Document:

exv10w2

 

EXHIBIT 10.2

	 	 	 
	 

	 	 
	 

GUARANTEE AND COLLATERAL AGREEMENT

dated as of

April 19, 2007

among

USPI HOLDINGS, INC.,

UNITED SURGICAL PARTNERS INTERNATIONAL, INC.,

THE SUBSIDIARIES OF UNITED SURGICAL PARTNERS INTERNATIONAL, INC.

IDENTIFIED HEREIN

and

CITIBANK, N.A.

as Collateral Agent

	 	 	 
	 

	 	 
	 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	ARTICLE I
	 	 	 	 
	 
	 	 	 	 
	DEFINITIONS
	 	 	 	 
	 
	 	 	 	 
	Section 1.01. Credit Agreement

	 	 	1	 
	Section 1.02. Other Defined Terms

	 	 	1	 
	 
	 	 	 	 
	ARTICLE II
	 	 	 	 
	 
	 	 	 	 
	GUARANTEE
	 	 	 	 
	Section 2.01. Guarantee

	 	 	5	 
	Section 2.02. Guarantee of Payment

	 	 	5	 
	Section 2.03. No Limitations

	 	 	5	 
	Section 2.04. Reinstatement

	 	 	6	 
	Section 2.05. Agreement To Pay; Subrogation

	 	 	6	 
	Section 2.06. Information

	 	 	7	 
	Section 2.07. Remedies

	 	 	7	 
	Section 2.08. Instrument for the Payment of Money

	 	 	7	 
	Section 2.09. Continuing Guarantee

	 	 	7	 
	Section 2.10. General Limitation on Guarantee

	 	 	7	 
	 
	 	 	 	 
	ARTICLE III
	 	 	 	 
	 
	 	 	 	 
	PLEDGE OF SECURITIES
	 	 	 	 
	 
	 	 	 	 
	Section 3.01. Pledge

	 	 	8	 
	Section 3.02. Delivery of the Pledged Collateral

	 	 	8	 
	Section 3.03. Representations, Warranties and Covenants

	 	 	9	 
	Section 3.04. Certification of Limited Liability Company and Limited Partnership Interests

	 	 	10	 
	Section 3.05. Registration in Nominee Name; Denominations

	 	 	11	 
	Section 3.06. Voting Rights; Dividends and Interest

	 	 	11	 
	ARTICLE IV
	 	 	 	 
	 
	 	 	 	 
	SECURITY INTERESTS IN PERSONAL PROPERTY
	 	 	 	 
	 
	 	 	 	 
	Section 4.01. Security Interest

	 	 	13	 
	Section 4.02. Representations and Warranties

	 	 	15	 
	Section 4.03. Covenants

	 	 	16	 

-i-

 

	 	 	 	 	 
	 	 	Page
	Section 4.04. Other Actions

	 	 	20	 
	Section 4.05. Covenants Regarding Patent, Trademark and Copyright Collateral

	 	 	21	 
	 
	 	 	 	 
	ARTICLE V
	 	 	 	 
	 
	 	 	 	 
	REMEDIES
	 	 	 	 
	 
	 	 	 	 
	Section 5.01. Remedies upon Default

	 	 	22	 
	Section 5.02. Application of Proceeds

	 	 	24	 
	Section 5.03. Grant of License To Use Intellectual Property

	 	 	25	 
	Section 5.04. Securities Act

	 	 	25	 
	Section 5.05. Medicare/Medicaid

	 	 	26	 
	ARTICLE VI
	 	 	 	 
	 
	 	 	 	 
	INDEMNITY, SUBROGATION AND SUBORDINATION
	 	 	 	 
	 
	 	 	 	 
	Section 6.01. Indemnity and Subrogation

	 	 	26	 
	Section 6.02. Contribution and Subrogation

	 	 	27	 
	Section 6.03. Subordination

	 	 	27	 
	 
	 	 	 	 
	ARTICLE VII
	 	 	 	 
	 
	 	 	 	 
	MISCELLANEOUS
	 	 	 	 
	 
	 	 	 	 
	Section 7.01. Notices

	 	 	27	 
	Section 7.02. Waivers; Amendment

	 	 	27	 
	Section 7.03. Collateral Agent’s Fees and Expenses; Indemnification

	 	 	28	 
	Section 7.04. Successors and Assigns

	 	 	29	 
	Section 7.05. Survival of Agreement

	 	 	29	 
	Section 7.06. Counterparts; Effectiveness; Several Agreement

	 	 	29	 
	Section 7.07. Severability

	 	 	29	 
	Section 7.08. Right of Set-Off

	 	 	30	 
	Section 7.09. Governing Law; Jurisdiction; Consent to Service of Process

	 	 	30	 
	Section 7.10. WAIVER OF JURY TRIAL

	 	 	31	 
	Section 7.11. Headings

	 	 	31	 
	Section 7.12. Security Interest Absolute

	 	 	31	 
	Section 7.13. Termination or Release

	 	 	31	 
	Section 7.14. Additional Subsidiaries

	 	 	32	 
	Section 7.15. Collateral Agent Appointed Attorney-in-Fact

	 	 	32	 
	Section 7.16. Further Assurances

	 	 	33	 

-ii-

 

	 	 	 	 	 
	Schedules
	 	 	 	 
	 
	 	 	 	 
	Schedule I Subsidiary Loan Parties
	 	 	 	 
	Schedule II Pledged Stock; Debt Securities
	 	 	 	 
	Schedule III Intellectual Property
	 	 	 	 
	Schedule IV Commercial Tort Claims
	 	 	 	 
	 
	 	 	 	 
	Exhibits
	 	 	 	 
	 
	 	 	 	 
	Exhibit I Form of Supplement
	 	 	 	 

-iii-

 

          GUARANTEE AND COLLATERAL AGREEMENT (this “Agreement”) dated as of April 19, 2007,
among USPI HOLDINGS, INC., a Delaware corporation, UNITED SURGICAL PARTNERS INTERNATIONAL, INC., a
Delaware corporation, the Subsidiaries of UNITED SURGICAL PARTNERS INTERNATIONAL, INC. identified
herein and CITIBANK, N.A., as Collateral Agent.

          Reference is made to the Credit Agreement dated as of April 19, 2007 (as amended, supplemented
or otherwise modified from time to time, the “Credit Agreement”), among United Surgical
Partners International, Inc. (the “Borrower”), USPI Holdings, Inc., the Lenders party
thereto, Citibank, N.A., as Administrative Agent, Lehman Brothers Inc., as Syndication Agent, and
Bear Stearns Corporate Lending Inc., Suntrust Bank and UBS Securities LLC, as Co-Documentation
Agents. The Lenders have agreed to extend credit to the Borrower subject to the terms and
conditions set forth in the Credit Agreement. The obligations of the Lenders to extend such credit
are conditioned upon, among other things, the execution and delivery of this Agreement. Holdings
and the Subsidiary Loan Parties are affiliates of the Borrower, will derive substantial benefits
from the extension of credit to the Borrower pursuant to the Credit Agreement and are willing to
execute and deliver this Agreement in order to induce the Lenders to extend such credit.
Accordingly, the parties hereto agree as follows:

ARTICLE I

Definitions

          Section 1.01. Credit Agreement. (a) Capitalized terms used in this Agreement and not
otherwise defined in this Agreement have the meanings specified in the Credit Agreement. All terms
defined in the New York UCC (as defined in this Agreement) and not defined in this Agreement have
the meanings specified therein.

          (b) The rules of construction specified in Section 1.03 of the Credit Agreement also apply to
this Agreement, mutatis mutandis.

          Section 1.02. Other Defined Terms. As used in this Agreement, the following terms
have the meanings specified below:

     “Account Debtor” means any Person who is or who may become obligated to any
Grantor under, with respect to or on account of an Account.

     “Article 9 Collateral” has the meaning assigned to such term in Section 4.01.

     “Claiming Party” shall have the meaning assigned to such term in Section 6.02.

     “Collateral” means Article 9 Collateral and Pledged Collateral.

     “Contributing Party” shall have the meaning assigned to such term in Section
6.02.

Schedule I-1

 

     “Copyright License” means any written agreement, now or hereafter in effect,
granting any right to any third party under any copyright now or hereafter owned by any
Grantor or that such Grantor otherwise has the right to license, or granting any right to
any Grantor under any copyright now or hereafter owned by any third party, and all rights of
any Grantor under any such agreement.

     “Copyrights” means all of the following now owned or hereafter acquired by any
Grantor: (a) all copyright rights in any work subject to the copyright laws of the United
States or any other country, whether as author, assignee, transferee or otherwise and (b)
all registrations and applications for registration of any such copyright in the United
States or any other country, including registrations, recordings, supplemental registrations
and pending applications for registration in the United States Copyright Office, including
those listed on Schedule III.

     “Credit Agreement” has the meaning assigned to such term in the preliminary
statement in this Agreement.

     “Federal Securities Laws” has the meaning assigned to such term in Section
5.04.

     “General Intangibles” means all “General Intangibles” of any Grantor as defined
in Section 9-102(42) of the New York UCC.

     “Grantors” means Holdings, the Borrower and the Subsidiary Loan Parties.

     “Guarantors” means Holdings and the Subsidiary Loan Parties.

     “Instrument” has the meaning specified in Article 9 of the New York UCC.

     “Intellectual Property” means all intellectual and similar property of any
Grantor of every kind and nature now owned or hereafter acquired by any Grantor, including
inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade secrets, confidential
or proprietary technical and business information, know-how or other data or information,
software and databases and all embodiments or fixations thereof and related documentation,
registrations and franchises, and all additions, improvements and accessions to, and books
and records describing or used in connection with, any of the foregoing.

     “Investment Property” means a security, whether certificated or uncertificated,
Security Entitlement, Securities Account, Commodity Contract or Commodity Account.

     “LC Account” means any account established and maintained in accordance with
the provisions of Section 2.05(j) of the Credit Agreement and all property from time
to time on deposit in such LC Account.

     “License” means any Patent License, Trademark License, Copyright License or
other license or sublicense agreement to which any Grantor is a party, including those
listed on Schedule III.

Sch. I-2

 

     “Loan Document Obligations” means (a) the due and punctual payment by the
Borrower of (i) the principal of and interest (including interest accruing during the
pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless
of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether
at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, (ii)
each payment required to be made by the Borrower under the Credit Agreement in respect of
any Letter of Credit, when and as due, including payments in respect of reimbursement of
disbursements, interest thereon (including interest accruing during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) and obligations to provide cash collateral, and
(iii) all other monetary obligations of the Borrower to any of the Secured Parties under the
Credit Agreement and each other Loan Document, including obligations to pay fees, expense
reimbursement obligations and indemnification obligations, whether primary, secondary,
direct, contingent, fixed or otherwise (including monetary obligations incurred during the
pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless
of whether allowed or allowable in such proceeding), (b) the due and punctual performance of
all other obligations of the Borrower under or pursuant to the Credit Agreement and each
other Loan Document, and (c) the due and punctual payment and performance in full of all the
obligations of each other Loan Party under or pursuant to this Agreement and each other Loan
Document.

     “Medicare” shall mean that government-sponsored entitlement program under Title
XVIII of the Social Security Act that provides for a health insurance system for eligible
elderly and disabled individuals (Social Security Act of 1965, Title XVIII, P.L. 89-87 as
amended; 42 U.S.C. § 1395 et seq.).

     “Medicaid” shall mean that means-tested entitlement program under Title XIX of
the Social Security Act that provides federal grants to states for medical assistance based
on specific eligibility criteria (Social Security Act of 1965, Title XIX, P.L. 89-87, as
amended; 42 U.S.C. § 1396 et seq.).

     “New York UCC” means the Uniform Commercial Code as from time to time in effect
in the State of New York.

     “Obligations” means (a) Loan Document Obligations and (b) the due and punctual
payment and performance in full of all obligations of each Loan Party under each Swap
Agreement relating to interest rates or Treasury Services Agreement that (i) is in effect on
the Effective Date with a counterparty that is a Lender or an Affiliate of a Lender as of
the Effective Date or (ii) is entered into after the Effective Date with any counterparty
that is a Lender or an Affiliate of a Lender at the time such Swap Agreement relating to
interest rates or Treasury Services Agreement is entered into.

     “Patent License” means any written agreement, now or hereafter in effect,
granting to any third party any right to make, use or sell any invention on which a patent,
now or hereafter owned by any Grantor or that any Grantor otherwise has the right to
license, is in existence, or granting to any Grantor any right to make, use or sell any

Sch. I-3

 

invention on which a patent, now or hereafter owned by any third party, is in existence, and
all rights of any Grantor under any such agreement.

     “Patents” means all of the following now owned or hereafter acquired by any
Grantor: (a) all letters patent of the United States or the equivalent thereof in any other
country, all registrations and recordings thereof, and all applications for letters patent
of the United States or the equivalent thereof in any other country, including
registrations, recordings and pending applications in the United States Patent and Trademark
Office or any similar offices in any other country, including those listed on Schedule III,
and (b) all reissues, continuations, divisions, continuations-in-part, renewals or
extensions thereof, and the inventions disclosed or claimed therein, including the right to
make, use and/or sell the inventions disclosed or claimed therein.

     “Pledged Collateral” has the meaning assigned to such term in Section 3.01.

     “Pledged Debt Securities” has the meaning assigned to such term in Section
3.01.

     “Pledged Securities” means any promissory notes, stock certificates or other
securities now or hereafter included in the Pledged Collateral, including all certificates,
instruments or other documents representing or evidencing any Pledged Collateral.

     “Pledged Stock” has the meaning assigned to such term in Section 3.01.

     “Proceeds” has the meaning specified in Section 9-102 of the New York UCC.

     “Secured Parties” means (a) the Lenders, (b) the Collateral Agent, (c) the
Administrative Agent, (d) the Issuing Bank, (e) each counterparty to any Swap Agreement or
Treasury Services Agreement with a Loan Party the obligations under which constitute
Obligations and (f) the successors and assigns of each of the foregoing.

     “Security Interest” has the meaning assigned to such term in Section 4.01.

     “Subsidiary Loan Parties” means (a) the Subsidiaries identified on Schedule I
and (b) each other Subsidiary that becomes a party to this Agreement as a Subsidiary Loan
Party after the Effective Date.

     “Trademark License” means any written agreement, now or hereafter in effect,
granting to any third party any right to use any trademark now or hereafter owned by any
Grantor or that any Grantor otherwise has the right to license, or granting to any Grantor
any right to use any trademark now or hereafter owned by any third party, and all rights of
any Grantor under any such agreement.

     “Trademarks” means all of the following now owned or hereafter acquired by any
Grantor: (a) all trademarks, service marks, trade names, domain names, corporate names,
company names, business names, fictitious business names, trade styles, trade dress, logos,
other source or business identifiers, designs and general intangibles of like nature, now
existing or hereafter adopted or acquired, all registrations and recordings thereof,

Sch. I-4

 

and all
registration and recording applications filed in connection therewith, including
registrations and registration applications in the United States Patent and Trademark Office
or any similar offices in any State of the United States or any other country or any
political subdivision thereof, and all extensions or renewals thereof, including those
listed on Schedule III, (b) all goodwill associated therewith or symbolized thereby and (c)
all other assets, rights and interests that uniquely reflect or embody such goodwill;
provided, however, that the foregoing definition shall not include any “intent to use” based
application for a Trademark until such time that a statement of use has been filed with the
United States Patent and Trademark Office.

     “Treasury Services Agreement” shall mean any agreement relating to treasury,
depositary and cash management services or automated clearinghouse transfer of funds.

ARTICLE II

Guarantee

          Section 2.01. Guarantee. Each Guarantor unconditionally guarantees, jointly with the
other Guarantors and severally, as a primary obligor and not merely as a surety, the due and
punctual payment and performance in full of the Obligations. Each Guarantor further agrees that
the Obligations may be extended or renewed, in whole or in part, or amended or modified, without
notice to or further assent from it, and that it will remain bound upon its guarantee
notwithstanding any extension, renewal, amendment or modification of the Obligations. Each
Guarantor waives presentment to, demand of payment from and protest to the Borrower or any other
Loan Party of the Obligations and also waives notice of acceptance of its guarantee and notice of
protest for nonpayment.

          Section 2.02. Guarantee of Payment. Each Guarantor further agrees that its guarantee
hereunder constitutes a guarantee of payment when due and not of collection, and waives any right
to require that any resort be had by the Collateral Agent or any other Secured Party to any
security held for the payment of the Obligations or credit on the books of the Collateral Agent or
any other Secured Party in favor of the Borrower or any other Person.

