party Damages shall not apply to any matters resulting from or caused by the gross negligence or willful misconduct of any MPT Indemnified Party, and (B) the obligations of FirstChoice under this Section 11.1(a) with respect to the Master Lease shall exclude any MPT Party Damages arising under the Master Lease, all of which must be pursued against FirstChoice (if at all) pursuant to the terms of the Master Lease and the Guaranty.

 

(b)                                 The indemnification of the MPT Indemnified Parties by the FirstChoice Parties provided for under this Article XI as to a particular Real Property shall terminate on the date that is the second (2nd) anniversary after the date of the Applicable Closing of such Real Property (the “MPT Party Indemnity Periods”); provided, however, if a particular Real Property is not Completed (as defined in the applicable Project Funding Agreement) prior to the second anniversary of the applicable Closing Date, such termination date shall be extended for one year following the date of Completion. The limitation in the preceding sentence shall not apply to any MPT Party Damages arising or resulting from (i) any act or omission of the FirstChoice Parties which constitutes fraud, (ii) any breach by FirstChoice Parties of their respective post-closing covenants under Sections 10.1, 10.2 or 10.3, or (iii) the Excluded Liabilities. Notwithstanding the foregoing, the obligations of the FirstChoice Parties for indemnification pursuant to this Section 11.1 with respect to any Real Property prior to the Completion thereof shall not in the aggregate exceed the Guaranty Limitation (as defined in the Project Development Agreement for such Real Property), except and to the extent otherwise provided for in the Cost Overrun Guaranty.

 

11.2.                     MPT’s Agreement to Indemnify.

 

(a)                                 Subject to the limitations set forth in this Article XI, the existing MPT Parties shall indemnify, defend and hold harmless FirstChoice, the other FirstChoice Parties, their respective Affiliates and their respective officers, managers, members, (general and limited) partners, shareholders, employees, agents and representatives (collectively, the “FirstChoice Indemnified Parties”) from and against all demands, claims, actions, losses, damages, liabilities, penalties, Taxes, costs and expenses (including, without limitation, reasonable attorneys’ fees, settlement costs, arbitration costs and any reasonable other expenses for investigating or defending any action or threatened action) asserted against or incurred by any of the FirstChoice Indemnified Parties or any of them arising out of or in connection with or resulting from (i) any breach of, misrepresentation associated with or failure to perform under any covenant, representation, warranty or agreement under this Agreement or the other agreements contemplated hereby on the part of any existing MPT Party; or (ii) any claims asserted against or damages suffered by the FirstChoice Parties as a result of any breach by any MPT Party its representations, warranties, covenants or obligations under this Agreement (collectively, “FirstChoice Damages”); provided, however, that FirstChoice Damages shall not apply to any

 

31

 

matters resulting from or caused by the gross negligence or willful misconduct of any FirstChoice Indemnified Party.

 

(b)                                 The indemnification of the FirstChoice Indemnified Parties by the existing MPT Parties provided for under this Section 11.2 shall terminate on the second (2nd) anniversary of the Applicable Closing (the “FirstChoice Indemnity Period”). The limitation in the preceding sentence shall not apply to any FirstChoice Damages arising or resulting from (i) any act or omission of any MPT Indemnified Party which constitutes fraud, or (ii) any breach by any MPT Party of its post-closing covenants under Section 10.3.

 

11.3.                     Notification and Defense of Claims.

 

(a)                                 A party entitled to be indemnified pursuant to this Article XI (the “Indemnified Party”) shall notify the party liable for such indemnification (the “Indemnifying Party”) in writing of any claim or demand which the Indemnified Party has determined has given or could give rise to a right of indemnification under this Agreement, as soon as possible after the Indemnified Party becomes aware of such claim or demand; provided, that, the Indemnified Party’s failure to give such notice to the Indemnifying Party in a timely fashion shall not result in the loss of the Indemnified Party’s rights with respect thereto except to the extent the Indemnifying Party is materially prejudiced by the delay.

 

(b)                                 If the Indemnified Party shall notify the Indemnifying Party of any claim or demand pursuant to the provisions hereof, and if such claim or demand relates to a claim or demand asserted by a third party against the Indemnified Party (a “Third Party Claim”), the Indemnifying Party shall have the obligation either (i) to pay such claim or demand, or (ii) defend any such Third Party Claim with counsel reasonably satisfactory to the Indemnified Party. After the Indemnifying Party has assumed the defense of such Third Party Claim, the Indemnifying Party shall not be liable to the Indemnified Party under this Article XI for any legal or other expenses subsequently incurred by the Indemnified Party in connection with the defense thereof other than reasonable costs of investigation, provided that the Indemnified Party shall have the right to employ counsel, at the Indemnifying Party’s expense, to represent it if (A) in the Indemnified Party’s reasonable opinion the Indemnifying Party is not diligently prosecuting the defense of such Third Party Claim, (B) such Third Party Claim involves remedies other than monetary damages and such remedies, in the Indemnified Party’s reasonable judgment, could have a Material Adverse Effect on such Indemnified Party, (C) the Indemnified Party may have available to it one or more defenses or counterclaims that are inconsistent with one or more defenses or counterclaims that may be alleged by the Indemnifying Party, or (D) the Indemnified Party believes in its reasonable discretion that a conflict of interest exists between the Indemnifying Party and the Indemnified Party with respect to such Third-Party Claim or action, and in any such event the reasonable fees and expenses of such separate counsel for the Indemnified Party shall be paid by the Indemnifying Party. The Indemnified Party shall make available to the Indemnifying Party or its agents all records and other materials in the Indemnified Party’s possession reasonably required by it for its use in contesting any Third-Party Claim or demand.

 

(c)                                  No Indemnified Party may settle or compromise any claim or consent to the entry of any judgment with respect to which indemnification is being sought hereunder without the

 

32

 

prior written consent of the Indemnifying Party, unless (i) the Indemnifying Party fails to assume and diligently prosecute the defense of such claim or (ii) such settlement, compromise or consent includes an unconditional release of the Indemnifying Party from all liability arising out of such claim and does not contain any equitable order, judgment or term which includes any admission of wrongdoing or could result in any liability (including regulatory liability) of the Indemnifying Party or which would otherwise in any manner affect, restrain or interfere with the business of the Indemnifying Party or any Affiliate of the Indemnifying Party. An Indemnifying Party may not, without the prior written consent of the Indemnified Party, settle or compromise any claim or consent to the entry of any judgment with respect to which indemnification is being sought hereunder unless such settlement, compromise or consent includes an unconditional release of the Indemnified Party from all liability arising out of such claim and does not contain any equitable order, judgment or term which includes any admission of wrongdoing or could result in any liability (including regulatory liability) of the Indemnified Party or which would otherwise in any manner affect, restrain or interfere with the business of the Indemnified Party or any of the Indemnified Party’s Affiliates.

 

11.4.             Investigations. The right to indemnification based upon breaches or inaccuracies of representations, warranties and covenants will not be affected by any investigation conducted with respect to, or knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement or the Applicable Closing Date, whether as a result of disclosure by a party pursuant to this Agreement or otherwise, the accuracy or inaccuracy of or compliance with any such representation, warranty or covenant. The waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant, will not affect a party’s right to indemnification, payment of damages or other remedies based on such representations, warranties and covenants.

 

11.5.             Exclusive Remedy. FROM AND AFTER THE APPLICABLE CLOSING, THE PARTIES AGREE AND ACKNOWLEDGE THAT THE INDEMNIFICATION RIGHTS PROVIDED IN THIS ARTICLE XI SHALL BE THE SOLE AND EXCLUSIVE REMEDY OF THE PARTIES TO THIS AGREEMENT FOR BREACHES OF THIS AGREEMENT AND FOR ALL DISPUTES ARISING UNDER OR RELATING TO THIS AGREEMENT AND ANY ADDITIONAL AGREEMENTS OR DOCUMENTS EXECUTED OR DELIVERED IN OR ARISING OUT OF THE TRANSACTIONS CONTEMPLATED HEREBY, EXCEPT FOR POST-CLOSING COVENANTS, CASES WHERE SPECIFIC PERFORMANCE IS AVAILABLE AS A REMEDY AND EXCEPT IN CASES OF FRAUD.

 

ARTICLE XII

 

DISPUTE RESOLUTION

 

12.1.             Governing Law. EXCEPT AS PROVIDED IN THIS SECTION 12.1, THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS EXECUTED AND PERFORMED IN SUCH STATE, WITHOUT GIVING EFFECT TO CONFLICTS OF LAW PRINCIPLES. NOTWITHSTANDING THE FOREGOING, THE PARTIES HERETO AGREE THAT ALL PROVISIONS OF THIS AGREEMENT OR THE

 

33

 

LEASE RELATING TO THE CREATION OF THE LEASEHOLD ESTATE AND ALL REMEDIES RELATING TO THE RECOVERY OF POSSESSION OF ALL OR ANY PORTION OF THE REAL PROPERTY (SUCH AS AN ACTION FOR UNLAWFUL DETAINER OR OTHER SIMILAR ACTION) SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE WHERE THE APPLICABLE PORTION OF THE REAL PROPERTY IS LOCATED.

 

12.2.             Jurisdiction and Venue. THE PARTIES CONSENT TO PERSONAL JURISDICTION IN THE STATE OF ALABAMA. EXCEPT AS PROVIDED IN THIS SECTION 12.12, THE PARTIES AGREE THAT ANY ACTION OR PROCEEDING ARISING UNDER THIS AGREEMENT SHALL BE BROUGHT AND TRIED EXCLUSIVELY IN THE STATE OR FEDERAL COURTS LOCATED IN THE STATE OF ALABAMA. EACH OF THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT. FURTHER, THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY CLAIM THAT SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY CERTIFIED MAIL ADDRESSED TO A PARTY AT THE ADDRESS DESIGNATED PURSUANT TO SECTION 13.2 SHALL BE EFFECTIVE SERVICE OF PROCESS AGAINST SUCH PARTY FOR ANY ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT. A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT MAY BE ENFORCED IN ANY OTHER COURT TO WHOSE JURISDICTION ANY OF THE PARTIES IS OR MAY BE SUBJECT. NOTWITHSTANDING THE FOREGOING, THE PARTIES FURTHER AGREE THAT ALL ACTIONS AND PROCEEDINGS RELATING TO THE CREATION OF THE LEASEHOLD ESTATE AND ALL REMEDIES RELATING TO THE RECOVERY OF POSSESSION OF ALL OR ANY PORTION OF THE REAL PROPERTY (SUCH AS AN ACTION FOR UNLAWFUL DETAINER OR OTHER SIMILAR ACTION) MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF THE STATE WHERE THE APPLICABLE PORTION OF THE REAL PROPERTY IS LOCATED.

 

12.3.             Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF ANY PARTY OR ANY EXERCISE OF ANY PARTY OF THEIR RESPECTIVE RIGHTS HEREUNDER OR IN ANY WAY RELATING TO THIS AGREEMENT OR THE ASSETS (INCLUDING ANY CLAIM OR DEFENSE ASSERTING THAT THIS AGREEMENT WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE). THIS WAIVER IS A MATERIAL INDUCEMENT FOR MPT TO ENTER INTO THIS AGREEMENT.

 

34

 

ARTICLE XIII

 

MISCELLANEOUS

 

13.1.             Assignment. Except as expressly permitted herein, this Agreement is not assignable by any party without the prior written consent of the other parties. Notwithstanding the foregoing, the MPT Parties may at any time and without the consent of FirstChoice or any other FirstChoice Party assign all of their rights and obligations hereunder to any Person other than any Person whose primary business is the provision of physician-staffed emergency room or urgent care medical services (a “Non-Permissible Assignee”); provided, however, that (a) no such assignment shall relieve or release the MPT Parties from their obligations hereunder, and (b) if there shall exist any Event of Default (under and as defined in the Master Lease), the MPT Parties may assign all of their rights and obligations hereunder to any Person, including, without limitation, a Non-Permissible Assignee. Notwithstanding the foregoing, so long as no Event of Default (as defined in the Master Lease) is outstanding under the Master Lease, the FirstChoice Parties may at any time and without the consent of MPT or any of the MPT Parties assign all or any portion of their respective rights and obligations hereunder to any Person in connection with (i) a Permitted Sale Transaction (as defined in the Master Lease), or (ii) any other transfer (be it by merger, consolidation, sale, assignments or otherwise) of all or substantially all of the assets of FirstChoice, so long as following the consummation of such transfer, the assignee of FirstChoice is in pro forma compliance with the covenants set forth in Section 16.1(1) of the Master Lease.

 

13.2.             Notice. All notices, demands, consents, approvals, requests and other communications required or permitted to be provided under this Agreement shall be in writing (except where specifically stated otherwise herein) and shall be (a) delivered in person, (b) sent by certified mail, return receipt requested, (c) delivered by a recognized delivery service, or (d) sent by facsimile transmission and addressed as follows:

 

	
If to any FirstChoice
    	
c/o First Choice ER, LLC
    
	
Party:
    	
2491 S. Lake Vista, Suite 200
    
	
 
    	
Lewisville, Texas 75067
    
	
 
    	
Attn: Chief Development Officer
    
	
 
    	
Telephone: (972) 899-6666
    
	
 
    	
Facsimile: (972) 899-6664
    
	
 
    	
 
    
	
With a copy to:
    	
First Choice ER, LLC
    
	
 
    	
2491 S. Lake Vista, Suite 200
    
	
 
    	
Lewisville, Texas 75067
    
	
 
    	
Attn: Legal Department
    
	
 
    	
Telephone: (972) 899-6666
    
	
 
    	
Facsimile: (972) 899-6664
    

 

35

 

	
With a copy to:
    	
DLA Piper LLP (US)
    
	
 
    	
203 North LaSalle Street, Suite 1900
    
	
 
    	
Chicago, Illinois 60601 1293
    
	
 
    	
Attn: Merle Teitelbaum Cowin,Esq.
    
	
 
    	
Telephone: (312) 368-4089
    
	
 
    	
Facsimile: (312) 630-7419
    
	
 
    	
 
    
	
If to any MPT Party:
    	
c/o MPT Operating Partnership, L.P.
    
	
 
    	
1000 Urban Center Drive, Suite 501
    
	
 
    	
Birmingham, AL 35242
    
	
 
    	
Attn: Legal Department
    
	
 
    	
Telephone: (205) 969-3755
    
	
 
    	
Facsimile: (205) 969-3756
    
	
 
    	
 
    
	
With a copy to:
    	
Baker, Donelson, Bearman, Caldwell &
    
	
 
    	
Berkowitz, PC
    
	
 
    	
420 20th Street North, Suite 1400
    
	
 
    	
Birmingham, Alabama 35203
    
	
 
    	
Attn: Thomas O. Kolb, Esq.
    
	
 
    	
Telephone: (205) 250-8321
    
	
 
    	
Facsimile: (205) 488-3721
    

 

or to such other address as either party may hereafter designate in writing, and shall be effective upon receipt. A notice, demand, consent, approval, request and other communication shall be deemed to be duly received if delivered in person or by a recognized delivery service, when left at the address of the recipient and if sent by facsimile, upon receipt by the sender of an acknowledgment or transmission report generated by the machine from which the facsimile was sent indicating that the facsimile was sent in its entirety to the recipient’s facsimile number; provided that if a notice, demand, consent, approval, request or other communication is served by hand or is received by facsimile on a day which is not a Business Day, or after 5:00 p.m. on any Business Day at the addressee’s location, such notice or communication shall be deemed to be duly received by the recipient at 9:00 a.m. (based upon Birmingham, Alabama time) on the first Business Day thereafter.

 

13.3.             Calculation of Time Period. When calculating the period of time before which, within which or following which any act is to be done or step taken, the date that is the reference date in calculating such period shall be excluded. If the last day of such period is a non-Business Day, the period in question shall end of the next succeeding Business Day.

 

13.4.             Captions. The section and paragraph headings or captions appearing in this Agreement are for convenience only, are not a part of this Agreement, and are not to be considered in interpreting this Agreement.

 

13.5.             Entire Agreement; Modification. This Agreement, including the Exhibits and Schedules attached hereto, and other written agreements executed and delivered at the Applicable Closings by the parties, constitute the entire agreement and understanding of the

 

36

 

parties with respect to the subject matter of this Agreement. This Agreement supersedes any prior oral or written agreements between the parties with respect to the subject matter of this Agreement. It is expressly agreed that there are no verbal understandings or agreements which in any way change the terms, covenants, and conditions set forth in this Agreement, and that no modification of this Agreement and no waiver of any of its terms and conditions shall be effective unless it is made in writing and duly executed by the parties.

 

13.6.             Schedules and Exhibits. All Schedules and Exhibits referred to in this Agreement shall be deemed a part of this Agreement and are hereby incorporated herein by reference. The statements in the Schedules referred to in this Agreement, and those in any supplement thereto, relate only to the provisions in the Section of this Agreement to which they expressly relate and not to any other provision in this Agreement. Further, nothing set forth in such Schedule shall be deemed adequate to disclose an exception to a representation or warranty related thereto unless such Schedule identifies the exception with reasonable particularity and describes the relevant facts in reasonable detail.

 

13.7.             Further Assurances. From time to time after the Applicable Closing and without further consideration, each party shall execute and deliver to the other such instruments of sale, transfer, conveyance, assignment, consent or other instruments as may be reasonably requested in order to carry out the purpose and intent of this Agreement.

 

13.8.             Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Executed signature pages to this Agreement may be delivered by facsimile transmission or by e-mail and any such signature page shall be deemed an original.

 

13.9.             Expenses. FirstChoice shall be responsible for the payment of all Closing Costs, Pursuit Costs and all other reasonable expenses incurred by the parties in connection with the transactions contemplated hereby; provided, that such costs and expenses with respect to each Real Property shall be included in the budget for each New Project and funded by the MPT Lessors in accordance with the applicable Project Development Agreement. The parties acknowledge that FirstChoice has delivered to MPT an expense deposit in the amount of One Hundred Thousand Dollars ($100,000) (the “Expense Deposit”). At the First Closing, MPT shall refund the Expense Deposit to FirstChoice. The provisions of this Section 13.9 shall survive the termination of this Agreement.

 

13.10.      Public Announcements. FirstChoice and MPT agree that public announcements, if any, concerning the subject matter of this Agreement shall be mutually approved in advance; provided, however, that, notwithstanding any provision hereof to the contrary, but subject to the provisions of the Confidentiality Agreement, without the prior approval of the other party, FirstChoice or MPT or their respective Affiliates, may (a) disclose that it has entered into this Agreement and may provide and disclose information regarding this Agreement, the parties to this Agreement, the Master Lease, the Real Property, the Assets and such additional information which such party may reasonably deem necessary, to its proposed investors in connection with a public offering or private offering of securities, or any current or prospective lenders with respect to its financing, and to investors, analysts and other parties in connection with earnings calls and other normal communications with investors, analysts and other parties, (b) release information

 

37

 

required to be disclosed pursuant to applicable law, including, without limitation, federal and state securities laws and the rules and regulations of the NYSE or NASDAQ, and (c) include any information in a prospectus, prospectus supplement or other offering circular or memorandum in connection with public or private capital raising or other activities undertaken by such party.

 

13.11.      Right to Specific Performance. Each of the parties hereto agree that irreparable damage, for which monetary damages (even if available) would not be an adequate remedy, would occur if a party breaches its obligations under this Agreement (including failing to take such actions as are required of it hereunder to consummate the transactions contemplated herein). Accordingly, each party acknowledges and agrees that the other parties shall be entitled to an injunction, specific performance and other equitable relief to prevent any such breaches of this Agreement and to enforce specifically the terms and provisions hereof, in addition to any other remedy to which they are entitled at law or in equity (including the recovery of damages from the other party), without proving actual damages or posting any bond or other security in connection with any such order or injunction. Each party agrees that it will not oppose the granting of an injunction, specific performance or other equitable relief on the basis that any other party has an adequate remedy at law or that any award of specific performance is not an appropriate remedy for any reason at law or in equity.

 

13.12.      Binding Effect; No-Third Party Beneficiaries. This Agreement shall bind and inure to the benefit of the parties and their successors and assigns; provided, however, that (a) this Agreement shall not inure to the benefit of any assignee pursuant to an assignment which violates the terms of this Agreement and (b) neither this Agreement nor any other agreement contemplated in this Agreement shall be deemed to confer upon any Person not a party to this Agreement or such other agreement any rights or remedies contained in this Agreement or such other agreement as a third party beneficiary hereof, thereof, or otherwise.

 

13.13.      Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of authorship of any of the provisions of this Agreement.

 

13.14.      Joint and Several Obligations. Whenever any provision of this Agreement refers to the joint and several liability of parties hereto, the other parties hereto may enforce such provision against any one or more or all of such parties.

 

[Signatures Appear on the Following Pages.]

 

38

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized officers as of the date first written above.

 

	
 
    	
MPT:
    
	
 
    	
 
    
	
 
    	
MPT OPERATING PARTNERSHIP, L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ R. Steven Hamner
    
	
 
    	
Name:
    	
R. Steven Hamner
    
	
 
    	
Title:
    	
Executive Vice President and CFO
    
	
 
    	
 
    
	
 
    	
FIRSTCHOICE:
    
	
 
    	
 
    
	
 
    	
FIRST CHOICE ER, LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Timothy L. Fielding
    
	
 
    	
Name:
    	
Timothy L. Fielding
    
	
 
    	
Title:
    	
CFO
    

 

39

 

EXHIBIT A

 

FORM COST OVERRUN GUARANTY

 

A-1

 

COST OVERRUN GUARANTY

 

THIS COST OVERRUN GUARANTY (this “Guaranty”) is made this [    ] day of [          ], 201[    ], by FIRST CHOICE ER, LLC, a Texas limited liability company (“Guarantor”), for the benefit of [MPT OF                       ], a Delaware [                       ] (together with its permitted successors and assigns, “Owner”):

 

RECITALS:

 

A.            Owner owns fee title to the real property located at               (the “Property”).

 

B.            Owner, Guarantor, [FirstChoice Sub #1, a                 (“Lessee”), and                    , a                 (“Developer”), have entered into that certain Project Funding and Development Agreement dated             , 20    (as the same may be modified, amended or restated from time to time, the “PFDA”), pursuant to which Developer has agreed develop and improve the Property as an approximately          square foot standalone emergency room facility (the “Project”) and Owner has agreed to fund the development and construction of the Project, upon the terms and conditions set forth therein. Capitalized terms that are not otherwise defined in this Guaranty shall have the respective meanings that such terms have in the PFDA.

 

C.            Owner and Lessee have entered into that certain Master Lease Agreement dated             ,2013 (as the same may be modified, amended or restated from time to time, the “Master Lease”), pursuant to which Lessee has agreed to lease the Project from Owner, upon the terms and conditions set forth therein.

 

D.            As a condition to entering into the PFDA and the Master Lease, Owner requires that Guarantor provide this Guaranty.

 

E.            Guarantor is an affiliate of Lessee and will derive substantial economic and other benefits from the development of the Project and the Master Lease.

 

AGREEMENT:

 

For valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in consideration of the matters described in the foregoing Recitals, which Recitals are incorporated herein and made a part hereof, Guarantor agrees as follows:

 

1.             Guaranty. Subject to the terms and condition of this Guaranty, Guarantor absolutely, unconditionally and irrevocably guarantees to Owner the following (the “Guaranteed Obligations”):

 

a.             the payment to Owner of all Cost Overruns (defined below), such payment to be made to Owner within ten (10) days after demand from Owner, provided, however, that at no time shall the aggregate liability of Guarantor for Cost Overruns and for

 

 

obligations owing under the PFDA exceed the Construction Period Maximum Liability (defined below); and

 

b.             the payment of all Enforcement Costs (as defined below).

 

As used in this Guaranty:

 

(i)                                     “Cost Overruns” shall mean the amount, if any, by which the aggregate amount of Actual Development and Construction Costs (defined below) for the Project exceeds the aggregate amount of Budgeted Development and Construction Costs (defined below) for the Project.

 

(ii)                                  “Actual Development and Construction Costs” shall mean the actual out-of-pocket costs and expenses incurred by Owner for construction and development costs (including both hard and soft costs) of the Project in accordance with the PFDA, through Completion, but excluding (x) any Construction Period Accrual, (y) any acquisition costs for the Property, and (z) any Force Majeure Costs (defined below).

 

(iii)                               “Budgeted Development and Construction Costs” shall mean the Total Funding Amount, less (x) the amount of the Construction Period Accrual (in any) set forth in the Development Budget, and (y) any acquisition costs for the Property.

 

(iv)                              “Construction Period Maximum Liability” as of any date shall mean the sum of (A) 89.95% of the then incurred Actual Development and Construction Costs for the Project that are properly capitalizable under US GAAP incurred as of such date, minus (B) the sum of (i) any payments previously paid by Guarantor or Master Lessee in connection with the Project which have been future valued at          [insert lessee’s incremental borrowing rate used to classify the lease under ASC 840 (FAS 13)] to such point in time, and (ii) the present value of any future payments in connection with the Project, discounted at          [insert lessee’s incremental borrowing rate used to classify the lease under ASC 840 (FAS 13)], that Guarantor or Master Lessee is obligated to make, but in each case excluding payments that are not required to be included in the calculation of Guarantor’s or Master Lessee’s maximum guaranty amount under ASC 840-40-55 (EITF 97-10).

 

(v)                                 “Force Majeure Costs” shall mean shall mean (A) all costs and expenses incurred by Owner or Developer to restore the Project in connection with a Force Majeure Event (including (1) all capitalized interest and other collateral costs and carrying costs accruing on such cost necessary to repair and restore damage caused by such Force Majeure Event, and (2) all capitalized interest and other collateral costs and carrying costs accruing as a result of time delays necessary to repair and restore damage caused by such Force Majeure Event) less the amount of all insurance proceeds applied to the restoration of the

 

2

 

Project and (B) to the extent the Project is not restored following such Force Majeure Event, the reduction, if any, in fair market value of the Project as a result of such Force Majeure Event.

 

(vi)                              “Force Majeure Event” shall mean the occurrence of one or more events that causes damage to the Project or any portion thereof caused by Owner or Owner’s employees, act of God, including fire, floods, tornadoes, hurricanes or any other causes, unless such damage was caused by Guarantor, Master Lessee or any of their respective employees.

 

2.                                      Waiver of Defenses. Guarantor agrees that the obligations, covenants and agreements of Guarantor under this Guaranty shall not be affected or impaired by any act of Owner, or any event or condition except full performance of the Guaranteed Obligations. Guarantor agrees that, without full performance of the Guaranteed Obligations, the liability of Guarantor hereunder shall not be discharged, and Guarantor waives any defense based on (a) lack of authority or bankruptcy or insolvency of the Owner, Developer, Master Lessee or any other person or entity; (b) any failure of Owner to commence action against the Developer or any other person or entity, or to file or enforce a claim against the estate (either in administration, bankruptcy, or any other proceeding) of Developer or any other person or entity; (c) any election of remedies by the Owner or any other person or entity which destroys or otherwise impairs any subrogation rights of Guarantor or the right of Guarantor to proceed against Developer, Owner or any other person or entity for reimbursement; (d) any failure on the part of the Owner to ascertain the extent or nature of the liability of any person or entity liable for the obligations of Developer under the PFDA, or any failure on the part of Owner or any other person or entity to disclose to Guarantor any material facts affecting the obligations of Developer under the PFDA; (e) any lack of acceptance or notice of acceptance of this Guaranty by Owner; (f) any lack of presentment, demand, protest, or notice of demand, protest, nonpayment or nonperformance with respect to the obligations of Developer under the PFDA; (g) any lack of due diligence by Owner in obtaining reimbursement from any person or entity now or hereafter liable for the obligations of Developer under the PFDA; (h) any deficiency in the ability of Owner to collect from any persons or entities now or hereafter liable for the obligations of Developer under the PFDA; (i) the renewal or extension of time for the payment or performance of the Guaranteed Obligations or any other agreement relating to the Guaranteed Obligations, whether made with or without the knowledge or consent of Guarantor; (j) any transfer, waiver, compromise, settlement, surrender or release of the provisions of the PFDA (provided that the PFDA shall not be modified or amended and no Change Order will be approved by Owner without the prior written consent of Guarantor); (k) the existence of any defenses to enforcement of the provisions of the PFDA other than mandatory counter-claims; (1) the existence of any set-off, claim, reduction or diminution of the Guaranteed Obligations, or any defense of any kind or nature, which Guarantor may have against Developer, Owner or any other person or entity or which any party has against Owner; (m) the addition of any and all other indorsers, guarantors, obligors and other persons liable for the payment and performance of the Guaranteed Obligations and the acceptance of any and all other security for the payment and performance of the Guaranteed Obligations; all whether or not Guarantor shall have had notice or knowledge or any act or omission referred to in the foregoing clauses (a) through (m) of this Paragraph. Guarantor intends that Guarantor shall remain liable hereunder as a principal until all Guaranteed Obligations shall have been

 

3

 

satisfied in full, notwithstanding any fact, act, event or occurrence which might otherwise operate as a legal or equitable discharge of a surety or guarantor.

 

3.                                      Unconditional Liability. This is a guaranty of payment and performance and not a guaranty of collection. The liability of Guarantor under this Guaranty shall be direct and immediate and not conditional or contingent on the pursuit of any remedies against Developer, Master Lessee or any other person or entity. Upon a default in payment or performance of any of the Guaranteed Obligations, Owner may enforce its rights, powers and remedies under the PFDA or hereunder, in any order, without demand or notice of any kind (except notice and cure periods as may be required by the PFDA), and without exercising any rights or remedies against Developer or any other person or entity, and all such rights, powers and remedies available to the Owner shall be nonexclusive and cumulative of all other available rights, powers and remedies. If any of the Guaranteed Obligations are partially paid or partially performed, for whatever reason, this Guaranty shall remain in full effect, and Guarantor shall remain liable for the entire remaining unpaid or unperformed Guaranteed Obligations.

 

4.                                      Waiver of Exemptions. Guarantor waives, to the fullest extent permitted by law, all rights to the benefits of any moratorium, reinstatement, marshaling, forbearance, valuation, stay, extension, redemption, appraisement, and exemption now or hereafter provided by any applicable law.

 

5.                                      Enforcement Costs. If: (i) this Guaranty is placed in the hands of one or more attorneys for collection or is collected through any legal proceeding; (ii) one or more attorneys is retained to represent Owner in any bankruptcy, reorganization, receivership, or other proceedings affecting creditors’ rights and involving a claim under this Guaranty or (iii) one or more attorneys is retained to represent Owner in any other proceedings whatsoever in connection with this Guaranty, then Guarantor shall pay to Owner upon demand all reasonable attorneys’ fees, costs and expenses, including, without limitation, court costs, filing fees, and all other costs and expenses incurred in connection therewith (all of which are referred to herein as “Enforcement Costs”), in addition to all other amounts due hereunder.

 

6.                                      Modification of Guaranty. This Guaranty may not be changed orally and no obligation of Guarantor can be released or waived by Owner except by a writing signed by the Owner. This Guaranty shall be irrevocable by Guarantor until all Guaranteed Obligations have been completely satisfied. This Guaranty shall be reinstated if any payment received Owner from Guarantor is returned or rescinded due to any law relating to bankruptcy, insolvency or other relief of debtors or for any other reason.

 

7.                                      Subrogation. Until all of the Guaranteed Obligations guaranteed hereunder have been satisfied and discharged in full, (a) Guarantor shall not exercise its right of subrogation and (b) Guarantor waives any right to enforce any remedy which it now has or may hereafter have against Lessee, any other guarantor or any other party to any of the Transaction Documents, or any other documents entered into in connection therewith, and any benefit of, and any right to participate in, any security or other assets now or hereafter held by Owner with respect to the Master Lease, the other Transaction Documents or any other document or instrument entered into in connection therewith.

 

4

 

8.                                      Binding Effect; No Third Party Beneficiaries. This Guaranty shall bind and inure to the benefit of Owner and its successors and assigns, and Owner’s successors and permitted assigns shall be entitled to enforce performance and observance of this Guaranty to the same extent Owner is entitled to do so; provided, however, that (a) this Guaranty shall not inure to the benefit of any assignee pursuant to an assignment which violates the terms of this Guaranty; and (b) this Guaranty shall not be deemed to confer any rights or remedies contained in this Guaranty upon any Person not a party or made subject to this Guaranty (other than Owner).

 

9.                                      Governing Law; Jurisdiction. This Guaranty and the obligations arising hereunder shall be governed by, and construed in accordance with, the laws of the State of Delaware applicable to contracts made and performed in such State, without giving effect to conflicts of law principles. To the fullest extent permitted by law, Guarantor hereby unconditionally and irrevocably waives any claim to assert that the law of any other jurisdiction governs this Guaranty. Any legal suit, action or proceeding against Guarantor or Owner arising out of or relating to this Guaranty shall be instituted in any federal or state court in the State of Alabama, and Guarantor waives any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding and hereby irrevocably submits to the jurisdiction of any such court in any suit, action or proceeding.

 

10.                               Notices. All notices, demands, consents, approvals, requests and other communications under this Guaranty shall be in writing and shall be either (a) delivered in person, (b) sent by certified mail, return receipt requested, (c) delivered by a recognized delivery service, or (d) sent by facsimile transmission and addressed as follows:

 

	
Address of Owner:
    	
c/o MPT Operating Partnership, L.P.
    
	
 
    	
1000 Urban Center Drive, Suite 501
    
	
 
    	
Birmingham, Alabama 35242
    
	
 
    	
Attn: Legal Department
    
	
 
    	
Fax: (205) 969-3756
    
	
 
    	
 
    
	
With a copy to:
    	
Baker, Donelson, Bearman, Caldwell & Berkowitz, PC
    
	
 
    	
1400 Wells Fargo Tower
    
	
 
    	
420 North 20th Street
    
	
 
    	
Birmingham, Alabama 35203
    
	
 
    	
Attn: Thomas O. Kolb, Esq.
    
	
 
    	
Fax: (205) 488-3721
    
	
 
    	
 
    
	
Address of Guarantor:
    	
First Choice ER, LLC
    
	
 
    	
2941 S. Lake Vista, Suite 200
    
	
 
    	
Lewisville, Texas 75067
    
	
 
    	
Attn: Chief Development Officer
    
	
 
    	
Fax: (972) 899-6664
    
	
 
    	
 
    
	
With copies to:
    	
First Choice ER, LLC
    
	
 
    	
2491 S. Lake Vista, Suite 200
    

 

5

 

	
 
    	
Lewisville, Texas 75067
    
	
 
    	
Attn: Legal Department
    
	
 
    	
Fax: (972) 899-6664
    
	
 
    	
 
    
	
 
    	
DLA Piper LLP (US)
    
	
 
    	
203 N. LaSalle Street, Suite 1900
    
	
 
    	
Chicago, Illinois 60601
    
	
 
    	
Attn: Merle Teitelbaum Cowin, Esq.
    
	
 
    	
Fax: (312) 630-7419
    

 

or to such other address as either party may hereafter designate in writing, and shall be effective upon receipt. A notice, demand, consent, approval, request and other communication shall be deemed to be duly received if delivered in person or by a recognized delivery service, when left at the address of the recipient and if sent by facsimile, upon receipt by the sender of an acknowledgment or transmission report generated by the machine from which the facsimile was sent indicating that the facsimile was sent in its entirety to the recipient’s facsimile number; provided that if a notice, demand, consent, approval, request or other communication is served by hand or is received by facsimile on a day which is not a Business Day, or after 5:00 p.m. on any Business Day at the addressee’s location, such notice or communication shall be deemed to be duly received by the recipient at 9:00 a.m. (based upon Birmingham, Alabama time) on the first Business Day thereafter.

 

11.                               Severability. Any provision of this Guaranty which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

 

12.                               No Waiver. No failure by any party to insist upon the strict performance of any term of this Guaranty or to exercise any right, power or remedy consequent upon a breach thereof, and no acceptance of full or partial performance under the terms of this Guaranty during the continuance of any such breach, shall constitute a waiver of any such breach or any such term. To the extent permitted by law, no waiver of any breach shall affect or alter this Guaranty, which shall continue in full force and effect with respect to any other then existing or subsequent breach. The parties agree that no waiver shall be effective hereunder unless it is in writing.

 

13.                               Tolling of Statute of Limitations. Any act or circumstance that shall toll any statute of limitations applicable to the Guaranteed Obligations shall also toll the statute of limitations applicable to the liability of Guarantor for the Guaranteed Obligations.

 

14.                               Assignment. This Guaranty is not assignable by Guarantor without the prior written consent of Owner. Owner may at any time and without the consent of Guarantor assign all of its rights and obligations hereunder to any other Person in connection with an assignment of the applicable Project Development Agreement in accordance with the terms thereof.

 

6

 

15.                               Necessary Action. Guarantor and Owner shall perform any further acts and execute and deliver any documents that may be reasonably necessary to carry out the provisions of this Guaranty.

 

16.                               Entire Agreement. This Guaranty supersedes all prior discussions and agreements among the parties with respect to the subject matter hereof and contains, together with the PFDA and the Master Lease, the entire understanding among the parties with respect to the subject matter hereof.

 

17.                               Descriptive Headings. Headings and other similar references are for the purpose of facilitating reference to this Guaranty and do not supplement, limit or otherwise vary the text of this Guaranty.

 

18.                               References. References to Sections shall be deemed to refer to the appropriate Sections of this Guaranty. Unless otherwise specified in this Guaranty, the terms “herein,” “hereof,” “hereunder” and other terms of like or similar import, shall be deemed to refer to this Guaranty as a whole, and not to any particular Section hereof. The term “including” shall mean including, without limitation.

 

19.                               Individual Enforcement. Owner shall be entitled to enforce this Guaranty and to take any action with respect hereto without any requirement to join any party (other than Guarantor) in any such enforcement or other action.

 

20.                               Time of Essence. Time is of the essence with respect to payment and performance of the Guaranteed Obligations.

 

7

 

Executed as of the date first written above.

 

	
 
    	
FIRST CHOICE ER, LLC, a Texas limited
    
	
 
    	
liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

EXHIBIT B

 

FORM GUARANTY

 

B-1

 

GUARANTY

 

THIS GUARANTY (this “Guaranty”) is made and entered into as of this              day of                   , 2013, by FIRST CHOICE ER, LLC, a Texas limited liability company (“Guarantor”), for the benefit of MPT OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (“MPT”), and the Lessors (as herein defined) (MPT and the Lessors, together with their respective permitted successors and permitted assigns, the “Beneficiary”).

 

W I T N E S S E T H:

 

WHEREAS, Guarantor and MPT are parties to that certain Master Funding and Development Agreement, dated as of                   , 2013, relating to (a) the acquisition and development of multiple parcels of real property and (b) the leasing of such real property by affiliates of MPT (each a “Lessor” and collectively the “Lessors”) to affiliates of Guarantor (each a “Lessee” and collectively the “Lessees”) (as the same may be amended, modified, supplemented and restated from time to time, the “Master Funding and Development Agreement”);

 

WHEREAS, Lessors and Lessees have entered into that certain Master Lease Agreement, dated as of                      , 2013, relating to the real property that either has been or will be acquired by Lessors pursuant to the Master Funding and Development Agreement (as the same may be amended, modified, supplemented and restated from time to time, the “Master Lease”);

 

WHEREAS, each Lessor and Lessee either have or will enter into a Project Funding and Development Agreement pursuant to the terms of the Master Funding and Development Agreement (as the same may be amended, modified and restated from time to time, the “Project Development Agreements”) relating to the development of the Leased Property (as defined in the Master Lease);

 

WHEREAS, Guarantor directly or indirectly owns equity interests in the Lessees; and

 

WHEREAS, Guarantor desires to guarantee unconditionally the Obligations (as herein defined) upon the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the premises, representations, warranties, mutual covenants and agreements set forth herein, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor hereby covenants and agrees as follows:

 

1.                                      Defined Terms. The following terms shall have the respective meanings ascribed to them in this Section 1:

 

Affiliate: With respect to any Person (i) any Person that, directly or indirectly, controls or is controlled by or is under common control with such Person, (ii) any other Person that owns, beneficially, directly or indirectly, 10% or more of the outstanding capital stock, shares or equity interests of such Person, or (iii) any officer, director, employee, partner, member, manager or trustee of such Person or any Person controlling, controlled by or under common control with such Person (excluding trustees and persons serving in similar capacities who are not otherwise an Affiliate of such Person). For the purposes of this definition, “control” (including the correlative meanings of the terms “controlled by” and “under common control with”), as used with respect to

 

 

any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, through the ownership of voting securities or otherwise.

 

Event of Default: As defined in Section 4.

 

Obligations: All obligations, duties and liabilities of the Lessees under or pursuant to (a) the Master Lease; and (b) all obligations arising under any and all renewals, increases, and substitutions, amendments and extensions of the liabilities or obligations under the Master Lease.

 

Person: An individual, a corporation, a limited liability company, a general or limited partnership, an unincorporated association, a joint venture, a Governmental Body or another entity or group.

 

2.                                      Guaranty. Guarantor hereby absolutely, unconditionally and irrevocably guarantees to and for the benefit of Beneficiary, the full and prompt payment, performance and discharge of the Obligations. Upon the occurrence of an Event of Default (as defined herein), Guarantor shall perform or cause Lessee to perform such obligations, as if they constituted the direct and primary obligations of Guarantor. Beneficiary may, in its sole discretion, seek satisfaction of such Obligations from either or both of Lessee and Guarantor. The obligations and liabilities of Guarantor hereunder are continuing, absolute and unconditional, shall not be subject to any counterclaim, recoupment, set-off, reduction or defense based upon any claim that Guarantor may have against Lessee, Lessor or any of their respective Affiliates, officers, directors, members, shareholders, employees, agents and representatives, and shall remain in full force and effect until all of the Obligations guaranteed hereby have been paid, performed and discharged in full, without regard to, and without being released, discharged, impaired, modified or in any way affected by, the occurrence from time to time of the following events, circumstances or conditions, whether or not Guarantor shall have knowledge or notice thereof or shall have consented thereto:

 

(a)                                 the failure or refusal to give notice to Guarantor;

 

(b)                                 the compromise, settlement, release or termination with Lessee of any or all of the obligations, covenants or agreements of Lessee under the Master Lease, or the amendment, modification, restatement or forgiveness of the Master Lease; 

 

(c)                                  any consent, extension or indulgence under or in respect of any exercise or non-exercise of any right, remedy, power or privilege under or with respect to any of the Obligations guaranteed hereby;

 

(d)                                 the assignment of the Master Funding and Development Agreement or the Master Lease by MPT or any applicable Beneficiary or Lessee (to the extent permitted under the Master Funding and Development Agreement or the Master Lease); or

 

(e)                                  the voluntary or involuntary liquidation or dissolution of, sale or other disposition of all or substantially all of the assets of, or the marshalling of assets and liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of, or other similar proceeding affecting, the Beneficiary, Guarantor,

 

2

 

Lessee, or any of their respective assets, or any action taken by any trustee or receiver or by any court in any such proceeding, or the disaffirmance, rejection or postponement in any such proceeding, of any of the Beneficiary’s, Guarantor’s or Lessee’s covenants, obligations, undertakings or agreements.

 

3.                                      Representations and Warranties of Guarantor. Guarantor hereby represents and warrants to Beneficiary that (a) Guarantor has full legal right, power and authority to enter into this Guaranty, to incur the obligations provided for herein, and to execute and deliver the same to Beneficiary; (b) this Guaranty has been duly executed and delivered by Guarantor and constitutes Guarantor’s valid and legally binding obligation, enforceable against Guarantor in accordance with its terms, subject to bankruptcy, insolvency, reorganization, and similar laws affecting the enforcement of creditor’s rights or contractual obligations generally and, as to enforcement, to general principles of equity, regardless of whether applied in a proceeding at law or in equity; (c) no approval or consent of any foreign, federal, state, county, local or other governmental or regulatory body, and no approval or consent of any other Person is required in connection with the execution and delivery by Guarantor of this Guaranty or the consummation and performance by Guarantor of the transactions contemplated hereby (other than consents and approvals that have been obtained); (d) the execution and delivery of this Guaranty and the obligations created hereby have been duly authorized by all necessary proceedings on the part of Guarantor, and will not conflict with or result in the breach or violation of any of the terms or conditions of, or constitute (or with notice or lapse of time or both would constitute) a default under the governing documents of Guarantor, any instrument, contract or other agreement to which Guarantor is a party or by or to which Guarantor or Guarantor’s assets or properties are bound or subject; or any statute or any regulation, order, judgment or decree of any court or governmental or regulatory body; and (e) Guarantor is not a party to or, to the knowledge of Guarantor, threatened in writing with any litigation or judicial, administrative or arbitration proceeding which, if decided adversely to Guarantor, would restrain, prohibit or materially delay the transactions contemplated hereby.

 

4.                                      Events of Default. An occurrence of any of the following shall constitute an “Event of Default” hereunder:

 

(a)                                 There shall occur an “Event of Default” under and within the meaning of the Master Lease.

 

(b)                                 If Guarantor shall fail, refuse or neglect to perform and discharge fully and timely any of its monetary obligations hereunder and, in the case of a non-monetary failure, such failure, refusal or neglect is not cured by Guarantor within a period of thirty (30) days after receipt by Guarantor of written notice thereof from MPT, unless such failure cannot with due diligence be cured within a period of thirty (30) days (in MPT’s reasonable discretion), in which case such failure shall not be deemed to continue so long as Guarantor commences to cure such failure within the thirty (30) day period and proceeds with due diligence to complete the curing thereof within sixty (60) days after receipt by Guarantor of MPT’s notice of default (or such longer period as is reasonably required in the determination of MPT to effect such cure if Guarantor is diligently proceeding to do so); provided however, in no event shall MPT be required to give more than one (1) notice and cure period for Guarantor’s failure to observe or perform the same (or repetitive) covenant or condition in any consecutive twelve (12) month period.

 

3

 

5.                                      Remedies. Upon the occurrence of an Event of Default, the Beneficiary shall have any and all rights and remedies available in law or equity to enforce any failure by Guarantor to fulfill its obligations hereunder. No remedy herein conferred upon or reserved to the Beneficiary hereunder is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every such remedy now or hereafter existing at law or in equity.

 

6.                                      Waiver of Acceptance, Etc. Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon Lessee, and/or Guarantor with respect to the Obligations guaranteed hereunder. Without limiting the other provisions of this Section 6, this Guaranty shall be construed as a continuing, absolute and unconditional guarantee of performance and payment without regard to the validity, regularity or enforceability of any obligations or any other collateral security thereof (if any) or other guarantee thereof (if any) or any other circumstance whatsoever (with or without notice to or knowledge of Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the obligations of Guarantor under this Guaranty, in bankruptcy or in any other instance, and the obligations and liabilities of Guarantor hereunder shall not be conditioned or contingent upon the pursuit by Beneficiary or any other person at any time of any right or remedy against Lessee, or against any other person (if any) which may be or become liable in respect of all or any part of the obligations or against any collateral security therefor or guarantee thereof or right of offset with respect thereto (if any). This Guaranty is not merely a guarantee of collection and the obligations of Guarantor hereunder are primary and this guarantee constitutes a guarantee of payment.

 

7.                                      Subrogation. Until all of the Obligations guaranteed hereunder have been satisfied and discharged in full, (a) Guarantor shall not exercise its right of subrogation and (b) Guarantor waives any right to enforce any remedy which Beneficiary now has or may hereafter have against Lessee, or any other guarantor or any other party to the Master Lease, or any other documents entered into in connection therewith, and any benefit of, and any right to participate in, any security or other assets now or hereafter held by Beneficiary with respect to the Master Lease or any other document or instrument entered into in connection therewith.

 

8.                                      Severability. Any provision of this Guaranty which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

 

9.                                      No Waiver. No failure by any party to insist upon the strict performance of any term of this Guaranty or to exercise any right, power or remedy consequent upon a breach thereof, and no acceptance of full or partial performance under the terms of this Guaranty during the continuance of any such breach, shall constitute a waiver of any such breach or any such term. To the extent permitted by law, no waiver of any breach shall affect or alter this Guaranty, which shall continue in full force and effect with respect to any other then existing or subsequent breach. The parties agree that no waiver shall be effective hereunder unless it is in writing.

 

10.                               Tolling of Statute of Limitations. Any act or circumstance that shall toll any statute of limitations applicable to the Obligations guaranteed hereby shall also toll the statute of limitations applicable to the liability of Guarantor for the Obligations guaranteed by this Guaranty.

 

4

 

11.                               Notices. All notices, demands, consents, approvals, requests and other communications under this Guaranty shall be in writing and shall be either (a) delivered in person, (b) sent by certified mail, return receipt requested, (c) delivered by a recognized delivery service, or (d) sent by facsimile transmission and addressed as follows:

 

	
if to Guarantor:
    	
First Choice ER, LLC
    
	
 
    	
2941 S. Lake Vista, Suite 200
    
	
 
    	
Lewisville, Texas 75067
    
	
 
    	
Attn: Chief Development Officer
    
	
 
    	
Phone: (972) 899-6666
    
	
 
    	
Fax: (972) 899-6664
    
	
 
    	
 
    
	
With copies to:
    	
First Choice ER, LLC
    
	
 
    	
2491 S. Lake Vista, Suite 200
    
	
 
    	
Lewisville, Texas 75067
    
	
 
    	
Attn: Legal Department
    
	
 
    	
Phone: (972) 899-6666
    
	
 
    	
Fax: (972) 899-6664
    
	
 
    	
 
    
	
 
    	
DLA Piper LLP (US)
    
	
 
    	
203 North LaSalle Street, Suite 1900
    
	
 
    	
Chicago, Illinois 60601-1293
    
	
 
    	
Attn: Merle Teitelbaum Cowin, Esq.
    
	
 
    	
Phone: (312) 368-4089
    
	
 
    	
Fax: (312) 630-7419
    
	
 
    	
 
    
	
if to any Beneficiary:
    	
c/o MPT Operating Partnership, L.P.
    
	
 
    	
1000 Urban Center Drive, Suite 501
    
	
 
    	
Birmingham, Alabama 35242
    
	
 
    	
Attn: Legal Department
    
	
 
    	
Phone: (205) 969-3755
    
	
 
    	
Fax: (205) 969-3756
    
	
 
    	
 
    
	
With a copy to:
    	
Baker, Donelson, Bearman, Caldwell & Berkowitz, PC
    
	
 
    	
1400 Wells Fargo Tower
    
	
 
    	
420 North 20th Street
    
	
 
    	
Birmingham, Alabama 35203
    
	
 
    	
Attn: Thomas O. Kolb, Esq.
    
	
 
    	
Phone: (205) 250-8321
    
	
 
    	
Fax: (205) 488-3721
    

 

or to such other address as either party may hereafter designate in writing, and shall be effective upon receipt. A notice, demand, consent, approval, request and other communication shall be deemed to be duly received if delivered in person or by a recognized delivery service, when left at the address of the recipient and if sent by facsimile, upon receipt by the sender of an acknowledgment or transmission report generated by the machine from which the facsimile was sent indicating that the facsimile was sent in its entirety to the recipient’s facsimile number;

 

5

 

provided that if a notice, demand, consent, approval, request or other communication is served by hand or is received by facsimile on a day which is not a Business Day (as defined in the Master Lease), or after 5:00 p.m. on any Business Day at the addressee’s location, such notice or communication shall be deemed to be duly received by the recipient at 9:00 a.m. (based upon Birmingham, Alabama time) on the first Business Day thereafter.

 

12.                               Governing Law. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS EXECUTED AND PERFORMED IN SUCH STATE, WITHOUT GIVING EFFECT TO CONFLICTS OF LAW PRINCIPLES.

