EXHIBIT 4.6
INTERCREDITOR AND SUBORDINATION AGREEMENT
THIS INTERCREDITOR AND SUBORDINATION AGREEMENT dated as of August 19,
2003 (this "Intercreditor Agreement") is by and among (i) BANK ONE, NA, as
collateral agent (in such capacity, the "Collateral Agent") for and on behalf of
the Secured Parties, (ii) BANK ONE, NA, as Administrative Agent (in such
capacity, the "Administrative Agent") for and on behalf of the Senior Creditors,
(iii) U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee (in such capacity,
together with its successors and assigns, the "Trustee") for and on behalf of
the Subordinated Creditors, and (iv) ARDENT HEALTH SERVICES, INC., a Delaware
corporation (the "Borrower").
WITNESSETH
WHEREAS, pursuant to the terms of the Credit Agreement, the Borrower is
required to (a) cause, under certain circumstances set forth therein, each HMO
Subsidiary to (i) issue an intercompany promissory note to the Borrower or a
Subsidiary in a principal amount set forth in the Credit Agreement and (ii)
grant to the Borrower or such Subsidiary, as applicable, a security interest in
all of its real and personal property to secure the obligations of such HMO
Subsidiary under such intercompany promissory note pursuant to the intercompany
security documents described in the Credit Agreement and (b) collaterally
assign, and grant a security interest in, all of the Borrower's or such
Subsidiary's, as applicable, rights under such intercompany promissory note and
such intercompany security documents to the Collateral Agent as collateral
security for the Senior Obligations;
WHEREAS, pursuant to the terms of the Indenture, in the event that the
Borrower or any Subsidiary grants a security interest in the Borrower's or such
Subsidiary's, as applicable, rights under any such intercompany promissory note
and any such intercompany security documents to the Collateral Agent as
collateral security for the Senior Obligations, then the Borrower or such
Subsidiary, as applicable, is also required to grant a security interest in the
Borrower's or such Subsidiary's, as applicable, rights under such intercompany
promissory note and such intercompany security documents in favor of the holders
of the Subordinated Notes as collateral security for the Subordinated
Obligations;
WHEREAS, the Trustee and the holders of the Subordinated Notes agree
that any such collateral assignment and security interest in favor of the
holders of the Subordinated Notes shall be made to the Collateral Agent as
collateral security for the Subordinated Obligations;
WHEREAS, the parties hereto have entered into this Intercreditor
Agreement to define the rights, duties, authority and responsibilities of the
Collateral Agent and the relationship among the Secured Parties regarding the
relative rights and priorities with respect to the Collateral.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. The following terms shall have the meanings provided
below:
"Credit Agreement" means that Credit Agreement dated as of
August 19, 2003 among the Borrower, the guarantors identified therein,
the Lenders and the Administrative Agent, as the same may be amended,
modified, supplemented, extended, increased, refinanced, restated and
replaced from time to time.
"Credit Documents" means the "Loan Documents" as defined in
the Credit Agreement, as the same may be amended, modified,
supplemented, extended, restated and replaced from time to time.
"Collateral" means all of the property (whether real or
personal, tangible or intangible) in which the Collateral Agent is
granted a Lien pursuant to the Collateral Documents.
"Collateral Documents" means any security agreement, pledge
agreement, mortgage, deed of trust or other security document pursuant
to which the Borrower or any Subsidiary grants a Lien in any of its
rights under any Intercompany Promissory Note or any Intercompany
Security Documents to the Collateral Agent to secure the Secured
Obligations, in each case as the same may be amended, modified,
supplemented, extended, restated and replaced from time to time.
"Event of Default" means the occurrence of an "Event of
Default" under, and as defined, the Credit Agreement.
"Financing Documents" means the Credit Documents and the
Subordinated Note Documents.
"HMO" means any health maintenance organization, managed care
organization, any Person doing business as a health maintenance
organization or managed care organization, or any Person required to
qualify or be licensed as a health maintenance organization or managed
care organization under applicable federal or state law (including,
without limitation, HMO Regulations).
"HMO Business" means the business of owning and operating an
HMO or other similar regulated entity or business.
"HMO Regulations" means all laws, regulations, directives and
administrative orders applicable under federal or state law to any HMO
Subsidiary (and any regulations, orders and directives promulgated or
issued pursuant to any of the foregoing) and Subchapter XI of Title 42
of the United States Code Annotated (and any regulations, orders and
directives promulgated or issued pursuant thereto, including, without
limitation, Part 417 of Chapter IV of 42 Code of Federal Regulations
(1990)).
"HMO Subsidiary" means any existing or future Subsidiary that
is capitalized or licensed as an HMO, conducting HMO Business or
providing managed care services.
"Indenture" means that certain Indenture dated as of August
19, 2003 among the Borrower, the Subsidiaries of the Borrower party
thereto and the Trustee, as the same may be amended, modified,
supplemented, extended, restated, refinanced and replaced from time to
time.
"Intercompany Promissory Notes" means each and every
promissory note issued by an HMO Subsidiary to the Borrower or a
Subsidiary of the Borrower pursuant to the requirements of the Credit
Agreement.
"Intercompany Security Documents" means each and every
security agreement, pledge agreement, mortgage, deed of trust or other
security document pursuant to which any HMO Subsidiary grants a Lien in
any of its real or personal property to secure its obligations under an
Intercompany Promissory Note.
"Lenders" means the lenders from time to time party to the
Credit Agreement.