          Section 2.03. No Limitations. (a) Except for termination of a Guarantor’s obligations hereunder as expressly provided in
Section 7.13, the obligations of each Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to any defense or set-off,
counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the generality of the
foregoing, the obligations of each Guarantor hereunder shall not be discharged or impaired or
otherwise affected by (i) the failure of the Collateral Agent or any other Secured Party to assert
any claim or demand or to enforce any right or remedy under the provisions of any Loan Document or
otherwise; (ii) any rescission, waiver, amendment or modification of, or any release from any of
the terms or provisions of, any Loan Document or

Sch. I-5

 

any other agreement, including with respect to any
other Guarantor under this Agreement; (iii) the release of, impairment of or failure to perfect any
Lien held by the Collateral Agent or any other Secured Party for the payment and performance of the
Obligations or any of them; (iv) any default, failure or delay, willful or otherwise, in the
performance of the Obligations; or (v) any other act or omission that may or might in any manner or
to any extent vary the risk of any Guarantor or otherwise operate as a discharge of any Guarantor
as a matter of law or equity (other than the indefeasible payment in full in cash of the
Obligations). Each Guarantor expressly authorizes the Collateral Agent (i) to take and hold
security for the payment and performance of the Obligations, (ii) to exchange, waive or release any
or all such security (with or without consideration), (iii) to enforce or apply such security and
direct the order and manner of any sale thereof in its sole discretion or (iv) to release or
substitute any one or more other guarantors or obligors upon or in respect of the Obligations, all
without affecting the obligations of any Guarantor hereunder.

          (b) To the fullest extent permitted by applicable law, each Guarantor waives any defense based
on or arising out of any defense of the Borrower or any other Loan Party or the unenforceability of
the Obligations or any part thereof from any cause, or the cessation from any cause of the
liability of the Borrower or any other Loan Party, other than the indefeasible payment in full in
cash of all the Obligations. The Collateral Agent and the other Secured Parties may, at their
election, foreclose on any security held by one or more of them by one or more judicial or
nonjudicial sales, accept an assignment of any such security in lieu of foreclosure, compromise or
adjust any part of the Obligations, make any other accommodation with the Borrower or any other
Loan Party or exercise any other right or remedy available to them against the Borrower or any
other Loan Party, without affecting or impairing in any way the liability of any Guarantor
hereunder except to the extent the Obligations have been fully and indefeasibly paid in full in
cash. To the fullest extent permitted by applicable law, each Guarantor waives any defense arising
out of any such election even though such election operates, pursuant to applicable law, to impair
or to extinguish any right of reimbursement or subrogation or other right or remedy of such
Guarantor against the Borrower or any other Loan Party, as applicable, or any security.

          Section 2.04. Reinstatement. Each of the Guarantors agrees that its guarantee
hereunder shall continue to be effective or be reinstated, as applicable, if at any time payment,
or any part thereof, of any Obligation is rescinded or must otherwise be restored by the Collateral
Agent or any other
Secured Party upon the bankruptcy or reorganization of the Borrower, any other Loan Party or
otherwise.

          Section 2.05. Agreement To Pay; Subrogation. In furtherance of the foregoing and not
in limitation of any other right that the Collateral Agent or any other Secured Party has at law or
in equity against any Guarantor by virtue hereof, upon the failure of the Borrower or any other
Loan Party to pay any Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, each Guarantor hereby promises to and will
forthwith pay, or cause to be paid, to the Collateral Agent for distribution to the applicable
Secured Parties in cash the amount of such unpaid Obligation. Upon payment by any Guarantor of any
sums to the Collateral Agent as provided above, all rights of such Guarantor against the Borrower
or any other Loan Party arising as a result thereof by way of

Sch. I-6

 

right of subrogation, contribution,
reimbursement, indemnity or otherwise shall in all respects be subject to Article VI.

          Section 2.06. Information. Each Guarantor assumes all responsibility for being and
keeping itself informed of the Borrower’s and each other Loan Party’s financial condition and
assets and of all other circumstances bearing upon the risk of nonpayment of the Obligations and
the nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder and
agrees that none of the Collateral Agent or the other Secured Parties will have any duty to advise
such Guarantor of information known to it or any of them regarding such circumstances or risks.

          Section 2.07. Remedies. The Guarantors jointly and severally agree that, as between
the Guarantors and the Secured Parties, the Obligations may be declared to be forthwith due and
payable as provided in the Credit Agreement for purposes of Section 2.01 notwithstanding any stay,
injunction or other prohibition preventing such declaration (or such obligations from becoming
automatically due and payable) as against the Borrower and that, in the event of such declaration
(or such obligations being deemed to have become automatically due and payable), such obligations
(whether or not due and payable by the Borrower) shall forthwith become due and payable by the
Guarantors for purposes of Section 2.01.

          Section 2.08. Instrument for the Payment of Money. Each Guarantor hereby acknowledges
that the guarantee in this Article II constitutes an instrument for the payment of money,
and consents and agrees that any Secured Party, at its sole option, in the event of a dispute by
such Guarantor in the payment of any moneys due hereunder, shall have the right to bring a
motion-action under New York CPLR Section 3213.

          Section 2.09. Continuing Guarantee. The guarantee in this Article II is a
continuing guarantee of payment, and shall apply to all Obligations whenever arising.

          Section 2.10. General Limitation on Guarantee. In any action or proceeding involving
any state corporate limited partnership or limited liability company law, or any applicable state,
federal or foreign bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Guarantor under Section 2.01 would otherwise be held
or determined to be void, voidable, invalid or unenforceable, or subordinated to the claims of any
other creditors, on account of the amount of its liability under Section 2.01, then,
notwithstanding any other provision to the contrary, the amount of such liability shall, without
any further action by such Guarantor, any Loan Party or any other person, be automatically limited
and reduced to the highest amount (after giving effect to the right of contribution established in
Section 6.02) that is valid and enforceable and not subordinated to the claims of other creditors
as determined in such action or proceeding.

Sch. I-7

 

ARTICLE III

Pledge of Securities

          Section 3.01. Pledge. As security for the payment or performance, as applicable, in
full of the Obligations, each Grantor hereby grants to the Collateral Agent, its successors and
assigns, for the ratable benefit of the Secured Parties, a security interest in, all of such
Grantor’s right, title and interest in, to and under (a) the shares of capital stock and other
Equity Interests of the Borrower and each wholly owned Restricted Subsidiary owned by it and listed
on Schedule II and any other Equity Interests of a wholly owned Restricted Subsidiary obtained in
the future by such Grantor and the certificates representing all such Equity Interests (the
“Pledged Stock”), provided that the Pledged Stock shall not include more than 65%
of the outstanding voting Equity Interests of any Foreign Subsidiary and shall not include Equity
Interests of entities that are Specified Subsidiaries by reason of clauses (ii) or (iii) of the
definition of Specified Subsidiary; (b)(i) the debt securities listed opposite the name of such
Grantor on Schedule II, (ii) any debt securities issued after the Effective Date to such Grantor by
any of Holdings, the Borrower or any Subsidiary and (iii) the promissory notes and any other
instruments evidencing such debt securities (the “Pledged Debt Securities”); (c) all other
property that may be delivered to and held by the Collateral Agent pursuant to the terms of this
Section 3.01; (d) subject to Section 3.06, all payments of principal or interest, dividends, cash,
instruments and other property from time to time received, receivable or otherwise distributed in
respect of, in exchange for or upon the conversion of, and all other Proceeds received in respect
of, the securities referred to in clauses (a), (b) and (c) above; (e) subject to Section 3.06, all
rights and privileges of such Grantor with respect to the securities and other property referred to
in clauses (a), (b), (c) and (d) above; and (f) all Proceeds of any of the foregoing (the items
referred to in clauses (a) through (f) above being collectively referred to as the “Pledged
Collateral”).

          TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title, interest, powers,
privileges and preferences pertaining or incidental thereto, unto the Collateral Agent, its
successors and assigns, for the ratable benefit of the Secured Parties, forever, subject,
however, to the terms, covenants and conditions hereinafter set forth.

          Section 3.02. Delivery of the Pledged Collateral. (a) Each Grantor represents and
warrants that all certificates, agreements or instruments representing or evidencing the Pledged
Collateral in existence on the date hereof have been delivered to the Collateral Agent in suitable
form for transfer by delivery or accompanied by duly executed instruments of transfer or assignment
in blank. Each Grantor agrees promptly to deliver or cause to be delivered to the Collateral Agent
any and all Pledged Securities. Notwithstanding the foregoing two sentences, it is understood and
agreed that no Grantor will have to deliver any Pledged Debt Securities to the Collateral Agent
unless the amount of the Indebtedness represented thereby is in excess of $2,000,000 individually
or $10,000,000 in the aggregate with all Pledged Debt Securities not so delivered.

          (b) Each Grantor will cause any Indebtedness for borrowed money owed to such Grantor by any
Person (other than a Loan Party) which is (A) in excess of $2,000,000 and (B) evidenced by a duly
executed promissory note to be pledged and delivered to the Collateral

Sch. I-8

 

Agent pursuant to the terms
hereof. If any Grantor shall at any time hold or acquire any Indebtedness for borrowed money owed
to such Grantor by any Person (other than a Loan Party) evidenced by a duly executed promissory
note that when taken together with the value of any other Indebtedness for borrowed money owed to
such Grantor by any Person (other than a Loan Party) evidenced by a duly executed promissory note
not endorsed and delivered to the Collateral Agent exceeds $10,000,000, such Grantor shall
forthwith endorse and deliver the same to the Collateral Agent, accompanied by such undated
instruments of transfer or assignment duly executed in blank as the Collateral Agent may from time
to time reasonably request.

          (c) Upon delivery to the Collateral Agent, (i) any Pledged Securities shall be accompanied by
undated stock powers duly executed in blank or other undated instruments of transfer reasonably
satisfactory to the Collateral Agent and by such other instruments and documents as the Collateral
Agent may reasonably request and (ii) all other property comprising part of the Pledged Collateral
shall be accompanied by proper instruments of assignment duly executed by the applicable Grantor
and such other instruments or documents as the Collateral Agent may reasonably request. Each
delivery of Pledged Securities shall be accompanied by a schedule describing such Pledged
Securities, which schedule shall be attached hereto as a supplement to Schedule II and made a part
hereof, provided that failure to attach any such schedule hereto shall not affect the
validity of such pledge of such Pledged Securities. Each schedule so delivered shall supplement
any prior schedules so delivered.

          Section 3.03. Representations, Warranties and Covenants. The Grantors jointly and
severally represent, warrant and covenant to and with the Collateral Agent, for the benefit of the
Secured Parties, that:

          (a) Schedule II correctly sets forth the percentage of the issued and outstanding shares (or
units or other comparable measure) of each class of the Equity Interests of the issuer thereof
represented by the Pledged Stock and includes all Equity Interests, debt securities and promissory
notes required to be pledged hereunder in order to satisfy the Collateral and Guarantee
Requirement;

          (b) the Pledged Stock and Pledged Debt Securities have been duly and validly authorized and
issued by the issuers thereof and (i) in the case of Pledged Stock, are fully paid and
nonassessable and (ii) in the case of Pledged Debt Securities, are legal, valid and binding
obligations of the issuers thereof;

          (c) except for the security interests granted hereunder, each of the Grantors (i) is and,
subject to any transfers made in compliance with the Credit Agreement, will continue to be the
direct owner, beneficially and of record, of the Pledged Securities indicated on Schedule II as
owned by such Grantor, (ii) holds the same free and clear of all Liens, other than Liens created by
any Loan Document and Liens permitted by Section 6.02 of the Credit Agreement, (iii) will make no
assignment, pledge, hypothecation or transfer of, or create or permit to exist any security
interest in or other Lien on, the Pledged Collateral, other than Liens created by any Loan
Document, Liens permitted by Section 6.02 of the Credit Agreement and transfers made in compliance
with the Credit Agreement and (iv) will defend its title or interest thereto or therein against any
and all Liens (other than Liens created by any Loan Document and Liens permitted by Section 6.02 of
the Credit Agreement), however arising, of all Persons

Sch. I-9

 

whomsoever; provided that nothing in
this Agreement shall prevent any Grantor from discontinuing the operation or maintenance of any of
its assets or properties if such discontinuance is (x) in the good faith determination of its Board
of Directors, desirable in the conduct of its business and (y) permitted by the Credit Agreement;

          (d) except for restrictions and limitations imposed by (i) the Loan Documents, (ii) securities
laws generally or (iii) customary provisions in joint venture agreements relating to purchase
options, rights of first refusal, tag, drag, call or similar rights of a third party that owns
Equity Interests in such joint venture, the Pledged Collateral is and will continue to be freely
transferable and assignable, and none of the Pledged Collateral is or will be subject to any
option, right of first refusal, shareholders agreement, charter or by-law provision or contractual
restriction of any nature that might prohibit, impair, delay or otherwise affect the pledge of such
Pledged Collateral hereunder, the sale or disposition thereof pursuant hereto or the exercise by
the Collateral Agent of rights and remedies hereunder;

          (e) each of the Grantors has the power and authority to pledge the Pledged Collateral pledged
by it hereunder in the manner hereby done or contemplated;

          (f) no consent or approval of any Governmental Authority, any securities exchange or any other
Person was or is necessary to the validity of the pledge effected hereby (other than such as have
been obtained and are in full force and effect);

          (g) subject to clauses (c) and (d) of this Section 3.03, by virtue of the execution and
delivery by the Grantors of this Agreement, when any Pledged Securities are delivered to the
Collateral Agent in accordance with this Agreement, the Collateral Agent will obtain, for the
benefit of the Secured Parties, a legal, valid and perfected lien upon and security
interest in such Pledged Securities as security for the payment and performance of the Obligations;
and

          (h) the pledge effected hereby is effective to vest in the Collateral Agent, for the benefit
of the Secured Parties, the rights of the Collateral Agent in the Pledged Collateral as set forth
in this Agreement.

          Section 3.04. Certification of Limited Liability Company and Limited Partnership
Interests. (a) Each Grantor acknowledges and agrees that each interest in any limited
liability company or limited partnership controlled by any Grantor and acquired after the Effective
Date and constituting Pledged Collateral that is represented by a certificate, shall be a
“security” within the meaning of Article 8 of the New York UCC and shall be governed by Article 8
of the New York UCC.

          (b) Each Grantor further acknowledges and agrees that (i) the interests in any limited
liability company or limited partnership controlled by such Grantor and constituting Pledged
Collateral that are not represented by a certificate are not “securities” within the meaning of
Article 8 of the New York UCC and (ii) such Grantor shall at no time elect to treat any such
interest as a “security” within the meaning of Article 8 of the New York UCC or issue any
certificate representing such interest, unless such Grantor provides prompt written notification to
the Collateral Agent of such election and promptly (but in no case later than 10

Sch. I-10

 

Business Days)
pledges any such certificate to the Collateral Agent pursuant to the terms hereof;
provided, however, that this Section 3.04 shall not apply to any Equity Interests
in limited liability companies or limited partnerships which may not be pledged, assigned or
otherwise encumbered pursuant to applicable Federal, state or local laws, rules or regulations
related to the practice of medicine or the healthcare industry generally.

          Section 3.05. Registration in Nominee Name; Denominations. The Collateral Agent, on
behalf of the Secured Parties, shall have the right (in its sole and absolute discretion) to hold
the Pledged Securities in the name of the applicable Grantor, endorsed or assigned in blank or in
favor of the Collateral Agent or, upon the occurrence and during the continuation of an Event of
Default, in its own name as pledge or the name of its nominee (as pledge or as sub-agent). Each
Grantor will promptly give to the Collateral Agent copies of any notices or other communications
received by it with respect to Pledged Securities registered in the name of such Grantor. The
Collateral Agent shall at all times upon the occurrence and during the continuation of an Event of
Default have the right to exchange the certificates representing Pledged Securities for
certificates of smaller or larger denominations for any purpose consistent with this Agreement.

