EXHIBIT 4.7
COLLATERAL ASSIGNMENT OF NOTE AND SECURITY AGREEMENT
THIS COLLATERAL ASSIGNMENT OF NOTE AND SECURITY AGREEMENT (this
"Assignment") is made and entered into as of the 1st day of October, 2003 (the
"Effective Date"), by ARDENT HEALTH SERVICES, INC, a Delaware corporation, with
a mailing address of One Burton Hills Boulevard, Suite 250, Nashville, Tennessee
37215 (the "Assignor"), to BANK ONE, NA, a national banking association, with a
mailing address of 416 W. Jefferson Street, PO Box 32500, Louisville, KY 40232,
in its capacity as collateral agent for the Secured Parties (the "Collateral
Agent"). All terms used but not otherwise defined herein shall have the meanings
provided in the Intercreditor Agreement (as defined below) or, if not defined
therein, in the Credit Agreement (as defined below).
WITNESSETH:
WHEREAS, the Assignor is party to that certain Credit Agreement dated
as of August 19, 2003 by and between Assignor, certain guarantors party thereto
from time to time, Bank One, NA, as administrative agent (the "Administrative
Agent") and the lenders party thereto from time to time (as amended, modified,
supplemented, extended, renewed or replaced from time to time, the "Credit
Agreement") pursuant to which the Assignor is required to (a) cause, under
certain circumstances set forth therein, each HMO Subsidiary to (i) issue an
intercompany promissory note to the Assignor or a Subsidiary in a principal
amount set forth in the Credit Agreement and (ii) grant to the Assignor or such
Subsidiary, as applicable, a security interest in certain 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 Assignor'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 that certain Indenture dated as of
August 19, 2003 among the Assignor, certain Subsidiaries of the Assignor party
thereto, and U.S. Bank Trust National Association, as trustee (the "Trustee"),
in the event that the Assignor or any Subsidiary grants a security interest in
the Assignor'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
Assignor or such Subsidiary, as applicable, is also required to grant a security
interest in the Assignor'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 Assignor, the Collateral Agent, the Administrative Agent
and the Trustee have entered into that certain Intercreditor Agreement dated as
of August 19, 2003 (the "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; and
WHEREAS, the Assignor has agreed to collaterally assign to the
Collateral Agent, all of Assignor's right, title and interest in and to the
Documents (defined below), pursuant to the terms and conditions hereof.
NOW, THEREFORE, for and in consideration of the sum of Ten Dollars
($10.00) and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Assignor hereby agrees with the Collateral
Agent, as follows:
1. Grant of Security Interest. To secure the payment, performance
and observance of the Secured Obligations (as defined below), the Assignor does
hereby collaterally grant, bargain, sell, convey, transfer, set over, assign and
deliver to the Collateral Agent, all right, title and interest of the Assignor
in and to the documents described on Exhibit A attached hereto and made a part
hereof, the loan evidenced thereby, and all other documents pertaining thereto
(collectively, the "Documents").
2. As used herein, the term "Secured Obligations" means:
(a) 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; and
(b) 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.
3. This assignment is absolute and effective immediately
and without possession. Notwithstanding the foregoing, so long as there
shall exist no Event of Default, Assignor shall have the revocable
right (but limited as provided in the following paragraph) to collect
upon, but not prior to, accrual, all amounts under the Documents and to
apply the same in such manner as Assignor shall elect, which right
shall be revoked automatically upon the occurrence of an Event of
Default, without need of notice, possession, foreclosure or any other
act or procedure, and all amounts due under the Documents shall
thereafter be payable to Collateral Agent.
4. In addition to the foregoing, upon the occurrence of
an Event of Default, Collateral Agent shall have all of the rights and
remedies of a secured party under the Uniform Commercial Code enacted
in the State of New Mexico (as such Uniform Commercial Code may be
amended hereafter, the "UCC"), and Collateral Agent shall be entitled
to avail itself of all such other rights
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and remedies as may now or hereafter exist at law or in equity for the
collection of the Secured Obligations and the foreclosure of the security
interest created hereby and the resort to any remedy provided hereunder, in the
Credit Documents or as provided by the UCC, or by any other applicable law, and
the exercise thereof by Collateral Agent shall not prevent the concurrent
employment of any other appropriate remedy. Upon the occurrence of an Event of
Default, the right granted pursuant to Paragraph 3 hereof shall be terminated
and Collateral Agent will be entitled to enforce all of the rights under the
Documents. Assignor agrees that it will facilitate in all reasonable ways the
enforcement of such rights.