 

13.                               Jurisdiction and Venue. GUARANTOR CONSENTS TO PERSONAL JURISDICTION IN THE STATE OF ALABAMA. GUARANTOR AGREES THAT ANY ACTION OR PROCEEDING ARISING FROM OR RELATED TO THIS GUARANTY SHALL BE BROUGHT AND TRIED EXCLUSIVELY IN THE STATE OR FEDERAL COURTS LOCATED IN JEFFERSON COUNTY, ALABAMA. GUARANTOR IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT. GUARANTOR EXPRESSLY ACKNOWLEDGES THAT THE STATE OF ALABAMA IS A FAIR, JUST AND REASONABLE FORUM AND AGREE NOT TO SEEK REMOVAL OR TRANSFER OF ANY ACTION FILED BY ANY OF THE OTHER PARTIES IN SAID COURTS. FURTHER, GUARANTOR IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY CLAIM THAT SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY CERTIFIED MAIL ADDRESSED TO GUARANTOR AT THE ADDRESS DESIGNATED PURSUANT TO SECTION 11 SHALL BE EFFECTIVE SERVICE OF PROCESS AGAINST GUARANTOR FOR ANY ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT. A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT MAY BE ENFORCED IN ANY OTHER COURT TO WHOSE JURISDICTION ANY OF THE PARTIES IS OR MAY BE SUBJECT.

 

14.                               Expenses. The Beneficiary shall be entitled to recover all reasonable costs associated with enforcing the provisions of this Guaranty in the event of a breach hereof by Guarantor, including, without limitation, courts costs and reasonable attorneys’ fees.

 

15.                               Entire Agreement; Modification. This Guaranty and other written agreements executed and delivered by the parties in connection with this Guaranty, constitute the entire agreement and understanding of the parties with respect to the subject matter of this Guaranty. This Guaranty supersedes any prior oral or written agreements between the parties with respect to the subject matter of this Guaranty. It is expressly agreed that there are no verbal understandings or agreements which in any way change the terms, covenants, and conditions set forth in this Guaranty, and that no modification of this Guaranty and no waiver of any of its terms and conditions shall be effective unless it is made in writing and duly executed by the parties.

 

16.                               Assignment. This Guaranty is not assignable by Guarantor without the prior written consent of Beneficiary. Beneficiary may at any time and without the consent of Guarantor assign

 

6

 

all of its rights and obligations hereunder to any Person to whom the Master Lease has been assigned in accordance with the provisions thereof.

 

17.                               Binding Effect; No Third Party Beneficiaries. This Guaranty shall bind and inure to the benefit of the parties and their successors and assigns, and the Beneficiary’s permitted successors and permitted assigns shall be entitled to enforce performance and observance of this Guaranty to the same extent Beneficiary is entitled to do so; provided, however, that (a) this Guaranty shall not inure to the benefit of any assignee pursuant to an assignment which violates the terms of this Guaranty or the Master Lease; and (b) this Guaranty shall not be deemed to confer any rights or remedies contained in this Guaranty upon any Person not a party or made subject to this Guaranty (other than any Person which constitutes a Beneficiary).

 

18.                               Counterparts. This Guaranty may be executed in counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument.

 

19.                               Necessary Action. Guarantor and Beneficiary shall perform any further acts and execute and deliver any documents that may be reasonably necessary to carry out the provisions of this Guaranty.

 

20.                               Joint Drafting. Guarantor and Beneficiary and their respective counsel have participated in the drafting and redrafting of this Guaranty and the general rules of construction which would construe any provisions of this Guaranty in favor of or to the advantage of one party as opposed to the other as a result of one party drafting this Guaranty as opposed to the other or in resolving any conflict or ambiguity in favor of one party as opposed to the other on the basis of which party drafted this Guaranty are hereby expressly waived by all parties to this Guaranty.

 

[Signature appears on following page.]

 

7

 

IN WITNESS WHEREOF, Guarantor has executed and delivered this Guaranty as of the date first above written.

 

 

	
 
    	
GUARANTOR:
    
	
 
    	
 
    
	
 
    	
FIRST CHOICE ER, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

EXHIBIT C

 

FORM MASTER LEASE

 

C-1

 

MASTER LEASE AGREEMENT

 

BY AND AMONG

 

THE ENTITIES LISTED ON SCHEDULE 1(a) ATTACHED HERETO,

 

collectively, Lessor

 

AND

 

THE ENTITIES LISTED ON SCHEDULE 1(b) ATTACHED HERETO,

 

collectively, jointly and severally, as Lessee

 

               , 2013

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
Page
    
	
Article I
    	
 
    	
DEFINITIONS
    	
2
    
	
Article II
    	
 
    	
LEASED   PROPERTY; TERM
    	
17
    
	
Article III
    	
 
    	
RENT
    	
18
    
	
3.1
    	
 
    	
Rent
    	
18
    
	
3.2
    	
 
    	
Additional   Charges
    	
19
    
	
Article IV
    	
 
    	
IMPOSITIONS
    	
20
    
	
4.1
    	
 
    	
Payment   of Impositions
    	
20
    
	
4.2
    	
 
    	
Adjustment   of Impositions
    	
21
    
	
4.3
    	
 
    	
Utility   Charges
    	
21
    
	
4.4
    	
 
    	
Insurance   Premiums
    	
21
    
	
Article V
    	
 
    	
ABSOLUTE   NET LEASE; NO TERMINATION; TERMINATION WITH RESPECT TO FEWER THAN ALL   FACILITIES
    	
22
    
	
5.1
    	
 
    	
Absolute   Net Lease; No Termination
    	
22
    
	
5.2
    	
 
    	
Termination   with Respect to Fewer than all Facilities
    	
22
    
	
Article VI
    	
 
    	
OWNERSHIP   OF LEASED PROPERTY AND PERSONAL PROPERTY
    	
23
    
	
6.1
    	
 
    	
Ownership   of the Leased Property
    	
23
    
	
6.2
    	
 
    	
Lessee’s   Personal Property
    	
23
    
	
Article VII
    	
 
    	
CONDITION   AND USE OF LEASED PROPERTY
    	
23
    
	
7.1
    	
 
    	
Condition   of the Leased Property
    	
23
    
	
7.2
    	
 
    	
Use   of the Leased Property
    	
24
    
	
7.3
    	
 
    	
Lessor   to Grant Easements
    	
25
    
	
Article VIII
    	
 
    	
LEGAL   AND INSURANCE REQUIREMENTS
    	
25
    
	
8.1
    	
 
    	
Compliance   with Legal and Insurance Requirements
    	
25
    
	
8.2
    	
 
    	
Hazardous   Materials
    	
26
    
	
8.3
    	
 
    	
Healthcare   Laws
    	
26
    
	
8.4
    	
 
    	
Single   Purpose Entity
    	
27
    
	
8.5
    	
 
    	
Organizational   Covenants
    	
27
    
	
Article IX
    	
 
    	
REPAIRS;   RESTRICTIONS
    	
27
    
	
9.1
    	
 
    	
Maintenance   and Repair
    	
27
    
	
9.2
    	
 
    	
Encroachments;   Restrictions
    	
28
    
	
Article X
    	
 
    	
CONSTRUCTION   OF LEASED IMPROVEMENTS; CAPITAL ADDITIONS
    	
29
    
	
10.1
    	
 
    	
Construction   of Capital Additions to the Leased Property
    	
29
    
	
10.2
    	
 
    	
Capital   Additions Financed by Lessee
    	
29
    
	
10.3
    	
 
    	
Capital   Additions Financed by Lessor
    	
30
    
	
10.4
    	
 
    	
Salvage
    	
30
    
	
Article XI
    	
 
    	
LIENS
    	
30
    
	
Article XII
    	
 
    	
PERMITTED   CONTESTS
    	
31
    
	
12.1
    	
 
    	
Permitted   Contests
    	
31
    
	
Article XIII
    	
 
    	
INSURANCE
    	
31
    
	
13.1
    	
 
    	
General   Insurance Requirements
    	
31
    
	
13.2
    	
 
    	
Additional   Insurance
    	
34
    
	
13.3
    	
 
    	
Waiver   of Subrogation
    	
34
    
	
13.4
    	
 
    	
Form of   Insurance
    	
35
    

 

i

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
 
    	
Page
    
	
13.5
    	
 
    	
Increase   in Limits
    	
36
    
	
13.6
    	
 
    	
No   Separate Insurance
    	
36
    
	
Article XIV
    	
 
    	
FIRE   AND CASUALTY
    	
36
    
	
14.1
    	
 
    	
Insurance   Proceeds
    	
36
    
	
14.2
    	
 
    	
Reconstruction in the Event of Damage or Destruction Covered by   Insurance
    	
37
    
	
14.3
    	
 
    	
Reconstruction   in the Event of Damage or Destruction Not Covered by Insurance
    	
38
    
	
14.4
    	
 
    	
Lessee’s   Personal Property
    	
38
    
	
14.5
    	
 
    	
Restoration   of Lessee’s Property
    	
38
    
	
14.6
    	
 
    	
No   Abatement of Rent
    	
38
    
	
14.7
    	
 
    	
Waiver
    	
38
    
	
Article XV
    	
 
    	
CONDEMNATION
    	
38
    
	
15.1
    	
 
    	
Parties’   Rights and Obligations
    	
38
    
	
15.2
    	
 
    	
Total   Taking
    	
38
    
	
15.3
    	
 
    	
Partial   Taking
    	
38
    
	
15.4
    	
 
    	
Award   Distribution
    	
39
    
	
Article XVI
    	
 
    	
DEFAULT
    	
39
    
	
16.1
    	
 
    	
Events   of Default
    	
39
    
	
16.2
    	
 
    	
Additional   Expenses
    	
46
    
	
16.3
    	
 
    	
No   Waiver by Lessor
    	
46
    
	
16.4
    	
 
    	
Waiver   of Statutory Rights
    	
46
    
	
Article XVII
    	
 
    	
LESSOR’S   RIGHT TO CURE
    	
46
    
	
Article XVIII
    	
 
    	
PURCHASE   OF THE LEASED PROPERTY
    	
46
    
	
Article XIX
    	
 
    	
HOLDING   OVER
    	
47
    
	
Article XX
    	
 
    	
RISK   OF LOSS
    	
47
    
	
Article XXI
    	
 
    	
INDEMNIFICATION
    	
48
    
	
Article XXII
    	
 
    	
ASSIGNMENTS   AND SUBLEASING
    	
49
    
	
22.1
    	
 
    	
Assignment   and Subleasing
    	
49
    
	
22.2
    	
 
    	
Sublease   Limitations
    	
49
    
	
22.3
    	
 
    	
Sublease   Subordination and Non-Disturbance
    	
50
    
	
Article XXIII
    	
 
    	
OFFICER’S   CERTIFICATES; FINANCIAL STATEMENTS; NOTICES AND OTHER CERTIFICATES
    	
50
    
	
Article XXIV
    	
 
    	
INSPECTION
    	
52
    
	
Article XXV
    	
 
    	
NO   WAIVER
    	
52
    
	
Article XXVI
    	
 
    	
REMEDIES   CUMULATIVE
    	
53
    
	
Article XXVII
    	
 
    	
SURRENDER
    	
53
    
	
Article XXVIII
    	
 
    	
NO   MERGER OF TITLE
    	
53
    
	
Article XXIX
    	
 
    	
TRANSFERS   BY LESSOR; LESSOR SEVERANCE RIGHTS
    	
53
    
	
29.1
    	
 
    	
Transfers   by Lessor
    	
53
    
	
29.2
    	
 
    	
Severance   Rights
    	
54
    
	
Article XXX
    	
 
    	
QUIET   ENJOYMENT
    	
55
    
	
Article XXXI
    	
 
    	
NOTICES
    	
55
    
	
Article XXXII
    	
 
    	
APPRAISAL
    	
56
    
	
Article XXXIII
    	
 
    	
PURCHASE   RIGHTS
    	
57
    

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
 
    	
Page
    
	
33.1
    	
 
    	
Lessee’s   Option to Purchase
    	
57
    
	
33.2
    	
 
    	
Lessor’s   Option to Purchase Lessee’s Personal Property
    	
57
    
	
Article XXXIV   
    	
 
    	
SUBSTITUTION   RIGHTS
    	
58
    
	
34.1
    	
 
    	
Lessee’s   Property Substitution Right
    	
58
    
	
34.2
    	
 
    	
Conditions   Precedent to Lessee’s Property Substitution Right
    	
58
    
	
34.3
    	
 
    	
Procedures   for Property Substitution
    	
59
    
	
34.4
    	
 
    	
Lessor   Costs
    	
60
    
	
Article XXXV
    	
 
    	
FINANCING   OF THE LEASED PROPERTY
    	
60
    
	
Article XXXVI   
    	
 
    	
RESERVED
    	
60
    
	
Article XXXVII   
    	
 
    	
LICENSES   AND COMPLIANCE WITH HEALTHCARE LAWS
    	
60
    
	
37.1
    	
 
    	
Maintenance   of Licenses
    	
60
    
	
37.2
    	
 
    	
No   Transfers or Alterations of Licenses
    	
61
    
	
37.3
    	
 
    	
Termination   of Lease or Possession
    	
61
    
	
37.4
    	
 
    	
Material   Condition of Lease
    	
62
    
	
Article XXXVIII   
    	
 
    	
MISCELLANEOUS
    	
62
    
	
38.1
    	
 
    	
General
    	
62
    
	
38.2
    	
 
    	
Bankruptcy   Covenants and Waivers
    	
62
    
	
38.3
    	
 
    	
Lessor’s   Expenses
    	
63
    
	
38.4
    	
 
    	
Entire   Agreement; Modifications
    	
63
    
	
38.5
    	
 
    	
Lessor   Securities Offering and Filings
    	
63
    
	
38.6
    	
 
    	
Non-Recourse   as to Lessor
    	
64
    
	
38.7
    	
 
    	
Covenants,   Restrictions and Reciprocal Easements
    	
64
    
	
38.8
    	
 
    	
Force   Majeure
    	
64
    
	
38.9
    	
 
    	
Management   Agreements
    	
65
    
	
38.10
    	
 
    	
Non-Competition
    	
65
    
	
38.11
    	
 
    	
Governing   Law
    	
66
    
	
38.12
    	
 
    	
Jurisdiction   and Venue
    	
66
    
	
38.13
    	
 
    	
Future   Intercreditor Agreements and Subordination Agreements
    	
66
    
	
38.14
    	
 
    	
Letter   of Credit
    	
66
    
	
38.15
    	
 
    	
True   Lease
    	
67
    
	
38.16
    	
 
    	
Representations   and Covenants relating to Certain Facilities
    	
67
    
	
38.17
    	
 
    	
Compliance   with Anti-Terrorism Laws
    	
67
    
	
38.18
    	
 
    	
Electronically   Transmitted Signatures
    	
67
    
	
38.19
    	
 
    	
Waiver   of Jury Trial
    	
68
    
	
38.20
    	
 
    	
Joint   and Several Obligations
    	
68
    
	
38.21
    	
 
    	
Counterparts
    	
68
    
	
38.22
    	
 
    	
Specific   Performance
    	
68
    
	
38.23
    	
 
    	
Continuation   of Defaults
    	
68
    
	
38.24
    	
 
    	
Survival
    	
68
    
	
38.25
    	
 
    	
Joint   Drafting
    	
69
    
	
Article XXXIX
    	
 
    	
MEMORANDUM   OF LEASE
    	
69
    

 

iii

 

MASTER LEASE AGREEMENT

 

This MASTER LEASE AGREEMENT (this “Lease”) is dated as of                   , 2013, and is by and among the entities listed on Schedule 1(a) attached hereto and made a part hereof by reference and incorporation (collectively, the “Lessor”), having their principal office at 1000 Urban Center Drive, Suite 501, Birmingham, Alabama 35242, and the entities listed on Schedule 1(b) attached hereto and made a part hereof by reference and incorporation (collectively, jointly and severally, the “Lessee”), having their principal office at 2941 S. Lake Vista, Suite 200, Lewisville, Texas 75067.

 

STATEMENT OF INTENT

 

Subject to Articles V, XIV, XV, XXIX, XXXIII and Section 16.1, this Lease constitutes one unitary, indivisible, non-severable true lease of all the Leased Property. This Lease does not constitute separate leases contained in one document each governed by similar terms. The use of the expression “unitary lease” to describe this Lease is not merely for convenient reference. It is the conscious choice of a substantive appellation to express the intent of Lessor and Lessee in regard to an integral part of this transaction, which is to accomplish the creation of an indivisible lease. Lessor and Lessee agree that from an economic point of view the portions of the Leased Property leased pursuant to this Lease constitute one economic unit and that the Rent and all other provisions have been negotiated and agreed to be based upon a lease of all the portions of the Leased Property as a single, composite, inseparable transaction. Except as expressly provided in this Lease for specific isolated purposes (and in such cases only to the extent expressly so stated), all provisions of this Lease, including definitions, commencement and expiration dates, rental provisions, use provisions, renewal provisions, breach, default, enforcement, termination and assignment and subletting provisions, shall apply equally and uniformly to all the Leased Property as one unit and are not severable. The economic terms of this Lease would have been substantially different had separate leases or a “divisible” lease been acceptable to Lessor. An Event of Default of any of the terms or conditions of this Lease occurring with respect to any portion of the Leased Property relating to a particular Facility shall constitute an Event of Default under this Lease with respect to all the Leased Property. Except as expressly provided in this Lease for specific isolated purposes (and in such cases only to the extent expressly so stated), Lessor and Lessee agree that the provisions of this Lease shall at all times be construed, interpreted and applied such that the intention of Lessor and Lessee to create a unitary lease shall be preserved and maintained. Lessor and Lessee agree that for the purposes of any assumption, rejection or assignment of this Lease under 11 U.S.C. Section 365 or any amendment or successor section thereof, this is one indivisible and non-severable lease dealing with and covering one legal and economic unit which must be assumed, rejected or assigned as a whole with respect to all (and only all) the Leased Property.

 

W I T N E S S E T H:

 

WHEREAS, Lessor has purchased those [                ()] parcels of real property which constitute the Land (as hereinafter defined), located in the [               ,            ,            ,              ,             ,             ] areas, and in the future Affiliates (as hereinafter defined) of Lessor may purchase additional parcels of real property which will be added to and 

 

 

constitute the “Land” in accordance with the terms and provisions of the Master Funding and Development Agreement (as hereinafter defined);

 

WHEREAS, each Facility Lessee (as hereinafter defined) has been formed as a wholly owned subsidiary of First Choice ER, LLC, a Texas limited liability company (“First Choice”), in order to lease and operate separate, freestanding emergency medical facilities on the Leased Property (as hereinafter defined), and it is intended that in the future Affiliates of Lessee will be formed as wholly owned subsidiaries of First Choice in order to lease and operate additional freestanding emergency medical facilities on the Leased Property;

 

WHEREAS, Lessor, Lessee and certain of their respective Affiliates (as hereinafter defined) plan to cause to be developed and constructed the Leased Improvements (as hereinafter defined) relating to certain freestanding emergency medical facilities listed on Schedule 1(c) (each a “Facility”), to be located on the Land and Lessor has agreed to finance the construction of such Leased Improvements in accordance with the Project Development Agreements (as hereinafter defined); and

 

WHEREAS, Lessor desires to lease the Leased Property to Lessee and Lessee desires to lease the Leased Property from Lessor, upon the terms and conditions hereinafter provided.

 

NOW, THEREFORE, the parties agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

For all purposes of this Lease, except as otherwise expressly provided or unless the context otherwise requires, (a) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular, (b) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP at the applicable time, (c) all references herein to Articles, Sections, Schedules, parties and Exhibits shall be deemed to refer to Articles, Sections and Schedules of, and parties and Exhibits to, this Lease, unless the context shall otherwise require, and (d) the words “herein,” “hereof,” “hereunder” and other words of similar import refer to this Lease as a whole and not to any particular Article, Section or other subdivision.

 

Acquisition Date: With respect to each Facility, the date of acquisition of the parcel of the Land and any existing improvements relating thereto in accordance with the Master Funding and Development Agreement.

 

Addendum: An Addendum/Joinder which will be entered into by an Affiliate of Lessor, an Affiliate of Lessee and all entities then constituting Lessor and Lessee, at the time an additional parcel of Land is made subject to this Lease in accordance with the Master Funding and Development Agreement.

 

Additional Charges: As defined in Section 3.2.

 

Adjustment Date: Each January 1 during the Term (as hereinafter defined), commencing on January 1, 2015.

 

2

 

Affiliate:  With respect to any Person (i) any Person that, directly or indirectly, controls or is controlled by or is under common control with such Person, (ii) any other Person that owns, beneficially, directly or indirectly, 10% or more of the outstanding capital stock, shares or equity interests of such Person, or (iii) any officer, director, employee, partner, member, manager or trustee of such Person or any Person controlling, controlled by or under common control with such Person (excluding trustees and persons serving in similar capacities who are not otherwise an Affiliate of such Person). For the purposes of this definition, “control” (including the correlative meanings of the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, through the ownership of voting securities or otherwise.

 

AIREA:  The American Institute of Real Estate Appraisers, or any successor organization.

 

Allocated Base Rent:  As defined in Section 3.1(a).

 

Allocated Development Cost:  With respect to each Facility, the portion of Total Development Cost relating thereto, plus or minus any adjustments as Lessor and Lessee may agree to from time to time.

 

Anti-Terrorism Laws:  Any laws, statutes and regulations relating to terrorism or money laundering, including Executive Order No. 13224 (effective September 24, 2001), the Patriot Act, the laws, statutes and regulations comprising or implementing the Bank Secrecy Act, and the laws, statutes and regulations administered by OFAC.

 

Award:  All compensation, sums or anything of value awarded, paid or received on a total or partial Condemnation.

 

Bankruptcy Code:  Chapter of 11 U.S.C. § 101, et seq.

 

Base Rent:  At any time, the total Allocated Base Rent payable with respect to all Facilities for any applicable period.

 

Blocked Person:  Any Person:  (a) listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (b) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (c) a Person with which any Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law, (d) a Person that commits, threatens or conspires to commit or supports “terrorism” as defined in Executive Order No. 13224, or (e) a Person that is named a “specially designated national” or “blocked person” on the most current list published by OFAC or other similar list.

 

BOA:  Bank of America, N.A.

 

Business:  The operation of each Facility as a freestanding emergency medical facility and the engagement in and pursuit and conduct of any business venture or activity related thereto.

 

3

 

Business Day:  Each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which money centers in the New York, New York are authorized or obligated by law or executive order to close.

 

Capital Additions:  With respect to each Facility, (a) non-routine renovations or expansions of buildings, structures or other improvements currently located on that portion of the Leased Property where such Facility is located (or on additional parcels added to such Leased Property), (b) the addition of one or more parcels of land to such portion of the Leased Property (whether by purchase or ground lease), or (c) the addition of one or more new buildings or additional structures placed on such portion of the Leased Property or any such additional parcels of land, including, without limitation, the construction of a new wing or new story.

 

Capital Addition Cost:  With respect to each Facility, the cost of any Capital Additions proposed to be made by Lessee whether or not paid for by Lessee or Lessor. Such cost shall be designated and limited pursuant to a schedule to be agreed upon by the parties prior to commencement of construction of any Capital Addition.

 

Cash Collections:  Any and all payments received for patient related services that are posted to Lessee’s accounting system for a Facility, including, without limitation, any such payments received from patients, insurance companies, managed care and preferred provider organizations, or other payors.

 

CERCLA:  As defined in the definition of “Hazardous Materials Laws.”

 

Certificate of Occupancy:  With respect to each Facility, the certification or other governmental authorization issued by the applicable Governmental Body authorizing the occupancy and operation of the portion of the Leased Property relating to such Facility, which certification may be subject to certain conditions, so long as occupancy is permitted.

 

Change of Control Transaction:  Any transaction, the consummation of which results in First Choice ceasing to own, directly or indirectly, at least fifty-one percent (51%) of the Equity Interests of any Facility Lessee, without the prior written consent of Lessor, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, that “Change of Control Transaction” shall not include any Permitted Sale Transaction (as hereinafter defined). For the avoidance of doubt, the entering into of a written agreement (unless the agreement is conditioned on MPT’s approval or will not close until after the expiration of the Term) or the granting of an option to acquire fifty-one percent (51%) or more of the Equity Interests of any Facility Lessee or the issuance of debt convertible into fifty-one percent (51%) or more of the Equity Interests of any Facility Lessee shall be deemed to be the issuance of Equity Interests for purposes of determining whether a Change of Control Transaction has occurred.

 

Code:  The Internal Revenue Code of 1986, as amended.

 

Combined Lease Payments:  For any period with respect to Lessee, the sum of the payment obligations of all Facility Lessees as the lessee under all leases for real property, including, without limitation, this Lease and any intra-company leases for real property; provided, however, that payment obligations with respect to a Facility will not be included until the first calendar month after such Facility has been open for business for six (6) months.

 

4

 

Commencement Date:                      , 2013.

 

Completion:  The terms “completion,” “complete construction,” “completion of construction” and similar phrases mean, with respect to the portion of the Leased Property relating to each Facility, such time as Lessor receives (i) written certification from the Architect (as defined in the Project Development Agreement for such Facility) that the construction of such portion of the Leased Improvements has been substantially completed in accordance with the Plans and Specifications (as defined in the Project Development Agreement for such Facility) therefor, which certificate shall be in form and substance reasonably satisfactory to Lessor and shall include the written approval of Lessor’s construction inspector noted thereon, and (ii) Lessor has received the Certificate of Occupancy for such portion of the Leased Property; provided, however, that for purposes of determining whether the Rent Commencement Date has occurred with respect to any Facility, Lessor may waive either of these requirements in writing in its sole discretion and, if such waiver is delivered, “Completion” for purposes of such Rent Commencement Date shall mean the date of issuance of the Certificate of Occupancy.

 

Completion Date:  With respect to each Facility, the date of Completion of the Leased Improvements relating to such Facility.

 

Condemnation:  Either (a) the exercise of any governmental power, whether by legal proceedings or otherwise, by a Condemnor or (b) a voluntary sale or transfer by Lessor to any Condemnor, either under threat of Condemnation or while legal proceedings for Condemnation are pending, in all of the foregoing cases with respect to any portion of the Leased Property.

 

Condemnor:  Any public or quasi-public authority, or private corporation or individual, having the power of Condemnation.

 

Consolidated Cash Flow:  For any period, for First Choice and its subsidiaries on a consolidated basis, an amount equal to the sum of (a) consolidated EBITDA for such period, minus (b) income taxes paid in cash during such period, minus (c) tax distributions made during such period, minus (d) management fees during such period.

 

Consolidated Fixed Charge Coverage Ratio:  As of any date of determination, the ratio of (a) Consolidated Cash Flow for the four calendar quarters most recently ended to, (b) Consolidated Fixed Charges for the four calendar quarters most recently ended.

 

Consolidated Fixed Charges:  For any period, for First Choice and its subsidiaries on a consolidated basis, an amount equal to the sum of (a) the cash portion of consolidated interest charges for such period, plus (b) consolidated maintenance capital expenditures for such period, plus (c) consolidated scheduled funded debt payments for such period.

 

Construction Period:  With respect to each Facility, that period of time commencing on the applicable Acquisition Date and ending on the last day of the calendar month during which the Completion Date shall occur.

 

Construction Period Accrual:  With respect to each Facility, an amount equal to the product of (a) the amount all hard and soft costs funded in accordance with the Development Budget for the acquisition of the Land and the development of the Leased Improvements, multiplied on a per

 

5

 

diem basis by (b) the Lease Rate (based upon a 360-day year), with such product being compounded on an annual basis during the Construction Period.

 

Cost Overrun Guaranty:  With respect to each Facility, that certain Cost Overrun Guaranty executed by First Choice in favor of MPT and the applicable Facility Lessor, as the same may be modified, amended or restated from time to time.

 

CPI:  The Consumer Price Index, all urban consumers, all items, U.S. City Average, published by the United States Department of Labor, Bureau of Labor Statistics, in which 1982-1984 equals one hundred (100). If the Consumer Price Index is discontinued or revised during the term of this Lease, such other governmental index or computation with which it is replaced shall be used in order to obtain substantially the same result as would be obtained if the Index had not been discontinued or revised.

 

Credit Enhancements:  Such documents, instruments and agreements (including without limitation, security agreements, non-competition agreements and guarantees) executed and delivered to Lessor as shall be necessary to provide Lessor with comparable rights, credit enhancements and security as are provided in the Other Agreements and the Letter of Credit, as determined in Lessor’s reasonable discretion.

 

Date of Taking:  The date the Condemnor has the right to possession of the property being condemned.

 

Declarations:  As defined in Section 38.7.

 

Developer:  With respect to each Facility, the “Developer” under and as defined in the applicable Project Development Agreement.

 

DHHS:  As defined in Section 37.1.

 

EBITDA:  For any period, for FirstChoice and its subsidiaries on a consolidated basis, earnings before the deduction of interest, taxes, depreciation and amortization, plus, to the extent deducted in calculating such earnings, (a) expenses incurred during such period to the extent the same have been reimbursed in cash during such period by a third party (other than FirstChoice or any subsidiary), and (b) fees and expenses incurred with respect to regulatory or strategic activities during such period, including any redesign of the physical plant in order to comply with state regulations, all as determined in accordance with GAAP.

 

EBITDAR:  For any period, for all Facility Lessees on a consolidated basis, earnings before the deduction of interest, taxes, depreciation, amortization and rent, plus, to the extent deducted in calculating such earnings, (a) expenses incurred during such period to the extent the same have been reimbursed in cash during such period by a third party (other than FirstChoice or any subsidiary), and (b) fees and expenses incurred with respect to regulatory or strategic activities during such period, including any redesign of the physical plant in order to comply with state regulations, all as determined in accordance with GAAP; provided, that the earnings of a Facility Lessee will not be included until the first calendar month after the Facility owned by such Facility Lessee has been open for business for six (6) months.

 

Encumbrance:  As defined in Article XXXV.

 

6

 

Environmental Indemnification Agreement:  That certain Environmental Indemnification Agreement, dated as of the date hereof, by First Choice and each Facility Lessee in favor of Lessor, as the same may be modified, amended or restated from time to time.

 

Equity Constituents:  With respect to any Person, as applicable, the members, general or limited partners, shareholders, stockholders or other Persons, however designated, who are the owners of the issued and outstanding equity or ownership interests of such Person.

 

Equity Interests:  With respect to any Person, the voting power, ownership, or other equitable interests of such Person, including any interest represented by any capital stock, convertible or participating debt instruments, membership interest, partnership interest, or any similar interest therein.

 

Escalator:  As defined in Section 3.1(b).

 

Escrow Invoice:  As defined in Section 3.2.

 

Events of Default:  As defined in Section 16.1.

 

Extension Notice:  As defined in Article II.

 

Extension Term(s):  As defined in Article II.

 

Facility:  Each of the freestanding emergency medical care facilities on the Land as described on Schedule 1(c) and each additional freestanding emergency medical care facility to be located on additional parcels of Land that are made subject to this Lease pursuant to an Addendum.

 

Facility Instrument:  A note (whether secured or unsecured), loan agreement, credit agreement, guaranty, security agreement, mortgage, deed of trust or other agreement pursuant to which a Facility Lender has provided financing to Lessor in connection with any portion of the Leased Property or any part thereof, or financing provided to Lessee, if such financing is provided by Lessor or any Affiliate of Lessor or in connection with a Capital Addition, and any and all renewals, replacements, modifications, supplements, consolidations, spreaders and extensions thereof.

 

Facility Lender:  A holder (which may include any Affiliate of Lessor) of any Facility Instrument.

 

Facility Lender SNDA:  As defined in Article XXXV.

 

Facility Lessee:  The individual lessee which operates a particular Facility. For the avoidance of doubt, all of the Facility Lessees are referred to collectively as Lessee.

 

Facility Lessor:  The individual lessor which owns and leases a particular Facility. For the avoidance of doubt, all of the Facility Lessors are referred to collectively as Lessor.

 

Facility Loan:  A loan made by a Facility Lender.

 

Fair Market Added Value:  With respect to each Facility, the Fair Market Value of the portion of the Leased Property relating to such Facility, including all Capital Additions with respect thereto,

 

7

 

less the Fair Market Value of such portion of the Leased Property determined as if no Capital Additions paid for by Lessee had been constructed with respect thereto.

 

Fair Market Value:  With respect to each Facility, the Fair Market Value of the portion of the Leased Property relating to such Facility, including all Capital Additions with respect thereto, (a) as shall be determined in accordance with the appraisal procedures set forth in Article XXXII or in such other manner as shall be mutually acceptable to Lessor and Lessee, and (b) which shall not take into account any reduction in value resulting from any damage, destruction or condemnation of any part of such portion of the Leased Property or any indebtedness to which such portion of the Leased Property is subject and which encumbrance Lessee or Lessor is otherwise required to remove pursuant to any provision of this Lease or agrees to remove at or prior to the closing of the transaction as to which such Fair Market Value determination is being made. With respect to each Facility and notwithstanding anything contained in this Lease to the contrary, any appraisal of the portion of the Leased Property relating thereto shall assume the Lease is in place for a term of fifteen (15) years, shall not take into account any purchase options and shall not take into account any closing costs customarily paid by either purchaser or seller.

 

Fair Market Value Purchase Price:  With respect to each Facility, the Fair Market Value of the portion of the Leased Property relating thereto, less the Fair Market Added Value with respect to such portion of the Leased Property.

 

Final Completion Date:  The date of Completion of construction of the Leased Improvements on the final parcel of land to be acquired and developed in accordance with the Master Funding and Development Agreement and to be added to the Leased Property hereunder.

 

Financial Statements:  For any fiscal year or other accounting period for Lessee or Guarantor balance sheets, statements of operations and capital accounts, and statements of cash flows setting forth in comparative form the corresponding figures for the year-earlier fiscal period, all prepared in accordance with GAAP.

 

First Choice:  As defined in the Recitals hereof.

 

Fixed Term:  As defined in Article II.

 

Fixtures:  All equipment, machinery, fixtures, and other items of real property, including all components thereof, now and hereafter located in, on, or used in connection with, and that are in each case permanently affixed to or incorporated into the buildings and structures on the Land, including, without limitation, all permanently affixed furnaces, boilers, heaters, electrical equipment, heating, plumbing, lighting, ventilating, refrigerating, incineration, air and water pollution control, waste disposal, air-cooling and air-conditioning systems and apparatus, sprinkler systems and fire and theft protection equipment, and built-in oxygen and vacuum systems, all of which, to the greatest extent permitted by law, are hereby deemed by the parties to constitute real estate, together with all replacements, modifications, alterations and additions thereto.

 

Force Majeure:  As defined in Section 38.8.

 

Full Replacement Cost:  As defined in Section 13.1.

 

8

 

GAAP:  The United States generally accepted accounting principles and practices as in effect from time to time and applied consistently throughout the periods involved.

 

Governmental Body:  Any United States federal, state or local government, political subdivision, governmental, regulatory or administrative authority, instrumentality, agency body or commission, self-regulatory organization, court, tribunal or judicial or arbitral body, including the Securities and Exchange Commission.

 

Guarantor:  First Choice ER, LLC, a Texas limited liability company, its successors and assigns.

 

Guaranty:  That certain Guaranty, dated as of the date hereof, executed and delivered by the Guarantor in favor of Lessor, as the same may be amended, modified and/or restated from time to time.

 

Hazardous Materials:  Any substance, including without limitation, asbestos or any substance containing asbestos and deemed hazardous under any Hazardous Materials Law, the group of organic compounds known as polychlorinated biphenyls, flammable explosives, radioactive materials, infectious wastes, biomedical and medical wastes, chemicals known to cause cancer or reproductive toxicity, pollutants, effluents, contaminants, emissions or related materials, and any items included in the definition of hazardous or toxic wastes, materials or substances under any Hazardous Materials Laws.

 

Hazardous Materials Laws:  Each federal, state and local law and regulation relating to pollution, protection, or preservation of human health or the environment, including ambient air, surface water, ground water, land surface or subsurface strata, and natural resources, and including each law and regulation relating to emissions, discharges, releases or threatened releases of Hazardous Materials, or otherwise relating to the manufacturing, processing, distribution, use, treatment, generation, storage, containment (whether above ground or underground), disposal, transport or handling of Hazardous Materials, or the preservation of the environment or mitigation of adverse effects thereon and each law and regulation with regard to record keeping, notification, disclosure and reporting requirements respecting Hazardous Materials, including, without limitation, the Resource Conservation and Recovery Act of 1976 (“RCRA”), the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), as amended by the Superfund Amendments and Reauthorization Act of 1986 (“SARA”), the Hazardous Materials Transportation Act, the Federal Water Pollution Control Act, the Clean Air Act, the Clean Water Act, the Toxic Substances Control Act, the Safe Drinking Water Act, and all similar federal, state and local environmental statutes and ordinances, and the regulations, orders, and decrees now or hereafter promulgated thereunder, in each case as amended from time to time.

 

Health Benefit Laws:  Laws relating to the licensure, certification, qualification or authority to transact business relating to the provision of, or payment for, or both the provision of and payment for, health benefits, health care or insurance coverage, including ERISA, COBRA, HIPAA, SCHIP, Medicare, Medi-Caid, CHAMPUS/TriCare, and laws relating to the regulation of workers compensation, utilization review, third-party administrative services, case management and coordination of benefits.

 

Health Compliance Laws:  All applicable laws pertaining to billing, kickbacks, false claims, self-referral, claims processing, marketing, HIPAA security standards for the storage,

 

9

 

maintenance, transmission, utilization and access to and privacy of patient information, and HIPAA and state standards for electronic transactions and data code sets, including, without limitation, the False Claims Act (31 U.S.C. Section 3729 et seq.), the Anti-Kickback Act of 1986 (41 U.S.C. Section 51 et seq.), the Federal Health Care Programs Anti-Kickback Statute (42 U.S.C. Section 1320a-7a(b)), the Stark Law, the Civil Monetary Penalties Law (42 U.S.C. Section 1320a-7a), or the Truth in Negotiations (10 U.S.C. Section 2304 et seq.), Health Care Fraud (18 U.S.C. Section 1347), Mail Fraud (18 U.S.C. Section 1341), Wire Fraud (18 U.S.C. Section 1343), Theft or Embezzlement (18 U.S.C. Section 669), Fraud and False Statements (18 U.S.C. Section 1001), False Statements Relating to Health Care Matters (18 U.S.C. Section 1035), and any other applicable federal health care law or equivalent state statutes, or any rule or regulation promulgated by a Governmental Body with respect to any of the foregoing, as any of the same may be amended, modified and/or restated from time to time.

 

Healthcare Laws:  Health Benefit Laws, Health Compliance Laws and HIPAA.

 

HIPAA:  The Health Insurance Portability and Accountability Act of 1996, as the same may be amended, modified or supplemented from time to time, and any successor statue thereto, and any and all rules or regulations promulgated from time to time thereunder.

 

Impacted Facility:  As defined in Section 14.2(a).

 

Impartial Appraiser:  As defined in Section 13.1(a).

 

Impositions:  Collectively, with respect to each Facility, all civil monetary penalties, fines and overpayments imposed by state and federal regulatory authorities (excluding any penalties or fines caused by the action or inaction of any Lessor or MPT), all Real Estate Taxes, all state and local sales and use taxes, single business, gross receipts, transaction privilege, rent or similar taxes, franchise (including but not limited to taxes based on capital, net worth or assets), license, business entity, annual report fees and other taxes imposed on any business entities, including limited partnerships, limited liability companies and other “pass through” entities, and any such taxes and statutory representation fees imposed on Lessor or Lessor’s Affiliates (including, without limitation, all assessments, charges and costs imposed under the Permitted Exceptions), all assessments for utilities, public improvements or benefits, ground rents, water, wastewater, sewer, sanitary sewer or other rents and charges, excises, tax levies, fees, including, without limitation, impact, development, license, permit, inspection, authorization and similar fees, and all other governmental charges of every kind or nature, , and all other fees, costs and expenses which at any time prior to, during or in respect of the Term may be charged, assessed or imposed on or in respect of or be a lien upon (a) Lessor or Lessor’s interest in the portion of the Leased Property relating to such Facility, (b) such portion of the Leased Property or any part thereof or any rent therefrom or any estate, right, title or interest therein, or (c) any occupancy, operation, use or possession of, sales from, or activity conducted on, or in connection with, such portion of the Leased Property or the leasing or use of such portion of the Leased Property or any part thereof. Notwithstanding any provision hereof to the contrary, nothing contained in this Lease shall be construed to require Lessee to pay (1) any tax based on net income (whether denominated as a financial institutions or other tax) imposed on Lessor, or (2) any transfer tax of Lessor, or (3) any tax imposed with respect to the sale, exchange or other disposition by Lessor of any portion of the Leased Property or the proceeds thereof, unless such disposition is to Lessee pursuant to the terms of this Lease, or (4) except as expressly provided elsewhere in this

 

10

 

Lease, any principal or interest on any Encumbrance on any portion of the Leased Property, except to the extent that any tax, assessment, tax levy or charge which Lessee is obligated to pay pursuant to the first sentence of this definition and which is in effect at any time during the Term is totally or partially repealed, and a tax, assessment, tax levy or charge set forth in clause (1) or (2) is levied, assessed or imposed expressly in lieu thereof, in which case the substitute tax, assessment, tax levy or charge shall be deemed to be an Imposition.

 

Insurance Premiums:  As defined in Section 4.4.

 

Insurance Requirements:  All terms of any insurance policy required by this Lease and all requirements of the issuer of any such policy, and such additional insurance which Lessor may reasonably require.

 

Intercreditor Agreement:  That certain Intercreditor Agreement, dated as of              , 2013, between Lessor and BOA, as Administrative Agent for itself and other lenders, relating to First Choice and its subsidiaries, as the same may be modified, amended or restated from time to time.

 

Joint Commission:  As defined in Article XXIII.

 

Land:  The parcels of land described on Exhibit A-1 et seq., attached hereto and incorporated herein by reference, together with all hereditaments, easements, mineral rights, rights of way and other appurtenances related thereto, and any additional parcel or parcels of land acquired by an Affiliate of Lessor and made subject to this Lease pursuant to an Addendum. With respect to each Facility, “Land” shall mean the portion of the Land relating to such Facility or any Capital Additions with respect thereto.

 

Late Payment Penalty Rate:  Shall mean on any date a rate equal to Five Percent (5%).

 

Lease:  As defined in the preamble.

 

Lease Assignment:  Those certain Assignment of Rents and Leases executed by each Facility Lessee in favor of Lessor, as the same may be amended, modified and/or restated from time to time.

 

Lease Rate: A per annum rate equal to [*].

 

Leased Improvements:  With respect to each portion of the Land relating to a particular Facility, those items described in Article II(b) relating thereto.

 

Leased Property:  With respect to each Facility, those items described in Article II, as well as all Capital Additions thereto.

 

Legal Requirements:  With respect to each Facility and the portion of the Leased Property related thereto, all federal, state, county and municipal governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions affecting such Leased Property, Lessee’s operation of the Business on such portion of the Leased Property, or the construction, use or alteration of such Leased Property (including, without limitation, the Americans with Disabilities Act and Section 504 of the Rehabilitation Act of 1973), whether now or hereafter enacted and in force, including any which may (a) require repairs, modifications, or alterations in

 

Confidential information has been omitted and filed separately with the Securities and Exchange Commission.

 

Confidential treatment has been requested with respect to this omitted information.

 

11

 

or to such portion of the Leased Property, or (b) in any way adversely affect the use and enjoyment thereof, and all permits, licenses, authorizations and regulations relating thereto, and all covenants, agreements, restrictions and encumbrances contained in any instruments, either of record or known to Lessee, at any time in force affecting such portion of the Leased Property.

 

Lessee:  Each of the entities listed on Schedule 1(b) attached hereto, and each additional Affiliate of Lessee added as a Lessee pursuant to an Addendum, together with their respective successors and permitted assigns, jointly and severally.

 

Lessor:  Each of the entities listed on Schedule 1(c) attached hereto, and each additional Affiliate of Lessor added as a Lessor pursuant to an Addendum, together with their respective successors and permitted assigns.

 

Lessor Parties:  As defined in Section 38.6.

 

Lessor’s Notice Address:  As defined in Section 13.4.

 

Letter of Credit:  As defined in Section 38.14.

 

Letter of Credit Obligations:  All obligations of Lessee and its Affiliates under this Lease and all Other Agreements.

 

Licenses:  As defined in Section 37.1.

 

Major Repairs:  All repairs to the Leased Property of every kind and nature, whether interior or exterior, structural or non-structural (including, without limitation, all parking decks and parking lots), which extend the life of the Leased Property (as opposed to being routine maintenance and repair expenditures), as shall be necessary or appropriate from time to time during the Term.

 

Management Agreement:  Any contract or agreement for the management of operations of the applicable Facility or any Facility Lessee.

 

Management Company:  Any person, firm, corporation or other entity or individual who or which will manage the operations of a Facility Lessee or a Facility.

 

Master Funding and Development Agreement:  That certain Master Funding and Development Agreement, dated as of the date hereof, by and among First Choice and MPT, as the same may be amended, modified and/or restated from time to time.

 

Material Obligation:  Any obligation of any Facility Lessee or any Guarantor (other than any obligations owing to Lessor or any of its Affiliates) which exceeds the lesser of (a) Five Million Dollars ($5,000,000), or (b) as of any date of determination, the enterprise value of Ten Percent (10%) of the Equity Interest in Guarantor (as reflected on Guarantor’s most recent monthly balance sheet delivered to Lessor as required under Article XXIII(b)(iii)).

 

Medicaid:  The medical assistance program established by Title XIX of the Social Security Act (42 U.S.C. Sections 1396 et seq.) and any statute succeeding thereto.

 

Medicare:  The health insurance program for the aged and disabled established by Title XVIII of the Social Security Act (42 U.S.C. Sections 1395 et seq.) and any statute succeeding thereto.

 

12

 

Monthly Escrow Amount:  As defined in Section 3.2.

 

MPT:  MPT Operating Partnership, L.P., a Delaware limited partnership.

 

Net Worth:  At any time, the sum of the following for the applicable Person, on a consolidated basis determined in accordance with GAAP:

 

(a)                                 the amount of capital, stated capital or capital account balance (after deducting the cost of any treasury shares), plus

 

(b)                                 the amount of capital surplus and retained earnings (or, in the case of a capital surplus or retained earnings deficit, minus the amount of such deficit), plus

 

(c)                                  the amount of all distributions to shareholders, partners or members, as applicable, as a result of debt or equity transactions, plus

 

(d)                                 the amount of all non-cash write-offs of intangible assets, minus

 

(e)                                  without duplication of deductions in respect of items already deducted in arriving at surplus and retained earnings, any write up in book value of assets resulting from a revaluation thereof pursuant to GAAP subsequent to the most recent balance sheet prior to the date thereof, except any net write up in value of foreign currency in accordance with GAAP, any write up resulting from reversal of a reserve for bad debts or depreciation, and any write up resulting from a change in methods of accounting for inventory.

 

Non-Competition Agreement:  That certain Non-Competition Agreement executed by First Choice simultaneously with the execution of this Lease, as the same may be amended, modified and/or restated from time to time.

 

Non-Permissible Assignee:  As defined in Section 29.1.

 

OFAC:  The U.S. Department of Treasury Office of Foreign Assets Control.

 

OFAC List:  Collectively, the Specially Designated Nationals and Blocked Persons List maintained by OFAC pursuant to Executive Order No. 13224, 66 Fed. Reg. 49079 (September 25, 2001) and/or any other list of terrorists or other restricted Persons maintained pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable Executive Orders.

 

Officer’s Certificate:  With respect to each Facility Lessee, a certificate of such Facility Lessee signed by the representative(s) authorized to so sign by the governing body of such Facility Lessee, or any other person whose power and authority to act has been properly authorized.

 

Operating Agreements:  With respect to each Facility Lessee, all agreements to which such Facility Lessee is a party with respect to the ownership, operation or management of the Business, including, without limitation, any and all service and maintenance contracts, employment contracts, management agreements, equipment leases, consulting agreements, laboratory servicing agreements, pharmaceutical contracts and physician, other clinician or other

 

13

 

professional services provider contracts, but excluding any Participation Agreements, as the same may from time to time be amended, restated, supplemented, renewed or modified.

 

Operational Date:  As defined in Section 7.2(a).

 

Option Price:  As defined in Section 14.2(a).

 

Organizational Documents:  With respect to any Person, the articles of incorporation or organization, certificate of incorporation or formation or other formation document, together with all other documents creating and governing such Person, including stockholder agreements, limited liability company or operating agreements, partnership agreements and bylaws.

 

Other Agreements:  All other leases, loans, and agreements entered into between Lessor or any Affiliate of Lessor, on the one hand, and Lessee, Guarantor or any of their respective Affiliates on the other hand, including, without limitation, the Master Funding and Development Agreement, the Project Development Agreements, the Guaranty, Cost Overrun Guaranties, the Non-Competition Agreement, the Security Agreement, the Environmental Indemnification Agreement, all other agreements, documents or instruments either having been executed prior to or contemporaneously herewith, or that will hereafter be executed, by Lessee, Guarantor or any of their respective Affiliates in favor of or with Lessor or any of its Affiliates, as any of the same may be modified, amended, or restated from time to time.

 

Overdue Rate:  On any date, the Lease Rate plus Six Percent (6%).

 

Participation Agreements:  With respect to each Facility Lessee, all third-party payor participation or reimbursement agreements, and provider numbers and provider agreements, to which such Facility Lessee is a party relating to rights to payment or reimbursement from, and claims against, private insurers, managed care plans, employee assistance programs, Blue Cross and/or Blue Shield, governmental authorities and other third-party payors (including, without limitation, if applicable to such Facility Lessee, Medicare and Medicaid), as the same may from time to time be amended, restated, extended, supplemented or modified, together with all rights, privileges and entitlements thereunder.

 

Patriot Act:  The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56, as the same may be amended, modified or restated from time to time.

 

Permitted Exceptions:  As defined in Article II.

 

Permitted Sale Transaction:  Any transaction which, directly or indirectly, through one or more step transactions or tiered transactions, results in the transfer (be it by merger, consolidation, sale, assignments, or otherwise) of (a) all or substantially all of the assets of Lessee, or (b) 51% or more of the direct or indirect Equity Interests held by First Choice in Lessee, to a Person, so long as immediately following the consummation of such transaction, a Person that owns 51% or more of the direct or indirect Equity Interests in Lessee (i) is in pro forma compliance with the covenants applicable to First Choice set forth in Section 16.1(1) (which compliance shall be measured to include such Person’s subsidiaries, as applicable), and (ii) employs executives experienced in managing the operations of medical care facilities or engages a third party manager that has such experience; it being understood and agreed that any such transaction shall

 

14

 

be permitted under this Lease only if no Event of Default then exists and Lessee (or the transferee, assignee or successor thereof) is in pro forma compliance with the covenant applicable to Lessee set forth in Section 16.1(k), to the extent then applicable.

 

Person:  An individual, a corporation, a limited liability company, a general or limited partnership, an unincorporated association, a joint venture, a Governmental Body or another entity or group.

 

Personal Property:  With respect to a Facility Lessee, all of such Facility Lessee’s consumable inventory and supplies, machinery, equipment, furniture, furnishings, trailers, movable walls or partitions, computers, trade fixtures and other tangible personal property (including all such items not permanently affixed to the portion of the Leased Property), currently owned and acquired after the execution of this Lease, and necessary, used, or useful in the operation of such Facility, but excluding any items within the definition of Fixtures.