          Section 3.06. Voting Rights; Dividends and Interest. (a) Unless and until an Event
of Default shall have occurred and be continuing and the Collateral Agent shall have notified the
Grantors that their rights under this Section 3.06 are being suspended:

     (i) Each Grantor shall be entitled to exercise any and all voting and other
consensual rights and powers inuring to an owner of Pledged Securities or any part
thereof for any purpose consistent with the terms in this Agreement, the Credit
Agreement and the other Loan Documents, provided that such rights and powers shall
not be exercised in any manner that would reasonably be expected to materially and
adversely affect the rights inuring to a holder of any Pledged Securities or the rights
and remedies of any of the Collateral Agent or the other Secured Parties under this
Agreement or the Credit Agreement or any other Loan Document or the ability of the Secured
Parties to exercise the same.

     (ii) The Collateral Agent shall execute and deliver to each Grantor, or cause to be
executed and delivered to such Grantor, all such proxies, powers of attorney and other
instruments as such Grantor may reasonably request for the purpose of enabling such
Grantor to exercise the voting and other consensual rights and powers it is entitled to
exercise pursuant to subparagraph (i) above.

     (iii) Each Grantor shall be entitled to receive and retain any and all dividends,
interest, principal and other distributions paid on or distributed in respect of the
Pledged Securities to the extent and only to the extent that such dividends, interest,
principal and other distributions are permitted by, and otherwise paid or distributed in
accordance with, the terms and conditions of the Credit Agreement, the other Loan
Documents and applicable laws, provided that any noncash dividends, interest,
principal or other distributions that would constitute Pledged Stock or Pledged Debt
Securities, whether resulting from a subdivision, combination or reclassification of the
outstanding Equity Interests of the issuer of any Pledged Securities or received in
exchange for Pledged

Sch. I-11

 

Securities or any part thereof, or in redemption thereof, or as a
result of any merger, consolidation, acquisition or other exchange of assets to which such
issuer may be a party or otherwise, shall be and become part of the Pledged Collateral,
and, if received by any Grantor, shall not be commingled by such Grantor with any of its
other funds or property but shall be held separate and apart therefrom, shall be held in
trust for the benefit of the Collateral Agent and the other Secured Parties and shall be
forthwith delivered to the Collateral Agent in the same form as so received (with any
necessary endorsement as described in Section 3.02(c) or otherwise).

          (b) Upon the occurrence and during the continuation of an Event of Default, after the
Collateral Agent shall have notified (or shall be deemed to have notified) the Grantors of the
suspension of their rights under Section 3.06(a)(iii), all rights of any Grantor to dividends,
interest, principal or other distributions that such Grantor is authorized to receive pursuant to
Section 3.06(a)(iii) shall cease, and all such rights shall thereupon become vested in the
Collateral Agent, which shall have the sole and exclusive right and authority to receive and retain
such dividends, interest, principal or other distributions. All dividends, interest, principal or
other distributions received by any Grantor contrary to the provisions of this Section 3.06 shall
be held in trust for the benefit of the Collateral Agent and the other Secured Parties, shall be
segregated from other property or funds of such Grantor and shall be forthwith delivered to the
Collateral Agent upon demand in the same form as so received (with any necessary endorsement). Any
and all money and other property paid over to or received by the Collateral Agent pursuant to the
provisions of this Section 3.06(b) shall be retained by the Collateral Agent in an account to be
established by the Collateral Agent upon receipt of such money or other
property and shall be applied in accordance with the provisions of Section 5.02. After all
Events of Default have been cured or waived and the Borrower has delivered to the Collateral Agent
a certificate to that effect, the Collateral Agent shall promptly repay to each Grantor (without
interest) all dividends, interest, principal or other distributions that such Grantor would
otherwise be permitted to retain pursuant to the terms of Section 3.06(a)(iii) and that remain in
such account.

          (c) Upon the occurrence and during the continuation of an Event of Default, after the
Collateral Agent shall have notified (or shall be deemed to have notified) the Grantors of the
suspension of their rights under Section 3.06(a)(i), all rights of any Grantor to exercise the
voting and other consensual rights and powers it is entitled to exercise pursuant to Section
3.06(a)(i), and the obligations of the Collateral Agent under Section 3.06(a)(ii), shall cease, and
all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole
and exclusive right and authority to exercise such voting and other consensual rights and powers,
provided that, unless otherwise directed by the Required Lenders, the Collateral Agent
shall have the right from time to time following and during the continuation of an Event of Default
to permit the Grantors to exercise such rights. After all Events of Default have been cured or
waived, the Grantors shall have the right to exercise the voting and consensual rights and powers
that they would otherwise be entitled to exercise pursuant to the terms of Section 3.06(a)(i).

          (d) Any notice given by the Collateral Agent to the Grantors suspending their rights under
Section 3.06(a) (i) may be given by telephone if promptly confirmed in writing,

Sch. I-12

 

(ii) may be given
to one or more of the Grantors at the same or different times and (iii) may suspend the rights of
the Grantors under Sections 3.06(a)(i) or (a)(iii) in part without suspending all such rights (as
specified by the Collateral Agent in its sole and absolute discretion) and without waiving or
otherwise affecting the Collateral Agent’s rights to give additional notices from time to time
suspending other rights so long as an Event of Default has occurred and is continuing.

ARTICLE IV

Security Interests in Personal Property

          Section 4.01. Security Interest. (a) As security for the payment or performance, as
applicable, in full of the Obligations, each Grantor hereby grants to the Collateral Agent, its
successors and assigns, for the ratable benefit of the Secured Parties, a security interest (the
“Security Interest”) in all right, title or interest in or to any and all of the following
assets and properties now owned or at any time hereafter acquired by such Grantor or in which such
Grantor now has or at any time in the future may acquire any right, title or interest
(collectively, the “Article 9 Collateral”):

     (i) all Accounts;

     (ii) all Chattel Paper;

     (iii) all Documents;

     (iv) all Equipment;

     (v) all General Intangibles;

     (vi) Intellectual Property;

     (vii)all Instruments;

     (viii)all Inventory;

     (ix) all Investment Property;

     (x) all Letter-of-credit rights;

     (xi) the commercial tort claims specified on Schedule IV;

     (xii) all books and records pertaining to the Article 9 Collateral; and

     (xiii) to the extent not otherwise included, all Proceeds and products of any and all
of the foregoing and all collateral security, supporting obligations and guarantees given
by any Person with respect to any of the foregoing.

Sch. I-13

 

Notwithstanding the foregoing, the Article 9 Collateral shall not include (i) any Equipment that is
subject to a purchase money Lien or Lien securing Capital Lease Obligations, in each case,
permitted under the Credit Agreement to the extent the documents relating to such purchase money
Lien or Capital Lease Obligations would not permit such Equipment to be subject to the Security
Interests created hereby, (ii) any property to the extent that the grant of the Security Interest
in such property is prohibited by any Requirements of Law of any Governmental Authority, (iii) any
contract, license or agreement to the extent that the grant of the Security Interest in such
contract, license or agreement constitutes a breach or default under or results in termination of
such contract, license, agreement, (iv) any Investment Property or Pledged Securities to the extent
that the grant of the Security Interest in such Investment Property or Pledged Securities
constitutes a breach or default under any applicable shareholder or similar agreement, except, in
each case (i) through (iv), to the extent that such Requirement of Law or the provision of such
contract, license, agreement instrument or other document or shareholder or similar agreement
giving rise to such prohibition, breach, default or termination is ineffective under applicable
law, (v) Equity Interests of Unrestricted Subsidiaries, Restricted Subsidiaries that are not wholly
owned, entities that are Specified Subsidiaries by reason of clauses (ii) or (iii) of the
definition of Specified Subsidiary or entities that are not Subsidiaries (other than Equity
Interests held in any Securities Account), and (vi) more than 65% of the outstanding voting Equity
Interests of any Foreign Subsidiary; it being understood that this paragraph shall not be seen as
excluding from the Article 9 Collateral Proceeds, substitutions or replacements of property
described in clauses (i) through (vi) above unless such Proceeds, substitutions or replacements
would constitute property described in such clauses (i) through (vi).

          (b) Each Grantor hereby irrevocably authorizes the Collateral Agent at any time and from time
to time to file in any relevant jurisdiction any initial financing statements (including fixture
filings) with respect to the Article 9 Collateral or any part thereof and amendments thereto that
(i) indicate the Collateral as “all assets” of such Grantor or such other description as the
Collateral Agent may determine and (ii) contain the information required by Article 9 of the
Uniform Commercial Code of each applicable jurisdiction for the filing of any financing statement
or amendment, including (A) whether such Grantor is an organization, the type of organization and
any organizational identification number issued to such Grantor and (B) in the case of a financing
statement filed as a fixture filing or covering Article 9 Collateral constituting minerals or the
like to be extracted or timber to be cut, a sufficient description of the real property to which
such Article 9 Collateral relates. Each Grantor agrees to provide such information to the
Collateral Agent promptly upon request.

          Each Grantor also ratifies its authorization for the Collateral Agent to file in any relevant
jurisdiction any initial financing statements (including fixture filings, as applicable) or other
appropriate filings, recordings or registrations or amendments thereto if filed prior to the date
hereof.

          The Collateral Agent is further authorized to file with the United States Patent and Trademark
Office or United States Copyright Office (or any successor office or any similar office in any
other country) such documents as may be necessary or advisable for the purpose of perfecting,
confirming, continuing, enforcing or protecting the Security Interest granted by each

Sch. I-14

 

Grantor,
without the signature of any Grantor, and naming any Grantor or the Grantors as debtors and the
Collateral Agent as secured party.

          (c) The Security Interest is granted as security only and shall not subject the Collateral
Agent or any other Secured Party to, or in any way alter or modify, any obligation or liability of
any Grantor with respect to or arising out of the Article 9 Collateral.

          Section 4.02. Representations and Warranties. The Grantors jointly and severally
represent and warrant to the Collateral Agent and the other Secured Parties that:

          (a) Each Grantor has good and valid rights in and title to the Article 9 Collateral and has
full power and authority to grant to the Collateral Agent, for the ratable benefit of the Secured
Parties, the Security Interest in such Article 9 Collateral pursuant hereto and to execute, deliver
and perform its obligations in accordance with the terms in this Agreement, without the consent or
approval of any other Person other than any consent or approval that has been obtained.

          (b) The Perfection Certificate has been duly prepared, completed and executed and the
information set forth therein, including (x) the exact legal name of each Grantor and (y) the
jurisdiction of organization of each Grantor, is correct and complete in all material respects as
of the Effective Date (except that the information referred to in the preceding clauses (x) and (y)
shall not be subject to such materiality qualifier). The Uniform Commercial Code financing
statements (including fixture filings, as applicable) or other appropriate filings,
recordings or registrations prepared by the Collateral Agent based upon the information
provided to the Collateral Agent in the Perfection Certificate for filing at the secretary of state
or other central filing office in each Grantor’s jurisdiction of organization, are all the filings,
recordings and registrations (other than filings required to be made in the United States Patent
and Trademark Office and the United States Copyright Office in order to perfect the Security
Interest in Article 9 Collateral consisting of United States Patents, United States registered
Trademarks (and Trademarks for which United States registration applications are pending) and
United States registered Copyrights) that are necessary to publish notice of and protect the
validity of and to establish a legal, valid and perfected security interest in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, in respect of all Article 9
Collateral in which the Security Interest may be perfected by filing, recording or registration in
the United States (or any political subdivision thereof) and its territories and possessions, and
no further or subsequent filing, refiling, recording, rerecording, registration or reregistration
is necessary in any such jurisdiction, except as provided under applicable law with respect to the
filing of continuation statements. Each Grantor represents and warrants that a fully executed
agreement in the form hereof or short form hereof and containing a description of all Article 9
Collateral consisting of Intellectual Property with respect to United States Patents and United
States registered Trademarks (and Trademarks for which United States registration applications are
pending) and United States registered Copyrights have been delivered to the Collateral Agent for
recording by the United States Patent and Trademark Office and the United States Copyright Office
pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 205 and the regulations thereunder, as
applicable, and otherwise as may be required pursuant to the laws of any other necessary
jurisdiction, to protect the validity of and to establish a legal, valid and perfected security
interest

Sch. I-15

 

in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, in
respect of all Article 9 Collateral consisting of United States Patents, United States registered
Trademarks (and Trademarks for which United States registration applications are pending) and
United States registered Copyrights in which a security interest may be perfected by filing,
recording or registration in the United States (or any political subdivision thereof) and its
territories and possessions, and no further or subsequent filing, refiling, recording, rerecording,
registration or reregistration is necessary (other than such actions as are necessary to perfect
the Security Interest with respect to any Article 9 Collateral consisting of United States Patents,
United States registered Trademarks (and Trademarks for which United States registration
applications are pending) and United States registered Copyrights acquired or developed after the
date hereof).

          (c) The Security Interest constitutes (i) a legal and valid security interest in all the
Article 9 Collateral securing the payment and performance of the Obligations, (ii) subject to the
filings described in Section 4.02(b), a perfected security interest in all Article 9 Collateral in
which a security interest may be perfected by filing, recording or registering a financing
statement or analogous document in the United States (or any political subdivision thereof) and its
territories and possessions pursuant to the Uniform Commercial Code or other applicable law in such
jurisdictions and (iii) a security interest that shall be perfected in all Article 9 Collateral in
which a security interest may be perfected upon the receipt and recording of this Agreement with
the United States Patent and Trademark Office and the United States Copyright Office, as
applicable, within the three-month period (commencing as of the date hereof) pursuant to 35 U.S.C.
§ 261 or 15 U.S.C. § 1060 or the one-month period (commencing as of the date hereof) pursuant to 17
U.S.C. § 205 and otherwise as may be required pursuant to the laws of
any other necessary jurisdiction. The Security Interest is and shall be prior to any other
Lien on any of the Article 9 Collateral, other than Permitted Encumbrances and Liens that are
permitted by the Credit Agreement and that have priority as a matter of applicable law.

          (d) The Article 9 Collateral is owned by the Grantors free and clear of any Lien, except for
Liens permitted pursuant to Section 6.02 of the Credit Agreement. None of the Grantors has filed
or consented to the filing of (i) any financing statement or analogous document under the Uniform
Commercial Code or any other applicable laws covering any Article 9 Collateral, (ii) any assignment
in which any Grantor assigns any Collateral or any security agreement or similar instrument
covering any Article 9 Collateral with the United States Patent and Trademark Office or the United
States Copyright Office or (iii) any assignment in which any Grantor assigns any Article 9
Collateral or any security agreement or similar instrument covering any Article 9 Collateral with
any foreign governmental, municipal or other office, which financing statement or analogous
document, assignment, security agreement or similar instrument is still in effect, except, in each
case, for Liens permitted pursuant to Section 6.02 of the Credit Agreement.

          Section 4.03. Covenants. (a) Each Grantor agrees promptly (but in no case more than
60 days) to notify the Collateral Agent in writing of any change (i) in its legal name, (ii) in the
location of its chief executive office or its principal place of business, (iii) in its identity or
type of organization or corporate structure, (iv) in its Federal Taxpayer Identification Number or
organizational identification number or (v) in its jurisdiction of organization. Each Grantor
agrees to promptly provide the Collateral Agent with certified organizational documents

Sch. I-16

 

reflecting
any of the changes described in the first sentence of this Section 4.03(a). Each Grantor agrees
not to effect or permit any change referred to in the second preceding sentence unless all filings
have been made under the Uniform Commercial Code or otherwise that are required in order for the
Collateral Agent to continue at all times following such change to have a valid, legal and
perfected first priority security interest (subject to Liens permitted under Section 6.02 of the
Credit Agreement that had priority as of the initial grant of such security interest) in the
Article 9 Collateral. Each Grantor agrees promptly to notify the Collateral Agent if any portion
of the Article 9 Collateral material to a Grantor’s business owned or held by such Grantor is
damaged or destroyed.

          (b) Each Grantor agrees to maintain, at its own cost and expense, such complete and accurate
records with respect to the Article 9 Collateral owned by it as is consistent with its current
practices and in accordance with such standard practices used in industries that are the same as or
similar to those in which such Grantor is engaged, but in any event to include complete accounting
records indicating all payments and proceeds received with respect to any part of the Article 9
Collateral, and, at such time or times as the Collateral Agent may reasonably request, promptly to
prepare and deliver to the Collateral Agent a duly certified schedule or schedules in form and
detail reasonably satisfactory to the Collateral Agent showing the identity, amount and location of
any and all Article 9 Collateral.

