Document:

EXHIBIT 10.1

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                               SECURITY AGREEMENT

                                     among

                         VANGUARD HEALTH SYSTEMS, INC.

                            CERTAIN SUBSIDIARIES OF
                         VANGUARD HEALTH SYSTEMS, INC.

                                      and

                             BANK OF AMERICA, N.A.,
                              as COLLATERAL AGENT

                        --------------------------------

                           Dated as of July 30, 2001
                        --------------------------------

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                               TABLE OF CONTENTS
                               -----------------

                                                                           Page
                                                                           ----

ARTICLE I  SECURITY INTERESTS.................................................2

         1.1.  Grant of Security Interests....................................2
         1.2.  Power of Attorney..............................................3

ARTICLE II  GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS.................3

         2.1.  Necessary Filings..............................................3
         2.2.  No Liens.......................................................3
         2.3.  Other Financing Statements.....................................3
         2.4.  Chief Executive Office, Record Locations.......................4
         2.5.  Location of Inventory and Equipment............................4
         2.6.  Legal Names; Organizational Identification Number; Trade Names;
               Change of Name; etc............................................4
         2.7.  Jurisdiction and Type of Organization..........................5
         2.8.  Collateral in the Possession of a Bailee.......................5
         2.9.  Recourse.......................................................5

ARTICLE III  SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT RIGHTS;
               INSTRUMENTS; CHATTEL PAPER AND
               CERTAIN OTHER COLLATERAL.......................................6

         3.1.  Additional Representations and Warranties......................6
         3.2.  Maintenance of Records.........................................6
         3.3.  Direction to Account Debtors; Contracting Parties; etc.........6
         3.4.  Modification of Terms; etc.....................................7
         3.5.  Collection.....................................................7
         3.6.  Instruments....................................................7
         3.7.  Assignors Remain Liable Under Receivables......................8
         3.8.  Assignors Remain Liable Under Contracts........................8
         3.9.  Deposit Accounts...............................................8
         3.10. Letter-of-Credit Rights........................................9
         3.11. Commercial Tort Claims.........................................9

ARTICLE IV  SPECIAL PROVISIONS CONCERNING TRADEMARKS..........................9

         4.1.  Additional Representations and Warranties......................9
         4.2.  Licenses and Assignments......................................10
         4.3.  Infringements.................................................10
         4.4.  Preservation of Marks.........................................10
         4.5.  Maintenance of Registration...................................10
         4.6.  Future Registered Marks.......................................10

                                      (i)
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         4.7.  Remedies......................................................11

ARTICLE V  SPECIAL PROVISIONS CONCERNING
               PATENTS, COPYRIGHTS AND TRADE SECRETS.........................11

         5.1.  Additional Representations and Warranties.....................11
         5.2.  Licenses and Assignments......................................11
         5.3.  Infringements.................................................12
         5.4.  Maintenance of Patents or Copyright...........................12
         5.5.  Prosecution of Patent Applications............................12
         5.6.  Other Patents and Copyrights..................................12
         5.7.  Remedies......................................................12

ARTICLE VI  PROVISIONS CONCERNING ALL COLLATERAL.............................13

         6.1.  Protection of Collateral Agent's Security.....................13
         6.2.  Warehouse Receipts Non-negotiable.............................13
         6.3.  Further Actions...............................................13
         6.4.  Financing Statements..........................................13

ARTICLE VII  REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT.................14

         7.1.  Remedies; Obtaining the Collateral Upon Default...............14
         7.2.  Remedies; Disposition of the Collateral.......................15
         7.3.  Waiver of Claims..............................................16
         7.4.  Application of Proceeds.......................................17
         7.5.  Remedies Cumulative...........................................19
         7.6.  Discontinuance of Proceedings.................................19

ARTICLE VIII  INDEMNITY......................................................19

         8.1.  Indemnity.....................................................19
         8.2.  Indemnity Obligations Secured by Collateral; Survival.........20

ARTICLE IX  DEFINITIONS......................................................21

ARTICLE X  MISCELLANEOUS.....................................................26

         10.1.  Notices......................................................26
         10.2.  Waiver; Amendment............................................27
         10.3.  Obligations Absolute.........................................28
         10.4.  Successors and Assigns.......................................28
         10.5.  Headings Descriptive.........................................28
         10.6.  Governing Law................................................28
         10.7.  Assignor's Duties............................................28
         10.8.  Termination; Release.........................................28
         10.9.  Counterparts.................................................29
         10.10.  Severability................................................29
         10.11.  The Collateral Agent and the other Secured Creditors........30

                                     (ii)
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         10.12.  Benefit of Agreement........................................30
         10.13.  Additional Assignors........................................30

ANNEX A  Schedule of Chief Executive Offices and Other Record Locations
ANNEX B  Schedule of Inventory and Equipment Locations
ANNEX C  Schedule of Legal Names, Organizational Identification Numbers and
         Trade and Fictitious Names
ANNEX D  Schedule of Jurisdictions and Types of Organizations
ANNEX E  Schedule of Marks
ANNEX F  Schedule of Patents
ANNEX G  Schedule of Copyrights
ANNEX H  Form of Grant of Security Interest in United States Trademarks
ANNEX I  Form of Grant of Security Interest in United States Patents
ANNEX J  Form of Grant of Security Interest in United States Copyrights

                                     (iii)

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                               SECURITY AGREEMENT
                               ------------------

          SECURITY  AGREEMENT,  dated as of July 30, 2001,  made by each of the
undersigned  assignors (each an "Assignor" and,  together with any other entity
that  becomes an assignor  hereunder  pursuant  to Section  10.13  hereof,  the
"Assignors") in favor of Bank of America,  N.A., as Collateral  Agent (together
with any successor  Collateral Agent, the "Collateral  Agent"), for the benefit
of the  Secured  Creditors  (as defined  below).  Except as  otherwise  defined
herein,  all capitalized  terms used herein and defined in the Credit Agreement
(as defined below) shall be used herein as therein defined.

                              W I T N E S S E T H:
                              --------------------

          WHEREAS, Vanguard Health Systems, Inc. (the "Borrower"),  the lenders
from time to time party thereto (the "Lenders"), Banc of America Securities LLC
and Morgan  Stanley  Senior  Funding,  Inc.,  as Joint Lead  Arrangers and Book
Managers,  Bank of America,  N.A., as  Administrative  Agent (together with any
successor Administrative Agent, the "Administrative Agent"), and Morgan Stanley
Senior  Funding,  Inc.,  as  Syndication  Agent  have  entered  into  a  Credit
Agreement, dated as of July 30, 2001 (as amended, modified or supplemented from
time to time,  the "Credit  Agreement"),  providing for the making of Loans to,
and the  issuance  of Letters of Credit for the  account  of, the  Borrower  as
contemplated  therein (the Lenders,  each Issuing  Lender,  the  Administrative
Agent and the Collateral Agent are herein called the "Lenders Creditors");

          WHEREAS,  the  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"
and, together with the Lender Creditors, the "Secured Creditors");

          WHEREAS,  pursuant  to the  Subsidiaries  Guaranty,  each  Subsidiary
Guarantor  has jointly and severally  guaranteed  to the Secured  Creditors the
payment when due of all Guaranteed Obligations as described therein;

          WHEREAS,  it is a condition  precedent to the making of Loans to, and
the  issuance of Letters of Credit for the account of, the  Borrower  under the
Credit  Agreement  that each Assignor  shall have executed and delivered to the
Collateral Agent this Agreement; and

          WHEREAS,  each Assignor will obtain  benefits from the  incurrence of
Loans by,  and the  issuance  of  Letters  of Credit  for the  account  of, the
Borrower  under the Credit  Agreement  and the entering into by the Borrower of
Interest  Rate  Protection   Agreements  and  Other  Hedging   Agreements  and,
accordingly,  each  Assignor  desires to enter into this  Agreement in order to
satisfy the condition described in the preceding paragraph;

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          NOW,  THEREFORE,  in consideration  of the benefits  accruing to each
Assignor,  the receipt and sufficiency of which are hereby  acknowledged,  each
Assignor  hereby makes the  following  representations  and  warranties  to the
Collateral Agent for the benefit of the Secured  Creditors and hereby covenants
and agrees with the Collateral  Agent for the benefit of the Secured  Creditors
as follows:

                                   ARTICLE I

                               SECURITY INTERESTS

          1.1. Grant of Security Interests.  (a) As security for the prompt and
complete  payment  and  performance  when due of all of its  Obligations,  each
Assignor does hereby assign and transfer unto the  Collateral  Agent,  and does
hereby pledge and grant to the Collateral  Agent for the benefit of the Secured
Creditors,  a  continuing  security  interest  in all of the  right,  title and
interest of such Assignor in, to and under all personal and fixture property of
such Assignor of every kind and nature,  whether now existing or hereafter from
time to time acquired,  including,  without limitation, in, to and under all of
the  following,  whether now existing or hereafter  from time to time acquired:
(i) each and every Receivable,  (ii) all Contracts,  together with all Contract
Rights arising  thereunder,  (iii) all Inventory,  (iv) all Equipment,  (v) all
Marks,  together with the registrations and right to all renewals thereof,  and
the goodwill of the business of such Assignor symbolized by the Marks, (vi) all
Patents and  Copyrights,  (vii) all computer  programs of such Assignor and all
intellectual  property rights therein and all other proprietary  information of
such Assignor,  including,  but not limited to, Trade Secret Rights, (viii) all
software and all software licensing rights, all writings, plans, specifications
and  schematics,  all  engineering  drawings,   customer  lists,  goodwill  and
licenses, and all other recorded data of any kind or nature,  regardless of the
medium of  recording,  (ix) all other Goods,  General  Intangibles,  Investment
Property,  Permits,  Chattel Paper (whether tangible or electronic),  Documents
and Instruments, (x) all Letter of Credit Rights (whether or not the respective
letter of credit is evidenced by a writing),  (xi) all commercial  tort claims,
(xii) all cash, (xiii) the Cash Collateral Account and all monies,  securities,
instruments and other investments  deposited or required to be deposited in the
Cash Collateral Account,  (xiv) all other bank, demand,  deposit, time savings,
cash  management,  passbook,  certificates  of  deposit  and  similar  accounts
maintained by such Assignor and all monies,  securities,  instruments and other
investments  deposited  or required  to be  deposited  in any of the  foregoing
accounts, (xv) all Supporting Obligations,  and (xvi) all Proceeds and products
of  any  and  all  of the  foregoing  (all  of  the  above,  collectively,  the
"Collateral").

          (b)  The  security  interest  of  the  Collateral  Agent  under  this
Agreement  extends to all Collateral which any Assignor may acquire at any time
during the term of this Agreement.

          (c)  Notwithstanding  anything to the contrary in this Agreement,  in
the  event  that  any  Assignor  acquires  an item of  Collateral  at any  time
following  the date hereof,  such Assignor may elect (which  election  shall be
made by delivering  written notice  thereof to the Collateral  Agent) that such
Collateral  shall not be required to be pledged  pursuant to this  Agreement as
otherwise  required above in this Section 1.1 so long as the book value or fair
market  value (as  determined  in good  faith by the  Borrower),  whichever  is
greater,  thereof  is less

                                      -2-
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than  $1,000,000  (although in no event shall the aggregate  book value or fair
market  value (as  determined  in good  faith by the  Borrower),  whichever  is
greater,  of all assets excluded from the security  interests granted hereunder
provided in this clause (c), exceed $5,000,000).

          1.2. Power of Attorney. Each Assignor hereby constitutes and appoints
the Collateral Agent its true and lawful attorney, irrevocably, with full power
after the  occurrence of and during the  continuance of an Event of Default (in
the name of such  Assignor or  otherwise)  to act,  require,  demand,  receive,
compound and give acquaintance for any and all moneys and claims for moneys due
or to become due to such Assignor  under or arising out of the  Collateral,  to
endorse any checks or other  instruments or orders in connection  therewith and
to file any claims or take any action or institute  any  proceedings  which the
Collateral Agent may deem to be necessary or advisable to protect the interests
of the Secured  Creditors,  which  appointment  as attorney is coupled  with an
interest.

                                   ARTICLE II

               GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS

Each Assignor represents, warrants and covenants, which representations,
warranties and covenants shall survive execution and delivery of this
Agreement, as follows:

          2.1. Necessary Filings.  All filings,  registrations,  recordings and
other  actions  necessary or  appropriate  to create,  preserve and perfect the
security  interest  granted by such Assignor to the Collateral  Agent hereby in
respect of the  Collateral  have been  accomplished  and the security  interest
granted  to the  Collateral  Agent  pursuant  to this  Agreement  in and to the
Collateral creates a valid and, together with all such filings,  registrations,
recordings and other actions,  a perfected  security  interest therein prior to
the rights of all other  Persons  therein and subject to no other Liens  (other
than  Permitted  Liens)  and is  entitled  to all the  rights,  priorities  and
benefits  afforded  by the Uniform  Commercial  Code or other  relevant  law as
enacted in any relevant  jurisdiction to perfected security interests,  in each
case to the extent  that the  Collateral  consists  of the type of  property in
which a security interest may be perfected by possession or control (within the
meaning  of the UCC as in effect on the date  hereof in the State of New York),
by filing a financing statement under the Uniform Commercial Code as enacted in
any relevant jurisdiction or by a filing of a Grant of Security Interest in the
respective  form  attached  hereto in the United  States  Patent and  Trademark
Office or in the United States Copyright Office.

          2.2. No Liens. Such Assignor is, and as to Collateral  acquired by it
from time to time after the date hereof such Assignor will be, the owner of all
Collateral free from any Lien,  security interest,  encumbrance or other right,
title or interest of any Person (other than Permitted Liens), and such Assignor
shall  defend the  Collateral  against all claims and demands of all Persons at
any time claiming the same or any interest  therein  adverse to the  Collateral
Agent.

          2.3. Other Financing  Statements.  As of the date hereof, there is no
financing  statement (or similar statement or instrument of registration  under
the law of any  jurisdiction)  covering or  purporting to cover any interest of
any kind in the Collateral (other than financing

                                      -3-
<PAGE>

statements filed in respect of Permitted Liens), and so long as the Termination
Date has not occurred,  such Assignor will not execute or authorize to be filed
in  any  public  office  any  financing  statement  (or  similar  statement  or
instrument of  registration  under the law of any  jurisdiction)  or statements
relating to the Collateral, except financing statements filed or to be filed in
respect of and covering the security  interests granted hereby by such Assignor
or in connection with Permitted Liens.

          2.4. Chief Executive Office,  Record  Locations.  The chief executive
office of such  Assignor is located at the address  indicated on Annex A hereto
for such  Assignor.  Such  Assignor  will not move its chief  executive  office
except to such new location as such Assignor may  establish in accordance  with
the  last  sentence  of  this  Section  2.4.  The  originals  of all  documents
evidencing all  Receivables  and Contract  Rights of such Assignor and the only
original  books of account and records of such Assignor  relating  thereto are,
and will continue to be, kept at such chief executive office, at one or more of
the other  locations  set forth on Annex A hereto or at such new  locations  as
such  Assignor  may  establish  in  accordance  with the last  sentence of this
Section 2.4. All Receivables and Contract Rights of such Assignor are, and will
continue to be, maintained at, and controlled and directed (including,  without
limitation,  for  general  accounting  purposes)  from,  the  office  locations
described  above or such new location  established in accordance  with the last
sentence of this Section 2.4. No Assignor  shall  establish  new  locations for
such  offices  until (i) it shall have given to the  Collateral  Agent not less
than  15  days'  prior  written  notice  of its  intention  to do  so,  clearly
describing such new location and providing such other information in connection
therewith as the Collateral Agent may reasonably request, and (ii) with respect
to such new location, it shall have taken all action reasonably satisfactory to
the Collateral Agent to maintain the security  interest of the Collateral Agent
in the Collateral  intended to be granted  hereby at all times fully  perfected
and in full force and effect.

          2.5. Location of Inventory and Equipment. All Inventory and Equipment
held on the date  hereof by each  Assignor  is located at one of the  locations
shown on Annex B hereto  for such  Assignor.  To the extent  that any  Assignor
desires to establish a new location for Inventory and Equipment that is located
in Alabama,  Connecticut,  Florida or Mississippi, such Assignor only may do so
if (i) it shall have given to the Collateral Agent not less than 15 days' prior
written notice of its intention so to do, clearly  describing such new location
and providing such other information in connection  therewith as the Collateral
Agent may reasonably  request,  and (ii) with respect to such new location,  it
shall have taken all action reasonably  satisfactory to the Collateral Agent to
maintain  the  security  interest  of the  Collateral  Agent in the  Collateral
intended to be granted  hereby at all times fully  perfected  and in full force
and  effect;  provided,  however,  (x) from and  after  October  1,  2001,  the
provisions  of this  sentence  shall not be  applicable if such new location is
located in  Connecticut  and (y) from and after January 1, 2002, the provisions
of this  sentence  shall not be  applicable  if such new location is located in
Alabama, Florida or Mississippi.

          2.6. Legal Names; Organizational  Identification Number; Trade Names;
Change of Name;  etc. The legal name of each Assignor,  and the  organizational
identification  number (if any) of each  Assignor,  is listed on Annex C hereto
for such Assignor. No Assignor has or operates in any jurisdiction under, or in
the preceding five years has had or has operated in any jurisdiction under, any
trade  names,  fictitious  names or other names  except its legal name and

                                      -4-
<PAGE>

such other trade or  fictitious  names as are listed on Annex C hereto for such
Assignor.   No   Assignor   shall   change  its  legal   name,   organizational
identification  number (if any) or assume or operate in any jurisdiction  under
any trade,  fictitious  or other name  except  its legal  name,  organizational
identification  number  and those  trade  names in each case  listed on Annex C
hereto for such Assignor and those that may be established  in accordance  with
the  immediately  succeeding  sentence of this Section  2.6. No Assignor  shall
change  its legal  name or  organizational  identification  number or assume or
operate in any jurisdiction under any new trade, fictitious or other name until
(i) it shall have given to the  Collateral  Agent not less than 15 days'  prior
written notice of its intention so to do, clearly  describing such new name and
the jurisdictions in which such new name shall be used and providing such other
information  in connection  therewith as the  Collateral  Agent may  reasonably
request, and (ii) with respect to such new name, it shall have taken all action
reasonably  requested by the Collateral Agent to maintain the security interest
of the Collateral Agent in the Collateral  intended to be granted hereby at all
times fully perfected and in full force and effect. In addition,  to the extent
that any Assignor does not have an organizational  identification number on the
date hereof and later  obtains one,  such Assignor  shall  promptly  thereafter
notify the Collateral Agent of such  organizational  identification  number and
shall take all actions  reasonably  satisfactory to the Collateral Agent to the
extent  necessary to maintain the security  interest of the Collateral Agent in
the Collateral  intended to be granted hereby fully perfected and in full force
and effect.

          2.7.  Jurisdiction  and Type of  Organization.  The  jurisdiction  of
organization  of each Assignor,  and the type of organization of each Assignor,
is listed on Annex D hereto for such  Assignor.  No Assignor  shall  change its
jurisdiction of  organization  or its type of  organization  until (i) it shall
have given to the Collateral  Agent not less than 15 days' prior written notice
of intention so to do, clearly describing such new jurisdiction of organization
and/or type of organization and providing such other  information in connection
therewith as the Collateral Agent may reasonably  request and (ii) with respect
to such new jurisdiction of organization and/or type of organization,  it shall
have taken all actions reasonably requested by the Collateral Agent to maintain
the security interest of the Collateral Agent in the Collateral  intended to be
granted hereby at all times fully perfected and in full force and effect.

          2.8.  Collateral in the  Possession of a Bailee.  If any Inventory or
other  Goods  are at any time in the  possession  of a bailee,  the  respective
Assignor shall promptly  notify the Collateral  Agent thereof and, if requested
by the  Collateral  Agent,  shall use its  reasonable  best efforts to promptly
obtain an  acknowledgment  from such bailee,  in form and substance  reasonably
satisfactory to the Collateral Agent, that the bailee holds such Collateral for
the benefit of the Collateral  Agent and shall act upon the instructions of the
Collateral Agent, without the further consent of the respective  Assignor.  The
Collateral  Agent agrees with the Assignors that the Collateral Agent shall not
give any such  instructions  unless an Event of  Default  has  occurred  and is
continuing  or  would  occur  after  taking  into  account  any  action  by the
respective Assignor with respect to any such bailee.

          2.9.  Recourse.  This  Agreement  is made with full  recourse to each
Assignor  and  pursuant  to  and  upon  all  the  warranties,  representations,
covenants and agreements on the part of such Assignor  contained herein, in the
other Credit  Documents,  in the Interest Rate  Protection

                                      -5-
<PAGE>

Agreements or Other Hedging  Agreements  and otherwise in writing in connection
herewith or therewith.

                                  ARTICLE III

          SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT RIGHTS;
            INSTRUMENTS; CHATTEL PAPER AND CERTAIN OTHER COLLATERAL

          3.1. Additional  Representations and Warranties.  As of the time when
each  of its  Receivables  arises,  each  Assignor  shall  be  deemed  to  have
represented and warranted that each such  Receivable,  and all records,  papers
and  documents  relating  thereto (if any) are genuine and what they purport to
be, and that all papers and documents  (if any)  relating  thereto (i) will, to
the knowledge of such Assignor, represent the genuine, legal, valid and binding
obligation of the account debtor evidencing indebtedness unpaid and owed by the
respective  account debtor arising out of the  performance of labor or services
or the sale or lease and delivery of the merchandise  listed therein,  or both,
(ii)  will  be  the  only  original  writings  evidencing  and  embodying  such
obligation of the account  debtor named therein  (other than copies created for
general  accounting  purposes),  (iii) will, to the knowledge of such Assignor,
evidence  true and valid  obligations,  enforceable  in  accordance  with their
respective  terms,  and (iv)  will be in  compliance  and will  conform  in all
material  respects  with all  applicable  federal,  state  and  local  laws and
applicable laws of any relevant foreign jurisdiction.

          3.2. Maintenance of Records.  Each Assignor will keep and maintain at
its own cost and expense  accurate  records of its  Receivables  and Contracts,
including,  but not limited to, originals of all documentation  (including each
Contract) with respect thereto,  records of all payments received,  all credits
granted thereon, all merchandise returned and all other dealings therewith, and
such Assignor will make the same available on such  Assignor's  premises to the
Collateral  Agent for inspection,  at such Assignor's own cost and expense,  at
any and all  reasonable  times upon prior notice to such Assignor and otherwise
in accordance  with the Credit  Agreement.  Upon the  occurrence and during the
continuance of an Event of Default and at the request of the Collateral  Agent,
such Assignor shall, at its own cost and expense, deliver all tangible evidence
of its Receivables  and Contract Rights  (including,  without  limitation,  all
documents  evidencing  the  Receivables  and all  Contracts) and such books and
records  to the  Collateral  Agent or to its  representatives  (copies of which
evidence  and books and records may be  retained  by such  Assignor).  Upon the
occurrence  and  during  the  continuance  of an  Event of  Default  and if the
Collateral  Agent so directs,  such Assignor  shall legend,  in form and manner
satisfactory to the Collateral  Agent,  the  Receivables and the Contracts,  as
well as books,  records and documents  (if any) of such Assignor  evidencing or
pertaining to such  Receivables and Contracts with an appropriate  reference to
the fact  that  such  Receivables  and  Contracts  have  been  assigned  to the
Collateral Agent and that the Collateral Agent has a security interest therein.

          3.3. Direction to Account Debtors; Contracting Parties; etc. Upon the
occurrence and during the continuance of an Event of Default, if the Collateral
Agent so directs any Assignor,  such Assignor  agrees (x) to cause all payments
on account of the  Receivables  and  Contracts to be made  directly to the Cash
Collateral Account, (y) that the Collateral Agent may,

                                      -6-
<PAGE>

at its option,  directly  notify the obligors  with respect to any  Receivables
and/or under any Contracts to make payments with respect thereto as provided in
the  preceding  clause  (x),  and (z) that the  Collateral  Agent  may  enforce
collection of any such  Receivables  and  Contracts  and may adjust,  settle or
compromise  the amount of payment  thereof,  in the same manner and to the same
extent as such  Assignor.  Without  notice to or  assent by any  Assignor,  the
Collateral  Agent may, upon the  occurrence  and during the  continuance  of an
Event of Default, apply any or all amounts then in, or thereafter deposited in,
the Cash Collateral Account toward the payment of the Obligations in the manner
provided in Section 7.4 of this Agreement. The reasonable costs and expenses of
collection  (including  reasonable  attorneys'  fees),  whether  incurred by an
Assignor or the Collateral Agent, shall be borne by the relevant Assignor.  The
Collateral  Agent  shall  deliver  a copy of  each  notice  referred  to in the
preceding clause (y) to the relevant Assignor, provided that (x) the failure by
the  Collateral  Agent  to  so  notify  such  Assignor  shall  not  affect  the
effectiveness  of such  notice or the  other  rights  of the  Collateral  Agent
created by this  Section  3.3 and (y) no such  notice  shall be  required if an
Event of Default of the type described in Section 10.05 of the Credit Agreement
has occurred and is continuing.

          3.4.  Modification  of Terms;  etc.  Except in  accordance  with such
Assignor's  ordinary course of business and consistent with reasonable business
judgment, no Assignor shall rescind or cancel any indebtedness evidenced by any
Receivable or under any  Contract,  or modify any material term thereof or make
any material  adjustment with respect thereto,  or extend or renew the same, or
compromise  or settle any material  dispute,  claim,  suit or legal  proceeding
relating  thereto,  or sell any  Receivable or Contract,  or interest  therein,
without the prior written consent of the Collateral  Agent. No Assignor will do
anything to impair the rights of the  Collateral  Agent in the  Receivables  or
Contracts.

          3.5.  Collection.  Each Assignor  shall  endeavor in accordance  with
reasonable  business practices to cause to be collected from the account debtor
named in each of its Receivables or obligor under any Contract, as and when due
(including,  without limitation,  amounts which are delinquent, such amounts to
be  collected  in  accordance  with  generally   accepted   lawful   collection
procedures) any and all amounts owing under or on account of such Receivable or
Contract,  and apply  forthwith upon receipt thereof all such amounts as are so
collected to the outstanding balance of such Receivable or under such Contract.
Except as otherwise  directed by the Collateral  Agent after the occurrence and
during the  continuation of an Event of Default,  any Assignor may allow in the
ordinary  course  of  business  as  adjustments  to  amounts  owing  under  its
Receivables  and  Contracts (i) an extension or renewal of the time or times of
payment,  or  settlement  for less than the total  unpaid  balance,  which such
Assignor finds appropriate in accordance with reasonable  business judgment and
(ii) a refund or credit due as a result of returned or damaged  merchandise  or
improperly  performed  services or for other reasons which such Assignor  finds
appropriate in accordance with  reasonable  business  judgment.  The reasonable
costs and expenses (including, without limitation,  reasonable attorneys' fees)
of collection,  whether incurred by an Assignor or the Collateral Agent,  shall
be borne by the relevant Assignor.

          3.6. Instruments.  If any Assignor owns or acquires any Instrument in
excess of  $1,000,000  constituting  Collateral  (other  than  checks and other
payment instruments received and collected in the ordinary course of business),
such Assignor will within 10 Business Days

                                      -7-
<PAGE>

notify the Collateral  Agent thereof,  and upon request by the Collateral Agent
will promptly  deliver such  Instrument to the Collateral  Agent  appropriately
endorsed to the order of the Collateral Agent as further security hereunder.

          3.7.  Assignors Remain Liable Under  Receivables.  Anything herein to
the contrary  notwithstanding,  the Assignors shall remain liable under each of
the Receivables to observe and perform all of the conditions and obligations to
be observed and performed by it thereunder, all in accordance with the terms of
any agreement giving rise to such Receivables. Neither the Collateral Agent nor
any other Secured  Creditor  shall have any  obligation or liability  under any
Receivable  (or any agreement  giving rise thereto) by reason of or arising out
of this Agreement or the receipt by the  Collateral  Agent or any other Secured
Creditor of any payment relating to such Receivable  pursuant hereto, nor shall
the Collateral  Agent or any other Secured  Creditor be obligated in any manner
to perform  any of the  obligations  of any  Assignor  under or pursuant to any
Receivable (or any agreement giving rise thereto), to make any payment, to make
any inquiry as to the nature or the sufficiency of any payment received by them
or as to the  sufficiency of any  performance by any party under any Receivable
(or any agreement  giving rise thereto),  to present or file any claim, to take
any action to enforce any  performance or to collect the payment of any amounts
which may have been  assigned  to them or to which they may be  entitled at any
time or times.

          3.8. Assignors Remain Liable Under Contracts.  Anything herein to the
contrary  notwithstanding,  the Assignors shall remain liable under each of the
Contracts to observe and perform all of the  conditions  and  obligations to be
observed and performed by them thereunder,  all in accordance with and pursuant
to the terms and provisions of each Contract.  Neither the Collateral Agent nor
any other Secured  Creditor  shall have any  obligation or liability  under any
Contract  by reason of or arising out of this  Agreement  or the receipt by the
Collateral  Agent or any other Secured Creditor of any payment relating to such
contract  pursuant hereto,  nor shall the Collateral Agent or any other Secured
Creditor be  obligated in any manner to perform any of the  obligations  of any
Assignor  under or pursuant to any Contract,  to make any payment,  to make any
inquiry as to the nature or the  sufficiency  of any  performance  by any party
under any Contract, to present or file any claim, to take any action to enforce
any  performance  or to collect the payment of any amounts  which may have been
assigned to them or to which they may be entitled at any time or times.

          3.9. Deposit  Accounts.  For each deposit or similar account that any
Assignor at any time opens or maintains, such Assignor shall, at the Collateral
Agent's  request  at any time  when an  Event of  Default  then  exists  and is
continuing,  pursuant to a control  agreement in form and substance  reasonably
satisfactory  to the Collateral  Agent,  use its reasonable best efforts to (a)
cause the depositary bank to agree to comply at any time with instructions from
the Collateral Agent to such depositary bank directing the disposition of funds
from time to time credited to such deposit account,  without further consent of
the respective Assignor,  or (b) arrange for the Collateral Agent to become the
customer of the depositary bank with respect to the deposit  account,  with the
respective  Assignor being  permitted,  only with the consent of the Collateral
Agent, to exercise rights to withdraw funds from such deposit account.

                                      -8-
<PAGE>

          3.10.  Letter-of-Credit  Rights.  If any  Assignor  is at any  time a
beneficiary  under a letter of credit  with a stated  amount of  $1,000,000  or
more, such Assignor shall promptly notify the Collateral  Agent thereof and, at
the  request of the  Collateral  Agent,  such  Assignor  shall,  pursuant to an
agreement  in form and  substance  reasonably  satisfactory  to the  Collateral
Agent,  use its  reasonable  best efforts to (i) arrange for the issuer and any
confirmer  of  such  letter  of  credit  to  consent  to an  assignment  to the
Collateral  Agent of the proceeds of any drawing under such letter of credit or
(ii) arrange for the Collateral  Agent to become the transferee  beneficiary of
such letter of credit,  with the Collateral Agent agreeing,  in each case, that
the  proceeds  of any  drawing  under the letter of credit are to be applied as
provided in this Agreement  after the occurrence and during the  continuance of
an Event of Default.