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"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge, or
preference, priority or other security interest or preferential
arrangement of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, and any financing lease having
substantially the same economic effect as any of the foregoing).
"Loan Parties" means the Borrower and the Guarantors.
"Parent" means Ardent Health Services LLC, a Delaware limited
liability company.
"Person" means any natural person, corporation, limited
liability company, trust, joint venture, association, company,
partnership, governmental authority or other entity.
"Required Lenders" means the "Required Lenders" under, and as
defined in, the Credit Agreement.
"Secured Obligations" means, collectively, the Senior
Obligations and the Subordinated Obligations.
"Secured Parties" means the Senior Creditors and the
Subordinated Creditors.
"Senior Creditors" means the Administrative Agent, the Lenders
and any affiliate of a Lender that enters into a Swap Contract with any
Loan Party.
"Senior Obligations" means all obligations (including (a)
principal, interest, fees, indemnities and all other amounts and (b)
interest accruing after commencement of a proceeding in bankruptcy,
reorganization or insolvency, whether or not allowable as a claim),
contingent or otherwise, of the Loan Parties from time to time to the
Senior Creditors under the Credit Documents. The foregoing shall also
include any Swap Contract between any Loan Party and any Lender or
affiliate of a Lender.
"Subordinated Creditors" means the Trustee and the holders of
the Subordinated Notes.
"Subordinated Obligations" means all obligations (including
(a) principal, interest, fees, premiums, liquidated damages,
indemnities and all other amounts and (b) interest accruing after
commencement of a proceeding in bankruptcy, reorganization or
insolvency, whether or not allowable as a claim), contingent or
otherwise, of the Loan Parties from time to time to the Subordinated
Creditors under the Subordinated Note Documents.
"Subordinated Notes" means those 10% Senior Subordinated Notes
of the Borrower due 2013 issued pursuant to the Indenture, as the same
may be amended, modified, supplemented, extended, restated, refinanced
and replaced from time to time.
"Subordinated Note Documents" means the Subordinated Notes,
the Indenture and all other documents executed and delivered in respect
of the Subordinated Notes and the Indenture, in each case as the same
may be amended, modified, supplemented, extended, restated, refinanced
and replaced from time to time.
"Subsidiary" of a Person means a corporation, partnership,
joint venture, limited liability company or other business entity of
which a majority of the shares of Capital Stock having ordinary voting
power for the election of directors or other governing body (other than
Capital Stock having such power only by reason of the happening of a
contingency) are at the time
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beneficially owned, or the management of which is otherwise controlled,
directly, or indirectly through one or more intermediaries, or both, by
such Person. Unless otherwise specified, all references herein to a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or
Subsidiaries of the Parent.
"Swap Contract" means (a) any and all rate swap transactions,
basis swaps, credit derivative transactions, forward rate transactions,
commodity swaps, commodity options, forward commodity contracts, equity
or equity index swaps or options, bond or bond price or bond index
swaps or options or forward bond or forward bond price or forward bond
index transactions, interest rate options, forward foreign exchange
transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any
options to enter into any of the foregoing), whether or not any such
transaction is governed by or subject to any master agreement, and (b)
any and all transactions of any kind, and the related confirmations,
which are subject to the terms and conditions of, or governed by, any
form of master agreement published by the International Swaps and
Derivatives Association, Inc., any International Foreign Exchange
Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "Master Agreement"),
including any such obligations or liabilities under any Master
Agreement.
2. Intercreditor and Subordination Provisions.
(a) Subordination. Notwithstanding any contrary provision contained in
the Uniform Commercial Code as in effect from time to time in the applicable
jurisdiction with respect to any Collateral, any applicable law or judicial
decision or the Financing Documents, or whether any Secured Party has possession
or control of all or any part of the Collateral, and irrespective of the time,
order or method of attachment, perfection, filing or recording of any Lien in
the Collateral or existing under the Collateral Documents, as among the Secured
Parties the rights of the Senior Creditors in respect of Liens in the Collateral
or existing under the Collateral Documents shall at all times be prior and
superior to the rights of the Subordinated Creditors in respect of any Lien in
the Collateral or existing under the Collateral Documents.
(b) Limit on Enforcement. The Secured Parties agree among themselves
and for their own benefit alone that the Liens granted and provided for in the
Collateral Documents shall not be enforced as against any of the Collateral
except by the Collateral Agent at the direction of the requisite Lenders as
provided in the Credit Agreement. Each Secured Party agrees that, until the
Credit Agreement has been terminated and the Senior Obligations have been paid
in full in cash, the provisions of this Intercreditor Agreement shall provide
the exclusive method by which any Secured Party may exercise rights and remedies
under the Collateral Documents. Each Subordinated Creditor agrees that, until
the Credit Agreement has been terminated and the Senior Obligations have been
paid in full in cash, no Subordinated Creditor may exercise any rights or
remedies in respect of any Lien in the Collateral or existing under the
Collateral Documents.
