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EXHIBIT 10.4
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SECURITY AGREEMENT
among
IASIS HEALTHCARE CORPORATION,
VARIOUS SUBSIDIARIES OF
IASIS HEALTHCARE CORPORATION
and
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK,
as Collateral Agent
Dated as of October 15, 1999
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TABLE OF CONTENTS
Page
ARTICLE I SECURITY INTERESTS............................................. 2
1.1. Grant of Security Interests.................................... 2
1.2. Power of Attorney.............................................. 4
ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS............. 4
2.1. Necessary Filings.............................................. 4
2.2. No Liens....................................................... 5
2.3. Other Financing Statements..................................... 5
2.4. Chief Executive Office; Records................................ 5
2.5. Location of Inventory and Equipment............................ 6
2.6. Recourse....................................................... 6
2.7. Trade Names; Change of Name.................................... 6
ARTICLE III SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT
RIGHTS; INSTRUMENTS............................................ 7
3.1. Additional Representations and Warranties...................... 7
3.2. Maintenance of Records......................................... 7
3.3. Direction to Account Debtors; Contracting Parties; etc. ....... 8
3.4. Modification of Terms; etc. ................................... 8
3.5. Collection..................................................... 8
3.6. Instruments.................................................... 9
3.7. Further Actions................................................ 9
ARTICLE IV SPECIAL PROVISIONS CONCERNING TRADEMARKS...................... 9
4.1. Additional Representations and Warranties...................... 9
4.2. Licenses and Assignments....................................... 10
4.3. Infringements.................................................. 10
4.4. Preservation of Marks.......................................... 10
4.5. Maintenance of Registration.................................... 10
4.6. Future Registered Marks........................................ 11
4.7. Remedies....................................................... 11
ARTICLE V SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND
TRADE SECRETS.................................................. 11
5.1. Additional Representations and Warranties...................... 11
5.2. Licenses and Assignments....................................... 12
5.3. Infringements.................................................. 12
5.4. Maintenance of Patents and Copyrights.......................... 13
(i)
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Page
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5.5. Prosecution of Patent or Copyright Applications............... 13
5.6. Other Patents and Copyrights.................................. 13
5.7. Remedies...................................................... 13
ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL........................... 14
6.1. Protection of Collateral Agent's Security..................... 14
6.2. Warehouse Receipts Non-Negotiable............................. 14
6.3. Further Actions............................................... 14
6.4. Financing Statements.......................................... 14
ARTICLE VII REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT.................. 15
7.1. Remedies; Obtaining the Collateral Upon Default............... 15
7.2. Remedies; Disposition of the Collateral....................... 16
7.3. Waiver of Claims.............................................. 17
7.4. Application of Proceeds....................................... 17
7.5. Remedies Cumulative........................................... 19
7.6. Discontinuance of Proceedings................................. 20
ARTICLE VIII INDEMNITY.................................................... 20
8.1. Indemnity..................................................... 20
8.2. Indemnity Obligations Secured by Collateral; Survival......... 21
ARTICLE IX DEFINITIONS.................................................... 22
ARTICLE X MISCELLANEOUS................................................... 28
10.1. Notices....................................................... 28
10.2. Waiver; Amendment............................................. 28
10.3. Obligations Absolute.......................................... 29
10.4. Successors and Assigns........................................ 29
10.5. Headings Descriptive.......................................... 30
10.6. Governing Law................................................. 30
10.7. Assignors' Duties............................................. 30
10.8. Termination; Release.......................................... 30
10.9. Counterparts.................................................. 31
10.10. The Collateral Agent.......................................... 31
10.11. Severability.................................................. 31
10.12. Limited Obligations........................................... 31
10.13. Additional Assignors.......................................... 31
10.14. Effectiveness................................................. 32
(ii)
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ANNEX A Schedule of Chief Executive Offices/Record Locations
ANNEX B Schedule of Inventory and Equipment Locations
ANNEX C Schedule of Trade and Fictitious Names
ANNEX D Schedule of Marks and Applications
ANNEX E Schedule of Patents and Applications
ANNEX F Schedule of Copyrights and Applications
ANNEX G Form of Grant of Security Interest in Certain Patents
and Trademarks
ANNEX H Form of Grant of Security Interest in Certain Copyrights
(iii)
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SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of October 15, 1999 (as amended,
restated, modified and/or supplemented from time to time in accordance with the
terms hereof, this "Agreement"), among each of the undersigned (each, an
"Assignor" and, together with each other entity which becomes a party hereto
pursuant to Section 10.13, collectively, the "Assignors") and XXXXXX GUARANTY
TRUST COMPANY OF NEW YORK, as Collateral Agent (the "Collateral Agent"), for the
benefit of the Secured Creditors (as defined below). Except as otherwise defined
in Article IX hereof, terms used herein and defined in the Credit Agreement (as
defined below) shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, IASIS Healthcare Corporation, a Delaware corporation
(the "Borrower"), various financial institutions from time to time party thereto
(the "Lenders"), X.X. Xxxxxx Securities Inc. and The Bank of Nova Scotia, as
Co-Lead Arrangers (in such capacity, each a "Co-Lead Arranger" and collectively,
the "Co-Lead Arrangers") and Co-Book Runners, Paribas, as Documentation Agent
(in such capacity, the "Documentation Agent"), The Bank of Nova Scotia, as
Syndication Agent (in such capacity, the "Syndication Agent"), and Xxxxxx
Guaranty Trust Company of New York, as Administrative Agent (in such capacity,
the "Administrative Agent", and together with the Lenders, the Co-Lead
Arrangers, the Syndication Agents, each Issuing Bank, the Pledgee and the
Collateral Agent, the "Lender Creditors") have entered into the Credit
Agreement, providing for the extension of credit to the Borrower as contemplated
therein;
WHEREAS, the Borrower may from time to time enter into one or
more (i) interest rate protection agreements (including, without limitation,
interest rate swaps, caps, floors, collars and similar agreements), (ii) foreign
exchange contracts, currency swap agreements, commodity agreements or other
similar agreements or arrangements designed to protect against the fluctuations
in currency or commodity values and/or (iii) other types of hedging agreements
from time to time (each such agreement or arrangement with an Other Creditor (as
hereinafter defined), an "Interest Rate Protection Agreement or Other Hedging
Agreement"), with Xxxxxx Guaranty Trust Company of New York in its individual
capacity ("Xxxxxx Guaranty"), any Lender or a syndicate of financial
institutions organized by Xxxxxx Guaranty or any such Lender, or an affiliate of
Xxxxxx Guaranty or any such Lender (Xxxxxx Guaranty, any such Lender or Lenders
or affiliate or affiliates of Xxxxxx Guaranty or such Lender or Lenders (even if
Xxxxxx Guaranty or any such Lender ceases to be a Lender under the Credit
Agreement for any reason) and any such institution that participates in such
Interest Rate Protection Agreements or Other Hedging Agreements, and in each
case their subsequent successors and assigns, collectively, the "Other
Creditors", and together with the Lender Creditors, the "Secured Creditors");
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WHEREAS, pursuant to a Subsidiaries Guaranty, dated as of
October 15, 1999 (as amended, restated, modified and/or supplemented from time
to time, the "Subsidiaries Guaranty"), each Assignor (other than the Borrower)
has, jointly and severally guaranteed to the Secured Creditors the payment when
due of all obligations and liabilities of the Borrower under or with respect to
the Credit Documents and each Interest Rate Protection Agreement and Other
Hedging Agreement;
WHEREAS, it is a condition precedent to the making of Loans to
the Borrower and the issuance of, and participation in, Letters of Credit for
the account of the Borrower under the Credit Agreement and to the Other
Creditors entering into Interest Rate Protection Agreements and Other Hedging
Agreements that each Assignor shall have executed and delivered to the
Collateral Agent this Agreement; and
WHEREAS, each Assignor will obtain benefits from the
incurrence and/or assumption of Loans by the Borrower and the issuance of
Letters of Credit for the account of the Borrower under the Credit Agreement and
the Borrower's entering into Interest Rate Protection Agreements or Other
Hedging Agreements and, accordingly, desires to execute this Agreement in order
to satisfy the conditions precedent described in the preceding paragraph and to
induce the Lenders to make Loans to the Borrower and to issue, and participate
in, Letters of Credit for the account of the Borrower, and to induce the Other
Creditors to enter into Interest Rate Protection Agreements and Other Hedging
Agreements with the Borrower;
NOW, THEREFORE, in consideration of the benefits accruing to
each Assignor, the receipt and sufficiency of which are hereby acknowledged,
each Assignor hereby makes the following representations and warranties to the
Collateral Agent and hereby covenants and agrees with the Collateral Agent as
follows:
ARTICLE I
SECURITY INTERESTS
1.1. Grant of Security Interests. (a) As security for the
prompt and complete payment and performance when due of all of its Obligations,
each Assignor does hereby assign and transfer unto the Collateral Agent, and
does hereby pledge and grant to the Collateral Agent for the benefit of the
Secured Creditors, a continuing security interest in, all of the right, title
and interest of such Assignor in, to and under all of the following, whether now
existing or hereafter from time to time acquired:
(i) each and every Receivable;
(ii) all Contracts, together with all Contract Rights arising
thereunder;
(iii) all Inventory;
(iv) the Cash Collateral Account and any other cash collateral
account established for such Assignor for the benefit of the Secured
Creditors and all moneys,
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securities and instruments deposited or required to be deposited in
such Cash Collateral Account;
(v) all Equipment;
(vi) all Marks, together with the registrations and right to
all renewals thereof, and the goodwill of the business of such Assignor
symbolized by the Marks;
(vii) all Patents and Copyrights and all reissues, renewals
and extensions thereof;
(viii) all computer programs of such Assignor and all
intellectual property rights therein and all other proprietary
information of such Assignor, including, but not limited to, Trade
Secrets and Trade Secret Rights;
(ix) all insurance policies;
(x) all other Goods, General Intangibles, Chattel Paper,
Documents and Instruments of such Assignor (other than the Pledged
Securities);
(xi) all Permits; and
(xii) all Proceeds and products of any and all of the
foregoing (all of the above, collectively, the "Collateral").
(b) The security interest of the Collateral Agent under this
Agreement extends to all Collateral of the kind which is the subject of this
Agreement which any Assignor may acquire at any time during the continuation of
this Agreement.
(c) Notwithstanding anything to the contrary contained in
clauses (a) and (b) above, the security interest created by this Agreement shall
not extend to, and the term "Collateral" shall not include any Equipment subject
to a purchase money Lien permitted under Section 9.01(iii) or (vii) of the
Credit Agreement or a Lien securing Capital Lease Obligations permitted under
Section 9.01(xiv) of the Credit Agreement, in each case to the extent, and only
to the extent, that the instrument evidencing the purchase money Indebtedness or
Capitalized Lease Obligations, as the case may be, secured by such Lien
expressly prohibits any other Lien on such Equipment and only for so long as
such purchase money Indebtedness or Capitalized Lease Obligations, as the case
may be, remains or remain outstanding and upon the earlier of the termination of
such prohibition or the satisfaction of such Indebtedness, such Equipment shall
be included in the term "Collateral" without any further action on the part of
any Assignor, the Collateral Agent or any other Secured Creditor.