          3.11.  Commercial Tort Claims. If any Assignor shall at any time hold
or acquire a commercial  tort claim with a value of  $1,000,000  or more,  such
Assignor shall promptly notify the Collateral Agent thereof in a writing signed
by such Assignor and  describing  the brief details  thereof and shall grant to
the  Collateral  Agent in such writing a security  interest  therein and in the
proceeds thereof, all upon the terms of this Agreement, with such writing to be
in form and substance reasonably satisfactory to the Collateral Agent.

          3.12. Further Actions. Each Assignor will, at its own expense,  make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such  vouchers,  invoices,  schedules,  confirmatory  assignments,
conveyances, financing statements, transfer endorsements, certificates, reports
and other assurances or instruments and take such further steps,  including any
and all actions as may be necessary or required under the Federal Assignment of
Claims  Act,  relating to its  Receivables,  Contracts,  Instruments  and other
property or rights  covered by the security  interest  hereby  granted,  as the
Collateral Agent may reasonably require.

                                   ARTICLE IV

                    SPECIAL PROVISIONS CONCERNING TRADEMARKS

          4.1.  Additional   Representations  and  Warranties.   Each  Assignor
represents  and  warrants  that it is the true and lawful owner of or otherwise
has the right to use the  registered  Marks  listed in Annex E hereto  for such
Assignor  and that said  listed  Marks  include  all  United  States  marks and
applications for United States marks registered in the United States Patent and
Trademark  Office  that  such  Assignor  owns or uses in  connection  with  its
business  as of the date  hereof.  Except as set forth in  Schedule  VII of the
Credit  Agreement,  each  Assignor  represents  and warrants  that it owns,  is
licensed to use or otherwise has the right to use, all Marks that it uses. Each
Assignor  further  warrants  that it has no  knowledge of any third party claim
received  by it that any  aspect of such  Assignor's  present  or  contemplated
business operations  infringes or will infringe any trademark,  service mark or
trade name of any other Person other than as could not, either  individually or
in the  aggregate,  reasonably be expected to have a Material  Adverse  Effect.
Each Assignor  represents  and warrants that it is the true and lawful owner of
or  otherwise  has  the  right  to use all  U.S.  trademark  registrations  and
applications  listed in Annex E hereto and that said  registrations  are valid,
subsisting, have not been canceled and that such Assignor is not

                                      -9-
<PAGE>

aware of any  third-party  claim that any of said  registrations  is invalid or
unenforceable,  and is not  aware  that  there is any  reason  that any of said
registrations is invalid or  unenforceable.  Each Assignor hereby grants to the
Collateral Agent an absolute power of attorney to sign, upon the occurrence and
during  the  continuance  of an Event of  Default,  any  document  which may be
required by the United States Patent and Trademark Office in order to effect an
absolute  assignment of all right,  title and interest in each Mark, and record
the same.

          4.2. Licenses and Assignments.  Except as otherwise  permitted by the
Secured Debt  Agreements,  each Assignor  hereby agrees not to divest itself of
any right under any Mark absent prior written approval of the Collateral Agent.

          4.3.  Infringements.  Each  Assignor  agrees,  promptly upon learning
thereof,  to notify the Collateral Agent in writing of the name and address of,
and to furnish such  pertinent  information  that may be available with respect
to, any party who such Assignor believes is infringing or diluting or otherwise
violating any of such  Assignor's  rights in and to any Mark in any manner that
could reasonably be expected to have a Material Adverse Effect, or with respect
to any party  claiming  that such  Assignor's  use of any Mark material to such
Assignor's business violates in any material respect any property right of that
party.  Each Assignor further agrees to prosecute in accordance with reasonable
business  practices  any Person  infringing  any Mark in any manner  that could
reasonably be expected to have a Material Adverse Effect.

          4.4.  Preservation  of Marks.  Each Assignor  agrees to use its Marks
which are material to such  Assignor's  business in interstate  commerce during
the  time in which  this  Agreement  is in  effect  and to take all such  other
actions as are  reasonably  necessary to preserve  such Marks as  trademarks or
service  marks under the laws of the United  States  (other than any such Marks
which are no longer used or useful in its business or operations).

          4.5.  Maintenance of  Registration.  Each Assignor  shall, at its own
expense,  diligently  process  all  documents  reasonably  required to maintain
trademark  registrations,  including  but not limited to  affidavits of use and
applications  for  renewals of  registration  in the United  States  Patent and
Trademark  Office for all of its material  registered  Marks, and shall pay all
fees and  disbursements in connection  therewith and shall not abandon any such
filing of  affidavit  of use or any such  application  of renewal  prior to the
exhaustion of all  administrative  and judicial  remedies without prior written
consent of the Collateral Agent (other than with respect to  registrations  and
applications deemed by such Assignor to be no longer prudent to pursue).

          4.6.  Future  Registered  Marks.  If any Mark  registration is issued
hereafter  to any  Assignor  as a result of any  application  now or  hereafter
pending before the United States Patent and Trademark Office, within 30 days of
receipt of such  certificate,  such Assignor  shall  deliver to the  Collateral
Agent a copy of such certificate,  and an assignment for security in such Mark,
to the  Collateral  Agent and at the expense of such  Assignor,  confirming the
assignment for security in such Mark to the  Collateral  Agent  hereunder,  the
form of such security to be  substantially  in the form of Annex H hereto or in
such other form as may be reasonably satisfactory to the Collateral Agent.

                                     -10-
<PAGE>

          4.7. Remedies.  If an Event of Default shall occur and be continuing,
the Collateral Agent may, by written notice to the relevant Assignor,  take any
or all of the  following  actions:  (i)  declare  the entire  right,  title and
interest  of such  Assignor  in and to each of the  Marks,  together  with  all
trademark rights and rights of protection to the same, vested in the Collateral
Agent for the benefit of the  Secured  Creditors,  in which event such  rights,
title and interest  shall  immediately  vest, in the  Collateral  Agent for the
benefit of the Secured Creditors, and the Collateral Agent shall be entitled to
exercise  the power of  attorney  referred to in Section 4.1 hereof to execute,
cause to be acknowledged and notarized and record said absolute assignment with
the applicable agency;  (ii) take and use or sell the Marks and the goodwill of
such Assignor's  business symbolized by the Marks and the right to carry on the
business and use the assets of such Assignor in connection with which the Marks
have been used; and (iii) direct such Assignor to refrain,  in which event such
Assignor shall refrain, from using the Marks in any manner whatsoever, directly
or indirectly,  and such Assignor shall execute such further documents that the
Collateral Agent may reasonably request to further confirm this and to transfer
ownership of the Marks and registrations and any pending trademark  application
in the United States Patent and Trademark Office to the Collateral Agent.

                                   ARTICLE V

                         SPECIAL PROVISIONS CONCERNING
                     PATENTS, COPYRIGHTS AND TRADE SECRETS

          5.1.  Additional   Representations  and  Warranties.   Each  Assignor
represents  and warrants  that it is the true and lawful owner of all rights in
(i) all United States trade secrets and  proprietary  information  necessary to
operate the  business of the Assignor  (the "Trade  Secret  Rights"),  (ii) the
Patents  listed  in Annex F hereto  for such  Assignor  and that  said  Patents
include  all the United  States  patents  and  applications  for United  States
patents that such Assignor owns as of the date hereof and (iii) the  Copyrights
listed in Annex G hereto for such Assignor and that said Copyrights  constitute
all the United States  copyrights  registered with the United States  Copyright
Office and applications to United States  copyrights that such Assignor owns as
of the date hereof.  Each Assignor further warrants that it has no knowledge of
any  third  party  claim  that  any  aspect  of  such  Assignor's   present  or
contemplated  business operations  infringes or will infringe any patent of any
other  Person  or  such  Assignor  has  misappropriated  any  trade  secret  or
proprietary  information which, either individually or in the aggregate,  could
reasonably be expected to have a Material Adverse Effect.  Each Assignor hereby
grants to the Collateral  Agent an absolute power of attorney to sign, upon the
occurrence  and during the  continuance  of any Event of Default,  any document
which may be required by the United States Patent and Trademark Office in order
to effect an  absolute  assignment  of all right,  title and  interest  in each
Patent, and to record the same.

          5.2. Licenses and Assignments.  Except as otherwise  permitted by the
Secured Debt  Agreements,  each Assignor  hereby agrees not to divest itself of
any right under any Patent or Copyright  absent prior  written  approval of the
Collateral Agent.

                                     -11-
<PAGE>

          5.3.  Infringements.  Each  Assignor  agrees,  promptly upon learning
thereof,  to  furnish  the  Collateral  Agent in  writing  with  all  pertinent
information  available  to such  Assignor  with  respect  to any  infringement,
contributing  infringement  or active  inducement  to infringe in any Patent or
Copyright  or to any  claim  that  the  practice  of any  Patent  or use of any
Copyright  violates any property right of a third party, or with respect to any
misappropriation  of any Trade Secret  Right or any claim that  practice of any
Trade Secret Right violates any property right of a third party,  in each case,
in any manner which, either individually or in the aggregate,  could reasonably
be expected to have a Material  Adverse Effect.  Each Assignor  further agrees,
absent  direction  of the  Collateral  Agent  to the  contrary,  to  diligently
prosecute,  in accordance  with its reasonable  business  judgment,  any Person
infringing  any Patent or  Copyright or any Person  misappropriating  any Trade
Secret  Right,   in  each  case  to  the  extent  that  such   infringement  or
misappropriation,  either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

          5.4.  Maintenance of Patents or Copyright.  At its own expense,  each
Assignor shall make timely payment of all post-issuance  fees required pursuant
to 35 U.S.C.  ss. 41 to  maintain  in force its  rights  under  each  Patent or
Copyright, absent prior written consent of the Collateral Agent (other than any
such Patents or  Copyrights  which are no longer used or useful in its business
or operations).

          5.5.  Prosecution of Patent  Applications.  At its own expense,  each
Assignor shall  diligently  prosecute all material  applications for (i) United
States Patents listed in Annex F hereto and (ii)  Copyrights  listed on Annex G
hereto,  in each  case  for  such  Assignor  and  shall  not  abandon  any such
application  prior to exhaustion of all  administrative  and judicial  remedies
(other than  applications  deemed by such  Assignor to be no longer  prudent to
pursue), absent written consent of the Collateral Agent.

          5.6. Other Patents and Copyrights.  Within 30 days of the acquisition
or  issuance  of a  United  States  Patent,  registration  of a  Copyright,  or
acquisition of a registered  Copyright,  or of filing of an  application  for a
United States Patent or Copyright,  the relevant  Assignor shall deliver to the
Collateral  Agent  a copy  of said  Copyright  or  Patent,  or  certificate  or
registration  of,  or  application  therefor,  as the  case  may  be,  with  an
assignment for security as to such Patent or Copyright,  as the case may be, to
the  Collateral  Agent and at the  expense  of such  Assignor,  confirming  the
assignment  for  security,  the  form of such  assignment  for  security  to be
substantially  in the form of Annex I or J hereto,  as appropriate,  or in such
other form as may be reasonably satisfactory to the Collateral Agent.

          5.7. Remedies.  If an Event of Default shall occur and be continuing,
the Collateral Agent may, by written notice to the relevant Assignor,  take any
or all of the  following  actions:  (i) declare the entire  right,  title,  and
interest of such Assignor in each of the Patents and  Copyrights  vested in the
Collateral Agent for the benefit of the Secured Creditors,  in which event such
right,  title, and interest shall  immediately vest in the Collateral Agent for
the benefit of the Secured Creditors,  in which case the Collateral Agent shall
be entitled to exercise the power of attorney referred to in Section 5.1 hereof
to execute,  cause to be acknowledged and notarized and to record said absolute
assignment  with the  applicable  agency;  (ii) take and  practice  or sell the
Patents and  Copyrights;  and (iii) direct such  Assignor to refrain,  in which
event such Assignor

                                     -12-
<PAGE>

shall refrain, from practicing the Patents and using the Copyrights directly or
indirectly,  and such  Assignor  shall  execute such  further  documents as the
Collateral Agent may reasonably request further to confirm this and to transfer
ownership of the Patents and Copyrights to the Collateral Agent for the benefit
of the Secured Creditors.

                                   ARTICLE VI

                      PROVISIONS CONCERNING ALL COLLATERAL

          6.1.  Protection of Collateral Agent's Security.  Except as otherwise
permitted  by the Secured Debt  Agreements,  each  Assignor  will do nothing to
impair the rights of the Collateral Agent in the Collateral. Each Assignor will
at all  times  keep  its  Inventory  and  Equipment  insured  in  favor  of the
Collateral  Agent,  at such  Assignor's  own  expense  to the extent and in the
manner provided in the Secured Debt Agreements.  Except to the extent otherwise
permitted to be retained by such Assignor or applied by such Assignor  pursuant
to the terms of the Secured Debt Agreements, the Collateral Agent shall, at the
time any proceeds of such insurance are  distributed to the Secured  Creditors,
apply such  proceeds in  accordance  with  Section 7.4  hereof.  Each  Assignor
assumes all liability and  responsibility  in  connection  with the  Collateral
acquired by it and the liability of such Assignor to pay the Obligations  shall
in no way be affected or diminished by reason of the fact that such  Collateral
may  be  lost,  destroyed,   stolen,  damaged  or  for  any  reason  whatsoever
unavailable to such Assignor.

          6.2. Warehouse Receipts  Non-negotiable.  To the extent  practicable,
each Assignor agrees that if any warehouse  receipt or receipt in the nature of
a  warehouse  receipt  is issued  with  respect to any of its  Inventory,  such
Assignor  shall  request that such  warehouse  receipt or receipt in the nature
thereof shall not be "negotiable" (as such term is used in Section 7-104 of the
Uniform  Commercial  Code as in effect in any  relevant  jurisdiction  or under
other relevant law).

          6.3. Further Actions. Each Assignor will, at its own expense and upon
the  reasonable  request  of the  Collateral  Agent,  make,  execute,  endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to time such
lists,  descriptions  and designations of its Collateral,  warehouse  receipts,
receipts in the nature of  warehouse  receipts,  bills of lading,  documents of
title, vouchers, invoices,  schedules,  confirmatory assignments,  conveyances,
financing statements,  transfer endorsements,  certificates,  reports and other
assurances  or  instruments  and  take  such  further  steps  relating  to  the
Collateral and other property or rights covered by the security interest hereby
granted,  which the Collateral Agent deems reasonably  appropriate or advisable
to perfect, preserve or protect its security interest in the Collateral.

          6.4.  Financing  Statements.  Each  Assignor  agrees to  execute  and
deliver to the Collateral Agent such financing  statements,  in form reasonably
acceptable to the Collateral  Agent,  as the Collateral  Agent may from time to
time  reasonably  request or as are  reasonably  necessary  or desirable in the
opinion of the Collateral Agent to establish and maintain a valid, enforceable,
perfected  security interest in the Collateral as provided herein and the other
rights and security  contemplated hereby. Each Assignor will pay any applicable
filing fees, recordation taxes and related expenses relating to its Collateral.
Each Assignor hereby authorizes the

                                     -13-
<PAGE>

Collateral Agent to file any such financing statements without the signature of
such  Assignor  where  permitted  by  law  (and  such  authorization   includes
describing the Collateral as "all assets" of such Assignor).

                                  ARTICLE VII

                REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT

          7.1. Remedies;  Obtaining the Collateral Upon Default.  Each Assignor
agrees that,  if any Event of Default  shall have  occurred and be  continuing,
then and in every such case,  the Collateral  Agent,  in addition to any rights
now or hereafter  existing under  applicable law and under the other provisions
of this Agreement,  shall have all rights as a secured  creditor under any UCC,
and such additional rights and remedies to which a secured creditor is entitled
under the laws in effect in all relevant jurisdictions and may:

          (i)  personally,   or  by  agents  or  attorneys,   immediately  take
     possession of the  Collateral  or any part thereof,  from such Assignor or
     any other  Person  who then has  possession  of any part  thereof  with or
     without notice or process of law, and for that purpose may enter upon such
     Assignor's  premises where any of the Collateral is located and remove the
     same  and use in  connection  with  such  removal  any  and all  services,
     supplies, aids and other facilities of such Assignor;

          (ii) instruct the obligor or obligors on any agreement, instrument or
     other obligation (including,  without limitation,  the Receivables and the
     Contracts) constituting the Collateral to make any payment required by the
     terms of such agreement,  instrument or other  obligation  directly to the
     Collateral Agent and may exercise any and all remedies of such Assignor in
     respect of such Collateral;

          (iii) instruct all depositary banks which have entered into a control
     agreement with the Collateral Agent to transfer all monies, securities and
     instruments held by such depositary bank to the Cash Collateral Account;

          (iv) sell, assign or otherwise liquidate any or all of the Collateral
     or any part thereof in accordance  with Section 7.2 hereof,  or direct the
     relevant Assignor to sell, assign or otherwise liquidate any or all of the
     Collateral or any part thereof,  and, in each case, take possession of the
     proceeds of any such sale or liquidation;

          (v)  take  possession  of the  Collateral  or any  part  thereof,  by
     directing  the  relevant  Assignor  in writing to deliver  the same to the
     Collateral  Agent at any  reasonable  place or  places  designated  by the
     Collateral Agent, in which event such Assignor shall at its own expense:

               (x) forthwith  cause the same to be moved to the place or places
          so  designated  by the  Collateral  Agent and there  delivered to the
          Collateral Agent;

                                     -14-
<PAGE>

               (y) store and keep any Collateral so delivered to the Collateral
          Agent  at  such  place  or  places  pending  further  action  by  the
          Collateral Agent as provided in Section 7.2 hereof; and

               (z) while the  Collateral  shall be so stored and kept,  provide
          such  security  and  maintenance  services  as  shall  be  reasonably
          necessary to protect the same and to preserve and maintain it in good
          condition; and

          (vi) license or sublicense,  whether on an exclusive or  nonexclusive
     basis,  any Marks,  Patents or Copyrights  included in the  Collateral for
     such term and on such  conditions  and in such  manner  as the  Collateral
     Agent shall in its sole judgment determine;

it  being  understood  that  each  Assignor's  obligation  so  to  deliver  the
Collateral  is of the essence of this  Agreement  and that,  accordingly,  upon
application  to a court of equity having  jurisdiction,  the  Collateral  Agent
shall be entitled to a decree requiring  specific  performance by such Assignor
of said obligation.  By accepting the benefits of this Agreement and each other
Security Document,  the Secured Creditors expressly  acknowledge and agree that
this  Agreement  and each other  Security  Document may be enforced only by the
action of the  Collateral  Agent acting upon the  instructions  of the Required
Secured  Creditors  and that no other  Secured  Creditor  shall  have any right
individually  to seek to enforce this Agreement or any other Security  Document
or to realize  upon the  security  to be granted  hereby or  thereby,  it being
understood  and agreed that such rights and  remedies  may be  exercised by the
Collateral  Agent for the  benefit of the Secured  Creditors  upon the terms of
this Agreement and the other Security Documents.

          7.2. Remedies; Disposition of the Collateral. If any Event of Default
shall have occurred and be continuing,  then any Collateral  repossessed by the
Collateral  Agent  under or  pursuant  to  Section  7.1  hereof  and any  other
Collateral  whether or not so repossessed by the Collateral Agent, may be sold,
assigned,  leased or otherwise disposed of under one or more contracts or as an
entirety,  and  without the  necessity  of  gathering  at the place of sale the
property to be sold, and in general in such manner,  at such time or times,  at
such  place  or  places  and on such  terms as the  Collateral  Agent  may,  in
compliance with any mandatory  requirements of applicable law,  determine to be
commercially reasonable. Any of the Collateral may be sold, leased or otherwise
disposed  of, in the  condition  in which the same  existed  when  taken by the
Collateral Agent or after any overhaul or repair at the expense of the relevant
Assignor  which  the  Collateral  Agent  shall  determine  to  be  commercially
reasonable. Any such disposition which shall be a private sale or other private
proceedings  permitted by such requirements shall be made upon not less than 10
days' prior  written  notice to the relevant  Assignor  specifying  the time at
which  such  disposition  is to be made and the  intended  sale  price or other
consideration  therefor, and shall be subject, for the 10 days after the giving
of such notice,  to the right of the  relevant  Assignor or any nominee of such
Assignor  to  acquire  the  Collateral  involved  at a price or for such  other
consideration at least equal to the intended sale price or other  consideration
so specified.  Any such  disposition  which shall be a public sale permitted by
such  requirements  shall be made  upon not less  than 10 days'  prior  written
notice to the relevant Assignor specifying the time and place of such sale and,
in the absence of applicable  requirements  of law,  shall be by public auction
(which may, at the Collateral  Agent's  option,  be subject to reserve),  after
publication  of notice of

                                     -15-
<PAGE>

such auction  (where  required by  applicable  law) not less than 10 days prior
thereto.  The Collateral Agent may, without notice or publication,  adjourn any
public or private sale or cause the same to be  adjourned  from time to time by
announcement  at the time and place  fixed  for the sale,  and such sale may be
made at any time or place to which the sale may be so adjourned.  To the extent
permitted by any such  requirement of law, the Collateral Agent may bid for and
become the purchaser of the Collateral or any item thereof, offered for sale in
accordance  with  this  Section  7.2  without  accountability  to the  relevant
Assignor.  If, under applicable law, the Collateral Agent shall be permitted to
make  disposition  of the  Collateral  within a period of time  which  does not
permit the giving of notice to the relevant Assignor as hereinabove  specified,
the Collateral Agent need give such Assignor only such notice of disposition as
shall be reasonably  practicable in view of such  applicable law. Each Assignor
agrees  to do or  cause to be done all such  other  acts and  things  as may be
reasonably  necessary  to make such sale or sales of all or any  portion of the
Collateral  valid and binding  and in  compliance  with any and all  applicable
laws, regulations, orders, writs, injunctions, decrees or awards of any and all
courts,  arbitrators or  governmental  instrumentalities,  domestic or foreign,
having  jurisdiction  over  any  such  sale or  sales,  all at such  Assignor's
expense.

          7.3.  Waiver  of  Claims.   Except  as  otherwise  provided  in  this
Agreement,  EACH ASSIGNOR HEREBY WAIVES,  TO THE EXTENT PERMITTED BY APPLICABLE
LAW,  NOTICE AND JUDICIAL  HEARING IN CONNECTION  WITH THE  COLLATERAL  AGENT'S
TAKING  POSSESSION  OR  THE  COLLATERAL  AGENT'S  DISPOSITION  OF  ANY  OF  THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY  PREJUDGMENT  REMEDY OR  REMEDIES,  and each  Assignor  hereby  further
waives, to the extent permitted by law:

          (i) all damages  occasioned by such taking of  possession  except any
     damages  which are the  direct  result  of the  Collateral  Agent's  gross
     negligence or willful  misconduct  (as  determined by a court of competent
     jurisdiction in a final and non-appealable decision);

          (ii) all other  requirements as to the time,  place and terms of sale
     or other  requirements  with respect to the  enforcement of the Collateral
     Agent's rights hereunder; and

          (iii)  all  rights  of  redemption,  appraisement,  valuation,  stay,
     extension or moratorium now or hereafter in force under any applicable law
     in order to  prevent or delay the  enforcement  of this  Agreement  or the
     absolute sale of the Collateral or any portion thereof, and each Assignor,
     for  itself and all who may claim  under it,  insofar as it or they now or
     hereafter lawfully may, hereby waives the benefit of all such laws.

Any sale of, or the grant of  options  to  purchase,  or any other  realization
upon, any Collateral shall operate to divest all right, title, interest,  claim
and demand,  either at law or in equity,  of the relevant  Assignor therein and
thereto,  and shall be a perpetual  bar both at law and in equity  against such
Assignor and against any and all Persons  claiming or  attempting  to claim the
Collateral  so sold,  optioned or realized  upon,  or any part  thereof,  from,
through and under such Assignor.

                                      -16
<PAGE>

          7.4.  Application  of  Proceeds.  (a)  All  moneys  collected  by the
Collateral  Agent (or, to the extent the Pledge Agreement or any other Security
Document  requires proceeds of collateral under such other Security Document to
be applied in accordance with the provisions of this Agreement,  the Pledgee or
Collateral  Agent under such other  Security  Document)  upon any sale or other
disposition of the  Collateral,  together with all other moneys received by the
Collateral Agent hereunder, shall be applied as follows.

          (i) first,  to the payment of all amounts owing the Collateral  Agent
     of the type  described  in  clauses  (iii) and (iv) of the  definition  of
     "Obligations";

          (ii) second,  to the extent  proceeds  remain  after the  application
     pursuant to the preceding  clause (i), an amount equal to the  outstanding
     Primary  Obligations shall be paid to the Secured Creditors as provided in
     Section  7.4(e)  hereof,  with each Secured  Creditor  receiving an amount
     equal to its  outstanding  Primary  Obligations  or, if the  proceeds  are
     insufficient  to pay in full all such  Primary  Obligations,  its Pro Rata
     Share of the amount remaining to be distributed;

          (iii) third,  to the extent  proceeds  remain  after the  application
     pursuant to the  preceding  clauses (i) and (ii),  an amount  equal to the
     outstanding  Secondary  Obligations shall be paid to the Secured Creditors
     as provided in Section 7.4(e) hereof, with each Secured Creditor receiving
     an  amount  equal to its  outstanding  Secondary  Obligations  or,  if the
     proceeds are  insufficient to pay in full all such Secondary  Obligations,
     its Pro Rata Share of the amount remaining to be distributed; and

          (iv) fourth,  to the extent  proceeds  remain  after the  application
     pursuant  to the  preceding  clauses  (i) through  (iii),  inclusive,  and
     following the  termination of this Agreement  pursuant to Section  10.8(a)
     hereof,  to the relevant  Assignor or to whomever may be lawfully entitled
     to receive such surplus.

          (b) For purposes of this Agreement,  (x) "Pro Rata Share" shall mean,
when  calculating a Secured  Creditor's  portion of any distribution or amount,
that amount  (expressed as a  percentage)  equal to a fraction the numerator of
which is the then unpaid amount of such Secured Creditor's Primary  Obligations
or Secondary  Obligations,  as the case may be, and the denominator of which is
the  then   outstanding   amount  of  all  Primary   Obligations  or  Secondary
Obligations,  as the case may be, (y) "Primary  Obligations"  shall mean (i) in
the case of the Credit Document  Obligations,  all principal of, premium,  fees
and  interest on, all Loans,  all Unpaid  Drawings and all Fees and (ii) in the
case of the Other  Obligations,  all  amounts  due  under  such  Interest  Rate
Protection Agreements or Other Hedging Agreements (other than indemnities, fees
(including,  without  limitation,  attorneys' fees) and similar obligations and
liabilities) and (z) "Secondary  Obligations"  shall mean all Obligations other
than Primary Obligations.

                  (c) When payments to Secured Creditors are based upon their
respective Pro Rata Shares, the amounts received by such Secured Creditors
hereunder shall be applied (for purposes of making determinations under this
Section 7.4 only) (i) first, to their Primary Obligations and (ii) second, to
their Secondary Obligations. If any payment to any Secured Creditor of its Pro
Rata Share of any distribution would result in overpayment to such Secured
Creditor, such

                                     -17-
<PAGE>

excess amount shall  instead be  distributed  in respect of the unpaid  Primary
Obligations or Secondary Obligations,  as the case may be, of the other Secured
Creditors,  with each Secured  Creditor whose Primary  Obligations or Secondary
Obligations,  as the case may be,  have not  been  paid in full to  receive  an
amount equal to such excess  amount  multiplied  by a fraction the numerator of
which is the unpaid Primary Obligations or Secondary  Obligations,  as the case
may be, of such  Secured  Creditor and the  denominator  of which is the unpaid
Primary  Obligations  or  Secondary  Obligations,  as the case  may be,  of all
Secured Creditors entitled to such distribution.

          (d)  Each  of the  Secured  Creditors,  by  their  acceptance  of the
benefits hereof and of the other Security  Documents,  agrees and  acknowledges
that if the  Lender  Creditors  are to  receive a  distribution  on  account of
undrawn  amounts  with  respect to Letters  of Credit  issued  under the Credit
Agreement (which shall only occur after all outstanding  Loans under the Credit
Agreement and Unpaid  Drawings  have been paid in full),  such amounts shall be
paid to the Administrative Agent under the Credit Agreement and held by it, for
the equal and ratable benefit of the Lender Creditors, as cash security for the
repayment of Obligations  owing to the Lender Creditors as such. If any amounts
are held as cash security pursuant to the immediately preceding sentence,  then
upon the  termination  of all  outstanding  Letters of Credit  under the Credit
Agreement, and after the application of all such cash security to the repayment
of all  Obligations  owing to the Lender  Creditors  after giving effect to the
termination  of all such Letters of Credit,  if there  remains any excess cash,
such  excess  cash  shall  be  returned  by  the  Administrative  Agent  to the
Collateral Agent for distribution in accordance with Section 7.4(a) hereof.

          (e) All payments  required to be made hereunder  shall be made (x) if
to the Lender  Creditors,  to the  Administrative  Agent for the account of the
Lender  Creditors  and (y) if to the Other  Creditors,  to the trustee,  paying
agent or other similar  representative (each a "Representative")  for the Other
Creditors  or, in the absence of such a  Representative,  directly to the Other
Creditors.

          (f) For purposes of applying  payments  received in  accordance  with
this Section 7.4, the  Collateral  Agent shall be entitled to rely upon (i) the
Administrative  Agent and (ii) the  Representative or, in the absence of such a
Representative,  upon  the  Other  Creditors  for a  determination  (which  the
Administrative  Agent,  each  Representative  and the Other Creditors agree (or
shall  agree)  to  provide  upon  request  of  the  Collateral  Agent)  of  the
outstanding  Primary  Obligations and Secondary  Obligations owed to the Lender
Creditors or the Other  Creditors,  as the case may be.  Unless it has received
written notice from a Lender Creditor or an Other Creditor to the contrary, the
Administrative  Agent  and  each  Representative,   in  furnishing  information
pursuant  to the  preceding  sentence,  and the  Collateral  Agent,  in  acting
hereunder,  shall be  entitled  to assume  that no  Secondary  Obligations  are
outstanding.  Unless  it has  written  notice  from an  Other  Creditor  to the
contrary,  the  Collateral  Agent,  in acting  hereunder,  shall be entitled to
assume that no Interest Rate Protection  Agreements or Other Hedging Agreements
are in existence.

          (g) This  Agreement  is made  with  full  recourse  to each  Assignor
(including,  without  limitation,  with  full  recourse  to all  assets of such
Assignor)  and  pursuant  to and  upon  all  the  warranties,  representations,
covenants and agreements on the part of such Assignor contained

                                     -18-
<PAGE>

herein,  in the other  Secured  Debt  Agreements  and  otherwise  in writing in
connection  herewith or therewith.  It is understood  that the Assignors  shall
remain jointly and severally liable to the extent of any deficiency between the
amount  of the  proceeds  of the  Collateral  and the  aggregate  amount of the
Obligations.

