<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
CHECK ONE:
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES ACT
OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM ______ TO _____.
COMMISSION FILE NUMBER 0-19532
AMERICAN HOMEPATIENT, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 62-1474680
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
5200 MARYLAND WAY, SUITE 400 37027-5018
BRENTWOOD TN (Zip Code)
(Address of principal executive offices)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (615) 221-8884
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
------------------- ----------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to the
filing requirements for the past 90 days.
Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of registrant's voting stock held by
non-affiliates of the registrant, computed by reference to the price at which
the stock was sold, or average of the closing bid and asked prices, as of March
17, 1998 was $315,218,314.
On March 17, 1998, 14,921,577 shares of the registrant's $0.01 par value
Common Stock were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
-----------------------------------
The following documents are incorporated by reference into Part III, Items
10, 11, 12 and 13 of this Form 10-K: Portions of the Registrant's definitive
proxy materials for its 1998 Annual Meeting of Stockholders.
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PART I
ITEM 1. BUSINESS
INTRODUCTORY SUMMARY
American HomePatient, Inc. (the "Company") was incorporated in Delaware in
September 1991. The Company's principal executive offices are located at 5200
Maryland Way, Suite 400, Brentwood, Tennessee 37027-5018, and its telephone
number at that address is (615) 221-8884. The Company provides home health care
services and products consisting primarily of respiratory and infusion therapies
and the rental and sale of home medical equipment and home health care supplies.
These services and products are paid for primarily by Medicare, Medicaid and
other third-party payors. As of December 31, 1997, the Company provided these
services to patients primarily in the home through 329 centers in 35 states.
Since its inception the Company has experienced substantial growth primarily as
a result of its strategy of acquiring successful, operating home healthcare
businesses and entering into joint venture relationships and strategic alliances
with hospitals and hospital systems.
MATERIAL 1997 CORPORATE DEVELOPMENTS.
Medicare Oxygen Reimbursement Reductions and Related Restructuring. In
August, Congress enacted and President Clinton signed the Balanced Budget Act of
1997 which will reduce the Medicare reimbursement rate for oxygen related
services by 25 percent beginning January 1, 1998, and by another five percent
beginning January 1, 1999. In addition, Consumer Price Index increases in oxygen
reimbursement rates will not resume until the year 2003. American HomePatient is
one of the nation's largest providers of home oxygen services to patients, many
of whom are Medicare recipients, and is therefore significantly affected by this
legislation. Medicare oxygen reimbursements account for approximately 23.5
percent of the Company's revenues.
On September 25, 1997, the Company announced initiatives to aggressively
respond to planned Medicare reimbursement reductions by fundamentally reshaping
the Company for long-term growth (the "Restructuring"). More than 100 of the
Company's total operating and billing locations will be impacted by the planned
activities. The specific actions resulted in pre-tax accounting charges in the
third quarter of 1997 of $65.0 million due to the closure, consolidation, or
scaling back of approximately 20 percent of the Company's total operating
centers, the closure or scaling back of nine billing centers, the elimination of
four operating regions, the scaling back or elimination of marginal products and
services at numerous locations, and the related termination of approximately 350
employees in the affected operating and billing centers. These activities are
expected to be substantially completed by June 1998.
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The $65.0 million pre-tax charges recorded in the third quarter of 1997
specifically related to the write-down of goodwill and other non current assets
($8.2 million), the closure, consolidation, scaling back, or elimination of
services at selected locations ($44.8 million), and the negative impact on the
remaining operating locations ($12.0 million).
The write-off of goodwill and other non current assets is required under
SFAS No. 121 based upon management's estimate of the impact of the announced
Medicare oxygen reimbursement reductions on the Company's continuing operations.
Management's projections of future operations considering the reduced
reimbursement rates for oxygen related services indicated that the carrying
value of goodwill and other non current assets should be written down by $8.2
million.
The closure, consolidation, scaling back, or elimination of services at
more than 100 of the Company's operating and billing centers resulted in the
write-off of goodwill and other intangible assets specifically identified with
affected locations ($12.2 million), the accrual of estimated employee severance
and related exit costs ($6.7 million), the accrual of estimated facility exit
costs including future lease costs, the write-off of leasehold improvements, and
the write-down of furniture and equipment ($6.1 million), the write-down of
accounts receivable to estimated realizable value ($8.7 million), the write-down
of inventory to estimated realizable value ($2.2 million), the write-down of
rental equipment to estimated realizable value ($2.8 million), the termination
of related management contracts ($3.0 million), and other exit costs ($3.1
million). The accounting charges discussed above are recorded in the
accompanying 1997 consolidated statements of operations as cost of sales
($2,204,000), operating expenses ($8,729,000), restructuring charge
($33,829,000), and goodwill impairments ($8,165,000).
Due to the comprehensive nature of this restructuring, including the
consolidation of regional responsibilities, refinements and modifications of
existing procedures in all locations, reorganization of the field management
structure, and additional management attention required to accomplish the
restructuring in the desired timeframe, negative impacts are anticipated in the
remaining operating businesses relative to realization of accounts receivable,
inventories and rental equipment, for which an additional $12.0 million charge
was recorded. This accounting charge is recorded in the accompanying 1997
consolidated statements of operations as cost of sales ($3,051,000) and
operating expenses ($9,022,000).
The total accounting charges discussed above are recorded in the
accompanying 1997 consolidated statements of operations in the following
classifications:
<TABLE>
<CAPTION>
<S> <C>
Cost of sales $ 5,255,000
Operating expenses 17,751,000
Restructuring charge 33,829,000
Goodwill impairments 8,165,000
-------------
$ 65,000,000
=============
</TABLE>
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The expected cash payments related to the restructuring charge accrued on
September 25, 1997 were approximately $17.7 million. During the fourth quarter
of 1997, $4.1 million was charged against the related accruals as costs were
incurred and payments were made. The remaining accrual at December 31, 1997
primarily represents estimated employee severance and related exit costs ($4.1
million), estimated facility exit costs ($4.5 million), termination of
management contracts ($3.0 million) and other exit costs ($2.0 million).
During the fourth quarter of 1997, the following actions occurred related
to the restructuring: (i) 323 employees were terminated or notified of upcoming
termination in 1998; (ii) 47 operating centers were closed; (iii) 5 billing
locations were closed and (iv) 44 operating centers were consolidated, scaled
back or eliminated marginal products and services. The Company also drastically
reduced and streamlined its field organization during the fourth quarter of
1997. The Company moved from three operating areas with over 20 regions to 11
areas. One of these areas is solely dedicated to the development and operations
of the Company's hospital joint venture partnerships.
Changes to Bank Credit Facility. On June 6, 1997, the Company amended and
restated its Bank Credit Facility (the "Bank Credit Facility") to increase
commitments thereunder from $225.0 million to $325.0 million. The Bank Credit
Facility included a $150.0 million five-year term loan and a $175.0 million
five-year revolving line of credit. On December 19, 1997, the Company amended
and restated its Bank Credit Facility to increase commitments thereunder from
$325.0 million to $400.0 million. The Bank Credit Facility includes a $75.0
million five-year term loan and a $325.0 million five-year revolving line of
credit. Borrowings under the Bank Credit Facility may be used to finance
acquisitions and for other general corporate purposes, subject to the terms and
conditions of the credit and security agreements. Most of the Company's
operating assets have been pledged as security for borrowings under the Bank
Credit Facility. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity and Capital Resources".
Home Health Care Acquisitions. Effective in December 1997, the Company
acquired the stock of National Medical Systems, Inc. ("NMS") for $34.1 million
in notes payable to sellers and $9.9 million in assumed liabilities. In February
1998, $33.1 million of the notes payable to sellers was funded from operations
and draws on the Bank Credit Facility. NMS consists of 35 centers in Arkansas,
Oklahoma and Texas.
Additionally, effective in 1997, the Company acquired 27 home health care
businesses consisting of 63 centers. The aggregate purchase price included cash
of $88.2 million, assumed liabilities of $18.2 million and notes payable to
sellers of $7.6 million. The cash amounts have been funded from operations and
draws on the Bank Credit Facility. Of the 98 centers acquired in 1997, the
Company has consolidated 10 centers within other Company locations.
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BUSINESS
The Company provides home health care services and products consisting
primarily of respiratory therapy services, infusion therapy services and the
rental and sale of home medical equipment and home health care supplies. For the
year ended December 31, 1997, such services represented 47%, 18% and 35%,
respectively, of net revenues. These services and products are paid for
primarily by Medicare, Medicaid and other third-party payors. The Company's
objective is to be a leading provider of diversified home health care services
in the markets in which it operates. Management seeks to establish regional
concentrations of centers to develop the market penetration necessary for the
Company to be a cost-effective provider of comprehensive home health care
services to managed care and other third-party payors.
The Company has long relied on its five "strategic imperatives" to guide
its successful growth. These imperatives have included: (i) growth by
acquisition in small to mid-size markets; (ii) building regional density; (iii)
development of joint ventures and strategic alliances with major integrated
health care delivery systems; (iv) same-store revenue growth, and (v) cost
containment.
In response to the Medicare oxygen reimbursement reductions, the Company
has redefined its strategic imperatives. The new imperatives include:
- Continuing to be an active consolidator in the home health care market
to take advantage of the increased acquisition opportunities presented
by current market conditions.
- Maximizing operating leverage by (i) achieving cost-efficiencies, (ii)
initiating process and structure improvements at all levels of the
Company's operations, and (iii) streamlining field operations to
create a new operating model.
- Accelerating the development of joint ventures and strategic alliances
with major hospitals and integrated health care delivery systems.
- Increasing local market share by focusing on the Company's core
product categories of respiratory and infusion services.
- Continuing the Company's commitment to provide Personal Caring
Service, its value system, which keeps quality patient care at the
forefront of all activities.
As of December 31, 1997, the Company provided services to patients
primarily in the home through 329 centers in the following 35 states: Alabama,
Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois,
Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota,
Mississippi, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, North
Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina,
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Tennessee, Texas, Virginia, Washington, and Wisconsin. The Company had
approximately 4,800 employees at December 31, 1997.
The Company has significantly expanded its operations over the past three
years through a combination of acquisitions, joint ventures and strategic
alliances with integrated health care systems and internal growth. During this
period, the Company generated a compound annual growth rate of approximately 63%
in net revenues, from $90.2 million in 1994 to $387.3 million in 1997, while
expanding from 141 centers in 20 states at December 31, 1994 to 329 centers in
35 states at December 31, 1997.
The acquisition of home health care companies in both existing and
contiguous markets has been a key component of the Company's growth strategy.
During 1997, the Company acquired 28 home health care companies, consisting of
98 centers with annualized net revenues of over $110 million, and entered 4 new
states. In 1997, the Company continued its strategy of developing joint venture
relationships and strategic contractual alliances with hospitals and hospital
systems to make the Company a provider of home care services in integrated
health care delivery networks. Internal growth in net revenues and operating
income has been achieved by expanding the range of services offered,
implementing branch level cost controls and aggressively seeking to increase the
sources of patient referrals.
SERVICES AND PRODUCTS
The Company provides a diversified range of home health care services and
products. The following table sets forth the percentage of net revenues
represented by each line of business for the periods presented:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Home respiratory therapy services . . . . . . . . . 53% 49% 47%
Home infusion therapy services . . . . . . . . . . . 20 18 18
Home medical equipment and medical supplies. . . . . 27 33 35
--- --- ---
Total 100% 100% 100%
=== === ===
</TABLE>
Home Respiratory Therapy Services. The Company provides a wide variety of
home respiratory services primarily to patients with severe and chronic
pulmonary diseases. Patients are referred to a Company center most often by
primary care and pulmonary physicians as well as by hospital discharge planners
and case managers. After reviewing pertinent medical records on the patient and
confirming insurance coverage information, a Company respiratory therapist or
technician visits the patient's home to deliver and to prepare the prescribed
therapy or equipment. Company representatives coordinate the prescribed therapy
with the patient's physician, train the patient and caregiver in the correct use
of the equipment, and make periodic follow-up visits to the
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home to provide additional instructions, required equipment maintenance and
oxygen and other supplies.
The respiratory services that the Company provides include the following:
- Oxygen systems to assist patients with breathing. There are three
types of oxygen systems: (i) oxygen concentrators, which are
stationary units that filter ordinary air to provide a continuous flow
of oxygen; (ii) liquid oxygen systems, which are portable,
thermally-insulated containers of liquid oxygen; and (iii) high
pressure oxygen cylinders, which are used for portability with oxygen
concentrators. Oxygen systems are used to treat patients with chronic
obstructive pulmonary disease, cystic fibrosis and
neurologically-related respiratory problems.
- Nebulizers to deliver aerosol medications to patients. Nebulizers are
used to treat patients with asthma, chronic obstructive pulmonary
disease, cystic fibrosis and neurologically-related respiratory
problems.
- Home ventilators to sustain a patient's respiratory function
mechanically in cases of severe respiratory failure when a patient can
no longer breathe normally.
- Non-invasive positive pressure ventilation ("NPPV") to provide
ventilation support via a face mask for patients with chronic
respiratory failure. This therapy enables patients to receive positive
pressure ventilation without the invasive procedure of intubation.
- Continuous positive airway pressure ("CPAP") therapy to force air
through respiratory passage-ways during sleep. This treatment is used
on adults with obstructive sleep apnea (OSA), a condition in which a
patient's normal breathing patterns are disturbed during sleep.
- Apnea monitors to monitor and to warn parents of apnea episodes in
newborn infants as a preventive measure against sudden infant death
syndrome.
- Home sleep screenings and studies to detect sleep disorders and the
magnitude of such disorders.
The provision of oxygen-related services and systems comprised
approximately 56% of the Company's 1997 respiratory revenues with the balance
generated from nebulizers and related aerosol medication services, home
ventilators, CPAP therapy, home sleep studies and infant apnea monitors. The
Company provides respiratory therapy services at all but 8 of its centers, and,
until recently, has historically focused its acquisition strategy almost
entirely on home respiratory services companies. The Company continues to
acquire home respiratory services companies.
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Home Infusion Therapy Services. The Company provides a wide range of home
infusion therapy services. Patients are referred to a Company center most often
by primary care and specialist physicians (such as infectious disease physicians
and oncologists) as well as by hospital discharge planners and case managers.
After confirming the patient's treatment plan with the physician, the pharmacist
mixes the medications and coordinates with the nurse the delivery of necessary
equipment, medication and supplies to the patient's home. The Company provides
the patient and caregiver with detailed instructions on the patient's prescribed
medication, therapy, pump and supplies. The Company also schedules follow-up
visits and deliveries in accordance with physicians' orders.
Home infusion therapy involves the administration of nutrients, antibiotics
and other medications intravenously (into the vein), subcutaneously (under the
skin), intramuscularly (into the muscle), intrathecally or epidurally (via
spinal routes) or through feeding tubes into the digestive tract. The primary
infusion therapy services that the Company provides include the following:
- Enteral nutrition is the infusion of nutrients through a feeding tube
inserted directly into the functioning portion of a patient's
digestive tract. This long-term therapy is often prescribed for
patients who are unable to eat or to drink normally as a result of a
neurological impairment such as a stroke or a neoplasm (tumor).
- Antibiotic therapy is the infusion of antibiotic medications into a
patient's bloodstream typically for two to four weeks to treat a
variety of serious infections and diseases.
- Total parenteral nutrition ("TPN") is the long-term provision of
nutrients through central vein catheters that are surgically implanted
into patients who cannot absorb adequate nutrients enterally due to a
chronic gastrointestinal condition.
- Pain management involves the infusion of certain drugs into the
bloodstream of patients, primarily terminally or chronically ill
patients, suffering from acute or chronic pain.
The Company's other infusion therapies include chemotherapy, hydration,
growth hormone and immune globulin therapies. Enteral nutrition services account
for approximately 32% of the Company's infusion revenues, while antibiotic
therapy, TPN, and pain management and other medications accounted for
approximately 27%, 9% and 14%, respectively. The Company's remaining infusion
revenues were derived from the provision of infusion nursing services,
prescription drug sales and other miscellaneous infusion therapies. Enteral
nutrition services are provided at most of the Company's centers, and the
Company currently provides other infusion therapies in 85 of its 329 centers.
The Company acquired over $27 million in infusion revenues in 1997 and expects
to evaluate the acquisitions of selective home infusion services companies
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primarily in larger markets in 1998 in order to increase net revenues
attributable to infusion therapy services.
Home Medical Equipment and Supplies. The Company provides a full line of
equipment and supplies to serve the needs of home care patients. Revenues from
home equipment services are derived principally from the rental and sale of
wheelchairs, hospital beds, ambulatory aids, bathroom aids and safety equipment,
patient lifts and rehabilitation equipment. In many of the Company's markets,
the Company maintains a retail store and showroom where patients may purchase or
rent supplies and miscellaneous equipment. The Company benefits from
opportunities to provide home medical equipment to its customers who also are
receiving respiratory therapy or infusion therapy.
OPERATIONS
Organization. A major component of the Company's reshaping activities was
the reorganization and streamlining of the field structure. Currently, the
Company's operations are divided into ten geographic areas, each headed by an
area vice president. The Company has also developed an eleventh special area
which is specifically dedicated to the operations of the Company's 21 hospital
joint ventures. See "Hospital Joint Ventures and Strategic Alliances". Each area
vice president oversees the operations of approximately 25 - 35 centers.
Management believes this regional organizational structure enhances management
flexibility and facilitates communication. Specifically, it provides for a
greater focus on local market operations and control at the operating level,
while enabling the Company's management to be close to the patients and
concentrate on achieving the Company's strategic goals. Area vice presidents
focus on cost control, participate in the identification and integration of new
acquisitions and assist local management with decision making to improve
responsiveness in local markets.
The Company's centers are typically staffed with a general manager, a
business office manager, a director of patient services (normally a registered
nurse or respiratory therapist), registered nurses, clinical coordinators,
respiratory therapists, service technicians and customer service
representatives. In addition, the Company employs a licensed pharmacist in all
centers that provide a significant amount of infusion therapy.
The Company has achieved what management believes is a successful balance
between centralized and decentralized management. Management believes that home
care is a local business dependent in large part on personal relationships and,
therefore, provides the Company's operating managers with a significant degree
of autonomy to encourage prompt and effective responses to local market demands.
In conjunction with this local operational authority, the Company provides,
through its corporate office (the "Support Center"), sophisticated management
support, marketing and managed care expertise, sales training and support,
product development and financial and information systems that typically are not
readily available to independent operators. The Company retains centralized
control over those functions necessary to monitor quality of patient care and to
maximize operational efficiency. Services performed at the Support
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Center level include financial and accounting functions, clinical policy and
procedure development, system design and corporate acquisitions and development.
The Company has moved certain functions previously performed at the Support
Center or local level to the area level, such as quality improvement oversight,
billing, collections and purchasing, in an effort to maximize efficiencies and
performance.
Commitment to Quality. The Company's quality improvement programs are
designed to ensure that its service standards are properly implemented.
Management believes that the Company has developed and implemented service and
procedure standards that not only comply with, but often exceed, the standards
required by the Joint Commission on Accreditation of Healthcare Organizations
("JCAHO"). All of the Company's centers are JCAHO-accredited or are in the
process of being reviewed for accreditation from the JCAHO. The Company's goal
is for all newly-acquired centers to become accredited within one year of
joining the Company. The Company has Quality Advisory Boards at many of its
centers, and center general managers conduct quarterly quality improvement
reviews. Area quality improvement ("QI") specialists conduct quality compliance
audits at each center to ensure compliance with state and federal regulations,
JCAHO, FDA and internal standards. The QI specialist also helps train all new
clinical personnel on the Company's policies and procedures. The Company's
corporate philosophy for service excellence is its Personal Caring Service
Promise, which characterizes the Company's standards for quality care and
customer service. The Company's Governing Body which consists of the President
and Chief Executive Office, Chief Operating Officer, Chief Financial Officer,
Senior Vice President of Marketing, Vice President of Clinical & Regulatory
Affairs and three Area Vice Presidents meets quarterly to review and oversee the
Company's quality assurance and corporate compliance programs. The Personal
Caring Service Promise is as follows: We promise to serve our customers with
personal caring service. We do this by treating them with dignity and respect,
just like members of our own family, giving each of them the individual
attention they deserve.
Training and Retention of Quality Personnel. Management recognizes that
home health care is by nature a localized business. In addition to retaining its
existing management team, the Company also seeks to retain certain members of
management from its acquisitions. General managers recruit knowledgeable local
account executives capable of gaining new business from the local medical
community. In addition, the Company provides training to all new nurses,
respiratory therapists and pharmacy personnel as well as continuing education
for existing employees.
Management Information Systems. Management believes that periodic
refinement and upgrading of its management information systems, which permit
management to monitor closely the activities of the Company's centers is
important to the Company's continuing success. These systems provide monthly
budget analyses, financial comparisons to prior periods and comparisons among
Company centers, thus enabling management to identify areas for improvement.
Medicare and many third-party payor claims are billed electronically, thereby
facilitating the collection of accounts receivable. In addition, the Company's
financial reporting system monitors certain key data for each center, such as
accounts receivable, payor mix, cash collections, net revenues and
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operating trends. The Company also has focused upon integrating the information
systems of acquired centers as a part of its overall integration efforts.
During 1997, the Company installed a new general ledger system to provide
expanded capacity and functionality. In so doing, Year 2000 compliance was also
accomplished. Remaining actions for Year 2000 involve primarily upgrading field
support software and desktop computers as part of an overall Year 2000 plan. The
remaining costs are not material to the Company.
The Company's Allowable Branch Cost Model(TM) is a productivity tool that
allows local and area managers use to track the cost of delivering a specific
product or service. The model is currently operating in 198 of the Company's 329
centers representing over 60% of the Company's revenues.
HOSPITAL JOINT VENTURES AND STRATEGIC ALLIANCES
As of December 31, 1997, the Company had 21 home health care joint ventures
with hospitals or hospital systems. The Company intends to continue forming
joint ventures with hospitals and hospital systems in order to enter larger
markets with reduced financial risk and capitalize on the trend toward
integrated health care delivery networks that provide a full range of health
care services, including physician services, in-patient hospital care,
out-patient surgery, diagnostics and home health care.
The Company's joint ventures with hospitals set forth below typically are
50/50% equity partnerships with an initial term of between three and ten years
and with the following typical provisions: (i) the Company contributes assets of
an existing business in the designated market or contributes cash to fund half
of the initial working capital required for the hospital joint venture to
commence operations; (ii) the hospital partner contributes an amount of cash
equal to the Company's net contribution; (iii) the Company is the managing
partner for the hospital joint venture and receives a monthly management and
administrative fee; and (iv) distributions, to the extent made, are generally
made on a quarterly basis and are consistent with each partners capital
contributions. Within the hospital joint venture's designated market, all net
revenues generated by the Company from the provision of those services for which
the joint venture was formed are deemed to be net revenues of the hospital joint
venture, including revenues from sources other than the hospital joint venture
partner.
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The following table lists the Company's hospital joint venture partners and
locations:
<TABLE>
<CAPTION>
HOSPITAL JOINT VENTURE PARTNER LOCATION
------------------------------ --------
<S> <C>
Baptist Medical Center Columbia, SC
Baptist Medical Center Montgomery, AL
Baptist Medical System (3 hospitals) Little Rock, AR
Baylor Health System (10 hospitals) Dallas, TX
Central Carolina Hospital Sanford, NC
Centura Health (6 hospitals) Denver, CO
Columbia/HCA Gainesville, FL
Columbia/HCA Jackson, TN
Columbia/HCA (10 hospitals) Nashville, TN
Columbia/HCA (5 hospitals) Richmond, VA
Columbia/HCA Roanoke, VA
Conway Hospital Conway, SC
East Alabama Medical Center Opelika, AL
Fort Sanders Alliance (5 hospitals) Knoxville, TN
Frye Regional Medical Center/Grace Hickory, Maiden,
Hospital/Caldwell Memorial Morganton, NC
High Plains Baptist Hospital (2 hospitals) Amarillo, TX
Otsego Memorial Hospital Gaylord, MI
Piedmont Medical Center Rock Hill, SC
Spruce Pine Community Hospital Spruce Pine, NC
Tolfree Memorial Hospital West Branch, MI
Wallace Thompson Hospital Union, SC
</TABLE>
To further its strategy of aligning with hospitals and hospital systems,
the Company also has developed numerous multi-year strategic alliance contracts.
These contracts enable the Company to be the preferred provider of home
respiratory services, home infusion services and home medical equipment and
supplies for certain hospitals in selected markets.
REVENUES AND COLLECTIONS
The Company derives substantially all of its net revenues from third-party
payors, including Medicare, private insurers and Medicaid. Medicare is a
federally funded and administered health insurance program that provides
coverage for beneficiaries who require certain medical services and products.
Medicaid is a state administered reimbursement program that provides
reimbursement for certain medical services and products.
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The following table sets forth the percentage of the Company's net revenues
from each source indicated for the years presented:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Medicare. . . . . . . . . . . . . . . . . . . . . 46% 46% 44%
Private pay, primarily private insurance. . . . . 42 41 44
Medicaid. . . . . . . . . . . . . . . . . . . . . 12 13 12
--- --- ---
Total 100% 100% 100%
=== === ===
</TABLE>
The Omnibus Budget Reconciliation Act of 1987 ("OBRA 1987") created six
categories for home medical equipment reimbursement under the Medicare Part B
program, for which the Company qualifies. OBRA 1987 also defined whether
products would be paid for on a rental or sale basis and established fixed
monthly payment rates for oxygen service regardless of the type of service (i.e.
concentrators, liquid oxygen, etc.) as well as a 15-month rental ceiling on
certain medical equipment. After 15 months of rental, rental payments cease for
HME and the Company receives a "maintenance fee" each six months equivalent to
one-month's rental. The Omnibus Budget Reconciliation Act of 1990 ("OBRA 1990")
made new changes to Medicare Part B reimbursement. The substantive changes
relating to OBRA 1990 included a national standardization of Medicare rates for
certain equipment categories, which vary slightly state by state and further
reductions in amounts paid for HME rentals.
In August 1993, Congress passed the Omnibus Budget Reconciliation Act of
1993 ("OBRA 1993"), which included approximately $56 billion in reimbursement
reductions to the Medicare program over the following five years. The specific
reimbursement changes that became effective for fiscal 1994 related to the
recategorization of certain respiratory products, to the capped rental program,
coupled with a reduction in reimbursement rates for these same products.
In August 1997, President Clinton signed a Balanced Budget Act that will
reduce the Medicare reimbursement rate for oxygen by 25% beginning January 1,
1998 and by another 5% beginning January 1, 1999. Medicare oxygen reimbursement
rates will be held steady thereafter as Consumer Price Index increases for
oxygen and durable medical equipment will not resume until the year 2003. The
Medicare oxygen reimbursement reductions affect approximately 23.5% of the
Company's net revenues. As a result, the Company announced in September that it
will close, consolidate or scale back 20% of its operating centers and nine of
its billing centers; and scale back or eliminate marginal products and services
for an additional 12% of its locations. The restructuring affected over 100 of
the Company's total operating and billing locations.
The Company's significant growth in net revenues has been accompanied by
corresponding growth in net accounts receivable. Net patient accounts receivable
at December 31, 1997 were $102.4 million compared to net accounts receivable of
$76.1 million at December 31, 1996. The Company attempts to minimize days' sales
in outstanding net accounts receivable ("DSO") by
13
<PAGE> 14
screening new patient cases for adequate sources of reimbursement and by
providing complete and accurate claims data to relevant payor sources.
The table below shows the Company's DSO for the periods indicated:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Days' sales outstanding. . . . . 91 days 93 days 88 days
</TABLE>
The decrease in DSO between 1997 and 1996 is primarily attributable to the
accounts receivable reserved in September, 1997 for restructured centers.
The increase in DSO between 1996 and 1995 is primarily attributable to
slightly extended collection time frames for Medicare receivables associated
with revised rules regarding physician completion of Certificates of Medical
Necessity.
SALES AND MARKETING
Sales. The Company has recorded strong sales revenue growth over the past
three years. However, as part of the Company's fundamental reshaping and in
anticipation of the needs of a changing market, it recently reorganized its
field sales function to provide greater support for the Company's marketing to
its three key "trade channels"--traditional sources (physicians, hospital
discharge planners, nursing agencies), strategic alliance/joint ventures and
managed care. Local market selling to traditional sources is the primary
responsibility of account executives who report directly to a branch general
manager. The Company's 1998 sales and marketing plan includes the addition of
50% more selling resources for local sales efforts.
Managed Care Sales. The Company takes a selective approach to managed care
contracts utilizing its local operating and market strengths, supplemented by
area and corporate managed care expertise. The Company utilizes the CURE(TM)
Report (Comprehensive Utilization Report and Evaluation), the Company's managed
care reporting system that provides a detailed accounting of home care
utilization and cost indicators to keep managed care organizations informed of
physician home care related practice patterns and costs.
Hospital Joint Ventures and Strategic Alliances Development. The Company
has a senior level, experienced operating team to lead its efforts to develop
additional hospital joint ventures and strategic alliances as well as to manage
and operate new joint ventures. The team also consists of six former key
operations managers providing it significant depth in leadership and experience.
In targeting hospital joint ventures and strategic alliances, this team markets
arrangements to regional and senior executives in hospital systems and the chief
executive and financial officers of hospitals. See -- "Hospital Joint Ventures
and Strategic Alliances."
Corporate Marketing Support. The Company's corporate marketing department
provides product and services planning and development, market research,
marketing communications,
14
<PAGE> 15
public and community relations and educational program development for all of
the Company's centers. The Company has primarily expanded services by adding
infusion, rehabilitation equipment and services, pediatric and other services as
well as repackaging and marketing existing services as branded products, such as
the Company's Resource(TM), Aermeds(TM) and EnterCare(TM) programs.
Additionally, the Company introduce its new clinical and marketing programs such
as NPPV (non-invasive positive pressure ventilators) program designed to treat
chronic respiratory failure patients. This therapy provides patients an
innovative method of treatment that helps reduce hospitalization and improve the
patients' quality of life. The Company has added many new NPPV patients to its
patient base during 1997. All marketing programs introduced by the corporate
marketing department are designed to meet the needs of the Company's traditional
referral sources as well as managed care organizations and integrated health
care delivery networks.
COMPETITION
The home health care industry is rapidly consolidating but remains highly
fragmented and competition varies significantly from market to market. In the
small and mid-size markets in which the Company primarily operates, the majority
of its competition comes from local independent operators or hospital-based
facilities, whose primary competitive advantage is market familiarity. In the
larger markets, regional and national providers account for a significant
portion of competition. In addition, there are still relatively few barriers to
entry in the local markets served by the Company, and it may encounter
substantial competition from new market entrants. Management believes that the
competitive factors most important in the Company's lines of business are
quality of care and service, reputation with referring sources, ease of doing
business with the provider, ability to develop and to maintain relationships
with referral sources, competitive prices, and the range of services offered.
Third party payors and their case managers actively monitor and direct the
care delivered to their beneficiaries. Accordingly, relationships with such
payors and their case managers and inclusion within preferred provider and other
networks of approved or accredited providers has become a prerequisite, in many
cases, to the Company's ability to serve many of the patients treated by it.
Similarly, the ability of the Company and its competitors to align themselves
with other health care service providers may increase in importance as managed
care providers and provider networks seek out providers who offer a broad range
of services and geographic coverage.
15
<PAGE> 16
BRANCH LOCATIONS
Following is a list of the Company's 329 home health care centers as of
December 31, 1997.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
ALABAMA Waterbury Ottumwa Joplin Marion Lock Haven Houston(2)
Alexander City Sioux City Kansas City Morehead City McKees Rocks Irving(a)
Andalusia DELAWARE Waterloo Kirksville Morganton(a) Mt. Pleasant Lake Jackson
Birmingham Dover Mexico Morrisville Phillipsburg Laredo
Dothan Newark KANSAS Mountain Grove Newland Philadelphia Longview
Fayette Wilmington Pittsburg Osage Beach Salisbury Pottsville Lubbock
Florence Potosi Sanford(a) Sharon Lufkin
Foley FLORIDA KENTUCKY Rolla Spruce Pine(a) State College McAllen
Huntsville Crawfordville Bowling Green Salem Sylva Titusville Mexia
Mobile Crystal River Corbin Springfield Wadesboro Trevose Mount Pleasant
Montgomery(a) Daytona Beach Danville St. Louis(2) Whiteville Warminster Nacogdoches
Opelika(a) Ft. Lauderdale Eddyville St. Robert Winston-Salem Waynesboro Pampa(a)
Russellville Ft. Myers Elizabethtown Warrensburg Warren Paris
Sylacauga(a) Ft. Walton Beach Florence OHIO York Pasadena
Troy Gainesville(a) Jackson NEBRASKA Bryan Pittsburgh
Tuscaloosa Jacksonville Lexington Omaha Cambridge SOUTH CAROLINA Plainview
Leesburg London Chillicothe Columbia(a) San Antonio
ARIZONA Marianna Louisville NEVADA Cincinnati Conway(a) San Angelo
Bullhead City Orlando Mayfield Boulder City Columbus Florence Temple
Globe Panama City Paducah Las Vegas(2) Dayton Greenville Texarkana
Lake Havasu Pensacola Pineville Pahrump Mansfield N. Charleston Tyler
Phoenix Port St. Lucie Somerset Maumee Rock Hill(a) Victoria
Safford Rockledge Whitley City NEW JERSEY Newark Union(a) Waco
Tucson(b) St. Augustine Cranbury Springfield Van
Tallahassee LOUISIANA Flemington Twinsburg TENNESSEE
ARKANSAS Tampa Bogalusa Cedar Grove Zanesville Chattanooga VIRGINIA
Batesville Hammond Cookeville Farmville
Benton GEORGIA Slidell NEW MEXICO OKLAHOMA Dayton Salem(a)
Berryville Albany Alamogordo Antlers Jackson(a) Onley
Dardanelle Americus MAINE Albuquerque Bartlesville Johnson City Richmond(a)
El Dorado(a) Brunswick Auburn Clovis Claremore Kingsport Chesapeake
Ft. Smith Camilla Bangor Farmington Enid Knoxville(a)
Harrison Dublin Rumford Grants Grove Manchester WASHINGTON
Hot Springs Eastman Hobbs Hugo Nashville(a) Bremerton
Jonesboro(2) Ft. Oglethorpe MARYLAND Las Cruces Lawton Oak Ridge(a) Seattle
Little Rock(a)(2) Martinez/Augusta Cumberland Roswell Muskogee Oneida(a) Tacoma
Mena Nashville Frederick McAlester Rogersville Yakima
Mtn. Home Savannah Salisbury NEW YORK Tulsa Union City
Newport Valdosta Albany Wagoner Morristown WISCONSIN
Rogers Waycross MICHIGAN Buffalo(2) Murfreesboro Burlington
Paragould Detroit E. Syracuse OREGON Eau Claire
Pine Bluff ILLINOIS Gaylord(a) Geneva Eugene TEXAS Elkhorn
Salem Alsip West Branch(a) Marcy Medford Abilene Kenosha
Springdale Arlington Heights Oneonta Amarillo(a) La Crosse
Warren Peoria MINNESOTA Skaneateles PENNSYLVANIA Austin Marshfield
Springfield Rochester Watertown Bradford Bay City Milwaukee
COLORADO Webster Brookville Beaumont Minocqua
Cortez IOWA MISSISSIPPI Utica Burnham Borger(a) Monona
Denver(a) Cedar Rapids Tupelo Carlisle Brownwood Racine
Durango Clarinda NORTH CAROLINA Clearfield Bryan
Pagosa Springs Coralville MISSOURI Asheboro Erie Conroe
Davenport Cameron Asheville Everett Corpus Christi
CONNECTICUT Decorah Columbia Bakersville Harrisburg Dallas(a)(2)
Brookfield Des Moines Festus Charlotte Hazelton Ennis(a)
Danielson Dubuque Florissant Hickory(a) Houtzdale Ft. Worth
New Britain Marshalltown Hannibal Kannapolis Johnstown Hereford
New Milford Mason City Ironton Maiden(a) Kane Harlingen
</TABLE>
- - ----------------------------------
(a) Owned by a joint venture.
(b) Managed but not owned by the Company.
16
<PAGE> 17
SUPPLIES AND EQUIPMENT
The Company purchases medical equipment, drugs, solutions and other
materials and leases certain equipment required in connection with the Company's
business from many suppliers. The Company has not experienced, and management
does not anticipate that the Company will experience, any significant difficulty
in purchasing supplies or leasing equipment from current suppliers. In the event
that such suppliers are unable or fail to sell supplies or lease equipment to
the Company, management believes that other suppliers are available to meet the
Company's needs at comparable prices.
INSURANCE
The Company's professional liability policies are on an occurrence basis
and are renewable annually with per claim coverage limits of up to $1,000,000
per occurrence and $3,000,000 in the aggregate. The Company maintains a
commercial general liability policy which includes product liability coverage on
the medical equipment that it sells or rents with per claim coverage limits of
up to $1,000,000 per occurrence with a $1,000,000 product liability annual
aggregate and a $2,000,000 general liability annual aggregate. The Company also
maintains excess liability coverage with a limit of $50,000,000 per occurrence
and $50,000,000 in the aggregate. While management believes the manufacturers of
the equipment it sells or rents currently maintain their own insurance, and in
some cases the Company has received evidence of such coverage and has been added
by endorsement as additional insured, there can be no assurance that such
manufacturers will continue to do so, that such insurance will be adequate or
available to protect the Company, or that the Company will not have liability
independent of that of such manufacturers and/or their insurance coverage. There
can be no assurance that any of the Company's insurance will be sufficient to
cover any judgments, settlements or cost relating to any pending or future legal
proceedings or that any such insurance will be available to the Company in the
future on satisfactory terms, if at all. If the insurance carried by the Company
is not sufficient to cover any judgments, settlements or cost relating to
pending or future legal proceedings, the Company's business and financial
condition could be materially, adversely affected.
EMPLOYEES
The retention of qualified employees is a high priority for the Company. At
December 31, 1997, the Company employed approximately 3,700 full-time, 450
part-time and 650 PRN individuals. Of these individuals, approximately 125 were
employed at the corporate support center. As of December 31, 1997, approximately
323 employees were terminated or notified of upcoming termination in 1998 as
part of the Restructuring. Management believes that the Company's employee
relations are good. None of the Company's employees are represented by a labor
union.
17
<PAGE> 18
TRADEMARKS
The Company owns and uses a variety of marks, including American
HomePatient, AerMeds, EnterCare, Resource and Extracare, which have either been
registered at the federal or state level, are currently being considered for
such registration or are being used pursuant to common law rights.
GOVERNMENT REGULATION
The Company, as a participant in the healthcare industry, is subject to
extensive federal, state and local regulation. The operations of the Company's
home health care centers are subject to federal laws covering the repackaging
and dispensing of drugs and regulating interstate motor-carrier transportation.
Such centers also are subject to state laws governing pharmacies, nursing
services and certain types of home health agency activities. Additionally,
certain of the Company's employees are subject to state laws and regulations
governing the professional practice of respiratory therapy, pharmacy and
nursing. Currently, the Company is licensed as a home health agency in Florida
and New York.
The Company's operations are also subject to a series of laws and
regulations dating back to the Omnibus Budget Reconciliation Act of 1987 ("OBRA
1987") which have been enacted and apply to the Company's operation. Periodic
changes have occurred from time to time since the 1987 Act including
reimbursement reduction and changes to payment rules.
As a provider of services under the Medicare and Medicaid programs, the
Company is subject to the Medicare and Medicaid anti-kickback statute, also
known as the "fraud and abuse law." This law prohibits any bribe, kickback,
rebate or remuneration of any kind in return for, or as an inducement for, the
referral of Medicare or Medicaid patients. The Company may also be affected by
the federal physician self-referral prohibition, known as the "Stark" law,
which, with certain exceptions, prohibits physicians from referring patients to
entities in which they have a financial interest. Many states in which the
Company operates have adopted similar self-referral laws, as well as laws that
prohibit certain direct or indirect payments or fee-splitting arrangements
between health care providers, under the theory that such arrangements are
designed to induce or to encourage the referral of patients to a particular
provider.
The Company regularly reviews and updates its policies and procedures in an
effort to comply with applicable laws and regulations. The Company must follow
strict requirements with paperwork and billing. As required by law, it is
Company policy that all service charges falling under Medicare Part B are
confirmed with a Certificate for Medical Necessity prescribed by a physician.
In recent years, various state and federal regulatory agencies have stepped
up investigative and enforcement activities with respect to the health care
industry, and many health care providers and DME suppliers have received
subpoenas and other requests for information in connection with such activities.
On February 12, 1998, a subpoena from the Office of Inspector General of the
18
<PAGE> 19
Department of Health and Human Services ("OIG") was served on the Company at its
Pineville, Kentucky center in connection with an investigation relating to
possible improper claims for Medicare payment. The Company has retained
experienced health care counsel to represent it in this connection and intends
to fully cooperate. Although the Company's counsel has conducted an initial
meeting with governmental officials, this matter is still in its preliminary
stages. In addition the Company from time to time receives notices and subpoenas
from various governmental agencies concerning their plans to audit the Company
or requesting information regarding certain aspects of the Company's business,
and the Company cooperates with the various agencies in responding to such
requests. While the government has broad authority to enforce applicable laws
and regulations, and therefore the scope and outcome of these investigations and
inquiries cannot be predicted with certainty, management does not believe at the
present time that any pending investigations or inquiries will have a material
adverse impact on the Company. As evidence of the past efforts of the Company in
successfully working with the government, in 1997 the Company was the recipient
of the prestigious Hammer Award by Vice President Al Gore in recognition of the
support of the Company in working with the Federal Food and Drug Administration
in developing compliance protocols.
Healthcare law is an area of extensive and dynamic regulatory change.
