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EXHIBIT 10.3
AMENDMENT TO
OPERATING AGREEMENT OF
MEDCATH OF LITTLE ROCK, L.L.C. (the "Company")
THIS AMENDMENT to the Operating Agreement of the Company is effective
as of January 20, 2000 (the "Amendment").
This Amendment is made under the terms of Section 11.1(e) of the
Operating Agreement in order to ensure that the Company remains in compliance
with all federal and state laws, rules, regulations and interpretations thereof.
The undersigned have also determined that this Amendment will not materially
reduce the economic return on investment in the Company to any of its Members.
Accordingly, the Operating Agreement is hereby amended as follows:
1. A new Section 5.16 is hereby added to the Operating Agreement
as follows:
SECTION 5.16 Guarantee Fee. In the event that any
Member of the Company or its Affiliates provide a guarantee of
any indebtedness of the Company which is acceptable to and
required by the Company's lenders ("Guarantor Members") and
such guarantees are not provided on a pro rata basis by all
other Members of the Company (the "Nonguarantor Members"),
then the Guarantor Members shall be paid an annual guarantee
fee equal to (a) the amount of such indebtedness which is
guaranteed by the Guarantor Members or its Affiliates,
multiplied by (b) .0075, multiplied by (c) the percentage
Membership Interest in the Company owned by the Nonguarantor
Members (the "Guarantee Fee"). The Guarantee Fee shall be paid
quarterly and the expense thereof shall be allocated to the
Nonguarantor Members as follows:
(a) The Guarantee Fee shall be deducted from
the Cash Distributions otherwise distributable to the
Nonguarantor Members and shall be paid to the
Guarantor Members;
(b) To the extent that at the time such
Guarantee Fee is due to be paid hereunder there are
no anticipated Cash Distributions, then the Company
shall pay such Guarantee Fee to the Guarantor Members
and the amount of such payments shall be charged to
the Capital Accounts of the Nonguarantor Members;
(c) When Cash Distributions become available
for distribution to the Members in the future, the
Cash Distributions otherwise distributable to the
Nonguarantor Members shall first be retained by the
Company to the extent that amounts were previously
charged to the Capital Accounts of the Nonguarantor
Members in accordance with (b)
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above and any remaining Cash Distributions shall be
distributed to the Members in accordance with Section
6.1.
2. Section 6.1 shall be deleted in its entirety and the following
new Section 6.1 shall be substituted in lieu thereof:
SECTION 6.1. Allocations and Distributions of Cash
Flow from Operations and Cash from Sales or Refinancing. After
repayment of any loans made by the Members to the Company,
Cash Flow from Sales or Refinancing shall be allocated, or
distributed as Cash Distributions according to the Economic
Interests of the Members and Economic Interest Owners which,
subject to the provisions of Section 6.6 and Article VII,
initially shall be in accordance with their respective
Membership Interests shown on Schedule A attached hereto,
provided however, that to the extent possible, any Guarantee
Fee shall be deducted from the Cash Distributions otherwise
distributable to the Nonguarantor Members and paid to the
Guarantor Members as set forth in Section 5.16.
Notwithstanding anything herein to the contrary no
distributions shall be made to Members if prohibited by
N.C.G.S. ss. 57C-4-06.
3. The following shall be added as the opening phrase of Section
6.2:
SECTION 6.2. Allocations of Income and Loss. Subject
in all events to the terms of Section 6.7:
4. Section 6.6(a) is amended by adding the following sentence at
the end thereof:
Notwithstanding any other provision above, Cash
Distributions due to Nonguarantor Members shall be
paid only after payments of the Guarantee Fee have
first been paid in accordance with Section 5.16.
5. The opening phrase of Section 6.6(b) is deleted and the
following is substituted in lieu thereof:
Subject to any limitations on Cash Distributions
imposed by statute and subject to payment of the
Guarantee Fee, but notwithstanding any other
provision in this Agreement to the contrary, the
Company and Members agrees as follows:
6. The following shall be added as a new Section 6.7:
SECTION 6.7. Special Allocations of Guarantee Fees.
Any and all deductions, losses or reductions to Capital
Account attributable to the payment by the Company of
Guarantee Fees shall be allocated to the Nonguarantor Members
in accordance with their relative percentage Membership
Interests.
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7. Section 7.3(b)(ii) shall be deleted in its entirety and the
following new section shall be substituted in lieu thereof:
(ii) To the payment of all debts and
liabilities (including interest), and further
including without limitation any accrued but unpaid
Guarantee Fees, owed to the Members or their
Affiliates as creditors; and
Except as provided herein, the Operating Agreement shall remain in full
force and effect.
This Amendment may be signed in counterparts.
This Amendment shall be effective once it has been signed in accordance
with the terms of the Operating Agreement.
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