EXHIBIT 10.3
VANGUARD GUARANTY
VANGUARD GUARANTY, (as amended, modified or supplemented from time to
time, this "Guaranty"), dated as of September 23, 2004, made by and among the
undersigned guarantor (the "Guarantor") in favor of Bank of America, N.A., as
Administrative Agent (together with any successor administrative agent, the
"Administrative 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. ("Co-Borrower" and, together with VHS Holdco II, the "Borrowers" and each,
a "Borrower"), the lenders from time to time party thereto (the "Lenders"), 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 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
and 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, VHS Holdco II, one or more Wholly-Owned Domestic 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 (as defined below), (collectively, the "Treasury Service Creditors"
and, together with the Lender Creditors and the Other Creditors, the "Secured
Creditors") have entered into, or in the future may enter into, a credit
arrangement providing for treasury, depositary or cash management services
(including without limitation, overnight overdraft services) to VHS Holdco II
and such 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 (collectively, "Treasury Services," and 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, the Guarantor is the indirect parent of the Borrowers;
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 the Treasury Services by Treasury Service Creditors,
that the Guarantor shall have executed and delivered to the Administrative Agent
this Guaranty; and
WHEREAS, the Guarantor 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
Guaranty 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 each 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 foregoing and other benefits
accruing to the Guarantor, the receipt and sufficiency of which are hereby
acknowledged, the Guarantor hereby makes the following representations and
warranties to the Administrative Agent for the benefit of the Secured Creditors
and hereby covenants and agrees with the Administrative Agent for the benefit of
the Secured Creditors as follows:
1. The Guarantor irrevocably, absolutely and unconditionally
guarantees as a primary obligor and not merely as surety:
(i) to the Lender Creditors the full and prompt payment when due
(whether at the stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise) of (x) the principal of, premium, if
any, and interest on the Notes issued by, and the Loans made to, the
Borrowers under the Credit Agreement, and all reimbursement obligations
and Unpaid Drawings with respect to Letters of Credit and (y) all other
obligations (including, without limitation, obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become
due), liabilities and indebtedness owing by the Borrowers to the Lender
Creditors under the Credit Agreement and each other Credit Document to
which the Borrowers are a party (including, without limitation,
indemnities, Fees and interest thereon (including, without
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limitation, any interest accruing after the commencement of any
bankruptcy, insolvency, receivership or similar proceeding at the rate
provided for in the respective documentation, whether or not such interest
is an allowed claim in any such proceeding)), whether now existing or
hereafter incurred under, arising out of or in connection with the Credit
Agreement and any such other Credit Document and the due performance and
compliance by the Borrowers with all of the terms, conditions and
agreements contained in all such Credit Documents (all such principal,
premium, interest, liabilities, indebtedness and obligations under this
clause (i), except to the extent consisting of obligations or liabilities
with respect to Interest Rate Protection Agreements or Other Hedging
Agreements, being herein collectively called the "Credit Document
Obligations");
(ii) to each Other Creditor the full and prompt payment when due
(whether at the stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise) of all obligations (including, without
limitation, obligations which, but for the automatic stay under Section
362(a) of the Bankruptcy Code, would become due), liabilities and
indebtedness (including, without limitation, any interest accruing after
the commencement of any bankruptcy, insolvency, receivership or similar
proceeding at the rate provided for in the respective documentation,
whether or not such interest is an allowed claim in any such proceeding)
owing by the Borrowers under any Interest Rate Protection Agreement or
Other Hedging Agreements, whether now in existence or hereafter arising,
and the due performance and compliance by the Borrowers with all of the
terms, conditions and agreements contained therein (all such obligations,
liabilities and indebtedness being herein collectively called the "Other
Obligations"); and
(iii) to each Treasury Service Creditor the full and prompt payment
when due (whether at the stated maturity, by required prepayment,
declaration, acceleration, demand 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 at the rate provided for in the respective documentation,
whether or not such interest is allowed in any such proceeding) owing by
VHS Holdco II or any of its Wholly-Owned Domestic Subsidiaries to the
Treasury Service Creditors, with respect to, Treasury Services, whether
now in existence or hereafter arising (all such obligations, liabilities
and indebtedness described in this clause (iii) being herein collectively
called the "Treasury Service Obligations", and together with the Credit
Document Obligations and the Other Obligations are herein collectively
called the "Guaranteed Obligations").