(d) Notwithstanding anything to the contrary contained in
clauses (a) and (b) above, the security interest created by this Agreement shall
not extend to, and the term "Collateral" shall not include (i) any permit, lease
or license held by any Assignor that is subject to any agreement which validly
prohibits the creation by such Assignor of a security interest in such permit,
lease or license, and (ii) any permit, lease or license to the extent that any
valid
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enforceable law or regulation applicable to such permit, lease or license
prohibits the creation of a security interest therein; provided, however, that
(A) to the extent permitted under applicable law, the right to receive payments
of money under such permits, leases or licenses described in the preceding
clauses (i) and (ii) above shall not be excluded from the security interest
created hereunder and (B) such rights and property described in the preceding
clauses (i) and (ii) above shall be excluded from the Collateral only to the
extent and for so long as such agreement (in the case of clause (i)) or such law
(in the case of clause (ii)) continues validly to prohibit the creation of such
security interest, and upon the expiration of such prohibition, the permits,
leases and licenses as to which such prohibition previously applied shall
automatically be included in the Collateral, without further action on the part
of each Assignor.
(e) Notwithstanding anything to the contrary contained in
clauses (a) and (b) above, it is acknowledged and agreed that the security
interest created hereby shall not extend to (i) the AHP Collateral, to the
extent, and only to the extent, that the AHP Security Agreement validly
prohibits the grant of such security interest and only for the period that the
AHP Security Agreement is in full force and effect and (ii) any Marks, Patents
or Copyrights owned by a third Person in which any Assignor has rights of usage
thereof to the extent (and only to the extent) the granting of a security
interest therein is expressly prohibited by an agreement relating thereto to
which such Assignor is a party provided, however, that such Marks, Patents or
Copyrights, as the case may be, shall be excluded from the Collateral only to
the extent and only for so long as the relevant agreement continues validly to
prohibit the creation of such security interest, and upon the expiration of such
prohibition, all Marks, Patents or Copyrights, as the case may be, as to which
such prohibition previously applied shall automatically be included in the
Collateral, without any further action on the part of any Assignor, the
Collateral Agent, or any other Secured Creditor.
1.2. Power of Attorney. Each Assignor hereby appoints the
Collateral Agent its true and lawful attorney, irrevocably, with full power
after the occurrence of and during the continuance of an Event of Default (in
the name of such Assignor or otherwise) to act, require, demand, receive,
compound and give acquittance for any and all monies and claims for monies due
or to become due to such Assignor under or arising out of the Collateral, to
endorse any checks or other instruments or orders in connection therewith and to
file any claims or take any action or institute any proceedings which the
Collateral Agent may deem to be necessary or advisable to accomplish the
purposes of this Agreement, which appointment as attorney is coupled with an
interest.
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:
2.1. Necessary Filings. (i) All filings, registrations and
recordings necessary or appropriate to create, preserve, protect and perfect the
security interest granted by such Assignor to the Collateral Agent hereby in
respect of the Collateral have been accomplished (or, in the
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case of Collateral for which it is necessary to file a UCC-1 financing statement
or the filing of the Grants of Security Interests set forth in Annexes G and H
in order to perfect a security interest in such Collateral, such filings will be
accomplished within 10 days following the Initial Borrowing Date (or to the
extent such Collateral is acquired after the Initial Borrowing Date, within 10
days following the date of the acquisition of such Collateral)), and (ii) the
security interest granted to the Collateral Agent pursuant to this Agreement in
and to the Collateral constitutes (or, in the case of Collateral referred to in
the parenthetical in clause (i) above, upon compliance with the requirements of
such parenthetical, will constitute) a perfected security interest therein prior
to the rights of all other Persons therein and subject to no other Liens (other
than Permitted Liens) and is entitled to all the rights, priorities and benefits
afforded by the Uniform Commercial Code or other relevant law as enacted in any
relevant jurisdiction to perfected security interests.
2.2. No Liens. Such Assignor is, and as to Collateral acquired
by it from time to time after the date hereof such Assignor will be, the owner
of, or has rights in, all Collateral free from any Lien, security interest,
encumbrance or other right, title or interest of any Person (other than
Permitted Liens and Liens created under this Agreement), and such Assignor shall
defend the Collateral against all claims and demands of all Persons at any time
claiming the same or any interest therein adverse to the Collateral Agent.
2.3. Other Financing Statements. There is no financing
statement evidencing a valid security interest against the Borrower or any of
its Subsidiaries (or similar statement or instrument of registration under the
law of any jurisdiction) covering or purporting to cover any interest of any
kind in the Collateral (other than (x) as may be filed in connection with Liens
permitted pursuant to Section 9.01 of the Credit Agreement and (y) those with
respect to which appropriate termination statements executed by the secured
lender thereunder have been delivered to the Administrative Agent pursuant to
the terms of the Credit Agreement), and so long as the Total Commitments have
not been terminated or any Note or Letter of Credit remains outstanding or any
of the Obligations (other than arising from indemnities for which no request has
been made) remain unpaid or any Interest Rate Protection Agreement or Other
Hedging Agreement remains in effect or any Obligations are owed with respect
thereto, such Assignor will not execute or authorize to be filed in any public
office any financing statement (or similar statement or instrument of
registration under the law of any jurisdiction) or statements relating to the
Collateral, except financing statements filed or to be filed in respect of and
covering the security interests granted hereby by such Assignor or as permitted
by the Credit Agreement.
2.4. Chief Executive Office; Records. The chief executive
office of such Assignor is located at the address or addresses indicated on
Annex A hereto. Such Assignor will not move its chief executive office except to
such new location as such Assignor may establish in accordance with the last
sentence of this Section 2.4. The originals of all documents evidencing all
Receivables, Contract Rights and Trade Secret Rights of such Assignor and the
only original books of account and records of such Assignor relating thereto
are, and will continue to be, kept at such chief executive office or at such new
locations as such Assignor may establish in accordance with the last sentence of
this Section 2.4. All Receivables, Contract Rights and Trade Secret Rights of
such Assignor are, and will continue to be, maintained at, and controlled and
directed (including, without limitation, for general accounting purposes) from,
the office locations described above or such new location established in
accordance with the last sentence
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of this Section 2.4. Such Assignor shall not establish new locations for such
offices until (i) it shall have given to the Collateral Agent not less than 30
days' (or such shorter period of time agreed to by the Collateral Agent) prior
written notice of its intention to do so, clearly describing such new location
and providing such other information in connection therewith as the Collateral
Agent may reasonably request, (ii) with respect to such new location, it shall
have taken all action, satisfactory to the Collateral Agent, to maintain the
security interest of the Collateral Agent in the Collateral intended to be
granted hereby at all times fully perfected and in full force and effect, (iii)
at the reasonable request of the Collateral Agent, it shall have furnished an
opinion of counsel reasonably acceptable to the Collateral Agent to the effect
that all financing or continuation statements and amendments or supplements
thereto have been filed in the appropriate filing office or offices, and (iv)
the Collateral Agent shall have received reasonable evidence that all other
actions (including, without limitation, the payment of all filing fees and
taxes, if any, payable in connection with such filings) have been taken, in
order to perfect (and maintain the perfection and priority of) the security
interest granted hereby.
2.5. Location of Inventory and Equipment. All Inventory and
Equipment held on the date hereof by such Assignor is located at one of the
locations shown on Annex B hereto. Such Assignor agrees that all Inventory and
Equipment now held or subsequently acquired by it shall be kept at (or shall be
in transport to) any one of the locations shown on Annex B hereto, or such new
location as such Assignor may establish in accordance with the last sentence of
this Section 2.5. Such Assignor may establish a new location for Inventory and
Equipment only if (i) it shall have given to the Collateral Agent not less than
30 days' (or such shorter period of time agreed to by the Collateral Agent)
prior written notice of its intention to do so, clearly describing such new
location and providing such other information in connection therewith as the
Collateral Agent may reasonably request, (ii) with respect to such new location,
it shall take all action as the Collateral Agent may reasonably request to
maintain the security interest of the Collateral Agent in the Collateral
intended to be granted hereby at all times fully perfected and in full force and
effect, (iii) at the reasonable request of the Collateral Agent, it shall have
furnished an opinion of counsel reasonably acceptable to the Collateral Agent to
the effect that all financing or continuation statements and amendments or
supplements thereto have been filed in the appropriate filing office or offices,
and (iv) the Collateral Agent shall have received reasonable evidence that all
other actions (including, without limitation, the payment of all filing fees and
taxes, if any, payable in connection with such filings) have been taken, in
order to perfect (and maintain the perfection and priority of) the security
interest granted hereby.
2.6. Recourse. This Agreement is made with full recourse to
such Assignor and pursuant to and upon all the warranties, representations,
covenants and agreements on the part of such Assignor contained herein, in the
other Credit Documents, in the Interest Rate Protection Agreements or Other
Hedging Agreements and otherwise in writing in connection herewith or therewith.
2.7. Trade Names; Change of Name. Such Assignor does not have
or operate in any jurisdiction under, or within the five year period preceding
the date of this Agreement previously has not had or has not operated in any
jurisdiction under, any trade names, fictitious names or other names (including
any names of divisions or operations) except its legal name and such other trade
or fictitious names as are listed on Annex C hereto. Such Assignor shall not
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change its legal name or assume or operate in any jurisdiction under any trade,
fictitious or other name except those names listed on Annex C hereto in the
jurisdictions listed with respect to such names and new names (including,
without limitation, any names of divisions or operations) and/or jurisdictions
established in accordance with the last sentence of this Section 2.7. Such
Assignor shall not assume or operate in any jurisdiction under any new trade,
fictitious or other name or operate under any existing name in any additional
jurisdiction until (i) it shall have given to the Collateral Agent not less than
30 days' (or such shorter period of time agreed to by the Collateral Agent)
prior written notice of its intention so to do, clearly describing such new name
and/or jurisdiction and, in the case of a new name, the jurisdictions in which
such new name shall be used and providing such other information in connection
therewith as the Collateral Agent may reasonably request, (ii) with respect to
such new name and/or jurisdiction, it shall have taken all action to maintain
the security interest of the Collateral Agent in the Collateral intended to be
granted hereby at all times fully perfected and in full force and effect, (iii)
at the reasonable request of the Collateral Agent, it shall have furnished an
opinion of counsel reasonably acceptable to the Collateral Agent to the effect
that all financing or continuation statements and amendments or supplements
thereto have been filed in the appropriate filing office or offices, and (iv)
the Collateral Agent shall have received reasonable evidence that all other
actions (including, without limitation, the payment of all filing fees and
taxes, if any, payable in connection with such filings) have been taken, in
order to perfect (and maintain the perfection and priority of) the security
interest granted hereby.