Changes in laws or regulations or new interpretations of existing laws or
regulations can have a dramatic effect on permissible activities, the relative
costs associated with doing business, and the amount and availability of
reimbursement by government and third-party payors. There can be no assurance
that either the federal, state or local governments will not impose additional
regulations upon the Company's activities which might adversely affect the
Company's business so that the Company will be unable to comply with all
regulations in the geographic areas in which it wishes to commence, or presently
conducts its business.
RISK FACTORS
This section summarizes certain risks, among others, that should be
considered by stockholders and prospective investors in the Company. Many of
these risks are discussed in other sections on this report.
Medicare Reimbursement for Oxygen Therapy Services. In 1997 oxygen therapy
services reimbursement from Medicare accounted for approximately 23.5% of the
Company's revenues. The Balanced Budget Act of 1997, as amended, reduced
Medicare reimbursement rates for oxygen and certain oxygen equipment to 75% of
their 1997 levels beginning January 1, 1998 and to 70% of their 1997 levels
beginning January 1, 1999. In addition, Consumer Price Index increases in
Medicare oxygen reimbursement rates will not resume until the year 2003. The
Company cannot be certain that additional reimbursement reductions for oxygen
therapy services or other services and products provided by the Company will not
occur. Any such reductions could have a material adverse effect on the Company's
net revenues and net income. See "Business - Material 1997 Corporate
Developments," "Business - Revenues and Collections" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Medicare Reimbursement for Oxygen Therapy Services."
19
<PAGE> 20
Dependence on Reimbursement by Third-Party Payors. In 1997, the percentage
of the Company's net revenues derived from Medicare, Medicaid and private pay
was 44%, 12% and 44%, respectively. The net revenues and profitability of the
Company are affected by the continuing efforts of all payors to contain or
reduce the costs of health care by lowering reimbursement rates, narrowing the
scope of covered services, increasing case management review of services and
negotiating reduced contract pricing. Any changes in reimbursement levels under
Medicare, Medicaid or private pay programs and any changes in applicable
government regulations could have a material adverse effect on the Company's net
revenues. Changes in the mix of the Company's patients among Medicare, Medicaid
and private pay categories and among different types of private pay sources, may
also affect the Company's net revenues and profitability. There can be no
assurance that the Company will continue to maintain its current payor or
revenue mix. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and "Business - Revenues and Collections."
Role of Managed Care. As managed care assumes an increasingly significant
role in markets in which the Company operates, the Company's success will, in
part, depend on retaining and obtaining managed care contracts. There can be no
assurance that the Company will retain or continue to obtain such managed care
contracts. In addition, reimbursement rates under managed care contracts are
likely to continue experiencing downward pressure as a result of payors' efforts
to contain or reduce the costs of health care by increasing case management
review of services and negotiating reduced contract pricing. Therefore, even if
the Company is successful in retaining and obtaining managed care contracts,
unless the Company also decreases its cost for providing services and increases
higher margin services, it will experience declining profit margins. See
"Business."
Government Regulation. The Company is subject to extensive and frequently
changing federal, state and local regulation. In addition, new laws and
regulations are adopted periodically to regulate new and existing products and
services in the health care industry. Changes in laws or regulations or new
interpretations of existing laws or regulations can have a dramatic effect on
operating methods, costs and reimbursement amounts provided by government and
other third-party payors. Federal laws governing the Company's activities
include regulation of the repackaging and dispensing of drugs, Medicare
reimbursement and certification and certain financial relationships with
physicians and other health care providers. Although the Company intends to
comply with all applicable fraud and abuse laws, there can be no assurance that
administrative or judicial interpretation of existing laws or regulations or
enactments of new laws or regulations will not have a material adverse effect on
the Company's business. The Company is subject to state laws governing Medicaid,
professional training, certificates of need, licensure, financial relationships
with physicians and the dispensing and storage of pharmaceuticals. The
facilities operated by the Company must comply with all applicable laws,
regulations and licensing standards. In addition, many of the Company's
employees must maintain licenses to provide some of the services offered by the
Company. There can be no assurance that federal, state or local governments will
not change existing standards or impose additional standards. Any failure to
comply with existing or future standards could have a material adverse effect on
the Company's results of operations, financial condition or prospects.
20
<PAGE> 21
No Assurance of Successful Integration of Acquisitions or Continued Growth.
The Company intends to continue to expand its business through acquisitions of
home health care companies, growth in internal net revenues and the formation
of additional hospital joint ventures and strategic alliances. There can be no
assurance that suitable acquisitions will be identified, that consent from the
Company's lenders, where required, will be obtained or that acquisitions will be
consummated on acceptable terms. In addition, there can be no assurance that
these companies, once acquired, will be integrated successfully into the
Company's operations or that any acquisition will not have a material adverse
effect upon the Company's results of operations, financial condition or
prospects, especially in the fiscal quarters immediately following such
transactions. In addition, although the Company intends to expand its business
through hospital joint ventures and strategic alliances, there can be no
assurance that the Company will be able to maintain such relationships. Finally,
there can be no assurance that the Company can increase or maintain growth in
net revenues, enter into additional hospital joint ventures and strategic
alliances or increase net revenues at existing hospital joint ventures and
strategic alliances. The price of the Company's common stock may fluctuate
substantially in response to quarterly variations in the Company's operating and
financial results, announcements by the Company or other developments affecting
the Company, as well as general economic and other external factors. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources" and "Business."
Management of Growth. As the Company's business develops and expands, the
Company may need to implement enhanced operational and financial systems and may
require additional employees and management, operational and financial
resources. There can be no assurance that the Company will successfully (i)
implement and maintain any such operational and financial systems, or (ii) apply
the human, operational and financial resources needed to manage a developing and
expanding business. Failure to implement such systems successfully and use such
resources effectively could have a material adverse effect on the Company's
results of Operations, financial condition or prospects. See "Business."
Competition. The home health care market is highly fragmented and
competition varies significantly from market to market. In the small and
mid-size markets in which the Company primarily operates, the majority of its
competition comes from local independent operators or hospital-based facilities,
whose primary competitive advantage is market familiarity. In the larger
markets, regional and national providers account for a significant portion of
competition. Some of the Company's present and potential competitors are
significantly larger than the Company and have, or may obtain, greater financial
and marketing resources than the Company. In addition, there are relatively few
barriers to entry in the local markets served by the Company, and it may
encounter substantial competition from new market entrants. As the industry
consolidates, the Company also faces competition for acquisitions from current
and new market participants that could increase acquisition prices or inhibit
the Company's acquisition strategy. See "Business - Competition."
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<PAGE> 22
Impact of Health Care Reform. The health care industry continues to undergo
dramatic changes. Although proposed federal legislation to impose greater
control on health care spending has not been enacted by Congress to date, there
can be no assurance that federal health care legislation will not be adopted in
the future. Some states are adopting health care programs and initiatives as a
replacement for Medicaid. It is also possible that proposed federal legislation
will include language which provides incentives to further encourage Medicare
recipients to shift to Medicare at-risk managed care programs. There can be no
assurance that the adoption of such legislation or other changes in the
administration or interpretation of governmental health care programs or
initiatives will not have a material adverse effect on the Company.
Liability and Adequacy of Insurance. The provision of health care services
entails an inherent risk of liability. Certain participants in the home health
care industry may be subject to lawsuits which may involve large claims and
significant defense costs. It is expected that the Company periodically will be
subject to such suits as a result of the nature of its business. The Company
currently maintains product and professional liability insurance intended to
cover such claims in amounts which management believes are in keeping with
industry standards. There can be no assurance that the Company will be able to
obtain liability insurance coverage in the future on acceptable terms, if at
all. There can be no assurance that claims in excess of the Company's insurance
coverage or claims not covered by the Company's insurance coverage will not
arise. A successful claim against the Company in excess of the Company's
insurance coverage could have a material adverse effect upon the results of
operations, financial condition or prospects of the Company. Claims against the
Company, regardless of their merit or eventual outcome, may also have a material
adverse effect upon the Company's ability to attract patients or to expand its
business. See "Business - Insurance."
Influence of Executive Officers, Directors and Principal Stockholder. On
March 20, 1998, the Company's executive officers, directors and principal
stockholder, Counsel Corporation ("Counsel"), in the aggregate, beneficially
owned approximately 35% of the outstanding shares of the common stock of the
Company. As a result of such equity ownership and their positions in the
Company, if the executive officers, directors and principal stockholder were to
vote all or substantially all of their shares in the same manner, they could
significantly influence the management and policies of the Company, including
the election of the Company's directors and the outcome of matters submitted to
stockholders of the Company for approval. The Company is highly dependent upon
its senior management, and competition for qualified management personnel is
intense. The inability to attract and retain qualified personnel could adversely
affect the Company's business.
22
<PAGE> 23
ITEM 2. PROPERTIES
The Company's corporate headquarters occupy approximately 31,000 square
feet leased in the Parklane Building, Maryland Farms, Brentwood, Tennessee. The
lease has a seven year term with base monthly rent of $39,000.
The Company owns its centers in Tallahassee, Florida, Waterloo, Iowa,
Harrisburg, Pennsylvania and North Charleston, South Carolina which consist of
approximately 15,000, 35,000, 43,000 and 10,000 square feet, respectively and
owns a 50% interest in its center in Little Rock, Arkansas, which consists of
approximately 15,000 square feet. The Company leases the operating space
required for its remaining 324 home health care centers. A typical center
occupies between 2,000 and 6,000 square feet and generally combines showroom,
office and warehouse space, with approximately two-thirds of the square footage
consisting of warehouse space. Lease terms on most of the leased centers range
from three to five years. Management believes that the Company's owned and
leased properties are adequate for its present needs and that suitable
additional or replacement space will be available as required.
ITEM 3. LEGAL PROCEEDINGS
As with any health care provider, the Company is engaged in routine
litigation incidental to its business and which is not material to the Company.
Additionally, in recent years, the health care industry has come under
increasing scrutiny from various state and federal regulatory agencies, which
are stepping up investigative and enforcement activities. While these activities
cannot be predicted with certainty, management does not believe that they will
have a material adverse impact on the Company. For a description of these
activities, see "Governmental Regulation."
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
None.
23
<PAGE> 24
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
The common stock of the Company is traded on the Nasdaq National Market
System ("NASDAQ Stock Market") under the designation "AHOM". The following table
sets forth representative bid quotations of the common stock for each quarter of
calendar years 1996 and 1997 as provided by NASDAQ Stock Market. The following
bid quotations reflect interdealer prices without retail mark-ups, mark-downs or
commissions, and may not necessarily represent actual transactions. In June 1996
the Company effectuated a 3-for-2 split of its common stock.
<TABLE>
<CAPTION>
BID QUOTATIONS
--------------
FISCAL PERIOD HIGH LOW
------------- ----- ---
<S> <C> <C>
1996 1st Quarter $26.17 $16.17
1996 2nd Quarter $31.83 $25.33
1996 3rd Quarter $30.38 $19.50
1996 4th Quarter $27.50 $20.00
1997 1st Quarter $28.25 $20.75
1997 2nd Quarter $25.25 $16.75
1997 3rd Quarter $25.50 $16.25
1997 4th Quarter $27.00 $18.50
</TABLE>
On March 17, 1998, there were 650 holders of record of the common stock and
the closing bid quotation for the common stock was $21.125 per share, as
reported by NASDAQ Stock Market. Most of the Company's stockholders have their
holdings in the street name of their broker/dealer.
The Company has not paid cash dividends on its common stock and anticipates
that, for the foreseeable future, any earnings will be retained for use in its
business and no cash dividends will be paid. The Company is prohibited from
issuing dividends under its Bank Credit Facility. See - "Management's Discussion
and Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources."
Pursuant to a Warrant Agreement issued to Robert A. Clasen in 1994 in
connection with one of the Company's acquisitions, Mr. Clasen purchased 2,500,
2,500, 1,500 and 1,000 shares of the Company's common stock for $12 per share on
January 24, March 13, May 19 and July 21, 1997, respectively. The common stock
was issued to Mr. Clasen in reliance upon Section 4(2) of the Securities Act of
1933, as amended, and upon Rule 505 of Regulation D. Less than
24
<PAGE> 25
$5,000,000 of the Company's common stock was issued and no general solicitation
or advertising was made.
25
<PAGE> 26
ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
FINANCIAL STATEMENTS PRESENTED AND DERIVATION OF INFORMATION
The following selected financial data below is derived from the audited
financial statements of the Company and should be read in conjunction with those
statements, including the related notes thereto. The addition of new operations
through acquisitions materially affects the comparability of the financial data
presented. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."
The historical operating data reflects the operations of the Company's home
health care business as continuing operations and its long-term care management
business as discontinued operations.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1993 1994 1995 1996 1997
---- ---- ---- ---- ----
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net revenues $ 61,315 $ 90,185 $ 162,371 $ 268,348 $ 387,277
Cost of sales and related services, excluding
depreciation and amortization expense 13,677 17,445 34,031 58,575 97,418
Operating expenses 31,307 47,081 82,608 138,213 216,532
General and administrative expenses 5,520 7,829 11,704 14,664 15,953
Depreciation and amoritization expense 4,532 6,656 14,081 23,845 33,736
Interest expense 542 2,132 4,829 8,294 16,494
Restructuring charge -- -- -- -- 33,829
Goodwill impairment -- -- -- -- 8,165
---------- ---------- ----------- ----------- ------------
Total expenses 55,578 81,143 147,253 243,591 422,127
---------- ---------- ----------- ----------- ------------
Income (Loss) from continuing operations before taxes 5,737 9,042 15,118 24,757 (34,850)
Provision (Benefit) for income taxes 2,254 3,476 6,029 9,556 (8,942)
---------- ---------- ----------- ----------- ------------
Income (Loss) from continuing operations $ 3,483 $ 5,566 $ 9,089 $ 15,201 $ (25,908)
========== ========== =========== =========== ============
Income (Loss) from continuing operations per
share - basic $ 0.46 $ 0.68 $ 0.86 $ 1.13 $ (1.75)
========== ========== =========== =========== ============
Income (Loss) from continuing operations per
share - diluted $ 0.45 $ 0.67 $ 0.84 $ 1.10 $ (1.75)
========== ========== =========== =========== ============
Weighted average shares outstanding - basic 7,621,000 8,131,000 10,550,000 13,473,000 14,839,000
Weighted average shares outstanding - diluted 7,734,000 8,344,000 10,838,000 13,841,000 14,839,000
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------------------------------------
1993 1994 1995 1996 1997
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital $14,961 $ 20,848 $ 46,272 $ 84,012 $112,721
Total assets 60,065 110,965 232,516 395,611 558,366
Total debt and capital leases, including current portion 17,472 35,908 93,606 149,703 301,324
Shareholders' equity 36,950 58,096 119,431 215,642 194,089
</TABLE>
26
<PAGE> 27
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
THIS ANNUAL REPORT ON FORM 10-K INCLUDES FORWARD-LOOKING STATEMENTS WITHIN
THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 INCLUDING,
WITHOUT LIMITATION, STATEMENTS CONTAINING THE WORDS "BELIEVES," "ANTICIPATES,"
"INTENDS," "EXPECTS," "ESTIMATES," "MAY," "WILL" AND WORDS OF SIMILAR IMPORT.
SUCH STATEMENTS INCLUDE STATEMENTS CONCERNING THE COMPANY'S BUSINESS STRATEGY,
ACQUISITION STRATEGY, OPERATIONS, COST SAVINGS INITIATIVES, INDUSTRY, ECONOMIC
PERFORMANCE, FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES, EXISTING
GOVERNMENT REGULATIONS AND CHANGES IN, OR THE FAILURE TO COMPLY WITH,
GOVERNMENTAL REGULATIONS, LEGISLATIVE PROPOSALS FOR HEALTHCARE REFORM, THE
ABILITY TO ENTER INTO JOINT VENTURES, STRATEGIC ALLIANCES AND ARRANGEMENTS WITH
MANAGED CARE PROVIDERS ON AN ACCEPTABLE BASIS AND CHANGES IN REIMBURSEMENT
POLICIES. SUCH STATEMENTS ARE SUBJECT TO VARIOUS RISKS AND UNCERTAINTIES. THE
COMPANY'S ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THE RESULTS DISCUSSED IN
SUCH FORWARD-LOOKING STATEMENTS BECAUSE OF A NUMBER OF FACTORS, INCLUDING THOSE
IDENTIFIED IN THE "RISK FACTORS" SECTION AND ELSEWHERE IN THIS ANNUAL REPORT ON
FORM 10-K. THE FORWARD-LOOKING STATEMENTS ARE MADE AS OF THE DATE OF THIS ANNUAL
REPORT ON FORM 10-K AND THE COMPANY DOES NOT UNDERTAKE TO UPDATE THE
FORWARD-LOOKING STATEMENTS OR TO UPDATE THE REASONS THAT ACTUAL RESULTS COULD
DIFFER FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS.
The Company has three principal services or product lines: home respiratory
services, home infusion services and home medical equipment and supplies. Home
respiratory services include oxygen systems, nebulizers and home ventilators and
are provided primarily to patients with severe and chronic pulmonary diseases.
Home infusion services are used to administer nutrients, antibiotics and other
medications to patients with medical conditions such as neurological
impairments, infectious diseases or cancer. The Company also sells and rents a
variety of home medical equipment and supplies, including wheelchairs, hospital
beds and ambulatory aids. The following table sets forth the percentage of the
Company's net revenues represented by each line of business for the periods
presented:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Home respiratory therapy services 53% 49% 47%
Home infusion therapy services 20 18 18
Home medical equipment and medical supplies 27 33 35
--- --- ---
Total 100% 100% 100%
=== === ===
</TABLE>
Changes in the Company's business mix over the periods indicated resulted
primarily from the increase in medical equipment and medical supplies revenues
generated by acquired operations. From 1995 through 1997, the Company acquired
85 home health care companies (17, 40 and 28 companies in 1995, 1996 and 1997,
respectively). The Company's goal is to maintain a diversified offering of home
health care services, including a higher percentage of infusion therapy services
27
<PAGE> 28
than it has currently in order to provide the comprehensive array of services
that managed care organizations are likely to require.
The Company continues to implement a variety of initiatives designed to
lower its costs. The Company is currently focused upon: (i) leveraging corporate
purchasing agreements to reduce supply and equipment costs, (ii) consolidating
same-market and overlapping centers; (iii) decreasing collection periods and
associated billing costs; and (iv) moving certain functions to the area level.
The Company reports its net revenues as follows: (i) sales and related
services; (ii) rentals and other; and (iii) earnings from joint ventures. Sales
and related services revenues are derived from the provision of infusion
therapies, the sale of home health care equipment and supplies, the sale of
aerosol and respiratory therapy equipment and supplies and services related to
the delivery of these products. Rentals and other revenues are derived from the
rental of home health care equipment, enteral pumps and equipment related to the
provision of respiratory therapies. The majority of the Company's hospital joint
ventures are not consolidated for financial statement reporting purposes.
Earnings from hospital joint ventures represent the Company's equity in earnings
from unconsolidated hospital joint ventures and management and administrative
fees for unconsolidated joint ventures. Cost of sales and related services
includes the cost of equipment, drugs and related supplies sold to patients.
Operating expenses include operating center labor costs, delivery expenses,
selling costs, occupancy costs, costs related to rentals other than
depreciation, billing center costs, provision for doubtful accounts and other
operating costs. General and administrative expenses include corporate and area
management expenses and costs.
The Company annually evaluates the realizability of goodwill by utilizing
an operating income realization test for the applicable businesses acquired. In
addition, the Company considers the effects of external changes to the Company's
business environment, including competitive pressures, market erosion and
technological and regulatory changes. The Company believes its estimated
goodwill life is reasonable given the continuing movement of patient care to
noninstitutional settings, expanding demand due to demographic trends, the
emphasis of the Company on establishing significant coverage in each local and
regional market, the goodwill life recognized by other home care companies and
other factors.
MEDICARE REIMBURSEMENT FOR OXYGEN THERAPY SERVICES
The Balanced Budget Act of 1997 will reduce the Medicare oxygen
reimbursement rates by 25 percent beginning January 1, 1998, and by another five
percent beginning January 1, 1999. In addition, Consumer Price Index increases
in Medicare oxygen reimbursement rates will not resume until the year 2003. The
Company is one of the nation's largest providers of home oxygen services to
patients, many of whom are Medicare recipients, and is therefore significantly
affected by this legislation. Medicare oxygen reimbursements account for
approximately 23.5 percent of the Company's revenues.
28
<PAGE> 29
On September 25, 1997, the Company announced initiatives to respond to the
Medicare oxygen reimbursement reductions by fundamentally reshaping the Company
for long-term growth. The Restructuring impacted more than 100 of the Company's
total operating and billing centers. Specific actions resulted in pre-tax
accounting charges of $65.0 million due to the closure, consolidation, or
scaling down of approximately 20 percent of the Company's operating centers, the
closure or scaling back of nine billing centers, the elimination of four
operating regions, the scaling back or elimination of marginal products and
services at numerous locations, and the related termination of approximately 350
employees.
RESULTS OF OPERATIONS
The Company's net revenues from continuing operations have grown at a
compound annual growth rate of approximately 63% during the period from January
1, 1994 through December 31, 1997. In addition, since 1991, the Company has
expanded its operations from 24 home health care centers in four states to 329
home health care centers in 35 states. This growth has been achieved through a
combination of internal growth, acquisitions, start-up operations, hospital
joint ventures and strategic alliances. The Company acquired 81, 101 and 98
centers during 1995, 1996 and 1997, respectively. Throughout this expansion, the
Company's earnings before interest, taxes, depreciation and amortization
("EBITDA") has remained constant at 21% of revenues.
As more fully discussed in "Material 1997 Corporate Developments" and Note
3 of the December 31, 1997 consolidated financial statements, the Company
recorded $65.0 million of accounting charges in the quarter ended September 30,
1997 related to the Medicare oxygen reimbursement reductions and related
restructuring. In addition to the $65.0 million charge, the Company also
recorded $2.0 million of unusual charges in the third quarter of 1997 as
follows: (i) the Company finalized the results of physical inventory counts for
certain acquired locations primarily in Oklahoma and Texas and recorded a charge
to income of $1.0 million, and (ii) in connection with the Company's analysis of
locations during the planning for the restructuring discussed above, management
determined that an additional charge of $1.0 million was required to
appropriately state the required franchise tax accrual.
The impact of these charges on the various classifications within the
consolidated statements of operations is as follows:
<TABLE>
<CAPTION>
<S> <C>
Cost of sales $ 6,255,000
Operating expenses 18,751,000
Restructuring charge 33,829,000
Goodwill impairment 8,165,000
------------
$ 67,000,000
============
</TABLE>
29
<PAGE> 30
Due to the comprehensive restructuring and reshaping program that occurred
in the fourth quarter of 1998, the Company purposefully slowed its pace of
acquisitions during the quarter and experienced higher than normal operating
expenses in select markets. Concurrently, it completely revamped its field
management structure and eliminated an entire layer of management. These
activities adversely affected the financial results for the fourth quarter.
The following table and discussion set forth items from the income
statement as a percentage of net revenues before the 1997 unusual charges for
the periods indicated:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Net revenues 100% 100% 100%
Cost of sales and related services, excluding depreciation and
amortization expense 21 22 24
Operating expenses 51 52 51
General and administrative expense 7 5 4
Depreciation and amortization expense 9 9 9
Interest expense 3 3 4
---- ---- ----
Total expenses 91 91 92
---- ---- ----
Income from operations before taxes 9 9 8
Provision for income taxes 3 3 3
---- ---- ----
Income from operations 6 6 5
==== ==== ====
OTHER DATA:
EBITDA 21% 21% 21%
</TABLE>
Historically, the Company reported same-store growth. Due to the
restructuring activity that occurred during the fourth quarter of 1997, the
Company determined that internal growth is a more accurate representation of
revenue growth than same-store growth. The Company has moved to an internal
growth calculation which still reflects the strength of operations excluding
acquired revenues.
YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996
The operations of acquired centers are included in the operations of the
Company from the effective date of each acquisition. Because of the substantial
acquisition activity, the comparison of the results of operations between 1997
and 1996 is materially impacted by the operations of these acquired businesses.
NET REVENUES. Net revenues increased from $268.3 million in 1996 to $387.3
million in 1997, an increase of $119.0 million, or 44%. The Company estimates
that $94.0 million of this increase in net revenues is attributable to the
acquired businesses. The remainder of the increase is primarily attributable to
internal revenue growth generated through the Company's sales and marketing
efforts. Internal revenue growth, including net revenues of hospital joint
ventures
30
<PAGE> 31
managed by the Company and accounted for under the equity method, was
13% for 1997. Following is a discussion of the components of net revenues:
Sales and Related Services Revenues. Sales and related services
revenues increased from $119.3 million in 1996 to $180.2 million in 1997,
an increase of $60.9 million, or 51%. This increase is primarily
attributable to the acquisition of home health care businesses and internal
revenue growth.
Rentals and Other Revenues. Rentals and other revenues increased from
$142.7 million in 1996 to $200.3 million in 1997, an increase of $57.6
million, or 40%. This increase is primarily attributable to the acquisition
of home health care businesses and internal revenue growth.
Earnings from Joint Ventures. Earnings from joint ventures increased
from $6.4 million in 1996 to $6.9 million in 1997, an increase of $500,000,
which was primarily attributable to internal growth, acquired and
newly-formed joint ventures. Internal revenue growth of joint ventures was
23% in 1997 compared to 1996, increasing the Company's total internal
revenue growth rate by 1%.
COST OF SALES AND RELATED SERVICES. Cost of sales and related services
increased from $58.6 million in 1996 to $91.2 million in 1997, an increase of
$32.6 million, or 56%. This increase was primarily attributable to acquisitions.
As a percentage of sales and related services revenues, cost of sales and
related services increased from 49% in 1996 to 51% in 1997. This percentage
increase was attributable to the change in the mix of sales and related service
revenues primarily attributable to the acquired home health care businesses.
OPERATING EXPENSES. Operating expenses increased from $138.2 million in
1996 to $197.8 million in 1997, an increase of $59.6 million, or 43%. This
increase was primarily attributable to increased costs associated with the
Company's increased net revenues. As a percentage of net revenues, operating
expenses decreased from 52% in 1996 to 51% in 1997. During the fourth quarter of
1997, operating expenses were higher than budgeted primarily due to the
reorganization of the field management structure and management's focus on
implementing the restructuring plan. The higher operating expenses were
partially offset by the improvement in bad debt expense. Bad debt expense as a
percentage of net revenue decreased from 4.3% in 1996 to 3.3% in 1997 as a
result of the Company's increased focus on accounts receivable management.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased from $14.7 million in 1996 to $16.0 million in 1997, an increase of
$1.3 million, or 9%. As a percentage of net revenues, general and administrative
expenses decreased from 5% in 1996 to 4% in 1997 as a result of a larger base of
revenues to which to spread the general and administrative expenses. The larger
base of revenues is due to internal growth and acquisitions.
DEPRECIATION AND AMORTIZATION EXPENSES. Depreciation and amortization
expenses increased from $23.8 million in 1996 to $33.7 million in 1997, an
increase of $9.9 million. This
31
<PAGE> 32
increase was primarily attributable to depreciation expense and the amortization
of goodwill recorded in connection with acquisitions.
INTEREST EXPENSE. Interest expense increased from $8.3 million in 1996 to
$16.5 million in 1997, an increase of $8.2 million. This increase was
attributable to interest expense on increased borrowings under the Bank Credit
Facility to fund acquisitions of home healthcare business during 1996 and 1997.
YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995
The operations of acquired centers are included in the operations of the
Company from the effective date of each acquisition. Because of the substantial
acquisition activity, the comparison of the results of operations between 1996
and 1995 is materially impacted by the operations of these acquired businesses.
NET REVENUES. Net revenues increased from $162.4 million in 1995 to $268.3
million in 1996, an increase of $105.9 million, or 65%. The Company estimates
that $97.0 million of this increase in net revenues is attributable to the
acquired businesses. The remainder of the increase is primarily attributable to
Same-store growth generated through the Company's sales and marketing efforts.
Same store growth, including net revenues of hospital joint ventures managed by
the Company and accounted for under the equity method, was 9% for 1996.
Following is a discussion of the components of net revenues:
Sales and Related Services Revenues. Sales and related services
revenues increased from $70.2 million in 1995 to $119.3 million in 1996, an
increase of $49.1 million, or 70%. This increase is primarily attributable
to the acquisition of home health care businesses and Same-store revenue
growth.
Rentals and Other Revenues. Rentals and other revenues increased from
$88.2 million in 1995 to $142.7 million in 1996, an increase of $54.5
million, or 62%. This increase is primarily attributable to the acquisition
of home health care businesses and Same-store revenue growth.
Earnings from Joint Ventures. Earnings from joint ventures increased
from $4.0 million in 1995 to $6.4 million in 1996, an increase of $2.4
million. Of this increase, $1.2 million was attributable to acquired and
newly-formed joint ventures and $1.2 million was attributable to growth in
the Company's existing joint ventures. Same-store revenue growth of joint
ventures was 37% in 1996 compared to 1995, increasing the Company's total
Same-store revenue growth rate by 4%.
COST OF SALES AND RELATED SERVICES. Cost of sales and related services
increased from $34.0 million in 1995 to $58.6 million in 1996, an increase of
$24.6 million, or 72%. This increase was primarily attributable to acquisitions.
As a percentage of sales and related services revenues, cost of sales and
related services increased from 48% in 1995 to 49% in 1996. This percentage
32
<PAGE> 33
increase was attributable to the change in mix of sales and related service
revenues primarily attributable to the acquired home health care businesses.
OPERATING EXPENSES. Operating expenses increased from $82.6 million in 1995
to $138.2 million in 1996, an increase of $55.6 million, or 67%. This increase
was primarily attributable to increased costs associated with the Company's
increased net revenues. As a percentage of net revenues, operating expenses
increased from 51% in 1995 to 52% in 1996. Even though field operating expenses
remained constant as a percentage of net revenues, slightly higher bad debt
expense as a percentage of net revenue was the primary factor contributing to
the overall operating expense percentage increase.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased from $11.7 million in 1995 to $14.7 million in 1996, an increase of
$3.0 million, or 26%. This increase was primarily attributable to increases in
personnel expenses associated with providing support for acquisitions and
continued growth. As a percentage of net revenues, general and administrative
expenses decreased from 7% in 1995 to 5% in 1996.
DEPRECIATION AND AMORTIZATION EXPENSES. Depreciation and amortization
expenses increased from $14.1 million in 1995 to $23.8 million in 1996, an
increase of $9.7 million, or 69%. This increase was primarily attributable to
depreciation expense and the amortization of goodwill recorded in connection
with acquisitions.
INTEREST EXPENSE. Interest expense increased from $4.8 million in 1995 to
$8.3 million in 1996, an increase of $3.5 million. This increase was due to
interest expense on increased borrowings used under the Bank Credit Facility to
fund acquisitions of home health care businesses during 1995 and 1996.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1997, the Company had current assets of $170.8 million and
current liabilities of $58.1 million, resulting in working capital of $112.7
million and a current ratio of 2.9x. This compares to working capital of $84.0
million and a current ratio of 3.4x at December 31, 1996.
The Company's future liquidity will continue to be dependent upon the
relative amounts of current assets (principally cash, accounts receivable and
inventories) and current liabilities (principally accounts payable and accrued
expenses). In that regard, accounts receivable can have a significant impact on
the Company's liquidity. The Company has various types of accounts receivable,
such as receivables from patients, contracts, and former owners of acquisitions.
The majority of the Company's accounts receivables are patient receivables.
Accounts receivable are generally outstanding for longer periods of time in the
health care industry than many other industries because of requirements to
provide third party payors with additional information subsequent to billing and
the time required by such payors to process claims. Certain accounts receivable
frequently are outstanding for more than 90 days, particularly where the account
33
<PAGE> 34
receivable relates to services for a patient receiving a new medical therapy or
covered by private insurance or Medicaid. Net patient accounts receivable were
$76.1 million and $102.4 million at December 31, 1996 and December 31, 1997,
respectively. This increase is primarily attributable to the acquisitions of
home health care businesses and the internal revenue growth net of the $17.7
million in accounts receivable related charges associated with the Medicare
oxygen reimbursement reduction response. Average days' sales in accounts
receivable was approximately 93 and 88 days' sales outstanding at December 31,
1996, and December 31, 1997, respectively. The decrease is primarily
attributable to the accounts receivable reserved in September, 1997 for
restructured centers.
Net cash provided by operating activities increased from $13.2 million in
1996 to $14.3 million in 1997, an increase of $1.1 million. Net cash used in
investing activities increased from $116.2 million in 1996 to $134.1 million in
1997, an increase of $17.9 million. Acquisition expenditures increased from
$93.8 million in 1996 to $103.3 million in 1997, an increase of $9.5 million.
Capital expenditures increased from $21.2 million in 1996 to $32.5 million in
1997, an increase of $11.3 million. Net cash provided from financing activities
increased from $106.1 million in 1996 to $124.6 million in 1997, an increase of
$18.5 million. The cash provided from financing activities in 1997 primarily
related to proceeds from the Bank Credit Facility, while $68.5 million of the
proceeds in 1996 were provided from a public sale of Company stock.
The Company's principal capital requirements are for acquisitions of
additional home health care companies and expansion of the services provided
through its existing home health care centers. The Company has financed and
intends to continue to finance these requirements, its net revenue growth, and
working capital needs with net cash provided by operations and with borrowings
under the Bank Credit Facility. On June 6, 1997, the Company amended and
restated its Bank Credit Facility to increase commitments thereunder from $225.0
million to $325.0 million. On December 19, 1997, the Company amended and
restated its Bank Credit Facility to increase commitments thereunder from $325.0
million to $400.0 million. The Bank Credit Facility currently includes a $75.0
million five-year term loan and a $325.0 million revolving line of credit.
Borrowings under the Bank Credit Facility may be used to finance acquisitions
and for other general corporate purposes, subject to the terms and conditions of
the credit and security agreements. Most of the Company's operating assets have
been pledged as security for borrowings under the Bank Credit Facility. Interest
is payable on borrowings under the Bank Credit Facility, at the election of the
Company, at either a "Base Lending Rate" or an "Adjusted Eurodollar Rate" (each
as defined in the Bank Credit Facility), plus a margin from 0% to 0.625% and
from 0.375% to 1.375%, respectively. The Company's ability to borrow under the
Bank Credit Facility terminates on December 16, 2002, subject to exceptions set
forth therein. As of December 31, 1997, the total loans outstanding under the
Bank Credit Facility was approximately $255.4 million and the weighted average
borrowing rate was 7.029%. A commitment fee of up to 0.375% per annum (0.375% as
of December 31, 1997) is payable by the Company on the undrawn balance. The
interest rate and commitment fee vary depending on the Company's leverage ratio,
as defined in the Bank Credit Facility.
34
<PAGE> 35
The Bank Credit Facility contains various financial covenants, the most
restrictive of which relate to measurements of leverage, shareholders' equity,
debt-to-equity ratios and interest coverage ratios. The Bank Credit Facility
also contains certain covenants which, among other things, impose certain
limitations or prohibitions on the Company with respect to the incurrence of
certain indebtedness, the creation of security interests on the assets of the
Company, the payment of dividends on and the redemption or repurchase of
securities of the Company, investments, acquisitions, investments in joint
ventures, capital expenditures and sales of Company assets. The Company must
generally obtain bank consent for any single acquisition with an aggregate
purchase price of $30.0 million or more, and any acquisition which, when
combined with all acquisitions completed in the prior 12 months, exceeds $100.0
million and certain other transactions. The Company was in compliance with the
covenants at December 31, 1997.
IMPLEMENTATION OF FINANCIAL ACCOUNTING STANDARDS
Statement of Financial Accounting Standards, "Earnings per Share" ("SFAS
128") has been issued effective for fiscal years ending after December 15, 1997.
SFAS No. 128 establishes standards for computing and presenting earnings per
share. The Company adopted SFAS No. 128 in the fourth quarter of 1997 and
restated all prior year earnings per share.
Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income" ("SFAS 130") has been issued effective for fiscal years
beginning after December 15, 1997. SFAS 130 establishes standards for reporting
and display of comprehensive income and its components in a full set of general
purpose financial statements. The Company is required to adopt the provisions of
SFAS 130 in 1998 and does not expect adoption thereof to have a material effect
on the Company's financial position or results of operations.
Statement of Financial Accounting Standards No. 131, "Disclosures about
Segments of an Enterprise and Related Information" ("SFAS 131") has been issued
effective for fiscal years beginning after December 15, 1997. SFAS 131
establishes standards for the way that public business enterprises report
information about operating segments in annual financial statements and requires
that these enterprises report selected information about operating segments in
interim financial reports issued to shareholders. The Company is required to
adopt the provisions of SFAS 131 in the fourth quarter of 1998 and does not
expect adoption thereof to have a material effect on the Company's financial
position or results of operations.
35
<PAGE> 36
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial statements are contained on pages 40 through 74 of this Report
and are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information concerning directors and executive officers of the Company is
incorporated by reference to the Company's definitive proxy statement dated
April 8, 1998 ("Proxy Statement") for the annual meeting of stockholders to be
held on May 28, 1998.
ITEM 11. EXECUTIVE COMPENSATION
Executive compensation information is incorporated by reference to the
Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security ownership of certain beneficial owners and management information
is incorporated by reference to the Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information concerning certain relationships and related transactions of
the Company is incorporated by reference to the Proxy Statement.
36
<PAGE> 37
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial statements are contained on pages 40 through 74 of this
Report and are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information concerning directors and executive officers of the Company
is incorporated by reference to the Company's definitive proxy statement dated
April 8, 1998 ("Proxy Statement") for the annual meeting of stockholders to be
held on May 28, 1998.
ITEM 11. EXECUTIVE COMPENSATION
Executive compensation information is incorporated by reference to the
Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security ownership of certain beneficial owners and management
information is incorporated by reference to the Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information concerning certain relationships and related transactions
of the Company is incorporated by reference to the Proxy Statement.
PART IV
36
<PAGE> 38
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
Financial statements and schedules of the Company and its subsidiaries
required to be included in Part II, Item 8 are listed below.
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS
FORM 10-K PAGES
---------------
<S> <C>
Report of Independent Public Accountants 41
Consolidated Balance Sheets, December 31, 1996 and 1997 42 - 43
Consolidated Statements of Operations for the Years Ended
December 31, 1995, 1996, and 1997 44 - 45
Consolidated Statements of Shareholders' Equity for
the Years Ended December 31, 1995, 1996, and 1997 46 - 48
Consolidated Statements of Cash Flows for the Years
Ended December 31, 1995, 1996, and 1997 49 - 51
Notes to Consolidated Financial Statements,
December 31, 1997 52 - 74
FINANCIAL STATEMENT SCHEDULES
Report of Independent Public Accountants S-1
Schedule II -- Valuation and Qualifying Accounts S-2
</TABLE>
EXHIBITS
The Exhibits filed as part of the Report on Form 10-K are listed in the
Index to Exhibits immediately following the financial statement schedules.
REPORTS ON FORM 8-K DURING THE LAST QUARTER OF THE YEAR ENDED DECEMBER 31, 1997.
None.
37
<PAGE> 39
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
AMERICAN HOMEPATIENT, INC.
/s/EDWARD K. WISSING
---------------------------------------
Edward K. Wissing, President and
Chief Executive Officer and Director
/s/MARY ELLEN RODGERS
---------------------------------------
Mary Ellen Rodgers
Chief Financial Officer
Date: March 20, 1998
38
<PAGE> 40
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Morris Perlis Chairman March 20, 1998
- - ----------------------------------
Morris A. Perlis
/s/Allan Silber Director March 20, 1998
- - ----------------------------------
Allan C. Silber
/s/Henry T. Blackstock Director March 20, 1998
- - ----------------------------------
Henry T. Blackstock
/s/Joseph Furlong III Director March 20, 1998
- - ----------------------------------
Joseph Furlong III
/s/Thomas Dattilo Director March 20, 1998
- - ----------------------------------
Thomas Dattilo
/s/Edward Sonshine Director March 20, 1998
- - ----------------------------------
Edward Sonshine
/s/Mark Manner Director March 20, 1998
- - ----------------------------------
Mark Manner
/s/Edward K. Wissing Chief Executive March 20, 1998
- - ---------------------------------- Officer
Edward K. Wissing
/s/Mary Ellen Rodgers Chief Financial March 20, 1998
- - ---------------------------------- Officer and
Mary Ellen Rodgers Chief Accounting
Officer
</TABLE>
39
<PAGE> 41
AMERICAN HOMEPATIENT, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 1997 AND 1996
TOGETHER WITH
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
40
<PAGE> 42
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To American HomePatient, Inc.:
We have audited the accompanying consolidated balance sheets of AMERICAN
HOMEPATIENT, INC. (a Delaware corporation) and subsidiaries as of December 31,
1997 and 1996, and the related consolidated statements of operations,
shareholders' equity and cash flows for each of the three years in the period
ended December 31, 1997. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of American HomePatient, Inc. and
subsidiaries as of December 31, 1997 and 1996 and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1997, in conformity with generally accepted accounting principles.