(c) Control by Senior Creditors. The Collateral Agent shall take any
action with respect to the Collateral and the Collateral Documents requested in
writing by the requisite Lenders as provided in the Credit Agreement (including,
without limitation, any direction (i) to release all or any portion of the
Collateral from the Liens created under the Collateral Documents, (ii) to
execute any amendment, modification or supplement to the Collateral Documents,
(ii) to exercise or refrain from exercising any right, remedy or power available
or conferred to the Collateral Agent under the Collateral Documents and (iv) to
sell all or any portion of the Collateral at any price and on any other terms
following exercise of remedies under the Collateral Documents) without the need
for the approval or consent of, and
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notwithstanding any contrary direction from, any Subordinated Creditor. During
the existence of an Event of Default, prior to receipt of any direction from the
requisite Lenders as provided in the Credit Agreement, the Collateral Agent may
take, but shall have no obligation to take, any and all actions with respect to
the Collateral and the Collateral Documents (including, without limitation, the
foreclosure of any Lien or any other exercise of remedies) as the Collateral
Agent shall deem advisable or in the best interest of the Senior Creditors and
the Subordinated Creditors; provided, however, that if instructions are
thereafter received from the Requisite Lenders as provided in the Credit
Agreement, then any subsequent actions of the Collateral Agent shall be subject
to such instructions.
(d) Application of Proceeds of the Collateral. The Collateral Agent
shall pay to and apply all proceeds of the Collateral as follows:
(i) First, to the payment of the reasonable costs and expenses
of the Collateral Agent incurred in connection with the execution of
its duties as Collateral Agent, in exercising or attempting to exercise
any right or remedy hereunder or under the Collateral Documents or in
taking possession of, protecting, preserving or disposing of any item
of Collateral, and all amounts against or for which the Collateral
Agent is to be indemnified or reimbursed hereunder;
(ii) Second, after payment in full of the amounts set forth in
clause (i) above, to the Administrative Agent for application to the
Senior Obligations in the order set forth in the Credit Agreement;
(iii) Third, after payment in full of the Senior Obligations,
to the Trustee for application to the Subordinated Obligations as set
forth in the Indenture;
(iv) Last, after payment in full of the amounts set forth in
clause (iii) above, to the payment of the surplus, if any, to
whomsoever may be lawfully entitled to receive the same.
(e) Recovery of Proceeds. If any Secured Party receives any proceeds of
the Collateral other than from the Collateral Agent pursuant to the order of
application set forth in Section 2(d), such Secured Party shall turn over such
proceeds to the Collateral Agent promptly upon receipt thereof for application
as provided in Section 2(d).
(f) Reduction of Secured Obligations. The Borrower agrees that,
notwithstanding any Financing Document to the contrary, the Secured Obligations
owing under any Financing Document to a Secured Party (i) shall be reduced by
the amount of any proceeds of the Collateral received by such Secured Party
from the Collateral Agent pursuant to Section 2(d) and (ii) shall not be
reduced by the amount of any proceeds of the Collateral paid over to the
Collateral Agent by such Secured Party pursuant to Section 2(e) (except to the
extent such proceeds are subsequently received by such Secured Party from the
Collateral Agent pursuant to Section 2(d)).
(g) Determination of Amounts of Secured Obligations. Whenever the
Collateral Agent is required to determine the existence or amount of any of
the Secured Obligations or any portion thereof or the existence of any Event
of Default for any purposes of this Intercreditor Agreement, it shall be
entitled to make such determination on the basis of one or more certificates
of any Secured Party (with respect to the Secured Obligations owed to such
Secured Party); provided, however, that if, notwithstanding the request of the
Collateral Agent, any Secured Party shall fail or refuse within ten days of
such request to certify as to the existence or amount of any Secured
Obligations or any portion thereof owed to it or the existence of any Event of
Default, the Collateral Agent shall be entitled to determine such existence or
amount by such method as the Collateral Agent may reasonably determine,
including by reliance upon a certificate of the Borrower; provided further,
that, promptly following determination of any such amount, the Collateral
Agent shall notify such Secured Party of such determination and thereafter
shall correct
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any error that such Secured Party brings to the attention of the Collateral
Agent. The Collateral Agent may rely conclusively, and shall be fully protected
in so relying, on any determination made by it in accordance with the provisions
of the preceding sentence (or as otherwise directed by a court of competent
jurisdiction in a final, nonappealable judgment) and shall have no liability to
the Borrower, any Guarantor, any Secured Party or any other Person as a result
of any action taken by the Collateral Agent based upon such determination prior
to receipt of notice of any error in such determination.
(h) Acts of Secured Parties. Any request, demand, authorization,
direction, notice, consent, waiver or other action permitted or required by this
Intercreditor Agreement to be given or taken by the Secured Parties or any
portion thereof may be and, at the request of the Collateral Agent, shall be
embodied in and evidenced by one or more instruments satisfactory in form and
substance to the Collateral Agent and signed by or on behalf of such Persons
and, except as otherwise expressly provided in any such instrument, any such
action shall become effective when such instrument or instruments shall have
been delivered to the Collateral Agent. The instrument or instruments evidencing
any action (and the action embodied therein and evidenced thereby) are sometimes
referred to herein as an "Act" of the Persons signing such instrument or
instruments. In the absence of bad faith on the part of the Collateral Agent,
the Collateral Agent shall be entitled to rely absolutely upon an Act of any
Secured Party if such Act purports to be taken by or on behalf of such Secured
Party, and nothing in this Intercreditor Agreement shall be construed to require
any Secured Party to demonstrate that it has been authorized to take any action
which it purports to be taking, the Collateral Agent being entitled to rely
conclusively, and being fully protected in so relying, on any Act of such
Secured Party.
(i) Intercreditor Arrangements in Bankruptcy.
(i) This Intercreditor Agreement shall remain in full force
and effect and enforceable pursuant to its terms in accordance with
Section 510(a) of the Bankruptcy Code of the United States, and all
references herein to any Loan Party shall be deemed to apply to such
entity as debtor in possession and to any trustee in bankruptcy for the
estate of such entity.