          (c) Each year, at the time of delivery of annual financial statements with respect to the
preceding fiscal year pursuant to Section 5.01(a) of the Credit Agreement, the
Borrower shall deliver to the Collateral Agent a certificate executed by a Financial Officer
of the Borrower setting forth the information required pursuant to the Perfection Certificate or
confirming that there has been no material change in such information since the date of the
Perfection Certificate delivered on the Effective Date or the date of the most recent certificate
delivered pursuant to this Section 4.03(c). Each certificate delivered pursuant to this Section
4.03(c) shall identify in the format of Schedule III all Intellectual Property of any Grantor in
existence on the date thereof and not then listed on the schedules to the Perfection Certificate
previously so identified to the Collateral Agent.

          (d) Each Grantor shall, at its own expense, take any and all actions necessary to defend title
to the Article 9 Collateral (other than Article 9 Collateral that is deemed by the Board of
Directors of such Grantor to be immaterial to the conduct of its business) against all Persons and
to defend the Security Interest of the Collateral Agent in the Article 9 Collateral and the
priority thereof against any Lien not expressly permitted pursuant to Section 6.02 of the Credit
Agreement. Nothing in this Agreement shall prevent any Grantor from discontinuing the operation or
maintenance of any of its assets or properties if such discontinuance is (x) in the judgment of its
Board of Directors, desirable in the conduct of its business and (y) permitted by the Credit
Agreement.

          (e) Each Grantor agrees, at its own expense, to execute, acknowledge, deliver and cause to be
duly filed all such further instruments and documents and take all such actions as the Collateral
Agent may from time to time reasonably request to better assure, preserve, protect and perfect the
Security Interest and the rights and remedies created hereby, including the payment of any fees and
taxes required in connection with the execution and delivery of this

Sch. I-17

 

Agreement, the granting of the
Security Interest and the filing of any financing statements (including fixture filings) or other
documents in connection herewith or therewith. If any amount payable to any Grantor under or in
connection with any of the Article 9 Collateral shall be or become evidenced by any promissory note
or other instrument in excess of $2,000,000 or by any promissory note or other instrument in an
amount that when taken together with any promissory note or other instruments not previously
pledged and endorsed to the Collateral Agent exceeds $5,000,000, such note or instrument shall be
promptly pledged and delivered to the Collateral Agent, duly endorsed in a manner satisfactory to
the Collateral Agent.

          (f) The Collateral Agent and such Persons as the Collateral Agent may reasonably designate
shall have the right, at the Grantors’ own cost and expense, to inspect the Article 9 Collateral,
all records related thereto (and to make extracts and copies from such records) and the premises
upon which any of the Article 9 Collateral is located, to discuss the Grantors’ affairs with the
officers of the Grantors and their independent accountants and to verify under reasonable
procedures, in accordance with Section 5.09 of the Credit Agreement, the validity, amount, quality,
quantity, value, condition and status of, or any other matter relating to, the Article 9
Collateral, including, (upon the occurrence and during the continuation of a Default or with the
consent of the applicable Grantor (not to be unreasonably withheld)) in the case of Accounts or
other Article 9 Collateral in the possession of any third person, by contacting Account Debtors or
the third person possessing such Article 9 Collateral for the purpose of making such a
verification. Subject to Section 9.12 of the Credit Agreement, the Collateral
Agent shall have the absolute right to share any information it gains from such inspection or
verification with any Secured Party.

          (g) At its option, the Collateral Agent may discharge past due Taxes, assessments, charges,
fees or Liens at any time levied or placed on the Article 9 Collateral and not permitted pursuant
to Section 6.02 of the Credit Agreement, and may pay for the maintenance and preservation of the
Article 9 Collateral to the extent any Grantor fails to do so as required by the Credit Agreement
or this Agreement, and each Grantor jointly and severally agrees to reimburse the Collateral Agent
on demand for any payment made or any expense incurred by the Collateral Agent pursuant to the
foregoing authorization, provided that nothing in this paragraph shall be interpreted as
excusing any Grantor from the performance of, or imposing any obligation on the Collateral Agent or
any Secured Party to cure or perform, any covenants or other promises of any Grantor with respect
to Taxes, assessments, charges, fees, Liens and maintenance as set forth in this Agreement or in
the other Loan Documents.

          (h) If at any time any Grantor shall take a security interest in any property of an Account
Debtor or any other Person with a value in excess of $2,000,000 or with a value that when taken
together with the value of any property of an Account Debtor or any other Person not previously
assigned to the Collateral Agent exceeds $5,000,000, to secure payment and performance of an
Account, such Grantor shall promptly assign such security interest to the Collateral Agent. Such
assignment need not be filed of public record unless necessary to continue the perfected status of
the security interest against creditors of and transferees from the Account Debtor or other Person
granting the security interest.

Sch. I-18

 

          (i) Each Grantor shall remain liable to observe and perform all the conditions and material
obligations to be observed and performed by it under each contract, agreement or instrument
relating to the Article 9 Collateral, all in accordance with the terms and conditions thereof, and
each Grantor jointly and severally agrees to indemnify and hold harmless the Collateral Agent and
the other Secured Parties from and against any and all liability for such performance.

          (j) None of the Grantors shall make or permit to be made an assignment, pledge or
hypothecation of the Article 9 Collateral or shall grant any other Lien in respect of the Article 9
Collateral, except as permitted by the Credit Agreement. Subject to the immediately following
sentence, none of the Grantors shall make or permit to be made any transfer of the Article 9
Collateral and each Grantor shall remain at all times in possession of the Article 9 Collateral
owned by it, except as permitted by Sections 6.02 and 6.05 of the Credit Agreement. Without
limiting the generality of the foregoing, each Grantor agrees that it shall not permit any
Inventory to be in the possession or control of any warehouseman, agent, bailee, or processor at
any time unless such Person shall have been notified of the Security Interest and shall have
acknowledged in writing, in form and substance reasonably satisfactory to the Collateral Agent,
that such warehouseman, agent, bailee or processor holds the Inventory for the benefit of the
Collateral Agent subject to the Security Interest and shall act upon the instructions of the
Collateral Agent without further consent from the Grantor, and that such warehouseman, agent,
bailee or processor further agrees to waive and release any Lien held by it with respect to such
Inventory, whether arising by operation of law or otherwise; provided that such notice and
acknowledgement shall not be required if the aggregate fair value of Inventory in the
possession of or subject to the control of such warehouseman, agent, bailee or processor who has
not been so notified and provided such acknowledgement is less than $2,000,000 and the aggregate
fair value of Inventory in the possession of or subject to the control of all warehousemen, agents,
bailees and processors who have not been so notified and provided such acknowledgement is less than
$5,000,000.

          (k) None of the Grantors will, without the Collateral Agent’s prior written consent, grant any
extension of the time of payment of any Accounts included in the Article 9 Collateral, compromise,
compound or settle the same for less than the full amount thereof, release, wholly or partly, any
Person liable for the payment thereof or allow any credit or discount whatsoever thereon, other
than compromises, compoundings, settlements and collections made in the ordinary course of business
or in accordance with the reasonable business judgment of such Grantor.

          (l) The Grantors, at their own expense, shall maintain or cause to be maintained insurance
covering physical loss or damage to the Inventory and Equipment in accordance with the requirements
set forth in Section 5.07 of the Credit Agreement. Each Grantor irrevocably makes, constitutes and
appoints the Collateral Agent (and all officers, employees or agents designated by the Collateral
Agent) as such Grantor’s true and lawful agent (and attorney-in-fact) for the purpose, upon the
occurrence and during the continuation of an Event of Default, of making, settling and adjusting
claims in respect of Article 9 Collateral under policies of insurance, endorsing the name of such
Grantor on any check, draft, instrument or other item of payment for the proceeds of such policies
of insurance and for making all

Sch. I-19

 

determinations and decisions with respect thereto. In the event
that any Grantor at any time or times shall fail to obtain or maintain any of the policies of
insurance required under the Credit Agreement or to pay any premium in whole or part relating
thereto, the Collateral Agent may, without waiving or releasing any obligation or liability of the
Grantors hereunder or any Event of Default, in its sole reasonable discretion, obtain and maintain
such policies of insurance and pay such premium and take any other actions with respect thereto as
the Collateral Agent deems advisable. All sums disbursed by the Collateral Agent in connection
with this paragraph, including reasonable attorneys’ fees, court costs, out-of-pocket expenses and
other charges relating thereto, shall be payable, upon demand, by the Grantors to the Collateral
Agent and shall be additional Obligations secured hereby.

          (m) Each Grantor shall maintain, in form and manner reasonably satisfactory to the Collateral
Agent, records of its Chattel Paper and its books, records and documents evidencing or pertaining
thereto.

          Section 4.04. Other Actions. In order to insure the attachment, perfection and
priority of, and the ability of the Collateral Agent to enforce, the Security Interest, each
Grantor agrees, in each case at such Grantor’s own expense, to take the following actions with
respect to the following Article 9 Collateral:

          (a) Instruments and Tangible Chattel Paper. Each Grantor represents and warrants that
each Instrument and each item of Tangible Chattel Paper with a value in excess of $2,000,000 in
existence on the date hereof has been properly endorsed, assigned and delivered to the Collateral
Agent, accompanied by instruments of transfer or assignment duly executed in blank or otherwise
acceptable to the Collateral Agent. If any Grantor shall at any time hold or acquire any
Instruments or Chattel Paper with a value in excess of $2,000,000 or any Instrument or Chattel
Paper with a value that when taken together with the value of any Instrument or Chattel Paper not
previously endorsed, assigned and delivered to the Collateral Agent exceeds $10,000,000, such
Grantor shall forthwith endorse, assign and deliver the same to the Collateral Agent, accompanied
by such undated instruments of transfer or assignment duly executed in blank or otherwise
acceptable to the Collateral Agent as the Collateral Agent may from time to time reasonably
request.

          (b) Electronic Chattel Paper and Transferable Records. If any Grantor at any time
holds or acquires an interest in any electronic chattel paper or any “transferable record,” as that
term is defined in Section 201 of the Federal Electronic Signatures in Global and National Commerce
Act, or in Section 16 of the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction, such Grantor shall promptly notify the Collateral Agent thereof and, at the request
of the Collateral Agent, shall take such action as the Collateral Agent may reasonably request to
vest in the Collateral Agent control under New York UCC Section 9-105 of such electronic chattel

Sch. I-20

 

paper or control under Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act or, as applicable, Section 16 of the Uniform Electronic Transactions Act, as in effect
in such jurisdiction, of such transferable record. The Collateral Agent agrees with such Grantor
that the Collateral Agent will arrange, pursuant to procedures reasonably satisfactory to the
Collateral Agent and so long as such procedures will not result in the Collateral Agent’s loss of
control, for the Grantor to make alterations to the electronic chattel paper or transferable record
permitted under UCC Section 9-105 or, as applicable, Section 201 of the Federal Electronic
Signatures in Global and National Commerce Act or Section 16 of the Uniform Electronic Transactions
Act for a party in control to allow without loss of control, unless an Event of Default has
occurred and is continuing or would occur after taking into account any action by such Grantor with
respect to such electronic chattel paper or transferable record.

          Section 4.05. Covenants Regarding Patent, Trademark and Copyright Collateral.

          (a) Each Grantor agrees that it will not do any act or omit to do any act (and will exercise
commercially reasonable efforts to prevent its licensees from doing any act or omitting to do any
act) whereby any Patent that is material to the conduct of such Grantor’s business would become
invalidated or dedicated to the public, and agrees that it shall continue to mark any products
covered by a Patent with the relevant patent number as necessary and sufficient in its reasonable
judgment to establish and preserve its material rights under applicable patent laws.

          (b) Each Grantor (either itself or through its licensees or its sublicensees) will, for each
Trademark material to the conduct of such Grantor’s business, (i) maintain such
Trademark in full force free from any claim of abandonment or invalidity for non-use, (ii) use
commercially reasonable efforts to maintain the quality of products and services offered under such
Trademark, (iii) display such Trademark with notice of Federal or foreign registration (or, if such
Trademark is unregistered, display such Trademark with notice as required for unregistered
Trademarks) to the extent necessary and sufficient to establish and preserve its maximum rights
under applicable law and (iv) not knowingly use or knowingly permit the use of such Trademark in
any violation of any third party rights.

          (c) Each Grantor (either itself or through its licensees or sublicensees) will, for each work
covered by a Copyright material to the conduct of such Grantor’s business, continue to publish,
reproduce, display, adopt and distribute the work with appropriate copyright notice as necessary
and sufficient in its reasonable judgment to establish and preserve its material rights under
applicable copyright laws.

          (d) Each Grantor shall notify the Collateral Agent promptly if it knows that any Patent,
Trademark or Copyright material to the conduct of its business could reasonably be expected to
become abandoned, lost or dedicated to the public, or of any materially adverse determination or
development (including the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, United States Copyright Office or any
court or similar office of any country) regarding such Grantor’s ownership of any Patent, Trademark
or Copyright, its right to register the same, or its right to keep and maintain the same.

          (e) In no event shall any Grantor, either itself or through any agent, employee, licensee or
designee, file an application with respect to any Patent, Trademark or Copyright (or for the
registration of any Trademark or Copyright) with the United States Patent and Trademark Office,
United States Copyright Office or any office or agency in any political subdivision of the United
States or in any other country or any political subdivision thereof, unless it promptly

Sch. I-21

 

informs the
Collateral Agent and, upon request of the Collateral Agent, executes and delivers any and all
agreements, instruments, documents and papers as the Collateral Agent may reasonably request to
evidence the Collateral Agent’s security interest in such Patent, Trademark or Copyright, and each
Grantor hereby appoints the Collateral Agent as its attorney-in-fact to execute and file such
writings as are reasonably necessary for the foregoing purposes, all acts of such attorney being
hereby ratified and confirmed; such power, being coupled with an interest, is irrevocable.

          (f) Each Grantor will take all reasonably necessary steps that are consistent with the
practice in any proceeding before the United States Patent and Trademark Office, United States
Copyright Office or any office or agency in any political subdivision of the United States or in
any other country or any political subdivision thereof, to maintain and pursue each registration or
application that is material to the conduct of such Grantor’s business relating to the Patents,
Trademarks and/or Copyrights (and to obtain the relevant grant or registration) and to maintain
each issued Patent and each registration of the Trademarks and Copyrights that is material to the
conduct of any Grantor’s business, including timely filings of applications for renewal, affidavits
of use, affidavits of incontestability and payment of maintenance fees, and, if
consistent with good business judgment, to initiate opposition, interference and cancellation
proceedings against third parties.

          (g) In the event that any Grantor knows that any Article 9 Collateral consisting of a Patent,
Trademark or Copyright material to the conduct of any Grantor’s business has been or is about to be
infringed, misappropriated or diluted by a third party, such Grantor promptly shall notify the
Collateral Agent and shall, if consistent with good business judgment, promptly sue for
infringement, misappropriation or dilution and to recover any and all damages for such
infringement, misappropriation or dilution (and take any actions required by applicable law prior
to instituting such suit), and take such other actions as are appropriate under the circumstances
to protect such Article 9 Collateral. Nothing in this Agreement shall prevent any Grantor from
discontinuing the use or maintenance of any Article 9 Collateral consisting of a Patent, Trademark
or Copyright, or require any Grantor to pursue any claim of infringement, misappropriation or
dilution, if (x) such Grantor so determines in its good business judgment and (y) it is not
prohibited by the Credit Agreement.

          (h) Upon and during the continuation of an Event of Default, each Grantor shall, at the
request of the Collateral Agent, use its commercially reasonable efforts to obtain all requisite
consents or approvals by the licensor of each Copyright License, Patent License or Trademark
License to effect the assignment of all such Grantor’s right, title and interest thereunder to the
Collateral Agent or its designee.

