Document:

Exhibit 10.5

 

SECOND
LIEN SECURITY AGREEMENT

 

Dated May 31, 2007

 

From

 

The Grantors referred to herein

 

as Grantors

 

To

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

 

as Collateral Agent

 

 

T  A  B  L
E  O  F  C  O  N  T  E  N
T  S

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 1.
  Grant of Security

  	
   

  	
  2

  
	
   

  	
   

  	
   

  
	
  SECTION 2.
  Security for Obligations

  	
   

  	
  5

  
	
   

  	
   

  	
   

  
	
  SECTION 3.
  Second Priority Nature of Liens

  	
   

  	
  5

  
	
   

  	
   

  	
   

  
	
  SECTION 4.
  Grantors Remain Liable

  	
   

  	
  5

  
	
   

  	
   

  	
   

  
	
  SECTION 5.
  Delivery and Control of Security Collateral and Chattel Paper

  	
   

  	
  5

  
	
   

  	
   

  	
   

  
	
  SECTION 6.
  Maintaining the Collateral Account; Pledged Deposit Accounts

  	
   

  	
  6

  
	
   

  	
   

  	
   

  
	
  SECTION 7.
  Investing of Amounts in the Collateral Account

  	
   

  	
  6

  
	
   

  	
   

  	
   

  
	
  SECTION 8.
  Release of Amounts

  	
   

  	
  6

  
	
   

  	
   

  	
   

  
	
  SECTION 9.
  Representations and Warranties

  	
   

  	
  7

  
	
   

  	
   

  	
   

  
	
  SECTION 10.
  Further Assurances

  	
   

  	
  9

  
	
   

  	
   

  	
   

  
	
  SECTION 11.
  As to Equipment and Inventory

  	
   

  	
  10

  
	
   

  	
   

  	
   

  
	
  SECTION 12.
  Insurance

  	
   

  	
  10

  
	
   

  	
   

  	
   

  
	
  SECTION 13.
  Post-Closing Changes

  	
   

  	
  10

  
	
   

  	
   

  	
   

  
	
  SECTION 14.
  As to Intellectual Property Collateral

  	
   

  	
  11

  
	
   

  	
   

  	
   

  
	
  SECTION 15.
  Commercial Tort Claims

  	
   

  	
  12

  
	
   

  	
   

  	
   

  
	
  SECTION 16.
  Transfers and Other Liens

  	
   

  	
  12

  
	
   

  	
   

  	
   

  
	
  SECTION 17.
  Collateral Agent Appointed Attorney in Fact

  	
   

  	
  12

  
	
   

  	
   

  	
   

  
	
  SECTION 18.
  Collateral Agent May Perform

  	
   

  	
  13

  
	
   

  	
   

  	
   

  
	
  SECTION 19.
  The Collateral Agent’s Duties

  	
   

  	
  13

  
	
   

  	
   

  	
   

  
	
  SECTION 20.
  As to Receivables and Security Collateral

  	
   

  	
  13

  
	
   

  	
   

  	
   

  
	
  SECTION 21.
  Remedies

  	
   

  	
  13

  
	
   

  	
   

  	
   

  
	
  SECTION 22.
  Indemnity and Expenses

  	
   

  	
  15

  
	
   

  	
   

  	
   

  
	
  SECTION 23.
  Amendments; Waivers; Additional Grantors; Etc.

  	
   

  	
  15

  

 

ii

 

	
  SECTION 24. Notices,
  Etc.

  	
   

  	
  16

  
	
   

  	
   

  	
   

  
	
  SECTION 25.
  Continuing Security Interest; Transfers under the Indenture

  	
   

  	
  16

  
	
   

  	
   

  	
   

  
	
  SECTION 26.
  Release; Termination

  	
   

  	
  16

  
	
   

  	
   

  	
   

  
	
  SECTION 27.
  Execution in Counterparts

  	
   

  	
  17

  
	
   

  	
   

  	
   

  
	
  SECTION 28.
  Intercreditor Agreement

  	
   

  	
  17

  
	
   

  	
   

  	
   

  
	
  SECTION 29.
  Governing Law

  	
   

  	
  17

  

 

Schedules

 

	
  Schedule
  I

  	
   

  	
  -

  	
   

  	
  Investment
  Property

  
	
  Schedule
  II

  	
   

  	
  -

  	
   

  	
  Pledged
  Deposit Accounts

  
	
  Schedule
  III

  	
   

  	
  -

  	
   

  	
  [Intentionally
  Omitted]

  
	
  Schedule
  IV

  	
   

  	
  -

  	
   

  	
  Intellectual
  Property

  
	
  Schedule
  V

  	
   

  	
  -

  	
   

  	
  Commercial
  Tort Claims

  
	
  Schedule
  VI

  	
   

  	
  -

  	
   

  	
  Location,
  Chief Executive Office, Type of Organization, Jurisdiction of Organization and
  Organizational Identification Number

  
	
  Schedule
  VII

  	
   

  	
  -

  	
   

  	
  Changes
  in Name, Location, Etc.

  
	
  Schedule
  VIII

  	
   

  	
  -

  	
   

  	
  Locations
  of Equipment and Inventory

  

 

Exhibits

 

	
  Exhibit
  A

  	
   

  	
  -

  	
   

  	
  Form
  of Consent and Agreement

  
	
  Exhibit
  B

  	
   

  	
  -

  	
   

  	
  Form
  of Second Lien Copyright Security Agreement

  
	
  Exhibit
  C

  	
   

  	
  -

  	
   

  	
  Form
  of Second Lien Patent Security Agreement

  
	
  Exhibit
  D

  	
   

  	
  -

  	
   

  	
  Form
  of Second Lien Trademark Security Agreement

  
	
  Exhibit
  E

  	
   

  	
  -

  	
   

  	
  Form
  of Second Lien Security Agreement Supplement

  

 

iii

 

SECOND
LIEN SECURITY AGREEMENT

 

SECOND LIEN SECURITY AGREEMENT dated May 31, 2007
(this “Agreement”) made by UHS MERGER SUB,
INC., a Delaware corporation (“Merger Sub”),
UNIVERSAL HOSPITAL SERVICES, INC., a Delaware corporation (“UHS”) (prior to the Acquisition, Merger
Sub, and after giving effect to the Acquisition, UHS as the surviving
corporation, shall be referred to as the “Company”),
and any other Persons who subsequently become parties hereto (together with the
Borrower, the “Grantors”),
to WELLS FARGO BANK, NATIONAL ASSOCIATION (“Wells Fargo”),
as collateral agent (together with any successor collateral agent appointed
pursuant to Article 12 of the Indenture referred to below, the “Collateral Agent”)
for the benefit of the Trustee (as defined below) and the Holders of the Notes
(collectively, the “Secured Parties”).

 

PRELIMINARY
STATEMENTS

 

Merger
Sub and Wells Fargo, as trustee (the “Trustee”),
have entered into an Indenture dated as of May 31, 2007 (such agreement, as it
may hereafter be amended, amended and restated, supplemented or otherwise
modified from time to time, being the “Indenture”).

 

Each Grantor is the owner of
the indebtedness (the “Initial Pledged Debt”)
set forth opposite such Grantor’s name on and as otherwise described in
Schedule I hereto and issued by the obligors named therein.

 

Each Grantor is the owner of
the deposit accounts (the “Pledged Deposit Accounts”) set forth opposite such Grantor’s
name on Schedule II hereto.

 

The Borrower will be the
owner of an account to be opened at the request of the Collateral Agent after
Discharge of First Lien Obligations (the “Collateral Account”).

 

The Grantors own the other
Collateral described below.

 

It is a requirement of the
Indenture that the Grantors shall have granted the security interest
contemplated by this Agreement. Each Grantor will derive substantial direct and
indirect benefit from the transactions contemplated by the Indenture.

 

Terms defined in the
Indenture and not otherwise defined in this Agreement are used in this
Agreement as defined in the Indenture, including those used in the first
paragraph and preliminary statements hereof. Further, unless otherwise defined
in this Agreement or in the Indenture, terms defined in Article 8 or 9 of the
UCC (as defined below) are used in this Agreement as such terms are defined in
such Article 8 or 9. “UCC” means the Uniform Commercial Code as in effect from
time to time in the State of New York; provided
that, if perfection or the effect of perfection or non-perfection or the
priority of the security interest in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of New
York,  “UCC” means the Uniform Commercial Code
as in effect from time to time in such other jurisdiction for purposes of the
provisions hereof relating to such perfection, effect of perfection or non-perfection
or priority.