(ii) Except as otherwise specifically permitted in this
Section 2(i), until the Credit Agreement is terminated and the Senior
Obligations have been paid in full in cash, no Subordinated Creditor
shall assert without the written consent of the Required Lenders any
claim, motion, objection, or argument in respect of any Collateral in
connection with any proceeding under Debtor Relief Laws which could
otherwise be asserted or raised in connection with such proceeding by
such Subordinated Creditor as a creditor of any Loan Party with a Lien
on any Collateral, including without limitation any claim, motion,
objection or argument seeking adequate protection or relief from the
automatic stay in respect of any Collateral.
(iii) Without limiting the generality of the foregoing, the
Subordinated Creditors agree that in any proceeding under Debtor Relief
Laws, the Subordinated Creditors shall not oppose any sale or other
disposition of any assets comprising part of the Collateral free and
clear of the Liens of any party, including the Subordinated Creditors
under Section 363 of the Bankruptcy Code of the United States on the
basis that the Subordinated Creditors' interest in the Collateral is
impaired by such sale or inadequately protected as a result of such
sale if the Senior Creditors have consented to such sale or disposition
of such assets.
(iv) The Subordinated Creditors agree that they will not
initiate, prosecute, encourage, or assist with any other person to
initiate or prosecute any claim, action or other proceeding (i)
challenging the validity or enforceability of this Intercreditor
Agreement, (ii) challenging the validity or enforceability of any
Senior Creditor's claim with respect to the Collateral, (iii)
challenging the perfection or enforceability of any Liens of the Senior
Creditors
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in any Collateral or (iv) asserting any claims which any Loan Party may
hold with respect to the Senior Creditors or the Senior Obligations, if
any.
(v) To the extent that any Senior Creditor receives payments
or transfers in respect of the Senior Obligations or proceeds of the
Collateral which are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, state or
federal law, common law, or equitable cause, then, to the extent of
such payment or proceeds received, the Senior Obligations, or part
thereof, intended to be satisfied shall be revived and continue in full
force and effect as if such payments or proceeds had not been received
by such Senior Creditor.
(vi) Notwithstanding any other provision of this Section, the
Senior Creditors and the Subordinated Creditors shall be entitled to
file any necessary pleadings, motions, objections or agreement which
assert rights or interests available to unsecured creditors of any Loan
Party arising under either the Bankruptcy Code of the United States or
applicable non-bankruptcy law.
3. Representations of Administrative Agent and Trustee.
(a) The Administrative Agent represents and warrants to the other
parties hereto that it has full power and authority to execute and deliver this
Intercreditor Agreement on behalf of the Senior Creditors and that this
Intercreditor Agreement shall be binding upon the Senior Creditors.
(b) The Trustee represents and warrants to the other parties hereto
that it has full power and authority to execute and deliver this Intercreditor
Agreement on behalf of the Subordinated Creditors and that this Intercreditor
Agreement shall be binding upon the Subordinated Creditors. The Trustee further
represents and warrants that it has full power and authority to execute and
deliver, on behalf of the Subordinated Creditors, a restatement or replacement
of this Intercreditor Agreement in connection with any refinance, restatement or
replacement of the Credit Agreement, provided that the terms of such restatement
or replacement of this Intercreditor Agreement shall be on substantially the
same terms hereof.
4. Collateral Agent
(a) Appointment and Authority of Collateral Agent.
(i) Each of the Secured Parties hereby irrevocably appoints,
designates and authorizes the Collateral Agent to take such action on
its behalf under the provisions of this Intercreditor Agreement and
each Collateral Document and to exercise such powers and perform such
duties as are expressly delegated to it by the terms of this
Intercreditor Agreement or any Collateral Document, together with such
powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary contained elsewhere herein or in any
Collateral Document, the Collateral Agent shall not have any duties or
responsibilities, except those expressly set forth herein or therein,
nor shall the Collateral Agent have or be deemed to have any fiduciary
relationship with any Secured Party, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall
be read into this Intercreditor Agreement or any Collateral Document or
otherwise exist against the Collateral Agent. Without limiting the
generality of the foregoing sentence, the use of the term "agent"
herein and in the Collateral Documents with reference to the Collateral
Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable
law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative
relationship between independent contracting parties. The Collateral
Agent shall act on behalf of the Secured Parties with respect to any
Collateral and the
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Collateral Documents, and the Collateral Agent shall have all of the
benefits and immunities as provided herein or in the Collateral
Documents.
(ii) The Secured Parties irrevocably authorize the Collateral
Agent:
(A) to execute the Collateral Documents for and on
behalf of the Secured Parties,
(B) to perfect the security interest in the
Collateral for the benefit of the Secured Parties,
(C) to hold instruments, if any, representing any
Collateral for the benefit of the Secured Parties, and
(D) to take any and all actions with respect to the
Collateral and the Collateral Documents requested in writing
by the Required Lenders without the need for the approval or
consent of, and notwithstanding any contrary direction from,
any Subordinated Creditor.
(b) Duties.
(i) The Collateral Agent accepts the duties hereunder and
under the Collateral Documents and agrees to perform the same, but only
upon the terms and conditions hereof and of the Collateral Documents,
to all of which the Loan Parties and the Secured Parties by their
acceptance hereof agree.
(ii) The Collateral Agent shall not have any duty or
obligation to manage, control, use, sell, dispose of or otherwise deal
with the Collateral or to otherwise take or refrain from taking any
action under, or in connection with, this Intercreditor Agreement or
the Collateral Documents, except as expressly provided by the terms and
conditions of this Intercreditor Agreement or the Collateral Documents.
