Exhibit 10.1
SECURITY AGREEMENT
This SECURITY AGREEMENT (as it may be amended, supplemented or
otherwise modified from time to time, this "Agreement") is dated as of August
23, 2000 and is made by and among each of the companies listed on Schedule VII
hereto, and any future Subsidiary, if any, of Sierra Health Services, Inc., a
Nevada corporation ("Borrower") that becomes a party to this Agreement (each
such party other than the Borrower is referred to herein as a "Subsidiary
Grantor"; the Borrower and each Subsidiary Guarantor is individually a "Grantor"
and are collectively the "Grantors") in favor of and for the benefit of BANK OF
AMERICA, N.A. ("Bank of America"), as Administrative Agent (together with any
successor appointed pursuant to Section 10.09 of the Credit Agreement (as
hereinafter defined), the "Agent") for the financial institutions (which
financial institutions, together with the Agent, are each a "Secured Party" and,
collectively, the "Secured Parties") that are or may hereafter become party to
the Credit Agreement (as hereinafter defined).
PRELIMINARY STATEMENTS
(1) The Borrower, various financial institutions (the "Lenders"), and Bank of
America, in its capacity as agent for the Lenders (in such capacity, the "Lender
Agent") have entered into a Credit Agreement dated as of October 30, 1998, as
amended (said agreement, as it may hereafter be amended or otherwise modified
from time to time, being the "Credit Agreement", capitalized terms used herein
and not otherwise defined herein shall have the meanings assigned to such terms
in the Credit Agreement), pursuant to which Lenders have, among other things,
and subject to the terms and conditions set forth in the Credit Agreement,
agreed to make available to the Borrower certain Loans and to issue Letters of
Credit for the account of the Borrower.
(2) Pursuant to that certain Guaranty (as it may be amended, supplemented or
otherwise modified from time to time, the "Guaranty") of even date herewith, the
Subsidiary Grantors have guaranteed all obligations of the Borrower under the
Credit Agreement.
(3) Pursuant to that certain Waiver and Fourth Amendment to the Credit Agreement
dated as of August 14, 2000 ("Fourth Amendment") Borrower agreed that each
Grantor shall grant the assignments and security interest and make the pledge
and assignment contemplated by this Agreement.
(4) The Grantors have duly authorized the execution, delivery and
performance of this Agreement.
(5) The obligations of each Subsidiary Grantor under the Guaranty are to be
secured pursuant to this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
the Lenders to execute the Fourth Amendment, the Grantors, and each of them,
hereby agree with the Agent for its benefit and the ratable benefit of the
Secured Parties as follows:
1. SECTION Grant of Security. Each Grantor hereby assigns and pledges to the
Agent for its benefit and the ratable benefit of the Secured Parties, and hereby
grants to the Agent for its benefit and the ratable benefit of the Secured
Parties a first priority security interest in, all of such Grantor's right,
title and interest, whether now owned or hereafter acquired, in and to the
following (collectively, the "Collateral"), subject only to Liens described on
Schedule VIII and Liens permitted under the Credit Agreement (the "Permitted
Liens"):
(a) all equipment in all of its forms, wherever located, now or hereafter
existing (including, but not limited to, all manufacturing,
distribution, selling, data processing and office equipment, all
machinery, all furniture, furnishings, appliances, tools, tooling,
molds, dies, vehicles, vessels, aircraft and all other goods of every
type and description other than Inventory as hereinafter defined), all
fixtures and trade fixtures and all parts thereof and accessions
thereto (any and all of the foregoing being the "Equipment");
(b) all inventory in all of its forms, wherever located, now or hereafter
existing (including, but not limited to, (i) all goods which are held
for sale or lease or to be furnished (or which have been furnished)
under any contract of service, or which are raw materials, work in
process therefor, finished goods thereof or materials used or consumed
in the manufacture or production thereof, and (ii) goods in which such
Grantor has an interest in mass or a joint or other interest or right
of any kind (including, without limitation, goods in which such Grantor
has an interest or right as consignee) and (iii) goods that are
returned to or repossessed by such Grantor), and all accessions thereto
and products thereof and documents therefor (any and all of the
foregoing being the "Inventory");
(c) all accounts, contract rights, chattel paper, instruments, deposit
accounts, general intangibles (including, without limitation, any licenses,
permits or quotas) and other obligations of any kind, now or hereafter existing,
whether or not arising out of or in connection with the sale or lease of goods
or the rendering of services, and all rights now or hereafter existing in and to
all security agreements, leases and other contracts securing or otherwise
relating to any such accounts, contract rights, chattel paper, instruments,
deposit accounts, general intangibles or obligations (any and all such accounts,
contract rights, chattel paper, instruments, deposit accounts, general
intangibles and obligations, to the extent not referred to in clause (d), (e),
(f) or (g) below, being the "Receivables", and any and all such leases, security
agreements and other contracts relating thereto being the "Related Contracts");
(d) all of the following (the "Security Collateral"):
(i) the indebtedness (the "Pledged Debt") described on Schedule I
and owing to such Grantor by the issuers named therein and the
instruments evidencing the Pledged Debt, and all interest,
cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or
in exchange for any or all of the Pledged Debt;
(ii) all additional indebtedness from time to time owed to such
Grantor by any obligor of the Pledged Debt or any other Person
and the instruments evidencing such indebtedness, and all
interest, cash, instruments and other property from time to
time received, receivable or otherwise distributed in respect
of or in exchange for any or all of such indebtedness; and
(iii) the shares of capital stock described on
Schedule II (the "Pledged Securities"), together with any
other shares, stock certificates, options or warrants of any
issuer listed in Schedule II that may be issued or granted to,
or held by, any Grantor while this Agreement is in effect;
(e) all of the following (collectively, the "Account Collateral"):
(i) the account at the offices of Agent in which the Borrower has
deposited cash collateral pursuant to Section 3.07 of the
Credit Agreement ("Cash Collateral Account"), all funds held
therein and all certificates and instruments, if any, from
time to time representing or evidencing the Cash Collateral
Account;
(ii) all other deposit accounts of such Grantor, all funds held
therein and all certificates and instruments, if any, from
time to time representing or evidencing such deposit accounts;
(iii) all notes, certificates of deposit, deposit accounts, checks
and other instruments from time to time hereafter delivered to
or otherwise possessed by the Agent for or on behalf of such
Grantor in substitution for or in addition to any or all of
the then-existing Account Collateral; and
(iv) all interest, dividends, cash, instruments and other property
from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the
then-existing Account Collateral;
(f) all past, present and future: trade secrets and other proprietary
information; trademarks, service marks, business names, designs, logos, indicia,
and/or other source and/or business identifiers and the goodwill of the business
relating thereto or symbolized thereby and all registrations or applications for
registrations which have heretofore been or may hereafter be issued thereon
throughout the world (collectively, "Trademarks"); copyrights (including,
without limitation, copyrights for computer programs) and copyright
registrations or applications for registrations which have heretofore been or
may hereafter be issued throughout the world and all tangible property embodying
the copyrights (collectively, "Copyrights"); unpatented inventions (whether or
not patentable); patent applications and patents, and the inventions and
improvements described and claimed therein, and patentable inventions and the
reissues, divisions, continuations, renewals, extensions and
continuations-in-part of the foregoing and any written agreement granting to
such Grantor any right to use any invention on which a subsisting patent exists
(collectively, the "Patents"); industrial designs, industrial design
applications and registered industrial designs; license agreements related to
any of the foregoing set forth in this definition and income therefrom; books,
records, writings, computer tapes or disks, flow diagrams, specification sheets,
source codes, object codes and other physical manifestations, embodiments or
incorporations of any of the foregoing set forth in this definition; the right
to ▇▇▇ for all past, present and future infringements of any of the foregoing
set forth in this definition; and all common law and other rights throughout the
world in and to all of the foregoing set forth in this definition (all of the
foregoing in this clause (f) being the "Intellectual Property");
(g) all proceeds of any and all of the foregoing Collateral (including
without limitation, proceeds that constitute property of the types
described in clauses (a)-(f) of this Section 1) and to the extent not
otherwise included, all (i) payments under insurance (whether or not
the Agent is the loss payee thereof), or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with
respect to any of the foregoing Collateral and (ii) cash;
provided, however, the foregoing grant of a security interest shall be
deemed not to grant a security interest in any of the property
described below (such property being hereinafter referred to as
"Excluded Property"):
(x) any Equipment, Related Contracts or Intellectual
Property, but only to the extent that, under applicable law,
the applicable Grantor is expressly prohibited from granting a
security interest therein or applicable law provides for the
involuntary forfeiture of the property in the event a security
interest is granted therein without the consent of the
appropriate Governmental Authority, or at all; provided,
however, that if such prohibition or the condition requiring
such consent relates only to the foreclosure of a security
interest or the exercise of other rights and remedies upon a
default but not to the granting of a security interest
therein, then a security interest in such property shall be
deemed to be granted by this Agreement subject to the
condition that the consent of such Governmental Authority is
obtained by the Agent prior to foreclosure or exercising its
other rights or remedies hereunder as to which such consent is
required, and
(y) any Equipment, Related Contracts or Intellectual
Property, but only to the extent that the terms and provisions
of a written agreement, document or instrument in effect on
the date hereof creating or evidencing such property or any
rights relating thereto expressly prohibit the granting of a
security interest therein or condition the granting of a
security interest therein on the consent of a third party
whose consent has not been obtained or would cause, or allow a
third party to cause, the forfeiture of such property upon the
granting of a security interest therein, provided, however,
that if such prohibition or the condition requiring such
consent relates only to the foreclosure of a security interest
or the exercise of other rights or remedies upon a default,
then a security interest in such property shall be deemed to
be granted by this Agreement subject to the condition that the
consent of such third party is obtained by the Agent prior to
foreclosure or exercising of its other rights or remedies
hereunder as to which such consent is required.
In the event of the termination or elimination of any prohibition or
the requirement for any consent contained in any applicable law, rule,
regulation, agreement, document or instrument to the extent sufficient to permit
any Excluded Property to become Collateral hereunder, or upon the granting of
any such consent, or waiving or terminating any requirement for such consent, a
security interest in such Excluded Property shall be automatically and
simultaneously granted hereunder in such Excluded Property, and the Excluded
Property automatically and simultaneously shall be deemed to be assigned and
pledged to the Agent and shall be included as Collateral hereunder.
