<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D**
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
Crescent Operating, Inc.
(Name of Issuer)
Common Stock, $0.01 par Value
(Title of Classes of Securities)
22575M 10 0
(CUSIP Number)
J. Randall Chappel
777 Main Street, Suite 2250
Fort Worth, Texas 76102
(817) 820-6620
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 16, 2000
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box [ ].
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Sections 240.13d-7(b) for
other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
**The total number of shares reported herein is 1,210,045 shares of Common
Stock, which constitute approximately 10.5% of the total number of shares
outstanding, assuming, pursuant to Rule 13d-3(d)(1)(i), that there are
11,531,525 shares deemed outstanding. All ownership percentages set forth herein
assume that there are 11,414,963 shares outstanding.
Exhibit Index is located at page 11 herein.
Page 1 of 11 Pages
<PAGE> 2
- --------------------- ------------------
CUSIP No. 22575M 10 0 13D Page 2 of 11 Pages
- --------------------- ------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
RICHARD E. RAINWATER
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP * (a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS *
NOT APPLICABLE -- SEE ITEM 3
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e)
[ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
RICHARD E. RAINWATER IS A CITIZEN OF THE UNITED STATES OF AMERICA
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
1,210,045 (1)
NUMBER OF ------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0
EACH ------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 1,210,045 (1)
------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,210,045 (1)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES *
SEE NOTE (2) [X]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.5% (3)
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON *
IN
- --------------------------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT !
<PAGE> 3
CUSIP NO. 22575M 10 0 13D Page 3 of 11 Pages
(1) Such shares include 239,337 shares of the Stock owned directly by Mr.
Rainwater; pursuant to Rule 13d-3(d)(1)(i)(A), 116,562 shares of the Stock
underlying an Issuer-granted stock option owned directly by Mr. Rainwater;
and a total of 854,146 shares of the Stock owned by the following persons
(the number of shares owned by each person is set forth parenthetically):
(a) Rainwater, Inc. (10,520)
(b) Rainwater RainAm Investors, LP (55,542)
(c) Rainwater Investor Partners, Ltd. (242,583)
(d) Office Towers LLC (326,099)
(e) Richard E. Rainwater, settlor of Trust Agreement creating The Richard
E. Rainwater 1995 Charitable Remainder Unitrust No. 1, dated March
10,1995 (219,402)
Mr. Rainwater may be deemed, for the following reasons, to be the
beneficial owner of the shares of the Stock owned by the foregoing persons:
(i) Rainwater, Inc. ("RI") is a Texas corporation wholly owned by Mr.
Rainwater, who is a director of RI and its President.
(ii) Mr. Rainwater is the settlor of The Richard E. Rainwater 1995
Charitable Remainder Unitrust No. 1, dated March 10,1995 ("CRUT").
Mr. Rainwater, in his capacity as settlor under the terms of the
trust agreement creating CRUT has power, upon prior notice, to remove
the trustee and designate a successor trustee, including himself.
(iii) Rainwater RainAm Investors, LP ("RRI") is a Texas limited
partnership, wholly owned by Mr. Rainwater and RI, which is its sole
general partner.
(iv) Rainwater Investor Partners, Ltd. ("RIP") is a Texas limited
partnership, wholly owned by Mr. Rainwater and RI, which is its sole
general partner.
(v) Office Towers LLC ("OT") is a Nevada limited liability company,
wholly owned and managed by Mr. Rainwater and RI.
(2) Excludes 45,178 shares of the Stock beneficially owned by Darla Moore, Mr.
Rainwater's spouse. Mr. Rainwater disclaims beneficial ownership of such
shares.
(3) Assumes 11,414,963 shares of the Stock actually outstanding and, pursuant
to Rule 13d-3(d)(1)(i), that the number of shares of the Stock deemed
outstanding is 11,531,525.
<PAGE> 4
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CUSIP No. 22575M 10 0 13D Page 4 of 11 Pages
- --------------------- ------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
RAINWATER, INC.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP * (a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS *
NOT APPLICABLE -- SEE ITEM 3
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e)
[ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
RAINWATER, INC. IS A CORPORATION ORGANIZED UNDER THE LAWS OF THE
STATE OF TEXAS
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
308,645 (1)
NUMBER OF ------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 326,099 (1)
EACH ------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 308,645 (1)
------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
326,099 (1)
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
634,744 (1)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES *
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.6% (2)
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON *
CO
- --------------------------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT !
<PAGE> 5
CUSIP NO. 22575M 10 0 13D Page 5 of 11 Pages
(1) Such shares include 10,520 shares of the Stock owned directly by RI and a
total of 624,224 shares of the Stock owned by the following persons (the
number of shares owned by each person is set forth parenthetically):
(a) RRI (55,542)
(b) RIP (242,583)
(c) OT (326,099)
RI may be deemed for the following reasons to be the beneficial owner of
the shares of the shares of the Stock owned by the foregoing persons:
(i) RI is the sole general partner of RRI.
(ii) RI is the sole general partner of RIP.
(iii) RI is a member of OT, which is managed by its members.
(2) Assumes 11,414,963 shares of the Stock actually outstanding.
<PAGE> 6
CUSIP NO. 22575M 10 0 13D Page 6 of 11 Pages
Richard E. Rainwater and Rainwater, Inc. filed a Statement on Schedule 13D
relating to the Common Stock of Crescent Operating, Inc. in July 1997. The
undersigned are amending such Statement to reflect certain matters in Item 4
(Purpose of Transaction) and to reflect several immaterial changes (none of
which involved a change in the aggregate stock owned by the Reporting Persons).
ITEM 1. SECURITY AND ISSUER.
This statement relates to the Common Stock, par value $0.01 per share (the
"Stock") of Crescent Operating, Inc., a Delaware corporation (the "Issuer"). The
address of the principal executive offices of the Issuer is 306 West 7th St.,
Suite 1000, Fort Worth, Texas 76102.
ITEM 2. IDENTITY AND BACKGROUND.
(a) - (c) This statement is being filed by Richard E. Rainwater and
Rainwater, Inc. ("RI"). The business address and principal occupation of Mr.
Rainwater are set forth below. Mr. Rainwater is a citizen of the United States
of America. RI is a corporation organized under the laws of the State of Texas.
The principal business address of RI is 777 Main Street, Suite 2250, Fort Worth,
Texas 76102. The principal business of RI is investments. The sole shareholder
of RI is Richard E. Rainwater.
The name, business address, present principal occupation or employment and the
name, principal business and address of any corporation or other organization in
which such employment is conducted, of each of the executive officers and
directors of RI, are set forth below:
<TABLE>
<CAPTION>
Name, Principal Business
Name and and Address of Organization
Business Capacity in Principal in which Principal Occupation
Address which serves Occupation is Conducted
- ------- ------------ ---------- ------------
<S> <C> <C> <C>
Richard E. Rainwater President, Director Personal Investment Self-employed
777 Main Street for own account 777 Main Street
Suite 2250 Suite 2250
Fort Worth, TX 76102 Fort Worth, TX 76102
Darla D. Moore Vice President, Personal Investment Self-employed
777 Main Street Director for own account 777 Main Street
Suite 2250 Suite 2250
Fort Worth, TX 76102 Fort Worth, TX 76102
Kenneth A. Hersh Vice President, Chief Investment Officer GFW II, L.L.C.
777 Main Street Secretary, for Rainwater, Inc. and 777 Main Street
Suite 2250 Treasurer, related partnerships Suite 2250
Fort Worth, TX 76102 Director Fort Worth, TX 76102
J. Randall Chappel Authorized Officer Officer of Rainwater, Inc. Goff Moore Strategic Partners, Inc.
777 Main Street and Principal of affiliated 777 Main Street
Suite 2250 investment partnership Suite 2250
Fort Worth, TX 76102 Fort Worth, TX 76102
</TABLE>
<PAGE> 7
CUSIP NO. 22575M 10 0 13D Page 7 of 11 Pages
The principal business of GFW II, L.L.C., is investments. The principal business
of Goff Moore Strategic Partners, L.P. is investments.
(d) - (e) None of the entities or individuals identified in this Item 2
has, during the last five years, been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
with respect to such laws.
(f) Each of the individuals identified in this Item 2 is a citizen of the
United States of America.
Richard E. Rainwater and RI are collectively sometimes called the
"Reporting Persons."
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Prior to June 12, 1997, the Issuer was wholly owned by Crescent Real Estate
Equities Limited Partnership, a Delaware limited partnership ("Operating
Partnership"), which itself is a subsidiary of Crescent Real Estate Equities
Company, a Texas real estate investment trust ("CRE"). CRE is a publicly owned
company. As of June 12, 1997, Operating Partnership made a pro-rata distribution
of all of the outstanding shares of the Stock of the Issuer among CRE's
shareholders and Operating Partnership's limited partners in a transaction (the
"Spin-Off Distribution") registered under the Securities Act of 1933, as amended
(Registration No. 333-25223). Prior to but in anticipation of the Spin-Off
Distribution, the Issuer adopted a stock incentive plan pursuant to which grants
of stock options were made in order to provide each holder of options in CRE or
Operating Partnership with an equivalent number of stock options in the Issuer.