The Collateral Agent may take, but shall have no obligation to take,
any and all such actions under the Collateral Documents or otherwise as
it shall reasonably deem to be in the best interests of the Secured
Parties in order to maintain the Collateral and protect and preserve
the Collateral and the rights of the Secured Parties.
(iii) The Collateral Agent makes no representation as to the
value or condition of the Collateral or any part thereof, as to the
title of any of the Loan Parties to the Collateral or as to the
security afforded by this Intercreditor Agreement or the Collateral
Documents and the Collateral Agent shall incur no liability or
responsibility in respect of any such matters. The Collateral Agent
shall not be required to ascertain or inquire as to the performance by
any Loan Party of its obligations under any of the Financing Documents.
(iv) The Collateral Agent shall not be responsible for
insuring the Collateral, for the payment of taxes, charges, assessments
or liens upon the Collateral or otherwise as to the maintenance of the
Collateral, except as provided in the immediately following sentence
when the Collateral Agent has possession of the Collateral. The
Collateral Agent shall have no duty to any of the Loan Parties, any of
their Subsidiaries or any of the Secured Parties as to any Collateral
in its possession or control or in the possession or control of any
agent or nominee of the Collateral Agent or any income thereon or as to
the preservation of rights against prior parties or any other rights
pertaining thereto, except the duty to accord such Collateral in its
possession substantially the same care as it accords its own assets and
the duty to account for monies received by it.
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(c) Delegation of Duties. The Collateral Agent may execute any of its
duties under this Intercreditor Agreement or any Collateral Document by or
through agents, employees or attorneys-in-fact and shall be entitled to advice
of counsel and other consultants or experts concerning all matters pertaining to
such duties. The Collateral Agent shall not be responsible for the negligence or
misconduct of any agent or attorney-in-fact that it selects with reasonable care
in the absence of gross negligence or willful misconduct.
(d) Liability.
(i) The Collateral Agent shall not be (A) liable to any Loan
Party or any Secured Party for any action taken or omitted to be taken
by it under or in connection with this Intercreditor Agreement or any
Collateral Document or the transactions contemplated hereby (except for
its own gross negligence or willful misconduct in connection with its
duties expressly set forth herein), (B) responsible in any manner to
any Secured Party for any recital, statement, representation or
warranty made by any Loan Party or any officer thereof, contained
herein or in any Collateral Document, or in any certificate, report,
statement or other document referred to or provided for in, or received
by the Collateral Agent under or in connection with, this Intercreditor
Agreement or any Collateral Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Intercreditor
Agreement or any Collateral Document, or for any failure of any Loan
Party or any other party to this Intercreditor Agreement or any
Collateral Document to perform its obligations hereunder or thereunder
or (C) liable except with respect to such duties as are specifically
set forth in this Intercreditor Agreement or in the Collateral
Documents and no implied covenants or obligations shall be read into
this Intercreditor Agreement or the Collateral Documents against the
Collateral Agent, but the duties and obligations of the Collateral
Agent shall be determined solely by the express provisions of this
Intercreditor Agreement and the Collateral Documents.
(ii) The Collateral Agent shall not be under any obligation to
any Secured Party to ascertain or to inquire as to the observance or
performance of by any Loan Party of any of the agreements contained
in, or conditions of, this Intercreditor Agreement or any Collateral
Document, or to inspect the properties, books or records of any Loan
Party or any affiliate thereof. The Collateral Agent shall not assume,
and shall not be deemed to have assumed, any obligation towards or
relationship of agency, fiduciary or trust with or for any other
Person.
(iii) Whether or not an Event of Default shall have occurred,
the Collateral Agent shall not be under any obligation to take or
refrain from taking any action under this Intercreditor Agreement or
the Collateral Documents (A) which may tend to involve it in any
expense or liability, unless and until it is (x) requested in writing
so to do by the Required Lenders as provided herein and (y) furnished,
from time to time as it may require, with satisfactory security and
indemnity or (B) which may conflict with any provisions of law, this
Intercreditor Agreement, the Collateral Documents or any order of any
court or administrative agency.
(e) Reliance. In the absence of bad faith on the part of the Collateral
Agent, the Collateral Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, electronic mail message, statement or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to any Loan Party),
independent accountants and other experts selected by the Collateral Agent. The
Collateral Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Intercreditor Agreement or any Collateral
Document in accordance with the direction or consent of the requisite Secured
Parties
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as set forth herein, and any action taken or failure to act pursuant to such
direction or consent shall be binding upon all the Secured Parties.
(f) Notice of Default. The Collateral Agent shall not be deemed to have
knowledge or notice of the occurrence of any Event of Default unless the
Collateral Agent shall have received a notice of Event of Default from a Senior
Creditor or a Loan Party as set forth herein. The Collateral Agent shall have no
obligation either prior to or after receiving such notice to inquire whether an
Event of Default has, in fact, occurred and shall be entitled to rely
conclusively, and shall be fully protected in so relying, on any notice so
furnished to it.