ARTICLE III
SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS
3.1. Additional Representations and Warranties. As of the time
when each of its Receivables arises, each Assignor shall be deemed to have
represented and warranted that such Receivable, and all records, papers and
documents relating thereto (if any) are genuine and in all material respects
what they purport to be, and that all papers and documents (if any) relating
thereto (i) will be the only original writings evidencing and embodying such
obligation of the account debtor named therein (other than copies created for
general accounting purposes) and (ii) will be in compliance and will in all
material respects conform with all applicable federal, state and local laws and
applicable laws of any relevant foreign jurisdiction.
3.2. Maintenance of Records. Each Assignor will keep and
maintain at its own cost and expense satisfactory and complete records of its
Receivables and Contracts, including, but not limited to, originals of all
documentation (including each Contract) with respect thereto, records of all
payments received, all credits granted thereon, all merchandise returned and all
other dealings therewith, and such Assignor will make the same available on such
Assignor's premises to the Collateral Agent for inspection, at such Assignor's
own cost and expense, at any and all reasonable times and intervals as the
Collateral Agent may request. Upon the occurrence and during the continuance of
an Event of Default and at the request of the Collateral Agent, such Assignor
shall, at its own cost and expense, deliver all tangible evidence of its
Receivables and Contract Rights (including, without limitation, all documents
evidencing the Receivables and
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all Contracts) and such books and records to the Collateral Agent or to its
representatives (copies of which evidence and books and records may be retained
by such Assignor). If the Collateral Agent so directs, such Assignor shall
legend, in form and manner reasonably satisfactory to the Collateral Agent, the
Receivables and the Contracts, as well as books, records and documents of such
Assignor evidencing or pertaining to such Receivables and Contracts with an
appropriate reference to the fact that such Receivables and Contracts have been
assigned to the Collateral Agent and that the Collateral Agent has a security
interest therein.
3.3. Direction to Account Debtors; Contracting Parties; etc.
Upon the occurrence and during the continuance of an Event of Default, and if
the Collateral Agent so directs any Assignor, such Assignor agrees (x) to cause
all payments on account of the Receivables and Contracts to be made directly to
the Cash Collateral Account, (y) that the Collateral Agent may, at its option
and in accordance with applicable law, directly notify the obligors with respect
to any Receivables and/or under any Contracts to make payments with respect
thereto as provided in preceding clause (x), and (z) that the Collateral Agent
may, in accordance with applicable law, enforce collection of any such
Receivables or Contracts and may adjust, settle or compromise the amount of
payment thereof, in the same manner and to the same extent as such Assignor,
provided that this sentence shall not apply to Receivables owed to St. Luke's
Sub to the extent (and only to the extent) that such action is prohibited by the
St. Luke's Lease. Upon the occurrence and during the continuance of an Event of
Default, without notice to or assent by any Assignor, the Collateral Agent may
apply, in accordance with applicable law, any or all amounts then in, or
thereafter deposited in, the Cash Collateral Account in the manner provided in
Section 7.4 of this Agreement. The costs and expenses (including attorneys'
fees) of collection, whether incurred by any Assignor or the Collateral Agent,
shall be borne by such Assignor.
3.4. Modification of Terms; etc. At any time when a Noticed
Event of Default shall have occurred and be continuing, no Assignor shall
rescind or cancel any indebtedness evidenced by any Receivable, or modify any
term thereof or make any adjustment with respect thereto, or extend or renew the
same, or compromise or settle any material dispute, claim, suit or legal
proceeding relating thereto, or sell any Receivable, or interest therein,
without the prior written consent of the Collateral Agent, except as permitted
by Section 3.5. No Assignor shall rescind or cancel any indebtedness evidenced
by any Contract, or modify any term thereof or make any adjustment with respect
thereto, or extend or renew the same, or compromise or settle any material
dispute, claim, suit or legal proceeding relating thereto, or sell any Contract,
or interest therein, without the prior written consent of the Collateral Agent,
except (i) as permitted by Section 3.5 and (ii) so long as no Default or Event
of Default is then in existence, to the extent that the aggregate cost to such
Assignor resulting from any such recission, cancellation, modification,
adjustment, extension, compromise, settlement or sale is not material to such
Assignor. Each Assignor will duly fulfill all material obligations on its part
to be fulfilled under or in connection with the Receivables and Contracts and
will do nothing to impair the rights of the Collateral Agent in the Receivables
or the Contracts, except as permitted by this Section 3.4 and Section 3.5.
3.5. Collection. At any time when a Noticed Event of Default
shall have occurred and be continuing, each Assignor shall use reasonable
efforts to endeavor to cause to be collected from the account debtor named in
each of its Receivables or obligor under any
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Contract, as and when due (including, without limitation, amounts, services or
products which are delinquent, such amounts, services or products to be
collected in accordance with generally accepted lawful collection procedures)
any and all amounts, services or products owing under or on account of such
Receivable or Contract, and apply forthwith upon receipt thereof all such
amounts, services or products as are so collected to the outstanding balance of
such Receivable or under such Contract, except that, prior to the occurrence of
an Event of Default, any Assignor may allow in the ordinary course of business
as adjustments to amounts, services or products owing under its Receivables and
Contracts (i) an extension or renewal of the time or times of payment or
exchange, or settlement for less than the total unpaid balance, which such
Assignor finds appropriate in accordance with reasonable business judgment and
(ii) a refund or credit due as a result of returned or damaged merchandise or
improperly performed services. The costs and expenses (including, without
limitation, attorneys' fees) of collection, whether incurred by an Assignor or
the Collateral Agent, shall be borne by the relevant Assignor.
3.6. Instruments. If any Assignor owns or acquires any
Instrument constituting Collateral, such Assignor will within 10 days notify the
Collateral Agent thereof and, upon request by the Collateral Agent, promptly
deliver such Instrument to the Collateral Agent appropriately endorsed to the
order of the Collateral Agent as further security hereunder.
3.7. Further Actions. Each Assignor will, at its own expense,
make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent
from time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take such further
steps relating to its Receivables, Contracts, Instruments and other property or
rights covered by the security interest hereby granted, as the Collateral Agent
may reasonably request to preserve and protect its security interest in the
Collateral.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING TRADEMARKS
4.1. Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true, lawful, sole and exclusive owner of
or otherwise has the right to use the Marks listed in Annex D hereto and that
said listed Marks constitute all the Marks that such Assignor presently owns or
uses in connection with its business (other than immaterial unregistered Marks)
and include all Marks registered in the United States Patent and Trademark
Office or the equivalent thereof in any foreign country and all unregistered
Marks (other than immaterial unregistered Marks) that such Assignor now owns,
licenses or uses for products developed by such Assignor in connection with its
business. Each Assignor further warrants that it has no knowledge of any
material third party claim that any aspect of such Assignor's present or
contemplated business operations infringes or will infringe any rights in any
trademark, service xxxx or trade name. Each Assignor represents and warrants
that it is the beneficial and record owner of all trademark registrations and
applications listed in Annex D hereto and designated as "owned" thereon and that
said registrations are valid, subsisting and have not been canceled and that
such Assignor is not aware of any material third-party claim that any of said
registrations is invalid or unenforceable, or that there is any reason that any
of said applications
14
will not pass to registration. Each Assignor represents and warrants that upon
the recordation of a Grant of Security Interest in United States Trademarks and
Patents in the form of Annex G hereto in the United States Patent and Trademark
Office, together with filings on Form UCC-1 pursuant to this Agreement, all
filings, registrations and recordings necessary or appropriate to perfect the
security interest granted to the Collateral Agent in the registered United
States Marks covered by this Agreement under federal law will have been
accomplished. Each Assignor agrees to execute such a Grant of Security Interest
in United States Trademark and Patents covering all right, title and interest in
each registered United States Xxxx, and the associated goodwill, of such
Assignor, and to record the same. Each Assignor hereby grants to the Collateral
Agent an absolute power of attorney to sign, upon the occurrence and during the
continuance of an Event of Default, any document which may be required by the
United States Patent and Trademark Office or secretary of state or equivalent
governmental agency of any State of the United States or any foreign
jurisdiction in order to effect an absolute assignment of all right, title and
interest in each Xxxx, and record the same.
4.2. Licenses and Assignments. Each Assignor hereby agrees not
to divest itself of any right under any Xxxx that is material to the business of
such Assignor absent prior written approval of the Collateral Agent, except as
otherwise permitted by this Agreement or the Credit Agreement.
4.3. Infringements. Each Assignor agrees, promptly upon
learning thereof, to notify the Collateral Agent in writing of the name and
address of, and to furnish such pertinent information that may be available with
respect to, (i) any party who such Assignor believes is infringing or diluting
or otherwise violating in any material respect any of such Assignor's rights in
and to any material Xxxx, or (ii) with respect to any party claiming that such
Assignor's use of any material Xxxx violates in any material respect any
property right of that party. Each Assignor further agrees, unless otherwise
agreed by the Collateral Agent, to prosecute, in accordance with reasonable
business practices, any Person infringing any material Xxxx owned by such
Assignor.
4.4. Preservation of Marks. Each Assignor agrees to use its
Marks in interstate or foreign commerce, as the case may be, during the time in
which this Agreement is in effect, sufficiently to preserve such Marks as valid
and subsisting trademarks or service marks under the laws of the United States
or the relevant foreign jurisdiction; provided that no Assignor shall be
obligated to preserve any Xxxx to the extent the Assignor determines, in its
reasonable business judgment, that the preservation of such Xxxx is no longer
desirable in the conduct of its business.
4.5. Maintenance of Registration. Each Assignor shall, at its
own expense and in accordance with reasonable business practices, process all
documents required by the Trademark Act of 1946, as amended, 15 U. S. C.
SectionSection 1051 et seq. and any foreign equivalent thereof to maintain
trademark registrations, including but not limited to affidavits of continued
use and applications for renewals of registration in the United States Patent
and Trademark Office or equivalent governmental agency in any foreign
jurisdiction for all of its registered Marks pursuant to 15 U. S. C.
SectionSection 1058(a), 1059 and 1065 or any foreign equivalent thereof, as
applicable, and shall pay all fees and disbursements in connection therewith and
shall not abandon any such filing of affidavit of use or any such application of
renewal prior to the
15
exhaustion of all administrative and judicial remedies without prior written
consent of the Collateral Agent; provided that no Assignor shall be obligated to
maintain any Xxxx to the extent such Assignor determines, in its reasonable
business judgment, that the maintenance of such Xxxx is no longer necessary or
desirable in the conduct of its business.
4.6. Future Registered Marks. Within 30 days following the end
of each fiscal quarter of the Borrower, the Assignors shall deliver to the
Collateral Agent, an updated Annex D listing (as of the end of such fiscal
quarter) any and all newly issued Marks (other than immaterial unregistered
Marks) not previously listed on such Annex D or any such update. Upon the
Collateral Agent's request, the relevant Assignor shall, at such Assignor's
expense, deliver to the Collateral Agent an assignment for security in any such
newly issued Xxxx, the form of such assignment for security to be substantially
the same as the form hereof or in such other form as may be reasonably
satisfactory to the Collateral Agent.