          7.5.  Remedies  Cumulative.  Each and every  right,  power and remedy
hereby specifically given to the Collateral Agent shall be in addition to every
other right, power and remedy  specifically given to the Collateral Agent under
this Agreement,  the other Secured Debt Agreements or now or hereafter existing
at law,  in equity or by  statute  and each and every  right,  power and remedy
whether  specifically  herein given or otherwise existing may be exercised from
time to time or simultaneously  and as often and in such order as may be deemed
expedient by the Collateral  Agent. All such rights,  powers and remedies shall
be  cumulative  and the exercise or the  beginning of the exercise of one shall
not be deemed a waiver of the right to exercise  any other or others.  No delay
or omission of the Collateral Agent in the exercise of any such right, power or
remedy and no renewal or extension of any of the  Obligations  shall impair any
such right, power or remedy or shall be construed to be a waiver of any Default
or Event of Default or an acquiescence  thereof.  No notice to or demand on any
Assignor in any case shall entitle it to any other or further  notice or demand
in similar or other  circumstances  or constitute a waiver of any of the rights
of the  Collateral  Agent to any other or further  action in any  circumstances
without notice or demand.  In the event that the  Collateral  Agent shall bring
any suit to  enforce  any of its  rights  hereunder  and shall be  entitled  to
judgment,  then in such  suit  the  Collateral  Agent  may  recover  reasonable
expenses,  including reasonable  attorneys' fees, and the amounts thereof shall
be included in such judgment.

          7.6.  Discontinuance  of  Proceedings.  In case the Collateral  Agent
shall have  instituted  any  proceeding  to enforce any right,  power or remedy
under  this  Agreement  by  foreclosure,  sale,  entry or  otherwise,  and such
proceeding  shall have been  discontinued  or abandoned for any reason or shall
have been determined  adversely to the Collateral Agent, then and in every such
case the relevant Assignor,  the Collateral Agent and each holder of any of the
Obligations  shall be restored to their former  positions and rights  hereunder
with respect to the Collateral  subject to the security  interest created under
this  Agreement,  and all rights,  remedies and powers of the Collateral  Agent
shall continue as if no such proceeding had been instituted.

                                  ARTICLE VIII

                                   INDEMNITY

          8.1.  Indemnity.  (a) Each Assignor  jointly and severally  agrees to
indemnify, reimburse and hold the Collateral Agent, each other Secured Creditor
and their  respective  successors,  assigns,  employees,  affiliates and agents
(hereinafter in this Section 8.1 referred to individually as "Indemnitee,"  and
collectively  as   "Indemnitees")   harmless  from  any  and  all  liabilities,
obligations,  damages,  injuries,  penalties,  claims, demands, actions, suits,
judgments  and  any  and  all  costs,  expenses  or  disbursements   (including
reasonable  attorneys' fees and expenses) (for the purposes of this Section 8.1
the foregoing are collectively called "expenses") of whatsoever kind and nature
imposed on,  asserted  against or incurred by any of the Indemnitees

                                     -19-
<PAGE>

in any way relating to or arising out of this Agreement, any other Secured Debt
Agreement or any other document executed in connection herewith or therewith or
in any  other  way  connected  with  the  administration  of  the  transactions
contemplated  hereby or thereby or the  enforcement  of any of the terms of, or
the preservation of any rights under any thereof,  or in any way relating to or
arising  out of  the  manufacture,  ownership,  ordering,  purchase,  delivery,
control, acceptance, lease, financing, possession,  operation, condition, sale,
return  or other  disposition,  or use of the  Collateral  (including,  without
limitation,  latent  or  other  defects,  whether  or  not  discoverable),  the
violation of the laws of any country, state or other governmental body or unit,
any tort (including,  without  limitation,  claims arising or imposed under the
doctrine of strict liability, or for or on account of injury to or the death of
any Person (including any Indemnitee),  or property damage), or contract claim;
provided  that no  Indemnitee  shall be  indemnified  pursuant to this  Section
8.1(a) for losses,  damages or  liabilities  to the extent  caused by the gross
negligence or willful  misconduct of such  Indemnitee (as determined by a court
of  competent  jurisdiction  in a  final  and  non-appealable  decision).  Each
Assignor  agrees that upon written notice by any Indemnitee of the assertion of
such a liability,  obligation,  damage, injury, penalty, claim, demand, action,
suit or judgment,  the relevant Assignor shall assume full  responsibility  for
the defense thereof. Each Indemnitee agrees to use its best efforts to promptly
notify the relevant Assignor of any such assertion of which such Indemnitee has
knowledge.

          (b) Without  limiting the application of Section 8.1(a) hereof,  each
Assignor  agrees,  jointly and  severally,  to pay or reimburse the  Collateral
Agent for any and all reasonable  fees,  costs and expenses of whatever kind or
nature incurred in connection with the creation,  preservation or protection of
the  Collateral  Agent's  Liens on, and security  interest in, the  Collateral,
including,  without  limitation,  all fees and  taxes  in  connection  with the
recording or filing of instruments and documents in public offices,  payment or
discharge of any taxes or Liens upon or in respect of the Collateral,  premiums
for  insurance  with respect to the  Collateral  and all other fees,  costs and
expenses  in  connection  with   protecting,   maintaining  or  preserving  the
Collateral  and  the  Collateral  Agent's  interest  therein,  whether  through
judicial proceedings or otherwise,  or in defending or prosecuting any actions,
suits or proceedings arising out of or relating to the Collateral.

          (c) Without limiting the application of Section 8.1(a) or (b) hereof,
each Assignor agrees,  jointly and severally,  to pay,  indemnify and hold each
Indemnitee  harmless  from and against any loss,  costs,  damages and  expenses
which such Indemnitee may suffer,  expend or incur in consequence of or growing
out of any  misrepresentation  by any  Assignor  in this  Agreement,  any other
Secured Debt Agreement or in any writing  contemplated  by or made or delivered
pursuant to or in  connection  with this  Agreement  or any other  Secured Debt
Agreement.

          (d) If and to the extent that the  obligations  of any Assignor under
this Section 8.1 are unenforceable for any reason,  such Assignor hereby agrees
to make the  maximum  contribution  to the  payment  and  satisfaction  of such
obligations which is permissible under applicable law.

          8.2.  Indemnity  Obligations  Secured by  Collateral;  Survival.  Any
amounts paid by any  Indemnitee  as to which such  Indemnitee  has the right to
reimbursement  shall  constitute

                                     -20-
<PAGE>

Obligations  secured  by the  Collateral.  The  indemnity  obligations  of each
Assignor contained in this Article VIII shall continue in full force and effect
notwithstanding   the  full  payment  of  all  of  the  other  Obligations  and
notwithstanding the full payment of all the Notes issued, and Loans made, under
the Credit Agreement, the termination of all Letters of Credit issued under the
Credit  Agreement,  the termination of all Interest Rate Protection  Agreements
and Other  Hedging  Agreements  entered into with the Other  Creditors  and the
payment of all other Obligations and notwithstanding the discharge thereof.

                                   ARTICLE IX

                                  DEFINITIONS

          The following  terms shall have the meanings herein  specified.  Such
definitions shall be equally applicable to the singular and plural forms of the
terms defined.

          "Administrative  Agent"  shall  have  the  meaning  provided  in  the
recitals of this Agreement.

          "Agreement"  shall mean this  Security  Agreement  as the same may be
modified,  supplemented  or amended  from time to time in  accordance  with its
terms.

          "Assignor"  shall have the meaning provided in the first paragraph of
this Agreement.

          "Borrower"  shall have the meaning  provided in the  recitals of this
Agreement.

          "Cash  Collateral  Account"  shall  mean  a cash  collateral  account
maintained  with, and in the sole dominion and control of, the Collateral Agent
for the benefit of the Secured Creditors.

          "Chattel  Paper"  shall  have the  meaning  provided  in the  Uniform
Commercial Code as in effect on the date hereof in the State of New York.

          "Class"  shall have the  meaning  provided  in  Section  10.2 of this
Agreement.

          "Collateral"  shall have the meaning  provided  in Section  1.1(a) of
this Agreement.

          "Collateral  Agent"  shall  have the  meaning  provided  in the first
paragraph of this Agreement.

          "Commercial  Tort  Claims"  shall have the  meaning  provided  in the
Uniform  Commercial  Code as in effect  on the date  hereof in the State of New
York.

          "Contract  Rights"  shall mean all rights of any Assignor  under each
Contract,  including, without limitation, (i) any and all rights to receive and
demand payments under any or all Contracts,  (ii) any and all rights to receive
and compel  performance  under any or all Contracts

                                     -21-
<PAGE>

and (iii) any and all other rights, interests and claims now existing or in the
future arising in connection with any or all Contracts.

          "Contracts"  shall mean all contracts between any Assignor and one or
more  additional  parties  (including,  without  limitation,  any Interest Rate
Protection Agreements,  Other Hedging Agreements,  licensing agreements and any
partnership agreements,  joint venture agreements and limited liability company
agreements),  but  excluding  any contract to the extent that (but only as long
as) the terms  thereof  prohibit  the  assignment  of, or  granting  a security
interest in, such contract (it being understood and agreed,  however,  (i) that
notwithstanding the foregoing, all rights to payment for money due or to become
due  pursuant to any such  excluded  contract  shall be subject to the security
interests  created by this  Agreement  and (ii) such  excluded  contract  shall
otherwise be subject to the security  interests  created by this Agreement upon
receiving  any  necessary   approvals  or  waivers  permitting  the  assignment
thereof).

          "Copyrights"  shall mean any  United  States  copyright  owned by any
Assignor,  including any registrations of any Copyrights,  in the United States
Copyright Office or any foreign  equivalent  office, as well as any application
for a  copyright  registration  now or  hereafter  made with the United  States
Copyright Office or any foreign equivalent office by any Assignor.

          "Credit Agreement" shall have the meaning provided in the recitals of
this Agreement.

          "Credit Document  Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article IX.

          "Default" shall mean any event which with notice or lapse of time, or
both, would constitute an Event of Default.

          "Documents" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.

          "Equipment"  shall mean any  "equipment,"  as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor and, in any event,  shall include,
but shall not be limited to, all machinery,  equipment,  furnishings,  fixtures
and vehicles now or hereafter  owned by any Assignor and any and all additions,
substitutions  and  replacements  of any of the  foregoing  and all  accessions
thereto,  wherever located, together with all attachments,  components,  parts,
equipment and accessories installed thereon or affixed thereto.

          "Event of  Default"  shall  mean any Event of Default  under,  and as
defined  in,  the  Credit  Agreement  and shall in any event  include,  without
limitation,  any payment default on any of the Obligations after the expiration
of any applicable grace period.

          "General  Intangibles" shall have the meaning provided in the Uniform
Commercial  Code as in effect on the date  hereof in the State of New York (and
shall include all payment  intangibles,  partnership  interests and all limited
liability company and membership

                                     -22-
<PAGE>

interests to the extent that same  constitutes a general  intangible under such
Uniform Commercial Code).

          "Goods"  shall have the meaning  provided  in the Uniform  Commercial
Code as in effect on the date hereof in the State of New York.

          "Indemnitee"  shall have the meaning  provided  in Section  8.1(a) of
this Agreement.

          "Instrument"   shall  have  the  meaning   provided  in  the  Uniform
Commercial Code as in effect on the date hereof in the State of New York.

          "Inventory"  shall mean  merchandise,  inventory  and goods,  and all
additions,  substitutions and replacements  thereof and all accessions thereto,
wherever located,  together with all goods,  supplies,  incidentals,  packaging
materials,   labels,   materials   and  any  other  items  used  or  usable  in
manufacturing,  processing,  packaging  or  shipping  same,  in all  stages  of
production from raw materials  through work in process to finished  goods,  and
all  products and  proceeds of whatever  sort and wherever  located any portion
thereof  which may be  returned,  rejected,  reclaimed  or  repossessed  by the
Collateral Agent from any Assignor's customers,  and shall specifically include
all  "inventory" as such term is defined in the Uniform  Commercial  Code as in
effect on the date hereof in the State of New York,  now or hereafter  owned by
any Assignor.

          "Investment  Property" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.

          "Lender Creditors" shall have the meaning provided in the recitals of
this Agreement.

          "Lenders"  shall have the meaning  provided  in the  recitals of this
Agreement.

          "Letter of Credit Rights" shall have the meaning provided in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York.

          "Liens" shall mean any security  interest,  mortgage,  pledge,  lien,
claim, charge, encumbrance,  title retention agreement,  lessor's interest in a
financing lease or analogous instrument, in, of, or on any Assignor's property.

          "Marks"  shall  mean all  right,  title  and  interest  in and to any
trademarks, service marks and trade names now held or hereafter acquired by any
Assignor, including any registration of any trademarks and service marks in the
United States Patent and Trademark  Office or in any equivalent  foreign office
and any trade dress  including  slogos and/or designs used by any Assignor,  but
excluding  any such right,  title and interest of an Assignor in and to same as
licensee pursuant to a contract which is expressly excluded from the definition
of "Contract" contained herein pursuant to the terms of such definition.

                                     -23-
<PAGE>

          "Material Adverse Effect" shall mean a material adverse effect on the
business,  property, assets, liabilities (actual or contingent),  operations or
condition  (financial or otherwise) of the Borrower and its Subsidiaries  taken
as a whole.

          "Obligations"  shall  mean (i) the full and prompt  payment  when due
(whether  at  the  stated  maturity,  by  acceleration  or  otherwise)  of  all
obligations,  liabilities  and  indebtedness  (including,  without  limitation,
principal,  premium,  interest,  reimbursement  obligations  under  Letters  of
Credit,  fees,  costs  and  indemnities  (including,  without  limitation,  all
interest that accrues after the  commencement of any case,  proceeding or other
action  relating  to the  bankruptcy,  insolvency,  reorganization  or  similar
proceeding  of  any  Assignor  at the  rate  provided  for  in  the  respective
documentation,  whether or not a claim for post-petition interest is allowed in
any such  proceeding))  of each Assignor to the Lender  Creditors,  whether now
existing or hereafter  incurred under,  arising out of, or in connection  with,
the Credit Agreement and the other Credit Documents to which such Assignor is a
party (including,  in the case of each Assignor that is a Subsidiary Guarantor,
all such  obligations,  liabilities and indebtedness of such Assignor under the
Subsidiaries  Guaranty) and the due performance and compliance by such Assignor
with all of the  terms,  conditions  and  agreements  contained  in the  Credit
Agreement and in such other Credit Documents (all such obligations, liabilities
and  indebtedness  under this clause (i),  except to the extent  consisting  of
obligations or indebtedness with respect to Interest Rate Protection Agreements
or Other  Hedging  Agreements,  being  herein  collectively  called the "Credit
Document  Obligations");  (ii) the full and prompt payment when due (whether at
the  stated  maturity,  by  acceleration  or  otherwise)  of  all  obligations,
liabilities and indebtedness (including,  without limitation, all interest that
accrues after the commencement of any case, proceeding or other action relating
to the  bankruptcy,  insolvency,  reorganization  or similar  proceeding of any
Assignor at the rate provided for in the respective  documentation,  whether or
not a claim for post-petition interest is allowed in any such proceeding) owing
by such Assignor to the Other  Creditors  under, or with respect to (including,
in the  case  of  each  Assignor  that  is a  Subsidiary  Guarantor,  all  such
obligations,   liabilities   and   indebtedness  of  such  Assignor  under  the
Subsidiaries  Guaranty),  each  Interest  Rate  Protection  Agreement  or Other
Hedging  Agreement,  whether such Interest Rate  Protection  Agreement or Other
Hedging  Agreement  is now in  existence  or  hereafter  arising,  and  the due
performance  and compliance by such Assignor with all of the terms,  conditions
and  agreements  contained  therein  (all  such  obligations,  liabilities  and
indebtedness described in this clause (ii) being herein collectively called the
"Other  Obligations");  (iii) any and all sums advanced by the Collateral Agent
in order to preserve the  Collateral  or preserve its security  interest in the
Collateral;  (iv)  in the  event  of  any  proceeding  for  the  collection  or
enforcement of any indebtedness,  obligations,  or liabilities of such Assignor
referred to in clauses (i) and (ii) above, after an Event of Default shall have
occurred and be  continuing,  the  reasonable  expenses of  retaking,  holding,
preparing for sale or lease,  selling or otherwise disposing of or realizing on
the  Collateral,  or of any  exercise  by the  Collateral  Agent of its  rights
hereunder,  together with reasonable  attorneys' fees and court costs;  and (v)
all amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement  under Section 8.1 of this Agreement;  it being  acknowledged and
agreed that the "Obligations"  shall include  extensions of credit of the types
described above,  whether outstanding on the date of this Agreement or extended
from time to time after the date of this Agreement.

                                     -24-
<PAGE>

          "Other  Creditors" shall have the meaning provided in the recitals of
this Agreement.

          "Other Obligations" shall have the meaning provided in the definition
of "Obligations" in this Article IX.

          "Patents"  shall  mean  any  patent  to  which  any  Assignor  now or
hereafter  has  right,   title  and  interest   therein,   and  any  divisions,
continuations  (including,  but not  limited  to,  continuations-in-parts)  and
improvements  thereof, as well as any application for a patent now or hereafter
made by any  Assignor,  but excluding any patent to which any such Assignor has
right, title and interest as licensee pursuant to a contract which is expressly
excluded from the  definition of "Contract"  contained  herein  pursuant to the
terms of such definition.

          "Permits"  shall mean, to the extent  permitted to be assigned by the
terms thereof or by  applicable  law, all licenses,  permits,  rights,  orders,
variances,  franchises or authorizations of or from any governmental  authority
or agency.

          "Primary  Obligations"  shall have the  meaning  provided  in Section
7.4(b) of this Agreement.

          "Pro Rata Share" shall have the meaning provided in Section 7.4(b) of
this Agreement.

          "Proceeds" shall have the meaning provided in the Uniform  Commercial
Code as in effect in the  State of New York on the date  hereof or under  other
relevant law and, in any event,  shall include,  but not be limited to, (i) any
and all proceeds of any insurance,  indemnity,  warranty or guaranty payable to
the  Collateral  Agent or any Assignor from time to time with respect to any of
the Collateral,  (ii) any and all payments (in any form whatsoever) made or due
and  payable  to any  Assignor  from  time  to  time  in  connection  with  any
requisition,  confiscation,  condemnation,  seizure or forfeiture of all or any
part of the  Collateral  by any  governmental  authority  (or any person acting
under color of governmental authority) and (iii) any and all other amounts from
time to time paid or payable under or in connection with any of the Collateral.

          "Receivables" shall mean any "account" as such term is defined in the
Uniform  Commercial  Code as in effect  on the date  hereof in the State of New
York, now or hereafter owned by any Assignor and, in any event,  shall include,
but shall not be  limited  to,  all of such  Assignor's  rights to  health-care
insurance  receivables  and to  payment  for goods  sold or leased or  services
performed  by such  Assignor,  whether now in existence or arising from time to
time hereafter,  including, without limitation, rights evidenced by an account,
note,  contract,  security  agreement,  chattel  paper,  or other  evidence  of
indebtedness  or security,  together with (a) all security  pledged,  assigned,
hypothecated  or granted to or held by such  Assignor to secure the  foregoing,
(b) all of any Assignor's  right,  title and interest in and to any goods,  the
sale  of  which  gave  rise  thereto,  (c)  all  guarantees,  endorsements  and
indemnifications  on, or of, any of the  foregoing,  (d) all powers of attorney
for the execution of any evidence of  indebtedness or security or other writing
in connection  therewith,  (e) all books,  records,  ledger cards, and invoices
relating  thereto,  (f) all instruments in connection  therewith and amendments
thereto,  notices to other

                                     -25-
<PAGE>

creditors  or  secured  parties,   and   certificates   from  filing  or  other
registration  officers,  (g) all  credit  information,  reports  and  memoranda
relating  thereto  and  (h)  all  other  writings  related  in  any  way to the
foregoing.

          "Representative" shall have the meaning provided in Section 7.4(e) of
this Agreement.

          "Required  Secured  Creditors"  shall  mean (i) at any time  when any
Credit Document Obligations are outstanding or any Commitments under the Credit
Agreement  exist,  the Required  Lenders (or, to the extent provided in Section
13.12 of the Credit Agreement,  each of the Lenders) and (ii) at any time after
all of the  Credit  Document  Obligations  have  been  paid  in  full  and  all
Commitments  under the Credit  Agreement  have been  terminated  and no further
Commitments may be provided thereunder,  the holders of a majority of the Other
Obligations.

          "Requisite Creditors" shall have the meaning provided in Section 10.2
of this Agreement.

          "Secondary  Obligations"  shall have the meaning  provided in Section
7.4(b) of this Agreement.

          "Secured  Creditors"  shall have the meaning provided in the recitals
of this Agreement.

          "Secured Debt Agreements" shall mean and include this Agreement,  the
other Credit  Documents and the Interest Rate  Protection  Agreements and Other
Hedging Agreements entered into with an Other Creditor.

          "Supporting  Obligations"  shall  have the  meaning  provided  in the
Uniform  Commercial  Code as in effect  on the date  hereof in the State of New
York.

          "Termination Date" shall have the meaning provided in Section 10.8(a)
of this Agreement.

          "Trade Secret Rights" shall have the meaning  provided in Section 5.1
of this Agreement.

          "UCC" shall mean the Uniform  Commercial  Code as in effect from time
to time in the relevant jurisdiction.

                                   ARTICLE X

                                 MISCELLANEOUS

          10.1.  Notices.  Except as otherwise  specified herein,  all notices,
requests,  demands or other  communications  to or upon the respective  parties
hereto shall be sent or delivered by mail, telegraph, telex, telecopy, cable or
courier  service and all such notices and  communications  shall,  when mailed,
telegraphed,  telexed,  telecopied,  or cabled or sent by

                                     -26-
<PAGE>

courier,  be effective when deposited in the mails,  delivered to the telegraph
company,  cable  company or overnight  courier,  as the case may be, or sent by
telex or telecopier,  except that notices and  communications to the Collateral
Agent or any Assignor  shall not be effective  until received by the Collateral
Agent  or  such   Assignor,   as  the  case  may  be.  All  notices  and  other
communications shall be in writing and addressed as follows:

          (a)      if to any Assignor, c/o:

                   Vanguard Health Systems, Inc.
                   20 Burton Hills Boulevard
                   Suite 100
                   Nashville, TN  37215
                   Attention: Joseph D. Moore
                   Telephone No.:  (615) 665-6000
                   Telecopier No.:  (615) 665-6099

          (b)      if to the Collateral Agent, at:

                   414 Union Street, 7th Floor
                   Nashville, TN  37239
                   Attention:  Kevin Wagley
                   Telephone No.:  (615) 749-3802
                   Telecopier No.:  (615) 749-4640

          (c) if to any Lender  Creditor  other than the Collateral  Agent,  at
     such address as such Lender  Creditor  shall have  specified in the Credit
     Agreement;

          (d) if to any Other Creditor,  at such address as such Other Creditor
     shall have specified in writing to each Assignor and the Collateral Agent;

or at such other  address or addressed to such other  individual  as shall have
been furnished in writing by any Person  described  above to the party required
to give notice hereunder.

          10.2.  Waiver;  Amendment.  Except as provided  in Sections  10.8 and
10.13,  none of the terms and  conditions  of this  Agreement  may be  changed,
waived,  modified  or varied in any manner  whatsoever  unless in writing  duly
signed by each Assignor  directly  affected  thereby and the  Collateral  Agent
(with  the  written  consent  of the  Required  Secured  Creditors);  provided,
however, that any change, waiver, modification or variance affecting the rights
and  benefits  of a single  Class of  Secured  Creditors  (and not all  Secured
Creditors in a like or similar  manner) also shall require the written  consent
of the  Requisite  Creditors of such  affected  Class.  For the purpose of this
Agreement,  the term "Class" shall mean each class of Secured Creditors,  i.e.,
whether (x) the Lender Creditors as holders of the Credit Document  Obligations
or (y) the Other  Creditors  as the holders of the Other  Obligations.  For the
purpose of this Agreement,  the term  "Requisite  Creditors" of any Class shall
mean each of (x) with respect to the Credit Document Obligations,  the Required
Lenders (or, to the extent  provided in Section 13.12 of the Credit

                                     -27-
<PAGE>

Agreement, each of the Lenders), and (y) with respect to the Other Obligations,
the holders of at least a majority of all Other  Obligations  outstanding  from
time to time.

          10.3.   Obligations  Absolute.   The  obligations  of  each  Assignor
hereunder  shall remain in full force and effect  without  regard to, and shall
not  be  impaired   by,  (a)  any   bankruptcy,   insolvency,   reorganization,
arrangement,  readjustment,  composition,  liquidation  or  the  like  of  such
Assignor;  (b) any  exercise  or  non-exercise,  or any  waiver  of, any right,
remedy,  power or privilege  under or in respect of this Agreement or any other
Secured Debt Agreement;  or (c) any amendment to or modification of any Secured
Debt Agreement or any security for any of the Obligations;  whether or not such
Assignor shall have notice or knowledge of any of the foregoing.

          10.4.  Successors and Assigns.  This Agreement  shall be binding upon
each Assignor and its successors  and assigns  (although no Assignor may assign
its rights and obligations  hereunder  except in accordance with the provisions
of  the  Secured  Debt  Agreements)  and  shall  inure  to the  benefit  of the
Collateral  Agent  and  the  other  Secured   Creditors  and  their  respective
successors  and  assigns.  All  agreements,  statements,   representations  and
warranties  made  by  each  Assignor  herein  or in any  certificate  or  other
instrument  delivered by such  Assignor or on its behalf  under this  Agreement
shall be considered to have been relied upon by the Secured Creditors and shall
survive the execution and delivery of this Agreement and the other Secured Debt
Agreements  regardless of any investigation made by the Secured Creditors or on
their behalf.

          10.5. Headings  Descriptive.  The headings of the several sections of
this  Agreement  are  inserted  for  convenience  only and shall not in any way
affect the meaning or construction of any provision of this Agreement.

          10.6. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES  HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK.

          10.7.  Assignor's  Duties.  It is expressly  agreed,  anything herein
contained  to the contrary  notwithstanding,  that each  Assignor  shall remain
liable to perform all of the obligations, if any, assumed by it with respect to
the  Collateral  and the  Collateral  Agent shall not have any  obligations  or
liabilities  with respect to any Collateral by reason of or arising out of this
Agreement,  nor shall the  Collateral  Agent be  required or  obligated  in any
manner to perform or fulfill any of the  obligations  of any Assignor  under or
with respect to any Collateral.

          10.8.  Termination;  Release.  (a) After the  Termination  Date, this
Agreement  shall  terminate  (provided  that all  indemnities  set forth herein
including,  without  limitation,  in Section  8.1  hereof  shall  survive  such
termination)  and the  Collateral  Agent,  at the  request  and  expense of the
respective  Assignor,  will  promptly  execute and  deliver to such  Assignor a
proper instrument or instruments (including Uniform Commercial Code termination
statements on form UCC-3)  acknowledging  the  satisfaction  and termination of
this  Agreement,  and will duly assign,  transfer and deliver to such  Assignor
(without  recourse  and without any  representation  or  warranty)  such of the
Collateral as may be in the possession of the  Collateral  Agent and as has

                                     -28-
<PAGE>

not  theretofore  been sold or otherwise  applied or released  pursuant to this
Agreement.  As used in this Agreement,  "Termination  Date" shall mean the date
upon which the Total  Commitment under the Credit Agreement has been terminated
and all  Interest  Rate  Protection  Agreements  and Other  Hedging  Agreements
entered into with any Other  Creditor have been  terminated,  no Note under the
Credit  Agreement is outstanding  and all Loans  thereunder have been repaid in
full,  all  Letters  of Credit  issued  under the  Credit  Agreement  have been
terminated and all Obligations  then due and payable have been paid in full and
no further  Incremental  Term Loan  Commitments  may be  requested  or provided
pursuant to the terms of the Credit Agreement.

          (b) In the event that any part of the Collateral is sold, transferred
or otherwise disposed of (other than to the Borrower or a Subsidiary Guarantor)
in  accordance  with the Credit  Agreement  or is otherwise  released  with the
consent  of the  Required  Secured  Creditors  and the  proceeds  of such sale,
transfer or other disposition,  or from such release, are applied in accordance
with the provisions of the Credit  Agreement,  to the extent  required to be so
applied,  such  Collateral will be sold,  transferred or otherwise  disposed of
free and clear of the Liens created by this Agreement and the Collateral Agent,
at the request and expense of the  relevant  Assignor,  will duly and  promptly
assign, transfer and deliver to such Assignor (without recourse and without any
representation  or warranty)  such of the  Collateral  as is then being (or has
been) so sold, transferred or otherwise disposed of, or released, and as may be
in the possession of the Collateral Agent and has not theretofore been released
pursuant to this  Agreement.  Furthermore,  upon the release of any  Subsidiary
Guarantor  from the  Subsidiaries  Guaranty in accordance  with the  provisions
thereof,  such  Assignor  (and the  Collateral  at such  time  assigned  by the
respective Assignor pursuant hereto) shall be released from this Agreement.

          (c) At any time that an Assignor  desires that the  Collateral  Agent
take any action to  acknowledge  or give  effect to any  release of  Collateral
pursuant to the foregoing  Section  10.8(a) or (b), such Assignor shall deliver
to the  Collateral  Agent a  certificate  signed  by a senior  officer  of such
Assignor  stating that the release of the  respective  Collateral  is permitted
pursuant to such  Section  10.8(a) or (b). At any time that the Borrower or the
respective  Assignor  desires that a Subsidiary of the Borrower  which has been
released from the  Subsidiaries  Guaranty be released  hereunder as provided in
the last sentence of Section 10.8(b),  it shall deliver to the Collateral Agent
a certificate  signed by a principal  executive officer of the Borrower and the
respective  Assignor  stating that the release of the respective  Assignor (and
its  Collateral)  is  permitted   pursuant  to  such  Section  10.8(b).

          10.9.  Counterparts.  This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original,  but all of which
shall together  constitute one and the same  instrument.  A set of counterparts
executed by all the parties  hereto shall be lodged with each  Assignor and the
Collateral Agent.

          10.10.  Severability.  Any  provision  of  this  Agreement  which  is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such  prohibition or  unenforceability  without
invalidating  the remaining  provisions  hereof,  and any such  prohibition  or
unenforceability   in  any   jurisdiction   shall  not   invalidate  or  render
unenforceable such provision in any other jurisdiction.

                                     -29-
<PAGE>

          10.11.  The  Collateral  Agent and the other Secured  Creditors.  The
Collateral  Agent will hold in accordance  with this Agreement all items of the
Collateral  at  any  time  received  under  this  Agreement.  It  is  expressly
understood and agreed that the obligations of the Collateral Agent as holder of
the  Collateral  and  interests  therein  and with  respect to the  disposition
thereof, and otherwise under this Agreement, are only those expressly set forth
in this  Agreement and in Section 12 of the Credit  Agreement.  The  Collateral
Agent shall act hereunder on the terms and  conditions  set forth herein and in
Section 12 of the Credit Agreement.