Arthur Andersen LLP
Nashville, Tennessee
February 23, 1998
41
<PAGE> 43
AMERICAN HOMEPATIENT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
ASSETS 1997 1996
------------- ------------ -------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 12,050,000 $ 7,299,000
Restricted cash 50,000 425,000
Accounts receivable, less allowance for doubtful
accounts of $43,862,000 and $18,755,000,
respectively 114,386,000 79,460,000
Inventories 25,824,000 21,921,000
Prepaid expenses and other assets 1,423,000 1,353,000
Income tax receivable 8,099,000 872,000
Deferred tax asset 8,998,000 7,470,000
------------ ------------
Total current assets 170,830,000 118,800,000
------------ ------------
PROPERTY AND EQUIPMENT, at cost: 146,803,000 95,254,000
Less accumulated depreciation and amortization (66,729,000) (38,384,000)
------------ ------------
Net property and equipment 80,074,000 56,870,000
------------ ------------
OTHER ASSETS:
Excess of cost over fair value of net assets
acquired, net 262,294,000 198,193,000
Investment in joint ventures 14,974,000 12,405,000
Deferred financing costs, net 3,967,000 2,761,000
Other assets 26,227,000 6,582,000
------------ ------------
Total other assets 307,462,000 219,941,000
------------ ------------
$558,366,000 $395,611,000
============ ============
</TABLE>
(Continued)
42
<PAGE> 44
AMERICAN HOMEPATIENT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1997 AND 1996
(Continued)
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY 1997 1996
------------------------------------ ------------ ------------
<S> <C> <C>
CURRENT LIABILITIES:
Current portion of long-term debt and capital leases $ 9,361,000 $ 10,245,000
Trade accounts payable 13,484,000 8,698,000
Other payables 1,343,000 775,000
Accrued expenses:
Payroll and related benefits 9,553,000 6,672,000
Restructuring accrual 13,604,000 --
Other 10,764,000 8,398,000
------------ ------------
Total current liabilities 58,109,000 34,788,000
------------ ------------
NONCURRENT LIABILITIES:
Long-term debt and capital leases, less
current portion 291,963,000 139,458,000
Deferred tax liabilities 2,046,000 4,578,000
Other noncurrent liabilities 12,159,000 1,145,000
------------ ------------
Total noncurrent liabilities 306,168,000 145,181,000
------------ ------------
COMMITMENTS, CONTINGENCIES AND GUARANTEES
SHAREHOLDERS' EQUITY:
Preferred stock, $.01 par value; authorized, 5,000,000
shares; none issued and outstanding -- --
Common stock, $.01 par value; authorized, 35,000,000
shares; issued and outstanding, 14,901,000 and
14,677,000 shares, respectively 149,000 147,000
Paid-in capital 171,133,000 166,780,000
Retained earnings 22,807,000 48,715,000
------------ ------------
Total shareholders' equity 194,089,000 215,642,000
------------ ------------
$558,366,000 $395,611,000
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
43
<PAGE> 45
AMERICAN HOMEPATIENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
1997 1996 1995
----------- ------------- ------------
<S> <C> <C> <C>
REVENUES:
Sales and related service revenues $180,176,000 $119,266,000 $ 70,240,000
Rentals and other revenues 200,251,000 142,660,000 88,170,000
Earnings from joint ventures 6,850,000 6,422,000 3,961,000
------------ ------------ ------------
Total revenues 387,277,000 268,348,000 162,371,000
------------ ------------ ------------
EXPENSES:
Cost of sales and related services, excluding
depreciation and amortization 97,418,000 58,575,000 34,031,000
Operating 216,532,000 138,213,000 82,608,000
General and administrative 15,953,000 14,664,000 11,704,000
Depreciation and amortization 33,736,000 23,845,000 14,081,000
Interest 16,494,000 8,294,000 4,829,000
Restructuring charge 33,829,000 -- --
Goodwill impairment 8,165,000 -- --
------------ ------------ ------------
Total expenses 422,127,000 243,591,000 147,253,000
------------ ------------ ------------
INCOME (LOSS) BEFORE INCOME TAXES (34,850,000) 24,757,000 15,118,000
------------ ------------ ------------
PROVISION (BENEFIT) FOR INCOME TAXES:
Current (5,979,000) 8,866,000 7,378,000
Deferred (2,963,000) 690,000 (1,349,000)
------------ ------------ ------------
(8,942,000) 9,556,000 6,029,000
------------ ------------ ------------
NET INCOME (LOSS) $(25,908,000) $ 15,201,000 $ 9,089,000
============ ============ ============
</TABLE>
(Continued)
44
<PAGE> 46
AMERICAN HOMEPATIENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
(Continued)
<TABLE>
<CAPTION>
1997 1996 1995
----------- ----------- ------------
<S> <C> <C> <C>
NET INCOME (LOSS) PER COMMON SHARE -
BASIC $ (1.75) $ 1.13 $ .86
=========== =========== ===========
DILUTED $ (1.75) $ 1.10 $ .84
=========== =========== ===========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING -
BASIC 14,839,000 13,473,000 10,550,000
=========== =========== ===========
DILUTED 14,839,000 13,841,000 10,838,000
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
45
<PAGE> 47
AMERICAN HOMEPATIENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
COMMON STOCK
----------------------- PAID-IN RETAINED
SHARES AMOUNT CAPITAL EARNINGS TOTAL
---------- -------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1994 8,375,204 $ 83,000 $33,588,000 $24,425,000 $ 58,096,000
---------- -------- ----------- ----------- ------------
Issuance of shares through exercise of
employee stock options 362,475 5,000 3,468,000 -- 3,473,000
Issuance of shares through employee stock
purchase plan 26,486 -- 245,000 -- 245,000
Tax benefit of stock options exercised -- -- 1,297,000 -- 1,297,000
Issuance of shares, net of issuance costs 2,722,500 27,000 47,204,000 -- 47,231,000
Net income -- -- -- 9,089,000 9,089,000
---------- -------- ----------- ----------- ------------
BALANCE, DECEMBER 31, 1995 11,486,665 $115,000 $85,802,000 $33,514,000 $119,431,000
---------- -------- ----------- ----------- ------------
</TABLE>
(Continued)
46
<PAGE> 48
AMERICAN HOMEPATIENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
(Continued)
<TABLE>
<CAPTION>
COMMON STOCK
----------------------- PAID-IN RETAINED
SHARES AMOUNT CAPITAL EARNINGS TOTAL
BALANCE, DECEMBER 31, 1995 11,486,665 $115,000 $ 85,802,000 $33,514,000 $119,431,000
---------- -------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Issuance of shares through exercise of
employee stock options 168,004 2,000 1,981,000 -- 1,983,000
Issuance of shares through employee
stock purchase plan 34,007 -- 423,000 -- 423,000
Issuance of shares through exercise
of stock warrants 66,600 -- 516,000 -- 516,000
Issuance of shares in connection with an
acquisition 446,460 5,000 11,603,000 -- 11,608,000
Tax benefit of stock options exercised -- -- 450,000 -- 450,000
Issuance of shares, net of issuance
costs 2,475,000 25,000 66,005,000 -- 66,030,000
Net income -- -- -- 15,201,000 15,201,000
---------- -------- ------------ ----------- ------------
BALANCE, DECEMBER 31, 1996 14,676,736 $147,000 $166,780,000 $48,715,000 $215,642,000
========== ======== ============ =========== ============
</TABLE>
(Continued)
47
<PAGE> 49
AMERICAN HOMEPATIENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
(Continued)
<TABLE>
<CAPTION>
COMMON STOCK
----------------------- PAID-IN RETAINED
SHARES AMOUNT CAPITAL EARNINGS TOTAL
---------- -------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1996 14,676,736 $147,000 $166,780,000 $ 48,715,000 $215,642,000
========== ======== ============ ============ ============
Issuance of shares through exercise of
employee stock options 184,862 2,000 3,125,000 -- 3,127,000
Issuance of shares through employee
stock purchase plan 32,152 -- 608,000 -- 608,000
Issuance of shares through exercise
of stock warrants 7,500 -- 90,000 -- 90,000
Tax benefit of stock options exercised -- -- 530,000 -- 530,000
Net loss -- -- -- (25,908,000) (25,908,000)
---------- -------- ------------ ------------ ------------
BALANCE, DECEMBER 31, 1997 14,901,250 $149,000 $171,133,000 $ 22,807,000 $194,089,000
========== ======== ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
48
<PAGE> 50
AMERICAN HOMEPATIENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
1997 1996 1995
------------ ----------- ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(25,908,000) $ 15,201,000 $ 9,089,000
Adjustments to reconcile net income (loss) to net
cash provided from operating activities:
Depreciation and amortization 33,736,000 23,845,000 14,081,000
Equity in earnings of unconsolidated joint ventures (3,476,000) (3,375,000) (2,138,000)
Deferred income taxes (2,963,000) 690,000 (1,349,000)
Minority interest 244,000 161,000 135,000
Goodwill impairment and write-off 20,411,000 -- --
Other non-cash charges 44,589,000 -- --
Change in assets and liabilities, net of acquisitions:
Restricted cash 375,000 (50,000) --
Accounts receivable, net (31,944,000) (14,920,000) (5,956,000)
Inventories (999,000) (2,303,000) (1,370,000)
Prepaid expenses and other assets 416,000 348,000 (573,000)
Income tax receivable (8,520,000) (940,000) --
Trade accounts payable, accrued expenses and
other current liabilities (5,982,000) (4,196,000) (6,889,000)
Restructuring accrual (4,108,000) -- --
Deferred costs (51,000) (30,000) (55,000)
Other assets and liabilities (1,475,000) (1,281,000) 158,000
------------ ------------ ------------
Net cash provided from operating
activities 14,345,000 13,150,000 5,133,000
------------ ------------ ------------
</TABLE>
(Continued)
49
<PAGE> 51
AMERICAN HOMEPATIENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
(Continued)
<TABLE>
<CAPTION>
1997 1996 1995
------------- ------------- -------------
<S> <C> <C> <C>
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions, net of cash acquired $(103,289,000) $ (93,800,000) $ (94,353,000)
Additions to property and equipment, net (32,530,000) (21,157,000) (13,964,000
Distributions to minority interest owners (166,000) (65,000) (135,000)
Distributions from (advances to) unconsolidated
joint ventures, net 1,839,000 (1,193,000) 240,000
------------- ------------- -------------
Net cash used in investing activities (134,146,000) (116,215,000) (108,212,000)
------------- ------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Deferred financing costs (1,859,000) (1,299,000) (1,255,000)
Proceeds from long-term debt 133,766,000 47,196,000 56,765,000
Principal payments on debt and capital leases (10,228,000) (8,286,000) (2,614,000)
Proceeds from sale of stock, net of issuance costs 2,873,000 68,529,000 50,703,000
------------- ------------- -------------
Net cash provided from financing activities 124,552,000 106,140,000 103,599,000
------------- ------------- -------------
</TABLE>
(Continued)
50
<PAGE> 52
AMERICAN HOMEPATIENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
(Continued)
<TABLE>
<CAPTION>
1997 1996 1995
----------- ---------- ----------
<S> <C> <C> <C>
INCREASE IN CASH AND CASH EQUIVALENTS $ 4,751,000 $3,075,000 $ 520,000
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD 7,299,000 4,224,000 3,704,000
----------- ---------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $12,050,000 $7,299,000 $4,224,000
=========== ========== ==========
SUPPLEMENTAL INFORMATION:
Cash payments of interest $16,675,000 $8,042,000 $4,171,000
=========== ========== ==========
Cash payments of income taxes $ 2,985,000 $9,866,000 $9,573,000
=========== ========== ==========
</TABLE>
In connection with the acquisitions of home health care businesses, the Company
issued 446,460 shares of common stock in 1996, and debt of $41.7 million, $22.4
million, and $13.5 million in 1997, 1996 and 1995, respectively.
The accompanying notes are an integral part of these consolidated financial
statements.
51
<PAGE> 53
AMERICAN HOMEPATIENT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
1. ORGANIZATION AND BACKGROUND
American HomePatient, Inc. and subsidiaries (the "Company" or "American
HomePatient") is a health care services company engaged in the provision
of home health care services. The Company's home health care services are
comprised of the rental and sale of home medical equipment and home health
care supplies, and the provision of infusion therapies and respiratory
therapies. As of December 31, 1997, the Company provides these services to
patients in the home through 329 branches in 35 states.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CONSOLIDATION
The consolidated financial statements include the accounts of the Company
and its majority-owned subsidiaries. All significant intercompany accounts
and transactions have been eliminated in consolidation. The results of
operations of companies and other entities acquired in purchase
transactions are included from the effective dates of their respective
acquisitions. Investments in 50% owned joint ventures are accounted for
using the equity method.
REVENUES
The Company's principal continuing business is the operation of home
health care centers. Approximately 56%, 59% and 58% of the Company's net
revenues in 1997, 1996 and 1995, respectively, are from participation in
Medicare and state Medicaid programs. Amounts paid under these programs
are generally based on a fixed rate. Revenues are recorded at the expected
reimbursement rates when the services are provided, merchandise delivered
or equipment rented to patients. Amounts earned under the Medicare and
Medicaid programs are subject to review by such third party payors. In the
opinion of management, adequate provision has been made for any adjustment
that may result from such reviews. Any differences between estimated
settlements and final determinations are reflected in operations in the
year finalized.
Sales and related service revenues are derived from the provision of
infusion therapies, the sale of home health care equipment and supplies,
the sale of aerosol medications and respiratory therapy equipment and
supplies and services related to the delivery of these products. Rentals
and other patient revenues are derived from the rental of home health care
equipment, enteral pumps and equipment related to the provision of
respiratory therapy.
52
<PAGE> 54
CASH EQUIVALENTS
Cash equivalents consist of highly liquid investments that have an
original maturity of less than three months.
ACCOUNTS RECEIVABLE
The Company's accounts receivable, before allowances, consists of the
following components:
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------
1997 1996
------------ -----------
<S> <C> <C>
Patient receivables:
Medicare $ 45,077,000 $31,388,000
All other, principally commercial insurance 101,137,000 63,439,000
------------ -----------
146,214,000 94,827,000
Other receivables, principally due from
vendors and former owners 12,034,000 3,388,000
------------ -----------
Total $158,248,000 $98,215,000
============ ===========
</TABLE>
The Company provides credit for a substantial portion of its non-third
party reimbursed revenues and continually monitors the creditworthiness
and collectibility of amounts due from its clients. The Company is subject
to accounting losses from uncollectible receivables in excess of its
reserves.
PROVISION FOR DOUBTFUL ACCOUNTS
The Company includes provisions for doubtful accounts in operating
expenses in the accompanying consolidated statements of operations. The
provisions for doubtful accounts excluding the restructuring and other
special charges of $17,750,000 in 1997 were $12,791,000, $11,450,000 and
$5,934,000 in 1997, 1996 and 1995, respectively.
INVENTORIES
All inventories represent goods or supplies and are priced at the lower of
cost (on a first-in, first-out basis) or net realizable value.
PROPERTY AND EQUIPMENT
Property and equipment are depreciated or amortized primarily using the
straight-line method over the estimated useful lives of the assets for
financial reporting purposes and the accelerated cost recovery method for
income tax reporting purposes. Assets under capital leases are amortized
over the term of the lease for financial reporting purposes. The estimated
useful lives are as follows: buildings and improvements, 18-30 years;
rental equipment, 3-7 years; furniture, fixtures and equipment, 4-5 years;
leasehold improvements, 5 years; and delivery equipment, 3-5 years. The
provision for depreciation includes the amortization of equipment and
vehicles under capital leases.
53
<PAGE> 55
In 1997, 1996 and 1995, depreciation expense includes $20,344,000,
$15,059,000 and $9,645,000, respectively, related to the depreciation of
rental equipment.
Maintenance and repairs are charged against income as incurred, and major
betterments and improvements are capitalized. The cost and accumulated
depreciation of assets sold or otherwise disposed of are removed from the
accounts and the resulting gain or loss is reflected in the consolidated
statements of operations.
Property and equipment obtained through purchase acquisitions are stated
at their estimated fair value determined on their respective dates of
acquisition.
EXCESS OF COST OVER FAIR VALUE OF NET ASSETS ACQUIRED
The excess of cost over fair value of net assets acquired ("goodwill") is
amortized over 40 years using the straight-line method. Accumulated
amortization related to goodwill totaled $12,296,000 and $6,968,000 as of
December 31, 1997 and 1996, respectively. The Company annually evaluates
the realizability of goodwill by utilizing an operating income realization
test for the applicable businesses acquired and by instituting plans and
strategies to improve performance and realization. In addition, the
Company considers the effects of external changes to the Company's
business environment, including competitive pressures, market erosion and
technological and regulatory changes. The Company believes its estimated
goodwill life is reasonable given the continuing movement of patient care
to noninstitutional settings, expanding demand due to demographic trends,
the emphasis of the Company on establishing significant coverage in each
local and regional market, the consistent practice with other home care
companies and other factors.
In connection with the restructuring as described in Note 3, the Company
wrote-down $8.1 million of goodwill as required under SFAS No. 121 based
upon management's estimate of the impact of the announced Medicare oxygen
reimbursement reductions on the Company's continuing operations. Also, the
Company wrote off $12.2 million of goodwill related to the closure of
certain operating centers which is reflected as part of the restructuring
charge in the consolidated statements of operations.
DEFERRED FINANCING COSTS
Financing costs are amortized primarily using the straight-line method
over the periods of the related indebtedness.
OTHER ASSETS
The estimated value of non-compete agreements, net of accumulated
amortization of $1,850,000 and $1,504,000 as of December 31, 1997 and
1996, respectively, are amortized over the lives of the agreements,
generally periods of up to seven years. As of December 31, 1997 and 1996,
the net amounts of non-compete agreements of $711,000 and $1,056,000,
respectively, are reflected in other assets in the accompanying
consolidated balance sheets.
Other intangibles are amortized over their expected benefit period of two
to three years. The net balance at December 31, 1997 and 1996 is
$1,902,000 and $1,791,000,
54
<PAGE> 56
respectively, and is reflected in other assets in the accompanying
consolidated balance sheets.
Receivables under split dollar value life insurance arrangements of
$14,957,000 at December 31, 1997, were recorded in connection with the
acquisitions of certain home health care businesses and are reflected in
other assets. The Company owes premiums on the split dollar value life
insurance policies of $10,770,000 at December 31, 1997 which are
classified as other noncurrent liabilities.
INCOME TAXES
The Company has adopted Statement of Financial Accounting Standards No.
109 which requires an asset and liability approach for financial
accounting and reporting for income taxes. Deferred income taxes are
provided for differences between financial reporting and tax bases of
assets and liabilities, with the primary differences related to the
allowance for doubtful accounts, accrued liabilities, depreciation methods
and periods and deferred cost amortization methods. See Note 9 for
additional information related to the provisions for income taxes.
STOCK BASED COMPENSATION
Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" ("SFAS 123"), encourages, but does not require,
companies to record compensation cost for stock-based employee
compensation plans at fair value. The Company has chosen to continue to
account for stock-based compensation using the intrinsic value method as
prescribed in Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees" ("APB Opinion No. 25"), and related
Interpretations. Under APB Opinion No. 25, no compensation cost related to
stock options has been recognized because all options are issued with
exercise prices equal to the fair market value at the date of grant. See
Note 8 for further discussion.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts of cash and cash equivalents, accounts receivable,
accounts payable and accruals approximate fair value because of the
short-term nature of these items. Based on the current market rates
offered for similar debt of the same maturities, the carrying amount of
the Company's long-term debt, including current portion, also approximates
fair value at December 31, 1997.
55
<PAGE> 57
ACCOUNTING PRONOUNCEMENTS
Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income" ("SFAS 130") has been issued effective for fiscal
years beginning after December 15, 1997. SFAS 130 establishes standards
for reporting and display of comprehensive income and its components in a
full set of general purpose financial statements. The Company is required
to adopt the provisions of SFAS 130 in 1998 and does not expect adoption
thereof to have a material effect on the Company's financial position or
results of operations.
Statement of Financial Accounting Standards No. 131 "Disclosures about
Segments of an Enterprise and Related Information" ("SFAS 131") has been
issued effective for fiscal years beginning after December 15, 1997. SFAS
131 establishes standards for the way that public business enterprises
report information about operating segments in annual financial statements
and require that these enterprises report selected information about
operating segments in interim financial reports issued to shareholders.
The Company is required to adopt the provisions of SFAS 131 in the fourth
quarter of 1998 and does not expect adoption thereof to have a material
effect on the Company's financial position or results of operations.
RECLASSIFICATIONS
Certain reclassifications have been made to the 1995 and 1996 consolidated
financial statements to conform to the 1997 presentation.
3. MEDICARE OXYGEN REIMBURSEMENT REDUCTIONS AND RELATED RESTRUCTURING
In August, Congress enacted and President Clinton signed the Balanced
Budget Act of 1997 which will reduce the Medicare reimbursement rate for
oxygen related services by 25 percent on January 1, 1998, and by another
five percent in 1999. In addition, Consumer Price Index increases in
oxygen reimbursement rates will not resume until the year 2003. American
HomePatient is one of the nation's largest providers of home oxygen
services to patients, many of whom are Medicare recipients, and is
therefore significantly affected by this legislation. Medicare oxygen
reimbursements account for approximately 23.5 percent of the Company's
revenues.
On September 25, 1997, the Company announced initiatives to aggressively
respond to planned Medicare oxygen reimbursement reductions by
fundamentally reshaping the Company for long-term growth and value
creation. More than 100 of the Company's total operating and billing
locations will be impacted by the planned activities. The specific actions
resulted in pre-tax accounting charges in the third quarter of 1997 of
$65.0 million due to the closure, consolidation, or scaling back of
approximately 20 percent of the Company's total operating centers, the
closure or scaling back of nine billing centers, the elimination of four
operating regions, the scaling back or elimination of marginal products
and services at numerous locations, and the related termination of
approximately 350 employees in the affected operating and billing centers.
These activities are expected to be substantially completed by June 1998.
56
<PAGE> 58
The $65.0 million pre-tax charges recorded in the third quarter of 1997
specifically related to the write-down of goodwill and other non current
assets ($8.2 million), the closure, consolidation, scaling back, or
elimination of services at selected locations ($44.8 million), and the
anticipated negative impact on assets of the remaining operating locations
($12.0 million).
The write-off of goodwill and other non current assets is required under
SFAS No. 121 based upon management's estimate of the impact of the
announced Medicare oxygen reimbursement reductions on the Company's
continuing operations. Management's projections of future operations
considering the reduced reimbursement rates for oxygen related services
indicated that the carrying value of goodwill and other non current assets
should be written down by $8.2 million.
The closure, consolidation, scaling back, or elimination of services at
more than 100 of the Company's operating and billing centers resulted in
the write-off of goodwill and other intangible assets specifically
identified with affected locations ($12.2 million), the accrual of
estimated employee severance and related exit costs ($6.7 million), the
accrual of estimated facility exit costs including future lease costs, the
write-off of leasehold improvements, and the write-down of furniture and
equipment ($6.1 million), the write-down of accounts receivable to
estimated realizable value ($8.7 million), the write-down of inventory to
estimated realizable value ($2.2 million), the write-down of rental
equipment to estimated realizable value ($2.8 million), the termination of
related management contracts ($3.0 million), and other exit costs ($3.1
million). The accounting charges discussed in this paragraph are recorded
in the accompanying 1997 consolidated statements of operations as cost of
sales ($2,204,000), operating expenses ($8,729,000), and restructuring
charge ($33,829,000).
Due to the comprehensive nature of this restructuring, including the
consolidation of regional responsibilities, reorganization of the field
management structure, refinements and modifications of existing procedures
in all locations and additional management attention required to
accomplish the restructuring in the desired timeframe, negative impacts
are anticipated in the remaining operating locations relative to
realization of accounts receivable, inventories and rental equipment, for
which an additional $12.0 million charge was recorded. This accounting
charge is recorded in the accompanying 1997 consolidated statements of
operations as cost of sales ($3,051,000) and operating expenses
($9,022,000).
The total accounting charges discussed above are recorded in the
accompanying 1997 consolidated statements of operations in the following
classifications:
<TABLE>
<S> <C>
Cost of sales $ 5,255,000
Operating expenses 17,751,000
Restructuring charge 33,829,000
Goodwill and other intangible impairments 8,165,000
-----------
$65,000,000
===========
</TABLE>
57
<PAGE> 59
During the fourth quarter of 1997, the following actions occurred related
to the restructuring: (i) 155 employees were terminated; (ii) 47 operating
centers were closed; (iii) 5 billing locations were closed and (iv) 44
operating centers were consolidated, scaled back or had marginal products
and services eliminated. Also, the Company revamped its field management
structure and eliminated an entire layer of management.
The expected cash payments related to the restructuring charge accrued on
September 25, 1997 were approximately $17.7 million. During the fourth
quarter of 1997, $4.1 million was charged against the related accruals as
costs were incurred and payments were made. The remaining accrual at
December 31, 1997 primarily represents estimated employee severance and
related exit costs ($4.1 million), estimated facility exit costs ($4.5
million), termination of management contracts ($3.0 million) and other
exit costs ($2.0 million).
4. INVESTMENT IN JOINT VENTURE PARTNERSHIPS
The Company owns 50% of sixteen home health care businesses (the
"Partnerships"). The remaining 50% of each business is owned by local
hospitals within the same community as the joint ventures. The Company is
solely responsible for the management of these businesses and receives
management fees ranging from 3% to 15% based on revenues or cash
collections.
The Company provides accounting and receivable billing services to the
Partnerships. The Partnerships are charged for their share of such costs
based on contract terms. The Company's earnings from joint ventures
include equity in earnings, management fees and fees for accounting and
receivable billing services. The Company's investment in unconsolidated
joint ventures includes receivables from joint ventures of $2,289,000 and
$1,807,000 at December 31, 1997 and 1996, respectively.
The Company guarantees a mortgage payable of one of the Partnerships. The
balance of the guaranteed debt at December 31, 1997 is $469,000.
58
<PAGE> 60
Summarized financial information of the Partnerships from the respective
effective dates on a combined basis is as follows:
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1997 1996
------------ ------------
<S> <C> <C>
Accounts receivable, net $12,902,000 $10,112,000
Other current assets 5,512,000 1,682,000
Property and equipment, net 12,551,000 9,351,000
Other assets 1,364,000 813,000
----------- -----------
Total assets $32,329,000 $21,958,000
=========== ===========
Accounts payable $ 1,236,000 $ 740,000
Accrued payroll and other 5,600,000 1,084,000
Partners' capital 25,493,000 20,134,000
----------- -----------
Total liabilities and partners' capital $32,329,000 $21,958,000
=========== ===========
Net sales and rental revenues $44,898,000 $34,756,000
----------- -----------
Cost of sales 7,513,000 7,696,000
Operating and management fees 25,952,000 17,519,000
Depreciation, amortization and interest
expense 4,342,000 2,793,000
----------- -----------
Total expenses 37,807,000 28,008,000
----------- -----------
Pre-tax income $ 7,091,000 $ 6,748,000
=========== ===========
</TABLE>
The Company's ownership percentage of undistributed earnings of the
Partnerships at December 31, 1997 and 1996 is $6,653,000 and $4,823,000,
respectively. For federal and state income tax reporting purposes, each
partner reports their share of the profits and losses of the Partnerships.
5. ACQUISITIONS
1997 ACQUISITIONS
Effective in December 1997, the Company acquired the stock of National
Medical Systems, Inc. ("NMS") for $34.1 million in notes payable to
sellers and $9.9 million in assumed liabilities. In February 1998, $33.1
million of the notes payable to sellers was funded from operations and
draws on the Bank Credit Facility (see discussion at Note 7). NMS consists
of 35 branches.
Additionally, effective in 1997, the Company acquired 27 home health care
businesses consisting of 63 branches. The aggregate purchase price
included cash of $88.2 million, assumed liabilities of $18.2 million and
notes payable to sellers of $7.6 million. The cash amounts have been
funded from operations and draws on the Bank Credit Facility (see
discussion at Note 7). Of the 98 branches acquired in 1997, the Company
has consolidated 10 branches within other Company locations.
59
<PAGE> 61
1996 ACQUISITIONS
Effective in 1996, the Company acquired 40 home health care businesses
consisting of 101 branches. The aggregate purchase price included cash of
$103.2 million, assumed liabilities of $15.4 million, notes payable to
sellers of $7.6 million and 446,460 shares of the Company's common stock.
The cash amounts have been funded from operations, draws on the Bank
Credit Facility (see discussion at Note 7) and the public offering of
common shares (see discussion at Note 8). Of the 101 branches acquired in
1996, the Company has consolidated 20 branches with other Company
locations.
The allocation of the aggregate purchase price of the 1997 and 1996
acquisitions is summarized as follows:
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
Net current and other assets $ 28,546,000 $ 24,877,000
Fixed assets 23,182,000 16,107,000
Goodwill, noncompete agreements and
other intangibles 106,306,000 96,898,000
------------ ------------
$158,034,000 $137,882,000
============ ============
</TABLE>
The purchase prices for the above acquisitions were allocated to the
underlying assets based on their estimated relative fair values. Certain
of the assets acquired in 1997 are currently being evaluated and final
allocations of the purchase prices will be made in 1998. Management
believes that the final allocations will not materially affect the
Company's results of operations. The consolidated statements of operations
include the results of operations of the acquired businesses from the
respective dates of acquisition of the controlling interests.
The following unaudited pro forma information assumes the acquisitions
described above had occurred as of the beginning of the respective
periods:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------
1997 1996
-------- --------
<S> <C> <C>
(in thousands except share data)
Net revenues $443,062 $426,985
======== ========
Net income (loss) from operations $(22,637) $ 22,139
======== ========
Net income (loss) from operations per
common share - basic $ (1.53) $ 1.61
======== ========
Net income (loss) from operations per
common share - diluted $ (1.53) $ 1.57
======== ========
Weighted average common shares
outstanding - basic 14,839 13,772
======== ========
Weighted average common shares
outstanding - diluted 14,839 14,140
======== ========
</TABLE>
60
<PAGE> 62
6. PROPERTY AND EQUIPMENT
Property and equipment, at cost, consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------
1997 1996
------------ -----------
<S> <C> <C>
Land $ 671,000 $ 902,000
Buildings and improvements 7,841,000 6,207,000
Rental equipment 113,166,000 74,234,000
Furniture, fixtures and equipment 20,837,000 11,053,000
Delivery vehicles 4,288,000 2,858,000
------------ -----------
$146,803,000 $95,254,000
============ ===========
</TABLE>
Property and equipment under capital leases are included under the various
equipment categories.
61
<PAGE> 63
7. LONG-TERM DEBT AND LEASE COMMITMENTS
LONG-TERM DEBT AND CAPITAL LEASES
Long-term debt and capital lease obligations consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1997 1996
------------ ------------
<S> <S> <C>
Secured Revolving Line of Credit $213,613,000 $ 36,755,000
Secured Term Loan 75,000,000 100,000,000
Notes payable, primarily secured with acquired assets,
with interest rates primarily from 6.5% to 9.5%,
principal and interest due monthly or quarterly,
maturities through 2016 1,107,000 2,583,000
Mortgage note payable, interest at 8%, principal
and interest due monthly, with balloon payment of
$442,000 due July 1, 2004 584,000 602,000
Notes payable, primarily secured with acquired assets,
with interest rates from 7% to 8%, interest due
quarterly, principal payment due at maturity
date, final maturities in 1998 7,292,000 7,156,000
Acquisition note payable, interest at 7.0%, principal
and interest due on August 26, 1998 1,000,000 --
Acquisition note payable, interest at 7.0%, principal
and interest due on February 4, 2000 1,000,000 --
Acquisition note payable, interest at 8.0%, principal
and interest due on July 11, 1997 -- 1,500,000
First mortgage note payable, interest at 8.5%, principal
and interest due monthly through 2003, with call
provisions beginning in 1998 -- 481,000
Capital lease obligations, monthly principal and
interest payments until 2001 1,728,000 626,000
----------- ------------
301,324,000 149,703,000
Less current portion (9,361,000) (10,245,000)
------------ ------------
$291,963,000 $139,458,000
============ ============
</TABLE>
62
<PAGE> 64
Principal payments required on long-term debt (excluding capital leases)
for the next five years and thereafter beginning January 1, 1998 are as
follows:
<TABLE>
<CAPTION>
<S> <C>
1998 $ 8,611,000
1999 3,075,000
2000 10,076,000
2001 21,075,000
2002 255,688,000
Thereafter 1,071,000
------------
$299,596,000
============
</TABLE>
On December 19, 1997, the Company entered into a Fourth Amended and
Restated Bank Credit Facility (the "Bank Credit Facility") to increase
commitments thereunder to $400.0 million. This Bank Credit Facility
includes a $75.0 million five-year secured term loan (the "Secured Term
Loan") and a $325.0 million five-year secured revolving line of credit
(the "Secured Revolving Line of Credit").
Interest is payable on borrowings under the Bank Credit Facility, at the
election of the Company, at either a "Base Lending Rate" or an "Adjusted
Eurodollar Rate" (each as defined in the Bank Credit Facility), plus a
margin from 0% to 1.00% and from 0.5% to 2.00%, respectively. As of
December 31, 1997, borrowings under the Bank Credit Facility bore interest
at the banks' Adjusted Eurodollar Rate plus 1.00%. The weighted average
borrowing rate was 7.029%. A commitment fee of up to 0.375% per annum
(0.375% as of December 31, 1997) is payable by the Company on the undrawn
balance. The interest rate and commitment fee are based on the Company's
leverage ratio, as such ratio is defined in the Bank Credit Facility
agreement.
Subsequent to year end, the Company refinanced $31,000,000 of notes
payable to shareholders of acquired companies using the Secured Revolving
Line of Credit. The refinanced notes are classified in the consolidated
balance sheet according to the terms of the Secured Revolving Line of
Credit. The remaining notes to shareholders of acquired companies are
classified according to the terms of the notes.
Commencing on September 15, 1999, the Company shall make quarterly
principal payments on the Secured Term Loan of $1.5 million per quarter
through and including June 15, 2000; $3.0 million per quarter through and
including March 15, 2001; $6.0 million per quarter through and including
June 15, 2002; and $15.0 million per quarter through and including
December 16, 2002. The Secured Revolving Line of Credit does not require
principal payments until maturity at December 16, 2002.
The Bank Credit Facility contains various financial covenants, the most
restrictive of which relate to measurements of leverage, shareholders'
equity, debt-to-equity ratios and interest coverage ratios. The Bank
Credit Facility also contains certain covenants which, among other
restrictions, impose certain limitations or prohibitions on the Company
with respect to the incurrence of certain indebtedness, the creation of
security interests on the assets of the Company, the payment of dividends
on and the redemption or repurchase of securities of the Company,
investments, acquisitions, advances, capital expenditures and sales of
Company assets. The Company must generally obtain bank consent for (i) any
single acquisition with an aggregate
63
<PAGE> 65
purchase price of $30.0 million or more or (ii) any acquisition which when
combined with all acquisitions completed in the prior twelve months
exceeds $100.0 million. The Company was in compliance with the covenants
as of December 31, 1997. Most of the Company's operating assets have been
pledged as security for borrowings under the Bank Credit Facility.
CAPITAL LEASE COMMITMENTS
The Company leases certain equipment under capital leases. Future minimum
rental payments required on capital leases for the next five years
beginning January 1, 1998, less amounts representing interest, are as
follows:
<TABLE>
<CAPTION>
<S> <C>
1998 $ 869,000
1999 617,000
2000 292,000
2001 101,000
2002 52,000
----------
1,931,000
Less amounts representing interest 203,000
----------
$1,728,000
==========
</TABLE>
OPERATING LEASE COMMITMENTS
The Company has noncancelable operating leases on certain land, vehicles,
buildings and equipment. The approximate minimum future rental commitments
on the operating leases for the next five years beginning January 1, 1998
are as follows:
<TABLE>
<CAPTION>
<S> <C>
1998 $ 9,796,000
1999 7,628,000
2000 5,187,000
2001 3,234,000
2002 1,581,000
Thereafter 1,459,000
-----------
$28,885,000
===========
</TABLE>
Rent expense for all operating leases was approximately $13,811,000,
$8,356,000 and $5,651,000 in 1997, 1996 and 1995, respectively.
64
<PAGE> 66
8. SHAREHOLDERS' EQUITY AND STOCK PLANS
NONQUALIFIED STOCK OPTION PLANS
Under the 1991 Nonqualified Stock Option Plan (the "Plan"), as amended,
3,200,000 shares of common stock have been reserved for issuance upon
exercise of options granted thereunder. The maximum term of any option
granted pursuant to the Plan is ten years. Shares subject to options
granted under the Plan which expire, terminate or are canceled without
having been exercised in full become available again for future grants.
An analysis of stock options outstanding is as follows:
<TABLE>
<CAPTION>
WEIGHTED AVERAGE
OPTIONS EXERCISE PRICE
--------- ----------------
<S> <C> <C>
OUTSTANDING AT DECEMBER 31, 1994 581,250 $ 9.21
Granted 518,250 $ 16.51
Exercised 362,475 $ 9.28
Canceled 1,125 $ 16.50
--------- ---------
OUTSTANDING AT DECEMBER 31, 1995 735,900 $ 14.16
Granted 1,011,500 $ 18.10
Exercised 168,004 $ 11.81
Canceled 4,001 $ 17.50
--------- ---------
OUTSTANDING AT DECEMBER 31, 1996 1,575,395 $ 16.93
Granted 267,000 $ 21.64
Exercised 184,862 $ 15.00
Canceled 54,475 $ 19.57
--------- ---------
OUTSTANDING AT DECEMBER 31, 1997 1,603,058 $ 17.85
========= =========
EXERCISABLE AT DECEMBER 31, 1997 1,062,388
=========
</TABLE>
31,638 options outstanding at December 31, 1997 have exercise prices of $6
and a weighted average remaining contractual life of 3.75 years. Each of
these are exercisable at year end. 37,900 options outstanding at December
31, 1997 have exercise prices of $10 to $11.5, a weighted average exercise
price of $10.05 and a weighted average remaining contractual life of 6.45
years. Each of these are exercisable at year end. 1,202,520 options
outstanding at December 31, 1997 have exercise prices of $15.83 to $17.5,
a weighted average exercise price of $17.18 and a weighted average
remaining contractual life of 7.70 years. Of these, 872,308 are
exercisable at year end and have a weighted average exercise price of
$17.10. 331,000 options outstanding at December 31, 1997 have exercise
prices of $20.44 to $28.00 a weighted average exercise price of $22.31 and
a weighted average remaining contractual life of 8.83 years. Of these,
120,542 are exercisable at year end and have a weighted average exercise
price of $22.95.
The options granted prior to 1995 are fully vested and expire in ten
years. Options granted during 1995 to all employees except officers and
directors have a three year
65
<PAGE> 67
vesting period, and expire in ten years. Options granted during 1996 have
a two year vesting period, and expire in ten years. Options granted during
1997 have two and three year vesting periods, and expire in ten years. As
of December 31, 1997, 408,351 shares remain available for future grants of
options under the Plan.
Effective May 17, 1995, the Company's Board of Directors approved the
adoption of the 1995 Nonqualified Stock Option Plan for Directors (the
"1995 Plan"). Under the 1995 Plan, 300,000 shares of common stock have
been reserved for issuance upon exercise of options granted thereunder.
The maximum term of any option granted pursuant to the 1995 Plan is ten
years. Shares subject to options granted under the Plan which expire,
terminate or are canceled without having been exercised in full become
available for future grants. In 1995, the Company granted 31,500 shares
of common stock under the 1995 Plan at exercise prices of $19.67 and
$20.67. In 1996, the Company granted 24,000 shares of common stock at an
exercise price of $26.25. In 1997, the Company granted 24,000 shares of
common stock at an exercise price of $21.06. The issued options are fully
vested and expire in ten years.
The Company has adopted the disclosure provisions of Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation." Accordingly, no compensation cost has been recognized for
the stock option plans. Had compensation cost for the Company's stock
option and employee stock purchase plans been determined based on the fair
value at the grant date of awards in 1997, 1996 and 1995 consistent with
the provisions of SFAS No. 123, the Company's net income (loss) and net
income (loss) per common share would have been reduced to the pro forma
amounts indicated below:
<TABLE>
<CAPTION>
1997 1996 1995
------------ ----------- ----------
<S> <C> <C> <C>
Net income (loss) - as reported $(25,908,000) $15,201,000 $9,089,000
Net income (loss) - pro forma (31,326,000) 10,521,000 7,659,000
Net income (loss) per common share -
as reported
Basic (1.75) 1.13 .86
Diluted (1.75) 1.10 .84
Net income (loss) per common share -
pro forma
Basic (2.11) .78 .73
Diluted (2.11) .77 .72
</TABLE>
Because the SFAS 123 method of accounting has not been applied to options
granted prior to January 1, 1995, the resulting pro forma compensation
cost may not be representative of that to be expected in future years. The
weighted average fair value of options granted were $13.31, $11.07 and
$10.82 for 1997, 1996 and 1995, respectively. The fair value of each grant
is estimated on the date of grant using the Black-Scholes option-pricing
model with the following assumptions used for grants in 1997, 1996 and
1995: dividend yield of 0.0%; expected volatility of 38.0%; expected lives
of 10 years; and risk-free interest rate range of 5.7% to 6.5%, 5.6% to
6.8% and 5.5% to 7.7% for 1997, 1996 and 1995, respectively.
66
<PAGE> 68
EMPLOYEE STOCK PURCHASE PLAN
On November 5, 1992, the Company's Board of Directors approved the
Company's 1993 Stock Purchase Plan and reserved 750,000 shares for
issuance under the plan. The plan was approved by the Company's
shareholders on May 7, 1993. Employees may purchase stock, subject to
certain limitations, at 85% of the lower of the closing market price at
the beginning or at the end of each plan year, which is the last day of
February. As of December 31, 1997, 135,559 shares have been issued under
this plan.
WARRANTS
The Company issued warrants in 1993 for 12,000 shares of common stock at
$8.33 per share in relation to consulting services received by the
Company. The Company issued stock warrants in 1994 for 96,267 shares of
common stock at $7.33 to $12.00 per share in relation to 1994
acquisitions. In 1997, warrants were exercised for 7,500 shares at $12.00
per share.
COMMON STOCK
In May 1996, the Company issued 1,650,000 shares of its common stock (on a
pre-split basis) to the public (the "1996 Secondary Offering") at a price
of $42.00 per share before underwriting discounts and expenses. Net of
discounts and expenses, the Company realized approximately $66 million
from the 1996 Secondary Offering. Of the 1996 Secondary Offering proceeds,
approximately $59 million was applied to reduce outstanding borrowings
under the Secured Revolving Line of Credit and the remainder was used to
fund acquisitions.