4.7. Remedies. If an Event of Default shall occur and be
continuing, the Collateral Agent may, by written notice to the relevant
Assignor, take any or all of the following actions: (i) declare the entire
right, title and interest of such Assignor in and to each of the Marks, together
with all trademark rights and rights of protection to the same and the goodwill
of such Assignor's business symbolized by said Marks and the right to recover
for past infringements thereof, vested in the Collateral Agent for the benefit
of the Secured Creditors, in which event such rights, title and interest shall
immediately vest, in the Collateral Agent for the benefit of the Secured
Creditors, and the Collateral Agent shall be entitled to exercise the power of
attorney referred to in Section 4.1 to execute, cause to be acknowledged and
notarized and to record an absolute assignment with the applicable agency; (ii)
take and use or sell the Marks and the goodwill of such Assignor's business
symbolized by the Marks and the right to carry on the business and use the
assets of such Assignor in connection with which the Marks have been used; and
(iii) direct such Assignor to refrain, in which event such Assignor shall
refrain, from using the Marks in any manner whatsoever, directly or indirectly,
and, if requested by the Collateral Agent, change such Assignor's corporate name
to eliminate therefrom any use of any Xxxx and execute such other and further
documents that the Collateral Agent may request to further confirm this and to
transfer ownership of the Marks and registrations and any pending trademark
applications therefor in the United States Patent and Trademark Office or any
equivalent government agency or office in any foreign jurisdiction to the
Collateral Agent.
ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS, COPYRIGHTS AND TRADE SECRETS
5.1. Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful exclusive owner of or
otherwise has the right to use all (i) Trade Secret Rights of such Assignor,
(ii) rights in the Patents of such Assignor listed in Annex E hereto and that
said Patents constitute all the patents and applications for patents that such
Assignor now owns or that are otherwise used, pursuant to a license or
sublicense, in the conduct of the business of such Assignor and (iii) rights in
the Copyrights of such Assignor listed in Annex F hereto, and that such
Copyrights constitute all registrations of copyrights and
16
applications for copyright registrations that the Assignor now owns or that are
otherwise used, pursuant to a license or sublicense, in the conduct of the
business of such Assignor. Each Assignor further represents and warrants that it
has the exclusive right (or, in the case of any Patents or Copyrights subject to
an agreement which provides such right is non-exclusive, non-exclusive rights),
in all material respects, to use and practice under all material Patents and
Copyrights that it owns, uses, pursuant to a license or sublicense, or under
which it practices and has the exclusive right (or, in the case of Patent
subject to an agreement which provides such right is non-exclusive,
non-exclusive right), in all material respects, to exclude others from using or
practicing under any Patents it owns, uses, pursuant to a license or sublicense,
or under which it practices. Each Assignor further warrants that it has no
knowledge of any material third party claim that any aspect of such Assignor's
present or contemplated business operations infringes or will infringe any
rights in any Patent or Copyright or that such Assignor has misappropriated any
Trade Secrets, Trade Secret Rights or other proprietary information. Each
Assignor represents and warrants that upon the recordation of a Grant of
Security Interest in United States Trademarks and Patents in the form of Annex G
hereto in the United States Patent and Trademark Office and the recordation of a
Grant of Security Interest in United States Copyrights in the form of Annex H
hereto in the United States Copyright Office, together with filings on Form
UCC-1 pursuant to this Agreement, all filings, registrations and recordings
necessary or appropriate to perfect the security interest granted to the
Collateral Agent in the registered United States Patents and registered United
States Copyrights covered by this Agreement under federal law will have been
accomplished. Each Assignor agrees to execute a Grant of Security Interest in
registered United States Trademarks and Patents covering all right, title and
interest in each registered United States Patent of such Assignor and to record
the same, and to execute such a Grant of Security Interest in registered United
States Copyrights covering all right, title and interest in each registered
United States Copyright of such Assignor and to record the same. Each Assignor
hereby grants to the Collateral Agent an absolute power of attorney to sign,
upon the occurrence and during the continuance of any Event of Default, any
document which may be required by the United States Patent and Trademark Office
or equivalent governmental agency in any foreign jurisdiction or the United
States Copyright Office or equivalent governmental agency in any foreign
jurisdiction in order to effect an absolute assignment of all right, title and
interest in each registered Patent and registered Copyright of such Assignor, as
the case may be, and to record the same.
5.2. Licenses and Assignments. Each Assignor hereby agrees not
to divest itself of any right under any Patent or Copyright that is material to
the business of such Assignor absent prior written approval of the Collateral
Agent, except as otherwise permitted by this Agreement or the Credit Agreement.
5.3. Infringements. Each Assignor agrees, promptly upon
learning thereof, to furnish the Collateral Agent in writing with all pertinent
information available to such Assignor with respect to any infringement,
contributing infringement or active inducement to infringe any of such
Assignor's rights in any material Patent or material Copyright or to any claim
that the practice of any material Patent or the use of any material Copyright of
such Assignor violates any property right of a third party, or with respect to
any misappropriation of any material Trade Secret Right of such Assignor or any
claim that practice of any material Trade Secret Right of such Assignor violates
any property right of a third party. Each Assignor further agrees, absent
17
direction of the Collateral Agent to the contrary, diligently to prosecute, in
accordance with reasonable business practices, any Person infringing any
material Patent or material Copyright of such Assignor or any Person
misappropriating any material Trade Secret Right of such Assignor.
5.4. Maintenance of Patents and Copyrights. At its own
expense, each Assignor shall make timely payment of all post-issuance fees
required pursuant to 35 U. S. C. Section 41 and any foreign equivalent thereof
to maintain in force rights under each of its Patents, and to apply as permitted
pursuant to applicable law for any renewal of each of its Copyrights, in any
case absent prior written consent of the Collateral Agent; provided, that, no
Assignor shall be obligated to pay any such fees or apply for any such renewal
to the extent that such Assignor determines, in its reasonable business
judgment, that the maintenance of such Patent or Copyright is no longer
necessary or desirable in the conduct of its business.
5.5. Prosecution of Patent or Copyright Applications. At its
own expense, each Assignor shall diligently prosecute, in accordance with
reasonable business practices, all of its applications for Patents listed in
Annex E hereto and for Copyrights listed in Annex F hereto and shall not abandon
any such application prior to exhaustion of all administrative and judicial
remedies, absent written consent of the Collateral Agent, provided that no
Assignor shall be obligated to prosecute such application for any such Patent or
Copyright to the extent that such Assignor determines, in its reasonable
business judgment, that the prosecution of such application for any such Patent
or Copyright is no longer necessary or desirable in the conduct of its business.
5.6. Other Patents and Copyrights. Within 30 days following
the end of each fiscal quarter of the Borrower, Assignors shall deliver to the
Collateral Agent updated Annexes E and F listing, as of the end of such fiscal
quarter, any and all newly issued or acquired United States Patent or Copyright
registrations and any and all newly filed applications for United States Patent
or Copyright registrations. Upon the Collateral Agent's reasonable request, the
relevant Assignor shall, at such Assignor's expense, deliver to the Collateral
Agent an assignment for security as to any such newly issued or acquired Patent
or Copyright (or newly filed application therefor), the form of such assignment
for security to be substantially the same as the form hereof or in such other
form as may be reasonably satisfactory to the Collateral Agent.
5.7. Remedies. If an Event of Default shall occur and be
continuing, the Collateral Agent may by written notice to the relevant Assignor,
take any or all of the following actions: (i) declare the entire right, title,
and interest of such Assignor in each of the Patents and Copyrights vested in
the Collateral Agent for the benefit of the Secured Creditors, in which event
such right, title, and interest shall immediately vest in the Collateral Agent
for the benefit of the Secured Creditors, and the Collateral Agent shall be
entitled to exercise the power of attorney referred to in Section 5.1 to
execute, cause to be acknowledged and notarized and to record an absolute
assignment with the applicable agency; (ii) take and use, practice or sell the
Patents, Copyrights and Trade Secret Rights; and (iii) direct such Assignor to
refrain, in which event such Assignor shall refrain, from practicing the Patents
and using the Copyrights and/or Trade Secret Rights directly or indirectly, and
such Assignor shall execute such other and further documents as the Collateral
Agent may request further to confirm this and to transfer ownership of the
18
Patents, Copyrights and Trade Secret Rights to the Collateral Agent for the
benefit of the Secured Creditors.
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1. Protection of Collateral Agent's Security. Each Assignor
will do nothing to impair the rights of the Collateral Agent in the Collateral.
Each Assignor will at all times keep its Inventory and Equipment insured, at
such Assignor's own expense to the extent and in the manner provided in the
Credit Agreement and the other Credit Documents. Except as otherwise permitted
to be retained or expended by the relevant Assignor pursuant to the Credit
Agreement, the Collateral Agent shall, at the time such proceeds of such
insurance are distributed to the Secured Creditors, apply such proceeds in
accordance with the Credit Agreement, or after the Obligations have been
accelerated or otherwise become due and payable, in accordance with Section 7.4.
Each Assignor assumes all liability and responsibility in connection with the
Collateral acquired by it and the liability of such Assignor to pay the
Obligations shall in no way be affected or diminished by reason of the fact that
such Collateral may be lost, destroyed, stolen, damaged or for any reason
whatsoever unavailable to such Assignor.
6.2. Warehouse Receipts Non-Negotiable. Each Assignor agrees
that if any warehouse receipt or receipt in the nature of a warehouse receipt is
issued with respect to any of its Inventory, such warehouse receipt or receipt
in the nature thereof shall not be "negotiable" (as such term is used in Section
7-104 of the Uniform Commercial Code as in effect in any relevant jurisdiction
or under other relevant law).
6.3. Further Actions. Each Assignor will, at its own expense,
make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent
from time to time such lists, descriptions and designations of its Collateral,
warehouse receipts, receipts in the nature of warehouse receipts, bills of
lading, documents of title, vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments and take
such further steps relating to the Collateral and other property or rights
covered by the security interest hereby granted, which the Collateral Agent
deems reasonably appropriate or advisable to perfect, preserve or protect its
security interest in the Collateral.
6.4. Financing Statements. Each Assignor agrees to execute and
deliver to the Collateral Agent such financing statements, in form acceptable to
the Collateral Agent, as the Collateral Agent may from time to time reasonably
request or as are reasonably necessary or desirable in the opinion of the
Collateral Agent to establish and maintain a valid, enforceable, first priority
(subject to Permitted Liens) perfected security interest in the Collateral as
provided herein and the other rights and security contemplated hereby all in
accordance with the Uniform Commercial Code as enacted in any and all relevant
jurisdictions or any other relevant law. Each Assignor will pay any applicable
filing fees, recordation taxes and related expenses relating to its Collateral.
Each Assignor hereby authorizes the Collateral Agent to file any such financing
statements without the signature of such Assignor where permitted by law.