          10.12. Benefit of Agreement. This Agreement shall be binding upon the
parties hereto and their  respective  successors and assigns and shall inure to
the  benefit  of and be  enforceable  by each  of the  parties  hereto  and its
successors and assigns.

          10.13.  Additional  Assignors.  It is understood  and agreed that any
Subsidiary  Guarantor  that  desires  to become an  Assignor  hereunder,  or is
required  to execute a  counterpart  of this  Agreement  after the date  hereof
pursuant  to the  requirements  of the  Credit  Agreement  or any other  Credit
Document,  shall become an Assignor hereunder by executing a counterpart hereof
and  delivering  same  to the  Collateral  Agent,  or by  executing  a  Joinder
Agreement  substantially in the form of Exhibit O to the Credit Agreement,  (y)
delivering  supplements to Annexes A through G hereto as are necessary to cause
such  Annexes to be  complete  and  accurate  with  respect to such  additional
Assignor on such date and (z) taking all actions as specified in this Agreement
as would have been taken by such Assignor had it been an original party to this
Agreement,  in each case with all documents  required  above to be delivered to
the  Collateral  Agent and with all documents and actions  required above to be
taken to the reasonable satisfaction of the Collateral Agent.

                                     * * *

                                     -30-
<PAGE>

          IN WITNESS WHEREOF,  the parties hereto have caused this Agreement to
be executed  and  delivered  by their duly  authorized  officers as of the date
first above written.

                                       VANGUARD HEALTH SYSTEMS, INC.
                                       VHS ACQUISITION CORPORATION
                                       VHS OF PHOENIX, INC.
                                       VHS OUTPATIENT CLINICS, INC.
                                       VHS OF ARROWHEAD, INC.
                                       PLEASANT PROPERTIES, INC.
                                       VHS OF SOUTH PHOENIX, INC.
                                       VHS IMAGING CENTERS, INC.
                                       VHS OF ANAHEIM, INC.
                                       VHS OF ORANGE COUNTY, INC.
                                       VHS HOLDING COMPANY, INC.
                                       VHS OF HUNTINGTON BEACH, INC.
                                       VHS OF ILLINOIS, INC.
                                       MACNEAL HEALTH PROVIDERS, INC.
                                       MACNEAL MANAGEMENT SERVICES,
                                         INC.
                                       MIDWEST CLAIMS PROCESSING, INC.
                                       PROS TEMPORARY STAFFING, INC.
                                       WATERMARK PHYSICIAN SERVICES,
                                         INC.
                                       VHS GENESIS LABS, INC.
                                       MACNEAL MEDICAL RECORDS, INC.
                                       VANGUARD HEALTH MANAGEMENT,
                                         INC.
                                       TRINITY MEDCARE, INC.
                                       V-II ACQUISITION CO., INC.
                                       VANGUARD HEALTH FINANCIAL
                                         COMPANY, INC.
                                       VHS OF RANCOCAS, INC.,
                                         each as an Assignor

                                       By: /s/ Joseph D. Moore
                                          ---------------------
                                          Title: Chief Financial Officer

                                       Duly authorized to sign on behalf of
                                          each of the foregoing entities

<PAGE>

                                       VHS ACQUISITION SUBSIDIARY
                                        NUMBER 1, INC.
                                       VHS ACQUISITION SUBSIDIARY
                                        NUMBER 2, INC.
                                       VHS ACQUISITION SUBSIDIARY
                                        NUMBER 3, INC.
                                       VHS ACQUISITION SUBSIDIARY
                                        NUMBER 4, INC.
                                       VHS ACQUISITION SUBSIDIARY
                                        NUMBER 5, INC.
                                       VHS ACQUISITION SUBSIDIARY
                                        NUMBER 6, INC.
                                       VHS ACQUISITION SUBSIDIARY
                                        NUMBER 7, INC.
                                       VHS ACQUISITION SUBSIDIARY
                                        NUMBER 8, INC.
                                       VHS ACQUISITION SUBSIDIARY
                                        NUMBER 9, INC.
                                       VHS ACQUISITION SUBSIDIARY
                                        NUMBER 10, INC.,
                                       each as an Assignor

                                       By: /s/ Joseph D. Moore
                                          ---------------------
                                          Title: Chief Financial Officer

                                       Duly authorized to sign on behalf of
                                            each of the foregoing entities

<PAGE>

                                       THE ANAHEIM VHS LIMITED
                                         PARTNERSHIP, as an Assignor

                                          By:  VHS of Anaheim, Inc., its
                                               General Partner

                                          By: /s/ Joseph D. Moore
                                             ---------------------
                                             Title: Chief Financial Officer

                                       THE HUNTINGTON BEACH VHS LIMITED
                                          PARTNERSHIP, as an Assignor

                                          By:  VHS of Huntington Beach, Inc.,
                                               its General Partner

                                          By: /s/ Joseph D. Moore
                                             ---------------------
                                             Title: Chief Financial Officer

                                       HEALTHCARE COMPLIANCE, L.L.C., as an
                                         Assignor

                                          By:  Vanguard Health Management, Inc.,
                                               its Member

                                          By: /s/ Joseph D. Moore
                                             ---------------------
                                             Title: Chief Financial Officer

<PAGE>

                                       THE VHS ARIZONA IMAGING CENTERS
                                         LIMITED PARTNERSHIP, as an Assignor
                                            By:  VHS Imaging Centers, Inc., its
                                                 General Partner

                                            By:   /s/ Joseph D. Moore
                                                  Title: Chief Financial Officer

Accepted and Agreed to:

BANK OF AMERICA, N.A.,
  as Administrative Agent

By:   /s/ Kevin Wagley
    --------------------------------
     Title: Principal

BANK OF AMERICA, N.A.,
  as Collateral Agent

By:   /s/ Kevin Wagley
    --------------------------------
     Title: Principal

<PAGE>
                                                                        Annex A
                                                                             to
                                                             SECURITY AGREEMENT

                      SCHEDULE OF CHIEF EXECUTIVE OFFICES
                           AND OTHER RECORD LOCATIONS

1.   Chief Executive Office of all Assignors except the Assignors referred to
     in Sections 2 through 24 below:

                           20 Burton Hills Boulevard
                                   Suite 100
                              Nashville, TN 37215

2.   Chief Executive Office of Healthcare Compliance, L.L.C.:

                           1440 New York Avenue, N.W.
                                   Suite 400
                              Washington, DC 20003

3.   Chief Executive Office of The Anaheim VHS Limited Partnership:

                            3033 West Orange Avenue
                               Anaheim, CA 92804

4.   (a) Chief Executive Office of VHS Acquisition Corporation:

                           5102 West Campbell Avenue
                               Phoenix, AZ 85031

     (b)  Other record locations of VHS Acquisition Corporation:

                          4949 West Indian School Road
                               Phoenix, AZ 85031

5.   Chief Executive Office of VHS of Anaheim, Inc.:

                            3033 West Orange Avenue
                               Anaheim, CA 92804

6.   Chief Executive Office of VHS of Huntington Beach, Inc.:

                             17772 Beach Boulevard
                        Huntington Beach, CA 92647-9932

                                       1
<PAGE>
                                                                        Annex A
                                                                             to
                                                             SECURITY AGREEMENT

7.   Chief Executive Office of VHS of Illinois, Inc.:

                           3249 South Oak Park Avenue
                                Berwyn, IL 60402

8.   Chief Executive Office of MacNeal Management Services, Inc.:

                           3249 South Oak Park Avenue
                                Berwyn, IL 60402

9.   Chief Executive Office of MacNeal Health Providers, Inc.:

                           3249 South Oak Park Avenue
                                Berwyn, IL 60402

10.  Chief Executive Office of VHS Genesis Labs, Inc.:

                           3249 South Oak Park Avenue
                                Berwyn, IL 60402

11.  Chief Executive Office of Midwest Claims Processing, Inc.:

                           3249 South Oak Park Avenue
                                Berwyn, IL 60402

12.  Chief Executive Office of Watermark Physician Services, Inc.:

                           3249 South Oak Park Avenue
                                Berwyn, IL 60402

13.  Chief Executive Office of Pros Temporary Staffing, Inc.:

                           3249 South Oak Park Avenue
                                Berwyn, IL 60402

14.  Chief Executive Office of MacNeal Medical Records, Inc.:

                           3249 South Oak Park Avenue
                                Berwyn, IL 60402

15.  Chief Executive Office of MacNeal Medical Records, Inc.:

                           3249 South Oak Park Avenue
                                Berwyn, IL 60402

                                       2
<PAGE>
                                                                        Annex A
                                                                             to
                                                             SECURITY AGREEMENT

16.  Chief Executive Office of VHS of Orange County, Inc.:

                               7901 Walker Street
                               La Palma, CA 90623

17.  (a) Chief Executive Office of VHS of Phoenix, Inc.:

                          2000 West Bethany Home Road
                               Phoenix, AZ 85015

     (b)  Other record location of VHS of Phoenix, Inc.:

                              8805 N. 23rd Avenue
                                   Suite 250
                               Phoenix, AZ 85021

18.  (a) Chief Executive Office of VHS of Arrowhead, Inc.:

                              18701 N. 67th Avenue
                            Glendale, AZ 85308-5722

     (b)  Other record location of VHS of Arrowhead, Inc.:

                              8805 N. 23rd Avenue
                                   Suite 250
                               Phoenix, AZ 85021

19.  (a) Chief Executive Office of VHS Outpatient Clinics, Inc.:

                          2000 West Bethany Home Road
                               Phoenix, AZ 85015

     (b) Other record location of VHS Outpatient Clinics, Inc.:

                              8805 N. 23rd Avenue
                                   Suite 250
                               Phoenix, AZ 85021

20.  (a) Chief Executive Office of Pleasant Properties, Inc.

                              18701 N. 67th Avenue
                            Glendale, AZ 85308-5722

                                       3
<PAGE>

                                                                        Annex A
                                                                             to
                                                             SECURITY AGREEMENT

     (b) Other record location of Pleasant Properties, Inc.

                              8805 N. 23rd Avenue
                                   Suite 250
                               Phoenix, AZ 85021

21.  Chief Executive Office of VHS of South Phoenix, Inc.

                               1201 S. 7th Avenue
                               Phoenix, AZ 85007

22.  (a) Chief Executive Office of The VHS Arizona Imaging Centers Limited
     Partnership

                              8805 N. 23rd Avenue
                                   Suite 250
                               Phoenix, AZ 85021

(b)  Other record locations of The VHS Arizona Imaging Centers Limited
     Partnership

                              18555 N. 79th Avenue
                             Suites C-104 and C-105
                               Glendale, AZ 85308

                            1616 N. Litchfield Road
                                   Suite 140
                               Goodyear, AZ 85338

                              9449 N. 90th Street
                               Suites 103 and 112
                              Scottsdale, AZ 85258

                            1351 N. Alma School Road
                       Suites 105, 115, 125, 155 and 175
                               Chandler, AZ 85224

                            2501 E. Southern Avenue
                                  Suites 5-11
                                Tempe, AZ 85282
                               941 S. Dobson Road
                                   Suite 226
                                 Mesa, AZ 85202

                                       4
<PAGE>
                                                                        Annex A
                                                                             to
                                                             SECURITY AGREEMENT

23.  Chief Executive Office of VHS Imaging Centers, Inc.

                              8805 N. 23rd Avenue
                                   Suite 250
                               Phoenix, AZ 85021

                                       5
<PAGE>

                                                                        Annex B
                                                                             to
                                                             SECURITY AGREEMENT

                  SCHEDULE OF INVENTORY AND EQUIPMENT LOCATIONS

1.   Vanguard Health Management, Inc.:

                           20 Burton Hills Boulevard
                                   Suite 100
                              Nashville, TN 37215

2.   Healthcare Compliance, L.L.C.:

                           1440 New York Avenue, N.W.
                                   Suite 400
                              Washington, DC 20003

3.   The Anaheim VHS Limited Partnership:

                            3033 West Orange Avenue
                               Anaheim, CA 92804

                             1154 N. Euclid Avenue
                                  Anaheim, CA

                             515 S. Beach Boulevard
                                  Anaheim, CA

                             2100 S. Euclid Avenue
                                  Anaheim, CA

4.   VHS Acquisition Corporation:

                           5102 West Campbell Avenue
                               Phoenix, AZ 85031

                           4949 W. Indian School Road
                               Phoenix, AZ 85031

                             140 N. Litchfield Road
                                  Goodyear, AZ

5.   VHS of Anaheim, Inc.:

                            3033 West Orange Avenue
                               Anaheim, CA 92804

                                       1
<PAGE>
                                                                        Annex B
                                                                             to
                                                             SECURITY AGREEMENT

                             1154 N. Euclid Avenue
                                  Anaheim, CA

                             515 S. Beach Boulevard
                                  Anaheim, CA

                             2100 S. Euclid Avenue
                                  Anaheim, CA

6.   Huntington Beach, Inc.:

                             17772 Beach Boulevard
                        Huntington Beach, CA 92647-9932

                             17742 Beach Boulevard
                              Huntington Beach, CA

                               8201 Newman Avenue
                              Huntington Beach, CA

                            17071 Springfield Street
                              Huntington Beach, CA

7.   VHS of Illinois, Inc.:

                           3249 South Oak Park Avenue
                                Berwyn, IL 60402

                                 Parking Garage
                                Euclid & Windsor
                                Berwyn, IL 60402

                          Parking East Side of Euclid
                                Berwyn, IL 60402

                            Remote Employee Parking
                                Berwyn, IL 60402

                                 6425 W. Cermak
                                Berwyn, IL 60402

                                 5601 W. Cermak
                                Cicero, IL 60804

                                       2

<PAGE>
                                                                        Annex B
                                                                             to
                                                             SECURITY AGREEMENT

                                125 N. LaGrange
                               LaGrange, IL 60525

                              7020 W. 79th Street
                              Bridgeview, IL 60455

                                5101 S. Kildare
                               Chicago, IL 60602

                                8100 S. Western
                               Chicago, IL 60602

                                  6649 Archer
                               Chicago, IL 60638

                              7222 W. Cermak Road
        Suite 200, 209, 210, 400, 601, 612, 606, 700, 703, LL1, 504, 610
                           North Riverside, IL 60546

                                5817 Cermak Road
                                Cicero, IL 60650

                           2947 South Oak Park Avenue
                                Berwyn, IL 60402

                                1144 Lake Street
                                   Suite 200
                               Oak Park, IL 60301

                         408/414 South Oak Park Avenue
                               Oak Park, IL 60302

                             4842-44 W. Cermak Road
                                Cicero, IL 60804

                                965 Lake Street
                               Oak Park, IL 60301

                            17W745 Butterfield Road
                                   Suites A-D
                           Oakbrook Terrace, IL 60181

                             6500 West 65th Street
                               Chicago, IL 60638

                                       3
<PAGE>
                                                                        Annex B
                                                                             to
                                                             SECURITY AGREEMENT

                              6812-6818 W. Windsor
                                Berwyn, IL 60402

                                 1701 S. First
                                   Suite 300
                               Maywood, IL 60153

                                1300 W. Belmont
                                   Suite 224
                               Chicago, IL 60657

                             2200 W. Roosevelt Road
                              Broadview, IL 60153

                              4255 Westbrook Drive
                                   Suite 216
                                Aurora, IL 60504

                                10110 Gladstone
                             Westchester, IL 60154

                                 6187 W. Archer
                               Chicago, IL 60638

                             6300 W. Roosevelt Road
                               Oak Park, IL 60304

                                 5141 S. Archer
                               Chicago, IL 60632

                                 West Building
                                6804 W. Windsor
                                Berwyn, IL 60402

                           3300 South Oak Park Drive
                                Berwyn, IL 60402

                           3340 South Oak Park Drive
                                Berwyn, IL 60402

                                  Parking Lot
                                  34th & Grove
                                Berwyn, IL 60402

                                       4
<PAGE>
                                                                        Annex B
                                                                             to
                                                             SECURITY AGREEMENT

                                3334 South Grove
                                Berwyn, IL 60402

8.   MacNeal Management Services, Inc.:

                           3249 South Oak Park Avenue
                                Berwyn, IL 60402

                           3345 South Oak Park Avenue
                                Berwyn, IL 60402

                               3231 South Euclid
                                Berwyn, IL 60402

                              6715 W. 34th Street
                                Berwyn, IL 60402

                           3400 South Oak Park Avenue
                                Berwyn, IL 60402

                             6805 W. Stanley Avenue
                                Berwyn, IL 60402

                             3722 S. Harlem Avenue
                              Riverside, IL 60546

                              6707 W. 34th Street
                                Berwyn, IL 60402

                                 3326 S. Wesley
                                Berwyn, IL 60402

9.   MacNeal Health Providers, Inc.:

                           3249 South Oak Park Avenue
                                Berwyn, IL 60402

10.  VHS Genesis Labs, Inc.:

                           3249 South Oak Park Avenue
                                Berwyn, IL 60402

                                       5
<PAGE>
                                                                        Annex B
                                                                             to
                                                             SECURITY AGREEMENT

                                8802 S. Madison
                             Indianapolis, IN 46227

                            640 S. Washington Street
                              Naperville, IL 60540

11.  Midwest Claims Processing, Inc.:

                           3249 South Oak Park Avenue
                                Berwyn, IL 60402

12.  Watermark Physician Services, Inc.:

                           3249 South Oak Park Avenue
                                Berwyn, IL 60402

13.  Pros Temporary Staffing, Inc.:

                           3249 South Oak Park Avenue
                                Berwyn, IL 60402

14.  MacNeal Medical Records, Inc.:

                           3249 South Oak Park Avenue
                                Berwyn, IL 60402

15.  VHS of Orange County, Inc.:

                               7901 Walker Avenue
                               La Palma, CA 90623

16.  VHS of Phoenix, Inc.:

                          2000 West Bethany Home Road
                               Phoenix, AZ 85015

                            2224 W. Northern Avenue
                               Phoenix, AZ 85021

17.  VHS of Arrowhead, Inc.:

                              18701 N. 67th Avenue
                            Glendale, AZ 85308-5722

                                       6
<PAGE>
                                                                        Annex B
                                                                             to
                                                             SECURITY AGREEMENT

                            2224 W. Northern Avenue
                               Phoenix, AZ 85021

18.  VHS Outpatient Clinics, Inc.:

                          2000 West Bethany Home Road
                               Phoenix, AZ 85015

                            2224 W. Northern Avenue
                               Phoenix, AZ 85021

                              7339 N. 27th Avenue
                               Phoenix, AZ 85051

                                 6151 W. Olive
                               Glendale, AZ 85302

                          34601 S. Phyllis Street East
                          Black Canyon City, AZ 85324

                              8805 W. Union Hills
                                Peoria, AZ 85382

19.  Trinity MedCare, Inc.

                           20 Burton Hills Boulevard
                                   Suite 100
                              Nashville, TN 37215

20.  Pleasant Properties, Inc.

                              18701 N. 67th Avenue
                            Glendale, AZ 85308-5722

                            2224 W. Northern Avenue
                               Phoenix, AZ 85021

21.  VHS of South Phoenix, Inc.

                               1201 S. 7th Avenue
                               Phoenix, AZ 85007

                                       7
<PAGE>
                                                                        Annex B
                                                                             to
                                                             SECURITY AGREEMENT

22.  The VHS Arizona Imaging Centers Limited Partnership

                              8805 N. 23rd Avenue
                                   Suite 250
                               Phoenix, AZ 85021

                              18555 N. 79th Avenue
                             Suites C-104 and C-105
                               Glendale, AZ 85308

                            1616 N. Litchfield Road
                                   Suite 140
                               Goodyear, AZ 85338

                              9449 N. 90th Street
                               Suites 103 and 112
                              Scottsdale, AZ 85258

                            1351 N. Alma School Road
                       Suites 105, 115, 125, 155 and 175
                               Chandler, AZ 85224

                            2501 E. Southern Avenue
                                  Suites 5-11
                                Tempe, AZ 85282

                               941 S. Dobson Road
                                   Suite 226
                                 Mesa, AZ 85202

23.  VHS Imaging Centers, Inc.

                              8805 N. 23rd Avenue
                                   Suite 250
                               Phoenix, AZ 85021

24.  Other Assignors have no inventory or equipment.

                                       8
<PAGE>

                                                                        Annex C
                                                                             to
                                                             SECURITY AGREEMENT

             SCHEDULE OF LEGAL NAMES, ORGANIZATIONAL IDENTIFICATION
                     NUMBERS AND TRADE AND FICTITIOUS NAMES
             ------------------------------------------------------

<TABLE>
                         LEGAL NAME                                             ORGANIZATIONAL ID#
                         ----------                                             ------------------

                                                                      Federal                      State ID#
                                                                      -------                      ---------
<S>                                                                   <C>                          <C>
Vanguard Health Systems, Inc.                                         62-1698183                   2765298
VHS Acquisition Corporation                                           62-1730519                   2863490
VHS of Phoenix, Inc.                                                  62-1809851                   3177186
VHS Outpatient Clinics, Inc.                                          62-1816823                   3212542
VHS of Arrowhead, Inc.                                                62-1811285                   318980
Pleasant Properties, Inc.                                             86-0692318                   0236400-8
VHS of South Phoenix, Inc.                                            62-1842396                   3448177
The VHS Arizona Imaging Centers Limited Partnership                   72-1503733                   3991889
VHS Imaging Centers, Inc.                                             62-1852828                   3381167
VHS of Anaheim, Inc.                                                  62-1781813                   3046767
VHS of Orange County, Inc.                                            62-1770074                   2991266
VHS Holding Company, Inc.                                             62-1782796                   3053546
VHS of Huntington Beach, Inc.                                         62-1782707                   3053551
The Anaheim VHS Limited Partnership                                   62-1782797                   3054158
The Huntington Beach VHS Limited Partnership                          62-1782795                   3052
VHS of Illinois, Inc.                                                 62-1796152                   3100647
MacNeal Health Providers, Inc.                                        36-3361297                   D5365-515-7
MacNeal Management Services, Inc.                                     36-3313638                   D5347-087-4
Midwest Claims Processing, Inc.                                       36-4295667                   D6050-154-8
Pros Temporary Staffing, Inc.                                         36-4339784                   D6086-116-1
Watermark Physician Services, Inc.                                    36-4339782                   D6080-956-9
VHS Genesis Labs, Inc.                                                62-1803765                   3143714
MacNeal Medical Records, Inc.                                         62-1807248                   3160763
Vanguard Health Management, Inc.                                      62-1686886                   2712798
Trinity Medcare, Inc.                                                 62-1684322                   2720439
V-II Acquisition Co., Inc.                                            62-1730482                   3795-539
Vanguard Health Financial Company, Inc.                               62-1730470                   0345736
Healthcare Compliance, LLC                                            52-2033964                   0236505
VHS of Rancocas, Inc.                                                 62-1746570                   0100-7423-73
VHS Acquisition Subsidiary Number 1, Inc.                             62-1861138                   3414395
VHS Acquisition Subsidiary Number 2, Inc.                             62-1861141                   3414394
VHS Acquisition Subsidiary Number 3, Inc.                             62-1861142                   3414388
VHS Acquisition Subsidiary Number 4, Inc.                             62-1861143                   3414383
VHS Acquisition Subsidiary Number 5, Inc.                             62-1861175                   3414379
VHS Acquisition Subsidiary Number 6, Inc.                             62-1861197                   3414377
VHS Acquisition Subsidiary Number 7, Inc.                             62-1861198                   3414374
VHS Acquisition Subsidiary Number 8, Inc.                             62-1861199                   3414371
VHS Acquisition Subsidiary Number 9, Inc.                             Pending                      3414366
VHS Acquisition Subsidiary Number 10, Inc.                            62-1861202                   3414364
</TABLE>

                                       1
<PAGE>

                                                                        Annex C
                                                                             to
                                                             SECURITY AGREEMENT

A.       1.       Maryvale Hospital
         2.       Maryvale Hospital Medical Center
         3.       Maryvale Medical Center
         4.       Maryvale Health Institute
         5.       Desert Sky Family Practice
         6.       Desert Sky Urgent Care

B.       1.       West Anaheim Medical Center
         2.       Huntington Beach Hospital
         3.       Huntington Beach Medical Center

         C.       Business Entities
                  -----------------
         1.       MacNeal Health Network
         2.       MacNeal Hospital
         3.       Genesis Clinical Laboratory
         4.       Azron, Inc.
         5.       MacNeal Home Care
         6.       MacNeal Center for Clinical Research
         7.       MacNeal Electronic Medical Records Initiatives (MEMRI)
         8.       MacNeal School
         9.       Midwest Claims Processing

                  Specialty Services
                  ------------------
         10.      Great Lakes Orthopedics
         11.      MacNeal Occupational Health Services
         12.      MacNeal Urology Group
         13.      BHS Digestive Disease Associates
         14.      MacNeal Behavioral Health Services
         15.      MacNeal Cancer Center
         16.      The Center for Neurological Surgery and Spine Surgery
         17.      MacNeal Rheumatology Associates
         18.      MacNeal Center for Diabetes
         19.      MacNeal Rehabilitation Center in Oak Park
         20.      Consultants in Clinical Psychiatry
         21.      Life Women's Health Center
         22.      MacNeal Medical Center in Bridgeview
         23.      MacNeal Medical Center in Broadview
         24.      Clearing Clinic
         25.      MacNeal Neurology Associates

                  Primary Care Offices
                  --------------------
         26.      MacNeal Healthcare Centers
         27.      Gunnar Medical Group in Riverside
         28.      MacNeal Family Practice
         29.      Primary Care Associates

                                       2

<PAGE>

                                                                        Annex C
                                                                             to
                                                             SECURITY AGREEMENT

         30.      Archer Family Medicine
         31.      Personal Physicians
         32.      Family Care Associates
         33.      R.M. Gunnar Clinic
         34.      Riverside Family Practice
         35.      Riverside Pediatrics
         36.      MacNeal Family HealthCare

                  Programs/Services
                  -----------------
         37.      MacNeal Cardiovision
         38.      MacNeal CardioCheck
         39.      MacNeal One to One
         40.      Pediatric OnCall
         41.      GLO Trotters
         42.      Health Horizons
         43.      Focus on Health
         44.      HouseCalls
         45.      MacNeal Coumadin Clinic
         46.      MacNeal Home Care Wound Care Program
         47.      MacNeal Hospice
         48.      Lifesteps Weight Management Program
         49.      MacNeal Travel Clinic
         50.      MacNeal Sleep Disorder Program
         51.      MacNeal Hospital Patient Management System
         52.      MacNeal Anticoagulation Center
         53.      New Beat
         54.      MacNeal Medical Staff
         55.      MacNeal Volunteer Copy Service
         56.      Suburban Counseling Center
         57.      Pediatric Therapy Services
         58.      Family Medical Dental Center
         59.      Health Matters
         60.      Journey Day Camp

D.       1.       La Palma Intercommunity Hospital

E.       1.       Phoenix Baptist Hospital and Medical Center
         2.       Arizona Network Development
         3.       Life-Core
         4.       Baby Club
         5.       Smart Options
         6.       Healthy Life Style Club for Seniors
         7.       Movin' Forward
         8.       Center for Arthritis & Joint Replacement

                                       3

<PAGE>

                                                                        Annex C
                                                                             to
                                                             SECURITY AGREEMENT

         9.       The Cancer Program
         10.      West Olive Family Medicine Center
         11.      Family Medicine Centers of Arizona
         12.      Dreamy Draw Family Medicine Center
         13.      Pinnacle Peak Family Medicine Center
         14.      North Canyon Ranch Family Medicine Center
         15.      Black Canyon Family Medicine Center
         16.      Union Hills Family Medicine Center
         17.      North Phoenix Family Medicine Center
         18.      The Women's Connection
         19.      People Who Care
         20.      Baptist Medical Center
         21.      Mammoscan
         22.      Care Connection
         23.      Bethany Medical Institute
         24.      PBH
         25.      Sunburst Golf Classic
         26.      The Heart Center at Phoenix Baptist Hospital
         27.      Wellness Connection
         28.      Bethany West Family Medical Center
         29.      2040 W. Bethany Medical Center
         30.      Arrowhead Community Hospital and Medical Center
         31.      Arrowhead Community Hospital Senior Option
         32.      Arrowhead Community Hospital Life Line
         33.      Arrowhead Breast Care Center
         34.      Joy Wellness Connection
         35.      MedVet
         36.      Arrowhead Cancer Center

F.       1.       Trinity MedCare

G.       1.       Pleasant Properties
         2.       Arrowhead Medical Plaza I

H.       1.       Phoenix Memorial Hospital
         2.       Phoenix Memorial Health System
         3.       Jesse Owens Memorial Medical Center
         4.       Palm Valley Medical Campus

I.       1.       TMC Advanced Imaging

                                       4
<PAGE>

                                                                        Annex D
                                                                             To
                                                             SECURITY AGREEMENT

              SCHEDULE OF JURISDICTIONS AND TYPES OF ORGANIZATIONS
              ----------------------------------------------------

<TABLE>

                     ENTITY NAME                                JURISDICTION           TYPE OF ORGANIZATION
-------------------------------------------------------------------------------------------------------------
<S>                                                            <C>                     <C>
Vanguard Health Systems, Inc.                                   Delaware               Corporation
VHS Acquisition Corporation                                     Delaware               Corporation
VHS of Phoenix, Inc.                                            Delaware               Corporation
VHS Outpatient Clinics, Inc.                                    Delaware               Corporation
VHS of Arrowhead, Inc.                                          Delaware               Corporation
Pleasant Properties, Inc.                                       Arizona                Corporation
VHS of South Phoenix, Inc.                                      Delaware               Corporation
The VHS Arizona Imaging Centers Limited Partnership             Delaware               Limited Partnership
VHS Imaging Centers, Inc.                                       Delaware               Corporation
VHS of Anaheim, Inc.                                            Delaware               Corporation
VHS of Orange County, Inc.                                      Delaware               Corporation
VHS Holding Company, Inc.                                       Delaware               Corporation
VHS of Huntington Beach, Inc.                                   Delaware               Corporation
The Anaheim VHS Limited Partnership                             Delaware               Limited Partnership
The Huntington Beach VHS Limited Partnership                    Delaware               Limited Partnership
VHS of Illinois, Inc.                                           Delaware               Corporation
MacNeal Health Providers, Inc.                                  Illinois               Corporation
MacNeal Management Services, Inc.                               Illinois               Corporation
Midwest Claims Processing, Inc.                                 Illinois               Corporation
Pros Temporary Staffing, Inc.                                   Illinois               Corporation
Watermark Physician Services, Inc.                              Illinois               Corporation
VHS Genesis Labs, Inc.                                          Delaware               Corporation
MacNeal Medical Records, Inc.                                   Delaware               Corporation
Vanguard Health Management, Inc.                                Tennessee              Corporation
Trinity Medcare, Inc.                                           Delaware               Corporation
V-II Acquisition Co., Inc.                                      Pennsylvania           Corporation
Vanguard Health Financial Company, Inc.                         Tennessee              Corporation
Healthcare Compliance, LLC                                      District of Columbia   Limited Liability Corporation
VHS of Rancocas, Inc.                                           New Jersey             Corporation
VHS Acquisition Subsidiary Number 1, Inc.                       Delaware               Corporation
VHS Acquisition Subsidiary Number 2, Inc.                       Delaware               Corporation
VHS Acquisition Subsidiary Number 3, Inc.                       Delaware               Corporation
VHS Acquisition Subsidiary Number 4, Inc.                       Delaware               Corporation
VHS Acquisition Subsidiary Number 5, Inc.                       Delaware               Corporation
VHS Acquisition Subsidiary Number 6, Inc.                       Delaware               Corporation
VHS Acquisition Subsidiary Number 7, Inc.                       Delaware               Corporation
VHS Acquisition Subsidiary Number 8, Inc.                       Delaware               Corporation
VHS Acquisition Subsidiary Number 9, Inc.                       Delaware               Corporation
VHS Acquisition Subsidiary Number 10, Inc.                      Delaware               Corporation
</TABLE>

<PAGE>
                                                                        Annex E
                                                                             to
                                                             SECURITY AGREEMENT
                                                             ------------------

                               SCHEDULE OF MARKS
                               -----------------

1.   U.S. Service Mark Application, Serial No. 75/359, 181; Filing Date:
     September 18, 1997; Register: Principal; Mark: Vanguard; Mark Type:
     Service Mark; Mark to be used in hospital and health care services in
     International Class 42.