ARTICLE V

Remedies

          Section 5.01. Remedies upon Default. Upon the occurrence and during the continuation
of an Event of Default, each Grantor agrees to deliver each item of Collateral to the Collateral
Agent on demand, and it is agreed that the Collateral Agent shall have the right to take

Sch. I-22

 

any of or
all the following actions at the same or different times: (a) with respect to any Article 9
Collateral consisting of Intellectual Property, on demand, to cause the Security Interest to become
an assignment, transfer and conveyance of any of or all such Article 9 Collateral by the applicable
Grantors to the Collateral Agent, for the ratable benefit of the Secured Parties, or to license or
sublicense, whether general, special or otherwise, and whether on an exclusive or nonexclusive
basis, any such Article 9 Collateral throughout the world on such terms and conditions and in such
manner as the Collateral Agent shall determine (other than in violation of any then-existing
licensing arrangements to the extent that waivers cannot be obtained), and (b) with or without
legal process and with or without prior notice or demand for performance, to take possession of the
Article 9 Collateral and without liability for trespass to enter any premises where the Article 9
Collateral may be located for the purpose of taking possession of or removing the Article 9
Collateral and, generally, to exercise any and all rights afforded to a secured party under the
Uniform Commercial Code or other applicable law. Without limiting the generality of the foregoing,
each Grantor agrees that the Collateral Agent shall have the right, subject to the mandatory
requirements of applicable law, to sell or otherwise dispose of all or any part of the
Collateral at a public or private sale or at any broker’s board or on any securities exchange,
for cash, upon credit or for future delivery as the Collateral Agent shall deem appropriate. Each
such purchaser at any sale of Collateral shall hold the property sold absolutely, free from any
claim or right on the part of any Grantor, and each Grantor hereby waives (to the extent permitted
by law) all rights of redemption, stay and appraisal that such Grantor now has or may at any time
in the future have under any rule of law or statute now existing or hereafter enacted.

          The Collateral Agent shall give the applicable Grantors 10 days’ written notice (which each
Grantor agrees is reasonable notice within the meaning of Section 9-611 of the New York UCC or its
equivalent in other jurisdictions) of the Collateral Agent’s intention to make any sale of
Collateral. Such notice, in the case of a public sale, shall state the time and place for such
sale and, in the case of a sale at a broker’s board or on a securities exchange, shall state the
board or exchange at which such sale is to be made and the day on which the Collateral, or portion
thereof, will first be offered for sale at such board or exchange. Any such public sale shall be
held at such time or times within ordinary business hours and at such place or places as the
Collateral Agent may fix and state in the notice (if any) of such sale. At any such sale, the
Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as the Collateral Agent may determine in its sole and absolute discretion. The Collateral
Agent shall not be obligated to make any sale of any Collateral if it shall determine not to do so,
regardless of the fact that notice of sale of such Collateral shall have been given. 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 sale,
and such sale may, without further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on credit or for future
delivery, the Collateral so sold may be retained by the Collateral Agent until the sale price is
paid by the purchaser or purchasers thereof, but the Collateral Agent and the other Secured Parties
shall not incur any liability in case any such purchaser or purchasers shall fail to take up and
pay for the Collateral so sold and, in case of any such failure, such Collateral may be sold again
upon like notice. At any public (or, to the extent permitted by law, private) sale made pursuant
to this Agreement, any Secured Party may bid for or purchase, free (to the extent permitted by law)

Sch. I-23

 

from any right of redemption, stay, valuation or appraisal on the part of any Grantor (all said
rights being also hereby waived and released to the extent permitted by law), the Collateral or any
part thereof offered for sale and may make payment on account thereof by using any claim then due
and payable to such Secured Party from any Grantor as a credit against the purchase price, and such
Secured Party may, upon compliance with the terms of sale, hold, retain and dispose of such
property without further accountability to any Grantor therefor. For purposes hereof, a written
agreement to purchase the Collateral or any portion thereof shall be treated as a sale thereof; the
Collateral Agent shall be free to carry out such sale pursuant to such agreement and no Grantor
shall be entitled to the return of the Collateral or any portion thereof subject thereto,
notwithstanding the fact that after the Collateral Agent shall have entered into such an agreement,
all Events of Default shall have been remedied and the Obligations paid in full. As an alternative
to exercising the power of sale herein conferred upon it, the Collateral Agent may proceed by a
suit or suits at law or in equity to foreclose this Agreement and to sell the Collateral or any
portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction
or pursuant to a proceeding by a court-appointed receiver. Any sale pursuant to the provisions of
this Section 5.01 shall be deemed to conform to the commercially reasonable
standards as provided in Section 9-610(b) of the New York UCC or its equivalent in other
jurisdictions.

          Section 5.02. Application of Proceeds. The proceeds received by the Collateral Agent
in respect of any sale of, collection from or other realization upon all or any part of the
Collateral pursuant to the exercise by the Collateral Agent of its remedies shall be applied, in
full or in part, together with any other sums then held by the Collateral Agent pursuant to the
Loan Documents, promptly by the Collateral Agent as follows:

     (a) First, to the payment of all reasonable costs and expenses, fees, commissions and
taxes of such sale, collection or other realization including compensation to the Collateral
Agent, the Administrative Agent, their respective agents and counsel, and all expenses,
liabilities and advances made or incurred by the Collateral Agent and Administrative Agent
in connection therewith and all amounts for which the Collateral Agent and Administrative
Agent are entitled to indemnification pursuant to the provisions of any Loan Document,
together with interest on each such amount at the highest rate then in effect under the
Credit Agreement from and after the date such amount is due, owing or unpaid until paid in
full;

     (b) Second, to the payment of all other reasonable costs and expenses of such sale,
collection or other realization including compensation to the other Secured Parties and
their agents and counsel and all costs, liabilities and advances made or incurred by the
other Secured Parties in connection therewith, together with interest on each such amount at
the highest rate then in effect under the Credit Agreement from and after the date such
amount is due, owing or unpaid until paid in full;

     (c) Third, without duplication of amounts applied pursuant to clauses (a) and (b)
above, to the indefeasible payment in full in cash, pro rata, of interest and other amounts
constituting Obligations (other than principal, reimbursement obligations pursuant to
Section 2.05(e) of the Credit Agreement and obligations to cash
collateralize Letters

Sch. I-24

 

of
Credit) and any fees, premiums and scheduled periodic payments due under Swap Agreements or
Treasury Services Agreements constituting Obligations and any interest accrued thereon, in
each case equally and ratably in accordance with the respective amounts thereof then due and
owing;

     (d) Fourth, to the indefeasible payment in full in cash, pro rata, of principal amount
of the Obligations and any premium thereon (including reimbursement obligations pursuant to
Section 2.05(e) of the Credit Agreement and obligations to cash collateralize Letters of
Credit) and any breakage, termination or other payments under Swap Agreements and Treasury
Services Agreements constituting Obligations and any interest accrued thereon; and

     (e) Fifth, the balance, if any, to the person lawfully entitled thereto (including the
applicable Loan Party or its successors or assigns) or as a court of competent jurisdiction
may direct.

     In the event that any such proceeds are insufficient to pay in full the items described
in clauses (a) through (e) of this Section 5.02, the Loan Parties shall remain liable,
jointly and severally, for any deficiency.

The Collateral Agent shall have sole and absolute discretion as to the time of application of any
such proceeds, moneys or balances in accordance with this Agreement. Upon any sale of Collateral
by the Collateral Agent (including pursuant to a power of sale granted by statute or under a
judicial proceeding), the receipt of the Collateral Agent or of 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 Collateral Agent or such officer or be answerable in any way for
the misapplication thereof.

          Section 5.03. Grant of License To Use Intellectual Property. For the purpose of
enabling the Collateral Agent to exercise rights and remedies under this Agreement at such time as
the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, each Grantor
hereby grants to the Collateral Agent an irrevocable, nonexclusive license (exercisable without
payment of royalty or other compensation to the Grantors) to use, license or sublicense any of the
Article 9 Collateral consisting of Intellectual Property now owned or hereafter acquired by such
Grantor, and wherever the same may be located, and including in such license reasonable access to
all media in which any of the licensed items may be recorded or stored and to all computer software
and programs used for the compilation or printout thereof. The use of such license by the
Collateral Agent shall be exercised, at the option of the Collateral Agent, only upon the
occurrence and during the continuation of an Event of Default, provided that any license,
sublicense or other transaction entered into by the Collateral Agent in accordance herewith shall
be binding upon the Grantors notwithstanding any subsequent cure of an Event of Default.

          Section 5.04. Securities Act. In view of the position of the Grantors in relation to
the Pledged Collateral, or because of other current or future circumstances, a question may arise
under the Securities Act of 1933, as now or hereafter in effect, or any similar statute

Sch. I-25

 

hereafter
enacted analogous in purpose or effect (such Act and any such similar statute as from time to time
in effect being called the “Federal Securities Laws”) with respect to any disposition of
the Pledged Collateral permitted hereunder. Each Grantor understands that compliance with the
Federal Securities Laws might very strictly limit the course of conduct of the Collateral Agent if
the Collateral Agent were to attempt to dispose of all or any part of the Pledged Collateral, and
might also limit the extent to which or the manner in which any subsequent transferee of any
Pledged Collateral could dispose of the same. Similarly, there may be other legal restrictions or
limitations affecting the Collateral Agent in any attempt to dispose of all or part of the Pledged
Collateral under applicable Blue Sky or other state securities laws or similar laws analogous in
purpose or effect. Each Grantor recognizes that in light of such restrictions and limitations the
Collateral Agent may, with respect to any sale of the Pledged Collateral, limit the purchasers to
those who will agree, among other things, to acquire such Pledged Collateral for their own account,
for investment, and not with a view to the distribution or resale thereof. Each Grantor
acknowledges
and agrees that in light of such restrictions and limitations, the Collateral Agent, in its
sole and absolute discretion (a) may proceed to make such a sale whether or not a registration
statement for the purpose of registering such Pledged Collateral or part thereof shall have been
filed under the Federal Securities Laws and (b) may approach and negotiate with a single potential
purchaser to effect such sale. Each Grantor acknowledges and agrees that any such sale might
result in prices and other terms less favorable to the seller than if such sale were a public sale
without such restrictions. In the event of any such sale, the Collateral Agent shall incur no
responsibility or liability for selling all or any part of the Pledged Collateral at a price that
the Collateral Agent, in its sole and absolute discretion, may in good faith deem reasonable under
the circumstances, notwithstanding the possibility that a substantially higher price might have
been realized if the sale were deferred until after registration as aforesaid or if more than a
single purchaser were approached. The provisions of this Section 5.04 will apply notwithstanding
the existence of a public or private market upon which the quotations or sales prices may exceed
substantially the price at which the Collateral Agent sells.

          Section 5.05.
Medicare/Medicaid. The parties hereto understand and
agree that the exercise of remedies hereunder with respect to receivables from Medicare or Medicaid
may be subject to applicable federal laws.

ARTICLE VI

Indemnity, Subrogation and Subordination

          Section 6.01. Indemnity and Subrogation. In addition to all such rights of indemnity
and subrogation as the Guarantors may have under applicable law (but subject to Section 6.03), the
Borrower agrees that (a) in the event a payment of any Obligation shall be made by any Guarantor
under this Agreement, the Borrower shall indemnify such Guarantor for the full amount of such
payment and such Guarantor shall be subrogated to the rights of the Person to whom such payment
shall have been made to the extent of such payment and (b) in the event any assets of any Grantor
shall be sold pursuant to this Agreement or any other Security

Sch. I-26

 

Document to satisfy in whole or in
part any Obligation owed to any Secured Party, the Borrower shall indemnify such Grantor in an
amount equal to the fair value of the assets so sold.

          Section 6.02. Contribution and Subrogation. Each Guarantor and Grantor (a
“Contributing Party”) agrees (subject to Section 6.03) that, in the event a payment shall
be made by any other Guarantor hereunder in respect of any Obligation or assets of any other
Grantor shall be sold pursuant to any Security Document to satisfy any Obligation owed to any
Secured Party and such other Guarantor or Grantor (the “Claiming Party”) shall not have
been fully indemnified by the Borrower as provided in Section 6.01, the Contributing Party shall
indemnify the Claiming Party in an amount equal to the amount of such payment or the greater of the
book value or the fair value of
such assets, as applicable, in each case multiplied by a fraction of which the numerator shall
be the net worth of the Contributing Party on the date hereof (or, in the case any Guarantor or
Grantor becomes a party hereto pursuant to Section 7.14, the date of the last supplement hereto
executed and delivered by a Guarantor or Grantor) and the denominator shall be the aggregate net
worth of all the Guarantors and Grantors on the date hereof (or, in the case any Guarantor or
Grantor becomes a party hereto pursuant to Section 7.14, the date of the last supplement hereto
executed and delivered by a Guarantor or Grantor). Any Contributing Party making any payment to a
Claiming Party pursuant to this Section 6.02 shall be subrogated to the rights of such Claiming
Party under Section 6.01 to the extent of such payment.

          Section 6.03. Subordination. Notwithstanding any provision in this Agreement to the
contrary, all rights of the Guarantors and Grantors under Sections 6.01 and 6.02 and all other
rights of indemnity, contribution or subrogation under applicable law or otherwise shall be fully
subordinated to the indefeasible payment in full in cash of the Obligations. No failure on the
part of the Borrower or any Guarantor or Grantor to make the payments required by Sections 6.01 and
6.02 (or any other payments required under applicable law or otherwise) shall in any respect limit
the obligations and liabilities of any Guarantor or Grantor with respect to its Obligations
hereunder, and each Guarantor and Grantor shall remain liable for the full amount of the
Obligations of such Guarantor or Grantor hereunder.

ARTICLE VII

Miscellaneous

          Section 7.01. Notices. All communications and notices hereunder shall (except as
otherwise expressly permitted in this Agreement) be in writing and given as provided in Section
9.01 of the Credit Agreement, provided that any communication or notice hereunder from the
Collateral Agent to any Loan Party upon the occurrence and during the continuation of an Event of
Default may be given by telephone if promptly confirmed in writing. All communications and notices
hereunder to any Subsidiary Loan Party shall be given to it in care of the Borrower as provided for
notices to the Borrower in Section 9.01 of the Credit Agreement.

          Section 7.02. Waivers; Amendment. (a) No failure or delay by any Secured Party in
exercising any right or power hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other

Sch. I-27

 

or further exercise
thereof or the exercise of any other right or power. The rights and remedies of the Secured
Parties hereunder and under the other Loan Documents are cumulative and are not exclusive of any
rights or remedies that they would otherwise have. No waiver of any provision in this Agreement or
consent to any departure by any Loan Party therefrom shall in any event be effective unless the
same shall be permitted Section 7.02(b), and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given. Without limiting the generality
of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as
a waiver of any Default, regardless of whether any Secured Party may have had notice or knowledge
of such Default at the time. No notice or demand on any Loan Party in any case shall entitle any
Loan Party to any other or further notice or demand in similar or other circumstances.

          (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Collateral Agent and the Loan
Party or Loan Parties with respect to which such waiver, amendment or modification is to apply,
subject to any consent required in accordance with Section 9.02 of the Credit Agreement.

          Section 7.03. Collateral Agent’s Fees and Expenses; Indemnification. (a) The parties
hereto agree that the Collateral Agent shall be entitled to reimbursement of its reasonable
out-of-pocket expenses incurred hereunder as provided in Section 9.03 of the Credit Agreement.

          (b) Without limitation of its indemnification obligations under the other Loan Documents, each
Grantor and each Guarantor jointly and severally agrees to indemnify the Collateral Agent and the
other Indemnitees (as defined in Section 9.03 of the Credit Agreement) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and related
out-of-pocket expenses, including the fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or
as a result of, the execution, delivery or performance of this Agreement or any actual or
prospective claim, litigation, investigation or proceeding relating to any of the foregoing
agreements or instruments contemplated hereby, or to the Collateral, whether or not any Indemnitee
is a party thereto, provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or related out-of-pocket
expenses are finally judicially determined by a non-appealable judgment of a court of competent
jurisdiction to have resulted from the gross negligence, bad faith or wilful misconduct of, or
breach of the Loan Documents by, such Indemnitee.

          (c) Any such amounts payable as provided hereunder shall be additional Obligations secured
hereby and by the other Security Documents. The provisions of this Section 7.03 shall remain
operative and in full force and effect regardless of the termination of this Agreement or any other
Loan Document, the consummation of the transactions contemplated hereby, the repayment of any of
the Obligations, the invalidity or unenforceability of any term or provision of this Agreement or
any other Loan Document, or any investigation made by or on behalf of the Collateral Agent or any
other Secured Party. All amounts due under this Section 7.03 shall be payable on written demand
therefor.

Sch. I-28

 

          Section 7.04. Successors and Assigns. Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include the permitted successors and
assigns of such party; and all
covenants, promises and agreements by or on behalf of any Guarantor, Grantor or the Collateral
Agent that are contained in this Agreement shall bind and inure to the benefit of their respective
successors and assigns and shall inure to the benefit of the other Secured Parties and their
respective successors and assigns.