The Guarantor understands, agrees and confirms that this Guaranty is a guarantee
of payment and not of collection, and that the Secured Creditors may enforce
this Guaranty up to the full amount of the Guaranteed Obligations against the
Guarantor without proceeding against either Borrower, or against any security
for the Guaranteed Obligations, or under any other guaranty covering all or a
portion of the Guaranteed Obligations.
2. Additionally, the Guarantor unconditionally, absolutely and
irrevocably, guarantees the payment of any and all Guaranteed Obligations of the
Borrowers to the Secured Creditors whether or not due or payable by the
Borrowers upon the occurrence in respect of
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either Borrower of any of the events specified in Section 10A.05 of the Credit
Agreement, and unconditionally, absolutely and irrevocably promises to pay such
Guaranteed Obligations to the Secured Creditors, or order, on demand, in lawful
money of the United States.
3. The liability of the Guarantor hereunder is primary, absolute,
and unconditional and is exclusive and independent of any security for or other
guaranty of the Guaranteed Obligations of the Borrowers whether executed by the
Guarantor, any other guarantor or by any other party, and the liability of the
Guarantor hereunder shall not be affected or impaired by any circumstance or
occurrence whatsoever, including, without limitation: (a) any direction as to
application of payment by either Borrower or by any other party, (b) any other
continuing or other guaranty, undertaking or maximum liability of a guarantor
of, or of any other party as to, the Guaranteed Obligations of the Borrowers,
(c) any payment on or in reduction of any such other guaranty or undertaking,
(d) any dissolution, termination or increase, decrease or change in personnel by
either Borrower, (e) the failure of the Guarantor to receive any benefit from or
as a result of its execution, delivery and performance of this Guaranty, (f) any
payment made to any Secured Creditor on the Guaranteed Obligations which any
Secured Creditor repays either Borrower pursuant to court order in any
bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and the Guarantor waives any right to the deferral or modification
of its obligations hereunder by reason of any such proceeding, (g) any action or
inaction by the Secured Creditors as contemplated in Section 6 hereof or (h) any
invalidity, rescission, irregularity or unenforceability of all or any part of
the Guaranteed Obligations or of any security therefor.
4. The obligations of the Guarantor hereunder are independent of
the obligations of any other guarantor or any Borrower, and a separate action or
actions may be brought and prosecuted against each Guarantor whether or not
action is brought against any other guarantor or either Borrower and whether or
not any other guarantor or either Borrower be joined in any such action or
actions. The Guarantor waives (to the fullest extent permitted by applicable
law) the benefits of any statute of limitations affecting its liability
hereunder or the enforcement thereof. Any payment by either Borrower or other
circumstance which operates to toll any statute of limitations as to either
Borrower shall, to the maximum extent permitted by law, operate to toll the
statute of limitations as to the Guarantor.
5. The Guarantor hereby waives (to the fullest extent permitted
by applicable law) notice of acceptance of this Guaranty and notice of any
liability to which it may apply, and waives promptness, diligence, presentment,
demand of payment, protest, notice of dishonor or nonpayment of any such
liabilities, suit or taking of other action by the Administrative Agent or any
other Secured Creditor against, and any other notice to, any party liable
thereon (including the Guarantor, any other guarantor, or any Borrower) and the
Guarantor further hereby waives any and all notice of the creation, renewal,
extension or accrual of any of the Guaranteed Obligations and notice or proof of
reliance by any Secured Creditor upon this Guaranty, and the Guaranteed
Obligations shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended, modified, supplemented or waived, in
reliance upon this Guaranty.