2.   Service Mark "New Arrivals at La Palma Intercommunity Hospital" (with
     design) registered by UniHealth America with the Secretary of State of the
     State of California.

3.   Trademark "Sunrise over Mountain" registered with the Arizona Secretary of
     State with an expiration date of 11/14/02.

4.   Trademark "A Stronger Body of Healthcare" registered with the Arizona
     Secretary of State with an expiration date of 03/31/07.

5.   Trademark "Sunburst on Partial Cross" registered with the Arizona
     Secretary of State with an expiration date of 06/18/02.

6.   Trademark "Sunburst on Partial Cross" registered with the Florida
     Department of State with an expiration date of 09/09/02.

7.   Trademark Heart (free-form w/"S" thru middle) registered with the Arizona
     Secretary of State with an expiration date of 01/24/04.

8.   Trademark Flying Arrows registered with the Arizona Secretary of State
     with an expiration date of 07/22/06.

9.   Trademark Arrowhead enclosed in Circle registered with the Arizona
     Secretary of State with an expiration date of 08/14/01.

10.  Service Mark "Las Comadres - The Co-Mothers" registered for Phoenix
     Memorial Hospital with the Arizona Secretary of State, Reg. No. 40232,
     dated October 14, 1997.

11.  Service Mark "Community Connection - Your Healthselect Option" registered
     for Phoenix Memorial Hospital with the Arizona Secretary of State, Reg.
     No. 34509, dated October 12, 1994.

12.  Service Mark "Young Company-An Intergenerational Child Development Center"
     registered for Phoenix Memorial Hospital with the Arizona Secretary of
     State, Reg. No. 26142, dated March 9, 1988.

13.  Service Mark "Dream Game" registered for Phoenix Memorial Hospital with
     the Arizona Secretary of State, Reg. No.25342, dated May 20, 1987.

                                       1
<PAGE>
                                                                        Annex E
                                                                             to
                                                             SECURITY AGREEMENT
                                                             ------------------

14.  Service Mark "The Waddell Institute for Longer Life (Will Center)"
     registered for Phoenix Memorial Hospital with the Arizona Secretary of
     State, Reg. No. 26170, dated March 22, 1988.

15.  Service Mark "Easy Street's First Place" registered for Phoenix Memorial
     Hospital with the Arizona Secretary of State, Reg. No.1,857,927, dated
     October 11, 1994.

16.  Service Mark "ESE & Design" registered for Phoenix Memorial Hospital with
     the Arizona Secretary of State, Reg. No.1,612,346, dated September 4,
     1990.

17.  Service Mark "East Street Environments" registered for Phoenix Memorial
     Hospital with the Arizona Secretary of State, Reg. No.1,436,706, dated
     April 14, 1987.

                                       2
<PAGE>

                                                                        Annex F
                                                                             to
                                                             SECURITY AGREEMENT
                                                             ------------------

                              SCHEDULE OF PATENTS
                              -------------------

MacNeal Medical Records, Inc.
-----------------------------

Patent                                 Patent No.                 Issue Date
------                                 ----------                 ----------
Electronic Medical Records System      5,924,074                  July 13, 1999

<PAGE>

                                                                        Annex G
                                                                             to
                                                             SECURITY AGREEMENT
                                                             ------------------

                          SCHEDULE OF U.S. COPYRIGHTS
                          ---------------------------

<TABLE>

                           Title                             Registration No.          Registration Date
                           -----                             ----------------          -----------------
<S>                                                          <C>                       <C>
1.  Common Sense Care of the Sick Child                      TX3800495                 March 7, 1994

2.  Taming the Monster: A Workbook for Child Sexual Abuse
    Victims by Wendy Dutton, Robert Emerick.                 TX2944506                 October 26, 1990

3.  Alternatives to Sexual Misbehavior: A Treatment
    Workbook for the Adult Sexual Offender.                  TX2733661                 January 16, 1990

4.  Resolution of Post Traumatic Stress Disorder: Sexual
    Abuse: A Treatment Workbook for the Adolescent Victim.
                                                             TX2569930                 March 15, 1989

5.  Alternatives to Sexual Misbehavior: A Treatment
    Workbook for the Adult Sexual Offender.                  TX2487029                 January 25, 1989

6.  Alternatives to Sexual Misbehavior: A Treatment
    Workbook for the Adolescent Sexual Offender.             TX2487028                 January 25, 1989

</TABLE>

<PAGE>

                                                                        ANNEX H
                                                                             to
                                                             SECURITY AGREEMENT
                                                             ------------------

                           GRANT OF SECURITY INTEREST
                          IN UNITED STATES TRADEMARKS
                          ---------------------------

          FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which
are  hereby  acknowledged,  [Name of  Grantor],  a  __________  _________  (the
"Grantor")  with  principal  offices  at  ____________________________,  hereby
assigns  and  grants  to Bank of  America,  N.A.,  as  Collateral  Agent,  with
principal  offices at 414 Union  Street,  7th Floor,  Nashville,  TN 37239 (the
"Grantee"),  a security  interest in (i) all of the Grantor's right,  title and
interest in and to the United States  trademarks,  trademark  registrations and
trademark  applications  (the "Marks") set forth on Schedule A attached hereto,
(ii) all Proceeds (as such term is defined in the Security  Agreement  referred
to below) and products of the Marks,  (iii) the goodwill of the businesses with
which the Marks are  associated  and (iv) all causes of action arising prior to
or  after  the date  hereof  for  infringement  of any of the  Marks or  unfair
competition regarding the same.

          THIS GRANT is made to secure the satisfactory performance and payment
of all the Obligations of the Grantor,  as such term is defined in the Security
Agreement  among the  Grantor,  the  other  assignors  from time to time  party
thereto and the  Grantee,  dated as of July 30,  2001 (as amended  from time to
time, the "Security  Agreement").  Upon the occurrence of the Termination  Date
(as defined in the Security Agreement), the Grantee shall execute, acknowledge,
and deliver to the Grantor an  instrument  in writing  releasing  the  security
interest in the Marks acquired under this Grant.

          This Grant has been granted in conjunction with the security interest
granted to the Grantee under the Security Agreement. The rights and remedies of
the Grantee  with respect to the security  interest  granted  herein are as set
forth in the  Security  Agreement,  all  terms  and  provisions  of  which  are
incorporated  herein by  reference.  In the event that any  provisions  of this

<PAGE>
                                                                        ANNEX H
                                                                         Page 2

Grant are deemed to conflict with the Security Agreement, the provisions of the
Security Agreement shall govern.

                                     * * *

<PAGE>
                                                                        ANNEX H
                                                                         Page 3

          IN WITNESS  WHEREOF,  the undersigned  have executed this Grant as of
the ____ day of ------------, ----.

                                          [NAME OF GRANTOR], Grantor

                                          By___________________________
                                              Name:
                                              Title:

                                          BANK OF AMERICA, N.A.,
                                            as Collateral Agent and Grantee

                                          By___________________________
                                              Name:
                                              Title:

<PAGE>

STATE OF ______________)
                       )  ss.:
COUNTY OF _____________)

          On this  ____ day of  _________,  ____,  before  me  personally  came
________  ________________  who, being by me duly sworn,  did state as follows:
that [s]he is ______________ of [Name of Grantor],  that [s]he is authorized to
execute the foregoing Grant on behalf of said  ____________  and that [s]he did
so by authority of the [Board of Directors] of said ____________.

                                          --------------------------------
                                                     Notary Public

<PAGE>

STATE OF ______________)
                       )  ss.:
COUNTY OF _____________)

          On this  ____ day of  _________,  ____,  before  me  personally  came
________  _____________________  who,  being  by me duly  sworn,  did  state as
follows: that [s]he is __________________ of Bank of America,  N.A., that [s]he
is authorized to execute the foregoing Grant on behalf of said  corporation and
that [s]he did so by authority of the Board of Directors of said corporation.

                                          --------------------------------
                                                     Notary Public

<PAGE>

                                                                     SCHEDULE A
                                                                     ----------

 MARK                            REG. NO.                             REG. DATE
 ----                            --------                             ---------

<PAGE>

                                                                        ANNEX I
                                                                             to
                                                             SECURITY AGREEMENT
                                                             ------------------

                           GRANT OF SECURITY INTEREST
                            IN UNITED STATES PATENTS
                            ------------------------

          FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which
are  hereby  acknowledged,  [Name of  Grantor],  a  __________  _________  (the
"Grantor")  with  principal  offices  at  ____________________________,  hereby
assigns  and  grants  to Bank of  America,  N.A.,  as  Collateral  Agent,  with
principal  offices at 414 Union  Street,  7th Floor,  Nashville,  TN 37239 (the
"Grantee"),  a security interest in (i) all of the Grantor's rights,  title and
interest  in and to the United  States  patents  (the  "Patents")  set forth on
Schedule A attached  hereto,  in each case  together with (ii) all Proceeds (as
such term is defined in the Security  Agreement referred to below) and products
of the Patents,  and (iii) all causes of action  arising  prior to or after the
date  hereof  for  infringement  of any of the  Patents  or unfair  competition
regarding the same.

          THIS GRANT is made to secure the satisfactory performance and payment
of all the Obligations of the Grantor,  as such term is defined in the Security
Agreement  among the  Grantor,  the  other  assignors  from time to time  party
thereto and the  Grantee,  dated as of July 30,  2001 (as amended  from time to
time, the "Security  Agreement").  Upon the occurrence of the Termination  Date
(as defined in the Security Agreement), the Grantee shall execute, acknowledge,
and deliver to the Grantor an  instrument  in writing  releasing  the  security
interest in the Patents acquired under this Grant.

<PAGE>

                                                                        ANNEX I
                                                                         Page 2

          This Grant has been granted in conjunction with the security interest
granted to the Grantee under the Security Agreement. The rights and remedies of
the Grantee  with respect to the security  interest  granted  herein are as set
forth in the  Security  Agreement,  all  terms  and  provisions  of  which  are
incorporated  herein by  reference.  In the event that any  provisions  of this
Grant are deemed to conflict with the Security Agreement, the provisions of the
Security Agreement shall govern.

                                     * * *

<PAGE>
                                                                        Annex I
                                                                         Page 3

          IN WITNESS  WHEREOF,  the undersigned  have executed this Grant as of
the ____ day of ------------, ----.

                                          [NAME OF GRANTOR], Grantor

                                          By___________________________
                                              Name:
                                              Title:

                                          BANK OF AMERICA, N.A.,
                                            as Collateral Agent and Grantee

                                          By___________________________
                                              Name:
                                              Title:

<PAGE>

STATE OF ______________)
                       )  ss:
COUNTY OF______________)

          On this  ____ day of  _________,  ____,  before  me  personally  came
________  ________________  who, being by me duly sworn,  did state as follows:
that [s]he is ______________ of [Name of Grantor],  that [s]he is authorized to
execute the foregoing Grant on behalf of said  ____________  and that [s]he did
so by authority of the Board of Directors of said ____________.

                                          -------------------------------
                                                     Notary Public

<PAGE>

STATE OF ______________)
                       )  ss:
COUNTY OF______________)

          On this  ____ day of  _________,  ____,  before  me  personally  came
________  _____________________  who,  being  by me duly  sworn,  did  state as
follows: that [s]he is __________________ of Bank of America,  N.A., that [s]he
is authorized to execute the foregoing Grant on behalf of said  corporation and
that [s]he did so by authority of the Board of Directors of said corporation.

                                          -------------------------------
                                                     Notary Public

<PAGE>

                                                                     SCHEDULE A
                                                                     ----------

          PATENT                   PATENT NO.               ISSUE DATE
          ------                   ----------               ----------

<PAGE>

                                                                        Annex J
                                                                             to
                                                             SECURITY AGREEMENT
                                                             ------------------

                           GRANT OF SECURITY INTEREST
                          IN UNITED STATES COPYRIGHTS
                          ---------------------------

          WHEREAS,  [Name of Grantor],  a  _______________  _____________  (the
"Grantor"),   having   its   chief   executive   office   at__________________,
___________________  , is the owner of all right,  title and interest in and to
the  United  States   copyrights   and  associated   United  States   copyright
registrations  and  applications  for  registration  set  forth in  Schedule  A
attached hereto;

          WHEREAS,  BANK OF AMERICA,  N.A.,  as  Collateral  Agent,  having its
principal  offices at 414 Union  Street,  7th Floor,  Nashville,  TN 37239 (the
"Grantee"),  desires to  acquire a security  interest  in said  copyrights  and
copyright registrations and applications therefor; and

          WHEREAS,  the  Grantor is willing  to assign to the  Grantee,  and to
grant to the Grantee a security  interest in and lien upon the  copyrights  and
copyright registrations and applications therefor described above.

          NOW, THEREFORE,  for good and valuable consideration,  the receipt of
which is hereby  acknowledged,  and subject to the terms and  conditions of the
Security Agreement,  dated as of July 30, 2001, made by the Grantor,  the other
assignors from time to time party thereto and the Grantee (as amended from time
to time, the "Security  Agreement"),  the Grantor hereby assigns to the Grantee
as collateral  security,  and grants to the Grantee a security interest in, the
copyrights and copyright  registrations and applications  therefor set forth in
Schedule A attached hereto.

This Grant has been granted in conjunction  with the security  interest granted
to the Grantee  under the  Security  Agreement.  The rights and remedies of the
Grantee with respect to the security  interest  granted herein are as set forth
in the Security  Agreement,  all terms and provisions of which are incorporated
herein by reference.  In the event that any provisions of this Grant are deemed
to  conflict  with the  Security  Agreement,  the  provisions  of the  Security
Agreement shall govern.

                                     * * *

<PAGE>
                                                                        Annex J
                                                                         Page 2

          IN WITNESS  WHEREOF,  the undersigned  have executed this Grant as of
the ____ day of ___________, ____.

                                          [NAME OF GRANTOR], Grantor

                                          By___________________________
                                              Name:
                                              Title:

                                          BANK OF AMERICA, N.A.,
                                            as Collateral Agent and Grantee

                                          By___________________________
                                              Name:
                                              Title:

<PAGE>

STATE OF                   )
                           )  ss:
COUNTY OF                  )

          On  this  __  day of  _________,  ____,  before  me  personally  came
___________ ______________, who being duly sworn, did depose and say that [s]he
is  ___________________  of [Name of  Grantor],  that  [s]he is  authorized  to
execute the foregoing Grant on behalf of said corporation and that [s]he did so
by authority of the Board of Directors of said corporation.

                                          -------------------------------
                                                     Notary Public

<PAGE>

STATE OF ______________)
                       )  ss.:
COUNTY OF______________)

          On this  ____ day of  _________,  ____,  before  me  personally  came
________  __________________ who, being by me duly sworn, did state as follows:
that  [s]he is  __________________  of Bank of  America,  N.A.,  that  [s]he is
authorized to execute the foregoing Grant on behalf of said __________ and that
[s]he did so by authority of the Board of Directors of said _____________.

                                          -------------------------------
                                                     Notary Public

<PAGE>

                                                                        ANNEX J
                                                                             to
                                                             SECURITY AGREEMENT
                                                             ------------------

                                U.S. COPYRIGHTS
                                ---------------

REGISTRATION                      PUBLICATION
   NUMBERS                           DATE                        COPYRIGHT TITLE
-------------                   --------------                   ---------------EXHIBIT 10.2

                                PLEDGE AGREEMENT

                  PLEDGE AGREEMENT (as amended, modified or supplemented from
time to time, this "Agreement"), dated as of July 30, 2001 made by each of the
undersigned pledgors (each a "Pledgor" and, together with any other entity that
becomes a party hereto pursuant to Section 25 hereof, the "Pledgors") to Bank
of America, N.A., as Collateral Agent (together with any successor collateral
agent, the "Pledgee"), for the benefit of the Secured Creditors (as defined
below). Except as otherwise defined herein, 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 Systems, Inc. (the "Borrower"), the
lenders from time to time party thereto (the "Lenders"), Banc of America
Securities LLC and Morgan Stanley Senior Funding, Inc., as Joint Lead Arrangers
and Book Managers, Bank of America, N.A., as Administrative Agent (together
with any successor Administrative Agent, the "Administrative Agent"), Morgan
Stanley Senior Funding, Inc., as Syndication Agent, and First Union National
Bank and General Electric Capital Corporation, as Co-Documentation Agents, have
entered into a Credit Agreement, dated as of July 30, 2001 (as amended,
modified or supplemented from time to time, the "Credit Agreement"), providing
for the making of Loans to, and the issuance of Letters of Credit for the
account of, the Borrower as contemplated therein (the Lenders, the
Administrative Agent, each Issuing Lender and the Pledgee are herein called the
"Lender Creditors");

                  WHEREAS, the 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," and together with the Lender Creditors, the "Secured Creditors");

                  WHEREAS, pursuant to the Subsidiaries Guaranty, each
Subsidiary Guarantor has jointly and severally guaranteed to the Secured
Creditors the payment when due of all Guaranteed Obligations as described
therein;

                  WHEREAS, it is a condition to the making of Loans to, and the
issuance of Letters of Credit for the account of, the Borrower under the Credit
Agreement that each Pledgor shall have executed and delivered to the Pledgee
this Agreement; and

                  WHEREAS, each Pledgor desires to enter into this Agreement in
order to satisfy the condition described in the preceding paragraph;

                  NOW, THEREFORE, in consideration of the foregoing and other
benefits accruing to each Pledgor, the receipt and sufficiency of which are
hereby acknowledged, each Pledgor hereby makes the following representations
and warranties to the Pledgee for the benefit of the

<PAGE>

Secured Creditors and hereby covenants and agrees with the Pledgee for the
benefit of the Secured Creditors as follows:

                  1. SECURITY FOR OBLIGATIONS. This Agreement is made by each
Pledgor for the benefit of the Secured Creditors to secure:

               (i) the full and prompt payment when due (whether at the stated
          maturity, by acceleration or otherwise) of all obligations and
          indebtedness (including, without limitation, indemnities, Fees and
          interest thereon (including, without limitation, all interest that
          accrues after the commencement of any case, proceeding or other
          action relating to the bankruptcy, insolvency, reorganization or
          similar proceeding of any Pledgor at the rate provided for in the
          respective documentation, whether or not a claim for post-petition
          interest is allowed in any such proceeding) of such Pledgor to the
          Lender Creditors, whether now existing or hereafter incurred under,
          arising out of, or in connection with the Credit Agreement and the
          other Credit Documents to which such Pledgor is a party and the due
          performance and compliance by such Pledgor with all of the terms,
          conditions and agreements contained in the Credit Agreement and in
          such other Credit Documents (all such obligations and liabilities
          under this clause (i), except to the extent consisting of obligations
          or indebtedness with respect to Interest Rate Protection Agreements
          or Other Hedging Agreements, being herein collectively called the
          "Credit Document Obligations");

               (ii) the full and prompt payment when due (whether at the stated
          maturity, by acceleration or otherwise) of all obligations and
          liabilities (including, without limitation, all interest that accrues
          after the commencement of any case, proceeding or other action
          relating to the bankruptcy, insolvency, reorganization or similar
          proceeding of any Pledgor at the rate provided for in the respective
          documentation, whether or not a claim for post-petition interest is
          allowed in any such proceeding) owing by such Pledgor to the Other
          Creditors under, or with respect to, any Interest Rate Protection
          Agreement or Other Hedging Agreement, whether such Interest Rate
          Protection Agreement or Other Hedging Agreement is now in existence
          or hereafter arising, and the due performance and compliance by such
          Pledgor with all of the terms, conditions and agreements contained
          therein (all such obligations and liabilities described in this
          clause (ii) being herein collectively called the "Other
          Obligations");

               (iii) any and all sums advanced by the Pledgee in order to
          preserve the Collateral (as hereinafter defined) or preserve its
          security interest in the Collateral;

               (iv) in the event of any proceeding for the collection or
          enforcement of any indebtedness, obligations or liabilities of such
          Pledgor referred to in clauses (i), (ii) and (iii) above, after an
          Event of Default (which term to mean and include any Event of Default
          under, and as defined in, the Credit Agreement or any payment default
          by the Borrower under any Interest Rate Protection Agreement or Other
          Hedging Agreement and shall, in any event, include, without
          limitation, any payment default (after the expiration of any
          applicable grace period) on any of the Obligations (as hereinafter
          defined)) shall have occurred and be continuing, the reasonable
          expenses of retaking, holding, preparing

                                       2
<PAGE>

          for sale or lease, selling or otherwise disposing of or realizing on
          the Collateral, or of any exercise by the Pledgee of its rights
          hereunder, together with reasonable attorneys' fees and court costs;
          and

               (v) all amounts paid by any Secured Creditor as to which such
          Secured Creditor has the right to reimbursement under Section 11 of
          this Agreement;

all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) of this Section 1 being herein collectively called the
"Obligations," it being acknowledged and agreed that the "Obligations" shall
include extensions of credit of the types described above, whether outstanding
on the date of this Agreement or extended from time to time after the date of
this Agreement.

                  2. DEFINITIONS. (a) Unless otherwise defined herein, all
capitalized terms used herein and defined in the Credit Agreement shall be used
herein as therein defined. Reference to singular terms shall include the plural
and vice versa.

                  (b) The following capitalized terms used herein shall have
the definitions specified below:

                  "Administrative Agent" has the meaning set forth in the
Recitals hereto.

                  "Adverse Claim" has the meaning given such term in Section
8-102(a)(1) of the UCC.

                  "Agreement" has the meaning set forth in the first paragraph
hereof.

                  "Certificated Security" has the meaning given such term in
Section 8-102(a)(4) of the UCC.

                  "Clearing Corporation" has the meaning given such term in
Section 8-102(a)(5) of the UCC.

                  "Collateral" has the meaning set forth in Section 3.1 hereof.

                  "Collateral Accounts" means any and all accounts established
and maintained by the Pledgee in the name of any Pledgor to which Collateral
may be credited.

                  "Credit Agreement" has the meaning set forth in the Recitals
hereto.

                  "Credit Document Obligations" has the meaning set forth in
Section 1 hereof.

                  "Domestic Corporation" has the meaning set forth in the
definition of "Stock."

                  "Event of Default" has the meaning set forth in Section 1
hereof.

                  "Financial Asset" has the meaning given such term in Section
8-102(a)(9) of the UCC.

                                       3
<PAGE>

                  "Foreign Corporation" has the meaning set forth in the
definition of "Stock."

                  "Indemnitees" has the meaning set forth in Section 11 hereof.

                  "Instrument" has the meaning given such term in Section
9-102(a)(47) of the UCC.

                  "Investment Property" has the meaning given such term in
Section 9-102(a)(49) of the UCC.

                  "Lender Creditors" has the meaning set forth in the Recitals
hereto.

                  "Lenders" has the meaning set forth in the Recitals hereto.

                  "Limited Liability Company Assets" means all assets, whether
tangible or intangible and whether real, personal or mixed (including, without
limitation, all limited liability company capital and interest in other limited
liability companies), at any time owned or represented by any Limited Liability
Company Interest.

                  "Limited Liability Company Interests" means the entire
limited liability company membership interest at any time owned by any Pledgor
in any limited liability company.

                  "Non-Voting Stock" means all capital stock which is not
Voting Stock.

                  "Notes" means all intercompany notes among the Borrower and
its Subsidiaries and all other promissory notes evidencing Indebtedness equal
to or greater than $1,000,000 from time to time issued to, or held by, any
Pledgor.

                  "Obligations" has the meaning set forth in Section 1 hereof.

                  "Other Creditors" has the meaning set forth in the Recitals
hereto.

                  "Other Obligations" has the meaning set forth in Section 1
hereof.

                  "Partnership Assets" means all assets, whether tangible or
intangible and whether real, personal or mixed (including, without limitation,
all partnership capital and interest in other partnerships), at any time owned
or represented by any Partnership Interest.

                  "Partnership Interest" means the entire general partnership
interest or limited partnership interest at any time owned by any Pledgor in
any general partnership or limited partnership.

                  "Pledged Notes" has the meaning set forth in Section 3.5
hereof.

                  "Pledgee" has the meaning set forth in the first paragraph
hereof.

                  "Pledgor" has the meaning set forth in the first paragraph
hereof.

                                       4

<PAGE>

                  "Proceeds" has the meaning given such term in Section
9-102(a)(64) of the UCC.

                  "Required Lenders" has the meaning given such term in the
Credit Agreement.

                  "Secured Creditors" has the meaning set forth in the Recitals
hereto.

                  "Secured Debt Agreements" has the meaning set forth in
Section 5 hereof.

                  "Securities Account" has the meaning given such term in
Section 8-501(a) of the UCC.

                  "Securities Act" means the Securities Act of 1933, as
amended, as in effect from time to time.

                  "Security" and "Securities" has the meaning given such term
in Section 8-102(a)(15) of the UCC and shall in any event include all Stock and
Notes.

                  "Security Entitlement" has the meaning given such term in
Section 8-102(a)(17) of the UCC.

                  "Stock" means (x) with respect to corporations incorporated
under the laws of the United States or any State or territory thereof (each a
"Domestic Corporation"), all of the issued and outstanding shares of capital
stock of any corporation at any time owned by any Pledgor of any Domestic
Corporation and (y) with respect to corporations not Domestic Corporations
(each a "Foreign Corporation"), all of the issued and outstanding shares of
capital stock at any time owned by any Pledgor of any Foreign Corporation.

                  "Termination Date" has the meaning set forth in Section 20
hereof.

                  "UCC" means the Uniform Commercial Code as in effect in the
State of New York from time to time; provided that all references herein to
specific sections or subsections of the UCC are references to such sections or
subsections, as the case may be, of the Uniform Commercial Code as in effect in
the State of New York on the date hereof.

                  "Uncertificated Security" has the meaning given such term in
Section 8-102(a)(18) of the UCC.

                  "Voting Stock" means all classes of capital stock of any
Foreign Corporation entitled to vote.

                  3.  PLEDGE OF SECURITIES, ETC.

                  3.1 Pledge. To secure the Obligations now or hereafter owed
or to be performed by such Pledgor, each Pledgor does hereby grant, pledge and
assign to the Pledgee for the benefit of the Secured Creditors, and does hereby
create a continuing security interest in favor of the Pledgee for the benefit
of the Secured Creditors in, all of the right, title and interest in and to the

                                       5

<PAGE>

following, whether now existing or hereafter from time to time acquired
(collectively, the "Collateral"):

               (a) each of the Collateral Accounts, including any and all
          assets of whatever type or kind deposited by such Pledgor in such
          Collateral Account, whether now owned or hereafter acquired, existing
          or arising, including, without limitation, all Financial Assets,
          Investment Property, moneys, checks, drafts, Instruments, Securities
          or interests therein of any type or nature deposited or required by
          the Credit Agreement or any other Secured Debt Agreement to be
          deposited in such Collateral Account, and all investments and all
          certificates and other Instruments (including depository receipts, if
          any) from time to time representing or evidencing the same, and all
          dividends, interest, distributions, cash and other property from time
          to time received, receivable or otherwise distributed in respect of
          or in exchange for any or all of the foregoing;

               (b) all Securities of such Pledgor from time to time;

               (c) all Limited Liability Company Interests of such Pledgor from
          time to time and all of its right, title and interest in each limited
          liability company to which each such interest relates, whether now
          existing or hereafter acquired, including, without limitation:

                    (A) all the capital thereof and its interest in all
               profits, losses, Limited Liability Company Assets and other
               distributions to which such Pledgor shall at any time be
               entitled in respect of such Limited Liability Company Interests;

                    (B) all other payments due or to become due to such Pledgor
               in respect of Limited Liability Company Interests, whether under
               any limited liability company agreement, operating agreement or
               otherwise, whether as contractual obligations, damages,
               insurance proceeds or otherwise;

                    (C) all of its claims, rights, powers, privileges,
               authority, options, security interests, liens and remedies, if
               any, under any limited liability company agreement or operating
               agreement, or at law or otherwise in respect of such Limited
               Liability Company Interests;

                    (D) all present and future claims, if any, of such Pledgor
               against any such limited liability company for moneys loaned or
               advanced, for services rendered or otherwise;

                    (E) all of such Pledgor's rights under any limited
               liability company agreement or operating agreement or at law to
               exercise and enforce every right, power, remedy, authority,
               option and privilege of such Pledgor relating to such Limited
               Liability Company Interests, including any power to terminate,
               cancel or modify any limited liability company agreement or
               operating agreement, to execute any instruments and to take any
               and all other action on behalf of and in the name of any of such
               Pledgor in respect of such Limited Liability Company Interests
               and any such limited liability company, to make determinations,
               to

                                       6
<PAGE>

               exercise any election (including, but not limited to, election
               of remedies) or option or to give or receive any notice,
               consent, amendment, waiver or approval, together with full power
               and authority to demand, receive, enforce, collect or receipt
               for any of the foregoing or for any Limited Liability Company
               Asset, to enforce or execute any checks, or other instruments or
               orders, to file any claims and to take any action in connection
               with any of the foregoing (with all of the foregoing rights only
               to be exercisable upon the occurrence and during the
               continuation of an Event of Default); and

                    (F) all other property hereafter delivered in substitution
               for or in addition to any of the foregoing, all certificates and
               instruments representing or evidencing such other property and
               all cash, securities, interest, dividends, rights and other
               property at any time and from time to time received, receivable
               or otherwise distributed in respect of or in exchange for any or
               all thereof;

               (d) all Partnership Interests of such Pledgor from time to time
          and all of its right, title and interest in each partnership to which
          each such interest relates, whether now existing or hereafter
          acquired, including, without limitation:

                    (A) all the capital thereof and its interest in all
               profits, losses, Partnership Assets and other distributions to
               which such Pledgor shall at any time be entitled in respect of
               such Partnership Interests;

                    (B) all other payments due or to become due to such Pledgor
               in respect of Partnership Interests, whether under any
               partnership agreement, operating agreement or otherwise, whether
               as contractual obligations, damages, insurance proceeds or
               otherwise;

                    (C) all of its claims, rights, powers, privileges,
               authority, options, security interests, liens and remedies, if
               any, under any partnership agreement or operating agreement, or
               at law or otherwise in respect of such Partnership Interests;

                    (D) all present and future claims, if any, of such Pledgor
               against any such partnership for moneys loaned or advanced, for
               services rendered or otherwise;

                    (E) all of such Pledgor's rights under any partnership
               agreement or operating agreement or at law to exercise and
               enforce every right, power, remedy, authority, option and
               privilege of such Pledgor relating to such Partnership
               Interests, including any power to terminate, cancel or modify
               any partnership agreement or operating agreement, to execute any
               instruments and to take any and all other action on behalf of
               and in the name of any of such Pledgor in respect of such
               Partnership Interests and any such partnership, to make
               determinations, to exercise any election (including, but not
               limited to, election of remedies) or option or to give or
               receive any notice, consent, amendment, waiver or approval,
               together

                                       7
<PAGE>

               with full power and authority to demand, receive, enforce,
               collect or receipt for any of the foregoing or for any
               Partnership Asset, to enforce or execute any checks, or other
               instruments or orders, to file any claims and to take any action
               in connection with any of the foregoing (with all of the
               foregoing rights only to be exercisable upon the occurrence and
               during the continuation of an Event of Default); and

                    (F) all other property hereafter delivered in substitution
               for or in addition to any of the foregoing, all certificates and
               instruments representing or evidencing such other property and
               all cash, securities, interest, dividends, rights and other
               property at any time and from time to time received, receivable
               or otherwise distributed in respect of or in exchange for any or
               all thereof;

               (e) all Security Entitlements of such Pledgor from time to time
          in any and all of the foregoing;

               (f) all Financial Assets and Investment Property of such Pledgor
          from time to time; and

               (g) all Proceeds of any and all of the foregoing.

