EXHIBIT 10.2
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SECURITY AGREEMENT
among
VANGUARD HEALTH HOLDING COMPANY I, LLC,
CERTAIN SUBSIDIARIES OF
VANGUARD HEALTH HOLDING COMPANY I, LLC
and
BANK OF AMERICA, N.A.,
as COLLATERAL AGENT
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Dated as of September 23, 2004
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SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of September 23, 2004, made by each of
the undersigned assignors (each an "Assignor" and, together with any other
entity that becomes an assignor hereunder pursuant to Section 10.13 hereof, the
"Assignors") in favor of Bank of America, N.A., as Collateral Agent (together
with any successor Collateral Agent, the "Collateral Agent"), for the benefit of
the Secured Creditors (as defined below). Except as otherwise defined herein,
all capitalized 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, Vanguard Health Holding Company I, LLC ("VHS Holdco I"),
Vanguard Health Holding Company II, LLC ("VHS Holdco II"), Vanguard Holding
Company II, Inc. (the "Co-Borrower" and, together with VHS Holdco II, the
"Borrowers" and each, a "Borrower"), the lenders from time to time party thereto
(the "Lenders"), Bank of America, N.A., as Administrative Agent (in such
capacity, together with any successor administrative agent, the "Administrative
Agent"), Citicorp North America, Inc., as Syndication Agent, General Electric
Capital Corporation, LaSalle Bank, National Association and Wachovia Bank,
National Association, as Co-Documentation Agents and Banc of America Securities
LLC and Citigroup Global Markets Inc., as Joint Lead Arrangers and Book Runners
have entered into a Credit Agreement, dated as of September 23, 2004 (as
amended, modified, restated and/or supplemented from time to time, the "Credit
Agreement"), providing for the making of Loans to, and the issuance of, and
participation in, Letters of Credit for the account of the Borrowers, all as
contemplated therein (the Lenders, each Issuing Lender, the Administrative
Agent, the Collateral Agent and each other Agent are herein called the "Lender
Creditors");
WHEREAS, each Borrower may at any time and from time to time enter
into one or more Interest Rate Protection Agreements or Other Hedging Agreements
with one or more Lenders or any affiliate thereof (each such Lender or
affiliate, even if the respective Lender subsequently ceases to be a Lender
under the Credit Agreement for any reason, together with such Lender's or
affiliate's successors and assigns, if any, collectively, the "Other
Creditors");
WHEREAS, pursuant to each Guaranty, each Assignor that is a party
thereto has guaranteed to the Secured Creditors the payment when due of all
Guaranteed Obligations as described in each such Guaranty;
WHEREAS, VHS Holdco II, one or more Wholly-Owned Subsidiaries of VHS
Holdco II and any bank (and/or one or more of its banking affiliates) reasonably
acceptable to the Administrative Agent, in each case, designated to the
Administrative Agent in writing by VHS Holdco II as a provider of Treasury
Services (collectively, the "Treasury Service Creditors" and, together with the
Lender Creditors and the Other Creditors, the "Secured Creditors") in the future
may enter into, a credit arrangement providing for Treasury Services (with any
written agreement evidencing such credit arrangements (to the extent expressly
stated therein that the liabilities and indebtedness thereunder are
"Obligations" for the purposes of this Agreement), as
amended, modified, supplemented, replaced or refinanced from time to time,
herein called the "Treasury Services Agreement");
WHEREAS, it is a condition precedent to (i) the making of Loans to
the Borrowers, and the issuance of, and participation in, Letters of Credit for
the account of the Borrowers under the Credit Agreement, (ii) the Other
Creditors entering into Interest Rate Protection Agreements and Other Hedging
Agreements and (iii) the extension of Treasury Services by the Treasury Service
Creditors that each Assignor shall have executed and delivered to the Collateral
Agent this Agreement; and
WHEREAS, each Assignor will obtain benefits from the incurrence of
Loans by the Borrowers, and the issuance of, and participation in, Letters of
Credit for the account of the Borrowers under the Credit Agreement, the entering
into by each Borrower of Interest Rate Protection Agreements or Other Hedging
Agreements and the extension of Treasury Services to VHS Holdco II and its
Wholly-Owned Domestic Subsidiaries and, accordingly, desires to execute this
Agreement in order to satisfy the condition described in the preceding paragraph
and to induce the Lenders to make Loans to the Borrowers and issue, and/or
participate in, Letters of Credit for the account of the Borrowers, the Other
Creditors to enter into Interest Rate Protection Agreements or Other Hedging
Agreements with the Borrower and the Treasury Service Creditors to extend
Treasury Services to VHS Holdco II and its Wholly-Owned Domestic Subsidiaries;
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 for the benefit of the Secured Creditors and hereby covenants
and agrees with the Collateral Agent for the benefit of the Secured Creditors 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 personal
property and fixtures (and all rights therein) of such Assignor, or in which or
to which such Assignor has any rights, in each case, whether now existing or
hereafter from time to time acquired:
(i) each and every Account;
(ii) all cash;
(iii) the Cash Collateral Account and all monies, securities,
Instruments and other investments deposited or required to be deposited in
the Cash Collateral Account;
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(iv) all Chattel Paper (including, without limitation, all Tangible
Chattel Paper and all Electronic Chattel Paper);
(v) all Commercial Tort Claims;
(vi) all proprietary information of such Assignor, including but not
limited to all writings, plans, specifications and schematics, all
engineering drawings, customer lists, all recorded data of any kind or
nature, regardless of the medium of recording and Trade Secret Rights;
(vii) Contracts, together with all Contract Rights arising
thereunder;
(viii) all Copyrights;
(ix) all Equipment;
(x) all Deposit Accounts and all other deposit, cash management and
similar accounts maintained by such Assignor with any Person and all
monies, securities, Instruments and other investments deposited or
required to be deposited in any of the foregoing;
(xi) all Documents;
(xii) all General Intangibles;
(xiii) all Goods;
(xiv) all Instruments;
(xv) all Inventory;
(xvi) all Investment Property;
(xvii) all Letter-of-Credit Rights (whether or not the respective
letter of credit is evidenced by a writing);
(xviii) all Marks and Domain Names, together with the registrations
and right to all renewals thereof, and the goodwill of the business of
such Assignor symbolized by the Marks;
(xix) all Patents;
(xx) all Permits;
(xxi) all Software and all Software licensing rights;
(xxii) all Supporting Obligations; and
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(xxiii) all Proceeds and products of any and all of the foregoing
(all of the above, the "Collateral").
(b) The security interest of the Collateral Agent under this
Agreement extends to all Collateral which any Assignor may acquire, or with
respect to which any Assignor may obtain rights, at any time during the term of
this Agreement.
(c) Notwithstanding anything to the contrary in this Agreement, (I)
in the event that any Assignor acquires an item of Collateral at any time
following the date hereof, such Assignor may elect (which election shall be made
by delivering written notice thereof to the Collateral Agent) that such
Collateral shall not be required to be pledged pursuant to this Agreement as
otherwise required above in this Section 1.1 so long as the book value or fair
market value (as determined in good faith by the Borrower), whichever is
greater, thereof is less than $1,000,000 (although in no event shall the
aggregate book value or fair market value (as determined in good faith by the
Borrower), whichever is greater, of all assets excluded from the security
interests granted hereunder provided in this clause (c), exceed $5,000,000) and
(II) this Agreement shall not constitute a grant of security interest in (i) any
assets (including Equity Interests) to the extent that, as of the Effective
Date, and for so long as, such grant of a security interest would violate a
contractual obligation or applicable law binding on such asset, except to the
extent the respective provisions of the contractual obligation or applicable law
giving rise to such violation would be rendered ineffective pursuant to Sections
9-406, 9-407, 9-408 or 9-409 of the UCC, (ii) any property of any person
acquired by an Assignor after the Effective Date pursuant to Section 9.05(xxv)
of the Credit Agreement if, and to the extent that, and for so long as, (A) such
grant of security interest would violate applicable law or any contractual
obligation binding upon such property and (B) such law or obligation existed at
the time of the acquisition thereof and was not created or made binding upon
such property in contemplation of or in connection with the acquisition of such
Subsidiary (provided that the foregoing clause (B) shall not apply in the case
of a joint venture, including a joint-venture that is a Subsidiary, except to
the extent the respective provisions of the contractual obligation or applicable
law giving rise to such violation would be rendered ineffective pursuant to
Sections 9-406, 9-407, 9-408 or 9-409 of the UCC); provided that each Assignor
shall use its commercial reasonable efforts to avoid any such restriction
described in this clause (ii) or (iii) rights in respect of any Letter of Credit
to the extent any Assignor is required by applicable law to apply the proceeds
of a drawing of such Letter of Credit for a specified purpose.
(d) Notwithstanding anything to the contrary contained in this
Agreement, the grant of a security interest hereunder in the Equity Interests of
any Foreign Subsidiary by an Assignor (to the extent that such Assignor is not a
Foreign Subsidiary) shall be limited solely to no more than 65% of the Voting
Stock and 100% of the Non-Voting Stock of such Assignor's "first tier" Foreign
Subsidiaries.
1.2. Power of Attorney. Each Assignor hereby constitutes and
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 the extent permitted by
applicable law, to act, require, demand, receive, compound and give acquittance
for any and all moneys and claims for moneys due or to become due to such
Assignor under or arising out of the Collateral, to endorse any checks or other
instruments or
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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 protect the interests of the Secured Creditors, 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. All filings, registrations, recordings and
other actions necessary or appropriate to create, preserve and perfect the
security interest granted by such Assignor to the Collateral Agent hereby in
respect of the Collateral have been (or, within ten days following the Initial
Borrowing Date, shall have been) accomplished and the security interest granted
to the Collateral Agent pursuant to this Agreement in and to the Collateral
creates a valid and, together with all such filings, registrations, recordings
and other actions, 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, in each case to the extent that
the Collateral consists of the type of property in which a security interest may
be perfected by possession or control (within the meaning of the UCC as in
effect on the date hereof in the State of New York), by filing a financing
statement under the Uniform Commercial Code as enacted in any relevant
jurisdiction or with respect to any U.S. issued patents or patent applications,
trademark registrations, trademark registration applications, copyright
registrations or copyright registration applications, by a filing of a Grant of
Security Interest in the respective form attached hereto in the United States
Patent and Trademark Office or in the United States Copyright Office.
2.2. No Liens. Such Assignor is, and as to all Collateral acquired
by it from time to time after the date hereof such Assignor will be, the owner
of all Collateral free from any Lien, security interest, encumbrance or other
right, title or interest of any Person (other than Permitted Liens), 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. So long as the Termination Date has not occurred, 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 in connection with
Permitted Liens.