2. SECTION Security for Obligations. This Agreement secures with respect to each
Grantor, and the Collateral of such Grantor is collateral security for, the
prompt payment and performance in full when due, whether on a specified payment
date, at stated maturity, by acceleration or otherwise (including, without
limitation, the payment of amounts that would become due but for the operation
of the automatic stay under Section 362(a) of the Bankruptcy Code or any similar
law) of all Obligations of such Grantor to any Secured Party now or hereafter
existing under the Credit Agreement, this Agreement, the Guaranty, the Notes,
any Swap Contract entered into with a Lender and permitted under the Credit
Agreement and the other Loan Documents in each case whether for principal
(including reimbursement for amounts drawn or available to be drawn under
Letters of Credit), interest (including, without limitation, interest that, but
for the filing of a petition in bankruptcy would accrue on such obligations),
fees, expenses, increased costs, indemnification or otherwise (any and all such
Obligations being the "Secured Obligations"). Without limiting the generality of
the foregoing, this Agreement secures the payment of all amounts that constitute
part of the Secured Obligations and would be owed by any Grantor to the Agent,
the Lender Agent, the Lenders, this Agreement, the Guaranty, the Notes, and the
other Loan Documents but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceedings.
3. SECTION Grantors Remains Liable. Anything herein to the contrary
notwithstanding, (a) each Grantor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein to perform
all of its duties and obligations thereunder to the same extent as if this
Agreement had not been executed, (b) the exercise by the Agent of any of the
rights hereunder shall not release any Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral and
(c) neither the Agent or any Lender shall have any obligation or liability under
the contracts and agreements included in the Collateral by reason of this
Agreement, nor shall the Agent, or any Lender be obligated to perform any of the
obligations or duties of any Grantor thereunder or to take any action to collect
or enforce any claim for payment assigned hereunder.
4. SECTION Delivery of Security Collateral and Account Collateral. Subject to
Section 5(f), all certificates or instruments representing or evidencing
Security Collateral or Account Collateral shall be delivered to and held by or
on behalf of the Agent pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Agent. The Agent shall have the right, upon the occurrence and during the
continuance of an Event of Default, upon three Business Days' notice to the
Grantors, to transfer to or to register in the name of the Agent or any of its
nominees any or all of the Security Collateral and Account Collateral, subject
to compliance with Applicable Regulatory Requirements. In addition, the Agent
shall have the right upon the occurrence and during the continuance of an Event
of Default to exchange instruments representing or evidencing Security
Collateral or Account Collateral, for instruments of smaller or larger
denominations.
5. SECTION Representations and Warranties. Each Grantor hereby represents
and warrants as follows:
(a) All of the Equipment and Inventory are located at the places specified
on Schedule III, except for (i) Inventory and Equipment in transit and
(ii) other Equipment and Inventory that, in the ordinary course of
business, is held or stored at other locations. The chief place of
business and chief executive office of such Grantor and the office
where such Grantor keeps its records concerning the Receivables, and
all originals of all chattel paper that evidence Receivables, are
located at the address specified for such Grantor on Schedule IV. None
of the Receivables are evidenced by a promissory note or other
instrument. Such Grantor's federal tax identification number is as set
forth on Schedule IV.
(b) Such Grantor is the legal and beneficial owner of the Collateral free
and clear of any Lien, except for the Lien created hereunder and
Permitted Liens. No effective financing statement or other instrument
similar in effect covering all or any part the Collateral is on file in
any recording office, except such as may have been filed in favor of
the Agent relating to this Agreement or any other Loan Document and
except for Permitted Liens. As of the date of this Agreement, such
Grantor currently conducts business only under its own name and, in
certain areas and for certain operations, the trade names listed on
Schedule V. Neither such Grantor nor any corporate predecessor has,
during the preceding five (5) years, been known as or used any other
corporate or fictitious name, except such names as are disclosed on
Schedule V.
(c) Such Grantor has exclusive possession and control of the Equipment and
Inventory of such Grantor except for (i) Equipment leased by such
Grantor as a lessee, Equipment in the possession and control of such
Grantor's lessees and licensees under written lease and license
agreements entered into in the ordinary course of business and
consistent with past practice, and (ii) Equipment and Inventory in
transit with common or other carriers.
(d) The Pledged Debt of such Grantor, if any, is in all respects what it
purports to be and represents genuine debt owing to such Grantor
arising from bona fide transactions completed in accordance with the
terms and provisions contained in the document delivered to the Agent
with respect thereto.
(e) Assuming continuous possession by the Agent, the pledge of each of the
Pledged Debt and Pledged Securities pursuant to this Agreement creates
a valid and first priority perfected security interest in the Pledged
Debt and Pledged Securities, respectively, subject only to Permitted
Liens.
(f) The Pledged Debt constitutes, as of the date hereof, all of the notes
and instruments payable to or owned by such Grantor, except for notes
and instruments with an outstanding principal amount of less than
Twenty Five Thousand Dollars ($25,000) and except for notes and
instruments received in the ordinary course of business and which such
Grantor is not required to deliver to the Agent pursuant to Section 6
hereof or of which the Agent has not at any time requested possession
and which are not a material portion of the Collateral either singly or
in the aggregate.
(g) All shares of capital stock described on Schedule II are duly
authorized, validly issued, fully paid and non-assessable.
(h) As to each issuer whose name appears on Schedule II, the Pledged
Securities represent on the date hereof not less than the applicable
percentage as shown on Schedule II of the total shares of capital stock
issued and outstanding of such issuer.
(i) Appropriate financing statements have been filed in the necessary
jurisdictions (or have been executed and delivered by the applicable Grantor to
the Agent in appropriate form for filing in the necessary jurisdictions) with
respect to the Collateral as to which financing statements are required to be
filed, so that the security interests granted pursuant to this Agreement, to the
extent they may be perfected by filing financing statements in the necessary
jurisdictions, constitute (or in the case of any such financing statements not
yet filed, will constitute upon filing thereof) valid, continuing and perfected
security interests in and liens on the Collateral to the extent a security
interest can be created therein under the Uniform Commercial Code as in effect
in the applicable jurisdictions in the United States, securing the payment of
the Secured Obligations, subject only to Permitted Liens. All other actions
necessary or requested by the Agent to perfect and protect such security
interest in each item of Collateral (including, without limitation, the actions
described in clauses (i) and (ii) of Section 6(a) to the extent required
therein) have been duly taken to the extent a security interest can be created
therein under the Uniform Commercial Code as in effect in the applicable
jurisdictions of the United States.
(j) No authorization, approval or other action by, and no notice to or
filing with, any Governmental Authority (other than such
authorizations, approvals and other actions as have already been taken
or are in full force and effect) is required (i) for the pledge of the
Security Collateral, for the grant of the security interest in the
Collateral held by such Grantor hereby or for the execution, delivery
or performance of this Agreement by such Grantor, or (ii) for the
exercise by the Agent of any rights or remedies in respect of the
Collateral hereunder except as may be required for the Agent to receive
payments directly from the United States government under the
Assignment of Claims Act, 31 U.S.C. ss. 3727 and 41 U.S.C. ss. 15 (the
"Assignment of Claims Act").
(k) To the best of such Grantor's knowledge, each Trademark, Copyright and
Patent material to the operations of the Borrower and its Subsidiaries
taken as a whole is validly subsisting and is presently in good
standing. Schedule VI contains a complete listing of all of such
Grantor's Copyrights, Registered Trademarks, Applications for
Trademarks and Patents.
(l) To the best of the Grantors' knowledge, no claim has been made by a
third party that any Intellectual Property is invalid or unenforceable.
(m) To the best of the Grantors' knowledge, no claim has been made that the
use of any Intellectual Property does or may violate the rights of any
third party.
(n) The execution and delivery of this Agreement and the performance by
such Grantor of its obligations hereunder are within such Grantor's
corporate power, have been duly authorized by all necessary corporate
action and do not and will not contravene or conflict with any
provision of law or of the organizational documents of such Grantor or
of any agreement, indenture, instrument or other document, or any
judgment, order or decree, which is binding upon such Grantor.
(o) This Agreement is a legal, valid and binding obligation of such
Grantor, enforceable in accordance with its terms, except that the
enforceability of this Agreement may be limited by bankruptcy, insolvency,
fraudulent conveyance, fraudulent transfer, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally
and by general principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or at law) and creates a valid and, except for
Permitted Liens, after all appropriate financing statements are filed, all
appropriate filings are made with the U.S. Patent and Trademark Office, and all
appropriate action is taken with respect to the chattel paper, the certified
securities and the deposit accounts, first priority security interest in the
Collateral and such security interest is entitled to all rights, priorities and
benefits afforded by the Uniform Commercial Code.
(p) Such Grantor is in compliance with the requirements of all applicable
laws (including, without limitation, the provisions of the Fair Labor
Standards Act), rules, regulations and orders of every Governmental
Authority, the non-compliance with which would materially adversely
affect any material portion of the Collateral of such Grantor.
6. SECTION Further Assurances.
(a) Each Grantor agrees from time to time that, at the expense of such
Grantor, such Grantor will promptly execute and deliver all further
instruments and documents, and take all further action, that may be
necessary or reasonably desirable, or that the Agent may reasonably
request, in order to perfect, protect and maintain the priority of any
pledge, assignment or security interest granted or purported to be
granted hereby or to enable the Agent to exercise and enforce its
rights and remedies hereunder with respect to any Collateral. Without
limiting the generality of the foregoing, each Grantor will: (i) at the
request of the Agent made at any time after the occurrence and during
the continuation of an Event of Default, ▇▇▇▇ conspicuously on the
applicable certificate, in the event any of its Equipment is covered by
a certificate of title or on the Equipment itself if not covered by a
certificate of title, each document included in each chattel paper
included in the Receivables, each Related Contract, and each of its
records pertaining to the Collateral with a legend, in form and
substance reasonably satisfactory to the Agent, indicating that such
Equipment, document, chattel paper, Related Contract or Collateral is
subject to the security interest granted hereby; (ii) if any Collateral
shall be evidenced by, or if such Grantor shall otherwise be the payee
under, a promissory note or other instrument or chattel paper having a
principal balance in excess of Twenty Five Thousand Dollars ($25,000),
deliver and pledge to the Agent hereunder such note or instrument or
chattel paper duly indorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance
reasonably satisfactory to the Agent; and (iii) execute and file such
financing or continuation statements, or amendments thereto, and such
other instruments or notices, as may be necessary or desirable, or as
the Agent may reasonably request, in order to perfect and preserve,
with the required priority, the pledge, assignment and security
interest granted or purported to be granted hereby.