 

Primary Intended Use:  As defined in Article VII.

 

Project Development Agreement:  With respect to each Facility, that certain Project Funding and Development Agreement to be executed by and among Developer, First Choice, the applicable Facility Lessee and Facility Lessor in accordance with the Master Funding and Development Agreement, as the same may be amended, modified and/or restated from time to time.

 

Property Substitution:  As defined in Section 34.1.

 

Property Substitution Date:  With respect to any applicable Facility, the effective date of a Property Substitution.

 

RCRA:  As defined in the definition of “Hazardous Materials Laws.”

 

Real Estate Taxes:  With respect to each Facility, all real estate taxes, assessments and special assessments, and dues which are levied or imposed during the Term upon the portion of the Leased Property relating to such Facility.

 

Removal Notice:  As defined in Section 16.1(E).

 

Rent:  Collectively, the Base Rent (as increased in accordance with the provisions of Section 3.1(b)), and the Additional Charges.

 

Rent Commencement Date:  With respect to each Facility, the date of Completion of the Leased Improvements in accordance with the applicable Project Development Agreement.

 

Replacement Facility:  As defined in the definition of “Substitute Property.”

 

Request:  As defined in Section 10.3.

 

RFFE Loans:  As defined in Article XVII.

 

SARA:  As defined in the definition of “Hazardous Materials Laws.”

 

Security Agreement:  That certain Security Agreement, dated of even date herewith, between Lessor and Lessee, as the same may be modified, amended or restated from time to time.

 

15

 

Severed Property:  As defined in Section 29.2.

 

Severance Notice:  As defined in Section 29.2.

 

Severance Date:  As defined in Section 29.2.

 

Severed Lease:  As defined in Section 29.2.

 

Single Purpose Entity:  With respect to each Facility, an entity which (a) exists solely for the purpose of leasing all or any portion of the Leased Property relating to such Facility and conducting the operation of the Business thereon, (b) conducts business only in its own name or under the name “FirstChoice”, (c) does not engage in any business other than the leasing of all or any portion of such portion of the Leased Property and the operation of such Business, (d) does not hold, directly or indirectly, any ownership interest (legal or equitable) in any entity or any real or personal property other than the leasehold interest which it owns in such portion of the Leased Property and the other assets incident to the operation of the Business with an ancillary healthcare or other services or businesses provided thereon, (e) does not have any debt other than as permitted by this Lease or arising in the ordinary course of the Business and does not guarantee or otherwise obligate itself with respect to the debts of any other person or entity, other than as contemplated by this Lease or approved by Lessor in writing, (f) has its own separate books, records, accounts and financial statements, except that financial statements of the individual facility Lessees may be consolidated, (g) holds itself out as being a company separate and apart from any other entity, and (h) maintains all entity formalities independent of any other entity.

 

Subordination Agreement:  That certain Subordination Agreement, dated as of              , 2013, among Lessor and BOA, as Administrative Agent for itself and other lenders, and FirstChoice, as the same may be modified, amended or restated from time to time.

 

Substitute Lease:  As defined in Section 34.3.

 

Substitute Property:  With respect to any Facility, a fee interest in land and improvements thereon which may be included in the Property Substitution, with respect to which:  (i) such improvements consist solely of a freestanding emergency medical facility or other real property (the “Replacement Facility”) consented to by Lessor in its sole and absolute discretion; (ii) the financial records (which records will include audited financial statements if available) of such freestanding emergency medical facility shall have been prepared in accordance with GAAP and made available to Lessor; (iii) all licenses, certificates of need, permits, approvals and authorizations pertaining to ownership and operation of such land and improvements as a freestanding emergency medical facility and related facilities shall be in full force and effect, free of material defaults or notices of material default; and (iv) neither the Property Substitution nor the utilization of such land and improvements in a Property Substitution will result in the realization of taxable income or gain to any Lessor or any Equity Constituent of any Lessor under the Code, as reasonably determined by Lessor, or if such taxable income or gain is realized, FirstChoice or an Affiliate agrees to pay the same and to indemnify Lessor for the same.

 

Taking:  With respect to each Facility, a taking or voluntary conveyance during the Term of all or part of the portion of the Leased Property relating to such Facility, or any interest therein or right accruing thereto or use thereof, as the result of, or in settlement of, any Condemnation or

 

16

 

other eminent domain proceeding affecting such portion of the Leased Property whether or not the same shall have actually been commenced.

 

Tenant(s):  The lessees, tenants, sublessees or subtenants under the Tenant Leases, if any.

 

Tenant Leases:  All leases, subleases, pharmacy leases and other rental agreements (written or verbal, now or hereafter in effect), if any, pursuant to which any Facility Lessee has granted a possessory interest in and to any space in or any part of the Leased Property, or that otherwise have rights with regard to the Leased Property, and all security deposits, security interests, letters of credit, pledges, guaranties, prepaid rent or other sums, deposits or interests held by Lessee, if any, with respect thereto.

 

Term:  With respect to each Facility, the actual duration of this Lease, including the Fixed Term and the Extension Terms (if extended by Lessee) as provided in Article II.

 

Terminated Facility:  As defined in Section 16.1(C).

 

Terminated Possession Facility:  As defined in Section 16.1(B).

 

Total Development Costs:  The sum of (a) all hard and soft costs incurred in connection with the acquisition of the Land and the development of the Leased Improvements pursuant to the Project Development Agreements; (b) the aggregate of the Construction Period Accruals relating to all the Facilities; and (c) the costs of any future Capital Additions financed by Lessor or its Affiliates after the Construction Period.

 

Unsuitable for Its Use or Unsuitable for Its Primary Intended Use:  As used anywhere in this Lease, the terms “Unsuitable for Its Use” or “Unsuitable for Its Primary Intended Use” shall mean that, with respect to the portion of the Leased Property relating to any Facility, by reason of damage or destruction or a partial Taking by Condemnation, such Facility cannot be operated on a commercially practicable basis for its Primary Intended Use and substantially in accordance with the manner in which it was previously operated, taking into account, all relevant factors (such as the availability of parking), and the effect of such damage or destruction or partial Taking.

 

USPAP:  The Uniform Standards of Professional Appraisal Practice, as amended from time to time.

 

ARTICLE II

 

LEASED PROPERTY; TERM

 

Upon and subject to the terms and conditions hereinafter set forth, Lessor leases to Lessee and Lessee rents from Lessor all of Lessor’s rights and interest in and to the following property (collectively, and as modified from time to time pursuant to the terms of this Lease, the “Leased Property”):

 

(a)                                 the Land; and

 

17

 

(b)                                 the existing improvements on the Land and the buildings and any improvements constructed on the Land, including, but not limited to, all buildings, structures, Fixtures and other improvements of every kind, alleyways and connecting tunnels, sidewalks, utility pipes, conduits and lines (on-site and off-site), parking areas and roadways appurtenant to such buildings and structures presently or hereafter situated upon the Land, Capital Additions financed by Lessor and all hereditaments, easements, rights of way and other appurtenances related thereto (collectively, the “Leased Improvements”).

 

SUBJECT, HOWEVER, to all applicable matters of record and any other matters as set forth on Exhibit B-1 et seq. (and such other matters set forth in any Addendum) (collectively, the “Permitted Exceptions”), Lessee shall have and hold the Leased Property for a fixed term (the “Fixed Term”) commencing on the Commencement Date and ending at midnight on the last day of the one hundred eightieth (180th) full month after the Final Completion Date, unless sooner terminated as herein provided.

 

So long as no Event of Default then exists, and no event then exists which with the giving of notice or the passage of time or both would constitute an Event of Default, Lessee shall have the option to extend the Fixed Term on the same terms and conditions set forth herein for three (3) additional periods of five (5) years each (each an “Extension Term”); it being understood and agreed that Lessee’s exercise of any such extension option must apply to the entire Leased Property. Lessee may exercise each such option by giving written notice to Lessor at least ninety (90) days prior to the expiration of the Fixed Term or Extension Term, as applicable (the “Extension Notice”). If, during the period following the delivery of the Extension Notice to Lessor and prior to the effective date of such extension, an Event of Default shall occur, at Lessor’s option, the Term shall not be so extended and Lessee shall be deemed to have forfeited all subsequent options to extend the Fixed Term of this Lease. If Lessee elects not to exercise its option to extend, all subsequent options to extend and all rights of Lessee to purchase as provided in Articles XIV, XV and XXXIII shall be deemed to have lapsed and be of no further force or effect.

 

ARTICLE III

 

RENT

 

3.1                               Rent.                   During the Term, Lessee shall pay to Lessor, in advance and without notice, demand, set off or counterclaim, in lawful money of the United States of America, at Lessor’s address set forth herein or at such other place or to such other person, firm or entity as Lessor may designate from time to time in writing, the Rent as provided in this Lease. With respect to each Facility, Rent shall be calculated and payable as follows:

 

(a)                                 Base Rent. With respect to each Facility, commencing on the applicable Rent Commencement Date, subject to adjustment as provided herein (including adjustments set forth in Section 3.1(b) below), Lessee shall pay Lessor, base rent with respect to such portion of the Leased Property (the “Allocated Base Rent”) in advance on the first (1st) day of each calendar month during the Term, including any partial months (prorated based upon a three hundred sixty (360) day year), in an amount equal to the

 

18

 

product of (i) the Allocated Development Costs for such Facility as of the last day of the immediately preceding month, multiplied by (ii) the Lease Rate, divided by (iii) twelve (12).

 

(b)                                 Adjustment of Lease Rate. Commencing on January 1, 2015 and continuing on each Adjustment Date thereafter during the Term, the Lease Rate shall be increased (and in no event decreased) and shall be equal to the sum of (i) the Lease Rate previously in effect, and (ii) [*].

 

(c)                                  Rent Schedule. From time to time during the Term, Lessor may, in its reasonable discretion, calculate the Base Rent payable hereunder (the “Rent Schedule”), and provide a copy of such Rent Schedule to Lessee. Base Rent, as calculated in accordance with Sections 3.1(a) and 3.1(b) shall include Allocated Base Rent payable with respect to the Leased Property relating to all Facilities. The Rent Schedule shall be adjusted and substituted on a periodic basis by Lessor, in its reasonable discretion, as the Base Rent is adjusted and calculated during the Term as provided herein. Lessor’s failure to provide a copy of the Rent Schedule or substitute or adjusted Rent Schedule shall not limit or affect the Lessee’s obligations hereunder. Notwithstanding the foregoing, to the extent the most recent Rent Schedule, if any, provided by Lessor to Lessee does not accurately reflect the current amount of Base Rent, as adjusted, Lessee shall not be in default of its obligation to pay rent pursuant to this Section 3.1 so long as Lessee pays the Base Rent, as adjusted, shown on the Rent Schedule most recently provided by Lessor to Lessee, and within ten (10) days after receipt by Lessee of an updated Rent Schedule provided by Lessor, Lessee pays to Lessor any additional Base Rent due as a result of the Base Rent shown on the updated Rent Schedule that has not previously been paid.

 

3.2                               Additional Charges. In addition to the Base Rent, (a) Lessee will also pay and discharge as and when due and payable all other amounts, liabilities, obligations and Impositions that Lessee assumes or agrees to pay under this Lease, and all other amounts, liabilities, obligations and Impositions related to the ownership, use, possession and operation of the Leased Property, including, without limitation, all costs of owning and operating each Facility, all Real Estate Taxes, Insurance Premiums, maintenance and capital improvements, all violations of and defaults under any of the Permitted Exceptions (but excluding any items Lessee is not required to pay under the definition of Impositions) and (b) in the event of any failure on the part of Lessee to pay any of those items referred to in clause (a) above, Lessee will also promptly pay and reimburse Lessor and/or its Affiliates for all such amounts paid by Lessor and/or its Affiliates and promptly pay and discharge every fine, penalty, interest and cost which may be added for non-payment or late payment of such items (the items referred to in clauses (a) and (b) above being referred to herein collectively as the “Additional Charges”), and Lessor shall have all legal,

 

Confidential information has been omitted and filed separately with the Securities and Exchange Commission.

 

Confidential treatment has been requested with respect to this omitted information.

 

19

 

equitable and contractual rights, powers and remedies provided in this Lease, by statute, or otherwise, in the case of non-payment of the Additional Charges, as in the case of the Base Rent. If any installment of Base Rent or Additional Charges shall not be paid within five (5) Business Days after the applicable due date, Lessee, in addition to all other obligations hereunder, will pay Lessor on demand, as Additional Charges, a late charge computed at the Overdue Rate and a late payment penalty computed at the Late Payment Penalty Rate on the amount of such installment, from the due date of such installment to the date of payment thereof. To the extent that Lessee pays any Additional Charges to Lessor pursuant to clause (b) above or pursuant to any other requirement of this Lease, Lessee shall be relieved of its obligation to pay such Additional Charges to the entity to which they would otherwise be due. Nothing in the foregoing limits the provisions of Article XII. At Lessor’s option, during the Term, upon its written request to Lessee, Lessee shall make monthly payments to Lessor (or to a Facility Lender, if requested by Lessor) in such amounts as Lessor shall estimate to be necessary to pay any Real Estate Taxes and/or some or all Insurance Premiums. If Lessor exercises this option, it shall include in its written request an invoice in reasonable detail (the “Escrow Invoice”) specifying the amount to be paid on account of Real Estate Taxes and/or Insurance Premiums (the “Monthly Escrow Amount”). Lessee shall pay to Lessor the Monthly Escrow Amount on the first (1st) day of each month after receipt of the initial Escrow Invoice. At any time, with at least five (5) Business Days’ notice prior to the end of any month during the Term, Lessor may deliver to Lessee a substituted, adjusted or amended Escrow Invoice providing for a new Monthly Escrow Amount, and thereafter Lessee shall pay the revised Monthly Escrow Amount on the first (1st) day of the each succeeding month (subject to further adjustment as provided for in this sentence). Any sums paid to Lessor pursuant to this Section 3.2 shall not bear interest, may be commingled with Lessor’s (or Facility Lender’s) books and accounts, and upon an Event of Default hereunder, may be applied by Lessor (or Facility Lender) to all sums owed by Lessee or any Affiliate of Lessee to Lessor or any Affiliate of Lessor (or to sums owed to Facility Lender) relating to the acquisition and leasing of the Leased Property (provided, that prior to an Event of Default Lessor shall use any amounts so paid to pay the relevant Real Estate Taxes and Insurance Premiums, as applicable, in each case prior to delinquency). Lessor shall refund to Lessee at the end of the Term, provided that no Event of Default then exists, any such remaining amounts collected in excess of the amounts ultimately required to pay the relevant Real Estate Taxes or Insurance Premiums.

 

ARTICLE IV

 

IMPOSITIONS

 

4.1                               Payment of Impositions. Subject to Article XII relating to permitted contests, Lessee will pay, or cause to be paid, all Impositions before any fine, penalty, interest or cost may be added for non-payment, with such payments to be made directly to the taxing or assessing authorities, unless, in the case of escrows and deposits, such Impositions are required to be paid to Lessor or Facility Lender as provided in Section 3.2, and Lessee will promptly furnish to Lessor copies of official receipts or other satisfactory proof evidencing such payments. Lessor, at its expense, shall, to the extent permitted by applicable law, prepare and file all tax returns and reports as may be required by governmental authorities in respect of Lessor’s net income, gross receipts, franchise taxes and taxes on its capital stock, and Lessee, at its expense, shall, to the extent permitted by applicable laws and regulations, prepare and file all other tax returns and

 

20

 

reports in respect of any Imposition as may be required by governmental authorities. If any refund shall be due from any taxing authority with respect to any Imposition paid by Lessee, the same shall be paid over to, or retained by, Lessee provided no Event of Default shall have occurred and be continuing. Any such funds retained by Lessor due to an Event of Default shall be applied to Lessee’s obligations as reasonably determined by Lessor. Lessor and Lessee shall, upon request of the other, provide any data (a) that is maintained by the party to whom the request is made, and (b) that pertains to the Leased Property, as may be necessary to prepare any required returns and reports. In the event that any Governmental Body classifies any property covered by this Lease as personal property, Lessee shall file all personal property tax returns in such jurisdictions where it may legally so file. Lessor, to the extent it possesses the same, and Lessee, to the extent it possesses the same, will provide the other party, upon request, with cost and depreciation records necessary for filing returns for any property so classified as personal property. In the event that Lessor is legally required to file personal property tax returns, Lessee will be provided with copies of assessment notices indicating a value in excess of the reported value as soon as reasonably practicable, and in any event, in sufficient time for Lessee to file a protest. After obtaining written approval from Lessor, which approval shall not be unreasonably withheld, conditioned or delayed, Lessee may, at Lessee’s sole cost and expense, protest, appeal, or institute such other proceedings as Lessee may deem appropriate to effect a reduction of real estate or personal property assessments, and Lessor, at Lessee’s expense as aforesaid, shall fully cooperate with Lessee in such protest, appeal, or other action. Billings for reimbursement by Lessee to Lessor of personal property taxes shall be accompanied by copies of a bill therefor and payments thereof which identify the personal property with respect to which such payments are made.

 

4.2                               Adjustment of Impositions. Impositions that are levied or assessed with respect to the tax-fiscal period during which the Term terminates, unless Lessee purchases the Leased Property pursuant to purchase options expressly provided herein, if any, shall be adjusted and prorated between Lessor and Lessee, whether or not such Imposition is imposed before or after such termination, and Lessee’s obligation to pay its prorated share thereof shall survive such termination.

 

4.3                               Utility Charges. Lessee will contract for, in its own name, and will pay or cause to be paid all charges for electricity, power, gas, oil, sewer, water and other utilities used in connection with the Leased Property during the Term, including, without limitation, all impact and tap fees necessary for the operation of the Facilities, except to the extent that such impact and tap fees were or are to be paid by Lessor as part of the Total Development Costs or the cost of a Capital Addition.

 

4.4                               Insurance Premiums. Lessee will contract for, in its own name, and will pay or cause to be paid all premiums for the insurance coverage required to be maintained pursuant to Article XIII during the Term (the “Insurance Premiums”); provided, however, if required by Lessor pursuant to Section 3.2, all or a portion of the Insurance Premiums shall be paid as required under Section 3.2.

 

21

 

ARTICLE V

 

ABSOLUTE NET LEASE; NO TERMINATION; TERMINATION

WITH RESPECT TO FEWER THAN ALL FACILITIES

 

5.1                               Absolute Net Lease; No Termination. The parties understand, acknowledge and agree that this is an absolute net lease and this Lease shall yield to Lessor the full amount of the installments of the Base Rent and the payments of Additional Charges throughout the Term. Lessee further acknowledges and agrees that all charges, assessments or payments of any kind are due and payable without notice, demand, set off or counterclaim and shall be paid by Lessee as they become due and payable. Lessee shall remain bound by this Lease in accordance with its terms and shall neither take any action without the consent of Lessor to modify, surrender or terminate the same, nor seek nor be entitled to any abatement, deduction, deferment or reduction of Rent, or set-off against the Rent, nor shall the respective obligations of Lessor and Lessee be otherwise affected by reason of (a) any damage to, or destruction of, any Leased Property or any portion thereof from whatever cause or any Taking of the Leased Property or any portion thereof, except as otherwise specifically provided in this Lease, (b) the lawful or unlawful prohibition of, or restriction upon, Lessee’s use of the Leased Property, or any portion thereof, or the interference with such use by any person, corporation, partnership or other entity, or by reason of eviction by paramount title; (c) any claim which Lessee has or might have against Lessor or by reason of any default or breach of any warranty by Lessor under this Lease or any other agreement between Lessor and Lessee, or to which Lessor and Lessee are parties, (d) any bankruptcy, insolvency, reorganization, composition, readjustment, liquidation, dissolution, winding up or other proceedings affecting Lessor or any assignee or transferee of Lessor, or (e) any other cause whether similar or dissimilar to any of the foregoing other than a discharge of Lessee from any such obligations as a matter of law. Lessee hereby specifically waives all rights, arising from any occurrence whatsoever, which may now or hereafter be conferred upon it by law to (i) modify, surrender or terminate this Lease or quit or surrender the Leased Property or any portion thereof, or (ii) entitle Lessee to any abatement, reduction, suspension or deferment of the Rent or other sums payable by Lessee hereunder, except as otherwise specifically provided in this Lease. The obligations of Lessor and Lessee hereunder shall be separate and independent covenants and agreements and the Rent and all other sums payable by Lessee hereunder shall continue to be payable in all events unless the obligations to pay the same shall be terminated pursuant to the express provisions of this Lease or by termination of this Lease other than by reason of an Event of Default.

 

5.2                               Termination with Respect to Fewer than all Facilities. Wherever in this Lease the action of terminating this Lease with respect to the portion of the Leased Property relating to a particular Facility (or action of similar import) is described or permitted, such action shall mean the termination of Lessee’s rights in and to the portion of the Leased Property relating to such Facility. Notwithstanding anything in this Lease to the contrary, if this Lease shall be terminated by Lessor or Lessee pursuant to rights granted hereunder with respect to any portion of the Leased Property relating to a particular Facility, such termination shall not affect the Term of this Lease with respect to the balance of the Leased Property relating to Facilities not so terminated and this Lease shall continue in full force and effect with respect to such portion of the Leased Property, except that the total Base Rent payable hereunder shall be reduced by the amount of Allocated Base Rent with respect to the Facility as to which this Lease has been so terminated, (b) all references herein to Leased Property shall thereafter no longer include such terminated portion of the Leased Property, (c) the relevant Facility shall no longer be a Facility

 

22

 

hereunder, and (d) provided that all of Lessee’s obligations hereunder with respect to such portion of the Leased Property (excluding unasserted contingent indemnification obligations) have been paid in full to Lessor, the relevant Facility Lessee shall no longer be a Facility Lessee hereunder or a party hereto; subject, however, to Lessor’s right, in the event of any such termination because of an Event of Default, to recover damages with respect thereto.

 

ARTICLE VI

 

OWNERSHIP OF LEASED PROPERTY AND PERSONAL PROPERTY

 

6.1                               Ownership of the Leased Property. Lessee acknowledges that the Leased Property is the property of Lessor and that Lessee has only the right to the possession and use of the Leased Property upon and subject to the terms, provisions and conditions of this Lease.

 

6.2                               Lessee’s Personal Property. Lessee agrees that, subject to Lessor’s purchase option with respect thereto, all of Lessee’s Personal Property not removed by Lessee within thirty (30) days following the expiration or earlier termination of this Lease with respect thereto shall be considered abandoned by Lessee and may be appropriated, sold, destroyed or otherwise disposed of by Lessor (at Lessee’s cost) with prior written notice thereof to Lessee, without any payment to Lessee and without any obligation to Lessee to account therefor. Lessee will, at its expense, restore the Leased Property to substantially the same condition existing before the removal and repair all damage to the Leased Property caused by the installation or removal of Lessee’s Personal Property.

 

ARTICLE VII

 

CONDITION AND USE OF LEASED PROPERTY

 

7.1                               Condition of the Leased Property. Lessee acknowledges receipt and delivery of possession of the portions of the Leased Property upon which the Facilities are or shall be situated and that Lessee has examined and otherwise has acquired knowledge of the condition of the Leased Property prior to the execution and delivery of this Lease and has found the same to be in good order and repair and satisfactory for its purpose hereunder. Lessee is leasing the Leased Property “as is” and “where is” in its present condition Lessee has not relied on any representation or warranty by Lessor and hereby waives any claim or action against Lessor in respect of the condition of the Leased Property. LESSOR MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN RESPECT OF THE LEASED PROPERTY OR ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR USE, SUITABILITY, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, AS TO QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING AGREED THAT ALL SUCH RISKS ARE TO BE BORNE BY LESSEE. LESSEE ACKNOWLEDGES THAT THE LEASED PROPERTY HAS BEEN INSPECTED BY LESSEE AND IS SATISFACTORY TO LESSEE. ACCORDINGLY, LESSEE HEREBY ACKNOWLEDGES THAT LESSOR HAS NOT MADE AND WILL NOT MAKE, NOR SHALL LESSOR BE DEEMED TO HAVE MADE ANY WARRANTY OR REPRESENTATION, WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT

 

23

 

LIMITATION, ALL WARRANTIES THAT THE LEASED PROPERTY IS FREE FROM VICES, DEFECTS AND DEFICIENCIES, WHETHER HIDDEN OR APPARENT OR ANY WARRANTY AS TO THE FITNESS, DESIGN OR CONDITION OF THE LEASED PROPERTY FOR ANY PARTICULAR USE OR PURPOSE OF SUCH LEASED PROPERTY. THE PROVISIONS OF THIS SECTION 7.1 HAVE BEEN NEGOTIATED, AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES BY LESSOR, EXPRESS, IMPLIED OR CREATED BY APPLICABLE LAW, WITH RESPECT TO THE CONDITION OF THE LEASED PROPERTY.

 

7.2                               Use of the Leased Property.

 

(a)                                 To the extent not obtained as of the Completion Date, Lessee or its Affiliates shall obtain all material Licenses necessary to operate each Facility as a freestanding emergency medical facility, as quickly as reasonably possible and, in any event, all such Licenses for a particular Facility shall be obtained by the required dates set forth on Schedule 7.2(a) relating to such Facility (each, an “Operational Date”); provided, however, that, upon written request from Lessee to Lessor prior to the Operational Date with respect to a particular Facility, and so long as Lessor is reasonably satisfied that Lessee is diligently proceeding in its efforts to obtain such Licenses for such Facility, Lessee shall have the option to extend the period in which to obtain such Licenses with respect to such Facility for two (2) additional periods of thirty (30) days each. Lessee may exercise each such option by giving written notice to Lessor at least five (5) Business Days prior to the Operational Date (or any applicable extension period).

 

(b)                                 After the Completion Date relating to each Facility, Lessee (i) subject to Section 7.2(a), shall operate such Facility throughout the entire remaining Term as a freestanding emergency medical facility and for such other legal ancillary uses as may be necessary in connection with or incidental to such use, subject to all covenants, restrictions, easements, and all other matters of record (including those set forth in the Permitted Exceptions) relating to the portion of the Leased Property relating to such Facility (the “Primary Intended Use”), and (ii) shall comply with all Legal Requirements that are necessary for the operation of such Facility consistent with the Primary Intended Use.

 

(c)                                  Lessee shall continuously operate the Leased Property only as a provider of healthcare services in accordance with the Primary Intended Use and Lessee shall maintain its certifications for reimbursement and licensure and all accreditations.

 

(d)                                 Lessee shall not commit or suffer to be committed any waste on the Leased Property nor shall Lessee cause or permit any nuisance thereon.

 

(e)                                  Lessee shall neither suffer nor permit the Leased Property or any portion thereof, including any Capital Addition whether or not financed by Lessor, or Lessee’s Personal Property, to be used in such a manner as (i) might reasonably tend to impair Lessor’s (or Lessee’s, as the case may be) title thereto or to any portion thereof, or (ii) may reasonably make possible a claim or claims of adverse usage or adverse possession by the public, as such, or of implied dedication of the Leased Property or any portion thereof.

 

24

 

(f)                                   With respect to each Facility, Lessor shall have the right and option to erect a plaque in the vicinity of the front desk located inside such Facility stating that such Leased Property is owned by Lessor. Such plaque shall be in a size, and shall be erected in an exact location acceptable to Lessor and approved by Lessee, which approval shall not be unreasonably withheld, conditioned or delayed.

 

7.3                               Lessor to Grant Easements. From time to time during the Term, so long as no Event of Default then exists and no event then exists which with the giving of notice or the passage of time or both would constitute an Event of Default, Lessor may, in its reasonable discretion, at the request of Lessee and at Lessee’s cost and expense; (a) grant easements and other rights in the nature of easements; (b) release existing easements or other rights in the nature of easements which are for the benefit of the Leased Property; (c) dedicate or transfer unimproved portions of the Leased Property for road, highway or other public purposes; (d) execute petitions to have the Leased Property annexed to any municipal corporation or utility district; (e) execute amendments to any covenants and restrictions affecting the Leased Property; and (f) execute and deliver to any person any instrument appropriate to confirm or effect such grants, releases, dedications and transfers (to the extent of its interest in the Leased Property), but only upon delivery to Lessor of such information as Lessor may reasonably require confirming that such grant, release, dedication, transfer, petition or amendment is required for or useful in connection with, and not detrimental to, the proper conduct of the Primary Intended Use on the Leased Property and does not reduce the value of the Leased Property.

 

ARTICLE VIII

 

LEGAL AND INSURANCE REQUIREMENTS

 

8.1                               Compliance with Legal and Insurance Requirements. Subject to Article XII relating to permitted contests, Lessee, at its expense, (a) shall comply with all Legal Requirements and Insurance Requirements applicable to Lessee and the use, operation, maintenance, repair and restoration of the Facilities and the Leased Property, whether or not compliance therewith shall require structural change in any of the Leased Improvements or interfere with the use and enjoyment of the Leased Property; (b) shall not use the Leased Property and Lessee’s Personal Property for any unlawful purpose; (c) shall procure, maintain and comply with all Licenses and other governmental approvals and authorizations required for any use of the Leased Property and Lessee’s Personal Property then being made; and (d) shall use its commercially reasonable efforts to cause all Tenants to acquire and maintain all licenses, certificates, permits, provider agreements and other authorizations and approvals, as well as all personal property needed to operate the Leased Property subleased to them for the Primary Intended Use and any other uses conducted on the Leased Property as may be permitted from time to time hereunder. Lessee shall indemnify and defend, at Lessee’s sole cost and expense, and hold Lessor, its successors and assigns, harmless from and against and agrees to reimburse Lessor and its successors and assigns with respect to any and all claims, demands, actions, causes of action, losses, damages, liabilities, costs and expenses (including, without limitation, reasonable attorneys’ fees and court costs) of any and every kind or character, known or unknown, fixed or contingent, asserted against or incurred by Lessor, its successors and assigns, at any time and from time to time by reason or arising out of any breach by Lessee of any of the provisions of this Article VIII or any breach or violation of any Legal Requirements.

 

25

 

8.2                               Hazardous Materials. Lessee shall ensure that the Leased Property and the operation of the Facilities comply with all Hazardous Materials Laws. Except for Hazardous Materials generated in the normal course of business regarding the Primary Intended Use (which Hazardous Materials shall be handled and disposed of in compliance with all Hazardous Materials Laws), no Hazardous Materials shall be installed, used, generated, manufactured, treated, handled, refined, produced, processed, stored or disposed of, or otherwise present in, on or under the Leased Property or in connection with the operation of any Facility. No activity shall be undertaken on the Leased Property or in connection with the operation of any Facility which would cause (a) the Leased Property to become a treatment, storage or disposal facility of hazardous waste, infectious waste, biomedical or medical waste, within the meaning of, or otherwise bring the Leased Property within the ambit of RCRA or any Hazardous Materials Laws, (b) a release or threatened release of Hazardous Materials from the Leased Property within the meaning of, or otherwise bring the Leased Property within the ambit of, CERCLA or SARA or any Hazardous Materials Laws or (c) the discharge of Hazardous Materials into any watercourse, surface or subsurface of body of water or wetland, or the discharge into the atmosphere of any Hazardous Materials which would require a permit under any Hazardous Materials Laws. No activity shall be undertaken with respect to the Leased Property or the operation of any Facility which would cause a violation or support a claim under RCRA, CERCLA, SARA or any Hazardous Materials Laws. Lessee shall, at its sole cost, expense, risk and liability, remove or cause to be removed from the Leased Property all Hazardous Materials generated in connection with the Primary Intended Use and as found in hospital and healthcare facilities, including, without limitation, all infectious waste materials, syringes, needles and any materials contaminated with bodily fluids of any type, character or description of whatsoever nature in accordance with all Hazardous Materials Laws. Lessee shall not dispose of any such infectious waste and Hazardous Materials in any receptacles used for the disposal of normal refuse. Lessee shall indemnify and defend, at its sole cost and expense, and hold Lessor and its successors and assigns, harmless from and against and to reimburse Lessor and its successors and assigns with respect to any and all claims, demands, actions, causes of action, losses, damages, liabilities, costs and expenses (including, without limitation, reasonable attorney’s fees and court costs) of any and every kind or character, known or unknown, fixed or contingent, asserted against or incurred by Lessor and its successors and assigns at any time and from time to time by reason or arising out of any breach by Lessee of this Section 8.2 or any violation of any Hazardous Materials Laws by any Person other than Lessor, any of Lessor’s Affiliates or any of their respective agents or representatives relating to the Leased Property.

 

8.3                               Healthcare Laws. Lessee represents, warrants and covenants that Lessee, this Lease and all Tenant Leases are, and at all times during the Term will be, in compliance with all Healthcare Laws. In the event it is determined that any provision of this Lease is in violation of the Healthcare Laws, the parties in good faith shall renegotiate such provision so that same is in compliance with all Healthcare Laws. Lessee agrees to add to all of its third party agreements relating to the Leased Property, including, without limitation, all Tenant Leases, that in the event it is determined that such agreement and/or Tenant Lease is in violation of the Healthcare Laws, such agreement and/or Tenant Lease shall be renegotiated so that same are in compliance with all Healthcare Laws. Lessee agrees promptly to notify Lessor in writing of the receipt of any notice of investigation of any alleged Healthcare Law violations. Lessee shall indemnify and defend, at Lessee’s sole cost and expense, and hold Lessor and its successors and assigns, harmless from and against, and shall reimburse Lessor and its successors and assigns with

 

26

 

respect to, any and all claims, demands, actions, causes of action, losses, damages, liabilities, costs and expenses (including, without limitation, reasonable attorneys’ fees and court costs) of any and every kind or character, known or unknown, fixed or contingent, asserted against or incurred by Lessor and its successors and assigns, at any time and from time to time by reason, or arising out, of any breach by Lessee of any of the provisions set forth in this Section 8.3 or any violation of any Healthcare Laws.

 

8.4                               Single Purpose Entity. Each Facility Lessee shall remain at all times during the Term a Single Purpose Entity in accordance with the terms of this Lease. Promptly following any written request from Lessor during the Term, each Facility Lessee shall provide Lessor with evidence that such Facility Lessee is a Single Purpose Entity and is in good standing in the state of its organization or incorporation and in the state in which the portion of the Leased Property relating to such Facility Lessee is located; provided, that Lessor shall not require more than one (1) such certification from each Facility Lessee during any twelve (12)-month period during the Term.

 

8.5                               Organizational Covenants. Lessee shall not permit or suffer, without the prior written consent of Lessor, (a) any material amendment or modification of any Facility Lessee’s Organizational Documents that changes such Facility Lessee’s status as a Single Purpose Entity or that modifies Lessee’s Organizational Documents in a manner materially adverse to Lessor; or (b) subject to the proviso below, that changes or modifies the governance or structure of, or changing the manager or managing member of, such Facility Lessee, or that dissolves or terminates any Facility Lessee’s existence or that effects a sale of substantially all of any Facility Lessee’s assets, whether by sale, transfer, merger, consolidation or otherwise; provided, however, that such amendments in subsection (b) shall be permitted in connection with any Permitted Sale Transaction. Lessee shall provide Lessor with notice contemporaneously upon any change to any Facility Lessee’s state of formation or any Facility Lessee’s name. Lessee has, simultaneously with the execution of this Lease, delivered to Lessor a true and complete copy of each Facility Lessee’s Organizational Documents and shall promptly provide Lessor with true and complete copies of all amendments to any Facility Lessee’s Organizational Documents.

 

ARTICLE IX

 

REPAIRS; RESTRICTIONS

 

9.1                               Maintenance and Repair.

 

(a)                                 Lessee, at its expense, will keep the Leased Property and all private roadways, sidewalks and curbs appurtenant thereto (and Lessee’s Personal Property) in good first class order and repair (whether or not the need for such repairs occurs as a result of Lessee’s use, any prior use, the elements, the age of the Leased Property or any portion thereof), ordinary wear and tear excepted, and, except as otherwise provided in Article XIV and Article XV, with reasonable promptness and in a workmanlike manner, will make all necessary and appropriate repairs thereto required to maintain such condition.

 

(b)                                 Lessee shall notify Lessor of any and all repairs, modifications and remodeling made to the portion of the Leased Property relating to a particular Facility in excess of Two

 

27

 

Hundred Fifty Thousand and No/100 Dollars ($250,000.00) and obtain consent from Lessor (which consent shall not be unreasonably withheld, conditioned or delayed) prior to making such repairs, improvements, additions, modifications or remodeling.

 

(c)                                  Except as otherwise expressly provided in this Lease, Lessor shall not under any circumstances be required to build or rebuild any improvements on the Leased Property, or to make any repairs, replacements, alterations, restorations, or renewals of any nature or description to the Leased Property, whether ordinary or extraordinary or capital in nature, structural or non-structural, foreseen or unforeseen, or to make any expenditure whatsoever with respect thereto in connection with this Lease, or to maintain the Leased Property in any way.

 

(d)                                 Unless Lessor conveys the Leased Property to Lessee pursuant to the provisions of this Lease, Lessee will, upon the expiration or prior termination of the Term, vacate and surrender the Leased Property to Lessor in the condition in which the Leased Property was originally received from Lessor, except as improved, constructed, repaired, rebuilt, restored, altered or added to as permitted or required by the provisions of this Lease and except for (i) ordinary wear and tear, (ii) damage caused by the gross negligence or willful acts of Lessor, and (iii) damage or destruction as described in Article XIV or resulting from a Taking as described in Article XV, which Lessee is not required by the terms of this Lease to repair or restore.

 

9.2                               Encroachments; Restrictions. If any of the Leased Improvements shall, at any time, encroach upon any property, street or right-of-way adjacent to any portion of the Leased Property, or shall violate the agreements or conditions contained in any federal, state or local law, restrictive covenant or other agreement affecting the Leased Property, or any part thereof, or shall impair the rights of others under any easement or right-of-way to which the Leased Property or any portion thereof is subject, then, promptly upon the request of Lessor, Lessee shall, at its expense, subject to its right to contest the existence of any encroachment, violation or impairment, (a) obtain valid and effective waivers or settlements of all claims, liabilities and damages resulting from each such encroachment, violation or impairment, whether the same shall affect Lessor or Lessee or (b) make such changes in the Leased Improvements, and take such other actions, as Lessor reasonably determines, to remove such encroachment, or to end such violation or impairment, including, if necessary, the alteration of any of the Leased Improvements, and, in any event, take all such actions as may be necessary to continue the operation of the applicable Facility without such violation, encroachment or impairment. Any such alteration shall be made in conformity with the applicable requirements of this Lease. Lessee’s obligations under this Section 9.2 shall be in addition to, and shall in no way discharge or diminish any obligation of, any insurer under any policy of title or other insurance, and Lessee shall be entitled to a credit for any sums paid by Lessee and recovered by Lessor under any such policy of title or other insurance, less Lessor’s reasonable costs and expenses to recover such sums.

 

28

 

ARTICLE X

 

CONSTRUCTION OF LEASED IMPROVEMENTS; CAPITAL ADDITIONS

 

10.1                        Construction of Capital Additions to the Leased Property.

 

(a)                                 With respect to each Facility, following the Completion Date in accordance with the applicable Project Development Agreement, and provided that no Event of Default has occurred, and no event then exists which with the giving of notice or passage of time or both would constitute an Event of Default hereunder, Lessee shall have the right, upon and subject to the terms and conditions set forth below, to construct or install Capital Additions on such portion of the Leased Property with the prior written consent of Lessor, not to be unreasonably withheld, conditioned or delayed. Lessee shall not be permitted to create any Lien on such portion of the Leased Property in connection with such Capital Addition, except as provided in Section 10.2. Prior to commencing construction of any such Capital Addition, Lessee shall, at Lessee’s sole cost and expense, (i) submit to Lessor in writing for Lessor’s prior approval a proposal setting forth in reasonable detail any such proposed Capital Addition, (ii) submit to Lessor for Lessor’s prior approval or consent (which approval shall not be unreasonably withheld, conditioned or delayed) such plans and specifications, certificates of need, and other approvals, permits, licenses, contracts in excess of $50,000 for the proposed Capital Addition and such other information available to Lessee concerning such proposed Capital Addition as Lessor may reasonably request, and (iii) obtain all necessary certificates of need, permits, licenses, state licensure surveys, and all regulatory approvals of architectural plans. Without limiting the generality of the foregoing, such proposal shall indicate the approximate projected cost of constructing such Capital Addition, together with the use or uses to which it will be put.

 

(b)                                 Prior to commencing construction of any Capital Addition, Lessee shall first request Lessor to provide funds to pay for such Capital Addition in accordance with the provisions of Section 10.3. If Lessor declines or is unable to provide such financing or the parties are unable to agree on the terms thereof, the provisions of Section 10.2 shall apply. Notwithstanding any other provision of this Article X to the contrary, no Capital Additions shall be made without the consent of Lessor, which consent may be withheld in Lessor’s sole discretion, if the Capital Addition would tie in or connect any portion of the Leased Property and/or any Leased Improvements on such portion of the Leased Property with any other improvements on property adjacent to such portion of the Leased Property (and not part of the Land covered by this Lease), including, without limitation, tie-ins of buildings or other structures or utilities. All proposed Capital Additions shall be architecturally integrated and consistent with the applicable portion of the Leased Property.

 

10.2                        Capital Additions Financed by Lessee. If Lessor does not finance any Capital Addition, this Lease shall be and hereby is amended to provide as follows:

 

(a)                                 There shall be no adjustment in the Base Rent by reason of any such Capital Addition.

 

(b)                                 Such Capital Addition shall revert to, and become the property of Lessor upon the expiration or termination of this Lease with respect to such portion of the

 

29

 

Leased Property (unless Lessee purchases such portion of the Leased Property as provided herein).

 

In connection with any such Capital Addition financed by Lessee, Lessee shall be permitted to place an Encumbrance on such Capital Addition as collateral for Lessee’s financing; provided, that, in the reasonable determination of Lessor such Encumbrance shall not interfere with Lessor’s ability to finance any portion of the Leased Property; it being understood and agreed, however, that (i) Lessor and Lessee shall cooperate in good faith to properly divide such Capital Addition from the applicable portion of the Leased Property and to grant such easements and use restrictions as shall be necessary to avoid any disruption of Lessee’s Business on such portion of the Leased Property; (ii) to the extent not inconsistent with the provisions of this Section 10.2, such Capital Addition shall remain subject to the other terms and provisions of this Lease; and (ii) upon the expiration or termination of this Lease (unless Lessee purchases such portion of the Leased Property as provided in Articles XIV, XV or XXXIII), Lessee, at its sole cost and expense, shall cause all such Encumbrances to be released from such Capital Addition and within ten (10) Business Days after such expiration or termination.

 

10.3                        Capital Additions Financed by Lessor. If Lessee desires for Lessor to provide or arrange financing for a Capital Addition, Lessee shall request the same by providing to Lessor written notice (a “Request”), together with all information referred to in Section 10.1. Lessor may, but shall be under no obligation to, provide the funds necessary to meet the Request. Within thirty (30) days following receipt of a Request, Lessor shall notify Lessee as to whether it will finance the proposed Capital Addition, including the proposed terms thereof, and the failure of Lessor to so notify Lessee within such time period, shall be deemed to constitute Lessor’s determination that it has declined to finance the proposed Capital Addition. Lessee shall have no obligation to accept any proposed terms received from Lessor. In the event Lessor declines or is deemed to have declined to finance a proposed Capital Addition or the parties are unable to agree on the terms of any proposed financing within thirty (30) days after Lessor’s receipt of a Request, Lessee shall have the right to finance such Capital Addition in any manner it deems appropriate, subject to Section 10.2.

 

10.4                        Salvage. All materials that are scrapped or removed in connection with the making of either Capital Additions or repairs hereunder shall be or become the property of Lessee, and Lessee shall remove the same at its sole cost and expense.

 

ARTICLE XI

 

LIENS

 

Subject to the provisions of Article XII relating to permitted contests, Lessee will not directly or indirectly create or allow to remain and will promptly discharge at its expense any lien, encumbrance, attachment, title retention agreement or claim upon any portion of the Leased Property or any attachment, levy, claim or encumbrance in respect of the Rent, or any funds or amounts that are or will be provided by Lessor or its Affiliates to Lessee at any time during the Term in accordance with this Lease; excluding, however, (a) this Lease, (b) the Permitted Exceptions, (c) restrictions, liens and other encumbrances which are consented to in writing by Lessor, or any easements granted pursuant to the provisions of Section 7.3, (d) liens for those

 

30

 

taxes of Lessor which Lessee is not required to pay hereunder, (e) Encumbrances which are permitted in accordance with Section 10.2, and (g) any liens which are the responsibility of Lessor pursuant to the provisions of Article XXXIV of this Lease. Unless otherwise expressly provided herein, Lessee shall not mortgage or grant any interest or security interest in, or otherwise collaterally assign, any part of Lessee’s rights and interests in this Lease, any portion of the Leased Property or Lessee’s Personal Property during the Term, except as provided in the Security Agreement or as otherwise permitted under the Intercreditor Agreement.

 

ARTICLE XII

 

PERMITTED CONTESTS

 

12.1                        Permitted Contests. After obtaining prior written approval from Lessor, not to be unreasonably withheld, conditioned or delayed, Lessee, at Lessee’s expense, may contest, by appropriate legal proceedings conducted in good faith and with due diligence, the amount, validity or application, in whole or in part, of any Imposition, Legal Requirement, Insurance Requirement, lien, attachment, levy, encumbrance, charge or claim (but expressly excluding any amounts payable to Lessor or Rent or other sums payable by Lessee to Lessor) not otherwise permitted by Article XI, provided that (a) in the case of an unpaid Imposition, lien, attachment, levy, encumbrance, charge or claim, the commencement and continuation of such proceedings shall suspend the collection thereof from Lessor and from the Leased Property; (b) neither the Leased Property nor any Rent therefrom nor any part thereof or interest therein would, as determined in Lessor’s sole and absolute discretion, be in any danger whatsoever of being sold, forfeited, attached or lost; (c) in the case of a Legal Requirement, Lessor would not be in any danger whatsoever of civil or criminal liability for failure to comply therewith pending the outcome of such proceedings; and (d) in the event that any such contest shall involve a sum of money or potential loss in excess of the Allocated Development Costs relating to the particular Facility, Lessee shall give such reasonable security as may be demanded by Lessor to insure ultimate payment of the same.

 

ARTICLE XIII

 

INSURANCE

 

13.1                        General Insurance Requirements.

 

(a)                                 During the Term, Lessee shall at all times keep the Leased Property and Lessee’s Personal Property insured against loss or damage from such causes as are customarily insured against, by prudent owners of similar facilities. Without limiting the generality of the foregoing, Lessee shall obtain and maintain in effect throughout the Term the kinds and amounts of insurance as described below (provided that, with respect to each Facility, the coverages required under subsections (a)(iii), (a)(iv), (a)(vii) and (a)(viii) below and for all other coverages under this subsection (a) that are obtained under and in accordance with the applicable Project Development Agreement, such coverages shall be required from and after the applicable Completion Date). This insurance shall be written by insurance companies (i) acceptable to Lessor, (ii) that are rated at least an “A-VIII” or better by Best’s Insurance Guide, and (iii) unless otherwise approved by Lessor, authorized, licensed and qualified to do insurance business in the

 

31

 

state in which the Leased Property is located. Lessee will pay or cause to be paid all Insurance Premiums for the insurance coverage required to be maintained pursuant to this Article XIII during the Term. The commercial property, rental value and business interruption policies shall name Lessor (and any other entity that Lessor may deem necessary) as additional insureds and loss payees as respects coverage afforded the Leased Property under standard Insurance Services Offices (ISO) commercial property insurance endorsements CP1219 and CP1503, or manuscript equivalents, and as additional insureds and loss payees under boiler and machinery and any other property insurance policy. All casualty insurance policies shall name Lessor (and any other entity that Lessor may deem necessary) as additional insureds. All property, business interruption and boiler and machinery losses shall be payable to Lessor and/or Lessee as provided in Article XIV. Each insurance policy required hereunder must, unless otherwise expressly provided herein (i) provide primary insurance without right of contribution from any other insurance carried by Lessor, (ii) contain express permission for Lessee to enter into a waiver of subrogation rights in favor of Lessor, or any right of setoff or counterclaim against any insured party thereunder including Lessor, (iii) permit Lessor to pay premiums at Lessor’s discretion, and (iv) as respects any third party liability claim brought against Lessor, obligate the insurer to defend Lessor as named insured thereunder. In addition, the property, business interruption and boiler and machinery policies shall name as an additional insured all Facility Lenders, if any, by way of a standard or other acceptable form of mortgagee’s loss payable endorsement. Any loss adjustment shall require the written consent of Lessor and each affected Facility Lender. Evidence or verification (as defined in Section 13.4 below) of insurance and/or Impositions shall be deposited with Lessor and, if requested, with any Facility Lender. If Insurance Premiums are required to be deposited or escrowed in accordance with Section 3.2, then Lessee shall pay or deposit the amount of such Insurance Premiums in accordance with Section 3.2. With respect to each Facility, the policies required hereunder relating to Lessee, the portion of the Leased Property relating to each Facility, including the Leased Improvements and Lessee’s Personal Property relating to such Facility, shall insure against the following risks:

 

(i)                                     Commercial Property insurance written on a broad “all risk” or “special perils” policy form covering physical loss or damage to such portion of the Leased Property including building and improvements and betterments. Unless otherwise provided such coverage shall be in an amount equal to the full replacement cost (as herein defined) value basis to the extent of the full insurable replacement value of such portion of the Leased Property. Unless otherwise provided hereunder, all policy deductibles shall be borne in full by Lessee and must not exceed, per occurrence, an amount in excess of Three Percent (3%), of the insurable value of such portion of the Leased Property. Lessee further agrees that it will notify Lessor of any loss in the amount equal to One-Half of One Percent (0.5%) of the Allocated Development Costs relating to such Facility or greater and that no claim at or in excess of such amount shall be settled without the prior written consent of Lessor, which consent shall not be unreasonably withheld, conditioned or delayed.

 

(ii)                                  Flood and earthquake insurance shall be required at a minimum amount equal to Twenty Percent (20%) of the Full Replacement Cost. The deductible for any such insurance shall not exceed Three Percent (3%) of the insured values.

 

32

 

(iii)                               Rental Value insurance using standard ISO endorsement CP 1503, or its equivalent, as respects rental value coverage on such portion of the Leased Property. Such endorsement shall require property insurer to send notice of cancellation or non-renewal to Lessor per Section 13.4.

 

(iv)                              Business interruption insurance covering lost earnings and continuing expenses, less rents due Lessor to the extent covered under subparagraph (iii), in an amount sufficient to cover not less than the aggregate amount of Lessee’s earnings during (A) the actual time required to rebuild such portion of the Leased Property following loss or damage, or (B) twelve (12) months, whichever is longer, plus an additional extended period of indemnity of not less than ninety (90) days shall be provided. Coverage shall be written on an “actual loss sustained” form, for the same perils and other events as described in subparagraph (v) below.

 

(v)                                 Commercial General Liability in a primary amount of at least One Million and No/100 Dollars ($1,000,000.00) per occurrence, bodily injury for injury or death of any one person and for Property Damage for damage to or loss of the property of others, subject to a Two Million and No/100 Dollars ($2,000,000.00) annual aggregate policy limit applicable separately to such portion of the Leased Property for all bodily injury and property damage claims, occurring on or about such Leased Property or in any way related to such portion of the Leased Property, including but not limited to, any swimming pools or other rehabilitation and recreational facilities or areas that are located on such portion of the Leased Property otherwise related to such portion of the Leased Property. All allocated loss adjustment expenses, including defense costs, shall be in addition to the policy limits required above. Such policy shall include coverages found on the ISO Commercial General Liability Policy form CG 0001, occurrence policy form, current edition, with deductible amounts reasonably acceptable to Lessor. Lessee shall be responsible for funding all deductibles and retentions, including those which may be applicable to Lessor as an additional insured thereunder.