          Section 7.05. Survival of Agreement. All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the certificates or other
instruments prepared or delivered in connection with or pursuant to this Agreement or any other
Loan Document shall be considered to have been relied upon by the Lenders and shall survive the
execution and delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any Lender or on its behalf and
notwithstanding that the Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender
may have had notice or knowledge of any Default or incorrect representation or warranty at the time
any credit is extended under the Credit Agreement, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any other amount payable
under any Loan Document is outstanding and unpaid or any Letter of Credit is outstanding and so
long as the Commitments have not expired or terminated.

          Section 7.06. Counterparts; Effectiveness; Several Agreement. This Agreement may be
executed in counterparts, each of which shall constitute an original but all of which, when taken
together, shall constitute single contract. Delivery of an executed signature page to this
Agreement by facsimile or electronic transmission shall be as effective as delivery of a manually
signed counterpart of this Agreement. This Agreement shall become effective as to any Loan Party
when a counterpart hereof executed on behalf of such Loan Party shall have been delivered to the
Collateral Agent and a counterpart hereof shall have been executed on behalf of the Collateral
Agent, and thereafter shall be binding upon such Loan Party and the Collateral Agent and their
respective permitted successors and assigns, and shall inure to the benefit of such Loan Party, the
Administrative Agent, the Collateral Agent and the other Secured Parties and their respective
successors and assigns, except that no Loan Party shall have the right to assign or transfer its
rights or obligations hereunder or any interest in this Agreement or in the Collateral (and any
such assignment or transfer shall be void) except as contemplated by this Agreement or the Credit
Agreement. This Agreement shall be construed as a separate agreement with respect to each Loan
Party and may be amended, modified, supplemented, waived or released with respect to any Loan Party
without the approval of any other Loan Party and without affecting the obligations of any other
Loan Party hereunder.

          Section 7.07. Severability. Any provision in this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such invalidity, illegality or unenforceability without affecting the validity, legality
and enforceability of the remaining provisions hereof; the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other jurisdiction. The
parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable

Sch. I-29

 

provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

          Section 7.08. Right of Set-Off. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other obligations at any
time owing by such Lender or Affiliate to or for the credit or the account of any Loan Party
against any of and all the obligations of such Loan Party now or hereafter existing under this
Agreement owed to such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement and although such obligations may be unmatured. The applicable Lender
shall notify the Borrower, the Collateral Agent and the Administrative Agent of such set-off or
application, provided that any failure to give or any delay in giving such notice shall not
affect the validity of any such set-off or application under this Section 7.08. The rights of each
Lender under this Section 7.08 are in addition to other rights and remedies (including other rights
of set-off) which such Lender may have.

          Section 7.09. Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement shall be construed in accordance with and governed by the law of the State
of New York.

          (b) Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York
sitting in New York County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any other Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined in such New York
State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees
that a final judgment in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in
this Agreement or any other Loan Document shall affect any right that the Collateral Agent, the
Issuing Bank, any Lender or any Loan Party may otherwise have to bring any action or proceeding
relating to this Agreement or any other Loan Document in the courts of any jurisdiction.

          (c) Each of the Loan Parties hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection that it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or
any other Loan Document in any court referred to in Section 7.09(b). Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.

          (d) Each party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 7.01. Nothing in this Agreement or any other Loan

Sch. I-30

 

Document will
affect the right of any party to this Agreement to serve process in any other manner permitted by
law.

          Section 7.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 7.10.

          Section 7.11. Headings. Article and Section headings and the Table of Contents used
in this Agreement are for convenience of reference only, are not part of this Agreement and are not
to affect the construction of, or to be taken into consideration in interpreting, this Agreement.

          Section 7.12. Security Interest Absolute. All rights of the Collateral Agent
hereunder, the Security Interest, the grant of a security interest in the Pledged Collateral and
all obligations of each Grantor and Guarantor hereunder shall be absolute and unconditional
irrespective of (a) any lack of validity or enforceability of the Credit Agreement, any other Loan
Document, any agreement with respect to any of the Obligations or any other agreement or instrument
relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any other amendment or waiver of or any
consent to any departure from the Credit Agreement, any other Loan Document or any other agreement
or instrument, (c) any exchange, release or non-perfection of any Lien on other collateral, or any
release or amendment or waiver of or consent under or departure from any guarantee, securing or
guaranteeing all or any of the Obligations, or (d) any other circumstance that might otherwise
constitute a defense available to, or a discharge of, any Grantor or Guarantor in respect of the
Obligations or this Agreement.

          Section 7.13. Termination or Release. (a) This Agreement and the Guarantees made in
this Agreement shall terminate and the Security Interest and all other security interests granted
hereby shall be automatically released when all the Loan Document Obligations (other than wholly
contingent indemnification
obligations not then due) have been indefeasibly paid in full and the Lenders have no further
commitment to lend under the Credit Agreement, the LC Exposure has been reduced to zero and the
Issuing Bank has no further obligations to issue Letters of Credit under the Credit Agreement.

          (b) A Person which was a Loan Party immediately prior to the consummation of any transaction
permitted by the Credit Agreement shall automatically be released from its obligations hereunder
and the Security Interest in the Collateral of such Person shall be

Sch. I-31

 

automatically released upon the
consummation of any transaction permitted by the Credit Agreement as a result of which such Person
ceases to be a Loan Party.

          (c) Upon any sale or other transfer by any Grantor of any Collateral that is permitted under
the Credit Agreement, or upon the effectiveness of any written consent to the release of the
security interest granted hereby in any Collateral pursuant to Section 9.02 of the Credit
Agreement, the security interest in such Collateral shall be automatically released.

          (d) In connection with any termination or release pursuant to Sections 7.13(a), (b) or (c),
the Collateral Agent shall execute and deliver to any Person, at such Person’s expense, all
documents that such Person shall reasonably request to evidence such termination or release of its
obligations or the Security Interests in its Collateral. Any execution and delivery of documents
pursuant to this Section 7.13 shall be without recourse to or warranty by the Collateral Agent.
Without limiting the provisions of Section 7.03, the Borrower shall reimburse the Collateral Agent
upon demand for all reasonable costs and out of pocket expenses, including the reasonable fees,
charges and disbursements of counsel, incurred by it in connection with any action contemplated by
this Section 7.13.

          Section 7.14. Additional Subsidiaries. Pursuant to Section 5.12 of the Credit
Agreement, certain Subsidiaries of a Loan Party that were not in existence or not a Subsidiary on
the date of the Credit Agreement are required to enter in this Agreement as a Subsidiary Loan Party
upon becoming such a Subsidiary. Upon execution and delivery by the Collateral Agent and a
Subsidiary of an instrument in the form of Exhibit I hereto, such Subsidiary shall become a
Subsidiary Loan Party hereunder with the same force and effect as if originally named as a
Subsidiary Loan Party in this Agreement. The execution and delivery of any such instrument shall
not require the consent of any other Loan Party hereunder. The rights and obligations of each Loan
Party hereunder shall remain in full force and effect notwithstanding the addition of any new Loan
Party as a party to this Agreement.

          Section 7.15. Collateral Agent Appointed Attorney-in-Fact. Each Grantor hereby
appoints the Collateral Agent the attorney-in-fact of such Grantor for the purpose of carrying out
the provisions of this Agreement and taking any action and executing any instrument that the
Collateral Agent may deem necessary or advisable to accomplish the purposes hereof, which
appointment is irrevocable and coupled with an interest. Without limiting the generality of the
foregoing, the Collateral Agent shall have the right, upon the occurrence and during the
continuation of an Event of Default, with full power of substitution
either in the Collateral Agent’s name or in the name of such Grantor (except to the extent
such action would be prohibited by applicable law with respect to Medicare and Medicaid
receivables) (a) to receive, endorse, assign and/or deliver any and all notes, acceptances, checks,
drafts, money orders or other evidences of payment relating to the Collateral or any part thereof;
(b) to demand, collect, receive payment of, give receipt for and give discharges and releases of
all or any of the Collateral; (c) to sign the name of any Grantor on any invoice or bill of lading
relating to any of the Collateral; (d) to send verifications of Accounts Receivable to any Account
Debtor; (e) to commence and prosecute any and all suits, actions or proceedings at law or in equity
in any court of competent jurisdiction to collect or otherwise realize on all or any of the
Collateral or to enforce any rights in respect of any Collateral; (f) to settle, compromise,

Sch. I-32

 

compound, adjust or defend any actions, suits or proceedings relating to all or any of the
Collateral; (g) to notify, or to require any Grantor to notify, Account Debtors to make payment
directly to the Collateral Agent; and (h) to use, sell, assign, transfer, pledge, make any
agreement with respect to or otherwise deal with all or any of the Collateral, and to do all other
acts and things necessary to carry out the purposes of this Agreement, as fully and completely as
though the Collateral Agent were the absolute owner of the Collateral for all purposes,
provided that nothing in this Agreement contained shall be construed as requiring or
obligating the Collateral Agent to make any commitment or to make any inquiry as to the nature or
sufficiency of any payment received by the Collateral Agent, or to present or file any claim or
notice, or to take any action with respect to the Collateral or any part thereof or the moneys due
or to become due in respect thereof or any property covered thereby. The Collateral Agent and the
other Secured Parties shall be accountable only for amounts actually received as a result of the
exercise of the powers granted to them in this Agreement, and neither they nor their officers,
directors, employees or agents shall be responsible to any Grantor for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct.

          Section 7.16. Further Assurances. Notwithstanding anything to the contrary herein,
the parties hereto agree to comply with the requirements set forth in Section 5.13 of the Credit
Agreement.

[Signature Pages to Follow]

Sch. I-33

 

     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and
year first above written.

	 	 	 	 	 
	 	USPI HOLDINGS INC.,

 	 
	 	By:  	/s/ William H. Wilcox
 	 
	 	 	Title:  President 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	UNITED SURGICAL PARTNERS INTERNATIONAL, INC.,

 	 
	 	By:  	/s/ William H. Wilcox
 	 
	 	 	Title:  President 	 
	 	 	 	 

Sch. I-34

 

	 	 	 	 	 

	 	 	 	 	 
	 	THE GUARANTORS SET FORTH ON 
EXHIBIT I HERETO,
as Guarantors

 	 
	 	By:  	/s/ William H. Wilcox
 	 
	 	Title: 	 President 	 
	 	 	 	 

Sch. I-35

 

	 	 	 	 	 

EXHIBIT I

GUARANTORS

Georgia Musculoskeletal Network, Inc.

Health Horizons of Kansas City, Inc.

Health Horizons of Murfreesboro, Inc.

Health Horizons of Nashville, Inc.

Medcenter Management Services, Inc.

North MacArthur Surgery Center, LLC

Ortho Excel, Inc.

OrthoLink ASC Corporation

OrthoLink Physicians Corporation

OrthoLink Radiology Services Corporation

OrthoLink/Georgia ASC, Inc.

OrthoLink/New Mexico ASC, Inc.

OrthoLink/TN ASC, Inc.

Same Day Surgery, L.L.C.

Specialty Surgicenters, Inc.

SSI Holdings, Inc.

Surginet of Northwest Houston, Inc.

Surginet of Rivergate, Inc.

Surginet, Inc.

Surgis Management Services, Inc.

Surgis of Chico, Inc.

Surgis of Pearland, Inc.

Surgis of Phoenix, Inc.

Surgis of Redding, Inc.

Surgis of Sand Lake, Inc.

Surgis of Sonoma, Inc.

Surgis of Victoria, Inc.

Surgis of Willowbrook, Inc.

Surgis, Inc.

United Surgical of Atlanta, Inc.

United Surgical Partners Holdings, Inc.

USP Alexandria, Inc.

USP Austin, Inc.

USP Austintown, Inc.

USP Baltimore, Inc.

USP Baton Rouge, Inc.

USP Bridgeton, Inc.

USP Cedar Park, Inc

USP Central New Jersey, Inc.

USP Chesterfield, Inc.

USP Chicago, Inc.

Sch. I-36

 

USP Cleveland, Inc.

USP Coast, Inc.

USP Columbia, Inc.

USP Corpus Christi, Inc.

USP Cottonwood, Inc.

USP Creve Coeur, Inc.

USP Decatur, Inc.

USP Des Peres, Inc.

USP Destin, Inc.

USP Domestic Holdings, Inc.

USP Florissant, Inc.

USP Fredericksburg, Inc.

USP Glendale, Inc.

USP Harbour View, Inc.

USP Houston, Inc.

USP Indiana, Inc.

USP International Holdings, Inc.

USP Kansas City, Inc.

USP Las Cruces, Inc.

USP Long Island, Inc.

USP Lyndhurst, Inc.

USP Mason Ridge, Inc.

USP Michigan, Inc.

USP Midwest, Inc.

USP Mission Hills, Inc.

USP Nevada, Inc.

USP New Jersey, Inc.

USP Newport News, Inc.

USP North Kansas City, Inc.

USP North Texas, Inc.

USP Oklahoma, Inc.

USP Olive, Inc.

USP Oxnard, Inc.

USP Phoenix, Inc.

USP Reading, Inc.

USP Richmond II, Inc.

USP Richmond, Inc.

USP Sacramento, Inc.

USP San Antonio, Inc.

USP San Gabriel, Inc.

USP Sarasota, Inc.

USP St. Peters, Inc.

USP Sunset Hills, Inc.

USP Tennessee, Inc.

USP Torrance, Inc.

USP Virginia Beach, Inc.

Sch. I-37

 

USP Webster Groves, Inc.

USP West Covina, Inc.

USP Westwood, Inc.

USP Winter Park, Inc.

USPI San Diego, Inc.

Sch. I-38

 

	 	 	 	 	 	 	 
	 	 	USP ASSURANCE COMPANY,	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John J. Wellik	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title: President	 	 

 

 

	 	 	 	 	 	 	 
	 	 	PHYSICIANS DATA PROFESSIONALS, INC.,	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John J. Wellik	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title: Secretary	 	 

-2-

 

	 	 	 	 	 	 	 
	 	 	USP SECURITIES CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Kim Tillett	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title: President	 	 

-3-

 

	 	 	 	 	 	 	 
	 	 	PASADENA HOLDINGS, LLC	 	 
	 	 	USP NEVADA HOLDINGS, LLC,	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	USP North Texas, Inc., its manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ William H. Wilcox	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title: President	 	 

-4-

 

	 	 	 	 	 	 	 
	 	 	SAME DAY MANAGEMENT, L.L.C.,	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Same Day Surgery LLC, its sole member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ William H. Wilcox	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title: President	 	 

-5-

 

	 	 	 	 	 	 	 
	 	 	WHASA, L.C.,	 	 
	 
	 	 	 	 	 	 
	 	 	By: Surginet, Inc., its sole member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ William H. Wilcox	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title: President	 	 

-6-

 

	 	 	 	 	 	 	 
	 	 	USP TEXAS, L.P.,	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	USP North Texas, Inc., its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ William H. Wilcox	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title: President	 	 

-7-

 

	 	 	 	 	 	 	 
	 	 	USP TEXAS AIR, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	USP North Texas, Inc., its sole member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ William H. Wilcox	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title: President	 	 

-8-

 

	 	 	 	 	 	 	 
	 	 	SURGERY CENTERS OF AMERICA II, L.L.C.,	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ William H. Wilcox	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title: Manager	 	 

-9-

 

	 	 	 	 	 	 	 
	 	 	ISS-ORLANDO, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ William H. Wilcox	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title: Manager	 	 

-10-

 

	 	 	 	 	 	 	 
	 	 	SURGERY CENTERS HOLDINGS COMPANY, L.L.C.,	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Surgery Centers of America II, L.L.C., its sole
member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John J. Wellik	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title: Manager	 	 

-11-

 

	 	 	 	 	 	 	 
	 	 	CITIBANK, N.A., AS COLLATERAL AGENT,	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael M. Schadt	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title: Vice President	 	 

-12-

 

Exhibit I to the

Collateral Agreement

     SUPPLEMENT NO. ___ dated as of [ ], to the Guarantee and Collateral Agreement dated as of
April 19, 2007 as the same may be amended or otherwise modified from time to time (the “Collateral
Agreement”), among UNITED SURGICAL PARTNERS INTERNATIONAL, INC., a Delaware corporation (the
“Borrower”), USPI HOLDINGS INC., a Delaware corporation, each subsidiary of the Borrower
listed on Schedule I thereto (each such subsidiary individually a “Subsidiary
Guarantor” and collectively, the “Subsidiary Guarantors”; the Subsidiary
Guarantors, Holdings and the Borrower are referred to collectively herein as the
“Grantors”) and CITIBANK, N.A., (“Citibank”), as Collateral Agent (in such
capacity, the “Collateral Agent”).