(g) Indemnification. The Loan Parties jointly and severally agree:
(i) to pay to the Collateral Agent all of its out-of-pocket
expenses in connection with the preparation, execution and delivery of
this Intercreditor Agreement and the transactions contemplated hereby,
including but not limited to the reasonable charges and disbursements
of its special counsel;
(ii) to pay to the Collateral Agent from time to time
reasonable compensation for all services rendered by it hereunder;
(iii) except as otherwise expressly provided herein, to
reimburse the Collateral Agent upon its request for all reasonable
expenses, disbursements and advances incurred or made by the
Collateral Agent in accordance with any provision of this
Intercreditor Agreement (including the reasonable compensation and the
expenses and disbursements of its agents and counsel); and
(iv) to indemnify the Collateral Agent for, and to hold it
harmless against, any loss, liability or expense incurred without
gross negligence or willful misconduct (as determined by a court of
competent jurisdiction in a final, nonappealable judgment) on its
part, arising out of or in connection with this Intercreditor
Agreement (excluding any amounts relating to disputes between or among
the parties to this Intercreditor Agreement other than any such
disputes involving a Loan Party) or the Collateral Documents or any
action taken or omitted by it thereunder or in connection therewith,
including, but not limited to, the costs and expenses of defending
itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder, and any loss,
liability, expense or claim arising out of its possession, management,
control, use or operation of the Collateral.
The Secured Parties (other than the Trustee) shall indemnify the
Collateral Agent upon demand (to the extent not reimbursed by or on behalf of
any Loan Party and without limiting the obligation of any Loan Party to do so),
pro rata, and hold the Collateral Agent harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature whatsoever that
may be imposed on, incurred by or asserted against the Collateral Agent arising
out of the actions of the Collateral Agent under this Intercreditor Agreement
or any Collateral Documents or the transactions contemplated thereby or the
enforcement of any of the terms thereof or of any such other documents
including all expenses, compensation, disbursements, advances, losses or
liabilities of the type described above; provided, however, that no Secured
Party shall be liable for the payment to the Collateral Agent of any portion
thereof to the extent determined in a final, nonappealable judgment by a court
of competent jurisdiction to have resulted from the Collateral Agent's own
gross negligence or willful misconduct; provided, further, that, with respect
to the Senior Creditors only, no action taken by the Collateral Agent in
accordance with the directions or the consent of the requisite Lenders as
provided in the Credit Agreement shall be deemed to constitute gross negligence
or willful misconduct for purposes hereof. The rights of each Secured Party
shall be subrogated to the rights of the Collateral Agent with respect to all
amounts paid by it pursuant to this
10
paragraph, and all such amounts shall constitute Senior Obligations or
Subordinated Obligations, as the case may be.
This Section 4(g) shall survive termination of the Financing Documents
and the repayment in full of the Secured Obligations.
(h) Status of Moneys Received.
(i) Pending the disbursement thereof pursuant to the terms of
this Intercreditor Agreement, all proceeds of the Collateral received
by the Collateral Agent following the enforcement of the Liens granted
and provided for in the Collateral Documents shall, until used or
applied as herein provided, be held for the purposes for which they
were received, in segregated accounts, and shall, if held by the
Collateral Agent for more than one business day, be invested by the
Collateral Agent in either (A) direct obligations of the United States
of America or (B) obligations for which the full faith and credit of
the United States is pledged to provide for the payment of principal
and interest, maturing not more than ninety days from the date of such
investment. Earnings on monies so invested shall constitute proceeds of
Collateral for purposes of this Intercreditor Agreement. The Collateral
Agent and any affiliated corporation may become the owner of any of the
Secured Obligations and be interested in any financial transaction with
any of the Loan Parties or any affiliated corporation, or the
Collateral Agent may act as depository or otherwise in respect to other
securities of any of the Loan Parties or any affiliated corporation,
all with the same rights which it would have if it was not the
Collateral Agent.
(i) Individual Capacity. Bank One, NA and its affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with any of the Loan Parties
and their respective affiliates as though Bank One, NA were not the Collateral
Agent hereunder and without notice to or consent of the Secured Parties. The
Secured Parties acknowledge that, pursuant to such activities, Bank One, NA or
its affiliates may receive information regarding any Loan Party or its
affiliates (including information that may be subject to confidentiality
obligations in favor of such Loan Party or such affiliate) and acknowledge that
the Collateral Agent shall be under no obligation to provide such information
to them.
(j) Successor Collateral Agent. The Collateral Agent may resign as
Collateral Agent upon not less than thirty days' notice to the Secured Parties.
Upon any such resignation, the Required Lenders shall have the right to appoint
a successor collateral agent (without the need for the consent or approval of,
and notwithstanding any contrary direction from, any Subordinated Creditor),
which successor shall be a state or national bank or trust company in good
standing, organized under the laws of the United States of America or of any
State, having a capital, surplus and undivided profits aggregating at least
$500 million, if there be such a bank or trust company willing and able to
accept the duties hereunder upon reasonable and customary terms. If no
successor collateral agent is appointed and shall have accepted such
appointment in writing within fifteen days prior to the effective date of the
resignation of the Collateral Agent, the Collateral Agent may appoint, after
consulting with the Senior Creditors (without the need to consult with any
Subordinated Creditor), a successor collateral agent that meets the eligibility
requirements set forth in the preceding sentence. Upon the acceptance of its
appointment as successor collateral agent hereunder, such successor shall
succeed to all the rights, powers and duties of the retiring Collateral Agent
and the retiring Collateral Agent, upon the signing, transferring and setting
over to such successor Collateral Agent all rights, monies and other collateral
held by it in its capacity as Collateral Agent, shall be discharged from its
duties and obligations hereunder. After any retiring Collateral Agent's
resignation hereunder, the provisions of this Section 4 and with respect to the
Collateral Agent hereunder shall inure to its benefit as to any actions taken
or omitted to be taken by it
11
while it was Collateral Agent hereunder. If no successor collateral agent has
accepted appointment as Collateral Agent by the date thirty days following a
retiring Collateral Agent's notice of resignation, the retiring Collateral
Agent's resignation shall nevertheless thereupon become effective and the
Required Lenders shall succeed to all the rights, powers and duties of the
retiring Collateral Agent until such time, if any, as a successor collateral
agent is appointed. Any successor Collateral Agent appointed hereunder shall
execute, acknowledge and deliver to the Borrower and the predecessor Collateral
Agent an instrument accepting such appointment, and thereupon such successor
Collateral Agent, without any further act, deed, conveyance or transfer, shall
become vested with the title to the Collateral, and with all the rights,
powers, duties and obligations of the predecessor Collateral Agent in the trust
hereunder, with like effect as if originally named as Collateral Agent herein.