         Notwithstanding anything to the contrary contained in this Section
3.1, (v) no Pledgor shall be required to pledge any equity interests in any
Health Care Joint Venture acquired in accordance with Section 9.14 of the
Credit Agreement if the equity interests of such Health Care Joint Venture
owned by all Pledgors has an aggregate investment cost of less than $2,000,000,
(w) no Pledgor (to the extent that it is the Borrower or a Domestic Subsidiary
of the Borrower) shall be required at any time to pledge hereunder more than
65% of the Voting Stock of any Foreign Corporation, (x) each Pledgor shall be
required to pledge hereunder 100% of any Non-Voting Stock at any time and from
time to time acquired by such Pledgor of any Foreign Corporation, (y) the
equity interests of such Pledgor in The 6300 West Roosevelt Partnership and
MacNeal/CCP Joint Venture shall not be required to be pledged hereunder so long
as the requisite consents to allow such pledge have not been obtained and (z)
the equity interests of such Pledgor in MacNeal/Daly/Shaw Joint Venture shall
not be required to be pledged hereunder (although to the extent such equity
interests have not been sold or otherwise disposed of in accordance with the
Credit Agreement within 180 days following the Effective Date, such equity
interests shall automatically be pledged hereunder on such date pursuant to the
terms hereof); provided that (i) the Pledgors agree to use their reasonable
best efforts to obtain such consents and (ii) if any such consent is obtained,
the equity interests of the entity for which such consent has been obtained
shall be pledged hereunder pursuant to the provisions hereof.

                  3.2. Procedures. (a) To the extent that any Pledgor at any
time or from time to time owns, acquires or obtains any right, title or
interest in any Collateral, such Collateral shall automatically (and without
the taking of any action by the respective Pledgor) be pledged pursuant to
Section 3.1 of this Agreement and, in addition thereto, such Pledgor shall (to
the extent provided below) take the following actions as set forth below (as
promptly as practicable

                                       8
<PAGE>

and, in any event, within 10 days after it obtains such Collateral) for the
benefit of the Pledgee and the Secured Creditors:

               (i) with respect to a Certificated Security (other than a
          Certificated Security credited on the books of a Clearing
          Corporation), the respective Pledgor shall physically deliver such
          Certificated Security to the Pledgee, endorsed to the Pledgee or
          endorsed in blank;

               (ii) with respect to an Uncertificated Security (other than an
          Uncertificated Security credited on the books of a Clearing
          Corporation), the respective Pledgor shall cause (or, in the case of
          an Uncertificated Security issued by a Person which is not a
          Subsidiary of such Pledgor, shall use its reasonable best efforts to
          cause) the issuer of such Uncertificated Security to duly authorize
          and execute, and deliver to the Pledgee, an agreement for the benefit
          of the Pledgee and the Secured Creditors substantially in the form of
          Annex G hereto (appropriately completed to the satisfaction of the
          Pledgee and with such modifications, if any, as shall be satisfactory
          to the Pledgee) pursuant to which such issuer agrees to comply with
          any and all instructions originated by the Pledgee without further
          consent by the registered owner and not to comply with instructions
          regarding such Uncertificated Security (and any Partnership Interests
          and Limited Liability Company Interests issued by such issuer)
          originated by any other Person other than a court of competent
          jurisdiction;

               (iii) with respect to a Certificated Security, Uncertificated
          Security, Partnership Interest or Limited Liability Company Interest
          credited on the books of a Clearing Corporation (including a Federal
          Reserve Bank, Participants Trust Company or The Depository Trust
          Company), the respective Pledgor shall promptly notify the Pledgee
          thereof and shall promptly take all actions required (i) to comply
          with the applicable rules of such Clearing Corporation and (ii) to
          perfect the security interest of the Pledgee under applicable law
          (including, in any event, under Sections 9-312(a) and (b), 9-106 and
          8-106(d) of the UCC). The Pledgor further agrees to take such actions
          as the Pledgee deems necessary or desirable to effect the foregoing;

               (iv) with respect to a Partnership Interest or a Limited
          Liability Company Interest (other than a Partnership Interest or
          Limited Liability Interest credited on the books of a Clearing
          Corporation), (1) if such Partnership Interest or Limited Liability
          Company Interest is represented by a certificate, the procedure set
          forth in Section 3.2(a)(i) hereof, and (2) if such Partnership
          Interest or Limited Liability Company Interest is not represented by
          a certificate, the procedure set forth in Section 3.2(a)(ii) hereof;

               (v) with respect to any Note, physical delivery of such Note to
          the Pledgee, endorsed to the Pledgee or endorsed in blank; and

               (vi) with respect to cash, upon the request of the Pledgee from
          and after, and during the continuation of, an Event of Default, (i)
          establishment by the Pledgee of a cash account in the name of such
          Pledgor over which the Pledgee shall have exclusive and absolute
          control and dominion (and no withdrawals or transfers may be made
          therefrom

                                       9

<PAGE>

          by any Person except with the prior written consent of the Pledgee)
          and (ii) deposit of such cash in such cash account.

                  (b) In addition to the actions required to be taken pursuant
to Section 3.2(a) hereof, each Pledgor shall take the following additional
actions with respect to the Securities and Collateral (as defined below):

               (i) with respect to all Collateral of such Pledgor whereby or
          with respect to which the Pledgee may obtain "control" thereof within
          the meaning of Section 8-106 of the UCC (or under any provision of
          the UCC as same may be amended or supplemented from time to time, or
          under the laws of any relevant State other than the State of New
          York), the respective Pledgor shall take all actions as may be
          requested from time to time by the Pledgee so that "control" of such
          Collateral is obtained (to the greatest extent feasible in the case
          of any Collateral constituting a partnership or membership interest
          in any Person which is not a Subsidiary of any Pledgor) and at all
          times held by the Pledgee; and

               (ii) each Pledgor shall from time to time cause appropriate
          financing statements (on Form UCC-1 or other appropriate form) under
          the Uniform Commercial Code as in effect in the various relevant
          States, covering all Collateral hereunder (with the form of such
          financing statements to be satisfactory to the Pledgee), to be filed
          in the relevant filing offices so that at all times the Pledgee has a
          security interest in all Investment Property and other Collateral
          which is perfected by the filing of such financing statements (in
          each case to the maximum extent perfection by filing may be obtained
          under the laws of the relevant States, including, without limitation,
          Section 9-312(a) of the UCC).

                  3.3 Subsequently Acquired Collateral. If any Pledgor shall
acquire (by purchase, stock dividend or otherwise) any additional Collateral at
any time or from time to time after the date hereof, such Collateral shall
automatically (and without any further action being required to be taken) be
subject to the pledge and security interests created pursuant to Section 3.1
hereof and, furthermore, the Pledgor will promptly thereafter take (or cause to
be taken) all action with respect to such Collateral in accordance with the
procedures set forth in Section 3.2 hereof, and will promptly thereafter
deliver to the Pledgee (i) a certificate executed by a principal executive
officer of such Pledgor describing such Collateral and certifying that the same
has been duly pledged in favor of the Pledgee (for the benefit of the Secured
Creditors) hereunder and (ii) supplements to Annexes A through F hereto as are
necessary to cause such annexes to be complete and accurate at such time.
Without limiting the foregoing, each Pledgor shall be required to pledge
hereunder any shares of stock at any time and from time to time after the date
hereof acquired by such Pledgor of any Foreign Corporation, provided that (x)
no Pledgor shall be required to pledge any equity interests in any Health Care
Joint Venture acquired in accordance with Section 9.14 of the Credit Agreement
if the equity interests of such Health Care Joint Venture owned by all Pledgors
has an aggregate investment cost of less than $2,000,000, (y) no Pledgor (to
the extent that it is the Borrower or a Domestic Subsidiary of the Borrower)
shall be required at any time to pledge hereunder more than 65% of the Voting
Stock of any Foreign Corporation and (z) each Pledgor shall be required to
pledge hereunder 100% of any Non-Voting Stock at any time and from time to time
acquired by such Pledgor of any Foreign Corporation.

                                      10
<PAGE>

                  3.4 Transfer Taxes. Each pledge of Collateral under Section
3.1 or Section 3.3 hereof shall be accompanied by any transfer tax stamps
required in connection with the pledge of such Collateral.

                  3.5 Definition of Pledged Notes. All Notes at any time
pledged or required to be pledged hereunder are hereinafter called the "Pledged
Notes."

                  3.6 Certain Representations and Warranties Regarding the
Collateral. Each Pledgor represents and warrants that on the date hereof (i)
each Subsidiary of such Pledgor, and the direct ownership thereof, is listed in
Annex A hereto; (ii) the Stock held by such Pledgor consists of the number and
type of shares of the stock of the corporations as described in Annex B hereto;
(iii) such Stock constitutes that percentage of the issued and outstanding
capital stock of the issuing corporation as is set forth in Annex B hereto;
(iv) the Notes held by such Pledgor consist of the promissory notes described
in Annex C hereto where such Pledgor is listed as the lender; (v) the Limited
Liability Company Interests held by such Pledgor consist of the number and type
of interests of the Persons described in Annex D hereto; (vi) each such Limited
Liability Company Interest constitutes that percentage of the issued and
outstanding equity interest of the issuing Person as set forth in Annex D
hereto; (vii) the Partnership Interests held by such Pledgor consist of the
number and type of interests of the Persons described in Annex E hereto; (viii)
each such Partnership Interest constitutes that percentage or portion of the
entire partnership interest of the Partnership as set forth in Annex E hereto;
(ix) the Pledgor has complied with the respective procedure set forth in
Section 3.2(a) hereof with respect to each item of Collateral described in
Annexes A through E hereto; and (x) on the date hereof, such Pledgor owns no
other Securities, Limited Liability Company Interests or Partnership Interests.

                  4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. If and to
the extent necessary to enable the Pledgee to perfect its security interest in
any of the Collateral or to exercise any of its remedies hereunder, the Pledgee
shall have the right to appoint one or more sub-agents for the purpose of
retaining physical possession of the Collateral, which may be held (in the
discretion of the Pledgee) in the name of the relevant Pledgor, endorsed or
assigned in blank or in favor of the Pledgee or any nominee or nominees of the
Pledgee or a sub-agent appointed by the Pledgee.

                  5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until
there shall have occurred and be continuing an Event of Default, each Pledgor
shall be entitled to exercise any and all voting and other consensual rights
pertaining to the Collateral owned by it, and to give consents, waivers or
ratifications in respect thereof; provided that, in each case, no vote shall be
cast or any consent, waiver or ratification given or any action taken or
omitted to be taken which would violate or be inconsistent with any of the
terms of this Agreement, the Credit Agreement, any other Credit Document or any
Interest Rate Protection Agreement or Other Hedging Agreement (collectively,
the "Secured Debt Agreements"), or which would have the effect of impairing the
value of the Collateral or any part thereof or the position or interests of the
Pledgee or any other Secured Creditor in the Collateral. All such rights of
each Pledgor to vote and to give consents, waivers and ratifications shall
cease in case an Event of Default has occurred and is continuing, and Section 7
hereof shall become applicable.

                                      11
<PAGE>

                  6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until there
shall have occurred and be continuing an Event of Default, all cash dividends,
cash distributions, cash Proceeds and other cash amounts payable in respect of
the Collateral shall be paid to the respective Pledgor. The Pledgee shall be
entitled to receive directly, and to retain as part of the Collateral:

               (i) all other or additional stock, notes, limited liability
          company interests, partnership interests, instruments or other
          securities or property paid or distributed by way of dividend or
          otherwise in respect of the Collateral (except for cash dividends,
          unless an Event of Default is continuing at the time of payment
          thereof);

               (ii) all other or additional stock, notes, limited liability
          company interests, partnership interests, instruments or other
          securities or property paid or distributed in respect of the
          Collateral by way of stock-split, spin-off, split-up,
          reclassification, combination of shares or similar rearrangement
          (except for cash dividends, unless an Event of Default is continuing
          at the time of payment thereof); and

               (iii) all other or additional stock, notes, limited liability
          company interests, partnership interests, instruments or other
          securities or property which may be paid in respect of the Collateral
          by reason of any consolidation, merger, exchange of stock, conveyance
          of assets, liquidation or similar corporate reorganization (except
          for cash dividends, unless an Event of Default is continuing at the
          time of payment thereof).

Nothing contained in this Section 6 shall limit or restrict in any way the
Pledgee's right to receive proceeds of the Collateral in any form in accordance
with Section 3 of this Agreement. All dividends, distributions or other
payments which are received by any Pledgor contrary to the provisions of this
Section 6 and Section 7 hereof shall be received in trust for the benefit of
the Pledgee, shall be segregated from other property or funds of such Pledgor
and shall be forthwith paid over to the Pledgee as Collateral in the same form
as so received (with any necessary endorsement).

                  7. REMEDIES IN CASE OF EVENT OF DEFAULT. If there shall have
occurred and be continuing an Event of Default, then and in every such case,
the Pledgee shall be entitled to exercise all of the rights, powers and
remedies (whether vested in it by this Agreement, any other Secured Debt
Agreement or by law) for the protection and enforcement of its rights in
respect of the Collateral, and the Pledgee shall be entitled to exercise all
the rights and remedies of a secured party under the Uniform Commercial Code as
in effect in any relevant jurisdiction and also shall be entitled, without
limitation, to exercise the following rights, which each Pledgor hereby agrees
to be commercially reasonable:

               (i) to receive all amounts payable in respect of the Collateral
          otherwise payable under Section 6 hereof to the respective Pledgor;

               (ii) to transfer all or any part of the Collateral into the
          Pledgee's name or the name of its nominee or nominees;

                                      12

<PAGE>

               (iii) to accelerate any Pledged Note which may be accelerated in
          accordance with its terms, and take any other lawful action to
          collect upon any Pledged Note (including, without limitation, to make
          any demand for payment thereon);

               (iv) to vote all or any part of the Collateral (whether or not
          transferred into the name of the Pledgee) and give all consents,
          waivers and ratifications in respect of the Collateral and otherwise
          act with respect thereto as though it were the outright owner thereof
          (each Pledgor hereby irrevocably constituting and appointing the
          Pledgee the proxy and attorney-in-fact of such Pledgor, with full
          power of substitution to do so);

               (v) at any time and from time to time to sell, assign and
          deliver, or grant options to purchase, all or any part of the
          Collateral, or any interest therein, at any public or private sale,
          without demand of performance, advertisement or notice of intention
          to sell or of the time or place of sale or adjournment thereof or to
          redeem or otherwise (all of which are hereby waived by each Pledgor),
          for cash, on credit or for other property, for immediate or future
          delivery without any assumption of credit risk, and for such price or
          prices and on such terms as the Pledgee in its absolute discretion
          may determine, provided that at least 10 days' written notice of the
          time and place of any such sale shall be given to the respective
          Pledgor. The Pledgee shall not be obligated to make any such sale of
          Collateral regardless of whether any such notice of sale has
          theretofore been given. Each Pledgor hereby waives and releases to
          the fullest extent permitted by law any right or equity of redemption
          with respect to the Collateral, whether before or after sale
          hereunder, and all rights, if any, of marshalling the Collateral and
          any other security for the Obligations or otherwise. At any such
          sale, unless prohibited by applicable law, the Pledgee on behalf of
          the Secured Creditors may bid for and purchase all or any part of the
          Collateral so sold free from any such right or equity of redemption.
          Neither the Pledgee nor any other Secured Creditor shall be liable
          for failure to collect or realize upon any or all of the Collateral
          or for any delay in so doing nor shall any of them be under any
          obligation to take any action whatsoever with regard thereto; and

               (vi) to set-off any and all Collateral against any and all
          Obligations, and to withdraw any and all cash or other Collateral
          from any and all Collateral Accounts and to apply such cash and other
          Collateral to the payment of any and all Obligations.

                  8. REMEDIES, ETC., CUMULATIVE. Each and every right, power
and remedy of the Pledgee provided for in this Agreement or in any other
Secured Debt Agreement, or now or hereafter existing at law or in equity or by
statute shall be cumulative and concurrent and shall be in addition to every
other such right, power or remedy. The exercise or beginning of the exercise by
the Pledgee or any other Secured Creditor of any one or more of the rights,
powers or remedies provided for in this Agreement or any other Secured Debt
Agreement or now or hereafter existing at law or in equity or by statute or
otherwise shall not preclude the simultaneous or later exercise by the Pledgee
or any other Secured Creditor of all such other rights, powers or remedies, and
no failure or delay on the part of the Pledgee or any other

                                      13
<PAGE>

Secured Creditor to exercise any such right, power or remedy shall operate as a
waiver thereof. No notice to or demand on any Pledgor in any case shall entitle
it to any other or further notice or demand in similar or other circumstances
or constitute a waiver of any of the rights of the Pledgee or any other Secured
Creditor to any other or further action in any circumstances without notice or
demand. The Secured Creditors agree that this Agreement may be enforced only by
the action of the Administrative Agent or the Pledgee, in each case acting upon
the instructions of the Required Lenders (or, after the date on which all
Credit Document Obligations have been paid in full, the holders of at least the
majority of the outstanding Other Obligations) and that no other Secured
Creditor shall have any right individually to seek to enforce or to enforce
this Agreement or to realize upon the security to be granted hereby, it being
understood and agreed that such rights and remedies may be exercised by the
Administrative Agent or the Pledgee or the holders of at least a majority of
the outstanding Other Obligations, as the case may be, for the benefit of the
Secured Creditors upon the terms of this Agreement.

                  9. APPLICATION OF PROCEEDS. (a) All monies collected by the
Pledgee upon any sale or other disposition of the Collateral pursuant to the
terms of this Agreement, together with all other monies received by the Pledgee
hereunder, shall be applied in the manner provided in the Security Agreement.

                  (b) It is understood and agreed that the Pledgors shall
remain jointly and severally liable to the extent of any deficiency between the
amount of the proceeds of the Collateral hereunder and the aggregate amount of
the Obligations.

                  10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral
by the Pledgee hereunder (whether by virtue of the power of sale herein
granted, pursuant to judicial process or otherwise), the receipt of the Pledgee
or the officer making the sale shall be a sufficient discharge to the purchaser
or purchasers of the Collateral so sold, and such purchaser or purchasers shall
not be obligated to see to the application of any part of the purchase money
paid over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.

                  11. INDEMNITY. Each Pledgor jointly and severally agrees (i)
to indemnify and hold harmless the Pledgee in such capacity and each other
Secured Creditor and their respective successors, assigns, employees, agents,
affiliates and servants (individually an "Indemnitee," and collectively the
"Indemnitees") from and against any and all claims, demands, losses, judgments
and liabilities (including liabilities for penalties) of whatsoever kind or
nature, and (ii) to reimburse each Indemnitee for all costs and expenses,
including reasonable attorneys' fees, in each case growing out of or resulting
from this Agreement or the exercise by any Indemnitee of any right or remedy
granted to it hereunder or under any other Secured Debt Agreement (but
excluding any claims, demands, losses, judgments and liabilities or expenses to
the extent incurred by reason of gross negligence or willful misconduct of such
Indemnitee as determined by a non-appealable decision by a court of competent
jurisdiction). In no event shall the Pledgee be liable, in the absence of gross
negligence or willful misconduct on its part, for any matter or thing in
connection with this Agreement other than to account for monies actually
received by it in accordance with the terms hereof. If and to the extent that
the obligations of any Pledgor under this Section 11 are unenforceable for any
reason, such Pledgor hereby agrees to make the maximum contribution to the
payment and satisfaction of such obligations which is permissible under
applicable law.

                                       14
<PAGE>

                  12. PLEDGEE NOT A PARTNER OR LIMITED LIABILITY COMPANY
MEMBER. (a) Nothing herein shall be construed to make the Pledgee or any other
Secured Creditor liable as a member of any limited liability company or as a
partner of any partnership and neither the Pledgee nor any other Secured
Creditor by virtue of this Agreement or otherwise (except as referred to in the
following sentence) shall have any of the duties, obligations or liabilities of
a member of any limited liability company or of a partner of any partnership.
The parties hereto expressly agree that, unless the Pledgee shall become the
absolute owner of Collateral consisting of a Limited Liability Company Interest
or Partnership Interest pursuant hereto, this Agreement shall not be construed
as creating a partnership or joint venture among the Pledgee, any other Secured
Creditor and/or any Pledgor.

                  (b) Except as provided in the last sentence of paragraph (a)
of this Section 12, the Pledgee, by accepting this Agreement, did not intend to
become a member of any limited liability company or a partner of any
partnership or otherwise be deemed to be a co-venturer with respect to any
Pledgor or any limited liability company or partnership either before or after
an Event of Default shall have occurred. The Pledgee shall have only those
powers set forth herein and the Secured Creditors shall assume none of the
duties, obligations or liabilities of a member of any limited liability company
or of a partner of any partnership or any Pledgor except as provided in the
last sentence of paragraph (a) of this Section 12.

                  (c) The Pledgee and the other Secured Creditors shall not be
obligated to perform or discharge any obligation of any Pledgor as a result of
the pledge hereby effected.

                  (d) The acceptance by the Pledgee of this Agreement, with all
the rights, powers, privileges and authority so created, shall not at any time
or in any event obligate the Pledgee or any other Secured Creditor to appear in
or defend any action or proceeding relating to the Collateral to which it is
not a party, or to take any action hereunder or thereunder, or to expend any
money or incur any expenses or perform or discharge any obligation, duty or
liability under the Collateral.

                  13. FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) Each Pledgor
agrees that it will join with the Pledgee in executing and, at such Pledgor's
own expense, file and refile under the Uniform Commercial Code or other
applicable law such financing statements, continuation statements and other
documents in such offices as the Pledgee may deem necessary and wherever
required by law in order to perfect and preserve the Pledgee's security
interest in the Collateral and hereby authorizes the Pledgee to file financing
statements and amendments thereto (including, without limitation, such
financing statements which list the collateral as "all assets" or any similar
designation) relative to all or any part of the Collateral without the
signature of such Pledgor where permitted by law, and agrees to do such further
acts and things and to execute and deliver to the Pledgee such additional
conveyances, assignments, agreements and instruments as the Pledgee may
reasonably require or deem necessary to carry into effect the purposes of this
Agreement or to further assure and confirm unto the Pledgee its rights, powers
and remedies hereunder.

                  (b) Each Pledgor hereby appoints the Pledgee such Pledgor's
attorney-in-fact, with full authority in the place and stead of such Pledgor
and in the name of such Pledgor or

                                      15
<PAGE>

otherwise, to act from time to time solely after the occurrence and during the
continuance of an Event of Default in the Pledgee's reasonable discretion to
take any action and to execute any instrument which the Pledgee may deem
necessary or advisable to accomplish the purposes of this Agreement.

                  14. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance
with this Agreement all items of the Collateral at any time received under this
Agreement. It is expressly understood and agreed by each Secured Creditor that
by accepting the benefits of this Agreement each such Secured Creditor
acknowledges and agrees that the obligations of the Pledgee as holder of the
Collateral and interests therein and with respect to the disposition thereof,
and otherwise under this Agreement, are only those expressly set forth in this
Agreement. The Pledgee shall act hereunder on the terms and conditions set
forth herein and in Section 12 of the Credit Agreement.

                  15. TRANSFER BY THE PLEDGORS. No Pledgor will sell or
otherwise dispose of, grant any option with respect to, or mortgage, pledge or
otherwise encumber any of the Collateral or any interest therein (except as may
be permitted in accordance with the terms of the Credit Agreement).

                  16. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
PLEDGORS. (a) Each Pledgor represents, warrants and covenants that:

               (i) it is the legal, beneficial and record owner of, and has
          good and marketable title to, all Collateral purported to be owned by
          it consisting of one or more Securities and that it has sufficient
          interest in all Collateral purported to be owned by it in which a
          security interest is purported to be created hereunder for such
          security interest to attach (subject, in each case, to no pledge,
          lien, mortgage, hypothecation, security interest, charge, option,
          Adverse Claim or other encumbrance whatsoever, except the liens and
          security interests created by this Agreement and Permitted Liens of
          the type described in Section 9.01(i));

               (ii) it has full power, authority and legal right to pledge all
          the Collateral pledged by it pursuant to this Agreement;

               (iii) this Agreement has been duly authorized, executed and
          delivered by such Pledgor and constitutes a legal, valid and binding
          obligation of such Pledgor enforceable against such Pledgor in
          accordance with its terms, except to the extent that the
          enforceability hereof 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);

               (iv) except to the extent already obtained or made, no consent
          of any other party (including, without limitation, any stockholder,
          partner, member or creditor of such Pledgor or any of its
          Subsidiaries) and no consent, license, permit, approval or
          authorization of, exemption by, notice or report to, or registration,
          filing or declaration with, any governmental authority is required to
          be obtained by such Pledgor in connection with (a) the execution,
          delivery or performance of this Agreement, (b) the validity or

                                      16

<PAGE>

          enforceability of this Agreement, (c) the perfection or
          enforceability of the Pledgee's security interest in the Collateral
          or (d) except for compliance with or as may be required by applicable
          securities laws, the exercise by the Pledgee of any of its rights or
          remedies provided herein;

               (v) the execution, delivery and performance of this Agreement
          will not violate any provision of any applicable law or regulation or
          of any order, judgment, writ, award or decree of any court,
          arbitrator or governmental authority, domestic or foreign, applicable
          to such Pledgor, or of the certificate of incorporation, operating
          agreement, limited liability company agreement, partnership agreement
          or by-laws of such Pledgor or of any securities issued by such
          Pledgor or any of its Subsidiaries, or of any mortgage, deed of
          trust, indenture, lease, loan agreement, credit agreement or other
          material contract, agreement or instrument or undertaking to which
          such Pledgor or any of its Subsidiaries is a party or which purports
          to be binding upon such Pledgor or any of its Subsidiaries or upon
          any of their respective assets and will not result in the creation or
          imposition of (or the obligation to create or impose) any lien or
          encumbrance on any of the assets of such Pledgor or any of its
          Subsidiaries except as contemplated by this Agreement;

               (vi) all of the Collateral pledged by it that consists of
          Securities, Limited Liability Company Interests or Partnership
          Interests has been duly and validly issued and acquired, is fully
          paid and non-assessable and is subject to no options to purchase or
          similar rights;

               (vii) each of the Pledged Notes pledged by it that constitutes,
          or when executed by the obligor thereof will constitute, the legal,
          valid and binding obligation of such obligor, enforceable in
          accordance with its terms, except to the extent that the
          enforceability 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);

               (viii) the pledge, collateral assignment and delivery to the
          Pledgee of the Collateral consisting of Certificated Securities
          pursuant to this Agreement creates a valid and perfected first
          priority security interest in such Certificated Securities, and the
          proceeds thereof, subject to no prior Lien or encumbrance or to any
          agreement purporting to grant to any third party a Lien or
          encumbrance on the property or assets of such Pledgor which would
          include the Securities, and the Pledgee is entitled to all the
          rights, priorities and benefits afforded by the UCC or other relevant
          law as enacted in any relevant jurisdiction to perfect security
          interests in respect of such Collateral; and

               (ix) "control" (as defined in Section 8-106 of the UCC) has been
          obtained by the Pledgee over all Collateral consisting of Securities
          (including Notes which are Securities) with respect to which such
          "control" may be obtained pursuant to Section 8-106 of the UCC.

                  (b) Each Pledgor covenants and agrees that it will defend the
Pledgee's right, title and security interest in and to the Securities and the
proceeds thereof against the claims and demands of all persons whomsoever; and
each Pledgor covenants and agrees that it will have like

                                      17
<PAGE>

title to and right to pledge any other property at any time hereafter pledged
to the Pledgee as Collateral hereunder and will likewise defend the right
thereto and security interest therein of the Pledgee and the other Secured
Creditors.

                  (c) Each Pledgor which is a limited liability company or a
partnership (and each Pledgor which is a direct parent of any such limited
liability company or partnership) covenants and agrees that it will not,
without 15 days prior written notice to the Pledgee, amend or modify (or allow
to be amended or modified) any limited liability company agreement, partnership
agreement or other organizational document of such limited liability company or
partnership in any manner which causes the Limited Liability Company Interests
or Partnership Interests of such limited liability company or partnership, as
the case may be, to be treated as a "security" governed under Article 8 of the
UCC; provided that nothing herein shall prohibit any Pledgor from creating or
acquiring limited liability companies or partnerships in compliance with the
Credit Agreement whose equity interests are treated as "securities" governed
under Article 8 of the UCC so long as the relevant procedures under Section 3.2
hereof are taken at the time of any such creation or acquisition.

                  17. JURISDICTION OF ORGANIZATION; CHIEF EXECUTIVE OFFICE;
RECORDS; ETC. The exact legal name of each Pledgor, the organizational
identification number (if any) of such Pledgor, the jurisdiction of
organization of such Pledgor and the type of organization of such Pledgor is
accurately set forth in Schedule XII to the Credit Agreement. The chief
executive office of each Pledgor is located at the address specified in Annex F
hereto for such Pledgor. No Pledgor shall take, or permit to be taken, any
action which would cause a violation of Section 9.15 of the Credit Agreement
with respect to such Pledgor or any of its Subsidiaries which are Subsidiary
Guarantors. Furthermore, each Pledgor will not move its chief executive office
until (i) it shall have given to the Pledgee not less than 15 days' prior
written notice of its intention so to do, clearly describing such new location
and providing such other information in connection therewith as the Pledgee may
reasonably request and (ii) with respect to such new location, it shall have
taken all action (if any is required), satisfactory to the Pledgee, to maintain
the security interest of the Collateral Agent in the Collateral intended to be
granted hereby at all times fully perfected and in full force and effect.
Promptly after establishing a new location for such offices in accordance with
the immediately preceding sentence, the respective Pledgor shall deliver to the
Pledgee a supplement to Annex F hereto so as to cause such Annex F hereto to be
complete and accurate.