2.3. Chief Executive Office, Record Locations. The chief executive
office of such Assignor is, on the date of this Agreement, located at the
address indicated on Annex A hereto for such Assignor. During the period of the
four calendar months preceding the date of this Agreement, the chief executive
office of such Assignor has not been located at any address other than that
indicated on Annex A in accordance with the immediately preceding sentence, in
each case unless each such other address is also indicated on Annex A hereto for
such Assignor.
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2.4. Location of Inventory and Equipment. All Inventory and
Equipment held on the date hereof, or held at any time during the four calendar
months prior to the date hereof, by each Assignor is located at one of the
locations shown on Annex B hereto for such Assignor.
2.5. Legal Names; Type of Organization (and Whether a Registered
Organization and/or a Transmitting Utility); Jurisdiction of Organization;
Location; Organizational Identification Numbers; Changes Thereto; etc. The exact
legal name of each Assignor, the type of organization of such Assignor, whether
or not such Assignor is a Registered Organization, the jurisdiction of
organization of such Assignor, such Assignor's Location, the organizational
identification number (if any) of such Assignor, and whether or not such
Assignor is a Transmitting Utility, is listed on Annex C hereto for such
Assignor. Such Assignor shall not change its legal name, its type of
organization, its status as a Registered Organization (in the case of a
Registered Organization), its status as a Transmitting Utility or as a Person
which is not a Transmitting Utility, as the case may be, its jurisdiction of
organization, its Location, or its organizational identification number (if any)
from that used on Annex C hereto, except that any such changes shall be
permitted (so long as not in violation of the applicable requirements of the
Secured Debt Agreements and so long as same do not involve (x) a Registered
Organization ceasing to constitute same or (y) such Assignor changing its
jurisdiction of organization or Location from the United States or a State
thereof to a jurisdiction of organization or Location, as the case may be,
outside the United States or a State thereof) if (i) it shall have given to the
Collateral Agent not less than 15 days' prior written notice of each change to
the information listed on Annex C (as adjusted for any subsequent changes
thereto previously made in accordance with this sentence), together with a
supplement to Annex C which shall correct all information contained therein for
such Assignor, and (ii) in connection with the respective such change or
changes, it shall have taken all action reasonably requested by the Collateral
Agent to maintain the security interests of the Collateral Agent in the
Collateral intended to be granted hereby at all times fully perfected and in
full force and effect. In addition, to the extent that such Assignor does not
have an organizational identification number on the date hereof and later
obtains one, such Assignor shall promptly thereafter notify the Collateral Agent
of such organizational identification number and shall take all actions
reasonably satisfactory to the Collateral Agent to the extent necessary to
maintain the security interest of the Collateral Agent in the Collateral
intended to be granted hereby fully perfected and in full force and effect.
2.6. Trade Names; etc. No Assignor has or operates in any
jurisdiction under, or in the preceding five years has had or has operated in
any jurisdiction under, any trade names, fictitious names or other names except
its legal name as specified in Annex C and such other trade or fictitious names
as are listed on Annex D hereto for such Assignor. Such Assignor shall not
assume or operate in any jurisdiction under any new trade, fictitious or other
name until (i) it shall have given to the Collateral Agent not less than 15
days' written notice of its intention so to do, clearly describing such new name
and the jurisdictions in which such new name will be used and providing such
other information in connection therewith as the Collateral Agent may reasonably
request and (ii) with respect to such new name, it shall have taken all action
reasonably requested by 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.
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2.7. Certain Significant Transactions. During the one-year period
preceding the date of this Agreement, no Person shall have merged or
consolidated with or into any Assignor, and no Person shall have liquidated
into, or transferred all or substantially all of its assets to, any Assignor, in
each case except as described in Annex E hereto. With respect to any
transactions so described in Annex E hereto, the respective Assignor shall have
furnished such information with respect to the Person (and the assets of the
Person and locations thereof) which merged with or into or consolidated with
such Assignor, or was liquidated into or transferred all or substantially all of
its assets to such Assignor, and shall have furnished to the Collateral Agent
such UCC lien searches as may have been requested with respect to such Person
and its assets, to establish that no security interest (excluding Permitted
Liens) continues perfected on the date hereof with respect to any Person
described above (or the assets transferred to the respective Assignor by such
Person), including, without limitation, pursuant to Section 9-316(a)(3) of the
UCC.
2.8. As-Extracted Collateral; Timber-to-be-Cut. On the date hereof,
such Assignor does not own, or expect to acquire, any property which
constitutes, or would constitute, As-Extracted Collateral or Timber-to-be-Cut.
If at any time after the date of this Agreement such Assignor owns, acquires or
obtains rights to any As-Extracted Collateral or Timber-to-be-Cut, such Assignor
shall furnish the Collateral Agent with prompt written notice thereof (which
notice shall describe in reasonable detail the As-Extracted Collateral and/or
Timber-to-be-Cut and the locations thereof) and shall take all actions as may be
deemed reasonably necessary or advisable by the Collateral Agent to perfect the
security interest of the Collateral Agent therein.
2.9. Collateral in the Possession of a Bailee. If any Inventory or
other Goods are at any time in the possession of a bailee, such Assignor shall
promptly notify the Collateral Agent thereof and, if requested by the Collateral
Agent, shall use commercially reasonable efforts to promptly obtain an
acknowledgment from such bailee, in form and substance reasonably satisfactory
to the Collateral Agent, that the bailee holds such Collateral for the benefit
of the Collateral Agent and shall act upon the instructions of the Collateral
Agent, without the further consent of such Assignor. The Collateral Agent agrees
with such Assignor that the Collateral Agent shall not give any such
instructions unless an Event of Default has occurred and is continuing or would
occur after taking into account any action by such Assignor with respect to any
such bailee.
2.10. Recourse. This Agreement is made with full recourse to each
Assignor and pursuant to and upon all the warranties, representations, covenants
and agreements on the part of such Assignor contained herein, in the Secured
Debt Agreements and otherwise in writing in connection herewith or therewith.
ARTICLE III
SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS;
INSTRUMENTS; CHATTEL PAPER AND CERTAIN OTHER COLLATERAL
3.1. Additional Representations and Warranties. As of the time when
each of its Accounts arises, each Assignor shall be deemed to have represented
and warranted that each such Account, and all records, papers and documents
relating thereto (if any) are genuine and
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what they purport to be, and that all papers and documents (if any) relating
thereto (i) will, to the knowledge of such Assignor, represent the genuine,
legal, valid and binding obligation of the account debtor enforceable in
accordance with its terms evidencing indebtedness unpaid and owed by the
respective account debtor arising out of the performance of labor or services or
the sale or lease and delivery of the merchandise listed therein, or both and
(ii) will be in compliance and will conform in all material respects 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 accurate records of its Accounts and Contracts
consistent with past practices, 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 upon prior notice to such
Assignor and otherwise in accordance with the Credit Agreement. 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 Accounts and Contract Rights (including,
without limitation, all documents evidencing the Accounts and 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). Upon
the occurrence and during the continuance of an Event of Default and if the
Collateral Agent so directs, such Assignor shall legend, in form and manner
satisfactory to the Collateral Agent, the Accounts and the Contracts, as well as
books, records and documents (if any) of such Assignor evidencing or pertaining
to such Accounts and Contracts with an appropriate reference to the fact that
such Accounts 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, if the
Collateral Agent so directs any Assignor, if permitted by applicable law, such
Assignor agrees (x) to cause all payments on account of the Accounts and
Contracts to be made directly to the Cash Collateral Account, (y) that the
Collateral Agent may, at its option, directly notify the obligors with respect
to any Accounts and/or under any Contracts to make payments with respect thereto
as provided in the preceding clause (x), and (z) that the Collateral Agent may
enforce collection of any such Accounts and Contracts and may adjust, settle or
compromise the amount of payment thereof, in the same manner and to the same
extent as such Assignor. Without notice to or assent by any Assignor, the
Collateral Agent may, upon the occurrence and during the continuance of an Event
of Default, apply any or all amounts then in, or thereafter deposited in, the
Cash Collateral Account toward the payment of the Obligations in the manner
provided in Section 7.4 of this Agreement. The reasonable costs and expenses of
collection (including reasonable attorneys' fees), whether incurred by an
Assignor or the Collateral Agent, shall be borne by the relevant Assignor. The
Collateral Agent shall deliver a copy of each notice referred to in the
preceding clause (y) to the relevant Assignor, provided that (x) the failure by
the Collateral Agent to so notify such Assignor shall not affect the
effectiveness of such notice or the other rights of the Collateral Agent created
by this Section 3.3 and (y) no such notice shall be required if an Event
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of Default of the type described in Section 10.05 of the Credit Agreement has
occurred and is continuing.
3.4. Modification of Terms; etc. Except in accordance with such
Assignor's ordinary course of business and consistent with reasonable business
judgment or as permitted by Section 3.5, no Assignor shall rescind or cancel any
indebtedness evidenced by any Account or under any Contract, or modify any
material term thereof in a manner adverse to such Assignor or the Collateral
Agent or make any material 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 Account or Contract, or interest
therein, without the prior written consent of the Collateral Agent. No Assignor
will do anything to impair in any material respect the rights of the Collateral
Agent in the Accounts or Contracts.
3.5. Collection. Each Assignor shall endeavor in accordance with
reasonable business practices to cause to be collected from the account debtor
named in each of its Accounts or obligor under any Contract, as and when due
(including, without limitation, amounts which are delinquent, such amounts to be
collected in accordance with generally accepted lawful collection procedures)
any and all amounts owing under or on account of such Account or Contract, and
apply forthwith upon receipt thereof all such amounts as are so collected to the
outstanding balance of such Account or under such Contract. Except as otherwise
directed by the Collateral Agent after the occurrence and during the
continuation of an Event of Default, any Assignor may allow in the ordinary
course of business as adjustments to amounts owing under its Accounts and
Contracts (i) an extension or renewal of the time or times of payment, 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 or for other reasons which such Assignor finds appropriate in
accordance with reasonable business judgment. The reasonable costs and expenses
(including, without limitation, reasonable 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 in
excess of $2,500,000 constituting Collateral (other than checks and other
payment instruments received and collected in the ordinary course of business),
such Assignor will within 10 Business Days notify the Collateral Agent thereof,
and upon request by the Collateral Agent will promptly deliver such Instrument
to the Collateral Agent appropriately endorsed to the order of the Collateral
Agent as further security hereunder.
3.7. Assignors Remain Liable Under Accounts. Anything herein to the
contrary notwithstanding, the Assignors shall remain liable under each of the
Accounts to observe and perform all of the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of any
agreement giving rise to such Accounts. Neither the Collateral Agent nor any
other Secured Creditor shall have any obligation or liability under any Account
(or any agreement giving rise thereto) by reason of or arising out of this
Agreement or the receipt by the Collateral Agent or any other Secured Creditor
of any payment relating to such Account pursuant hereto, nor shall the
Collateral Agent or any other Secured Creditor be obligated in any manner to
perform any of the obligations of any Assignor under or pursuant to any
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Account (or any agreement giving rise thereto), to make any payment, to make any
inquiry as to the nature or the sufficiency of any payment received by them or
as to the sufficiency of any performance by any party under any Account (or any
agreement giving rise thereto), to present or file any claim, to take any action
to enforce any performance or to collect the payment of any amounts which may
have been assigned to them or to which they may be entitled at any time or
times.