Upon the request of any such successor Collateral Agent, and at the expense of
the Loan Parties, the Loan Parties and the predecessor Collateral Agent shall
promptly execute and deliver such instruments of conveyance and do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in such successor Collateral Agent its interest in the Collateral
and all such rights, powers, duties and obligations of the predecessor
Collateral Agent hereunder, and the predecessor Collateral Agent shall also
promptly assign and deliver to the successor Collateral Agent any Collateral
then in its possession.
5. Miscellaneous.
(a) Successors; Continuing Effect.
(i) This Intercreditor Agreement is being entered into for
the benefit of, and shall be binding upon, (A) the Senior Creditors
and their respective successors and assigns, including subsequent
holders of the Senior Obligations and (B) the Subordinated Creditors
and their respective successors and assigns, including subsequent
holders of the Subordinated Obligations.
(ii) The Trustee agrees to execute (on behalf of the
Subordinated Creditors) a restatement or replacement of this
Intercreditor Agreement in connection with any refinance, restatement
or replacement of the Credit Agreement, provided that the terms of
such restatement or replacement of this Intercreditor Agreement shall
be on substantially the same terms hereof.
(iii) This Intercreditor Agreement shall terminate upon the
termination of the Credit Agreement and the payment of all Senior
Obligations in full in cash (unless otherwise terminated sooner upon
the request of the Required Lenders) and the Subordinated Creditors
agree that the Collateral Agent may release the Liens arising under
the Collateral Documents upon the termination of this Intercreditor
Agreement.
(b) Amendments to this Intercreditor Agreement. Each of the parties
hereto agrees that this Intercreditor Agreement may not be amended, modified or
supplemented unless such amendment, modification or supplement has been approved
in writing by the Loan Parties, the Required Lenders (or the Administrative
Agent acting with the consent of the Required Lenders) and the Trustee acting
with the consent of the requisite holders of the Subordinated Notes under the
Indenture.
(c) Further Assurances. Each of the parties hereto will, at the expense
of the Loan Parties, and at any time and from time to time, promptly execute and
deliver all further instruments and documents, and take all further action, that
the Collateral Agent may reasonably request in order to perfect or otherwise
protect any right or interest granted or purported to be granted hereby or to
enable the Collateral Agent to exercise and enforce its rights and remedies
hereunder.
(d) Expenses. The Loan Parties shall pay upon demand, the amount of any
and all reasonable expenses of the Secured Parties (including, without
limitation, the reasonable fees and
12
expenses of counsel) which any of the Secured Party may incur in connection with
the exercise or enforcement of any of their rights or interests hereunder.
(e) Notices. All notices and other communications provided for
hereunder shall be in writing (including by facsimile transmission). All such
notices and other communications shall be deemed to be given or made upon the
earlier to occur of (i) actual receipt by the relevant party hereto and (ii) if
delivered (A) by hand or by courier, when signed for by or on behalf of the
relevant party hereto, (B) by certified or registered mail, four business days
after deposit in the mails, postage prepaid and (C) by facsimile, when sent and
receipt has been confirmed (which confirmation may be by telephone); provided,
however, that notices and other communications to the Collateral Agent shall not
be effective until actually received. In no event shall a voicemail message be
effective as a notice, communication or confirmation hereunder. All written
notices shall be delivered, and any notices and other communications expressly
permitted hereunder to be given by telephone shall be made, to the address,
facsimile number or telephone number specified on the signature pages hereto for
such party or to such other address, facsimile number or telephone number as
shall be designated by such party in a notice to the other parties.
(f) Severability. Any provision of this Intercreditor Agreement which
is prohibited or unenforceable in any jurisdiction, shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or invalidity
without invalidating the remaining portions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
(g) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
(h) Entire Agreement; Governing Law. This Intercreditor Agreement
embodies the entire agreement and understanding of the parties hereto regarding
the subject matter hereof. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
(i) Counterparts. This Intercreditor Agreement may be executed in any
number of counterparts, and each such counterpart shall be deemed to be an
original instrument, but all such counterparts together shall constitute one
agreement.
[Signature Pages Follow]
13
IN WITNESS WHEREOF, the undersigned have caused this Intercreditor Agreement to
be duly executed and delivered by their duly authorized officers on the date and
year first above written.
BANK ONE, NA,
as Collateral Agent
By: /s/ Timothy K. Boyle
-----------------------------------
Name: Timothy K. Boyle
Title: First Vice President
BANK ONE, NA,
as Administrative Agent for and on behalf of the Senior Creditors
By: /s/ Timothy K. Boyle
-----------------------------------
Name: Timothy K. Boyle
Title: First Vice President
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee for and on behalf of the Subordinated Creditors
By:
------------------------------------
Name:
Title:
ARDENT HEALTH SERVICES, INC.,
a Delaware corporation
By:
------------------------------------
Name:
Title:
IN WITNESS WHEREOF, the undersigned have caused this Intercreditor Agreement to
be duly executed and delivered by their duly authorized officers on the date
and year first above written.