 

The Grantors are
concurrently granting to the collateral agent under the First Lien Credit
Agreement (the “First Lien Collateral Agent”), for
the benefit of the holders of obligations under the First Lien Documents and
certain other secured parties, a first priority security interest in the
Collateral, it being understood that the relative rights and priorities of the
grantees in respect of the Pledged Collateral are governed by the Intercreditor
Agreement.

 

 

NOW, THEREFORE, in
consideration of the premises and in order to induce the Holders to purchase
the Notes issued pursuant to the Indenture, each Grantor hereby agrees with the
Collateral Agent for the ratable benefit of the Secured Parties as follows:

 

SECTION
1. Grant of Security. Each Grantor hereby grants to the
Collateral Agent, for the ratable benefit of the Secured Parties, a security
interest in such Grantor’s right, title and interest in and to the following,
in each case, as to each type of property described below, whether now owned or
hereafter acquired by such Grantor, wherever located, and whether now or
hereafter existing or arising (collectively, the “Collateral”):

 

(a)           all equipment in all of its forms, including, without
limitation, all machinery, tools, motor vehicles, vessels, aircraft, furniture
and fixtures, and all parts thereof and all accessions thereto, including,
without limitation, computer programs and supporting information that
constitute equipment within the meaning of the UCC (any and all such property
being the “Equipment”);

 

(b)           all inventory in all of its forms, including, without
limitation, (i) all raw materials, work in process, finished goods and
materials used or consumed in the manufacture, production, preparation or
shipping thereof, (ii) goods in which such Grantor has an interest in mass or a
joint or other interest or right of any kind (including, without limitation,
goods in which such Grantor has an interest or right as consignee) and (iii)
goods that are returned to or repossessed or stopped in transit by such
Grantor), and all accessions thereto and products thereof and documents
therefor, including, without limitation, computer programs and supporting
information that constitute inventory within the meaning of the UCC (any and
all such property being the “Inventory”);

 

(c)           all accounts (including, without limitation,
health-care-insurance receivables), chattel paper (including, without
limitation, tangible chattel paper and electronic chattel paper), instruments
(including, without limitation, promissory notes), deposit accounts,
letter-of-credit rights, general intangibles (including, without limitation,
payment intangibles) and other obligations of any kind, whether or not arising
out of or in connection with the sale or lease of goods or the rendering of
services and whether or not earned by performance, and all rights now or
hereafter existing in and to all supporting obligations and in and to all security
agreements, mortgages, Liens, leases, letters of credit and other contracts
securing or otherwise relating to the foregoing property (any and all of such
accounts, chattel paper, instruments, deposit accounts, letter-of-credit
rights, general intangibles and other obligations, to the extent not referred
to in subsection (d), (e) or (f) below, being the “Receivables,” and any and all such supporting obligations,
security agreements, mortgages, Liens, leases, letters of credit and other
contracts being the “Related Contracts”);

 

(d)           the following (collectively, the “Security  Collateral”):

 

(i)            the Initial Pledged Debt and the
instruments, if any, evidencing the Initial Pledged Debt, and all interest,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the
Initial Pledged Debt;

 

(ii)           all additional indebtedness from time
to time owed to such Grantor (such indebtedness, together with the Initial
Pledged Debt, being the “Pledged Debt”) and the instruments, if any, evidencing such
indebtedness, and all interest, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such indebtedness;

 

(e)           Contracts;

 

2

 

(f)            the following (collectively, the “Account Collateral”):

 

(i)            the Pledged Deposit Accounts, the
Collateral Account and all funds from time to time credited thereto (including
without limitation, all Cash Equivalents), and all certificates and
instruments, if any, from time to time representing or evidencing the Pledged
Deposit Accounts or the Collateral Account;

 

(ii)           all promissory notes, certificates of
deposit, checks and other instruments from time to time delivered to or
otherwise possessed by the Collateral Agent for or on behalf of such Grantor in
substitution for or in addition to any or all of the then existing Account
Collateral; and

 

(iii)          all interest, dividends,
distributions, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the then existing Account Collateral; and

 

(g)           the following (collectively, the “Intellectual Property Collateral”):

 

(i)            all patents, patent applications,
utility models and statutory invention registrations, all inventions claimed or
disclosed therein and all improvements thereto (“Patents”);

 

(ii)           all trademarks, service marks, domain
names, trade dress, logos, designs, slogans, trade names, business names,
corporate names and other source identifiers, whether registered or
unregistered (provided that no security interest shall be granted in United
States intent-to-use trademark applications to the extent that, and solely
during the period in which, the grant of a security interest therein would
impair the validity or enforceability of such intent-to-use trademark
applications under applicable federal law), together, in each case, with the goodwill
symbolized thereby (“Trademarks”);

 

(iii)          all copyrights, including, without
limitation, copyrights in Computer Software (as hereinafter defined), internet
web sites and the content thereof, whether registered or unregistered (“Copyrights”);

 

(iv)          all computer software, programs and
databases (including, without limitation, source code, object code and all
related applications and data files), firmware and documentation and materials
relating thereto, together with any and all maintenance rights, service rights,
programming rights, hosting rights, test rights, improvement rights, renewal
rights and indemnification rights and any substitutions, replacements,
improvements, error corrections, updates and new versions of any of the
foregoing (“Computer
Software”);

 

(v)           all confidential and proprietary
information, including, without limitation, know-how, trade secrets,
manufacturing and production processes and techniques, inventions, research and
development information, databases and data, including, without limitation,
technical data, financial, marketing and business data, pricing and cost
information, business and marketing plans and customer and supplier lists and
information (collectively, “Trade Secrets”), and all other intellectual, industrial and
intangible property of any type, including, without limitation, industrial
designs and mask works;

 

(vi)          all registrations and applications for
registration for any of the foregoing, including, without limitation, those
registrations and applications for registration set forth in

 

3

 

Schedule IV hereto, together
with all reissues, divisions, continuations, continuations-in-part, extensions,
renewals and reexaminations thereof;

 

(vii)         all tangible embodiments of the
foregoing, all rights in the foregoing provided by international treaties or
conventions, all rights corresponding thereto throughout the world and all
other rights of any kind whatsoever of such Grantor accruing thereunder or
pertaining thereto;

 

(viii)        all agreements, permits, consents,
orders and franchises relating to the license, development, use or disclosure
of any of the foregoing to which such Grantor, now or hereafter, is a party or
a beneficiary, (all of the foregoing collectively referred to as “IP Agreements”);
and

 

(ix)           any and all claims for damages and
injunctive relief for past, present and future infringement, dilution,
misappropriation, violation, misuse or breach with respect to any of the
foregoing, with the right, but not the obligation, to sue for and collect, or
otherwise recover, such damages;

 

(h)           the commercial tort claims described in Schedule V hereto
(together with any commercial tort claims as to which the Grantors have
complied with the requirements of Section 15, the “Commercial Tort Claims Collateral”);

 

(i)            all books and records (including, without limitation,
customer lists, credit files, printouts and other computer output materials and
records) of such Grantor pertaining to any of the Collateral; and

 

(j)            all proceeds of, collateral for, income, royalties and
other payments now or hereafter due and payable with respect to, and supporting
obligations relating to, any and all of the Collateral (including, without
limitation, proceeds, collateral and supporting obligations that constitute
property of the types described in subsections (a) through (i) of this Section
1) and, to the extent not otherwise included, all (A) payments under
insurance (whether or not the Collateral Agent is the loss payee thereof), or
any indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral, and (B) cash.

 

Notwithstanding anything
herein to the contrary, this Agreement shall not constitute a grant of security
interest in (and the term “Collateral” shall be deemed not to include) (A) any
lease, license, contract, property rights or agreement to which any Grantor is
a party or any of its rights or interests thereunder, to the extent that and
for so long as (but only for so long as), the grant of such security interest
shall (1) constitute or result in the abandonment, invalidation or
unenforceability under applicable law of any right, title or interest of any
Grantor therein or (2) constitute or result in a material breach or termination
pursuant to the terms of, or a material default, under, any such lease,
license, contract, property rights or agreement (other than to the extent that
any such term would be rendered ineffective pursuant to Sections 9-406, 9-407,
9-408 or 9-409 of the UCC (or any successor provision or provisions)); (B) any
Equipment owned by any Grantor that is subject to a purchase money Lien or a
capital lease permitted pursuant to the Indenture if the contract or other
agreement in which such Lien is granted (or in the documentation providing for
such capital lease) prohibits the creation of any other Lien on such Equipment,
but only, in each case, to the extent and for so long as (but only for so long
as), the Indebtedness secured by the applicable Lien or the applicable capital
Lease has not been repaid in full or the applicable prohibition has not
otherwise been removed or terminated; provided that any proceeds, substitutions or
replacements of any property included in subclauses (A) and (B) above shall not
be excluded (unless such proceeds, substitutions or replacements would itself
constitute property excluded under subclause (A) or (B)); (C) any Equity
Interests or investment property in any subsidiary or joint venture, (D) motor
vehicles and other assets subject to certificates of title and letter of credit
rights, or (E)

 

4

 

assets requiring perfection
through control agreements (excluding deposit accounts (excluding payroll,
trust, petty cash, zero balance and withholding accounts)).