                  18. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of
each Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation: (i) any renewal,
extension, amendment or modification of or addition or supplement to or
deletion from any Secured Debt Agreement or any other instrument or agreement
referred to therein, or any assignment or transfer of any thereof; (ii) any
waiver, consent, extension, indulgence or other action or inaction under or in
respect of any such agreement or instrument including, without limitation, this
Agreement; (iii) any furnishing of any additional security to the Pledgee or
its assignee or any acceptance thereof or any release of any security by the
Pledgee or its assignee; (iv) any limitation on any party's liability or
obligations under any such

                                      18

<PAGE>

instrument or agreement or any invalidity or unenforceability, in whole or in
part, of any such instrument or agreement or any term thereof; or (v) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceeding relating to any Pledgor or any Subsidiary
of any Pledgor, or any action taken with respect to this Agreement by any
trustee or receiver, or by any court, in any such proceeding, whether or not
such Pledgor shall have notice or knowledge of any of the foregoing.

                  19. REGISTRATION, ETC. If at any time when the Pledgee shall
determine to exercise its right to sell all or any part of the Collateral
consisting of Securities, Limited Liability Company Interests or Partnership
Interests pursuant to Section 7 hereof, and the Collateral or the part thereof
to be sold shall not, for any reason whatsoever, be effectively registered
under the Securities Act, as then in effect, the Pledgee may, in its sole and
absolute discretion, sell such Collateral, as the case may be, or part thereof
by private sale in such manner and under such circumstances as the Pledgee may
deem necessary or advisable in order that such sale may legally be effected
without such registration. Without limiting the generality of the foregoing, in
any such event the Pledgee, in its sole and absolute discretion (i) may proceed
to make such private sale notwithstanding that a registration statement for the
purpose of registering such Collateral or part thereof shall have been filed
under such Securities Act, (ii) may approach and negotiate with a single
possible purchaser to effect such sale, and (iii) may restrict such sale to a
purchaser who will represent and agree that such purchaser is purchasing for
its own account, for investment, and not with a view to the distribution or
sale of such Collateral or part thereof. In the event of any such sale, the
Pledgee shall incur no responsibility or liability for selling all or any part
of the Collateral at a price which the Pledgee, in its sole and absolute
discretion, in good faith deems reasonable under the circumstances,
notwithstanding the possibility that a substantially higher price might be
realized if the sale were deferred until after registration as aforesaid.

                  20. TERMINATION; RELEASE. (a) After the Termination Date,
this Agreement and the security interest created hereby shall terminate
(provided that all indemnities set forth herein including, without limitation,
in Section 11 hereof shall survive any such termination), and the Pledgee, at
the request and expense of any Pledgor, will execute and deliver to such
Pledgor a proper instrument or instruments (including Uniform Commercial Code
termination statements on form UCC-3) acknowledging the satisfaction and
termination of this Agreement, and will duly assign, transfer and deliver to
such Pledgor (without recourse and without any representation or warranty) such
of the Collateral as has not theretofore been sold or otherwise applied or
released pursuant to this Agreement, together with any monies at the time held
by the Pledgee or any of its sub-agents hereunder. As used in this Agreement,
"Termination Date" shall mean the date upon which the Total Commitments and all
Interest Rate Protection Agreements and Other Hedging Agreements have been
terminated, no Note under the Credit Agreement is outstanding (and all Loans
have been repaid in full), all Letters of Credit have been terminated, no
further Incremental Term Loan Commitments may be requested by the Borrower or
provided by any Lender or any other Person, and all Obligations then due and
payable have been paid in full.

                  (b) In the event that any part of the Collateral is sold,
transferred or otherwise disposed of (other than to the Borrower or a
Subsidiary Guarantor) in accordance with the Credit

                                      19

<PAGE>

Agreement, or is otherwise released at the direction of the Required Lenders
(or all Lenders if required by Section 13.12 of the Credit Agreement) and the
proceeds of such sale, transfer or other disposition, or from such release, are
applied in accordance with the provisions of the Credit Agreement, to the
extent required to be so applied, the Pledgee, at the request and expense of
any Pledgor, will duly assign, transfer and deliver to such Pledgor (without
recourse and without any representation or warranty) such of the Collateral
(and releases therefor) as is then being (or has been) so sold, transferred or
otherwise disposed of or released and has not theretofore been released
pursuant to this Agreement. Furthermore, upon the release of any Subsidiary
Guarantor from the Subsidiaries Guaranty in accordance with the provisions
thereof, such Pledgor (and the Collateral at such time pledged by the
respective Pledgor pursuant hereto) shall be released from this Agreement.

                  (c) At any time that a Pledgor desires that the Pledgee
assign, transfer and deliver Collateral (and releases therefor) as provided in
Section 20(a) or (b) hereof, it shall deliver to the Pledgee a certificate
signed by a principal executive officer of such Pledgor stating that the
release of the respective Collateral is permitted pursuant to such Section
20(a) or (b). At any time that the Borrower or the respective Pledgor desires
that a Subsidiary of the Borrower which has been released from the Subsidiaries
Guaranty be released hereunder as provided in the last sentence of Section
20(b), it shall deliver to the Pledgee a certificate signed by a principal
executive officer of the Borrower and the respective Pledgor stating that the
release of the respective Pledgor (and its Collateral) is permitted pursuant to
such Section 20(b).

                  (d) The Pledgee shall have no liability whatsoever to any
other Secured Creditor as the result of any release of Collateral or any
Pledgor by it which the Pledgee in good faith believes to be in accordance with
this Section 20.

                  21. NOTICES, ETC. All such notices and communications
provided for hereunder shall be in writing (including telegraphic, telex,
telecopier or cable communication) and mailed, telegraphed, telexed,
telecopied, cabled or delivered to the appropriate address set forth below. All
such notices and communications shall, when mailed, telegraphed, telexed,
telecopied, or cabled or sent by overnight courier, be effective when deposited
in the mails, delivered to the telegraph company, cable company or overnight
courier, as the case may be, or sent by telex or telecopier, except that
notices and communications to (x) the Pledgee shall not be effective until
received by the Pledgee and (y) any Pledgor shall not be effective until
received by any such Pledgor. All notices and other communications shall be in
writing and addressed as follows:

                  (a)      if to any Pledgor, at

                           c/o Vanguard Health Systems, Inc.
                           20 Burton Hills Boulevard
                           Suite 100
                           Nashville, TN  37215
                           Telephone No.:  (615) 665-6000
                           Facsimile No.:  (615) 665-6099
                           Attention:  Joseph D. Moore

                                      20

<PAGE>

                  (b)      if to the Pledgee, at:

                           414 Union Street
                           7th Floor
                           Nashville, TN  37239
                           Attention:  Kevin Wagley
                           Telephone No.:  (615) 749-3802
                           Telecopier No.:  (615) 749-4640

                  (c) if to any Lender Creditor, either (x) to the
Administrative Agent, at the address of the Administrative Agent specified in
the Credit Agreement or (y) at such address as such Lender Creditor shall have
specified in the Credit Agreement; and

                  (d) if to any Other Creditor, at such address as such Other
Creditor shall have specified in writing to the Pledgors and the Pledgee;

or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.

                  22. WAIVER; AMENDMENT. Except as provided in Sections 20 and
25, none of the terms and conditions of this Agreement may be changed, waived,
modified or varied in any manner whatsoever unless in writing duly signed by
each Pledgor directly affected thereby and the Pledgee (with the written
consent of either (x) the Required Lenders (or all of the Lenders to the extent
required by Section 13.12 of the Credit Agreement) at all times prior to the
time on which all Credit Document Obligations have been paid in full or (y) the
holders of at least a majority of the outstanding Other Obligations at all
times after the time on which all Credit Document Obligations have been paid in
full); 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
affected Class. For the purpose of this Agreement, the term "Class" shall mean
each class of Secured Creditors, i.e., whether (i) the Lender Creditors as
holders of the Credit Document Obligations or (ii) the Other Creditors as the
holders of the Other Obligations. For the purpose of this Agreement, the term
"Requisite Creditors" of any Class shall mean each of (i) with respect to the
Credit Document Obligations, the Required Lenders (or all Lenders if required
by Section 13.12 of the Credit Agreement) and (ii) 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.

                  23. MISCELLANEOUS. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of and be enforceable by each of the parties hereto and its
successors and assigns, provided that no Pledgor may assign any of its rights
or obligations under this Agreement without the prior consent of the Collateral
Agent. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. EACH PLEDGOR
IRREVOCABLY WAIVES ALL RIGHT

                                      21

<PAGE>

TO A TRIAL BY JURY IN ANY ACTION PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. The
headings in this Agreement are for purposes of reference only and shall not
limit or define the meaning hereof. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
shall constitute one instrument. In the event that any provision of this
Agreement shall prove to be invalid or unenforceable, such provision shall be
deemed to be severable from the other provisions of this Agreement which shall
remain binding on all parties hereto.

                  24. RECOURSE. This Agreement is made with full recourse to
the Pledgors and pursuant to and upon all the representations, warranties,
covenants and agreements on the part of the Pledgors contained herein and in
the other Secured Debt Agreements and otherwise in writing in connection
herewith or therewith.

                  25. ADDITIONAL PLEDGORS. It is understood and agreed that any
Subsidiary Guarantor that desires to become a Pledgor hereunder, or is required
to execute a counterpart of this Agreement after the date hereof pursuant to
the requirements of the Credit Agreement or any other Credit Document, shall
become a Pledgor hereunder by (x) executing a counterpart hereof and delivering
the same to the Pledgee or a Joinder Agreement substantially in the form of
Exhibit O to the Credit Agreement, (y) delivering supplements to Schedule XII
to the Credit Agreement and Annexes A through F hereto as are necessary to
cause such schedule and annexes to be complete and accurate with respect to
such additional Pledgor on such date and (z) taking all actions as specified in
this Agreement as would have been taken by such Pledgor had it been an original
party to this Agreement, in each case with all documents required above to be
delivered to the Collateral Agent and with all documents and actions required
above to be taken to the reasonable satisfaction of the Collateral Agent.

                                    * * * *

                                      22
<PAGE>

                  IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused
this Agreement to be executed by their duly elected officers duly authorized as
of the date first above written.

                                    VANGUARD HEALTH SYSTEMS, INC.
                                    VHS ACQUISITION CORPORATION
                                    VHS OF PHOENIX, INC.
                                    VHS OUTPATIENT CLINICS, INC.
                                    VHS OF ARROWHEAD, INC.
                                    PLEASANT PROPERTIES, INC.
                                    VHS OF SOUTH PHOENIX, INC.
                                    VHS IMAGING CENTERS, INC.
                                    VHS OF ANAHEIM, INC.
                                    VHS OF ORANGE COUNTY, INC.
                                    VHS HOLDING COMPANY, INC.
                                    VHS OF HUNTINGTON BEACH, INC.
                                    VHS OF ILLINOIS, INC.
                                    MACNEAL HEALTH PROVIDERS, INC.
                                    MACNEAL MANAGEMENT SERVICES, INC.
                                    MIDWEST CLAIMS PROCESSING, INC.
                                    PROS TEMPORARY STAFFING, INC.
                                    WATERMARK PHYSICIAN SERVICES, INC.
                                    VHS GENESIS LABS, INC.
                                    MACNEAL MEDICAL RECORDS, INC.
                                    VANGUARD HEALTH MANAGEMENT, INC.
                                    TRINITY MEDCARE, INC.
                                    V-II ACQUISITION CO., INC.
                                    VANGUARD HEALTH FINANCIAL COMPANY, INC.
                                    VHS OF RANCOCAS, INC.,
                                     each as a Pledgor

                                    By:   /s/ Joseph D. Moore
                                        ------------------------------------
                                          Title: Chief Financial Officer

                                    Duly authorized to sign on behalf of
                                        each of the foregoing entities

<PAGE>

                                    VHS ACQUISITION SUBSIDIARY
                                     NUMBER 1, INC.
                                    VHS ACQUISITION SUBSIDIARY
                                     NUMBER 2, INC.
                                    VHS ACQUISITION SUBSIDIARY
                                     NUMBER 3, INC.
                                    VHS ACQUISITION SUBSIDIARY
                                     NUMBER 4, INC.
                                    VHS ACQUISITION SUBSIDIARY
                                     NUMBER 5, INC.
                                    VHS ACQUISITION SUBSIDIARY
                                     NUMBER 6, INC.
                                    VHS ACQUISITION SUBSIDIARY
                                     NUMBER 7, INC.
                                    VHS ACQUISITION SUBSIDIARY
                                     NUMBER 8, INC.
                                    VHS ACQUISITION SUBSIDIARY
                                     NUMBER 9, INC.
                                    VHS ACQUISITION SUBSIDIARY
                                     NUMBER 10, INC.,
                                    each as a Pledgor

                                    By:    /s/ Joseph D. Moore
                                       -------------------------------------
                                         Title: Chief Financial Officer

                                    Duly authorized to sign on behalf of
                                         each of the foregoing entities

<PAGE>

                                    THE ANAHEIM VHS LIMITED
                                       PARTNERSHIP, as a Pledgor

                                         By:  VHS of Anaheim, Inc., its General
                                              Partner

                                     By:     /s/ Joseph D. Moore
                                        ----------------------------------
                                          Title: Chief Financial Officer

                                    THE HUNTINGTON BEACH VHS LIMITED
                                      PARTNERSHIP, as a Pledgor

                                         By:  VHS of Huntington Beach, Inc.,
                                              its General Partner

                                     By:     /s/ Joseph D. Moore
                                        ----------------------------------
                                          Title: Chief Financial Officer

                                    HEALTHCARE COMPLIANCE, L.L.C., as a
                                      Pledgor

                                         By:  Vanguard Health Management, Inc.,
                                              its Member

                                     By:     /s/ Joseph D. Moore
                                        ----------------------------------
                                          Title: Chief Financial Officer

<PAGE>

                                    THE VHS ARIZONA IMAGING CENTERS
                                      LIMITED PARTNERSHIP, as a Pledgor
                                         By:  VHS Imaging Centers, Inc., its
                                                 General Partner

                                     By:     /s/ Joseph D. Moore
                                        -----------------------------------
                                          Title: Chief Financial Officer

Accepted and Agreed to:

BANK OF AMERICA, N.A.,
  as Administrative Agent

By:     /s/ Kevin Wagley
    --------------------------------
     Title: Principal

BANK OF AMERICA, N.A.,
  as Collateral Agent

By:      /s/ Kevin Wagley
     -------------------------------
     Title: Principal

<PAGE>

                                                                        Annex A
                                                                             to
                                                               PLEDGE AGREEMENT
                                                               ----------------

                              LIST OF SUBSIDIARIES

A.   Vanguard Health Systems, Inc. ("Borrower"), as Pledgor
<TABLE>

                                                                                     Direct
                        Subsidiary                            Jurisdiction         Ownership
                        ----------                            ------------         ---------
<S>                                                           <C>               <C>
Vanguard Health Management, Inc.                                Delaware        100% by Borrower
Vanguard Health Financial Company, Inc.                         Tennessee       100% by Borrower

B.   Vanguard Health Financial Company, Inc. ("VHFCI"), as Pledgor
                                                                                     Direct
                        Subsidiary                            Jurisdiction         Ownership
                        ----------                            ------------         ---------
VHS Acquisition Corporation                                     Delaware         100% by VHFCI
V-II Acquisition Co., Inc.                                    Pennsylvania       100% by VHFCI
Healthcare Compliance, L.L.C.                                  District of       100% by VHMI
                                                                Columbia
VHS of Orange County, Inc.                                      Delaware         100% by VHFCI
VHS Holding Company, Inc.                                       Delaware         100% by VHFCI
VHS of Illinois, Inc.                                           Delaware         100% by VHFCI
MacNeal Medical Records, Inc.                                   Delaware         100% by VHFCI
VHS Genesis Labs, Inc.                                          Delaware         100% by VHFCI
MacNeal Management Services, Inc.                               Illinois         100% by VHFCI
VHS of Phoenix, Inc.                                            Delaware         100% by VHFCI
Trinity MedCare, Inc.                                           Delaware         100% by VHFCI
The VHS Arizona Imaging Centers Limited Partnership             Delaware          88% by VHS-HC
                                                                                  10% by VHFCI
                                                                                   2% by VHS-I
VHS Imaging Centers, Inc.                                       Delaware         100% by VHFCI
VHS Acquisition Subsidiary Number 1, Inc.                       Delaware         100% by VHFCI
VHS Acquisition Subsidiary Number 2, Inc.                       Delaware         100% by VHFCI
VHS Acquisition Subsidiary Number 3, Inc.                       Delaware         100% by VHFCI
VHS Acquisition Subsidiary Number 4, Inc.                       Delaware         100% by VHFCI
VHS Acquisition Subsidiary Number 5, Inc.                       Delaware         100% by VHFCI
VHS Acquisition Subsidiary Number 6, Inc.                       Delaware         100% by VHFCI
VHS Acquisition Subsidiary Number 7, Inc.                       Delaware         100% by VHFCI
VHS Acquisition Subsidiary Number 8, Inc.                       Delaware         100% by VHFCI
VHS Acquisition Subsidiary Number 9, Inc.                       Delaware         100% by VHFCI
VHS Acquisition Subsidiary Number 10, Inc.                      Delaware         100% by VHFCI

C.   V-II Acquisition Co., Inc. ("VAC"), as Pledgor
                                                                                     Direct
                        Subsidiary                            Jurisdiction         Ownership
                        ----------                            ------------         ---------
VHS of Rancocas, Inc.                                          New Jersey         100% by VAC

D.   Vanguard Health Management, Inc. ("VHMI"), as Pledgor
                                                                                     Direct
                        Subsidiary                            Jurisdiction         Ownership
                        ----------                            ------------         ---------
Healthcare Compliance, L.L.C.                                  District of        100% by VHMI
                                                                Columbia
</TABLE>

                                  Page 1 of 3
<PAGE>
                                                                        Annex A
                                                                             to
                                                               PLEDGE AGREEMENT
                                                               ----------------

E.   VHS of Orange County, Inc. ("VHOC"), as Pledgor
<TABLE>

                                                                                     Direct
                        Subsidiary                            Jurisdiction         Ownership
                        ----------                            ------------         ---------
<S>                                                           <C>               <C>
VHS of Huntington Beach, Inc.                                   Delaware          100% by VHOC
VHS of Anaheim, Inc.                                            Delaware          100% by VHOC

F.   VHS Holding Company, Inc. ("VHS-HC"), as Pledgor
                                                                                     Direct
                        Subsidiary                            Jurisdiction         Ownership
                        ----------                            ------------         ---------
The Anaheim VHS Limited Partnership                             Delaware         98% by VHS-HC
                                                                                  2% by VHS-A
The Huntington Beach VHS Limited Partnership                    Delaware         98% by VHS-HC
                                                                                  2% of VHS-HB
Magnolia Surgery Center Limited Partnership                     Delaware         97% by VHS-HC
                                                                                  2% by VHS-HB
                                                                                1% by Physicians
The VHS Arizona Imaging Centers Limited Partnership             Delaware         88% by VHS-HC
                                                                                  10% by VHFCI
                                                                                  2% by VHS-I

G.   VHS of Anaheim, Inc. ("VHS-A"), as Pledgor
                                                                                     Direct
                        Subsidiary                            Jurisdiction         Ownership
                        ----------                            ------------         ---------
The Anaheim VHS Limited Partnership                             Delaware         98% by VHS-HC
                                                                                  2% by VHS-A
North Anaheim Surgicenter, Ltd.                                California          75% VHS-A(1)
                                                                               25% by Physicians

H.   VHS of Huntington Beach, Inc ("VHS-HB"), as Pledgor
                                                                                     Direct
                        Subsidiary                            Jurisdiction         Ownership
                        ----------                            ------------         ---------
The Huntington Beach VHS Limited Partnership                    Delaware         98% by VHS-HC
                                                                                  2% by VHS-HB
Magnolia Surgery Center Limited Partnership                     Delaware         97% by VHS-HC
                                                                                  2% by VHS-HB
                                                                                1% by Physicians

I.   MacNeal Management Services, Inc. ("MMS"), as Pledgor
                                                                                     Direct
                        Subsidiary                            Jurisdiction         Ownership
                        ----------                            ------------         ---------
Primary Care Physicians Center, LLC                             Illinois          94% by MMS(2)
Midwest Claims Processing, Inc.                                 Illinois          100% by MMS
MacNeal Health Providers, Inc.                                  Illinois          100% by MMS
Watermark Physician Services, Inc.4                             Illinois          100% by MMS
Pros Temporary Staffing, Inc.                                   Illinois          100% by MMS
The 6300 West Roosevelt Limited Partnership                     Illinois         50.33% by MMS(3)
</TABLE>

----------------

(1)  VHS-A aggregate ownership is 75% of the partnership interests (150 units
     out of 200 units). Physicians own 50 LP units for 25% partnership interest
     ownership.

(2)  A third party (or parties) owns 6% of the Membership Interests.

(3)  A third party (or parties) owns 49.67% of the partnership interests.

(4)  Formerly, Watermark Ventures, Inc.

                                  Page 2 of 3
<PAGE>

                                                                        Annex A
                                                                             to
                                                               PLEDGE AGREEMENT
                                                               ----------------

<TABLE>

J.       VHS of Phoenix, Inc. ("VHS-P"), as Pledgor
                                                                                     Direct
                        Subsidiary                            Jurisdiction         Ownership
                        ----------                            ------------         ---------
<S>                                                           <C>               <C>
VHS of Arrowhead, Inc.                                          Delaware         100% by VHS-P
VHS Outpatient Clinics, Inc.                                    Delaware         100% by VHS-P
VHS of South Phoenix, Inc.                                      Delaware         100% by VHS-P

K.   VHS of Arrowhead, Inc. ("VA"), as Pledgor
                                                                                     Direct
                        Subsidiary                            Jurisdiction         Ownership
                        ----------                            ------------         ---------
Pleasant Properties, Inc.                                        Arizona           100% by VA

L.   VHS of South Phoenix, Inc. ("VHS-SP"), as Pledgor
                                                                                     Direct
                        Subsidiary                            Jurisdiction         Ownership
                        ----------                            ------------         ---------
VHS Phoenix Health Plan, Inc.                                   Delaware         100% by VHS-SP

M.   VHS Imaging Centers, Inc. ("VHS-I"), as Pledgor
                                                                                     Direct
                        Subsidiary                            Jurisdiction         Ownership
                        ----------                            ------------         ---------
The VHS Arizona Imaging Centers                                 Delaware         88% by VHS-HC
Limited Partnership                                                               10% by VHFCI
                                                                                  2% by VHS-I
</TABLE>

N.   Other Subsidiaries- no others Subsidiaries as of the Effective Date

                                  Page 3 of 3

<PAGE>

                                                                        Annex B
                                                                             to
                                                               PLEDGE AGREEMENT

                                 LIST OF STOCK

A.       Vanguard Health Systems, Inc. ("Borrower"), as Pledgor
<TABLE>
                                                                                                                      Relevant
                                                                                             Number of Shares/      Sub-Clause of
                                                                       Percentage of         Type of Shares/       Section 3.2(a)
                    Issuing Corporation              Jurisdiction    Outstanding Shares      Certificate No.    of Pledge Agreement
                    -------------------              ------------    ------------------      ---------------    -------------------
<S>                                                    <C>                     <C>              <C>                      <C>
Vanguard Health Management, Inc.                       Delaware                100%             1,000 Common-1           (i)

Vanguard Health Financial Company, Inc.                Tennessee               100%           1,000 Common-6(a)          (i)
                                                                                                1,000 Common-4           (i)
                                                                                                2,000 Common-5           (i)
                                                                                                1,000 Common-7           (i)
</TABLE>

B.       Vanguard Health Financial Company, Inc. ("VHFCI"), as Pledgor
         -------------------------------------------------------------
<TABLE>
                                                                                                                     Relevant
                                                                                            Number of Shares/      Sub-Clause of
                                                                           Percentage of     Type of Shares/       Section 3.2(a)
                    Issuing Corporation              Jurisdiction       Outstanding Shares   Certificate No.    of Pledge Agreement
                    -------------------              ------------       ------------------   ---------------    -------------------
<S>                                                    <C>                     <C>              <C>                      <C>
VHS Acquisition Corporation                            Delaware                100%             1,000 Common-1            (i)
                                                                                                1,000 Common-2            (i)

V-II Acquisition Co., Inc.                           Pennsylvania              100%             1,000 Common-1            (i)

VHS of Orange County, Inc.                             Delaware                100%             1,000 Common-1            (i)
                                                                                              1,000 Common-3(b)           (i)
                                                                                                1,000 Common-4            (i)

VHS Holding Company, Inc.                              Delaware                100%             1,000 Common-1            (i)
                                                                                              1,000 Common-3 (b)          (i)
                                                                                                1,000 Common-4

VHS of Illinois, Inc.                                  Delaware                100%             1,000 Common-1            (i)
                                                                                                1,000 Common-2            (i)

MacNeal Medical Records, Inc.                          Delaware                100%             1,000 Common-1            (i)
                                                                                                1,000 Common-2            (i)

VHS Genesis Labs, Inc.                                 Delaware                100%             1,000 Common-1            (i)
                                                                                                1,000 Common-2            (i)

MacNeal Management Services, Inc.                      Illinois                100%             1,000 Common-3            (i)

VHS of Phoenix, Inc.                                   Delaware                100%             1,000 Common-1            (i)
                                                                                                1,000 Common-2            (i)
</TABLE>
------------------------------

(a)  Certificates 1 and 2 cancelled due to typographical error in name of
     holder. Certificate 3 lost.

(b)  Certificate 2 for each issuer lost.

                                  Page 1 of 3
<PAGE>
                                                                        Annex B
                                                                             to
                                                               PLEDGE AGREEMENT
<TABLE>

                                                                                                                      Relevant
                                                                                             Number of Shares/     Sub-Clause of
                                                                           Percentage of       Type of Shares/     Section 3.2(a)
                    Issuing Corporation              Jurisdiction       Outstanding Shares     Certificate No.  of Pledge Agreement
                    -------------------              ------------       ------------------     ---------------  -------------------
<S>                                                    <C>                     <C>              <C>                      <C>

Trinity MedCare, Inc.                                  Delaware                100%            6,961 Common-23            (i)

VHS Imaging Centers, Inc.                              Delaware                100%             1,000 Common-1            (i)
                                                                                                1,000 Common-2            (i)

VHS Acquisition Subsidiary Number 1, Inc.              Delaware                100%             1,000 Common-1            (i)

VHS Acquisition Subsidiary Number 2, Inc.              Delaware                100%             1,000 Common-1            (i)

VHS Acquisition Subsidiary Number 3, Inc.              Delaware                100%             1,000 Common-1            (i)

VHS Acquisition Subsidiary Number 4, Inc.              Delaware                100%             1,000 Common-1            (i)

VHS Acquisition Subsidiary Number 5, Inc.              Delaware                100%             1,000 Common-1            (i)

VHS Acquisition Subsidiary Number 6, Inc.              Delaware                100%             1,000 Common-1            (i)

VHS Acquisition Subsidiary Number 7, Inc.              Delaware                100%             1,000 Common-1            (i)

VHS Acquisition Subsidiary Number 8, Inc.              Delaware                100%             1,000 Common-1            (i)

VHS Acquisition Subsidiary Number 9, Inc.              Delaware                100%             1,000 Common-1            (i)

VHS Acquisition Subsidiary Number 10, Inc.             Delaware                100%             1,000 Common-1            (i)
</TABLE>

C.       V-II Acquisition Co., Inc. ("VAC"), as Pledgor
         ----------------------------------------------
<TABLE>
                                                                                                                      Relevant
                                                                                             Number of Shares/     Sub-Clause of
                                                                           Percentage of       Type of Shares/     Section 3.2(a)
                    Issuing Corporation              Jurisdiction       Outstanding Shares     Certificate No.  of Pledge Agreement
                    -------------------              ------------       ------------------     ---------------  -------------------
<S>                                                    <C>                     <C>              <C>                      <C>
VHS of Rancocas, Inc.                                 New Jersey               100%             1,000 Common-1           (i)
</TABLE>

D.       VHS of Orange County, Inc. ("VHOC"), as Pledgor
         -----------------------------------------------
<TABLE>
                                                                                                                      Relevant
                                                                                               Number of Shares/    Sub-Clause of
                                                                           Percentage of        Type of Shares/     Section 3.2(a)
                    Issuing Corporation              Jurisdiction        Outstanding Shares     Certificate No.  of Pledge Agreement
                    -------------------              ------------        ------------------     ---------------  -------------------
<S>                                                    <C>                     <C>              <C>                      <C>
VHS of Huntington Beach, Inc.                          Delaware                 100%            1,000 Common-1             (i)
                                                                                               1,000 Common-3(a)           (i)

VHS of Anaheim, Inc.                                   Delaware                 100%            1,000 Common-1             (i)
                                                                                               1,000 Common-3(a)           (i)
</TABLE>
-----------------------------
(a)  Certificate 2 for each issuer lost.