5. Without limitation of any other provision of any other Credit
Document, Assignor hereby agrees to pay all costs and expenses incurred by
Collateral Agent in connection with the enforcement of this Assignment,
including, without limitation, reasonable attorneys' fees and expenses and court
costs.
6. Assignor shall take such further actions and shall execute
such other documents as may be necessary or as may be reasonably required by
Collateral Agent to protect or perfect the liens and security interests created
or intended to be created hereby and otherwise to complete the transactions
contemplated hereby.
7. Collateral Agent shall not by virtue of this Assignment be
deemed in any manner to have assumed any obligations with respect to the
Documents. Assignor agrees to indemnify and to hold Collateral Agent harmless of
any and from any and all liability, loss or damage which Collateral Agent may or
might incur by reason of any claims or demands against Collateral Agent arising
out of or in any way connected with this Assignment, unless Collateral Agent
assumes Assignor's obligations under the Documents in writing and except to the
extent that loss or damage results from Collateral Agent's gross negligence or
willful misconduct.
8. This Assignment shall also constitute and serve as a "Security
Agreement" within the meaning of and shall create a security interest under the
UCC to the extent applicable to the Documents. Collateral Agent shall have all
rights with respect to the Documents under the UCC in addition to the other
rights afforded to Collateral Agent by this Assignment. Assignor agrees to
execute and deliver to Collateral Agent such "Financing Statements" and other
reasonable documents and assurances which Collateral Agent may from time to time
consider necessary to perfect or continue to effect Collateral Agent's lien on
the Documents, and Assignor agrees to pay all costs of recording any such
documents.
9. Assignor hereby warrants and represents to Collateral Agent
that: (i) Assignor has not pledged, assigned or otherwise encumbered or disposed
of the Documents or the Assignor's rights thereunder except pursuant to this
Assignment and agrees not to do so without Collateral Agent's prior express
written consent; (ii) the Documents constitute the valid, binding and
enforceable obligations of Assignor; and (iii) to the best of Assignor's
knowledge there exists no default, nor any act, event and/or condition which
with lapse of time and/or notice would constitute a default under the Documents.
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10. Assignor covenants and warrants that, except with the express
written consent of Collateral Agent, Assignor will not (a) change, amend, modify
or waive any term or condition of any of the Documents or (b) agree to a
compromise or any other modification of the terms of the Documents.
11. Assignor covenants and warrants that Assignor will comply with
the terms of the Documents.
12. Assignor covenants that it, within five (5) Business Days of
receipt of notice thereof, promptly notify the Collateral Agent of any reduction
in the minimum amount necessary to maintain Lovelace Health Systems, Inc.'s
compliance with minimum net worth or other applicable solvency requirements set
forth in Chapter 59A, NMSA 1978 and the regulations promulgated thereunder. Such
notice shall include an explanation regarding the reasons for the reduction and
its anticipated duration. In addition, Assignor covenants that it will within
five (5) Business Days of the receipt or giving thereof, provide the Collateral
Agent with a copy of any notice received or given by the Assignor pursuant to
the Documents.
13. THIS ASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.
14. Upon payment in full and complete discharge of the Secured
Obligations, this Assignment shall become and be void and of no force or effect,
and Collateral Agent shall release its lien on and security interest in the
Documents.
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IN WITNESS WHEREOF, the Assignor and the Collateral Agent have duly
executed this Assignment under seal as of the day and year first above written.
ARDENT HEALTH SERVICES, INC.
a Delaware corporation
By: /s/ William P. Barnes
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Name: William P. Barnes
Title: Senior Vice President/Treasurer
BANK ONE, NA,
a national banking association,
as Collateral Agent
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
IN WITNESS WHEREOF, the Assignor and the Collateral Agent have duly
executed this Assignment under seal as of the day and year first above written.
ARDENT HEALTH SERVICES, INC.
a Delaware corporation
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
BANK ONE, NA,
a national banking association,
as Collateral Agent
By: /s/ Timothy K. Boyle
----------------------------
Name: Timothy K. Boyle
--------------------------
Title: First Vice President
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EXHIBIT A
DOCUMENTS
1. Amended and Restated Intercompany Promissory Note dated October 1, 2003
issued by Lovelace Health Systems, Inc., a New Mexico corporation in favor of
Ardent Health Services, Inc., in the amount of $70,000,000.
2. Security Agreement dated as of October 1, 2003 between Lovelace Health
Systems, Inc., a New Mexico corporation and Ardent Health Services, Inc.