(b) Each Grantor hereby authorizes the Agent to file one or more
financing or continuation statements, and amendments thereto, relating
to all or any part of the Collateral without the signature of such
Grantor where permitted by law. A photocopy or other reproduction of
this Agreement or any financing statement covering the Collateral or
any part thereof shall be sufficient as a financing statement where
permitted by law.
(c) Each Grantor shall furnish to the Agent, from time to time,
statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as
the Agent may reasonably request, all in reasonable detail.
(d) Each Grantor agrees that, at the request of the Agent, following
the occurrence and during the continuance of an Event of Default, such
Grantor will execute any and all documents, notices or instruments as
may be necessary or desirable, or as the Agent may reasonably request,
to direct the government of the United States of America to pay to the
Agent, for the account of the Agent and the Lenders, all amounts
otherwise payable to the Grantors under the Assignment of Claims Act.
(e) Each Grantor shall (i) preserve and maintain all material rights in
the material Intellectual Property, and (ii) upon the occurrence and
during the continuation of an Event of Default, use its best efforts to
obtain any consents, waivers or agreements necessary to enable the
Agent to exercise its remedies with respect to the Intellectual
Property. No Grantor shall abandon any material right to file a
material Copyright, Patent or Trademark application nor shall any
Grantor abandon any material pending Copyright, Patent or Trademark
application, or material Copyright, Patent or Trademark without the
prior written consent of Agent.
7. SECTION As to Equipment and Inventory.
(a) Each Grantor shall keep the Equipment and Inventory of such Grantor
(other than (i) Inventory sold in the ordinary course of business, and
(ii) Equipment and Inventory that, in the ordinary course of business,
is held or stored at other locations) at the places therefor specified
on Schedule III or, upon prior written notice to the Agent, at such
other places in a jurisdiction where all action required by Section 6
shall have been taken with respect to the Equipment and Inventory.
(b) Each Grantor shall cause the Equipment material to its operations to be
maintained and preserved in good repair and working order, ordinary
wear and tear and damage due to casualty excepted, and make or cause to
be made all appropriate repairs, renewals and replacements thereof, to
the extent not obsolete, and consistent with past practice of such
Grantor, as quickly as practicable after the occurrence of any loss or
damage thereto, that are necessary or desirable to such end. Each
Grantor shall promptly furnish to the Agent a statement respecting any
material loss or damages to any of the Equipment or Inventory.
8. SECTION Insurance.
(a) Each Grantor (or the Borrower, on behalf of each Grantor) shall, at its own
expense, maintain insurance with respect to the Equipment and Inventory of such
Grantor with financially sound and reputable insurers in such amounts, covering
such risks and in such form as is consistent with past practice and as is
usually carried by companies engaged in similar businesses and owning similar
properties in the same general areas in which such Grantor operates. Each policy
for property damage insurance shall provide for all losses to be paid directly
to the Agent. Each such policy shall in addition: (i) name such Grantor (or the
Borrower) as insured thereunder and the Agent as an additional insured
thereunder (without any representation or warranty by or obligation upon the
Agent) as their interests may appear, (ii) in the case of property damage
insurance, contain the agreement by the insurer that any loss thereunder shall
be payable to the Agent, (iii) not contain any provision providing for recourse
against the Agent for payment of premiums or other amounts with respect thereto
and (iv) provide that at least 10 days' prior written notice of cancellation or
of lapse shall be given to the Agent by the insurer. Each Grantor (or the
Borrower) shall, if so requested by the Agent, deliver to the Agent original or
duplicate policies of such insurance and, as often as the Agent may reasonably
request, a report of a reputable insurance broker with respect to such
insurance. Further, each Grantor (or the Borrower) shall, at the request of the
Agent, duly exercise and deliver instruments of assignment of such insurance
policies to comply with the requirements of this Section 8 and use reasonable
efforts to cause the insurers to acknowledge notice of such assignment.
(b) Reimbursement under any liability insurance maintained by such Grantor
pursuant to this Section 8 may be paid directly to the Person who shall have
incurred liability covered by such insurance. In case of any loss involving
damage to Equipment or Inventory when clause (c) of this Section 8 is not
applicable, such Grantor shall make or cause to be made the necessary repairs to
or replacements of such Equipment or Inventory, and any proceeds of insurance
maintained by such Grantor pursuant to this Section 8 and received by the Agent
shall be released to such Grantor as reimbursement for the costs of such repairs
or replacements.
(c) At the request of the Agent, upon the occurrence and during the continuance
of any Event of Default, all insurance payments made by an insurer in respect of
such Equipment or Inventory shall be paid to and applied by the Agent as
specified in Section 17(b) hereof.
9. SECTION Voting Rights; Dividends; Payments; etc.
(a) So long as the Agent has not given the notice referred to in clause (b)
below:
(i) Each Grantor shall be entitled to exercise any and all voting
or consensual rights and powers and stock purchase or
subscription rights relating or pertaining to the Pledged
Securities for any purpose; provided, however, that each
Grantor agrees that it will not exercise any such right or
power in any manner which would have a material adverse effect
on the value of the Collateral or any part thereof.
(ii) Each Grantor shall be entitled to receive and retain any and all
lawful dividends payable in respect of the Pledged Securities which are paid in
cash by any issuer if such dividends are permitted by the Credit Agreement, but
all dividends and distributions in respect of such Collateral or any part
thereof made in shares of stock or other property or representing any return of
capital, whether resulting from a subdivision, combination or reclassification
of such Collateral or any part thereof or received in exchange for such Pledged
Securities or any part thereof or as a result of any merger, consolidation,
acquisition or other exchange of assets to which any issuer of Pledged
Securities may be a party or otherwise or as a result of any exercise of any
stock purchase or subscription right, shall be and become part of the Collateral
hereunder and, if received by any Grantor, shall be forthwith delivered to the
Agent in due form for transfer (i.e., endorsed in blank or accompanied by stock
or bond powers executed in blank) to be held for the purposes of this Agreement.
(iii) The Agent shall execute and deliver, or cause to be executed
and delivered, to each Grantor, all such proxies, powers of
attorney, dividend orders and other instruments as such
Grantor may request for the purpose of enabling such Grantor
to exercise the rights and powers which it is entitled to
exercise pursuant to subclause (I) above and to receive the
dividends which it is authorized to retain pursuant to
subclause (ii) above.
(iv) Each Grantor shall be entitled to (A) collect all regular
payments made or proceeds received with respect to the Pledged
Debt and (B) enforce and prosecute all rights and remedies
available under any of the Pledged Debt.
(b) Upon written notice from the Agent during the existence of an Event
of Default, and so long as the same shall be continuing, all rights and
powers which the Grantors are entitled to exercise pursuant to Section
9(a)(I) hereof, and all rights of the Grantors to receive and retain
dividends pursuant to Section 9(a)(ii) hereof, and all rights of the
Pledgors to receive payments pursuant to Section 9(a)(iv) hereof, shall
forthwith cease, and all such rights and powers shall thereupon become
vested in the Agent which shall have, during the continuance of such
Event of Default, the sole and exclusive authority to exercise such
rights and powers and to receive such dividends and payments, subject
to Applicable Regulatory Requirements. Any and all money and other
property paid over to or received by the Agent pursuant to this clause
(b) shall be retained by the Agent as additional Collateral hereunder
and applied in accordance with the provisions hereof.
10. SECTION Place of Perfection; Records; Collection of Receivables;
Intellectual Property.
(a) Each Grantor shall keep its chief place of business and chief
executive office and the office where it keeps its records concerning
the Collateral, and all originals of all chattel paper that evidence
Receivables, at the location therefor specified on Schedule III or,
upon prior written notice to the Agent, at such other locations in a
jurisdiction where all actions required by Section 6 shall have been
taken with respect to the Collateral. Each Grantor will hold and
preserve such records, and chattel paper and will permit
representatives of the Agent at any time during normal business hours
to inspect and make abstracts from such records and chattel paper.
(b) Except as otherwise provided in this clause (b), each Grantor shall
continue to collect in accordance with its customary practice, at its
own expense, all amounts due or to become due such Grantor under the
Receivables and, prior to the occurrence of an Event of Default, such
Grantor shall have the right to adjust, settle or compromise the amount
or payment of any account, or release wholly or partly any account
debtor or obligor thereof, or allow any credit or discount thereon, all
in accordance with its customary practices. In connection with such
collections, each Grantor may take (and, upon the occurrence and during
the continuation of an Event of Default, at the Agent's direction,
shall take) such action as such Grantor or the Agent may deem necessary
or advisable to enforce collection of the Receivables; provided,
however, that the Agent shall have the right, upon the occurrence and
during the continuance of an Event of Default, and upon written notice
to such Grantor of its intention to do so, to notify the obligors under
any Receivables of the assignment of such Receivables to the Agent and
to direct such obligors to make payment of all amounts due or to become
due to such Grantor thereunder directly to the Agent and, upon such
notification and at the expense of such Grantor, to enforce collection
of any such Receivables, and to adjust, settle or compromise the amount
or payment thereof, in the same manner and to the same extent as such
Grantor might have done. After receipt by such Grantor or Grantors of
the notice from the Agent referred to in the proviso to the preceding
sentence, (i) all amounts and proceeds (including instruments received
by such Grantor in respect of the Receivables) shall be received in
trust for the benefit of the Agent hereunder, shall be segregated from
other funds of such Grantor and shall be forthwith paid over to the
Agent in the same form as so received (with any necessary endorsement)
to be applied as provided by Section 17(b) and (ii) such Grantor shall
not adjust, settle or compromise the amount or payment of any
Receivable, release wholly or partly any obligor thereof, or allow any
credit or discount thereon.
