Document:

Exhibit 10.6

 

SUBSTITUTE GUARANTY AGREEMENT

 

SUBSTITUTE GUARANTY AGREEMENT, dated as of May 1, 2012 (as amended, restated, supplemented or otherwise modified and in effect from time to time, this “Guaranty”) is made and entered upon the terms hereinafter set forth by ARES COMMERCIAL REAL ESTATE CORPORATION, a Maryland corporation, whose address is c/o Ares Management LLC, 2 North LaSalle Street, Suite 925, Chicago, IL 60602, (together with its permitted successors and/or assigns, “Guarantor”), in favor of CITIBANK, N.A., a national banking association, whose address is 388 Greenwich Street, New York, New York 10013 (together with its successors and/or assigns, “Lender”), pursuant to that certain Master Loan and Security Agreement by and among ACRC Lender C LLC (“Borrower”), as borrower, and Lender, as lender, dated as of December 8, 2011 (as amended, restated, supplemented or otherwise modified and in effect from time to time, the “Loan Agreement”).

 

RECITALS

 

WHEREAS, Borrower and Lender are parties to the Loan Agreement;

 

WHEREAS, in connection with the making of the initial Loan (as defined in the Loan Agreement) by Lender, ACRC Holdings LLC, a Delaware limited liability company (“Original Guarantor”), executed and delivered that certain Guaranty Agreement, dated as of December 8, 2011, in favor of Lender (the “Original Guaranty”);

 

WHEREAS, Section 11.18 of the Loan Agreement provides that Lender shall release Original Guarantor from Guarantor’s obligations under the Original Guaranty only upon the occurrence of a Capital Markets Event (as defined in the Loan Agreement) and Lender’s receipt, of, among other things, a substitute Guaranty (as defined in the Loan Agreement); and

 

WHEREAS, a Capital Markets Event has occurred and Lender is willing to release Original Guarantor from its obligations under the Original Guaranty on the condition that Guarantor execute and deliver this Guaranty and that each of the other conditions set forth in Section 11.18 of the Loan Agreement are satisfied.

 

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged by Guarantor, Guarantor hereby agrees as follows:

 

Section 1.              Definitions.  Capitalized terms used but not defined herein shall have the meanings specified in the Loan Agreement.  As used herein, the following terms shall have the following meanings (all terms in this Section 1 or in other provisions of the Guaranty in the singular to have the same meanings when used in the plural and vice-versa):

 

1.1          “Cash” means coin or currency of the United States of America or immediately available federal funds, including such funds delivered by wire transfer.

 

1.2          “Cash Equivalents” means any of the following, to the extent owned by Guarantor or any of its Subsidiaries free and clear of all Liens and having a maturity of not greater than 90 days from the date of issuance thereof: (a) readily marketable direct obligations of the government of the United States or any agency or instrumentality thereof or obligations

 

 

unconditionally guaranteed by the full faith and credit of the government of the United States, (b) certificates of deposit of or time deposits with Lender or a member of the Federal Reserve System that issues (or the parent of which issues) commercial paper rated as described in clause (c) below, is organized under the laws of the United states or any State thereof and has combined capital and surplus of at least $500,000,000, (c) commercial paper in an aggregate amount of not more than $50,000,000 per issuer outstanding at any time, issued by any corporation organized under the laws of any State of the United States and rated at least “Prime-1” (or the then equivalent grade) by Moody’s or “A-1” (or the then equivalent grade) by S&P, (d) repurchase obligations of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than seven days with respect to securities issued or fully guaranteed or insured by the United States Government, (e) securities with maturities of 90 days or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A by Moody’s, (f) securities with maturities of 90 days or less from the date of acquisition backed by standby letters of credit issued by any commercial bank satisfying the requirements of clause (b) of this definition or (g) shares of money market mutual or similar funds which invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this definition.

 

1.3          “Cash Liquidity” means, at any date of determination, the sum of unrestricted (i) Cash plus (ii) Cash Equivalents.

 

1.4          “Consolidated Net Income” for any period means the amount of consolidated net income (or loss) of the Guarantor and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP.

 

1.5          “Contingent Liabilities” means, with respect to any Person as of any date, all of the following (without duplication) as of such date: obligations, including the Guaranteed Obligations, guaranteeing in whole or in part any Indebtedness, lease or dividend, excluding, however, (i) contractual indemnities (including, without limitation, any indemnity or price—adjustment provision relating to the purchase or sale of securities or other assets), and (ii) guarantees of non—monetary obligations which have not yet been called on or quantified, of such Person or any other Person.  The amount of any Contingent Liabilities described in the preceding clause shall be deemed to be (i) with respect to a guaranty of interest or interest and principal, or operating income guaranty, the sum of all payments required to be made thereunder (which, in the case of an operating income guaranty, shall be deemed to be equal to the debt service for the note secured thereby), through (x) in the case of a principal guaranty, the stated date of maturity of the obligation (and commencing on the date interest could first be payable thereunder), or (y) in the case of an operating income guaranty, the date through which such guaranty will remain in effect, and (ii) with respect to all guaranties not covered by the preceding clause (i), an amount equal to the stated or determinable amount of the primary obligation in respect of which such guaranty is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as recorded on the balance sheet and in the footnotes to the most recent financial statements of such Person.

 

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1.6          “Dividend Payout Ratio” means, as of a particular date, the ratio, expressed as a percentage, of (a) Guarantor Dividend Distributions, to (b) taxable income, as reported on the most recent tax filings of Guarantor, in each case for the four consecutive fiscal quarters of Guarantor most recently ended (or, in the case of the first, second or third fiscal quarter of the Guarantor for which financial statements are required to be delivered to the Lender pursuant to this Guaranty and the other Loan Documents, as the case may be, one, two or three consecutive fiscal quarters, respectively).

 

1.7          “Guarantor Dividend Distributions” means the sum, without duplication, of all dividends paid by the Guarantor on account of any common stock or preferred stock of Guarantor, except dividends, to the extent paid in additional Equity Interests of Guarantor of the same class.

 

1.8          “Investment Securities” shall mean any of the following:

 

(a)           par value of negotiable debt obligations issued by the U.S. Treasury Department having a remaining maturity of less than 1 year; or

 

(b)           par value of negotiable debt obligations issued by the U.S. Treasury Department having a remaining maturity of 1-10 years; or

 

(c)           par value of negotiable debt obligations issued by the U.S. Treasury Department having a remaining maturity of more than 10 years; or

 

(d)           par value of single-class mortgage participation certificates (“FHLMC Certificates”) in book-entry form backed by single-family residential mortgage loans, the full and timely payment of interest at the applicable certificate rate and the ultimate collection of principal of which are guaranteed by the Federal Home Loan Mortgage Corporation (excluding REMIC or other multi-class pass-through certificates, collateralized mortgage obligations, pass-through certificates backed by adjustable rate mortgages, securities paying interest or principal only and similar derivative securities); or

 

(e)           par value of single-class mortgage pass-through certificates (“FNMA Certificates”) in book-entry form backed by single-family residential mortgage loans, the full and timely payment of interest at the applicable certificate rate and ultimate collection of principal of which are guaranteed by the Federal National Mortgage Association (excluding REMIC or other multi-class pass-through certificates, pass-through certificates backed by adjustable rate mortgages collateralized mortgage obligations, securities paying interest or principal only and similar derivative securities); or

 

(f)            par value of single-class fully modified pass-through certificates (“GNMA Certificates”) in book-entry form backed by single-family residential mortgage loans, the full and timely payment of principal and interest of which is guaranteed by the Government National Mortgage Association (excluding REMIC or other multi-class pass-through certificates, collateralized mortgage obligations, pass-through certificates backed by adjustable rate mortgages, securities paying interest or principal only and similar derivatives securities); or

 

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(g)           par value of all actively and regularly traded investment-grade residential mortgage-backed securities; or

 

(h)           such other collateral as Guarantor and Lender may agree, with such valuation percentage applied thereto as Lender, in its reasonable discretion acting in good faith shall deem appropriate.

 

1.9          “Qualified Capital Commitments” means the amount of any unencumbered, unconditional capital commitments of the partners, members or shareholders, as applicable, in Guarantor that have not yet been funded (it being agreed that (a) all capital commitments of the partners, members or shareholders, as applicable, in Guarantor set forth on Exhibit A attached hereto, shall be deemed Qualified Capital Commitments and (b) the existence of any notice requirements or contribution periods or any other ministerial requirements set forth in the organizational documents of Guarantor shall not, in an of themselves, deem a capital commitment of the partners, members or shareholders, as applicable, of Guarantor not to be a Qualified Capital Commitment).

 

1.10        “REIT” means a Person that is qualified to be treated for tax purposes as a real estate investment trust under Sections 856-860 of the Internal Revenue Code.

 

1.11        “Tangible Net Worth” means, with respect to any Person and any date, (i) all amounts which would be included under capital or shareholder’s equity (or any like caption) on a consolidated balance sheet of such Person and its consolidated Subsidiaries, as determined in accordance with GAAP, plus, without duplication, (ii) all Qualified Capital Commitments plus origination fees, net of deferred origination costs, minus (a) intangible assets included in the foregoing and (b) prepaid taxes and/or expenses, all on or as of such date.

 

1.12        “Total Indebtedness” means, with respect to any Person and any date, all amounts of Indebtedness and Contingent Liabilities of such Person and its Subsidiaries on or as of such date.

 

1.13        “Total Liabilities” means, as of a particular date, all amounts that would be included under total liabilities on a balance sheet of Guarantor and its consolidated Subsidiaries at such date, determined on a consolidated basis in accordance with GAAP.

 

1.14        “Total Liquidity” means, at any date of determination, the sum of (i) Cash Liquidity plus (ii) unencumbered Investment Securities.