In April 1995, the Company issued 1,815,000 shares of common stock (on a
pre-split basis) to the public (the "Secondary Offering") at a price of
$28.00 per share before underwriting discounts and expenses. Net of
discounts and expenses, the Company realized approximately $47.2 million
from the Secondary Offering. The proceeds were used in part to reduce
outstanding borrowings under the Secured Revolving Line of Credit and to
fund acquisitions.
The Company completed a 3-for-2 common stock split dividend effective with
a record date at close of trading on June 28, 1996. All amounts shown in
the financial statements related to common shares outstanding, weighted
average common shares outstanding, net income per share, stock options,
and warrants have been adjusted to reflect this stock split.
PREFERRED STOCK
The Company's certificate of incorporation was amended in 1996 to
authorize the issuance of up to 5,000,000 shares of preferred stock. The
Company's board of directors is authorized to establish the terms and
rights of each such series, including the voting powers, designations,
preferences, and other special rights, qualifications, limitations or
restrictions thereof.
67
<PAGE> 69
EARNINGS PER SHARE
In the fourth quarter of 1997, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 128, "Earnings per Share"
("SFAS 128"). SFAS No. 128 establishes standards for computing and
presenting earnings per share. Under the standards established by SFAS
128, earnings per share is measured at two levels: basic earnings per
share and diluted earnings per share. Basic earnings per share is computed
by dividing net income by the weighted average number of common shares
outstanding during the year. Diluted earnings per share is computed by
dividing net income by the weighted average number of common shares after
considering the additional dilution related to convertible preferred
stock, convertible debt, options and warrants. Net income per common share
for prior periods have been restated to comply with SFAS 128. In computing
diluted earnings per share, the outstanding stock warrants and stock
options are considered dilutive using the treasury stock method. The
following table information is necessary to calculate earnings per share
for the years ending December 31, 1997, 1996 and 1995:
<TABLE>
<CAPTION>
1997 1996 1995
------------ ----------- -----------
<S> <C> <C> <C>
Net income (loss) $(25,908,000) $15,201,000 $ 9,089,000
============ =========== ===========
Weighted average common
shares outstanding 14,839,000 13,473,000 10,550,000
Effect of dilutive options and
warrants -- 368,000 288,000
------------ ----------- -----------
Adjusted diluted common shares
outstanding 14,839,000 13,841,000 10,838,000
============ =========== ===========
Net income (loss) per common
share
- Basic $ (1.75) $ 1.13 $ 0.86
============ =========== ===========
- Diluted $ (1.75) $ 1.10 $ 0.84
============ =========== ===========
</TABLE>
68
<PAGE> 70
9. INCOME TAXES
The provision (benefit) for income taxes is comprised of the following
components:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
--------------------------------------
1997 1996 1995
------------ ---------- ----------
<S> <C> <C> <C>
Current
Federal $(5,702,000) $8,039,000 $ 6,527,000
State (277,000) 827,000 851,000
----------- ---------- -----------
(5,979,000) 8,866,000 7,378,000
----------- ---------- -----------
Deferred
Federal (2,826,000) 626,000 (1,193,000)
State (137,000) 64,000 (156,000)
----------- ---------- -----------
(2,963,000) 690,000 (1,349,000)
----------- ---------- -----------
Provision (benefit) for income taxes $(8,942,000) $9,556,000 $ 6,029,000
=========== ========== ===========
</TABLE>
A reconciliation of taxes computed at statutory income tax rates is as
follows:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
------------------------------------
1997 1996 1995
------------ ---------- ----------
<S> <C> <C> <C>
Provision (benefit) for federal income taxes at
statutory rate $(12,198,000) $8,665,000 $5,216,000
State income taxes, net of federal tax benefit (592,000) 371,000 545,000
Other, principally non-deductible goodwill 3,848,000 520,000 268,000
------------ ---------- ----------
Provision (benefit) for income taxes $ (8,942,000) $9,556,000 $6,029,000
============ ========== ==========
</TABLE>
69
<PAGE> 71
The net deferred tax assets and liabilities, at the respective income tax
rates, are as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1997 1996
----------- ------------
<S> <C> <C>
Current deferred tax asset:
Accrued restructuring liabilities $ 5,346,000 $ --
Accounts receivable reserves 403,000 5,936,000
Accrued liabilities and other 3,249,000 1,534,000
----------- -----------
Net current deferred tax asset $ 8,998,000 $ 7,470,000
=========== ===========
Noncurrent deferred tax asset:
Valuation reserves $ 2,163,000 $ 122,000
Employee benefit plan deposits 354,000 101,000
Other 1,155,000 --
----------- -----------
$ 3,672,000 $ 223,000
----------- -----------
Noncurrent deferred tax liability:
Tax amortization in excess of financial
reporting amortization $(1,685,000) $(2,448,000)
Acquisition costs (2,575,000) (1,923,000)
Tax depreciation in excess of financial
reporting depreciation (1,455,000) --
Other (3,000) (430,000)
----------- -----------
(5,718,000) (4,801,000)
----------- -----------
Net noncurrent deferred tax liability $(2,046,000) $(4,578,000)
=========== ===========
</TABLE>
In 1997, 1996 and 1995 the Company realized tax deductions resulting from
employees' exercise of non-qualified stock options. Tax benefits of
$530,000, $450,000 and $1,297,000 respectively, have been recorded to
paid-in capital.
10. COMMITMENTS AND CONTINGENCIES
LITIGATION
There is certain known or possible litigation incidental to the Company's
business which, in management's opinion, will not have a material adverse
effect on the Company's results of operations or financial condition.
Professional liability insurance up to certain limits is carried by the
Company for coverage of such claims. See Note 11 for further discussion.
70
<PAGE> 72
EMPLOYMENT AND CONSULTING AGREEMENTS
The Company has employment agreements with certain members of management
which provide for the payment to these members of amounts up to one and
one-half times their annual compensation in the event of a termination
without cause, a constructive discharge (as defined) or upon a change in
control of the Company (as defined). In addition, upon such an event, the
members may elect to require the Company to purchase options granted to
them for a purchase price equal to the difference between the fair market
value of the Company's common stock at the date of termination and the
stated option exercise price. The terms of such agreements are from one to
three years and automatically renew for one year if not terminated by the
employee or the Company. The maximum contingent liability under these
agreements is approximately $3.4 million.
The Company has consulting agreements with certain former owners of
businesses acquired by the Company. These agreements require payments to
be made to the former owners in the event of cancellation of the
consulting agreements without cause. The maximum contingent liability
under these agreements is approximately $560,000.
CONTINGENCIES
The Company is self-insured for the first $250,000, on a per claim basis,
for workers' compensation claims and for the first $100,000 or $150,000
(depending on the plan chosen by the employee), on a per claim basis, for
health insurance for substantially all employees. The Company provides
reserves for the settlement of outstanding claims at amounts believed to
be adequate. The differences between actual settlements and reserves are
included in expense in the year finalized.
LETTERS OF CREDIT
The Company has in place a letter of credit totaling $375,000 securing
obligations with respect to its workers' compensation self-insurance
program.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The Company has established a Supplemental Executive Retirement Plan (the
"SERP") to provide retirement benefits for officers and employees of the
Company at the level of manager and above who have been designated for
participation by the President of the Company. Participants in the SERP
will be eligible to receive benefits thereunder after reaching normal
retirement age which is defined in the SERP as either (i) age 65, (ii) age
60 and 10 years of service, or (iii) age 55 and 15 years of service.
Under the SERP, participants can defer up to 6% of his or her base pay.
The Company makes matching contributions of 100% of the amount deferred
by each participant.
71
<PAGE> 73
Benefits under the SERP become fully vested upon the participant reaching
normal retirement age or the participant's disability or death. In
addition, if there is a change in control of the Company as defined in the
SERP, all participants shall be fully vested and each participant shall be
entitled to receive his or her benefits under the SERP upon termination of
employment.
The SERP trust funds are at risk of loss. Should the Company become
insolvent, its creditors would be entitled to a claim to the funds
superior to the claim of SERP participants.
401K RETIREMENT SAVINGS PLAN
The Company has a 401K Retirement Savings Plan (the "401K"), administered
by Pan American Life Insurance Company, to provide a tax deferred
retirement savings plan to its employees. To qualify employees must be 21
years of age and over, with twelve months of continuous employment and
must work at least twenty hours per week. The 401K is 100% employee funded
with contributions limited to 1% to 15% of compensation each pay period.
HEALTH CARE INDUSTRY
The health care industry is subject to numerous laws and regulations of
Federal, state and local governments. These laws and regulations include,
but are not necessarily limited to, matters such as licensure,
accreditation, government health care program participation requirements,
reimbursement for patient services, and Medicare and Medicaid fraud and
abuse. Recently, government activity has increased with respect to
investigation and allegations concerning possible violations of fraud and
abuse statutes and regulations by health care providers. Violations of
these laws and regulations could result in expulsion from government
health care programs together with the imposition of significant fines and
penalties, as well as significant repayment for patient services
previously billed. Management believes that the Company is in compliance
with fraud and abuse as well as other applicable government laws and
regulations. Compliance with such laws and regulations can be subject to
future government review and interpretation as well as regulatory actions
unknown or unasserted at this time. On February 12, 1998, a subpoena from
the Office of Inspector General of the Department of Health and Human
Services ("OIG") was served on the Company at its Pineville, Kentucky
center in connection with an investigation relating to possible improper
claims for Medicare payment. The Company has retained experienced health
care counsel to represent it in this connection and intends to fully
cooperate. Although the Company's counsel has conducted an initial meeting
with governmental officials, this matter is still in its preliminary
stages. In addition the Company from time to time receives notices and
subpoenas from various governmental agencies concerning their plans to
audit the Company or requesting information regarding certain aspects of
the Company's business, and the Company cooperates with the various
agencies in responding to such requests. While the government has broad
authority to enforce applicable laws and regulations, and therefore the
scope and outcome of these investigations and inquiries cannot be
predicted with certainty, management does not believe at the present time
that any pending investigations or inquiries will have a material adverse
impact on the Company.
72
<PAGE> 74
11. PROFESSIONAL LIABILITY INSURANCE
The Company's professional liability policies are on an occurrence basis
and are renewable annually with per claim coverage limits of up to
$1,000,000 per occurrence and $3,000,000 in the aggregate. The Company
maintains a commercial general liability policy which includes product
liability coverage on the medical equipment that it sells or rents with
per claim coverage limits of up to $1,000,000 per occurrence with a
$1,000,000 product liability annual aggregate and a $2,000,000 general
liability annual aggregate. The Company also maintains excess liability
coverage with a limit of $50,000,000 per occurrence and $50,000,000 in the
aggregate. While management believes the manufacturers of the equipment it
sells or rents currently maintain their own insurance, and in some cases
the Company has received evidence of such coverage and has been added by
endorsement as additional insured, there can be no assurance that such
manufacturers will continue to do so, that such insurance will be adequate
or available to protect the Company, or that the Company will not have
liability independent of that of such manufacturers and/or their insurance
coverage. There can be no assurance that any of the Company's insurance
will be sufficient to cover any judgments, settlements or cost relating to
any pending or future legal proceedings or that any such insurance will be
available to the Company in the future on satisfactory terms, if at all.
If the insurance carried by the Company is not sufficient to cover any
judgments, settlements or cost relating to pending or future legal
proceedings, the Company's business and financial condition could be
materially, adversely affected.
12. RELATED PARTY TRANSACTIONS
Colman Furlong & Co., a merchant banking firm ("Colman Furlong") of which
a director of the Company is a partner, was engaged in 1995 to assist in
an acquisition and an increase in the Secured Revolving Line of Credit for
which Colman Furlong was paid $617,000.
Effective January 1, 1992 and for a term of one year, the Company entered
into a consulting agreement with the then chairman of the Company and the
chairman and chief executive officer of Counsel Corporation ("Counsel").
The agreement has been renewed each year through 1997. The agreement
provides for a base consulting fee of $20,000 per month, with additional
compensation at the discretion of the Board of Directors of up to $60,000
per year. For each year of the agreement, the Company has paid $300,000
pursuant to this agreement. In May 1994, the president of Counsel became
chairman of the Company and receives a consulting fee of $8,500 per month
for his service as chairman. The Company paid $102,000 under this
agreement for 1997, 1996 and 1995. Counsel owns approximately 26% of the
Company's common stock at December 31, 1997.
A director of the Company is a partner in the law firm of Harwell Howard
Hyne Gabbert & Manner, P.C. ("Harwell Howard") which the Company engaged
during
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<PAGE> 75
1997, 1996 and 1995 to render legal advice in a variety of activities for
which Harwell Howard was paid $1,656,000, $1,400,000 and $1,100,000,
respectively.
13. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
1997 QUARTER QUARTER QUARTER QUARTER TOTAL
------------ ------- ------- -------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Net Revenues
$84,586 $94,789 $102,651 $105,251 $387,277
======= ======= ======== ======== ========
Net Income (Loss) $ 4,638 $ 4,902 $(40,196)(1) $ 4,748 $(25,908)
======= ======= ======== ======== ========
Basic Income (Loss) Per Share $ 0.31 $ 0.33 $ (2.70)(1) $ 0.32 $ (1.75)
======= ======= ======== ======== ========
Diluted Income (Loss) Per Share $ 0.31 $ 0.33 $ (2.70)(1) $ 0.31 $ (1.75)
======= ======= ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
1996 QUARTER QUARTER QUARTER QUARTER TOTAL
--------------- ------- --------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Net Revenues $55,053 $62,418 $ 71,980 $ 78,897 $268,348
======= ======= ======== ======== ========
Net Income $ 2,930 $ 3,541 $ 4,304 $ 4,426 $ 15,201
======= ======= ======== ======== ========
Basic Income Per Share $ 0.25 $ 0.27 $ 0.29 $ 0.30 $ 1.13
======= ======= ======== ======== ========
Diluted Income Per Share $ 0.24 $ 0.27 $ 0.29 $ 0.30 $ 1.10
======= ======= ======== ======== ========
</TABLE>
(1) Includes $65.0 million pre-tax charges recorded due to restructuring.
(See Note 3)
74
<PAGE> 76
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To American HomePatient, Inc.:
We have audited, in accordance with generally accepted auditing standards, the
consolidated financial statements of American HomePatient, Inc. and have issued
our report thereon dated February 23, 1998. Our audit was made for the purpose
of forming an opinion on those statements taken as a whole. The financial
statement schedule listed in the index under Item 14 is the responsibility of
the Company's management and is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
financial statements. This schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.
ARTHUR ANDERSEN LLP
Nashville, Tennessee
February 23, 1998
S-1
<PAGE> 77
AMERICAN HOMEPATIENT, INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
For the Years Ended December 31, 1995, 1996 and 1997
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
- - ----------------------------------- ----------- --------------------------------- ----------- ----------
Additions
--------------------------------
Charged
Balance at to Costs Charged Balance at
Beginning and to other Deductions End of
Description of Period Expenses Accounts Other (1) (2) Period
- - ------------------------------------- ---------- -------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
FOR THE YEAR ENDED DECEMBER 31, 1997:
Allowances for doubtful accounts $18,755 $30,541(3) $-- $8,408 $13,842 $43,862
------- ------- --- ------ ------- -------
FOR THE YEAR ENDED DECEMBER 31, 1996:
Allowances for doubtful accounts $12,383 $11,450 $-- $6,540 $11,618 $18,755
------- ------- --- ------ ------- -------
FOR THE YEAR ENDED DECEMBER 31, 1995:
Allowances for doubtful accounts $ 5,961 $ 5,934 $-- $6,775 $ 6,287 $12,383
------- ------- --- ------ ------- -------
</TABLE>
- - ----------------
(1) Amounts recorded in connection with acquisitions.
(2) Amounts written off as uncollectible accounts, net of recoveries.
(3) Includes $17.75 million charge associated with restructuring.
S-2
<PAGE> 78
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
------- ----------------------- ----
<S> <C> <C>
3.1 Certificate of Incorporation of the Company (incorporated by reference to Exhibit
3.1 to the Company's Registration Statement No. 33-42777 on Form S-1).
3.2 Certificate of Amendment to the Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.2 to Amendment No. 2 to the Company's
Registration Statement No. 33-42777 on Form S-1).
3.3 Certificate of Amendment to the Certificate of Incorporation of the Company
(incorporated by reference to Registration Statement on Form S-8 dated
February 16, 1993).
3.4 Certificate of Ownership and Merger merging American HomePatient, Inc. into
Diversicare Inc. dated May 11, 1994 (incorporated by reference to Exhibit 4.4 to the
Company's Registration Statement No. 33-89568 on Form S-2).
3.5 Bylaws of the Company, as amended (incorporated by reference to Exhibit 3.3 to the
Company's Registration Statement No. 33-42777 on Form S-1).
10.1 Revolving Note dated October 26, 1995, by and between Bankers Trust Company
and American HomePatient, Inc. (incorporated by reference to Exhibit 10.8 to the
Company's Annual Report on Form 10-K for the year ended December 31, 1995).
10.2 Revolving Note dated October 26, 1995, by and between NationsBank of Tennessee, N.A.
and American HomePatient, Inc. (incorporated by reference to Exhibit 10.9 to the
Company's Annual Report on Form 10-K for the year ended December 31, 1995).
10.3 Revolving Note dated October 26, 1995, by and between The Boatmen's National
Bank of St. Louis and American HomePatient, Inc. (incorporated by reference to
Exhibit 10.10 to the Company's Annual Report on Form 10-K for the year ended
December 31, 1995).
10.4 Revolving Note dated October 26, 1995, by and between BanqueParibas and
American HomePatient, Inc. (incorporated by reference to Exhibit 10.11 to the
Company's Annual Report on Form 10-K for the year ended December 31, 1995).
10.5 Revolving Note dated October 26, 1995, by and between Rabobank Nederland,
New York Branch and American HomePatient, Inc. (incorporated by reference to
Exhibit 10.12 to the Company's Annual Report on Form 10-K for the year ended
December 31, 1995).
10.6 Revolving Note dated October 26, 1995, by and between PNC Bank, Kentucky, Inc. and
American HomePatient, Inc. (incorporated by reference to Exhibit 10.13 to the
Company's Annual Report on Form 10-K for the year ended December 31, 1995).
10.7 Revolving Note dated October 26, 1995, by and between AmSouth Bank of Alabama
and American HomePatient, Inc. (incorporated by reference to Exhibit
10.14 to the Company's Annual Report on Form 10-K for the year ended
December 31, 1995).
10.8 Swing Line Note dated October 26, 1995, by and between Bankers
Trust Company and American HomePatient, Inc. (incorporated by
reference to Exhibit 10.15 to the Company's Annual Report on Form
10-K for the year ended December 31, 1995).
</TABLE>
<PAGE> 79
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
------- ----------------------- ----
<S> <C> <C>
10.9 Subsidiary Security Agreement dated October 20, 1994 by and among Bankers Trust
Company and certain direct and indirect subsidiaries of American HomePatient, Inc.
(incorporated by reference to Exhibit 10.17 to the Company's Registration Statement
No. 33-89568 on Form S-2).
10.10 Borrower Security Agreement dated October 20, 1994, by and between Bankers Trust
Company and American HomePatient, Inc. (incorporated by reference to Exhibit 10.18 to
the Company's Registration Statement No. 33-89568 on Form S-2).
10.11 Employment Agreement dated October 1, 1991, by and between the Company and Edward K.
Wissing (incorporated by reference to Exhibit 10.24 to Amendment No. 1 to the
Company's Registration Statement No. 33-42777 on Form S-1).
10.12 Amendment No. 1 to Employment Agreement dated June 10, 1994, by and between the
Company and Edward K. Wissing (incorporated by reference to Exhibit 10.21 to the
Company's Registration Statement No. 33-89568 on Form S-2).
10.13 Amendment No. 2 to Employment Agreement dated December 1, 1995, by and between
the Company and Edward K. Wissing (incorporated by reference to Exhibit 10.23 to
the Company's Annual Report on Form 10-K for the year ended December 31, 1995).
10.14 Consulting Agreement dated April 27, 1992, by and between the Company and Allan C.
Silber (incorporated by reference to Exhibit 10.24 to the Company's Registration
Statement No. 33-89568 on Form S-2).
10.15 1991 Non-Qualified Stock Option Plan, as amended (incorporated by reference to
Exhibit 10.25 to the Company's Registration Statement No. 33-89568 on Form S-2).
10.16 Amendment No. 4 to 1992 Nonqualified Stock Option Plan (incorporated herein by
reference to Exhibit A of Schedule 14A dated April 17, 1995).
10.17 1995 Nonqualified Stock Option Plan for Directors (incorporated herein by
reference to Exhibit B of Schedule 14A dated April 17, 1995).
10.18 1993 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.26 to the
Company's Registration Statement No. 33-89568 on Form S-2).
10.19 Trust Agreement for the Company Master Plan dated January 1, 1992, by and
between the Company and C&S/Sovran Trust Company (incorporated by reference
to Exhibit 10.42 to the Company's Annual Report on Form 10-K for the year ended
December 31, 1991).
10.20 Restated Master Agreement and Supplemental Executive Retirement Plan
(restated as of December 31, 1993) (incorporated by reference to Exhibit 10.57 to
the Company's Annual Report on Form 10-K for the year ended December 31, 1993).
10.21 Form of Stock Purchase Warrant dated August 11, 1994, by and between Joseph F.
Furlong, III, Kenneth B. Sawyer, and Robert S. Colman, respectively, and American
HomePatient, Inc. (incorporated by reference to Exhibit 10.32 to the Company's
Registration Statement No. 33-89568 on Form S-2).
10.22 Form of Stock Purchase Warrant dated August 11, 1993, by and between Diversicare Inc.
and Age Wave, Inc. (incorporated by reference to Exhibit 10.41 to the Company's
Registration Statement No. 33-89568 on Form S-2).
</TABLE>
<PAGE> 80
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
------- ----------------------- ----
<S> <C> <C>
10.23 Partnership Agreement dated November 1, 1994, by and between HCA Health Services of
Tennessee, Inc. and American HomePatient Ventures, Inc. (incorporated by reference to
Exhibit 10.42 to the Company's Registration Statement No. 33-89568 on Form S-2).
10.24 Agreement of Partnership of Alliance Home Health Care Partnership d/b/a
Medcenters Home Equipment dated January 1, 1994, by and between Medical
Centers Home Equipment and American HomePatient Ventures, Inc. (incorporated by
reference to Exhibit 10.43 to the Company's Registration statement No. 33-89568
on Form S-2)
10.25 Agreement of Limited Partnership of Health Star DME, Ltd. dated May 19, 1988, by and
between Health Star Medical of Amarillo, Inc. and HPBH Enterprises, Inc. as amended
by Amendment No. 1 to Certificate of Limited Partnership of Health Star DME, Ltd.
dated February 4, 1994, by AHP, L.P., D/B/A AHP Health, L.P. (incorporated by
reference to Exhibit 10.44 to the Company's Registration Statement No. 33-89568 on
Form S-2).
10.26 Partnership Agreement of Paragon Home Medical Equipment Partnership dated January 15,
1990, by and between Baylor Medical Plaza Services Corporation and Healthstar Medical
Equipment of Dallas, Inc. as amended by Amendment to Partnership Agreement dated
January 15, 1990, by and between Baylor Medical Plaza Services Corporation and
Healthstar Medical Equipment of Dallas and as amended by Amendment to Partnership
Agreement dated March 31, 1994, by and between Medical Development Corp. and AHP,
L.P. (incorporated by reference to Exhibit 10.45 to the Company's Registration
Statement No. 33-89568 on Form S-2).
10.27 Agreement of Partnership of Homelink Home Healthcare Partnership dated February 28,
1985, by and between Med-E-Quip Rental and Leasing, Inc. and Homelink Home Health
Care Services, Inc., as amended by First Amendment to Agreement of Partnership of
Homelink Home Health Care Partnership dated February 28, 1988, by and between
Med-E-Quip Rental and Leasing, Inc. and Homelink Home Healthcare Services, Inc. and
Second Amendment to Agreement of Partnership of Homelink Home Health Care Partnership
dated October 1, 1988, by and between Med-E-Quip Rental and Leasing, Inc. and
Homelink Home Health Care Services, Inc. and Third Amendment to Agreement of
Partnership of Homelink Healthcare Partnership dated October 1, 1991, by and between
Med-E-Quip Rental and Leasing, Inc. and Homelink Home Health Care Services, Inc.
(Incorporated by reference to Exhibit 10.46 to the Company's Registration Statement
No. 33-89568 on Form S-2).
10.28 Management Agreement dated December 27, 1994, by and among Rural/Metro Corporation,
Coronado Health Services, Inc. and American HomePatient, Inc. (Incorporated by
reference to Exhibit 10.49 to the Company's Registration Statement No. 33-89568 on
Form S-2).
10.29 Option Agreement dated December 27, 1994, by and among Rural/Metro Corporation,
Coronado Health Services, Inc. and American HomePatient, Inc. (incorporated by
reference to Exhibit 10.50 to the Company's Registration Statement No. 33-89568 on
Form S-2).
10.30 Form of Underwriting Agreement (incorporated by reference to Exhibit 1 to
the Company's Registration Statement No. 33-89568 on Form S-2).
10.31 First Amendment to Credit Agreement by and among American HomePatient, Inc., The
Banks Named Therein, and Bankers Trust Company, as the Agent (incorporated by
reference to Exhibit 10.1 to the Company's Report on Form 10-Q for the quarter
ending March 31, 1995).
</TABLE>
<PAGE> 81
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
------- ----------------------- ----
<S> <C> <C>
10.32 Amended and Restated Credit Agreement by and among American HomePatient, Inc., the
Banks Named Therein and Bankers Trust Company, as the Agent (incorporated by
reference to Exhibit 10.1 to the Company's Report on Form 10-Q for the quarter
ending September 30, 1995).
10.33 First Amendment to Amended and Restated Credit Agreement dated December 28, 1995, by
and among the Company, Bankers Trust Company and the banks named therein
(incorporated by reference to Exhibit 10.68 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1995).
10.34 Borrower Partnership Security Agreement dated December 28, 1995 by and between
Bankers Trust Company and the Company (incorporated by reference to Exhibit
10.69 to the Company's Annual Report on Form 10-K for the year ended December
31, 1995).
10.35 Subsidiary Partnership Security Agreement dated December 28, 1995 by and between
Bankers Trust Company and certain direct and indirect subsidiaries of the Company
(incorporated by reference to Exhibit 10.70 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1995).
10.36 Amended and Restated Borrower Pledge Agreement dated December 28, 1995 by
and between Bankers Trust Company and the Company (incorporated by
reference to Exhibit 10.71 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1995).
10.37 Amended and Restated Subsidiary Pledge Agreement dated December 28, 1995 by and among
Bankers Trust Company and certain direct and indirect subsidiaries of the Company
(incorporated by reference to Exhibit 10.72 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1995).
10.38 Subsidiary Guaranty dated October 20, 1994 by certain direct and indirect
subsidiaries of the Company (incorporated by reference to Exhibit 10.73 to the
Company's Annual Report on Form 10-K for the year ended December 31, 1995).
10.39 Second Amended and Restated Credit Agreement dated May 1, 1996 by and among American
HomePatient, Inc., the banks named therein and Bankers Trust Company (incorporated by
reference to Exhibit 10.3 to the Company's Report on Form 10-Q for the quarter
ending June 30, 1996).
10.40 Lease and addendum as amended dated October 25, 1995 by and between Principal Mutual
Life Insurance Company and American HomePatient, Inc. (incorporated by reference to
Exhibit 10.47 to the Company's Report on Form 10-K for the year ended December
31, 1996).
10.41 Stock Purchase Agreement dated December 23, 1997 among National Medical
Systems, Inc., its stockholders named therein, and American HomePatient, Inc.
(Incorporated by reference to Exhibit 2.1 to the Company's Report on Form 8-K
dated February 17, 1998).
10.42 Amendment to Stock Purchase Agreement dated February 5, 1998 among National Medical
Systems, Inc., its stockholders named therein, and American HomePatient, Inc.
(Incorporated by reference to Exhibit 2.2 to the Company's Report on Form
8-K dated February 17, 1998).
</TABLE>
<PAGE> 82
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
------- ----------------------- ----
<S> <C> <C>
10.43 Third Amended and Restated Credit Agreement dated June 6, 1997 by and among American
HomePatient, Inc. and banks named therein and Bankers Trust Company (Incorporated by
reference to Exhibit 10.1 to the Company's Report on Form 10-Q for the quarter
ending June 30, 1997).
10.44 Fourth Amended and Restated Credit Agreement dated December 19, 1997 by and among
American HomePatient, Inc., the Banks named therein and Bankers Trust Company.
10.45 Revolving Note dated December 23, 1997 by and between American HomePatient, Inc. and
Bankers Trust Company.
10.46 Revolving Note dated December 23, 1997 by and between American HomePatient, Inc. and
ABN Amrobank, N.V.
10.47 Revolving Note dated December 23, 1997 by and between American HomePatient, Inc. and
AmSouth Bank.
10.48 Revolving Note dated December 23, 1997 by and between American HomePatient, Inc. and
Bank of America, NT & SA.
10.49 Revolving Note dated December 23, 1997 by and between American HomePatient, Inc. and
Bank of Montreal.
10.50 Revolving Note dated December 23, 1997 by and between American HomePatient, Inc. and
Corestates Bank, N.A.
10.51 Revolving Note dated December 23, 1997 by and between American HomePatient, Inc. and
First American National Bank.
10.52 Revolving Note dated December 23, 1997 by and between American HomePatient, Inc. and
The First National Bank of Chicago.
10.53 Revolving Note dated December 23, 1997 by and between American HomePatient, Inc. and
The Fuji Bank, Limited, Atlanta Agency.
10.54 Revolving Note dated December 23, 1997 by and between American HomePatient, Inc. and
NationsBank, N.A.
10.55 Revolving Note dated December 23, 1997 by and between American HomePatient, Inc. and
PNC Bank, Kentucky, Inc.
10.56 Revolving Note dated December 23, 1997 by and between American HomePatient, Inc. and
Cooperative Centrale Raiffesen Boerenleenbank, B.A., "Rabobank Nederland," New York
Branch.
10.57 Revolving Note dated December 23, 1997 by and between American HomePatient, Inc. and
the Sakura Bank, Limited.
10.58 Revolving Note dated December 23, 1997 by and between American HomePatient, Inc. and
Suntrust Bank, Nashville, N.A.
10.59 Revolving Note dated December 23, 1997 by and between American HomePatient, Inc. and
Union Bank of California, N.A.
10.60 Revolving Note dated December 23, 1997 by and between American HomePatient, Inc. and
Union Bank of Switzerland, New York Branch.
10.61 Term Note dated December 19, 1997 by and between American HomePatient, Inc. and
Bankers Trust Company.
</TABLE>
<PAGE> 83
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
------- ----------------------- ----
<S> <C> <C>
10.62 Term Note dated December 19, 1997 by and between American HomePatient, Inc. and ABN
Amrobank, N.V.
10.63 Term Note dated December 19, 1997 by and between American HomePatient, Inc. and
AmSouth Bank.
10.64 Term Note dated December 19, 1997 by and between American HomePatient, Inc. and
Bank of America, NT & SA.
10.65 Term Note dated December 19, 1997 by and between American HomePatient, Inc. and Bank
of Montreal.
10.66 Term Note dated December 19, 1997 by and between American HomePatient, Inc. and
Corestates Bank, N.A.
10.67 Term Note dated December 19, 1997 by and between American HomePatient, Inc. and First
American National Bank.
10.68 Term Note dated December 19, 1997 by and between American HomePatient, Inc. and The
First National Bank of Chicago.
10.69 Term Note dated December 19, 1997 by and between American HomePatient, Inc. and The
Fuji Bank, Limited, Atlanta Agency.
10.70 Term Note dated December 19, 1997 by and between American HomePatient, Inc. and
NationsBank, N.A.
10.71 Term Note dated December 19, 1997 by and between American HomePatient, Inc. and PNC
Bank, Kentucky, Inc.
10.72 Term Note dated December 19, 1997 by and between American HomePatient, Inc. and
Cooperative Centrale Raiffesen Boerenleenbank, B.A., "Rabobank Nederland," New York
Branch.
10.73 Term Note dated December 19, 1997 by and between American HomePatient, Inc. and the
Sakura Bank, Limited.
10.74 Term Note dated December 19, 1997 by and between American HomePatient, Inc. and
Suntrust Bank, Nashville, N.A.
10.75 Term Note dated December 19, 1997 by and between American HomePatient, Inc. and Union
Bank of California, N.A.
10.76 Term Note dated December 19, 1997 by and between American HomePatient, Inc. and Union
Bank of Switzerland, New York Branch.
10.77 Swing Line Note dated December 19, 1997 by and between American HomePatient, Inc. and
Bankers Trust Company.
10.78 Master Agreement dated October 11, 1996 by and between American HomePatient, Inc. and
Bank of Montreal.
10.79 Severance Agreement dated December 22, 1997 by and between American HomePatient, Inc.
and Thomas E. Mills.
10.80 Amendment No. 3 to Employment Agreement dated December 23, 1997 by and between
American HomePatient, Inc. and Edward K. Wissing.
10.81 Letter Agreement dated August 7, 1997 by and between American HomePatient, Inc.,
and DCAmerica, Inc.
21 Subsidiary List.
</TABLE>
<PAGE> 84
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
------- ----------------------- ----
<S> <C> <C>
23.1 Consent of Arthur Andersen LLP.
27 Financial Data Schedule (for SEC use only).
</TABLE>
<PAGE> 1
EXHIBIT 10.44
FOURTH AMENDED AND RESTATED
CREDIT AGREEMENT
BY AND AMONG
AMERICAN HOMEPATIENT, INC.,
THE BANKS NAMED HEREIN
AND
BANKERS TRUST COMPANY,
AS THE AGENT
----------------------------------
DATED AS OF DECEMBER 19, 1997
----------------------------------
<PAGE> 2
TABLE OF CONTENTS*
<TABLE>
<CAPTION>
Page
<S> <C> <C>
SECTION 1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION......................................................... 2
1.01 DEFINED TERMS.................................................................................... 2
1.02 PRINCIPLES OF CONSTRUCTION....................................................................... 23
SECTION 2. AMOUNT AND TERMS OF CREDIT......................................................................... 24
2.01 THE REVOLVING LOANS.............................................................................. 24
2.02 THE SWING LINE LOANS............................................................................. 26
2.03 THE TERM LOANS................................................................................... 29
2.04 DISBURSEMENT OF FUNDS............................................................................ 30
2.05 PREPAYMENT OF LOANS OUTSTANDING ON EFFECTIVE DATE; NOTES......................................... 30
2.06 INTEREST ON THE LOANS............................................................................ 31
2.07 INCREASED COSTS; TAXES........................................................................... 35
2.08 USE OF PROCEEDS.................................................................................. 38
2.09 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS............................................... 39
2.10 LETTERS OF CREDIT................................................................................ 44
SECTION 3. FEES............................................................................................... 52
3.01 FEES .......................................................................................... 52
SECTION 4. PREPAYMENTS AND REDUCTIONS IN COMMITMENTS; PAYMENTS................................................ 53
4.01 SCHEDULED PAYMENTS OF TERM LOANS................................................................. 53
4.02 Prepayments and Reductions in Commitments........................................................ 54
4.03 APPLICATION OF PREPAYMENTS....................................................................... 56
4.04 GENERAL PROVISIONS REGARDING PAYMENTS............................................................ 57
SECTION 5. CONDITIONS PRECEDENT............................................................................... 58
5.01 CONDITIONS TO EFFECTIVENESS...................................................................... 58
5.02 CONDITIONS TO ALL LOANS AND LETTERS OF CREDIT.................................................... 63
SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS......................................................... 64
6.01 CORPORATE STATUS................................................................................. 64
6.02 CORPORATE POWER AND AUTHORITY.................................................................... 65
6.03 NO VIOLATION..................................................................................... 65
6.04 GOVERNMENTAL APPROVALS........................................................................... 66
6.05 FINANCIAL STATEMENTS; FINANCIAL CONDITION; UNDISCLOSED LIABILITIES; ETC.......................... 66
6.06 LITIGATION....................................................................................... 67
6.07 TRUE AND COMPLETE DISCLOSURE..................................................................... 67
6.08 USE OF PROCEEDS; MARGIN REGULATIONS.............................................................. 67
</TABLE>
- - --------
*This Table of Contents is provided for convenience only and is not a part of
the attached Credit Agreement.
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
<S> <C> <C>
6.09 TAX RETURNS AND PAYMENTS......................................................................... 67
6.10 COMPLIANCE WITH ERISA............................................................................ 67
6.11 CAPITALIZATION................................................................................... 68
6.12 SUBSIDIARIES..................................................................................... 68
6.13 COMPLIANCE WITH STATUTES, ETC.................................................................... 68
6.14 INVESTMENT COMPANY ACT........................................................................... 69
6.15 PUBLIC UTILITY HOLDING COMPANY ACT............................................................... 69
6.16 LABOR RELATIONS.................................................................................. 69
6.17 PATENTS, LICENSES, FRANCHISES AND FORMULAS....................................................... 69
6.18 NO MATERIAL ADVERSE CHANGE....................................................................... 70
6.19 FRAUD AND ABUSE.................................................................................. 70
6.20 TITLE TO PROPERTIES; LIENS....................................................................... 72
6.21 JOINT VENTURES................................................................................... 72
6.22 ACCOUNTS RECEIVABLE COLLATERAL................................................................... 72
6.23 SELLER DEBT...................................................................................... 72
6.24 SURVIVAL OF RIGHTS CREATED UNDER EXISTING CREDIT AGREEMENT....................................... 72
SECTION 7. AFFIRMATIVE COVENANTS.............................................................................. 73
7.01 INFORMATION COVENANTS............................................................................ 73
7.02 BOOKS, RECORDS AND INSPECTIONS................................................................... 76
7.03 MAINTENANCE OF PROPERTY, INSURANCE............................................................... 77
7.04 CORPORATE FRANCHISES............................................................................. 77
7.05 COMPLIANCE WITH STATUTES, ETC.................................................................... 77
7.06 ERISA .......................................................................................... 77
7.07 END OF FISCAL YEARS; FISCAL QUARTERS............................................................. 78
7.08 PERFORMANCE OF OBLIGATIONS....................................................................... 78
7.09 PAYMENT OF TAXES AND CLAIMS...................................................................... 79
7.10 LICENSING........................................................................................ 79
7.11 FURTHER ASSURANCES; NEW SUBSIDIARIES............................................................. 79
7.12 ACCOUNTS RECEIVABLE.............................................................................. 80
SECTION 8. NEGATIVE COVENANTS................................................................................. 80
8.01 LIENS .......................................................................................... 80
8.02 CONSOLIDATION, MERGER, SALE OF ASSETS, ETC....................................................... 82
8.03 DIVIDENDS........................................................................................ 84
8.04 INDEBTEDNESS..................................................................................... 85
8.05 ADVANCES, INVESTMENTS AND LOANS.................................................................. 87
8.06 TRANSACTIONS WITH AFFILIATES..................................................................... 89
8.07 CAPITAL EXPENDITURES............................................................................. 89
8.08 LEVERAGE RATIO................................................................................... 89
8.09 MINIMUM CONSOLIDATED NET WORTH................................................................... 90
8.10 MINIMUM INTEREST COVERAGE RATIO.................................................................. 90
8.11 LIMITATION ON VOLUNTARY PAYMENTS AND MODIFICATIONS OF
INDEBTEDNESS; MODIFICATIONS OF CERTIFICATE OF INCORPORATION, BY-
LAWS AND CERTAIN OTHER AGREEMENTS; ETC.................................................... 90
8.12 RESTRICTIONS ON SUBSIDIARY DIVIDENDS AND OTHER DISTRIBUTIONS..................................... 91
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Page
<S> <C> <C>
8.13 BUSINESS......................................................................................... 91
8.14 TRANSFER OF COPYRIGHTS, PATENTS AND TRADEMARKS................................................... 91
8.15 JOINT VENTURES................................................................................... 91
8.16 COLLECTION BANK AGREEMENTS....................................................................... 92
SECTION 9. EVENTS OF DEFAULT.................................................................................. 92
9.01 PAYMENTS......................................................................................... 92
9.02 REPRESENTATIONS, ETC............................................................................. 92
9.03 COVENANTS........................................................................................ 92
9.04 DEFAULT UNDER OTHER AGREEMENTS................................................................... 92
9.05 BANKRUPTCY, ETC.................................................................................. 93
9.06 ERISA .......................................................................................... 93
9.07 CREDIT DOCUMENTS................................................................................. 94
9.08 CHANGES OF CONTROL............................................................................... 94
9.09 JUDGMENTS........................................................................................ 94
9.10 GOVERNMENTAL POLICIES............................................................................ 94
9.11 LOSS OF LICENSES................................................................................. 95
SECTION 10. THE AGENT......................................................................................... 96
10.01 APPOINTMENT..................................................................................... 96
10.02 NATURE OF DUTIES................................................................................ 96
10.03 LACK OF RELIANCE ON THE AGENT................................................................... 96
10.04 CERTAIN RIGHTS OF THE AGENT..................................................................... 97
10.05 RELIANCE........................................................................................ 97
10.06 INDEMNIFICATION................................................................................. 97
10.07 THE AGENT IN ITS INDIVIDUAL CAPACITY............................................................ 97
10.08 HOLDERS......................................................................................... 98
10.09 RESIGNATION BY THE AGENT AND THE SWING LINE BANK................................................ 98
SECTION 11. MISCELLANEOUS..................................................................................... 99
11.01 PAYMENT OF EXPENSES, ETC........................................................................ 99
11.02 RIGHT OF SETOFF.................................................................................100
11.03 NOTICES.........................................................................................100
11.04 BENEFIT OF AGREEMENT............................................................................101
11.05 ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND LETTERS OF CREDIT...................................101
11.06 NO WAIVER; REMEDIES CUMULATIVE..................................................................103
11.07 PAYMENTS PRO RATA...............................................................................104
11.08 CALCULATIONS; COMPUTATIONS......................................................................104
11.09 GOVERNING LAW; WAIVER OF JURY TRIAL.............................................................104
11.10 CONFIDENTIALITY.................................................................................105
11.11 COUNTERPARTS....................................................................................105
11.12 HEADINGS DESCRIPTIVE............................................................................105
11.13 AMENDMENT OR WAIVER.............................................................................105
11.14 SURVIVAL........................................................................................108
11.15 DOMICILE OF LOANS...............................................................................108
11.16 INTEGRATION.....................................................................................108
11.17 SECURED OBLIGATIONS.............................................................................108
</TABLE>
iii
<PAGE> 5
SCHEDULES
SCHEDULE 1.01(a) Pro Rata Shares, Revolving Commitments
SCHEDULE 6.05 Undisclosed Liabilities
SCHEDULE 6.06 Litigation
SCHEDULE 6.11 Rights With Respect to Capital Stock
SCHEDULE 6.12 Subsidiaries
SCHEDULE 6.13 Statutory Noncompliance
SCHEDULE 6.17 Trademarks
SCHEDULE 6.18 Material Adverse Changes
SCHEDULE 6.21 Joint Ventures
SCHEDULE 7.03 Insurance
SCHEDULE 8.01 Permitted Liens
SCHEDULE 8.01(xvi) Existing Financing Statements
SCHEDULE 8.04(ii) Existing Indebtedness; Acquisition Notes
EXHIBITS
EXHIBIT A Form of Notice of Revolver Borrowing
EXHIBIT B Form of Notice of Swing Line Borrowing
EXHIBIT C Form of Notice of Term Borrowing
EXHIBIT D Form of Notice of Conversion/Continuation
EXHIBIT E Form of Notice of Issuance of Letter of Credit
EXHIBIT F-1 Form of Revolving Note
EXHIBIT F-2 Form of Swing Line Note
EXHIBIT F-3 Form of Term Note
EXHIBIT G Subsidiary Guaranty
EXHIBIT H Borrower Pledge Agreement
EXHIBIT I Subsidiary Pledge Agreement
EXHIBIT J Borrower Security Agreement
EXHIBIT K Subsidiary Security Agreement
EXHIBIT L-1 Trademark Security Agreement
EXHIBIT L-2 Form of Subsidiary Trademark Security Agreement
EXHIBIT M Form of Subordination Agreement
EXHIBIT N Form of Collection Bank Agreement
EXHIBIT O Concentration Bank Agreement
EXHIBIT P Form of Assignment and Acceptance Agreement
EXHIBIT Q Form of Compliance Certificate
EXHIBIT R Form of Opinion of Counsel to Borrower
EXHIBIT S Consent to Amendment and Restatement
EXHIBIT T Borrower Partnership Security Agreement
EXHIBIT U Subsidiary Partnership Security Agreement
iv
<PAGE> 6
AMERICAN HOMEPATIENT, INC.
FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
This FOURTH AMENDED AND RESTATED CREDIT AGREEMENT is dated as
of December 19, 1997 and entered into by and among AMERICAN HOMEPATIENT, INC.
(the "BORROWER"), a corporation organized and existing under the laws of
Delaware, BANKERS TRUST COMPANY and THE OTHER FINANCIAL INSTITUTIONS LISTED ON
THE SIGNATURE PAGES HEREOF (each a "BANK" and, collectively, the "BANKS"), and
BANKERS TRUST COMPANY, acting in the manner and to the extent described in
Section 10 (in such capacity, the "AGENT"). Capitalized terms used herein and
not otherwise defined shall have the meanings set forth in Section 1.01 of this
Agreement.
R E C I T A L S
WHEREAS, pursuant to that certain Third Amended and Restated
Credit Agreement dated as of June 6, 1997, as amended, supplemented or otherwise
modified to the date hereof (said Third Amended and Restated Credit Agreement,
as so amended, supplemented or otherwise modified, is referred to hereinafter as
the "EXISTING CREDIT AGREEMENT"), by and among the Borrower, Bankers Trust
Company and the other financial institutions listed on the signature pages
thereof (together with any other financial institutions that have become lenders
thereunder to the date hereof, the "EXISTING BANKS"), and Bankers Trust Company,
acting as agent for the Existing Banks, the Existing Banks have made certain
credit facilities available to the Borrower in accordance with the terms
thereof;
WHEREAS, the parties hereto desire to amend and restate the
Existing Credit Agreement in its entirety for the purposes of, among other
things, (i) increasing the maximum amount available to be drawn under the loan
facilities provided thereunder, (ii) amending certain provisions thereof
relating to the interest rates, maturity and loan amortization schedules
applicable to such loan facilities, and (iii) making certain other amendments to
and modifications of the provisions of the Existing Credit Agreement as provided
herein:
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the Borrower, the Banks
and the Agent agree to amend and restate the Existing Credit Agreement in its
entirety as follows:
1
<PAGE> 7
SECTION 1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION.
1.01 DEFINED TERMS. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"ACCOUNTS RECEIVABLE" means all accounts receivable pledged as
Collateral.
"ACQUISITION" means any acquisition of the capital stock of,
or all (or substantially all) of the assets of, any Person or any division of
such Person permitted pursuant to Section 8.02(v).
"ACQUISITION NOTES" means the notes, set forth in Part B of
Schedule 8.04(ii) attached hereto, that represent a portion of the purchase
price paid by the Borrower to acquire certain healthcare entities.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
Determination Date, the rate (rounded upward to the next highest one hundredth
of one percent) obtained by dividing (i) the Eurodollar Rate for that date by
(ii) a percentage equal to 100% minus the stated maximum rate of all reserves
required to be maintained against "EUROCURRENCY LIABILITIES" as specified in
Regulation D of the Board of Governors of the Federal Reserve System (or against
any other category of liabilities that includes deposits by reference to which
the interest rate on Eurodollar Rate Loans is determined or any category of
extensions of credit or other assets that includes loans by a non-United States
office of a bank to United States residents).
"AFFECTED BANK" means any Bank affected by any of the events
described in Section 2.09(b) or (c).
"AFFILIATE" means, with respect to any Person, any other
Person (other than an individual) directly or indirectly controlling, controlled
by, or under direct or indirect common control with, such Person; provided,
however, that for purposes of Section 8.06, an Affiliate of the Borrower shall
include any Person (including an individual) that directly or indirectly owns
more than 10% of the Borrower and any officer or director of the Borrower or any
such Person. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such other Person, whether through the ownership
of voting securities, by contract or otherwise.
"AGENT" has the meaning assigned to that term in the first
paragraph of this Agreement and shall include any successor to the Agent
appointed pursuant to Section 10.09.
"AGREEMENT" means this Fourth Amended and Restated Credit
Agreement, as it may be amended, amended and restated, supplemented or otherwise
modified from time to time.
"AHPF" means AHP Finance, Inc., a Tennessee corporation.
"AHPT" means American HomePatient, Inc., a Tennessee
corporation.
2
<PAGE> 8
"APPLICABLE BASE MARGIN" means, as of any date of
determination, a percentage per annum as shown in the applicable table set forth
below (depending on whether or not the Borrower has consummated a Qualified
High-Yield Offering as of such date of determination), in each case determined
with reference to the Leverage Ratio then in effect; provided that, if the
Borrower has failed to provide a Margin Rate Determination Certificate within
the most recent period set forth in Section 5.01 or 7.01, the Leverage Ratio for
purposes of determining the Applicable Base Margin shall be deemed to be
3.50:1.00 until such time as the Borrower next delivers a Margin Rate
Determination Certificate establishing a Leverage Ratio of less than 3.50:1.00;
and provided, further, that in no event shall the Applicable Base Margin exceed
0.25% during the period from the Effective Date through and including the
earlier of (i) the High-Yield Cut-Off Date and (ii) the consummation of a
Qualified High-Yield Offering.
A. PRIOR TO CONSUMMATION OF A QUALIFIED HIGH-YIELD OFFERING:
<TABLE>
<CAPTION>
================================================================================
LEVERAGE RATIO APPLICABLE
BASE MARGIN
- - --------------------------------------------------------------------------------
<S> <C>
x less than 2.75 0.00%
- - --------------------------------------------------------------------------------
2.75 less than or equal to x less than 3.00 0.25%
- - --------------------------------------------------------------------------------
3.00 less than or equal to x less than 3.50 0.50%
- - --------------------------------------------------------------------------------
3.50 less than or equal to x 0.625%
================================================================================
</TABLE>
3
<PAGE> 9
B. AFTER CONSUMMATION OF A QUALIFIED HIGH-YIELD OFFERING:
<TABLE>
<CAPTION>
================================================================================
LEVERAGE RATIO APPLICABLE
BASE MARGIN
- - --------------------------------------------------------------------------------
<S> <C>
x less than 3.50 0.00%
- - --------------------------------------------------------------------------------
3.50 less than or equal to x 0.25%
================================================================================
</TABLE>
"APPLICABLE EURODOLLAR MARGIN" means, as of any date of
determination, a percentage per annum as shown in the applicable table set forth
below (depending on whether or not the Borrower has consummated a Qualified
High-Yield Offering as of such date of determination), in each case determined
with reference to the Leverage Ratio then in effect; provided that, if the
Borrower has failed to provide a Margin Rate Determination Certificate within
the most recent period set forth in Section 5.01 or 7.01, the Leverage Ratio for
purposes of determining the Applicable Eurodollar Margin shall be deemed to be
3.50:1.00 until such time as the Borrower next delivers a Margin Rate
Determination Certificate establishing a Leverage Ratio of less than 3.50:1.00;
and provided, further, that in no event shall the Applicable Eurodollar Margin
exceed 1.00% during the period from the Effective Date through and including the
earlier of (i) the High-Yield Cut-Off Date and (ii) the consummation of a
Qualified High-Yield Offering.
A. PRIOR TO CONSUMMATION OF A QUALIFIED HIGH-YIELD OFFERING:
<TABLE>
<CAPTION>
================================================================================
LEVERAGE RATIO APPLICABLE
EURODOLLAR
MARGIN
- - --------------------------------------------------------------------------------
<S> <C>
x less than .75 0.375%
- - --------------------------------------------------------------------------------
.75 less than or equal to x less than 1.75 0.50%
- - --------------------------------------------------------------------------------
1.75 less than or equal to x less than 2.25 0.625%
- - --------------------------------------------------------------------------------
2.25 less than or equal to x less than 2.50 0.75%
- - --------------------------------------------------------------------------------
2.50 less than or equal to x less than 2.75 0.875%
- - --------------------------------------------------------------------------------
2.75 less than or equal to x less than 3.00 1.125%
- - --------------------------------------------------------------------------------
3.00 less than or equal to x less than 3.50 1.25%
- - --------------------------------------------------------------------------------
3.50 less than or equal to x 1.375%
================================================================================
</TABLE>
4
<PAGE> 10
B. AFTER CONSUMMATION OF A QUALIFIED HIGH-YIELD OFFERING:
<TABLE>
<CAPTION>
================================================================================
LEVERAGE RATIO APPLICABLE
EURODOLLAR
MARGIN
- - --------------------------------------------------------------------------------
<S> <C>
x less than 1.00 0.25%
- - --------------------------------------------------------------------------------
1.00 less than or equal to x less than 1.50 0.35%
- - --------------------------------------------------------------------------------
1.50 less than or equal to x less than 2.00 0.40%
- - --------------------------------------------------------------------------------
2.00 less than or equal to x less than 2.50 0.50%
- - --------------------------------------------------------------------------------
2.50 less than or equal to x less than 3.00 0.625%
- - --------------------------------------------------------------------------------
3.00 less than or equal to x less than 3.25 0.75%
- - --------------------------------------------------------------------------------
3.25 less than or equal to x less than 3.50 0.875%
- - --------------------------------------------------------------------------------
3.50 less than or equal to x 1.125%
================================================================================
</TABLE>
"ASSIGNMENT AND ACCEPTANCE" means an Assignment and Acceptance
Agreement entered into by a Bank and an Eligible Assignee, and accepted by the
Agent, substantially in the form annexed hereto as EXHIBIT P.
"BANK" has the meaning assigned to that term in the first
paragraph of this Agreement and shall include each successor and assignee
pursuant to Section 11.05.
"BANKRUPTCY CODE" has the meaning assigned to that term in
Section 9.05.
"BASE LENDING RATE" means, at any time, the higher of, (a) the
Prime Rate and (b) the rate that is 1/2 of 1% in excess of the Federal Funds
Effective Rate.
"BASE RATE LOANS" means Loans maintained or made by the Banks
bearing interest at rates determined by reference to the Base Lending Rate as
provided in Section 2.06.
"BORROWER" has the meaning assigned to that term in the first
paragraph of this Agreement.
"BORROWER PARTNERSHIP SECURITY AGREEMENT" means a Borrower
Partnership Security Agreement executed and delivered by the Agent and the
Borrower pursuant to the Prior Credit Agreements or this Agreement,
substantially in the form annexed hereto as EXHIBIT T, as such Borrower
Partnership Security Agreement may be amended, amended and restated,
supplemented or otherwise modified from time to time.
"BORROWER PLEDGE AGREEMENT" means that certain Borrower Pledge
Agreement dated as of October 20, 1994, executed and delivered by the Borrower
and the Agent pursuant to the Original Credit Agreement, a copy of which is
annexed hereto as EXHIBIT H, as such
5
<PAGE> 11
Borrower Pledge Agreement has heretofore been, and as it hereafter may be,
amended, amended and restated, supplemented or otherwise modified from time to
time.
"BORROWER SECURITY AGREEMENT" means that certain Borrower
Security Agreement dated as of October 20, 1994, executed and delivered by the
Borrower and the Agent pursuant to the Original Credit Agreement, a copy of
which is annexed hereto as EXHIBIT J, as such Borrower Security Agreement has
heretofore been, and as it hereafter may be, amended, amended and restated,
supplemented or otherwise modified from time to time.
"BUSINESS DAY" means any day except Saturday, Sunday and any
day that shall be in New York City a legal holiday or a day on which banking
institutions are authorized or required by law or other government action to
close.
"CASH" means money, currency or a credit balance in a Deposit
Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after such date
and having, at the time of the acquisition thereof, the highest rating
obtainable from either Standard & Poor's Corporation ("S&P") or Moody's
Investors Service, Inc. ("MOODY'S"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Bank or by any commercial
bank organized under the laws of the United States or any state thereof or the
District of Columbia that (a) is at least "adequately capitalized" (as defined
in the regulations of its primary Federal banking regulator) and (b) has Tier 1
capital (as defined in such regulations) of not less than $100,000,000; and (v)
shares of any money market mutual fund that (a) has at least 95% of its assets
invested continuously in the types of investments referred to in clauses (i) and
(ii) above, (b) has net assets of not less than $500,000,000, and (c) has the
highest rating then obtainable from either S&P or Moody's.
"CERTIFICATE OF EXEMPTION" has the meaning assigned to that
term in Section 2.09(g)(iii).
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time.
"COLLATERAL" means all the personal and mixed property made
subject to a Lien pursuant to the Credit Documents.
"COLLECTION BANK AGREEMENTS" means (i) those certain
Collection Bank Agreements executed and delivered pursuant to the Prior Credit
Agreement by each of the
6
<PAGE> 12
Borrower or any of its Subsidiaries and the financial institutions into which
the proceeds of Accounts Receivable of such of the Borrower or its Subsidiaries
are deposited, as each such Collection Bank Agreement has heretofore been, and
as it hereafter may be, amended, amended and restated, supplemented or otherwise
modified from time to time, and (ii) any Collection Bank Agreements executed on
or after the Effective Date pursuant to Section 8.16 between the Borrower or any
of its Subsidiaries and the financial institutions into which the proceeds of
Accounts Receivable of such of the Borrower or its Subsidiaries are deposited,
substantially in the form annexed hereto as EXHIBIT N, as such agreements may be
amended, amended and restated, supplemented or otherwise modified from time to
time.
"COMMITMENTS" means the commitments of Banks to make Loans as
set forth in Sections 2.01, 2.02 and 2.03.
7
<PAGE> 13
"COMMITMENT FEE PERCENTAGE" means, as of any date of
determination, a percentage per annum as shown in the applicable table set forth
below (depending on whether or not the Borrower has consummated a Qualified
High-Yield Offering as of such date of determination), in each case determined
with reference to the Leverage Ratio then in effect; provided that, if the
Borrower has failed to provide a Margin Rate Determination Certificate within
the most recent period set forth in Section 5.01 or 7.01, the Leverage Ratio for
purposes of determining the Commitment Fee Percentage shall be deemed to be at
the highest level shown in the applicable table set forth below until such time
as the Borrower next delivers a Margin Rate Determination Certificate
establishing a Leverage Ratio of less than such highest level:
A. PRIOR TO CONSUMMATION OF A QUALIFIED HIGH-YIELD OFFERING:
<TABLE>
<CAPTION>
================================================================================
LEVERAGE RATIO APPLICABLE COMMITMENT FEE
PERCENTAGE
- - --------------------------------------------------------------------------------
<S> <C>
x less than 2.50 0.250%
- - --------------------------------------------------------------------------------
2.50 less than or equal to x 0.375%
================================================================================
</TABLE>
B. AFTER CONSUMMATION OF A QUALIFIED HIGH-YIELD OFFERING:
<TABLE>
<CAPTION>
================================================================================
LEVERAGE RATIO APPLICABLE COMMITMENT FEE
PERCENTAGE
- - --------------------------------------------------------------------------------
<S> <C>
x less than 1.50 0.100%
- - --------------------------------------------------------------------------------
1.50 less than or equal to x less than 2.00 0.125%
- - --------------------------------------------------------------------------------
2.00 less than or equal to x less than 2.50 0.150%
- - --------------------------------------------------------------------------------
2.50 less than or equal to x less than 3.00 0.175%
- - --------------------------------------------------------------------------------
3.00 less than or equal to x less than 3.25 0.200%
- - --------------------------------------------------------------------------------
3.25 less than or equal to x less than 3.50 0.225%
- - --------------------------------------------------------------------------------
3.50 less than or equal to x 0.250%
================================================================================
</TABLE>
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form annexed hereto as EXHIBIT Q delivered to the Agent and Banks by the
Borrower under Section 7.01(f).
8
<PAGE> 14
"CONCENTRATION BANK AGREEMENT" means either (i) that certain
Concentration Bank Agreement dated as of October 20, 1994, executed and
delivered pursuant to the Original Credit Agreement by the Borrower, the Agent
and NationsBank of Tennessee, N.A., as concentration bank, a copy of which is
annexed hereto as EXHIBIT O, as such Concentration Bank Agreement has heretofore
been, and as it hereafter may be, amended, amended and restated, supplemented or
otherwise modified from time to time (the "EXISTING CONCENTRATION BANK
AGREEMENT"), or (ii) an agreement replacing the Existing Concentration Bank
Agreement, substantially in the form annexed hereto as EXHIBIT O, entered into
pursuant to Section 12(b) of the Existing Concentration Bank Agreement by and
among the Borrower, the Agent and one of the Banks, as the concentration bank,
and delivered to the Agent and Banks by the Borrower.
"CONFIDENTIAL INFORMATION MEMORANDUM" means the confidential
information memorandum dated December 1997 relating to the Borrower and the loan
facilities to be made available pursuant to this Agreement.
"CONPHARMA NOTE" has the meaning assigned to that term in the
Existing Credit Agreement.
"CONSENT TO AMENDMENT AND RESTATEMENT" means the Consent to
Amendment and Restatement to be executed and delivered by each Guarantor
Subsidiary pursuant to Section 5.01(a)(v), substantially in the form annexed
hereto as EXHIBIT S.
"CONSOLIDATED ADJUSTED EBITDA" means Consolidated EBITDA of
the Borrower and its Subsidiaries at the end of any period of determination and
shall be calculated on a pro forma basis, in accordance with the balance sheets
and related statements of operations provided under Section 7.01(k), as if any
Acquisition that occurred during such period and any related Divestiture had
taken place on the first day of such period.
"CONSOLIDATED EBIT" means, as to any Person and for any
period, the Consolidated Net Income of such Person and its Subsidiaries for such
period, before interest expense and provision for taxes and without giving
effect to (i) any extraordinary gains (or extraordinary noncash losses), (ii)
gains (or losses) from sales of assets (other than sales of inventory in the
Ordinary Course of Business) to the extent that the gain or loss from all such
sales is, in the aggregate, greater than $500,000 for the immediately prior
four-quarter period, and (iii) certain one-time restructuring or similar charges
and related asset write-downs and/or write-offs, in each case taken or recorded
during the fiscal quarter of the Borrower ending September 30, 1997, in an
aggregate amount not to exceed $70,000,000.
"CONSOLIDATED EBITDA" means, as to any Person and for any
consecutive four-quarter period, the Consolidated EBIT of such Person and its
Subsidiaries and Joint Ventures for such period, adjusted by (i) adding thereto
the amount of all amortization of intangibles and depreciation that was deducted
in arriving at such Consolidated EBIT for such period and (ii) excluding
therefrom amounts attributable to (x) minority interests held by third Persons
and/or their Subsidiaries, (y) the portion of Consolidated EBIT attributable to
operations sold or disposed of in Divestitures during such period if the
Consolidated EBITDA associated with such operations exceeds $250,000, and (z)
Joint Ventures that remain invested in such Joint Ventures and are not
distributed to the Borrower.
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<PAGE> 15
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
interest expense (including that portion attributable to capitalized interest
and capital leases in accordance with generally accepted accounting principles
consistently applied) of the Borrower and its Subsidiaries on a consolidated
basis with respect to all outstanding Indebtedness of the Borrower and its
Subsidiaries, including, without limitation, all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs under Interest Rate Agreements, but
excluding, however, any amounts referred to in Section 3 payable to the Agent
and Banks on or before the Effective Date.
"CONSOLIDATED NET INCOME" means, as to any Person and for any
period, the net income (or loss) of such Person and its Subsidiaries, after
provisions for taxes, on a consolidated basis for such period taken as a single
accounting period determined in conformity with generally accepted accounting
principles consistently applied.
"CONSOLIDATED NET WORTH" means, as to any Person, the Net
Worth of such Person and its Subsidiaries determined on a consolidated basis
without deduction for any minority interests in any corporation, association,
general partnership or joint venture (including Joint Ventures).
"CONTINGENT OBLIGATION" means, as to any Person, (A) any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("PRIMARY OBLIGATIONS") of
any other Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (x) for the purchase or payment of any such primary obligation or
(y) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect thereof;
provided, however, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business; and (B) any obligations of such Person under any Interest Rate
Agreement. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"CREDIT DOCUMENTS" means this Agreement, each Note, the
Letters of Credit, the Subsidiary Guaranty, the Borrower Pledge Agreement, the
Subsidiary Pledge Agreement, the Borrower Security Agreement, the Subsidiary
Security Agreement, the Borrower Partnership Security Agreement, the Subsidiary
Partnership Security Agreement, the Collection Bank Agreements, the
Concentration Bank Agreement, the Consent to Amendment and Restatement,
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<PAGE> 16
the Trademark Security Agreement and the Subsidiary Trademark Security
Agreement.
"DEFAULT" means any event, act or condition that with notice
or lapse of time, or both, would constitute an Event of Default.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DIVESTITURE" means the resale of any assets or property
acquired in any Acquisition within one year of such Acquisition.
"DOLLARS" and "$" means the lawful money of the United States
of America.
"EFFECTIVE DATE" means the first date upon which all of the
conditions set forth in Section 5.01 of this Agreement shall have been satisfied
or waived.
"ELIGIBLE ASSIGNEE" means (i) (A) a commercial bank organized
under the laws of the United States or any state thereof; (B) a savings and loan
association or savings bank organized under the laws of the United States or any
state thereof; (C) a commercial bank organized under the laws of any other
country or a political subdivision thereof; provided that (x) such bank is
acting through a branch or agency located in the United States or (y) such bank
is organized under the laws of a country that is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country; and (D) any other entity that is an "accredited investor" (as defined
in Regulation D under the Securities Act of 1933, as amended) that extends
credit or buys loans as one of its businesses including, but not limited to,
insurance companies, mutual funds and lease financing companies, and (ii) any
Bank and any Affiliate of any Bank or the Issuing Bank; provided that no
Affiliate of the Borrower shall be an Eligible Assignee.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time. Section references to ERISA are to ERISA, as
in effect at the date of this Agreement, and to any subsequent provisions of
ERISA, amendatory thereof, supplemental thereto or substituted therefor.
"ERISA AFFILIATE" means any person (as defined in Section 3(9)
of ERISA) that together with the Borrower or any of its Subsidiaries would be a
member of the same "CONTROLLED GROUP" within the meaning of Section 414(b), (m),
(c) and (o) of the Code.
"EURODOLLAR RATE" means, for any Interest Rate Determination
Date, the arithmetic average (rounded upwards, if necessary, to the nearest 1/16
of 1%) of the offered quotation, if any, to first class banks in the Eurodollar
market by Bankers Trust Company for Dollar deposits of amounts in immediately
available funds comparable to the principal amount of the Eurodollar Rate Loan
of the Agent for which the Eurodollar Rate is being determined with maturities
comparable to the Interest Period for which such Eurodollar Rate will apply as
of approximately 10:00 A.M. (New York time) two Business Days prior to the
commencement of such Interest Period.
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<PAGE> 17
"EURODOLLAR RATE LOANS" means Loans bearing interest at rates
determined by reference to the Eurodollar Rate as provided in Section 2.06.
"EURODOLLAR RATE TAXES" has the meaning assigned to that term
in Section 2.09(g)(i).
"EVENT OF DEFAULT" has the meaning assigned to that term in
Section 9.
"EXISTING BANKS" has the meaning assigned to that term in the
Recitals to this Agreement.
"EXISTING CREDIT AGREEMENT" has the meaning assigned to that
term in the Recitals to this Agreement.
"EXISTING INDEBTEDNESS" has the meaning assigned to that term
in Section 8.04(ii).
"EXISTING NOTES" means the "Revolving Notes", the "Term Notes"
and the "Swing Line Note" as defined in the Existing Credit Agreement and issued
to the Existing Banks thereunder.
"EXISTING BANK LOANS" means the "Revolving Loans" and the
"Term Loans" as defined in the Existing Credit Agreement and extended to the
Borrower thereunder.
"EXISTING SWING LINE LOANS" means the "Swing Line Loans" as
defined in the Existing Credit Agreement and extended to the Borrower
thereunder.
"FDA" means the United States Food and Drug Administration.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day that is a Business Day, the average of the quotations for such day
on such transactions received by the Agent from three Federal funds brokers of
recognized standing selected by the Agent.
"FEES" means all amounts payable pursuant to or referred to in
Section 3.01.
"FIRST AMENDED AND RESTATED CREDIT AGREEMENT" means that
certain Amended and Restated Credit Agreement dated as of October 26, 1995 by
and among the Borrower, the "Banks" party thereto and Bankers Trust Company, as
the "Agent", as amended, supplemented or otherwise modified prior to the
effective date of the Second Amended and Restated Credit Agreement.
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<PAGE> 18
"FISCAL YEAR" means the fiscal year of the Borrower and its
Subsidiaries (other than Joint Ventures) ending on December 31 of each calendar
year.
"FOREIGN BANK" has the meaning assigned to that term in
Section 2.09(g)(iii).
"FUNDING DATE" means the date of the funding of a Loan or the
date of the issuance of a Letter of Credit, as applicable.
"GOVERNMENT ACTS" has the meaning assigned to such term in
Section 2.10(h).
"GOVERNMENTAL AUTHORITY" means any nation or government, any
state or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"GUARANTOR SUBSIDIARY" means each Subsidiary of the Borrower
listed in Schedule 6.12 annexed hereto and each other Subsidiary of the Borrower
that executes a Subsidiary Guaranty pursuant to Section 7.11(b).
"HIGH-YIELD CUT-OFF DATE" means May 15, 1998.
"INDEBTEDNESS" means, as to any Person, without duplication,
(i) all indebtedness (including principal, fees and charges) of such Person for
borrowed money or for the deferred purchase price of property or services, (ii)
the maximum undrawn amount of or maximum unreimbursed amount under all letters
of credit issued for the account of such Person and all drafts drawn thereunder,
(iii) all liabilities secured by any Lien on any property owned by such Person,
whether or not such liabilities have been assumed by such Person; provided that
liabilities that are nonrecourse to the credit of the Borrower and its
Subsidiaries, shall be deemed to constitute Indebtedness only in an amount equal
to the lesser of (a) the fair market value (on the date of determination of
Indebtedness for purposes of this Agreement) of such property or (b) the amount
of such liabilities, (iv) the aggregate amount required to be capitalized under
generally accepted accounting principles under leases under which such Person is
the lessee, (v) all Contingent Obligations of such Person and (vi) the total
redemption price (including, without limitation, the liquidation preference, par
value, premium and accrued dividends) of any preferred stock of such Person with
a mandatory redemption date prior to the Termination Date.
"INTERCOMPANY ACQUISITION NOTE" means any promissory note
evidencing Indebtedness under a loan or advance by AHPF to AHPT permitted under
Section 8.05(xi) to fund an Acquisition by AHPT; provided that the obligations
of AHPT under any Intercompany Acquisition Note shall be expressly subordinated,
on terms satisfactory in form and substance to the Agent, to the Obligations of
AHPT under the Subsidiary Guaranty.
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<PAGE> 19
"INTERCOMPANY ACQUISITION GUARANTY/SECURITY AGREEMENT" means
any guaranty, security agreement or guaranty and security agreement pursuant to
which (x) a newly-acquired Subsidiary of AHPT guaranties the obligations of AHPT
under an Intercompany Acquisition Note issued to AHPF in connection with the
Acquisition of such Subsidiary and/or grants a security interest to AHPF in its
inventory to secure its obligations under such a guaranty or (y) AHPT grants a
security interest to AHPF in its inventory to secure its obligations under an
Intercompany Acquisition Note issued to AHPF in connection with an Acquisition
of assets; provided that (i) any such guaranty shall be expressly subordinated
in right of payment, on terms satisfactory in form and substance to the Agent,
to the Obligations of such Subsidiary under the Subsidiary Guaranty, (ii) any
such security interest shall be expressly subordinated, on terms satisfactory in
form and substance to the Agent, to the security interest in the inventory of
such Subsidiary created in favor of the Agent pursuant to the Subsidiary
Security Agreement, and (iii) any such guaranty or security interest shall be
assigned to the Agent on terms satisfactory in form and substance to the Agent.
"INTEREST PAYMENT DATE" means, (i) with respect to any
Eurodollar Rate Loan having an Interest Period of one, two or three months, the
last day of the Interest Period applicable to such Loan or, (ii) in the case of
any Eurodollar Rate Loan having an Interest Period of six or nine months, (a)
the date that is three months after the initial date of the Interest Period
applicable to such Loan, (b) the date that is six months after the initial date
of the Interest Period applicable to such Loan, and (c) the last day of the
Interest Period applicable to such Loan.
"INTEREST PERIOD" means any period applicable to a Loan as
determined pursuant to Section 2.06(b).
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement or other similar agreement or arrangement
designed to protect the Borrower against fluctuations in interest rates.
"INTEREST RATE DETERMINATION DATE" means each date for
calculating the Eurodollar Rate for purposes of determining the interest rate in
respect of an Interest Period. The Interest Rate Determination Date shall be the
second Business Day prior to the first day of the related Interest Period for a
Eurodollar Rate Loan.
"ISSUING BANK" means Bankers Trust Company or its Affiliate or
any successor Bank or its Affiliate in the capacity of issuer of Letters of
Credit pursuant to Section 2.10.
"JOINT VENTURE" means a single-purpose corporation,
partnership, joint venture or other similar legal arrangement (whether created
pursuant to contract or conducted through a separate legal entity) now or
hereafter formed by the Borrower or any of its Subsidiaries with another Person
(other than the Borrower or any of its Subsidiaries) in order to conduct a
common venture or enterprise with such other Person.
"LENDING OFFICE" means, with respect to each Bank, the office
of such Bank specified opposite its signature below as its lending office or
such other office of such Bank as such Bank may from time to time specify as
such to the Borrower and the Agent.
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<PAGE> 20
"LETTER OF CREDIT" means any of the standby letters of credit
issued (or deemed issued under Section 2.10(a)) or to be issued by the Issuing
Bank for the account of the Borrower pursuant to Section 2.10 and for the
purposes described in Section 2.08(b); provided that, notwithstanding anything
to the contrary contained herein, any such letter of credit may be issued by an
Affiliate of the Issuing Bank; provided, further, that to the extent that a
letter of credit is issued by an Affiliate of the Issuing Bank, such Affiliate
shall, for all purposes under this Agreement, the Credit Documents and all other
instruments and documents referred to herein and therein be deemed to be the
"ISSUING BANK" with respect to such letter of credit.
"LETTER OF CREDIT USAGE" means, as at any date of
determination, the sum of (i) the maximum aggregate amount that is or at any
time thereafter may become available for drawing under all Letters of Credit
then outstanding plus (ii) the aggregate amount of all drawings under Letters of
Credit honored by the Issuing Bank and not theretofore reimbursed by the
Borrower.
"LETTER OF NON-EXEMPTION" has the meaning assigned to that
term in Section 2.09(g)(iii).
"LEVERAGE RATIO" means the ratio of Total Debt to Consolidated
Adjusted EBITDA of the Borrower and its Subsidiaries on the date of the most
recent Margin Rate Determination Certificate.
"LIEN" means any mortgage, pledge, hypothecation, assignment
for security, deposit arrangement, encumbrance, lien (statutory or other),
preference, priority or other security agreement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing or similar statement or notice filed under
the UCC or any other similar recording or notice statute, any agreement to give
any security interest and any lease having substantially the same effect as any
of the foregoing).
"LOAN" or "LOANS" means one or more of the Term Loans or the
Revolving Loans or the Swing Line Loans.
"MARGIN RATE DETERMINATION CERTIFICATE" means an Officers'
Certificate of the Borrower setting forth in reasonable detail the Total Debt
and the Consolidated Adjusted EBITDA as of the date on which such Officers'
Certificate is delivered pursuant to Section 7.01(j) of the Existing Credit
Agreement or Section 7.01(j) of this Agreement with the financial statements
required pursuant to Section 7.01(a) or (b) of each such agreement.
"MARGIN STOCK" has the meaning provided in Regulation U of the
Board of Governors of the Federal Reserve System.
"NATIONAL MEDICAL SYSTEMS ACQUISITION" means the acquisition
by the Borrower or any of its Subsidiaries of National Medical Systems, Inc. for
aggregate consideration not to exceed $36,000,000 on the terms disclosed by the
Borrower to the Banks prior to their execution of this Agreement.
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<PAGE> 21
"NET WORTH" means, as to any Person, the sum of its capital
stock, capital in excess of par or stated value of shares of its capital stock,
retained earnings and any other account that, in accordance with generally
accepted accounting principles consistently applied, constitutes stockholders'
equity, excluding any treasury stock.
"NOTES" means one or more of the Term Notes or the Revolving
Notes or the Swing Line Note.
"NOTICE OF REVOLVER BORROWING" means a notice substantially in
the form of EXHIBIT A annexed hereto with respect to a proposed Revolving Loan.
"NOTICE OF SWING LINE BORROWING" means a notice substantially
in the form of EXHIBIT B annexed hereto with respect to a proposed Swing Line
Loan.
"NOTICE OF TERM BORROWING" means a notice substantially in the
form of EXHIBIT C annexed hereto with respect to a proposed Term Loan.
"NOTICE OF CONVERSION/CONTINUATION" means a notice
substantially in the form of EXHIBIT D annexed hereto with respect to a proposed
conversion or continuation of a Loan.
"NOTICE OF ISSUANCE OF LETTER OF CREDIT" means a notice in the
form of EXHIBIT E annexed hereto with respect to a proposed issuance of a Letter
of Credit.
"NOTICE OFFICE" means the office of the Agent located at One
Bankers Trust Plaza, 130 Liberty Street, 14th Floor, New York, New York 10006,
Attn: Jocelyn Rock in each case with a copy to 300 South Grand Avenue, 41st
Floor, Los Angeles, California 90071, Attn: Kate Cook, or such other office or
offices as the Agent may hereafter designate in writing as such to the other
parties hereto.
"OBLIGATIONS" means all amounts now or hereafter owing to the
Agent or any Bank pursuant to the terms of this Agreement or any other Credit
Document. For the purposes of the Credit Documents, the Obligations shall
include all "Obligations", as such term is defined in the Existing Credit
Agreement, to the extent such Obligations are not otherwise continued pursuant
to this Agreement.
"OFFICERS' CERTIFICATE" means, as applied to any corporation,
association or joint venture, a certificate executed on behalf of such
corporation, association or joint venture, by the Chairman of the Board (if an
officer) or the President or one of its Vice Presidents and by the Chief
Financial Officer or the Chief Accounting Officer or the Treasurer or an
Assistant Treasurer of such corporation or the managing partner (or Person with
equivalent authority) of such association or joint venture; provided that every
Officers' Certificate with respect to the compliance with a condition precedent
to the making of any Loans or issuance of any Letters of Credit hereunder shall
include (i) a statement that the officer or officers or managing partner (or
Person with equivalent authority) making or giving such Officers' Certificate
have read such condition and any definitions or other provisions contained in
this Agreement relating thereto, (ii) a statement that, in the opinion of the
signers, they have made or have caused to be made
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<PAGE> 22
such examination or investigation as is necessary to enable them to express an
informed opinion as to whether or not such condition has been complied with, and
(iii) a statement as to whether, in the opinion of the signers, such condition
has been complied with.
"ORDINARY COURSE OF BUSINESS" means, in respect of any
transaction involving the Borrower or any Subsidiary of the Borrower, the
ordinary course of such Person's business, as conducted by any such Person in
accordance with past practice (including, without limitation, such Person's past
practice of consultation with legal counsel) and undertaken by such Person in
good faith and not for purposes of evading any covenant or restriction in any
Credit Document.
"ORIGINAL CREDIT AGREEMENT" means that certain Credit
Agreement dated as of October 20, 1994 by and among the Borrower, the "Banks"
party thereto, and Banker's Trust Company, as the "Agent", as amended,
supplemented or otherwise modified prior to the effective date of the First
Amended and Restated Credit Agreement.
"OSHA" means the United States Occupational Safety and Health
Administration.
"PAYMENT OFFICE" means the office of the Agent located at One
Bankers Trust Plaza, New York, New York 10006, Attention: Commercial Loan
Division Ref: AHP, or such other office as the Agent may hereafter designate in
writing as such to the other parties hereto.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA or any successor thereto.
"PERMITTED LIENS" has the meaning assigned to that term in
Section 8.01(iii).
"PERSON" means any individual, partnership, joint venture,
firm, corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"PERFORMANCE PLAN" has the meaning assigned to that term in
Section 7.01(d).
"PLAN" means any multiemployer plan or single-employer plan as
defined in Section 4001 of ERISA, that is maintained or contributed to, or at
any time during the five calendar years preceding the date of this Agreement was
maintained or contributed to, by the Borrower or by a Subsidiary of the Borrower
or an ERISA Affiliate.
"PRIME RATE" means the rate that Bankers Trust Company
announces from time to time as its prime lending rate, and the Prime Rate shall
change when and as such prime lending rate changes. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. Bankers Trust Company may make commercial
loans or other loans at rates of interest at, above or below the Prime Rate.
"PRIOR CREDIT AGREEMENT" means, collectively, the Original
Credit Agreement, the First Amended and Restated Credit Agreement, the Second
Amended and Restated Credit Agreement and the Existing Credit Agreement.
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<PAGE> 23
"PRO RATA SHARE" means (i) with respect to all payments,
computations and other matters relating to the Term Loan Commitment or the Term
Loan of any Bank, the percentage obtained by dividing (x) the Term Loan Exposure
of that Bank by (y) the aggregate Term Loan Exposure of all Banks, (ii) with
respect to all payments, computations and other matters relating to the
Revolving Loan Commitment or the Revolving Loans of any Bank or any Letters of
Credit issued or participations therein purchased by any Bank or any
participations in any Swing Line Loans purchased by any Bank, the percentage
obtained by dividing (x) the Revolving Loan Exposure of that Bank by (y) the
aggregate Revolving Loan Exposure of all Banks, and (iii) for all other purposes
with respect to each Bank, the percentage obtained by dividing (x) the sum of
the Term Loan Exposure of that Bank plus the Revolving Loan Exposure of that
Bank by (y) the sum of the aggregate Term Loan Exposure of all Banks plus the
aggregate Revolving Loan Exposure of all Banks, in any such case as the
applicable percentage may be adjusted by assignments permitted pursuant to
Section 11.05. The initial Pro Rata Share of each Bank for purposes of each of
clauses (i), (ii) and (iii) of the preceding sentence is set forth opposite the
name of that Bank in SCHEDULE 1.01(A) annexed hereto and SCHEDULE 1.01(A) shall
be amended and the Banks' Pro Rata Shares shall be adjusted from time to time to
give effect to the addition of any new Banks and any reallocations among
existing Banks necessary to reflect assignments pursuant to Section 11.05. The
sum of the Pro Rata Shares of all Banks at any date of determination shall equal
100%.
"QUALIFIED HIGH-YIELD DEBT" means Indebtedness of the Borrower
subordinated in right of payment to the Obligations pursuant to documentation
containing maturities, amortization schedules, covenants, defaults, remedies,
subordination provisions and other material terms in form and substance
satisfactory to the Agent and Required Banks.