3.8. Assignors Remain Liable Under Contracts. Anything herein to the
contrary notwithstanding, the Assignors shall remain liable under each of the
Contracts to observe and perform all of the conditions and obligations to be
observed and performed by them thereunder, all in accordance with and pursuant
to the terms and provisions of each Contract. Neither the Collateral Agent nor
any other Secured Creditor shall have any obligation or liability under any
Contract by reason of or arising out of this Agreement or the receipt by the
Collateral Agent or any other Secured Creditor of any payment relating to such
contract pursuant hereto, nor shall the Collateral Agent or any other Secured
Creditor be obligated in any manner to perform any of the obligations of any
Assignor under or pursuant to any Contract, to make any payment, to make any
inquiry as to the nature or the sufficiency of any performance by any party
under any Contract, to present or file any claim, to take any action to enforce
any performance or to collect the payment of any amounts which may have been
assigned to them or to which they may be entitled at any time or times.
3.9. Letter-of-Credit Rights. If any Assignor is at any time a
beneficiary under a letter of credit with a stated amount of $2,500,000 or more,
such Assignor shall promptly notify the Collateral Agent thereof and, at the
request of the Collateral Agent, such Assignor shall, pursuant to an agreement
in form and substance reasonably satisfactory to the Collateral Agent, use its
reasonable best efforts to (i) arrange for the issuer and any confirmer of such
letter of credit to consent to an assignment to the Collateral Agent of the
proceeds of any drawing under such letter of credit or (ii) arrange for the
Collateral Agent to become the transferee beneficiary of such letter of credit,
with the Collateral Agent agreeing, in each case, that the proceeds of any
drawing under the letter of credit are to be applied as provided in this
Agreement after the occurrence and during the continuance of an Event of
Default.
3.10. Commercial Tort Claims. All Commercial Tort Claims of each
Assignor in existence on the date of this Agreement are described in Annex F
hereto. If any Assignor shall at any time after the date of this Agreement
acquire a Commercial Tort Claim in an amount (taking the greater of the
aggregate claimed damages thereunder or the reasonably estimated value thereof)
of $2,500,000 or more, such Assignor shall promptly notify the Collateral Agent
thereof in a writing signed by such Assignor and describing the details thereof
and shall grant to the Collateral Agent in such writing a security interest
therein and in the proceeds thereof, all upon the terms of this Agreement, with
such writing to be in form and substance reasonably satisfactory to the
Collateral Agent.
3.11. Chattel Paper. Upon the request of the Collateral Agent made
at any time or from time to time, each Assignor shall promptly furnish to the
Collateral Agent a list of all Electronic Chattel Paper held or owned by such
Assignor. Furthermore, if requested by the Collateral Agent, each Assignor shall
promptly take all actions which are reasonably practicable so that the
Collateral Agent has "control" of all Electronic Chattel Paper in accordance
with the
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requirements of Section 9-105 of the UCC. Each Assignor will promptly (and in
any event within 10 days), following any request by the Collateral Agent,
deliver all of its Tangible Chattel Paper to the Collateral Agent.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING TRADEMARKS
4.1. Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful owner of or otherwise has
the right to use the registered Marks and Domain Names listed in Annex G hereto
for such Assignor and that said listed Marks and Domain Names include all United
States marks registered and all applications for registration of United States
marks in the United States Patent and Trademark Office and all Domain Names that
each such Assignor owns or uses in connection with its business as of the date
hereof. Except as set forth in Schedule VII of the Credit Agreement, each
Assignor represents and warrants that it owns, is licensed to use or otherwise
has the right to use, all Marks and Domain Names that it uses. Each Assignor
further warrants that it has no knowledge of any third-party claim received by
it that any aspect of such Assignor's present or contemplated business
operations infringes or will infringe any trademark, service xxxx or trade name
of any other Person other than as could not, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Each
Assignor further represents and warrants that it is the true and lawful owner of
or otherwise has the right to use all U.S. trademark registrations and
applications and Domain Name registrations listed in Annex G hereto and that
said registrations are valid, subsisting, have not been canceled and that such
Assignor is not aware of any third-party claim that any of said registrations is
invalid or unenforceable and is not aware that there is any reason that any of
said applications will not mature into registrations, and is not aware that
there is any reason that any of said registrations is invalid or unenforceable.
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 similar registrar in order to effect an absolute assignment
of all right, title and interest in each Xxxx and/or Domain Name, and record the
same.
4.2. Licenses and Assignments. Except as otherwise permitted by the
Secured Debt Agreements, each Assignor hereby agrees not to divest itself of any
right under any Xxxx or Domain Name absent prior written approval of the
Collateral Agent.
4.3. Infringements. Each Assignor agrees, promptly upon learning
thereof, to notify the Collateral Agent in writing of the name and address (if
available) of, and to furnish such pertinent information that may be available
with respect to, any party who such Assignor believes is or may be infringing or
diluting or otherwise violating any of such Assignor's rights in and to any Xxxx
or Domain Name in any manner that could reasonably be expected to have a
Material Adverse Effect, or with respect to any party claiming that such
Assignor's use of any Xxxx or Domain Name material to such Assignor's business
violates in any material respect any property right of that party. Each Assignor
further agrees to pursue or prosecute in accordance with reasonable business
practices any Person infringing any Xxxx or Domain Name in any manner that could
reasonably be expected to have a Material Adverse Effect.
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4.4. Preservation of Marks and Domain Names. Except as otherwise
permitted herein, each Assignor agrees to use its Marks which are material to
such Assignor's business in interstate commerce during the time in which this
Agreement is in effect and to take all such other actions as are reasonably
necessary to preserve such Marks as trademarks or service marks under the laws
of the United States (other than any such Marks which are no longer used or
useful in its business or operations).
4.5. Maintenance of Registration. Except as otherwise permitted
herein, each Assignor shall, at its own expense, diligently process all
documents reasonably required to maintain all Xxxx and/or Domain Name
registrations, including but not limited to affidavits of use and applications
for renewals of registration in the United States Patent and Trademark Office
for all of its material registered Marks, 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 exhaustion of
all administrative and judicial remedies without prior written consent of the
Collateral Agent (other than with respect to registrations and applications
deemed by such Assignor in its reasonable business judgment to be no longer
prudent to pursue).
4.6. Future Registered Marks and Domain Names. If a registration for
any Xxxx is issued hereafter to any Assignor as a result of any application now
or hereafter pending before the United States Patent and Trademark Office or any
Domain Name is registered by such Assignor within 30 days of receipt of such
registration certificate or similar indicia of ownership, such Assignor shall
deliver to the Collateral Agent a copy of such registration certificate or
similar indicia of ownership, and a grant of a security interest in such Xxxx
and/or Domain Name, to the Collateral Agent and at the expense of such Assignor,
confirming the grant of a security interest in such Xxxx and/or Domain Name to
the Collateral Agent hereunder, the form of such security to be substantially in
the form of Annex J hereto 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 and Domain Names, together
with all trademark rights and rights of protection to the same, 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 hereof to execute,
cause to be acknowledged and notarized and record said absolute assignment with
the applicable agency or registrar; (ii) take and use or sell the Marks or
Domain Names and the goodwill of such Assignor's business symbolized by the
Marks or Domain Names and the right to carry on the business and use the assets
of such Assignor in connection with which the Marks or Domain Names have been
used; and (iii) direct such Assignor to refrain, in which event such Assignor
shall refrain, from using the Marks or Domain Names in any manner whatsoever,
directly or indirectly, and such Assignor shall execute such further documents
that the Collateral Agent may reasonably request to further confirm this and to
transfer ownership of the Marks or Domain Names and registrations and any
pending trademark applications in the United States Patent and Trademark Office
or applicable Domain Name registrar to the Collateral Agent.
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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 owner of all rights in
(i) all United States Trade Secret Rights, (ii) the Patents listed in Annex H
hereto for such Assignor and that said Patents include all the United States
patents and applications for United States patents that such Assignor owns as of
the date hereof and (iii) the Copyrights listed in Annex I hereto for such
Assignor and that said Copyrights include all the United States copyrights
registered with the United States Copyright Office and applications to register
United States copyrights, in each case, that such Assignor owns as of the date
hereof. Each Assignor further warrants that it has no knowledge of any third
party claim that (a) any aspect of such Assignor's present or contemplated
business operations infringes or will infringe any patent of any other Person or
(b) such Assignor has misappropriated any trade secret or proprietary
information which, in each case, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect. 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 the
United States Copyright Office in order to effect an absolute assignment of all
right, title and interest in each Patent or Copyright, and to record the same.
5.2. Licenses and Assignments. Except as otherwise permitted by the
Secured Debt Agreements, each Assignor hereby agrees not to divest itself of any
right under any Patent or Copyright absent prior written approval of the
Collateral Agent.
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 or other violation of
such Assignor's rights in any Patent or Copyright or to any claim that the
practice of any Patent or use of any Copyright violates any intellectual
property right of a third party, or with respect to any misappropriation of any
Trade Secret Right or any claim that Assignor's practice of any Trade Secret
Right violates any intellectual property right of a third party, in each case,
in any manner which, either individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect. Each Assignor further agrees,
absent direction of the Collateral Agent to the contrary, to diligently
prosecute, in accordance with its reasonable business judgment, any Person
infringing any Patent or Copyright or any Person misappropriating any Trade
Secret Right, in each case to the extent that such infringement or
misappropriation, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
5.4. Maintenance of Patents or Copyright. Except as otherwise
permitted in paragraph 5.2 herein, at its own expense, each Assignor shall make
timely payment of all post-issuance fees required to maintain in force its
rights under each Patent or Copyright, absent prior written consent of the
Collateral Agent (other than any such Patents or Copyrights which are no longer
used or are deemed by such Assignor in its reasonable business judgment to no
longer be useful in its business or operations).
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5.5. Prosecution of Patent or Copyright Applications. Except as
otherwise permitted in paragraph 5.2 herein, at its own expense, each Assignor
shall diligently prosecute all material applications for (i) United States
Patents listed in Annex H hereto and (ii) Copyrights listed on Annex I hereto,
in each case for such Assignor and shall not abandon any such application prior
to exhaustion of all administrative and judicial remedies (other than
applications that are deemed by such Assignor in its reasonable business
judgment to no longer be necessary in the conduct of the Assignor's business),
absent written consent of the Collateral Agent.