In their capacities as shareholders of CRE and/or limited partners of Operating
Partnership, Mr. Rainwater, RI, 777 Main Street Corporation, Tower Holdings,
Inc., CRUT, RRI, RIP and OT acquired pursuant to the Spin-Off Distribution all
of the shares of the Stock herein reported (777 Main Street Corporation and
Tower Holdings, Inc. were subsequently merged with RI) and Mr. Rainwater
acquired the stock option herein reported (the "Option"). Subsequently, on June
23, 1997, the Issuer's registration statement registering the Stock under
Section 12(g) of the Securities Exchange Act of 1934, as amended (Registration
No. 000-22725), was declared effective by the Securities and Exchange
Commission.
ITEM 4. PURPOSE OF TRANSACTION.
As more fully described in Item 3, the shares of Stock herein reported (and
the Option) were acquired pursuant to the Spin-Off Distribution. All of the
shares of Stock herein reported are held for investment purposes. Depending upon
a variety of factors the Reporting Persons may deem significant to their
investment decisions, the Reporting Persons may purchase additional shares of
the Stock in open market or private transactions or may dispose of all or some
of the shares of Stock they now own or may hereafter acquire.
On February 16, 2000, COPI Healthcare, Inc. (a wholly-owned subsidiary of
the Issuer) entered into an asset purchase agreement with Charter Behavioral
Health Systems, LLC ("Charter") in conjunction with Charter's filing for
reorganization in federal bankruptcy court. The agreement
<PAGE> 8
CUSIP NO. 22575M 10 0 13D Page 8 of 11 Pages
is subject to bankruptcy court approval and other conditions. The Issuer has 90%
of the economic interest of Charter, directly and indirectly. Mr. Rainwater is
in favor of the asset purchase agreement between COPI Healthcare, Inc. and
Charter. In connection therewith, Mr. Rainwater, the Issuer and COPI Healthcare,
Inc. entered into a letter agreement, as described below.
COPI Healthcare, Inc., a wholly-owned subsidiary of the Issuer, entered
into an agreement with Charter for the acquisition of Charter's core business,
which consists of the assets used in the operation of 37 behavioral healthcare
facilities, for $24.5 million. The Issuer has announced in a press release that
it anticipates that if COPI Healthcare, Inc. is successful in acquiring the
selected operating assets of Charter, it would first fund the purchase through a
bank loan, guaranteed by Mr. Rainwater, on a compensated basis. In connection
therewith, on February 16, 2000, the Issuer, COPI Healthcare and Mr. Rainwater
entered into a letter agreement pursuant to which Mr. Rainwater agreed that if
COPI Healthcare is successful in acquiring the selected operating assets of
Charter, he would provide a personal guarantee to the bank providing the
acquisition financing subject to the terms and conditions set forth in such
letter agreement. The Issuer has announced in a press release that it plans to
refinance such acquisition loan through the sale of equity in COPI Healthcare or
the Issuer. The Issuer has also announced in a press release that it currently
intends to offer its existing shareholders the first opportunity to participate
in any such refinancing, although the form of any such refinancing has not been
determined.
CRE, a company in which Mr. Rainwater is chairman and a significant
shareholder, is Charter's landlord in 30 of the 37 core facilities. CRE and COPI
Healthcare have agreed in principle that if COPI Healthcare is successful in
acquiring the operating assets, CRE will lease its 30 facilities to COPI
Healthcare, provided that an agreement is reached on various terms of the lease
and certain other conditions are satisfied.
Mr. Rainwater realizes that matters that relate to the bankruptcy
proceeding of Charter, including the possible purchase of Charter's operating
assets by COPI Healthcare and the ability of COPI Healthcare to reach agreement
with CRE on lease terms, are inherently unpredictable as to both outcome and
timing, and events could differ materially from Mr. Rainwater's current
expectations. As such, Mr. Rainwater may or may not be in favor of any different
or amended proposals.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) By virtue of his direct beneficial ownership of shares of Stock and in
his capacities as the sole shareholder and/or director of RI (which also is the
sole general partner of RRI and RIP and a managing member of OT), the settlor of
CRUT with the right to remove the trustee and designate a successor trustee, and
a managing member of OT, Mr. Rainwater may be deemed to be the beneficial owner
of 1,210,045 shares of the Stock, including 116,562 shares of the Stock which
may be acquired upon exercise of the Option described in Item 3. Assuming
pursuant to Rule 13d-3(d)(1)(i) that 11,531,525 shares of the Stock are deemed
outstanding, Mr. Rainwater may be deemed to be the beneficial owner of
approximately 10.5% of the outstanding shares of the Stock. Pursuant to Rule
13d-4, Mr. Rainwater disclaims beneficial ownership of 45,178 shares of the
Stock beneficially owned by Mr. Rainwater's spouse, Darla Moore, and such shares
are not included within the 1,210,045 shares identified above.