 

SECTION 2. Security for Obligations. This Agreement secures, in
the case of each Grantor, the payment of all Obligations of such Grantor now or
hereafter existing under the Note Documents, whether direct or indirect,
absolute or contingent, and whether for principal, reimbursement obligations,
interest, fees, premiums, penalties, indemnifications, contract causes of
action, costs, expenses or otherwise (all such Obligations being the “Secured Obligations”).
Without limiting the generality of the foregoing, this Agreement secures, as to
each Grantor, the payment of all amounts that constitute part of the Secured
Obligations and would be owed by such Grantor to any Secured Party under the
Indenture, but for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar proceeding involving
the Company or any Guarantor.

 

SECTION 3. Second Priority Nature of Liens. Notwithstanding
anything herein to the contrary, the lien and security interest granted to the
Collateral Agent pursuant to this Agreement shall be a second priority lien on
and security interest in the Collateral and the exercise of any right or remedy
by the Collateral Agent hereunder is subject to the provisions of the
Intercreditor Agreement and this Agreement, the terms of the Intercreditor
Agreement shall govern and control. Notwithstanding anything herein to the
contrary, prior to the Discharge of the First Lien Obligations (as defined in
the Intercreditor Agreement), the requirements of this Agreement to deliver
Collateral to the Collateral Agent shall be deemed satisfied by delivery of
such Collateral to the First Lien Collateral Agent.

 

SECTION 4. Grantors Remain Liable. Anything herein to the
contrary notwithstanding, (a) each Grantor shall remain liable under the
contracts and agreements included in such Grantor’s Collateral to the extent
set forth therein to perform all of its duties and obligations thereunder to
the same extent as if this Agreement had not been executed, (b) the exercise by
the Collateral Agent of any of the rights hereunder shall not release any
Grantor from any of its duties or obligations under the contracts and
agreements included in the Collateral and (c) no Secured Party shall have any
obligation or liability under the contracts and agreements included in the
Collateral by reason of this Agreement, the Indenture, the Notes, the
Intercreditor Agreement or the Subsidiary Guaranties (collectively, the “Note Documents”), nor shall any Secured
Party be obligated to perform any of the obligations or duties of any Grantor
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.

 

SECTION 5. Delivery and Control of Security Collateral and Chattel
Paper. (a)  After the Discharge of
First Lien Obligations, all instruments representing or evidencing Security
Collateral in excess of $500,000 in
principal amount individually shall be delivered to and held by or on behalf of
the Collateral Agent pursuant hereto and shall be in suitable form for transfer
by delivery, or shall be accompanied by duly executed instruments of transfer
or assignment in blank, all in form and substance reasonably satisfactory to
the Collateral Agent. Upon the occurrence and during the continuance of an
Event of Default, after the Discharge of First Lien Obligations, the Collateral
Agent shall have the right, at any time, to (i) transfer to or to register
in the name of the Collateral Agent or any of its nominees any or all of the Security
Collateral and (ii) exchange instruments representing or evidencing
Security Collateral for instruments of smaller or larger denominations; provided that the Collateral Agent provides written notice
to the applicable Grantor. If any Grantor has possession of any chattel paper
representing monetary obligations in excess of $500,000, such chattel paper
shall be marked with the following legend: “This writing and the obligations
evidenced or secured thereby are subject to the security interest of Wells
Fargo Bank, National Association, as Collateral Agent, for the benefit of the
Collateral Agent and certain Holders of Notes”. If any Grantor has possession
of any electronic chattel paper representing monetary obligations in excess of
$500,000, each Grantor shall take all steps necessary to grant the Collateral
Agent control of all such electronic chattel paper in accordance with the UCC
and all

 

5

 

“transferable records” as defined in each of the Uniform Electronic Transactions
Act and the Electronic Signatures in Global and National Commerce Act.

 

(b)           Upon the occurrence and during the continuance of an Event
of Default, after the Discharge of First Lien Obligations, the Collateral Agent
shall have the right to transfer to or to register in the name of the
Collateral Agent or any of its nominees any or all of the Security Collateral.

 

(c)           Upon the request of the Collateral Agent upon the
occurrence and during the continuance of an Event of Default after the
Discharge of First Lien Obligations, each Grantor will notify each issuer of
Security Collateral granted by it hereunder that such Security Collateral is
subject to the security interest granted hereunder.

 

SECTION 6. Maintaining the Collateral Account; Pledged Deposit
Accounts. After the Discharge of First Lien Obligations, so long as any
Note or any other Obligation of the Company or any Guarantor under any Note
Document shall remain unpaid (other than contingent indemnification obligations
not yet accrued and payable and which by their terms survive termination of the
Note Document):

 

(a)           Each Grantor will maintain the Collateral Account and the
Pledged Deposit Accounts only with the financial institution acting as
Collateral Agent hereunder or with a bank (a “Pledged
Account Bank”) that has agreed with such Grantor and the Collateral
Agent to comply, upon the occurrence and during the continuance of an Event of
Default, and upon the receipt of notice of exclusive control, to comply with
instructions originated by the Collateral Agent directing the disposition of
funds in such deposit account without the further consent of such Grantor, such
agreement to be in form and substance reasonably satisfactory to the Collateral
Agent (a “Deposit Account Control Agreement”);
provided, however, this Section
6(a) shall not apply to deposit accounts (i) to the extent the average
daily balance, measurable over a trailing 30-day period, on deposit in each
such deposit account does not exceed $50,000 at any time or (ii) operated solely
as a payroll account, zero balance account or tax withholding account. Each
Grantor agrees that at no time shall the average daily balance, measurable over
a trailing 30-day period, on deposit in all deposit accounts for which there is
not in effect a Deposit Account Control Agreement exceed $250,000.

 

(b)           If an Event of Default shall have occurred or be
continuing, the Collateral Agent may, after the Discharge of First Lien
Obligations, at any time and without notice to, or consent from, the Grantor, transfer,
or direct the transfer of, funds from the Pledged Deposit Accounts or the
Collateral Account to satisfy the Grantor’s Obligations under the Indenture.

 

SECTION 7. Investing of Amounts in the Collateral Account. During
periods when the Collateral Agent exercises sole control over the Collateral
Account, the Collateral Agent shall, subject to the provisions of Sections 6,
8 and 21:  (a) from
time to time, invest, or direct the applicable Pledged Account Bank to invest,
amounts received with respect to the Collateral Account in such Cash
Equivalents credited to the Collateral Account as the Borrower may select, (b)
from time to time, invest interest paid on the Cash Equivalents referred to in
subsection (a) above and reinvest other proceeds of any such Cash Equivalents
that may mature or be sold, in each case in such Cash Equivalents credited in
the same manner, (c) deposit interest and proceeds that are not invested or
reinvested in Cash Equivalents as provided above in the Collateral Account and
(d) have the right to exchange, or direct the applicable Pledged Account Bank
to exchange, such Cash Equivalents for similar Cash Equivalents of smaller or
larger determinations, or for other Cash Equivalents, credited to the
Collateral Account.

 

SECTION 8. Release of Amounts. To the extent that (a) any
proceeds were deposited in the Collateral Account or a Pledged Deposit Account
during the continuance of an Event of Default, after the

 

6

 

Discharge of First Lien Obligations, and (b) there are remaining
proceeds in such Collateral Account or Pledged Deposit Account upon the
termination of such Event of Default, so long as no Event of Default shall have
occurred and be continuing, the Collateral Agent will pay and release, or
direct the applicable Pledged Account Bank to pay and release, to the
applicable Grantor or at its order or, at the request of such Grantor, to the
Collateral Agent to be applied to the Obligations of the Grantors under the
Note Documents, such amount, if any, as is then on deposit in such Collateral
Account or Pledged Deposit Account, in each case to the extent permitted to be
released under the terms of the Indenture.