 

(vi)                              Umbrella liability insurance in the minimum amount of Ten Million and No/100 Dollars ($10,000,000.00) for each occurrence and aggregate combined single limit for all liability. The umbrella shall follow form with the primary commercial general liability with respect to providing primary and non-contributory coverage to Lessor as an additional insured when required by written contract or agreement. The umbrella liability policy shall name in its underlying schedule the policies of commercial general liability, professional liability and employer’s liability under the workers compensation policy.

 

(vii)                           Professional liability insurance for Lessee and all employed professionals (including any physicians) of Lessee in an amount not less than One Million and No/100 Dollars ($1,000,000.00) per individual claim and Three Million and No/100 Dollars ($3,000,000.00) annual aggregate. All medical professionals (including physicians) who perform professional services at such Facility shall meet the required minimum insurance requirements of One Million

 

33

 

and No/100 Dollars ($1,000,000.00) per individual claim and Three Million and No/100 Dollars ($3,000,000.00) annual aggregate.

 

(viii)                        Worker’s Compensation and Employers Liability insurance covering all of Lessee’s employees in amounts that are customary for Lessee’s industry. Any Worker’s Compensation or Employers Liability insurance that is customary for Lessee’s industry should provide coverage for any subcontractors, including physicians, who use the Facility but are not deemed “employees” of Lessee. If such coverage is not available, then Lessee must ensure that the subcontractor has adequate Worker’s Compensation and/or Liability insurance coverage.

 

The term “Full Replacement Cost” as used herein, shall mean the actual replacement cost thereof from time to time. In the event either Lessor or Lessee believes that the Full Replacement Cost has increased or decreased at any time during the Term, it shall have the right to have such Full Replacement Cost re-determined by an impartial third party, hereinafter referred to as the “Impartial Appraiser.” If the Lessor and Lessee are unable to agree on the selection of an Impartial Appraiser, each party shall select one appraiser, and the two appraisers so selected shall jointly select the Impartial Appraiser. The party desiring to have the Full Replacement Cost so re-determined shall forthwith, on receipt of such determination by such Impartial Appraiser, give written notice thereof to the other party. The determination of such Impartial Appraiser shall be final and binding on the parties, and Lessee shall forthwith increase, or may decrease, the amount of the insurance carried pursuant to this Section 13.1, as the case may be, to the amount so determined by the Impartial Appraiser. Lessee shall pay the fee, if any, of the Impartial Appraiser.

 

(b)                                 At Lessor’s option, and provided that the costs of such coverages collectively do not exceed the costs of such insurance to be obtained by Lessee, Lessor may obtain the property and casualty insurance coverages as required herein in its own name and, in such event, Lessee shall reimburse Lessor for the costs of such coverages, including any required deductibles or retention payments, immediately upon request by Lessor.

 

13.2                        Additional Insurance. In addition to the insurance described above, with respect to each Facility, Lessee shall maintain such additional insurance, including, without limitation, adequate loss of rents insurance with respect to casualty or condemnation events to the extent the coverages set forth in Sections 13.1(a)(iii) and 13.1(a)(iv) are not adequate, as may be reasonably required from time to time by any Facility Lender, and shall further at all times maintain adequate worker’s compensation insurance coverage for all persons employed by Lessee on the portion of the Leased Property relating to such Facility, to the extent required by any applicable local, state and federal laws. Notwithstanding anything contained herein to the contrary, Lessor shall not be prohibited from purchasing and maintaining such additional insurance as it may determine, in its sole discretion and at its own expense, to be necessary to protect its interest in all or any portion of the Leased Property.

 

13.3                        Waiver of Subrogation. Lessee hereby waives any and all rights of recovery against Lessor, its officers, agents and employees, for all injury, loss of or damage to persons or

 

34

 

property, howsoever caused, including loss of use, to the extent such injury, loss or damage is covered or should be covered by required insurance or any other insurance maintained by Lessee, including sums within deductibles, retentions or self-insurance applicable thereto. This waiver applies to all first party property, business interruption, equipment, vehicle and workers compensation claims (unless prohibited under applicable state statutes), as well as third party liability claims. This waiver shall be in addition to, and not in limitation or derogation of, any other waiver or release contained in this Lease with respect to loss of, or damage to, property of the parties hereto. In as much as the above mutual waivers preclude the assignment of any aforesaid claim by way of subrogation to an insurance company, Lessee shall immediately give to each insurance company providing coverage under this Lease, written notice of the terms of said mutual waivers, and to have said insurance policies properly endorsed, if necessary, to prevent the invalidation of said insurance coverage by reason of said waivers. Lessee shall indemnify Lessor against any loss or expense, including reasonable attorneys’ fees, resulting from the failure to obtain such waiver from the insurer, if required.

 

13.4                        Form of Insurance. At least five (5) Business Days prior to the applicable Acquisition Date with respect to a particular Facility, and thereafter, at least ten (10) Business Days prior to any insurance policy expiration date, Lessee shall provide verification of required insurance coverage for the following year which shall include the following:

 

(a)                                 No later than the date that is forty-five (45) days after the applicable Acquisition Date and any such insurance policy expiration date, true and certified copies of the required insurance policies.

 

(b)                                 In the event Lessee does not provide timely or proper verification, or does not maintain the insurance required hereunder or pay the premiums as required hereunder, Lessor shall be entitled, but shall have no obligation, to obtain such insurance and pay the premiums therefor, which premiums shall be repayable to Lessor as provided in this Lease, and failure to adhere to those repayment provisions shall constitute an Event of Default within the meaning of Section 16.1(a).

 

Lessee acknowledges and agrees that any insurance policies, endorsements and/or binders or certificates that provide that the insurer will “endeavor to” give notice before same may be altered, allowed to expire, or canceled will not be acceptable to Lessor, and Lessee shall use its commercially reasonable efforts to cause such language to be deleted from such any insurance policies, endorsements and/or binders or certificates. Notwithstanding anything contained herein to the contrary, all policies of insurance required to be obtained by Lessee hereunder shall (but only to the extent commercially available) provide (i) that such policies will not lapse, terminate, be canceled, or be amended or modified to reduce limits or coverage terms unless and until Lessor has received not less than thirty (30) days’ prior written notice at Lessor’s notice address as specified in this Lease (the “Lessor’s Notice Address”), with a simultaneous copy to (A) MPT Operating Partnership, L.P., Attention: President, 1000 Urban Center Drive, Suite 501, Birmingham, Alabama 35242, and (B) McGriff, Seibels & Williams, Inc., Attention: John F. Carter, 2211 7th Avenue South, Birmingham, Alabama 35233, and (ii) that in the event of cancellation due to non-payment of premium, the insurer will provide not less than ten (10) days’ prior written notice to Lessor at Lessor’s Notice Address, with a simultaneous copy to (A) MPT Operating Partnership, L.P., Attention: President, 1000 Urban Center Drive, Suite 501,

 

35

 

Birmingham, Alabama 35242, and (B) McGriff, Seibels & Williams, Inc., Attention: John F. Carter, 2211 7th Avenue South, Birmingham, Alabama 35233.

 

13.5                        Increase in Limits. In the event that Lessor shall at any time in its reasonable discretion deem the limits of the personal injury, property damage or general public liability insurance then carried to be insufficient based on insurance limits generally in effect with respect to similar properties, the parties shall endeavor to agree on the proper and reasonable limits for such insurance to be carried and such insurance shall thereafter be carried with the limits thus agreed on until further change pursuant to the provisions of this Section 13.5. If the parties shall be unable to agree thereon, the proper and reasonable limits for such insurance to be carried shall be determined by an impartial third party selected by the parties. Nothing herein shall permit the amount of insurance to be reduced below the amount or amounts required by any of the Facility Instruments.

 

13.6                        No Separate Insurance. Lessee shall not, on Lessee’s own initiative or pursuant to the request or requirement of any third party, take out separate insurance concurrent in form or contributing in the event of loss with that required in this Article XIII to be furnished by, or which may reasonably be required to be furnished by, Lessee, or increase the amounts of any then existing insurance by securing an additional policy or additional policies, unless all parties having an insurable interest in the subject matter of the insurance, including in all cases Lessor and all Facility Lenders, are included therein as additional insureds and the loss is payable under said insurance in the same manner as losses are required to be payable under this Lease. Lessee shall immediately notify Lessor of the taking out of any such separate insurance or of the increasing of any of the amounts of the then existing insurance by securing an additional policy or additional policies.

 

ARTICLE XIV

 

FIRE AND CASUALTY

 

14.1                        Insurance Proceeds. All proceeds payable by reason of any loss or damage to the Leased Property, or any portion thereof, and insured under any policy of insurance required by Article XIII shall be paid to Lessor and held by Lessor in trust and shall be made available for reconstruction or repair, as the case may be, of any damage to or destruction of the Leased Property, or any portion thereof, and shall be paid out by Lessor from time to time for the reasonable cost of such reconstruction or repair. Any excess proceeds of insurance remaining after the completion of the restoration or reconstruction of the Leased Property, or any portion thereof, (or in the event neither Lessor nor Lessee is required or elects to repair and restore, all such insurance proceeds) shall be paid over to, or retained by Lessor. All salvage resulting from any risk covered by insurance shall belong to Lessor except that any salvage relating to Capital Additions paid for by Lessee as described in Section 10.2 or to Lessee’s Personal Property as described in Section 14.4 shall belong to Lessee.

 

36

 

14.2                        Reconstruction in the Event of Damage or Destruction Covered by Insurance.

 

(a)           With respect to any Facility, if during the Term the portion of the Leased Property relating thereto is totally or partially destroyed from a risk covered by the insurance described in Article XIII and such portion of the Leased Property is thereby rendered Unsuitable for its Primary Intended Use (the “Impacted Facility”), Lessee shall elect, by giving written notice to Lessor within sixty (60) days following the date of such destruction, one of the following: (i) to restore such portion of the Leased Property relating to such Impacted Facility to substantially the same condition as existed immediately before the damage or destruction, or (ii) so long as no Event of Default then exists and no event then exists which with the giving of notice or the passage of time or both would constitute an Event of Default, and subject to Section 36.2, to purchase such portion of the Leased Property from Lessor for the Option Price, in which case all insurance proceeds payable pursuant to Section 14.1 shall be paid over to, or retained by, Lessee. The “Option Price” shall be equal to the greater of (1) the Fair Market Value Purchase Price of such portion of the Leased Property and (2) the sum of the Allocated Development Costs for such Impacted Facility and the actual costs of any Capital Additions funded by Lessor with respect thereto. In the event Lessee purchases such portion of the Leased Property pursuant to this Section 14.2(a), the terms set forth in Article XVIII shall apply and the sale/purchase must be closed within sixty (60) days after the date of the written notice from Lessee to Lessor of Lessee’s intent to purchase, unless a different closing date is agreed upon in writing by Lessor and Lessee. For purposes of any appraisal conducted in accordance with this Section, such appraisal shall not take into account the damage or destruction giving rise to Lessee’s rights hereunder.

 

(b)                                 With respect to any Facility, if, during the Term, the portion of the Leased Property relating thereto is totally or partially destroyed from a risk covered by the insurance described in Article XIII, but such portion of the Leased Property is not thereby rendered Unsuitable for its Primary Intended Use, Lessee shall restore such portion of the Leased Property to substantially the same condition as existed immediately before the damage or destruction. Such damage or destruction shall not terminate this Lease with respect to such portion of the Leased Property.

 

(c)                                  With respect to each Facility, if the cost of the repair or restoration of the portion of the Leased Property relating thereto exceeds the amount of insurance proceeds received by Lessor from the insurance required under Article XIII, Lessee shall be obligated to contribute any excess amount needed to restore the portion of the Leased Property relating to such Facility prior to use of the insurance proceeds. Such amount shall be paid by Lessee to Lessor (or a Facility Lender if required) to be held in trust together with any other insurance proceeds for application to the cost of repair and restoration.

 

(d)                                 With respect to each Facility, in the event Lessee elects to purchase the portion of the Leased Property relating to such Facility as provided in this Section 14.2, and, so long as no Event of Default then exists and no event then exists which with the giving of notice or the passage of time or both would constitute an Event of Default, this Lease shall terminate with respect to such portion of the Leased Property upon payment of the purchase price the Base Rent shall be reduced in accordance with Section 5.2, and Lessor shall transfer to Lessee its rights in

 

37

 

or remit to Lessee all insurance proceeds being held in trust by Lessor or the Facility Lender on or prior to the closing of Lessee’s purchase of such portion of the Leased Property.

 

14.3                        Reconstruction in the Event of Damage or Destruction Not Covered by Insurance. If during the Term the portion of the Leased Property relating to any Facility is totally or partially damaged or destroyed from a risk not covered by the insurance described in Article XIII, then, whether or not such damage or destruction renders such Facility Unsuitable for its Primary Intended Use, Lessee shall, at its sole cost and expense, restore such portion of the Leased Property to substantially the same condition it was in immediately before such damage or destruction and such damage or destruction shall not terminate this Lease with respect to such portion of the Leased Property.

 

14.4                        Lessee’s Personal Property. All insurance proceeds payable by reason of any loss of or damage to any Lessee’s Personal Property or any Capital Addition financed by Lessee shall be paid to Lessor and Lessor shall hold such insurance proceeds in trust to pay the cost of repairing or replacing the damage to Lessee’s Personal Property or the Capital Additions financed by Lessee, unless Lessee elects to purchase the portion of the Leased Property relating to such Facility, in which case such proceeds shall be paid to Lessee.

 

14.5                        Restoration of Lessee’s Property. If Lessee is required or elects to restore the portion of the Leased Property relating to any Facility as provided in Sections 14.2 or 14.3, Lessee shall also restore all alterations and improvements made to Lessee’s Personal Property with respect thereto and all Capital Additions paid for by Lessee with respect thereto, in each case, to substantially the same condition existing before such casualty.

 

14.6                        No Abatement of Rent. This Lease shall remain in full force and effect, and Lessee’s obligation to pay Rent and all other charges required by this Lease shall remain unabated during any period required for repair and restoration.

 

14.7                        Waiver. Lessee hereby waives any statutory or common law rights of termination which may arise by reason of any damage to or destruction of any portion of the Leased Property relating to a particular Facility.

 

ARTICLE XV

 

CONDEMNATION

 

15.1                        Parties’ Rights and Obligations. If during the Term there is any Taking of all or any part of the portion of the Leased Property relating to any Facility or any interest in this Lease relating to such portion of the Leased Property by Condemnation, the rights and obligations of the parties shall be determined by this Article XV.

 

15.2                        Total Taking. If there is a Taking of all of the portion of the Leased Property relating to any Facility by Condemnation, this Lease shall terminate with respect to such portion of the Leased Property on the Date of Taking.

 

15.3                        Partial Taking. If there is a Taking of a part, but not all, of the portion of the Leased Property relating to any Facility by Condemnation, this Lease shall remain in effect with

 

38

 

respect to such portion of the Leased Property if such portion of the Leased Property is not thereby rendered Unsuitable for its Primary Intended Use. If, however, such portion of the Leased Property is thereby rendered Unsuitable for its Primary Intended Use, Lessee shall either (a) restore such portion of the Leased Property, at its own expense and to the extent possible, to substantially the same condition as existed immediately before the partial Taking, or (b) so long as no Event of Default then exists and no event then exists which with the giving of notice or the passage of time or both would constitute an Event of Default, and subject to Section 36.2, acquire such portion of the Leased Property from Lessor for a purchase price equal to the Option Price, in which event this Lease shall terminate with respect to such portion of the Leased Property upon payment of the Option Price, and the Base Rent shall be reduced in accordance with Section 5.2. Lessee shall exercise its option by giving Lessor notice thereof within sixty (60) days after Lessee receives notice of the Taking with respect to such portion of the Leased Property. In the event Lessee exercises the option to purchase such portion of the Leased Property pursuant to this Section 15.3, the terms set forth in Article XVIII shall apply and the sale/purchase must be closed within sixty (60) days after the date of the written notice from Lessee to Lessor of Lessee’s intent to purchase, unless a different closing date is agreed upon in writing by Lessor and Lessee.

 

15.4                        Award Distribution. In the event Lessee exercises the purchase option with respect to the portion of the Leased Property relating to a Facility as described in Section 15.3(b), the entire Award shall belong to Lessee so long as no Event of Default then exists and no event then exists which with the giving of notice or the passage of time or both would constitute an Event of Default, and Lessor agrees to assign to Lessee all of its rights to the Award. In any other event, the entire Award shall belong to and be paid to Lessor; provided, however, that if this Lease is terminated with respect to such portion of the Leased Property, and subject to the rights of any Facility Lender, Lessee shall be entitled to receive a sum attributable to Lessee’s Personal Property relating thereto and any reasonable removal and relocation costs, provided, in each case, the Award specifically includes such items. If Lessee is required or elects to restore such portion of the Leased Property, Lessor agrees that the Award shall be used for that restoration and it shall hold the Award in trust for application to the cost of the restoration.

 

ARTICLE XVI

 

DEFAULT

 

16.1                        Events of Default. The occurrence of any one or more of the following events (individually, an “Event of Default”) shall constitute Events of Default hereunder:

 

(a)                                 Lessee shall fail to make a payment of the Rent or any other monetary obligation when the same becomes due and payable by Lessee under this Lease (including, but not limited to, any failure to pay Insurance Premiums or Impositions), and such failure shall continue for a period of five (5) days after delivery of written notice thereof from Lessor; or

 

(b)                                 Lessee shall fail to observe or perform any other term, covenant or condition of this Lease and such failure is not cured by Lessee within a period of thirty (30) days after receipt by Lessee of written notice thereof from Lessor, unless such failure cannot with due diligence be cured within a period of thirty (30) days (in Lessor’s reasonable discretion), in which case such

 

39

 

failure shall not be deemed to continue so long as Lessee commences to cure such failure within the thirty (30) day period and proceeds with due diligence to complete the curing thereof within sixty (60) days after receipt by Lessee of Lessor’s notice of default (it being understood and agreed that in no event shall any cure period exceed sixty (60) days); provided, however, in no event shall Lessor be required to give more than one (1) notice and cure period for Lessee’s failure to observe or perform the same (or repetitive) covenant or condition in any consecutive twelve (12) month period; or

 

(c)                                  (i) any Facility Lessee or any Guarantor shall admit in writing its inability to pay its debts as they become due; or (ii) any Facility Lessee or any Guarantor shall file a petition in bankruptcy as a petition to take advantage of any insolvency act; or (iii) any Facility Lessee or any Guarantor shall be declared insolvent according to any law; or (iv) any Facility Lessee or any Guarantor shall make any general assignment for the benefit of its creditors; or (v) the estate or interest of any Facility Lessee in the Leased Property or any part thereof shall be levied upon or attached in any proceeding and the same shall not be vacated or discharged within the later of ninety (90) days after commencement thereof or thirty (30) days after receipt by Lessee of written notice thereof from Lessor (unless Lessee shall be contesting such lien or attachment in good faith in accordance with Article XII); or (vi) any petition shall be filed against any Facility Lessee or any Guarantor to declare such Facility Lessee or such Guarantor bankrupt, to take advantage of any insolvency act, or to delay, reduce or modify such Facility Lessee’s or such Guarantor’s capital structure and the same shall not be removed or vacated within ninety (90) days from the date of its creation, service or attachment; or (vii) any Facility Lessee or any Guarantor shall, after a petition in bankruptcy is filed against it, be adjudicated a bankrupt, or a court of competent jurisdiction shall enter an order or decree, with or without the consent of such Facility Lessee or such Guarantor, as the case may be, appointing a trustee, examiner or receiver of such Facility Lessee or such Guarantor or the whole or substantially all of its property, or approving a petition filed against such Facility Lessee or such Guarantor seeking reorganization or arrangement of such Facility Lessee or such Guarantor under the federal bankruptcy laws or any other applicable law or statute of the United States of America or any state thereof, and such judgment, order or decree shall not be vacated or set aside or stayed within ninety (90) days from the date of the entry thereof; or

 

(d)                                 a Change of Control Transaction (other than a Permitted Sale Transaction) shall occur which is not approved by Lessor in writing in advance; or

 

(e)                                  Lessee abandons or vacates any portion of the Leased Property relating to a Facility (Lessee’s absence from such portion of the Leased Property for sixty (60) consecutive days shall constitute abandonment), or Lessee fails to continuously operate such Leased Property for sixty (60) consecutive days in accordance with the terms of this Lease (other than if such failure to continuously operate is due to casualty or other events of force majeure); or

 

(f)                                   any Facility Lessee or Guarantor shall be liquidated or dissolved, or shall begin proceedings toward such liquidation or dissolution, or shall, in any manner, permit the sale or divestiture of substantially all of its assets other than in connection with a Permitted Sale Transaction; or

 

40

 

(g)                                  a default shall occur under the Master Funding and Development Agreement, any Project Development Agreement or any Other Agreement which is not cured within the cure period as provided therein; or

 

(h)                                 any Facility Lessee or Guarantor shall receive written notice of a monetary or a material non-monetary default or event of default occurs with respect to any Material Obligation of any Facility Lessee or Guarantor and such default or event of default is not cured within the applicable cure period provided by the document evidencing the Material Obligation; or

 

(i)                                     Lessee shall fail to obtain or maintain the Letter of Credit as required by Section 38.14 or Lessee fails to provide Lessor with a replacement letter of credit as and when required under this Lease; or

 

(j)                                    the Licenses necessary to operate any Facility as a Hospital location shall not be obtained by the applicable Operational Date, subject to extension as provided in Section 7.2(a); or

 

(k)                                 at any time during the Term after at least three (3) Facilities have each been open for business for six (6) months, Lessee’s EBITDAR shall be less than Two Hundred Percent (200%) of Combined Lease Payments (as determined utilizing the trailing twelve (12) month operating and financial results of Lessee and measured on a calendar quarterly basis, commencing with the first calendar quarter when at least three (3) Facilities have each been open for business for six (6) months; provided, however, that in lieu of the trailing twelve (12) month operating and financial results with respect to any Facility Lessee (including the first three (3) Facility Lessees), the determination of EBITDAR and Combined Lease Payments will be based on the actual EBITDAR of such Facility Lessee and the portion of the Combined Lease Payments payable with respect to the Facility owned by such Facility Lessee during each of the first twelve (12) calendar months commencing in the first calendar month after such Facility Lessee has been open for business for six (6) months); or

 

(l)                                     at any time during the Term:

 

(i)                                     the Consolidated Fixed Charge Coverage Ratio of First Choice and its subsidiaries shall be less than (A) One Hundred Seventy-Five Percent (175%) for any calendar quarter ending on or before December 31, 2013, or (B) Two Hundred Percent (200%) for any calendar quarter ending on or after March 31, 2014 (in each case as determined utilizing the trailing twelve (12) month operating and financial results of First Choice and its subsidiaries and measured on a calendar quarterly basis); or

 

(ii)                                  the consolidated Net Worth of First Choice and its subsidiaries shall be less than Fifty Million Dollars ($50,000,000) (as determined utilizing such information as provided to Lessor by Lessee or as Lessor may request pursuant to Section 23.6); provided, however, that for purposes of testing subsections (1)(i) and (1)(ii), in the event that a new Person becomes a FirstChoice subsidiary after the Commencement Date, such Person’s operating and financial results shall be measured from the first (1st) day of the first (1st) calendar month

 

41

 

after such Person becomes a FirstChoice subsidiary and such operating and financial results, in lieu of trailing twelve (12) month results, shall be utilized for a period of one (1) year); or

 

(m)                             Lessor shall receive a BOA Special Enforcement Notice (as defined in the Intercreditor Agreement) from BOA.

 

If an Event of Default has occurred, Lessor shall have the right at its election, then or at any time thereafter, to pursue any one or more of the following remedies, in addition to any remedies which may be permitted by law, by other provisions of this Lease or otherwise, without notice or demand, except as hereinafter provided:

 

A.            If Lessee deserts, abandons, or vacates any portion of the Leased Property, Lessor may enter upon and take possession of the portion of the Leased Property relating to any one or more (including all, if so elected by Lessor) of the Facilities, regardless of whether such Event of Default emanated from or related primarily to a single Facility, to protect it or them from deterioration and continue to demand from Lessee Rent and other charges as provided in this Lease, without any obligation to relet (except to the extent required by applicable law); but if Lessor does relet such portion or portions of the Leased Property (on such terms and conditions as Lessor, in its sole discretion, shall deem reasonable), such action by Lessor shall not be deemed an acceptance of Lessee’s surrender of the Leased Property relating to such Facilities unless Lessor expressly notifies Lessee of such acceptance in writing, Lessee hereby acknowledging that Lessor shall otherwise be reletting as Lessee’s agent and Lessee furthermore hereby agreeing to pay to Lessor on demand any deficiency that may arise between the Rent and other charges as provided in this Lease and that which is actually collected by Lessor for such relet portion of the Leased Property.

 

B.            Lessor may immediately terminate Lessee’s right of possession of the portion or portions of the Leased Property relating to any one or more (including all, if so elected by Lessor) of the Facilities (whether one or more, the “Terminated Possession Facility”), but not terminate this Lease with respect to such portion or portions of the Leased Property, and without notice or demand, except as may be required by applicable law, enter upon such portion or portions of the Leased Property or any part thereof and take absolute possession of the same, and at Lessor’s sole option may relet such portion or portions of the Leased Property or any part thereof for such terms and such rents as Lessor may reasonably elect. In the event of such reletting, the rent received by Lessor from such reletting shall be applied to Lessee’s obligations in the order which Lessor may reasonably determine, and Lessee shall satisfy and pay any deficiency upon demand therefor from time to time. Any entry into and possession of any portion of the Leased Property by Lessor shall be without liability or responsibility to Lessee and shall not be in lieu of or in substitution for any other legal rights of Lessor hereunder. Lessee further agrees that Lessor may file suit to recover any sums due under the terms of this Lease and that no recovery of any portion due Lessor hereunder shall be any defense to any subsequent action brought by Lessor for any other amounts not reduced to judgment in favor of Lessor. Reletting the portion of the Leased Property relating to any one or more of such Terminated Possession Facilities shall not be construed as an election on the part of Lessor to terminate this Lease with respect to such Leased Property and, notwithstanding any such reletting without termination, Lessor may at any time thereafter elect to terminate this Lease for default with

 

42

 

respect to the Leased Property of any one or more (including all, if so elected by Lessor) of the Facilities.

 

C.                                    Lessor may terminate this Lease with respect to any portion or portions of the Leased Property of any one or more (including all, if so elected by Lessor) of the Facilities (whether one or more, the “Terminated Facility”), regardless of whether such Event of Default emanated from or related primarily to a single Facility, by written notice to Lessee, in which event Lessee shall immediately surrender to Lessor the portion of the Leased Property relating to each such Terminated Facility, and if Lessee fails to do so, Lessor may, without prejudice to any other remedy which Lessor may have for possession or arrearages in Rent or any other payments under this Lease (including any interest and payment penalty which may have accrued pursuant to the terms of this Lease), enter upon and take possession of such portion of the Leased Property relating to such Terminated Facility and expel or remove the applicable Facility Lessee and any other Person who may be occupying such portion of the Leased Property, by force, if necessary, without being liable for prosecution or any claim for damages therefor.

 

D.                                    In the event that Lessor has either repossessed a portion of the Leased Property pursuant to subsections A or B above, or terminated this Lease with respect to one or more (or all, if so elected by Lessor) of such Facilities pursuant subsection C, and Lessor elects to enter upon such portion of the Leased Property as provided herein, Lessor may change, alter, and/or modify the door locks on all entry doors of such portion of the Leased Property, thereby permanently excluding Lessee and its officers, principals, agents, employees, representatives and invitees therefrom.

 

E.                                     In addition to any other available remedies, at Lessor’s option, with respect to each Facility, Lessor shall have those rights (i) to purchase Lessee’s Personal Property in the manner provided in Section 33.2, and (ii) to effect a transfer or reissuance of the Licenses pursuant to the terms of Article XXXVI.

 

F.                                      Without limiting any rights or remedies available to Lessor, Lessee acknowledges and agrees that if Lessor receives a Special Enforcement Notice from BOA in accordance with the Intercreditor Agreement, Lessor shall have the right and option, in its sole and absolute discretion, to terminate this Lease or Lessee’s right to possession of the Leased Property as provided under subsections B and C above. Lessee’s acknowledgement and agreement in this subsection F is a material inducement to Lessor entering into the Intercreditor Agreement and without such acknowledgement Lessor would not be willing to enter into the Intercreditor Agreement with BOA.

 

G.                                    If this Lease is assigned with respect to any portion of the Leased Property, or if any portion of the Leased Property is relet, Lessee hereby irrevocably constitutes and appoints Lessor as Lessee’s agent to collect the rents and all other sums due by such assignee or Tenant and apply the same to the Rent due hereunder without in any way affecting Lessee’s obligation to pay any unpaid balance of Rent due hereunder.

 

H.                                   Proceed as a secured party under the provisions of the Uniform Commercial Code against the goods and other personal property relating to the Leased Property, including Lessee’s

 

43

 

Personal Property located on the Leased Property, in which Lessor has a security interest, subject to the Intercreditor Agreement.

 

I.                                        Exercise any and all other rights and/or remedies granted or allowed to landlords by any existing or future statute or other law of the State where the applicable portion of the Leased Property is located.

 

J.                                        In the event, and only in the event, that applicable law requires Lessor to attempt to mitigate damages following the exercise of Lessor’s rights under this Lease, as the case may be, Lessor shall use reasonable efforts to the extent required by applicable law to relet such portion or portions of Leased Property on such terms and conditions as Lessor, in its sole good faith judgment, may determine (including, without limitation, a lease term different than the Term, rental concessions, alterations and repair any such portion of the Leased Property; provided, however, that, with respect to any such portion of the Leased Property (i) Lessor shall not be obligated to relet such portion of the Leased Property before leasing other vacant space owned or operated by Lessor, (ii) Lessor reserves the right to refuse to lease such portion of the Leased Property to any potential tenant that does not meet Lessor’s reasonable standards and criteria for leasing any other comparable space owned or operated by Lessor, and (iii) Lessor shall not be obligated to undertake any greater efforts to relet such portion of the Leased Property than Lessor utilizes to lease any other vacant space owned or operated by Lessor. In any proceeding in which Lessor’s efforts to mitigate damages and/or its compliance with this subsection J is at issue, Lessor shall be presumed to have used reasonable efforts to mitigate damages and Lessee shall bear the burden of proof to establish that such reasonable efforts were not used. Lessee shall cooperate with Lessor in all reletting and mitigation efforts.

 

K.                                   To the extent permitted by law and without limiting any of the other legal and equitable remedies available to Lessor hereunder and under law, any loss and damages incurred by Lessor hereunder may be determined, at Lessor’s option, by either of the following alternative measures of damages:

 

L.                                     Until Lessor is able to relet the portion of the Leased Property relating to any Terminated Facility or Terminated Possession Facility, although Lessor shall be under no obligation to attempt to do so (unless expressly required by applicable law), Lessee shall pay to Lessor, on or before the first day of each calendar month, the monthly rentals and other charges relating to such Terminated Facility or Terminated Possession Facility as provided in this Lease. After such portion or portions of the Leased Property have been relet by Lessor, Lessee shall pay to Lessor on the tenth (10th) day of each calendar month the difference between the monthly rentals and other charges relating to such Terminated Facility or Terminated Possession Facility as provided in this Lease for the preceding calendar month and those actually collected by Lessor for that month. If it is necessary for Lessor to bring suit to collect any deficiency, Lessor shall have the right to allow such deficiencies to accumulate and to bring an action on several or all of the accrued deficiencies at one time. Any such suit shall not prejudice in any way the right of Lessor to bring a similar action for any subsequent deficiency or deficiencies. Any amount collected by Lessor from subsequent Tenants for any calendar month, in excess of the monthly rentals and other charges relating to such Terminated Facility or Terminated Possession Facility as provided in this Lease, shall be credited to Lessee in reduction of Lessee’s liability for any calendar month for which the amount collected by Lessor will be less than the monthly rentals

 

44

 

and other charges provided in this Lease, but Lessee shall have no right to any excess other than the above described credit.

 

M.                                 When Lessor desires, Lessor may demand a final settlement with respect to any one or more Terminated Facilities or Terminated Possession Facilities. Upon demand for such final settlement, Lessor shall have a right to, and Lessee hereby agrees to pay an amount equal to the difference between (A) the total of all monthly rentals and other charges relating to such Terminated Facility or Terminated Possession Facility as provided in this Lease for the remainder of the Term and (B) the reasonable rental value for such Terminated Facility or Terminated Possession Facility for such period, with such difference to be discounted to present value at a fixed discount rate equal to eight percent (8%).

 

N.                                    If Lessor elects to exercise any of the foregoing remedies with respect to one or more of the Facilities, such election shall in no way prejudice Lessor’s right at any time thereafter to cancel said election in favor of any other legal or equitable remedies or elsewhere in this Lease or under law.

 

O.                                    No receipt of moneys by Lessor from Lessee after a termination of this Lease with respect to any portion of the Leased Property relating to any one or more of the Facilities or of Lessee’s rights under this Lease by Lessor with respect to any such portion of the Leased Property shall reinstate, continue or extend the Term of this Lease with respect to such portion of the Leased Property or affect any notice theretofore given to Lessee, or operate as a waiver of the right of Lessor to enforce the payment of Rent and any related amounts to be paid by Lessee to Lessor then due or thereafter falling due, it being agreed that after the commencement of suit for possession of such portion of the Leased Property, or after final order or judgment for the possession of such portion of the Leased Property, Lessor may demand, receive and collect any moneys due or thereafter falling due without in any manner affecting such suit, order or judgment, all such money collected being deemed payments on account of the use and occupation of such portion of the Leased Property or, at the election of Lessor, on account of Lessee’s liability hereunder. Lessee hereby waives any and all rights of redemption provided by any law, statute or ordinance now in effect or which may hereafter be enacted.

 

16.2                        Additional Expenses. It is further agreed that, in addition to payments required pursuant to Section 16.1 above and the provisions of Section 38.3, Lessee shall compensate Lessor and its Affiliates for (a) all expenses incurred by Lessor and its Affiliates in enforcing the provisions of this Lease and in repossessing the Leased Property, (b) all expenses incurred by Lessor and its Affiliates in reletting, (c) all concessions granted to a new Tenant or Tenants upon reletting, and (d) Lessor’s and its Affiliates’ reasonable attorneys’ fees and expenses.

 

16.3                        No Waiver by Lessor. No right or remedy herein conferred upon or reserved to Lessor is intended to be exclusive of any other right or remedy, and every right and remedy shall be cumulative and in addition to any other legal or equitable right or remedy given hereunder, or at any time existing. The failure of Lessor to insist upon the strict performance of any provision or to exercise any option, right, power or remedy contained in this Lease shall not be construed as a waiver or a relinquishment thereof for the future. Forbearance by Lessor to enforce one or more of the remedies herein provided upon an Event of Default shall not be deemed or construed to constitute a waiver of such default. Further, if Lessor elects to exercise any of the remedies

 

45

 

prescribed in any of Section 16.1 above, this election shall in no way prejudice Lessor’s right at any time thereafter to cancel said election in favor of any other remedy elsewhere in this Lease. Pursuit of any of such remedies shall not preclude pursuit of any other remedies prescribed in other sections of this Lease and any other remedies provided by law or equity.

 

16.4                        Waiver of Statutory Rights. If this Lease is terminated pursuant to Section 16.1, Lessee waives, to the extent permitted by applicable law, (a) any right of redemption, re-entry or repossession, (b) the benefit of any laws now or hereafter in force exempting property from liability for rent or for debt, and (c) any statutory requirement of prior written notice for filing eviction or damage suits for nonpayment of Rent or any other payments under this Lease. Lessee acknowledges and agrees that no waiver by Lessor of any provision of this Lease shall be deemed to have been made unless made under signature of an authorized representative of Lessor.

 

ARTICLE XVII

 

LESSOR’S RIGHT TO CURE

 

Upon the occurrence of an Event of Default, or if any Facility Lessee or Guarantor shall fail to make payment or to perform any Material Obligation, including any obligation relating to any receivables or working capital loan or financing provided to Lessee for the purchase or lease of Lessee’s Personal Property (collectively the “RFFE Loans”) and to cure such failure within the relevant time period provided in the document evidencing such Material Obligation, Lessor, without waiving or releasing any obligation or Event of Default, may (but shall be under no obligation to) at any time thereafter make such payment or perform such act for the account and at the expense of Lessee, and may, to the extent permitted by law, enter upon the portion of the Leased Property relating to each Facility for such purpose and take all such action thereon as, in Lessor’s opinion, may be necessary or appropriate therefor. No such entry shall be deemed an eviction of Lessee. All sums so paid by Lessor and all costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses, in each case, to the extent permitted by law) so incurred, together with a late charge thereon (to the extent permitted by law) at the Overdue Rate from the date on which such sums or expenses are paid or incurred by Lessor, shall be paid by Lessee to Lessor on demand.

 

ARTICLE XVIII

 

PURCHASE OF THE LEASED PROPERTY

 

In the event Lessee purchases the Leased Property or any portion of the Leased Property relating to any Facility pursuant to the terms of this Lease, Lessor shall, upon receipt from Lessee of the applicable purchase price, together with full payment of any unpaid Rent, including, without limitation, any unpaid Additional Charges and any other amounts owed by Lessee or its Affiliates to Lessor and its Affiliates, due and payable with respect to any period ending on or before the date of the purchase, deliver to Lessee an appropriate special warranty deed or other instrument of conveyance conveying the entire interest of Lessor in and to the Leased Property of such Facility to Lessee in the condition as received from Lessee, free and clear of all encumbrances other than (a) those placed by Lessee on the Leased Property; (b) those that

 

46

 

Lessee has agreed or is required hereunder to pay or discharge; (c) those encumbrances placed on the Leased Property in accordance with Sections 7.3 and 38.7, if any; and (d) any matters affecting such portion of the Leased Property on or as of the applicable Acquisition Date. It shall be a condition precedent to Lessee’s obligation to purchase the Leased Property that the applicable Title Company agree to commit to issue a title policy insuring title to the Leased Property subject only to the matters described in clauses (a) through (d) of the preceding sentence (and MPT shall deliver an Owner’s Affidavit in customary form to the Title Company as may be necessary for the Title Company, with appropriate qualifications based on Lessee’s sole and absolute control and possession of the Leased Property during the Term) to issue a title policy). All expenses of such conveyance, including, without limitation, the cost of title examination or standard coverage title insurance, survey, reasonable attorneys’ fees incurred by Lessor in connection with such conveyance, transfer taxes, prepayment penalties, and any other fees of any Facility Lender with respect to any Facility Instrument, recording fees and similar charges shall be paid by Lessee.

 

ARTICLE XIX

 

HOLDING OVER

 

If Lessee shall for any reason remain in possession of the Leased Property after the expiration or earlier termination of this Lease, or after the termination of Lessee’s right to possession of the Leased Property hereunder, such possession shall be as a month-to-month tenancy, during which time Lessee shall pay, as rental each month, the product of one and one-half (1.5) times the monthly Base Rent payable with respect to the last complete month prior to such expiration or termination of this Lease, together with all Additional Charges accruing during the month and all other sums, if any, payable by Lessee pursuant to the provisions of this Lease with respect to the Leased Property. During such period of tenancy, Lessee shall be obligated to perform and observe all of the terms, covenants and conditions of this Lease, but shall have no rights hereunder other than the right, to the extent given by law to month-to-month tenancies, to continue its occupancy and use of the Leased Property. Nothing contained herein shall constitute the consent, express or implied, of Lessor to the holding over of Lessee after the expiration or earlier termination of this Lease, or after the termination of Lessee’s right to possession of the Leased Property hereunder.

 

ARTICLE XX

 

RISK OF LOSS

 

During the Term, the risk of loss of, or decrease in, the enjoyment and beneficial use of the Leased Property in consequence of the damage or destruction thereof by fire, the elements, casualties, thefts, riots, wars or otherwise, or in consequence of foreclosures, attachments, levies or executions (other than by Lessor and those claiming from, through or under Lessor) is assumed by Lessee and, Lessor shall in no event be answerable or accountable therefor nor shall any of the events mentioned in this Article XX entitle Lessee to any abatement of Rent except as specifically provided in this Lease.

 

47

 

ARTICLE XXI

 

INDEMNIFICATION

 

NOTWITHSTANDING THE EXISTENCE OF ANY INSURANCE OR SELF INSURANCE PROVIDED FOR IN ARTICLE XIII AND WITHOUT REGARD TO THE POLICY LIMITS OF ANY SUCH INSURANCE OR SELF INSURANCE, IN ADDITION TO ANY OTHER INDEMNIFICATION OBLIGATIONS OF LESSEE AND GUARANTOR AS PROVIDED IN THIS LEASE AND THE OTHER AGREEMENTS, LESSEE WILL PROTECT, INDEMNIFY, SAVE HARMLESS AND DEFEND LESSOR FROM AND AGAINST ALL LIABILITIES, OBLIGATIONS, CLAIMS, DAMAGES, PENALTIES, CAUSES OF ACTION, COSTS AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS’ FEES AND EXPENSES) TO THE EXTENT PERMITTED BY LAW), IMPOSED UPON OR INCURRED BY OR ASSERTED AGAINST LESSOR BY REASON OF: (A) ANY ACCIDENT, INJURY TO OR DEATH OF PERSONS OR LOSS OF PERSONAL PROPERTY OCCURRING ON OR ABOUT THE LEASED PROPERTY OR ADJOINING SIDEWALKS, INCLUDING WITHOUT LIMITATION ANY CLAIMS OF MALPRACTICE, (B) ANY USE, MISUSE, NON-USE, CONDITION, MAINTENANCE OR REPAIR BY LESSEE OF THE LEASED PROPERTY, (C) ANY IMPOSITIONS (WHICH ARE THE OBLIGATIONS OF LESSEE TO PAY PURSUANT TO THE APPLICABLE PROVISIONS OF THIS LEASE), (D) ANY FAILURE ON THE PART OF LESSEE TO PERFORM OR COMPLY WITH ANY OF THE TERMS OF THIS LEASE, (E) THE NON-PERFORMANCE OF ANY OF THE TERMS AND PROVISIONS OF ANY AND ALL EXISTING AND FUTURE SUBLEASES OF THE LEASED PROPERTY TO BE PERFORMED BY THE LANDLORD (LESSEE) THEREUNDER, (F) THE REALIZATION OF TAXABLE INCOME OR GAIN BY ANY FACILITY LESSOR OR ANY EQUITY CONSTITUENT OF ANY FACILITY LESSOR UNDER THE CODE IN CONNECTION WITH ANY PROPERTY SUBSTITUTION, AND (G) ANY AND ALL LAWFUL ACTION THAT MAY BE TAKEN BY LESSOR IN CONNECTION WITH THE ENFORCEMENT OF THE PROVISIONS OF THIS LEASE, WHETHER OR NOT SUIT IS FILED IN CONNECTION WITH SAME, OR IN CONNECTION WITH LESSEE OR A GUARANTOR AND/OR ANY PARTNER, JOINT VENTURER, MEMBER OR SHAREHOLDER THEREOF BECOMING A PARTY TO A VOLUNTARY OR INVOLUNTARY FEDERAL OR STATE BANKRUPTCY, INSOLVENCY OR SIMILAR PROCEEDING. ANY AMOUNTS WHICH BECOME PAYABLE BY LESSEE UNDER THIS ARTICLE XXI SHALL BE PAID WITHIN FIFTEEN (15) DAYS AFTER LIABILITY THEREFOR ON THE PART OF LESSOR IS DETERMINED BY LITIGATION OR OTHERWISE AND, IF NOT TIMELY PAID, SHALL BEAR A LATE CHARGE (TO THE EXTENT PERMITTED BY LAW) AT THE OVERDUE RATE AND A LATE PAYMENT PENALTY COMPUTED AT THE LATE PAYMENT PENALTY RATE FROM THE DATE OF SUCH DETERMINATION TO THE DATE OF PAYMENT. LESSEE, AT ITS EXPENSE, SHALL CONTEST, RESIST AND DEFEND ANY SUCH CLAIM, ACTION OR PROCEEDING ASSERTED OR INSTITUTED AGAINST LESSOR AND MAY COMPROMISE OR OTHERWISE DISPOSE OF THE SAME, SUBJECT TO LESSOR’S APPROVAL. NOTHING HEREIN SHALL BE

 

48

 

CONSTRUED AS INDEMNIFYING LESSOR AGAINST ITS OWN GROSSLY NEGLIGENT ACTS OR OMISSIONS OR WILLFUL MISCONDUCT.

 

ARTICLE XXII

 

ASSIGNMENTS AND SUBLEASING

 

22.1                        Assignment and Subleasing.

 

(a)                                 Except an assignment in connection with a Permitted Sale Transaction (which shall be permitted without Lessor prior written consent), Lessee shall not assign this Lease without Lessor’s prior written consent. Lessor shall not unreasonably withhold its consent to any assignment that requires its consent, provided that, that no Event of Default then exists and so long as immediately following any such assignment, Lessor has reasonably determined that (x) the assignee shall be in pro forma compliance with the covenant applicable to Lessee set forth in Section 16.1(k), to the extent then applicable, and (y) a Person than owns 51% or more of the direct or indirect Equity Interests of the assignee shall be in pro forma compliance with the covenants applicable to First Choice set forth in Section 16.1(l) (which compliance shall be measured to include such Person’s subsidiaries, as applicable), and provided further that (i) the assignee shall assume in writing and agree to keep and perform all of the terms of this Lease on the part of Lessee to be kept and performed; (ii) an original counterpart of each such assignment and assumption, duly executed by Lessee and such assignee in form and substance reasonably satisfactory to Lessor, shall be delivered promptly to Lessor; and (iii) Lessor shall have received the necessary Credit Enhancements from such assignee comparable to that existing prior to such assignment. If the foregoing conditions are satisfied, then Lessee shall be released from all liabilities and obligations accruing under this Lease from and after such assignment. Notwithstanding anything contained in this Lease to the contrary, any assignment must be of all of Lessee’s right, title and interest in and to this Lease and the Leased Property such that this Lease is not severed with respect to any one or more of the Facilities.

 

(b)                                 Lessee may sublease any portion of the Leased Property provided that (i) the Tenant Lease and the Tenant shall comply with the provisions of Section 22.2, (ii) an original counterpart of each such Tenant Lease, duly executed by Lessee and such Tenant shall be delivered promptly to Lessor, and (iii) Lessee shall remain primarily liable, as principal rather than as surety, for the prompt payment of the Rent and for the performance and observance of all of the obligations, covenants and conditions to be performed by Lessee hereunder and under all of the other documents executed in connection herewith.

 

22.2                        Sublease Limitations. In addition to the sublease limitations as set forth in Section 22.1, and notwithstanding anything contained in this Lease to the contrary, Lessee shall not sublet the Leased Property on any basis such that the rental to be paid by the Tenant thereunder would be based, in whole or in part, on either (a) the income or profits derived by the business activities of the Tenant, or (b) any other formula such that any portion of the sublease rental received by Lessor would fail to qualify as “rents from real property” within the meaning of Section 856(d) of the Code, or any similar or successor provision thereto. Moreover, Lessee shall not sublet any portion of the Leased Property for a term extending beyond the Fixed Term without the express consent of Lessor, not to be unreasonably withheld, conditioned or delayed.

 

49

 

In addition, all Tenants and Tenant Leases shall comply with the Healthcare Laws. Lessee agrees that all subleases must include provisions to the effect that (i) such Tenant Lease is subject and subordinate to all of the terms and provisions of this Lease, to the rights of Lessor hereunder, and to all financing documents relating to any Lessor financing in connection with the Leased Property, (ii) in the event this Lease shall terminate or be terminated before the expiration of the Tenant Lease, the Tenant will, at Lessor’s option, exercisable at any time in Lessor’s discretion, attorn to Lessor and waive any right the Tenant may have to terminate the Tenant Lease or to surrender possession thereunder as a result of the termination of this Lease, (iii) Tenant shall from time to time upon request of Lessee or Lessor furnish within twenty (20) days from request an estoppel certificate in form and content reasonably acceptable to Lessor or any Facility Lender relating to the Tenant Lease, (iv) in the event the Tenant receives a written notice from Lessor or Lessor’s successor or assign, if any, stating that an Event of Default has occurred under this Lease, the Tenant shall thereafter be obligated to pay all rentals accruing under said Tenant Lease directly to the party giving such notice, or as such party may direct (all rentals received from the Tenant by Lessor or Lessor’s successor or assign, if any, as the case may be, shall be credited against the amounts owing by Lessee under this Lease), (vi) such Tenant Lease shall at all times be subject to the obligations and requirements as set forth in this Article XXII, and (vii) Tenant shall provide to Lessor upon written request such officer’s certificates and financial statements as Lessor may reasonably request from time to time.

 

22.3                        Sublease Subordination and Non-Disturbance. Within twenty (20) days after request by Lessor or Lessee with respect to any Tenant, Lessee shall cause such Tenant to execute and deliver to Lessor and Lessor shall execute and deliver to such Tenant a subordination, non-disturbance and attornment agreement relating to such Tenant’s Tenant Lease, which subordination, non-disturbance and attornment agreement shall be in form mutually satisfactory to Lessor and Lessee. Within twenty (20) days from the date of request of Lessor, a Facility Lender or Lessee, with respect to any Tenant, Lessee shall cause such Tenant and Lessor shall cause such Facility Lender to enter into a written agreement in a form reasonably acceptable to such Facility Lender and such Tenant whereby (x) such Tenant subordinates the Tenant Lease and all of its rights and estate thereunder to each such mortgage or deed of trust that encumbers the Leased Property or any part thereof and agrees with each such Facility Lender that such Tenant will attorn to and recognize such Facility Lender or the purchaser at any foreclosure sale or any sale under a power of sale contained in any such mortgage or deed of trust, as the case may be, as Lessor under this Lease for the balance of the Term then remaining, subject to all of the terms and provisions of the Tenant Lease and (y) such Facility Lender shall agree that Tenant shall not be disturbed in peaceful enjoyment of the applicable portion of the Leased Property nor shall the applicable Tenant Lease be terminated or canceled at any time, except as specified in the applicable Tenant Lease.

 

ARTICLE XXIII

 

OFFICER’S CERTIFICATES; FINANCIAL

 

STATEMENTS; NOTICES AND OTHER CERTIFICATES

 

23.1                        At any time and from time to time within twenty (20) days following written request by Lessor or Lessee, Lessor ,or each Facility Lessee and Guarantor, as the case may be, shall furnish to the other party an Officer’s Certificate certifying that (i) this Lease is unmodified and in full

 

50

 

force and effect (or that this Lease is in full force and effect as modified and setting forth the modifications) and the dates to which the Rent has been paid, and (ii) no Event of Default then exists and no event has occurred and no condition currently exists that would, but for the giving of any required notice or expiration of any applicable cure period, constitute an Event of Default, or disclosing that such an event or condition, if any, exists. Any such Officer’s Certificate furnished by Lessee and Guarantor pursuant to this Section 23.1 may be relied upon by Lessor and any prospective purchaser of the Leased Property. Any such Officer’s Certificate furnished by Lessor pursuant to this Section 23.1 may be relied upon by Lessee and by any prospective assignee thereof.