11. SECTION Intentionally Deleted.
12. SECTION Intentionally Deleted.
13. SECTION Transfers and Other Liens; Additional Shares. Except as otherwise
permitted under the Credit Agreement, no Grantor shall (a) sell, assign (by
operation of law or otherwise) or otherwise dispose of, or grant any option with
respect to, any of the Collateral, or (b) create or suffer to exist any Lien
upon or with respect to any of the Collateral.
14. SECTION Agent Appointed Attorney-in-Fact. Each Grantor hereby irrevocably
appoints the Agent such Grantor's attorney-in-fact, with full authority in the
place and stead of such Grantor and in the name of such Grantor or otherwise,
from time to time in the Agent's discretion, to take any action and to execute
any instrument that the Agent may deem necessary or advisable to accomplish the
purposes of this Agreement and to enforce its right hereunder, including,
without limitation:
(a) upon the occurrence and during the continuance of an Event of Default,
to obtain and adjust insurance required to be paid to the Agent pursuant to
Section 8;
(b) upon the occurrence of an Event of Default and while it is
continuing, to ask for, demand, collect, ▇▇▇ for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral including, without
limitation, to receive, endorse and collect all instruments made
payable to such Grantor representing any dividend, interest payment or
other distribution in respect of the Collateral or any part thereof and
to give full discharge for the same;
(c) to receive, endorse and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) or (b) above; and
(d) upon the occurrence of an Event of Default and while it is continuing,
to file any claims or take any action or institute any proceedings that
the Agent may deem necessary or desirable for the collection of any of
the Collateral or otherwise to enforce compliance with the rights of
the Agent with respect to any of the Collateral.
15. SECTION Agent May Perform. If any Grantor fails to perform any agreement
contained herein, the Agent, upon prior written notice and reasonable
opportunity to remedy such failure to such Grantor or the Borrower, may (but
shall not be obligated to) itself perform, or cause performance of, such
agreement, and the reasonable expenses of the Agent incurred in connection
therewith shall be payable by such Grantor and the Borrower under Section 18(b).
Neither the Agent nor any Lender shall have any obligation or duty to perform
any of the obligations or duties of any Grantor hereunder.
16. SECTION The Agent's Duties. The powers conferred on the Agent hereunder are
solely to protect its interest in the Collateral and shall not impose any duty
upon it to exercise any such powers. Except for the safe custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the Agent shall have no duty as to any Collateral, as to
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Security Collateral,
whether or not the Agent or any Lender has or is deemed to have knowledge of
such matters, or as to the taking of any necessary steps to preserve rights
against any parties or any other rights pertaining to any Collateral. The Agent
shall be deemed to have exercised reasonable care in the custody and
preservation of any Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which Bank of America accords its own
property or if it takes such action as any applicable Grantor requests in
writing; but, failure of the Agent to comply with any such request shall not of
itself be deemed a failure to exercise reasonable care. No failure of the Agent
to preserve or protect any rights with respect to such Collateral against prior
parties, or to do any act with respect to the preservation of such Collateral
not so requested by any Grantor, shall be deemed of itself a failure to exercise
reasonable care in the custody or preservation of such Collateral.
17. SECTION Remedies. If any Event of Default shall have occurred and be
continuing:
(a) The Agent may exercise in respect of the Collateral, in addition to
all other rights and remedies provided for herein or otherwise available to it
under applicable law, all the rights and remedies of a secured party upon
default under the Uniform Commercial Code in effect in the State of California
at such time (the "Uniform Commercial Code") (whether or not the Uniform
Commercial Code applies to the affected Collateral) and also may (i) require
each Grantor to, and each Grantor hereby agrees that it shall at its expense and
upon request of the Agent forthwith, assemble all or part of the Collateral as
directed by the Agent and make it available to the Agent at a place to be
designated by the Agent that is reasonably convenient to both parties (ii)
require each Grantor to, and each Grantor hereby agrees that it shall upon
request of the Agent forthwith, execute all such documents and do all such other
things which may be reasonably necessary or desirable in order to enable the
Agent or its nominee to be registered as the owner of the Intellectual Property
with any competent registration authority, and (iii) without notice, except as
specified herein, advertisement, hearing or process of law of any kind, sell the
Collateral or any part thereof in one or more parcels free and clear of all
rights and claims of the Grantors at public or private sale, at any of the
Agent's offices or elsewhere, for cash, on credit or for future delivery, and
upon such other terms as the Agent may deem commercially reasonable. Each
Grantor agrees that, to the extent notice of sale shall be required by law, at
least five days' notice to such Grantor of the time and place of any public sale
or the time after which any private sale is to be made shall constitute
reasonable notification. The Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Agent may adjourn
any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned. The Grantors further agree that the
Secured Parties shall have the right to bid for and purchase any or all of the
Collateral at any such public sale.
(b) All cash proceeds received by the Agent in respect of any sale of,
collection from, or other realization upon all or any part of the Collateral
may, in the discretion of the Agent, be held by the Agent as collateral for,
and/or then or at any time thereafter applied (after payment of any amounts
payable to the Agent pursuant to Section 18) in whole or in part by the Agent
against, all or any part of the Secured Obligations as provided in the Credit
Agreement. Any surplus of such cash or cash proceeds held by the Agent and
remaining after payment in full of all the Secured Obligations shall be promptly
paid over to the Borrower or to whomsoever may be lawfully entitled to receive
such surplus.
(c) The Agent may exercise any and all rights and remedies of any Grantor under
or in respect of the Collateral, including, without limitation, any and all
rights of any Grantor to demand or otherwise require payment of any amount
under, or performance of any provision of, any agreement.
(d) All payments received by any of the Grantors under or in connection with any
agreement or otherwise in respect of the Collateral shall be received in trust
for the benefit of the Agent, shall be segregated from other funds of such
Grantor and shall be forthwith paid over to the Agent in the same form as so
received (with any necessary endorsement).
(e) The Agent may, without notice to any Grantor except as required by
applicable law and at any time or from time to time, charge, set-off and
otherwise apply all or any part of the Secured Obligations against the Cash
Collateral Account, or any other Account Collateral or any part of either
thereof.
(f) The Agent is hereby authorized to comply with any limitation or restriction
in connection with any sale of Security Collateral as it may be advised by
counsel is necessary in order to (i) avoid any violation of applicable law
(including, without limitation, compliance with such procedures as may restrict
the number of prospective bidders and purchasers and/or further restrict such
prospective bidders or purchasers to persons or entities who will represent and
agree that they are purchasing for their own account for investment and not with
a view to the distribution or resale of such Collateral) or (ii) obtain any
required approval of the sale or of the purchase by any governmental regulatory
authority or official, and each Grantor agrees that such compliance shall not
result in such sale being considered or deemed not to have been made in a
commercially reasonable manner and that the Agent shall not be liable or
accountable to any Grantor for any discount allowed by reason of the fact that
such Collateral is sold in compliance with any such limitation or restriction.
18. SECTION Indemnity and Expenses; Taxes.
(a) Each Grantor agrees, jointly and severally, to indemnify each
Indemnified Person from and against any and all claims, losses and
liabilities arising out of or resulting from this Agreement (including,
without limitation, enforcement of this Agreement), except claims,
losses or liabilities resulting from such Indemnified Person's gross
negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction.
(b) Each Grantor agrees, jointly and severally, to pay to the Agent, upon
written demand, the amount of any and all reasonable expenses,
including the reasonable fees and expenses of its counsel and of any
experts and agents, that the Agent may incur in connection with: (i)
the administration of this Agreement, (ii) the custody, preservation,
use or operation of, or the sale of, collection from or other
realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of the Agent or the Lenders hereunder
or (iv) the failure by such Grantor to perform or observe any of the
provisions hereof.
(c) Each Grantor shall pay: (i) all taxes, assessments and other charges of
governmental authorities imposed upon any of the Collateral before any penalty
or interest accrues thereon, and (ii) all claims (including, without limitation,
claims for labor, services, materials and supplies) for sums materially
adversely affecting the Collateral, which have become due and payable and which
by law have or may become a Lien (other than a Permitted Lien) upon any of the
Collateral prior to the time when any material penalty or fine shall be incurred
with respect thereto, provided that no such taxes, assessments and charges of
Governmental Authorities referred to in subclause (i) above or claims referred
to in subclause (ii) need to be paid if being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted and
enforcement thereof is stayed and if a reserve or other appropriate provision
required in conformity with GAAP shall have been made therefor and if, at the
request of the Agent, it posts a bond or other form of indemnity satisfactory to
the Agent in the amount of such contested taxes, assessments and charges plus
any applicable interest and penalties.
19. SECTION Security Interest Absolute. The obligations of each Grantor under
this Agreement are independent of the Secured Obligations, and a separate action
or actions may be brought and prosecuted against each Grantor to enforce this
Agreement, irrespective of whether any action is brought against the Borrower or
whether the Borrower are joined in any such action or actions. All rights of the
Agent and the pledge, assignment and security interest hereunder, and all
obligations of each Grantor hereunder, shall be absolute and unconditional,
irrespective of:
(a) any lack of validity or enforceability of any Loan Document or any
other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations or any other
amendment or waiver of or any consent to any departure from any Loan
Document, including, without limitation, any increase in the Secured
Obligations resulting from the extension of additional credit to the
Borrower or any of its Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any other
collateral, or any taking, release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Secured Obligations;
(d) any manner of application of collateral, or proceeds thereof, to all or
any of the Secured Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Secured Obligations
or any other assets of the Borrower or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate structure or
existence of the Borrower or any of its Subsidiaries; or
(f) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, such Grantor or a third party grantor
of a security interest.
20. SECTION Amendments: Waivers; Etc. No amendment or waiver of any provision of
this Agreement, and no consent to any departure by any Grantor herefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Agent and each Grantor, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given; provided,
however, that any amendment to this Agreement that is in substantially the same
form as Exhibit A hereto shall be effective when signed by only the Agent and
the Additional Grantor (as defined therein). No failure on the part of the Agent
to exercise, and no delay in exercising any right hereunder, shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right.