 

SECTION 9. Representations and Warranties. Each Grantor
represents and warrants as follows:

 

(a)           Such Grantor’s exact legal name, as defined in Section
9-503(a) of the UCC, is correctly set forth in Schedule VI hereto. Such Grantor’s
location, chief executive office, type of organization, jurisdiction of
organization and organizational identification number, if any, is set forth in
Schedule VI hereto and is accurate in all material respects. Within the five
years preceding the date hereof, such Grantor has not changed its legal name,
location (as defined in the UCC), chief executive office, type of organization,
jurisdiction of organization or organizational identification number, if any,
from those set forth in Schedule VI hereto except as set forth in
Schedule VII hereto.

 

(b)           Such Grantor is the legal and beneficial owner of, or with
respect to Intellectual Property has the right to use, the Collateral for which
a security interest is granted or purported to be granted by it under this
Agreement free and clear of any Lien, claim, option or right of others, except
for the security interest created under this Agreement or otherwise permitted
under the Indenture. No effective financing statement or other instrument
similar in effect covering all or any part of the Collateral or listing such
Grantor as debtor is on file in any relevant recording office, except such as
may have been filed in favor of the Collateral Agent relating to the Note
Documents or as otherwise permitted under the Indenture.

 

(c)           All of the Equipment and Inventory (other than Equipment
and Inventory that is (i) located at customer or supplier locations in the
normal course of business or (ii) in transit or out for repair or further
process) of such Grantor are located at the places specified therefor in
Schedule VIII hereto or at another location as to which such Grantor has
complied with the requirements of Section 11(a) (or will comply within
the period set forth therein) or otherwise have an aggregate book value of no
more than $250,000.

 

(d)           After the Discharge of First Lien Obligations, none of the
Receivables or Agreement Collateral is evidenced by a promissory note or other
instrument in excess of (i) $250,000 individually and (ii) $1,000,000 in the
aggregate, that has not been delivered to the Collateral Agent.

 

(e)           If such Grantor is an issuer of Security Collateral, such
Grantor confirms that it has received notice of the security interest granted
hereunder.

 

(f)            The Pledged Debt pledged by such Grantor hereunder has
been duly authorized, authenticated or issued and delivered, is the legal,
valid and binding obligation of the issuers thereof, is not in default and, to
the extent applicable, is evidenced by one or more promissory notes (which
promissory notes, subject to the Intercreditor Agreement, have been delivered
to the Collateral Agent).

 

(g)           The Initial Pledged Debt constitutes all of the
outstanding indebtedness in excess of (i) $100,000 individually and (ii)
$500,000 in the aggregate, owed to such Grantor by the issuers thereof
evidenced by a note or other instrument and is outstanding in the principal
amount indicated on Schedule I hereto.

 

7

 

(h)           Such Grantor has no deposit accounts to the extent that
the average daily balance, measurable over a 30-day trailing period, on deposit
in each such deposit account does not exceed $50,000 other than the Collateral
Account, or Pledged Deposit Accounts listed on Schedule II hereto or operated
solely as a payroll account, zero balance account or tax withholding account
and additional Pledged Deposit Accounts as to which such Grantor has complied
with the applicable requirements of Section 6.

 

(i)            This Agreement creates in favor of the Collateral Agent
for the benefit of the Secured Parties a valid second priority security
interest, except as otherwise provided for under the Note Documents, in the
Collateral granted by such Grantor, securing the payment of the Secured
Obligations. Each Grantor has agreed to file, and if it fails to file, has
authorized the Collateral Agent to file financing and continuation statements
on its behalf under the UCC and record Intellectual Property Security
Agreements referred to in Section 14(d) with the U.S. Patent and
Trademark Office and the U.S. Copyright Office necessary to perfect a second
priority security interest in the respective Collateral, as applicable, subject
to certain exceptions contained herein and in the Indenture.

 

(j)            No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required (other than as otherwise provided for under the Indenture or this
Agreement) for (i) the grant by such Grantor of the security interest
granted hereunder or for the execution, delivery or performance of this
Agreement by such Grantor, (ii) the perfection (to the extent required
hereunder and excluding any security interest in cash) or maintenance of the
security interest created hereunder (including the second priority nature of
such security interest), except for the filing of financing and continuation
statements under the UCC, which upon filing of the financing statements
delivered pursuant to Section 12.06 of the Indenture, have been duly
filed and are in full force and effect, upon the recordation of the
Intellectual Property Security Agreements referred to in Section 14(d)
with the U.S. Patent and Trademark Office and the U.S. Copyright Office, any
filings outside the United States required to perfect a security interest in
Intellectual Property Collateral, and, subject to Section 3 and the
Intercreditor Agreement, the actions described in Section 5 with respect
to the Security Collateral, which actions, upon filing of the Intellectual
Property Security Agreement executed by the Company or the Guarantors on the
Issue Date have been taken and are in full force and effect, or (iii) the
exercise by the Collateral Agent of its voting or other rights provided for in
this Agreement or the remedies in respect of the Collateral pursuant to this
Agreement, except as may be required in connection with the disposition of any portion
of the Security Collateral by laws affecting the offering and sale of
securities generally.

 

(k)           As to itself and its Intellectual Property Collateral:

 

(i)            Except as could not be reasonably
expected to have a material adverse effect (x) on the business, assets, properties,
financial condition or results of operations of the Company and its Restricted
Subsidiaries, taken as a whole, (y) a material adverse effect on the ability of
the Company and the Guarantors (taken as a whole) to perform their obligations
under any Note Document or (c) a material adverse effect on the rights and
remedies of the Holders of the Notes under any Note Document (each, a “Material Adverse Effect”), the operation of such Grantor’s business
as currently conducted and the use of any of the Subsidiaries of any Material
Intellectual Property Collateral
(as defined below) in connection therewith does not infringe, misappropriate,
dilute, misuse or otherwise violate the intellectual property rights of any
third party.

 

(ii)           Such Grantor is the exclusive owner
or joint owner of all right, title and interest in and to the Material
Intellectual Property Collateral, or is entitled to use all Material
Intellectual Property Collateral subject only to the terms of the related IP
Agreements.

 

8

 

(iii)          The Intellectual Property Collateral
set forth on Schedule IV hereto includes all patents, patent applications,
domain names, trademark registrations and applications, copyright registrations
and applications that are owned by and material to the business of such
Grantor, in each case which are reasonably necessary to the operation of such
Grantor’s respective business.

 

(iv)          The Material Intellectual Property
Collateral owned by such Grantor is subsisting and has not been adjudged
invalid or unenforceable in whole or part, and is valid and enforceable.

 

(v)           Except as set forth on Schedule IV
hereto, such Grantor has not granted any material license, release, covenant
not to sue, non-assertion assurance, or other material right to any Person with
respect to any part of the Material Intellectual Property Collateral (other
than (A) licenses granted to such Grantor’s customers in the ordinary course of
business), the effect of which would create a material impairment of such
Grantor’s use of such Material Intellectual Property Collateral as intended in
the operation of its respective business. The consummation of the Transactions
will not result in the termination or impairment of any of the Material Intellectual
Property Collateral.

 

(vi)          With respect to each material IP
Agreement, except as could not be reasonably expected to have a Material
Adverse Effect:  (A) such IP Agreement is
valid and binding and in full force and effect with respect to each Grantor,
and to the knowledge of any Specified Officer of such Grantor, with respect to
any other party thereto, and represents the entire agreement between the
respective parties thereto with respect to the subject matter thereof; (B) such
IP Agreement will not cease to be valid and binding and in full force and
effect on terms identical to those currently in effect as a result of the
rights and interest granted herein, nor will the grant of such rights and
interest constitute a material breach or default under such IP Agreement or
otherwise give any party thereto a right to terminate such IP Agreement; (C)
such Grantor has not received any notice of termination or cancellation under
such IP Agreement; (D) such Grantor has not received any notice of a breach or
default under such IP Agreement, which breach or default has not been cured;
and (E) neither such Grantor nor, to the knowledge of any Specified Officer of
such Grantor, is any other party to such IP Agreement is in breach or default
thereof in any material respect, and, to the knowledge of any Specified Officer
of such Grantor no event has occurred that, with notice or lapse of time or
both, would constitute such a breach or default or permit termination,
modification or acceleration under such IP Agreement.