<PAGE> 9
CUSIP NO. 22575M 10 0 13D Page 9 of 11 Pages
By virtue of its direct beneficial ownership of shares of Stock and in its
capacities as the sole general partner of RRI and RIP and a managing member of
OT, RI may be deemed to be the beneficial owner of 634,744 shares of the Stock.
Assuming that 11,414,963 shares of the Stock are outstanding, RI may be deemed
to be the beneficial owner of approximately 5.6% of the outstanding shares of
the Stock.
(b) Mr. Rainwater (whether directly or in his capacities as the sole
shareholder and/or director of RI (which also is the sole general partner of RRI
and RIP and a managing member of OT), the settlor of the CRUT, and a managing
member of OT) has or may be deemed to have the sole power to vote or to direct
the vote and to dispose or to direct the disposition of 1,210,045 shares of the
Stock, including 116,562 shares of the Stock underlying the Option.
RI (whether directly or in its capacities as the sole general partner of
RRI and RIP) has or may be deemed to have the sole power to vote or to direct
the vote and to dispose or to direct the disposition of 308,645 shares of the
Stock. RI, in its capacity as a managing member of OT, has or may be deemed to
have the shared power, with Mr. Rainwater, to vote or to direct the vote and to
dispose or to direct the disposition of 326,099 shares of the Stock.
(c) The Reporting Persons have had no transactions in the Stock during the
past 60 days.
(d) No person other than the Reporting Persons has the right to receive or
the power to direct the receipt of dividends from, or the proceeds from the sale
of, the shares of Stock owned by them.
(e) It is inapplicable for the purposes herein to state the date on which
the Reporting Persons ceased to be the owners of more than five percent (5%) of
the Stock.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Except as described herein, there are no contracts, arrangements,
understandings or relationships between the Reporting Persons or between the
Reporting Persons and any other person with respect to the shares of Stock owned
by the Reporting Persons.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A -- Agreement pursuant to Rule 13d-1(f)(iii).
Exhibit B -- Power of Attorney authorizing J. Randall Chappel and
Kenneth A. Hersh to act on behalf of Richard E. Rainwater.
<PAGE> 10
CUSIP NO. 22575M 10 0 13D Page 10 of 11 Pages
Exhibit C -- Agreement dated February 16, 2000 between Richard E.
Rainwater, COPI HealthCare, Inc. and Crescent Operating, Inc.
Signatures
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: February 25, 2000
/s/ J. Randall Chappel
---------------------------------------------------------------
J. Randall Chappel as Attorney-in-Fact for Richard E. Rainwater
RAINWATER, INC.
By: /s/ J. Randall Chappel
------------------------------------------------------------
J. Randall Chappel, Authorized Officer
<PAGE> 11
CUSIP NO. 22575M 10 0 13D Page 11 of 11 Pages
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ------- -----------
<S> <C>
Exhibit A Agreement pursuant to Rule 13-d-1(f)(iii),
previously filed with the Schedule 13D Statement
dated July 3, 1997.
Exhibit B Power of Attorney authorizing J. Randall Chappel
and Kenneth A. Hersh to act on behalf of Richard
E. Rainwater, previously filed with Form 4
Statement of Richard E. Rainwater for December
1995 relating to securities of Crescent Real
Estate Equities, Inc., dated January 9, 1996.
Exhibit C Agreement dated February 16, 2000 between Richard
E. Rainwater, COPI HealthCare, Inc. and Crescent
Operating, Inc., filed herewith.
</TABLE>
<PAGE> 1
EXHIBIT C
[Letterhead]
February 16, 2000
COPI Healthcare, Inc.
Crescent Operating, Inc.