6. Any Secured Creditor may at any time and from time to time
without the consent of, or notice to, the Guarantor, without incurring
responsibility to the Guarantor, without
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impairing or releasing the obligations or liabilities of the Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:
(a) change the manner, place or terms of payment of, and/or
change, increase or extend the time of payment of, renew, increase,
accelerate or alter, any of the Guaranteed Obligations (including, without
limitation, any increase or decrease in the rate of interest thereon or
the principal amount thereof), any security therefor, or any liability
incurred directly or indirectly in respect thereof, and the guaranty
herein made shall apply to the Guaranteed Obligations as so changed,
extended, increased, accelerated, renewed or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, impair, realize upon
or otherwise deal with in any manner and in any order any property or
other collateral by whomsoever at any time pledged or mortgaged to secure,
or howsoever securing, the Guaranteed Obligations or any liabilities
(including any of those hereunder) incurred directly or indirectly in
respect thereof or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against either
Borrower, any other Credit Party, any Subsidiary thereof, any other
guarantor of either Borrower or others or otherwise act or refrain from
acting;
(d) release or substitute any one or more endorsers, other
guarantors of the Guaranteed Obligations, either Borrower, or other
obligors;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of either Borrower to creditors of either
Borrower other than the Secured Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of either Borrower to the Secured Creditors
regardless of what liabilities of either Borrower remain unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, any of the Interest Rate Protection Agreements or Other
Hedging Agreements, the Credit Documents, the Treasury Services Agreement
or any of the instruments or agreements referred to therein, or otherwise
amend, modify or supplement any of the Interest Rate Protection Agreements
or Other Hedging Agreements, the Credit Documents, the Treasury Services
Agreement or any of such other instruments or agreements;
(h) act or fail to act in any manner which may deprive the
Guarantor of its right to subrogation against either Borrower to recover
full indemnity for any payments made pursuant to this Guaranty; and/or
(i) take any other action or omit to take any other action which
would, under otherwise applicable principles of common law, give rise to a
legal or equitable discharge
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of the Guarantor from its liabilities under this Guaranty (including,
without limitation, any action or omission whatsoever that might otherwise
vary the risk of the Guarantor or constitute a legal or equitable defense
to or discharge of the liabilities of a guarantor or surety or that might
otherwise limit recourse against the Guarantor).
7. No invalidity, illegality, irregularity or unenforceability of
all or any part of the Guaranteed Obligations, the Credit Documents or any other
agreement or instrument relating to the Guaranteed Obligations or of any
security or guarantee therefor shall affect, impair or be a defense to this
Guaranty (other than the defense of payment in full in cash of the Guaranteed
Obligations), and this Guaranty shall be primary, absolute and unconditional
notwithstanding the occurrence of any event or the existence of any other
circumstances which might constitute a legal or equitable discharge of a surety
or guarantor except payment in full in cash of the Guaranteed Obligations.
8. This Guaranty is a continuing one and all liabilities to which
it applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. No failure or delay on the part of any
Secured Creditor in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein expressly specified are cumulative and not exclusive of any
rights or remedies which any Secured Creditor would otherwise have. No notice to
or demand on the Guarantor in any case shall entitle the Guarantor to any other
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of any Secured Creditor to any other or further action in
any circumstances without notice or demand. It is not necessary for any Secured
Creditor to inquire into the capacity or powers of either Borrower or any of its
Subsidiaries or the officers, directors, partners or agents acting or purporting
to act on its or their behalf, and any indebtedness made or created in reliance
upon the professed exercise of such powers shall be guaranteed hereunder.
9. (a) The Guarantor waives any right (except as shall be
required by applicable statute or law and cannot be waived) to require the
Secured Creditors to: (i) proceed against any Borrower, any other guarantor of
the Guaranteed Obligations or any other party; (ii) proceed against or exhaust
any security held from either Borrower, any other guarantor of the Guaranteed
Obligations or any other party; or (iii) pursue any other remedy in the Secured
Creditors' power whatsoever. The Guarantor waives any defense based on or
arising out of any defense of either Borrower, any other guarantor of the
Guaranteed Obligations or any other party other than payment in full in cash of
the Guaranteed Obligations, including, without limitation, any defense based on
or arising out of the disability of either Borrower, any other guarantor of the
Guaranteed Obligations or any other party, or the unenforceability of the
Guaranteed Obligations or any part thereof from any cause, or the cessation from
any cause of the liability of either Borrower other than payment in full of the
Guaranteed Obligations. The Secured Creditors may, at their election, foreclose
on any collateral serving as security held by the Administrative Agent, the
Collateral Agent or the other Secured Creditors by one or more judicial or
nonjudicial sales, whether or not every aspect of any such sale is commercially
reasonable (to the extent such sale is permitted by applicable law), or exercise
any other right or remedy the Secured Creditors may have against either Borrower
or any other party, or any security, without affecting or impairing in any way
the liability of the Guarantor hereunder
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except to the extent the Guaranteed Obligations have been paid in full in cash.