21. SECTION Addresses for Notices. All notices and other communications provided
to the Agent and to any Grantor shall be in writing or by facsimile and
addressed, delivered or transmitted to such party at its address or facsimile
number set forth below its signature hereto or at such other address or
facsimile number as may be designated by such party in a notice to the other
parties. Any notice, if mailed and properly addressed with postage prepaid or if
properly addressed and sent by pre-paid courier service, shall be deemed given
when received; any notice, if transmitted by facsimile, shall be deemed given
when transmitted.
22. SECTION Continuing Security Interest; Assignments under the Credit
Agreement. This Agreement shall create a continuing security interest in the
Collateral and shall: (a) remain in full force and effect until all Secured
Obligations have been paid in full and all Commitments have terminated, all
Letters of Credit have expired or been cross-collateralized, (b) be binding upon
each Grantor, its successors and assigns and (c) inure, together with the rights
and remedies of the Agent hereunder, to the benefit of the Agent, the Lenders
and their respective permitted successors, transferees and assigns. Without
limiting the generality of the foregoing clause (c), any Lender may assign or
otherwise transfer all or any portion of its rights and obligations under the
Credit Agreement (including, without limitations all or any portion of its
Commitment, the loans owing to it and the Notes, if any, held by it) to any
other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender herein or otherwise, in each
case as provided in Section 10.04 of the Credit Agreement.
23. SECTION Termination. When all Secured Obligations have been paid in full,
all Commitments have terminated and all Letters of Credit have expired or been
cross-collateralized, the security interest granted hereby shall terminate and
all rights to the Collateral as shall not have been sold or otherwise applied
pursuant to the terms hereof shall revert to the applicable Grantor. Upon the
termination of any such security interest, the Agent shall promptly return to
the applicable Grantor, at such Grantor's expense, such of the Collateral (and,
in the case of a release, such of the released Collateral) held by the Agent as
shall not have been sold or otherwise applied pursuant to the terms hereof. The
Agent will, at such Grantor's expense, execute and deliver to the Grantor such
other documents as the Grantor shall reasonably request to evidence such
termination or release, as the case may be.
24. SECTION Governing Law; Terms. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA WITHOUT
REFERENCE TO CONFLICTS OF LAW PRINCIPLES, except to the extent that the validity
or perfection of the security interest hereunder, or remedies hereunder, in
respect of any particular Collateral are governed by the laws of a jurisdiction
other than the State of California. Unless otherwise defined herein or in the
Credit Agreement, terms used in Article 9 of the Uniform Commercial Code are
used herein as therein defined.
25. SECTION Entire Agreement; Severability of Provisions. This Agreement, taken
together with all of the other Loan Documents and all certificates and other
documents delivered by the Borrower and the other Grantors to the Agent or the
Lenders, embodies the entire agreement and supersedes all prior agreements,
written and oral, relating to the subject matter hereof. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
26. SECTION Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Agreement by facsimile shall be as
effective as delivery of a manually executed counterpart of this Agreement.
27. SECTION WAIVER OF JURY TRIAL. EACH OF THE GRANTORS, THE AGENT AND THE
LENDERS IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR THE ACTIONS OF THE AGENT OR ANY LENDER IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
28. SECTION Consent to Jurisdiction and Service of Process. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST THE GRANTORS WITH RESPECT TO THIS AGREEMENT MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF
CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH GRANTOR
ACCEPTS, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, AND
IRREVOCABLY AGREES TO BE BOUND BY ANY FINAL JUDGMENT RENDERED THEREBY IN
CONNECTION WITH THIS AGREEMENT FROM WHICH NO APPEAL HAS BEEN TAKEN OR IS
AVAILABLE. EACH GRANTOR IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS 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 ITS NOTICE
ADDRESS SPECIFIED IN SECTION 21, SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER
SUCH MAILING. EACH GRANTOR, THE AGENT AND THE LENDERS IRREVOCABLY WAIVE, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION (INCLUDING WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT IN ANY JURISDICTION SET
FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE AGENT OR ANY LENDER TO
BRING PROCEEDINGS AGAINST THE GRANTORS IN THE COURTS OF ANY OTHER JURISDICTION.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
SIERRA HEALTH SERVICES, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President & COO
SIERRA HEALTH-CARE OPTIONS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary
NEVADA ADMINISTRATORS, INC.
By: /s/ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Secretary
BEHAVIORAL HEALTHCARE OPTIONS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary
SIERRA HOME MEDICAL PRODUCTS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Secretary
FAMILY HEALTHCARE SERVICES
By: /s/ ▇. ▇▇▇▇▇▇▇▇▇
Title: Secretary
FAMILY HOME HOSPICE, INC.
By: /s/ ▇. ▇▇▇▇▇▇▇▇▇
Title: Secretary
SIERRA MEDICAL MANAGEMENT, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Secretary/Treasurer
SIERRA HEALTH HOLDINGS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Secretary
SOUTHWEST MEDICAL ASSOCIATES, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
Title: President/Secretary
NORTHERN NEVADA HEALTH NETWORK, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Secretary
INTERMED, INC.
By: /s/ ▇. ▇▇▇▇▇▇▇▇▇
Title: Secretary
MOHAVE VALLEY HOSPITAL, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Secretary
TOLEMAC, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Secretary
M.E.G.A., INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Secretary
CII FINANCIAL, INC.
By: /s/ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Secretary
SOUTHWEST REALTY, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Secretary
Address for all of the foregoing:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
BANK OF AMERICA, N.A., as
Administrative Agent
By:
Title:
EXHIBIT A
AMENDMENT TO SECURITY AGREEMENT
This Amendment to Security Agreement (this "Amendment"), dated as of
________, ____, relates to the Security Agreement dated as of August 23, 2000
(as amended to date, the "Agreement") executed by each of the Subsidiary
Grantors listed on Schedule 1 hereto (collectively, the "Grantors") in favor of
Bank of America, N.A. ("Bank of America"), as agent (the "Agent") for the
benefit of the Lenders (as defined in the Credit Agreement as hereinafter
defined).
In compliance with the Credit Agreement dated as of October 30, 1998(as
amended from time to time, the "Credit Agreement") among the Borrower, the
Lenders and Agent, and in conjunction with the execution by the parties hereto
of the Amendment to Guaranty dated of even date herewith, ______________ (the
"Additional Grantor") and the Agent hereby agree as follows (capitalized terms
used but not otherwise defined herein shall have the meanings ascribed to them
in the Credit Agreement):
29. Amendment. The Agreement is hereby amended to add as a party, and more
specifically, as a Subsidiary Grantor, thereunder, the Additional Grantor.
30. Representations and Warranties. The Additional Grantor represents and
warrants to the Agent and the Secured Parties that each of the representations
and warranties of a Subsidiary Grantor contained in the Agreement is hereby made
by the Additional Grantor as of the date hereof except to the extent such
representations and warranties relate to an earlier date and is true and correct
as to the Additional Grantor as of the date hereof except to the extent such
representations and warranties relate to an earlier date.
31. Grant of Security Interest. The Additional Grantor, to secure the complete
and timely payment, observance and performance of all of its Obligations at any
time arising under or in connection with the Guaranty, the Agreement and each
other Loan Document to which it is a party, hereby assigns and pledges to the
Agent, and hereby grants to the Agent for its benefit and the benefit of the
Secured Parties, a first priority security interest and lien under the
Agreement, in all of the Additional Grantor's right, title and interest in and
to the Collateral (as defined in the Agreement), subject only to Permitted
Liens, whether now owned or existing or hereafter arising or acquired and
wheresoever located together in each instance, with all accessions and additions
thereto, substitutions therefor, and replacements, proceeds and products
thereof.
32. Assumption of Rights, Obligations and Liabilities. The Additional
Grantor assumes all of the rights, obligations and liabilities of a Grantor
under the Agreement and agrees to be bound thereby as if the Additional Grantor
were an original party to the Agreement.
33. Effectiveness. This Amendment shall become effective on the date hereof
upon the execution hereof by the Additional Grantor and the Agent and delivery
hereof to the Agent.
34. Governing Law. This Amendment shall be governed by, and construed in
accordance with, the laws of the State of California.
-----------------------------------
By:________________________________
Title:
Notice Address:
Attention:
BANK OF AMERICA, N.A., as Administrative
Agent
By:________________________________
Title:
Schedule I
to Security Agreement
Pledged Debt
Loan/Note Receivable Amount Due
Dr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ $5,277,589 06/30/02
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ $152,000 03/22/29
▇▇. ▇▇▇▇▇ $935,000 09/12/12
▇▇. ▇▇▇▇▇ $153,440 03/01/13
TriWest (Buyout) $3,700,000 03/30/01
▇▇▇▇▇▇ (uncollectable) $550,000 Past Due
Schedule II
to Security Agreement
Pledged Securities
PLEDGED STOCK CERTIFICATES
Name of Stock No. Shares Stock No. Owner
Behavioral Healthcare Options, Inc. 100,000 Cert. No. 5 SHS
Family Health Care Services 1,000 Cert. No. 6 SHS
Family Home Hospice, Inc. 100 Cert. No. 1 SHS
Health Plan of Nevada, Inc. 100 Cert. No. 2 SHS
Intermed, Inc. 100 Cert. No. 2 SHS
Med One Health Plan 1,000 Cert. No. 2 PHI
M.E.G.A. 10 Cert. No. 8 PHI
M.E.G.A. 1.76 Cert. No. 9 PHI
Mohave Valley Hospital, Inc. 100 Cert. No. 9 SMM
Nevada Administrators, Inc. 55 Cert. No. 9 SHS
Nevada Administrators, Inc. 40 Cert. No. 7 SHS
Nevada Administrators, Inc. 5 Cert. No. 11 SHS
Northern Nevada Health Network, Inc. 1,600 Cert. No. 17 SHS
Prime Health, Inc. 1,765 Cert. No. 9 PHI
Prime Holdings, Inc. 745,556.67 Cert. No. 008 SHS
Prime Holdings, Inc. 588,235 Cert. No. 014 SHS
Sierra Acquisition, Inc. 100 Cert. No. 1 SHS
Sierra Health-Care Options, Inc. 100 Cert. No. 1 SHS
Sierra Health Holdings, Inc. 100 Cert. No. 1 SHS
Sierra Home Medical Products, Inc. 100 Cert. No. 001 SHS
Sierra Medical Management, Inc. 100 Cert. No. 2 SHS
Sierra Military Health Services, Inc. 100 Cert. No. 2 SHS
Sierra Texas Systems, Inc. 100 Cert. No. 1 SHS
Southwest Medical Associates 100 Cert. No. 1 SHS
Southwest Realty, Inc. 1,000 Cert. No. 1 SHS
Tolemac, Inc. 100 Cert. No. 3 SMM
Schedule III
Occupied Properties by
State and Address
08/22/00
SIERRA HEALTH SERVICES AND SUBSIDIARIES
OCCUPIED PROPERTIES - NON REGULATED ENTITIES
SQ FT.