          A. Reference is made to the Credit Agreement dated as of April 19, 2007 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”), among the
Borrower, Holdings, the lenders from time to time party thereto, Citibank, as Administrative Agent,
Lehman Brothers Inc., as Syndication Agent, and Bear Stearns Corporate Lending Inc., Suntrust Bank
and UBS Securities LLC, as Co-Documentation Agents.

          B. Capitalized terms used in this Agreement and not otherwise defined in this Agreement shall
have the meanings assigned to such terms in the Credit Agreement and the Collateral Agreement
referred to therein.

          C. The Grantors have entered into the Collateral Agreement in order to induce the Lenders to
make Loans and the Issuing Bank to issue Letters of Credit. Section 7.14 of the Collateral
Agreement provides that additional Subsidiaries of the Borrower may become Subsidiary Loan Parties
under the Collateral Agreement by execution and delivery of an instrument in the form of this
Supplement. The undersigned Subsidiary (the “New Subsidiary”) is executing this Supplement
in accordance with the requirements of the Credit Agreement to become a Subsidiary Loan Party under
the Collateral Agreement in order to induce the Lenders to make additional Loans and the Issuing
Bank to issue additional Letters of Credit and as consideration for Loans previously made and
Letters of Credit previously issued.

          Accordingly, the Collateral Agent and the New Subsidiary agree as follows:

          SECTION 1. In accordance with Section 7.14 of the Collateral Agreement, the New Subsidiary by
its signature below becomes a Subsidiary Loan Party, a Grantor and a Guarantor under the Collateral
Agreement with the same force and effect as if originally named therein as a Subsidiary Loan Party,
a Grantor and a Guarantor and the New Subsidiary hereby (a) agrees to all the terms and provisions
of the Collateral Agreement applicable to it as a Subsidiary Loan Party, Grantor and Guarantor
thereunder and (b) represents and warrants that the representations and warranties made by it as a
Grantor and Guarantor thereunder are true and correct on and as of the date hereof. In furtherance
of the foregoing, the New Subsidiary, as security for the payment and performance in full of the
Obligations (as defined in the Collateral Agreement), does hereby create and grant to the
Collateral Agent, its successors and assigns, for

Exh. I-1

 

the ratable benefit of the Secured Parties, their successors and assigns, a security interest
in and lien on all the New Subsidiary’s right, title and interest in and to the Collateral (as
defined in the Collateral Agreement) of the New Subsidiary. Each reference to a “Guarantor” or
“Grantor” in the Collateral Agreement shall be deemed to include the New Subsidiary. The
Collateral Agreement is hereby incorporated in this Agreement by reference.

          SECTION 2. The New Subsidiary represents and warrants to the Collateral Agent and the other
Secured Parties that this Supplement has been duly authorized, executed and delivered by it and
constitutes its legal, valid and binding obligation, enforceable against it in accordance with its
terms.

          SECTION 3. This Supplement may be executed in counterparts, each of which shall constitute an
original, but all of which when taken together shall constitute a single contract. This Supplement
shall become effective when the Collateral Agent shall have received a counterpart of this
Supplement that bears the signature of the New Subsidiary and the Collateral Agent has executed a
counterpart hereof. Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart of this Supplement.

          SECTION 4. The New Subsidiary hereby represents and warrants that set forth under its
signature hereto is (i) the true and correct legal name of the New Subsidiary, (ii) its
jurisdiction of formation, (iii) its Federal Taxpayer Identification Number or its organizational
identification number and (iv) the location of its chief executive office.

          SECTION 5. Except as expressly supplemented hereby, the Collateral Agreement shall remain in
full force and effect.

          SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.

          SECTION 7. Any provision of this Supplement held to be invalid, illegal or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality and enforceability of the
remaining provisions hereof and in the Collateral Agreement; the invalidity of a particular
provision in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction. The parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of which comes as
close as possible to that of the invalid, illegal or unenforceable provisions.

          SECTION 8. All communications and notices hereunder shall be in writing and given as provided
in Section 7.01 of the Collateral Agreement.

          SECTION 9. The New Subsidiary agrees to reimburse the Collateral Agent for its reasonable
out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other
charges and disbursements of counsel for the Collateral Agent.

Exh. I-2

 

     IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have duly executed this
Supplement to the Collateral Agreement as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	[NAME OF NEW SUBSIDIARY],	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Legal Name:	 	 
	 

	 	 	 	Jurisdiction of Formation:	 	 
	 

	 	 	 	Location of Chief Executive Office:	 	 
	 
	 	 	 	 	 	 
	 	 	CITIBANK, N.A., AS COLLATERAL AGENT,	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

Exh. I-3

 

			
	 
	 	Schedule I
	 
	 	to the Supplement No.      
	 
	 	to the Collateral Agreement

LOCATION OF COLLATERAL

	 	 	 
	Description	 	Location
	 	 	 
	 	 	 
	 	 	 
	 	 	 

EQUITY INTERESTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Number and	 	 
	 	 	Number of	 	Registered	 	Class of	 	Percentage of
	Issuer	 	Certificate	 	Owner	 	Equity Interests	 	Equity Interests
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 

DEBT SECURITIES

	 	 	 	 	 	 	 
	 	 	Principal	 	 	 	 
	Issuer	 	Amount	 	Date of Note	 	Maturity Date
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

INTELLECTUAL PROPERTY

I. Copyrights

	 	 	 	 	 	 	 
	 	 	 	 	Registration	 	Expiration
	Registered Owner	 	Title	 	Number	 	Date
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

II. Copyright Applications

	 	 	 	 	 	 	 
	 	 	 	 	Registration	 	Date
	Registered Owner	 	Title	 	Number	 	Filed
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

 

 

III. Copyright Licenses

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Registration	 	Expiration
	Licensee	 	Licensor	 	Title	 	Number	 	Date
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 

IV. Patents

	 	 	 	 	 	 	 
	 	 	 	 	Registration	 	Expiration
	Registered Owner	 	Mark	 	Number	 	Date
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

V. Patent Applications

	 	 	 	 	 	 	 
	 	 	 	 	Registration	 	Date
	Registered Owner	 	Mark	 	Number	 	Filed
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

VI. Patent Licenses

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Registration	 	Expiration
	Licensee	 	Licensor	 	Mark	 	Number	 	Date
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 

VII. Trademarks

	 	 	 	 	 	 	 
	 	 	 	 	Registration	 	Expiration
	Registered Owner	 	Type	 	Number	 	Date
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

-2-

 

VIII. Trademark Applications

	 	 	 	 	 	 	 
	 	 	 	 	Registration	 	Date
	Registered Owner	 	Type	 	Number	 	Filed
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

IX. Trademark Licenses

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Registration	 	Expiration
	Licensee	 	Licensor	 	Type	 	Number	 	Date
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 

-3-exv10w3

 

EXHIBIT 10.3

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

     AMENDED AND RESTATED EMPLOYMENT AGREEMENT made and entered into by and between United Surgical
Partners International, Inc. (the “Company”), a Delaware corporation with its principal place of
business at 15305 Dallas Parkway, Suite 1600, Addison, TX 75001-6491 and Donald E. Steen of 5715
Thames Ct., Dallas, TX 75252 (the “Executive”), effective as of the 19th day of April, 2007 (the
“Effective Date”).

     WHEREAS, the Company and Executive are parties to an Employment Agreement effective as of
November 15, 2002, as amended on February 18, 2004, April 28, 2006 and February 28, 2007 (the
“Original Agreement”); and

     WHEREAS, the Company and Executive desire to amend and restate the Original Agreement in its
entirety as provided herein.

     In consideration of the mutual promises, terms, provisions and conditions set forth in this
Agreement, the parties hereby agree:

     1. Employment. Subject to the terms and conditions set forth in this Agreement, the
Company hereby offers and the Executive hereby accepts employment.

     2. Term. The Company hereby agrees to employ Executive as Chairman of the Board of
Directors of the Company (the “Board”), and Executive hereby agrees to accept such employment, on
the terms and conditions set forth herein, for the period commencing on the date hereof (the
“Effective Date”) and terminating as of and on November 14, 2011 (unless sooner terminated as
hereinafter set forth) (the “Term”). Following the date on which the Executive’s employment so
terminates (the “Termination Date”), unless specifically otherwise agreed between Executive and the
Company, the Executive shall cease to hold any position (whether as an officer, director, manager,
employee, trustee, fiduciary or otherwise) with the Company or any of its Subsidiaries or
Affiliates.

     3. Capacity and Performance.

     (a) During the term of Executive’s employment hereunder, the Executive shall serve the
Company as the Chairman of the Board. In addition, and without further compensation, the
Executive shall serve as a director and/or officer of one or more of the Company’s
Subsidiaries if so elected or appointed from time to time.

     (b) During the term of Executive’s employment hereunder, the Executive shall be
employed by the Company and shall devote such portion of his business time to the Company’s
affairs as the Executive and the Board deem necessary to fulfill his duties.

     (c) The Executive may, without being in violation of the Executive’s obligations
hereunder, (i) serve on corporate, civic or charitable boards, or committees which are not
engaged in business competition with the Company, and (ii) invest the

 

 

Executive’s personal assets in such form or manner as will not require any material
services by the Executive in the operation of the entities in which such investments are
made, provided the Executive shall use the Executive’s best efforts to pursue such
activities in such a manner so that such activities shall not prevent the Executive from
fulfilling the Executive’s obligations to the Company hereunder.

     4. Compensation and Benefits. During the term of Executive’s employment hereunder as
compensation for all services performed by the Executive:

     (a) Base Salary. The Company shall pay the Executive a base salary at the rate
of Two Hundred and Eighty-Seven Thousand Five Hundred Dollars ($287,500) per year, payable
in accordance with the payroll practices of the Company for its executives and subject to
increase from time to time by the Board, in his sole discretion. Such base salary, as from
time to time increased, is hereafter referred to as the “Base Salary”.

     (b) Bonus. During the Term of this Agreement, the Company may pay to the
Executive such bonus payments, if any, as may be determined by the Board in its sole
discretion, based upon the Executive’s performance and other criteria as may be established
by the Board from time to time.

     (c) Vacations. The Executive shall be entitled to twenty-five (25) paid
vacation days in each calendar year, or such additional number as may be determined from
time to time. For purposes of this Section 4(c), weekends shall not count as vacation days
and Executive shall also be entitled to all paid holidays given by the Company to its senior
executive officers. Vacation shall otherwise be governed by the policies of the Company, as
in effect from time to time.

     (d) Other Benefits. Subject to any contribution therefor generally required of
executives of the Company, the Executive shall be entitled to participate in any and all
employee benefit plans from time to time in effect for executives of the Company generally,
except to the extent such plans are in a category of benefit specifically otherwise provided
to the Executive under this Agreement (e.g., severance pay). Such participation shall be
subject to the terms of the applicable plan documents and generally applicable Company
policies. The Board may alter, modify, add to or delete employee benefit plans at any time
as it, in its sole judgment, determines to be appropriate.

     (e) Business Expenses. The Company shall pay or reimburse the Executive for
all reasonable and necessary business expenses incurred or paid by the Executive in the
performance of his duties and responsibilities hereunder, subject to any maximum annual
limit or other restrictions on such expenses set by the Board and to such reasonable
substantiation and documentation as may be specified by the Company from time to time.

     5. Termination of Employment. The Executive’s employment hereunder shall terminate
under the following circumstances:

-2-

 

     (a) Death. In the event of the Executive’s death during the term of
Executive’s employment hereunder, the Executive’s employment shall immediately and
automatically terminate.

     (b) Disability. The Company may terminate the Executive’s employment
hereunder, upon notice to the Executive, in the event that the Executive becomes disabled
during his employment hereunder through any illness, injury, accident or condition of either
a physical or psychological nature and, as a result, is unable to satisfactorily perform his
duties and responsibilities hereunder on a full-time basis, with or without reasonable
accommodation, for ninety (90) days during any period of three hundred and sixty-five (365)
consecutive calendar days. If any question shall arise as to whether during any period the
Executive is disabled through any illness, injury, accident or condition of either a
physical or psychological nature so as to be unable to perform substantially all of his
duties and responsibilities hereunder, the Executive, at the request of the Company, shall
submit to a medical examination by a physician selected by the Company to determine whether
the Executive is so disabled and such determination shall for the purposes of this Agreement
be conclusive of the issue. If such question shall arise and the Executive shall fail to
submit to such medical examination, the Company’s determination of the issue shall be
binding on the Executive.

     (c) By the Company for Cause. The Company may terminate the Executive’s
employment hereunder for Cause at any time upon notice to the Executive setting forth the
nature of such Cause. The following shall constitute Cause for termination (in each case as
determined by not less than seventy-five percent (75%) of the members of the Board): (i) the
Executive’s indictment for a felony or other crime involving moral turpitude; (ii) the
Executive’s fraud, theft or embezzlement committed with respect to the Company or its
Subsidiaries; (iii) material breach by the Executive of any of the provisions of Sections 7,
8 and/or 9 hereof; or (iv) the Executive’s willful and continued failure to perform his
material duties to the Company and its Subsidiaries.

     (d) By the Company Other than for Cause. The Company may terminate the
Executive’s employment hereunder other than for Cause at any time upon notice to the
Executive. Any such termination requires the affirmative vote of not less than seventy-five
percent (75%) of the members of the Board.

     (e) By the Executive for Good Reason. At his option, Executive may terminate
his employment hereunder for Good Reason. For purposes of this Agreement, the termination
of Executive’s employment hereunder by Executive because of the occurrence of any one or
more of the following events shall be deemed to have occurred for “Good Reason”;

	 	(A)	 	a material change in the nature or scope of
Executive’s authorities, status, powers, functions, duties,
responsibilities, or reporting relationships that is determined by
Executive in good faith to be adverse to those existing before such
change;

-3-

 

	 	(B)	 	a material reduction in Executive’s Base Salary
that is not consented to or approved by Executive;
	 
	 	(C)	 	a failure by the Company or any subsidiary or
affiliate of the Company to comply with any other material term or
provision hereof or of any other written agreement between Executive
and the Company or any such subsidiary or affiliate; or
	 
	 	(D)	 	a refusal by the Executive upon a request by
the Company to report for the performance of his services hereunder on
a regular or permanent basis at any location or office more than fifty
(50) miles from the Company’s current address as described above in the
preamble to this Agreement or Executive’s current place of employment.

     (f) By the Executive Other than for Good Reason. The Executive may terminate
his employment hereunder other than for Good Reason pursuant to Section 5(e) above at any
time upon the provision of 90 days written notice to the Company. In the event of
termination of the Executive pursuant to this Section 5(f), the Board may elect to waive the
period of notice or any portion thereof.

     6. Compensation Upon Termination.

     (a) Death. In the event of a termination of the Executive’s employment
hereunder by reason of death as contemplated by Section 5(a), the Company shall pay in a
lump sum within 30 days of such termination to the Executive’s designated beneficiary or, if
no beneficiary has been designated by the Executive, to his estate, the Base Salary earned
but not paid through the Termination Date.

     (b) Disability. In the event of any termination of Executive’s employment
hereunder by reason of disability as contemplated by Section 5(b), the Company shall (i) pay
to the Executive 75% of his Base Salary commencing on the Termination Date until the first
to occur of (A) 36 months from the Termination Date or (B) the death of Executive and (ii)
continue the Executive’s health insurance benefits for such period (at a cost no less
favorable than that paid by the Executive immediately prior to the Termination Date) or the
economic equivalent thereof if such continuation is not permissible under the terms of the
Company’s health insurance plan. The obligation of the Company to continue to pay the
Executive 75% of this Base Salary shall be net of payments to the Executive under any
disability insurance paid by the Company.

     (c) By the Company for Cause. In the event of any termination of Executive’s
employment hereunder by the Company for Cause as contemplated by Section 5(c), the Company
shall have no further obligations to the Executive under this Agreement other than payment
of Base Salary through the Termination Date.