5.6. Other Patents and Copyrights. Within 30 days of the acquisition
or issuance of a United States Patent or filing of an application for a United
States Patent, or within 30 days of the acquisition or issuance of a registered
Copyright, or of filing of an application for a United States Copyright, the
relevant Assignor shall deliver to the Collateral Agent a copy of said Copyright
or Patent, or certificate or registration of, or application therefor, as the
case may be, with a grant of a security interest as to such Patent or Copyright,
as the case may be, to the Collateral Agent and at the expense of such Assignor,
confirming the grant of a security interest, the form of such grant of a
security interest to be substantially in the form of Annex K or L hereto, as
appropriate, 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, in which case the Collateral Agent shall
be entitled to exercise the power of attorney referred to in Section 5.1 hereof
to execute, cause to be acknowledged and notarized and to record said absolute
assignment with the applicable agency; (ii) take and practice or sell the
Patents and Copyrights; and (iii) direct such Assignor to refrain, in which
event such Assignor shall refrain, from practicing the Patents and using the
Copyrights directly or indirectly, and such Assignor shall execute such further
documents as the Collateral Agent may reasonably request further to confirm this
and to transfer ownership of the Patents and Copyrights 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. Except as otherwise
permitted by the Secured Debt Agreements, each Assignor will do nothing to
impair the rights of the Collateral Agent in the Collateral in any material
respect. Each Assignor will at all times maintain insurance, at such Assignor's
own expense to the extent and in the manner provided in the Secured Debt
Agreements. Except to the extent otherwise permitted to be retained by such
Assignor or applied by such Assignor pursuant to the terms of the Secured Debt
Agreements, the Collateral Agent shall, at the time any proceeds of such
insurance are distributed to the Secured Creditors, apply such proceeds in
accordance with Section 7.4 hereof. Each Assignor assumes all liability and
responsibility in connection with the Collateral acquired by it and the
liability of
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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. To the extent practicable,
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 Assignor
shall request that 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 and
upon the reasonable request of the Collateral Agent, 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, 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 authenticate and
deliver to the Collateral Agent such financing statements, in form reasonably
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,
perfected security interest in the Collateral as provided herein and the other
rights and security contemplated hereby. 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 (and
such authorization includes describing the Collateral as "all assets" of such
Assignor).
ARTICLE VII
REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT
7.1. Remedies; Obtaining the Collateral Upon an Event of 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 and under the other
provisions of this Agreement, shall have all rights as a secured creditor under
any UCC, and such additional rights and remedies to which a secured creditor is
entitled under the laws in effect in all relevant jurisdictions and may:
(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
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and remove the same and use in connection with such removal any and all
services, supplies, aids and other facilities of such Assignor;
(ii) instruct the obligor or obligors on any agreement, instrument
or other obligation (including, without limitation, the Accounts 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 and may exercise any and all remedies of such Assignor in
respect of such Collateral;
(iii) sell, assign or otherwise liquidate any or all of the
Collateral or any part thereof in accordance with Section 7.2 hereof, or
direct such 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;
(iv) take possession of the Collateral or any part thereof, by
directing such Assignor in writing to deliver the same to the Collateral
Agent at any reasonable 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 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 hereof; and
(z) while the Collateral shall be so stored and kept, provide
such security and maintenance services as shall be reasonably
necessary to protect the same and to preserve and maintain it in
good condition;
(v) license or sublicense, whether on an exclusive or nonexclusive
basis, any Marks, Domain Names, 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;
(vi) apply any monies constituting Collateral or proceeds thereof in
accordance with the provisions of Section 7.4; and
(vii) take any other action as specified in clauses (1) through (5),
inclusive, of Section 9-607 of the UCC;
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. By
accepting the benefits of this Agreement and each other Security Document, the
Secured Creditors expressly acknowledge and agree that this Agreement and each
other Security Document may be enforced only by the action of the Collateral
Agent acting upon the instructions of the Required Secured Creditors and that no
other Secured Creditor shall have
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any right individually to seek to enforce this Agreement or any other Security
Document or to realize upon the security to be granted hereby or thereby, it
being understood and agreed that such rights and remedies may be exercised by
the Collateral Agent, the holders of at least a majority of the outstanding
Other Obligations or the holders of at least a majority of the outstanding
Treasury Service Obligations, as the case may be, for the benefit of the Secured
Creditors upon the terms of this Agreement and the other Security Documents.
7.2. Remedies; Disposition of the Collateral. If any Event of
Default shall have occurred and be continuing, then any Collateral repossessed
by the Collateral Agent under or pursuant to Section 7.1 hereof, 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 sale, lease or other disposition may be effected by means
of a public disposition or private disposition, effected in accordance with the
applicable requirements (in each case if and to the extent applicable) of
Sections 9-610 through 9-613 of the UCC and/or such other mandatory requirements
of applicable law as may apply to the respective disposition. The Collateral
Agent may, without notice or publication, adjourn any public or private
disposition or cause the same to be adjourned from time to time by announcement
at the time and place fixed for the disposition, and such disposition may be
made at any time or place to which the disposition may be so adjourned. To the
extent permitted by any such requirement of law, the Collateral Agent may bid
for and become the purchaser (and may pay all or any portion of the purchase
price by crediting Obligations against the purchase price) of the Collateral, or
any item thereof, offered for disposition in accordance with this Section 7.2
without accountability to the relevant Assignor. If, under applicable law, the
Collateral Agent shall be permitted to make 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 required by such 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 disposition or dispositions of all or
any portion of the Collateral valid and binding and in compliance with any and
all applicable laws, regulations, orders, writs, injunctions, decrees or awards
of any and all courts, arbitrators 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 each Assignor hereby further waives,
to the extent permitted by law:
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(i) all damages occasioned by such taking of possession or any such
disposition except any damages which are the direct result of the
Collateral Agent's gross negligence or willful misconduct (as determined
by a court of competent jurisdiction in a final and non-appealable
decision);
(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 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 (or, to the extent the Pledge Agreement, any Mortgage or any
other Security Document requires proceeds of collateral under such other
Security Document to be applied in accordance with the provisions of this
Agreement, the Pledgee, the Mortgagee (or Trustee) or Collateral Agent under
such other Security Document) upon any sale or other disposition of the
Collateral, together with all other moneys received by the Collateral Agent
hereunder, shall be applied as follows:
(i) first, to the payment of all amounts owing the Collateral Agent
of the type described in clauses (iv), (v) and (vi) of the definition of
"Obligations";
(ii) second, to the extent proceeds remain after the application
pursuant to the preceding clause (i), to the payment of all amounts owing
to any Agent of the type described in clause (vi) (other than with respect
to the Collateral Agent to the extent provided for in clause (i) above)
and clause (vii) of the definition of "Obligations";
(iii) third, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) and (ii), an amount equal to the
outstanding Primary Obligations shall be paid to the Secured Creditors as
provided in Section 7.4(e) hereof, 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;
(iv) fourth, to the extent proceeds remain after the application
pursuant to the preceding clauses (i), (ii) and (iii), inclusive, an
amount equal to the outstanding Secondary Obligations shall be paid to the
Secured Creditors as provided in Section 7.4(e) hereof, with each Secured
Creditor receiving an amount equal to its outstanding
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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
(v) fifth, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) through (iv), 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, premium, fees and interest on,
all Loans, all Unpaid Drawings and all Fees, (ii) in the case of the Other
Obligations, all amounts due under such Interest Rate Protection Agreements or
Other Hedging Agreements (other than indemnities, fees (including, without
limitation, attorneys' fees) and similar obligations and liabilities) and (iii)
in the case of Treasury Service Obligations, all principal owed, and interest
on, extensions of credit made in respect of the Treasury Services and (without
duplication) under the Treasury Service Agreement, 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 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, by their acceptance of the
benefits hereof and of the other Security Documents, 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 under the Credit Agreement
(which shall only occur after all outstanding Loans under the Credit Agreement
and Unpaid Drawings 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 under the Credit Agreement, 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
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Letters of Credit, if there remains any excess cash, such excess cash shall be
returned by the Administrative Agent to the Collateral Agent for distribution in
accordance with Section 7.4(a) hereof.
(e) All payments required to be made hereunder shall be made (x) if
to the Lender Creditors, to the Administrative Agent for the account of the
Lender Creditors, (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 and
(z) if to the Treasury Service Creditors directly to the Treasury Service
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, (ii) the Representative or, in the absence of such a
Representative, upon the Other Creditors and (iii) the Treasury Service
Creditors for a determination (which the Administrative Agent, each
Representative, the Other Creditors and the Treasury Service 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, the
Other Creditors or the Treasury Service Creditors, as the case may be. Unless it
has received written notice from a Lender Creditor, an Other Creditor or a
Treasury Service 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 written notice from (x)
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 or (y) a Treasury Service Creditor to the
contrary, the Collateral Agent, in acting hereunder, shall be entitled to assume
that no Treasury Service Obligations and no Treasury Service Agreements are in
existence.
(g) This Agreement is made with full recourse to each Assignor
(including, without limitation, with full recourse to all assets of 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 Secured Debt Agreements and otherwise in writing in connection herewith or
therewith. It is understood that the Assignors shall remain jointly and
severally liable to the extent of any deficiency between the amount of the
proceeds of the Collateral and the aggregate amount of the 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 to the Collateral Agent under
this Agreement, the other Secured Debt Agreements 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
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Default or an acquiescence thereof. 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 reasonable 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, affiliates and agents
(hereinafter in this Section 8.1 referred to individually as "Indemnitee," and
collectively as "Indemnitees") harmless from any and all liabilities,
obligations, damages, injuries, penalties, claims, demands, actions, suits,
judgments and any and all costs, expenses or disbursements (including reasonable
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 other Secured Debt Agreement
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 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 (as determined by a court of competent jurisdiction in a
final and non-appealable decision). Each Assignor agrees that upon written
notice by any Indemnitee of the assertion of such a liability, obligation,
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
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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) hereof, each
Assignor agrees, jointly and severally, to pay or reimburse the Collateral Agent
for any and all reasonable 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)
hereof, 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 other
Secured Debt Agreement or in any writing contemplated by or made or delivered
pursuant to or in connection with this Agreement or any other Secured Debt
Agreement.
(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 of the
other Obligations and notwithstanding the full payment of all the Notes issued,
and Loans made, under the Credit Agreement, the termination of all Letters of
Credit issued under the Credit Agreement, the termination of all Interest Rate
Protection Agreements and Other Hedging Agreements entered into with the Other
Creditors and all Treasury Services provided by Treasury Service Creditors and
the payment of all other Obligations and notwithstanding the discharge thereof
and the occurrence of the Termination Date.
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.
-22-
"Account" 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, and in any event shall include but shall not be limited to, all rights to
payment of any monetary obligation, whether or not earned by performance, (i)
for property that has been or is to be sold, leased, licensed, assigned or
otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a
policy of insurance issued or to be issued, (iv) for a secondary obligation
incurred or to be incurred, (v) for energy provided or to be provided, (vi) for
the use or hire of a vessel under a charter or other contract, (vii) arising out
of the use of a credit or charge card or information contained on or for use
with the card, or (viii) as winnings in a lottery or other game of chance
operated or sponsored by a State, governmental unit of a State, or person
licensed or authorized to operate the game by a State or governmental unit of a
State. Without limiting the foregoing, the term "account" shall include all
Health-Care-Insurance Receivables.