 

(l)            Such Grantor has no commercial tort claims in excess of
$2,500,000 other than those listed in Schedule V hereto and additional
commercial tort claims as to which such Grantor has complied with the
requirements of Section 15.

 

SECTION 10. Further Assurances. (a)  Each Grantor agrees that from time to time,
at the expense of such Grantor, such Grantor will promptly execute and deliver,
or otherwise authenticate and file, all further instruments and documents, and
take all further commercially reasonable action that is necessary, or that the
Collateral Agent may reasonably request, in order to perfect and protect any
pledge or security interest granted or purported to be granted by such Grantor
hereunder or to enable the Collateral Agent to exercise and enforce its rights
and remedies hereunder with respect to any Collateral of such Grantor. Each
Grantor further agrees that it shall, at the expense of such Grantor, take any
and all commercially reasonable actions necessary to defend title to the Collateral
against all Persons and to defend the security interest created hereunder and
the priority thereof against any Lien prohibited under the Indenture.

 

(b)           Each Grantor hereby authorizes the Collateral Agent to
file one or more financing or continuation statements, and amendments thereto,
including, without limitation, one or more

 

9

 

financing statements indicating that such financing statements cover
all assets or all personal property (or words of similar effect) of such
Grantor, regardless of whether any particular asset described in such financing
statements falls within the scope of the UCC or the granting clause of this
Agreement. A photocopy or other reproduction of this Agreement shall be
sufficient as a financing statement where permitted by law.

 

(c)           Each Grantor will furnish to the Collateral Agent from
time to time statements and schedules further identifying and describing the
Collateral of such Grantor and such other reports in connection with such
Collateral as the Collateral Agent may reasonably request, all in reasonable
detail.

 

(d)           Upon notice by the Collateral Agent, the Company will
furnish to the Collateral Agent on or prior to the fifth anniversary of the
date hereof (but not more than six months prior thereto), an opinion of
counsel, from outside counsel reasonably satisfactory to the Collateral Agent,
to the effect that all financing or continuation statements have been filed,
and all other action has been taken to perfect continuously from the date
hereof the security interest granted hereunder.

 

(e)           Notwithstanding anything to the contrary in this Agreement
or any other Note Document, this Agreement shall be subject to the provisions
of Section 12.06 of the Indenture.

 

SECTION 11. As to Equipment and Inventory. Each Grantor will
keep its Equipment (other than Equipment that is located at a customer or
supplier location or is in transit in the ordinary course of business or sold
in accordance with the Indenture) and Inventory (other than Inventory on
consignment or sold in the ordinary course of business) at the places therefor
specified in Section 9(c) or at such other places identified by UHS
concurrently with the delivery of the financing statements pursuant to Section
12.06 of the Indenture.

 

(a)           Each Grantor will pay promptly when due all property and
other material taxes, assessments and governmental charges or levies imposed
upon, and all claims (including, without limitation, claims for labor,
materials and supplies) against, its Equipment and Inventory, except to the
extent payment thereof is not required by Section 4.05 of the
Indenture.

 

(b)           Each Grantor, at its own expense, shall deliver to the
Collateral Agent the results of each physical verification, if any, which such
Grantor may in its discretion have made, or caused any other Person to make on
its behalf, of all or a portion of its Inventory.

 

SECTION 12. Insurance. Each Grantor will, at its own expense,
maintain insurance. Each casualty, property and liability (excluding business
interruption) policy shall in addition (a) withing 30 days following the Issue
Date, name the Collateral Agent as loss payee or additional insured party, as
applicable, thereunder (without any representation or warranty by or obligation
upon the Collateral Agent) or other language satisfactory to the Collateral
Agent, (b) provide that there shall be no recourse against the Collateral Agent
for payment of premiums or other amounts with respect thereto and (c) provide
that at least 10 days’ prior written notice of cancellation or of lapse shall
be given to the Collateral Agent by the insurer or other language satisfactory
to the Collateral Agent. Each Grantor will, if so reasonably requested by the
Collateral Agent, deliver to the Collateral Agent original or duplicate
policies of such insurance. Reimbursement under any liability insurance
maintained by any Grantor pursuant to this Section 12 may be paid
directly to the Person who shall have incurred liability covered by such
insurance.

 

SECTION 13. Post-Closing Changes. Each Grantor agrees to
promptly notify the Collateral Agent in writing of any change to its legal
name, type of organization, jurisdiction of organization, organizational
identification number (if any) and shall take all action reasonably required by
the

 

10

 

Collateral Agent for the purposes of perfecting or protecting the
security interest granted by this Agreement. Each Grantor will hold and
preserve its records relating to the Collateral, including, without limitation
and the Related Contracts, and after Discharge of First Lien Obligations, will
permit representatives of the Collateral Agent at any reasonable time during
normal business hours to inspect and make abstracts from such records and other
documents, upon reasonable advance notice to such Grantor; provided
that, excluding any such visits and inspections during the continuance of an
Event of Default, only the Collateral Agent may exercise rights under this Section
13 and the Collateral Agent shall not exercise such rights more often than
one (1) time during any calendar year absent the existence of an Event of
Default; provided further that, upon the
occurrence and during the continuance of an Event of Default, the Collateral
Agent or any Lender (or any respective representative or independent
contractor) may do any of the foregoing at the reasonable expense of such
Grantor at any time during normal business hours and upon reasonable advance
notice. If any Grantor does not have an organizational identification number
and later obtains one, within thirty (30) days, it will notify the Collateral
Agent of such organizational identification number.

 

SECTION 14. As to Intellectual Property Collateral. (a)  With respect to each item of its Intellectual
Property Collateral that is material to the business of any Grantor (any such
item of Intellectual Property Collateral being “Material
Intellectual Property Collateral”), except to the extent failure to
act could not reasonably be expected to have a Material Adverse Effect, with
respect to each item of Material Intellectual Property Collateral owned by such
Grantor, each Grantor agrees to take, at its expense, commercially reasonable
actions that it determines are necessary in accordance with the exercise of its
business discretion, including, without limitation, in the U.S. Patent and
Trademark Office, the U.S. Copyright Office and any other governmental
authority, to (i) maintain the validity and enforceability of such Material
Intellectual Property Collateral and maintain such Material Intellectual
Property Collateral in full force and effect, and (ii) pursue the registration
and maintenance of each patent, trademark, or copyright registration or
application, now or hereafter included in such Material Intellectual Property
Collateral of such Grantor, including, without limitation, the payment of
required fees and taxes, the filing of responses to office actions issued by
the U.S. Patent and Trademark Office, the U.S. Copyright Office or other governmental
authorities, the filing of applications for renewal or extension, the filing of
affidavits under Sections 8 and 15 of the U.S. Trademark Act, the filing of
divisional, continuation, continuation-in-part, reissue and renewal
applications or extensions, the payment of maintenance fees and the
participation in interference, reexamination, opposition, cancellation,
infringement and misappropriation proceedings.

 

(b)           Except as could not be reasonably expected to have a
Material Adverse Effect, no Grantor shall do or permit any act or knowingly
omit to do any act whereby any of its Material Intellectual Property Collateral
may lapse, be terminated or become invalid or unenforceable or placed in the
public domain (or, in case of a trade secret, lose its competitive value) other
than the expiration of patents at the end of their statutory term.

 

(c)           Except when failure to do so could not reasonably be
expected to cause a Material Adverse Effect, each Grantor shall take
commercially reasonable actions that it determines are necessary in accordance
with the exercise of its business discretion to preserve and protect each item
of its Material Intellectual Property Collateral.

 

(d)           With respect to its Material Intellectual Property, on the
Issue Date or such later date as provided under the terms of the Indenture or
which the Collateral Agent consents to in writing, each Grantor agrees to
execute and deliver to the Collateral Agent, with respect to all Material
Intellectual Property that is registered or with respect to which registration
is pending (i) an agreement, in substantially the form set forth in Exhibit B
hereto or otherwise in form and substance reasonably satisfactory to the
Collateral Agent (a “Copyright Security
Agreement”), (ii) an agreement, in

 

11

 

substantially the form set forth in Exhibit C hereto or otherwise in
form and substance reasonably satisfactory to the Collateral Agent (a “Patent Security Agreement”) and (iii) an
agreement, in substantially the form set forth in Exhibit D hereto or otherwise
in form and substance reasonably satisfactory to the Collateral Agent (a “Trademark Security Agreement” and, together
with each Copyright Security Agreement and each Patent Security Agreement, the “Intellectual Property Security Agreements”),
in each case for recording the security interest granted hereunder to the
Collateral Agent in such Intellectual Property Collateral with the U.S. Patent
and Trademark Office or the U.S. Copyright Office, as applicable.