The Guarantor waives any defense arising out of any such election by the Secured
Creditors, even though such election operates to impair or extinguish any right
of reimbursement, contribution, indemnification or subrogation or other right or
remedy of the Guarantor against the Borrower, any other guarantor of the
Guaranteed Obligations or any other party or any security.
(b) The Guarantor waives (except as shall be required by
applicable statute or law and cannot be waived) all presentments, demands for
performance, protests and notices, including, without limitation, notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance
of this Guaranty, and notices of the existence, creation or incurring of new or
additional indebtedness. The Guarantor has knowledge and assumes all
responsibility for being and keeping itself informed of each Borrower's
financial condition, affairs and assets, and of all other circumstances bearing
upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope
and extent of the risks which the Guarantor assumes and incurs hereunder, and
has adequate means to obtain from the Borrowers on an ongoing basis information
relating thereto and each Borrower's ability to pay and perform its respective
Obligations, and agrees to assume the responsibility for keeping, and to keep,
so informed for so long as this Guaranty is in effect. The Guarantor
acknowledges and agrees that (x) the Secured Creditors shall have no obligation
to investigate the financial condition or affairs of either Borrower for the
benefit of the Guarantor nor to advise the Guarantor of any fact respecting, or
any change in, the financial condition, assets or affairs of either Borrower
that might become known to any Secured Creditor at any time, whether or not such
Secured Creditor knows or believes or has reason to know or believe that any
such fact or change is unknown to the Guarantor, or might (or does) increase the
risk of the Guarantor as guarantor hereunder, or might (or would) affect the
willingness of such Guarantor to continue as a guarantor of the Obligations
hereunder and (y) the Secured Creditors shall have no duty to advise the
Guarantor of information known to them regarding any of the aforementioned
circumstances or risks.
10. The Secured Creditors agree (by their acceptance of the
benefits of this Guaranty) that this Guaranty may be enforced only by the action
of the Administrative Agent or the Collateral Agent, in each case acting upon
the instructions of the Required Secured Creditors (as defined in the Security
Agreement) and that no other Secured Creditor shall have any right individually
to seek to enforce or to enforce this Guaranty or to realize upon the security
to be granted by the Security Documents. The Secured Creditors further agree
that this Guaranty may not be enforced against any director, officer, employee,
partner, member or stockholder of the Guarantor. It is understood and agreed
that the agreement in this Section 10 is among and solely for the benefit of the
Secured Creditors and that, if the Required Secured Creditors so agree (without
requiring the consent of the Guarantor), this Guaranty may be directly enforced
by any Secured Creditor.
11. In order to induce the Lenders to make Loans to, and issue
Letters of Credit for the account of, the Borrowers pursuant to the Credit
Agreement, to induce the Other Creditors to execute, deliver and perform the
Interest Rate Protection Agreements and Other Hedging Agreements and to induce
the Treasury Service Creditors to provide Treasury Services, the Guarantor
represents, warrants and covenants that:
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(a) the Guarantor (i) is a duly organized and validly existing
corporation in good standing under the laws of the jurisdiction of its
organization, (ii) has the corporate power and authority to own its
property and assets and to transact the business in which it is engaged
and presently proposes to engage and (iii) is duly qualified and is
authorized to do business and, to the extent applicable, is in good
standing in each jurisdiction where the conduct of its business requires
such qualification except for failures to be so qualified which,
individually or in the aggregate, would not reasonably be expected to have
a material adverse effect on the business, assets, liabilities, operations
or condition (financial or otherwise) of the Guarantor and its
Subsidiaries taken as a whole;
(b) the Guarantor has the corporate power and authority to
execute, deliver and perform the terms and provisions of this Guaranty and
each other Document (such term, for purposes of this Guaranty, to mean
each Credit Document, each Interest Rate Protection Agreement and Other
Hedging Agreement with an Other Creditor and each Treasury Services
Agreement) to which it is a party and has taken all necessary corporate
action to authorize the execution, delivery and performance by it of this
Guaranty and each such other Document.