"Administrative Agent" shall have the meaning provided in the
recitals of this Agreement.
"Agreement" shall mean this Security Agreement as the same may be
amended, modified, restated and/or supplemented from time to time in accordance
with its terms.
"As-Extracted Collateral" shall mean "as-extracted collateral" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"Assignor" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrower" shall have the meaning provided in the recitals of this
Agreement.
"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 mean "chattel paper" as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York. Without limiting the foregoing, the term "Chattel Paper" shall in any
event include all Tangible Chattel Paper and all Electronic Chattel Paper.
"Class" shall have the meaning provided in Section 10.2 of this
Agreement.
"Co-Borrower" has the meaning provided in the recitals to this
Agreement.
"Collateral" shall have the meaning provided in Section 1.1(a) of
this Agreement.
"Collateral Agent" shall have the meaning provided in the first
paragraph of this Agreement.
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"Commercial Tort Claims" shall mean "commercial tort claims" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Contract Rights" shall mean all rights of any Assignor under each
Contract, including, without limitation, (i) any and all rights to receive and
demand payments under any or all Contracts, (ii) any and all rights to receive
and compel performance under any or all Contracts and (iii) any and all other
rights, interests and claims now existing or in the future arising in connection
with any or all Contracts.
"Contracts" shall mean all contracts between any Assignor and one or
more additional parties (including, without limitation, any Interest Rate
Protection Agreements, Other Hedging Agreements, licensing agreements and any
partnership agreements, joint venture agreements and limited liability company
agreements), but excluding any contract to the extent that (but only as long as)
the terms thereof prohibit the assignment of, or granting a security interest
in, such contract (it being understood and agreed, however, (i) that
notwithstanding the foregoing, all rights to payment for money due or to become
due pursuant to any such excluded contract shall be subject to the security
interests created by this Agreement and (ii) such excluded contract shall
otherwise be subject to the security interests created by this Agreement upon
receiving any necessary approvals or waivers permitting the assignment thereof).
"Copyrights" shall mean any United States or foreign copyright,
including any registrations thereof in the United States Copyright Office or any
foreign equivalent office, as well as any application for a copyright
registration now or hereafter made with the United States Copyright Office or
any foreign equivalent office by any Assignor and the right to obtain all
renewals thereof.
"Credit Agreement" shall have the meaning provided in the recitals
of this Agreement.
"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.
"Deposit Accounts" shall mean all "deposit accounts" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Documents" shall mean "documents" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Domain Names" shall mean all Internet domain names and associated
URL addresses and the right to obtain all renewals thereof.
"Domestic Corporation" shall have the meaning provided in the
definition of "Stock."
-24-
"Electronic Chattel Paper" shall mean "electronic chattel paper" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"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, fixtures and
vehicles now or hereafter owned by any Assignor and any and all additions,
substitutions and replacements of any of the foregoing and all accessions
thereto, 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 include, without
limitation, any payment default on any of the Obligations after the expiration
of any applicable grace period.
"Exempted Foreign Entity" shall mean any Foreign Corporation, any
limited liability company or other entity organized under the laws of a
jurisdiction other than the United States or any State or Territory thereof
that, in any such case, is treated as a corporation or an association taxable as
a corporation for U.S. Federal income tax purposes.
"Foreign Corporation" shall have the meaning provided in the
definition of "Stock."
"General Intangibles" shall mean "general intangibles" as such term
is defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Goods" shall mean "goods" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Health-Care-Insurance Receivable" shall mean any
"health-care-insurance receivable" as such term is defined 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(a) of
this Agreement.
"Instrument" means "instruments" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof and all accessions thereto,
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 any portion thereof
which may be returned, rejected, reclaimed or repossessed by the Collateral
Agent from any Assignor's customers, and shall
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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.
"Investment Property" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Lender Creditors" shall have the meaning provided in the recitals
of this Agreement.
"Lenders" shall have the meaning provided in the recitals of this
Agreement.
"Letter of Credit Rights" shall mean "letter-of-credit rights" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"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.
"Location" of any Assignor, shall mean such Assignor's "location" as
determined pursuant to Section 9-307 of the UCC.
"Marks" shall mean all right, title and interest in and to any
trademarks, service marks and trade names now held or hereafter acquired by any
Assignor, including any registration or application for registration of any
trademarks and service marks now held or hereafter acquired by any Assignor,
which are registered or filed in the United States Patent and Trademark Office
or the equivalent thereof in any state of the United States or any equivalent
foreign office or agency, as well as any unregistered trademarks and service
marks used by an Assignor and any trade dress logos, designs, fictitious
business names and other business identifiers used by the Assignor, and the
goodwill of the business symbolized thereby and the right to obtain all renewals
thereof, but excluding any such right, title and interest of an Assignor in and
to same as licensee pursuant to a contract which is expressly excluded from the
definition of "Contract" contained herein pursuant to the terms of such
definition.
"Material Adverse Effect" shall mean a material adverse effect on
the business, assets, liabilities, operations or condition (financial or
otherwise) of VHS Holdco I and its Subsidiaries taken as a whole.
"Non-Voting Stock" shall mean all Equity Interests which are not
Voting Stock.
"Obligations" shall mean and include, as to any Assignor, all of the
following:
(i) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations, liabilities
and indebtedness (including, without limitation, principal, premium,
interest, reimbursement obligations under Letters of Credit, fees, costs
and indemnities (including, without limitation, all interest that accrues
after the commencement of any case, proceeding or other action relating to
the bankruptcy, insolvency, reorganization or similar proceeding of any
Assignor at the rate
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provided for in the respective documentation, whether or not a claim for
post-petition interest is allowed in any such proceeding)) of each
Assignor to the Lender Creditors, whether now existing or hereafter
incurred under, arising out of, or in connection with, the Credit
Agreement and the other Credit Documents to which such Assignor is a party
(including, in the case of each Assignor that is a Guarantor, all such
obligations, liabilities and indebtedness of such Assignor under the
Guaranty to which it is a party) and the due performance and compliance by
such Assignor with all of the terms, conditions and agreements contained
in the Credit Agreement and in such other Credit Documents (all such
obligations, liabilities and indebtedness 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, liabilities
and indebtedness (including, without limitation, all interest that accrues
after the commencement of any case, proceeding or other action relating to
the bankruptcy, insolvency, reorganization or similar proceeding of any
Assignor at the rate provided for in the respective documentation, whether
or not a claim for post-petition interest is allowed in any such
proceeding) owing by such Assignor to the Other Creditors under, or with
respect to (including, in the case of each Assignor that is a Guarantor,
all such obligations, liabilities and indebtedness of such Assignor under
the Guaranty to which it is a party), each 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, and the due performance and compliance by such Assignor
with all of the terms, conditions and agreements contained therein (all
such obligations, liabilities and indebtedness described in this clause
(ii) being herein collectively called the "Other Obligations");
(iii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations, liabilities
and indebtedness (including, without limitation, all interest that accrues
after the commencement of any case, proceeding or other action relating to
the bankruptcy, insolvency, reorganization or similar proceeding of any
Assignor at the rate provided for in the respective documentation, whether
or not a claim for post-petition interest is allowed in any such
proceeding) owing by such Assignor to the Treasury Service Creditors with
respect to Treasury Services, whether such Treasury Services are now in
existence or hereafter arising under any Treasury Services Agreement (all
such obligations, liabilities and indebtedness described in this clause
(iii) being herein collectively called the "Treasury Service
Obligations");
(iv) any and all sums advanced by the Collateral Agent in order to
preserve the Collateral or preserve its security interest in the
Collateral;
(v) in the event of any proceeding for the collection or enforcement
of any indebtedness, obligations, or liabilities of such Assignor referred
to in clauses (i), (ii) and (iii) above, after an Event of Default shall
have occurred and be continuing, the
-27-
reasonable expenses of retaking, holding, preparing for sale or lease,
selling or otherwise disposing of or realizing on the Collateral, or of
any exercise by the Collateral Agent of its rights hereunder, together
with reasonable attorneys' fees and court costs;
(vi) all amounts paid by any Indemnitee as to which such Indemnitee
has the right to reimbursement under Section 8.1 of this Agreement; and
(vii) all amounts owing to any Agent pursuant to any of the Credit
Documents in its capacity as such;
it being acknowledged and agreed that the "Obligations" shall include extensions
of 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 of
this Agreement.
"Other Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article IX.
"Patents" shall mean any patent and any divisions, continuations
(including, but not limited to, continuations-in-parts) and improvements
thereof, as well as any application for a patent now or hereafter made, but
excluding any patent to which any Assignor has right, title and interest as
licensee pursuant, and all rights to obtain any reissues or extensions of the
foregoing to a contract which is expressly excluded from the definition of
"Contract" contained herein pursuant to the terms of such definition.
"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 of or from any governmental authority or
agency.
"Primary Obligations" shall have the meaning provided in Section
7.4(b) of this Agreement.
"Pro Rata Share" shall have the meaning provided in Section 7.4(b)
of this Agreement.
"Proceeds" shall mean all "proceeds" as such term is defined in the
Uniform Commercial Code as in effect in the State of New York on the date hereof
and, in any event, shall also 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.
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"Registered Organization" shall have the meaning provided in the
Uniform Commercial Code as in effect in the State of New York.
"Representative" shall have the meaning provided in Section 7.4(e)
of this Agreement.
"Required Secured Creditors" shall mean (i) at any time when any
Credit Document Obligations are outstanding or any Commitments under the Credit
Agreement exist, the Required Lenders (or, to the extent provided in Section
14.12 of the Credit Agreement, each of the Lenders), (ii) at any time after all
of the Credit Document Obligations have been paid in full and all Commitments
under the Credit Agreement have been terminated and no further Commitments may
be provided thereunder, the holders of a majority of outstanding Other
Obligations and (iii) at any time after (x) all Credit Document Obligations have
been paid in full and all Commitments under the Credit Agreement have been
terminated (and no further commitments to extend credit may be requested or
provided thereunder) and (y) all Other Obligations have been paid in full, the
holders of a majority of outstanding Treasury Service 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
of this Agreement.
"Secured Debt Agreements" shall mean and include this Agreement, the
other Credit Documents, the Interest Rate Protection Agreements and Other
Hedging Agreements Software entered into with an Other Creditor and the Treasury
Service Agreement.