"QUALIFIED HIGH-YIELD OFFERING" means a public or private
offering of Qualified High-Yield Debt with gross proceeds of not less than
$200,000,000.
"REFUNDED SWING LINE LOANS" has the meaning assigned to that
term in Section 2.02(c).
"REPORTABLE EVENT" means an event described in Section 4043(b)
of ERISA with respect to a Plan as to which the 30-day notice requirement has
not been waived by the PBGC.
"REQUIRED BANKS" means Banks having or holding 51% or more of
the sum of the aggregate Term Loan Exposure of all Banks plus the aggregate
Revolving Loan Exposure of all Banks.
"RESTRUCTURING NOTE" has the meaning assigned to that term in
the Existing Credit Agreement.
"REVOLVING LOAN COMMITMENT" or "REVOLVING LOAN COMMITMENTS"
means the commitment or commitments of a Bank or Banks to make Revolving Loans
as set forth in Section 2.01(a).
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<PAGE> 24
"REVOLVING LOAN EXPOSURE" means, with respect to any Bank as
of any date of determination (i) prior to the termination of the Revolving Loan
Commitments, that Bank's Revolving Loan Commitment and (ii) after the
termination of the Revolving Loan Commitments, the sum of (a) the aggregate
outstanding principal amount of the Revolving Loans of that Bank plus (b) in the
event that Bank is an Issuing Bank, the aggregate Letter of Credit Usage in
respect of all Letters of Credit issued by that Bank (in each case net of any
participations purchased by other Banks in such Letters of Credit or any
unreimbursed drawings thereunder) plus (c) the aggregate amount of all
participations purchased by that Bank in any outstanding Letters of Credit or
any unreimbursed drawings under any Letters of Credit plus (d) in the case of
Swing Line Bank, the aggregate outstanding principal amount of all Swing Line
Loans (net of any participations therein purchased by other Banks) plus (e) the
aggregate amount of all participations purchased by that Bank in any outstanding
Swing Line Loans.
"REVOLVING LOANS" means the Revolving Loans made by the Banks
on or after the Effective Date pursuant to Section 2.01(a). The term "Revolving
Loan" shall not include Swing Line Loans.
"REVOLVING NOTES" means the promissory notes of the Borrower
issued in favor of the Banks pursuant to Section 2.05 to evidence the Revolving
Loans, substantially in the form annexed hereto as EXHIBIT F-1, as they may be
amended, supplemented or otherwise modified from time to time.
"SEC" has the meaning assigned to that term in Section
7.01(h).
"SECOND AMENDED AND RESTATED CREDIT AGREEMENT" means that
certain Second Amended and Restated Credit Agreement dated as of May 1, 1996 by
and among the Borrower, the "Banks" party thereto and Bankers Trust Company, as
the "Agent", as amended, supplemented or otherwise modified prior to the
effective date of the Existing Credit Agreement.
"SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"SUBORDINATION AGREEMENTS" means the Subordination Agreements
executed pursuant to the Prior Credit Agreement among the Borrower, the Agent
and certain holders of the Unsecured Seller Debt, substantially in the form
annexed hereto as EXHIBIT M.
"SUBSIDIARY" means, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of
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any class or classes of such corporation shall have or might have voting power
by reason of the happening of any contingency which has not occurred by the date
of determination) is at the time owned by such Person and/or one or more
Subsidiaries of such Person and (ii) any partnership, association, joint venture
or other entity in which such Person and/or one or more Subsidiaries of such
Person has more than a 50% equity interest at the time.
"SUBSIDIARY GUARANTY" means that certain Guaranty Agreement
dated as of October 20, 1994, executed and delivered by each Guarantor
Subsidiary for the benefit of the Agent pursuant to Section 5.01 of the Prior
Credit Agreement and any Guarantor Subsidiary required to deliver the same
pursuant to Section 7.11(b) of the Prior Credit Agreement or this Agreement, a
copy of which (executed by each Subsidiary of the Borrower which is a Guarantor
Subsidiary on the Effective Date) is annexed hereto as EXHIBIT G, as such
Guaranty Agreement has heretofore been, and as it hereafter may be, amended,
amended and restated, supplemented or otherwise modified from time to time.
"SUBSIDIARY PARTNERSHIP SECURITY AGREEMENT" means a Subsidiary
Partnership Security Agreement executed and delivered by the Agent and any
Guarantor Subsidiary required to deliver the same pursuant to Section 7.11(b) of
the Prior Credit Agreement or this Agreement, substantially in the form annexed
hereto as EXHIBIT U, as such Subsidiary Partnership Security Agreement may be
amended, amended and restated, supplemented or otherwise modified from time to
time.
"SUBSIDIARY PLEDGE AGREEMENT" means that certain Subsidiary
Pledge Agreement dated as of October 20, 1994, executed and delivered by the
Agent and each Guarantor Subsidiary pursuant to Section 5.01 of the Prior Credit
Agreement and any Guarantor Subsidiary required to deliver the same pursuant to
Section 7.11(b) of the Prior Credit Agreement or this Agreement, a copy of which
(executed by each Subsidiary of the Borrower which is a Guarantor Subsidiary on
the Effective Date) is annexed hereto as EXHIBIT I, as such Subsidiary Pledge
Agreement has heretofore been, and as it hereafter may be, amended, amended and
restated, supplemented or otherwise modified from time to time.
"SUBSIDIARY SECURITY AGREEMENT" means that certain Subsidiary
Security Agreement dated as of October 20, 1994, executed and delivered by the
Agent and each Guarantor Subsidiary pursuant to Section 5.01 of the Prior Credit
Agreement and any Guarantor Subsidiary required to deliver the same pursuant to
Section 7.11(b) of the Prior Credit Agreement or this Agreement, a copy of which
(executed by each Subsidiary of the Borrower which is a Guarantor Subsidiary on
the Effective Date) is annexed hereto as EXHIBIT K, as such Subsidiary Security
Agreement has heretofore been, and as it hereafter may be, amended, amended and
restated, supplemented or otherwise modified from time to time.
"SUBSIDIARY TRADEMARK SECURITY AGREEMENT" means the trademark
security agreement dated as of May 1, 1996, executed and delivered by the Agent
and each Guarantor Subsidiary which is not party to the Trademark Security
Agreement pursuant to Section 5.01 of the Prior Credit Agreement, and any
Guarantor Subsidiary required to deliver the same pursuant to Section 7.11(b) of
the Prior Credit Agreement or this Agreement, a copy of which (executed by each
Subsidiary of the Borrower which is a Guarantor Subsidiary on the Effective
Date) is
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annexed hereto as EXHIBIT L-2, as such Subsidiary Trademark Security Agreement
may be amended, amended and restated, supplemented or otherwise modified from
time to time.
"SWING LINE LOAN COMMITMENT" has the meaning assigned to that
term in Section 2.02(a).
"SWING LINE BANK" means Bankers Trust Company in its capacity
as the holder of the Swing Line Loan Commitment and any entity that assumes
Bankers Trust Company's rights and obligations with respect thereto pursuant to
Section 11.05.
"SWING LINE LOAN" means one or more of the Loans made by the
Swing Line Bank pursuant to Section 2.02(a). The term "Swing Line Loan" shall
not include Revolving Loans.
"SWING LINE NOTE" means (i) the promissory note of the
Borrower issued pursuant to Section 2.05 on the Effective Date and (ii) any
promissory note issued by the Borrower to any successor Agent and Swing Line
Bank pursuant to the last sentence of Section 10.09(d), in each case
substantially in the form of EXHIBIT F-2 annexed hereto, as they may be amended,
supplemented or otherwise modified from time to time.
"TARGET" means the Person to be acquired, or the Person whose
assets are to be acquired, in any Acquisition.
"TAX" or "TAXES" means any present or future tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature and whatever
called, by whomsoever, on whomsoever and wherever imposed, levied, collected,
withheld or assessed; provided that "TAX ON THE OVERALL NET INCOME" of a Person
shall be construed as a reference to a tax imposed by the jurisdiction (whether
local, state, federal or foreign) in which that Person's principal office
(and/or, in the case of a Bank, its lending office) is located or in which that
Person is deemed to be doing business on all or part of the net income, profits
or gains of that Person (whether worldwide, or only insofar as such income,
profits or gains are considered to arise in or to relate to a particular
jurisdiction, or otherwise).
"TERM LOAN COMMITMENT" means the commitment of a Bank to make
a Term Loan to the Borrower pursuant to Section 2.03, and "TERM LOAN
COMMITMENTS" means such commitments of all Banks in the aggregate.
"TERM LOAN EXPOSURE" means, with respect to any Bank as of any
date of determination (i) prior to the funding of the Term Loans, that Bank's
Term Loan Commitment and (ii) after the funding of the Term Loans, the
outstanding principal amount of the Term Loan of that Bank.
"TERM LOANS" means the Loans made by Banks to the Borrower
pursuant to Section 2.03.
"TERM NOTES" means any promissory notes of the Borrower issued
in favor of
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the Banks pursuant to Section 2.05 to evidence the Term Loans of any Banks,
substantially in the form annexed hereto as EXHIBIT F-3, as they may be amended,
supplemented or otherwise modified from time to time.
"TERMINATION DATE" means the earlier of (a) December 16, 2002
and (b) the date upon which the Revolving Loan Commitments are terminated
pursuant to Section 4.03 or Section 9.
"TOTAL DEBT" means all Indebtedness of the Borrower and its
Subsidiaries on a consolidated basis outstanding on any date of determination,
including, without limitation, any Indebtedness incurred or to be incurred on
such date in connection with an Acquisition, but excluding Indebtedness with
respect to Letters of Credit and Interest Rate Agreements.
"TOTAL REVOLVING LOAN COMMITMENTS" means, as at any date of
determination, the aggregate principal amount of all Revolving Loan Commitments
then outstanding.
"TOTAL UTILIZATION OF REVOLVING LOAN COMMITMENTS" means, as at
any date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans plus (ii) the Letter of Credit Usage plus (iii) the
aggregate principal amount of all Swing Line Loans outstanding at such time;
provided that Total Utilization of Revolving Loan Commitments shall be
determined without duplication of Revolving Loans, the proceeds of which are
used simultaneously to refund other Revolving Loans or Swing Line Loans.
"TRADEMARK SECURITY AGREEMENT" means that certain Trademark
Security Agreement dated as of October 20, 1994, executed and delivered by the
Borrower, the Agent and each Guarantor Subsidiary which is a Guarantor
Subsidiary prior to the Effective Date pursuant to Section 5.01 of the Prior
Credit Agreement, a copy of which is annexed hereto as EXHIBIT L-1, as such
Trademark Security Agreement has heretofore been, and as it hereafter may be,
amended, amended and restated, supplemented or otherwise modified from time to
time.
"UCC" means the Uniform Commercial Code as from time to time
in effect in the relevant jurisdiction.
"UNFUNDED CURRENT LIABILITY" means, as to any Plan, the
amount, if any, by which the present value of the accrued benefits under such
Plan as of the close of its most recent plan year determined in accordance with
Section 412 of the Code exceeds the fair market value of the assets allocable
thereto.
"UNSECURED SELLER DEBT" means the Indebtedness represented by
the Acquisition Notes and the Indebtedness permitted by Section 8.04(xii).
"WHOLLY-OWNED SUBSIDIARY" means, as to any Person, (i) any
corporation 100% of whose capital stock is at the time owned by such Person
and/or one or more Wholly-Owned Subsidiaries of such Person and (ii) any
partnership, association, joint venture or other entity in which such Person
and/or one or more Wholly-Owned Subsidiaries of such Person has a 100% equity
interest at such time.
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1.02 PRINCIPLES OF CONSTRUCTION.
(a) All references to sections, schedules and exhibits are to
sections, schedules and exhibits in or to this Agreement unless otherwise
specified. The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement.
(b) All accounting terms not specifically defined herein shall
be construed in accordance with generally accepted accounting principles in
conformity with those used in the preparation of the financial statements
referred to in Sections 6.05(a). Except in connection with the preparation of
the financial statements and other information required to be delivered by the
Borrower to the Banks pursuant to Sections 7.01(a), (b), (d), (e) and (h),
calculations made with respect to the definitions, covenants and other
provisions of this Agreement shall give effect to adjustments in component
amounts required or permitted by Accounting Principles Board Opinions Nos. 16
and 17 as a result of any Acquisition.
SECTION 2. AMOUNT AND TERMS OF CREDIT.
2.01 THE REVOLVING LOANS.
(A) THE REVOLVING LOANS. Subject to the terms and conditions
of this Agreement and in reliance upon the representations and warranties of the
Borrower set forth herein, each Bank hereby severally agrees, subject to the
limitations set forth below with respect to the maximum amount of Revolving
Loans permitted to be outstanding from time to time, to make Revolving Loans to
the Borrower from time to time during the period from the Effective Date through
but excluding the Termination Date in an amount not exceeding its Pro Rata Share
of the difference between the (i) aggregate Revolving Loan Commitments (as
defined below) then in effect and (ii) the sum of (a) the aggregate principal
amount of Swing Line Loans then outstanding (excluding Swing Line Loans to be
repaid with the proceeds of such Revolving Loans) and (b) the Letter of Credit
Usage for the purposes identified in Section 2.08. Each Bank's commitment to
maintain and make Revolving Loans to the Borrower pursuant to this Section
2.01(a) is hereby called its "REVOLVING LOAN COMMITMENT" and such commitments of
all the Banks in the aggregate are herein called the "REVOLVING LOAN
COMMITMENTS." The initial amount of each Bank's Revolving Loan Commitment is set
forth in SCHEDULE 1.01(A) and the aggregate initial amount of all Revolving Loan
Commitments is $325,000,000. The amount of the Revolving Loan Commitments shall
be reduced by the amount of all reductions thereof made pursuant to Section 4.02
or Section 9 through the date of determination. In no event shall the aggregate
principal amount of the Revolving Loans from any Bank outstanding at any time
exceed the amount of its Revolving Loan Commitment then in effect. Each Bank's
Revolving Loan Commitment shall expire on the Termination Date and all Revolving
Loans and all other amounts owed hereunder with respect to the Revolving Loans,
the Revolving Loan Commitments, or otherwise (including, without limitation, any
cash deposit required under Section 2.10(a) with respect to any Letter of Credit
having an expiration date subsequent to the Termination Date) shall be paid in
full no later than that date.
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Notwithstanding the foregoing provisions of this Section
2.01(a) and the provisions of Section 2.01(b), the extensions of credit under
the Revolving Loan Commitments shall be subject to the following limitations in
the amounts and during the periods indicated:
(i) The amount otherwise available for borrowing under the
Revolving Loan Commitments as of any time of determination (other than
to reimburse the Issuing Bank for the amount of any drawings under any
Letter of Credit honored by the Issuing Bank and not theretofore
reimbursed by the Borrower or to reimburse the Swing Line Bank for the
amount of any Swing Line Loans outstanding) shall be reduced by the
Letter of Credit Usage and the aggregate principal amount of the Swing
Line Loans then outstanding as of such time of determination; and
(ii) In no event shall the Total Utilization of Revolving Loan
Commitments exceed the Total Revolving Loan Commitments then in effect.
Subject to Section 2.09(d), all Revolving Loans under this
Agreement shall be made by the Banks simultaneously and proportionately to their
respective Pro Rata Shares, it being understood that no Bank shall be
responsible for any default by any other Bank in that other Bank's obligation to
make Revolving Loans hereunder nor shall the Revolving Loan Commitment of any
Bank be increased or decreased as a result of the default by any other Bank in
that other Bank's obligation to make Revolving Loans hereunder. Amounts borrowed
by the Borrower under this Section 2.01(a) may be repaid and, through but
excluding the Termination Date, reborrowed.
(B) NOTICE OF REVOLVER BORROWING. Subject to Section 2.01(a),
whenever the Borrower desires to borrow Revolving Loans under this Section 2.01,
it shall deliver to the Agent at its Notice Office a Notice of Revolver
Borrowing no later than 12:00 Noon (New York time) one Business Day in advance
of the proposed Funding Date (in the case of a requested Base Rate Loan) and
three Business Days in advance of the proposed Funding Date (in the case of a
requested Eurodollar Rate Loan). The Notice of Revolver Borrowing shall specify
(i) the proposed Funding Date (which shall be a Business Day), (ii) the amount
of the proposed borrowing and that the proposed borrowing shall be a Revolving
Loan, (iii) in the case of any Revolving Loans requested to be made on or within
three days after the Effective Date, that such Revolving Loans shall initially
be Base Rate Loans, (iv) in the case of Revolving Loans requested to be made
more than three days after the Effective Date, whether such Revolving Loans are
initially to consist of Base Rate Loans or Eurodollar Rate Loans or a
combination thereof, (v) if such Revolving Loans, or any portion thereof, are
initially to be Eurodollar Rate Loans, the amounts thereof and the initial
Interest Periods therefor and (vi) that the Total Utilization of Revolving Loan
Commitments (after giving effect to the Revolving Loans then requested) will not
exceed the Total Revolving Loan Commitments then in effect. Revolving Loans
shall be made in an aggregate minimum amount of $1,000,000 and integral
multiples of $100,000 in excess of that amount. Revolving Loans may be continued
as or converted into Base Rate Loans and Eurodollar Rate Loans in the manner
provided in Section 2.06(d); provided that unless the Agent otherwise consents
in writing, the Revolving Loans made during the period from and including the
Effective Date until the date three Business Days after the Effective Date
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may not be converted until three Business Days after the Effective Date. In lieu
of delivering the above-described Notice of Revolver Borrowing, the Borrower may
give the Agent telephonic notice by the required time of any proposed borrowing
of Revolving Loans under this Section 2.01; provided that such notice shall be
promptly confirmed in writing by delivery of a Notice of Revolver Borrowing to
the Agent on or prior to the Funding Date of the requested Revolving Loans.
Neither the Agent nor any Bank shall incur any liability to
the Borrower in acting upon any telephonic notice referred to above that the
Agent believes in good faith to have been given by a duly authorized officer or
other person authorized to borrow on behalf of the Borrower or for otherwise
acting in good faith under this Section 2.01 and upon funding of Revolving Loans
by the Banks in accordance with this Agreement pursuant to any such telephonic
notice, the Borrower shall have effected Revolving Loans hereunder.
Except as provided in Section 2.09(d), a Notice of Revolver
Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu thereof)
shall be irrevocable on and after the related Interest Rate Determination Date,
and the Borrower shall be bound to make a borrowing in accordance therewith.
2.02 THE SWING LINE LOANS.
(A) The Swing Line Bank hereby agrees, subject to the
limitations set forth below with respect to the maximum amount of Swing Line
Loans permitted to be outstanding from time to time and subject to the other
terms and conditions hereof, to make a portion of the Revolving Loan Commitments
available to the Borrower from time to time during the period from the Business
Day immediately following the Effective Date to but excluding the second day
prior to the Termination Date by making Swing Line Loans to the Borrower in an
aggregate amount not exceeding the amount of the Swing Line Loan Commitment (as
defined below) to be used for the purposes identified in Section 2.08(a),
notwithstanding the fact that such Swing Line Loans, when aggregated with the
Swing Line Bank's outstanding Revolving Loans may exceed its Revolving Loan
Commitment. The Swing Line Bank's commitment to make Swing Line Loans to the
Borrower pursuant to this Section 2.02(a) is herein called its "SWING LINE LOAN
COMMITMENT," and the original amount of the Swing Line Loan Commitment is
$15,000,000 and may not be increased without the consent of the Swing Line Bank
and the Required Banks. Amounts borrowed under this Section 2.02(a) may be
repaid and reborrowed to but excluding the second day prior to the Termination
Date on which second day all Swing Line Loans and all other amounts owed
hereunder with respect to the Swing Line Loans shall be paid in full by the
Borrower.
Anything contained in this Agreement to the contrary
notwithstanding, the Swing Line Loans and the Swing Line Loan Commitment shall
be subject to the following limitations in the amounts and during the periods
indicated:
(i) in no event shall the Total Utilization of Revolving Loan
Commitments exceed the Total Revolving Loan Commitments then in
effect; and
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(ii) any reduction of the Revolving Loan Commitments made
pursuant to Section 4.02 that reduces the aggregate Revolving Loan
Commitments to an amount less than the then current amount of the Swing
Line Loan Commitment shall result in an automatic corresponding
reduction of the Swing Line Loan Commitment to the amount of the
Revolving Loan Commitments, as so reduced, without any further action
on the part of the Swing Line Bank.
(B) Whenever the Borrower desires that the Swing Line Bank
make a Swing Line Loan under Section 2.02(a), it shall deliver to the Swing Line
Bank a Notice of Swing Line Borrowing no later than 12:00 Noon (New York City
time) on the proposed Funding Date (which shall be a Business Day). The Notice
of Swing Line Borrowing shall specify (i) the proposed Funding Date, (ii) the
amount of the Swing Line Loan requested (which shall be in the amount of
$100,000 and integral multiples of $10,000 in excess thereof) and (iii) that the
Total Utilization of Revolving Loan Commitments (after giving effect to the
proposed borrowing) does not exceed the Total Revolving Loan Commitments then in
effect. In lieu of delivering the above-described Notice of Swing Line
Borrowing, the Borrower may give the Agent telephonic notice by the required
time of any proposed borrowing of Swing Line Loans under this Section 2.02;
provided that such notice shall be promptly confirmed in writing by delivery of
a Notice of Swing Line Borrowing to the Agent on or prior to the Funding Date of
the requested Loans, which Notice of Swing Line Borrowing may be given by
facsimile.
(C) With respect to any Swing Line Loans that have not been
voluntarily prepaid by the Borrower pursuant to Section 4.02, the Swing Line
Bank may at any time (without regard to whether an Event of Default has occurred
and is continuing) in its sole and absolute discretion, deliver to each Bank
(with a copy to the Borrower), no later than 12:00 Noon (New York City time) at
least one Business Day in advance of the proposed Funding Date, a notice (which
shall be deemed to be a Notice of Revolver Borrowing given by the Borrower)
requesting Banks to make Revolving Loans that are Base Rate Loans on such
Funding Date in an aggregate amount equal to the amount of such Swing Line Loans
(the "REFUNDED SWING LINE LOANS") outstanding on the date such notice is given
that the Swing Line Bank requests the Banks to prepay. Each Bank (other than the
Swing Line Bank) shall make the amount of its Revolving Loan available to the
Agent by depositing the amount thereof in same day funds at the Agent's Payment
Office on the next Business Day. Anything contained in this Agreement to the
contrary notwithstanding, (i) the proceeds of such Revolving Loans made by the
Banks other than the Swing Line Bank shall be delivered immediately to the Swing
Line Bank (and not to the Borrower) and applied to repay a corresponding portion
of the Refunded Swing Line Loans and (ii) on the day such Revolving Loans are
made, the Swing Line Bank's Pro Rata Share of the Refunded Swing Line Loans
shall be deemed to be paid with the proceeds of a Revolving Loan made by the
Swing Line Bank and such portion of the Swing Line Loans deemed to be so paid
shall no longer be outstanding as Swing Line Loans and shall no longer be due
under the Swing Line Note of the Swing Line Bank but shall be outstanding as
Revolving Loans and shall be due under the Revolving Note of the Swing Line Bank
in its capacity as a Bank. If any portion of any such amount paid (or deemed to
be paid) to the Swing Line Bank should be recovered by or on behalf of the
Borrower from the Swing Line Bank in bankruptcy, by assignment for the benefit
of creditors or otherwise, the loss of the amount so recovered shall be shared
ratably among all the Banks in the manner contemplated by Section 11.07.
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If, as a result of any bankruptcy or similar proceeding with
respect to the Borrower, Revolving Loans are not made pursuant to this Section
2.02(c) in an amount sufficient to repay any amounts owed to the Swing Line Bank
in respect of any outstanding Swing Line Loans or if the Swing Line Bank shall
so request each Bank for any reason, the Swing Line Bank shall be deemed to have
sold without recourse or representation or warranty, and each Bank shall be
deemed to have purchased and hereby agrees to purchase, a participation in such
outstanding Swing Line Loans in an amount equal to its Pro Rata Share of the
unpaid amount thereof together with accrued interest thereon. Upon one Business
Day's notice from the Swing Line Bank, each Bank (other than the Swing Line
Bank) shall deliver to the Swing Line Bank an amount equal to its respective
participation in same day funds at the Agent's Payment Office. In the event any
such Bank fails to make available to the Swing Line Bank the amount of such
Bank's participation as provided in this paragraph, the Swing Line Bank shall be
entitled to recover such amount on demand from such Bank together with interest
thereon at the Base Lending Rate in effect from time to time.
Anything contained herein to the contrary notwithstanding, the
obligation of each Bank (other than the Swing Line Bank) to make Revolving Loans
for the purpose of repaying any Refunded Swing Line Loans pursuant to the second
preceding paragraph and each such Bank's obligation to purchase a participation
in any unpaid Swing Line Loans pursuant to the immediately preceding paragraph
shall be absolute and unconditional and shall not be affected by any
circumstance, including without limitation (a) any set-off, counterclaim,
recoupment, defense or other right that such Bank may have against the Swing
Line Bank, the Borrower or any other Person for any reason whatsoever; (b) the
occurrence or continuance of an Event of Default; (c) any adverse change in the
business, operations, properties, assets, condition (financial or otherwise), or
prospects of the Borrower or any of its Subsidiaries; (d) any breach of this
Agreement by any party hereto; or (e) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing; provided, however,
that no Bank shall have any obligation to make a Revolving Loan for the purpose
of repaying, or to purchase any participation in, any Swing Line Loan to the
extent such Swing Line Loan increased the Total Utilization of Revolving Loan
Commitments (after giving effect to the repayment of any Loans with the proceeds
of such Swing Line Loan) and was made even though the Swing Line Bank had actual
knowledge that the conditions to making such Swing Line Loan were not satisfied.
2.03 THE TERM LOANS.
(A) THE TERM LOANS. Subject to the terms and conditions of
this Agreement and in reliance upon the representations and warranties of the
Borrower set forth herein, each Bank severally agrees to lend to the Borrower,
in a single borrowing on the Effective Date, an amount not exceeding its Pro
Rata Share of the Term Loan Commitments to be used for the purposes identified
in Section 2.08. The amount of each Bank's Term Loan Commitment is set forth
opposite its name on SCHEDULE 1.01(A) annexed hereto and the aggregate amount of
the Term Loan Commitments is $75,000,000.
(B) NOTICE OF TERM LOAN BORROWING. Whenever the Borrower
desires that Banks
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make Term Loans it shall deliver to Agent a Notice of Term Borrowing no later
than 12:00 Noon (New York City time) three Business Days in advance of the
proposed Funding Date (in the case of a Eurodollar Rate Loan) or one Business
Day in advance of the proposed Funding Date (in the case of a Base Rate Loan).
The Notice of Term Borrowing shall specify (i) the proposed Funding Date (which
shall be a Business Day), (ii) the amount requested, (ii) whether such Loans
shall be Base Rate Loans or Eurodollar Rate Loans, and (iii) in the case of any
Loans requested to be made as Eurodollar Rate Loans, the initial Interest Period
requested therefor. Term Loans may be continued as or converted into Base Rate
Loans and Eurodollar Rate Loans in the manner provided in Section 2.06(d). In
lieu of delivering the above-described Notice of Borrowing, the Borrower may
give Agent telephonic notice by the required time of any proposed borrowing
under Section 2.03(a); provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Borrowing to Agent on or before the
applicable Funding Date.
Neither Agent nor any Bank shall incur any liability to the
Borrower in acting upon any telephonic notice referred to above that Agent
believes in good faith to have been given by a duly authorized officer or other
person authorized to borrow on behalf of the Borrower or for otherwise acting in
good faith under this Section 2.03(b), and upon funding of Loans by Banks in
accordance with this Agreement pursuant to any such telephonic notice the
Borrower shall have effected Loans hereunder.
The Borrower shall notify Agent prior to the funding of any
Loans in the event that any of the matters to which the Borrower is required to
certify in the applicable Notice of Borrowing is no longer true and correct as
of the applicable Funding Date, and the acceptance by the Borrower of the
proceeds of any Loans shall constitute a re-certification by the Borrower, as of
the applicable Funding Date, as to the matters to which the Borrower is required
to certify in the applicable Notice of Borrowing.
2.04 DISBURSEMENT OF FUNDS. Promptly after receipt of a Notice
of Revolver Borrowing or a Notice of Term Borrowing (or telephonic notice
thereof) pursuant to Section 2.01(b) or 2.03(b), but no later than 4:00 p.m.
(New York time) on the date of such receipt, the Agent shall notify each Bank of
the proposed borrowing. Each Bank shall make the amount of its applicable Loan
available to the Agent, in same day funds, at its Payment Office not later than
12:00 Noon (New York time) on the Funding Date. Upon satisfaction or waiver of
the conditions precedent specified in Section 5, as applicable, the Agent shall
make the proceeds of such Loans available to the Borrower on such Funding Date
by causing an amount of same day funds equal to the proceeds of all such Loans
received by the Agent to be credited to the account of the Borrower at such
office of the Agent.
Unless the Agent shall have been notified by any Bank in
writing prior to any Funding Date in respect of any Loans that such Bank does
not intend to make available to the Agent such Bank's applicable Loan on such
Funding Date (which such notice, if so received by the Agent, promptly shall be
communicated to the Borrower), the Agent may assume that such Bank has made such
amount available to the Agent on such Funding Date and the Agent in its sole
discretion may, but shall not be obligated to, make available to the Borrower a
corresponding amount on such Funding Date. If such corresponding
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amount is not in fact made available to the Agent by such Bank, the Agent shall
be entitled to recover such corresponding amount on demand from such Bank
together with interest thereon, for each day from such Funding Date until the
date such amount is paid to the Agent, at the customary rate set by the Agent
for the correction of errors among banks for three Business Days and thereafter
at the Base Lending Rate. If such Bank does not pay such corresponding amount
forthwith upon the Agent's demand therefor, the Agent promptly shall notify the
Borrower, and the Borrower immediately shall pay such corresponding amount to
the Agent. Nothing in this Section 2.04 shall be deemed to relieve any Bank from
its obligation to fulfill its Commitments hereunder or to prejudice any rights
that the Borrower may have against any Bank as a result of any default by such
Bank hereunder.
2.05 PREPAYMENT OF LOANS OUTSTANDING ON EFFECTIVE DATE; NOTES.
(A) On the Effective Date, the Existing Bank Loans shall be
prepaid with the proceeds of the Term Loans together with a portion of the
proceeds of the initial Revolving Loans. Based on such assumed prepayment of the
Existing Bank Loans, the Agent shall advise each Bank and each Existing Bank as
to the net amount of payments to be received by, or Loans to be advanced by,
such Bank or Existing Bank on the Effective Date.
(B) On and after the Effective Date, the Existing Notes shall
be of no further force and effect, and the Swing Line Bank and each Existing
Bank that is also a Bank hereunder shall deliver any Existing Notes issued to
such Bank, marked to show their cancellation, to the Borrower. The Borrower
shall execute and deliver (i) to each Bank (or to the Agent for that Bank) on
the Effective Date a Revolving Note substantially in the form of EXHIBIT F-1 to
evidence that Bank's Revolving Loans, in the principal amount of that Bank's
Revolving Loan Commitment and with other appropriate insertions, (ii) to the
Swing Line Bank on the Effective Date a Swing Line Note substantially in the
form of EXHIBIT F-2 annexed hereto to evidence the Swing Line Bank's Swing Line
Loans, in the principal amount of the Swing Line Loan Commitment and with other
appropriate insertions, and (iii ) to each Bank (or to the Agent for that Bank)
on the Effective Date a Term Note substantially in the form of EXHIBIT F-3 to
evidence that Bank's Term Loan, in the principal amount of that Bank's Term Loan
Commitment and with other appropriate insertions. Each Bank will note on its
internal records the amount of each Loan made by it and each payment in respect
thereof and, prior to any transfer of any of its Notes, will endorse on the
reverse side thereof the outstanding principal amount of the Loans evidenced
thereby. Failure to make any such notation shall not affect the Borrower's
obligations in respect of such Loans.
2.06 INTEREST ON THE LOANS.
(A) RATE OF INTEREST. Subject to the provisions of Sections
2.06(e) and 2.09(g), each Loan shall bear interest on the unpaid principal
amount thereof from the date made through maturity (whether by acceleration or
otherwise) at a rate determined by reference to, (i) if a Term Loan or Revolving
Loan, the Base Lending Rate or the Adjusted Eurodollar Rate and (ii) if a Swing
Line Loan, the Base Lending Rate. The applicable basis for determining the rate
of interest for Revolving Loans and Term Loans shall be selected by the Borrower
initially at the time a Notice of Revolver Borrowing or Notice of Term Borrowing
is given with respect thereto pursuant to Section 2.01(b) or Section 2.03(b), as
the case may be. The basis for
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determining the interest rate with respect to any Revolving Loan or Term Loan
may be changed from time to time pursuant to Section 2.06(d). If on any day a
Revolving Loan or Term Loan is outstanding with respect to which notice has not
been delivered to the Agent in accordance with the terms of this Agreement
specifying the basis for determining the rate of interest, then for that day
that Loan shall bear interest determined by reference to the Base Lending Rate.
(i) The Term Loans and the Revolving Loans shall bear interest
through maturity as follows:
(A) if a Base Rate Loan, then at the sum of the Base Lending
Rate plus the Applicable Base Margin; and
(B) if a Eurodollar Rate Loan, then at the sum of the Adjusted
Eurodollar Rate plus the Applicable Eurodollar Margin;
(ii) The Swing Line Loans shall bear interest at a per annum
rate equal to the Base Lending Rate plus the Applicable Base Margin minus the
Commitment Fee Percentage then in effect.
Subject to the maximum amounts specified for the Applicable
Base Margin and the Applicable Eurodollar Margin in the definitions thereof, (X)
the Applicable Base Margin and the Applicable Eurodollar Margin shall be
determined on the Effective Date in accordance with the Leverage Ratio set forth
in the Margin Rate Determination Certificate delivered by the Borrower to the
Agent pursuant to Section 5.01(e), and (Y) upon delivery of any subsequent
Margin Rate Determination Certificate by the Borrower to the Agent pursuant to
Section 7.01(j), the Applicable Base Margin and the Applicable Eurodollar Margin
shall automatically be adjusted in accordance with the Leverage Ratio set forth
therein, such adjustment to become effective on the Business Day next succeeding
the Business Day on which the Agent received such Margin Rate Determination
Certificate; provided that, in the event a Qualified High-Yield Offering is not
consummated on or before the High-Yield Cut-Off Date, the Borrower shall pay to
the Agent on the High-Yield Cut-Off Date, for distribution to the applicable
Banks, such additional amounts of interest, if any, that the Borrower would have
been required to pay in respect of any Base Rate Loans and/or Euro-Dollar Rate
Loans outstanding during the period from the Effective Date through the
High-Yield Cut-Off Date if the applicable interest rates in respect of such Base
Rate Loans and/or Eurodollar Rate Loans had been determined on the basis of the
table set forth in the definition of "Applicable Base Margin" or "Applicable
Eurodollar Margin", as the case may be, without giving effect to the proviso set
forth therein regarding the maximum amount of the Applicable Base Margin or the
Applicable Eurodollar Margin, as the case may be, during the period prior to the
High-Yield Cut-Off Date.
(B) INTEREST PERIODS. In connection with each Eurodollar Rate
Loan, the Borrower shall elect an interest period (each an "INTEREST PERIOD") to
be applicable to such Loan, which Interest Period shall be either a one, two,
three, six or, if available to all Banks making the applicable Loans (as
determined by such Banks in good faith based on prevailing market conditions),
nine-month period; provided that:
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(i) the initial Interest Period for any Loan shall commence on
the Funding Date of such Loan;
(ii) in the case of immediately successive Interest Periods,
each successive Interest Period shall commence on the day on which the
next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided that if any Interest Period
would otherwise expire on a day that is not a Business Day but is a day
of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month;
(v) no Interest Period with respect to any Loan shall extend
beyond the Termination Date;
(vi) no Interest Period with respect to any portion of the
Term Loans shall extend beyond a date on which the Borrower is required
to make a scheduled payment of principal of the Term Loans unless the
sum of (a) the aggregate principal amount of Term Loans that are Base
Rate Loans plus (b) the aggregate principal amount of Term Loans that
are Eurodollar Rate Loans with Interest Periods expiring on or before
such date equals or exceeds the principal amount required to be paid on
the Term Loans on such date; and
(vii) there shall be no more than ten (10) Eurodollar Rate
Loans with different maturities outstanding at any time.
(C) INTEREST PAYMENTS. Subject to Section 2.06(e), interest
shall be payable on the Loans as follows:
(i) interest on each Base Rate Loan shall be payable quarterly
in arrears on and to the last Business Day of each January, April, July
and October commencing on January 31, 1998, on any prepayment of any
such Loan pursuant to Section 4.02(c) (to the extent accrued on the
amount being prepaid) and at maturity.
(ii) interest on each Eurodollar Rate Loan shall be payable in
arrears on and to (but not including) each Interest Payment Date
applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity.
(iii) interest on each Swing Line Loan shall be payable
quarterly in arrears on
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and to the last Business Day of each January, April, July and October
commencing on January 31, 1998, on any prepayment of such Loan pursuant
to Section 4.02(c) and upon maturity.
(D) CONVERSION OR CONTINUATION. Subject to the provisions of
Section 2.09, the Borrower shall have the option (i) to convert at any time all
or any part of the outstanding Loans from Loans bearing interest at a rate
determined by reference to one basis to Loans bearing interest at a rate
determined by reference to an alternative basis, or (ii) upon the expiration of
any Interest Period applicable to a Eurodollar Rate Loan, to continue all or any
portion of such Loan equal to $1,000,000 and integral multiples of $100,000 in
excess of that amount as a Eurodollar Rate Loan and the succeeding Interest
Period(s) of such continued Loan shall commence on the last day of the Interest
Period of the Loan to be continued; provided, however, Eurodollar Rate Loans may
only be converted into Base Rate Loans on the expiration date of an Interest
Period applicable thereto; provided further that no outstanding Loan may be
continued as, or be converted into, a Eurodollar Rate Loan when any Default or
Event of Default has occurred and is continuing; and provided further that the
Base Rate Loans made on the Effective Date may not be converted to Eurodollar
Rate Loans prior to three Business Days after the Effective Date.
The Borrower shall deliver a Notice of Conversion/Continuation
to the Agent no later than 12:00 Noon (New York time) at least two Business Days
in advance of the proposed conversion/continuation date (in the case of a
conversion to a Base Rate Loan), and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation
shall certify (i) the proposed conversion/continuation date (which shall be a
Business Day), (ii) the amount of the Loan to be converted/continued, (iii) the
nature of the proposed conversion/continuation, (iv) in the case of a conversion
to, or a continuation of, a Eurodollar Rate Loan, the requested Interest Period,
and (v) that no Default or Event of Default has occurred and is continuing. In
lieu of delivering the above-described Notice of Conversion/Continuation, the
Borrower may give the Agent telephonic notice by the required time of any
proposed conversion/continuation under this Section 2.06(d); provided that such
notice shall be promptly confirmed in writing by delivery of a Notice of
Conversion/Continuation to the Agent on or before the proposed
conversion/continuation date.
Neither the Agent nor any Bank shall incur any liability to
the Borrower in acting upon any telephonic notice referred to above that the
Agent believes in good faith to have been given by a duly authorized officer or
other person authorized to act on behalf of the Borrower or for otherwise acting
in good faith under this Section 2.06(d) and upon conversion/continuation by the
Agent in accordance with this Agreement, pursuant to any telephonic notice the
Borrower shall have effected such conversion or continuation, as the case may
be, hereunder.
Except as provided in Section 2.09(d), a Notice of
Conversion/Continuation for conversion to, or continuation of, a Eurodollar Rate
Loan (or telephonic notice in lieu thereof) shall be irrevocable on and after
the related Interest Rate Determination Date, and the Borrower shall be bound to
convert or continue in accordance therewith.
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(E) POST MATURITY INTEREST. Upon the occurrence and during the
continuation of any Event of Default, the outstanding principal amount of all
Loans and, to the extent permitted by applicable law, any interest payments
thereon not paid when due and any fees and other amounts then due and payable
hereunder, shall thereafter bear interest (including post-petition interest in
any proceeding under the Bankruptcy Code or other applicable bankruptcy laws)
payable upon demand at a rate that is 2.00% per annum in excess of the interest
rate otherwise payable under this Agreement with respect to the applicable Loans
(or, in the case of any such fees and other amounts, at a rate that is 2.00% per
annum in excess of the interest rate otherwise payable under this Agreement for
Base Rate Loans; provided that, in the case of Eurodollar Rate Loans, upon the
expiration of the Interest Period in effect at the time any such increase in
interest rate is effective, such Eurodollar Rate Loans shall thereupon become
Base Rate Loans and thereafter bear interest payable upon demand at a rate that
is 2.00% per annum in excess of the interest rate otherwise payable under this
Agreement for Base Rate Loans. The payment or acceptance of the increased rate
provided by this Section 2.06(e) shall not constitute a waiver of any Event of
Default or an amendment to this Agreement or otherwise prejudice or limit any
rights or remedies of the Agent or any Bank.
(F) COMPUTATION OF INTEREST. Interest on the Loans shall be
computed on the basis of a 360-day year and the actual number of days elapsed in
the period during which it accrues. In computing interest on any Revolving Loan
(or any de facto loan from the Swing Line Bank to a Bank under Section 2.02(c)),
the date of the making of such Loan or the first day of an Interest Period
applicable to such Loan or, with respect to a Base Rate Loan being converted
from a Eurodollar Rate Loan, the date of conversion of such Eurodollar Rate Loan
to such Base Rate Loan, shall be included; and the date of payment of such Loan
or the expiration date of an Interest Period applicable to such Loan, or with
respect to a Base Rate Loan being converted to a Eurodollar Rate Loan, the date
of conversion of such Base Rate Loan to such Eurodollar Rate Loan, shall be
excluded; provided that if a Loan is repaid on the same day on which it is made,
one day's interest shall be paid on that Loan.