UNDER 2000 LEASE
STREET COMPLEX DEPARTMENT LEASE/ MONTHLY TERM
ADDRESS NAME CITY COMPANY OR USE ACRES RENT DATE
ARIZONA
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇ Medical Plaza Bullhead City SMM Medical Clinic 124,014 owned na
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇ Medical Plaza Bullhead City SMM Medical Clinic 1,392 owned na
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇. Bullhead City BHO Clinical 3,360 3,763.20 10/31/00 (1)
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ Palo Verde Plaza, Bullhead City BHO Admin/Clinical 4,100 4,797.00 09/30/05 (2)(3)
▇▇▇▇▇ ▇▇▇ ▇▇/▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇. Hilltop Plaza, #H-1 Kingman BHO Clinical 300 360.00 10/31/00
CONNECTICUT
▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ SHS-SMHS TSC 2,400 2,400.00 06/30/03
▇▇▇▇ ▇
▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇ Blue Hen Corp Dover SHS-SMHS TSC 3,690 4,835.67 06/30/03
Center, Ste 5G2
MARYLAND
1202 Technology Dr. Heat Business Aberdeen SMHS TSC 1,500 1,988.93 05/31/03
Center., Suite B
621 ▇▇▇▇▇▇▇ Ave. Ridgely Oaks Annapolis SMHS TSC 1,610 1,999.08 06/30/03
Prof Ctr, ▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ SMHS Administrative 4,730 6,306.67 11/30/03
First Floor
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ SMHS Administrative 83,151 117,450.78 05/30/08 (2)
2nd, 4th, & 6th Floors
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇ Plaza California SMHS TSC 1,600 2,051.07 06/14/03 (2)
& MacArthur Blvd Store #▇▇▇
▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇ Frederick SMHS TSC 1,500 1,850.00 06/30/03
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SMHS TSC 3,000 2,678.06 06/15/03
Med. Ctr., Ste 204
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇. One Constellation Oxon Hill SMHS TSC 3,151 5,054.54 05/31/03 (2)
Center., ▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ SMHS TSC 3,093 6,562.73 06/30/03 (2)
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇. Silver Spring Silver Spring SMHS TSC 2,641 4,320.23 06/30/03
Metro Plaza,
4th Floor
MAINE
▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ SMHS TSC 1,200 1,414.19 06/30/03
▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇ SMHS TSC 1,700 2,431.92 06/15/03
NEW HAMPSHIRE
▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ SMHS TSC 3,661 5,177.26 06/14/03 (2)
NEW JERSEY
▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ SHS TSC 2,030 2,368.33 06/15/03
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇. N. Hanover Mall Wrightstown SMHS TSC 1,998 1,700.00 06/14/03
NEVADA
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ #▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ SMA Medical Clinic 1,468 1,556.04 05/31/06 (2)
▇▇ ▇. ▇▇▇▇ ▇▇▇▇ ▇▇. St. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ SMA OB/GYN Clinic 4,063 7,811.99 04/15/06
Dominican #▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇. Civic Center Henderson SMA Medical Clinic 13,942 21,191.84 03/31/05 (2)
Building D
150 ▇. ▇▇▇▇▇▇ Ave. ▇▇▇▇▇▇ Med. Ctr. Las Vegas SMA Medical Clinic 25,500 NA NA (4)
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇ ▇▇▇▇▇ SMA Medical Clinic 36,765 owned NA
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ SMA HPN sublease 5,008 8,120.00 04/30/02
F1 & F2
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇▇▇ SMA Medical Clinic 45,000 owned NA
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇▇▇ SMA Demand Mgmt. 4,992 9,984.00 auto renew
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇. Cambridge Quail Las Vegas BHO Clinical 4,076 6,929.00 04/03/03
▇▇▇▇ ▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇ Administrative 20,266 37,495.80 11/30/05
1st & 2nd floors
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇ ▇▇▇▇▇ SMA Medical Clinic 25,425 owned NA
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇ ▇▇▇▇▇ SMA Medical Clinic 25,122 61,623.14 12/31/04
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇ ▇▇▇▇▇ SMA/SMM Administrative 15,300 19,890.00 07/20/05 (2)
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇ ▇▇▇▇▇ SMA Surgery Center 28,500 owned NA
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇ SMA Medical Clinic 40,103 owned NA
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇ SHS Administrative 113,887 227,774.00 12/31/06
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ADM Administrative 1,571 3,141.18 12/31/06
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇ SMA Administrative 841 1,662.00 12/31/06
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇ SHS Administrative 2,876 5,752.00 auto renew
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇ SHO Administrative 9,713 19,426.00 auto renew
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇ SHS Administrative 43,480 owned NA
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ BHO Admin.Clinical 11,280 18,418.63 11/30/01 (5)
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇ #▇▇▇ ▇▇▇ ▇▇▇▇▇ SHS Sales 27,000 51,300.00 05/31/07
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇. Location I Las Vegas SHS Purchasing 20,248 9,899.00 12/31/02
C104/D104-105
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇ ▇▇▇▇▇ SMA Medical Clinic 53,672 90,168.96 auto renew
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ THC Business / Whse.18,695 16,322.34 01/14/04 (2)
Park
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇▇▇ SMA Medical Clinic 11,700 owned NA
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇ SHS Print Shop 6,860 owned NA
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇ ▇. ▇▇▇ ▇▇▇▇▇ SHS Hangar 9,400 1,725.00 01/31/06
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇. Reno SMM Medical Clinic Pending Pending Pending (6)
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ SHS Master Lease 11,410 17,387.00 11/30/00 (2)
NEW YORK
▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇/▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ SMHS TSC 2,464 2,150.00 06/30/03 (2)
▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ SMHS TSC 1,525 1,668.96 06/15/03 (2)
584 Phoenix ▇▇. ▇▇▇▇▇▇▇ Bus & Rome SMHS TSC 2,366 2,760.33 06/30/03 (2)
▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ 3 ▇▇▇▇▇▇▇▇▇ BerryInn Watertown SMHS TSC 2,500 1,875.00 06/14/03 (2)
PENNSYLVANIA
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇. Eleven Parkway Green Tree SHS TSC 1,653 2,410.63 06/30/03 (2)
Center, Ste 215 (Pittsburgh)
▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇ Palmyra SMHS TSC 1,360 1,345.00 06/14/03 (2)
▇▇ ▇▇▇▇▇ Way & ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Tinicum SMHS TSC 2,445 4,687.33 06/14/03
Suite 635 (Philadelphia)
RHODE ISLAND
▇▇▇ ▇▇▇▇▇ ▇▇. Admiral's Gate Newport SMHS TSC 1,4 1,703.08 06/14/03
Tower
TEXAS
▇▇▇ ▇-▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ BHO Clinical 165 330.00 auto renew
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. Dallas BHO Clinical 165 330.00 auto renew
4201 Brook Spring Dr. Southwest Dallas Dallas TMGT/TXHC SW Dallas Ctr. 29,635.00 owned NA (7)
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇▇▇▇ III Dallas BHO Clinical 9,773 19,546.00 auto renew
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇▇▇▇ III Dallas TMGT/TXHC Medical Clinic 33,725 owned NA (7)
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇▇▇▇▇▇ IV Dallas TMGT/TXHC Dallas Spec. Ctr 122,310 owned NA (7)
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇. Worth TMGT/TXHC Medical Clinic 77,783 owned NA (7)
1300 S. University Dr. University Ft. Worth BHO Clinical 5,465 10,930.00 auto renew (8)
Centre 1
2727 Military Pkwy. Mesquite BHO Clinical 158 316.00 auto renew
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇/▇▇▇▇ Medical Clinic 30,684 owned NA (9)
VIRGINIA
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇ SHS TSC 1,846 3,753.65 05/31/03 (2)
17479 Jefferson Coach House Dumfries SMHS TSC 1,240 1,025.00 06/14/00 (2)
▇▇▇▇▇ Highway Plaza, Unit B5
3918 Prosperity Ave. Suite 202 Fairfax SHS-SMHS TSC 1,229 2,060.03 06/15/03 (2)
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇. Gunston Plaza Lorton SHS-SMHS TSC 3,472 4,833.75 06/30/03 (2)
Suite 260
(1) Relo to 3003 (2) Option to Extend (3) Relo from 2728 (4) Sumitomo Bank (5)
Increase Overdue (6) Info ▇▇▇ ▇▇▇▇▇ (7) staying open (8) relo to 1001 12th (9)
close 9/30
Schedule IV
Chief Place of Business and Chief Executive Office and
Office Where Records Concerning Receivables and
Assigned Agreements are Maintained:
All subsidiaries listed below have their
chief place of business, chief executive office, and records
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇.