 

23.2                        Each Facility Lessee shall furnish, or cause to be furnished, to Lessor the following items in such form and detail as Lessor may reasonably require:

 

(a)                                 within one hundred twenty (120) days after the end of each year, audited Financial Statements of Guarantor on a consolidated basis (which shall include supplementary consolidating schedules for each Facility Lessee), prepared by a nationally recognized accounting firm or an independent certified public accounting firm reasonably acceptable to Lessor, which statements shall include balance sheets and statements of operations and of cash flows, all in accordance with GAAP for the year then ended; and

 

(b)                                 within forty-five (45) days after the end of each quarter, current balance sheets and quarterly statements of operations and of cash flows of Guarantor and such Facility Lessee, certified to be true and correct by an officer of Guarantor; and

 

(c)                                  within thirty (30) days after the end of each month, current balance sheets, monthly income statements and of cash flows (if such monthly statement of cash flows is available or produced in the ordinary course of business) of such Facility Lessee and operating statistics of its Facility; and

 

(d)                                 within ten (10) days after receipt, any and all notices (regardless of form) from any and all licensing and/or certifying agencies that any license or certification operated by such Facility Lessee is being downgraded to a substandard category, revoked, or suspended, or that action is pending or being considered to downgrade to a substandard category, revoke, or suspend such Facility’s license or certification; and

 

(e)                                  with reasonable promptness, such other information respecting the financial condition and affairs of such Facility Lessee and Guarantor as Lessor may reasonably request from time to time.

 

23.3                        Within two (2) Business Days after receipt, each Facility Lessee shall furnish to Lessor copies of all notices and demands from any third-party payor concerning any overpayment which will or may result in a repayment or a refund in excess of Five Percent (5%) of the Allocated Development Costs with respect to such Facility.

 

23.4                        Each Facility Lessee shall furnish to Lessor prompt written notice of, and any information related to, any governmental investigations of such Facility Lessee or any Guarantor (or any of their respective Affiliates), or any inspections or investigations of the Facility which

 

51

 

are conducted by any United States Attorney, State Attorney General, or the Office of the Inspector General of the Department of Health and Human Services.

 

23.5                        Each Facility Lessee shall furnish to Lessor immediately upon receipt thereof copies of all notices of material adverse events or deficiencies as defined by the regulations and standards of the Joint Commission (formerly known as the Joint Commission on the Accreditation of Healthcare Organizations) (the “Joint Commission”) or the equivalent accrediting body relied upon by such Facility Lessee in the operation of the Facility operated by such Facility Lessee or any part thereof.

 

23.6                        In order to determine and confirm the prevailing consolidated Net Worth of First Choice and its subsidiaries, upon Lessor’s request from time to time, Lessee shall deliver (or cause to be delivered) promptly to Lessor, but in no event later than ten (10) Business Days after such request, the most recently available Financial Statements and such other financial and operational information as Lessor reasonably requests to determine such Net Worth.

 

23.7                        Each Facility Lessee shall provide immediate written notice to Lessor of any written notice it receives relating to a monetary or material non-monetary default or event of default with respect to any Material Obligation of such Facility Lessee or Guarantor, including any RFFE Loan, and upon Lessor’s request, such Facility Lessee or Guarantor shall furnish to Lessor a certificate in form reasonably acceptable to Lessor certifying that, with respect to each Material Obligation, no default or event of default then exists and no event has occurred and no condition currently exists that would, but for the giving of any required notice or expiration of any applicable cure period, constitute a default or event of default thereunder.

 

ARTICLE XXIV

 

INSPECTION

 

Upon reasonable prior written notice, Lessee shall permit Lessor, or its designated Affiliate, and their respective authorized representatives to inspect the Leased Property during usual business hours subject to any security, health, safety or confidentiality requirements of Lessee, any governmental agency, any Insurance Requirements relating to the Leased Property, or imposed by law or applicable regulations; except that, in the event of an emergency, Lessor shall have the right to inspect the Leased Property upon reasonable notice (which in this circumstance may be verbal).

 

ARTICLE XXV

 

NO WAIVER

 

No failure by Lessor or Lessee to insist upon the strict performance of any term of this Lease or to exercise any right, power or remedy consequent upon a breach thereof, and no acceptance of full or partial payment of Rent or any other payment due under the terms of this Lease during the continuance of any such breach, shall constitute a waiver of any such breach or any such term. To the extent permitted by law, no waiver of any breach shall affect or alter this Lease, which shall continue in full force and effect with respect to any other then existing or subsequent

 

52

 

breach. Lessor and Lessee agree that no waiver shall be effective hereunder unless it is in writing.

 

ARTICLE XXVI

 

REMEDIES CUMULATIVE

 

To the extent permitted by law, each legal, equitable or contractual right, power and remedy of Lessor or Lessee now or hereafter provided either in this Lease or by statute or otherwise shall be cumulative and concurrent and shall be in addition to every other right, power and remedy and the exercise or beginning of the exercise by Lessor or Lessee of any one or more of such rights, powers and remedies shall not preclude the simultaneous or subsequent exercise by Lessor or Lessee of any or all of such other rights, powers and remedies.

 

ARTICLE XXVII

 

SURRENDER

 

No surrender to Lessor of this Lease or of the Leased Property, or of any part thereof or interest therein, shall be valid or effective unless agreed to and accepted in writing by Lessor, and no act by Lessor or any representative or agent of Lessor, other than such a written acceptance by Lessor, shall constitute an acceptance of any such surrender.

 

ARTICLE XXVIII

 

NO MERGER OF TITLE

 

There shall be no merger of this Lease or of the leasehold estate created hereby by reason of the fact that the same person, firm, corporation or other entity may acquire, own or hold, directly or indirectly, (a) this Lease or the leasehold estate created hereby or any interest in this Lease or such leasehold estate and (b) the fee estate in the Leased Property.

 

ARTICLE XXIX

 

TRANSFERS BY LESSOR; LESSOR SEVERANCE RIGHTS

 

29.1                        Transfers by Lessor. Lessee acknowledges and agrees that Lessor may sell its interest in the Leased Property in whole or in part, and Lessor may assign its interest in this Lease (including any Severed Lease) in whole or in part, to any Person other than any Person whose primary business is the provision of physician-staffed emergency room or urgent care medical services (a “Non-Permissible Assignee”); provided, however, that if there shall exist any Event of Default, Lessor may sell its interest in the Leased Property in whole or in part, and Lessor may assign its interest in this Lease (including any Severed Lease) in whole or in part, to any Person, including, without limitation, a Non-Permissible Assignee. If Lessor or any successor owner of any portion of the Leased Property relating to any Facility shall convey such portion of the Leased Property in accordance with the terms hereof, other than as security for a debt, and the grantee or transferee of such portion of the Leased Property shall expressly assume all obligations of Lessor hereunder arising or accruing from and after the date of such

 

53

 

conveyance or transfer and Lessor or such successor owner, as the case may be, shall thereupon be released from all future liabilities and obligations of Lessor under this Lease relating to such portion of the Leased Property arising or accruing from and after the date of such conveyance or other transfer and all such future liabilities and obligations shall thereupon be binding upon the new owner. Lessee agrees that any successor purchaser may exercise any and all rights of Lessor; provided, however, such successor purchaser shall be subject to the same restrictions imposed upon Lessor hereunder. Lessor may divulge to any such prospective purchaser all information, reports, financial statements, certificates and documents obtained by it from Lessee and shall require any such prospective purchaser to enter into a confidentiality agreement with respect to such information. Lessee shall have no right of consent or approval relating to any such sale, transfer or assignment by Lessor.

 

29.2                        Severance Rights. Notwithstanding the unitary nature of this Lease, Lessor may at any time and from time to time cause this Lease to be severed with respect to the portion or portions of Leased Property relating to any one or more Facilities (each, a “Severed Property”). If Lessor shall desire to sever this Lease pursuant to this Section 29.2, Lessor shall deliver written notice (each, a “Severance Notice”) to Lessee not less than fifteen (15) days prior to the date that this Lease shall be severed with respect to the Severed Property or Severed Properties identified in the Severance Notice (such date identified in a Severance Notice, a “Severance Date”). The Severance Notice shall specify the Severed Property and the Severance Date. Effective upon a Severance Date, the applicable Severed Property shall no longer be part of the Leased Property under this Lease and such Severed Property shall be deemed to be and shall be leased by such Lessor to Lessee for the amount of Rent allocable to such Severed Property pursuant to a separate lease (a “Severed Lease”) upon the same terms and conditions as provided in this Lease (except for such provisions as by their terms are not applicable to such Severed Property); it being agreed, however, that the liability of the applicable lessor under the Severed Lease shall be limited to such Lessor’s interest in the Severed Property. Effective upon the Severance Date, the Rent payable with respect to each Severed Property shall no longer be payable by Lessee under this Lease and shall instead be payable under the Severed Lease applicable to such Severed Property. Effective on the Severance Date, the parties shall enter into the Severed Lease, and an amendment of this Lease, an amendment of the applicable Other Agreements that assures that Lessor receives Credit Enhancements for both the Severed Lease and this Lease as so amended, comparable to that existing prior to the severance. For so long as Lessor under this Lease shall be the lessor under a Severed Lease, any such Severed Lease and the related Credit Enhancements shall be deemed “Other Agreements” for all purposes under this Lease, any Event of Default under such Severed Lease or such Credit Enhancements shall constitute an Event of Default under this Lease, and any Event of Default under this Lease or such Other Agreements shall constitute an Event of Default under such Severed Lease. Lessor will prepare the Severed Lease, the Credit Enhancements, the Lease amendment and, if necessary, the amendments to the applicable Other Agreements with respect to each Severed Property consistent with the provisions of this Section 29.2 and the parties agree to execute and deliver or cause to be executed and delivered.

 

54

 

ARTICLE XXX

 

QUIET ENJOYMENT

 

So long as Lessee shall pay all Rent as the same becomes due and shall fully comply with all of the terms of this Lease and fully perform its obligations hereunder, Lessee shall peaceably and quietly have, hold and enjoy the Leased Property for the Term hereof, free of any claim or other action by Lessor or anyone claiming by, through or under Lessor, but subject to the Permitted Exceptions and all liens and encumbrances hereafter consented to by Lessee.

 

ARTICLE XXXI

 

NOTICES

 

All notices, demands, consents, approvals, requests and other communications required or permitted to be provided under this Lease shall be in writing (except where specifically stated otherwise) and shall be either (a) delivered in person, (b) sent by certified mail, return receipt requested, (c) delivered by a recognized delivery service, or (d) sent by facsimile transmission and addressed as follows:

 

	
if to any Lessee:
    	
c/o First Choice ER, LLC
    
	
 
    	
2941 S. Lake Vista, Suite 200
    
	
 
    	
Lewisville, Texas 75067
    
	
 
    	
Attn: Chief Development Officer
    
	
 
    	
Phone: (972) 899-6666
    
	
 
    	
Fax: (972) 899-6664
    
	
 
    	
 
    
	
with a copy to:
    	
First Choice ER, LLC
    
	
 
    	
2491 S. Lake Vista, Suite 200
    
	
 
    	
Lewisville, Texas 75067
    
	
 
    	
Attn: Legal Department
    
	
 
    	
Phone: (972) 899-6666
    
	
 
    	
Fax: (972) 899-6664
    
	
 
    	
 
    
	
with a copy to:
    	
DLA Piper LLP (US)
    
	
 
    	
203 North LaSalle Street, Suite 1900
    
	
 
    	
Chicago, Illinois 60601 1293
    
	
 
    	
Attn: Merle Teitelbaum Cowin, Esq.
    
	
 
    	
Phone: (312) 368-4089
    
	
 
    	
Fax: (312) 630-7419
    

 

55

 

	
if to any Lessor:
    	
c/o MPT Operating Partnership, L.P.
    
	
 
    	
1000 Urban Center Drive, Suite 501
    
	
 
    	
Birmingham, Alabama 35242
    
	
 
    	
Attn: Legal Department
    
	
 
    	
Phone: (205) 969-3755
    
	
 
    	
Fax: (205) 969-3756
    
	
 
    	
 
    
	
with a copy to:
    	
Baker, Donelson, Bearman, Caldwell & Berkowitz, PC
    
	
 
    	
1400 Wells Fargo Tower
    
	
 
    	
420 Twentieth Street North
    
	
 
    	
Birmingham, Alabama 35203
    
	
 
    	
Attn: Thomas O. Kolb, Esq.
    
	
 
    	
Phone: (205) 250-8321
    
	
 
    	
Fax: (205) 322-8007
    

 

or to such other address as either party may hereafter designate in writing, and shall be effective upon receipt. A notice, demand, consent, approval, request and other communication shall be deemed to be duly received if delivered in person or by a recognized delivery service, when left at the address of the recipient and if sent by facsimile, upon receipt by the sender of an acknowledgment or transmission report generated by the machine from which the facsimile was sent indicating that the facsimile was sent in its entirety to the recipient’s facsimile number; provided that if a notice, demand, consent, approval, request or other communication is served by hand or is received by facsimile on a day which is not a Business Day, or after 5:00 p.m. on any Business Day at the addressee’s location, such notice or communication shall be deemed to be duly received by the recipient at 9:00 a.m. (based upon Birmingham, Alabama time) on the first Business Day thereafter.

 

ARTICLE XXXII

 

APPRAISAL

 

If it becomes necessary to determine the Fair Market Value of any portion of the Leased Property relating to a particular Facility, each party, within twenty (20) Business Days following the date of the event which makes such determination necessary, shall, by notice to the other, appoint an appraiser (each of whom must be a member of the AIREA and adhere to the USPAP standards in the preparation of the appraisal and have at least ten years’ experience appraising properties comparable to the Facilities). The appraisers thus appointed shall appoint a third appraiser (such third appraiser must also be a member of the AIREA and adhere to the USPAP standards in the preparation of the appraisal and have at least ten years’ experience appraising properties comparable to the Facilities) and such third appraiser shall appraise the portion of the Leased Property relating to such Facility to determine the Fair Market Value; provided, however, that if a party fails to appoint an appraiser within such required period, the sole appraiser appointed shall conduct the appraisal and the parties shall use commercially reasonable efforts to cause such appraisal to be completed within forty-five (45) days following the event which makes such determination necessary. This provision for determination by appraisal shall be specifically enforceable to the extent such remedy is available under applicable law, and any determination

 

56

 

hereunder shall be final and binding upon the parties except as otherwise provided by applicable law. Lessor and Lessee shall each pay one-half (1⁄2) of all costs and expenses incurred in connection with such appraisal. Any appraisal shall assess the Fair Market Value of the portion of the Leased Property relating to such Facility as of the date of the event which makes such assessment necessary.

 

ARTICLE XXXIII

 

PURCHASE RIGHTS

 

33.1                        Lessee’s Option to Purchase.

 

(a)                                 So long as (i) no Event of Default has occurred and is continuing, and no event then exists which with the giving of notice or the passage of time or both would constitute an Event of Default, and (ii) no Event of Default has occurred and is continuing at the time of the closing of the purchase after Lessee notifies Lessor of its intent to exercise of such option, at the expiration of the Term of this Lease (as the same may be extended pursuant to Article II), Lessee shall have the option, to be exercised by written notice to the Lessor at least three hundred sixty-five (365) days prior to the expiration of the Term to purchase the entire Leased Property then subject to this Lease, and not less than the entire Leased Property then subject to this Lease, at a purchase price equal to the Option Price for the entire Leased Property then subject to this Lease. In the event that Lessee exercises the foregoing purchase option, upon delivery of the exercise notice, all of Lessee’s rights to extend the Term under Article II (if any remaining at the time of exercise of the purchase option) shall be forever forfeited and of no further force or effect.

 

(b)                                 Unless expressly otherwise provided in this Section 33.1, if Lessee exercises the option to purchase the Leased Property as provided in this Section 33.1, (i) the terms set forth in Article XVIII shall apply, (ii) Lessee shall continue paying Rent as required under this Lease until the purchase is closed, and (iii) the sale/purchase must be closed upon the expiration of the Term.

 

33.2                        Lessor’s Option to Purchase Lessee’s Personal Property. With respect to any Facility, upon prior written notice to Lessee, Lessor shall have the option to purchase all (but not less than all) of the Facility Lessee’s Personal Property relating to such Facility, if any, at the expiration or earlier termination of this Lease with respect to such Facility, for an amount equal to its then fair market value as mutually agreed upon by the parties. If Lessor and Lessee are unable to agree upon the value of such Personal Property, the fair market value shall be determined by an appraisal in the manner and method set forth in Article XXXII. Notwithstanding anything contained in this Section 33.2 to the contrary, the options to purchase granted under this Section 33.2 do not pertain to any of the Licenses, it being understood and agreed that all matters relating to the transfer of the Licenses are addressed in Article XXXVII.

 

57

 

ARTICLE XXXIV

 

SUBSTITUTION RIGHTS

 

34.1                        Lessee’s Property Substitution Right. Subject to its satisfaction of the conditions precedent to such right set forth in Section 34.2 and to all other terms and conditions hereof, Lessee is hereby granted the right, at any time during the Term, so long as no Event of Default then exists, and no event then exists which with the giving of notice or the passage of time or both would constitute an Event of Default, (a) to cause this Lease to be amended to release the portion of the Leased Property relating to any Facility from this Lease and to convey the same to Lessee or its Affiliate, concurrently with (b) the conveyance of a Substitute Property to Lessor and the execution of an amendment adding such Substitute Property to the Leased Property under this Lease (a “Property Substitution”).

 

34.2                        Conditions Precedent to Lessee’s Property Substitution Right. The right of Lessee to effect a Property Substitution is subject to satisfaction by Lessee, or waiver by Lessor in its sole and absolute discretion, of each of the following:

 

(a)                                 Lessee shall have given Lessor notice of such proposed Property Substitution not less than sixty (60) days prior to the proposed Property Substitution Date. Any notice from Lessee to Lessor concerning a proposed Property Substitution shall include the following:

 

(i)                                     notice of the Property Substitution Date proposed by Lessee and Lessee’s Affiliate proposed to be the operator of the Substitute Property;

 

(ii)                                  a title insurance commitment from a title insurance company of recognized standing undertaking to issue to Lessor or its designee, at Lessee’s expense, an ALTA Owner’s extended coverage policy of title insurance with respect to the proposed fee real property interests included in the Substitute Property and in the amount of the Fair Market Value thereof, confirming that upon conveyance thereof to Lessor or its designee, such transferee will hold good and marketable title to the proposed Substitute Property, free and clear of title defects, liens, encumbrances and burdens which are not acceptable to such transferee in its sole discretion;

 

(iii)                               a written Phase I Environmental Assessment (and if necessary, a Phase II Assessment) of the proposed Substitute Property, prepared not more than one hundred twenty (120) days prior to the proposed Property Substitution Date by a qualified geotechnical firm acceptable to Lessor concerning the absence of Hazardous Materials on or in the proposed Substitute Property and the absence of other liabilities or potential liabilities of the owner thereof under any Hazardous Materials Laws or under any similar federal or state laws or regulations hereinafter enacted;

 

(iv)                              a current as-built survey of the real property included in the proposed Substitute Property;

 

(v)                                 an engineering and architectural inspection of the buildings and other improvements included in the proposed Substitute Property prepared by an engineering firm reasonably acceptable to Lessor not more than one hundred twenty (120) days prior

 

58

 

to the proposed Property Substitution Date, confirming that the proposed Substitute Property is in a good and safe condition and does not require modifications or repairs costing more than Two Percent (2%) of the Fair Market Value thereof during the first (1st) twelve (12) months after the effective date of such Property Substitution;

 

(vi)                              a list of all material leases and contracts pertaining to the proposed Substitute Property, together with copies of any such agreements which have a term of more than one (1) year or which involve payment of consideration in excess of Five Hundred Thousand Dollars ($500,000) in any twelve (12) month period;

 

(vii)                           a list of all material accreditations, permits, authorizations and approvals of accreditation agencies and federal, state and local agencies pertaining to the proposed Substitute Property and to the freestanding emergency medical facility location and related facilities located and operated thereon, together with copies of all such accreditation, permits, authorizations and approvals;

 

(viii)                        a copy of the most recent Joint Commission survey of the freestanding emergency medical facility location, if any, operated on the proposed Substitute Property; and

 

(ix)                              financial information concerning the Substitute Property sufficient to demonstrate the financial performance of the Substitute Property either (A) in form and level of detail acceptable to Lessor in its sole and absolute discretion, or (B) if Lessee’s Affiliate shall have operated the Substitute Property for at least the preceding two (2) fiscal years, presented in a form and level of detail reasonably acceptable to Lessor; and

 

(b)                                 the proposed Substitute Property shall have a Fair Market Value of no less than the Fair Market Value of the applicable portion of the Leased Property, as determined in the good faith, reasonable discretion of Lessor.

 

34.3                        Procedures for Property Substitution. On the Property Substitution Date, Lessee and Lessor and/or their respective Affiliates shall take the following actions:

 

(a)                                 Lessee and Lessor will execute instruments in mutually agreeable form terminating the Lease with respect to the portion of the Leased Property relating to the applicable Facility, except for such obligations which expressly survive any such termination, and adding such Substitute Property to the Leased Property under this Lease;

 

(b)                                 Lessor shall convey or cause to be conveyed the Leased Property relating to the applicable Facility to Lessee or its designee on an “as is” and “where is” basis in the manner and on the terms set forth in Article XVIII;

 

(c)                                  Lessee or its Affiliate will convey the Substitute Property to Lessor or its Affiliate by special warranty deed, which conveyance will be accompanied by pro forma ALTA Owner’s title insurance policy as contemplated by Section 34.2(a)(ii) above; and

 

59

 

(d)                                 To the extent that any of the existing Credit Enhancements shall no longer be effective, Lessee and the Guarantor shall deliver to Lessor the Credit Enhancements as shall be necessary to provide Lessor with the security and credit enhancements comparable, in Lessor’s reasonable discretion, to those provided for herein or in the Other Agreements which pertain to the Substitute Lease.

 

34.4                        Lessor Costs. As soon as practicable after the Property Substitution Date, Lessee shall reimburse Lessor and its Affiliates for all documented, out-of-pocket expenses incurred by Lessor and its Affiliates thereof in connection with such Property Substitution.

 

ARTICLE XXXV

 

FINANCING OF THE LEASED PROPERTY

 

Lessor agrees that if it grants or creates any mortgage, lien, encumbrance or other title retention agreement (“Encumbrances”) upon any portion of the Leased Property relating to any particular Facility, concurrently with the granting of such Encumbrance, the holder of each such Encumbrance shall enter into an agreement (a “Facility Lender SNDA”) reasonably acceptable to the holder of such Encumbrance and Lessee whereby (i) such holder agrees (a) to give the Facility Lessee which operates the Facility on such portion of the Leased Property the same notice, if any, given to Lessor of any default or acceleration of any obligation underlying any such Encumbrance or any sale in foreclosure of such Encumbrance, (b) to permit such Facility Lessee, after twenty (20) days’ prior written notice, to cure any such default on Lessor’s behalf within any applicable cure period, (c) to permit such Facility Lessee to appear with its representatives and to bid at any foreclosure sale with respect to any such Encumbrance, and (d) notwithstanding the existence of any such Encumbrance, or any default, expiration, termination, foreclosure, sale, entry or other act or omission under, pursuant to or affecting such Encumbrance, such Facility Lessee shall not be disturbed in peaceful enjoyment of such portion of the Leased Property nor shall this Lease be terminated or canceled at any time, except upon the occurrence of an Event of Default under this Lease; and (ii) Lessee agrees to subordinate this Lease and all of its rights and estate hereunder to such Encumbrances that encumbers the portion of the Leased Property utilized by such Facility Lessee or any part thereof, and agrees with each such holder that such Facility Lessee will attorn to and recognize such holder or the purchaser at any foreclosure sale or any sale under a power of sale contained in any such Encumbrance, as the case may be, as Lessor under this Lease for the balance of the Term then remaining, subject to all of the terms and provisions of this Lease.

 

ARTICLE XXXVI

 

RESERVED

 

ARTICLE XXXVII

 

LICENSES AND COMPLIANCE WITH HEALTHCARE LAWS

 

37.1                        Maintenance of Licenses. With respect to each Facility, after the applicable Completion Date but subject to the provisions of Section 7.2(b), each Facility Lessee (a) shall

 

60

 

maintain at all times during the Term and any holdover period, the Operating Agreements, Participation Agreements (if applicable) and all applicable federal, state and local governmental licenses, approvals, qualifications, variances, certificates of need, franchises, accreditations, certificates, certifications, consents, permits and other authorizations and contracts, including provider numbers and provider agreements with any third parties which may be necessary for the operation of such Facility for the Primary Intended Use, or required for certification and participation under any applicable governmental provider programs applicable to the Facility (collectively, the “Licenses”); and (b) shall remain in compliance with all state and federal laws, rules, regulations and procedures with regard to the operation of such Facility, including, without limitation, HIPAA and the regulations promulgated by Governmental Bodies, as they may from time to time exist. The provisions of this Article XXXVII are in addition to the other provisions of this Lease.

 

37.2                        No Transfers or Alterations of Licenses. Lessee covenants and agrees that it shall not, without the prior written consent of Lessor, which may be granted or withheld in Lessor’s sole discretion, whether before, during or after the Term, (a) sell, move, modify (including, without limitation, the establishment of a “provider based” network or similar arrangement), cancel, surrender, transfer, assign, relocate, pledge, secure, convey or in any manner encumber any License, except to the assignee of the applicable Facility Lessee in connection with a Permitted Sale Transaction, or (b) effect or attempt to effect any change in the license category or status of any Facility or any part thereof.

 

37.3                        Termination of Lease or Possession. UPON THE TERMINATION OF THIS LEASE OR THE TERMINATION OF LESSEE’S POSSESSION WITH RESPECT TO THE PORTION OF THE LEASED PROPERTY RELATING TO ANY ONE OR MORE OF THE FACILITIES FOLLOWING AN EVENT OF DEFAULT PURSUANT TO SECTION 16.1 OR IN CONNECTION WITH A CASUALTY EVENT PURSUANT TO ARTICLE XIV (AND ASSUMING LESSEE DOES NOT PURCHASE SUCH LEASED PROPERTY AS PROVIDED HEREIN), WITHOUT ANY ADDITIONAL CONSIDERATION TO LESSEE, LESSEE SHALL, FOR REASONABLE PERIODS OF TIME IMMEDIATELY BEFORE AND AFTER SUCH TERMINATION, USE ITS BEST EFFORTS, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO FACILITATE THE ISSUANCE OR OBTAINING OF NEW PARTICIPATION AGREEMENTS (IF APPLICABLE) NECESSARY FOR THE OPERATION AND OCCUPANCY OF SUCH PORTION OF THE LEASED PROPERTY TO LESSOR OR ITS DESIGNEE, AND SUCH COOPERATION SHALL INCLUDE, WITHOUT LIMITATION, (A) THE APPLICABLE FACILITY LESSEE’S EXECUTION AND SUBMISSION TO THE APPROPRIATE AUTHORITY OF ANY AND ALL DOCUMENTS REQUIRED TO EFFECT THE ISSUANCE TO LESSOR OR ITS DESIGNEE OF ANY AND ALL NEW LICENSES, INCLUDING NEW MEDICARE AND MEDICAID PROVIDER NUMBERS AND PROVIDER AGREEMENTS, TO THE EXTENT APPLICABLE; (B) SUCH FACILITY LESSEE’S MAINTENANCE OF THE EFFECTIVENESS OF ANY AND ALL SUCH LICENSES UNTIL SUCH TIME AS ANY NEW LICENSES NECESSARY FOR ANY NEW LESSEE OR OPERATOR TO OPERATE THE APPLICABLE FACILITY HAVE BEEN ISSUED; AND (C) THE TAKING OF SUCH OTHER ACTIONS AS REASONABLY REQUESTED BY LESSOR OR REQUIRED BY APPLICABLE LAW.

 

61

 

37.4                        Material Condition of Lease. IT IS AN INTEGRAL CONDITION OF THIS LEASE, AND A MATERIAL INDUCEMENT TO LESSOR’S AGREEMENT TO ENTER INTO THIS LEASE, THAT (I) LESSEE ACKNOWLEDGES AND AGREES TO COOPERATE WITH AND ASSIST LESSOR AND/OR ITS DESIGNEE IN CONNECTION WITH ANY TRANSFER OF THE LICENSES OR THE OPERATIONS OF ANY FACILITY IN ACCORDANCE WITH THIS ARTICLE XXXVII, INCLUDING, WITHOUT LIMITATION, IN CONNECTION WITH A TERMINATION OF THIS LEASE OR REMOVAL OF LESSEE FROM POSSESSION WITH RESPECT TO THE PORTION OF THE LEASED PROPERTY RELATING TO ANY ONE OR MORE OF THE FACILITIES IN THE MANNER SET FORTH IN SECTION 37.3 ABOVE, WHICH COOPERATION AND ASSISTANCE SHALL BE WITHOUT ANY ADDITIONAL CONSIDERATION TO LESSEE, PROVIDED THAT LESSEE’S OBLIGATIONS SHALL BE SUBJECT TO APPLICABLE LAW.

 

ARTICLE XXXVIII

 

MISCELLANEOUS

 

38.1                        General. If any term or provision of this Lease or any application thereof shall be invalid or unenforceable, the remainder of this Lease and any other application of such term or provision shall not be affected thereby. If any late charges provided for in any provision of this Lease are based upon a rate in excess of the maximum rate permitted by applicable law, the parties agree that such charges shall be fixed at the maximum permissible rate. All the terms and provisions of this Lease shall be binding upon and inure to the benefit of the parties and their respective successors and assigns (subject to Article XXII); provided, however, that (a) this Lease shall not inure to the benefit of any assignee pursuant to an assignment which violates or is inconsistent with the terms of this Lease and (b) neither this Lease nor any other agreement contemplated in this Lease shall be deemed to confer upon any Person not a party to this Lease any rights or remedies contained in this Lease. The headings in this Lease are for convenience of reference only and shall not limit or otherwise affect its meaning.

 

38.2                        Bankruptcy Covenants and Waivers.

 

(a)                                 Unitary and Non-Severable Lease. The parties agree that for the purposes of any assumption, rejection or assignment of this Lease under 11 U.S.C. Section 365 or any amendment or successor section thereof, this is one indivisible and non-severable lease dealing with and covering one legal and economic unit which must be assumed, rejected or assigned as a whole with respect to all (and only all) the Leased Property covered hereby.

 

(b)                                 Relief from Stay. Lessee acknowledges and agrees that in the event any Lessee or any Leased Property relating to any Facility shall become the subject of any bankruptcy or insolvency estate, then (i) Lessee shall not oppose any request by Lessor to obtain an order from the court granting relief from the automatic stay pursuant to Section 362 of the Bankruptcy Code so as to permit the exercise of all rights and remedies pursuant to this Lease, and (ii) the occurrence or existence of any Event of Default under this Lease shall, in and of itself, constitute “cause” for relief from the automatic stay pursuant to the provisions of Section 362(d)(1) of the

 

62

 

Bankruptcy Code, based, among other reasons, on the fact that the non-existence of a bankruptcy proceeding was a material inducement for the entry by Lessor into this Lease.

 

(c)                                  Automatic Stay. Lessee hereby waives the stay imposed by 11 U.S.C. Section 362(a) as to actions by the Lessor against each Facility and Lessee. Lessee acknowledges and agrees that in the event of the filing of any voluntary or involuntary petition in bankruptcy by or against Lessee, it shall not assert or request that any other party assert that the automatic stay provided by Section 362 of the Bankruptcy Code shall operate or be interpreted to stay, interdict, condition, reduce or inhibit the ability of Lessor to enforce any rights or remedies held by virtue of the Lease or applicable law.

 

38.3                        Lessor’s Expenses. In addition to the other provisions of this Lease, including, without limitation, Section 16.2, Lessee agrees and shall pay and/or reimburse Lessor’s and its Affiliates’ reasonable costs and expenses, including, without limitation, the costs and expenses of reports and investigations and legal fees and expenses, incurred or resulting from or relating to (a) requests by Lessee for approval or consent under this Lease (including any consents relating to management, the placing of liens on Lessee’s Personal Property and any intercreditor issues which arise in connection with any Material Obligation), (b) requests by Lessee for approval or consent under this Lease and all other documents executed between Lessor (and its Affiliates) and Lessee in connection herewith, (c) any circumstances or developments which give rise to Lessor or its Affiliates’ right of consent or approval under this Lease or any Other Agreement, (d) circumstances resulting from any action or inaction by Lessee contrary to the lease provisions, (e) any Property Substitution, (f) a request for changes, including, but not limited to, (i) the permitted use of the Leased Property, (ii) alterations, improvements and Capital Additions to the Leased Improvements and monitoring any such alterations, improvements and Capital Additions, (iii) subletting or assignment, and (iv) any other changes in the terms, conditions or provisions of this Lease or any Other Agreement, and (g) enforcement by Lessor or its Affiliates of any of the provisions of this Lease or the Other Agreements. Such expenses and fees shall be paid by Lessee within thirty (30) days of the submission of a statement for the same or such amount(s) shall become Additional Charges and subject to the Overdue Rate and a late payment penalty computed at the Late Payment Penalty Rate after that thirty (30)-day period.

 

38.4                        Entire Agreement; Modifications. This Lease, together with all exhibits, schedules and the other documents referred to herein, embody and constitute the entire understanding between the parties with respect to the transactions contemplated herein, and all prior to contemporaneous agreements, understandings, representations and statements (oral or written) are merged into this Lease. Neither this Lease, any exhibit or schedule attached hereto, nor any provision hereof or thereof may be modified or amended except by an instrument in writing signed by Lessor and Lessee.

 

38.5                        Lessor Securities Offering and Filings. Notwithstanding anything contained herein to the contrary, Lessee shall cooperate with Lessor in connection with any securities offerings and filings, or Lessor’s efforts to procure or maintain financing for, or related to, the Leased Property or any portion thereof and, in connection therewith, Lessee shall furnish Lessor, in a timely fashion, with such financial and other information (including audited financial statements and consents of auditors) as Lessor shall request. Lessor may disclose that Lessor has entered into this Lease with Lessee and may provide and disclose information regarding this

 

63

 

Lease, Lessee, the Guarantor, the Leased Property and each Facility, and such additional information which Lessor may reasonably deem necessary, to its proposed investors in such public offering or private offering of securities, or any current or prospective lenders with respect to such financing, and to investors, analysts and other parties in connection with earnings calls and other normal communications with investors, analysts, and other parties; provided, however, that any disclosure of Guarantor’s Financial Statements or other financial information relating thereto shall only be made to the extent required to comply with applicable laws or if the recipient agrees to keep such Financial Statements and other financial information confidential. The additional costs of Lessee in complying with this Section 38.5 shall be reimbursed to Lessee by Lessor.

 

38.6                        Non-Recourse as to Lessor. Anything contained herein to the contrary notwithstanding, any claim based on, or in respect of, any liability of Lessor under this Lease shall be enforced only against the Leased Property and not against any other assets, properties or funds of (i) Lessor, (ii) any director, officer, general partner, member, shareholder, limited partner, beneficiary, employee, representative, contractor or agent of Lessor or any of its Affiliates (collectively, the “Lessor Parties”) (or any legal representative, heir, estate, successor or assign of Lessor or any of the Lessor Parties), (iii) any predecessor or successor partnership or corporation (or other entity) of Lessor or any of the Lessor Parties, either directly or through Lessor or the Lessor Parties, or (iv) any person or entity affiliated with any of the foregoing. In no event shall Lessor or any of the Lessor Parties be liable for indirect, incidental, consequential, special, punitive or exemplary damages, regardless of the form of action, whether in contract, tort or otherwise, and even if such party has been advised of the possibility of such damages.

 

38.7                        Covenants, Restrictions and Reciprocal Easements. Notwithstanding anything herein to the contrary, Lessor shall have the right, but not the obligation, to place of record all covenants, restrictions and reciprocal easements on all or any portion of the Land (collectively, the “Declarations”) which Lessor deems reasonably necessary for the ownership and operation of any Facility or portion of the Leased Property, with such Declarations to be in form and content acceptable to Lessor in its reasonable discretion.

 

38.8                        Force Majeure. Except for Rent and other monetary obligations payable pursuant to the terms of this Lease (which shall not be extended or excused), in the event that Lessor or Lessee shall be delayed, hindered in or prevented from the performance of any act required under this Lease by reason of strikes, lockouts, labor troubles, or other industrial disturbances, inability to procure materials, failure of power, unavailability of any utility service, restrictive governmental laws or regulations, acts of public enemies, war, blockades, riots, insurrections, earthquakes, fires, storms, floods, civil disturbances, weather-related acts of God, failure to act, or default of another party, or other reason beyond Lessor’s or Lessee’s control (individually “Force Majeure”), then performance of such act shall be excused for the period of the delay, and the period of the performance of any such act shall be extended for a period equivalent to the period of such delay. Within ten (10) Business Days following the occurrence of Force Majeure, the party claiming a delay due to such event shall give written notice to the other setting forth a reasonable estimate of such delay.

 

38.9                        Management Agreements. Lessee shall not engage or remove any Management Company or enter into any Management Agreements without Lessor’s prior written consent,

 

64

 

which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, that Lessor’s rights relating to any Management Company after Lessor’s exercise of its remedies as set forth in Section 16.1 shall be at Lessor’s sole and absolute discretion. Lessee shall, if required by Lessor, assign all of Lessee’s rights under the Management Agreements to Lessor, and Lessor shall be entitled to assign same to a Facility Lender or Facility Lenders. At the request of Lessor, from time to time Lessee shall execute and deliver (and require the Management Company to execute and deliver, if applicable) an assignment and/or subordination agreement relating to the Management Agreements, which assignment and/or subordination agreement shall be in a form and content reasonably acceptable to Lessor and/or any lender providing financing to Lessor, and shall be delivered to Lessor within ten (10) days after Lessor’s request. Lessee hereby agrees that all payments and fees payable under the Management Agreements are and shall be subordinate to the payment of the obligations under this Lease and all other documents executed in connection with this Lease and any loan made by Lessor or Lessor’s Affiliates to Lessee or to Lessee’s Affiliates. Lessee agrees that all Management Agreements entered into in connection with the Leased Property relating to any particular Facility shall expressly contain provisions acceptable to Lessor which (a) require an assignment of the Management Agreements to Lessor upon request by Lessor, (b) confirm and warrant that all sums due and payable under the Management Agreements are subordinate to this Lease, (c) grant Lessor the right to terminate the Management Agreement upon the occurrence of an Event of Default under this Lease, (d) require the Management Company to execute and deliver to Lessor within ten (10) days from Lessor’s request an estoppel certificate, assignment and/or subordination agreement as required by Lessor and/or Lessor’s lender providing financing to Lessor, in a form and content acceptable to Lessor and/or its lender, and (e) all fees due and payable under any Management Agreements shall be subordinate to all obligations under this Lease. At the request of Lessor, from time to time Lessee shall execute and obtain from all parties subject to such Management Agreements executed written confirmation of such assignment or subordination, which shall be delivered to Lessor within ten (10) days from Lessor’s request.

 

38.10                 Non-Competition. Each Facility Lessee hereby acknowledges the Non-Competition Agreement and, as an inducement to Lessor to enter into this Lease and as a condition precedent to this Lease, each Facility Lessee agrees that the terms, provisions and conditions of the Non-Competition Agreement are binding on it and incorporated herein by reference.

 

38.11                 Governing Law. EXCEPT AS PROVIDED IN THIS SECTION 38.11, THIS LEASE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS EXECUTED AND PERFORMED IN SUCH STATE, WITHOUT GIVING EFFECT TO CONFLICTS OF LAW PRINCIPLES. NOTWITHSTANDING THE FOREGOING, THE PARTIES HERETO AGREE THAT ALL PROVISIONS OF THIS LEASE RELATING TO THE CREATION OF THE LEASEHOLD ESTATE AND ALL REMEDIES SET FORTH IN ARTICLE XVI RELATING TO THE RECOVERY OF POSSESSION OF ALL OR ANY PORTION OF THE LEASED PROPERTY (SUCH AS AN ACTION FOR UNLAWFUL DETAINER OR OTHER SIMILAR ACTION) SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE

 

65

 

STATE WHERE THE APPLICABLE PORTION OF THE LEASED PROPERTY IS LOCATED.

 

38.12                 Jurisdiction and Venue. LESSOR AND LESSEE CONSENT TO PERSONAL JURISDICTION IN THE STATE OF ALABAMA. EXCEPT AS PROVIDED IN THIS SECTION 38.12, THE PARTIES AGREE THAT ANY ACTION OR PROCEEDING ARISING FROM OR RELATED TO THIS LEASE SHALL BE BROUGHT AND TRIED EXCLUSIVELY IN THE STATE OR FEDERAL COURTS LOCATED IN THE STATE OF ALABAMA. EACH OF THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT. FURTHER, LESSOR AND LESSEE IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY CLAIM THAT SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY CERTIFIED MAIL ADDRESSED TO A PARTY AT THE ADDRESS DESIGNATED PURSUANT TO ARTICLE XXXI SHALL BE EFFECTIVE SERVICE OF PROCESS AGAINST SUCH PARTY FOR ANY ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT. A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT MAY BE ENFORCED IN ANY OTHER COURT TO WHOSE JURISDICTION ANY OF THE PARTIES IS OR MAY BE SUBJECT. NOTWITHSTANDING THE FOREGOING, THE PARTIES FURTHER AGREE THAT ALL ACTIONS AND PROCEEDINGS RELATING TO THE CREATION OF THE LEASEHOLD ESTATE AND ALL REMEDIES RELATING TO THE RECOVERY OF POSSESSION OF ALL OR ANY PORTION OF THE LEASED PROPERTY (SUCH AS AN ACTION FOR UNLAWFUL DETAINER OR OTHER SIMILAR ACTION) MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF THE STATE WHERE THE APPLICABLE PORTION OF THE LEASED PROPERTY IS LOCATED.

 

38.13                 Future Intercreditor Agreements and Subordination Agreements. Lessor agrees that in connection with any future financing that may be obtained from time to time by FirstChoice or its Affiliates relating to the Leased Property, any permitted assignees of Lessee’s interest in the Lease or any Affiliates or parent of any such assignees, upon request by the then Lessee, so long as no Event of Default then exists, Lessor shall enter into an intercreditor agreement and a subordination agreement with the lender under any such financing in forms substantially similar to the Intercreditor Agreement and the Subordination Agreement.

 

38.14                 Letter of Credit. Until completion of all the Facilities to be constructed in accordance with the Master Funding and Development Agreement, all letter of credit requirements shall be addressed in the applicable Project Development Agreements. Upon completion of the last Facility to be constructed in accordance with the Master Funding and Development Agreement and as security for the Letter of Credit Obligations, Guarantor or, at Guarantor’s option, Lessee shall obtain and deliver to Lessor an irrevocable letter of credit at a financial institution reasonably acceptable to Lessor naming Lessor as beneficiary thereunder (the “Letter of Credit”), which Letter of Credit shall be upon such other terms, conditions and provisions acceptable to Lessor (including, without limitation, an “evergreen” provision requiring no less than sixty (60) days’ prior written notice to Lessor of any failure or refusal to

 

66

 

renew such Letter of Credit). Subject to the proviso below, the Letter of Credit shall be in the amount of Fifty Percent (50%) of one (1) year’s Base Rent relating to all completed Facilities. The Letter of Credit or any replacement letter of credit shall provide that Lessor shall be entitled to draw upon such Letter of Credit upon the occurrence of an Event of Default. In the event Lessor receives a notice of termination or nonrenewal of the Letter of Credit or any replacement letter of credit, Guarantor or, at Guarantor’s option, Lessee shall provide a replacement letter of credit no later than thirty (30) days prior to the expiration or termination of such Letter of Credit or replacement letter of credit, which replacement letter of credit (a) shall confirm that it shall take effect immediately upon the expiration of the expiring Letter of Credit (or such other than current replacement letter of credit), and (b) shall be in form and substance satisfactory to Lessor in its reasonable discretion. Lessee shall maintain throughout the Term a letter of credit conforming to the requirements of this Section 38.14.

 

38.15                 True Lease. Lessor and Lessee agree that this Lease is intended as, and shall for all purposes constitute, a lease under the laws of each State where any portion of the Leased Property is located, and nothing herein shall be construed as conveying to the Lessee any right, title or interest in or to the Leased Property or to any remainder or reversionary estates in the Leased Property held by any Person, except, in each instance, as a lessee. Under no circumstances shall this Lease be regarded as an assignment of all of Lessor’s interest in and to the Leased Property; instead, Lessor and Lessee shall have the relationship between them of Lessor and Lessee, pursuant to the terms and provisions of this Lease. In no event shall Lessee or any Affiliate of Lessee claim depreciation, amortization or interest deductions as owner of any Leased Property for United States federal, state or local income tax purposes (except as to alterations not financed by Lessor).

 

38.16                 Representations and Covenants relating to Certain Facilities. Further representations, agreements and covenants regarding certain of the Facilities are set forth on Schedule 38.16 attached hereto and are hereby incorporated herein by reference.

 

38.17                 Compliance with Anti-Terrorism Laws. Lessee will not, directly or indirectly, knowingly enter into any lease for the operation of any part of a Facility or any other lease or any material contracts with any person listed on the OFAC Lists. Lessee shall immediately notify Lessor if Lessee has knowledge that Lessee or any of its principals or Affiliates or any Guarantor is listed on the OFAC Lists or (a) is convicted on, (b) pleads nolo contendere to, (c) is indicted on, or (d) is arraigned and held over on charges involving money laundering or predicate crimes to money laundering. Lessee will not, directly or indirectly (i) knowingly conduct any business or engage in any transaction or dealing with any Blocked Person, including, without limitation, the making or receiving of any contribution of funds, goods or services to or for the benefit of any Blocked Person, (ii) knowingly deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to Executive Order No. 13224, any similar executive order or other Anti-Terrorism Law, or (iii) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in Executive Order No. 13224, or other Anti-Terrorism Law.

 

38.18                 Electronically Transmitted Signatures.  In order to expedite the execution of this Lease, telecopied signatures or signatures sent by electronic mail may be used in the place of

 

67

 

original signatures on this Lease. The parties intend to be bound by the signatures of the telecopied or electronically mailed signatures, and hereby waive any defenses to the enforcement of the terms of this Lease based on the form of the signature. Following any facsimile or electronic mail transmittal, the party shall promptly deliver the original instrument by reputable overnight courier in accordance with the notice provisions of this Lease.

 

38.19                 Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED BY LAW, LESSOR AND LESSEE HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LEASE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF EITHER PARTY OR ANY EXERCISE OF ANY PARTY OF THEIR RESPECTIVE RIGHTS HEREUNDER OR IN ANY WAY RELATING TO THIS LEASE OR THE LEASED PROPERTY (INCLUDING ANY CLAIM OR DEFENSE ASSERTING THAT THIS LEASE WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE). THIS WAIVER IS A MATERIAL INDUCEMENT FOR LESSOR TO ENTER INTO THIS LEASE.

 

38.20                 Joint and Several Obligations. Each Facility Lessee shall be jointly and severally liable for all of the liabilities and obligations of Lessee under this Lease. Additionally, each Facility Lessee acknowledges and agrees that all of the representations, warranties, covenants, obligations, conditions, agreements and other terms contained in this Lease shall be applicable to and shall be binding upon and enforceable against any one or more Facility Lessees.

 

38.21                 Counterparts. This Lease may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument.

 

38.22                 Specific Performance. In addition to any rights and remedies available to the parties hereunder or at law, each party shall be entitled to bring an action for specific performance and to seek other equitable relief in connection with any breach or violation, or any attempted breach or violation, of the provisions of this Lease.

 

38.23                 Continuation of Defaults. Notwithstanding any provision hereof to the contrary, whenever in this Lease the phrases “continuing,” “continuation of” or similar words or phrases are used in connection with Events of Default, defaults, or events which with notice or passage of time would constitute Events of Default, such phrases or words shall not be construed to create any right in the Lessee to have additional periods of time to cure such defaults or Events of Default other than those specific cure periods provided in this Lease.

 

38.24                 Survival. Notwithstanding any provision of this Lease to the contrary, the parties acknowledge and agree that all claims against and liabilities of Lessee or Lessor arising prior to the date of expiration or termination of this Lease, or prior to the termination of Lessee’s right to possession of the Leased Property hereunder, and the covenants and obligations under this Lease which relate to periods after the expiration or earlier termination of this Lease, or after the

 

68

 

termination of Lessee’s right to possession of the Leased Property hereunder, including, without limitation, those covenants and obligations described in Sections 4.2, 8.1, 8.2, 8.3, 16.2, and 38.3, and Articles XVIII, XIX, XXI and XXXVII, shall survive such expiration or earlier termination.

 

38.25                 Joint Drafting. The parties hereto and their respective counsel have participated in the drafting and redrafting of this Lease and the general rules of construction which would construe any provisions of this Lease in favor of or to the advantage of one party as opposed to the other as a result of one party drafting this Lease as opposed to the other or in resolving any conflict or ambiguity in favor of one party as opposed to the other on the basis of which party drafted this Lease are hereby expressly waived by all parties to this Lease.

 

ARTICLE XXXIX

 

MEMORANDUM OF LEASE

 

Lessor and Lessee shall, promptly upon the request of either, enter into a short form memorandum of this Lease, in form suitable for recording under the laws of the state in which the Leased Property is located, in which reference to this Lease, the Term and all options contained herein, shall be made. Further, upon the execution of any Addendum an amended memorandum of this Lease shall be prepared and recorded in applicable jurisdiction. Lessee shall pay any recording taxes and other costs in connection therewith.

 

[Signatures appear on following pages.]

 

69

 

IN WITNESS WHEREOF, the parties have caused this Master Lease Agreement to be executed by their respective officers thereunto duly authorized.

 

 

	
 
    	
LESSOR:
    
	
 
    	
 
    
	
 
    	
MPT OF                                          ,   LLC
    
	
 
    	
 
    
	
 
    	
MPT OF                                          ,   LLC
    
	
 
    	
 
    
	
 
    	
By: 
    	
MPT Operating Partnership, L.P.
    
	
 
    	
Its: 
    	
Sole Member of each above-referenced
    
	
 
    	
 
    	
limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Its:
    	
 
    
				

 

70

 

	
 
    	
LESSEE:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Its:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Its:
    	
 
    

 

71

 

EXHIBIT A-1

 

LAND

 

A-1

 

EXHIBIT B-1

 

PERMITTED EXCEPTIONS

 

B-1

 

 

SCHEDULE 1(A)

 

LESSOR

 

1(A)-1

 

SCHEDULE 1(B)

 

LESSEE

 

1(B)-1

 

SCHEDULE 1(C)

 

FACILITIES

 

1(C)-1

 

SCHEDULE 7.2(A)

 

OPERATIONAL DATES

 

7.2(A)-1

 

SCHEDULE 38.16

 

REPRESENTATIONS AND COVENANTS RELATING TO CERTAIN FACILITIES

 

As to each of the Facilities located in the State of Texas:

 

1.                                      Texas Deceptive Trade Practices-Consumer Protection Act. Lessor and Lessee each acknowledge, on its own behalf and on behalf of its successors and assigns, that the Texas Deceptive Trade Practices-Consumer Protection Act, Subchapter E of Chapter 17 of the Texas Business and Commerce Code (“DTPA”), is not applicable to this Lease. Accordingly, the rights and remedies of Lessor and Lessee with respect to all acts or practices of the other, past, present or future, in connection with this Lease shall be governed by legal principles other than the DTPA. Lessor and Lessee each hereby waives its rights under the DTPA, a law that gives consumers special rights and protections. After consultation with an attorney of its own selection, Lessor and Lessee, respectively, voluntarily consent to this waiver.