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2.07 INCREASED COSTS; TAXES.
(A) INCREASED COSTS. If any Bank shall determine that the
adoption of any applicable law, rule or regulation concerning capital adequacy
or any applicable change therein, or any change in interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Bank (or its Lending Office) with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, in each case occurring after the Effective
Date, has or will have the effect of reducing the rate of return on such Bank's
capital as a consequence of its obligation to make a Loan hereunder to a level
below that which such Bank could have achieved but for such adoption, change or
compliance (taking into consideration such Bank's policies with respect to
capital adequacy) by any amount deemed by such Bank to be material, then from
time to time, within fifteen (15) days after demand by such Bank, the Borrower
shall pay to such Bank such additional amounts as shall compensate such Bank for
such reduction. Each Bank shall promptly notify the Borrower of any of the
matters set forth in the preceding sentence. A certificate as to additional
amounts owed any such Bank, showing in reasonable detail the basis for the
calculation thereof, submitted in good faith to the Borrower and the Agent by
such Bank shall be presumed to be correct.
(B) WITHHOLDING OF TAXES.
(i) Payments to Be Free and Clear. All sums payable by the
Borrower under this Agreement and the other Credit Documents shall be
paid free and clear of and (except to the extent required by law)
without any deduction or withholding on account of any Tax (other than
franchise taxes and Taxes on the overall net income of any Bank)
imposed, levied, collected, withheld or assessed by or within the
United States of America or any political subdivision in or of the
United States of America or any other jurisdiction from or to which a
payment is made by or on behalf of the Borrower or by any federation or
organization of which the United States of America or any such
jurisdiction is a member at the time of payment.
(ii) Grossing-up of Payments. If the Borrower or any other
Person is required by law to make any deduction or withholding on
account of any such Tax from any sum paid or payable by the Borrower to
the Agent or any Bank under any of the Credit Documents:
(A) the Borrower shall notify the Agent of any such
requirement or any change in any such requirement as soon as
the Borrower becomes aware of it;
(B) the Borrower shall pay any such Tax before the
date on which penalties attach thereto, such payment to be
made (if the liability to pay is imposed on the Borrower) for
its own account or (if that liability is imposed on the Agent
or such Bank, as the case may be) on behalf of and in the name
of the Agent or such Bank;
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(C) the sum payable by the Borrower in respect of
which the relevant deduction, withholding or payment is
required shall be increased to the extent necessary to ensure
that, after the making of that deduction, withholding or
payment, the Agent or such Bank, as the case may be, receives
on the due date a net sum equal to what it would have received
had no such deduction, withholding or payment been required or
made; and
(D) within 30 days after paying any sum from which it
is required by law to make any deduction or withholding, and
within 30 days after the due date of payment of any Tax that
it is required by clause (B) above to pay, the Borrower shall
deliver to the Agent evidence satisfactory to the other
affected parties of such deduction, withholding or payment and
of the remittance thereof to the relevant taxing or other
authority;
provided that no such additional amount shall be required to be paid to
any Bank under clause (C) above except to the extent that any change,
after the date hereof (in the case of each Bank listed on the signature
pages hereof) or after the date of the assignment under Section 11.05
by which such Bank became a Bank (in the case of each other Bank), in
any such requirement for a deduction, withholding or payment as is
mentioned therein shall result in an increase in the rate of such
deduction, withholding or payment from that in effect at the date of
this Agreement or at the date of such assignment, as the case may be,
in respect of payments to such Bank.
(iii) Alternatives. Notwithstanding the provisions of Section
2.07(b)(ii), in lieu of paying a Bank such additional moneys as are
required by Section 2.07(b)(ii), the Borrower may exercise any one of
the following options:
(A) If the requirement to make a deduction or
withholding of a Tax referred to in Section 2.07(b)(ii)
relates only to Eurodollar Rate Loans then being requested by
the Borrower pursuant to a Notice of Revolver Borrowing or a
Notice of Conversion/Continuation, the Borrower may by giving
notice (by telephone promptly confirmed in writing) to the
Agent (who shall promptly give similar notice to each other
Bank) no later than the date immediately prior to the date on
which such Eurodollar Rate Loans are to be made, withdraw that
Notice of Revolver Borrowing or Notice of
Conversion/Continuation and the Eurodollar Rate Loans then
being requested shall be made by the Banks as Base Rate Loans;
or
(B) If the requirement to make a deduction or
withholding of a Tax referred to in Section 2.07(b)(ii)
relates only to Eurodollar Rate Loans outstanding at the time
the requirement is discovered, upon written notice to the
Agent and each Bank, the Borrower may terminate the
obligations of the Banks to make or maintain Loans as, and to
convert Loans into, Eurodollar Rate Loans and, in such event,
the Borrower shall at the end of the then current Interest
Period, convert all of the Eurodollar Rate Loans into Base
Rate Loans in the manner contemplated by Section 2.06(d) but
without satisfying the advance notice requirements therein in
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which case the Borrower must take the actions referred to in
Section 2.07(b)(ii) until such conversion; or
(C) If the requirement to make a deduction or
withholding of a Tax referred to in Section 2.07(b)(ii)
relates to Loans other than Eurodollar Rate Loans, the
Borrower may notify each Bank to which such requirement
relates that the Borrower will not make the payments required
under Section 2.07(b)(ii)(C) with respect to such Loans at the
end of the 30 day period described below and each such Bank
will have 30 days in which to notify the Agent (which will
notify the Borrower) that it will continue as a Bank under
this Agreement without such payments or that it refuses so to
continue, and, if any such Bank refuses to continue, (i) the
Borrower shall pay to such Bank, on a date 15 days after
notice of such refusal is made, all interest and fees and
other amounts due and owing to such Bank including amounts due
under Section 2.07(b)(ii) through the end of such 30 day
period (and, to the extent such Bank is the Issuing Bank, any
Letters of Credit shall be returned to the Issuing Bank marked
"cancelled" or Cash shall be deposited with the Issuing Bank
in an amount equal to the maximum amount that may at any time
be drawn on such Letters of Credit) on such date and the
principal amount of all such Loans of such Bank or (ii)
another financial institution that is an Eligible Assignee,
shall purchase for cash such Loans of such Bank and become a
Bank for all purposes under this Agreement and assume all
obligations of such Bank pursuant to an Assignment and
Acceptance that shall have become effective pursuant to
Section 11.05.
2.08 USE OF PROCEEDS.
(A) LOANS. The proceeds of the Term Loans borrowed on the
Effective Date, together with a portion of the proceeds of the initial Revolving
Loans, shall be applied by the Borrower to prepay all the Existing Bank Loans.
The proceeds of any subsequent Revolving Loans and any Swing Line Loans shall be
applied by the Borrower for the general corporate purposes of the Borrower and
its Subsidiaries, which may include, without limitation, (i) the reimbursement
of the Issuing Bank of any amounts drawn under any Letter of Credit as provided
in Section 2.10(c), (ii) the reimbursement of the Swing Line Bank of any Swing
Line Loans as provided in Section 2.02(c), (iii) the payment of amounts to be
expended by the Borrower in connection with any Acquisition, and (iv) payment of
any fees and expenses associated with the Loans and the other transactions
contemplated hereby. The Borrower hereby represents that the proceeds of the
Existing Bank Loans and the Existing Swing Line Loans were used in compliance
with Section 2.08(a) of the Existing Credit Agreement.
(B) LETTERS OF CREDIT. The Letters of Credit shall be used for
the purpose of supporting (x) workers' compensation liabilities of the Borrower
or its Subsidiaries, (y) the obligations of the Borrower or its Subsidiaries to
third party insurers arising (1) by virtue of the laws of any jurisdiction
requiring third party insurers and (2) in lieu of payments in cash of insurance
obligations or (z) performance, payment, deposit or surety obligations of the
Borrower or its Subsidiaries, in any case if required by law or governmental
rule or regulation, by any landlord under any real estate lease, or by custom
and practice in the business of the Borrower
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and its Subsidiaries (including in connection with the participation by the
Borrower and its Subsidiaries in Medicare or Medicaid programs).
(C) MARGIN REGULATIONS. No portion of the proceeds of any
borrowing under this Agreement shall be used by the Borrower to purchase or
carry any Margin Stock in any manner that might cause the borrowing or the
application of such proceeds to violate Regulation G, Regulation T, Regulation U
or Regulation X of the Board of Governors of the Federal Reserve System or any
other regulation of the Board or to violate the Securities Exchange Act of 1934,
in each case as in effect on the date or dates of such borrowing and such use of
proceeds.
2.09 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
Notwithstanding any other provision of this Agreement, the
following provisions shall govern with respect to Eurodollar Rate Loans as to
the matters covered:
(A) DETERMINATION OF INTEREST RATE. As soon as practicable
after 10:00 A.M. (New York time) on each Interest Rate Determination Date, the
Agent shall determine (which determination shall, absent manifest error, be
final, conclusive and binding upon all parties) the interest rate that shall
apply to the Eurodollar Rate Loans for which an interest rate is then being
determined for the applicable Interest Period and shall promptly give notice
thereof (in writing or by telephone confirmed in writing) to the Borrower and
each Bank.
(B) SUBSTITUTED RATE OF BORROWING. If on any Interest Rate
Determination Date any Bank (including the Agent) shall have determined (which
determination shall be final and conclusive and binding upon all parties but,
with respect to the following clauses (i) and (ii)(B), shall be made only after
consultation with the Borrower and the Agent) that:
(i) by reason of any changes arising after the date of this
Agreement affecting the Eurodollar market or affecting the position of
that Bank in such market, adequate and fair means do not exist for
ascertaining the applicable interest rate by reference to the
Eurodollar Rate with respect to the Eurodollar Rate Loans as to which
an interest rate determination is then being made; or
(ii) by reason of (A) any change after the date hereof in any
applicable law or governmental rule, regulation or order (or any
interpretation thereof and including the introduction of any new law or
governmental rule, regulation or order) or (B) other circumstances
affecting that Bank or the Eurodollar market or the position of that
Bank in such market (such as for example, but not limited to, official
reserve requirements required by Regulation D of the Board of Governors
of the Federal Reserve System to the extent not given effect in the
Eurodollar Rate), the Eurodollar Rate shall not represent the effective
pricing to that Bank for Dollar deposits of comparable amounts for the
relevant period;
then, and in any such event, that Bank shall be an Affected Bank and it shall
promptly (and in any event as soon as possible after being notified of a
borrowing, conversion or continuation) give notice (by telephone promptly
confirmed in writing) to the Borrower and the Agent (which
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notice the Agent shall promptly transmit to each other Bank) of such
determination. Thereafter, the Borrower shall pay to the Affected Bank, upon
written demand therefor, such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as the
Affected Bank in its sole discretion shall reasonably determine) as shall be
required to cause the Affected Bank to receive interest with respect to its
Eurodollar Rate Loans for the Interest Period following that Interest Rate
Determination Date at a rate per annum equal to 1.00% per annum in excess of the
effective pricing to the Affected Bank for Dollar deposits to make or maintain
its Eurodollar Rate Loans. A certificate as to additional amounts owed the
Affected Bank, showing in reasonable detail the basis for the calculation
thereof, submitted in good faith to the Borrower and the Agent by the Affected
Bank shall be presumed to be correct.
(C) REQUIRED TERMINATION AND PREPAYMENT. If on any date any
Bank shall have reasonably determined (which determination shall be final and
conclusive and binding upon all parties) that the making or continuation of its
Eurodollar Rate Loans has become unlawful or impossible by reason of compliance
by that Bank in good faith with any law, governmental rule, regulation or order
(whether or not having the force of law and whether or not failure to comply
therewith would be unlawful), then, and in any such event, that Bank shall be an
Affected Bank and it shall promptly give notice (by telephone promptly confirmed
in writing) to the Borrower and the Agent (which notice the Agent shall promptly
transmit to each other Bank) of that determination. Subject to the prior
withdrawal of a Notice of Revolver Borrowing or a Notice of
Conversion/Continuation or prepayment of the Eurodollar Rate Loans of the
Affected Bank as contemplated by the following Section 2.09(d), the obligation
of the Affected Bank to make or maintain its Eurodollar Rate Loans during any
such period shall be terminated at the earlier of the termination of the
Interest Period then in effect or when required by law and the Borrower shall no
later than the termination of the Interest Period in effect at the time any such
determination pursuant to this Section 2.09(c) is made or, earlier, when
required by law, repay or prepay the Eurodollar Rate Loans of the Affected Bank,
together with all interest accrued thereon.
(D) OPTIONS OF THE BORROWER. In lieu of paying an Affected
Bank such additional moneys as are required by Section 2.09(b) or the prepayment
of an Affected Bank required by Section 2.09(c), the Borrower may exercise any
one of the following options:
(i) If the determination by an Affected Bank relates only to
Eurodollar Rate Loans then being requested by the Borrower pursuant to
a Notice of Revolver Borrowing or a Notice of Conversion/Continuation,
the Borrower may by giving notice (by telephone promptly confirmed in
writing) to the Agent (who shall promptly give similar notice to each
other Bank) no later than the date immediately prior to the date on
which such Eurodollar Rate Loans are to be made, withdraw that Notice
of Revolver Borrowing or Notice of Conversion/Continuation and the
Eurodollar Rate Loans then being requested shall be made by the Banks
as Base Rate Loans; or
(ii) Upon written notice to the Agent and each Bank, the
Borrower may terminate the obligations of the Banks to make or maintain
Loans as, and to convert Loans into, Eurodollar Rate Loans and in such
event, the Borrower shall, prior to the time any payment pursuant to
Section 2.09(c) is required to be made or, if the provisions of
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Section 2.09(b) are applicable, at the end of the then current Interest
Period, convert all of the Eurodollar Rate Loans into Base Rate Loans
in the manner contemplated by Section 2.06(d) but without satisfying
the advance notice requirements therein.
(E) COMPENSATION. The Borrower shall compensate each Bank,
upon written request by that Bank (which request shall set forth in reasonable
detail the basis for requesting such amounts), for all reasonable losses,
expenses and liabilities (including, without limitation, any loss (including
interest paid) sustained by that Bank in connection with the re-employment of
such funds), that such Bank may sustain: (i) if for any reason (other than a
default by that Bank) a borrowing of any Eurodollar Rate Loan does not occur on
a date specified therefor in a Notice of Revolver Borrowing, a Notice
of Conversion/Continuation or a telephonic request for borrowing or
conversion/continuation or a successive Interest Period does not commence after
notice therefor is given pursuant to Section 2.06(d), (ii) if any prepayment of
any of its Eurodollar Rate Loans occurs on a date that is not the last day of an
Interest Period applicable to that Loan, (iii) if any prepayment of any of its
Eurodollar Rate Loans is not made on any date specified in a notice of
prepayment given by the Borrower, or (iv) as a consequence of any other default
by the Borrower to repay its Eurodollar Rate Loans when required by the terms of
this Agreement.
(F) QUOTATION OF EURODOLLAR RATE. Anything herein to the
contrary notwithstanding, if on any Interest Rate Determination Date the Agent
is as a matter of general practice not quoting rates to first class banks in the
Eurodollar market for the offering of Dollars for deposit with maturities
comparable to the Interest Period and in amounts comparable to the Eurodollar
Rate Loans requested, the Agent shall contact the other Banks, if any, for their
quotes for rates to first class banks in the Eurodollar market with respect to
the requested Eurodollar Rate Loan, such other Banks to be contacted in
decreasing order of their respective Pro Rata Shares (and in alphabetical order
in the case of two or more Banks having the same Pro Rata Shares). In the event
that none of the Banks are making Eurodollar quotes in the applicable amount and
with the applicable maturity, the Agent shall give the Borrower and each Bank
prompt notice thereof and the Loans requested shall be made as Base Rate Loans.
(G) EURODOLLAR RATE TAXES. The Borrower agrees that:
(i) Promptly upon notice from any Bank to the Borrower, the
Borrower will pay, prior to the date on which penalties attach thereto,
all present and future income, stamp and other taxes, levies, or costs
and charges whatsoever imposed, assessed, levied or collected on or in
respect of a Loan solely as a result of the interest rate being
determined by reference to the Eurodollar Rate and/or the provisions of
this Agreement relating to the Eurodollar Rate and/or the recording,
registration, notarization or other formalization of any thereof and/or
any payments of principal, interest or other amounts made on or in
respect of a Loan when the interest rate is determined by reference to
the Eurodollar Rate (all such taxes, levies, costs and charges being
herein collectively called "EURODOLLAR RATE TAXES"); provided,
however, that Eurodollar Rate Taxes shall not include any other Taxes.
The Borrower shall also pay such additional amounts equal to increases
in Taxes payable by that Bank which increases are attributable to
payments made by the Borrower described in the immediately preceding
sentence or this sentence.
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A certificate as to additional amounts owed by the Borrower pursuant to
this clause (i), showing in reasonable detail the basis for the
calculation thereof, submitted in good faith to the Borrower and the
Agent by any Bank shall be presumed to be correct. Promptly after the
date on which payment of any such Eurodollar Rate Tax is due pursuant
to applicable law, the Borrower will, at the request of that Bank,
furnish to that Bank evidence, in form and substance satisfactory to
that Bank, that the Borrower has met its obligations under this Section
2.09(g).
(ii) The Borrower will indemnify each Bank against, and
reimburse each Bank on demand for, any Eurodollar Rate Taxes, as
determined by that Bank in its good faith discretion; provided that
such Bank shall provide the Borrower with appropriate receipts for any
payments or reimbursements made by the Borrower pursuant to this clause
(ii) of Section 2.09(g).
(iii) Each Bank organized under the laws of a jurisdiction
outside of the United States (referred to in this Section 2.09(g) as a
"FOREIGN BANK") as to which payments to be made hereunder or under the
Notes are exempt from United States withholding tax or are subject to
such tax at a reduced rate under an applicable statute or tax treaty
shall provide to the Borrower and the Agent (x) a properly completed
and executed Internal Revenue Service Form 4224 or Form 1001 or other
applicable form, certificate or document prescribed by the Internal
Revenue Service of the United States certifying as to such Foreign
Bank's entitlement to such exemption or reduced rate with respect to
payments to be made to such Foreign Bank hereunder and under the Notes
(referred to in this Section 2.09(g) as a "CERTIFICATE OF EXEMPTION")
or (y) a letter from such Foreign Bank stating that it is not entitled
to any such exemption or reduced rate (referred to in this Section
2.09(g) as a "LETTER OF NON-EXEMPTION"). Each Foreign Bank shall
provide such a Certificate of Exemption or a Letter of Non-Exemption
before the Effective Date. Each Foreign Bank that becomes a Bank
pursuant to an Assignment and Acceptance that has become effective
pursuant to Section 11.05 shall provide a Certificate of Exemption or a
Letter of Non-Exemption on the date such Foreign Bank becomes a Bank.
Until the Borrower and the Agent have received from such Foreign Bank a
Certificate of Exemption, the accuracy of which shall be reasonably
satisfactory to the Borrower, the Borrower shall, subject to its
obligations under Sections 2.09(g)(i), 2.09(g)(ii) and 2.09(i), be
entitled to withhold taxes from such payments to such Foreign Bank at
the statutory rate applicable to amounts to be paid hereunder to such
Foreign Bank.
(iv) Notwithstanding anything to the contrary contained in
this Section 2.09(g), the Borrower shall not be required to pay any
amounts pursuant to this Section 2.09(g) to any Foreign Bank unless
such Foreign Bank has provided to the Borrower, within 60 days after
the receipt by such Foreign Bank of a written request therefor, either
a Certificate of Exemption or a Letter of Non-Exemption.
(H) BOOKING OF EURODOLLAR RATE LOANS. Any Bank may make, carry
or transfer Eurodollar Rate Loans at, to, or for the account of, any of its
branch offices or the office of an Affiliate of that Bank.
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(I) INCREASED COSTS. Except as provided in Section 2.09(b)
with respect to certain determinations on Interest Rate Determination Dates, if,
after the date hereof by reason of, (x) the introduction of or any change
(including, without limitation, any change by way of imposition or increase of
reserve requirements) in, or in the interpretation of, any law or regulation, or
(y) the compliance with any guideline or request from any central bank or other
governmental authority or quasi-governmental authority exercising control over
banks or financial institutions generally (whether or not having the force of
law):
(i) any Bank (or its applicable lending office) shall be
subject to any tax, duty or other charge with respect to its Eurodollar
Rate Loans or its obligation to make Eurodollar Rate Loans, or shall
change the basis of taxation of payments to any Bank of the principal
of or interest on its Eurodollar Rate Loans or its obligation to make
Eurodollar Rate Loans (except for changes in the rate of tax on the
overall net income of such Bank or its applicable lending office
imposed by the jurisdiction (whether local, state, federal or foreign)
in which such Bank's principal executive office or applicable lending
office is located); or
(ii) any reserve (including, without limitation, any imposed
by the Board of Governors of the Federal Reserve System), special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Bank's applicable lending
office shall be imposed or deemed applicable or any other condition
affecting its Eurodollar Rate Loans or its obligation to make
Eurodollar Rate Loans shall be imposed on any Bank or its applicable
lending office or the interbank Eurodollar market,
and as a result thereof there shall be any increase in the cost to such Bank of
agreeing to make or making, funding or maintaining Eurodollar Rate Loans, or
there shall be a reduction in the amount received or receivable by that Bank or
its applicable lending office, then the Borrower shall from time to time, upon
written notice from and demand by that Bank (with a copy of such notice and
demand to the Agent), pay to the Agent for the account of that Bank, within five
Business Days after receipt of such notice and demand, additional amounts
sufficient to indemnify that Bank against such increased cost or reduced amount.
A certificate as to the amount of such increased cost or reduced amount,
submitted to the Borrower and the Agent by that Bank, shall be presumed to be
correct. Any payments to be made by the Borrower under Sections 2.09(b), 2.09(g)
or 2.09(i) are to be without duplication.
(J) ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS.
Calculation of all amounts payable to a Bank under this Section 2.09 shall be
made as though that Bank had actually funded its relevant Eurodollar Rate Loan
through the purchase of a Eurodollar deposit bearing interest at the Eurodollar
Rate in an amount equal to the amount of that Eurodollar Rate Loan and having a
maturity comparable to the relevant Interest Period and through the transfer of
such Eurodollar deposit from an offshore office of that Bank to a domestic
office of that Bank in the United States of America; provided, however, that
each Bank may fund each of its Eurodollar Rate Loans in any manner it sees fit
and the foregoing assumption shall be utilized only for the calculation of
amounts payable under this Section 2.09.
(K) EURODOLLAR RATE LOANS AFTER DEFAULT. Unless the Agent and
the
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Required Banks shall otherwise agree, after the occurrence of and during the
continuance of a Default or an Event of Default, the Borrower may not elect to
have a Loan be made or maintained as, or converted to, a Eurodollar Rate Loan
after the expiration of any Interest Period then in effect for that Loan.
(L) AFFECTED BANKS' OBLIGATION TO MITIGATE. Each Bank agrees
that, as promptly as practicable after it becomes aware of the occurrence of an
event or the existence of a condition that would cause it to be an Affected Bank
under Section 2.09(b) or 2.09(c) or that would entitle such Bank to receive
payments under Section 2.09(g) or 2.09(i), it will, to the extent not
inconsistent with such Bank's internal policies, use reasonable efforts to make,
fund or maintain the affected Eurodollar Rate Loans of such Bank through another
lending office of such Bank if as a result thereof the additional moneys which
would otherwise be required to be paid to such Bank pursuant to Section 2.09(b),
2.09(g) or 2.09(i) would be materially reduced or the illegality or other
adverse circumstances which would otherwise require prepayment of such Loans
pursuant to Section 2.09(c) would cease to exist, and if, as determined by such
Bank in its sole discretion, the making, funding or maintaining of such Loans
through such other lending office would not otherwise materially adversely
affect such Loans or such Bank. The Borrower hereby agrees to pay all reasonable
expenses incurred by any Bank in utilizing another lending office of such Bank
pursuant to this Section 2.09(l).
2.10 LETTERS OF CREDIT.
(A) LETTERS OF CREDIT. In addition to the Borrower requesting
that the Banks make Revolving Loans pursuant to Section 2.01(a), the Borrower
may request, in accordance with the provisions of this Section 2.10, on and
after the Effective Date to and excluding the Termination Date, that the Issuing
Bank issue Letters of Credit for the account of the Borrower; provided that the
Borrower shall not request that the Issuing Bank issue (and the Issuing Bank
shall not issue):
(i) any Letter of Credit if, after giving effect to such
issuance, the Total Utilization of Revolving Loan Commitments would
exceed the Total Revolving Loan Commitments then in effect; or
(ii) any Letter of Credit if, after giving effect to such
issuance, the Letter of Credit Usage would exceed $15,000,000.
In no event shall the Issuing Bank issue any Letter of Credit having an
expiration date later than the Termination Date or the date that is one year
after the issuance thereof except as expressly provided herein; provided,
however, that the Issuing Bank may agree to renew any Letter of Credit
automatically annually for a period not to exceed one year if the Issuing Bank
does not cancel such renewal. If the Issuing Bank, in its sole discretion,
determines to issue a Letter of Credit expiring after the scheduled Termination
Date, the Borrower shall be required on the third Business Day immediately
preceding the Termination Date to deposit with the Issuing Bank cash collateral
for the repayment of any drawings under the Letter of Credit, such deposit to be
in an amount equal to the maximum amount that may be drawn under such Letter of
Credit and to be upon such terms and conditions as the Issuing Bank may require.
The issuance of any Letter of Credit
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in accordance with the provisions of this Section 2.10 shall require the
satisfaction of each condition set forth in Section 5.02; provided, however,
that the obligation of the Issuing Bank to issue any Letter of Credit is subject
to the condition that (i) the Issuing Bank believed in good faith that all
conditions under this Section 2.10(a) and Section 5.02 to the issuing of such
Letter of Credit were satisfied at the time such Letter of Credit was issued or
(ii) the satisfaction of any such condition not satisfied had been waived by the
Required Banks prior to or at the time such Letter of Credit was issued;
provided further that the Issuing Bank shall be entitled to rely, and shall be
fully protected in relying, upon any communication, instrument or document
believed by it to be genuine and correct and to have been signed or sent by the
proper person or persons, including, without limitation, an Officer's
Certificate from the Borrower as to the satisfaction of the conditions under
Section 5.02 in determining the satisfaction of any conditions to the issuance
of any Letter of Credit or the Total Utilization of Revolving Loan Commitments
or Letter of Credit Usage then in effect.
Immediately upon the issuance of each Letter of Credit, each
Bank shall be deemed to, and hereby agrees to, have irrevocably purchased from
the Issuing Bank a participation in such Letter of Credit and drawings
thereunder in an amount equal to such Bank's Pro Rata Share of the maximum
amount that is or at any time may become available to be drawn thereunder. If
the Issuing Bank issues a Letter of Credit having an expiration date after the
scheduled Termination Date, such participations shall expire without further
action by any Bank on the scheduled Termination Date.
Each Letter of Credit supporting the payment of Indebtedness
may provide that the Issuing Bank may (but shall not be required to) pay the
beneficiary thereof upon the occurrence of a Default or an Event of Default and
the acceleration of the maturity of the Loans or, if payment is not then due to
the beneficiary, provide for the deposit of funds in an account to secure
payment to the beneficiary and that any funds so deposited shall be paid to the
beneficiary of the Letter of Credit if conditions to such payment are satisfied
or returned to the Issuing Bank for distribution to the Banks (or, if all
Obligations shall have been indefeasibly paid in full, to the Borrower) if no
payment to the beneficiary has been made and the final date available for
drawings under the Letter of Credit has passed. Each payment or deposit of funds
by the Issuing Bank as provided in this paragraph shall be treated for all
purposes of this Agreement as a drawing duly honored by the Issuing Bank under
the related Letter of Credit.
(B) NOTICE OF ISSUANCE. Whenever the Borrower desires to cause
the Issuing Bank to issue a Letter of Credit, it shall deliver to the Issuing
Bank and the Agent a Notice of Issuance of Letter of Credit in the form of
EXHIBIT E no later than 1:00 P.M. (New York time) at least four Business Days in
advance of the proposed date of issuance or such shorter time as may be
acceptable to the Issuing Bank (and the Agent shall promptly notify each Bank of
the proposed issuance of a Letter of Credit). The Notice of Issuance of Letter
of Credit shall specify (i) the proposed date of issuance (which shall be a
Business Day), (ii) the face amount of the Letter of Credit, (iii) the
expiration date of the Letter of Credit, (iv) the name and address of the
beneficiary, (v) such other documents or materials as the Issuing Bank may
reasonably request, and (vi) a precise description of the documents and the
verbatim text of any certificate to be presented by the beneficiary which, if
presented by the beneficiary prior to the expiration date of the Letter of
Credit, would require the Issuing Bank to make payment under the Letter of
Credit;
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provided that the Issuing Bank, in its sole judgment, may require changes in any
such documents and certificates. In determining whether to pay any Letter of
Credit, the Issuing Bank shall be responsible only to use reasonable care to
determine that the documents and certificates required to be delivered under
that Letter of Credit have been delivered and that they comply on their face
with the requirements of that Letter of Credit. Promptly upon the issuance of a
Letter of Credit, the Issuing Bank shall notify each other Bank of the issuance
and the amount of each such other Bank's respective participation therein
determined in accordance with Section 2.10(a) and such notice shall be
accompanied by a copy of such issued Letter of Credit.
(C) PAYMENT OF AMOUNTS DRAWN UNDER OR NECESSARY TO
COLLATERALIZE LETTERS OF CREDIT. In the event (i) the beneficiary of any Letter
of Credit makes a drawing thereunder or (ii) the Borrower is required under
Section 2.10(a) to cash collateralize any Letter of Credit, the Issuing Bank
immediately shall notify the Borrower and the Agent, and the Borrower shall
reimburse the Issuing Bank or make a deposit with the Issuing Bank, as
appropriate, on the day on which such drawing is honored or such cash collateral
deposit is required in an amount in same day funds equal to the amount of such
drawing or, in the case of such a deposit, the maximum amount that may be drawn
under the applicable Letter of Credit; provided that, anything contained in this
Agreement to the contrary notwithstanding, (i) unless prior to 1:00 P.M. (New
York time) on the date of such drawing or the date the Borrower is required to
make such required deposit of cash collateral, as applicable, (A) the Borrower
shall have notified the Issuing Bank and the Agent that the Borrower intends to
reimburse the Issuing Bank for the amount of such drawing or to make such
deposit with funds other than the proceeds of Revolving Loans or (B) the
Borrower shall have delivered a Notice of Revolver Borrowing requesting
Revolving Loans that are Base Rate Loans in an amount equal to the amount of
such drawing or deposit, the Borrower shall be deemed to have given a Notice of
Revolver Borrowing to the Agent requesting the Banks to make Revolving Loans
that are Base Rate Loans on the date on which such drawing is honored or on
which such deposit is required in an amount equal to the amount of such drawing
or deposit, and (ii) if so requested by the Agent, the Banks shall, on the date
of such drawing or required deposit, make Revolving Loans that are Base Rate
Loans in the amount of such drawing or required deposit, the proceeds of which
shall be applied directly by the Agent to reimburse the Issuing Bank for the
amount of such drawing or to make a deposit with the Issuing Bank in the amount
of such required deposit; and provided further that, if for any reason proceeds
of Revolving Loans are not received by the Issuing Bank on such date in an
amount equal to the amount of such drawing or deposit, the Borrower shall
reimburse or make a deposit with the Issuing Bank, on the Business Day
immediately following the date of such drawing or such deposit, in an amount in
same day funds equal to the excess of the amount of such drawing or deposit over
the amount of such Revolving Loans, if any, that are so received, plus accrued
interest on such amount at the rate set forth in Section 2.10(e)(ii).
(D) PAYMENT BY THE BANKS. If the Borrower shall fail to
reimburse the Issuing Bank, for any reason, as provided in Section 2.10(c)
(including, without limitation, reimbursement by the making of Revolving Loans
by the Banks pursuant to the terms of Section 2.10(c)) in an amount equal to the
amount of any drawing honored by the Issuing Bank under a Letter of Credit
issued by it, the Issuing Bank promptly shall notify each Bank of the
unreimbursed amount of such drawing and of such Bank's respective participation
therein based on such Bank's Pro Rata Share. Each Bank shall make available to
the Issuing Bank an amount
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equal to its respective participation, in same day funds, at the office of the
Issuing Bank specified in such notice, not later than 1:00 P.M. (New York time)
on the Business Day after the date notified by the Issuing Bank. If any Bank
fails to make available to the Issuing Bank the amount of such Bank's
participation in such Letter of Credit as provided in this Section 2.10(d), the
Issuing Bank shall be entitled to recover such amount on demand from such Bank
together with interest at the customary rate set by the Issuing Bank for the
correction of errors among banks for one Business Day and thereafter at the Base
Lending Rate. Nothing in this Section 2.10 shall be deemed to prejudice the
right of any Bank to recover from the Issuing Bank any amounts made available by
such Bank to the Issuing Bank pursuant to this Section 2.10(d) if it is
determined in a final judgment by a court of competent jurisdiction that the
payment with respect to a Letter of Credit by the Issuing Bank in respect of
which payment was made by such Bank constituted gross negligence or willful
misconduct on the part of the Issuing Bank. The Issuing Bank shall distribute to
each other Bank that has paid all amounts payable by it under this Section
2.10(d) with respect to any Letter of Credit issued by the Issuing Bank such
other Bank's Pro Rata Share of all payments received by the Issuing Bank from
the Borrower or pursuant to the last paragraph of Section 2.10(a), in each case,
in reimbursement of drawings honored by the Issuing Bank under such Letter of
Credit when such payments are received.
(E) COMPENSATION. The Borrower agrees to pay the following
amounts to the Issuing Bank with respect to each Letter of Credit issued by it:
(i) with respect to each Letter of Credit, (A) a letter of
credit fee (to be distributed to all the Banks according to their
respective Pro Rata Shares) equal to the Applicable Eurodollar Margin
multiplied by the maximum amount available from time to time for
drawing under such Letter of Credit (calculated on the basis of a
360-day year and the actual number of days elapsed) and (B) a facing
fee (to be retained by the Issuing Bank) equal to 0.25% per annum
multiplied by the maximum amount available from time to time for
drawing under such Letter of Credit (calculated on the basis of a
360-day year and the actual number of days elapsed), which amounts
payable under clauses (A) and (B) shall be payable to the Issuing Bank
quarterly in arrears on and to the last Business Day of each January,
April, July and October, commencing January 31, 1998; provided that if
the aggregate amount of the facing fee payable under clause (B) in
respect of any Letter of Credit will be less than $500, the Borrower
shall pay to the Issuing Bank, on the date of issuance of such Letter
of Credit, a facing fee of $500 which shall be in lieu of the facing
fee otherwise payable pursuant to such clause (B);
(ii) with respect to drawings made under any Letter of Credit,
interest, payable on demand, on the amount paid by the Issuing Bank in
respect of each such drawing from the date of the drawing through the
date such amount is reimbursed by the Borrower (including any such
reimbursement out of the proceeds of Revolving Loans pursuant to
Section 2.09(c)) at a rate that is equal to the sum of the Base Lending
Rate and the Applicable Base Margin; provided that if such amount is
not paid on demand, such amount shall bear interest thereafter at a
rate that is equal to 2.00% per annum in excess of the interest rate
otherwise payable under this Agreement for Base Rate Loans which such
rate shall not thereafter be increased pursuant to Section 2.06(e); and
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(iii) with respect to the issuance, amendment or transfer of
each Letter of Credit and each drawing made thereunder, documentary and
processing charges in accordance with the Issuing Bank's standard
schedule for such charges in effect at the time of such issuance,
amendment, transfer or drawing, as the case may be, or as otherwise
agreed to by the Issuing Bank.
Promptly upon receipt by the Issuing Bank of any amount
described in clauses (i) or (ii) of this Section 2.10(e) (other than amounts
specifically designated for distribution to the Issuing Bank) with respect to a
Letter of Credit, the Issuing Bank shall distribute to each Bank its Pro Rata
Share of such amount.
(F) OBLIGATIONS ABSOLUTE. The obligation of the Borrower to
reimburse the Issuing Bank for drawings made under the Letters of Credit issued
by it and to repay any Revolving Loans made by the Banks pursuant to Section
2.10(c) and the obligations by the Banks under Section 2.10(d) shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances including, without limitation,
the following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit;
(ii) the existence of any claim, set-off, defense or other
right that the Borrower may have at any time against a beneficiary or
any transferee of any Letter of Credit (or any persons or entities for
whom any such transferee may be acting), the Agent, any Bank or any
other Person, whether in connection with this Agreement, the
transactions contemplated herein or any unrelated transaction
(including any underlying transaction between the Borrower and the
beneficiary for which the Letter of Credit was procured);
(iii) any draft, demand, certificate or any other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect; provided that the Issuing Bank
shall use reasonable care to determine that the documents and
certificates required to be delivered under any Letter of Credit have
been delivered and that they comply on their face with the requirements
of that Letter of Credit;
(iv) payment by the Issuing Bank under any Letter of Credit
against presentation of a demand, draft or certificate or other
document that does not comply with the terms of such Letter of Credit;
provided that the Issuing Bank shall use reasonable care to determine
that the documents and certificates required to be delivered under any
Letter of Credit have been delivered and that they comply on their face
with the requirements of that Letter of Credit;
(v) any adverse change in the business, operations, property,
assets, condition (financial or otherwise) or prospects of the Borrower
or any of its Subsidiaries;
(vi) any breach of this Agreement or any other Credit Document
by the Borrower or any of its Subsidiaries, the Agent or any Bank
(other than the Issuing Bank);
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(vii) any other circumstance or happening whatsoever, that is
similar to any of the foregoing; or
(viii) the fact that a Default or an Event of Default shall
have occurred and be continuing;
provided that the Borrower shall not be required to pay any such amounts to the
extent they arise from the gross negligence or willful misconduct of the Issuing
Bank (as determined by a court of competent jurisdiction).
(G) ADDITIONAL PAYMENTS. IF by reason of:
(i) any change in any applicable law, regulation, rule, decree
or regulatory requirement or any change in the interpretation or
application by any judicial or regulatory authority of any law,
regulation, rule, decree or regulatory requirement, in each case
occurring after the Effective Date; or
(ii) compliance by the Issuing Bank or any Bank with any
direction, request or requirement (whether or not having the force of
law) announced or issued after the Effective Date by any governmental
or monetary authority, including, without limitation, any announcements
or issuances under Regulation D of the Board of Governors of the
Federal Reserve System;
THEN:
(i) the Issuing Bank or any Bank shall be subject to any tax,
levy, charge or withholding of any nature or to any variation thereof
or to any penalty with respect to the maintenance or fulfillment of its
obligations under this Section 2.10, whether directly or by such being
imposed on or suffered by the Issuing Bank or any Bank;
(ii) any reserve, special deposit, premium, FDIC assessment,
capital adequacy or similar requirement is or shall be applicable,
imposed or modified in respect of any Letters of Credit issued by the
Issuing Bank or participations therein purchased by any Bank; or
(iii) there shall be imposed on the Issuing Bank or any Bank
any other condition regarding this Section 2.10, any Letter of Credit
or any participation therein;
AND the result of the foregoing is to directly or indirectly increase the cost
to the Issuing Bank or any Bank of issuing, making or maintaining any Letter of
Credit or of purchasing or maintaining any participation therein, or to reduce
the amount receivable in respect thereof by the Issuing Bank or any Bank, THEN
and in any such case the Issuing Bank or such Bank may, at any time within a
reasonable period after the additional cost is incurred or the amount received
is reduced, notify the Borrower and the Agent, and the Borrower shall pay within
five Business Days of the date of such notice such amounts as the Issuing Bank
or such Bank may specify to be necessary
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to compensate the Issuing Bank or such Bank for such additional cost or reduced
receipt, together with interest on such amount from the date demanded until
payment in full thereof at a rate equal at all times to the Base Lending Rate
plus 2.00% per annum. The determination by the Issuing Bank or any Bank, as the
case may be, of any amount due pursuant to this Section 2.10(g) as set forth in
a certificate setting forth the calculation thereof in reasonable detail, shall
be presumed to be correct.
(H) INDEMNIFICATION; NATURE OF THE ISSUING BANK'S DUTIES. In
addition to amounts payable as elsewhere provided in this Section 2.10, the
Borrower hereby agrees to protect, indemnify, pay and save harmless the Issuing
Bank from and against any and all claims, demands, liabilities, damages, losses,
costs, charges and expenses (including reasonable attorneys' fees and reasonable
allocated costs of internal counsel) that the Issuing Bank may incur or be
subject to as a consequence, direct or indirect, of (i) the issuance of any
Letter of Credit, other than as a result of gross negligence or willful
misconduct of the Issuing Bank or the Issuing Bank's failure to use reasonable
care to determine that the documents and certificates required to be delivered
under such Letter of Credit had been delivered and that they complied on their
face with the requirements of that Letter of Credit as determined by a court of
competent jurisdiction or (ii) the failure of the Issuing Bank to honor a
drawing under any Letter of Credit as a result of any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto government or
governmental authority (all such acts or omissions herein called "GOVERNMENT
ACTS"). Each Bank, proportionately to its Pro Rata Share, severally agrees to
indemnify the Issuing Bank to the extent the Issuing Bank shall not have been
reimbursed by the Borrower or its Subsidiaries, for and against any of the
foregoing claims, demands, liabilities, damages, losses, costs, charges and
expenses to which the Issuing Bank is entitled to reimbursement from the
Borrower.