 

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Section 2.              Guaranty.   Guarantor hereby unconditionally and absolutely guarantees to Lender and its respective successors and assigns the full and prompt payment of all amounts due and owing by Borrower under the Loan Agreement, as and when they shall become due thereunder (the “Guaranteed Obligations”).  This is a guaranty of payment and not of collection.  The liability of Guarantor hereunder shall be direct and immediate and not conditional or contingent upon the occurrence of any event.If at any time any amounts that shall have become due and payable under the Loan Agreement (including but not limited to, (i) interest, default interest and principal payments required under Section 2 thereof, (ii) any fees due under the Fee Letter, and (iii) indemnification payments pursuant to Section 11.03  and all reimbursable out-of-pocket expenses incurred by Lender) and Borrower shall not have delivered full and timely payment to Lender as required by the Loan Agreement, Lender shall notify Guarantor in writing of the amounts that remain due and unpaid (the “Shortfall Amount”).  Guarantor shall deliver the Shortfall Amount to Lender in immediately available funds no later than three (3) Business Days after such notice is received.

 

Section 3.              Obligations Unconditional.  The obligations of Guarantor under Section 2 hereof are absolute and unconditional irrespective of the value, genuineness, validity, regularity or enforceability of the Loan Agreement or any other agreement or instrument referred to herein or therein, or any substitution, release or exchange of any other guaranty of the Guaranteed Obligations, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor (other than any payments made by Borrower, a release of the Borrower or other satisfaction in full of Borrower’s obligations under the Loan Agreement, but subject to the provisions of Section 4).  Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not alter or impair the liability of Guarantor hereunder which shall remain absolute and unconditional as described above:

 

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

 

3.2          any of the acts mentioned in any of the provisions of the Loan Agreement or any other agreement or instrument referred to herein or therein shall be done or omitted (other than any payments made by Borrower, a release of the Borrower, or other satisfaction in full of the Borrower’s obligations under the Loan Agreement, but subject to the provisions of Section 4);

 

3.3          the maturity of any of the Guaranteed Obligations shall be accelerated, or any Guaranteed Obligations due and unpaid shall be modified, supplemented or amended in any respect, or any right under the Loan Agreement or any other agreement or instrument referred to herein or therein shall be waived or any other guaranty of any of the obligations hereunder or any security therefor shall be released or exchanged in whole or in part or otherwise dealt with; or

 

3.4          any lien or security interest granted to, or in favor of Lender or Custodian, as the case may be, as security for any of the Guaranteed Obligations shall fail to be perfected.

 

Guarantor hereby expressly waives diligence, presentment, demand of payment and protest whatsoever, and any requirement that Lender exhaust any right, power or remedy or

 

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proceed against Borrower under the Loan Agreement or any other agreement or instrument referred to herein or therein, or against any other Person under any other guaranty of any of the obligations guaranteed hereunder.

 

Section 4.              Reinstatement.  The obligations of Guarantor shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of Borrower in respect of the Guaranteed Obligations is rescinded or must be otherwise restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceeding under the Bankruptcy Code or similar law (“Debtor Relief Law”) and Guarantor agrees that it will indemnify Lender on demand for all reasonable costs and expenses (including, without limitation, fees of counsel) incurred by Lender 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 a Debtor Relief Law.

 

Section 5.              Subrogation.  Upon making any payment hereunder, Guarantor shall be subrogated to the rights of Lender against Borrower and any collateral for any Guaranteed Obligations with respect to such payment; provided until such time as the Note is paid or satisfied in full, Guarantor shall not seek to enforce any right or receive any payment by way of subrogation; and further provided that such subrogation rights shall be subordinate in all respects to all amounts owing to Lender under the Loan Agreement.

 

Section 6.              Remedies.  Guarantor agrees that, as between Guarantor and Lender, the obligations of Borrower under the Loan Agreement may be declared to be forthwith due and payable as provided therein (and shall be deemed to have become automatically due and payable pursuant thereto) for purposes of Section 2 hereof, notwithstanding any stay, injunction or other prohibition preventing such declaration (or such obligations from becoming automatically due and payable) as against Borrower and that, in the event of such declaration (or such obligations being deemed to have become automatically due and payable), such obligations (whether or not due and payable by Borrower) shall forthwith become due and payable by Guarantor.

 

Section 7.              Instrument for the Payment of Money.  To the extent permitted by applicable law, Guarantor hereby acknowledges that the guaranty provided herein constitutes an instrument for the payment of money, and consents and agrees that Lender, at its sole option, in the event of a dispute by Guarantor in the payment of any moneys due hereunder, shall have the right to bring motion-action under New York CPLR Section 3213.

 

Section 8.              Continuing Guaranty.  The guaranty provided herein is a continuing guaranty, and shall apply to all Guaranteed Obligations whenever or however arising and shall survive the termination of the Loan Agreement.

 

Section 9.              General Limitation on Guaranteed Obligations.  In any action or proceeding involving any state, corporate law, or any state or Federal bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the Guaranteed Obligations would otherwise be held or determined to be void, invalid or unenforceable, or subordinated to the claims of any other creditors, on account of the amount of its liability hereunder, then, notwithstanding any other provision hereof to the contrary, the amount of such liability shall, without any further action by Guarantor or any other Person, be automatically limited and reduced to the highest amount that is valid and enforceable and not subordinated to the claims of other creditors as determined in such action or proceeding.

 

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Section 10.            Representations and Warranties.

 

10.1        Existence.  Guarantor (a) is a corporation duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has all requisite corporate or other power, and has all governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being or as proposed to be conducted, except where the lack of such licenses, authorizations, consents and approvals would not be reasonably likely to have a Material Adverse Effect, and (c) is qualified to do business and is in good standing in all other jurisdictions in which the nature of the business conducted by it makes such qualification necessary, except where failure so to qualify would not be reasonably likely (either individually or in the aggregate) to have a Material Adverse Effect.

 

10.2        Litigation.  There are no actions, suits, arbitrations, investigations (including, without limitation, any of the foregoing which are pending or, to Guarantor’s knowledge, threatened) or other legal or arbitrable proceedings affecting Guarantor or any of its Affiliates or affecting any of the Property of any of them before any Governmental Authority (a) that questions or challenges the validity or enforceability of this Guaranty or any action to be taken in connection with the transactions contemplated hereby, (b) that makes a claim or claims in an aggregate amount greater than $2,000,000, (c) which, individually or in the aggregate, if adversely determined, could reasonably be likely to have a Material Adverse Effect or (d) that requires filing with the Securities and Exchange Commission in accordance with the 1934 Act or any rules thereunder.

 

10.3        No Breach.  Neither (a) the execution and delivery of this Guaranty nor (b) the consummation of the transactions herein contemplated in compliance with the terms and provisions hereof will conflict with or result in a breach of the charter or by-laws of Guarantor, or any applicable law, rule or regulation, or any order, writ, injunction or decree of any Governmental Authority, or other material agreement or instrument to which Guarantor or any of its Affiliates is a party or by which any of them or any of their Property is bound or to which any of them is subject, or constitute a default under any such material agreement or instrument or result in the creation or imposition of any Lien upon any Property of Guarantor or any of its Subsidiaries pursuant to the terms of any such agreement or instrument.

 

10.4        Action.  Guarantor has all necessary corporate or other power, authority and legal right to execute, deliver and perform its obligations hereunder; the execution, delivery and performance by Guarantor of this Guaranty has been duly authorized by all necessary corporate or other action on its part and this Guaranty has been duly and validly executed and delivered by Guarantor and constitutes a legal, valid and binding obligation of Guarantor, enforceable against Guarantor in accordance with its terms, subject to the effect of equitable, legal or statutory principles affecting the enforcement of contractual rights and the rights of creditors generally.

 

10.5        Approvals.  No authorizations, approvals or consents of, and no filings or registrations with, any Governmental Authority or any securities exchange are necessary for the execution, delivery or performance by Guarantor hereunder or for the legality, validity or enforceability hereof.

 

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10.6        Taxes.  Guarantor and its Subsidiaries have filed all Federal income tax returns and all other tax returns that are required to be filed by them and have paid all taxes due pursuant to such returns or pursuant to any assessment received by any of them, except for any such taxes as are being appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided.  The charges, accruals and reserves on the books of Guarantor and its Subsidiaries in respect of taxes and other governmental charges are, in the opinion of Guarantor, adequate.

 

10.7        Investment Company Act.  Neither Guarantor nor any of its Subsidiaries is an “investment company”, or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

10.8        True and Complete Disclosure.  All written information furnished after the date hereof by or on behalf of Guarantor to Lender in connection with this Guaranty and the other Loan Documents and the transactions contemplated hereby and thereby will be true, complete and accurate or (in the case of projections) based on reasonable estimates, on the date as of which such information is stated or certified.

 

10.9        ERISA.  Each Plan to which Guarantor or its Subsidiaries make direct contributions, and, to the knowledge of Guarantor, each other Plan and each Multiemployer Plan is in compliance in all material respects with, and has been administered in all material respects in compliance with, the applicable provisions of ERISA, the Code and any other Federal or state law.

 

Section 11.            Covenants.

 

11.1        Financial Statements.  Guarantor covenants and agrees that so long as this Guaranty is in effect:

 

(a)           Guarantor shall furnish to Lender, at the time it furnishes each set of financial statements pursuant to Section 7.01(b) of the Loan Agreement, in addition to the requirements set forth in Section 7.01 of the Loan Agreement, a certificate of a Responsible Officer of Guarantor (i)  stating that, to the best of such Responsible Officer’s knowledge, Guarantor during such fiscal period or year has observed or performed all of its covenants and other agreements, and satisfied every condition, contained in this Guaranty to be observed, performed or satisfied by it, and that such Responsible Officer has obtained no knowledge of any default except as specified in such certificate (and, if any default has occurred and is continuing, describing the same in reasonable detail and describing the action Guarantor has taken or proposes to take with respect thereto) and (ii) showing in detail the calculations supporting such Responsible Officer’s certification of Guarantor’s compliance with the requirements of Section 11.7.