 

(e)           Each Grantor agrees that should it obtain an ownership
interest in any item of the type set forth in Section 1(g) that is not
on the date hereof a part of the Intellectual Property Collateral (“After-Acquired Intellectual Property”) (i)
the provisions of this Agreement shall automatically apply thereto, and (ii)
any such After-Acquired Intellectual Property and, in the case of trademarks,
the goodwill symbolized thereby, shall automatically become part of the
Material Intellectual Property Collateral subject to the terms and conditions
of this Agreement with respect thereto. After the end of each fiscal quarter of
the Company, each Grantor shall provide written notice to the Collateral Agent
identifying the After-Acquired Intellectual Property consisting of material
patents, patent applications, trademark registrations, trademark applications,
copyright registrations, and copyright applications acquired during such fiscal
quarter, and such Grantor shall execute and deliver to the Collateral Agent
with such written notice, or otherwise authenticate, an agreement in form and
substance reasonably satisfactory to the Collateral Agent (an “IP Security Agreement Supplement”) covering
such After-Acquired Intellectual Property, which IP Security Agreement
Supplement shall be recorded with the U.S. Patent and Trademark Office, the
U.S. Copyright Office and any other governmental authorities necessary to
perfect (subject to the exceptions contained herein and in the Indenture) the
security interest hereunder in such After-Acquired Material Intellectual
Property in the United States.

 

SECTION 15. Commercial Tort Claims. After Discharge of the First
Lien Obligations, each Grantor will promptly after the end of each fiscal
quarter give notice to the Collateral Agent of any commercial tort claim
individually in excess of $2,500,000 that may arise after the date hereof and
will immediately execute or otherwise authenticate a supplement to this
Agreement, and otherwise take all necessary action, to subject such commercial
tort claim to the second priority security interest created under this
Agreement.

 

SECTION 16. Transfers and Other Liens. (a)  Each Grantor agrees that it will not (i)
sell, assign or otherwise dispose of, or grant any option with respect to, any
of the Collateral, other than sales, assignments and other dispositions of
Collateral and options relating to Collateral permitted under the terms of the
Indenture or (ii) create or suffer to exist any Lien upon or with respect to
any of the Collateral of such Grantor except for the pledge, assignment and
security interest created under this Agreement and Liens permitted under the
Note Documents.

 

SECTION 17. Collateral Agent Appointed Attorney in Fact. Each
Grantor hereby irrevocably appoints the Collateral Agent such Grantor’s
attorney in fact, with full authority in the place and stead of such Grantor
and in the name of such Grantor or otherwise, subject to the Intercreditor
Agreement, from time to time, upon the occurrence and during the continuance of
an Event of Default, in the Collateral Agent’s reasonable discretion, to take
any action and to execute any instrument that the Collateral Agent may deem
necessary or advisable to effect the provisions of this Agreement, including,
without limitation:

 

(a)           to obtain and adjust insurance
required to be paid to the Collateral Agent pursuant to Section 12,

 

12

 

(b)           to ask for, demand, collect, sue for,
recover, compromise, receive and give acquittance and receipts for moneys due
and to become due under or in respect of any of the Collateral,

 

(c)           to receive, indorse and collect any
drafts or other instruments, documents and chattel paper, in connection with
subsection (a) or (b) above, and

 

(d)           to file any claims or take any action
or institute any proceedings that the Collateral Agent may deem necessary or
desirable for the collection of any of the Collateral or the rights of the
Collateral Agent with respect to any of the Collateral.

 

SECTION 18. Collateral Agent May Perform. If any Grantor fails
to perform any agreement contained herein, after Discharge of First Lien
Obligations, the Collateral Agent may, but without any obligation to do so,
with notice (or upon the occurrence and during the continuance of an Event of
Default, without notice), itself perform, or cause performance of, such
agreement, and the expenses of the Collateral Agent incurred in connection
therewith shall be payable by such Grantor under Section 22.

 

SECTION 19. The Collateral Agent’s Duties. The powers conferred
on the Collateral Agent hereunder are solely to protect the Secured Parties’
interest in the Collateral and shall not impose any duty upon it to exercise
any such powers. Except for the safe custody of any Collateral in its
possession and the accounting for moneys actually received by it hereunder, the
Collateral Agent shall have no duty (other than as imposed by law, this
Agreement or any other Note Document) as to any Collateral, as to ascertaining
or taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relative to any Collateral, whether or not any Secured
Party has or is deemed to have knowledge of such matters, or as to the taking
of any necessary steps to preserve rights against any parties or any other
rights pertaining to any Collateral. The Collateral Agent shall be deemed to
have exercised reasonable care in the custody and preservation of any
Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which it accords its own property or as required by
law and will not be liable or responsible for any loss or damage to any
Collateral, or for any diminution in the value thereof, by reason of any act or
omission of any sub-agent or bailee selected by the Collateral Agent in good
faith, except to the extent that such liability arises from the Collateral
Agent’s gross negligence, bad faith or willful misconduct.

 

SECTION 20. As to Receivables and Security Collateral. The
Collateral Agent may at any time after Discharge of First Lien Obligations, in
the Collateral Agent’s own name, in the name of a nominee of the Collateral
Agent or in the name of any Grantor communicate (by mail, telephone, facsimile
or otherwise) with account debtors, and obligors in respect of any Security
Collateral to verify with such Persons, to the Collateral Agent’s satisfaction,
the existence, the amount, the terms of, and any other matter relating to
Receivables, payment intangibles, Security Collateral or Chattel Paper.

 

SECTION 21. Remedies. Subject to Section 6.02 of the
Indenture, after Discharge of the First Lien Obligations, if any Event of
Default shall have occurred and be continuing:

 

(a)           The Collateral Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party upon
default under the UCC (whether or not the UCC applies to the affected
Collateral),  and also may:  (i) require each Grantor to, and each Grantor
hereby agrees that it will at its expense and upon request of the Collateral
Agent forthwith, assemble all or part of the Collateral as directed by the
Collateral Agent and make it available to the Collateral Agent at a place and
time to be designated by the Collateral Agent that is reasonably convenient to
both parties; (ii) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private
sale, at any of the

 

13

 

Collateral Agent’s offices or elsewhere, for cash, on credit or for
future delivery, and upon such other terms as the Collateral Agent may deem
commercially reasonable; (iii) occupy any premises owned or, to the extent
lawful and permitted, leased by any of the Grantors where the Collateral or any
part thereof is assembled or located for a reasonable period in order to
effectuate its rights and remedies hereunder or under law, without obligation
to such Grantor in respect of such occupation; and (iv) exercise any and all
rights and remedies of any of the Grantors under or in connection with the
Collateral, or otherwise in respect of the Collateral, including, without
limitation, (A) any and all rights of such Grantor to demand or otherwise
require payment of any amount under, or performance of any provision of, the
Receivables, the Related Contracts and the other Collateral, (B) withdraw, or
cause or direct the withdrawal, of all funds with respect to the Account
Collateral and (C) exercise all other rights and remedies with respect to
the Receivables, the Related Contracts and the other Collateral, including,
without limitation, those set forth in Section 9-607 of the UCC. Each Grantor
agrees that, to the extent notice of sale shall be required by law, at least
ten days’ notice to such Grantor of the time and place of any public sale or
the time after which any private sale is to be made shall constitute reasonable
notification. The Collateral Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Collateral Agent
may adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.

 

(b)           Any cash held by or on behalf of the Collateral Agent and
all cash proceeds received by or on behalf of the Collateral Agent in respect
of any sale of, collection from, or other realization upon all or any part of
the Collateral shall be held by the Collateral Agent as collateral for, or at
any time thereafter applied (after payment of any amounts payable to the
Collateral Agent pursuant to Section 22) in whole or in part by the
Collateral Agent for the ratable benefit of the Secured Parties against, all or
any part of the Secured Obligations, as set forth in Section 12.03 of
the Indenture.

 

(c)           [Intentionally ommitted].

 

(d)           The Collateral Agent may, without notice to any Grantor
except as required by law and at any time or from time to time, charge, set off
and otherwise apply all or any part of the Secured Obligations against any
funds held with respect to the Account Collateral or in any other deposit
account.

 

(e)           The Collateral Agent may send to each bank party to any
Deposit Account Control Agreement a “Notice of Exclusive Control” (or similar
term) as defined in and under such Agreement.