 

2.                                      Waiver Under Texas Property Code Section 93.012. LESSOR AND LESSEE ARE KNOWLEDGEABLE AND EXPERIENCED IN COMMERCIAL LEASING TRANSACTIONS AND AGREE THAT THE PROVISIONS OF THIS LEASE FOR DETERMINING ALL CHARGES, AMOUNTS AND ADDITIONAL RENT PAYABLE BY LESSEE ARE COMMERCIALLY REASONABLE AND VALID EVEN THOUGH SUCH METHODS MAY NOT STATE A PRECISE MATHEMATICAL FORMULA FOR DETERMINING SUCH CHARGES. ACCORDINGLY, LESSEE VOLUNTARILY AND KNOWINGLY WAIVES ALL RIGHTS AND BENEFITS OF A LESSEE UNDER SECTION 93.012 OF THE TEXAS PROPERTY CODE, AS SUCH SECTION NOW EXISTS.

 

3.                                      Lien Waiver. Lessee hereby waives all lien rights under Section 91.004 of the Texas Property Code (as currently enacted or hereafter modified), as well as any successor statute granting Lessee a lien in Lessor’s property.

 

4.                                      Compliance with Texas Health and Safety Code. Lessee shall comply in all respects with Chapter 254 of the Texas Health and Safety Code and Chapter 131 of the Texas Administrative Code, and any other Law governing the construction, licensure, or operation of freestanding emergency medical care facilities, and the Texas Family and Social Services Administration regulations.

 

2

 

EXHIBIT D

 

FORM MPT GUARANTY

 

D-1

 

GUARANTY

 

THIS GUARANTY (this “Guaranty”) is made and entered into as of this           day of                  , 2013, by MPT OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (“Guarantor”), for the benefit of FIRST CHOICE ER, LLC, a Texas limited liability company (“FCER”); and the FirstChoice Lessees (as herein defined) (FCER and the FirstChoice Lessees, together with their respective permitted successors and permitted assigns, the “FirstChoice Parties”). All capitalized terms used herein but not defined herein shall have the meanings set forth in the Master Funding and Development Agreement (as herein defined).

 

W I T N E S S E T H:

 

WHEREAS, Guarantor and FCER are parties to that certain Master Funding and Development Agreement, dated of even date herewith (as the same may be amended, modified and restated from time to time, the “Master Funding and Development Agreement”), pursuant to which Guarantor has agreed to cause certain of its Affiliates (whether now existing or hereafter formed, each, an “MPT Lessor”) to fund all hard and soft costs relating to the construction and development of the New Projects;

 

WHEREAS, as contemplated in the Master Funding and Development Agreement, the funding and development of each New Project shall be pursuant to the terms and conditions of certain Project Funding and Development Agreements to be entered into by and among the applicable MPT Lessor, FCER, the applicable Developer and the applicable First Choice Lessee that will lease the Leased Property (as defined in the Master Lease) relating to such New Project pursuant to the terms and conditions of the Master Lease; and

 

WHEREAS, Guarantor desires to guarantee unconditionally the Obligations (as herein defined) upon the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the premises, representations, warranties, mutual covenants and agreements set forth herein, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor hereby covenants and agrees as follows:

 

1.                                      Defined Terms. Capitalized terms used and not otherwise defined in this Guaranty shall have the meanings ascribed thereto in the Master Funding and Development Agreement.

 

2.                                      Guaranty. Guarantor hereby absolutely, unconditionally and irrevocably guarantees to and for the benefit of the FirstChoice Parties, the full and prompt payment and performance of the Obligations. For purposes of this Agreement, the term “Obligations” shall mean the individual obligations of the MPT Lessors to provide funding for the New Projects up to the Maximum Funding Amount pursuant to the terms and conditions of the respective Project Development Agreements. Upon the occurrence of an Event of Default hereunder, Guarantor shall, within five (5) days after receipt of written notice from any FirstChoice Party perform or cause to be performed the Obligations, as if they constituted the direct and primary obligations of Guarantor. The obligations and liabilities of Guarantor under this Guaranty are continuing, absolute and unconditional, shall not be subject to any counterclaim, recoupment, set-off, reduction or defense based upon any claim that Guarantor may have against any of the FirstChoice Parties or their respective Affiliates, officers, directors, members, shareholders, employees, agents and

 

 

representatives, and shall remain in full force and effect until all of the Obligations guaranteed hereby have been paid and performed in full, without regard to, and without being released, discharged, impaired, modified or in any way affected by, the occurrence from time to time of the following events, circumstances or conditions, whether or not Guarantor shall have knowledge or notice thereof or shall have consented thereto:

 

(a)                                 the failure or refusal to give notice to Guarantor;

 

(b)                                 the compromise, settlement, release or termination with respect to any FirstChoice Party of any or all of the obligations, covenants or agreements of such FirstChoice Party under any of the Project Development Agreements, or the amendment, modification, restatement, or forgiveness of any of the Project Development Agreements;

 

(c)                                  any consent, extension or indulgence under or in respect of any exercise or non-exercise of any right, remedy, power or privilege under or with respect to any of the Obligations guaranteed hereby;

 

(d)                                 the assignment of any of the Project Development Agreements by any MPT Lessor or FirstChoice Party (to the extent permitted by the applicable Project Development Agreement) or the subletting of any portion of the Leased Property (to the extent permitted under the Master Lease);

 

(e)                                  the voluntary or involuntary liquidation or dissolution of, sale or other disposition of all or substantially all of the assets of, or the marshalling of assets and liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of, or other similar proceeding affecting, the FirstChoice Parties, Guarantor, or any of their respective assets, or any action taken by any trustee or receiver or by any court in any such proceeding, or the disaffirmance, rejection or postponement in any such proceeding, of any of the FirstChoice Parties’ or Guarantor’s covenants, obligations, undertakings or agreements.

 

3.                                      Events of Default. The occurrence of any of the following shall constitute an “Event of Default” hereunder:

 

(a)                                 Any MPT Lessor shall fail to provide the funding required under the Project Development Agreements in accordance with the terms of such Project Development Agreements.

 

(b)                                 Guarantor shall fail to observe or perform any non-monetary term, covenant or condition of this Guaranty or any other documents or agreements entered into by Guarantor in connection herewith, and such failure is not cured by Guarantor within a period of thirty (30) days after receipt by Guarantor of written notice thereof from any FirstChoice Party, unless such failure cannot with due diligence be cured within a period of thirty (30) days, in which case such failure shall not be deemed to continue if Guarantor proceeds promptly and with due diligence to cure the failure and diligently completes the curing thereof within sixty (60) days after Guarantor’s receipt of the FirstChoice Party’s notice of default; provided however, in no event shall the FirstChoice Parties

 

2

 

be required to give more than one (1) notice and cure period for Guarantor’s failure to observe or perform the same (or repetitive) covenant or condition in any consecutive twelve (12) month period.

 

4.                                      Remedies. Upon the occurrence of an Event of Default, the applicable FirstChoice Party shall have any and all rights and remedies available in law or equity to enforce any failure by Guarantor to fulfill its obligations hereunder. No remedy herein conferred upon or reserved to such FirstChoice Party hereunder is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every such remedy now or hereafter existing at law or in equity.

 

5.                                      Waiver of Acceptance, Etc. Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon any FirstChoice Party with respect to the Obligations guaranteed hereunder. Without limiting the other provisions of this Section 5, this Guaranty shall be construed as a continuing, absolute and unconditional guarantee of performance and payment without regard to the validity, regularity or enforceability of any obligations or any other collateral security thereof (if any) or other guarantee thereof (if any) or any other circumstance whatsoever (with or without notice to or knowledge of Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the obligations of Guarantor under this Guaranty, in bankruptcy or in any other instance, and the obligations and liabilities of Guarantor hereunder shall not be conditioned or contingent upon the pursuit by any FirstChoice Party or any other person at any time of any right or remedy against any FirstChoice Party or against any other person (if any) which may be or become liable in respect of all or any part of the obligations or against any collateral security therefor or guarantee thereof or right of offset with respect thereto (if any). This Guaranty is not merely a guarantee of collection and the Obligations of Guarantor hereunder are primary and this guarantee constitutes a guarantee of payment.

 

6.                                      Representations and Warranties of Guarantor. Guarantor hereby represents and warrants to Beneficiary that (a) Guarantor has full legal right, power and authority to enter into this Guaranty, to incur the obligations provided for herein, and to execute and deliver the same to Beneficiary; (b) this Guaranty has been duly executed and delivered by Guarantor and constitutes Guarantor’s valid and legally binding obligation, enforceable against Guarantor in accordance with its terms, subject to bankruptcy, insolvency, reorganization, and similar laws affecting the enforcement of creditor’s rights or contractual obligations generally and, as to enforcement, to general principles of equity, regardless of whether applied in a proceeding at law or in equity; (c) no approval or consent of any foreign, federal, state, county, local or other governmental or regulatory body, and no approval or consent of any other Person is required in connection with the execution and delivery by Guarantor of this Guaranty or the consummation and performance by Guarantor of the transactions contemplated hereby (other than consents and approvals that have been obtained); (d) the execution and delivery of this Guaranty and the obligations created hereby have been duly authorized by all necessary proceedings on the part of Guarantor, and will not conflict with or result in the breach or violation of any of the terms or conditions of, or constitute (or with notice or lapse of time or both would constitute) a default under the governing documents of Guarantor, any instrument, contract or other agreement to which Guarantor is a party or by or to which Guarantor or Guarantor’s assets or properties are bound or subject; or any statute or any regulation, order, judgment or decree of any court or governmental or regulatory body; and (e) Guarantor is not a party to or, to the knowledge of Guarantor, threatened in writing with any litigation or judicial,

 

3

 

administrative or arbitration proceeding which, if decided adversely to Guarantor, would restrain, prohibit or materially delay the transactions contemplated hereby.

 

7.                                      Severability. Any provision of this Guaranty which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

 

8.                                      No Waiver. No failure by any party to insist upon the strict performance of any term of this Guaranty or to exercise any right, power or remedy consequent upon a breach thereof, and no acceptance of full or partial performance under the terms of this Guaranty during the continuance of any such breach, shall constitute a waiver of any such breach or any such term. To the extent permitted by law, no waiver of any breach shall affect or alter this Guaranty, which shall continue in full force and effect with respect to any other then existing or subsequent breach. The parties agree that no waiver shall be effective hereunder unless it is in writing.

 

9.                                      Tolling of Statute of Limitations. Any act or circumstance that shall toll any statute of limitations applicable to the Obligation guaranteed hereby shall also toll the statute of limitations applicable to the liability of Guarantor for the Obligations guaranteed by this Guaranty.

 

10.                               Notices. All notices, demands, consents, approvals, requests and other communications under this Guaranty shall be in writing and shall be either (a) delivered in person, (b) sent by certified mail, return receipt requested, (c) delivered by a recognized delivery service, or (d) sent by facsimile transmission and addressed as follows:

 

	
IF TO GUARANTOR: 
    	
MPT Operating Partnership, L.P.
    
	
 
    	
1000 Urban Center Drive, Suite 501
    
	
 
    	
Birmingham, Alabama 35242
    
	
 
    	
Attention:
    	
Legal Department
    
	
 
    	
Telephone:
    	
(205) 969-3755
    
	
 
    	
Facsimile:
    	
(205) 969-3756
    

 

	
WITH A COPY TO:
    	
Baker, Donelson, Bearman, Caldwell & Berkowitz, PC
    
	
 
    	
420 North 20th Street
    
	
 
    	
1400 Wells Fargo Tower
    
	
 
    	
Birmingham, Alabama 35203
    
	
 
    	
Attention:
    	
Thomas O. Kolb, Esq.
    
	
 
    	
Telephone:
    	
(205) 250-8321
    
	
 
    	
Facsimile:
    	
(205) 322-8007
    

 

	
IF TO ANY
    	
 
    
	
FIRSTCHOICE PARTY:
    	
c/o First Choice ER, LLC
    
	
 
    	
2491 S. Lake Vista, Suite 200
    
	
 
    	
Lewisville, Texas 75067
    
	
 
    	
Attn:
    	
Chief Development Officer
    
	
 
    	
Telephone:
    	
(972) 899-6666
    
	
 
    	
Facsimile:
    	
(972) 899-6664
    

 

4

 

	
WITH COPIES TO:
    	
First Choice ER, LLC
    
	
 
    	
2491 S. Lake Vista, Suite 200
    
	
 
    	
Lewisville, Texas 75067
    
	
 
    	
Attn:
    	
Legal Department
    
	
 
    	
Telephone:
    	
(972) 899-6666
    
	
 
    	
Facsimile:
    	
(972) 899-6664
    

 

	
 
    	
DLA Piper LLP (US)
    
	
 
    	
203 North LaSalle Street, Suite 1900
    
	
 
    	
Chicago, Illinois 60601-1293
    
	
 
    	
Attention:
    	
Merle Teitelbaum Cowin, Esq.
    
	
 
    	
Telephone:
    	
(312)368-4089
    
	
 
    	
Facsimile:
    	
(312)630-7419
    

 

or to such other address as either party may hereafter designate in writing, and shall be effective upon receipt. A notice, demand, consent, approval, request and other communication shall be deemed to be duly received if delivered in person or by a recognized delivery service, when left at the address of the recipient and if sent by facsimile, upon receipt by the sender of an acknowledgment or transmission report generated by the machine from which the facsimile was sent indicating that the facsimile was sent in its entirety to the recipient’s facsimile number; provided that if a notice, demand, consent, approval, request or other communication is served by hand or is received by facsimile on a day which is not a Business Day (as defined in the Master Lease), or after 5:00 p.m. on any Business Day at the addressee’s location, such notice or communication shall be deemed to be duly received by the recipient at 9:00 a.m. (based upon Birmingham, Alabama time) on the first Business Day thereafter.

 

11.                               Governing Law. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS EXECUTED AND PERFORMED IN SUCH STATE, WITHOUT GIVING EFFECT TO CONFLICTS OF LAW PRINCIPLES.

 

12.                               Jurisdiction and Venue. THE PARTIES CONSENT TO PERSONAL JURISDICTION IN THE STATE OF ALABAMA. THE PARTIES AGREE THAT ANY ACTION OR PROCEEDING ARISING UNDER THIS AGREEMENT SHALL BE BROUGHT AND TRIED EXCLUSIVELY IN THE STATE OR FEDERAL COURTS LOCATED IN THE STATE OF ALABAMA. EACH OF THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT. FURTHER, THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY CLAIM THAT SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY CERTIFIED MAIL ADDRESSED TO A PARTY AT THE ADDRESS DESIGNATED PURSUANT TO SECTION 10 SHALL BE EFFECTIVE SERVICE OF PROCESS AGAINST SUCH PARTY FOR ANY ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT. A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT MAY BE ENFORCED IN ANY OTHER COURT TO WHOSE JURISDICTION ANY OF THE PARTIES IS OR MAY BE SUBJECT.

 

5

 

13.                               Expenses. The FirstChoice Parties shall be entitled to recover all reasonable costs associated with enforcing the provisions of this Guaranty, including, without limitation, courts costs and reasonable attorneys’ fees.

 

14.                               Entire Agreement; Modification. This Guaranty and other written agreements executed and delivered by the parties in connection with this Guaranty, constitute the entire agreement and understanding of the parties with respect to the subject matter of this Guaranty. This Guaranty supersedes any prior oral or written agreements between the parties with respect to the subject matter of this Guaranty. It is expressly agreed that there are no verbal understandings or agreements which in any way change the terms, covenants, and conditions set forth in this Guaranty, and that no modification of this Guaranty and no waiver of any of its terms and conditions shall be effective unless it is made in writing and duly executed by the parties.

 

15.                               Assignment. This Guaranty is not assignable by Guarantor or First Choice without the prior written consent of the other party, except that First Choice and the First Choice Lessees may assign this Guaranty in connection with an assignment of any one or more Project Development Agreements pursuant to the terms thereof.

 

16.                               Binding Effect; No Third Party Beneficiaries. This Guaranty shall bind and inure to the benefit of the parties and their successors and assigns, and the First Choice Parties’ permitted successors and permitted assigns shall be entitled to enforce performance and observance of this Guaranty to the same extent the First Choice Parties are entitled to do so; provided, however, that (a) this Guaranty shall not inure to the benefit of any assignee pursuant to an assignment which violates the terms of this Guaranty or the applicable Project Development Agreement; and (b) this Guaranty shall not be deemed to confer any rights or remedies contained in this Guaranty upon any Person not a party or made subject to this Guaranty (other than any Person which constitutes a First Choice Party or a permitted assignee thereof).

 

17.                               Counterparts. This Guaranty may be executed in counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument.

 

18.                               Necessary Action. Each party shall perform any further acts and execute and deliver any documents that may be reasonably necessary to carry out the provisions of this Guaranty.

 

19.                               Joint Drafting. The parties hereto and their respective counsel have participated in the drafting and redrafting of this Guaranty and the general rules of construction which would construe any provisions of this Guaranty in favor of or to the advantage of one party as opposed to the other as a result of one party drafting this Guaranty as opposed to the other or in resolving any conflict or ambiguity in favor of one party as opposed to the other on the basis of which party drafted this Guaranty are hereby expressly waived by all parties to this Guaranty.

 

[Signature appears on following page.]

 

6

 

IN WITNESS WHEREOF, Guarantor has executed and delivered this Guaranty as of the date first above written.

 

	
 
    	
 
    
	
 
    	
GUARANTOR:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
MPT OPERATING PARTNERSHIP, L.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Its:
    	
 
    

 

MPT Op Guaranty

 

 

EXHIBIT E

 

FORM PROJECT DEVELOPMENT AGREEMENT

 

E-1

 

PROJECT FUNDING AND DEVELOPMENT AGREEMENT

 

THIS PROJECT FUNDING AND DEVELOPMENT AGREEMENT (this “Agreement”) is dated this         day of                   , 20      , by and among MPT OF                       , LLC, a Delaware limited liability company (“MPT”); [applicable Developer, a                     ] (“Developer”); and FIRST CHOICE ER, LLC, a Texas limited liability company (“First Choice”), and [APPLICABLE FIRST CHOICE LESSEE], a                          (“Lessee”) (First Choice and Lessee each individually an “First Choice Party” and collectively, the “First Choice Parties”).

 

W I T N E S S E T H

 

WHEREAS, First Choice and MPT Operating Partnership, L.P. are parties to that certain Master Funding and Development Agreement, dated as of May       , 2013, relating to the acquisition, financing, development and construction of freestanding emergency medical facilities (as the same may be modified, amended, restated or supplemented from time to time, the “Master Funding and Development Agreement”);

 

WHEREAS, MPT and the Lessee have entered into or joined (as applicable) that certain Master Lease Agreement, dated as of            , 2013 (as the same may be modified, amended, restated or supplemented from time to time, the “Master Lease”), pursuant to which MPT and certain of its Affiliates lease to the Lessee and certain of its Affiliates, among other things, that certain real property located in                ,                , as more particularly described on Exhibit A attached hereto (the “Property”);

 

WHEREAS, pursuant to the Master Funding and Development Agreement, MPT has agreed to fund the costs of construction and development of improvements relating to an approximately [              ] square foot freestanding emergency medical facility (the “Facility”) on the Property (the “Project”);

 

WHEREAS, the Developer has substantial experience and expertise in supervising and coordinating the design, construction and development of improvements of a similar size and scope as the Facility contemplated hereunder;

 

WHEREAS, MPT desires to engage the Developer (i) to supervise and direct the design of the Project by the Architect (as hereinafter defined) with the cooperation and assistance of the First Choice Parties, (ii) to administer and supervise construction of the Project by the General Contractor and other Third Parties (each as hereinafter defined) with the cooperation and assistance of the First Choice Parties, and (iii) to provide other services to MPT as specified herein with the cooperation and assistance of the First Choice Parties, and the Developer desires to provide such services to MPT, upon the terms and conditions hereof; and

 

WHEREAS, given that the Improvements being constructed will be utilized by the Lessee and its Affiliates under the Master Lease, and in order to induce MPT to fund the costs of such development and construction, the First Choice Parties shall assist and coordinate with the Developer in the design, development and construction of the Project upon the terms and conditions hereof.

 

NOW, THEREFORE, in consideration of the promises and mutual agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:

 

 

ARTICLE I

DEFINED TERMS

 

1.01                        Certain Defined Terms. Certain capitalized terms used herein shall have the respective meanings:

 

Affiliate(s): With respect to any Person (i) any Person that, directly or indirectly, controls or is controlled by or is under common control with such Person, (ii) any other Person that owns, beneficially, directly or indirectly, 10% or more of the outstanding capital stock, shares or equity interests of such Person, or (iii) any officer, director, employee, partner, member, manager or trustee of such Person or any Person controlling, controlled by or under common control with such Person (excluding trustees and persons serving in similar capacities who are not otherwise an Affiliate of such Person). For the purposes of this definition, “control” (including the correlative meanings of the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, through the ownership of voting securities or otherwise.

 

Applicable Environmental Law: All applicable Hazardous Materials Laws, as defined in the Master Lease.

 

Applicable Healthcare Laws: All applicable Healthcare Laws, as defined in the Master Lease.

 

Architect: [                                  ], the architect for the Project, or any replacement architect therefor.

 

Architect Agreement: That certain AIA Document B101-2007 Standard Form of Agreement dated                 , 2013 between MPT and Architect, whether entered into directly by MPT or assigned to MPT by First Choice pursuant to the Assignment of Third Party Agreements, together with any Change Order with respect thereto which is approved in accordance with Section 3.08 or the approval thereof is not required pursuant to such Section 3.08, as the same may be modified, amended, restated, or supplemented from time to time.

 

Architect Certificate: A certificate from Architect certifying to MPT and the First Choice Parties, as of a particular date, to the best of Architect’s knowledge, information and belief, that (a) the Project (as herein defined) through such date has been substantially completed in accordance with the Plans and Specifications and (b) the quality of work performed in connection with the Project through such date complies with the requirements of the Construction Contract and the Plans and Specifications.

 

Assignment of Third Party Agreements: That certain assignment document, attached hereto as Exhibit E and dated of even date herewith, pursuant to which First Choice shall assign and deliver to MPT the Architect Agreement and all other agreements in place as of the date of this Agreement relating to, and necessary for, the continued design, construction and development of the Project by MPT, the First Choice Parties and the Developer in accordance with terms of this Agreement.

 

2

 

Business Day: Each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which money centers in New York, New York are authorized or obligated by law or executive order to close.

 

Certificate of Occupancy: A certificate or other governmental authorization from the appropriate governmental authorities unconditionally approving and certifying that the Improvements (as defined herein) are suitable for permanent occupancy (or conditionally approving and certifying the Improvements for immediate occupancy).

 

Change Order: As defined in Section 3.08(a).

 

Complete, Completed or Completion: Means the occurrence of both of the following: (i) MPT and the First Choice Parties have received the Architect Certificate, which shall be in form and substance satisfactory to MPT and the First Choice Parties, and shall include the written approval of the Construction Consultant noted thereon, and (ii) MPT has received the Certificate of Occupancy; provided, however, that for purposes of determining whether the “Rent Commencement Date” has occurred under the Master Lease with respect to the Property, MPT may waive either of these requirements in writing in its sole discretion and, if such waiver is delivered, “Completion” for purposes of such “Rent Commencement Date” shall mean the date of issuance of the Certificate of Occupancy.

 

Construction Consultant: [                                      ], or such other architect, engineer or other person or entity selected by MPT, in its sole discretion, who shall assist MPT in connection with the construction of the Improvements, including but not limited to, reviewing Plans and Specifications, consulting with MPT regarding the progress of construction of the Improvements for purposes of funding, and advising MPT with respect to other matters relating to the Project. The fees payable to any such Construction Consultant shall be included in the Development Budget. It is understood and agreed by Developer and the First Choice Parties that delivery of any items, notices, approval or funding requests to the Construction Consultant as contemplated under this Agreement, whether delivered by Developer, any First Choice Party or any Third Party shall not constitute or be deemed to constitute delivery of the same to MPT.

 

Construction Contract: That certain AIA Document A101-2007 Standard Form Agreement Between Owner and Contractor, as amended, dated as of                , 20       , between MPT and the General Contractor relating to the Project, together with any Change Order with respect thereto which is approved in accordance with Section 3.08 or the approval thereof is not required pursuant to such Section 3.08, as the same may be modified, amended or restated from time to time.

 

Construction Period: That period of time commencing on the date of MPT’s acquisition of the Property in accordance with the Master Funding and Development Agreement and ending on the last day of the calendar month during which the Completion shall occur.

 

Construction Period Accrual: An amount equal to the product of (a) the amount all hard and soft costs funded in accordance with the Development Budget for the acquisition of the Property and the development of the Improvements, multiplied on a per diem basis by (b) the Lease Rate

 

3

 

(as defined in the Master Lease) (based upon a 360-day year), with such product being compounded on an annual basis during the Construction Period.

 

Developer: As defined in the preamble hereof.

 

Developer Fee: As defined in Article VII.

 

Development Budget: The detailed line item cost budget attached hereto as Exhibit B setting forth the estimated Total Development Costs with respect to the Project, which shall include, without limitation, all Transaction Expenses, the Developer Fee, the costs of the Construction Consultant and the expenses described in Section 8.15 hereof.

 

Development Schedule: The Development Schedule for the Project attached hereto as Exhibit C, as modified or amended from time to time with MPT’s prior written approval which approval shall not be unreasonably withheld, conditioned or delayed.

 

Event of Default: As defined in Article VI.

 

Facility: As defined in the recitals hereof.

 

Facility Lender: As defined in the Master Lease.

 

Final Funding: As defined in Section 5.05.

 

Final Endorsement: As defined in Section 5.05(d).

 

First Choice: As defined in the preamble hereof.

 

First Choice Parties: As defined in the preamble hereof.

 

Force Majeure Events: As defined in Section 3.11 (i).

 

Funding: Each disbursement of funds by MPT hereunder, including the Initial Funding.

 

GAAP: The United States generally accepted accounting principles and practices as in effect from time to time and applied consistently throughout the periods involved.

 

General Contractor: [                             ], or any other replacement or completion contractor hired by MPT.

 

Guaranty: That certain Cost Overrun Guaranty, dated as of                        , 2013, executed by First Choice, as the same may be amended, modified, restated or supplemented from time to time.

 

4

 

Guaranty Limitation: Such limitation on each First Choice Party’s obligations to pay or perform its aggregate obligations under this Agreement and the Cost Overrun Guaranty solely to the extent necessary to comply with the provisions of ASC 840-40-55.

 

Hazardous Materials: As defined in the Master Lease.

 

Improvements: As defined in Article II.

 

Initial Funding: As defined in Section 5.01.

 

Lessee: As defined in the preamble hereof.

 

Letter of Credit: As defined in Section 3.11(k).

 

Letter of Credit Obligations: All obligations of the First Choice Parties under this Agreement.

 

Master Funding and Development Agreement: As defined in the recitals hereof.

 

Master Lease: As defined in the recitals hereof.

 

MPT: As defined in the preamble hereof.

 

MPT Indemnified Parties: As defined in Section 8.10.

 

Overdue Rate: On any date, the Lease Rate (as defined in the Master Lease) plus Six Percent (6%).

 

Person: An individual, firm, corporation, general or limited partnership, limited liability company, an unincorporated association, joint venture, governmental entity or another entity or group.

 

Plans and Specifications: As defined in Section 3.11(e).

 

Project: As defined in the recitals hereof.

 

Project Completion Date: As defined in Section 3.11 (f)(i).

 

Property: As defined in the recitals hereof.

 

Proposed Change Order: As defined in Section 3.08(b).

 

Punch List: As defined in Section 3.11(h).

 

Recorded Agreements: As defined in Section 3.01(a).

 

5

 

Retainage: With respect to the Construction Contract, the greater of (a) the retainage required by the Construction Contract, or (b) Ten Percent (10%) of the costs of completed construction under the Construction Contract, to the extent such completed construction and costs thereof have then been approved by the Architect and the Construction Consultant.

 

Site Plan: The Site Plan for the Project prepared by the Architect, a copy of which is attached hereto as Exhibit D.

 

Third Parties: As defined in Section 3.11(c)(i).

 

Third Party Agreements: All agreements with respect to the design, development and construction of the Improvements, including the Architect Contract and Construction Contract.

 

Title Company: [                        Title Insurance Company].

 

Title Policy: As defined in Section 5.05(d).

 

Total Development Cost: The sum of (a) all hard and soft development costs that are included in the Development Budget for the acquisition of the Property and the development of all Improvements in accordance with this Agreement; and (b) the Construction Period Accrual.

 

Total Funding Amount: An amount equal to [                         and No/100 Dollars ($                   )].

 

Transaction Documents: This Agreement, the Master Funding and Development Agreement, the Master Lease, the Guaranty, the Assignment of Third Party Agreements and any and all other agreements, documents or instruments either having been executed prior to or contemporaneously herewith, or that will hereafter be executed, by either of the First Choice Parties or any of their respective Affiliates in favor of or with MPT or any of its Affiliates, as any of the same may be extended, amended, modified, restated and/or supplemented from time to time.

 

Transaction Expenses: All costs and expenses relating to the Project payable by the First Choice Parties and their Affiliates as required under Section 13.9 of the Master Funding and Development Agreement.

 

1.02                        Singular and Plural Terms. Singular terms shall include the plural forms and vice versa, as applicable, of the terms defined.

 

1.03                        Accounting Terms. All accounting terms used in this Agreement shall be construed in accordance with GAAP, except as otherwise defined.

 

ARTICLE II

THE PROJECT AND ENGAGEMENT

 

2.01                        Project. The parties acknowledge that the Project contemplates the acquisition of the Property and the design, construction and development of certain improvements relating to the

 

6

 

Facility as depicted on the Site Plan, including all the related parking areas, driveways, walkways, utility improvements, site work and any other improvements, amenities and facilities to be constructed on the Property for use in connection with the operation of the Facility (collectively, the “Improvements”). It shall be a condition precedent to MPT’s funding obligations under this Agreement that MPT shall have approved the final Development Budget in accordance with Section 3.11.

 

2.02                        Engagement. MPT hereby engages the Developer, and the Developer hereby accepts such engagement, to perform services relating to the design, permitting, construction and development of the Project as described herein on the terms and conditions and in consideration of the payments set forth herein. In performing such services, Developer will be acting on its own behalf, as an independent contractor and not as a partner, venture or employee of MPT or the First Choice Parties. Developer agrees to further the interest of MPT and the First Choice Parties by furnishing Developer’s skill, judgment and expertise in the design, construction and development of the Project. Developer shall perform its services hereunder in an expeditious and economical manner, consistent with the best interest of MPT, the First Choice Parties and in accordance with the generally accepted and customary standards for providing such services for comparable facilities. Subject to the terms and conditions of this Agreement, Developer shall have the authority to make and coordinate day-to-day decisions that are necessary in the performance of its obligations hereunder and to render directions to all third parties in connection therewith. Notwithstanding anything contained herein to the contrary, in no event shall Developer have any right or authority, express or implied, to commit or otherwise bind or obligate MPT or its Affiliates or First Choice or its Affiliates to any liability or agreement, unless expressly authorized to do so in writing by MPT or First Choice, as applicable, or unless expressly authorized by the terms of this Agreement.

 

2.03                        Representations and Warranties of Developer. Developer hereby represents and warrants to MPT and the First Choice Parties that (a) Developer has full legal right, power and authority to enter into this Agreement, to incur the obligations provided for herein, and to execute and deliver the same to MPT and the First Choice Parties; (b) this Agreement has been duly executed and delivered by Developer and constitutes Developer’s valid and legally binding obligation, enforceable against Developer in accordance with its terms, subject to bankruptcy, insolvency, reorganization, and similar laws affecting the enforcement of creditor’s rights or contractual obligations generally and, as to enforcement, to general principles of equity, regardless of whether applied in a proceeding at law or in equity; (c) no approval or consent of any foreign, federal, state, county, local or other governmental or regulatory body, and no approval or consent of any other Person is required in connection with the execution and delivery by Developer of this Agreement or the consummation and performance by Developer of the transactions contemplated hereby; (d) the execution and delivery of this Agreement and the obligations created hereby have been duly authorized by all necessary proceedings on the part of Developer, and will not conflict with or result in the breach or violation of any of the terms or conditions of, or constitute (or with notice or lapse of time or both would constitute) a default under the governing documents of Developer, any instrument, contract or other agreement to which Developer is a party or by or to which Developer or Developer’s assets or properties are bound or subject; or any statute or any regulation, order, judgment or decree of any court or governmental or regulatory body; and (e) Developer is not a party to or, to the knowledge of Developer, threatened with any litigation or judicial, administrative or arbitration proceeding

 

7

 

which, if decided adversely to Developer, would restrain, prohibit or materially delay the transactions contemplated hereby.

 

ARTICLE III

COVENANTS OF THE DEVELOPER AND FIRST CHOICE PARTIES

 

During the term of this Agreement, each of the Developer and the First Choice Parties, jointly and severally, covenant and agree to perform all of the duties and obligations as provided under this Article III and elsewhere in this Agreement to be performed thereby.

 

3.01                        Construction of Improvements. The Developer, with the coordination and assistance of the First Choice Parties, shall:

 

(a)                                 cause the commencement of construction and the Completion of the Improvements in accordance with the terms of this Agreement, the Plans and Specifications, the Development Budget and the Development Schedule, which shall, among other things, require the Developer to:

 

(i)                                     interview, negotiate with, and, if required, after consultation with and approval of MPT select and negotiate agreements with all other third party design and development consultants for the Project, including, if and as appropriate, space planners, landscape architects, civil, soils, mechanical, electrical and plumbing engineers, and acoustical, curtain wall, lighting, art and graphic design consultants;

 

(ii)                                  oversee the third party consultants regarding the Project and the Architect’s preparation of conceptual design, and the detailed plans and specifications therefor, including matters relating to site planning, engineering, construction of the Improvements, public space and landscape design, traffic and circulation matters;

 

(iii)                               initiate the planning and coordinate with MPT, the First Choice Parties and the Architect the receipt of all necessary public and private approvals for the Project, including city planning, applicable building codes, public works, any applicable architectural review committee, and building permit approvals;

 

(iv)                              monitor, with reliance on the Architect, engineers and Third Parties, compliance with laws and regulations affecting the Project;

 

(v)                                 provide preliminary evaluation of the budget, prepare preliminary estimates of construction costs, assist MPT and the First Choice Parties in achieving a mutually agreed upon development program, budget requirements and other design parameters, and provide cost evaluations of alternative materials and systems as reasonably requested;

 

(vi)                              review designs during their development and advise MPT and the First Choice Parties regarding on-site use and improvements, selection of materials, building systems and equipment and methods of Project delivery;

 

8

 

(vii)                           prepare and submit for MPT’s approval the Development Schedule with anticipated construction schedules, covering all phases of the work required pursuant to the Construction Contract, indicating the established dates for the start and completion of all primary phases of the Project including the date for Completion:

 

(viii)                        provide MPT and the First Choice Parties with a monthly progress report at the end of each month detailing the amount of work on the Project which has been completed in relation to the Development Schedule;

 

(ix)                              assist MPT and the First Choice Parties in space planning, design and finish-out evaluations and costs of Improvements;

 

(x)                                 provide business and contract administration consistent with good construction practices; and

 

(xi)                              cause to be prepared and furnished to MPT and the First Choice Parties the Project budget draw projections for key trades and schedules for the purchase and delivery of materials for the Project.

 

(b)                                 ensure that the Architect has and will continue to perform its construction administration obligations as set forth in the Architect Agreement;

 

(c)                                  cause the Improvements to be constructed in a good and workmanlike manner and in compliance with and thereafter remain in compliance with all agreements and covenants and restrictions of record (including, without limitation, those agreements set forth on Exhibit F attached hereto and made a part hereof by reference and incorporation) (the “Recorded Agreements”) and all applicable laws, ordinances and regulations, including, without limitation, Applicable Environmental Laws, the Applicable Healthcare Laws, Americans with Disabilities Act and regulations thereunder, and laws, ordinances and regulations relating to subdivision, zoning, building codes, set back requirements and environmental matters, all of which shall include, among other things, the Developer:

 

(i)                                     providing or obtaining responses to inquiries of the General Contractor;

 

(ii)                                  endeavoring to guard MPT and the First Choice Parties against any defects or deficiencies in the work of any Third Parties including by performing any appropriate inspection and testing of such work;

 

(iii)                               advising MPT and the First Choice Parties of any observed material omissions, substitutions, defects, or deficiencies noted in the work of any Third Party;

 

(iv)                              rejecting any work or materials that do not, in Developer’s reasonable judgment, materially conform to the appropriate contract documents;

 

(v)                                 overseeing the correction of defective or non-conforming work;

 

(vi)                              requiring the Architect or appropriate Third Party to review and approve shop drawings, samples, submittals and other submissions of the General Contractor for

 

9

 

conformance with the Plans and Specifications and compliance with the appropriate contract documents;

 

(vii)                           consulting with the Architect and/or MPT and the First Choice Parties if any Third Party requests interpretations of the meaning and intent of the Plans and Specifications and assisting in the resolution of any questions which may arise;

 

(viii)                        causing the preparation of such reports as may be required for the use of any public agency on the progress of the construction of the Improvements;

 

(ix)                              reviewing the substitution of any materials or equipment for those required by the Plans and Specifications for the Improvements and evaluating the laboratory reports on such substituted materials or equipment, all to the extent materially consistent with the Plans and Specifications, including permitted Change Orders thereto;

 

(x)                                 maintaining construction accounts for the Improvements;

 

(xi)                              conducting monthly on-site meetings with the General Contractor, First Choice Parties, Construction Consultant, and Architect to review the work in-place, progress of the work, and schedule for subsequent month;

 

(xii)                           inspecting the Project at substantial Completion;

 

(xiii)                        preparing punch lists of incomplete or rejected work and ensuring the correction and completion of the work;

 

(xiv)                       conducting final inspection of the work, assembling and delivering to the First Choice Parties and MPT of written guaranties, releases, bonds and waivers, instruction books, diagrams and charts required by the appropriate contract documents, and issuing a final recommendation for final payment;

 

(xv)                          Upon Completion of the Project, Developer shall deliver a copy of the General Contractor’s final “Sworn Statement” which will be provided for in the General Contract and copies of all necessary waivers of lien from the General Contractor and its subcontractors;

 

(xvi)                       provide an ALTA survey of the Project showing, inter alia, all building setback requirements, parking spaces, encroachments, the dimensions and locations of the Improvements and all recorded or visible easements. Said survey shall be accompanied by the certification with regard to the accuracy and content of the survey, a set of record drawings of the Improvements including architectural and mechanical, electrical, structural, plumbing, heating, ventilation and air conditioning record drawings including record shop drawings in both printed and electronic format, in their original editable format, and/or in a manner or format as requested by FCER (i.e. AutoCAD .dwg files by example);

 

10

 

(xvii)                    provide all manufacturers’ written brochures, catalog cuts, maintenance instructions, training and such other information received by Developer with respect to the fixtures or any other component of the Improvements; and

 

(xviii)                 provide any documentation required by Texas Administrative Code, Title 25, Chapter 131.

 

(d)                                 review and update MPT with respect to each Funding request;

 

(e)                                  review and update MPT with respect to all Change Orders and Proposed Change Orders;

 

(f)                                   assist in securing all required inspections and the Certificate of Occupancy;

 

(g)                                  cause the completion or correction of all items identified on the Punch List;

 

(h)                                 assist in procuring all warranties relating to the construction of the Improvements;

 

(i)                                     obtain all consents and approvals required by the Recorded Agreements;

 

(j)                                    cause the Improvements to be constructed so as not to encroach upon or overhang any property line, setback line, easement or right-of-way (except as permitted pursuant to a properly executed and recorded easement or other applicable agreement, in form and substance reasonably acceptable to MPT);

 

(k)                                 cause such construction to proceed continuously (subject to temporary cessation to the extent not in violation of the terms of this Agreement); and

 

(l)                                     complete construction of the Improvements no later than the Project Completion Date, time being of the essence (subject to Force Majeure Events).

 

3.02                        Use of Proceeds. The First Choice Parties, with the coordination and assistance of the Developer, shall use the proceeds of each Funding solely and exclusively for the purposes set forth in, and in the amounts set forth in, the Development Budget and this Agreement, and to pay such other fees, closing costs, and other non-construction expenses relating to the construction of the Improvements, as MPT has approved or may from time to time approve.

 

3.03                        Liens and Encumbrances.

 

(a)                                 The Developer shall: (i) keep free from all liens and encumbrances (A) MPT’s and the Lessee’s interests in the Property and the Improvements, and (B) the proceeds of all Fundings (including the Initial Funding and Final Funding); (ii) pay prior to delinquency and prior to any interest, fees or penalties being incurred for not promptly paying, all persons or entities supplying work or materials for the construction of the Improvements, except, in each case, for good faith contests of which MPT has been notified in writing to the extent such contest is material to the completion of the Project; and (iii) promptly discharge, bond off, provide affirmative title insurance coverage insuring MPT against any loss or damage with respect to, or make other arrangements acceptable to MPT with respect to, any mechanic’s, materialman’s or

 

11

 

other lien filed against the Property, the Improvements, the Lessee or the proceeds of any Funding.

 

(b)                                 The First Choice Parties shall, subject to the Guaranty Limitation,: (i) keep free from all liens and encumbrances (A) MPT’s and the Lessee’s interests in the Property and the Improvements, (B) the proceeds of all Fundings (including the Initial Funding and Final Funding), and (C) all other assets of the Lessee, except those liens and encumbrances contemplated by the Transaction Documents; and (ii) use commercially reasonable efforts to ensure that the Developer promptly pays or discharges all obligations described in Section 3.03(a) hereof.

 

3.04                        Cost Overruns and Deficiencies.

 

(a)                                 The parties acknowledge that MPT shall not be required to provide funding in excess of the Total Funding Amount for the Project, MPT shall not be responsible for cost overruns and, to the extent such cost overruns are not borne by the General Contractor, the Architect or other applicable Third Party, the First Choice Parties (subject to the Guaranty Limitation with respect to the First Choice Parties) shall be jointly and severally responsible for and shall promptly pay any and all cost overruns.

 

(b)                                 Within twenty (20) days following MPT’s demand therefor (which demand may be made at MPT’s option), subject to the Guaranty Limitation, the First Choice Parties shall deposit with MPT the amount of money equal to the difference between the undisbursed Total Funding Amount as of such date, and the amount which MPT shall reasonably determine is necessary to fully Complete the Improvements, free of all encumbrances or liens, including direct and indirect costs and work performed but for which payment has not been made, and MPT shall be under no obligation to make any further Fundings until any amount so demanded is so deposited with MPT.

 

3.05                        Reports and Notices. The Developer and, to the extent such information is reasonably available to them, the First Choice Parties shall: (a) furnish promptly to MPT such information as MPT may reasonably require concerning costs, design and engineering, progress of construction, marketing, and such other factors as MPT may require; and (b) notify MPT promptly of any litigation instituted, or any claim or litigation threatened in writing against the Developer or any First Choice Party, any lien filed by the Internal Revenue Service against the Developer, any First Choice Party, the Property or the Improvements as a result of deficiencies asserted against the Developer or any First Choice Party, any audits of any Federal or State tax return of the Developer or any First Choice Party, any dispute pursuant to or default under any Third Party Agreement, any material changes in governmental requirements pertaining to the Property or Improvements, utility availability or anticipated costs of Completion, and any other matters which could reasonably be expected to materially adversely affect the Property, the Improvements or the Developer’s or any First Choice Party’s ability to perform their respective obligations under this Agreement, in each case, as determined in the reasonable discretion of MPT.

 

3.06                        Books and Records. The Developer shall maintain complete and accurate account books and records with respect to the Project and the design and construction of the

 

12

 

Improvements, , and make such books and records available at reasonable times upon reasonable prior notice for inspection and copying by MPT or its agents. The First Choice Parties shall assist the Developer in maintaining and providing such books and records as required herein.

 

3.07                        Access and Promotion. The Developer shall permit MPT and its agents to have access to the Property and Improvements upon reasonable notice. The Developer shall provide to MPT, at the First Choice Parties’ expense, a sign in accordance with MPT’s reasonable specifications publicizing MPT’s interest in the Property for placement on the Property and shall permit MPT to maintain the sign on the Property; provided, however, that any such sign shall be (i) in a size and shall be erected in a location reasonably acceptable to MPT and approved by the Developer and the First Choice Parties, which approval shall not be unreasonably withheld, conditioned or delayed; and (ii) subject to all applicable laws.

 

3.08                        Change Orders.

 

(a)                                 Neither the First Choice Parties nor Developer shall authorize or permit any change, modification, supplement or substitution to the Construction Contract, the Architect Agreement, the Site Plan, the Plans and Specifications (and if Plans and Specifications have not yet been provided to and approved by MPT, then to any working drawings), or the scope of work pursuant to any of the foregoing (each a “Change Order”), without the prior written consent of MPT, which may be given or withheld in its sole discretion; provided, however, notwithstanding anything to the contrary herein, it shall not be necessary for the First Choice Parties or the Developer to obtain the prior consent of MPT for a Change Order to the extent that (i) the cost of such Change Order is less than One Hundred Thousand and No/Dollars ($100,000.00), (ii)the Change Order does not increase the overall Development Budget, (iii) the scope of the Project is not materially changed by such Change Order, and (iv) the Change Order does not reduce the quality of any materials used in the construction of the Project or reduce the quality of the Improvements.

 

(b)                                 The Construction Contract and the Architect Agreement shall require contemporaneous delivery by the General Contractor and the Architect of any “proposed” Change Order (a “Proposed Change Order”) requiring the review and approval by MPT, which approval may be withheld in its sole discretion. Notwithstanding the preceding sentence, each of the Developer and the First Choice Parties shall immediately forward to MPT copies of any Proposed Change Order received by the Developer or any of the First Choice Parties that require the review and approval by MPT, the Construction Consultant and any other designee of MPT. Any Proposed Change Order that requires the review and approval by MPT shall detail the proposed change in scope of work, the costs and the impact on the applicable work schedule. In MPT’s sole discretion, MPT may require that its Construction Consultant certify such details in writing to MPT. From and after the date on which MPT has received the Proposed Change Order and the Construction Consultant’s certification relating thereto, MPT shall have Ten (10) Business Days to review and approve or disapprove such Proposed Change Order. In the event that MPT fails to approve or disapprove any Proposed Change Order within said Ten (10) Business Day period, then MPT shall be deemed to have disapproved of such Change Order. If any such Proposed Change Order is approved by MPT, the Architect shall prepare a final Change Order for execution by the Developer, the General Contractor and the Architect, as well as MPT’s signature for consent only. Upon the full and complete execution of a final

 

13

 

Change Order as required by this subsection (b), such Change Order will become effective immediately without further action of the parties. The Developer and the First Choice Parties (i) waive any and all rights and claims for Fundings for increased costs or work performed under Change Orders that require the review and approval by MPT but that are not approved by MPT and implemented in accordance with this Section 3.08(b), and (ii) jointly and severally agree to indemnify and hold harmless MPT and its Affiliates from any increased costs or claims or requests for time relating to Change Orders, or work performed thereunder, not approved by MPT and implemented in accordance with this Section 3.08(b) (subject to the Guaranty Limitation with respect to the First Choice Parties). If any surety has provided bonds in connection with the construction of the Improvements, then either (i) such Change Order shall have received the prior written approval of such surety or (ii) such surety shall have waived the right to approve the same.

 

(c)                                  In addition to the foregoing, the parties acknowledge that the Architect shall have limited authority pursuant to the Construction Contract to order certain minor changes in the Work (as defined in the Construction Contract), and without obtaining the consent of any of the parties hereto. Further, Developer shall have the same authority to order minor changes in such Work not involving adjustment in the Development Budget or extension of the Development Schedule and not inconsistent with the intent of the Contract Documents (as defined in the Construction Contract), this Agreement or the other Transaction Documents. Such changes will be effected by written order signed by Developer, a copy of which shall be delivered to MPT by Developer within two (2) Business Days after any such minor change.

 

3.09                        Ownership of Personalty. The Developer and the First Choice Parties, as applicable, shall furnish to MPT, if MPT so requests, copies of the contracts, bills of sale, receipted vouchers, and agreements, or any of them, under which the Developer or any First Choice Party claims title to the materials, articles, fixtures and other personal property used or to be used in the construction or operation of the Improvements.

 

3.10                        Appraisals. Upon MPT’s request and upon reasonable notice, the Developer and, as applicable, the First Choice Parties shall (a) permit MPT and its representatives to enter upon and appraise the Improvements; (b) cooperate with and provide any information requested in connection with such appraisals; and (c) reimburse MPT for the cost of the first such appraisal and one (1) reappraisal per year while an Event of Default exists.

 

3.11                        Development Budget; Management of Project. The Developer, the First Choice Parties and MPT hereby acknowledge and agree that each has reviewed and does hereby approve of the Development Budget attached hereto as Exhibit B. Subject to Section 5.04(c) hereof, all modifications or amendments to the Development Budget shall require MPT’s prior written approval, which approval may be given or withheld in MPT’s sole discretion. The Developer, in consultation and cooperation with the First Choice Parties, shall manage and oversee all design, development and construction aspects of the Project in accordance with the Development Budget and the Development Schedule. In connection with such management and oversight, the Developer shall perform, without limitation, the following services:

 

(a)                                 Development Documents. The Developer, with the cooperation and assistance of the First Choice Parties, shall prepare (or cause to be prepared):

 

14

 

(i)                                     the Plans and Specifications (to the extent not prepared as of the date of this Agreement);

 

(ii)                                  the Development Schedule setting forth a detailed analysis and schedule for the development and construction of the Project; and

 

(iii)                               a survey of the location and boundaries of the Property on which the Project will be constructed, which shall, at a minimum, clearly depict all wetland areas and contain a legal description of the Property, and contain such other information and detail as required by MPT and the Title Company (to the extent not prepared as of the date of this Agreement).

 

(b)                                 Construction Approvals and Permits; Construction Notices. The Developer, with the cooperation and assistance of the First Choice Parties, shall use its best efforts to obtain as soon as practicable, all approvals, governmental approvals and permits necessary or appropriate for the development and construction of the Project, including, without limitation, approvals required pursuant to any Recorded Agreements, zoning approvals, zoning variances, subdivision approvals, grading and utility permits, building permits, tap permits or “connections” for water and sanitary sewer service for the Project (the expense for which shall be included in the Development Budget) (all such approvals and permits shall be on terms and conditions approved by MPT, such approval not to be unreasonably withheld, conditioned or delayed). The Developer shall file, or cause to be obtained and filed, all notices of commencement of construction and completion of construction as may be required by the applicable local and state laws and ordinances. The Developer shall furnish MPT with evidence of such approvals within ten (10) days after receipt of the same and shall furnish MPT with copies of all such notices promptly following submission thereof. The First Choice Parties shall assist and cooperate with the Developer in the performance of the Developer’s obligations hereunder.