Federal Tax Identification Numbers:
Employer
Name of Corporation Identification Number
Sierra Health-Care Options ▇▇-▇▇▇▇▇▇▇
Nevada Administrators, Inc. ▇▇-▇▇▇▇▇▇▇
Behavioral Healthcare Options, Inc. ▇▇-▇▇▇▇▇▇▇
Sierra Home Medical Products, Inc. ▇▇-▇▇▇▇▇▇▇
Family Healthcare Services ▇▇-▇▇▇▇▇▇▇
Family Home Hospice, Inc. ▇▇-▇▇▇▇▇▇▇
Sierra Medical Management, Inc. ▇▇-▇▇▇▇▇▇▇
Sierra Health Holdings, Inc. ▇▇-▇▇▇▇▇▇▇
Southwest Medical Associates, Inc. ▇▇-▇▇▇▇▇▇▇
Northern Nevada Health Network, Inc. ▇▇-▇▇▇▇▇▇▇
Intermed, Inc. ▇▇-▇▇▇▇▇▇▇
Mohave Valley Hospital, Inc. ▇▇-▇▇▇▇▇▇▇
Tolemac, Inc. ▇▇-▇▇▇▇▇▇▇
M.E.G.A., Inc. ▇▇-▇▇▇▇▇▇▇
CII Financial, Inc. ▇▇-▇▇▇▇▇▇▇
Southwest Realty, Inc. ▇▇-▇▇▇▇▇▇▇
Prime Holdings, Inc. ▇▇-▇▇▇▇▇▇▇
Schedule V
Trade Names, Corporate or Fictitious Names
Trade Names
See Schedule VI
Corporation Names
Behavioral Healthcare Options, Inc.
CII Financial, Inc.
Family Healthcare Services
Family Home Hospice, Inc.
Intermed, Inc.
M.E.G.A., Inc.
Mohave Valley Hospital, Inc.
Nevada Administrators, Inc.
Northern Nevada Health Network, Inc.
Prime Holdings, Inc.
Sierra Health Holdings, Inc.
Sierra Health-Care Options, Inc.
Sierra Home Medical Products, Inc.
Sierra Medical Management, Inc.
Southwest Medical Associates, Inc.
Southwest Realty, Inc.
Tolemac, Inc.
Fictitious Names
Company Doing Business As File Date County
Health Plan of Nevada, Inc. Southwest Vision 06/28/85 ▇▇▇▇▇
Southwest Medical Associates, Inc. Rancho Surgical Plaza 06/28/85 ▇▇▇▇▇
M.E.G.A., Inc. Silver State Medical Administrators 06/28/91 ▇▇▇▇▇
Prime Health, Inc. Med One Works 10/18/95 ▇▇▇▇▇
M.E.G.A., Inc. Patient Advocate 07/02/96 ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, M.D. Las Vegas Anesthesia Consultants 01/09/97 ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, M.D. Pacific Anesthesia Consultants 03/25/97 ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ CURB Associates1 10/23/97 ▇▇▇▇▇
▇▇▇▇▇▇ Health-Care Options, Inc. Sierra at Work 10/24/97 ▇▇▇▇▇
▇▇▇▇▇▇ Health-Care Options, Inc. Sierra at Work 11/04/97 ▇▇▇▇▇
Terminated
Nevada Administrators, Inc. Sierra at Work 11/04/97 ▇▇▇▇▇
Southwest Medical Associates, Inc. ▇▇▇▇▇▇ Medical Center 02/09/98 ▇▇▇▇▇
Southwest Medical Associates, Inc. Laughlin Medical Center 02/09/98 ▇▇▇▇▇
▇▇▇▇▇▇ Home Medical Products, Inc. THC of Nevada 02/09/98 ▇▇▇▇▇
▇▇▇▇▇▇ Home Medical Products, Inc. THC of Nevada2 08/20/98 Sacramento,
California
Sierra Home Medical Products, Inc. THC of Nevada3 09/14/98 ▇▇▇
Sierra Home Medical Products, Inc. THC of Nevada4 10/05/98 Mohave County,
Arizona
Tolemac,Inc. Mohave Medical Associates 10/08/98 Mohave County,
Arizona
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ CURB Associates 12/21/98 ▇▇▇▇▇
Terminated
Sierra Health-Care Options, Inc. CURB Associates 12/21/98 ▇▇▇▇▇
▇▇▇▇▇▇ Home Medical Products, Inc. THC of Nevada Pharmacy 03/10/99 ▇▇▇▇▇
Southwest Medical Associates, Inc. Laughlin Medical Center 06/22/99 ▇▇▇▇▇
Terminated5
Health Plan of Nevada, Inc. Southwest Vision 11/12/99 ▇▇▇▇▇
Terminated
Health Plan of Nevada, Inc. Southwest Vision Services 11/12/99 ▇▇▇▇▇
Mohave Valley Hospital ▇▇▇▇▇▇▇ Medical Plaza6 07/20/00 Mohave County,
Arizona
1A Termination of Fictitious Firm name was never filed after the Prime closing;
hence the late filing date.
2 Required pursuant to Section 17917 of the California Business & Professions
Code, SMHS was required to file Fictitious Statement in Sacramento County in
connection with its Needles, California business license and, because it has
not business location in California, we were also required to publish a
statement for 3 consecutive weeks in a newspaper of general circulation in
Sacramento County. IN ADDITION, THIS MUST BE RENEWED WITHIN FIVE (5) YEARS OF
FILING DATE.
3This filing required for the Pahrump business license.
4This filing required for the Kingman, AZ business license ~ THC works out of
its Bullhead City, AZ office.
5This dba was terminated because SMA sold Laughlin Medical Center to UMC. The
termination became effective as of the closing date of 03/31/99 at ▇▇▇▇▇
▇▇▇▇▇▇▇▇'▇ request.
6This filing made at the request of ▇▇▇▇▇ ▇▇▇▇▇.
Schedule VI
to Security Agreement
Copyrights, Trademarks and Patents
PATENTS
None
COPYRIGHTS
None
TRADEMARKS
▇▇▇▇ Appl. T or S Registered Renew Abnd. Reg. No Class
Date Date
Senior Dimensions 07/03/85 T 01/28/96 01/28/06 1,380,893 Unk
Sierra Health
Services, Inc. 03/22/85 T 05/13/86 05/13/06 1,393,502 34
Health Dimensions 03/11/85 T 02/24/87 Cxled. 1,430,511 36 & 42
SHS 03/22/85 T 03/10/87 03/10/07 1,432,169 35
Diamond Design 04/17/90 S 02/08/94 02/08/04 1,820,310 35, 36 & 42
Gemini 05/19/87 S 12/29/87 12/29/07 1,470,955 36
Gemini & Design 05/19/87 S 01/05/88 01/05/08 1,471,657 36
Sierra Health &
Life Ins. Co., Inc. 05/19/87 T 02/28/89 02/28/09 1,527,323 36
SHL & Design 05/19/87 T 02/09/88 Cxled. 1,476,187 36
SD 07/03/85 T 01/28/86 Cxled. 1,380,892 42
SD & Design 07/03/85 T 09/23/86 Cxled. 1,410,903 42
HD (Stylized) 03/22/85 Unk 09/23/86 Cxled. 1,410,851 36 & 42
SHS (Stylized) 03/22/85 Unk 03/10/87 Cxled. 1,432,170 35
1"T" for Trademark; "S" for Servicemark
Page 1
Schedule VI
To the Security Agreement (continued)
SHS Federal Registrations(R)
▇▇▇▇ Appl. T or S2 Registered Renew Abnd. Reg. No Class
Date Date
Behavioral Health- 35, 36, 41
Care Options, Inc. 08/27/91 T Abandoned X & 42
Southwest Medical
Associates, Inc. 03/13/92 T 02/23/93 02/23/03 1,754,358 42
Health Dimensions 03/13/92 T Abandoned X 42
HMO Texas 04/12/95 S 02/17/98 02/17/08 2,136,473 36 & 42
HMO Texas & Design 04/12/95 S 02/17/98 02/17/08 2,136,474 36 & 42
Just What the Patient
Ordered 04/12/95 S 02/24/98 02/24/08 2,139,367 36 & 42
Golden Choice 04/02/96 S App. Pending Serial No.
75/082/625 36 & 42
Reg. Pending
Texas Choice 12/29/98 S App. Pending Serial No.
Reg. Pending
Texas Health Choice 02/25/99 S App. Pending Serial No. 36 & 42
75/647,836
Reg. Pending
Texas Health Choice &
Design 02/01/00 S App. Pending Serial No. 36 & 42
75/907,095
Reg. Pending
Western Medical Serial No.
Consultants 05/04/99 S Abandoned X 75/698,573 36 & 42
02/02/00
1"T" for Trademark; "S" for Servicemark
Page 2
Schedule VI
To the Security Agreement (continued)
SHS State Trademarkssm
▇▇▇▇ State Appl. T or S1 Registered Renew Abnd. Reg. No Class
Date Date2
Sierra Health
Services, Inc. Colorado Unk S 11/15/85 11/15/05 0 951122493 Unk
Gemini The Dual
Choice Healthcare
Plan & Design Nevada Unk S 02/03/86 N/A X 20 Pg 21; 36
2021
Gemini The Dual
Choice Healthcare
Plan & Design
(Tradename) Nevada Unk T 02/03/86 N/A X 20 Pg 22; 102
2022
Gemini & Design Arizona 05/19/87 S 04/04/88 N/A X 26,203 Unk
Gemini California 05/19/87 S 09/30/87 N/A X 30,270 100
Gemini Missouri 07/20/87 S 10/30/87 N/A X S09,745 101
Gemini Kansas 07/20/87 S 11/23/87 N/A X Unk 2
Gemini Colorado 05/21/87 S 05/21/87 N/A X 33,218 101
Design Only Nevada 05/30/90 T 06/19/90 06/19/00 - 23 Pg 666; 42
(Diamond) 23666
1"T" for Trademark; "S" for Servicemark
2Nevada marks are no longer good for ten (10) years; effective 10/02/93, when
each ▇▇▇▇ is renewed, they are good only for a period of five (5) years.