BANK ONE, NA,
as Collateral Agent
By:
--------------------------------
Name:
Title:
BANK ONE, NA,
as Administrative Agent for and on behalf of the Senior Creditors
By:
--------------------------------
Name:
Title:
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee for and on behalf of the Subordinated Creditors
By: /s/ Frank P. Leslie, III
--------------------------------
Name: Frank P. Leslie, III
Title: Vice President
ARDENT HEALTH SERVICES, INC.,
a Delaware corporation
By:
--------------------------------
Name:
Title:
IN WITNESS WHEREOF, the undersigned have caused this Intercreditor Agreement to
be duly executed and delivered by their duly authorized officers on the date
and year first above written.
BANK ONE, NA,
as Collateral Agent
By:
---------------------------------
Name:
Title:
BANK ONE, NA,
as Administrative Agent for and on behalf of the Senior Creditors
By:
---------------------------------
Name:
Title:
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee for and on behalf of the Subordinated Creditors
By:
---------------------------------
Name:
Title:
ARDENT HEALTH SERVICES, INC.
a Delaware corporation
By: /s/ William P. Barnes
---------------------------------
Name: William P. Barnes
Title: Treasurer
BHC ALHAMBRA HOSPITAL, INC.,
a Tennessee corporation
BHC BELMONT PINES HOSPITAL, INC.,
a Tennessee corporation
BHC CEDAR VISTA HOSPITAL, INC.,
a California corporation
BHC COLUMBUS HOSPITAL, INC.,
a Tennessee corporation
BHC FAIRFAX HOSPITAL, INC.,
a Tennessee corporation
BHC FOX RUN HOSPITAL, INC.,
a Tennessee corporation
BHC FREMONT HOSPITAL, INC.,
a Tennessee corporation
BHC GULF COAST MANAGEMENT GROUP, INC.,
a Tennessee corporation
BHC HEALTH SERVICES OF NEVADA, INC.,
a Nevada corporation
BHC HERITAGE OAKS HOSPITAL, INC.,
a Tennessee corporation
BHC HOSPITAL HOLDINGS, INC.,
a Delaware corporation
BHC INTERMOUNTAIN HOSPITAL, INC.,
a Tennessee corporation
BHC LEBANON HOSPITAL, INC.,
a Tennessee corporation
BHC MANAGEMENT HOLDINGS, INC.,
a Delaware corporation
BHC MANAGEMENT SERVICES, LLC,
a Delaware limited liability company
BHC MANAGEMENT SERVICES OF INDIANA, LLC,
a Delaware limited liability company
BHC MANAGEMENT SERVICES OF KENTUCKY, LLC,
a Delaware limited liability company
BHC MANAGEMENT SERVICES OF NEW MEXICO, LLC,
a Delaware limited liability company
BHC MANAGEMENT SERVICES OF STREAMWOOD, LLC,
a Delaware limited liability company
BHC MEADOWS PARTNER, INC.,
a Delaware corporation
BHC MONTEVISTA HOSPITAL, INC.,
a Nevada corporation
BHC OF INDIANA, GENERAL PARTNERSHIP,
a Tennessee general partnership
By: /s/ William P. Barnes
---------------------------------------
Name: William P. Barnes
Title: Treasurer of each of the foregoing Grantors
[Signature Pages Follow]
BHC OF NORTHERN INDIANA, INC.,
a Tennessee corporation
BHC PHYSICIAN SERVICES OF KENTUCKY, LLC,
a Delaware limited liability company
BHC PINNACLE POINT HOSPITAL, INC.,
a Tennessee corporation
BHC PROPERTIES, INC.
a Tennessee corporation
BHC SIERRA VISTA HOSPITAL, INC.,
a Tennessee corporation
BHC SPIRIT OF ST. LOUIS HOSPITAL, INC.,
a Tennessee corporation
BHC STREAMWOOD HOSPITAL, INC.,
a Tennessee corporation
BHC VALLE VISTA HOSPITAL, INC.,
a Tennessee corporation
BHC WINDSOR HOSPITAL, INC.,
an Ohio corporation
BLOOMINGTON MEADOWS, G.P.,
a Delaware general partnership
COLUMBUS HOSPITAL, LLC,
a Delaware limited liability company
INDIANA PSYCHIATRIC INSTITUTES, INC.,
a Delaware corporation
LEBANON HOSPITAL, LLC,
a Delaware limited liability company
MESILLA VALLEY GENERAL PARTNERSHIP,
a New Mexico general partnership
MESILLA VALLEY HOSPITAL, INC.,
a New Mexico corporation
MESILLA VALLEY MENTAL HEALTH ASSOCIATES, INC.,
a New Mexico corporation
NORTHERN INDIANA HOSPITAL, LLC,
a Delaware limited liability company
VALLE VISTA, LLC,
a Delaware limited liability company
WILLOW SPRINGS, LLC,
a Delaware limited liability company
AHS RESEARCH AND REVIEW, LLC,
a New Mexico limited liability company
BHC NORTHWEST PSYCHIATRIC HOSPITAL, LLC,
a Delaware limited liability company
By: /s/ William P. Barnes
----------------------------------------------
Name: William P. Barnes
Title: Treasurer of each of the foregoing Grantors