                                  Page 2 of 3

<PAGE>
                                                                        Annex B
                                                                             to
                                                               PLEDGE AGREEMENT

E.       MacNeal Management Services, Inc. ("MMS"), as Pledgor
         -----------------------------------------------------
<TABLE>
                                                                                                                      Relevant
                                                                                               Number of Shares/     Sub-Clause of
                                                                           Percentage of        Type of Shares/     Section 3.2(a)
                    Issuing Corporation              Jurisdiction        Outstanding Shares     Certificate No.  of Pledge Agreement
                    -------------------              ------------        ------------------     ---------------  -------------------
<S>                                                    <C>                     <C>              <C>                      <C>
Midwest Claims Processing, Inc.                        Illinois                 100%             1,000-Common-2            (i)

MacNeal Health Providers, Inc.                         Illinois                 100%            1,000-Common-001           (i)

Watermark Physician Services, Inc.(a)                  Illinois                 100%             1,000-Common-1            (i)

Pros Temporary Staffing, Inc.                          Illinois                 100%             1,000-Common-1            (i)
</TABLE>

F.       VHS of Phoenix, Inc. ("VHS-P"), as Pledgor
         ------------------------------------------
<TABLE>
                                                                                                                      Relevant
                                                                                               Number of Shares/    Sub-Clause of
                                                                           Percentage of        Type of Shares/     Section 3.2(a)
                    Issuing Corporation              Jurisdiction        Outstanding Shares     Certificate No.  of Pledge Agreement
                    -------------------              ------------        ------------------     ---------------  -------------------
<S>                                                    <C>                     <C>              <C>                      <C>
VHS of Arrowhead, Inc.                                 Delaware                 100%             1,000 Common-1            (i)
                                                                                                 1,000 Common-2            (i)

VHS Outpatient Clinics, Inc.                           Delaware                 100%             1,000 Common-1            (i)
                                                                                                 1,000 Common-2            (i)

VHS of South Phoenix, Inc.                             Delaware                 100%             1,000 Common-1            (i)
                                                                                                 1,000 Common-2            (i)
</TABLE>

G.       VHS of Arrowhead, Inc. ("VA"), as Pledgor
         -----------------------------------------
<TABLE>
                                                                                                                       Relevant
                                                                                                Number of Shares/    Sub-Clause of
                                                                           Percentage of        Type of Shares/     Section 3.2(a)
                    Issuing Corporation              Jurisdiction        Outstanding Shares     Certificate No.  of Pledge Agreement
                    -------------------              ------------        ------------------     ---------------  -------------------

<S>                                                    <C>                     <C>              <C>                      <C>
Pleasant Properties, Inc.                               Arizona                 100%            1,000 Common-2(b)          (i)

</TABLE>

H.       VHS of South Phoenix, Inc. ("VHS-SP"), as Pledgor
         -------------------------------------------------
<TABLE>
                                                                                                                      Relevant
                                                                                              Number of Shares/    Sub-Clause of
                                                                           Percentage of       Type of Shares/     Section 3.2(a)
                    Issuing Corporation              Jurisdiction        Outstanding Shares    Certificate No.  of Pledge Agreement
                    -------------------              ------------        ------------------    ---------------  -------------------

<S>                                                    <C>                     <C>              <C>                      <C>
VHS Phoenix Health Plan, Inc.                          Delaware                 100%             1,000 Common-1            (i)
                                                                                                 1,000 Common-2            (i)
</TABLE>

I.       No other Pledgors hold Stock as of the Effective Date.
         ------------------------------------------------------

------------------------------
(a)  Formerly, Watermark Ventures, Inc.

(b)  Certificate No. 1 cancelled in connection with acquisition of this issuer.

                                  Page 3 of 3

<PAGE>

                                                                        Annex C
                                                                             to
                                                               PLEDGE AGREEMENT

                                 LIST OF NOTES
                                 -------------
           (With respect to all of the following Notes, the relevant
                     Sub-clause of Section 3.2(a) is (v).)

I.       Vanguard Health Systems, Inc. (Payee and Pledgor)
         -----------------------------
<TABLE>
<S>                                                  <C>                            <C>
                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Management, Inc.                           n/a1                          n/a
Vanguard Health Financial Company, Inc.                    n/a                           n/a

II.      Vanguard Health Financial Company, Inc. (Payee and Pledgor)
         ---------------------------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Systems, Inc.                              n/a                           n/a
Vanguard Health Management, Inc.                           n/a                           n/a
V-II Acquisition Co., Inc.                                 n/a                           n/a
VHS Acquisition Corporation                                n/a                           n/a
VHS of Rancocas, Inc.                                      n/a                           n/a
Healthcare Compliance, L.L.C.                              n/a                           n/a
VHS of Orange County, Inc.                                 n/a                           n/a
VHS Holding Company, Inc.                                  n/a                           n/a
VHS of Huntington Beach, Inc.                              n/a                           n/a
VHS of Anaheim, Inc.                                       n/a                           n/a
The Anaheim VHS Limited Partnership                        n/a                           n/a
VHS of Illinois, Inc.                                      n/a                           n/a
MacNeal Management Services, Inc.                          n/a                           n/a
Primary Care Physician Center, Inc.                        n/a                           n/a
Midwest Claims Processing, Inc.                            n/a                           n/a
MacNeal Health Providers, Inc.                             n/a                           n/a
Chicago Health System, Inc.                                n/a                           n/a
VHS Genesis Labs, Inc.                                     n/a                           n/a
Watermark Physician Services, Inc.                         n/a                           n/a
Pros Temporary Staffing, Inc.                              n/a                           n/a
MacNeal Medical Records, Inc.                              n/a                           n/a
VHS of Phoenix, Inc.                                       n/a                           n/a
VHS of Arrowhead, Inc.                                     n/a                           n/a
VHS Outpatient Clinics, Inc.                               n/a                           n/a
Trinity MedCare, Inc.                                      n/a                           n/a
Pleasant Properties, Inc.                                  n/a                           n/a
VHS of South Phoenix, Inc.                                 n/a                           n/a
The VHS Arizona Imaging Centers Limited Partnership        n/a                           n/a
VHS Imaging Centers, Inc.                                  n/a                           n/a
VHS Acquisition Subsidiary Number 1, Inc.                  n/a                           n/a
VHS Acquisition Subsidiary Number 2, Inc.                  n/a                           n/a
VHS Acquisition Subsidiary Number 3, Inc.                  n/a                           n/a
VHS Acquisition Subsidiary Number 4, Inc.                  n/a                           n/a
</TABLE>

--------

1    n/a means the Note has no stated principal amount, but the Note represents
     the unpaid principal amount, from time to time, of all loans and advances
     made by the payee to the obligor.
<PAGE>
                                                                        Annex C
                                                                             to
                                                               PLEDGE AGREEMENT

<TABLE>
<S>                                                  <C>                            <C>

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
VHS Acquisition Subsidiary Number 5, Inc.                  n/a                           n/a
VHS Acquisition Subsidiary Number 6, Inc.                  n/a                           n/a
VHS Acquisition Subsidiary Number 7, Inc.                  n/a                           n/a
VHS Acquisition Subsidiary Number 8, Inc.                  n/a                           n/a
VHS Acquisition Subsidiary Number 9, Inc.                  n/a                           n/a
VHS Acquisition Subsidiary Number 10, Inc.                 n/a                           n/a

III. V-II Acquisition Co., Inc. (Payee and Pledgor)
     --------------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

IV.  VHS Acquisition Corporation (Payee and Pledgor)

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

V.       VHS of Rancocas, Inc. (Payee and Pledgor)
         ---------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

VI.  Healthcare Compliance, L.L.C. (Payee and Pledgor)

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

VII. VHS of Orange County, Inc. (Payee and Pledgor)
     --------------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

VIII. VHS Holding Company, Inc. (Payee and Pledgor)
      -------------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

IX.  VHS of Huntington Beach, Inc. (Payee and Pledgor)
     -----------------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a
</TABLE>

                                  Page 2 of 6

<PAGE>

                                                                        Annex C
                                                                             to
                                                               PLEDGE AGREEMENT

X.   VHS of Anaheim, Inc. (Payee and Pledgor)
     --------------------
<TABLE>
<S>                                                  <C>                            <C>

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

XI.  Vanguard Health Management, Inc. (Payee and Pledgor)
     --------------------------------
                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a
Vanguard Health Systems, Inc.                              n/a                           n/a

XII. The Anaheim VHS Limited Partnership (Payee and Pledgor)
     -----------------------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

XIII. VHS Genesis Labs, Inc. (Payee and Pledgor)
      ----------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

XIV. VHS of Illinois, Inc. (Payee and Pledgor)
     ---------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

XV.  MacNeal Management Services, Inc. (Payee and Pledgor)
     --------------------------------
                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

XVI. Midwest Claims Processing, Inc. (Payee and Pledgor)
     -------------------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

XVII. MacNeal Health Providers, Inc. (Payee and Pledgor)
      ------------------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a
</TABLE>

                                  Page 3 of 6

<PAGE>

                                                                        Annex C
                                                                             to
                                                               PLEDGE AGREEMENT

XVIII. Watermark Physician Services, Inc. (Payee and Pledgor)
       ----------------------------------
<TABLE>
<S>                                                  <C>                            <C>

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

XIX. Pros Temporary Staffing, Inc. (Payee and Pledgor)
     -----------------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

XX.  MacNeal Medical Records, Inc. (Payee and Pledgor)
     -----------------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

XXI. VHS of Phoenix, Inc. (Payee and Pledgor)
     --------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

XXII. VHS of Arrowhead, Inc. (Payee and Pledgor)
      ----------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

XXIII. VHS Outpatient Clinics, Inc. (Payee and Pledgor)
       ----------------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

XXIV. Trinity MedCare, Inc. (Payee and Pledgor)
      ---------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

XXV. Pleasant Properties, Inc. (Payee and Pledgor)
     -------------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a
</TABLE>

                                  Page 4 of 6

<PAGE>

                                                                        Annex C
                                                                             to
                                                               PLEDGE AGREEMENT

XXVI. VHS South Phoenix, Inc. (Payee and Pledgor)
      -----------------------
<TABLE>
<S>                                                  <C>                            <C>
                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

XXVII. The VHS Arizona Imaging Centers Limited Partnership (Payee and Pledgor)
       ---------------------------------------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

XXVIII. VHS Imaging Centers, Inc. (Payee and Pledgor)
        -------------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

XXIX. VHS Acquisition Subsidiary Number 1, Inc. (Payee and Pledgor)
      -----------------------------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

XXX. VHS Acquisition Subsidiary Number 2, Inc. (Payee and Pledgor)
     -----------------------------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

XXXI. VHS Acquisition Subsidiary Number 3, Inc. (Payee and Pledgor)
      -----------------------------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

XXXII. VHS Acquisition Subsidiary Number 4, Inc. (Payee and Pledgor)
       -----------------------------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

XXXIII. VHS Acquisition Subsidiary Number 5, Inc. (Payee and Pledgor)
        -----------------------------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a
</TABLE>

                                 Page 5 of 6

<PAGE>

                                                                        Annex C
                                                                             to
                                                               PLEDGE AGREEMENT

XXXIV. VHS Acquisition Subsidiary Number 6, Inc. (Payee and Pledgor)
       -----------------------------------------

<TABLE>
<S>                                                  <C>                            <C>
                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

XXXV. VHS Acquisition Subsidiary Number 7, Inc. (Payee and Pledgor)
      -----------------------------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

XXXVI. VHS Acquisition Subsidiary Number 8, Inc. (Payee and Pledgor)
       -----------------------------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

XXXVII. VHS Acquisition Subsidiary Number 9, Inc. (Payee and Pledgor)
        -----------------------------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a

XXXIII. VHS Acquisition Subsidiary Number 10, Inc. (Payee and Pledgor)
        ------------------------------------------

                           Obligor                   Principal Amount               Maturity Date
                           -------                   ----------------               -------------
                                                         (if any)                     (if any)
Vanguard Health Financial Company, Inc.                    n/a                           n/a
</TABLE>

                                  Page 6 of 6
<PAGE>
                                                                        Annex D
                                                                             to
                                                               PLEDGE AGREEMENT

                  LIST OF LIMITED LIABILITY COMPANY INTERESTS

A.   Vanguard Health Management, Inc., ("VHMI") as Pledgor

<TABLE>

                                                                   Percentage Ownership                       Relevant SubClause
                                                                      and Type of                              of Section 3.2(a)
                        Issuing LLC           Jurisdiction         Outstanding Equity      Certificate No.    of Pledge Agreement
                        -----------           ------------         ------------------      ---------------    -------------------

<S>                                            <C>                      <C>                      <C>                        <C>
Healthcare Compliance, L.L.C.                  District of              100% of                  3(a)                   (iv)(1)
                                                Columbia          Membership Interests

B.   VHS of Anaheim, Inc., ("VHSA") as Pledgor

                                                                 Percentage Ownership                         Relevant SubClause
                                                                      and Type of                              of Section 3.2(a)
                        Issuing LLC           Jurisdiction         Outstanding Equity      Certificate No.    of Pledge Agreement
                        -----------           ------------         ------------------      ---------------    -------------------

West Anaheim MSO, LLC                           Delaware        50% Membership Interests          1                     (iv)(1)

C.   MacNeal Management Services, Inc. ("MMS"), as Pledgor

                                                                  Percentage Ownership                        Relevant SubClause
                                                                       and Type of                             of Section 3.2(a)
                        Issuing LLC           Jurisdiction         Outstanding Equity      Certificate No.    of Pledge Agreement
                        -----------           ------------         ------------------      ---------------    -------------------

Primary Care Physicians Center, LLC             Illinois                 94% of                  n/a                   (iv)(2)
                                                                   Capital Interests       Not certificated

D.   VHS of Illinois, Inc. ("VOI"), as Pledgor

                                                                  Percentage Ownership                       Relevant SubClause
                                                                       and Type of                            of Section 3.2(a)
                        Issuing LLC           Jurisdiction         Outstanding Equity      Certificate No.   of Pledge Agreement
                        -----------           ------------         ------------------      ---------------   -------------------

Berwyn Magnetic Resonance Center, LLC           Illinois                 25% of                   1                   (iv)(1)
                                                                    Percentage Interests

E.   No other Pledgors hold LLC Interests as of the Effective Date.
</TABLE>

--------------
(a)  Certificates 1 and 2 cancelled upon 6/30/01 transfer by 20% Member of its
     membership interest to 80% Member. At 7/30/01, there is one 100% Member.

<PAGE>

                                                                        Annex E
                                                                             to
                                                               PLEDGE AGREEMENT

                         LIST OF PARTNERSHIP INTERESTS

A.   VHS of Huntington Beach, Inc. ("VOH"), as Pledgor

<TABLE>

                                                                Percentage
                                                                Ownership                                         Relevant SubClause
                                                               and  Type of                                        of Section 3.2(a)
                      Issuing Entity          Jurisdiction  Outstanding Equity      Certificate No. and Amount   of Pledge Agreement
                      --------------          ------------  ------------------      --------------------------   -------------------

<S>                                             <C>           <C>                        <C>                               <C>
The Huntington Beach VHS Limited Partnership    Delaware     2% General Partner(1)        1-2% GP interest                (iv)(1)

Magnolia Surgery Center Limited Partnership     Delaware     2% General Partner           1-2% GP interest                (iv)(1)
</TABLE>

B.   VHS Holding Company, Inc., ("VHSHC") as Pledgor

<TABLE>
                                                                Percentage
                                                                 Ownership                                        Relevant SubClause
                                                               and  Type of                                       of Section 3.2(a)
                      Issuing Entity          Jurisdiction   Outstanding Equity     Certificate No. and Amount   of Pledge Agreement
                      --------------          ------------   ------------------     --------------------------   -------------------

<S>                                             <C>           <C>                        <C>                          <C>
The Anaheim VHS Limited Partnership             Delaware     98% Limited Partner(2)        2-98% LP interest          (iv)(1)

The Huntington Beach VHS Limited Partnership    Delaware     98% Limited Partner(3)        2-98% LP interest          (iv)(1)

Magnolia Surgery Center Limited Partnership     Delaware     97% Limited Partner           2-97% LP interest          (iv)(1)

The VHS Arizona Imaging Centers
  Limited Partnership                           Delaware     88% Limited Partner           2-88% LP interest          (iv)(1)
</TABLE>

C.   VHS of Anaheim, Inc. ("VOA"), as Pledgor

<TABLE>
                                                                Percentage
                                                                 Ownership                                       Relevant SubClause
                                                               and  Type of                                       of Section 3.2(a)
                      Issuing Entity          Jurisdiction   Outstanding Equity     Certificate No. and Amount   of Pledge Agreement
                      --------------          ------------   ------------------     --------------------------   -------------------

<S>                                             <C>           <C>                        <C>                          <C>
North Anaheim Surgicenter, Ltd.                California    73% General Partner    1-105 Units (52.5% GP interest)   (iv)(1)
                                                             2% Limited Partner     2-41 Units (20.5% GP interest)    (iv)(1)
                                                                                     3-4 Units (2% LP interest)       (iv)(1)

The Anaheim VHS Limited Partnership             Delaware     2% General Partner(4)      1-2% GP interests             (iv)(1)
</TABLE>

-----------------------------------------
1    This entity is a Wholly-Owned Subsidiary. See B below.

2    This entity is a Wholly-Owned Subsidiary. See C below.

3    This entity is a Wholly-Owned Subsidiary. See A above.

4    This entity is a Wholly-Owned Subsidiary. See B above.

<PAGE>
                                                                        Annex E
                                                                             to
                                                               PLEDGE AGREEMENT

D.   VHS of Illinois, Inc. ("VOI"), as Pledgor

<TABLE>
                                                                 Percentage
                                                                  Ownership                                       Relevant SubClause
                                                                and  Type of                                      of Section 3.2(a)
                      Issuing Entity          Jurisdiction    Outstanding Equity    Certificate No. and Amount   of Pledge Agreement
                      --------------          ------------    ------------------    --------------------------   -------------------

<S>                                             <C>           <C>                        <C>                               <C>
BHS Digestive Disease Associates,
Joint Venture(5)                                Illinois        25% JV interest      uncertificated-25% JV interest   (iv)(2)
</TABLE>

E.   Pleasant Properties, Inc., as Pledgor

<TABLE>
                                                                 Percentage
                                                                  Ownership                                       Relevant SubClause
                                                                and  Type of                                      of Section 3.2(a)
                      Issuing Entity          Jurisdiction    Outstanding Equity    Certificate No. and Amount   of Pledge Agreement
                      --------------          ------------    ------------------    --------------------------   -------------------

<S>                                             <C>           <C>                        <C>                               <C>
Arrowhead MOB Joint Venture                      Arizona        80% JV Interest      uncertificated-80% JV Interest   (iv)(2)
</TABLE>

F.   VHS of South Phoenix, Inc. ("VHSSP"), as Pledgor

<TABLE>
                                                                 Percentage
                                                                  Ownership                                       Relevant SubClause
                                                                and  Type of                                      of Section 3.2(a)
                      Issuing Entity          Jurisdiction    Outstanding Equity    Certificate No. and Amount   of Pledge Agreement
                      --------------          ------------    ------------------    --------------------------   -------------------

<S>                                             <C>           <C>                        <C>                               <C>
Palm Valley Nursing Facility Limited
Partnership LLLP                                 Arizona      18% Limited Partner    uncertificated-18% LP Interest   (iv)(2)
</TABLE>

G.   Vanguard Health Financial Company, Inc. ("VHFCI"), as Pledgor

<TABLE>
                                                                 Percentage
                                                                  Ownership                                      Relevant SubClause
                                                                and  Type of                                      of Section 3.2(a)
                      Issuing Entity          Jurisdiction    Outstanding Equity    Certificate No. and Amount  of Pledge Agreement
                      --------------          ------------    ------------------    --------------------------  -------------------

<S>                                             <C>           <C>                        <C>                               <C>
The VHS Arizona Imaging Centers Limited
 Partnership                                     Delaware      10% Limited Partner           3-10% LP interest         (iv)(1)
</TABLE>

H.   VHS Imaging Centers, Inc. ("VHSI"), as Pledgor

<TABLE>

                                                                 Percentage
                                                                  Ownership                                       Relevant SubClause
                                                                and  Type of                                       of Section 3.2(a)
                      Issuing Entity          Jurisdiction    Outstanding Equity    Certificate No. and Amount   of Pledge Agreement
                      --------------          ------------    ------------------    --------------------------   -------------------

<S>                                             <C>           <C>                        <C>                               <C>
The VHS Arizona Imaging Centers Limited
Partnership                                      Delaware      2% General Partner          1-2% GP interest             (iv)(1)
</TABLE>
--------------------

5    f/k/a Gastro and Liver Specialists Joint Venture.

<PAGE>

                                                                        Annex E
                                                                             to
                                                               PLEDGE AGREEMENT

I.   VHS Acquisition Corporation ("VAC"), as Pledgor

<TABLE>
                                                                  Percentage
                                                                  Ownership                                       Relevant SubClause
                                                                and  Type of                                       of Section 3.2(a)
                      Issuing Entity          Jurisdiction    Outstanding Equity    Certificate No. and Amount   of Pledge Agreement
                      --------------          ------------    ------------------    --------------------------   -------------------

<S>                                             <C>           <C>                        <C>                               <C>
PBG Partners, Ltd.                              Florida       49% Limited Partner        2-49% LP interest              (iv)(1)

</TABLE>

J.   No other Pledgors hold Partnership or Joint Venture Interests as of the
     Effective Date.

<PAGE>

                                                                        Annex F
                                                                             to
                                                               PLEDGE AGREEMENT

                        LIST OF CHIEF EXECUTIVE OFFICES
                        -------------------------------

1.   Chief Executive Office of all Pledgors except the Pledgors referred to in
     Sections 2 through 23 below:

                           20 Burton Hills Boulevard
                                   Suite 100
                              Nashville, TN 37215

          2. Chief Executive Office of Healthcare Compliance, L.L.C.:

                           1440 New York Avenue, N.W.
                                   Suite 400
                              Washington, DC 20003

3.   Chief Executive Office of The Anaheim VHS Limited Partnership:

                            3033 West Orange Avenue
                               Anaheim, CA 92804

4.   Chief Executive Office of VHS Acquisition Corporation:

                           5102 West Campbell Avenue
                               Phoenix, AZ 85031

5.   Chief Executive Office of VHS of Anaheim, Inc.:

                            3033 West Orange Avenue
                               Anaheim, CA 92804

6.   Chief Executive Office of VHS of Huntington Beach, Inc.:

                             17772 Beach Boulevard
                        Huntington Beach, CA 92647-9932

7.   Chief Executive Office of VHS of Illinois, Inc.:

                           3249 South Oak Park Avenue
                                Berwyn, IL 60402

8.   Chief Executive Office of MacNeal Management Services, Inc.:

                           3249 South Oak Park Avenue
                               Berwyn, IL 60402

                                       1
<PAGE>
                                                                        Annex F
                                                                             to
                                                               PLEDGE AGREEMENT

9.   Chief Executive Office of MacNeal Health Providers, Inc.:

                           3249 South Oak Park Avenue
                                Berwyn, IL 60402

10.  Chief Executive Office of VHS Genesis Labs, Inc.:

                           3249 South Oak Park Avenue
                                Berwyn, IL 60402

11.  Chief Executive Office of Midwest Claims Processing, Inc.:

                           3249 South Oak Park Avenue
                                Berwyn, IL 60402

12.  Chief Executive Office of Watermark Physician Services, Inc.:

                           3249 South Oak Park Avenue
                                Berwyn, IL 60402

13.  Chief Executive Office of Pros Temporary Staffing, Inc.:

                           3249 South Oak Park Avenue
                                Berwyn, IL 60402

14.  Chief Executive Office of MacNeal Medical Records, Inc.:

                           3249 South Oak Park Avenue
                                Berwyn, IL 60402

15.  Chief Executive Office of VHS of Orange County, Inc.:

                               7901 Walker Street
                               La Palma, CA 90623

16.  Chief Executive Office of VHS of Phoenix, Inc.:

                          2000 West Bethany Home Road
                               Phoenix, AZ 85015

17.  Chief Executive Office of VHS of Arrowhead, Inc.:

                              18701 N. 67th Avenue
                            Glendale, AZ 85308-5722

                                       2
<PAGE>
                                                                        Annex F
                                                                             to
                                                               PLEDGE AGREEMENT

18.  Chief Executive Office of VHS Outpatient Clinics, Inc.:

                          2000 West Bethany Home Road
                               Phoenix, AZ 85015

19.  Chief Executive Office of Pleasant Properties, Inc.

                              18701 N. 67th Avenue
                            Glendale, AZ 85308-5722

20.  Chief Executive Office of VHS of South Phoenix, Inc.

                               1201 S. 7th Avenue
                               Phoenix, AZ 85007

21.  Chief Executive Office of The VHS Arizona Imaging Centers Limited
     Partnership

                              8805 N. 23rd Avenue
                                   Suite 250
                               Phoenix, AZ 85021

22.  Chief Executive Office of VHS Imaging Centers, Inc.

                              8805 N. 23rd Avenue
                                   Suite 250
                               Phoenix, AZ 85021

                                       3

<PAGE>

                                                                        ANNEX G
                                                                             to
                                                               PLEDGE AGREEMENT

    Form of Agreement Regarding Uncertificated Securities, Limited Liability
                  Company Interests and Partnership Interests
    ------------------------------------------------------------------------

                  AGREEMENT (as amended, modified or supplemented from time to
time, this "Agreement"), dated as of _______ __, ____, among each of the
undersigned pledgors (each a "Pledgor" and, collectively, the "Pledgors"), Bank
of America, N.A. , not in its individual capacity but solely as Collateral
Agent (the "Pledgee"), and __________, as the issuer of the Uncertificated
Securities, Limited Liability Company Interests and/or Partnership Interests
(each as defined below) (the "Issuer").

                             W I T N E S S E T H :
                              - - - - - - - - - -

                  WHEREAS, each Pledgor and the Pledgee have entered into a
Pledge Agreement, dated as of July 30, 2001 (as amended, amended and restated,
modified or supplemented from time to time, the "Pledge Agreement"), under
which, among other things, in order to secure the payment of the Obligations
(as defined in the Pledge Agreement), each Pledgor will pledge to the Pledgee
for the benefit of the Secured Creditors (as defined in the Pledge Agreement),
and grant a security interest in favor of the Pledgee for the benefit of the
Secured Creditors in, all of the right, title and interest of such Pledgor in
and to any and all (1) "uncertificated securities" (as defined in Section
8-102(a)(18) of the Uniform Commercial Code, as adopted in the State of New
York) ("Uncertificated Securities"), (2) Partnership Interests (as defined in
the Pledge Agreement) and (3) Limited Liability Company Interests (as defined
in the Pledge Agreement), in each case issued from time to time by the Issuer,
whether now existing or hereafter from time to time acquired by such Pledgor
(with all of such Uncertificated Securities, Partnership Interests and Limited
Liability Company Interests being herein collectively called the "Issuer
Pledged Interests"); and

                  WHEREAS, each Pledgor desires the Issuer to enter into this
Agreement in order to perfect the security interest of the Pledgee under the
Pledge Agreement in the Issuer Pledged Interests, to vest in the Pledgee
control of the Issuer Pledged Interests and to provide for the rights of the
parties under this Agreement;

                  NOW THEREFORE, in consideration of the premises and the
mutual promises and agreements contained herein, and for other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby agree as follows:

                  1. Each Pledgor hereby irrevocably authorizes and directs the
Issuer, and the Issuer hereby agrees, to comply with any and all instructions
and orders originated by the Pledgee (and its successors and assigns) regarding
any and all of the Issuer Pledged Interests without the further consent by the
registered owner (including the respective Pledgor), and not to comply with any
instructions or orders regarding any or all of the Issuer Pledged Interests
originated by

<PAGE>

any person or entity other than the Pledgee (and its successors and assigns) or
a court of competent jurisdiction.

                  2. The Issuer hereby certifies that (i) no notice of any
security interest, lien or other encumbrance or claim affecting the Issuer
Pledged Interests (other than the security interest of the Pledgee) has been
received by it, and (ii) the security interest of the Pledgee in the Issuer
Pledged Interests has been registered in the books and records of the Issuer.

                  3. The Issuer hereby represents and warrants that (i) the
pledge by the Pledgors of, and the granting by the Pledgors of a security
interest in, the Issuer Pledged Interests to the Pledgee, for the benefit of
the Secured Creditors, does not violate the charter, by-laws, partnership
agreement, membership agreement or any other agreement governing the Issuer or
the Issuer Pledged Interests, and (ii) the Issuer Pledged Interests are fully
paid and nonassessable.

                  4. All material notices, statements of accounts, reports,
prospectuses, financial statements and other communications to be sent to any
Pledgor by the Issuer in respect of the Issuer will also be sent to the Pledgee
at the following address:

                             Bank of America, N.A.
                             414 Union Street
                             7th Floor
                             Nashville, TN 37239
                             Attention:  Kevin Wagley
                             Tel:  (615) 749-3802
                             Fax:  (615) 749-4640

                  5. Upon Pledgee's request, the Issuer will send any and all
redemptions, distributions, interest or other payments in respect of the Issuer
Pledged Interests from the Issuer for the account of the Pledgor to an account
designated by the Collateral Agent.

                  6. In the event that all of the Issuer Pledged Interests are
sold, transferred or otherwise disposed of (other than to the Borrower or a
Subsidiary Guarantor) in accordance with the Credit Agreement, or are otherwise
released at the direction of the Required Lenders (or all Lenders if required
by Section 13.12 of the Credit Agreement) and the proceeds of such sale,
transfer or other disposition, or from such release, are applied in accordance
with the provisions of the Credit Agreement, to the extent required to be so
applied, this Agreement shall terminate. Furthermore, upon the release of the
Pledgor in accordance with Section 20(a) or (b) of the Pledge Agreement, the
Pledgor and the Issuer shall be released from this Agreement.

                  7. Except as expressly provided otherwise in Sections 4 and 5
above, all notices, instructions, orders and communications hereunder shall be
sent or delivered by mail, telex, telecopy or overnight courier service and all
such notices and communications shall, when mailed, telexed, telecopied or sent
by overnight courier, be effective when deposited in the mails or delivered to
the overnight courier, prepaid and properly addressed for delivery on such or
the next Business Day, or sent by telex or telecopier, except that notices and
communications to the

<PAGE>

Pledgee shall not be effective until received by the Pledgee. All notices and
other communications shall be in writing and addressed as follows:

                  (a)      if to any Pledgor, at:

                           c/o Vanguard Health Systems, Inc.
                           20 Burton Hills Boulevard
                           Suite 100
                           Nashville, TN  37215
                           Attention:  Joseph D. Moore
                           Tel.:  (615) 665-6000
                           Fax:  (615) 665-6099

                  (b)      if to the Pledgee, at:

                           Bank of America, N.A.
                           414 Union Street
                           7th Floor
                           Nashville, TN 37239
                           Attention:  Kevin Wagley
                           Tel:  (615) 749-3802
                           Fax:  (615) 749-4640

                  (c)      if to the Issuer, at:

                           [c/o Vanguard Health Systems, Inc.
                           20 Burton Hills Boulevard
                           Suite 100
                           Nashville, TN  37215
                           Attention:  Joseph D. Moore
                           Tel.:  (615) 665-6000
                           Fax:  (615) 665-6099]

or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder. As used in this
Section 6, "Business Day" means any day other than a Saturday, Sunday, or other
day in which banks in New York are authorized to remain closed.

                  8. This Agreement shall be binding upon the successors and
assigns of each Pledgor and the Issuer and shall inure to the benefit of and be
enforceable by the Pledgee and its successors and assigns. This Agreement may
be executed in any number of counterparts, each of which shall be an original,
but all of which shall constitute one instrument. In the event that any
provision of this Agreement shall prove to be invalid or unenforceable, such
provision shall be deemed to be severable from the other provisions of this
Agreement which shall remain binding on all parties hereto. None of the terms
and conditions of this Agreement may be changed,

<PAGE>

waived, modified or varied in any manner whatsoever except in writing signed by
the Pledgee, the Issuer and any Pledgor which at such time owns any Issuer
Pledged Interests.

                  9. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to its
principles of conflict of laws.

<PAGE>

                  IN WITNESS WHEREOF, each Pledgor, the Pledgee and the Issuer
have caused this Agreement to be executed by their duly elected officers duly
authorized as of the date first above written.

                                    [                                         ],
                                       as a Pledgor

                                    By_____________________________
                                       Name:
                                        Title:

                                    BANK OF AMERICA, N.A.
                                       not in its individual capacity but solely
                                       as Collateral Agent and Pledgee

                                    By_____________________________
                                       Name:
                                        Title:

                                    [                                         ],
                                       the Issuer

                                    By_____________________________
                                       Name:
                                        Title:

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