 

(f)            In the event of any sale or other disposition of any of
the Intellectual Property Collateral of any Grantor, the goodwill symbolized by
any Trademarks subject to such sale or other disposition shall be included
therein, and such Grantor shall supply to the Collateral Agent or its designee
such Grantor’s know-how and expertise, and documents and things relating to any
Intellectual Property Collateral subject to such sale or other disposition, and
such Grantor’s customer lists and other records and documents relating to such
Intellectual Property Collateral and to the manufacture, distribution,
advertising and sale of products and services of such Grantor.

 

(g)           If the Collateral Agent shall determine to exercise its
right to sell all or any of the Security Collateral of any Grantor pursuant to
this Section 21, each Grantor agrees that, upon request of the
Collateral Agent, such Grantor will, at its own reasonable expense, do or cause
to be done all such other commercially reasonable acts and things as may be
reasonably necessary to make such sale of such Security Collateral or any part
thereof valid and binding and in compliance with applicable law.

 

14

 

(h)           Notwithstanding anything to the contrary in this
Agreement, the exercise of remedies by the Collateral Agent under this
Agreement upon the occurrence and during the continuance of an Event of Default
shall be subject to Section 6.02 of the Indenture.

 

SECTION 22. Indemnity and Expenses. (a)  Each Grantor agrees to indemnify, defend and
save and hold harmless each Secured Party and each Representative Party (as
defined below) of any of the foregoing Persons (each, an “Indemnified Party”)
from and against, and shall pay on demand, any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel (which shall be limited to one (1) counsel to the
Collateral Agent and the Holders of Notes (exclusive of one local counsel to
the Collateral Agent and the Holders of Notes in each appropriate
jurisdiction), unless (x) the interests of the Collateral Agent and the Holders
of Notes are sufficiently divergent, in which case one (1) additional counsel
may be appointed and (y) if the interests of any Holder of Note or group of
Holders of Notes (other than all of the Holders of Notes) are distinctly or
disproportionately affected, one (1) additional counsel for such Lender or
group of Holders of Notes))) that may be incurred by or asserted or awarded
against any Indemnified Party, in each case arising out of or in connection
with or resulting from this Agreement (including, without limitation,
enforcement of this Agreement), provided that
such indemnity shall not, as to any Indemnitee, be available to the extent that
such losses, claims, damages, liabilities or related expenses (x) are
determined by a court of competent jurisdiction by final judgment to have
resulted from the gross negligence, bad faith or willful misconduct of such
Indemnitee or such Indemnitee’s Representative Parties or (y) result from a
claim brought by any Grantor against an Indemnitee for breach of such
Indemnitee’s obligations under this Agreement, if such Grantor has obtained a
final judgment in its favor on such claim as determined by a court of competent
jurisdiction. For purposes of this Section 22(a), “Representative Parties” means, as to any Person, (i) such
Person’s officers, directors and employees and (ii) such Person’s Affiliates,
agents, advisers and other representatives, in each case to the extent acting
at the direction of such Person.

 

(b)           Each Grantor will within 30 days of written demand pay to
the Collateral Agent the amount of any and all reasonable expenses, including,
without limitation, the reasonable fees and reasonable out-of-pocket expenses
of its counsel and of any experts and agents, that the Collateral Agent may
incur in connection with (i) the custody, preservation, use or operation of, or
the sale of, collection from or other realization upon, any of the Collateral
of such Grantor, (ii) the exercise or enforcement of any of the rights of the
Collateral Agent or the other Secured Parties hereunder or (iii) the failure by
such Grantor to perform or observe any of the provisions hereof.

 

SECTION 23. Amendments; Waivers; Additional Grantors; Etc. (a)  Subject to the Intercreditor Agreement, no
amendment or waiver of any provision of this Agreement, and no consent to any
departure by any Grantor herefrom, shall in any event be effective unless the
same shall be in writing and signed by the Collateral Agent and the Grantors,
and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No failure on the part
of the Collateral Agent or any other Secured Party to exercise, and no delay in
exercising any right hereunder, shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right.

 

(b)           Upon the execution and delivery by any Person of a
security agreement supplement in substantially the form of Exhibit E hereto (each
a “Security Agreement Supplement”),
such Person shall be referred to as an “Additional
Grantor” and shall be and become a Grantor hereunder, and each
reference in this Agreement and the other Note Documents to “Grantor” shall
also mean and be a reference to such Additional Grantor, each reference in this
Agreement and the other Note Documents to the “Collateral” shall also mean and be a reference to the
Collateral granted by such Additional Grantor and each reference in this
Agreement to a Schedule shall also mean and be a reference to the schedules
attached to such Security Agreement Supplement.

 

15

 

SECTION 24. Notices, Etc. All notices and other communications
provided for hereunder shall be either (a) in writing (including telegraphic,
telecopier or telex communication) and mailed, telegraphed, telecopied, telexed
or otherwise delivered or (b) by electronic mail (if electronic mail addresses
are designated as provided below) confirmed immediately in writing, in the case
of the Company or the Collateral Agent (as provided for the Trustee
thereunder), addressed to it at its address specified in the Indenture and, in
the case of each Grantor other than the Company, addressed to it at its address
set forth opposite such Grantor’s name on the signature pages hereto or on the
signature page to the Security Agreement Supplement pursuant to which it became
a party hereto; or, as to any party, at such other address as shall be
designated by such party in a written notice to the other parties. All such
notices and other communications shall be deemed to be given or made upon the
earlier to occur of (a) actual receipt by the relevant party hereto and (b) (i)
if delivered by hand or by courier, when signed for by or on behalf of the
relevant party hereto; (ii) if delivered by mail, four (4) Business Days after
deposit in the mails, postage prepaid; (iii) if delivered by facsimile, when
sent and receipt has been confirmed; and (iv) if delivered by electronic mail,
when delivered. Delivery by telecopier or “pdf” of an executed counterpart of
any amendment or waiver of any provision of this Agreement or of any Security
Agreement Supplement or Schedule hereto shall be effective as delivery of an
original executed counterpart thereof.

 

SECTION 25. Continuing Security Interest; Transfers under the
Indenture. This Agreement shall create a continuing security interest in
the Collateral and shall (a) remain in full force and effect until the payment
in full in cash of the Secured Obligations (other than with respect to
contingent obligations not yet accrued and payable under the Note Documents),
(b) be binding upon each Grantor, its permitted successors and assigns and (c)
inure, together with the rights and remedies of the Collateral Agent hereunder,
to the benefit of the Secured Parties and their respective permitted
successors, transferees and assigns. Without limiting the generality of the
foregoing subsection (c), any Holder may transfer the Note or Notes held by it
to any other Person, and such other Person shall thereupon become vested with
all the benefits in respect thereof granted to such Holder herein or otherwise,
in each case as provided in Section 2.06 of the Indenture.

 

SECTION 26. Release; Termination. (a)  Upon any sale, lease, transfer or other
disposition of any item of Collateral of any Grantor in accordance with the
terms of the Note Documents (other than sales of Inventory in the ordinary
course of business), the Collateral Agent will, at such Grantor’s expense,
execute and deliver to such Grantor such documents as such Grantor shall
reasonably request to evidence the release of such item of Collateral from the
assignment and security interest granted hereby; provided, however,
that (i) such Grantor shall have delivered to the Collateral Agent a written
request for release describing the item of Collateral and the terms of the
sale, lease, transfer or other disposition in reasonable detail, together with
a form of release for execution by the Collateral Agent and a certificate of
such Grantor to the effect that the transaction is in compliance with the Note
Documents and as to such other matters as the Collateral Agent may reasonably
request, and (ii) the proceeds of any such sale, lease, transfer or other disposition
required to be applied, or any payment to be made in connection therewith, in
accordance with Section 4.10 of the Indenture shall, to the extent so
required, be paid or made to, or in accordance with the instructions of, the
Collateral Agent when and as required under Section 4.10 of the
Indenture.

 

(b)           Upon the payment in full in cash of the Secured
Obligations (other than (with respect contingent indemnification obligations
not yet accrued and payable under the Note Documents), the pledge and security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to the applicable Grantor. Upon any such termination, the Collateral
Agent will, at the applicable Grantor’s expense, execute and deliver to such
Grantor such documents as such Grantor shall reasonably request to evidence
such termination.

 

16

 

SECTION 27. Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page
to this Agreement by telecopier shall be effective as delivery of an original
executed counterpart of this Agreement.