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ARTICLE VII
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
7.1. Remedies; Obtaining the Collateral Upon Default. Each
Assignor agrees that, if any Event of Default shall have occurred and be
continuing, then and in every such case, the Collateral Agent, in addition to
any rights now or hereafter existing under applicable law, shall have all rights
as a secured creditor under the Uniform Commercial Code in all relevant
jurisdictions and may also, in each case subject to and in accordance with all
applicable laws:
(i) personally, or by agents or attorneys, immediately take
possession of the Collateral or any part thereof, from such Assignor or
any other Person who then has possession of any part thereof with or
without notice or process of law, and for that purpose may enter upon
such Assignor's premises where any of the Collateral is located and
remove the same and use in connection with such removal any and all
services, supplies and other facilities of such Assignor;
(ii) instruct the obligor or obligors on any agreement,
instrument or other obligation (including, without limitation, the
Receivables and the Contracts) constituting the Collateral to make any
payment required by the terms of such agreement, instrument or other
obligation directly to the Collateral Agent;
(iii) withdraw all monies, securities and instruments in the
Cash Collateral Account for application to the Obligations in
accordance with Section 7.4;
(iv) sell, assign or otherwise liquidate, or direct such
Assignor to sell, assign or otherwise liquidate, any or all of the
Collateral or any part thereof in accordance with Section 7.2, or
direct the relevant Assignor to sell, assign or otherwise liquidate any
or all of the Collateral or any part thereof, and, in each case, take
possession of the proceeds of any such sale or liquidation;
(v) take possession of the Collateral or any part thereof, by
directing the relevant Assignor in writing to deliver the same to the
Collateral Agent at any place or places designated by the Collateral
Agent, in which event such Assignor shall at its own expense:
(x) forthwith cause the same to be moved to the place
or places so reasonably designated by the Collateral Agent and
there delivered to the Collateral Agent;
(y) store and keep any Collateral so delivered to the
Collateral Agent at such place or places pending further
action by the Collateral Agent as provided in Section 7.2; and
(z) while the Collateral shall be so stored and kept,
provide such guards and maintenance services as shall be
necessary to protect the same and to preserve and maintain
them in good condition; and
20
(vi) license or sublicense, whether on an exclusive or
nonexclusive basis, any Marks, Patents or Copyrights included in the
Collateral for such term and on such conditions and in such manner as
the Collateral Agent shall in its sole judgment determine;
it being understood that each Assignor's obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Collateral Agent shall be entitled to a
decree requiring specific performance by such Assignor of said obligation. The
Secured Creditors agree that this Agreement may be enforced only by the action
of the Administrative Agent or the Collateral Agent, in each case acting upon
the instructions of the Required Secured Creditors and that no other Secured
Creditor shall have any right individually to seek to enforce or to enforce this
Agreement or to realize upon the security to be granted hereby, it being
understood and agreed that such rights and remedies may be exercised by the
Administrative Agent or the Collateral Agent or the holders of at least a
majority of the outstanding Other Obligations, as the case may be, for the
benefit of the Secured Creditors upon the terms of this Agreement.
7.2. Remedies; Disposition of the Collateral. Any Collateral
repossessed by the Collateral Agent under or pursuant to Section 7.1 and any
other Collateral whether or not so repossessed by the Collateral Agent, may be
sold, assigned, leased or otherwise disposed of under one or more contracts or
as an entirety, and without the necessity of gathering at the place of sale the
property to be sold, and in general in such manner, at such time or times, at
such place or places and on such terms as the Collateral Agent may, in
compliance with any mandatory requirements of applicable law, determine to be
commercially reasonable. Any of the Collateral may be sold, leased or otherwise
disposed of, in the condition in which the same existed when taken by the
Collateral Agent or after any overhaul or repair at the expense of the relevant
Assignor which the Collateral Agent shall determine to be commercially
reasonable. Any such disposition which shall be a private sale or other private
proceedings permitted by such requirements shall be made upon not less than 10
days' written notice to the relevant Assignor specifying the time at which such
disposition is to be made and the intended sale price or other consideration
therefor, and shall be subject, for the 10 days after the giving of such notice,
to the right of the relevant Assignor or any nominee of such Assignor to acquire
the Collateral involved at a price or for such other consideration at least
equal to the intended sale price or other consideration so specified. Any such
disposition which shall be a public sale permitted by such requirements shall be
made upon not less than 10 days' written notice to the relevant Assignor
specifying the time and place of such sale and, in the absence of applicable
requirements of law, shall be by public auction (which may, at the Collateral
Agent's option, be subject to reserve), after publication of notice of such
auction not less than 10 days prior thereto in two newspapers in general
circulation to be selected by the Collateral Agent. To the extent permitted by
any such requirement of law, the Collateral Agent on behalf of the Secured
Creditors (or certain of them) may bid for and become the purchaser of the
Collateral or any item thereof, offered for sale in accordance with this Section
without accountability to the relevant Assignor. If, under mandatory
21
requirements of applicable law, the Collateral Agent shall be required to make a
disposition of the Collateral within a period of time which does not permit the
giving of notice to the relevant Assignor as hereinabove specified, the
Collateral Agent need give such Assignor only such notice of disposition as
shall be reasonably practicable in view of such mandatory requirements of
applicable law. Each Assignor agrees to do or cause to be done all such other
acts and things as may be reasonably necessary to make such sale or sales of all
or any portion of the Collateral of such Assignor valid and binding and in
compliance with any and all applicable laws, regulations, orders, writs,
injunctions, decrees or awards of any and all courts, arbitrations or
governmental instrumentalities, domestic or foreign, having jurisdiction over
any such sale or sales, all at such Assignor's expense.
7.3. Waiver of Claims. Except as otherwise provided in this
Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S
TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH SUCH ASSIGNOR
WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES
OR OF ANY STATE, and such Assignor hereby further waives, to the extent
permitted by law:
(i) all damages occasioned by such taking of possession except
any damages which are the direct result of the Collateral Agent's gross
negligence or willful misconduct;
(ii) all other requirements as to the time, place and terms of
sale or other requirements with respect to the enforcement of the
Collateral Agent's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable
law in order to prevent or delay the enforcement of this Agreement or
the absolute sale of the Collateral or any portion thereof, and each
Assignor, for itself and all who may claim under it, insofar as it or
they now or hereafter lawfully may, hereby waives the benefit of all
such laws.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall, to the fullest extent permitted under applicable law,
operate to divest all right, title, interest, claim and demand, either at law or
in equity, of the relevant Assignor therein and thereto and shall be a perpetual
bar both at law and in equity against such Assignor and against any and all
Persons claiming or attempting to claim the Collateral so sold, optioned or
realized upon, or any part thereof, from, through and under such Assignor.
7.4. Application of Proceeds. (a) All moneys collected by the
Collateral Agent upon any sale or other disposition of the Collateral (or, to
the extent the Pledge Agreement, any Mortgage or any other Security Document
requires proceeds of collateral thereunder to be applied in accordance with the
provisions of this Agreement, the Pledgee under the Pledge Agreement, the
mortgagee under such Mortgage or the collateral agent under such other Security
Document), together with all other moneys received by the Collateral Agent
hereunder, shall be applied as follows:
22
(i) first, to the payment of all Obligations owing to the
Pledgee or the Collateral Agent of the type described in clauses (iii)
and (iv) of the definition of "Obligations";
(ii) second, to the extent proceeds remain after the
application pursuant to the preceding clause (i), an amount equal to
the outstanding Primary Obligations shall be paid to the Secured
Creditors as provided in Section 7.4(e), with each Secured Creditor
receiving an amount equal to its outstanding Primary Obligations or, if
the proceeds are insufficient to pay in full all such Primary
Obligations, its Pro Rata Share of the amount remaining to be
distributed;
(iii) third, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) and (ii), an amount
equal to the outstanding Secondary Obligations shall be paid to the
Secured Creditors as provided in Section 7.4(e), with each Secured
Creditor receiving an amount equal to its outstanding Secondary
Obligations or, if the proceeds are insufficient to pay in full all
such Secondary Obligations, its Pro Rata Share of the amount remaining
to be distributed; and
(iv) fourth, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) through (iii),
inclusive, and following the termination of this Agreement pursuant to
Section 10.8(a) hereof, to the relevant Assignor or to whomever may be
lawfully entitled to receive such surplus.
(b) For purposes of this Agreement (x) "Pro Rata Share" shall
mean, when calculating a Secured Creditor's portion of any distribution or
amount, that amount (expressed as a percentage) equal to a fraction the
numerator of which is the then unpaid amount of such Secured Creditor's Primary
Obligations or Secondary Obligations, as the case may be, and the denominator of
which is the then outstanding amount of all Primary Obligations or Secondary
Obligations, as the case may be, (y) "Primary Obligations" shall mean (i) in the
case of the Credit Document Obligations, all principal of, and interest on, all
Loans under the Credit Agreement, all Unpaid Drawings theretofore made (together
with all interest accrued thereon), the aggregate Stated Amounts of all Letters
of Credit issued (or deemed issued) under the Credit Agreement, and all Fees and
(ii) in the case of the Other Obligations, all amounts due under the Interest
Rate Protection Agreements or Other Hedging Agreements (other than indemnities,
fees (including, without limitation, attorneys' fees) and similar obligations
and liabilities) and (z) "Secondary Obligations" shall mean all Obligations
other than Primary Obligations.
(c) When payments to Secured Creditors are based upon their
respective Pro Rata Shares, the amounts received by such Secured Creditors
hereunder shall be applied (for purposes of making determinations under this
Section 7.4 only) (i) first, to their Primary Obligations and (ii) second, to
their Secondary Obligations. If any payment to any Secured Creditor of its Pro
Rata Share of any distribution would result in overpayment to such Secured
Creditor, such excess amount shall instead be distributed in respect of the
unpaid Primary Obligations or Secondary Obligations, as the case may be, of the
other Secured Creditors, with each Secured Creditor whose Primary Obligations or
Secondary Obligations, as the case may be, have not been paid in full to receive
an amount equal to such excess amount multiplied by a
23
fraction the numerator of which is the unpaid Primary Obligations or Secondary
Obligations, as the case may be, of such Secured Creditor and the denominator of
which is the unpaid Primary Obligations or Secondary Obligations, as the case
may be, of all Secured Creditors entitled to such distribution.
(d) Each of the Secured Creditors agrees and acknowledges that
if the Lender Creditors are to receive a distribution on account of undrawn
amounts with respect to Letters of Credit issued (or deemed issued) under the
Credit Agreement (which shall only occur after all outstanding Loans and Unpaid
Drawings with respect to such Letters of Credit have been paid in full), such
amounts shall be paid to the Administrative Agent under the Credit Agreement and
held by it, for the equal and ratable benefit of the Lender Creditors, as cash
security for the repayment of Obligations owing to the Lender Creditors as such.
If any amounts are held as cash security pursuant to the immediately preceding
sentence, then upon the termination of all outstanding Letters of Credit, and
after the application of all such cash security to the repayment of all
Obligations owing to the Lender Creditors after giving effect to the termination
of all such Letters of Credit, if there remains any excess cash, such excess
cash shall be returned by the Agent to the Collateral Agent for distribution in
accordance with Section 7.4(a) hereof.