Page 1
Schedule VI
To the Security Agreement (continued)
SHS State Trademarkssm
▇▇▇▇ State Appl. T or S Registered Renew Abnd. Reg. No Class
Date Date
Design Only 23 Pg 667; 0
(Diamond) Nevada Unk T 06/19/90 06/19/00 23667 42
Design Only 23 Pg 668;
(Diamond) Nevada Unk T 06/19/90 06/19/00 23668 42
Coordinated Care Nevada Unk S 06/19/90 N/A X
Med One Health Plan Nevada Unk S 10/30/90 10/30/00 ▇▇▇▇ at the SOS to
send us a copy
Northern Nevada ▇▇▇▇ at the SOS to
Health Network Nevada Unk S 12/27/90 12/27/00 send us a copy
Health Plan of Nevada Nevada 07/31//91 S 07/31/91 10/21/01 Vol. 17, Pg 307 Unk
Sierra Choice Nevada 03/25/94 S 04/01/94 04/01/04 27 Pg 388; 27388 102
Gemini: The Dual
Choice Healthcare
Plan Nevada Unk S N/A X
Nevada Administrators Nevada 07/19/99 S 08/17/99 08/17/04 None 102
One Generation to the
The Next Nevada 05/08/00 S 05/15/00 05/15/05 None 101
Schedule VII
Subsidiary Grantors
Sierra Health-Care Options, Inc., a Nevada corporation
Nevada Administrators, Inc., a Nevada corporation
Behavioral Healthcare Options, Inc., a Nevada corporation
Sierra Home Medical Products, Inc., a Nevada corporation
Family Healthcare Services, a Nevada corporation
Family Home Hospice, Inc., a Nevada corporation
Sierra Medical Management, Inc., a Nevada corporation
Sierra Health Holdings, Inc., a Nevada corporation
Southwest Medical Associates, Inc., a Nevada corporation
Northern Nevada Health Network, Inc., a Nevada corporation
Intermed, Inc., an Arizona corporation, a Nevada corporation
Mohave Valley Hospital, Inc., an Arizona corporation
Tolemac, Inc., an Arizona corporation
M.E.G.A., Inc., a Nevada corporation
CII Financial, Inc., a Nevada corporation
Southwest Realty, Inc., a Nevada corporation
Prime Holdings, Inc., a Nevada corporation
Schedule VIII
Existing Liens
[to follow]
Schedule VIII
Existing Liens*
Debtor Secured Party Collateral Description
Sierra Home Medical Originally Sabratek (10) 6060 Infusion Pumps
Products, Inc. (Prin DB Credit Corp assigned to
For Debtor THC of Michigan Heritage Bank
Nevada)
Sierra Home Medical Originally Sabratek (10) 6060 Infusion Pumps
Products, Inc. (Prin DB Credit Corp assigned to
For Debtor THC of Michigan Heritage Bank
Nevada)
Sierra Home Medical Originally Sabratek (10) 6060 Infusion Pumps
Products, Inc. (Prin DB Credit Corp assigned to
For Debtor THC of Michigan Heritage Bank
Nevada)
Sierra Health Services BCL Capital (1) Toshiba Copier System Model 1560
(Prin DB for Debtor (1) Toshiba Copier System Model 2460
Sierra Home Medical (1) Toshiba Controller Model SC-1
Products)
Southwest Medical General Electric Co. (1) CT HiSpeed Advantage 2.X System and all
Associates, Inc. additions, improvements, etc. thereto
Mohave Valley Hospital Copelco Capital Inc. (1) Demo MAC 6 Computerized
Electrocardiograph Inc.
(1) Siemens Siremobile 2U
fluoroscopic C-arm refurbished
in 1993 with [7 additional parts]
(1) Demo EPM-3000 Video Endoscopy Processor
(1) Demo PV-M2030/BS Demo 20" Color Monitor
(1) Demo EC-3801L Video Colonoscope
with water jet
(1) Demo EG-2901 Video Gastroscope
(1) AMSCO Eagle 2021 Gravity
Sterilizer with 20 KW Electric Steam Generator
Sierra Military Health Pitney ▇▇▇▇▇ Credit All equipment of whatever nature manufactured,
Services, Inc. Corporation sold or distributed by Pitney ▇▇▇▇▇ Credit Inc.,
Monarch Marketing Systems Inc., Pitney ▇▇▇▇▇
Credit Corp., Dictaphone Corp. and subject to
lease dated 12/21/98 between Debtor and
Secured Party and all proceeds, additions
thereto and replacements thereof. (says "not
subject to recordation tax-does not create a
security interest")
Southwest Realty (Prin Marvco Inc. (1) Gestetner #2301 Copier
DB for Debtor ▇▇▇▇▇▇▇▇, (1) Murata Fax
Sierra Health Services, Bank of America Nevada All of the Debtor's right, title and interest in
Inc. and to all personal property of every kind and
description,
whether
now
existing
or
later
acquired,
which
now,
or
which
at
any
later
time
may
be
attached
to,
erected
upon,
situated
in
or
upon,
forming
a
part
of,
appurtenant
to,
used
or
useful
in
the
construction
or
operation
of
or
in
connection
with,
or
arising
from
the
use
or
enjoyment
of
all
or
any
part
of,
or
from
any
lease
or
agreement
pertaining
to,
the
real
property
or
interests
in
it
located
in
the
County
of
▇▇▇▇▇,
State
of
Nevada,
as
more
particularly
described
in
Exhibit
A
attached
hereto
and
made
a
part
of
this
financing
statement
as
if
fully
set
forth
(the
"Land"),
including,
without
limitation:
Description
of
the
Land:
The
following
Land
situated
in
the
city
of
Las
Vegas,
County
of
▇▇▇▇▇,
State
of
Nevada:
Commencing
at
the
South
Quarter
Corner
of
Section
15
Township
20
South,
Range
60
East,
M.D.M.,
City
of
Las
Vegas,
▇▇▇▇▇
County,
Nevada,
as
shown
on
the
Plat
of
"Resubdivision
of
a
Portion
of
the
Las
Vegas
Technology
Center",
a
commercial
subdivision,
as
shown
in
Book
47,
Page
35
or
recorded
Plats
official
records,
▇▇▇▇▇
County,
Nevada;
Thence
North
12(degree)12'21"
East,
2752.56
Feet
to
the
centerline
intersection
of
Peak
Drive
and
Tenaya
Way;
Thence South 89(degree)51'34" East, 45.00 Feet to a
point on the east right-of-way on Tenaya Way;
Thence North 07(degree)10'13" East, 12.67 Feet
Along Said east right-of-way;
Thence Departing said right-of-way, south
89(degree)57'23" East, 298.29 Feet;
Thence North 84(degree)04'34", 191.14 feet
to the
true point of beginning;
Thence North 84(degree)04'34" East, 346.94 Feet;
Thence South 04(degree)00'00" West, 582.89 Feet;
Thence North 86(degree)00'00" West, 278.75 Feet;
Thence North 04(degree)00'00" East, 208.52 Feet;
Thence North 20(degree)34'57" West, 151.44 Feet;
Thence
North
04(degree)00'00"
East,
176.86
Feet
to
the
true
point
of
beginning.
(a) all buildings structures and improvements
located or later constructed on the land
(b) all existing and future appurtenances,
privileges, easements, mineral rights, etc.
(c) all existing and future leases, subleases, etc.
(d) all real property and improvements, described
or not, required for the beneficial enjoyment
of the land
(e) all goods, materials, supplies, chattels,
furniture, etc. nor or later attached or
placed on land
(f) all building materials, equipment, etc. used
for land improvements
(g) all right to payment of money and all value
arising from any and all existing and future
interest rate protection agreements
(h) all rights to the payment of money, accounts,
etc. which arise from or relate to
construction on the land or to any business
now or later to be conducted on it
(i)
all
proceeds,
including
all
claims
and
demands
for
them
of
the
voluntary
or
involuntary
conversion
of
any
of
the
land
etc.
(j) all books and records pertaining to any and
all of the property described above
(k)
all
proceeds
of,
additions
and
accretions
to,
substitutions
and
replacements
for,
and
changes
in
any
of
the
property
described
above.
Sierra Health Services, Norstan Financial Aspect Call Center Model 200-R telecommunications
Inc. Services Inc. system and all related equipment.
Sierra Health Services, Norstan Financial Refurbished 9751 Model 10 with AVT system and all
Inc. Services Inc. related equipment.
Sierra Health Services, Norstan Financial Siemens 9751 Model 50 telecommunication system and
Inc. Services Inc. all related equipment.
Sierra Health Services, Young Electric Sign Co. (1) double faced non-illuminated monument sign.
Inc.
Sierra Health Services, Sumitomo Bank Leasing Description of Land:
Inc. & Finance Inc. That portion of the Northwest Quarter (NW1/4)
of Section 21 Township 21 South, Range 61
East, M.D.B.&M., more particularly described
as parcel one (1) as shown by parcel map in
file 13, Page 40, recorded June 14, 1977 as
document No. 709873 of official records,
▇▇▇▇▇ County, Nevada.
Savings
and
excepting
therefrom
that
portion
of
the
hereinabove
described
property
conveyed
to
the
county
of
▇▇▇▇▇,
State
of
Nevada,
by
document
no.744760
in
book
785
of
Official
Records,
Recorded
September
8,
1977
in
the
office
of
the
county
recorder
of
▇▇▇▇▇
County,
Nevada.
(a) All buildings, structures, facilities,
landscaping and other improvements to the
land, etc.
(b) All additions, proceeds, substitutions,
replacements etc. on land
(c)
The
lease
of
the
land
between
Debtor
and
Secured
Party
dated
of
even
date
herewith
and
all
rights
of
Debtor
therein,
etc.
(d) Any and all moneys, goods, accounts,
chattel paper, general intangibles,
documents, etc. that the Secured Party is
authorized to receive.
(e)
All
unearned
premiums
under
insurance
policies,
all
proceeds
from
conversion
of
any
property
etc.
(f) Any process equipment, furniture, furnishings
or trade fixtures which are purchased or
constructed by Debtor
Sierra Health Services, BCL Capital (1) Toshiba Copier System Model 1560
Inc. (Prin DB for Debtor (1) Toshiba Copier System Model 2460
Sierra Home Medical (1) Toshiba Controller Model SC-1
Products)
Sierra Health Services, Norstan Financial Aspect Call Center Model 200R and related
Inc. Services Inc. equipment
Sierra Health Services, General Electric C-Arm Demo System per contract 509327 and related
Inc. (and Mohave Valley Company equipment.
Hospital & Medical
Center Inc.)
Sierra Health Services, Minolta Business (2?) Minolta D1520 Copiers
Inc. Systems (3) Minolta D1250 Copiers
(1) Minolta 1030 Copier
(1) Minolta 1031F Copier
*The descriptions of collateral contained in this Schedule VIII may be
abbreviated, and are subject to the actual descriptions as they appear in the
original financing statements.