 

SECTION 28. Intercreditor Agreement. Notwithstanding anything
herein to the contrary, the lien and security interest granted on the
Collateral Agent pursuant to this Agreement and the exercise of any right or
remedy by the Collateral Agent hereunder are subject to the provisions of the
Intercreditor Agreement dated as of May 31, 2007 (as amended, restated,
supplemented or otherwise modified from time to time, the “Intercreditor
Agreement”), among Merrill Lynch Capital, a division of Merrill
Lynch Business Financial Services Inc., as collateral agent under the First
Lien Credit Agreement and Wells Fargo, as Collateral Agent under the Indenture
and certain other persons party or that may become party thereto from time to
time. In the event of any conflict between the terms of the Intercreditor
Agreement and this Agreement, the terms of the Intercreditor Agreement shall
govern and control.

 

SECTION 29. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York.

 

[REMAINDER OF THIS PAGE
INTENTIONALLY LEFT BLANK.]

 

17

 

IN WITNESS WHEREOF, each Grantor has caused this
Agreement to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.

 

	
   

  	
  UHS HOLDCO, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Rex T. Clevenger

  
	
   

  	
   

  	
   

  	
  Name: Rex T. Clevenger

  
	
   

  	
   

  	
   

  	
  Title: CFO & Executive Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address for Notices:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UHS MERGER SUB, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Bret Bowerman

  
	
   

  	
   

  	
   

  	
  Name: Bret Bowerman

  
	
   

  	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address for Notices:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNIVERSAL
  HOSPITAL SERVICES, INC., after

  giving effect to the Acquisition

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Rex T. Clevenger

  
	
   

  	
   

  	
   

  	
  Name: Rex T. Clevenger

  
	
   

  	
   

  	
   

  	
  Title: CFO & Executive Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address for Notices:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
					

 

 

	
   

  	
  WELLS
  FARGO BANK, NATIONAL

  ASSOCIATION, as Collateral Agent

  
	
   

  	
  By:

  	
   

  	
  /s/ Lynn M. Steiner

  
	
   

  	
   

  	
   

  	
  Name: Lynn M. Steiner

  
	
   

  	
   

  	
   

  	
  Title: Vice PresidentExhibit 10.6

 

SECOND LIEN TRADEMARK
SECURITY AGREEMENT

 

This Second Lien Trademark
Security Agreement (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Second Lien
Trademark Security Agreement”) dated
May 31, 2007 is made by the Persons listed on the signature pages hereof
(collectively, the “Grantors”) in
favor of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Wells Fargo”), as collateral agent (together with any
successor collateral agent appointed pursuant to Article 12 of the Indenture
referred to below, the “Collateral Agent”)
for the benefit of the Trustee (as defined below) and the Holders of the Notes
(collectively, the “Secured Parties”).

 

WHEREAS, UHS MERGER SUB,
INC., a Delaware corporation and Wells Fargo, as trustee (the “Trustee”), have entered into an Indenture
dated as of May 31, 2007 (such agreement, as it may hereafter be amended,
amended and restated, supplemented or otherwise modified from time to time,
being the “Indenture”).

 

WHEREAS, as a requirement of
the Indenture each Grantor has executed and delivered that certain Second Lien
Security Agreement dated as of May 31, 2007 made by the Grantors to the
Collateral Agent (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Security Agreement”).
Terms defined in the Security Agreement and not otherwise defined herein are
used herein as defined in the Security Agreement.

 

WHEREAS, under the terms of
the Security Agreement, the Grantors have granted to the Collateral Agent, for
the ratable benefit of the Secured Parties, a security interest in, among other
property, certain Trademarks constituting Material Intellectual Property
Collateral of the Grantors, and have agreed as a condition thereof to execute
this Second Lien Trademark Security Agreement for recording with the U.S.
Patent and Trademark Office and any other appropriate governmental authorities.

 

NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Grantor agrees as follows:

 

Section 1. Grant of
Security. Each Grantor hereby grants to the Collateral Agent for the
ratable benefit of the Secured Parties a continuing security interest in all of
such Grantor’s right, title and interest in and to the following (all of the
following items or types of property being herein collectively referred to as
the “Trademark Collateral”), whether now
owned or existing or hereafter acquired or arising:

 

(i)            each
Trademark constituting Material Intellectual Property Collateral owned by the
Grantor (including, without limitation, each Trademark registration and
application therefor, referred to in Schedule 1 hereto, and all of the goodwill
of the business connected with the use of or symbolized by, each Trademark);

 

(ii)           all
registrations and applications for registration for any of the foregoing,
together with all renewals thereof;

 

(iii)          all
rights in the foregoing provided by international treaties or conventions, all
rights corresponding thereto throughout the world and all other rights of any
kind whatsoever of such Grantor accruing thereunder or pertaining thereto; and

 

 

(iv)          any
and all proceeds of, collateral for, income, royalties and other payments now
or hereafter due and payable with respect to any and all of the foregoing,
including, without limitation, all Proceeds of and revenues from any and all
claims for damages and injunctive relief for past, present and future
infringement, dilution, misappropriation, violation, misuse or breach with
respect to any of the foregoing, with the right, but not the obligation, to sue
for and collect, or otherwise recover, all proceeds and damages relating
thereto.

 

Notwithstanding the foregoing, no security interest
shall be granted in any United States intent-to-use applications to the extent
that, and solely during the period in which, the grant of a security interest
therein would impair the validity or enforceability of such intent-to-use
trademark applications under federal law.

 

Section 2. Recordation.
Each Grantor authorizes and requests that the Commissioner for Trademarks and
any other applicable government officer record this Second Lien Trademark
Security Agreement.

 

Section 3. Execution in
Counterparts. This Second Lien Trademark Security Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement.

 

Section 4. Grants, Rights
and Remedies. This Second Lien Trademark Security Agreement has been
executed and delivered by the Grantors for the purpose of recording the grant
of security interest herein with the U.S. Patent and Trademark Office. The
security interest granted hereby has been granted to the Collateral Agent in
connection with the Security Agreement and is expressly subject to the terms
and conditions thereof and does not modify its terms or conditions or create
any additional rights or obligations for any party thereto or hereto. The
Security Agreement (and all rights and remedies of the Collateral Agent
thereunder) shall remain in full force and effect in accordance with its terms.
In the event of a conflict between any provision of this Second Lien Trademark
Security Agreement and any provision of the Security Agreement, the Security
Agreement shall govern. Notwithstanding anything herein to the contrary, the
liens and security interests granted to the Collateral Agent pursuant to this
Second Lien Trademark Security Agreement and the exercise of any right or
remedy by the Collateral Agent hereunder are subject to the limitations and
provisions of the General Intercreditor Agreement, dated as of May 31, 2007 (as
amended, restated, supplemented or otherwise modified from time to time, the “Intercreditor Agreement”) among Merrill
Lynch Capital, a division of Merrill Lynch Business Financial Services Inc., as
First Lien Collateral Agent, and Wells Fargo, as Junior Lien Collateral Agent,
and certain other persons party or that may become party thereto from time to
time, and consented to by Universal Hospital Services, Inc. and the Grantors
identified therein. In the event of any conflict between the terms of the
Intercreditor Agreement and the terms of this Agreement, the terms of the
Intercreditor Agreement shall govern and control.

 

Section 5. Governing Law.
This Second Lien Trademark Security Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.

 

2

 

IN WITNESS WHEREOF, each
Grantor has caused this Second Lien Trademark Security Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.

 

	
   

  	
  UHS MERGER SUB, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bret Bowerman

  
	
   

  	
   

  	
  Name: Bret Bowerman

  
	
   

  	
   

  	
  Title: Vice President

  

 

 

	
   

  	
  UNIVERSAL HOSPITAL SERVICES,
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rex T. Clevenger

  
	
   

  	
   

  	
  Name: Rex T. Clevenger

  
	
   

  	
   

  	
  Title: CFO & Executive
  Vice President

  

 

 

	
   

  	
  UHS HOLDCO, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rex T. Clevenger

  
	
   

  	
   

  	
  Name: Rex T. Clevenger

  
	
   

  	
   

  	
  Title: CFO & Executive
  Vice President

  

 

 

	
   

  	
  WELLS FARGO BANK, NATIONAL

  ASSOCIATION, as Collateral Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lynn M. Steiner

  
	
   

  	
   

  	
  Name: Lynn M. Steiner

  
	
   

  	
   

  	
  Title: Vice President

  

 

2

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