(e) Except as set forth in Section 7.4(d), all payments
required to be made hereunder shall be made (x) if to the Lender Creditors, to
the Administrative Agent under the Credit Agreement for the account of the
Lender Creditors, and (y) if to the Other Creditors, to the trustee, paying
agent or other similar representative (each, a "Representative") for the Other
Creditors or, in the absence of such a Representative, directly to the Other
Creditors.
(f) For purposes of applying payments received in accordance
with this Section 7.4, the Collateral Agent shall be entitled to rely upon (i)
the Administrative Agent under the Credit Agreement and (ii) the Representative
for the Other Creditors or, in the absence of such a Representative, upon the
Other Creditors for a determination (which the Administrative Agent, each
Representative for any Secured Creditors and the Secured Creditors agree (or
shall agree) to provide upon request of the Collateral Agent) of the outstanding
Primary Obligations and Secondary Obligations owed to the Lender Creditors or
the Other Creditors, as the case may be. Unless it has actual knowledge
(including by way of written notice from a Lender Creditor or an Other Creditor)
to the contrary, the Administrative Agent and each Representative, in furnishing
information pursuant to the preceding sentence, and the Collateral Agent, in
acting hereunder, shall be entitled to assume that no Secondary Obligations are
outstanding. Unless it has actual knowledge (including by way of written notice
from an Other Creditor) to the contrary, the Collateral Agent, in acting
hereunder, shall be entitled to assume that no Interest Rate Protection
Agreements or Other Hedging Agreements are in existence.
(g) It is understood and agreed that each Assignor shall
remain liable to the extent of any deficiency between the amount of the proceeds
of the Collateral in which it has granted a security interest hereunder and the
aggregate amount of its Obligations.
7.5. Remedies Cumulative. Each and every right, power and
remedy hereby specifically given to the Collateral Agent shall be in addition to
every other right, power and remedy specifically given under this Agreement, the
Interest Rate Protection Agreements or
24
Other Hedging Agreements or the other Credit Documents or now or hereafter
existing at law, in equity or by statute and each and every right, power and
remedy whether specifically herein given or otherwise existing may be exercised
from time to time or simultaneously and as often and in such order as may be
deemed expedient by the Collateral Agent. All such rights, powers and remedies
shall be cumulative and the exercise or the beginning of the exercise of one
shall not be deemed a waiver of the right to exercise any other or others. No
delay or omission of the Collateral Agent in the exercise of any such right,
power or remedy and no renewal or extension of any of the Obligations shall
impair any such right, power or remedy or shall be construed to be a waiver of
any Default or Event of Default or an acquiescence therein. No notice to or
demand on any Assignor in any case shall entitle it to any other or further
notice or demand in similar or other circumstances or constitute a waiver of any
of the rights of the Collateral Agent to any other or further action in any
circumstances without notice or demand. In the event that the Collateral Agent
shall bring any suit to enforce any of its rights hereunder and shall be
entitled to judgment, then in such suit the Collateral Agent may recover
expenses, including reasonable attorneys' fees, and the amounts thereof shall be
included in such judgment.
7.6. Discontinuance of Proceedings. In case the Collateral
Agent shall have instituted any proceeding to enforce any right, power or remedy
under this Agreement by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Collateral Agent, then and in every such
case the relevant Assignor, the Collateral Agent and each holder of any of the
Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral subject to the security interest created under
this Agreement, and all rights, remedies and powers of the Collateral Agent
shall continue as if no such proceeding had been instituted.
ARTICLE VIII
INDEMNITY
8.1. Indemnity. (a) Each Assignor jointly and severally agrees
to indemnify, reimburse and hold the Collateral Agent, each other Secured
Creditor and their respective successors, assigns, employees, agents and
servants (hereinafter in this Section 8.1 referred to individually as an
"Indemnitee," and, collectively, as "Indemnitees") harmless from any and all
liabilities, obligations, losses, damages, injuries, penalties, claims, demands,
actions, suits, judgments and any and all costs, expenses or disbursements
(including attorneys' fees and expenses) (for the purposes of this Section 8.1,
the foregoing are collectively called "expenses") of whatsoever kind and nature
imposed on, asserted against or incurred by any of the Indemnitees in any way
relating to or arising out of this Agreement, any Interest Rate Protection
Agreement or Other Hedging Agreement, any other Credit Document or any other
document executed in connection herewith or therewith or in any other way
connected with the administration of the transactions contemplated hereby or
thereby or the enforcement of any of the terms of, or the preservation of any
rights under any thereof, or in any way relating to or arising out of the
manufacture, ownership, ordering, purchase, delivery, control, acceptance,
lease, financing, possession, operation, condition, sale, return or other
disposition, or use of the Collateral (including, without limitation, latent or
other defects, whether or not discoverable), the violation
25
of the laws of any country, state or other governmental body or unit, any tort
(including, without limitation, claims arising or imposed under the doctrine of
strict liability, or for or on account of injury to or the death of any Person
(including any Indemnitee), or property damage), or contract claim; provided
that no Indemnitee shall be indemnified pursuant to this Section 8.1(a) for
losses, damages or liabilities to the extent caused by the gross negligence or
willful misconduct of such Indemnitee. Each Assignor agrees that upon written
notice by any Indemnitee of the assertion of such a liability, obligation, loss,
damage, injury, penalty, claim, demand, action, suit or judgment, the relevant
Assignor shall assume full responsibility for the defense thereof. Each
Indemnitee agrees to use its best efforts to promptly notify the relevant
Assignor of any such assertion of which such Indemnitee has knowledge.
(b) Without limiting the application of Section 8.1(a), each
Assignor agrees, jointly and severally, to pay, or reimburse the Collateral
Agent for any and all fees, costs and expenses of whatever kind or nature
incurred in connection with the creation, preservation or protection of the
Collateral Agent's Liens on, and security interest in, the Collateral,
including, without limitation, all fees and taxes in connection with the
recording or filing of instruments and documents in public offices, payment or
discharge of any taxes or Liens upon or in respect of the Collateral, premiums
for insurance with respect to the Collateral and all other fees, costs and
expenses in connection with protecting, maintaining or preserving the Collateral
and the Collateral Agent's interest therein, whether through judicial
proceedings or otherwise, or in defending or prosecuting any actions, suits or
proceedings arising out of or relating to the Collateral.
(c) Without limiting the application of Section 8.1(a) or (b),
each Assignor agrees, jointly and severally, to pay, indemnify and hold each
Indemnitee harmless from and against any loss, costs, damages and expenses which
such Indemnitee may suffer, expend or incur in consequence of or growing out of
any misrepresentation by any Assignor in this Agreement, any Interest Rate
Protection Agreement or Other Hedging Agreement, any other Credit Document or in
any writing contemplated by or made or delivered pursuant to or in connection
with this Agreement, any Interest Rate Protection Agreement or Other Hedging
Agreement or any other Credit Document.
(d) If and to the extent that the obligations of any Assignor
under this Section 8.1 are unenforceable for any reason, such Assignor hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
8.2. Indemnity Obligations Secured by Collateral; Survival.
Any amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Assignor contained in this Article VIII shall
continue in full force and effect notwithstanding the full payment of all the
Notes issued under the Credit Agreement, the termination of all Interest Rate
Protection Agreements or Other Hedging Agreements and Letters of Credit, and the
payment of all other Obligations and notwithstanding the discharge thereof.
26
ARTICLE IX
DEFINITIONS
The following terms shall have the meanings herein specified.
Such definitions shall be equally applicable to the singular and plural forms of
the terms defined.
"Administrative Agent" shall have the meaning provided in the recitals
hereto.
"Agreement" shall have the meaning provided in the preamble to this
Agreement.
"Assignor" shall have the meaning provided in the preamble to this
Agreement.
"Borrower" shall mean IASIS Healthcare Corporation, a Delaware
corporation.
"Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with, and in the sole dominion and control of, the
Collateral Agent for the benefit of the Secured Creditors.
"Chattel Paper" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Class" shall have the meaning provided in Section 10.2 of this
Agreement.
"Co-Book Runner" shall have the meaning set forth in the recitals
hereto.
"Co-Lead Arrangers" shall have the meaning provided in the recitals
hereto.
"Collateral" shall have the meaning provided in Section 1.1(a) of this
Agreement.
"Collateral Agent" shall have the meaning provided in the preamble to
this Agreement.
"Contract Rights" shall mean (i) all rights of an Assignor (including,
without limitation, all rights to payment) under each Contract and (ii) any
Receivable or any money(ies) due or to become due under any Excluded Contract.
"Contracts" shall mean all contracts between any Assignor and
one or more additional parties (including, without limitation, any Interest Rate
Protection Agreement or Other Hedging Agreement) to the extent the grant by an
Assignor of a security interest pursuant to this Agreement in its right, title
and interest in any such contract is not prohibited by such contract (or, if
prohibited, the consent of each other party to such grant of a security interest
is obtained) and would not give any other party to such contract the right to
terminate, or automatically result in the termination of, such other party's
obligations thereunder or the Assignor's rights thereunder (those contracts
where such grant is so prohibited (and consent not obtained) or resulting in
such a right of, or automatic, termination are referred to herein as "Excluded
Contracts").
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"Copyrights" shall mean any United States or foreign copyright owned by
any Assignor, including any registrations of any Copyright in the United States
Copyright Office or the equivalent thereof in any foreign country, other than
any country outside the United States where the grant of a security interest
would violate such Copyrights, as well as any application for a United States or
foreign copyright registration now or hereafter made with the United States
Copyright Office or the equivalent thereof in any foreign jurisdiction by any
Assignor.
"Credit Agreement" shall mean the Credit Agreement, dated as of October
15, 1999, among the Borrower, the Lenders, the Co-Lead Arrangers, the
Syndication Agent and the Administrative Agent, providing for the making of
Loans to the Borrower and the issuance of, and participation in, Letters of
Credit for the account of the Borrower as contemplated therein, as the same may
be amended, restated, modified, extended, renewed, replaced, supplemented,
restructured and/or refinanced from time to time, and including any agreement
extending the maturity of, refinancing or restructuring (including, but not
limited to, the inclusion of additional borrowers thereunder that are
Subsidiaries of the Borrower and whose obligations are guaranteed by the
Borrower and/or the Subsidiary Guarantors thereunder or any increase in the
amount borrowed) all, or any portion of, the Indebtedness under such agreement
or any successor agreements; provided, that with respect to any agreement
providing for the refinancing of Indebtedness under the Credit Agreement, such
agreement shall only be treated as, or as part of, the Credit Agreement
hereunder if (i) either (A) all obligations under the Credit Agreement being
refinanced shall be paid in full at the time of such refinancing, and all
commitments under the refinanced Credit Agreement shall have terminated in
accordance with their terms or (B) the Required Lenders shall have consented in
writing to the refinancing Indebtedness being treated, along with their
Indebtedness, as Indebtedness pursuant to the Credit Agreement, (ii) the
refinancing Indebtedness shall be permitted to be incurred under the Credit
Agreement being refinanced (if such Credit Agreement is to remain outstanding)
and (iii) a notice to the effect that the refinancing Indebtedness shall be
treated as issued under the Credit Agreement shall be delivered by the Borrower
to the Collateral Agent).