"Software" shall mean "software" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Stock" means (x) with respect to corporations incorporated under
the laws of the United States or any State or territory thereof (each a
"Domestic Corporation"), all of the issued and outstanding shares of capital
stock of any corporation at any time owned by any Pledgor of any Domestic
Corporation and (y) with respect to corporations not Domestic Corporations (each
a "Foreign Corporation"), all of the issued and outstanding shares of capital
stock at any time owned by any Pledgor of any Foreign Corporation.
"Supporting Obligations" shall mean any "supporting obligation" 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, or in
which any Assignor has any rights, and, in any event, shall include, but shall
not be limited to all of such Assignor's rights in any Letter-of-Credit Right or
secondary obligation that supports the payment or performance of, and all
security for, any Account, Chattel Paper, Document, General Intangible,
Instrument or Investment Property.
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"Tangible Chattel Paper" shall mean "tangible chattel paper" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Termination Date" shall have the meaning provided in Section
10.8(a) of this Agreement.
"Timber-to-be-Cut" shall mean "timber-to-be-cut" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Trade Secret Rights" shall mean the rights of an Assignor in any
Trade Secret it holds.
"Trade Secrets" shall mean any secretly held existing engineering or
other data, information, production procedures and other know-how relating to
the design manufacture, assembly, installation, use, operation, marketing, sale
and/or servicing of any products or business of an Assignor worldwide whether
written or not.
"Transmitting Utility" shall have the meaning given such term in
Section 9-102(a)(80) of the UCC.
"Treasury Service Agreement" has the meaning provided in the
recitals of this Agreement.
"Treasury Service Creditors" has the meaning provided in the
recitals of this Agreement.
"Treasury Service Obligations" has the meaning provided in the
definition of "Obligations" in this Article IX.
"Treasury Services" means treasury, depositary or cash management
services (including, without limitation overnight overdraft services) provided
to VHS Holdco II and its Wholly-Owned Domestic Subsidiaries by the Treasury
Service Creditors, and automated clearinghouse transfers of funds to, the
Treasury Service Creditors, in each case pursuant to uncommitted lines of
credit.
"UCC" shall mean the Uniform Commercial Code as in effect from time
to time in the relevant jurisdiction.
"VHS Holdco I" shall have the meaning set forth in the recitals to
this Agreement.
"VHS Holdco II" has the meaning provided in the recitals to this
Agreement.
"Voting Stock" means all classes of Equity Interests of any Foreign
Subsidiary entitled to vote.
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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 sent or delivered by mail, telegraph, telex, telecopy, cable or
courier service and all such notices and communications shall, when mailed,
telegraphed, telexed, telecopied, or cabled or sent by courier, be effective
when deposited in the mails, delivered to the telegraph company, cable company
or overnight courier, as the case may be, or sent by telex or telecopier, except
that notices and communications to the Collateral Agent or any Assignor shall
not be effective until received by the Collateral Agent or such Assignor, as the
case may be. All notices and other communications shall be in writing and
addressed as follows:
(a) if to any Assignor, c/o:
Vanguard Health Systems, Inc.
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
(b) if to the Collateral Agent, at:
Bank of America, N.A.
Agency Management
Mail Code: CA5-701-05-19
0000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: xxxx.xxxxxx@xxxxxxxxxxxxx.xxx
With a copy to:
Bank of America, N.A.
Mail Code: NC1-007-17-11
000 X. Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: Xxxxx.x.xxxxxx@xxxxxxxxxxxxx.xxx
-31-
(c) if to any Lender Creditor other than the Collateral Agent, at
such address as such Lender Creditor shall have specified in its
Administrative Questionnaire;
(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;
(e) if to any Treasury Service Creditor, at such address as such
Treasury Service Creditor shall have specified in writing to each Assignor
and the Collateral Agent.
or at such other address or addressed to such other individual as shall have
been furnished in writing by any Person described above to the party required to
give notice hereunder.
10.2. Waiver; Amendment. Except as provided in Sections 10.8 and
10.13, 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 affected thereby (it being understood that the
addition or release of any Assignor hereunder shall not constitute a change,
waiver, discharge or termination affecting any Assignor other than the Assignor
so added or released) and the Collateral Agent (with the written consent of the
Required Secured Creditors); provided, however, that any change, waiver,
modification or variance affecting the rights and benefits of a single Class of
Secured Creditors (and not all Secured Creditors in a like or similar manner)
also shall require the written consent of the Requisite Creditors of such
affected Class. 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, (y) the Other Creditors as the
holders of the Other Obligations or (z) the Treasury Service Creditors as
holders of the Treasury Service 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 (or, to the extent
provided in Section 14.12 of the Credit Agreement, each of the Lenders), (y)
with respect to the Other Obligations, the holders of at least a majority of all
Other Obligations outstanding from time to time and (z) with respect to the
Treasury Service Obligations, the holders of at least a majority of all Treasury
Service Obligations outstanding from time to time.
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 or any other Secured Debt
Agreement; or (c) any amendment to or modification of any Secured Debt Agreement
or any security for any of the Obligations; whether or not such Assignor shall
have notice or knowledge of any of the foregoing.
10.4. Successors and Assigns. This Agreement shall create a
continuing security interest in the Collateral and shall (i) remain in full
force and effect, subject to release and/or termination as set forth in Section
10.8, (ii) be binding upon each Assignor, its successors and assigns; provided,
however, that no Assignor shall assign any of its rights or obligations
-32-
hereunder without the prior written consent of the Collateral Agent, in
accordance with the provisions of the Secured Debt Agreement, and (iii) inure,
together with the rights and remedies of the Collateral Agent hereunder, to the
benefit of the Collateral Agent, the other Secured Creditors and their
respective successors, transferees and assigns. 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 and the
other Secured Debt Agreements regardless of any investigation made by the
Secured Creditors or on their behalf.
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. (a) 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. ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH
ASSIGNOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS. EACH ASSIGNOR HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH
COURTS LACK JURISDICTION OVER SUCH ASSIGNOR, AND AGREES NOT TO PLEAD OR CLAIM IN
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS THAT ANY SUCH COURT LACKS
JURISDICTION OVER SUCH ASSIGNOR. EACH ASSIGNOR FURTHER IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO ANY SUCH ASSIGNOR AT ITS ADDRESS FOR NOTICES AS
PROVIDED IN SECTION 10.1 ABOVE, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER
SUCH MAILING. EACH ASSIGNOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH
SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR
CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT
DOCUMENT THAT SUCH SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT UNDER THIS
AGREEMENT, OR ANY SECURED CREDITOR, TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
ANY ASSIGNOR IN ANY OTHER JURISDICTION.
(b) EACH ASSIGNOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF
-33-
VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE
COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND
AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
10.7. Assignor's 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, 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
respective Assignor, will promptly execute and deliver to such Assignor a proper
instrument or instruments (including 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 under the Credit Agreement have been terminated and all Interest
Rate Protection Agreements and Other Hedging Agreements entered into with any
Other Creditor have been terminated, no Note under the Credit Agreement is
outstanding and all Loans thereunder have been repaid in full, all Letters of
Credit issued under the Credit Agreement have been terminated, all Treasury
Services have been terminated and all outstanding obligations thereunder and
under the Treasury Services Agreement have been paid in full, and all
Obligations then due and payable have been paid in full and no further
Incremental Term Loan Commitments may be requested or provided pursuant to the
terms of the Credit Agreement.
(b) In the event that any part of the Collateral is sold,
transferred or otherwise disposed of (to a Person other than a Credit Party) (x)
at any time prior to the time at which all Credit Document Obligations have been
paid in full and all Commitments and Letters of Credit under the Credit
Agreement have been terminated in connection with a sale or disposition
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
14.12 of the Credit Agreement) or (y) at any time thereafter, to the extent
permitted by the other Secured Debt Agreements, and in the case of clauses (x)
and (y), the proceeds of such sale, transfer or other disposition (or from
-34-
such release) are applied in accordance with the terms of the Credit Agreement
or such other Secured Debt Agreement, as the case may be, to the extent required
to be so applied, such Collateral will be sold, transferred or otherwise
disposed of free and clear of the Liens created by this Agreement and the
Collateral Agent, at the request and expense of such Assignor, will execute and
deliver such documentation, including termination or partial release statements
and the like in connection therewith and 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, transferred or otherwise
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.
Furthermore, upon the release of any Subsidiary Guarantor from the Subsidiaries
Guaranty in accordance with the provisions thereof, such Assignor (and the
Collateral at such time assigned by the respective Assignor pursuant hereto)
shall be released from this Agreement.
(c) At any time that an Assignor desires that the Collateral Agent
take any action to acknowledge or give effect to any release of Collateral
pursuant to the foregoing Section 10.8(a) or (b), VHS Holdco I, the Borrowers,
or such Assignor shall deliver to the Collateral Agent a certificate signed by a
senior officer of VHS Holdco I, the Borrowers, or such Assignor stating that the
release of the respective Collateral is permitted pursuant to such Section
10.8(a) or (b). At any time that VHS Holdco I, the Borrowers, or the respective
Assignor desires that a Subsidiary of the Borrower which has been released from
the Subsidiaries Guaranty be released hereunder as provided in the last sentence
of Section 10.8(b), it shall deliver to the Collateral Agent a certificate
signed by a principal executive officer of VHS Holdco I, the Borrowers, or the
respective Assignor stating that the release of the respective Assignor (and its
Collateral) is permitted pursuant to such Section 10.8(b).
(d) The Collateral Agent shall have no liability whatsoever to any
other Secured Creditor as the result of any release of Collateral by it in
accordance with (or which the Collateral Agent in the absence of gross
negligence and willful misconduct (as determined by a court of competent
jurisdiction, in a final and non-appealable decision) believes to be in
accordance with) 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 each Assignor and the
Collateral Agent.
10.10. 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.
10.11. The Collateral Agent and the other Secured Creditors. 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
-35-
disposition thereof, and otherwise under this Agreement, are only those
expressly set forth in this Agreement and in Section 12 of the Credit Agreement.
The Collateral Agent shall act hereunder on the terms and conditions set forth
herein and in Section 12 of the Credit Agreement.
10.12. Benefit of Agreement. This Agreement shall be binding upon
the parties hereto and their respective successors and assigns and shall inure
to the benefit of and be enforceable by each of the parties hereto and its
successors and assigns.
10.13. Additional Assignors. It is understood and agreed that any
Subsidiary Guarantor that desires to become an Assignor hereunder, or is
required to execute a counterpart of this Agreement after the date hereof
pursuant to the requirements of the Credit Agreement or any other Credit
Document, shall become an Assignor hereunder by executing a counterpart hereof
and delivering same to the Collateral Agent, or by executing a Joinder Agreement
substantially in the form of Exhibit M to the Credit Agreement, (y) delivering
supplements to Annexes A through I, inclusive, hereto as are necessary to cause
such Annexes to be complete and accurate with respect to such additional
Assignor on such date and (z) taking all actions as specified in this Agreement
as would have been taken by such Assignor had it been an original party to this
Agreement, in each case with all documents required above to be delivered to the
Collateral Agent and with all documents and actions required above to be taken
to the reasonable satisfaction of the Collateral Agent.