306 W. 7th Street, Suite 1000
Fort Worth, Texas 76102
Gentlemen:
You have asked me to guarantee to Bank of America ("BOA") the payment of
the proposed $25 million asset acquisition borrowing (the "Borrowing") by COPI
Healthcare, Inc. ("COPI Healthcare") from Bank of America described in the
letter from Cary Conwell dated February 10, 2000, a copy of which is attached to
this letter. You have advised me that the Borrowing (or your reimbursement
obligations with respect to my Guarantee) would be secured by (i) all of the
assets of COPI Healthcare, whether purchased pursuant to the Asset Purchase
Agreement (hereinafter defined) or thereafter acquired, and (ii) all of the
stock or other interests of Crescent Operating, Inc. ("COI") in COPI Healthcare
(COI's wholly-owned subsidiary). COPI Healthcare is proposing to incur the
Borrowing in connection with the acquisition of certain assets of Charter
Behavioral Health Systems, LLC ("CBHS") out of the bankruptcy of CBHS pursuant
to the terms of an Asset Purchase Agreement (the "Asset Purchase Agreement"),
which COPI Healthcare plans to present to CBHS contemporaneously with CBHS's
filing a voluntary petition in bankruptcy. You have provided me with the final
draft of the Asset Purchase Agreement, dated February 16, 2000.
I have agreed to guarantee the Borrowing in an amount not to exceed $25
million, provided that, as conditions to my execution and delivery of the
Guarantee, the Asset Purchase Agreement is consummated on substantially the
terms and conditions set forth in the attached Asset Purchase Agreement, the
Borrowing and the Guarantee are evidenced by loan documents reasonably
satisfactory to me including provisions giving me the right to acquire COPI
Healthcare's debt to BOA if there is a default under such loan documents, the
terms of the proposed transaction are not materially different than those
previously discussed between you and me, you pay me the Fee described below,
COPI Healthcare executes and delivers to me a reimbursement agreement evidencing
its agreement and obligation to reimburse to me all amounts that I am called
upon to fund under my Guarantee, all on terms and conditions (and secured by
such collateral) as are reasonably satisfactory to me, and COPI Healthcare
secures a working capital facility from a financial institution (without the
benefit of my guarantee) on such
<PAGE> 2
terms and in such amount as are reasonably satisfactory to me. My agreement to
provide such Guarantee on the conditions set forth herein shall expire if for
any reason the transactions contemplated by the Asset Purchase Agreement are not
closed prior to the expiration of 60 days after the date hereof unless extended
by me in writing.
If I provide the Guarantee, COPI Healthcare shall pay to me concurrently
with the execution and delivery of such Guarantee, in immediately available cash
funds, a fee equivalent to $937,000 (the "Fee"). COI and COPI Healthcare agree
to pay, and to jointly and severally indemnify me from, all of my out-of-pocket
and transaction expenses and costs, such as legal fees associated with this
letter, the Guarantee and the transactions contemplated hereby as well as any
other fees and expenses (including legal fees) incurred by me in any way
relating to the transactions that are the subject of this letter.
Neither BOA nor any other third party is intended to be a third party
beneficiary of this letter. This letter may not be relied upon, circulated,
quoted, in whole or in part, or otherwise referred to in any report or document
or furnished to any other person without my prior written consent except to the
extent required by law.
To indicate your agreement with the foregoing, please execute and deliver
to me a copy of this letter in the space provided.
Very truly yours,
/s/ Richard E. Rainwater
/s/ by J. Randall Chappel
Richard E. Rainwater
[stamp: Richard E. Rainwater
by J. Randall Chappel, Attorney-in-fact]
COPI HEALTHCARE, INC.
By: /s/ Rick Knight
-------------------------------
Name: Rick Knight
-----------------------------
Title: Vice President, CFO
----------------------------
CRESCENT OPERATING, INC.
By: /s/ Rick Knight
-------------------------------
Name: Rick Knight
-----------------------------
Title: Chief Financial Officer
----------------------------
<PAGE> 3
[Bank of America Letterhead]
February 10, 2000
Mr. Jeffrey Stevens-Chief Operations Officer
Crescent Operating, Inc.
306 Main Street, Suite 1025
Fort Worth, TX 76102
Re: COPI Healthcare, Inc.
Dear Jeff,
This written communication is prepared to provide you the financial support you
requested regarding the proposed $25,000,000 asset acquisition of selected
Charter Behavioral Health Systems facilities out of bankruptcy.
Bank of America, N.A. is pleased to make available to COPI Healthcare, Inc.
$25,000,000 to finance the purchase of selected assets of the above mentioned
Charter Systems. The Bank is prepared to provide this financing upon request of
COPI Healthcare, Inc. within the course of the bankruptcy court's time table.
Please feel free to have those officers of the bankruptcy court contact me at
1-817-390-6477 should they deem it necessary to verify this financing facility.
Thank you for the opportunity to provide solutions for your company's banking
needs.
Regards,
/s/ Cary C. Conwell
Cary C. Conwell
Senior Vice President