 

11.2        Litigation.  Guarantor will promptly, and in any event within 10 days after service of process on any of the following, give to Lender notice of all litigation, actions, suits, arbitrations, investigations (including, without limitation, any of the foregoing which are pending or threatened) or other legal or arbitrable proceedings affecting Guarantor before any Governmental Authority that (i) questions or challenges the validity or enforceability of any of the Loan Documents or any action to be taken in connection with the transactions contemplated

 

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hereby, (ii) makes a claim or claims in an aggregate amount greater than $2,000,000, (iii) which, individually or in the aggregate, if adversely determined, could be reasonably likely to have a Material Adverse Effect with respect to Guarantor, or (iii) requires filing with the Securities and Exchange Commission by Guarantor in accordance with the 1934 Act and any rules thereunder.

 

11.3        Existence, etc.  Guarantor will:

 

(a)           preserve and maintain its legal existence;

 

(b)           comply with the requirements of all applicable laws, rules, regulations and orders of Governmental Authorities (including, without limitation all environmental laws, all laws with respect to unfair and deceptive lending practices and predatory lending practices) if failure to comply with such requirements would be reasonably likely (either individually or in the aggregate) to have a Material Adverse Effect;

 

(c)           keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied;

 

(d)           not move its chief executive office or change its jurisdiction of organization from the jurisdiction unless it shall have provided Lender 30 days’ prior written notice of such change;

 

(e)           pay and discharge all taxes, assessments and governmental charges or levies imposed on it or on its income or profits or on any of its Property prior to the date on which penalties attach thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained in conformance with GAAP; and

 

(f)            permit representatives of Lender, on three Business Days prior notice, during normal business hours, to examine, copy and make extracts from its books and records, to inspect any of its Properties, and to discuss its business and affairs with its officers, all to the extent reasonably requested by Lender.

 

11.4        Prohibition of Fundamental Changes.  Guarantor shall not enter into any transaction of merger or consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or dissolution) or sell all or substantially all of its assets;

 

11.5        Notices.  Guarantor shall give notice to Lender (unless Borrower has already given such notice under the Loan Agreement) promptly upon receipt of notice other than from Lender or knowledge of the occurrence of any breach of a representation or warranty or the failure to observe or perform any covenant or agreement contained herein.  Each notice pursuant to this provision shall be accompanied by a statement of a Responsible Officer of Guarantor setting forth details of the occurrence referred to therein and stating what action Guarantor has taken or proposes to take with respect thereto.

 

11.6        Transactions with Affiliates.  Other than a distribution of dividends that is not otherwise prohibited hereby, Guarantor will not enter into any transaction, including without limitation any purchase, sale, lease or exchange of property or the rendering of any service, with

 

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any Affiliate unless such transaction is (a) not a violation of any provision under this Guaranty or the Loan Agreement, (b) in the ordinary course of Guarantor’s business, and (c) upon fair and reasonable terms no less favorable to Guarantor than it would obtain in a comparable arm’s length transaction with a Person which is not an Affiliate, or make a payment that is not otherwise permitted by this clause to any Affiliate.  Notwithstanding the foregoing, Lender hereby approves of the Servicing Agreement and Management Agreement with Affiliates of Guarantor.

 

11.7        Certain Financial Covenants. Guarantor shall not permit with respect to itself (and its Subsidiaries on a consolidated basis) any of the following, as determined quarterly (provided  however, for purposes of subsection (c) of this Section 11.7, as first determined on June 30, 2013 and thereafter on a quarterly basis) on a consolidated basis in conformity with GAAP:

 

(a)           Minimum Tangible Net Worth.  Guarantor’s Tangible Net Worth to be less than the sum of (x) 80% of Guarantor’s Tangible Net Worth as of the date a Capital Markets Event is consummated plus (y) 80% of the total net contributed capital actually raised (after deducting transaction costs) as a result of the issuance of Equity Interests in Guarantor subsequent to the date a Capital Markets Event is consummated;

 

(b)           Minimum Total Liquidity.  Guarantor’s Total Liquidity to be less than the greater of (x) $20,000,000 or (y) 5% of Guarantor’s Tangible Net Worth; or

 

(c)           Maximum Guarantor Dividend Distributions. Guarantor Dividend Distributions to be greater than the greater of (A) an amount necessary to achieve a Dividend Payout Ratio of 100%, or (B) such greater amount as may be required by applicable law to maintain Guarantor’s status as a REIT for tax purposes.

 

11.8        Required Filings.  Guarantor shall promptly provide Lender with copies of all documents which Guarantor or any Affiliate of Guarantor is required to file with the Securities and Exchange Commission in accordance with the 1934 Act or any rules thereunder.

 

Section 12.            Limitation of Liability.  The liability of Guarantor hereunder shall in no way be affected by (i) the release or discharge of Borrower in any creditors’, receivership, bankruptcy or other proceedings, (ii) the impairment, limitation or modification of the liability of Borrower in bankruptcy, or of any remedy for enforcement of any obligations of Lender under the Loan Agreement resulting from the operation of any present or future provision of the federal bankruptcy law or any other statute or the decision of any court, (iii) the rejection or disaffirmance of any instrument, document or agreement evidencing any of Lender’s rights or obligations under the Loan Agreement in any such proceedings, (iv) the assignment or transfer of Lender’s obligations under the Loan Agreement by Lender or (v) the cessation from any cause whatsoever of the liability of Lender with respect to any such party’s obligations under the Loan Agreement, other than on account of a satisfaction in full of the Guaranteed Obligations.

 

Section 13.            No Waiver.  No failure on the part of Lender to exercise and no course of dealing with respect to, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by Lender of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power

 

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or remedy.  The remedies herein are cumulative and not exclusive of any remedies provided by law.

 

Section 14.             Notices.  All notices, requests and demands to be made under this Guaranty shall be given in writing at the parties’ address set forth below their signature block to this Guaranty and shall be effective for all purposes if hand delivered or sent by: (i) hand delivery, with proof of attempted delivery, (ii) certified or registered United States mail, postage prepaid, (iii) expedited prepaid delivery service, either commercial or United States Postal Service, with proof of attempted delivery, or (iv) by telecopier (with answerback acknowledged) provided that such telecopied notice must also be delivered by one of the means set forth in (i), (ii) or (iii) above, to the address set forth below such parties’ signature block to this Guaranty or at such other address and person as shall be designated from time to time by any party hereto, as the case may be, in a written notice to the other parties hereto in the manner provided for in this Section 14.  Any notice, request or demand shall be deemed to have been given: (i) in the case of hand delivery, at the time of delivery, (ii) in the case of registered or certified mail, when first delivered or the first attempted delivery on a business day, (iii) in the case of expedited prepaid delivery upon the first attempted delivery on a business day, or (iv) in the case of telecopier, upon receipt of answerback confirmation transmitted on a Business Day prior to 5:30 p.m. recipient local time, and otherwise on the next succeeding Business Day, provided that such telecopied notice was also delivered as required in this Section 14.

 

Section 15.             Expenses.  Guarantor agrees to indemnify Lender for all reasonable costs and expenses of Lender (including, without limitation, the reasonable fees and expenses of legal counsel) in connection with (i) any non-payment of Shortfall Amounts as they shall become due and any enforcement or collection proceeding resulting therefrom, including, without limitation, all manner of participation in or other involvement with (x) bankruptcy, insolvency, receivership, foreclosure, winding up or liquidation proceeding, (y) judicial or regulatory proceedings and (z) workout, restructuring or other negotiations or proceedings (whether or not the workout, restructuring or transaction contemplated thereby is consummated) and (ii) the enforcement of this Section 15.

 

Section 16.             Assignment.  Guarantor may not assign its obligations hereunder without the prior written consent of Lender.  The Lender may assign its rights under this Guaranty to any successor to Lender under the Loan Agreement, and any assignment of Lender’s obligations under the Loan Agreement or any portion thereof by Lender shall operate to vest in the assignee, the rights and powers of Lender hereunder to the extent of such assignment.  This Guaranty shall be binding upon Guarantor and Guarantor’s successors and assigns, and shall inure to the benefit of Lender and its respective representatives, successors, successors-in-title and assigns.

 

Section 17.             Governing Law.

 

17.1         THIS GUARANTY AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA.  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 AND THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO § 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

 

17.2         ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR GUARANTOR ARISING OUT OF OR RELATING TO THIS GUARANTY MAY AT LENDER’S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE

 

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CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND LENDER AND GUARANTOR EACH WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND LENDER AND GUARANTOR EACH HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING.  GUARANTOR AGREES THAT SERVICE OF PROCESS UPON GUARANTOR AT THE ADDRESS FOR GUARANTOR SET FORTH HEREIN AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO GUARANTOR IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON GUARANTOR IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK.  GUARANTOR (I) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGE IN THE ADDRESS FOR GUARANTOR SET FORTH HEREIN, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE AN AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE AN AUTHORIZED AGENT IF GUARANTOR CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK.

 

Section 18.             WAIVER OF JURY TRIAL.  EACH OF THE GUARANTOR AND THE LENDER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

Section 19              LIMITATION OF DAMAGES.  EACH OF GUARANTOR AND LENDER HEREBY IRREVOCABLY AGREES THAT ANY CLAIM FOR DAMAGES ARISING HEREUNDER OR RELATED HERETO SHALL BE LIMITED TO ACTUAL DAMAGES INCURRED AND NEITHER GUARANTOR NOR LENDER SHALL BE ENTITLED, AND HEREBY IRREVOCABLY WAIVES, TO ANY CONSEQUENTIAL DAMAGES OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM ARISING HEREUNDER OR RELATED HERETO.