10.14. Acknowledgment. It is understood and agreed that in order for
a Treasury Service Creditor to receive the benefits of the Security Documents,
such Treasury Service Creditor shall have executed an acknowledgment of the
terms and conditions of the Security Documents and delivered same to the
Collateral Agent.
10.15. Vanguard Health Financial Company, Inc. Notwithstanding
anything to the contrary contained in this Agreement or in any other Credit
Document, the Collateral Agent, on behalf of each Secured Creditor, hereby
agrees that any claim of the United States Government or IRS on the assets of
Vanguard Health Financial Company, Inc., relating to a closing agreement to be
entered into under Section 7121 of the Code between Vanguard Health Financial
Company, Inc. and the Commissioner of Internal Revenue with respect to the
election under Section 953(d) of the Code made (or to be made) by the Captive
Insurance Subsidiary, shall not be subordinated to any claim the Secured
Creditors may have hereunder or under any Credit Document against Vanguard
Health Financial Company, Inc., provided that the foregoing clause shall apply
to no more than an amount of assets of Vanguard Health Financial Company, Inc.
with an adjusted basis equal to 10% of the gross income (as defined in such
closing agreement as originally in effect) of the Captive Insurance Subsidiary.
10.16. Treasury Services Obligations. The parties hereto hereby
acknowledge and agree that the Treasury Services Obligations are (i) "Senior
Indebtedness" for the purposes of the Existing Senior Subordinated Note
Documents, (ii) "Senior Debt" for the purposes of the New Senior Subordinated
Note Documents or (iii) any similar term for the purposes of any Permitted
Senior Subordinated Note Documents.
* * *
-36-
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.
VANGUARD HEALTH HOLDING COMPANY I, LLC
VANGUARD HOLDING COMPANY I, INC.
VANGUARD HEALTH HOLDING COMPANY II, LLC
VANGUARD HOLDING COMPANY II, INC.
VHS ACQUISITION CORPORATION
VHS OF PHOENIX, INC.
VHS OUTPATIENT CLINICS, INC.
VHS OF ARROWHEAD, INC.
VHS OF SOUTH PHOENIX, INC.
VHS IMAGING CENTERS, INC.
VHS OF ANAHEIM, INC.
VHS OF ORANGE COUNTY, INC.
VHS HOLDING COMPANY, INC.
VHS OF HUNTINGTON BEACH, INC.
VHS OF ILLINOIS, INC.
XXXXXXX HEALTH PROVIDERS, INC.
XXXXXXX MANAGEMENT SERVICES, INC.
MIDWEST CLAIMS PROCESSING, INC.
PROS TEMPORARY STAFFING, INC.
WATERMARK PHYSICIAN SERVICES,INC.
VHS GENESIS LABS, INC.
XXXXXXX MEDICAL RECORDS, INC.
VANGUARD HEALTH MANAGEMENT, INC.
VANGUARD HEALTH FINANCIAL COMPANY, INC.
VHS ACQUISITION SUBSIDIARY NUMBER 1, INC.
VHS ACQUISITION SUBSIDIARY NUMBER 2, INC.
VHS ACQUISITION SUBSIDIARY NUMBER 4, INC.
VHS ACQUISITION SUBSIDIARY NUMBER 5, INC.
VHS ACQUISITION SUBSIDIARY NUMBER 8, INC.
HOSPITAL DEVELOPMENT OF WEST PHOENIX, INC., as
Assignors
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Title: Executive Vice President,
Chief Financial Officer and Treasurer
Duly authorized to sign on behalf of
each of the foregoing entities
THE ANAHEIM VHS LIMITED PARTNERSHIP,
as an Assignor
By: VHS of Anaheim, Inc., its General Partner
By: /s/ Xxxxxx X. Xxxxx
-----------------------
Title: Executive Vice President,
Chief Financial Officer and Treasurer
THE HUNTINGTON BEACH VHS LIMITED PARTNERSHIP,
as an Assignor
By: VHS of Huntington Beach, Inc., its General
Partner
By: /s/ Xxxxxx X. Xxxxx
----------------------------
Title: Executive Vice President,
Chief Financial Officer and Treasurer
HEALTHCARE COMPLIANCE, L.L.C.,
as an Assignor
By: Vanguard Health Management, Inc., its Member
By: /s/ Xxxxxx X. Xxxxx
---------------------------
Title: Executive Vice President,
Chief Financial Officer and Treasurer
THE VHS ARIZONA IMAGING CENTERS LIMITED
PARTNERSHIP, as an Assignor
By: VHS Imaging Centers, Inc.,
its General Partner
By: /s/ Xxxxxx X. Xxxxx
----------------------------
Title: Executive Vice President,
Chief Financial Officer and Treasurer
VHS SAN ANTONIO PARTNERS, L.P.,
as an Assignor
By: VHS Acquisition Subsidiary Number 5,
Inc., as General Partner
By: /s/ Xxxxxx X. Xxxxx
----------------------------
Title: Executive Vice President,
Chief Financial Officer and Treasurer
Accepted and Agreed to:
BANK OF AMERICA, N.A.,
as Administrative Agent
By: /s/ Xxxxx Xxxxxx
-------------------------
Title: Principal
BANK OF AMERICA, N.A.,
By: /s/ Xxxxx Xxxxxx
-------------------------
Title: Principal
ANNEX A
to
SECURITY AGREEMENT
SCHEDULE OF CHIEF EXECUTIVE OFFICES
AND OTHER RECORD LOCATIONS
ANNEX B
to
SECURITY AGREEMENT
SCHEDULE OF INVENTORY AND EQUIPMENT LOCATIONS
Assignor Location
ANNEX C
to
SECURITY AGREEMENT
SCHEDULE OF LEGAL NAMES, TYPE OF ORGANIZATION
(AND WHETHER A REGISTERED ORGANIZATION AND/OR
A TRANSMITTING UTILITY), JURISDICTION OF ORGANIZATION,
LOCATION AND ORGANIZATIONAL IDENTIFICATION NUMBERS
Type of Assignor's
Organization Assignor's Organization
(or, if the Location (for Identification
Exact Legal Assignor is an Registered purposes of NY Number (or, if Transmitting
Name of Each Individual, so Organization? Jurisdiction of UCC it has none, so Utility?
Assignor indicate) (Yes/No) Organization Section 9-307) indicate) (Yes/No)
------------ -------------- ------------- --------------- -------------- --------------- -----------
ANNEX D
to
SECURITY AGREEMENT
SCHEDULE OF TRADE AND FICTITIOUS NAMES
Name of Trade and/or
Assignor Fictitious Names
ANNEX E
to
SECURITY AGREEMENT
DESCRIPTION OF CERTAIN SIGNIFICANT TRANSACTIONS OCCURRING WITHIN
ONE YEAR PRIOR TO THE DATE OF THE SECURITY AGREEMENT
Name of Assignor Description of any Transactions as required
by Section 2.8 of the Security Agreement
ANNEX F
to
SECURITY AGREEMENT
DESCRIPTION OF COMMERCIAL TORT CLAIMS
Name of Assignor Description of Commercial Tort Claims
ANNEX G
to
SECURITY AGREEMENT
SCHEDULE OF MARKS AND APPLICATIONS;
INTERNET DOMAIN NAME REGISTRATIONS
1. MARKS AND APPLICATIONS:
Marks Country Registration No.
2. INTERNET DOMAIN NAME REGISTRATIONS:
Internet Domain Names
ANNEX H
to
SECURITY AGREEMENT
SCHEDULE OF PATENTS
ANNEX I
to
SECURITY AGREEMENT
U.S. COPYRIGHTS
REGISTRATION
OWNER NUMBERS COPYRIGHT TITLE
ANNEX J
To
SECURITY AGREEMENT
GRANT OF SECURITY INTEREST
IN UNITED STATES TRADEMARKS
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of
which are hereby acknowledged, [Name of Grantor], a __________ _________ (the
"Grantor") with principal offices at ____________________________, hereby grants
to Bank of America, N.A., as Collateral Agent, with principal offices at 000
Xxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxx, XX 00000 (the "Grantee"), a security
interest in (i) all of the Grantor's right, title and interest in and to the
United States trademarks, trademark registrations and trademark applications
(the "Marks") set forth on Schedule A attached hereto, (ii) all Proceeds (as
such term is defined in the Security Agreement referred to below) and products
of the Marks, (iii) the goodwill of the businesses with which the Marks are
associated and (iv) all causes of action arising prior to or after the date
hereof for infringement of any of the Marks or unfair competition regarding the
same.
THIS GRANT is made to secure the satisfactory performance and
payment of all the Obligations of the Grantor, as such term is defined in the
Security Agreement among the Grantor, the other assignors from time to time
party thereto and the Grantee, dated as of September 23, 2004 (as amended,
modified, restated and/or supplemented from time to time, the "Security
Agreement"). Upon the occurrence of the Termination Date (as defined in the
Security Agreement), the Grantee shall execute, acknowledge, and deliver to the
Grantor an instrument in writing releasing the security interest in the Marks
acquired under this Grant.
This Grant has been granted in conjunction with the security
interest granted to the Grantee under the Security Agreement. The rights and
remedies of the Grantee with respect to the security interest granted herein are
as set forth in the Security Agreement, all terms and provisions of which are
incorporated herein by reference. In the event that any provisions of this
Annex J
Page 2
Grant are deemed to conflict with the Security Agreement, the provisions of the
Security Agreement shall govern.
* * *
Annex J
Page 3
IN WITNESS WHEREOF, the undersigned have executed this Grant as of
the ____ day of _____________, _____.
[NAME OF GRANTOR], Grantor
By_____________________________
Name:
Title:
BANK OF AMERICA, N.A.,
as Collateral Agent and Grantee
By_____________________________
Name:
Title:
STATE OF ______________)
) ss.:
COUNTY OF _____________)
On this ____ day of _________, ____, before me personally came
________ ________________ who, being by me duly sworn, did state as follows:
that [s]he is ______________ of [Name of Grantor], that [s]he is authorized to
execute the foregoing Grant on behalf of said ____________ and that [s]he did so
by authority of the [Board of Directors] of said ____________.
__________________________
Notary Public
STATE OF ______________)
) ss.:
COUNTY OF _____________)
On this ____ day of _________, ____, before me personally came
________ _____________________ who, being by me duly sworn, did state as
follows: that [s]he is __________________ of Bank of America, N.A., that [s]he
is authorized to execute the foregoing Grant on behalf of said corporation and
that [s]he did so by authority of the Board of Directors of said corporation.
__________________________
Notary Public
SCHEDULE A
XXXX REG. NO./SER. NO.