 

(c)                                  Third Parties and Third Party Agreements. MPT, with the cooperation and assistance of the First Choice Parties, shall negotiate the Construction Contract and the Architect Agreement, or MPT shall otherwise review the Architect Agreement to the extent it has been executed by First Choice prior to MPT’s acquisition of the Property, and, if acceptable, MPT shall enter into (or as to the Architect Agreement, if applicable, accept an assignment of) the Construction Contract and the Architect Agreement with the General Contractor and Architect, respectively. The Developer, with the cooperation and assistance of the First Choice Parties, shall negotiate all other Third Party Agreements with all landscape architects, engineers, planners, designers, subcontractors, technology suppliers and consultants, and other suppliers and vendors (together with the Architect and the General Contractor, collectively, the “Third Parties”) utilized or to be utilized in connection with the Project. Notwithstanding anything contained herein to the contrary, (A) the Developer, in consultation and cooperation with the First Choice Parties, shall have the right to select the Third Parties (other than the Architect and the General Contractor) and others that will participate in the Project, and (B) the Developer, in consultation and cooperation with the First Choice Parties, shall control the preparation and negotiation of the definitive agreements with such Third Parties.

 

(d)                                 Utility Services. The Developer, with the cooperation and assistance of the First Choice Parties, shall contract with the appropriate government authorities and utility companies

 

15

 

for the construction and provision of any utility services necessary for the implementation of the Project and the use of the Facility; provided, however, that any such contract or utility service which requires that an easement or other encumbrance be placed upon any portion of the Property shall require the prior written approval of MPT, which approval shall not be unreasonably withheld, conditioned or delayed. MPT shall be deemed to have given its approval unless MPT delivers written notice of disapproval to the Developer within five (5) Business Days after MPT’s receipt of the request for such approval.

 

(e)                                  Plans and Specifications. To the extent not already completed as of the date of this Agreement, the Developer, in consultation and cooperation with the First Choice Parties, shall, within [                  (        ) - TO BE DETERMINED] days after the date hereof, cause the Architect to complete the preparation of the final working drawings, plans and specifications for the Project, including interior partitions, finishes and other tenant improvement work, all related utility, parking, driveway, landscape and other site improvements to be located on the Property, and to submit four (4) copies of such working drawings, plans and specifications to MPT. The Developer and the First Choice Parties acknowledge and agree that the Site Plan and the Plans and Specifications must be prepared, completed and approved in accordance with the terms, provisions and conditions of the Recorded Agreements. If MPT has any objections or comments with respect to any such drawings, plans and specifications which are submitted to it, MPT shall submit the same to the Developer and the Architect in writing within ten (10) Business Days after MPT’s receipt of such working drawings, plans and specifications and the Developer, in consultation and cooperation with the First Choice Parties, shall promptly coordinate with the Architect and cause the requested comments, objections, changes and corrections to be addressed and made. The Developer shall cause to be resubmitted promptly to MPT modified working drawings, plans and specifications addressing such comments, objections, changes and corrections, which shall be subject to the same review and approval procedures set forth above. All working drawings and specifications which are approved by MPT are herein referred to as the “Plans and Specifications.” Approval of the Plans and Specifications by MPT shall constitute only an approval of the aesthetic features of the building described in the drawings, and acknowledgment that the floor plan and the spatial relationship of the various parts of the Plans and Specifications are satisfactory, and shall not be construed as an approval of the character or quality of the architectural, structural or engineering design of the Improvements or any of their components, or an acknowledgment that the design complies with applicable building codes. No such approval shall constitute a waiver of any warranties or guaranties set forth in this Agreement or release the Developer, any First Choice Party or the Architect from liability for any errors or omissions. Except as specifically set forth herein, none of the Plans and Specifications may be changed or otherwise modified without the prior written consent of MPT in its reasonable discretion. All costs, fees and expenses of the preparation of the Plans and Specifications by the Architect and any other consultants shall be included in the Development Budget. Additionally, the Developer, with the cooperation and assistance of the First Choice Parties, shall ensure that Architect fulfills its obligations under the Architect Agreement and shall not reduce or diminish the Architect’s obligations or responsibilities under the Architect Agreement without the prior written consent of MPT, which may be withheld in the reasonable discretion of MPT.

 

(f)                                   Construction Phase Services. During the construction phase of the Project, the obligations and services to be performed by the Developer shall, with the assistance and

 

16

 

coordination of the First Choice Parties, include, without limitation, those detailed in Section 3.01 above and the following:

 

(i)                                     Commencing construction of the Project in accordance with the Development Schedule and diligently pursuing the Completion of the Project in accordance with this Agreement, the Development Schedule and the Development Budget by no later than [                            , 201     ] (the “Project Completion Date”), subject to Force Majeure Events.

 

(ii)                                  Coordinating with all Third Parties with respect to the development, budgeting, design, engineering, construction and landscaping of the Project in accordance with the Development Schedule and the Development Budget and supervising the performance by the Third Parties and their compliance with their respective obligations under the Third Party Agreements in connection with the Project.

 

(iii)                               If required by MPT in its sole discretion, insure that the General Contractor deliver to MPT to secure performance of construction of the Project in compliance with the Plans and Specifications, either (A) performance and payment bonds in the penal sum of the cost for construction of the Project; or (B) subguard insurance.

 

(g)                                  Insurance.

 

(i)                                     The Developer, with the cooperation and assistance of the First Choice Parties, shall cause all Third Parties to maintain general liability and other types of insurance (including, without limitation, errors and omissions coverages) satisfactory in form, content and amount to MPT and any Facility Lender, in their reasonable discretion, and insuring against all hazards normally insured against in the construction industry for similar projects. The Developer shall cause MPT and any Facility Lender to be added as additional insureds on all liability and property coverages. The Developer, with the cooperation and assistance of the First Choice Parties, shall obtain and deliver to such insured parties before the commencement of the construction of the Project original policies of insurance, or a certified copy thereof (which is certified in writing by a duly authorized agent for the insurance company as a “true, correct, complete and certified” copy of the policy) for the required insurance. All policies of insurance required hereunder to be obtained shall provide that (A) such policies will not lapse, terminate, be canceled, or be amended or modified to reduce limits or coverage terms unless and until the Developer, MPT and Facility Lender have received not less than thirty (30) days’ prior written notice, (B)the language “endeavor to” will be deleted from all notice provisions and (C) the First Choice Parties, jointly and severally (but subject to the Guaranty Limitation with respect to the First Choice Parties), shall deposit the amount of any deficiency resulting from a casualty or other event in accordance with the requirements of any Facility Lender (except to the extent the deficiency arises from a Force Majeure Event (as defined in the Overrun Cost Guaranty).

 

(ii)                                  Without limiting the generality of the foregoing, MPT, with the cooperation and assistance of the First Choice Parties, shall procure and maintain (or shall cause the General Contractor to procure and maintain) until Completion of the

 

17

 

Improvements an “All Risk” Builder’s Risk insurance policy written at One Hundred Percent (100%) of the completed value of the Improvements, which insurance policy shall comply with the following:

 

(a)                                 the policy shall be in effect during the course of construction until Completion and acceptance of the Improvements by MPT;

 

(b)                                 the policy shall provide for valuation on a replacement basis with no coinsurance;

 

(c)                                  the policy shall have a thirty (30) day notice of cancellation;

 

(d)                                 the policy shall name MPT as loss payee and MPT and any Facility Lender shall be listed as additional insureds thereunder;

 

(e)                                  the policy shall grant waivers of subrogation against the additional insureds;

 

(f)                                   the policy shall provide soft costs/delayed start up insurance covering lost earnings and continuing expenses, plus interest due MPT, in an amount sufficient to cover not less than the aggregate amount of the estimated lost earnings during (i) the actual time required to rebuild the Improvements following loss or damage, or (ii) twelve (12) months, whichever is longer, plus an additional extended period of indemnity of not less than ninety (90) days. Such coverage shall be written on an “actual loss sustained” form;

 

(g)                                  the policy shall provide a sublimit of at least One Hundred Thousand and No/100 Dollars ($100,000.00) to cover reasonable expenses incurred by the insured or loss payee for professional services necessary to measure, quantify or determine the amount of any loss covered by the policy, such as appraisers, auditors, accountants, architects, and engineers (such expenses shall not include the insured’s or loss payee’s own employees or public adjusters); and

 

(h)                                 the policy shall provide flood and earthquake coverage at a minimum amount equal to Twenty Percent (20%) of the full replacement cost. The deductible for such coverage shall not exceed Three Percent (3%) of the insured values.

 

The costs of such coverages shall be included in the Development Budget, it being understood and agreed that the First Choice Parties, jointly and severally (but subject to the Guaranty Limitation) shall be directly liable for the payment of any deductibles related to any claims made under such policy other than deductibles related to claims arising from a Force Majeure Event (as defined in the Cost Overrun Guaranty). Contemporaneously with the execution of this Agreement, the Developer, with the cooperation and assistance of the First Choice

 

18

 

Parties, shall deliver to MPT certificates of insurance which evidence the types and amount of coverage required under this Section 3.1 Kg). Within thirty (30) days after execution of this Agreement, the Developer shall deliver to MPT binders of insurance, and a copy of the policy.

 

(iii)                               MPT, with the cooperation and assistance of the First Choice Parties, shall require the General Contractor to provide the following:

 

(a)                                 statutory worker’s compensation and employers liability insurance covering all the General Contractor and subcontractor employees in amounts that are customary for the General Contractor’s industry;

 

(b)                                 commercial general liability insurance in a primary amount of at least Two Million and No/100 Dollars ($2,000,000.00) per occurrence, bodily injury for injury or death of any one person and for property damage for damage to or loss of the property of others, subject to a Four Million and No/100 Dollars ($4,000,000.00) annual aggregate policy limit applicable for the Project with MPT being named as an additional insured as respects liability arising from the General Contractor’s construction, use, occupancy or maintenance of the Property for a period of not less than five (5) years following Completion of construction.

 

(c)                                  automobile and vehicle liability insurance coverage for all owned, non-owned, leased or hired automobiles and vehicles in a primary limit amount of One Million and No/100 Dollars ($1,000,000.00) per occurrence for bodily injury and property damage with all allocated loss adjustment expenses, including defense costs, in addition to the policy limits required above and with MPT being named as an additional insured thereby; and

 

(d)                                 umbrella liability insurance in the minimum amount of Ten Million and No/100 Dollars ($10,000,000.00) for each occurrence and aggregate combined single limit for all liability.

 

The umbrella liability policy shall follow form with the primary commercial general liability with respect to providing coverage to MPT as an additional insured when required by written contract or agreement. The umbrella liability policy shall name in its underlying schedule the policies of commercial general liability, automobile/vehicle liability and employer’s liability under the workers compensation policy. Each of the policies and coverages described in subsections (A) through (D) above shall grant waivers of subrogation against MPT. Further, each of the policies and coverages described in subsections (B) through (D) shall provide primary and non-contributory coverage to MPT and provide for no less than thirty (30) days’ written notice to MPT prior to cancellation of any such policies or coverages.

 

19

 

(iv)                              MPT, with the cooperation and assistance of the First Choice Parties, as reflected in the Architect Agreement, shall require the Architect to provide an Architect and Engineering Professional Liability insurance policy providing coverage for errors and omissions in professional services in architecture and engineering, including, but not limited to, building design, electrical, mechanical, plumbing, civil and structural engineering that might be made pursuant to the Project. Such insurance shall provide claims made coverage with an occurrence and aggregate limit in amounts not less than Three Million Dollars ($3,000,000) and Three Million Dollars ($3,000,000), respectively. Such insurance shall remain in place from the date of Architect’s engagement through the construction of the Project and for three years following Completion of the Project.

 

(h)                                 Punch List Items. Following the issuance of the final Architect Certificate, MPT, with the cooperation and assistance of the First Choice Parties, may, within seven (7) Business Days after receipt of the final Architect Certificate, inspect the Property and Improvements and prepare punch lists (each a “Punch List”) setting forth all incomplete, defective or other items of construction not in conformity with the Plans and Specifications and if MPT delivers any such Punch List, the Developer, with the cooperation and assistance of the First Choice Parties, shall cause all such items to be completed or corrected within ninety (90) days after receipt of such Punch List. If ninety (90) days is an insufficient period of time in which to complete or correct any Punch List item, the Developer may request one or more thirty (30) day extensions of said 90-day period, which extensions MPT shall grant so long as the Developer and the First Choice Parties are working and continue to work in good faith and diligently pursue the completion and correction thereof. In the event such items are not completed within the ninety (90) day period, or the extended period of time, as applicable, MPT may complete or correct any or all of such items and the Developer and the First Choice Parties, jointly and severally (subject to the Guaranty Limitation with respect to the First Choice Parties), shall reimburse MPT for the cost thereof within thirty (30) days after receipt from MPT of written demand for such payment, with interest thereon computed at the Overdue Rate from the date of demand to the date of payment. In the event the Developer and First Choice Parties fail to reimburse MPT for such cost and interest within such thirty (30) day period, such failure shall constitute an Event of Default and MPT shall be entitled to pursue any remedies available against the Developer and the First Choice Parties provided herein or at law or in equity.

 

(i)                                     Limitation of Developer’s and First Choice Parties’ Authority. Except as specifically approved in writing by MPT, or as expressly set forth herein, neither the Developer nor either First Choice Party shall have authority to bind MPT in any matters regarding the Project. The Developer’s and the First Choice Parties’ actual authority hereunder is limited by this Agreement. Neither the Developer nor the First Choice Parties shall undertake or permit any development of or construction on the Property or Improvements, engage the services of any contractor, architect, engineer, consultant or other third party, engage a vendor or supplier, expend any funds or incur any debt in connection with the development and construction of the Project or the performance of any other obligation under this Agreement or in connection with the Project, unless either (i) the action shall have been expressly authorized in this Agreement and can be completed within the limits of the Development Budget and the time periods set by the Development Schedule, or (ii) the action is approved by MPT in writing prior to taking such action; provided, however, the foregoing shall not apply to the Architect Agreement entered into by First Choice prior to the date hereof that is substantially in accordance with a form approved

 

20

 

by MPT (as such form may have been modified as reasonably directed by MPT) and subject to the Assignment of Third Party Agreements.

 

(j)                                    Force Majeure. The Project Completion Date shall be extended by any enforced delay due to an unforeseeable cause beyond the Developer’s or First Choice Parties’ control and without either the Developer’s or any First Choice Party’s fault or negligence, including, but not limited to, weather-related acts of God, strikes, lockouts or other industrial disturbances, acts of public enemies, war, blockades, riots, earthquakes, fires, storms, floods, civil disturbances and unusually severe weather conditions not reasonably anticipatable (collectively the “Force Majeure Events”); provided, however, that such excused delay by any of the Force Majeure Events shall be deemed to exist only so long as the Developer or the First Choice Parties promptly and specifically notify MPT in writing of such delay and exercise due diligence to remove or overcome such delay; and, provided further that such Force Majeure Events shall not excuse, defer or delay any obligation of the Developer or any First Choice Party involving the payment of money.

 

(k)                                 Letter of Credit.

 

(i)                                     Subject to the terms of this subsection (i) and subsection (ii) below, contemporaneously with the Initial Funding and as security for the Letter of Credit Obligations, the First Choice Parties shall obtain and deliver to MPT an irrevocable letter of credit at a financial institution reasonably acceptable to MPT naming MPT as beneficiary thereunder (the “Letter of Credit”), which Letter of Credit shall be upon such other terms, conditions and provisions acceptable to MPT (including, without limitation, an “evergreen” provision requiring no less than sixty (60) days’ prior written notice to MPT of any failure or refusal to renew such Letter of Credit). Subject to the proviso below and the increases provided for in this subsection (i), the Letter of Credit shall be in an amount equal to the maximum amount permitted without violating the Guaranty Limitation, based upon the amount of the Total Development Costs incurred through the applicable Funding date, which in no event shall exceed an amount equal to Fifty Percent (50%) of one (1) year’s Base Rent (as defined under the Master Lease) relating to the Facility; provided, however, that delivery of the Letter of Credit shall not be required until the First Choice Parties can deliver a Letter of Credit in a minimum amount of Seventy-Five Thousand Dollars ($75,000) without violating the Guaranty Limitation. Following initial delivery of the Letter of Credit to MPT, on each subsequent Funding date the First Choice Parties shall deliver to MPT a replacement letter of credit, or an amendment to the Letter of Credit, reflecting an increase in the Letter of Credit amount calculated as provided herein above; provided, further, that the First Choice Parties will not be required to replace the Letter of Credit or provide an amendment to increase the amount of the Letter of Credit pursuant to this sentence (A) more frequently than once every thirty (30) days, or (B) if the Letter of Credit amount would be increased by less than Twenty-Five Thousand Dollars ($25,000). The Letter of Credit, or any replacement letter of credit, shall provide that MPT shall be entitled to draw upon such Letter of Credit upon the occurrence of an Event of Default. In the event MPT receives a notice of termination or nonrenewal of the Letter of Credit or any replacement letter of credit, First Choice Parties shall provide a replacement letter of credit no later than thirty (30) days prior to the expiration or termination of such Letter of Credit or replacement letter of credit, the terms of which shall be consistent with the requirements of this Section 3.1l(k). The First Choice Parties

 

21

 

shall maintain a letter of credit conforming to the requirements of this Section 3.11(k) until the date of Completion or as otherwise required under Master Lease.

 

(ii)                                  The First Choice Parties may, at their option, satisfy the Letter of Credit requirements under this Agreement by providing one (1) letter of credit satisfying the letter of credit requirements of this Agreement, as well as the letter of credit requirements under the other Project Development Agreements (as defined in the Master Lease) entered into by their Affiliates.

 

3.12                        Other Acts. Upon MPT’s request, each of the Developer and the First Choice Parties shall execute and deliver to MPT all other documents and perform all other acts which MPT reasonably deems necessary in connection herewith.

 

ARTICLE IV

GENERAL DUTIES OF DEVELOPER, FIRST CHOICE PARTIES AND MPT

 

(a)                                 Each of the Developer and the First Choice Parties shall diligently, in good faith and with due care, (i) consult with MPT in performing its obligations in accordance with the terms and conditions of this Agreement, and (ii) respond promptly to any request made by MPT or its representatives regarding the Project.

 

(b)                                 MPT shall diligently, in good faith and with due care, (i) respond promptly to any request by the Developer for consents and approvals as required hereunder and (ii) cooperate with the Developer and the First Choice Parties in the performance of their respective duties under this Agreement.

 

(c)                                  Each of the Developer and the First Choice Parties shall perform their respective obligations under this Agreement in accordance and in compliance with all applicable laws, rules, regulations, statutes and ordinances of all governmental authorities.

 

ARTICLE V

DISBURSEMENTS

 

5.01                        Disbursement Procedure. Subject to the conditions set forth in this Article V, MPT agrees to disburse in the manner set forth herein the Total Development Costs relating to the acquisition of the Property and the construction of the Improvements as set forth in the Development Budget, not to exceed the Total Funding Amount (less the sum of                                        and No/100 Dollars ($                        .00), which is the total cost that has been funded contemporaneously herewith (the “Initial Funding”)).

 

5.02                        Documents to be Furnished by First Choice Parties Prior to Each Funding. As a condition precedent to each Funding, after the Initial Funding, the Developer, with the cooperation and assistance of the First Choice Parties, shall furnish or cause to be furnished to MPT each of the following documents in form and substance reasonably satisfactory to MPT at least Ten (10) Business Days prior to the Developer’s desired Funding date:

 

(a)                                 a Draw Request Summary Form in the form attached hereto as Exhibit K, certified to be true and correct by the Developer, together with a completed standard AIA Form

 

22

 

G702 and Form G703 signed by the General Contractor for such phase of construction, together with sworn statements and conditional waivers of liens signed by the applicable Third Party engaged or to be engaged by MPT with whom the Developer or any First Choice Party shall have any dealings with respect to construction of the Improvements, covering all work, together with such invoices, contracts or other supporting data as MPT or the Title Company may reasonably require to evidence that all costs for which Funding is sought have been incurred;

 

(b)                                 an Architect Certificate with respect to the work performed through the date of the AIA Form G702 and Form G703 signed by the General Contractor;

 

(c)                                  unconditional waivers of claims and liens of Third Parties with respect to all prior Fundings, to the extent not previously delivered to MPT;

 

(d)                                 copies of any final and executed Change Orders not previously furnished to MPT;

 

(e)                                  copies of all Third Party Agreements executed since the last Funding and any amendments or modifications to any Third Party Agreements;

 

(f)                                   the Letter of Credit, or a replacement letter of credit or amendment to the Letter of Credit, if and to the extent required under Section 3.11(k);

 

(g)                                  satisfactory evidence that all government approvals with respect to the applicable stage of construction of the Project, the Property and Improvements, if not previously delivered to MPT, have been obtained (e.g. building permit, grading permit);

 

(h)                                 a certificate dated the date of delivery of such Funding request signed by the Developer to the effect that (i) the Developer has performed and satisfied in all respects all covenants and conditions required by this Agreement to be performed or satisfied by the Developer as of the date thereof, and (ii) there exists no default or Event of Default by the Developer hereunder and there exists no default or event of default under any Third Party Agreement, and no event has occurred which with notice or the passage of time or both would constitute such a default or Event of Default;

 

(i)                                     a certificate dated the date of delivery of such Funding request signed by the First Choice Parties to the effect that (i) each of the First Choice Parties have performed and satisfied in all respects all covenants and conditions required by this Agreement to be performed or satisfied by the First Choice Parties as of the date thereof, and (ii) there exists no default or Event of Default by any First Choice Party hereunder or under any other Transaction Document and no event has occurred which with notice or the passage of time or both would constitute such a default, Event of Default or event of default;

 

(j)                                    if not previously delivered to MPT, original executed consents, approvals and estoppels required under the Recorded Agreements (including, without limitation, consents, approvals and estoppels required by any architectural review committee under the Recorded Agreements), if any; and

 

(k)                                 such other instruments, documents and information as MPT or the Title Company may reasonably request.

 

23

 

5.03                        Review of Disbursement Requests. As a condition precedent to each Funding (after the Initial Funding), the Construction Consultant shall have observed the construction work with respect to the Improvements completed as of the date of any Funding request. The Developer Parties shall contact the Construction Consultant and coordinate delivery of such request for a Funding with a visit by the Construction Consultant in order to allow the Construction Consultant to review the completed construction work for which costs are included in such request for a Funding. The Construction Consultant will review and certify to MPT its opinion of the percentage of completion, compliance with Plans and Specifications and the maximum allowable Funding applicable thereto, which shall be determined in accordance with this Agreement. From and after MPT’s receipt of all documents required by Section 5.02, MPT and its Construction Consultant shall have Ten (10) Business Days to review such materials prior to making the applicable Funding. In the event that MPT fails to make the applicable Funding within said Ten (10) Business Day period, then MPT shall be deemed to have disapproved of such Funding request.

 

5.04                        Funding Amounts and Limitations.

 

(a)                                 MPT shall not be required to provide funding in excess of the Total Funding Amount for the Project and MPT shall not be responsible for cost overruns.

 

(b)                                 The maximum amount of proceeds relating to any Funding (except in the case of the Final Funding) will equal (1) non-construction expenses actually incurred within the amounts set forth in the Development Budget (as reallocated from time to time in accordance with subparagraph (c), below), plus (2) the lesser of (i) the actual cost of the completed construction of the Improvements, deposits or purchases for future use, or (ii) MPT-approved scheduled value of each completed portion of the Improvements (as set forth in the Development Budget) (but no Funding shall be provided for cost overruns, duplication or repair of work for which funds were previously disbursed, work that does not conform in all material respects to the Plans and Specifications, work or increased costs pursuant to any Change Order not approved (to the extent MPT’s approval is required) and finalized in accordance with Section 3.08(b) or work that is unsatisfactory in the reasonable opinion of the Construction Consultant or unavailable for review by the Construction Consultant), less: (l) the Retainage and (2) the amounts previously disbursed by MPT.

 

(c)                                  Any reallocation among line items shown in the Development Budget that (i) exceeds One Hundred Thousand and No/Dollars ($100,000.00), (ii) increases the overall Development Budget, (iii) materially changes the scope of the Project, or (iv) reduces the quality of any materials used in the construction of the Project or reduces the quality of the Improvements, may be made only upon the prior written consent of MPT, which consent may be given or withheld in MPT’s sole discretion. No Funding will be made for deposits or materials stored for future use unless approved by MPT in its reasonable discretion.

 

(d)                                 Notwithstanding the foregoing, MPT shall not be required to make a Funding more than once each month, and MPT reserves the right to limit the total amount disbursed hereunder at any time to an amount which, when deducted from the Total Funding Amount, leaves a balance to be disbursed equal to or greater than the cost of completion of the Improvements and payment of remaining non-construction expenses (including funding of

 

24

 

reserve funds or deposits if required by this Agreement) plus the Retainage under the Construction Contract for which the conditions for release have not been satisfied, all as reasonably determined by MPT from time to time, and MPT will make such Funding within Ten (10) Business Days after receipt of such request. In addition to MPT’s rights under Section 3.04, prior to the Final Funding, MPT shall be entitled to retain at all times as undisbursed funds an amount sufficient to pay all construction and non-construction costs relating to construction of the Improvements, as reasonably estimated by MPT, including, but not limited to, amounts to become due pursuant to construction contracts, amounts to complete the Improvements but not yet included in any such contract, maintenance bond and completion bond payments, estimated post-closing fees and expenses of MPT and its counsel, estimated permit and license fees, estimated architectural and engineering fees of the Developer, the First Choice Parties and/or the Construction Consultant, and estimated recording and title insurance costs.

 

(e)                                  In the event MPT, at its option, elects to make one or more Fundings prior to receipt and approval of all items required by this Article V, such election shall not obligate MPT to make any subsequent Funding unless the terms, conditions and provisions set forth herein are met.

 

(f)                                   No Fundings (other than the Final Funding) shall be made after the Project Completion Date, as may be extended due to Force Majeure Events.

 

5.05                        Final Funding. The Retainage and any other amounts not previously funded shall be disbursed (the “Final Funding”) no later than Ten (10) Business Days after the occurrence of all of the following:

 

(a)                                 the satisfactory completion (as determined by MPT) of all construction work under the Construction Contract;

 

(b)                                 MPT’s receipt of the final Architect Certificate, which Architect Certificate shall be in form and substance satisfactory to MPT in its reasonable discretion and shall include the written approval of the Construction Consultant noted thereon, together with copies of all lien and claim waivers, affidavits, warranties, guaranties, assignments and subordinations received by the Architect and the General Contractor in accordance with the Third Party Agreements;

 

(c)                                  MPT’s receipt of evidence that the Certificate of Occupancy has been issued;

 

(d)                                 MPT’s receipt of either tract book searches or other evidence of title (“Title Evidence”) or if available for a cost that MPT and First Choice agree is reasonable and appropriate, a final date-down endorsement (the “Final Endorsement”) to MPT’s title insurance policy issued in connection with its acquisition of the Property (the “Title Policy”) (the cost of either of which shall be added to the Development Budget), bringing the effective date current, (i) which Title Evidence or Final Endorsement, as applicable, shall confirm that (A) there has been no change in the status of the title to the Property or the Improvements, (B) there has been no creation of any new encumbrance or lien on the Property, the Improvements or the proceeds of any Funding (including the Final Funding), and (C) upon delivery of the Final Funding the Property and the Improvements will be free of all mechanic’s and materialmen’s liens and other liens and encumbrances, (ii) which Final Endorsement, if applicable, shall add an ALTA 3.1

 

25

 

zoning endorsement and comprehensive endorsement (if not yet a part of the Title Policy) and such other additional endorsements reasonably required by MPT, all to the extent available in the state where the Property is located, and (iii) which Final Endorsement, if applicable, if the amount of the Title Policy is less than the actual Total Funding Amount, shall increase the coverage thereof by an amount equal to the total amount funded to the Developer under this Agreement;

 

(e)                                  MPT’s receipt of an “as built” ALTA survey (or TLTA as applicable) prepared by an engineer or surveyor licensed in the State where the Property is located in form and content reasonably acceptable to MPT, certified to ALTA standards (or TLTA as applicable), and certifying that the Completed Improvements, among other things, do not encroach upon any contiguous properties;

 

(f)                                   the completion of all Punch List items to MPT’s and the Construction Consultant’s satisfaction; and

 

(g)                                  a replacement letter of credit or amendment to the Letter of Credit to the extent required under Section 3.11(k);

 

(h)                                 without duplicating the conditions set forth in this Section 5.06, MPT’s satisfaction that the other requirements of Section 5.02 have been met.

 

5.06                        Direct Funding. The parties acknowledge and agree that regardless of whether the Developer and the First Choice Parties have submitted a request therefor, MPT shall have the option, upon giving notice to the Developer and the First Choice Parties, to make Fundings directly to the General Contractor and other payees under the Third Party Agreements and all such Fundings shall be deemed Fundings to the Developer and the First Choice Parties hereunder and shall be subject to the terms hereof to the same extent as if they were made directly to the Developer and the First Choice Parties. Notwithstanding the foregoing, if the Developer notifies MPT of a payment dispute with any such payee, MPT shall not make a Funding to such payee until notified by the Developer that such dispute has been resolved, unless MPT determines that withholding such funding will be detrimental to the Project.

 

ARTICLE VI

EVENTS OF DEFAULT; REMEDIES

 

6.01                        Events of Default by Developer or First Choice Parties. The occurrence of any of the events listed in this Section 6.01 shall constitute an “Event of Default” under this Agreement by the Developer and/or First Choice Parties, as applicable:

 

(a)                                 the failure by the Developer or either First Choice Party to perform any term, condition or covenant of this Agreement which is to be performed by it, which failure is not cured within any applicable notice or cure period, and if no notice or cure period shall apply, within thirty (30) days after demand by MPT, provided, however, that if the Developer or the applicable First Choice Party has commenced cure within such applicable thirty (30)-day period and is diligently pursuing cure in MPT’s reasonable determination, the cure period will be automatically extended for up to an additional thirty (30) days or such longer period if not capable of being cured with that time frame;

 

26

 

(b)                                 any Event of Default described in Section 3.11(h);

 

(c)                                  assignment or attempted assignment by the Developer or either First Choice Party of this Agreement, any rights hereunder, or any advance to be made hereunder, or the conveyance, lease, mortgage, or any other alienation or encumbrance of their respective interests (if any) in the Property or Improvements or any interest therein without the prior written consent of MPT, except as otherwise expressly permitted in the Transaction Documents;

 

(d)                                 the filing by the Developer or any First Choice Party of a voluntary petition in bankruptcy or the Developer’s or any such First Choice Party’s adjudication as a bankrupt or insolvent, or the filing by the Developer or any such First Choice Party of any petition or answer seeking or acquiescing in any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief for itself under any present or future federal, state or other statute, law or regulation relating to bankruptcy, insolvency or other relief for debtors, or the Developer’s or any such First Choice Party’s seeking or consenting to or acquiescence in the appointment of any trustee, receiver or liquidator of the Developer or any such First Choice Party (as applicable) or of all or any substantial part its respective property or of any or all of the rents, revenues, issues, earnings, profits or income thereof, or the making of any general assignment for the benefit of creditors or the admission in writing by the Developer or any such First Choice Party of its inability to pay its debts generally as they become due;

 

(e)                                  the entry by a court of competent jurisdiction of an order, judgment, or decree approving a petition filed against the Developer or any First Choice Party seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future federal, state or other statute, law or regulation relating to bankruptcy, insolvency, or other relief for debtors, which order, judgment or decree remains unvacated and unstayed for an aggregate of ninety (90) days (whether or not consecutive) from the date of entry thereof, or the appointment of any trustee, receiver or liquidator of the Developer or any such First Choice Party, or of all or any substantial part of their respective property or of any or all of the rents, revenues, issues, earnings, profits or income thereof which appointment shall remain unvacated and unstayed for an aggregate of ninety (90) days (whether or not consecutive);

 

(f)                                   the institution of a foreclosure action against the Property or Improvements or any part thereof under on any mortgage, deed of trust or lien created by the Developer or any First Choice Party, or the filing of a lien against the Property or Improvements or any part thereof as the result of the actions of the Developer or any First Choice Party, which is not removed of record or dismissed within ninety (90) days after the Developer or such First Choice Party receives notice of such filing, unless the Developer and such First Choice Parties have made arrangements satisfactory to MPT in its sole discretion with respect to such lien pursuant to Section 3.03(c) and no foreclosure or other possessory action against the Property or Improvements has been commenced;

 

(g)                                  failure by the Developer to cause commencement of the construction of the Project on the “Project Start Date” as defined in the Development Schedule, subject to Force Majeure Events;

 

27

 

(h)                                 failure by the Developer to cause Completion of the construction of the Improvements on or before the Project Completion Date, subject to Force Majeure Events;

 

(i)                                     the cessation of work on the construction of the Improvements for any period of fifteen (15) consecutive days, subject to Force Majeure Events; or

 

(j)                                    failure by the First Choice Parties to obtain or maintain the Letter of Credit as required by Section 3.11(k) or failure to provide MPT with a replacement letter of credit as and when required under this Agreement; or

 

(k)                                 an Event of Default or any default by any First Choice Party or their respective Affiliates shall occur under any of the other Transaction Documents or any of the Third Party Agreements.

 

Nothing herein shall require notice except as expressly set forth herein or in the other Transaction Documents. Notwithstanding the foregoing, no notice shall be required if a party is prevented from giving notice by bankruptcy or other applicable law, and the cure period, if any, shall commence with the date of such event rather than from the date of notice. Notwithstanding the foregoing, in the event of an Event of Default caused solely by Developer (other than pursuant to subsections (g) and (h) above), First Choice shall have the right to cure the Event of Default within thirty (30) days after the occurrence thereof by engaging another developer acceptable to MPT that will enter into an agreement acceptable to MPT to complete the remaining obligations of Developer hereunder.

 

6.02        Events of Default by MPT. The failure by MPT to perform any term, condition or covenant of this Agreement, which failure is not cured within any applicable notice or cure period, and if no notice or cure period shall apply, within thirty (30) days after demand by the Developer or any First Choice Party, shall constitute an “Event of Default” under this Agreement by MPT.

 

6.03        Remedies of MPT. Upon an Event of Default by the Developer or any First Choice Party hereunder, and following the expiration of any applicable notice or cure period, MPT may if it so elects, without any notice or demand to the Developer or the First Choice Parties (or to any other Person) whatsoever (which notice or demand is expressly waived, except to the extent otherwise specifically provided herein or in the other Transaction Documents), exercise any or all (or none) of the following rights and remedies (all of which rights and remedies shall be cumulative) as MPT, in its sole discretion, may deem necessary or appropriate:

 

(a)                                 terminate this Agreement (which shall be in addition to any other termination rights granted elsewhere in this Agreement);

 

(b)                                 exercise all or any of its rights or remedies granted herein or in any of the other Transaction Documents (including, but not limited to, the right to set off any or all of the obligations of the Developer and/or any First Choice Party against any or all of the property of the Developer or such First Choice Party), or such other rights and remedies which are available at law or in equity;

 

28

 

(c)                                  enter upon and take possession of the Property, together with the Improvements in the course of construction and all materials, supplies and construction facilities located thereon, and proceed either in MPT’s name, or in the name of any of the Developer or the First Choice Parties (as applicable) as the attorney-in-fact of the Developer or such First Choice Parties (which authority is coupled with an interest and is irrevocable by the Developer and the First Choice Parties), as MPT shall elect, to complete the Project. If not assigned to MPT simultaneously with the execution of this Agreement, if requested by MPT, the Developer or the First Choice Parties (as applicable) shall immediately assign to MPT, in writing, their rights under any Third Party Agreement with any Third Party; provided, however, that MPT shall have no obligation to accept any such assignment or to assume any of the Developer’s or the First Choice Parties’ obligations under any such Third Party Agreements. If MPT elects to complete or cause the Project to be completed, they may do so according to the terms of the Third Party Agreements (including the Plans and Specifications) or according to such changes, alterations or modifications in and to the Third Party Agreements and the Plans and Specifications as MPT shall deem advisable. The Developer and First Choice Parties shall be jointly and severally liable for and shall reimburse to MPT, upon demand, all costs and expenses incurred by MPT or its representatives in connection with completion of the Project and the exercise of the foregoing rights, including, without limitation, reasonable attorneys’ fees and expenses in an amount by which such costs and expenses incurred by MPT in connection with the foregoing exceed the Total Funding Amount (and subject to the Guaranty Limitation with respect to the First Choice Parties). Any amounts which shall not be reimbursed to MPT within five (5) days after demand shall bear interest thereon at the Overdue Rate;

 

(d)                                 exercise all or any of its rights or remedies granted in the Master Lease;

 

(e)                                  decline to make additional Fundings to or for the benefit of the Developer, the First Choice Parties or any other Person;

 

(f)                                   solely in connection with an Event of Default under Section 6.01(g) above, if such failure to commence construction of the Improvements by the “Project Start Date” shall continue beyond thirty (30) days after such date, subject to any Force Majeure Events, then MPT may charge the Developer and the First Choice Parties, jointly and severally (but subject to the Guaranty Limitation with respect to the First Choice Parties) a late delivery fee in the amount of One Thousand and No/100 Dollars ($1,000.00) per day for each day after the expiration of said thirty (30) day period until commencement of construction occurs; and

 

(g)                                  solely in connection with an Event of Default under Section 6.01(h) above, if such failure to Complete the Improvements shall continue beyond thirty (30) days after the Project Completion Date, subject to any Force Majeure Events, then MPT may charge the Developer and the First Choice Parties, jointly and severally (but subject to the Guaranty Limitation with respect to the First Choice Parties) a late delivery fee in the amount of Three Thousand and No/100 Dollars ($3,000.00) per day for each day after the expiration of said thirty (30) day period until Completion of the Improvements, which late delivery fee shall be deducted from the Final Funding under Section 5.05.

 

6.04                        Remedies of Developer; First Choice Parties. Upon an Event of Default by MPT, and following the expiration of any applicable notice or cure period, the Developer and the First

 

29

 

Choice Parties may, without any notice or demand to MPT (or to any other Person) whatsoever (which notice or demand is expressly waived, except to the extent otherwise specifically provided herein or in the other Transaction Documents), exercise any or all remedies at law or in equity (all of which rights and remedies shall be cumulative) as the Developer and the First Choice Parties may deem necessary or appropriate.

 

6.05                        Failure to Exercise Remedies. Neither failure nor delay on the part MPT, the Developer, or the First Choice Parties to exercise any right, remedy, power or privilege hereunder or under any Transaction Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder or under any Transaction Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The acceptance by MPT of any partial payments under the Transaction Documents made by or on behalf of the Developer or the First Choice Parties after the occurrence of an Event of Default hereunder or under any Transaction Document shall not be deemed a waiver or cure by MPT of said Event of Default unless expressly agreed in writing by MPT.

 

ARTICLE VII

DEVELOPER FEE

 

Subject to the terms and conditions of this Agreement, MPT shall pay to the Developer a fee in the amount of One Hundred Fifty Thousand and No/Dollars ($150,000.00) (the “Developer Fee”), so long as (a) the Project is proceeding in accordance with the terms, provisions and conditions of this Agreement, within the Development Budget and in accordance with the Development Schedule; (b) there shall not have occurred an Event of Default and no event has occurred which with the giving of notice or the passage of time or both would constitute such an Event of Default; and (c) the terms and conditions for funding set forth in Article V have been satisfied. Subject to the Developer’s continuing satisfaction of the foregoing, the Developer Fee shall be earned and paid to the Developer as follows: (a) on the date of MPT’s acquisition of the Property, an amount equal to Thirty-Three Percent (33%) of the Developer Fee; (ii) upon the completion of fifty percent (50%) of the construction of the Improvements, as certified by the Construction Consultant, an amount equal to Thirty-Three Percent (33%) of the Developer Fee; and (iii) on the date that the Lessee opens for business at the Facility, the remaining Thirty-Three Percent (33%) of the Developer Fee. MPT, the First Choice Parties and the Developer agree that the Developer Fee shall be included in the Development Budget.

 

ARTICLE VIII

MISCELLANEOUS

 

8.01                        Conflict of Transaction Documents. In the event of a conflict between any of the provisions any other Transaction Document with this Agreement, with respect to the subject matter hereof and such subject matter only, the provisions of this Agreement shall control.

 

8.02                        Notice. All notices, demands, consents, approvals, requests and other communications under this Agreement shall be in writing and shall be (a) delivered in person, (b) sent by certified mail, return receipt requested, (c) delivered by a recognized delivery service, or (d) sent by facsimile transmission and addressed as follows:

 

30

 

	
If to Developer:
    	
 
    
	
 
    	
 
    
	
 
    	
Attention:
    
	
 
    	
Telephone:
    
	
 
    	
Facsimile:
    
	
 
    	
 
    
	
With a copy to:
    	
 
    
	
 
    	
 
    
	
 
    	
Attention:
    
	
 
    	
Telephone:
    
	
 
    	
Facsimile:
    
	
 
    	
 
    
	
If to First Choice Parties:
    	
c/o   First Choice ER, LLC
    
	
 
    	
2491   S. Lake Vista, Suite 200
    
	
 
    	
Lewisville,   Texas 75067
    
	
 
    	
Attention:   Chief Development Officer
    
	
 
    	
Telephone:
    	
(972)   899-6666
    
	
 
    	
Facsimile:
    	
(972)   899-6664
    
	
 
    	
 
    
	
With a copy to:
    	
c/o   First Choice ER, LLC
    
	
 
    	
2491   S. Lake Vista, Suite 200
    
	
 
    	
Lewisville,   Texas 75067
    
	
 
    	
Attention:   Legal Department
    
	
 
    	
Telephone:
    	
(972)   899-6666
    
	
 
    	
Facsimile:
    	
(972)   899-6664
    
	
 
    	
 
    
	
With a copy to:
    	
DLA   Piper LLP (US)
    
	
 
    	
203   North LaSalle Street, Suite 1900
    
	
 
    	
Chicago, Illinois   60601-1293
    
	
 
    	
Attention:   Merle Teitelbaum Cowin, Esq.
    
	
 
    	
Telephone:
    	
(312)   368-4089
    
	
 
    	
Facsimile:
    	
(312)   630-7419
    
	
 
    	
 
    
	
If to MPT:
    	
c/o   MPT Operating Partnership, L.P.
    
	
 
    	
1000   Urban Center Drive, Suite 501
    
	
 
    	
Birmingham,   AL 35242
    
	
 
    	
Attention:
    	
Legal   Department
    
	
 
    	
Telephone:
    	
(205)   969-3755
    
	
 
    	
Facsimile:
    	
(205)   969-3756
    

 

31

 

	
With   a copy to:
    	
Baker,   Donelson, Bearman, Caldwell &
    
	
 
    	
Berkowitz,   PC
    
	
 
    	
420   20th Street North, Suite 1400
    
	
 
    	
Birmingham,   Alabama 35203
    
	
 
    	
Attention:
    	
Thomas   O. Kolb, Esq.
    
	
 
    	
Telephone:
    	
(205)   250-8321
    
	
 
    	
Facsimile:
    	
(205)   488-3721
    

 

or to such other address as either party may hereafter designate in writing, and shall be effective upon receipt. A notice, demand, consent, approval, request and other communication shall be deemed to be duly received if delivered in person or by a recognized delivery service, when left at the address of the recipient and if sent by facsimile, upon receipt by the sender of an acknowledgment or transmission report generated by the machine from which the facsimile was sent indicating that the facsimile was sent in its entirety to the recipient’s facsimile number; provided that if a notice, demand, consent, approval, request or other communication is served by hand or is received by facsimile on a day which is not a Business Day, or after 5:00 p.m. on any Business Day at the addressee’s location, such notice or communication shall be deemed to be duly received by the recipient at 9:00 a.m. (based upon Birmingham, Alabama time) on the first Business Day thereafter.

 

8.03                        Entire Agreement; Modification. This Agreement, including the Exhibits and Schedules attached hereto, the Transaction Documents and other written agreements and instruments executed and delivered in connection herewith by the parties, constitute the entire agreement and understanding of the parties with respect to the subject matter of this Agreement. This Agreement supersedes any prior oral or written agreements between the parties with respect to the subject matter of this Agreement. It is expressly agreed that there are no verbal understandings or agreements which in any way change the terms, covenants, and conditions set forth in this Agreement, and that no modification of this Agreement and no waiver of any of its terms and conditions shall be effective unless it is made in writing and duly executed by the parties.

 

8.04                        Severability. Inapplicability or unenforceability of any provisions of this Agreement shall not limit or impair the operation or validity of any other provision of this Agreement.

 

8.05                        Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Executed signature pages to this Agreement may be delivered by facsimile transmission or e-mail and any such signature page shall be deemed an original.

 

8.06                        Assignment. Except as expressly permitted herein, this Agreement is not assignable by any party without the prior written consent of the other parties. Notwithstanding the foregoing, MPT may at any time and without the consent of the Developer or any First Choice Party assign all of its rights and obligations hereunder to any Person other than any Person whose primary business is the provision of physician-staffed emergency room or urgent care medical services (a “Non-Permissible Assignee”); provided, however, that (a) no such assignment shall relieve or release MPT from its obligations hereunder, and (b) if there shall exist an Event of Default (under and as defined in the Master Lease), MPT may assign all of its rights and obligations to

 

32

 

any Person, including, without limitation, a Non-Permissible Assignee. Notwithstanding the foregoing, so long as no Event of Default then exists under this Agreement, the First Choice Parties may, at any time and without the consent of MPT, assign all or any portion of their respective rights and obligations hereunder to any Person in connection with (i) a Permitted Sale Transaction (as defined in the Master Lease), or (ii) any other transfer (be it by merger, consolidation, sale, assignments or otherwise) of all or substantially all of the assets of First Choice, so long as following the consummation of such transfer, the assignee of First Choice is in pro forma compliance with the covenants set forth in Section 16.1(1) of the Master Lease.

 

8.07                        No Agency Relationship. The parties acknowledge and agree that, except as expressly provided herein, nothing contained herein shall be construed to create a relationship between MPT and the Developer or the First Choice Parties, or between MPT and the General Contractor or any Third Party, of employment, partnership, joint venture, or any other joint undertaking, and MPT shall not be liable to the General Contractor or any Third Party for debts or claims accruing to such parties against the Developer or any First Choice Party; it being understood and agreed that the relationship among the various parties is that of an independent contractor.

 

8.08                        Binding Effect. This Agreement shall bind and inure to the benefit of the parties and their successors and assigns; provided, however, that this Agreement shall not inure to the benefit of any assignee pursuant to an assignment which violates the terms of this Agreement.

 

8.09                        Joint Drafting. The parties hereto and their respective counsel have participated in the drafting and redrafting of this Agreement and the general rules of construction which would construe any provisions of this Agreement in favor of or to the advantage of one party as opposed to the other as a result of one party drafting this Agreement as opposed to the other or in resolving any conflict or ambiguity in favor of one party as opposed to the other on the basis of which party drafted this Agreement are hereby expressly waived by all parties to this Agreement.

 

8.10                        Indemnification by Developer and First Choice Parties.

 

(a)           Subject to the limitations with respect to the First Choice Parties as set forth in Section 8.10(b) hereof, the Developer and the First Choice Parties jointly and severally agree to indemnify, defend and hold harmless MPT and its Affiliates, and their respective officers, managers, members, (general and limited) partners, shareholders, employees, agents and representatives (collectively, the “MPT Indemnified Parties”) from and against all demands, claims, actions, losses, damages, liabilities, penalties, taxes, costs and expenses (including, without limitation, reasonable attorneys’ and accountants’ fees, settlement costs, arbitration costs and any reasonable other expenses for investigating or defending any action or threatened action) asserted against or incurred by the MPT Indemnified Parties or any of them arising out of or in connection with or resulting from (i) any breach of, misrepresentation associated with or failure to perform under any covenant, representation, warranty or agreement under this Agreement or the other agreements contemplated hereby or thereby on the part of the Developer or any of the First Choice Parties; (ii) any act or omission of the Developer or any of the First Choice Parties, any Third Party or other contractor, subcontractor, architect, engineer, material supplier, vendor or other Person with respect to the Project; (iii) any claim or cause of action of any kind by any Third Party or other contractor, subcontractor, architect, engineer, material supplier or vendor with respect to the Project (except as otherwise expressly provided herein); (iv) any claim or

 

33

 

cause of action of any kind by any Person which would have the effect of denying MPT the full benefit or protection of any provision of any Transaction Document; or (v) any costs incurred by MPT that are not reimbursed to MPT by the General Contractor for any damages or claims suffered by MPT arising or resulting from the Construction Contract; provided, however, that the foregoing indemnity shall not apply to any matter caused by the gross negligence or willful misconduct of MPT or any Affiliate thereof.

 

(b)           Notwithstanding the joint and several nature of the obligations set forth in Section 8.10(a) hereof, (i) the obligations of the First Choice Parties (but not the Developer) for indemnification shall not in the aggregate exceed the Guaranty Limitation (except as otherwise expressly provided in the Guaranty), and (ii) the obligation of First Choice under Section 8.10(a) in respect of the Master Lease shall exclude any demands, claims, actions, losses, damages, liabilities, penalties, taxes, costs and expenses arising under the Master Lease, all of which must be pursued against First Choice (if at all) pursuant to the terms of the Master Lease and the Guaranty (as defined in the Master Lease).

 

8.11        GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS EXECUTED AND PERFORMED IN SUCH STATE, WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES.

 

8.12        JURISDICTION AND VENUE. THE PARTIES CONSENT TO PERSONAL JURISDICTION IN THE STATE OF ALABAMA AND AGREE THAT ANY ACTION OR PROCEEDING ARISING UNDER THIS AGREEMENT WILL BE BROUGHT AND TRIED EXCLUSIVELY IN THE STATE OR FEDERAL COURTS OF ALABAMA. EACH OF THE PARTIES (I) IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND (II) EXPRESSLY ACKNOWLEDGES THAT ALABAMA IS A FAIR, JUST AND REASONABLE FORUM AND AGREES NOT TO SEEK REMOVAL OR TRANSFER OF ANY ACTION FILED IN SAID COURTS. FURTHER, THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY CLAIM THAT SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY CERTIFIED MAIL ADDRESSED TO A PARTY AT THE ADDRESS SET FORTH IN SECTION 8.02 WILL BE EFFECTIVE SERVICE OF PROCESS AGAINST SUCH PARTY FOR ANY ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT. A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT MAY BE ENFORCED IN ANY OTHER COURT TO WHOSE JURISDICTION ANY OF THE PARTIES IS OR MAY BE SUBJECT.

 

8.13        WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF ANY PARTY OR ANY EXERCISE OF ANY PARTY OF THEIR RESPECTIVE RIGHTS HEREUNDER OR IN ANY WAY RELATING

 

34

 

TO THIS AGREEMENT OR THE ASSETS (INCLUDING ANY CLAIM OR DEFENSE ASSERTING THAT THIS AGREEMENT WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE). THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS AGREEMENT.

 

8.14                        Professional Fees. If either MPT, the Developer, or any First Choice Party should bring suit against any of the other parties with respect to this Agreement, then all costs and expenses (including, without limitation, actual appraisers’, accountants’, attorneys’ and other professional fees and court costs) incurred by the prevailing party therein, as determined by the judge of the court and not by the jury, shall be paid by the other parties. Notwithstanding the foregoing, nothing shall limit or impede MPT from recovering costs, fees and expenses as provided elsewhere in this Agreement, including, without limitation, pursuant to the provisions of Sections 3.04, 3.11(h), 6.03(g) and 8.15.