 

Section 20.             Amendments.  No amendment or modification hereof shall be effective unless evidenced by a writing signed by Guarantor and Lender.

 

Section 21.             Severability.  If any provision hereof is invalid and unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (i) the other provisions hereof shall remain in full force and effect in such jurisdiction and (ii) the invalidity or unenforceability of any provisions hereof in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction.

 

Section 22.             Counterparts.  This Guaranty may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Guaranty by signing any such counterpart.

 

[SIGNATURES FOLLOW]

 

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IN WITNESS WHEREOF, the undersigned has executed this Guaranty, or has caused this Guaranty to be executed by its duly authorized representative, as of the date first above written.

 

 

	
 
    	
GUARANTOR
    
	
 
    	
 
    
	
 
    	
ARES   COMMERCIAL REAL ESTATE CORPORATION, a Maryland corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   TIMOTHY B. SMITH
    
	
 
    	
Name:
    	
Timothy   B. Smith
    
	
 
    	
Title:
    	
Vice   President
    
	
 
    	
 
    	
 
    
	
 
    	
Address   for Notices:
    
	
 
    	
 
    
	
 
    	
c/o Ares Management LLC
    
	
 
    	
Two North LaSalle Street, Suite 925
    
	
 
    	
Chicago, IL 60602
    
	
 
    	
Attention: Sharon Ephraim 
    
	
 
    	
Telecopier No.: 312-324-5901
    
	
 
    	
Telephone No.: 312-324-5900
    
	
 
    	
 
    
	
 
    	
With a copy to:
    
	
 
    	
 
    
	
 
    	
c/o Ares Management LLC
    
	
 
    	
Two North LaSalle Street, Suite 925
    
	
 
    	
Chicago, IL 60602
    
	
 
    	
Attention: Legal Department
    
	
 
    	
Telecopier No.: 312-324-5901
    
	
 
    	
Telephone No.: 312-324-5900
    

 

 

ACCEPTED AND ACKNOWLEDGED:

 

LENDER

 

CITIBANK, N.A.,

a national banking association

 

 

	
By:
    	
/s/   RICHARD B. SCHLENGER
    	
 
    
	
Name:
    	
Richard   B. Schlenger
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    

 

 

Address for Notices:

 

CITIBANK, N.A.
 388 Greenwich Street
 New York, NY 10013
 Attention: Richard Schlenger
 Telecopier No.: 212-816-8307
 Telephone No.: 212-816-7806

 

with a copy to

 

Sidley Austin LLP
 787 7th Avenue New York, New York 10019
 Attn: Brian Krisberg, Esq.
 Telecopier No.: (212) 839-5599
 Telephone No.: (212) 839-8735

 

 

EXHIBIT A

 

Capital Commitments

 

Ares Investments Holdings LLC — $30,000,000Exhibit 10.1

 

EXECUTION VERSION

 

TENET HEALTHCARE CORPORATION

 

6.25% Senior Secured Notes due 2018

 

unconditionally guaranteed as to the
 payment of principal, premium,
 if any, and interest by the
 Guarantors named on Schedule I hereto

 

 

Exchange and Registration Rights Agreement

 

	
 
    	
April 30,   2012
    

 

Merrill Lynch, Pierce, Fenner & Smith Incorporated

One Bryant Park
 New York, NY 10036

 

Ladies and Gentlemen:

 

Tenet Healthcare Corporation, a Nevada corporation (the “Company”), is issuing, on the date hereof, $141,233,000 in aggregate principal amount of its 6.25% Senior Secured Notes due 2018 (the “Notes”), which are unconditionally guaranteed by the Guarantors (as defined herein), upon the terms and conditions set forth in that certain Offering Memorandum, dated April 25, 2012, as amended and supplemented, and that certain Purchase Agreement (the “Purchase Agreement”), dated as of April 25, 2012, among the Company, the Guarantors (as defined herein) and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as the Initial Purchaser (the “Initial Purchaser”).  The Notes are a reopening of the Company’s $900,000,000 6.25% Senior Secured Notes issued on November 21, 2011.  As an inducement to purchase the Notes, and in satisfaction of a condition to the obligations of the Company under the Purchase Agreement, the Company and the Guarantors agree with the Initial Purchaser, for the benefit of the holders (as defined herein) from time to time of the Registrable Securities (as defined herein), as follows:

 

1.             Certain Definitions.  For purposes of this Exchange and Registration Rights Agreement (this “Agreement”), the following terms shall have the following respective meanings:

 

“Base Interest” shall mean the interest that would otherwise accrue on the Securities under the terms thereof and the Indenture, without giving effect to the provisions of this Agreement.

 

The term “broker-dealer” shall mean any broker or dealer registered with the Commission under the Exchange Act.

 

 

“Business Day” shall have the meaning set forth in Rule 13e-4(a)(3) promulgated by the Commission under the Exchange Act, as the same may be amended or succeeded from time to time.

 

“Closing Date” shall mean the date hereof, which is the date of original issuance of the Securities.

 

“Commission” shall mean the United States Securities and Exchange Commission, or any other federal agency at the time administering the Exchange Act or the Securities Act, whichever is the relevant statute for the particular purpose.

 

“Company” shall have the meaning assigned thereto in the preamble.

 

“Consummation Date” shall have the meaning assigned thereto in Section 2(a) hereof.

 

“Effective Time” shall mean the time and date as of which the Commission declares the Exchange Registration Statement effective or as of which the Exchange Registration Statement otherwise becomes effective.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any successor thereto, as the same may be amended or succeeded from time to time.

 

“Exchange Offer” shall have the meaning assigned thereto in Section 2(a) hereof.

 

“Exchange Registration” shall have the meaning assigned thereto in Section 3(c) hereof.

 

“Exchange Registration Statement” shall have the meaning assigned thereto in Section 2(a) hereof.

 

“Exchange Securities” shall have the meaning assigned thereto in Section 2(a) hereof.

 

“FINRA” shall mean the Financial Industry Regulatory Authority, Inc.

 

“Free Trade Date” shall mean the 380th day following the Closing Date.

 

“Freely Tradable” shall mean, with respect to the Securities at any time of determination, that (a) all outstanding Securities are eligible to be sold by a person who has not been an “affiliate” (as defined in Rule 405 under the Securities Act) of the Company or any Guarantor during the preceding 90 days without any volume or manner of sale restrictions under the Securities Act, (b) the Company has provided a certificate to the Trustee instructing the Trustee that the restrictive legend on the Securities no longer applies and (c) the Securities have been assigned an unrestricted CUSIP number.

 

“Guarantors” shall have the meaning assigned thereto in the Indenture.

 

The term “holder” shall mean each of the persons who acquire Registrable Securities from time to time (including any successors or assigns), in each case for so long as such person owns any Registrable Securities.

 

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“Indenture” shall mean the Indenture, dated November 6, 2001, between the Company and The Bank of New York Mellon Trust Company, N.A., as successor to The Bank of New York, as supplemented by the Fourteenth Supplemental Indenture, dated as of November 21, 2011, among the Company, the Guarantors and the Trustee, as the same shall be supplemented or amended from time to time.

 

“Initial Purchaser” shall have the meaning assigned thereto in the preamble.

 

“Notes” shall have the meaning assigned thereto in the preamble.

 

The term “person” shall mean any individual, corporation, partnership, limited liability company, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof.

 

“Purchase Agreement” shall have the meaning assigned thereto in the preamble.

 

“Registrable Securities” shall mean the Securities; provided, however,  that a Security shall cease to be a Registrable Security upon the earliest to occur of the following: (a) in the circumstances contemplated by Section 2(a) hereof, the Security has been exchanged for an Exchange Security in an Exchange Offer as contemplated in Section 2(a) hereof (provided that any Exchange Security that, pursuant to the second to last and third to last sentences of Section 2(a), is included in a prospectus for use in connection with resales by broker-dealers shall be deemed to be a Registrable Security with respect to Sections 5, 6 and 9 until resale of such Registrable Security has been effected within the Resale Period); (b) the Securities become Freely Tradable or (c) such Security shall cease to be outstanding.

 

“Registration Default” shall have the meaning assigned thereto in Section 2(b) hereof.

 

“Registration Default Period” shall have the meaning assigned thereto in Section 2(b) hereof.

 

“Registration Expenses” shall have the meaning assigned thereto in Section 4 hereof.

 

“Resale Period” shall have the meaning assigned thereto in Section 2(a) hereof.

 

“Restricted Holder” shall mean (i) a holder that is an affiliate of the Company within the meaning of Rule 405, (ii) a holder who acquires Exchange Securities outside the ordinary course of such holder’s business, (iii) a holder who has arrangements or understandings with any person to participate in the Exchange Offer for the purpose of distributing Exchange Securities and (iv) a holder that is a broker-dealer, but only with respect to Exchange Securities received by such broker-dealer pursuant to an Exchange Offer in exchange for Registrable Securities acquired by the broker-dealer directly from the Company.

 

“Rule 144,” “Rule 405,” “Rule 415” and “Rule 433” shall mean, in each case, such rule promulgated by the Commission under the Securities Act (or any successor provision), as the same may be amended or succeeded from time to time.