(c) the Guarantor has duly executed and delivered this Guaranty
and each other Document to which it is a party, and this Guaranty and each
such other Credit Document constitutes the legal, valid and binding
obligation of the Guarantor enforceable in accordance with its terms,
except to the extent that the enforceability hereof or thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws generally affecting creditors' rights and by
equitable principles (regardless of whether enforcement is sought in
equity or at law);
(d) neither the execution, delivery or performance by the
Guarantor of this Guaranty or any other Documents to which it is a party,
nor compliance by it with the terms and provisions thereof, nor the
consummation of the transactions contemplated therein, (i) will contravene
any provision of any applicable law, statute, rule or regulation or any
applicable order, writ, injunction or decree of any court or governmental
instrumentality, (ii) will conflict with or result in any breach of any of
the terms, covenants, conditions or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, credit agreement or loan
agreement, or any other material agreement, contract or instrument, to
which the Guarantor or any of its Subsidiaries is a party or by which it
or any of its property or assets is bound or to which it may be subject,
(iii) will violate any provision of the certificate of incorporation or
by-laws (or equivalent organizational document(s)) of the Guarantor or any
of its Subsidiaries or (iv) will result in the creation or imposition of
(or the obligation to create or impose) any Lien (except pursuant to the
Security Documents) upon any of the properties or assets of the Guarantor
or any of its Subsidiaries pursuant to the terms of any indenture,
mortgage, deed of trust, credit agreement or loan agreement, or any other
material agreement, contract or instrument, to which the Guarantor or any
of its Subsidiaries is a party or by which it or any of its property or
assets is bound or to which it may be subject except in the cases of
preceding clause (i) through (iii), inclusive, to the extent that any such
contravention, conflict, breach or violation referred in any such clause
could not, either individually or in the aggregate, reasonably be expected
to have a material adverse effect
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on the business, assets, liabilities, operations or condition (financial
or otherwise) of the Guarantor and its Subsidiaries taken as a whole;
(e) no order, consent, approval, license, authorization or
validation of, or filing, recording or registration with (except for (v)
those filings that have been obtained or made and which remain in full
force and effect, (w) the filing of UCC-1 financing statements, (x)
filings with the United States Patent and Trademark Office and the United
States Copyright Office and comparable offices in foreign jurisdictions
and equivalent filings in foreign jurisdictions, (y) the recordation of
the Mortgages and (z) such actions, consents and approvals the failure to
be obtained or made which could not be reasonably be expected to have a
material adverse effect on the business, assets, liabilities, operations
or condition (financial or otherwise) of the Guarantor and its
Subsidiaries taken as a whole), or exemption by, any governmental or
public body or authority, or any subdivision thereof, is required to
authorize, or is required in connection with, (i) the execution, delivery
and performance of this Guaranty by the Guarantor or any other Document to
which the Guarantor is a party or (ii) the legality, validity, binding
effect or enforceability of this Guaranty or any other Document to which
the Guarantor is a party;
(f) there are no actions, suits or proceedings (private or
governmental) pending or, to the Guarantor's knowledge, threatened in
writing (i) with respect to this Guaranty, (ii) on and as of the Initial
Borrowing Date with respect to the Transaction, or (iii) with respect to
the Guarantor that could reasonably be expected to have a material adverse
effect on (a) the business, assets, liabilities, operations or condition
(financial or otherwise) of the Guarantor and its Subsidiaries taken as a
whole.
12. The Guarantor hereby agrees to pay all reasonable
out-of-pocket costs and expenses of the Collateral Agent, the Administrative
Agent and each Secured Creditor in connection with the enforcement of this
Guaranty and the protection of the Secured Creditors' rights hereunder and any
amendment, waiver or consent relating hereto (including, in each case, without
limitation, the reasonable fees and disbursements of counsel (including in-house
counsel) employed by the Collateral Agent, the Administrative Agent and each
Secured Creditor).