     (d) By the Company Other than for Cause; By the Executive for Good Reason. In
the event of any termination of Executive’s employment hereunder by the Company other than
for Cause pursuant to Section 5(d), or by the Executive for Good

-4-

 

Reason pursuant to Section 5(e), the Company shall (i) continue to pay the Executive
the Base Salary at the rate in effect on the Termination Date until the end of the Term,
(ii) continue the Executive’s health insurance benefits until the end of the Term following
the Termination Date (at a cost no less favorable than that paid by the Executive
immediately prior to the Termination Date) or the economic equivalent thereof if such
continuation is not permissible under the terms of the Company’s health insurance plan, and
(iii) pay to the Executive a good faith estimate of the bonus the Executive would have
received had the Executive remained employed by the Company through the end of the fiscal
year in which the Termination Date occurred, as determined by the Company in its sole and
absolute discretion. Any such estimated bonus shall be payable at such time or times as
bonuses are payable to the other executives of the Company. Any obligation of the Company
to the Executive pursuant to this Section 6(d) conditioned upon (i) the Executive signing a
release of claims in the form appended hereto as Attachment A (the “Employee
Release”) within twenty-one (21) days (or such greater period as the Company may specify)
following the date notice of termination of employment is given hereunder and upon the
Executive’s not revoking the Employee Release in a timely manner thereafter and (ii) the
Executive’s continued full performance of his continuing obligations hereunder, including
those under Sections 7, 8 and/or 9 hereof. Base Salary to which the Executive is entitled
under this Section 6(d) shall be payable in accordance with the normal payroll practices of
the Company and will begin at the Company’s next regular payroll period which is at least
five business days following the effective date of the Employee Release, but shall be
retroactive to next business day following the Termination Date.

     (e) By the Executive Other than for Good Reason. If the Executive shall
terminate his employment pursuant to Section 5(f), the Company shall continue to pay
Executive his Base Salary through the Termination Date (it being understood that if, in
accordance with Section 5(f), the Board elects to waive the period of notice, or any portion
thereof, the payment of Base Salary under this Section 6(e) shall continue through the
notice period or any portion thereof so waived).

     7. Restricted Activities. The Executive agrees that some restrictions on his
activities during and after his employment are necessary to protect the goodwill, Confidential
Information and other legitimate interests of the Company and its Subsidiaries:

     (a) While the Executive is employed by the Company and for one (1) year from the later
of the Termination Date or the last date on which the Executive receives a severance payment
from the Company (in the aggregate, the “Non-Competition Period”), the Executive shall not,
directly or indirectly, whether as owner, partner, investor, consultant, agent, employee,
co-venturer or otherwise (other than through ownership of publicly-traded capital stock of
a corporation which represents less than one (1%) of the outstanding capital stock of such
corporation), (i) compete with the Company or any Subsidiary in any business activities, in
the United States or in any other country, which the Company or any Subsidiary shall conduct
or intend to conduct as of the Termination Date, or (ii) undertake any planning for any
business competitive with the Company or any of its Subsidiaries. Specifically, but without
limiting the foregoing, the Executive agrees not to engage in any manner in any activity
that is directly or indirectly

-5-

 

competitive or potentially competitive with the business of the Company or any of its
Subsidiaries as conducted or under consideration at any time during the Executive’s
employment with the Company or any of its Subsidiaries (including prior to the date hereof).

     (b) The Executive agrees that, during his employment with the Company, he will not
undertake any outside activity, whether or not competitive with the business of the Company
or its Subsidiaries, that could reasonably give rise to a conflict of interest or otherwise
interfere with his duties and obligations to the Company or any of its Subsidiaries.

     (c) The Executive further agrees that while he is employed by the Company and during
the Non-Competition Period, the Executive will not, directly or indirectly, (i) hire or
attempt to hire any employee of the Company or any of its Subsidiaries or anyone who was
such an employee within the six (6) months preceding such hire or attempt to hire, (ii) hire
or attempt to hire any independent contractor providing services to the Company or any of
its Subsidiaries or anyone who was such an independent contractor within six (6) months
preceding such hire or attempt to hire, (iii) assist in hiring or any attempt to hire of
anyone identified in clauses (i) or (ii) of this sentence by any other Person, (iv)
encourage any employee or independent contractor of the Company or any of its Subsidiaries
to terminate his relationship with the Company or any of its Subsidiaries, or (v) solicit or
encourage any customer or vendor of the Company or any of its Subsidiaries (including
physicians holding clinical privileges at any surgical facility in which the Company has a
direct or indirect ownership interest or with which a subsidiary of the Company has a
management agreement) to terminate or diminish its relationship with any of them, or, in the
case of a customer, to conduct with any Person any business or activity which such customer
conducts or could conduct with the Company or any of its Subsidiaries.

     8. Confidential Information.

     (a) The Executive acknowledges that the Company and its Subsidiaries continually
develop Confidential Information, that the Executive has in the past and may in the future
develop Confidential Information for the Company or its Subsidiaries and that the Executive
has in the past and may in the future learn of Confidential Information during the course of
employment. The Executive will comply with the policies and procedures of the Company and
its Subsidiaries for protecting Confidential Information and shall never use or disclose to
any Person (except as required by applicable law or for the proper performance of his duties
and responsibilities to the Company and its Subsidiaries), any Confidential Information
obtained by the Executive incident to his employment or other association with the Company
or any of its Subsidiaries. The Executive understands that this restriction shall continue
to apply after his employment terminates, regardless of the reason for such termination.

     (b) All documents, records, tapes and other media of every kind and description
relating to the business, present or otherwise, of the Company or its Subsidiaries and any
copies, in whole or in part, thereof (the “Documents”), whether or

-6-

 

not prepared by the Executive, shall be the sole and exclusive property of the Company
and its Subsidiaries. The Executive shall safeguard all Documents and shall surrender to
the Company at the time his employment terminates, or at such earlier time or times as the
Board or its designee may specify, all Documents then in the Executive’s possession or
control.

     9. Assignment of Rights to Intellectual Property. The Executive shall promptly and
fully disclose all Intellectual Property to the Company. The Executive hereby assigns and agrees
to assign to the Company (or as otherwise directed by the Company) the Executive’s full right,
title and interest in and to all Intellectual Property. The Executive agrees to execute any and
all applications for domestic and foreign patents, copyrights or other proprietary rights and to do
such other acts (including without limitation the execution and delivery of instruments of further
assurance or confirmation) requested by the Company to assign the Intellectual Property to the
Company and to permit the Company to enforce any patents, copyrights or other proprietary rights to
the Intellectual Property. The Executive will not charge the Company for time spent in complying
with these obligations. All copyrightable works that the Executive creates shall be considered
“work made for hire”.

     10. Notification Requirement. Until the conclusion of the Non-Competition Period, the
Executive shall give notice to the Company of each new business activity that he plans to undertake
at least thirty (30) days prior to beginning any such activity. Such notice shall state the name
and address of the Person for whom such activity is undertaken and the nature of the Executive’s
business relationship(s) and position(s) with such Person. The Executive shall provide the Company
with such other pertinent information concerning such business activity as the Company may
reasonably request in order to determine the Executive’s continued compliance with his obligations
under Sections 7, 8 and/or 9 hereof.

     11. Enforcement of Covenants. The Executive acknowledges that he has carefully read
and considered all the terms and conditions of this Agreement, including the restraints imposed
upon him pursuant to Sections 7, 8 and/or 9 hereof. The Executive agrees that said restraints are
necessary for the reasonable and proper protection of the Company and its Subsidiaries and that
each and every one of the restraints is reasonable in respect to subject matter, length of time and
geographic area. The Executive further acknowledges that, were he to breach any of the covenants
contained in Sections 7, 8 and/or 9 hereof, the damage to the Company would be irreparable. The
Executive therefore agrees that the Company, in addition to any other remedies available to it,
shall be entitled to preliminary and permanent injunctive relief against any breach or threatened
breach by the Executive of any of said covenants, without having to post bond. The parties further
agree that, in the event that any provision of Sections 7, 8 and/or 9 hereof shall be determined by
any court of competent jurisdiction to be unenforceable by reason of its being extended over too
great a time, too large a geographic area or too great a range of activities, such provision shall
be deemed to be modified to permit its enforcement to the maximum extent permitted by law.

     12. Conflicting Agreements. The Executive hereby represents and warrants that the
execution of this Agreement and the performance of his obligations hereunder will not breach or be
in conflict with any other agreement to which the Executive is a party or is bound and that the
Executive is not now subject to any covenants against competition or similar covenants or any

-7-

 

court order or other legal obligation that would affect the performance of his obligations
hereunder. The Executive will not disclose to or use on behalf of the Company any proprietary
information of a third party without such party’s consent.

     13. Definitions. Words or phrases which are initially capitalized or are within
quotation marks shall have the meanings provided in this Section 13 and as provided elsewhere
herein. For purposes of this Agreement, the following definitions apply:

     (a) “Affiliate” means, with respect to the Company or any other specified Person, any
other Person directly or indirectly controlling, controlled by or under common control with
the Company or such other specified Person, where control may be by management authority,
equity interest or other means.

     (b) “Confidential Information” means any and all information of the Company and its
Subsidiaries that is not generally known by others with whom they compete or do business, or
with whom they plan to compete or do business and any and all information which, if
disclosed by the Company or its Subsidiaries, would assist in competition against them.
Confidential Information includes without limitation such information relating to (i) the
development, research, testing, manufacturing, marketing and financial activities of the
Company and its Subsidiaries, (ii) the Products, (iii) the costs, sources of supply,
financial performance and strategic plans of the Company and its Subsidiaries, (iv) the
identity and special needs of the customers of the Company and its Subsidiaries and (v) the
people and organizations with whom the Company and its Subsidiaries have business
relationships and those relationships. Confidential Information also includes any
information that the Company or any of its Subsidiaries have received, or may receive
hereafter, from others which was received by the Company or any of its Subsidiaries with any
understanding, express or implied, that the information would not be disclosed.

     (c) “Intellectual Property” means inventions, discoveries, developments, methods,
processes, compositions, works, concepts and ideas (whether or not patentable or
copyrightable or constituting trade secrets) conceived, made, created, developed or reduced
to practice by the Executive (whether alone or with others and whether or not during normal
business hours or on or off the premises of the Company or any of its Subsidiaries) during
the Executive’s employment with the Company or any of its Subsidiaries (including prior to
the Effective Date) that relate to either the Products or any prospective activity of the
Company or any of its Subsidiaries or that make use of Confidential Information or any of
the equipment or facilities of the Company or any of its Subsidiaries.

     (d) “Person” means an individual, a corporation, a limited liability company, an
association, a partnership, an estate, a trust and any other entity or organization.

     (e) “Products” mean all products planned, researched, developed, tested, manufactured,
sold, licensed, leased or otherwise distributed or put into use by the Company or any of its
Subsidiaries, together with all services provided or planned by the

-8-

 

Company or any of its Subsidiaries, during the Executive’s employment with the Company
or any of its Subsidiaries (including prior to the Effective Date).

     (f) “Subsidiary” shall mean any Person of which the Company (or other specified Person)
shall, directly or indirectly, own beneficially or control the voting of at least a majority
of the outstanding capital stock (or other shares of beneficial interest) entitled to vote
generally or at least a majority of the partnership, membership, joint venture or similar
interests, or in which the Company (or other specified Person) or a Subsidiary thereof shall
be a general partner or joint venturer without limited liability.

     14. Survival. The provisions of this Agreement shall survive following the
Termination Date if so provided herein or desirable to accomplish the purposes of other surviving
provisions, including without limitation the provisions of Section 6, 7, 8 and 9 hereof.

     15. Withholding. All payments made by the Company under this Agreement shall be
reduced by any tax or other amounts required to be withheld by the Company under applicable law.

     16. Assignment. Neither the Company nor the Executive may make any assignment of this
Agreement or any interest herein, by operation of law or otherwise, without the prior written
consent of the other; provided, however, that the Company may assign its rights and obligations
under this Agreement without the consent of the Executive in the event that the Company shall
hereafter effect a reorganization, consolidation or merger or to whom the Company transfers all or
substantially all of its properties or assets. This Agreement shall inure to the benefit of and be
binding upon the Company and the Executive, their respective successors, executors, administrators,
heirs and permitted assigns.

     17. Severability. If any portion or provision of this Agreement shall to any extent
be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of
this Agreement, or the application of such portion or provision in circumstances other than those
as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the fullest extent
permitted by law.

     18. Waiver. No waiver of any provision hereof shall be effective unless made in
writing and signed by the waiving party. The failure of either party to require the performance of
any term or obligation of this Agreement, or the waiver by either party of any breach of this
Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a
waiver of any subsequent breach.

     19. Notices. Any and all notices, requests, demands and other communications provided
for by this Agreement shall be in writing and shall be effective when delivered in person, when
delivered by courier at the Executive’s last known address on the books of the Company, or three
business days following deposit in the United States mail, postage prepaid, registered or
certified, and addressed to the Executive at his last known address on the books of the Company or,
in the case of the Company, at its principal place of business, attention of the

-9-

 

Chairman of the Board, or to such other address as either party may specify by notice to the
other actually received.

     20. Original Agreement. This Agreement shall amend and restate the Original Agreement
in its entirety and upon execution and delivery of this Agreement, the Original Agreement shall be
replaced in its entirety by this Agreement and the Original Agreement shall thereafter have no
further force or effect.

     21. Entire Agreement. This Agreement and the other plans and documents specifically
referred to herein constitute the entire agreement between the parties regarding the subject matter
of this Agreement and such other plans and documents and supersede all prior communications,
agreements and understandings, written or oral, with respect to such subject matter, including,
without limitation, the Original Agreement.

     22. Amendment. This Agreement may be amended or modified only by a written instrument
signed by the Executive and by a expressly authorized representative of the Company.

     23. Headings. The headings and captions in this Agreement are for convenience only
and in no way define or describe the scope or content of any provision of this Agreement.

     24. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be an original and all of which together shall constitute one and the same instrument.

     25. Governing Law. This contract and shall be construed and enforced under and be
governed in all respects by the laws of Texas, without regard to the conflict of laws principles
thereof.

-10-

 

     IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument by the Company, by
its duly authorized representative, and by the Executive, as of the date first above written.

	 	 	 	 	 	 	 
	 	 	UNITED SURGICAL PARTNERS 

INTERNATIONAL, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Paul B. Queally	 	 
	 

	 	 	 	 	 	 
	 	 	Title: Authorized Person	 	 
	 
	 	 	 	 	 	 
	 	 	THE EXECUTIVE:	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Donald E. Steen	 	 
	 	 	 	 	 

SIGNATURE PAGE TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

 

Attachment A

Release of Claims

     FOR AND IN CONSIDERATION OF the special payments and benefits to be provided in connection
with the termination of my employment in accordance with the terms of the Employment Agreement
between me and UNITED SURGICAL PARTNERS INTERNATIONAL, INC. a Delaware corporation (the “Company”)
dated as of April 19, 2007 (the “Employment Agreement”), I, on my own behalf and on behalf of my
personal or legal representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees and all others connected with me, hereby release and forever discharge, the
Company, its Subsidiaries and Affiliates and all of their respective past and present officers,
directors, stockholders, members, partners, managers, controlling persons, employees, agents,
representatives, successors and assigns and all others connected with any of them (all
collectively, the “Released”), both individually and in their official capacities, from any and all
rights, liabilities, claims, demands and causes of action of any type (all collectively “Claims”)
which I have had in the past, now have, or might now have, through the date of my signing of this
Release of Claims, in any way resulting from, arising out of or connected with my employment or its
termination or pursuant to any federal, state, foreign or local employment law, regulation or other
requirement (including without limitation Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Americans with Disabilities Act, and the fair employment
practices laws of the state or states in which I have been employed pursuant to the Employment
Agreement, each as amended from time to time); provided, however, that the foregoing release shall
not apply to any right or benefit that Section 6 of the Employment Agreement explicitly provides
shall survive the termination of my employment. Capitalized terms used in this Release of Claims
which are defined in the Employment Agreement are used herein with the meanings so defined.

     In signing this Release of Claims, I acknowledge that I have had at least twenty-one (21) days
from the date of notice of termination of my employment to consider the terms of this Release of
Claims and that such time has been sufficient; that I am encouraged by the Company to seek the
advice of an attorney prior to signing this Release of Claims; and that I am signing this Release
of Claims voluntarily and with a full understanding of its terms.

     I understand that I may revoke this Release of Claims at any time within seven (7) days of the
date of my signing by written notice to the Company and that this Release of Claims will take
effect only upon the expiration of such seven-day revocation period and only if I have not timely
revoked it.

     Intending to be legally bound, I have signed this Release of Claims under seal as of the date
written below.

	 	 	 	 	 
	Signature:
	 	 	 	 
	 

	 	 	 	 
	 

	 	Donald E. Steen	 	 
	 
	 	 	 	 
	Date:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}]]