 

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“Securities” shall mean the $141,233,000 in aggregate principal amount of the Company’s 6.25% Senior Secured Notes due 2018 issued on the Closing Date, and securities issued in exchange therefor or in lieu thereof pursuant to the Indenture.  Each Security is entitled to the benefit of the guarantees provided for in the Indenture (the “Guarantees”) and, unless the context otherwise requires, any reference herein to a “Security,” an “Exchange Security” or a “Registrable Security” shall include the related Guarantees.

 

“Securities Act” shall mean the Securities Act of 1933, as amended, or any successor thereto, as the same may be amended or succeeded from time to time.

 

“Special Interest” shall have the meaning assigned thereto in Section 2(b) hereof.

 

“Trust Indenture Act” shall mean the Trust Indenture Act of 1939, as amended, or any successor thereto, and the rules, regulations and forms promulgated thereunder, all as the same may be amended or succeeded from time to time.

 

“Trustee” shall mean The Bank of New York Mellon Trust Company, N.A., as trustee under the Indenture, together with any successors in such capacity.

 

Unless the context otherwise requires, any reference herein to a “Section” or “clause” refers to a Section or clause, as the case may be, of this Agreement, and the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision.

 

2.             Registration Under the Securities Act.

 

(a)           Subject to the last sentence of this Section 2(a), if the Securities have not become Freely Tradable on or before the Free Trade Date, the Company and the Guarantors agree to use all commercially reasonable efforts to (i) file under the Securities Act a registration statement relating to an offer to exchange (such registration statement, the “Exchange Registration Statement,” and such offer, the “Exchange Offer”) any and all of the Securities for a like aggregate principal amount of debt securities issued by the Company and guaranteed by the Guarantors, which debt securities and guarantees are substantially identical to the Securities and the related Guarantees, respectively (and are entitled to the benefits of a trust indenture that is substantially identical to the Indenture or is the Indenture and that has been qualified under the Trust Indenture Act), except that they have been registered pursuant to an effective registration statement under the Securities Act and do not contain provisions for the additional interest contemplated in Section 2(b) below (such new debt securities are hereinafter called “Exchange Securities”), (ii) cause the Exchange Registration Statement to become effective under the Securities Act, (iii) commence the Exchange Offer promptly after such Exchange Registration Statement has become effective, (iv) hold the Exchange Offer open for at least 20 Business Days (or longer if required by applicable law) after the date that notice of the Exchange Offer is mailed to holders of the Securities, (v) exchange Exchange Securities for all Registrable Securities that have been properly tendered and not withdrawn on or prior to the expiration of the Exchange Offer and (vi) consummate the Exchange Offer on the earliest practicable date after the Exchange Registration Statement has become effective, but in no event later than 30 Business Days thereafter (such 30th Business Day being the “Consummation Date”).  The

 

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Exchange Offer will be registered under the Securities Act on the appropriate form and will comply with all applicable tender offer rules and regulations under the Exchange Act.  The Exchange Offer will be deemed to have been “completed” only (A) if the debt securities and related guarantees received by holders other than Restricted Holders in the Exchange Offer for Registrable Securities are, upon receipt, transferable by each such holder without restriction under the Securities Act and the Exchange Act and without material restrictions under the blue sky or securities laws of a substantial majority of the states of the United States of America, and (B) upon the earlier to occur of (1) the Company having exchanged the Exchange Securities for all outstanding Registrable Securities pursuant to the Exchange Offer and (2) the Company having exchanged, pursuant to the Exchange Offer, Exchange Securities for all Registrable Securities that have been properly tendered and not withdrawn before the expiration of the Exchange Offer, which shall be on a date that is at least 20 Business Days following the commencement of the Exchange Offer.  The Company and the Guarantors agree (I) to include in the Exchange Registration Statement a prospectus for use in any resales by any holder of Exchange Securities that is a broker-dealer and (II) to keep such Exchange Registration Statement effective for a period (the “Resale Period”) beginning when Exchange Securities are first issued in the Exchange Offer and ending upon the earlier of the expiration of the 180th day after the Exchange Offer has been completed or such time as such broker-dealers no longer own any Registrable Securities.  With respect to such Exchange Registration Statement, such holders shall have the benefit of the rights of indemnification and contribution set forth in Sections 6(a), (b), (c) and (d) hereof.  The obligations of the Company and the Guarantors set forth in this Section 2(a) shall cease on the date on which the Securities become Freely Tradable.

 

(b)           If (i) the Exchange Offer has not been consummated prior to the Consummation Date, (ii) the Securities have not become Freely Tradable on or before the Free Trade Date, or (iii) any Exchange Registration Statement required by this Agreement is filed and declared effective, but shall thereafter cease to be effective or fail to be usable for its intended purpose without being succeeded by a post-effective amendment or prospectus supplement to such Exchange Registration Statement that cures such failure and that is itself declared effectively promptly (each such event referred to in clauses (i) through (iii), a “Registration Default,” and the period during which a Registration Default has occurred and is continuing, the “Registration Default Period”), then, as liquidated damages for such Registration Default, subject to the provisions of Section 8(b), special interest (“Special Interest”), in addition to the Base Interest, shall accrue at a per annum rate of 0.25% for the first 90 days of the Registration Default Period, at a per annum rate of 0.50% for the second 90 days of the Registration Default Period, at a per annum rate of 0.75% for the third 90 days of the Registration Default Period and at a per annum rate of 1.0% thereafter for the remaining portion of the Registration Default Period, provided that in no event shall the Company be required to pay Special Interest for more than one Registration Default at any given time.  The Registration Default Period shall terminate on the date on which (i) the Securities become Freely Tradable or (ii) the Exchange Registration Statement has been declared effective and the Exchange Offer has been consummated.  Special Interest shall not accrue as a result of the Company’s failure to provide a certificate to the Trustee instructing the Trustee that the restrictive legend on the Securities no longer applies unless the Company has received a request to do so by a holder of Securities or the Trustee on or after the 365th day after the Closing Date; provided that if the Company receives such a request on or after the fifth Business Day immediately preceding the Free Trade Date and the restrictive legend on the Securities has not been removed by the close of business on the fifth Business Day

 

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thereafter, Special Interest shall accrue as provided in this Section 2(b) until the date on which (i) the Securities become Freely Tradable or (ii) the Exchange Registration Statement has been declared effective and the Exchange Offer has been consummated.

 

(c)           The Company shall take, and shall cause the Guarantors to take, all actions necessary or advisable to be taken to ensure that the transactions contemplated herein are effected as so contemplated, including all actions necessary or desirable to register the Guarantees under the Exchange Registration Statement contemplated in Section 2(a) hereof.

 

(d)           Any reference herein to a registration statement or prospectus as of any time shall be deemed to include any document incorporated, or deemed to be incorporated, therein by reference as of such time and any reference herein to any post-effective amendment to a registration statement or to any prospectus supplement as of any time shall be deemed to include any document incorporated, or deemed to be incorporated, therein by reference as of such time.

 

3.             Registration Procedures.

 

If the Company and the Guarantors file a registration statement pursuant to Section 2(a), the following provisions shall apply:

 

(a)           At or before the Effective Time of the Exchange Registration, the Company and the Guarantors shall qualify the Indenture under the Trust Indenture Act.

 

(b)           In the event that such qualification would require the appointment of a new trustee under the Indenture, the Company and the Guarantors shall appoint a new trustee thereunder pursuant to the applicable provisions of the Indenture.

 

(c)           In connection with the Company’s and the Guarantors’ obligations with respect to the registration of Exchange Securities as contemplated by Section 2(a) (the “Exchange Registration”), if applicable, the Company and the Guarantors shall, as soon as practicable (or as otherwise specified):

 

(i)            prepare and file with the Commission an Exchange Registration Statement on any form that may be utilized by the Company and the Guarantors and that shall permit the Exchange Offer and resales of Exchange Securities by broker-dealers during the Resale Period to be effected as contemplated by Section 2(a), and use all commercially reasonable efforts to cause such Exchange Registration Statement to become effective;

 

(ii)           prepare and file with the Commission such amendments and supplements to such Exchange Registration Statement and the prospectus included therein as may be necessary to effect and maintain the effectiveness of such Exchange Registration Statement for the periods and purposes contemplated in Section 2(a) hereof and as may be required by the applicable rules and regulations of the Commission and the instructions applicable to the form of such Exchange Registration Statement, and promptly provide each broker-dealer holding Exchange Securities with such number of copies of the prospectus included therein (as then amended or supplemented), in

 

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conformity in all material respects with the requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder, as such broker-dealer reasonably may request prior to the expiration of the Resale Period, for use in connection with resales of Exchange Securities;

 

(iii)          notify each broker-dealer that has requested or received copies of the prospectus included in such Exchange Registration Statement, and confirm such advice in writing, (A) when such Exchange Registration Statement or the prospectus included therein or any prospectus amendment or supplement or post-effective amendment has been filed, and, with respect to such Exchange Registration Statement or any post-effective amendment, when the same has become effective, (B) of any comments by the Commission and by the blue sky or securities commissioner or regulator of any state with respect thereto or any request by the Commission for amendments or supplements to such Exchange Registration Statement or prospectus or for additional information, (C) of the issuance by the Commission of any stop order suspending the effectiveness of such Exchange Registration Statement or the initiation or threatening of any proceedings for that purpose, (D) if at any time the representations and warranties of the Company and the Guarantors contemplated by Section 5 cease to be true and correct in all material respects, (E) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Exchange Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, or (F) at any time during the Resale Period when a prospectus is required to be delivered under the Securities Act, that such Exchange Registration Statement, prospectus, prospectus amendment or supplement or post-effective amendment does not conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder or contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;

 

(iv)          in the event that the Company and the Guarantors would be required, pursuant to Section 3(c)(iii)(F) above, to notify any broker-dealers holding Exchange Securities, prepare and furnish to each such holder a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to purchasers of such Exchange Securities during the Resale Period, such prospectus shall conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder and shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;