"Credit Document Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article IX.
"Default" shall mean any event which, with notice or lapse of time, or
both, would constitute an Event of Default.
"Documents" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.
"Documentation Agent" shall have the meaning set forth in the recitals
hereto
"Equipment" shall mean any "equipment," as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor and, in any event, shall include,
but shall not be limited to, all machinery, equipment, furnishings, movable
trade fixtures and vehicles now or hereafter owned by any Assignor and any and
all additions, substitutions and replacements of any of the foregoing,
28
wherever located, together with all attachments, components, parts, equipment
and accessories installed thereon or affixed thereto.
"Event of Default" shall mean any Event of Default under, and as
defined in, the Credit Agreement and shall in any event, without limitation,
include any payment default on any of the Credit Document Obligations after the
expiration of any applicable grace period.
"Excluded Contracts" shall have the meaning provided in the definition
of Contracts.
"General Intangibles" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York, but
excluding those General Intangibles constituting or arising under Excluded
Contracts (other than any Receivable or any money(ies) due or to become due
under any such Excluded Contract).
"Goods" shall have the meaning provided in the Uniform Commercial Code
as in effect on the date hereof in the State of New York.
"Indemnitee" shall have the meaning provided in Section 8.1 of this
Agreement.
"Instrument" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.
"Interest Rate Protection Agreement or Other Hedging Agreement" shall
have the meaning provided in the recitals to this Agreement.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof, wherever located, together
with all goods, supplies, incidentals, packaging materials, labels, materials
and any other items used or usable in manufacturing, processing, packaging or
shipping same; in all stages of production -- from raw materials through
work-in-process to finished goods -- and all products and proceeds of whatever
sort and wherever located and any portion thereof which may be returned,
rejected, reclaimed or repossessed by the Collateral Agent from any Assignor's
customers, and shall specifically include all "inventory" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York, now or hereafter owned by any Assignor.
"Lender Creditors" shall have the meaning provided in the recitals to
this Agreement.
"Lenders" shall have the meaning provided in the recitals to this
Agreement.
"Liens" shall mean any security interest, mortgage, pledge, lien,
claim, charge, encumbrance, title retention agreement, lessor's interest in a
financing lease or analogous instrument, in, of, or on any Assignor's property.
"Marks" shall mean all right, title and interest in and to any United
States or foreign trademarks, service marks and trade names now held or
hereafter acquired by any
29
Assignor, including any registration or application for registration of any
trademarks and service marks in the United States Patent and Trademark Office,
or the equivalent thereof in any State of the United States or in any foreign
country, other than any country outside the United States where the grant of a
security interest would violate such Marks and any trade dress including logos,
designs, trade names, company names, business names, fictitious business names
and other business identifiers used by any Assignor in the United States or any
foreign country.
"Noticed Event of Default" shall mean (i) an Event of Default with
respect to the Borrower under Section 10.05 of the Credit Agreement and (ii) any
other Event of Default in respect of which the Pledgee has given the Borrower
notice that such Event of Default constitutes a "Noticed Event of Default".
"Obligations" shall mean (i) the full and prompt payment when due
(whether at the stated maturity, by acceleration or otherwise) of all
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities
(including, without limitation, indemnities, fees and interest thereon) of each
Assignor owing to the Lender Creditors, now existing or hereafter incurred
under, arising out of or in connection with any Credit Document to which such
Assignor is a party (including all such obligations and indebtedness under any
Subsidiaries Guaranty to which such Assignor is a party) and the due performance
and compliance by each Assignor with the terms, conditions and agreements of
each such Credit Document (all such obligations and liabilities under this
clause (i), except to the extent consisting of obligations or indebtedness with
respect to Interest Rate Protection Agreements or Other Hedging Agreements,
being herein collectively called the "Credit Document Obligations"); (ii) the
full and prompt payment when due (whether at the stated maturity, by
acceleration or otherwise) of all obligations (including obligations which, but
for the automatic stay under Section 362(a) of the Bankruptcy Code, would become
due) and liabilities (including, without limitation, indemnities, fees and
interest thereon) of each Assignor owing to the Other Creditors, now existing or
hereafter incurred under, arising out of or in connection with any Interest Rate
Protection Agreement or Other Hedging Agreement, whether such Interest Rate
Protection Agreement or Other Hedging Agreement is now in existence or hereafter
arising, including, in the case of each Subsidiary Guarantor, all obligations
under the Subsidiaries Guaranty in respect of Interest Rate Protection
Agreements or Other Hedging Agreements, and the due performance and compliance
by each Assignor with all of the terms, conditions and agreements contained in
any such Interest Rate Protection Agreement or Other Hedging Agreement (all such
obligations and indebtedness under this clause (ii) being herein collectively
called the "Other Obligations"); (iii) any and all sums advanced by the
Collateral Agent or the Pledgee in order to preserve the Collateral or preserve
its security interest in the Collateral; (iv) in the event of any proceeding for
the collection or enforcement of any indebtedness, obligations, or liabilities
of each Assignor referred to in clauses (i), (ii) and (iii) after an Event of
Default shall have occurred and be continuing, the reasonable expenses of
re-taking, holding, preparing for sale or lease, selling or otherwise disposing
of or realizing on the Collateral, or of any exercise by the Collateral Agent or
the Pledgee of its rights hereunder, together with reasonable attorneys' fees
and court costs; and (v) all amounts paid by any Indemnitee as to which such
Indemnitee has the right to reimbursement under Section 8.1 of this Agreement.
It is acknowledged and agreed that the "Obligations" shall include extensions of
30
credit of the types described above, whether outstanding on the date of this
Agreement or extended from time to time after the date of this Agreement.
"Other Creditors" shall have the meaning provided in the recitals to
this Agreement.
"Other Obligations" shall have the meaning provided in the definition
of "Obligations" in this Article IX.
"Patents" shall mean any United States or foreign patent to which any
Assignor now or hereafter has title and any divisions or continuations thereof,
as well as any application for a United States or foreign patent now or
hereafter made by any Assignor, except as to patents or patent applications in
any country where the granting of a security interest therein is not permissible
under the laws of such country.
"Permits" shall mean, to the extent permitted to be assigned by the
terms thereof or by applicable law, all licenses, permits, rights, orders,
variances, franchises or authorizations (including certificates of need) of or
from any governmental authority or agency.
"Pledge Agreement" shall have the meaning provided in the Credit
Agreement.
"Pledged Securities" shall mean all Securities under, and as defined
in, the Pledge Agreement, which have been pledged by the Assignors pursuant
thereto.
"Pledgee" shall have the meaning provided in the Pledge Agreement.
"Primary Obligations" shall have the meaning provided in Section 7.4(b)
of this Agreement.
"Proceeds" shall have the meaning provided in the Uniform Commercial
Code as in effect in the State of New York on the date hereof or under other
relevant law and, in any event, shall include, but not be limited to, (i) any
and all proceeds of any insurance, indemnity, warranty or guaranty payable to
the Collateral Agent or any Assignor from time to time with respect to any of
the Collateral, (ii) any and all payments (in any form whatsoever) made or due
and payable to any Assignor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any governmental authority (or any person acting under
color of governmental authority) and (iii) any and all other amounts from time
to time paid or payable under or in connection with any of the Collateral.
"Pro Rata Share" shall have the meaning provided in Section 7.4(b) of
this Agreement.
"Receivables" shall mean any "account" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor and, in any event, shall include,
but shall not be limited to, all of such Assignor's rights to payment for, or
exchange of, goods sold or leased or services performed or product exchanged by
such Assignor, whether now in existence or arising from time to time
31
hereafter, including, without limitation, rights evidenced by an account, note,
contract, barter arrangement, security agreement, chattel paper, or other
evidence of indebtedness or security, together with (a) all security pledged,
assigned, hypothecated or granted to or held by such Assignor to secure the
foregoing, (b) all of any Assignor's right, title and interest in and to any
goods or services, the sale or exchange of which gave rise thereto, (c) all
guarantees, endorsements and indemnifications on, or of, any of the foregoing,
(d) all powers of attorney for the execution of any evidence of indebtedness or
security or other writing in connection therewith, (e) all books, records,
ledger cards, and invoices relating thereto, (f) all evidences of the filing of
financing statements and other statements and the registration of other
instruments in connection therewith and amendments thereto, notices to other
creditors or secured parties, and certificates from filing or other registration
officers, (g) all credit information, reports and memoranda relating thereto and
(h) all other writings related in any way to the foregoing.
"Representative" shall have the meaning provided in Section 7.4(e) of
this Agreement.
"Required Secured Creditors" shall mean the Required Lenders (or, after
the date on which all Credit Document Obligations have been paid in full, the
holders of at least the majority of the outstanding Other Obligations).
"Requisite Creditors" shall have the meaning provided in Section 10.2
of this Agreement.
"Secondary Obligations" shall have the meaning provided in Section
7.4(b) of this Agreement.
"Secured Creditors" shall have the meaning provided in the recitals to
this Agreement.
"Subsidiaries Guaranty" shall have the meaning provided in the recitals
to this Agreement.
"Syndication Agent" shall have the meaning provided in the recitals to
this Agreement.
"Termination Date" shall have the meaning provided in Section 10.8 of
this Agreement.
"Trade Secret Rights" shall mean the rights of an Assignor in any Trade
Secrets it holds or owns.
"Trade Secrets" means any secretly held engineering and other data,
information, production procedures and other know-how relating to the design,
manufacture, assembly, installation, use, operation, marketing, sale and
servicing of any products or business of an Assignor worldwide, whether written
or not written.
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ARTICLE X
MISCELLANEOUS
10.1. Notices. Except as otherwise specified herein, all
notices, requests, demands or other communications to or upon the respective
parties hereto shall be deemed to have been duly given or made when delivered to
the party to which such notice, request, demand or other communication is
required or permitted to be given or made under this Agreement, addressed:
(a) if to any Assignor, at:
x/x XXXXX Xxxxxxxxxx Xxxxxxxxxxx
Xxxxx 000
000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Attention: President or General Counsel
Tel: (000) 000-0000
Fax: (000) 000-0000
(b) if to the Collateral Agent:
Xxxxxx Guaranty Trust Company of New York
c/o X.X. Xxxxxx Services, Inc.