13. This Guaranty shall be binding upon the Guarantor and its
successors and assigns and shall inure to the benefit of the Secured Creditors
and their successors and assigns.
14. Subject to Section 20 hereof, neither this Guaranty nor any
provision hereof may be changed, waived, discharged or terminated except with
the written consent of the Guarantor and with the written consent of the
Required Secured Creditors; provided, that any change, waiver, modification or
variance affecting the rights and benefits of a single Class (as defined below)
of Secured Creditors (and not all Secured Creditors in a like or similar manner)
shall also require the written consent of the Requisite Creditors (as defined
below) of such Class of Secured Creditors. For the purpose of this Guaranty, 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 Guaranty, the term "Requisite Creditors" of any Class shall mean (x) with
respect to the Credit
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Document Obligations, the Required Lenders (or, to the extent required by
Section 14.12 of the Credit Agreement, each Lender), (y) with respect to the
Other Obligations, the holders of at least a majority of all obligations
outstanding from time to time under the Interest Rate Protection Agreements and
Other Hedging Agreements 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.
15. The Guarantor acknowledges that an executed (or conformed)
copy of each of the Credit Documents, the Interest Rate Protection Agreements,
the Other Hedging Agreements and the Treasury Service Agreement (if any) has
been made available to its principal executive officers and such officers are
familiar with the contents thereof.
16. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Creditor Law) and not by way of limitation of any such rights, upon
the occurrence and during the continuance of an Event of Default (such term to
mean and include any "Event of Default" as defined in the Credit Agreement and
any payment default under any Interest Rate Protection Agreement, Other Hedging
Agreement or Treasury Service Agreement, in each case continuing after any
applicable grace period), each Secured Creditor is hereby authorized, at any
time or from time to time, without notice to the Guarantor or to any other
Person, any such notice being expressly waived, to set off and to appropriate
and apply any and all deposits (general or special) and any other indebtedness
at any time held or owing by such Secured Creditor to or for the credit or the
account of the Guarantor, against and on account of the obligations and
liabilities of the Guarantor to such Secured Creditor under this Guaranty,
irrespective of whether or not such Secured Creditor shall have made any demand
hereunder and although said obligations, liabilities, deposits or claims, or any
of them, shall be contingent or unmatured. Each Secured Creditor acknowledges
and agrees that the provisions set forth in this Section 16 are subject to the
sharing provisions set forth in Section 14.06 of the Credit Agreement.
17. Except as otherwise specified herein, all notices, requests,
demands or other communications pursuant hereto shall be deemed to have been
duly given or made when delivered to the Person to which such notice, request,
demand or other communication is required or permitted to be given or made under
this Guaranty, and addressed to such party (i) in the case of any Lender
Creditor, as provided in its Administrative Questionnaire, (ii) in the case of
the Guarantor, at 00 Xxxxxx Xxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000,
Telephone No.: (000) 000-0000, Facsimile No.: (000) 000-0000, Attention: Xxxxxx
X. Xxxxx, (iii) in the case of any Other Creditor, at such address as such Other
Creditor shall have specified in writing to the Guarantor and (iv) if to any
Treasury Service Creditor, at such address as such Treasury Service Creditor
shall have specified in writing to the Guarantor; or in any case at such other
address as any of the Persons listed above may hereafter notify the others in
writing.
18. If any claim is ever made upon any Secured Creditor for
repayment or recovery of any amount or amounts received in payment or on account
of any of the Guaranteed Obligations and any of the aforesaid payees repays all
or part of said amount by reason of (i) any judgment, decree or order of any
court or administrative body having jurisdiction over such payee or any of its
property or (ii) any settlement or compromise of any such claim effected in good
faith by such payee with any such claimant (including either Borrower), then and
in such
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event the Guarantor agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon the Guarantor, notwithstanding any revocation
hereof or the cancellation of any Note, any Interest Rate Protection Agreement,
any Other Hedging Agreement, any Treasury Service Agreement or any other
instrument evidencing any liability of either Borrower, and the Guarantor shall
be and remain liable to the aforesaid payees hereunder for the amount so repaid
or recovered to the same extent as if such amount had never originally been
received by any such payee.