 

(v)           use all commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of such Exchange Registration Statement or any post-effective amendment thereto at the earliest practicable date;

 

(vi)          use all commercially reasonable efforts to (A) register or qualify the Exchange Securities under the securities laws or blue sky laws of such jurisdictions as

 

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are contemplated by Section 2(a) no later than the commencement of the Exchange Offer, (B) keep such registrations or qualifications in effect and comply with such laws so as to permit the continuance of offers, sales and dealings therein in such jurisdictions until the expiration of the Resale Period and (C) take any and all other actions as may be reasonably necessary or advisable to enable each broker-dealer holding Exchange Securities to consummate the disposition thereof in such jurisdictions; provided, however,  that neither the Company nor any of the Guarantors shall be required for any such purpose to (1) qualify as a foreign corporation in any jurisdiction wherein it would not otherwise be required to qualify but for the requirements of this Section 3(c)(vi), (2) consent to general service of process in any such jurisdiction or (3) in the case of the Company, make any changes to its certificate of incorporation or bylaws or any agreement between it and its stockholders, and in the case of the Guarantors, make any changes to (x) the certificate (or articles) of incorporation, certificate (or articles) of organization, certificate (or articles) of formation or certificate of limited partnership, as the case may be, and any amendments thereto, of any Guarantor, (y) the bylaws, limited liability company agreement, operating agreement or partnership agreement, as the case may be, and any amendments thereto, of any Guarantor or (z) any agreement between any Guarantor and its stockholders, shareholders, members or partners;

 

(vii)         use all commercially reasonable efforts to obtain the consent or approval of each governmental agency or authority, whether federal, state or local, that may be required to effect the Exchange Registration, the Exchange Offer and the offering and sale of Exchange Securities by broker-dealers during the Resale Period;

 

(viii)        provide a CUSIP number for all Exchange Securities, not later than the applicable Effective Time; and

 

(ix)          comply with all applicable rules and regulations of the Commission, and make generally available to its security holders as soon as practicable but no later than 18 months after the Effective Time of such Exchange Registration Statement, an earnings statement of the Company and its subsidiaries complying with Section 11(a) of the Securities Act (including, at the option of the Company, Rule 158 thereunder).

 

(d)           Until the expiration of one year after the Closing Date, the Company and the Guarantors will not, and will not permit any of their “affiliates” (as defined in Rule 144) to, resell any of the Securities that have been acquired by any of them except pursuant to an effective registration statement under the Securities Act.

 

4.             Registration Expenses.

 

The Company and the Guarantors agree to bear and to pay or cause to be paid promptly all expenses incident to the Company’s and the Guarantors’ performance of or compliance with this Agreement, including, without limitation, (a) all Commission and any FINRA registration, filing and review fees and expenses including fees and disbursements of counsel for the placement or sales agent or underwriters in connection with such registration, filing and review; (b) all expenses relating to the preparation, printing, production, distribution and reproduction of

 

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each registration statement required to be filed hereunder, each prospectus included therein or prepared for distribution pursuant hereto, each amendment or supplement to the foregoing, the expenses of preparing the Securities for delivery and the expenses of printing or producing any blue sky or legal investment memoranda and all other documents in connection with the offering, sale or delivery of Securities to be disposed of (including certificates representing the Securities); (c) messenger, telephone and delivery expenses relating to the offering, sale or delivery of Securities and the preparation of documents referred in clause (b) above; (d) fees and expenses of the Trustee under the Indenture, any agent of the Trustee and any counsel for the Trustee and of any collateral agent or custodian; (e) internal expenses (including all salaries and expenses of the Company’s or Guarantors’ officers and employees performing legal or accounting duties); (f) fees, disbursements and expenses of counsel and independent registered public accountants of the Company (including the expenses of any opinions or “comfort” letters required by or incident to such performance and compliance); (g) any fees charged by securities rating services for rating the Securities; and (h) fees, expenses and disbursements of any other persons, including special experts, retained by the Company or its Guarantors in connection with this Agreement (collectively, the “Registration Expenses”).  To the extent that any reasonable fees are incurred, assumed or paid by any holder of Registrable Securities or its counsel, the Company or its Guarantors shall reimburse such person for the full amount of such reasonable fees so incurred, assumed or paid promptly after receipt of a request therefor.  Notwithstanding the foregoing, the holders of the Registrable Securities being registered shall pay all agency fees and commissions attributable to the sale of such Registrable Securities.

 

5.             Representations and Warranties.

 

Each of the Company and the Guarantors, jointly and severally, represents and warrants to, and agrees with, the Initial Purchaser and each of the holders from time to time of Registrable Securities that:

 

(a)           Each registration statement covering Registrable Securities and each prospectus (including any preliminary or summary prospectus) contained therein or furnished pursuant to Section 3(c) hereof and any further amendments or supplements to any such registration statement or prospectus, when it becomes effective or is filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and at all times subsequent to the Effective Time when a prospectus would be required to be delivered under the Securities Act, other than from (i) such time as a notice has been given to holders of Registrable Securities pursuant to Section 3(c)(iii)(F) hereof until (ii) such time as the Company furnishes an amended or supplemented prospectus pursuant to Section 3(c)(iv) hereof, each such registration statement, and each prospectus (including any summary prospectus) contained therein or furnished pursuant to Section 3(c) hereof, as then amended or supplemented, will conform in all material respects to the requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing; provided, however,  that this representation and warranty shall not apply to any statements or omissions

 

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made in reliance upon and in conformity with information furnished in writing to the Company by a holder of Registrable Securities expressly for use therein.

 

(b)           Any documents incorporated by reference in any prospectus referred to in Section 5(a) hereof, when they become or became effective or are or were filed with the Commission, as the case may be, will conform or conformed in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and none of such documents will contain or contained an untrue statement of a material fact or will omit or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by a holder of Registrable Securities expressly for use therein.

 

(c)           The compliance by the Company and the Guarantors with all of the provisions of this Agreement and the consummation of the transactions herein contemplated will not: (i) conflict with or result in a material breach of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any subsidiary of the Company is a party or by which the Company or any subsidiary of the Company is bound or to which any of the property or assets of the Company or any subsidiary of the Company is subject; (ii) result in any violation of the provisions of the articles of incorporation, as amended, or the bylaws of the Company; the certificate (or articles) of incorporation, certificate (or articles) of organization, certificate (or articles) of formation or certificate of limited partnership, as the case may be, and any amendments thereto, of any Guarantor; the bylaws, limited liability company agreement, operating agreement or partnership agreement, as the case may be, and any amendments thereto, of any Guarantor; or (iii) result in any material violation of any law or statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any subsidiary of the Company or any of their properties.  No consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the consummation by the Company and the Guarantors of the transactions contemplated by this Agreement, except the registration under the Securities Act of the Securities, the qualification of the Indenture under the Trust Indenture Act and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or blue sky laws in connection with the offering and distribution of the Securities.

 

(d)           This Agreement has been duly authorized, executed and delivered by the Company and each Guarantor.

 

6.             Indemnification.

 

(a)           Indemnification by the Company and the Guarantors.  The Company and the Guarantors, jointly and severally, will indemnify and hold harmless each of the holders of Registrable Securities included in an Exchange Registration Statement, and each person who participates as a placement or sales agent or as an underwriter in any offering or sale of such Registrable Securities against any losses, claims, damages or liabilities, joint or several, to which such holder, agent or underwriter may become subject under the Securities Act or otherwise,

 

10

 

insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Exchange Registration Statement under which such Registrable Securities were registered under the Securities Act, or any preliminary, final or summary prospectus (including, without limitation, any “issuer free writing prospectus” as defined in Rule 433) contained therein or furnished by the Company to any such holder, agent or underwriter, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse such holder, such agent and such underwriter for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that neither the Company nor any Guarantor shall be liable to any such person in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any registration statement contemplated hereunder, or preliminary, final or summary prospectus (including, without limitation, any “issuer free writing prospectus” as defined in Rule 433), or amendment or supplement thereto, in reliance upon and in conformity with written information furnished to the Company by such person expressly for use therein.

 

(b)           Notices of Claims, Etc. Promptly after receipt by an indemnified party under subsection (a) above of written notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party pursuant to the indemnification provisions of or contemplated by this Section 6, notify such indemnifying party in writing of the commencement of such action; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under the indemnification provisions of or contemplated by Section 6(a) hereof.  In case any such action shall be brought against any indemnified party and it shall notify an indemnifying party of the commencement thereof, such indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, such indemnifying party shall not be liable to such indemnified party for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation.  No indemnifying party shall, without the prior written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

 

(c)           Contribution.  If for any reason the indemnification provisions contemplated by Section 6(a) are unavailable to or insufficient to hold harmless an indemnified

 

11

 

party in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations.  The relative fault of such indemnifying party and indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by such indemnifying party or by such indemnified party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  The parties hereto agree that it would not be just and equitable if contributions pursuant to this Section 6(c) were determined by pro rata allocation (even if the holders or any agents or underwriters or all of them were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in this Section 6(c).  The amount paid or payable by an indemnified party as a result of the losses, claims, damages, or liabilities (or actions in respect thereof) referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim.  Notwithstanding the provisions of this Section 6(c), no holder shall be required to contribute any amount in excess of the amount by which the dollar amount of the proceeds received by such holder from the sale of any Registrable Securities (after deducting any fees, discounts and commissions applicable thereto) exceeds the amount of any damages that such holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission, and no underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that such underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.  The holders’ obligations in this Section 6(c) to contribute shall be several in proportion to the principal amount of Registrable Securities registered by them and not joint.