000 Xxxxxxx Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
(c) if to any Lender Creditor (other than the Collateral
Agent), at such address as such Lender Creditor shall have specified in
the Credit Agreement; and
(d) if to any Other Creditor, at such address as such Other
Creditor shall have specified in writing to each Assignor and the
Collateral Agent;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
10.2. Waiver; Amendment. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by each Assignor directly and adversely
affected thereby and the Collateral Agent (with the consent of (x) the Required
Lenders (or all the Lenders if required by Section 13.12 of the Credit
Agreement) at all times prior to the time at which all Credit Document
Obligations (other than those arising from indemnities for which no request has
been made) have been paid in full and all Commitments and Letters of Credit
under the Credit Agreement have been terminated or (y) the holders of at least a
majority of the outstanding Other Obligations at all times after the
33
time on which all Credit Document Obligations have been paid in full and all
Commitments and Letters of Credit under the Credit Agreement have been
terminated); provided, however, that no such change, waiver, modification or
variance shall be made to Section 8 hereof or this Section 10.2 without the
consent of each Secured Creditor adversely affected thereby, provided further,
that any change, waiver, modification or variance affecting the rights and
benefits of a single Class (as defined below) of Secured Creditors (and not all
Secured Creditors in a like or similar manner) shall require the written consent
of the Requisite Creditors (as defined below) of such Class of Secured
Creditors. For the purpose of this Agreement, the term "Class" shall mean each
class of Secured Creditors, i.e., whether (x) the Lender Creditors as holders of
the Credit Document Obligations or (y) the Other Creditors as the holders of the
Other Obligations. For the purpose of this Agreement, the term "Requisite
Creditors" of any Class shall mean each of (x) with respect to the Credit
Document Obligations, the Required Lenders and (y) with respect to the Other
Obligations, the holders of at least a majority of all obligations outstanding
from time to time under the Interest Rate Protection Agreements and Other
Hedging Agreements.
10.3. Obligations Absolute. The obligations of each Assignor
hereunder shall remain in full force and effect without regard to, and shall not
be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of such Assignor; (b) any
exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement, any other Credit Document or
any Interest Rate Protection Agreement or Other Hedging Agreement; (c) any
renewal, extension, amendment or modification of or addition or supplement to or
deletion from any Credit Document or any Interest Rate Protection Agreement or
Other Hedging Agreement or any security for any of the Obligations; (d) any
waiver, consent, extension, indulgence or other action or inaction under or in
respect of any such agreement or instrument including, without limitation, this
Agreement; (e) any furnishing of any additional security to the Collateral Agent
or its assignee or any acceptance thereof or any release of any security by the
Collateral Agent or its assignee; or (f) any limitation on any party's liability
or obligations under any such instrument or agreement or any invalidity or
unenforceability, in whole or in part, of any such instrument or agreement or
any term thereof; whether or not any Assignor shall have notice or knowledge of
any of the foregoing. The rights and remedies of the Collateral Agent herein
provided are cumulative and not exclusive of any rights or remedies which the
Collateral Agent would otherwise have.
10.4. Successors and Assigns. This Agreement shall be binding
upon each Assignor and its successors and assigns and shall inure to the benefit
of the Collateral Agent and its successors and assigns; provided, that no
Assignor may transfer or assign any or all of its rights or obligations
hereunder without the prior written consent of the Collateral Agent. All
agreements, statements, representations and warranties made by each Assignor
herein or in any certificate or other instrument delivered by such Assignor or
on its behalf under this Agreement shall be considered to have been relied upon
by the Secured Creditors and shall survive the execution and delivery of this
Agreement, the other Credit Documents and the Interest Rate Protection
Agreements or Other Hedging Agreements regardless of any investigation made by
the Secured Creditors or on their behalf.
34
10.5. Headings Descriptive. The headings of the several
sections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
10.6. Governing Law. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
10.7. Assignors' Duties. It is expressly agreed, anything
herein contained to the contrary notwithstanding, that each Assignor shall
remain liable to perform all of the obligations, if any, assumed by it with
respect to the Collateral and the Collateral Agent shall not have any
obligations or liabilities with respect to any Collateral by reason of or
arising out of this Agreement, nor shall the Collateral Agent be required or
obligated in any manner to perform or fulfill any of the obligations of any
Assignor under or with respect to any Collateral.
10.8. Termination; Release. (a) After the Termination Date (as
defined below), this Agreement shall terminate (provided that all indemnities
set forth herein including, without limitation, in Section 8.1 hereof shall
survive such termination) and the Collateral Agent, at the request and expense
of the relevant Assignor, will execute and deliver to such Assignor a proper
instrument or instruments (including, without limitation, Uniform Commercial
Code termination statements on form UCC-3) acknowledging the satisfaction and
termination of this Agreement, and will duly assign, transfer and deliver to
such Assignor (without recourse and without any representation or warranty) such
of the Collateral as may be in the possession of the Collateral Agent and as has
not theretofore been sold or otherwise applied or released pursuant to this
Agreement. As used in this Agreement, "Termination Date" shall mean the date
upon which the Total Commitments and all Interest Rate Protection Agreements or
Other Hedging Agreements have been terminated, no Note is outstanding (and all
Loans have been paid in full), all Letters of Credit have been terminated and
all other Obligations (other than those arising from indemnities for which no
request has been made) then owing have been paid in full.
(b) In the event that any part of the Collateral is sold or
otherwise disposed of (to a Person other than the Borrower or a Subsidiary
thereof) (x) at any time prior to the time at which all Credit Document
Obligations have been paid in full and all Commitments under the Credit
Agreement have been terminated, in connection with a sale or other disposition
(including the sale of the capital stock or other equity interests of an
Assignor) permitted by Section 9.02 of the Credit Agreement or is otherwise
released at the direction of the Required Lenders (or all the Lenders if
required by Section 13.12 of the Credit Agreement) or (y) at any time
thereafter, in accordance with the terms of the Interest Rate Protection
Agreements or Other Hedging Agreements, and the proceeds of any such sale or
disposition are applied in accordance with the terms of the Credit Agreement or
such Interest Rate Protection Agreements or Other Hedging Agreements, as the
case may be, to the extent required to be so applied, the Collateral Agent, at
the request and expense of such Assignor, will (i) duly assign, transfer and
deliver to such Assignor (without recourse and without any representation or
warranty) such of the Collateral as is then being (or has been) so sold,
disposed of or released and as may be in the possession of the Collateral Agent
and has not theretofore been released pursuant to this Agreement and/or (ii)
35
execute such releases and discharges in respect of such Collateral as is then
being (or has been) so sold, disposed of or released as such Assignor may
reasonably request.
(c) At any time that the respective Assignor desires that
Collateral be released as provided in the foregoing Section 10.8(a) or (b), it
shall deliver to the Collateral Agent a certificate signed by an Authorized
Officer stating that the release of the respective Collateral is permitted
pursuant to Section 10.8(a) or (b). If requested by the Collateral Agent
(although the Collateral Agent shall have no obligation to make any such
request), the relevant Assignor shall furnish appropriate legal opinions (from
counsel, which may be in-house counsel, reasonably acceptable to the Collateral
Agent) to the effect set forth in the immediately preceding sentence. The
Collateral Agent shall have no liability whatsoever to any Secured Creditor as
the result of any release of Collateral by it as permitted (or which the
Collateral Agent in the absence of gross negligence or willful misconduct
believes to be permitted) by this Section 10.8.
10.9. Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with the
Borrower and the Collateral Agent.
10.10. The Collateral Agent. The Collateral Agent will hold in
accordance with this Agreement all items of the Collateral at any time received
under this Agreement. It is expressly understood and agreed that the obligations
of the Collateral Agent as holder of the Collateral and interests therein and
with respect to the disposition thereof, and otherwise under this Agreement, are
only those expressly set forth in this Agreement. The Collateral Agent shall act
hereunder on the terms and conditions set forth in Section 12 of the Credit
Agreement.
10.11. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.12. Limited Obligations. It is the desire and intent of
each Assignor and the Secured Creditors that this Agreement shall be enforced
against each Assignor to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought.
Notwithstanding anything to the contrary contained herein, in furtherance of the
foregoing, it is noted that, on and after the execution and delivery of the
Subsidiaries Guaranty, the obligations of each Subsidiary Guarantor constituting
an Assignor have been limited as provided in the Subsidiaries Guaranty.
10.13. Additional Assignors. It is understood and agreed that
any Subsidiary of the Borrower that is required to execute a counterpart of this
Agreement after the date hereof pursuant to Section 8.11, 8.13 or 9.14 of the
Credit Agreement shall automatically become an Assignor hereunder by executing a
counterpart hereof and delivering the same to the Collateral Agent.
36
10.14. Effectiveness. This Agreement shall become effective
when the Collateral Agent, the Borrower and each Subsidiary of the Borrower
whose name appears on the signature pages hereto shall have signed a counterpart
hereof (whether the same or different counterparts) and shall have delivered
(including by way of facsimile transmission) the same to the Administrative
Agent.
* * *
37
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their duly authorized officers as of
the date first above written.
IASIS HEALTHCARE CORPORATION,
as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
SALT LAKE REGIONAL MEDICAL CENTER, INC.,
as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
JORDAN VALLEY HOSPITAL, INC.,
as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
XXXXX HOSPITAL & MEDICAL CENTER, INC.,
as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
ROCKY MOUNTAIN MEDICAL CENTER, INC.,
as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
38
PIONEER VALLEY HOSPITAL, INC.,
as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
PIONEER VALLEY HEALTH PLAN, INC.,
as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
CLINICARE OF UTAH, INC., as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
SOUTHRIDGE PLAZA HOLDINGS, INC.,
as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
XXXXX CITY HOLDINGS, INC.,
as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
XXXXX SURGICAL CENTER HOLDINGS, INC.,
as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
39
MESA GENERAL HOSPITAL, LP,
as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
ST. LUKE'S MEDICAL CENTER, LP,
as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
ST. LUKE'S BEHAVIORAL HOSPITAL, LP,
as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
HEALTH CHOICE ARIZONA, INC.,
as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
METRO AMBULATORY SURGERY CENTER, INC.,
as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
40
BILTMORE SURGERY CENTER, INC.,
as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
PALMS OF PASADENA HOSPITAL, LP,
as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
ODESSA REGIONAL HOSPITAL, LP,
as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
TEMPE ST. LUKE'S HOSPITAL, LP,
as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
MEMORIAL HOSPITAL OF TAMPA, LP,
as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
41
TOWN & COUNTRY HOSPITAL, LP,
as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
SOUTHWEST GENERAL HOSPITAL, LP,
as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
SSJ ST. PETERSBURG HOLDINGS, INC.,
as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
FIRST CHOICE PHYSICIANS NETWORK
HOLDINGS, INC., as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
BAPTIST JOINT VENTURE HOLDINGS, INC.,
as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
42
BEAUMONT HOSPITAL HOLDINGS, INC.,
as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
IASIS HEALTHCARE HOLDINGS, INC.,
as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
IASIS MANAGEMENT COMPANY,
as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
Accepted and Agreed to:
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK,
as Collateral Agent, as Assignee
By: /s/ Xxxxxxx Xxxxx
----------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
43
BILTMORE SURGERY CENTER, INC.
(ARIZONA CORPORATION), as an Assignor
By: /s/ Xxxxx Xxxxx
---------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
44
IASIS HEALTHCARE MSO SUB OF SALT
LAKE CITY, LLC, as an Assignor
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive
Officer