 

8.15                        Expenses. The Developer and the First Choice Parties are jointly and severally responsible for, and shall pay or reimburse to MPT upon demand, all reasonable expenses (including but not limited to legal, accounting, brokerage and other fees and expenses) which may be incurred by MPT with respect to this Agreement, the administration of this Agreement and the transactions contemplated hereby. All such costs and expenses (together with the Transaction Expenses and the Developer Fee) shall be included within the Development Budget; provided, that the same shall remain subject to the Total Funding Amount limitation, it being further understood and agreed that to the extent that such limitation is exceeded, the Developer and the First Choice Parties (subject to the Guaranty Limitation with respect to the First Choice Parties) shall be jointly and severally responsible for, and shall promptly pay or reimburse to MPT upon demand for, any such excess (including, without limitation, any such excess resulting from the costs and expenses described herein).

 

8.16                        Joint and Several Obligations. The Developer and the First Choice Parties shall be jointly and severally liable for all of their respective liabilities and obligations under this Agreement to the extent each is otherwise liable therefor; provided, however, that the First Choice Parties shall be subject to the Guaranty Limitation. Additionally, the Developer and each First Choice Party acknowledges and agrees that all of the representations, warranties, covenants, obligations, conditions, agreements and other terms contained in this Agreement that they each have made shall be applicable to and shall be binding upon and enforceable against any one or more or all of the Developer and the First Choice Parties.

 

8.17                        Cooperation and Assistance by the First Choice Parties. From the date hereof until the Completion, in addition to their own respective duties set forth elsewhere in this Agreement, the First Choice Parties shall assist and cooperate with the Developer in the performance of the Developer’s services hereunder, including, without limitation, (a) services relating to the design, permitting, construction and development of the Project, (b) providing MPT updates on the progress of the Project, (c) using all commercially reasonable efforts to obtain or assist Developer in obtaining all authorizations, consents, orders and approvals of all Governmental Bodies (as defined in the Master Funding and Development Agreement) and officials that are required by the Recorded Agreements or that otherwise may be or become necessary for its execution and delivery of, and the performance of the Developer’s obligations hereunder, and (d) generally coordinating with the Developer regarding the Completion of the Improvements no

 

35

 

later than the Project Completion Date, time being of the essence (subject to Force Majeure Events), and in accordance with the terms of this Agreement, the Plans and Specifications, the Development Budget and the Development Schedule.

 

8.18                        Limitation of Certain Obligations of the First Choice Parties. Notwithstanding any term or provision hereof to the contrary, all monetary obligations of the First Choice Parties under this Agreement, whether relating to cost overruns, reimbursements, indemnity claims or otherwise, shall be subject to the Guaranty Limitation.

 

8.19                        Notifications and Deliveries to MPT. It is understood and agreed by Developer and the First Choice Parties that delivery at any time of any working drawings, plans and specifications, draw requests, Proposed Change Orders, Third Party Agreements, instruments, insurance certificates, approval requests or any other documents, notices or other items to the Construction Consultant, whether delivered by Developer, any First Choice Party, the Architect or the General Contractor, shall not constitute or be deemed to constitute delivery of the same to MPT.

 

8.20                        Right to Specific Performance. Each of the parties hereto agree that irreparable damage, for which monetary damages (even if available) would not be an adequate remedy, would occur if a party breaches its obligations under this Agreement (including failing to take such actions as are required of it hereunder to consummate the transactions contemplated herein). Accordingly, each party acknowledges and agrees that the other parties shall be entitled to an injunction, specific performance and other equitable relief to prevent any such breaches of this Agreement and to enforce specifically the terms and provisions hereof, in addition to any other remedy to which they are entitled at law or in equity (including the recovery of damages from the other party), without proving actual damages or posting any bond or other security in connection with any such order or injunction. Each party agrees that it will not oppose the granting of an injunction, specific performance or other equitable relief on the basis that any other party has an adequate remedy at law or that any award of specific performance is not an appropriate remedy for any reason at law or in equity.

 

8.21                        Survival. Notwithstanding any provision of this Agreement to the contrary, the parties acknowledge and agree that, all claims against, and liabilities of, the Developer, the First Choice Parties, or MPT which relate to acts or omissions prior to the date of expiration or termination of this Agreement, and the covenants and obligations under this Agreement which expressly relate to periods after the expiration or earlier termination of this Agreement, including, without limitation, all indemnification obligations and those covenants and obligations described in Sections 3.04, 3.08(b), 5.04(a), 8.10, 8.14 and 8.15 shall survive such expiration or earlier termination.

 

8.22                        No Third Party Beneficiaries. Neither this Agreement nor any other agreement contemplated in this Agreement shall be deemed to confer upon any Person not a party to this Agreement any rights or remedies contained in this Agreement.

 

[Signatures appear on following page.]

 

36

 

IN WITNESS WHEREOF, the Developer, the First Choice Parties and MPT have caused this Agreement to be executed as of the date first set forth above.

 

	
 
    	
MPT:
    
	
 
    	
 
    
	
 
    	
MPT OF                                        ,   LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Its: Sole Member
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
				

 

Signature Page 1 of 3

of

Project Funding and Development Agreement

 

	
 
    	
FIRST CHOICE PARTIES:
    
	
 
    	
 
    
	
 
    	
FIRST CHOICE ER, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[Insert First Choice Lessee]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

Signature Page 2 of 3

of

Project Funding and Development Agreement

 

	
 
    	
DEVELOPER:
    
	
 
    	
 
    
	
 
    	
[TO BE DETERMINED]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

Signature Page 3 of 3

of

Project Funding and Development Agreement

 

EXHIBIT A

 

Description of Property

 

A-1

 

EXHIBIT B

 

Development Budget

 

(See Attached)

 

B-1

 

EXHIBIT C

 

Development Schedule

 

(See Attached)

 

C-1

 

EXHIBIT D

 

Site Plan

 

(See attached)

 

D-1

 

EXHIBIT E

 

Assignment of Third Party Agreements

 

E-1

 

EXHIBIT F

 

Recorded Agreements

 

F-1

 

EXHIBIT G

 

Draw Request Summary Form

 

(See Attached)

 

 

SCHEDULE 2.2(a)

 

INITIAL TARGET PROPERTY NOTICE

 

Information and materials for each Initial Target Property Notice shall include:

 

(1)                                 Written notice to MPT identifying the Target Property.

 

(2)                                 A fully-executed non-binding Letter of Intent or Real Estate Contract between FirstChoice Buyer and the applicable Unrelated Seller.

 

(3)                                 Market-Demand study

 

(4)                                 Executive Summary to include rationale for site selection, description of area, and planned building size and configuration.

 

(5)                                 A copy of any development agreement relating to the location and selection of the Target Property.

 

2.2(a)-1

 

SCHEDULE 2.2(b)

 

FINAL APPROVAL INFORMATION

 

(1)                                 Executive Summary describing the project in reasonable detail.

 

(2)                                 A detailed construction budget including both hard and soft costs.

 

(3)                                 If not previously delivered, a full and complete copy of the Real Estate Contract between FirstChoice Buyer and the applicable Unrelated Seller.

 

(4)                                 Copies of all materials delivered by the Unrelated Seller to FirstChoice Buyer as required under the Real Estate Contract.

 

(5)                                 An ALTA Survey in form and substance acceptable to MPT in its reasonable discretion.

 

(6)                                 A Title Commitment for the issuance of an ALTA 2006 Owner’s Policy of Title Insurance in form and substance satisfactory to MPT issued by a title insurance company acceptable to MPT and qualified to insure titles in the state where the applicable Real Property is located.

 

(7)                                 All third party reports (and/or reliance letters) relating to the applicable Real Property, including, without limitation, a seismic report and environmental report, along with MPT Reliance letters if not included in the third party reports.

 

(8)                                 Sets of site plans and specifications.

 

(9)                                 Utility letters.

 

(10)                          Zoning approvals.

 

(11)                          Storm water discharge permit.

 

(12)                          If applicable, a wetlands report and permit.

 

(13)                          Flood zone certification.

 

(14)                          If included in environmental report, a pest report in a form acceptable to MPT, showing the property to be free of termites and other destructive insects, dry rot, fungus, or other destructive agency infestation.

 

(15)                          Appraisal of the real property and any improvements, along with copies of any prior appraisals.

 

(16)                          Property tax statements and assessment notices for current and two prior years.

 

(17)                          Building permit.

 

(18)                          Architect’s Agreement.

 

2.2(b)-1

 

(19)                          To the extent available, a list of all subcontractors including license number, address, contract name, telephone number, general statement of the nature of work to be done, and the approximate dollar amount of the contract.

 

(20)                          To the extent available, copies of all permits, licenses, certificates of need, if applicable, or other governmental authorizations required in connection with the operation of the property.

 

2.2(b)-2

 

SCHEDULE 4.1(A)

 

OWNERSHIP OF FIRSTCHOICE AND OTHER EXISTING FIRSTCHOICE PARTIES

 

1.              First Choice ER, LLC:

 

A.            Preferred Ownership:

a. First Choice AIV Holding LLC (a Delaware LLC) = 98.1 % of Class A Preferred Units

b. Thomas Hall = .9% of Class A Preferred Units

c. Stephen Farber = .4% of Class A Preferred Units

d. Ron Taylor = .4% of Class A Preferred Units

e. Jeff Vender = .2% of Class A Preferred Units

f. Richard Covert = 50% of Class B Preferred Units

g. Jacob Novak = 50% of Class B Preferred Units

 

B.            Common Ownership:

a. Class A Preferred Units = 66.4% of Fully Diluted Ownership

b. Class B Preferred Units = 21.6% of Fully Diluted Ownership

c. Incentive Units = 12% of Fully Diluted Ownership

 

2.              OpFree RE Investments, Ltd.:

 

First Choice ER, LLC = 99%

 

ECC Management, LLC = 1%

 

3.              ECC Management, LLC:

 

First Choice ER, LLC = 100%

 

 

SCHEDULE 4.1(B)

 

SUBSIDIARIES

 

1.              AJNH Medical Center LLC (a Texas limited liability company);

2.              Arvada Ralston Medical Center LLC (a Texas limited liability company);

3.              Basswood Medical Center LLC (a Texas limited liability company);

4.              Center Street DP Medical Center LLC (a Texas limited liability company);

5.              Colleyville Medical Center LLC (a Texas limited liability company);

6.              Copperwood Medical Center LLC (a Texas limited liability company);

7.              Eagles Nest Medical Center LLC (a Texas limited liability company);

8.              ECC Management, LLC (a Texas limited liability company);

9.              FCER Management, LLC (a Texas limited liability company);

10.       Flower Mound ERCare Facility LLC (a Texas limited liability company);

11.       Flower Mound ERCare General Partner, LLC (a Texas limited liability company);

12.       FM Crossing Medical Center LLC (a Texas limited liability company);

13.       Garland Shiloh Medical Center LLC (a Texas limited liability company);

14.       Katy ER Center LLC (a Texas limited liability company);

15.       Kingwood Medical Center LLC (a Texas limited liability company);

16.       KPTC Medical Center LLC (a Texas limited liability company);

17.       Kuykendahl Medical Center LLC (a Texas limited liability company);

18.       Lewisville Medical Center LLC (a Texas limited liability company);

19.       Little Elm FM 423 Medical Center LLC (a Texas limited liability company);

20.       Louetta Medical Center LLC (a Texas limited liability company);

21.       Mansfield Walnut Creek Medical Center LLC (a Texas limited liability company);

22.       Matlock Medical Center LLC (a Texas limited liability company);

23.       Mesquite Town East Medical Center LLC (a Texas limited liability company);

24.       Mid-Collin Cty Medical Center LLC (a Texas limited liability company);

25.       North Dallas Tollway Medical Center LLC (a Texas limited liability company);

26.       North Powers Medical Center LLC (a Texas limited liability company);

27.       OpFree, LLC (a Texas limited liability company);

28.       OpFree Licensing, Ltd. (a Texas limited partnership);

29.       OpFree RE Investments, Ltd. (a Texas limited partnership);

30.       Pearland Parkway Medical Ctr LLC (a Texas limited liability company);

31.       Pflugerville Medical Center LLC (a Texas limited liability company);

32.       Phoenix Mountain Parkway Medical Center LLC

33.       Plano ERCare Center LLC (a Texas limited liability company);

34.       SSH Medical Center LLC (a Texas limited liability company);

35.       Sterling Ridge Medical Center LLC (a Texas limited liability company);

36.       WC Medical Center LLC (a Texas limited liability company);

37.       WCB Medical Center LLC (a Texas limited liability company);

 

 

SCHEDULE 4.4

 

CONSENTS AND APPROVALS

 

·

 

 

SCHEDULE 4.5

 

FINANCIAL STATEMENTS

 

SEE ATTACHED.

 

 

 

Financial Statements

 

December 2012 (Submitted January 18, 2013)

 

CONFIDENTIAL - For INTERNAL purposes only; not for distribution

 

 

First Choice Emergency Room

Financial Statements

December 2012 (Submitted January 18, 2013)

As prepared by Company Management

 

FCER

Summary Profit & Loss Statement

For the 12 months ending December 31, 2012

 

	
 
    	
 
    	
Year To Date
    	
 
    
	
 
    	
 
    	
Actual 2012
    	
 
    	
Reforecast (4/15)
    	
 
    	
Actual 2011
    	
 
    
	
 
    	
 
    	
Dollars
    	
 
    	
% of Rev
    	
 
    	
Dollars
    	
 
    	
% of Rev
    	
 
    	
Dollars
    	
 
    	
% of Rev
    	
 
    
	
REVENUE
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Patient Volume
    	
 
    	
54,301
    	
 
    	
 
    	
 
    	
56,101
    	
 
    	
 
    	
 
    	
48,603
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Gross Revenue
    	
 
    	
$
    	
125,413,265
    	
 
    	
100.00
    	
%
    	
$
    	
128,680,828
    	
 
    	
100.00
    	
%
    	
$
    	
78,208,837
    	
 
    	
100.00
    	
%
    
	
Gross Revenue/Patient
    	
 
    	
2,310
    	
 
    	
 
    	
 
    	
2,294
    	
 
    	
 
    	
 
    	
1,609
    	
 
    	
 
    	
 
    
	
Contractual Allowance and Bad Debt
    	
 
    	
52,889,519
    	
 
    	
42.17
    	
%
    	
57,675,266
    	
 
    	
44.82
    	
%
    	
29,989,099
    	
 
    	
38.34
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net Revenue
    	
 
    	
$
    	
72,523,746
    	
 
    	
57.83
    	
%
    	
$
    	
71,005,562
    	
 
    	
55.18
    	
%
    	
$
    	
48,219,738
    	
 
    	
61.66
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net Revenue/Patient
    	
 
    	
1,336
    	
 
    	
 
    	
 
    	
1,266
    	
 
    	
 
    	
 
    	
992
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Facility Labor Costs
    	
 
    	
$
    	
33,284,281
    	
 
    	
45.89
    	
%
    	
$
    	
35,655,254
    	
 
    	
50.21
    	
%
    	
$
    	
20,906,569
    	
 
    	
43.36
    	
%
    
	
Rent
    	
 
    	
1,297,251
    	
 
    	
1.79
    	
%
    	
2,190,337
    	
 
    	
3.08
    	
%
    	
1,039,482
    	
 
    	
2.16
    	
%
    
	
Other Facilities Expense
    	
 
    	
2,244,912
    	
 
    	
3.10
    	
%
    	
2,235,424
    	
 
    	
3.15
    	
%
    	
1,892,955
    	
 
    	
3.93
    	
%
    
	
Total Location G&A Expenses
    	
 
    	
1,112,914
    	
 
    	
1.53
    	
%
    	
1,096,726
    	
 
    	
1.54
    	
%
    	
1,073,925
    	
 
    	
2.23
    	
%
    
	
Supplies/Patient Cost
    	
 
    	
3,499,801
    	
 
    	
4.83
    	
%
    	
3,044,462
    	
 
    	
4.29
    	
%
    	
2,600,683
    	
 
    	
5.39
    	
%
    
	
Preopening Expense
    	
 
    	
375,517
    	
 
    	
0.52
    	
%
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total Field Expenses
    	
 
    	
$
    	
41,814,676
    	
 
    	
57.66
    	
%
    	
$
    	
44,222,203
    	
 
    	
62.28
    	
%
    	
$
    	
27,513,614
    	
 
    	
57.06
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Facility EBITDA
    	
 
    	
$
    	
30,709,070
    	
 
    	
42.34
    	
%
    	
$
    	
26,783,359
    	
 
    	
37.72
    	
%
    	
$
    	
20,706,124
    	
 
    	
42.94
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Corporate Labor Costs
    	
 
    	
$
    	
9,579,013
    	
 
    	
13.21
    	
%
    	
$
    	
8,326,054
    	
 
    	
11.73
    	
%
    	
$
    	
4,209,982
    	
 
    	
8.73
    	
%
    
	
HQ Rent/Utilities/Maintenance
    	
 
    	
1,030,953
    	
 
    	
1.42
    	
%
    	
887,464
    	
 
    	
1.25
    	
%
    	
618,804
    	
 
    	
1.28
    	
%
    
	
Marketing
    	
 
    	
3,322,309
    	
 
    	
4.58
    	
%
    	
3,260,406
    	
 
    	
4.59
    	
%
    	
1,303,929
    	
 
    	
2.70
    	
%
    
	
Legal/Accounting/Other Fees
    	
 
    	
2,878,403
    	
 
    	
3.97
    	
%
    	
1,881,439
    	
 
    	
2.65
    	
%
    	
811,592
    	
 
    	
1.68
    	
%
    
	
Other Corporate Overhead
    	
 
    	
1,968,570
    	
 
    	
2.71
    	
%
    	
2,006,782
    	
 
    	
2.83
    	
%
    	
897,055
    	
 
    	
1.86
    	
%
    
	
Management Fees and other expenses - Sterling
    	
 
    	
744,641
    	
 
    	
1.03
    	
%
    	
1,569,402
    	
 
    	
2.21
    	
%
    	
527,265
    	
 
    	
1.09
    	
%
    
	
Other Expenses
    	
 
    	
989,874
    	
 
    	
1.36
    	
%
    	
—
    	
 
    	
0.00
    	
%
    	
2,727,570
    	
 
    	
5.66
    	
%
    
	
Total Corporate Expenses
    	
 
    	
$
    	
20,513,763
    	
 
    	
28.29
    	
%
    	
$
    	
17,931,547
    	
 
    	
25.25
    	
%
    	
$
    	
11,096,196
    	
 
    	
23.01
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total EBITDA
    	
 
    	
$
    	
10,195,307
    	
 
    	
14.06
    	
%
    	
$
    	
8,851,811
    	
 
    	
12.47
    	
%
    	
$
    	
9,609,929
    	
 
    	
19.93
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Sterling Fees & Expenses
    	
 
    	
$
    	
744,468
    	
 
    	
1.03
    	
%
    	
$
    	
1,569,402
    	
 
    	
2.21
    	
%
    	
$
    	
527,340
    	
 
    	
1.09
    	
%
    
	
Facility Redesign
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
0.00
    	
%
    	
—
    	
 
    	
—
    	
 
    
	
Write offs for Discontinued Operations
    	
 
    	
473,214
    	
 
    	
0.65
    	
%
    	
—
    	
 
    	
0.00
    	
%
    	
—
    	
 
    	
—
    	
 
    
	
Accounting Fees
    	
 
    	
123,600
    	
 
    	
0.17
    	
%
    	
—
    	
 
    	
0.00
    	
%
    	
62,992
    	
 
    	
0.13
    	
%
    
	
Legal & Bank Fees
    	
 
    	
610,211
    	
 
    	
0.84
    	
%
    	
—
    	
 
    	
0.00
    	
%
    	
267,498
    	
 
    	
0.55
    	
%
    
	
Recruiting Expenses
    	
 
    	
969,686
    	
 
    	
1.34
    	
%
    	
—
    	
 
    	
0.00
    	
%
    	
123,000
    	
 
    	
0.26
    	
%
    
	
Consulting Fees
    	
 
    	
456,154
    	
 
    	
0.63
    	
%
    	
—
    	
 
    	
0.00
    	
%
    	
1,156
    	
 
    	
0.00
    	
%
    
	
Management Adjustments
    	
 
    	
747,858
    	
 
    	
1.03
    	
%
    	
1,187,000
    	
 
    	
1.67
    	
%
    	
2,684,437
    	
 
    	
5.57
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total Adjustments
    	
 
    	
$
    	
4,125,191
    	
 
    	
5.69
    	
%
    	
$
    	
2,756,402
    	
 
    	
3.88
    	
%
    	
$
    	
3,666,423
    	
 
    	
7.60
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Adjusted EBITDA
    	
 
    	
$
    	
14,320,498
    	
 
    	
19.75
    	
%
    	
$
    	
11,608,213
    	
 
    	
16.35
    	
%
    	
$
    	
13,276,352
    	
 
    	
27.53
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Depreciation and Amortization
    	
 
    	
$
    	
4,613,503
    	
 
    	
6.36
    	
%
    	
4,390,140
    	
 
    	
6.18
    	
%
    	
2,538,903
    	
 
    	
5.27
    	
%
    
	
Interest Expense
    	
 
    	
984,516
    	
 
    	
1.36
    	
%
    	
1,133,775
    	
 
    	
1.60
    	
%
    	
879,038
    	
 
    	
1.82
    	
%
    
	
Provision for taxes
    	
 
    	
385,210
    	
 
    	
0.53
    	
%
    	
293,365
    	
 
    	
0.41
    	
%
    	
393,453
    	
 
    	
0.82
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net Income
    	
 
    	
$
    	
4,212,078
    	
 
    	
6.27
    	
%
    	
$
    	
3,034,531
    	
 
    	
4.27
    	
%
    	
5,798,535
    	
 
    	
12.03
    	
%
    

 

2

 

First Choice Emergency Room

Financial Statements

December 2012 (Submitted January 18, 2013)

As prepared by Company Management

 

First Choice Emergency Room

Consolidated Statement of Cash Flows

For the Twelve Months Ending December 31, 2012

 

	
 
    	
 
    	
Current
    	
 
    	
Current
    	
 
    
	
 
    	
 
    	
MTD
    	
 
    	
YTD
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CASH FLOWS FROM OPERATING   ACTIVITIES:
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net income / (loss)
    	
 
    	
1,022,650
    	
 
    	
4,212,078
    	
 
    
	
Depreciation & Amortization
    	
 
    	
418,420
    	
 
    	
4,613,503
    	
 
    
	
Accounts receivable, net
    	
 
    	
(1,873,318
    	
)
    	
(1,284,342
    	
)
    
	
Other receivables and other assets
    	
 
    	
195,229
    	
 
    	
(612,672
    	
)
    
	
Accounts payable
    	
 
    	
354,343
    	
 
    	
338,914
    	
 
    
	
Accrued expenses and other liabilities
    	
 
    	
3,231,658
    	
 
    	
1,530,409
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net cash provided by operating activities
    	
 
    	
3,348,982
    	
 
    	
8,797,890
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CASH FLOWS FROM INVESTING   ACTIVITIES:
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net change in property and equipment
    	
 
    	
(4,511,709
    	
)
    	
(13,251,510
    	
)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net cash used in investing activities
    	
 
    	
(4,511,709
    	
)
    	
(13,251,510
    	
)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CASH FLOWS FROM FINANCING   ACTIVITIES:
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Proceeds from long-term borrowings-Sterling
    	
 
    	
—
    	
 
    	
(24,360,000
    	
)
    
	
Other changes in long term borrowings
    	
 
    	
—
    	
 
    	
23,003,879
    	
 
    
	
Changes in capital lease obligations
    	
 
    	
(448
    	
)
    	
(32,294
    	
)
    
	
Net proceeds from shareholders
    	
 
    	
(166,833
    	
)
    	
4,532,570
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net cash provided by (used in) financing   activities
    	
 
    	
(167,281
    	
)
    	
3,144,155
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net increase/(decrease) in cash   and cash equivalents
    	
 
    	
(1,330,008
    	
)
    	
(1,309,465
    	
)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cash and cash equivalents, beginning of period
    	
 
    	
4,785,190
    	
 
    	
4,764,647
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cash and cash equivalents, end of period
    	
 
    	
$
    	
3,455,182
    	
 
    	
$
    	
3,455,182
    	
 
    
								

 

3

 

First Choice Emergency Room

Financial Statements

December 2012 (Submitted January 18, 2013)

As prepared by Company Management

 

First Choice Emergency Room

Consolidated Statement Balance Sheet

As of December 31, 2012

 

	
 
    	
 
    	
12/31/2012
    	
 
    	
12/31/11
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ASSETS
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Current asets
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cash
    	
 
    	
3,455,182
    	
 
    	
4,764,647
    	
 
    
	
Accounts receivable, less allowance for doubtful   accounts
    	
 
    	
9,650,438
    	
 
    	
8,366,096
    	
 
    
	
Other receivables and current assets
    	
 
    	
1,962,331
    	
 
    	
1,332,971
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total current assets
    	
 
    	
15,067,951
    	
 
    	
14,463,714
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Property and equipment, net
    	
 
    	
20,059,063
    	
 
    	
9,641,067
    	
 
    
	
Goodwill and other intangibles, net
    	
 
    	
84,584,173
    	
 
    	
86,294,096
    	
 
    
	
Other long term assets
    	
 
    	
(16,688
    	
)
    	
—
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total assets
    	
 
    	
119,694,499
    	
 
    	
110,398,877
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
LIABILITIES AND OWNERS’ EQUITY
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Current liabilities
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Accounts payable
    	
 
    	
1,416,654
    	
 
    	
1,077,740
    	
 
    
	
Accrued expenses
    	
 
    	
8,853,762
    	
 
    	
7,619,653
    	
 
    
	
Current maturities of long-term debt and capital   lease obligations
    	
 
    	
3,432,000
    	
 
    	
24,393,212
    	
 
    
	
Deferred Rent
    	
 
    	
354,423
    	
 
    	
58,123
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total current liabilities
    	
 
    	
14,056,839
    	
 
    	
33,148,728
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Long-term debt and capital lease obligations, less   current maturities
    	
 
    	
19,853,434
    	
 
    	
280,637
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total liabilities
    	
 
    	
33,910,273
    	
 
    	
33,429,365
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Owner’s equity
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Founders equity
    	
 
    	
18,535,416
    	
 
    	
19,000,000
    	
 
    
	
Sterling equity
    	
 
    	
56,833,167
    	
 
    	
57,000,000
    	
 
    
	
Additional paid in capital
    	
 
    	
4,114,053
    	
 
    	
—
    	
 
    
	
Other owners’ equity
    	
 
    	
1,120,000
    	
 
    	
—
    	
 
    
	
Retained earnings
    	
 
    	
969,512
    	
 
    	
969,512
    	
 
    
	
Net income (loss)
    	
 
    	
4,212,078
    	
 
    	
—
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total owners’ equity
    	
 
    	
85,784,226
    	
 
    	
76,969,512
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total liabilities and owners’   equity
    	
 
    	
119,694,499
    	
 
    	
110,398,877
    	
 
    

 

4

 

 

Financial Statements

 

March 2013 (Submitted April 19, 2013)

 

CONFIDENTIAL - For INTERNAL purposes only; not for distribution

 

 

First Choice Emergency Room

Financial Statements

March 2013 (Submitted April 19, 2013)

As prepared by Company Management

 

FCER

Summary Profit & Loss Statement

For the 3 Months ending March 31, 2013

 

	
 
    	
 
    	
Year To Date
    	
 
    
	
 
    	
 
    	
Actual 2013
    	
 
    	
Budget 2013
    	
 
    	
Actual 2012
    	
 
    
	
 
    	
 
    	
Dollars
    	
 
    	
% of Rev
    	
 
    	
Dollars
    	
 
    	
% of Rev
    	
 
    	
Dollars
    	
 
    	
% of Rev
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Patient Volume
    	
 
    	
15,896
    	
 
    	
 
    	
 
    	
14,956
    	
 
    	
 
    	
 
    	
11,418
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net Revenue/Patient
    	
 
    	
1,356
    	
 
    	
 
    	
 
    	
1,347
    	
 
    	
 
    	
 
    	
1,291
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Gross Revenue
    	
 
    	
$
    	
36,567,756
    	
 
    	
100.00
    	
%
    	
$
    	
36,629,450
    	
 
    	
100.00
    	
%
    	
$
    	
26,324,652
    	
 
    	
100.00
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Contractual Allowance and Bad Debt
    	
 
    	
15,006,102
    	
 
    	
41.04
    	
%
    	
16,483,252
    	
 
    	
45.00
    	
%
    	
11,582,188
    	
 
    	
44.00
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net Revenue
    	
 
    	
$
    	
21,561,654
    	
 
    	
58.96
    	
%
    	
$
    	
20,146,197
    	
 
    	
55.00
    	
%
    	
$
    	
14,742,464
    	
 
    	
56.00
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Facility Labor Costs
    	
 
    	
$
    	
10,727,159
    	
 
    	
49.75
    	
%
    	
$
    	
9,973,437
    	
 
    	
49.51
    	
%
    	
$
    	
6,668,624
    	
 
    	
45.23
    	
%
    
	
Rent, including CAM
    	
 
    	
508,248
    	
 
    	
2.36
    	
%
    	
498,626
    	
 
    	
2.48
    	
%
    	
360,390
    	
 
    	
2.44
    	
%
    
	
Other Facilities Expense
    	
 
    	
751,894
    	
 
    	
3.49
    	
%
    	
792,995
    	
 
    	
3.94
    	
%
    	
544,664
    	
 
    	
3.69
    	
%
    
	
Location G&A Expenses
    	
 
    	
260,944
    	
 
    	
1.21
    	
%
    	
335,961
    	
 
    	
1.67
    	
%
    	
302,369
    	
 
    	
2.05
    	
%
    
	
Lab Fees, Supplies & Other Patient Cost
    	
 
    	
1,212,818
    	
 
    	
5.62
    	
%
    	
1,051,349
    	
 
    	
5.22
    	
%
    	
755,645
    	
 
    	
5.13
    	
%
    
	
Preopening Expense
    	
 
    	
433,941
    	
 
    	
2.01
    	
%
    	
168,127
    	
 
    	
0.83
    	
%
    	
—
    	
 
    	
—
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total Field Expenses
    	
 
    	
$
    	
13,895,004
    	
 
    	
64.44
    	
%
    	
$
    	
12,820,495
    	
 
    	
63.64
    	
%
    	
$
    	
8,631,692
    	
 
    	
58.55
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Facility EBITDA
    	
 
    	
$
    	
7,666,650
    	
 
    	
35.56
    	
%
    	
$
    	
7,325,702
    	
 
    	
36.36
    	
%
    	
$
    	
6,110,771
    	
 
    	
41.45
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Corporate Labor Costs
    	
 
    	
$
    	
2,789,196
    	
 
    	
12.94
    	
%
    	
$
    	
3,409,105
    	
 
    	
16.92
    	
%
    	
$
    	
1,738,500
    	
 
    	
11.79
    	
%
    
	
HQ Rent/Utilities/Maintenance
    	
 
    	
641,871
    	
 
    	
2.98
    	
%
    	
501,000
    	
 
    	
2.49
    	
%
    	
203,130
    	
 
    	
1.38
    	
%
    
	
Marketing
    	
 
    	
985,519
    	
 
    	
4.57
    	
%
    	
1,160,960
    	
 
    	
5.76
    	
%
    	
409,212
    	
 
    	
2.78
    	
%
    
	
Legal/Accounting/Other Fees
    	
 
    	
317,352
    	
 
    	
1.47
    	
%
    	
228,750
    	
 
    	
1.14
    	
%
    	
583,511
    	
 
    	
3.96
    	
%
    
	
IT, T&E, Bank Fees
    	
 
    	
711,146
    	
 
    	
3.30
    	
%
    	
404,361
    	
 
    	
2.01
    	
%
    	
301,892
    	
 
    	
2.05
    	
%
    
	
License, Regulatory, Insurance
    	
 
    	
21,801
    	
 
    	
0.10
    	
%
    	
47,620
    	
 
    	
0.24
    	
%
    	
16,716
    	
 
    	
0.11
    	
%
    
	
Management Fees and other expenses - Sterling
    	
 
    	
175,970
    	
 
    	
0.82
    	
%
    	
187,500
    	
 
    	
0.93
    	
%
    	
224,391
    	
 
    	
1.52
    	
%
    
	
Total Corporate Expenses
    	
 
    	
5,642,855
    	
 
    	
26.17
    	
%
    	
5,939,296
    	
 
    	
29.48
    	
%
    	
3,477,352
    	
 
    	
23.59
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total EBITDA
    	
 
    	
$
    	
2,023,795
    	
 
    	
9.39
    	
%
    	
$
    	
1,386,406
    	
 
    	
6.88
    	
%
    	
$
    	
2,633,420
    	
 
    	
17.86
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Sterling Fees & Expenses
    	
 
    	
175,970
    	
 
    	
0.82
    	
%
    	
187,500
    	
 
    	
0.93
    	
%
    	
224,391
    	
 
    	
1.52
    	
%
    
	
Preopening Expenses
    	
 
    	
939,839
    	
 
    	
4.36
    	
%
    	
712,386
    	
 
    	
3.54
    	
%
    	
—
    	
 
    	
0.00
    	
%
    
	
Legal & Bank Fees
    	
 
    	
83,469
    	
 
    	
0.39
    	
%
    	
228,750
    	
 
    	
1.14
    	
%
    	
76,600
    	
 
    	
0.52
    	
%
    
	
Recruiting Expenses
    	
 
    	
—
    	
 
    	
0.00
    	
%
    	
—
    	
 
    	
0.00
    	
%
    	
127,845
    	
 
    	
0.87
    	
%
    
	
Consulting Fees
    	
 
    	
25,000
    	
 
    	
0.12
    	
%
    	
—
    	
 
    	
0.00
    	
%
    	
—
    	
 
    	
0.00
    	
%
    
	
Management Adjustments(1)
    	
 
    	
477,156
    	
 
    	
2.21
    	
%
    	
—
    	
 
    	
0.00
    	
%
    	
33,900
    	
 
    	
0.23
    	
%
    
	
Total Adjustments
    	
 
    	
1,701,434
    	
 
    	
7.89
    	
%
    	
1,128,636
    	
 
    	
5.60
    	
%
    	
462,736
    	
 
    	
3.14
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Adjusted EBITDA
    	
 
    	
$
    	
3,725,229
    	
 
    	
17.28
    	
%
    	
$
    	
2,515,042
    	
 
    	
12.48
    	
%
    	
$
    	
3,096,156
    	
 
    	
21.00
    	
%
    

 

(1) Includes $370K for old corporate lease write off

 

2

 

First Choice Emergency Room

Financial Statements

March 2013 (Submitted April 19, 2013)

As prepared by Company Management

 

First Choice Emergency Room

Consolidated Balance Sheet

March 31, 2013

 

	
 
    	
 
    	
3/31/2013
    	
 
    	
12/31/2012
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ASSETS
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Current assets
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cash
    	
 
    	
$
    	
1,487,689
    	
 
    	
$
    	
3,455,182
    	
 
    
	
Accounts receivable, less allowance for doubtful   accounts
    	
 
    	
10,321,115
    	
 
    	
9,857,143
    	
 
    
	
Other receivables and current assets
    	
 
    	
2,055,022
    	
 
    	
1,601,241
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total current assets
    	
 
    	
13,863,826
    	
 
    	
14,913,566
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Property and equipment, net
    	
 
    	
24,372,732
    	
 
    	
20,390,925
    	
 
    
	
Goodwill and other intangibles, net
    	
 
    	
84,139,174
    	
 
    	
84,584,173
    	
 
    
	
Other long term assets
    	
 
    	
256,597
    	
 
    	
280,649
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total assets
    	
 
    	
$
    	
122,632,329
    	
 
    	
$
    	
120,169,314
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
LIABILITIES AND OWNERS’ EQUITY
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Current liabilities
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Accounts payable
    	
 
    	
$
    	
2,829,285
    	
 
    	
$
    	
1,416,654
    	
 
    
	
Accrued expenses
    	
 
    	
7,762,316
    	
 
    	
11,231,288
    	
 
    
	
Current maturities of long-term debt and capital   lease obligations
    	
 
    	
3,432,478
    	
 
    	
3,433,434
    	
 
    
	
Deferred rent
    	
 
    	
729,623
    	
 
    	
354,423
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total current liabilities
    	
 
    	
14,753,702
    	
 
    	
16,435,799
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Long-term debt and capital lease obligations, less   current maturities
    	
 
    	
23,994,000
    	
 
    	
19,852,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total liabilities
    	
 
    	
38,747,702
    	
 
    	
36,287,799
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Owner’s equity
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Founders equity
    	
 
    	
18,529,779
    	
 
    	
18,529,779
    	
 
    
	
Sterling equity
    	
 
    	
54,796,584
    	
 
    	
54,796,584
    	
 
    
	
Additional paid in capital
    	
 
    	
4,406,057
    	
 
    	
4,406,057
    	
 
    
	
Other owners’ equity
    	
 
    	
970,000
    	
 
    	
870,000
    	
 
    
	
Retained earnings
    	
 
    	
5,279,095
    	
 
    	
5,279,095
    	
 
    
	
Net income (loss)
    	
 
    	
(96,888
    	
)
    	
—
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total owners’ equity
    	
 
    	
83,884,627
    	
 
    	
83,881,515
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total liabilities and owners’   equity
    	
 
    	
$
    	
122,632,329
    	
 
    	
$
    	
120,169,314
    	
 
    

 

3

 

First Choice Emergency Room

Financial Statements

March 2013 (Submitted April 19, 2013)

As prepared by Company Management

 

First Choice Emergency Room

Consolidated Statement of Cash Flows

For the Months Ending March 31, 2013

 

	
 
    	
 
    	
Current
    	
 
    	
3 Months Ending
    	
 
    
	
 
    	
 
    	
MTD
    	
 
    	
3/31/2013
    	
 
    
	
CASH FLOWS FROM OPERATING   ACTIVITIES:
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net Income (loss)
    	
 
    	
$
    	
(430,983
    	
)
    	
$
    	
(96,888
    	
)
    
	
Loss from disposal of property and equipment
    	
 
    	
78,118
    	
 
    	
152,989
    	
 
    
	
Depreciation and amortization
    	
 
    	
696,518
    	
 
    	
1,684,109
    	
 
    
	
Amortization of deferred loan costs
    	
 
    	
8,017
    	
 
    	
24,052
    	
 
    
	
Loss on sublease
    	
 
    	
370,586
    	
 
    	
370,586
    	
 
    
	
Accounts receivable, net
    	
 
    	
(1,119,172
    	
)
    	
(463,972
    	
)
    
	
Other receivables and other assets
    	
 
    	
77,425
    	
 
    	
(453,781
    	
)
    
	
Accounts payable
    	
 
    	
659,077
    	
 
    	
1,412,631
    	
 
    
	
Accrued expenses and other liabilities
    	
 
    	
541,999
    	
 
    	
(3,464,358
    	
)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net cash provided by (used in) operating   activities
    	
 
    	
881,586
    	
 
    	
(834,633
    	
)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CASH FLOWS FROM INVESTING   ACTIVITIES:
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net change in property and equipment
    	
 
    	
(1,461,439
    	
)
    	
(5,373,904
    	
)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net cash used in investing activities
    	
 
    	
(1,461,439
    	
)
    	
(5,373,904
    	
)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CASH FLOWS FROM FINANCING   ACTIVITIES:
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Proceeds/Payments from long-term borrowings
    	
 
    	
2,000,000
    	
 
    	
5,000,000
    	
 
    
	
Payments on long-term borrowings
    	
 
    	
—
    	
 
    	
(858,000
    	
)
    
	
Payments of capital lease obligations
    	
 
    	
(239
    	
)
    	
(956
    	
)
    
	
Issuance of Class A units
    	
 
    	
100,000
    	
 
    	
100,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net cash provided by (used in) financing   activities
    	
 
    	
2,099,761
    	
 
    	
4,241,044
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net increase/(decrease) in cash   and cash equivalents
    	
 
    	
1,519,908
    	
 
    	
(1,967,493
    	
)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cash and cash equivalents, beginning of period
    	
 
    	
(32,219
    	
)
    	
3,455,182
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cash and cash equivalents, end of period
    	
 
    	
$
    	
1,487,689
    	
 
    	
$
    	
1,487,689
    	
 
    

 

4

 

SCHEDULES 4.6 (A)

 

UNDISCLOSED LIABILITIES

 

NONE.

 

 

SCHEDULES 4.6 (B)

 

GUARANTIES

 

	
1.
    	
 
    	
Guaranty — Bank of America Credit Agreement; Beneficiary — Bank of   America, Regions Bank, F&M Bank
    
	
 
    	
 
    	
 
    
	
2.
    	
 
    	
Guaranty — Shopping Center Lease Agreement (2650 Flower Mound Rd.,   Flower Mound, TX 75028); Beneficiary — Inland American Retail Management, LLC
    
	
 
    	
 
    	
 
    
	
3.
    	
 
    	
Lease Guaranty - Lease Agreement (5401 Basswood Blvd., Fort Worth, TX   76137); Beneficiary — K&E Limited Partnership
    
	
 
    	
 
    	
 
    
	
4.
    	
 
    	
Limited Guaranty - Shopping Center Lease (211 E. FM 544,   Suite 401, Murphy, TX 75094); Beneficiary — Allen & Loucks   Venture LP
    
	
 
    	
 
    	
 
    
	
5.
    	
 
    	
Guaranty - Lease (2158 Northpark Drive, Kingwood, TX 77339);   Beneficiary — BK Northpark, Ltd.
    
	
 
    	
 
    	
 
    
	
6.
    	
 
    	
Guaranty Agreement - Lease Agreement (1510 S. Mason Rd., Katy, TX   77450); Beneficiary — James A. Marsh, Trustee of the James A. Marsh Defined   Benefit Plan as to an undivided l/4th interest, Glen Volk, Trustee of the Glen   Volk Living Trust dated April 21, 1998 as to an undivided l/4th interest, Rex A. Huffman, Trustee of the Rex   A. Huffman Living Trust as to an undivided l/4th interest, and John R. Lanza and Dorine   Lanza, husbnd and wife, as joint tenants as to an undivided l/4th interest as tenants in common
    
	
 
    	
 
    	
 
    
	
7.
    	
 
    	
Lease Guaranty - Retail Lease (2770 N Powers Blvd., Colorado Springs,   CO 80922); Beneficiary — Gail W. Gelles, Trustee of the William Wagenseil   Testamentary Trust FBO Gail Gelles, Established under the William Wagenseil   Trust UTA Dated August 17, 1978, and Gail W. Gelles and Ann Martha   Chamberlin, Co-Trustees of the 2001 Gail W. Gelles Family Exempt Irrevocable   Trust UTA Dated April 10, 2001, and Gail C. Gelles, Trustee of the Gail   C. Gelles 2002 Revocable Trust dated August 26, 2002
    
	
 
    	
 
    	
 
    
	
8.
    	
 
    	
Lease Guaranty* - Lease Agreement (8200 Matlock Rd., Arlington, TX   76002); Beneficiary — K&E Limited Partnership
    
	
 
    	
 
    	
 
    
	
9.
    	
 
    	
Lease Guaranty* - Single Tenant Property Lease (3701 Center St., Deer   Park, TX 77536); Beneficiary — Wingfield Partners LLC
    
	
 
    	
 
    	
 
    
	
10.
    	
 
    	
Lease Guaranty* - Commercial Lease Agreement (5000 SH 121,   Colleyville, TX 76034); Beneficiary — SCC Colleyville Partners, Ltd.
    
	
 
    	
 
    	
 
    
	
11.
    	
 
    	
Guaranty of Lease* - Shopping Center Lease (4551 Western Ctr. Blvd.,   Ft. Worth, TX 76137) Beneficiary — WFC Beach Western Commons LLC
    

 

Schedule 4.6 - 1

 

	
12.
    	
 
    	
Guaranty* - Shopping Center Lease (6850 N. Shiloh Rd., Garland, TX   75044); Beneficiary — US Regency Retail I, LLC
    
	
 
    	
 
    	
 
    
	
13.
    	
 
    	
Lease Guaranty* - Commercial Lease Agreement (3400 Gus Thomasson Rd.,   Mesquite, TX 75150); Beneficiary — SCC Mesquite Partners, Ltd.
    
	
 
    	
 
    	
 
    
	
14.
    	
 
    	
Guaranty of Lease* - Lease (4535 Frankford Rd., Dallas, TX 75287);   Beneficiary — Wenzhold, LP
    
	
 
    	
 
    	
 
    
	
15.
    	
 
    	
Lease Guaranty* - Commercial Lease Agreement (9505 Ralston Rd.,   Arvada, CO 80002); Beneficiary — Cherry Street Acquisition Partners, LLC
    
	
 
    	
 
    	
 
    
	
16.
    	
 
    	
Lease Guaranty* - Commercial Lease Agreement (1596 W. Main St.,   Lewisville, TX 75067); SCC Lewisville Partners, Ltd.
    
	
 
    	
 
    	
 
    
	
17.
    	
 
    	
Lease Guaranty* - Commercial Lease Agreement (3830 E. Ray Rd.,   Phoenix, AZ 85044); Beneficiary — Samuelson/Hornaday
    

 

* Lease in question has been executed, but facility is not yet constructed or operating.

 

Schedule 4.6 - 2

 

SCHEDULE 4.7

 

ABSENCE OF CHANGES

 

NONE.

 

 

SCHEDULE 4.10

 

PENDING AND THREATENED LITIGATION

 

NONE.

 

 

SCHEDULE 4.11(A)(I)

 

DEVELOPMENT CONTRACTS

 

	
1.
    	
 
    	
AIA Document B101-2007 (Master Agreement) —   GSR-Andrade Architects, Inc. (01.15.2013)
    
	
 
    	
 
    	
 
    
	
2.
    	
 
    	
AIA Document B101-2007 (Master Agreement) — Ascension   Group Architects, LLP (01.16.2013)
    
	
 
    	
 
    	
 
    
	
3.
    	
 
    	
Commercial Contract of Sale — Little Elm, TX   (10.03.2012)
    
	
 
    	
 
    	
 
    
	
4.
    	
 
    	
Assignment and Assumption of Real Estate Purchase Agreement — Little Elm,   TX (12.05.2012)
    
	
 
    	
 
    	
 
    
	
5.
    	
 
    	
Project Services Agreement — Buttry & Brown   Development, LLC - Little Elm, TX (10.23.2012)
    
	
 
    	
 
    	
 
    
	
6.
    	
 
    	
Addendum to Project Services Agreement —   Buttry & Brown Development, LLC — Little Elm, TX (01.25.2013)
    
	
 
    	
 
    	
 
    
	
7.
    	
 
    	
Addendum to Project Services Agreement — Buttry &   Brown Development, LLC — 9312 Brodie Ln., Austin, TX (01.25.2013)
    
	
 
    	
 
    	
 
    
	
8.
    	
 
    	
Assignment and Assumption of Real Estate Purchase Agreement — Little   Elm, TX (04.23.2013)
    
	
 
    	
 
    	
 
    
	
9.
    	
 
    	
Purchase and Sale Agreement — 13434 Nacogdoches Rd.,   San Antonio, TX (05.02.2013)
    
	
 
    	
 
    	
 
    
	
10.
    	
 
    	
Purchase and Sale Agreement — Hwy. 78 & FM   544, Wylie, TX (04.22.2013)
    
	
 
    	
 
    	
 
    
	
11.
    	
 
    	
Purchase and Sale Agreement — Arizona Ave. &   Ocotillo Rd., Chandler, AZ (02.08.2013)
    
	
 
    	
 
    	
 
    
	
12.
    	
 
    	
Commercial Contract of Sale — 9312 Brodie Ln.,   Austin, TX (08.21.2012)
    
	
 
    	
 
    	
 
    
	
13.
    	
 
    	
Assignment and Assumption of Real Estate Purchase Agreement — 9312   Brodie Ln., Austin, TX (12.05.2012)
    
	
 
    	
 
    	
 
    
	
14.
    	
 
    	
Modification of Commercial Contract of Sale — 9312   Brodie Ln., Austin, TX (11.14.2012)
    
	
 
    	
 
    	
 
    
	
15.
    	
 
    	
Second Amendment to Commercial Contract of Sale - 9312 Brodie   Ln., Austin, TX (12.14.2012)
    
	
 
    	
 
    	
 
    
	
16.
    	
 
    	
Third Amendment to Commercial Contract of Sale - 9312 Brodie   Ln., Austin, TX (12.19.2012)
    
	
 
    	
 
    	
 
    
	
17.
    	
 
    	
Fourth Amendment to Commercial Contract of Sale - 9312 Brodie   Ln., Austin, TX (02.01.2013)
    
	
 
    	
 
    	
 
    
	
18.
    	
 
    	
Purchase and Sale Agreement — Bethany Dr. &   FM 2551, Allen, TX (03.04.2013)
    
	
 
    	
 
    	
 
    
	
19.
    	
 
    	
Purchase and Sale Agreement — Colorado &   Firestone, Firestone, CO (03.22.2013)
    
	
 
    	
 
    	
 
    
	
20.
    	
 
    	
Purchase and Sale Agreement — 13510 Meadowgrass Dr.,   Colorado Springs, CO (02.28.2013)
    

 

Schedule 4.11(A)(I)-1

 

	
21.
    	
 
    	
Contract for Purchase and Sale — 875 W. 136th Ave., Broomfield, CO (02.13.2013)
    
	
 
    	
 
    	
 
    
	
22.
    	
 
    	
Purchase and Sale Agreement — 810 N. J. Elmer Weaver   Fwy., Cedar Hill, TX (02.21.2013)
    

 

Schedule 4.11(A)(I)-2

 

SCHEDULE 4.11(A)(II)

 

EXCEPTIONS TO DEVELOPMENT CONTRACTS

 

NONE.

 

 

SCHEDULE 4.11(B)

 

MATERIAL CONTRACTS

 

NONE.

 

 

SCHEDULE 4.14

 

BROKERS

 

	
1.
    	
 
    	
Austin, TX - Edge Realty Partners (Darren Nix &   Andrew Scroggie)
    
	
 
    	
 
    	
 
    
	
2.
    	
 
    	
Colorado Springs, CO - CBRE, Inc. (Brad   Bird)
    
	
 
    	
 
    	
 
    
	
3.
    	
 
    	
Dallas/Fort Worth, TX - CBRE, Inc. (Jeff   Kittleson and Campbell Foster)
    
	
 
    	
 
    	
 
    
	
4.
    	
 
    	
Denver, CO - Legend Properties (Kyle Underwood &   Blake Skinner)
    
	
 
    	
 
    	
 
    
	
5.
    	
 
    	
Houston, TX — CBRE, Inc. (Russell Janicek, Mark   Raines & Matt Parsons)
    
	
 
    	
 
    	
 
    
	
6.
    	
 
    	
Phoenix, AZ — CBRE, Inc. (Todd Folger &   Ryan Eustice)
    
	
 
    	
 
    	
 
    
	
7.
    	
 
    	
San Antonio, TX — CBRE, Inc. (Gene Williams &   Graham Ketchum)
    

 

 

SCHEDULE 4.15

 

AGREEMENTS WITH AFFILIATES AND CERTAIN OTHER PERSONS

 

	
1.
    	
 
    	
Exclusive Management and Administrative Services Agreement
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By and between Conjugate Health PLLC, successor in interest to   Conjugate Health Professional Association, and First Choice ER, LLC.
    
	
 
    	
 
    	
 
    
	
2.
    	
 
    	
Exclusive Management and Administrative Services Agreement
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By and between Colorado Conjugate PC and First Choice ER, LLC.
    
	
 
    	
 
    	
 
    
	
3.
    	
 
    	
Advisory Services Agreement
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By and between Sterling Fund Management, LLC and First Choice ER,   LLC.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00231-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00231-of-00352.parquet"}]]