 

(d)           The obligations of the Company and the Guarantors under this Section 6 shall be in addition to any liability which the Company or the Guarantors may otherwise have and shall extend, upon the same terms and conditions, to each officer, director and partner of each holder, agent and underwriter and each person, if any, who controls any holder, agent or underwriter within the meaning of the Securities Act; and the obligations of the holders and any agents or underwriters contemplated by this Section 6 shall be in addition to any liability which the respective holder, agent or underwriter may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company or any Guarantor (including any person who, with his consent, is named in any registration statement as about to become a director of the Company or any Guarantor) and to each person, if any, who controls the Company within the meaning of the Securities Act.

 

12

 

7.             Rule 144.

 

The Company covenants to the holders of Registrable Securities that to the extent it shall be required to do so under the Exchange Act, the Company shall timely file the reports required to be filed by it under the Exchange Act or the Securities Act (including the reports under Section 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted by the Commission under the Securities Act) and the rules and regulations adopted by the Commission thereunder, and shall take such further action as any holder of Registrable Securities may reasonably request, all to the extent required from time to time to enable such holder to sell Registrable Securities without registration under the Securities Act within the limitations of the safe harbor provided by Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar or successor rule or regulation hereafter adopted by the Commission.  Upon the request of any holder of Registrable Securities in connection with that holder’s sale pursuant to Rule 144, the Company shall deliver to such holder a written statement as to whether it has complied with such requirements.

 

8.             Miscellaneous.

 

(a)           No Inconsistent Agreements.  The Company and each Guarantor represents, warrants, covenants and agrees that it has not granted, and shall not grant, registration rights with respect to Registrable Securities or any other securities which would be inconsistent with the terms contained in this Agreement.

 

(b)           Specific Performance.  The parties hereto acknowledge that there would be no adequate remedy at law if the Company or any Guarantor fails to perform any of its obligations hereunder and that the Initial Purchaser and the holders from time to time of the Registrable Securities may be irreparably harmed by any such failure, and accordingly agree that the Initial Purchaser and such holders, in addition to any other remedy to which they may be entitled at law or in equity, shall be entitled to seek specific performance of the obligations of the Company and the Guarantors under this Agreement in accordance with the terms and conditions of this Agreement, in any court of the United States or any state thereof having jurisdiction.

 

(c)           Notices.  All notices, requests, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered by hand, if delivered personally or by courier, or three days after being deposited in the mail (registered or certified mail, postage prepaid, return receipt requested) as follows:  If to the Company, to it at 1445 Ross Avenue, Suite 1400, Dallas, Texas 75202, Attention:  Chief Financial Officer, and if to a holder, to the address of such holder set forth in the security register or other records of the Company, or to such other address as the Company or any such holder may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

 

(d)           Parties in Interest.  All the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto and the holders from time to time of the Registrable Securities and the respective successors and assigns of the parties hereto and such holders.  In the event that any transferee of any holder of Registrable Securities shall acquire Registrable Securities, in any manner, whether by gift, bequest, purchase, operation of law or otherwise, such transferee shall, without any further writing or action of any kind, be deemed a beneficiary hereof for all purposes and such

 

13

 

Registrable Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such Registrable Securities such transferee shall be entitled to receive the benefits of, and be conclusively deemed to have agreed to be bound by all of the applicable terms and provisions of this Agreement.  If the Company shall so request, any such successor, assign or transferee shall agree in writing to acquire and hold the Registrable Securities subject to all of the applicable terms hereof.

 

(e)           Survival.  The respective indemnities, agreements, representations, warranties and each other provision set forth in this Agreement or made pursuant hereto shall remain in full force and effect regardless of any investigation (or statement as to the results thereof) made by or on behalf of any holder of Registrable Securities, any director, officer or partner of such holder, any agent or underwriter or any director, officer or partner thereof, or any controlling person of any of the foregoing, and shall survive delivery of and payment for the Registrable Securities pursuant to the Purchase Agreement and the transfer and registration of Registrable Securities by such holder and the consummation of an Exchange Offer.

 

(f)            Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

 

(g)           Headings.  The descriptive headings of the several sections and paragraphs of this Agreement are inserted for convenience only, do not constitute a part of this Agreement and shall not affect in any way the meaning or interpretation of this Agreement.

 

(h)           Entire Agreement; Amendments.  This Agreement and the other writings referred to herein (including the Indenture, the Purchase Agreement and the form of Securities) or delivered pursuant hereto which form a part hereof contain the entire understanding of the parties with respect to its subject matter.  This Agreement supersedes all prior agreements and understandings between the parties with respect to its subject matter.  This Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a written instrument duly executed by the Company, the Guarantors and the holders of at least a majority in aggregate principal amount of the Registrable Securities at the time outstanding.  Each holder of any Registrable Securities at the time or thereafter outstanding shall be bound by any amendment or waiver effected pursuant to this Section 8(h), whether or not any notice, writing or marking indicating such amendment or waiver appears on such Registrable Securities or is delivered to such holder.

 

(i)            Inspection.  For so long as this Agreement shall be in effect, this Agreement and a complete list of the names and addresses of all the holders of Registrable Securities shall be made available for inspection and copying on any Business Day by any holder of Registrable Securities for proper purposes only (which shall include any purpose related to the rights of the holders of Registrable Securities under the Securities, the Indenture and this Agreement) at the offices of the Company at the address thereof set forth in Section 8(c) above and at the office of the Trustee under the Indenture.

 

(j)            Counterparts.  This Agreement may be executed by the parties in counterparts, each of which shall be deemed to be an original, but all such respective

 

14

 

counterparts shall together constitute one and the same instrument.  Delivery of an executed counterpart of a signature page to this Agreement by telecopier, facsimile or other electronic transmission (i.e., a “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart thereof.

 

(k)           Severability.  If any provision of this Agreement, or the application thereof in any circumstance, is held to be invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of such provision in every other respect and of the remaining provisions contained in this Agreement shall not be affected or impaired thereby.

 

(signature pages follow)

 

15

 

If the foregoing is in accordance with your understanding, please sign and return to us two counterparts hereof, and upon the acceptance hereof by you, on behalf of each of the holders, this letter and such acceptance hereof shall constitute a binding agreement among each of the holders, the Guarantors and the Company.

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    	
 
    
	
 
    	
TENET   HEALTHCARE CORPORATION
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Tyler C. Murphy
    
	
 
    	
 
    	
Name:   
    	
Tyler   C. Murphy
    
	
 
    	
 
    	
Title:
    	
Treasurer
    
					

 

Signature Page to 2018 Notes Exchange and Registration Rights Agreement

 

 

	
 
    	
CORAL   GABLES HOSPITAL, INC., as: General Partner of CGH HOSPITAL, LTD.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Tyler C. Murphy
    
	
 
    	
 
    	
Name:   
    	
Tyler   C. Murphy
    
	
 
    	
 
    	
Title:
    	
Treasurer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
TENET   PHYSICIAN SERVICES—HILTON HEAD, INC., as: General Partner of HILTON HEAD   HEALTH SYSTEM, L.P.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Tyler C. Murphy
    
	
 
    	
 
    	
Name:   
    	
Tyler   C. Murphy
    
	
 
    	
 
    	
Title:
    	
Treasurer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
CYPRESS   FAIRBANKS MEDICAL CENTER, INC., as: General Partner of NEW MEDICAL   HORIZONS II, LTD.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Tyler C. Murphy
    
	
 
    	
 
    	
Name:   
    	
Tyler   C. Murphy
    
	
 
    	
 
    	
Title:
    	
Treasurer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
TENET   LOUISIANA, INC., as: Sole and Managing Member of TENET 100 MEDICAL   CENTER SLIDELL, L.L.C.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Tyler C. Murphy
    
	
 
    	
 
    	
Name:   
    	
Tyler   C. Murphy
    
	
 
    	
 
    	
Title:
    	
Treasurer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
TENET   TEXAS, INC., as: General Partner of TENET FRISCO, LTD.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Tyler C. Murphy
    
	
 
    	
 
    	
Name:   
    	
Tyler   C. Murphy
    
	
 
    	
 
    	
Title:
    	
Treasurer
    

 

Signature Page to 2018 Notes Exchange and Registration Rights Agreement

 

 

	
 
    	
TENET   HEALTHSYSTEM PHILADELPHIA, INC., as: Managing Member of TENET HEALTHSYSTEM   HAHNEMANN, L.L.C.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Tyler C. Murphy
    
	
 
    	
 
    	
Name:   
    	
Tyler   C. Murphy
    
	
 
    	
 
    	
Title:
    	
Treasurer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
TENET   HEALTHSYSTEM PHILADELPHIA, INC., as: Managing Member of TENET HEALTHSYSTEM   ST. CHRISTOPHER’S HOSPITAL FOR CHILDREN, L.L.C.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Tyler C. Murphy
    
	
 
    	
 
    	
Name:   
    	
Tyler   C. Murphy
    
	
 
    	
 
    	
Title:
    	
Treasurer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
TENET   TEXAS, INC., as: General Partner of TENET HOSPITALS LIMITED
    
	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Tyler C. Murphy
    
	
 
    	
 
    	
Name:   
    	
Tyler   C. Murphy
    
	
 
    	
 
    	
Title:
    	
Treasurer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
LIFEMARK   HOSPITALS, INC., as: General Partner of TH HEALTHCARE, LTD.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Tyler C. Murphy
    
	
 
    	
 
    	
Name:   
    	
Tyler   C. Murphy
    
	
 
    	
 
    	
Title:
    	
Treasurer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
AMERICAN   MEDICAL (CENTRAL), INC.
    
	
 
    	
AMI   INFORMATION SYSTEMS GROUP, INC.
    
	
 
    	
AMISUB   (HEIGHTS), INC.
    