19. (a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE
SECURED CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Any legal action
or proceeding with respect to this Guaranty may be brought in the courts of the
State of New York or of the United States of America for the Southern District
of New York, in each case located within the County of New York, and, by
execution and delivery of this Guaranty, the Guarantor hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. The Guarantor hereby
further irrevocably waives any claim that any such courts lack personal
jurisdiction over the Guarantor, and agrees not to plead or claim, in any legal
action or proceeding with respect to this Guaranty brought in any of the
aforesaid courts, that any such court lacks jurisdiction over the Guarantor. The
Guarantor 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 the
Guarantor at its address set forth opposite its signature below, such service to
become effective 30 days after such mailing. The Guarantor 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
that such service of process was in any way invalid or ineffective. Nothing
herein shall affect the right of any of the Secured Creditors to serve process
in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against the Guarantor in any other jurisdiction.
(b) The Guarantor hereby irrevocably waives (to the fullest extent
permitted by applicable law) any objection which it may now or hereafter have to
the laying of venue of any of the aforesaid actions or proceedings arising out
of or in connection with this Guaranty 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 such action or proceeding brought in any such
court has been brought in an inconvenient forum.
(c) THE GUARANTOR AND EACH SECURED CREDITOR (BY ITS ACCEPTANCE OF
THE BENEFITS OF THIS GUARANTY) HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
20. (a) Notwithstanding anything to the contrary contained herein
or in any other Credit Document, in the event that the Guarantor is released
from its guarantees of both the New Senior Subordinated Notes and the Holdco
Senior Discount Notes, the Guarantor shall (immediately after the effectiveness
of the releases described above) be released from this
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Guaranty automatically and without further action and this Guaranty shall
terminate, and have no further force or effect; provided that if the Guarantor
subsequently guarantees either the New Senior Subordinated Notes or the Holdco
Senior Discount Notes, this Guaranty shall automatically be reinstated and the
Guarantor shall execute such documentation reasonably acceptable to the
Collateral Agent evidencing such reinstatement.
(b) At the time of any release from this Guaranty pursuant to
preceding clause (a), the Borrower shall deliver to the Administrative Agent and
the Collateral Agent a certificate signed by a principal executive officer of
the Borrower stating that the release of the Guarantor is permitted pursuant to
Section 20(a).
21. (A) THE GUARANTOR HEREBY ACKNOWLEDGES AND AFFIRMS THAT IT
UNDERSTANDS THAT TO THE EXTENT THE GUARANTEED OBLIGATIONS ARE SECURED BY REAL
PROPERTY LOCATED IN THE STATE OF CALIFORNIA, THE GUARANTOR SHALL BE LIABLE FOR
THE FULL AMOUNT OF THE LIABILITY HEREUNDER NOTWITHSTANDING FORECLOSURE ON SUCH
REAL PROPERTY BY TRUSTEE SALE OR ANY OTHER REASON IMPAIRING THE GUARANTOR'S, THE
COLLATERAL AGENT'S OR ANY SECURED CREDITORS' RIGHT TO PROCEED AGAINST EITHER
BORROWER OR ANY OTHER GUARANTOR OF THE GUARANTEED OBLIGATIONS.
(B) THE GUARANTOR HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ALL RIGHTS AND BENEFITS UNDER SECTIONS 580a, 580b, 580d AND
726 OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. THE GUARANTOR HEREBY FURTHER
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING OR ANY OTHER PROVISION HEREOF, ALL RIGHTS AND
BENEFITS WHICH MIGHT OTHERWISE BE AVAILABLE TO THE GUARANTOR UNDER SECTIONS
2809, 2810, 2815, 2819, 2821, 2839, 2845, 2848, 2849, 2850, 2899 AND 3433 OF THE
CALIFORNIA CIVIL CODE.