ANNEX K
to
SECURITY AGREEMENT
GRANT OF SECURITY INTEREST
IN UNITED STATES PATENTS
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which are
hereby acknowledged, [Name of Grantor], a __________ _________ (the "Grantor")
with principal offices at ____________________________, hereby grants to Bank of
America, N.A., as Collateral Agent, with principal offices at 000 Xxxxx Xxxxxx,
0xx Xxxxx, Xxxxxxxxx, XX 00000 (the "Grantee"), a security interest in (i) all
of the Grantor's rights, title and interest in and to the United States patents
(the "Patents") set forth on Schedule A attached hereto, in each case together
with (ii) all Proceeds (as such term is defined in the Security Agreement
referred to below) and products of the Patents, and (iii) all causes of action
arising prior to or after the date hereof for infringement of any of the Patents
or unfair competition regarding the same.
THIS GRANT is made to secure the satisfactory performance and payment of
all the Obligations of the Grantor, as such term is defined in the Security
Agreement among the Grantor, the other assignors from time to time party thereto
and the Grantee, dated as of September 23, 2004 (as amended, modified, restated
and/or supplemented from time to time, the "Security Agreement"). Upon the
occurrence of the Termination Date (as defined in the Security Agreement), the
Grantee shall execute, acknowledge, and deliver to the Grantor an instrument in
writing releasing the security interest in the Patents acquired under this
Grant.
Annex K
Page 2
This Grant has been granted in conjunction with the security interest
granted to the Grantee under the Security Agreement. The rights and remedies of
the Grantee with respect to the security interest granted herein are as set
forth in the Security Agreement, all terms and provisions of which are
incorporated herein by reference. In the event that any provisions of this Grant
are deemed to conflict with the Security Agreement, the provisions of the
Security Agreement shall govern.
* * *
Annex K
Page 3
IN WITNESS WHEREOF, the undersigned have executed this Grant as of the
____ day of ____________, ____.
[NAME OF GRANTOR], Grantor
By___________________________
Name:
Title:
BANK OF AMERICA, N.A.,
as Collateral Agent and Grantee
By___________________________
Name:
Title:
STATE OF ______________)
) ss:
COUNTY OF______________)
On this ____ day of _________, ____, before me personally came ________
________________ who, being by me duly sworn, did state as follows: that [s]he
is ______________ of [Name of Grantor], that [s]he is authorized to execute the
foregoing Grant on behalf of said ____________ and that [s]he did so by
authority of the Board of Directors of said ____________.
___________________________
Notary Public
STATE OF ______________)
) ss:
COUNTY OF _____________)
On this ____ day of _________, ____, before me personally came ________
_____________________ who, being by me duly sworn, did state as follows: that
[s]he is __________________ of Bank of America, N.A., that [s]he is authorized
to execute the foregoing Grant on behalf of said corporation and that [s]he did
so by authority of the Board of Directors of said corporation.
____________________________
Notary Public
SCHEDULE A
PATENT PATENT NO.
ANNEX L
to
SECURITY AGREEMENT
GRANT OF SECURITY INTEREST
IN UNITED STATES COPYRIGHTS
WHEREAS, [Name of Grantor], a _______________ _____________ (the
"Grantor"), having its chief executive office at , , is the owner of all right,
title and interest in and to the United States copyrights and associated United
States copyright registrations and applications for registration set forth in
Schedule A attached hereto;
WHEREAS, BANK OF AMERICA, N.A., as Collateral Agent, having its principal
offices at 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxx, XX 00000 (the "Grantee"),
desires to acquire a security interest in said copyrights and copyright
registrations and applications therefor; and
WHEREAS, the Grantor is willing to grant to the Grantee a security
interest in and lien upon the copyrights and copyright registrations and
applications therefor described above.
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, and subject to the terms and conditions of the Security
Agreement, dated as of September 23, 2004, made by the Grantor, the other
assignors from time to time party thereto and the Grantee (as amended, modified,
restated and/or supplemented from time to time, the "Security Agreement"), the
Grantor hereby assigns to the Grantee as collateral security, and grants to the
Grantee a security interest in, the copyrights and copyright registrations and
applications therefor set forth in Schedule A attached hereto.
This Grant has been granted in conjunction with the security interest granted to
the Grantee under the Security Agreement. The rights and remedies of the Grantee
with respect to the security interest granted herein are as set forth in the
Security Agreement, all terms and provisions of which are incorporated herein by
reference. In the event that any provisions of this Grant are deemed to conflict
with the Security Agreement, the provisions of the Security Agreement shall
govern.
* * *
Annex L
Page 2
IN WITNESS WHEREOF, the undersigned have executed this Grant as of the
____ day of ____________, ____.
[NAME OF GRANTOR], Grantor
By___________________________
Name:
Title:
BANK OF AMERICA, N.A.,
as Collateral Agent and Grantee
By___________________________
Name:
Title:
STATE OF ______________)
) ss:
COUNTY OF _____________)
On this __ day of _________, ____, before me personally came ___________
______________, who being duly sworn, did depose and say that [s]he is
___________________ of [Name of Grantor], that [s]he is authorized to execute
the foregoing Grant on behalf of said corporation and that [s]he did so by
authority of the Board of Directors of said corporation.
____________________________
Notary Public
STATE OF ______________)
) ss.:
COUNTY OF______________)
On this ____ day of _________, ____, before me personally came ________
__________________ who, being by me duly sworn, did state as follows: that [s]he
is __________________ of Bank of America, N.A., that [s]he is authorized to
execute the foregoing Grant on behalf of said __________ and that [s]he did so
by authority of the Board of Directors of said _____________.
____________________________
Notary Public
SCHEDULE A
U.S. COPYRIGHTS
REGISTRATION
NUMBERS COPYRIGHT TITLE
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.................................................... 5
2.1. Necessary Filings.................................................................................. 5
2.2. No Liens........................................................................................... 5
2.3. Chief Executive Office, Record Locations........................................................... 5
2.4. Location of Inventory and Equipment................................................................ 6
2.5. Legal Names; Type of Organization (and Whether a Registered Organization and/or a Transmitting
Utility); Jurisdiction of Organization; Location; Organizational Identification Numbers;
Changes Thereto; etc. .......................................................................... 6
2.6. Trade Names; etc. ................................................................................ 6
2.7. Certain Significant Transactions.................................................................. 7
2.8. As-Extracted Collateral; Timber-to-be-Cut......................................................... 7
2.9. Collateral in the Possession of a Bailee.......................................................... 7
2.10. Recourse.......................................................................................... 7
ARTICLE III SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER AND
CERTAIN OTHER COLLATERAL................................................................................ 7
3.1. Additional Representations and Warranties......................................................... 7
3.2. Maintenance of Records............................................................................ 8
3.3. Direction to Account Debtors; Contracting Parties; etc. .......................................... 8
3.4. Modification of Terms; etc. ...................................................................... 9
3.5. Collection........................................................................................ 9
3.6. Instruments....................................................................................... 9
3.7. Assignors Remain Liable Under Accounts............................................................ 9
3.8. Assignors Remain Liable Under Contracts........................................................... 10
3.9. Letter-of-Credit Rights........................................................................... 10
3.10. Commercial Tort Claims........................................................................... 10
3.11. Chattel Paper.................................................................................... 10
ARTICLE IV SPECIAL PROVISIONS CONCERNING TRADEMARKS............................................................. 11
4.1. Additional Representations and Warranties......................................................... 11
4.2. Licenses and Assignments.......................................................................... 11
4.3. Infringements..................................................................................... 11
4.4. Preservation of Marks and Domain Names............................................................ 12
4.5. Maintenance of Registration....................................................................... 12
4.6. Future Registered Marks and Domain Names.......................................................... 12
4.7. Remedies.......................................................................................... 12
(i)
TABLE OF CONTENTS
(continued)
Page
----
ARTICLE V SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE SECRETS................................... 13
5.1. Additional Representations and Warranties......................................................... 13
5.2. Licenses and Assignments.......................................................................... 13
5.3. Infringements..................................................................................... 13
5.4. Maintenance of Patents or Copyright............................................................... 13
5.5. Prosecution of Patent or Copyright Applications................................................... 14
5.6. Other Patents and Copyrights...................................................................... 14
5.7. Remedies.......................................................................................... 14
ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL................................................................. 14
6.1. Protection of Collateral Agent's Security......................................................... 14
6.2. Warehouse Receipts Non-Negotiable................................................................. 15
6.3. Further Actions................................................................................... 15
6.4. Financing Statements.............................................................................. 15
ARTICLE VII REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT..................................................... 15
7.1. Remedies; Obtaining the Collateral Upon an Event of Default....................................... 15
7.2. Remedies; Disposition of the Collateral........................................................... 17
7.3. Waiver of Claims.................................................................................. 17
7.4. Application of Proceeds........................................................................... 18
7.5. Remedies Cumulative............................................................................... 20
7.6. Discontinuance of Proceedings..................................................................... 21
ARTICLE VIII INDEMNITY.......................................................................................... 21
8.1. Indemnity......................................................................................... 21
8.2. Indemnity Obligations Secured by Collateral; Survival............................................. 22
ARTICLE IX DEFINITIONS.......................................................................................... 22
ARTICLE X MISCELLANEOUS......................................................................................... 31
10.1. Notices.......................................................................................... 31
10.2. Waiver; Amendment................................................................................ 32
10.3. Obligations Absolute............................................................................. 32
10.4. Successors and Assigns........................................................................... 32
10.5. Headings Descriptive............................................................................. 33
10.6. Governing Law.................................................................................... 33
10.7. Assignor's Duties................................................................................ 34
10.8. Termination; Release............................................................................. 34
10.9. Counterparts..................................................................................... 35
10.10. Severability.................................................................................... 35
10.11. The Collateral Agent and the other Secured Creditors............................................ 35
(ii)
TABLE OF CONTENTS
(continued)
Page
----
10.12. Benefit of Agreement............................................................................ 36
10.13. Additional Assignors............................................................................ 36
10.14. Acknowledgment.................................................................................. 36
10.15. Vanguard Health Financial Company, Inc.......................................................... 36
ANNEX A Schedule of Chief Executive Offices and Other Record Locations
ANNEX B Schedule of Inventory and Equipment Locations
ANNEX C Schedule of Legal Names, Type of Organization (and Whether a
Registered Organization and/or a Transmitting Utility),
Jurisdiction of Organization, Location and Organizational
Identification Numbers
ANNEX D Schedule of Trade and Fictitious Name
ANNEX E Description of Certain Significant Transactions Occurring
Within One Year Prior to the Date of The Security Agreement
ANNEX F Description of Commercial Tort Claims
ANNEX G Schedule of Marks and Applications; Internet Domain Name
Registrations
ANNEX H Schedule of Patents
ANNEX I U.S. Copyrights
ANNEX J Form of Grant of Security Interest in United States Trademarks
ANNEX K Form of Grant of Security Interest in United States Patents
ANNEX L Form of Grant of Security Interest in United States Copyrights
(iii)