	
 
    	
AMISUB   (HILTON HEAD), INC.
    
	
 
    	
AMISUB   (SFH), INC.
    
	
 
    	
AMISUB   (TWELVE OAKS), INC.
    
	
 
    	
AMISUB   OF NORTH CAROLINA, INC.
    
	
 
    	
AMISUB   OF SOUTH CAROLINA, INC.
    
	
 
    	
AMISUB   OF TEXAS, INC.
    
	
 
    	
ANAHEIM   MRI HOLDING INC.
    
						

 

Signature Page to 2018 Notes Exchange and Registration Rights Agreement

 

 

	
 
    	
BROOKWOOD   HEALTH SERVICES, INC.
    
	
 
    	
COASTAL CAROLINA MEDICAL CENTER,   INC.
    
	
 
    	
COMMUNITY   HOSPITAL OF LOS GATOS, INC.
    
	
 
    	
CORAL   GABLES HOSPITAL, INC.
    
	
 
    	
CYPRESS FAIRBANKS MEDICAL CENTER,   INC.
    
	
 
    	
DELRAY   MEDICAL CENTER, INC.
    
	
 
    	
DOCTORS   HOSPITAL OF MANTECA, INC.
    
	
 
    	
DOCTORS MEDICAL CENTER OF MODESTO, INC.
    
	
 
    	
EAST   COOPER COMMUNITY HOSPITAL, INC.
    
	
 
    	
FMC   MEDICAL, INC.
    
	
 
    	
FOUNTAIN VALLEY REGIONAL HOSPITAL AND MEDICAL   CENTER
    
	
 
    	
FRYE   REGIONAL MEDICAL CENTER, INC.
    
	
 
    	
JFK   MEMORIAL HOSPITAL, INC.
    
	
 
    	
LAKEWOOD   REGIONAL MEDICAL CENTER, INC.
    
	
 
    	
LIFEMARK   HOSPITALS, INC.
    
	
 
    	
LIFEMARK   HOSPITALS OF FLORIDA, INC.
    
	
 
    	
LOS   ALAMITOS MEDICAL CENTER, INC.
    
	
 
    	
NORTH   FULTON MEDICAL CENTER, INC.
    
	
 
    	
ORNDA   HOSPITAL CORPORATION
    
	
 
    	
PALM   BEACH GARDENS COMMUNITY HOSPITAL, INC.
    
	
 
    	
PLACENTIA-LINDA HOSPITAL, INC.
    
	
 
    	
SAN RAMON REGIONAL MEDICAL CENTER, INC.
    
	
 
    	
SIERRA VISTA HOSPITAL, INC.
    
	
 
    	
TENET   CALIFORNIA, INC.
    
	
 
    	
TENET   FLORIDA, INC.
    
	
 
    	
TENET   GOOD SAMARITAN, INC.
    
	
 
    	
TENET   HEALTHSYSTEM BARTLETT, INC.
    
	
 
    	
TENET   HEALTHSYSTEM CFMC, INC.
    
	
 
    	
TENET   HEALTHSYSTEM DESERT, INC.
    
	
 
    	
TENET   HEALTHSYSTEM DI, INC.
    
	
 
    	
TENET   HEALTHSYSTEM GB, INC.
    
	
 
    	
TENET   HEALTHSYSTEM HEALTHCORP
    
	
 
    	
TENET   HEALTHSYSTEM HOLDINGS, INC.
    
	
 
    	
TENET   HEALTHSYSTEM KNC, INC.
    
	
 
    	
TENET   HEALTHSYSTEM MEDICAL, INC.
    
	
 
    	
TENET   HEALTHSYSTEM NORTH SHORE, INC.
    

 

Signature Page to 2018 Notes Exchange and Registration Rights Agreement

 

 

	
 
    	
TENET   HEALTHSYSTEM PHILADELPHIA, INC.
    
	
 
    	
TENET   HEALTHSYSTEM SGH, INC.
    	
 
    
	
 
    	
TENET   HEALTHSYSTEM SL, INC.
    	
 
    
	
 
    	
TENET   HEALTHSYSTEM SPALDING, INC.
    	
 
    
	
 
    	
TENET   HIALEAH HEALTHSYSTEM, INC.
    	
 
    
	
 
    	
TENET   HOSPITALS, INC.
    	
 
    
	
 
    	
TENET   LOUISIANA, INC.
    	
 
    
	
 
    	
TENET   MISSOURI, INC.
    	
 
    
	
 
    	
TENET   PHYSICIAN SERVICES—HILTON HEAD, INC.
    
	
 
    	
TENET   SOUTH FULTON, INC.
    	
 
    
	
 
    	
TENET   ST. MARY’S, INC.
    	
 
    
	
 
    	
TENET   TEXAS, INC.
    	
 
    
	
 
    	
TENETSUB   TEXAS, INC.
    	
 
    
	
 
    	
TWIN   CITIES COMMUNITY HOSPITAL, INC.
    	
 
    
	
 
    	
WEST   BOCA MEDICAL CENTER, INC.
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Tyler C. Murphy
    
	
 
    	
 
    	
Name:   
    	
Tyler   C. Murphy
    
	
 
    	
 
    	
Title:
    	
Treasurer
    
					

 

Signature Page to 2018 Notes Exchange and Registration Rights Agreement

 

 

The foregoing Agreement is hereby confirmed and
 accepted as of the date first above written.

 

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

(on behalf of the holders)

 

	
By:
    	
/s/   Sarang Gadkari
    	
 
    
	
Name:   Sarang Gadkari
    
	
Title:   Managing Director
    

 

Signature Page to 2018 Notes Exchange and Registration Rights Agreement

 

 

Schedule I

 

Guarantors

 

	
American   Medical (Central), Inc.
    
	
AMI   Information Systems Group, Inc.
    
	
Amisub   (Heights), Inc.
    
	
Amisub   (Hilton Head), Inc.
    
	
Amisub   (SFH), Inc.
    
	
Amisub   (Twelve Oaks), Inc.
    
	
Amisub   of North Carolina, Inc.
    
	
Amisub   of South Carolina, Inc.
    
	
Amisub   of Texas, Inc.
    
	
Anaheim   MRI Holding, Inc. (formerly known as USC University Hospital, Inc.   and formerly known as Tenet 1500 San Pablo, Inc.)
    
	
Brookwood   Health Services, Inc.
    
	
CGH   Hospital, Ltd.
    
	
Coastal   Carolina Medical Center, Inc.
    
	
Community   Hospital of Los Gatos, Inc.
    
	
Coral   Gables Hospital, Inc.
    
	
Cypress   Fairbanks Medical Center, Inc.
    
	
Delray   Medical Center, Inc.
    
	
Doctors   Hospital of Manteca, Inc.
    
	
Doctors   Medical Center of Modesto, Inc.
    
	
East   Cooper Community Hospital, Inc.
    
	
FMC   Medical, Inc.
    
	
Fountain   Valley Regional Hospital and Medical Center
    
	
Frye   Regional Medical Center, Inc.
    
	
Hilton   Head Health System, L.P.
    
	
JFK   Memorial Hospital, Inc.
    
	
Lakewood   Regional Medical Center, Inc.
    
	
Lifemark   Hospitals, Inc.
    
	
Lifemark   Hospitals of Florida, Inc.
    
	
Los   Alamitos Medical Center, Inc.
    
	
New   Medical Horizons II, Ltd.
    
	
North   Fulton Medical Center, Inc.
    
	
OrNda   Hospital Corporation
    
	
Palm   Beach Gardens Community Hospital, Inc.
    
	
Placentia-Linda   Hospital, Inc.
    
	
San   Ramon Regional Medical Center, Inc.
    
	
Sierra   Vista Hospital, Inc.
    
	
Tenet   100 Medical Center Slidell, L.L.C. (formerly known as NorthShore Regional   Medical Center, L.L.C.)
    
	
Tenet   California, Inc.
    
	
Tenet   Florida, Inc.
    
	
Tenet   Frisco, Ltd.
    
	
Tenet   Good Samaritan, Inc.
    

 

 

	
Tenet   HealthSystem Bartlett, Inc.
    
	
Tenet   HealthSystem CFMC, Inc.
    
	
Tenet   HealthSystem Desert, Inc.
    
	
Tenet   HealthSystem DI, Inc.
    
	
Tenet   HealthSystem GB, Inc.
    
	
Tenet   HealthSystem Hahnemann, L.L.C.
    
	
Tenet   HealthSystem HealthCorp
    
	
Tenet   HealthSystem Holdings, Inc.
    
	
Tenet   HealthSystem KNC, Inc.
    
	
Tenet   HealthSystem Medical, Inc.
    
	
Tenet   HealthSystem North Shore, Inc.
    
	
Tenet   HealthSystem Philadelphia, Inc.
    
	
Tenet   HealthSystem SGH, Inc.
    
	
Tenet   HealthSystem SL, Inc.
    
	
Tenet   HealthSystem Spalding, Inc.
    
	
Tenet   HealthSystem St. Christopher’s Hospital for Children, L.L.C.
    
	
Tenet   Hialeah HealthSystem, Inc.
    
	
Tenet   Hospitals, Inc.
    
	
Tenet   Hospitals Limited
    
	
Tenet   Louisiana, Inc.
    
	
Tenet   Missouri, Inc.
    
	
Tenet   Physician Services — Hilton Head, Inc.
    
	
Tenet   South Fulton, Inc.
    
	
Tenet   St. Mary’s, Inc.
    
	
Tenet   Texas, Inc.
    
	
Tenetsub   Texas, Inc.
    
	
TH   Healthcare, Ltd.
    
	
Twin   Cities Community Hospital, Inc.
    
	
West   Boca Medical Center, Inc.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00203-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00203-of-00352.parquet"}]]