(C) THE GUARANTOR WAIVES ITS RIGHTS OF SUBROGATION AND
REIMBURSEMENT AND ANY OTHER RIGHTS AND DEFENSES AVAILABLE TO THE GUARANTOR BY
REASON OF SECTIONS 2787 TO 2855, INCLUSIVE, OF THE CALIFORNIA CIVIL CODE,
INCLUDING, WITHOUT LIMITATION, (1) ANY DEFENSES THE GUARANTOR MAY HAVE TO THIS
GUARANTY BY REASON OF AN ELECTION OF REMEDIES BY THE COLLATERAL AGENT OR THE
SECURED CREDITORS AND (2) ANY RIGHTS OR DEFENSES THE GUARANTOR MAY HAVE BY
REASON OF PROTECTION AFFORDED TO EITHER BORROWER PURSUANT TO THE ANTIDEFICIENCY
OR OTHER LAWS OF CALIFORNIA LIMITING OR DISCHARGING EITHER BORROWER'S
INDEBTEDNESS, INCLUDING, WITHOUT LIMITATION, SECTION 580a, 580b, 580d OR 726 OF
THE CALIFORNIA CODE OF CIVIL PROCEDURE. IN FURTHERANCE OF SUCH PROVISIONS, THE
GUARANTOR HEREBY WAIVES ALL RIGHTS AND DEFENSES ARISING OUT OF AN ELECTION OF
REMEDIES BY THE COLLATERAL AGENT OR THE SECURED CREDITORS, EVEN THOUGH THAT
ELECTION OR REMEDIES, SUCH A NONJUDICIAL FORECLOSURE DESTROYS THE GUARANTOR'S
RIGHTS OF SUBROGATION AND REIMBURSEMENT AGAINS
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EITHER BORROWER BY THE OPERATION OF SECTION 580d OF THE CALIFORNIA CODE OF CIVIL
PROCEDURE OR OTHERWISE.
(D) THE GUARANTOR WARRANTS AND AGREES THAT EACH OF THE WAIVERS SET
FORTH ABOVE IS MADE WITH FULL KNOWLEDGE OF ITS SIGNIFICANCE AND CONSEQUENCES AND
THAT IF ANY OF SUCH WAIVERS ARE DETERMINED TO BE CONTRARY TO ANY APPLICABLE LAW
OR PUBLIC POLICY, SUCH WAIVERS SHALL BE EFFECTIVE ONLY TO THE MAXIMUM EXTENT
PERMITTED BY LAW.
22. This Guaranty 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 Borrower and the Administrative
Agent.
23. All payments made by the Guarantor hereunder will be made
without setoff, counterclaim or other defense and on the same basis as payments
are made by the Borrowers under Sections 4.03 and 4.04 of the Credit Agreement.
24. The Guarantor and each Secured Creditor (by its acceptance of
the benefits of this Guaranty) hereby confirms that it is its intention that
this Guaranty not constitute a fraudulent transfer or conveyance for purposes of
the Bankruptcy Code, the Uniform Fraudulent Conveyance Act of any similar
applicable Federal or state law. To effectuate the foregoing intention, the
Guarantor and each Secured Creditor (by its acceptance of the benefits of this
Guaranty) hereby irrevocably agrees that the Guaranteed Obligations guaranteed
by the Guarantor shall be limited to such amount as will, after giving effect to
such maximum amount and all other (contingent or otherwise) liabilities of the
Guarantor that are relevant under such laws (excluding any guarantee by the
Guarantor of any Existing Senior Subordinated Notes, any New Senior Subordinated
Notes, Holdco Senior Discount Notes any Permitted Subordinated Notes or any
Permitted Senior Notes) and after giving effect to any rights to contribution
pursuant to any agreement providing for an equitable contribution among the
Guarantor and any other guarantor of the Guaranteed Obligations, result in the
Guaranteed Obligations of the Guarantor in respect of such maximum amount not
constituting a fraudulent transfer or conveyance.
26. It is understood and agreed that in order for a Treasury
Service Creditor to receive the benefits of this Guaranty, such Treasury Service
Creditor shall have executed an acknowledgment of the terms and conditions of
this Guaranty and delivered same to the Administrative Agent. It is further
understood and agreed by the parties hereto 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.
* * *
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
VANGUARD HEALTH SYSTEMS, INC., as the
Guarantor
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