As between the Borrower and the Issuing Bank, the Borrower
assumes all risks of the acts and omissions of, or misuse of the Letters of
Credit issued by the Issuing Bank by, the respective beneficiaries of such
Letters of Credit. In furtherance and not in limitation of the foregoing, the
Issuing Bank shall not be responsible (absent gross negligence or willful
misconduct (as determined by a court of competent jurisdiction)): (i) for the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for and
issuance of such Letters of Credit, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii)
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) for failure of the beneficiary
of any such Letter of Credit to comply fully with conditions required in order
to draw upon such Letter of Credit; (iv) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) for errors in
interpretation of technical terms; (vi) for any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii) for the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; and (viii) for any consequences
arising from causes beyond the control of the Issuing Bank, including, without
limitation, any Government Acts. None of the above shall affect,
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<PAGE> 54
impair, or prevent the vesting of any of the Issuing Bank's rights or powers
hereunder; provided that, notwithstanding the foregoing, the Issuing Bank shall
use reasonable care to determine that the documents and certificates required to
be delivered under such Letter of Credit have been delivered and that they
comply on their face with the requirements of that Letter of Credit.
In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by the
Issuing Bank under or in connection with the Letters of Credit issued by it or
the related certificates, if taken or omitted in good faith and absent gross
negligence or willful misconduct of the Issuing Bank (as determined by a court
of competent jurisdiction), shall not put the Issuing Bank under any resulting
liability to the Borrower.
Notwithstanding anything to the contrary contained in this
Section 2.10(h), the Borrower shall have no obligation to indemnify the Issuing
Bank in respect of any liability incurred by the Issuing Bank arising solely out
of the gross negligence or willful misconduct of the Issuing Bank as determined
by a court of competent jurisdiction, or out of the wrongful dishonor by the
Issuing Bank of a proper demand for payment made under the Letters of Credit;
provided that the Issuing Bank shall use reasonable care to determine that the
documents and certificates required to be delivered under any Letter of Credit
have been delivered and that they comply on their face with the requirements of
that Letter of Credit.
(I) COMPUTATION OF INTEREST. Interest payable pursuant to this
Section 2.10 shall be computed on the basis of a 360-day year and the actual
number of days elapsed in the period during which it accrues.
SECTION 3. FEES.
3.01 FEES.
(A) AGENCY FEE. The Borrower agrees to pay to the Agent on the
Effective Date an amount separately agreed to by the Agent and the Borrower.
(B) COMMITMENT FEE. The Borrower agrees to pay to the Agent,
for distribution to each Bank in proportion to its Pro Rata Share, commitment
fees for the period from and including the Effective Date to but excluding the
Termination Date equal to the average of the daily unused portion of the
Revolving Loan Commitments multiplied by the Commitment Fee Percentage per
annum, such commitment fees to be calculated on the basis of a 360-day year and
the actual number of days elapsed and to be payable quarterly in arrears on and
to the last Business Day of January, April, July and October commencing on
January 31, 1998 and upon the termination of the Revolving Loan Commitments.
Anything contained in this Agreement to the contrary notwithstanding, for the
purposes of calculating the commitment fees payable by the Borrower pursuant to
this Section 3.01(b), the "UNUSED PORTION OF THE REVOLVING LOAN COMMITMENTS," as
of any date of determination, shall be an amount equal to the aggregate amount
of the Revolving Loan Commitments as of such date minus the aggregate principal
amount of all outstanding Revolving Loans and the Letter of Credit Usage on such
date, and the
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unused portion of the Revolving Loan Commitments shall not be reduced by (i)
reason of the Borrower's inability to satisfy the conditions precedent set forth
in Section 5 and consequent inability to borrow Loans hereunder or (ii) the
aggregate principal amount of all outstanding Swing Line Loans.
(C) ADMINISTRATIVE FEE. The Borrower agrees to pay to the
Agent an annual administrative fee in the amount and at the times separately
agreed to by the Agent and the Borrower.
(D) CONSENT FEE. On the Effective Date, the Borrower shall pay
to the Agent, for distribution (as appropriate) to Existing Banks, a consent fee
as set forth in the term sheet (for purposes of this Section 3.01, the "TERM
SHEET") contained in the Confidential Information Memorandum.
(E) ADDITIONAL BANK FINANCING FEE. On the Effective Date, the
Borrower shall pay to the Agent, for distribution (as appropriate) to the Banks,
the "Additional Bank Financing Fees" described in the Term Sheet.
SECTION 4. PREPAYMENTS AND REDUCTIONS IN COMMITMENTS;
PAYMENTS.
4.01 SCHEDULED PAYMENTS OF TERM LOANS. The Borrower shall make
principal payments on the Term Loans in installments on the dates and in the
amounts set forth below:
<TABLE>
<CAPTION>
===============================================================================
DATE SCHEDULED PAYMENT
===============================================================================
<S> <C>
September 15, 1999 $ 1,500,000
- - -------------------------------------------------------------------------------
December 15, 1999 $ 1,500,000
- - -------------------------------------------------------------------------------
March 15, 2000 $ 1,500,000
- - -------------------------------------------------------------------------------
June 15, 2000 $ 1,500,000
- - -------------------------------------------------------------------------------
September 15, 2000 $ 3,000,000
- - -------------------------------------------------------------------------------
December 15, 2000 $ 3,000,000
- - -------------------------------------------------------------------------------
March 15, 2001 $ 3,000,000
- - -------------------------------------------------------------------------------
June 15, 2001 $ 6,000,000
- - -------------------------------------------------------------------------------
September 15, 2001 $ 6,000,000
- - -------------------------------------------------------------------------------
December 15, 2001 $ 6,000,000
- - -------------------------------------------------------------------------------
March 15, 2002 $ 6,000,000
- - -------------------------------------------------------------------------------
June 15, 2002 $ 6,000,000
- - -------------------------------------------------------------------------------
September 15, 2002 $15,000,000
- - -------------------------------------------------------------------------------
December 16, 2002 $15,000,000
===============================================================================
</TABLE>
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<PAGE> 56
provided that the scheduled installments of principal of the Term Loans set
forth above shall be reduced in connection with (i) any voluntary prepayments of
the Term Loans in accordance with Section 4.02(a) and (ii) any mandatory
prepayments in accordance with Section 4.02(c); and provided, further that the
Term Loans and all other amounts owed hereunder with respect to the Term Loans
shall be paid in full no later than the Termination Date, and the final
installment payable by the Borrower in respect of the Term Loans on such date
shall be in an amount, if such amount is different from that specified above,
sufficient to repay all amounts owing by the Borrower under this Agreement with
respect to the Term Loans.
4.02 PREPAYMENTS AND REDUCTIONS IN COMMITMENTS.
(A) VOLUNTARY PREPAYMENTS. The Borrower shall have the right
to prepay the Loans, without premium or penalty, in whole or in part from time
to time on the following terms and conditions: (i) the Borrower shall deliver to
the Agent at its Notice Office prior notice of its intent to prepay the Term
Loans or the Revolving Loans and the amount of such prepayment no later than
12:00 Noon (New York time) one Business Day in advance of the proposed
prepayment date (in the case of a Base Rate Loan) and three Business Days in
advance of the proposed prepayment date (in the case of a Eurodollar Rate Loan),
which notice the Agent shall promptly transmit to each of the Banks, (ii)
Eurodollar Rate Loans prepaid other than on the expiration of the Interest
Period applicable thereto shall be subject to payment of breakage costs by the
Borrower and (iii) the Borrower may prepay Swing Line Loans at any time in full
or in part without notice or penalty. Any such voluntary prepayment shall be
applied as specified in Section 4.03(a).
(B) VOLUNTARY REDUCTIONS OF REVOLVING LOAN COMMITMENTS. The
Borrower shall have the right, at any time and from time to time, to terminate
in whole or permanently reduce in part, without premium or penalty, the
Revolving Loan Commitments in an amount up to the amount by which the Total
Revolving Loan Commitments exceed the Total Utilization of Revolving Loan
Commitments. The Borrower shall give not less than three Business Days' prior
written notice to the Agent designating the date (which shall be a Business Day)
of such termination or reduction and the amount of any partial reduction.
Promptly after receipt of a notice of such termination or partial reduction, the
Agent shall notify each Bank of the proposed termination or reduction. Such
termination or partial reduction of the Revolving Loan Commitments shall be
effective on the date specified in the Borrower's notice and shall reduce the
Revolving Loan Commitment of each Bank proportionately to its Pro Rata Share.
Any such partial reduction of the Revolving Loan Commitments shall be in an
aggregate minimum amount of $1,000,000 and integral multiples of $100,000 in
excess of that amount unless the remaining amount of the Revolving Loan
Commitments is less than $1,000,000 in which case such reduction shall be in the
amount of the then remaining Revolving Loan Commitments.
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<PAGE> 57
(C) MANDATORY PREPAYMENTS AND MANDATORY REDUCTIONS OF
REVOLVING LOAN COMMITMENTS. The Loans shall be prepaid and/or the Revolving Loan
Commitments shall be permanently reduced in the amounts and under the
circumstances set forth below, all such prepayments and/or reductions to be
applied as set forth below or as more specifically provided in Section 4.03:
(I) Prepayments and Reductions Due to Qualified
High-Yield Offering. No later than the second Business Day
following the date of receipt by the Borrower of the cash
proceeds (net of underwriting discounts and commissions and
other reasonable costs associated therewith) from a Qualified
High-Yield Offering, the Borrower shall (i) prepay the Term
Loans in full utilizing the first $75,000,000 of such
proceeds, (ii) prepay first outstanding Swing Line Loans and
second outstanding Revolving Loans utilizing the next
$125,000,000 of such proceeds with no corresponding reduction
in the Revolving Loan Commitments, and (iii) to the extent of
any such proceeds in excess of $200,000,000, prepay
outstanding Revolving Loans and permanently reduce the
Revolving Loan Commitments in an amount equal to such excess.
Concurrently with any prepayment of the Loans and/or reduction
of the Revolving Loan Commitments pursuant to this Section
4.02(c)(i), the Borrower shall deliver to Agent an Officers'
Certificate demonstrating the calculation of the net cash
proceeds that gave rise to such prepayment and/or reduction.
In the event that the Borrower shall subsequently determine
that the actual net cash proceeds were greater than the amount
set forth in such Officers' Certificate, the Borrower shall
promptly make an additional prepayment of the Loans (and/or,
if applicable, the Revolving Loan Commitments shall be
permanently reduced) in an amount equal to the amount of such
excess, and the Borrower shall concurrently therewith deliver
to Agent an Officers' Certificate demonstrating the derivation
of the additional net cash proceeds resulting in such excess.
(ii) Prepayments and Reductions Due to
Issuance of Debt Securities Other Than in Connection With a
Qualified High-Yield Offering. No later than the second
Business Day following the date of receipt by the Borrower of
the cash proceeds (net of underwriting discounts and
commissions and other reasonable costs associated therewith)
from the issuance of any debt Securities of the Borrower
(other than pursuant to a Qualified High-Yield Offering), the
Borrower shall prepay the Loans and/or the Revolving Loan
Commitments shall be permanently reduced in an aggregate
amount equal to 100% of such net cash proceeds. Concurrently
with any prepayment of the Loans and/or reduction of the
Revolving Loan Commitments pursuant to this Section
4.02(c)(ii), the Borrower shall deliver to Agent an Officers'
Certificate demonstrating the calculation of the net cash
proceeds that gave rise to such prepayment and/or reduction.
In the event that the Borrower shall subsequently determine
that the actual net cash proceeds were greater than the amount
set forth in such Officers' Certificate, the Borrower shall
promptly make an additional prepayment of the Loans (and/or,
if applicable, the Revolving Loan Commitments shall be
permanently reduced) in an amount equal to the amount of such
excess, and the Borrower shall concurrently therewith deliver
to Agent an Officers' Certificate demonstrating the derivation
of the additional net cash proceeds resulting in such excess.
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(iii) Prepayments Due to Reductions or Restrictions
of Revolving Loan Commitments. The Borrower shall from time to
time prepay first the Swing Line Loans and second the
Revolving Loans to the extent necessary to give effect to the
limitations set forth in Sections 2.01(a) and 2.02(a).
4.03 APPLICATION OF PREPAYMENTS.
(A) APPLICATION OF VOLUNTARY PREPAYMENTS BY TYPE OF LOANS AND
ORDER OF MATURITY. Any voluntary prepayments pursuant to Section 4.02(a) shall
be applied as specified by the Borrower in the applicable notice of prepayment;
provided that in the event the Borrower fails to specify the Loans to which any
such prepayment shall be applied, such prepayment shall be applied first to
repay outstanding Swing Line Loans to the full extent thereof, second to repay
outstanding Revolving Loans to the full extent thereof, and third to repay
outstanding Term Loans to the full extent thereof. Any voluntary prepayments of
the Term Loans pursuant to Section 4.02(a) shall be applied to reduce the
scheduled installments of principal of the Term Loans set forth in Section 4.01
on a pro rata basis in accordance with the respective outstanding principal
amounts thereof.
(B) APPLICATION OF CERTAIN MANDATORY PREPAYMENTS BY TYPE OF
LOANS. Any amount (the "APPLIED AMOUNT") required to be applied as a mandatory
prepayment of the Loans and/or a reduction of the Revolving Loan Commitments
pursuant to Section 4.02(c)(ii) shall be applied first to prepay the Term Loans
to the full extent thereof, second, to the extent of any remaining portion of
the Applied Amount, to prepay the Swing Line Loans to the full extent thereof
and to permanently reduce the Revolving Loan Commitments by the amount of such
prepayment, third, to the extent of any remaining portion of the Applied Amount,
to prepay the Revolving Loans to the full extent thereof and to further
permanently reduce the Revolving Loan Commitments by the amount of such
prepayment, and fourth, to the extent of any remaining portion of the Applied
Amount, to further permanently reduce the Revolving Loan Commitments to the full
extent thereof.
(C) APPLICATION OF CERTAIN MANDATORY PREPAYMENTS OF TERM
LOANS. Any mandatory prepayments of the Term Loans pursuant to Section
4.02(c)(ii) shall be applied to reduce the scheduled installments of principal
of the Term Loans set forth in Section 4.01 on a pro rata basis in accordance
with the respective outstanding principal amounts thereof.
(D) APPLICATION OF PREPAYMENTS TO BASE RATE LOANS AND
EURODOLLAR RATE LOANS. Considering Term Loans and Revolving Loans being prepaid
separately, any prepayment thereof shall be applied first to Base Rate Loans to
the full extent thereof before application to Eurodollar Rate Loans, in each
case in a manner which minimizes the amount of any payments required to be made
by the Borrower pursuant to subsection 2.09(e).
(E) APPLICATION OF PREPAYMENTS TO PRINCIPAL AND INTEREST.
Except with respect to prepayments of Revolving Loans pursuant to Section
4.02(a), all payments in respect
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<PAGE> 59
of the principal amount of any Loan shall include payment of accrued interest on
the principal amount being repaid or prepaid, and all such payments (and, in any
event, any payments in respect of any Loan on a date when interest is due and
payable with respect to such Loan) shall be applied to the payment of interest
before application to principal.
4.04 GENERAL PROVISIONS REGARDING PAYMENTS.
(A) METHOD AND PLACE OF PAYMENT. Except as otherwise
specifically provided herein, all payments under this Agreement or any Note
shall be made (i) subject to the second paragraph of Section 4.04(c), in the
case of any Swing Line Loan to the Swing Line Bank, and (ii) to the Agent for
the account of the Bank or the Banks entitled thereto not later than 1:00 P.M.
(New York time), on the date when due and shall be made in Dollars in
immediately available funds at the Payment Office of the Agent. Whenever any
payment to be made hereunder or under any Note shall be stated to be due on a
day that is not a Business Day, the due date thereof shall be extended to the
next succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or under any Note or of the
commitment or other fees hereunder, as the case may be; provided, however, that
if the day on which payment relating to a Eurodollar Rate Loan is due is not a
Business Day but is a day of the month after which no further Business Day
occurs in that month, then the due date thereof shall be the next preceding
Business Day. The Borrower and the Swing Line Bank shall give the Agent prompt
notice of each Swing Line Loan and any payment thereof. All voluntary
prepayments shall be made in an aggregate minimum amount of $100,000 and
integral multiples of $10,000 in excess of that amount.
(B) NET PAYMENTS. All payments made by the Borrower hereunder
or under any Note will be made without setoff, counterclaim or other defense.
(C) APPORTIONMENT OF PAYMENTS. Aggregate principal and
interest payments shall be apportioned among all outstanding Loans to which such
payments relate, and such payments shall be apportioned ratably to the Banks,
proportionately to the Banks' respective Pro Rata Shares. The Agent promptly
shall distribute to each Bank at its primary address set forth below its name on
the appropriate signature page hereof or such other address as any Bank may
request its share of all such payments received by the Agent and the commitment
and loan fees of such Bank when received by the Agent pursuant to Section 3.01.
Anything contained in this agreement to the contrary
notwithstanding, upon the occurrence and during the continuance of any Event of
Default specified in Section 9 or after the acceleration of the maturity of the
Loans and the other amounts referred to in Section 9 or termination of the
Revolving Loan Commitments, all payments relating to the Loans and the other
Obligations shall be made to the Agent for the account of the Banks and all
amounts received by the Agent that are to be applied to the payment of the
Obligations shall be distributed first to the Swing Line Bank to the extent of
the unpaid principal of, and accrued interest on, Swing Line Loans and second to
the Banks in such a manner that each Bank receives its proportionate share of
such amounts based on the outstanding principal amounts of all Revolving Loans
then outstanding and the amount of all other Obligations then payable.
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SECTION 5. CONDITIONS PRECEDENT.
5.01 CONDITIONS TO EFFECTIVENESS. This Agreement shall become
effective only upon satisfaction of all of the following conditions:
(A) EXECUTION OF AGREEMENT; CREDIT DOCUMENTS; NOTES. The Agent
shall have received: (i) an original of this Agreement (whether the
same or different copies) duly executed by the Borrower, each Bank and
the Agent, (ii) an original Revolving Note and Term Note made to the
order of each Bank, duly executed by the Borrower in the amount,
maturity and as otherwise provided herein, (iii) an original Swing Line
Note made to the order of the Swing Line Bank, duly executed by the
Borrower, (iv) an original Consent to Amendment and Restatement duly
executed by each Guarantor Subsidiary, and (v) to the extent not
already received, signed copies of the other Credit Documents (whether
the same or different copies) duly executed by the parties thereto.
(B) NO DEFAULT; REPRESENTATION AND WARRANTIES; MATERIAL
ADVERSE CHANGES. All representations and warranties of the Borrower and
its Subsidiaries set forth in this Agreement and in each of the other
Credit Documents shall be true, correct and complete in all material
respects on and as of the Effective Date and after giving effect to the
transactions contemplated to occur on such date, and the Borrower shall
have delivered to the Agent an Officer's Certificate, dated as of the
Effective Date, signed by the President or Vice President of the
Borrower, and attested to by the Secretary or any Assistant Secretary
of the Borrower, in form and substance satisfactory to the Agent, to
the effect that on and as of the Effective Date and after giving effect
to the transactions contemplated to occur on such date, (i) no Default
or Event of Default shall have occurred and be continuing, (ii) all
representations and warranties contained herein and in the other Credit
Documents are true, correct and complete in all material respects and
(iii) no material adverse change has occurred in the business,
operations, properties, assets or condition (financial or otherwise) or
prospects of any of the Borrower and its Subsidiaries taken as whole
since December 31, 1996; provided, however, that the enactment of
legislation on August 6, 1997 providing for reductions in Medicare's
reimbursement rates for oxygen therapy shall not in and of itself be
considered a material adverse change for purposes of this clause (iii).
(C) CORPORATE DOCUMENTS; PROCEEDINGS.
(i) On the Effective Date, the Agent shall have
received a certificate, dated the Effective Date, signed by the
President or Vice President of the Borrower, and attested to by the
Secretary or any Assistant Secretary of the Borrower, in form and
substance satisfactory to the Agent, certifying (A) resolutions of the
Board of Directors of the Borrower authorizing and approving this
Agreement, the Notes, the other Credit Documents and the transactions
contemplated hereby, (B) the signatures and incumbency of the
Borrower's officers executing this Agreement, the Notes, any other
Credit Documents to which the Borrower is a party and the documents,
instruments or other certificates to be delivered in connection with
this Agreement and the other Credit
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<PAGE> 61
Documents, and (C) the Certificate of Incorporation and By-Laws of the
Borrower together with copies of the Certificate of Incorporation and
By-Laws of the Borrower and the resolutions of the Borrower referred to
in such certificate. In lieu of delivering a copy of its Certificate of
Incorporation or By-Laws to the Agent pursuant to the preceding
sentence, the Borrower may certify in its certificate delivered
pursuant to this clause (i) that such Certificate of Incorporation or
By-Laws, as the case may be, were delivered to the Agent pursuant to
the Existing Credit Agreement and that there has been no change in such
Certificate of Incorporation or By-Laws, as the case may be, since the
date of such delivery.
(ii) On the Effective Date, the Agent shall have
received a certificate, dated the Effective Date, signed by the
President or Vice President of each of the Borrower's Subsidiaries
party to any Credit Document, and attested to by the Secretary or any
Assistant Secretary of such Subsidiary, in form and substance
satisfactory to the Agent, certifying (A) the resolutions adopted by
the Board of Directors of such Subsidiary approving and authorizing the
Consent to Amendment and Restatement, the Subsidiary Guaranty, the
Subsidiary Security Agreement, the Subsidiary Pledge Agreement, the
Trademark Security Agreement, the Subsidiary Trademark Security
Agreement (if such Subsidiary is a party thereto), the Subsidiary
Partnership Security Agreement (if such Subsidiary is a party thereto)
and the transactions contemplated thereby and by this Agreement, (B)
the signatures and incumbency of the officers such Subsidiary executing
the Credit Documents to which such Subsidiary is a party and the
documents, instruments or other certificates to be delivered in
connection with this Agreement and the other Credit Documents, and (C)
the Articles or Certificate of Incorporation or other charter documents
and By-Laws of such Subsidiary, together with copies of the Articles or
Certificate of Incorporation or other charter documents and By-Laws of
such Subsidiary and the resolutions of such Subsidiary referred to in
such certificate. In lieu of delivering a copy of its Articles or
Certificate of Incorporation or other charter documents or By-Laws to
the Agent pursuant to the preceding sentence, any of the Borrower's
Subsidiaries may certify in its certificate delivered pursuant to this
clause (ii) that such Articles or Certificate of Incorporation, other
charter documents or By-Laws, as the case may be, were delivered to the
Agent pursuant to the Existing Credit Agreement and that there has been
no change in such Articles or Certificate of Incorporation, other
charter documents or By-Laws, as the case may be, since the date of
such delivery.
(iii) On the Effective Date, the Agent shall have
received copies of the Articles or Certificate of Incorporation or
other charter documents of each of the Borrower and each of the
Borrower's Subsidiaries party to any Credit Document, certified as of a
recent date prior to delivery by the Secretary of State of its
jurisdiction of incorporation, together with a good standing
certificate from its jurisdiction of incorporation dated a recent date
prior to delivery; provided, however, that the Articles or Certificate
of Incorporation or other charter documents of a Subsidiary need not be
delivered pursuant to this clause (iii) if such Subsidiary certifies
pursuant to clause (ii) above that such Articles or Certificate of
Incorporation or other charter documents were delivered to the Agent
pursuant to the Existing Credit Agreement and that there has been
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<PAGE> 62
no change in such Articles or Certificate of Incorporation or other
charter documents since the date of such delivery.
(iv) All corporate, partnership and legal proceedings
and all instruments and agreements in connection with the transactions
contemplated by this Agreement and the other Credit Documents shall be
satisfactory in form and substance to the Banks, and the Agent shall
have received all information and copies of all documents and papers,
including records of corporate proceedings and governmental approvals,
if any, that any Bank reasonably may have requested in connection
therewith, such documents and papers as appropriate to be certified by
proper corporate, partnership or governmental authorities.
(D) PERFECTION OF SECURITY INTERESTS. The Borrower and its
Subsidiaries shall have taken or caused to be taken such actions in
such a manner so that the Agent has or maintains a valid and perfected
first priority security interest in all Collateral (subject to Liens
consented to by the Required Banks with respect to such Collateral and
other Liens permitted by Section 8.01) encumbered or to be encumbered
under the Credit Documents. Such actions shall include, without
limitation: (i) the delivery, to the extent not theretofore delivered,
pursuant to the applicable Credit Documents by the Borrower and its
Subsidiaries of such certificates (which certificates shall be
registered in the name of the Agent or properly endorsed in blank for
transfer or accompanied by irrevocable undated stock powers duly
endorsed in blank, all in form and substance satisfactory to the Agent)
representing all of the capital stock required to be pledged pursuant
to the Credit Documents; (ii) the delivery, to the extent not
theretofore delivered, pursuant to the applicable Credit Documents by
the Borrower and its Subsidiaries of such promissory notes (which
promissory notes shall be endorsed to the order of the Agent, all in
form and substance satisfactory to the Agent) representing all of the
pledged debt required to be pledged pursuant to the Credit Documents;
(iii) the delivery, to the extent not theretofore delivered, to the
Agent of Uniform Commercial Code financing statements, or amendments
thereto, executed by the Borrower and its Subsidiaries as to the
Collateral granted by the Borrower and its Subsidiaries for all
jurisdictions as may be necessary or desirable to perfect the Agent's
security interest in such Collateral; and (iv) evidence reasonably
satisfactory to the Agent that all other filings (including, without
limitation, filings with the United States Patent and Trademark
Office), recordings and other actions the Agent deems necessary or
advisable to establish, preserve and perfect the first priority Liens
(subject to Liens permitted under this Agreement or consented to by the
Required Banks with respect to such Collateral) granted to the Agent in
personal and mixed property shall have been made.
(E) MARGIN RATE DETERMINATION CERTIFICATE. The Borrower shall
have delivered a Margin Rate Determination Certificate calculated using
consolidated financial statements of the Borrower dated September 30,
1997.
(F) PAYMENT OF FEES. The Borrower shall have paid (i) the Fees
required by Section 3.01 to be paid on or prior to the Effective Date,
and (ii) to the Agent and the Banks (as such terms are defined in the
Existing Credit Agreement) all unpaid fees
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<PAGE> 63
accrued under the Existing Credit Agreement prior to the Effective
Date.
(G) CONVERSION OF EXISTING REVOLVING LOANS; PAYMENT OF
INTEREST, FEES AND EXISTING SWING LINE LOANS. On or before the
Effective Date, notwithstanding anything contained in the Existing
Credit Agreement or Section 2.04 of this Agreement to the contrary, (i)
the Borrower shall repay in full all Existing Swing Line loans,
together with all accrued and unpaid interest thereon (ii) the Borrower
shall convert all Existing Bank Loans outstanding on the Effective Date
as Eurodollar Rate Loans into Base Rate Loans and, in connection
therewith, shall pay to Existing Banks such amounts as would have been
payable pursuant to Section 2.09(e) of the Existing Credit Agreement if
such Eurodollar Rate Loans had been prepaid on the Effective Date,
(iii) the Borrower shall pay to Agent, for distribution (as
appropriate) to Banks, all accrued and unpaid interest with respect to
all Existing Bank Loans outstanding on the Effective date, (iv) the
Borrower shall pay to Agent, for distribution (as appropriate) to
Banks, all commitment fees and letter of credit fees which are accrued
and unpaid as of the Effective Date under Sections 3.01(b) and 2.10(e)
of the Existing Credit Agreement, and (v) the Borrower shall pay to
Agent, for distribution (as appropriate) to Banks and Agent the fees
payable on the Effective Date referred to at Section 3.01.
(H) FINANCIAL STATEMENTS. The Banks shall have received (i)
audited financial statements of the Borrower and its Subsidiaries for
the fiscal years ended December 31, 1994, 1995 and 1996, (ii) unaudited
financial statements of the Borrower and its Subsidiaries for the
nine-month period ended September 30, 1997, and (iii) final projected
financial statements (including balance sheets and statements of
operations, stockholders' equity and cash flows) of the Borrower and
its Subsidiaries for the five-year period after the Effective Date, all
of the foregoing to be (x) substantially consistent with any financial
statements for the same periods delivered to the Agent prior to
preparation of the Confidential Information Memorandum and, in the case
of any such financial statements for subsequent periods, substantially
consistent (subject to variances resulting from changes of a general
economic nature) with any projected financial results for such periods
delivered to the Agent prior to such preparation and (y) otherwise in
form and substance satisfactory to the Banks.
(I) EXISTING AND CONTINUING INDEBTEDNESS. The Existing
Indebtedness that shall remain outstanding after the Effective Date
shall be as set forth on SCHEDULE 8.04(II) annexed hereto, and the
Borrower shall have delivered to the Agent an Officers' Certificate to
such effect.
(J) SATISFACTION OF CONDITIONS TO FUNDING. All conditions
precedent to the making of Loans and the issuance of Letters of Credit
described in Section 5.02 shall be satisfied on and as of the Effective
Date with respect to the Term Loans, the Revolving Loans and Swing Line
Loans, if any, to be made, and the Letters of Credit to be issued, on
such date.
(K) NO EVENT OF DEFAULT. Immediately prior to the Effective
Date, no "Default" or "Event of Default" (as such terms are defined in
the Existing Credit Agreement) shall have occurred and be continuing.
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(L) OPINIONS OF COUNSEL. On the Effective Date, the Agent
shall have received from Harwell Howard Hyne Gabbert & Manner, P.C.,
counsel to the Borrower, an opinion substantially in the form annexed
hereto as EXHIBIT R, addressed to each of the Banks and dated the date
of delivery, covering such matters incident to the transactions
contemplated herein as the Agent may reasonably request.
(M) CERTAIN APPROVALS AND AGREEMENTS. Borrower and its
Subsidiaries shall have obtained all third party consents, waivers,
amendments, and approvals that may be necessary under Borrower's and
its Subsidiaries' existing contracts and agreements in connection with
the borrowings under this Agreement and all related transactions, and
Borrower and its Subsidiaries shall otherwise be in material compliance
with such agreements.
All the Notes, certificates, legal opinions and other
documents and papers referred to in this Section 5, unless otherwise specified,
shall be delivered to the Agent for the account of each of the Banks and, except
for the Notes, in sufficient counterparts for each of the Banks and shall be
satisfactory in form and substance to the Banks.
5.02 CONDITIONS TO ALL LOANS AND LETTERS OF CREDIT. The
obligations of the Banks to make Term Loans and Revolving Loans, the Swing Line
Bank to make Swing Line Loans and the Issuing Bank to issue Letters of Credit on
each Funding Date are subject to the following further conditions precedent:
(A) The Agent or Issuing Bank shall have received, in
accordance with the provisions of Sections 2.01(b), 2.03(b) or 2.10(b),
as the case may be, before that Funding Date, an originally executed
Notice of Term Borrowing, Notice of Revolver Borrowing or Notice of
Issuance of Letter of Credit, as the case may be (or, in the case of a
Swing Line Loan, the Swing Line Bank shall have received an executed
Notice of Swing Line Borrowing), in each case signed by the Chief
Executive Officer, the Chief Financial Officer or the Treasurer of the
Borrower or by any officer of the Borrower designated by the Board of
Directors of the Borrower or any of the above-described officers on
behalf of the Borrower in writing delivered to the Agent. The
obligation of the Issuing Bank to issue any Letter of Credit is subject
to the further condition precedent that on or before the date of
issuance of such Letter of Credit, the Issuing Bank shall have
received, in accordance with the provisions of Section 2.10(b), all
other information specified in Section 2.10(b) and such other documents
as the Issuing Bank reasonably may require in connection with the
issuance of such Letter of Credit.
(B) As of the Funding Date:
(i) The representations and warranties contained
herein shall be true, correct and complete in all material
respects on and as of that Funding Date to the same extent as
though made on and as of that date taking into account any
amendments to the Schedules or Exhibits hereto as a result of
any disclosures
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made by the Borrower to the Agent and the Banks after the
Effective Date approved by the Agent and the Required Banks
in their reasonable discretion;
(ii) No event shall have occurred and be continuing
or would result from the consummation of the borrowing
contemplated by such Notice of Revolver Borrowing or the
issuance of such Letter of Credit that would constitute a
Default or an Event of Default;
(iii) The Borrower shall have performed in all
material respects all agreements and satisfied all conditions
that this Agreement provides shall be performed by it on or
before that Funding Date;
(iv) No order, judgment or decree of any court,
arbitrator or governmental authority shall purport to enjoin
or restrain any Bank (or, in the case of a Swing Line Loan,
the Swing Line Bank) from making the Revolving Loans, the Term
Loans or the Issuing Bank from issuing the Letter of Credit
(or, in the case of a Swing Line Loan, making a Swing Line
Loan); and
(v) The making of the Loans or the issuing of the
Letter of Credit requested on such Funding Date shall not
violate any law, including, without limitation, Regulation G,
Regulation T, Regulation U or Regulation X of the Board of
Governors of the Federal Reserve System.
SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. In
order to induce the Banks to enter into this Agreement and to maintain and make
the Loans, the Borrower makes the following representations, warranties and
agreements, which shall survive the execution and delivery of this Agreement and
the Notes and the making of the Loans:
6.01 CORPORATE STATUS. Each of the Borrower and its
Subsidiaries (i) is a duly organized and validly existing corporation,
partnership or association, as the case may be, in good standing under the laws
of the jurisdiction of its incorporation (except in the case of each of American
HomePatient of Illinois, Inc., Medical Equipment Service, Inc., and American
HomePatient Ventures, Inc., each of which the Borrower shall cause to be in good
standing within 30 days after the Effective Date), (ii) has the power and
authority to own its property and assets and to transact the business in which
it is engaged, (iii) is duly qualified as a foreign corporation, partnership or
association, as the case may be, and in good standing in ea ch jurisdiction
where its ownership, leasing or operation of property or the conduct of its
business requires such qualification, except if the failure to be so qualified
could not reasonably be expected to have a material adverse effect on the
business, operations, property, assets, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole and (iv) is in
compliance with all requirements of law, including, but not limited to, all
federal, state and local statutes, regulations and ordinances relating to the
delivery of healthcare services of the type provided by the Borrower and its
Subsidiaries and payment therefor, except to the extent that the failure to do
so could not reasonably be expected to have a material adverse effect on the
business, operations, property, assets, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole.
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6.02 CORPORATE POWER AND AUTHORITY. The Borrower and each of
its Subsidiaries has the corporate, partnership or other power to execute,
deliver and perform the terms and provisions of each of the Credit Documents to
which it is a party and has taken all necessary corporate, partnership or other
action to authorize the execution, delivery and performance by it of each of
such Credit Documents. The Borrower and each of its Subsidiaries has duly
executed and delivered each of the Credit Documents to which it is party, and
each of such Credit Documents constitutes the legal, valid and binding
obligation of the Borrower or such Subsidiary, as the case may be, enforceable
against the Borrower or such Subsidiary, as the case may be, in accordance with
its terms except as the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws affecting
creditors' rights generally and by general equitable principles (regardless of
whether the issue of enforceability is considered in a proceeding in equity or
at law). The Borrower and each Subsidiary making any Acquisition shall have the
corporate, partnership or other power to consummate such Acquisition upon the
consummation thereof, on the terms set forth in any applicable purchase
agreement, agreement of merger or other operative agreement. Upon the
consummation of any Acquisition, such Acquisition shall have been duly
authorized by all necessary action of the Borrower and any of its Subsidiaries
participating therein.
6.03 NO VIOLATION. Neither the execution, delivery or
performance by the Borrower or a Subsidiary of the Borrower of the Credit
Documents to which it is a party, nor compliance by it with the terms and
provisions of any such Credit Documents, nor the consummation of any
Acquisition, upon the consummation thereof, (i) will contravene any provision of
any law, statute, rule or regulation or any order, writ, injunction or decree of
any court or governmental instrumentality (except, in the case of the
consummation of any Acquisition, as could not reasonably be expected to have a
material adverse effect on the business, operations, properties, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries taken
as a whole), (ii) will conflict or be inconsistent with or result in any breach
of any of the terms, covenants, conditions or provisions of, or constitute a
default under (except, in the case of the consummation of any Acquisition, as
could not reasonably be expected to have a material adverse effect on the
business, operations, properties, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole), or result in
the creation or imposition of (or the obligation to create or impose) any Lien
(other than Liens permitted under Section 8.01) upon any of the property or
assets of the Borrower or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement, loan agreement or any
other agreement, contract or instrument to which the Borrower or any of its
Subsidiaries is a party or by which it or any of its property or assets is bound
or to which it may be subject or (iii) will violate any provision of the
Certificate of Incorporation or By-Laws (or other documents of formation and
governance, as the case may be) of the Borrower or any of its Subsidiaries.
6.04 GOVERNMENTAL APPROVALS. No order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with (except as have been obtained or made prior to the Effective Date), or
exemption by, any governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required in connection with, (i) the
execution, delivery and performance by the Borrower or any of its Subsidiaries
of
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any Credit Document to which the Borrower or any of such Subsidiaries is a
party, (ii) the legality, validity, binding effect or enforceability of any such
Credit Document or (iii) any Acquisition, except filings, approvals and
authorizations that shall have been made or obtained prior to the consummation
of such Acquisition or for which arrangements shall have been made for the
subsequent issuance thereof within four weeks of the closing of such Acquisition
(or, if an additional period is necessary such additional period as is
satisfactory to the Agent) except, in any case, filings, approvals and
authorizations that could not reasonably be expected to have a material adverse
effect on the business, operations, properties, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole.
6.05 FINANCIAL STATEMENTS; FINANCIAL CONDITION; UNDISCLOSED
LIABILITIES; ETC.
(A) The financial statements delivered to the Existing Banks
pursuant to Sections 7.01(a) and (b) of the Existing Credit Agreement and to the
Banks pursuant to Section 5.01(h) present fairly the consolidated financial
condition of the Borrower and its Subsidiaries as at the respective dates
thereof and the consolidated results of operations and changes in financial
condition of the Borrower and its Subsidiaries for each of the periods covered
thereby, subject (in the case of any unaudited interim financial statements) to
changes resulting from normal year-end adjustments. All such consolidated
financial statements have been prepared in accordance with generally accepted
accounting principles and practices consistently applied.
(B) Except as fully reflected in the financial statements
described in Section 6.05(a) or in SCHEDULE 6.05, and except for Interest Rate
Agreements permitted hereunder, there were as of the Effective Date no
liabilities or obligations with respect to the Borrower or any of its
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) that, either individually or in aggregate,
would be material to the Borrower and its Subsidiaries taken as a whole. Except
as set forth in SCHEDULE 6.05, as of the Effective Date the Borrower does not
know of any basis for the assertion against the Borrower or any of its
Subsidiaries of any liability or obligation of any nature whatsoever that is not
fully reflected in the financial statements described in Section 6.05(a) that,
either individually or in the aggregate, would be material to the Borrower and
its Subsidiaries taken as a whole.
6.06 LITIGATION. Except as set forth on SCHEDULE 6.06, there
is no action, suit or arbitration or other proceeding pending or, to the best
knowledge of the Borrower), threatened with respect to (i) any Credit Document,
(ii) any tax return, (iii) any Acquisition that has been consummated, if any, or
(iv) any other matter that, if adversely determined, is reasonably likely to
materially and adversely affect the business, operations, property, assets,
condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole.
6.07 TRUE AND COMPLETE DISCLOSURE. All factual information
(taken as a whole) heretofore or contemporaneously furnished by the Borrower or
on behalf of the Borrower with its knowledge in writing to any Bank (including,
without limitation, all information contained in the Credit Documents) for
purposes of or in connection with this Agreement or any transaction contemplated
herein (including, without limitation, any Acquisition) is, and all other such
factual information (taken as a whole) hereafter furnished by or on behalf of
the Borrower in writing to any Bank will be, true and accurate in all material
respects on the date as of which such
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information is dated or certified and not incomplete by omitting to state any
fact necessary to make such information (taken as a whole) not materially
misleading at such time in light of the circumstances under which such
information was provided.
6.08 USE OF PROCEEDS; MARGIN REGULATIONS. All proceeds of the
Loans and any Letters of Credit have been and will be used by the Borrower for
the purposes set forth in Section 2.07; provided that no part of the proceeds of
any Loan or any Letter of Credit was or will be used by the Borrower to purchase
or carry any Margin Stock or to extend credit to others for the purpose of
purchasing or carrying any Margin Stock. Neither the making of any Loan or the
issuance of any Letter of Credit nor the use of the proceeds thereof will
violate or be inconsistent with the provisions of Regulations G, T, U or X of
the Board of Governors of the Federal Reserve System.
6.09 TAX RETURNS AND PAYMENTS. Each of the Borrower and its
Subsidiaries has filed all tax returns required to be filed by it and has paid
all income taxes payable by it that have become due pursuant to such tax returns
and all other taxes and assessments payable by it that have become due, other
than those not yet delinquent, those being contested in good faith and those
listed on SCHEDULE 6.06.
6.10 COMPLIANCE WITH ERISA. Each Plan is in substantial
compliance with ERISA; no Plan is insolvent or in reorganization; no Plan has an
Unfunded Current Liability, no Plan has an accumulated or waived funding
deficiency or permitted decreases in its funding standard account within the
meaning of Section 412 of the Code; neither the Borrower nor any Subsidiary of
the Borrower nor ERISA Affiliate has incurred any material liability to or on
account of a Plan pursuant to Sections 502(c), (i) or (l), 515, 4062, 4063,
4064, 4071, 4201 or 4204 of ERISA or Chapter 43 of the Code or expects to incur
any liability under any of the foregoing sections; no proceedings have been
instituted to terminate any Plan; no condition exists that presents a material
risk to the Borrower or any of its Subsidiaries of incurring a liability to or
on account of a Plan pursuant to the foregoing provisions of ERISA and the Code;
no Lien imposed under the Code or ERISA on the assets of the Borrower or any of
its Subsidiaries exists or is likely to arise on account of any Plan; the
Borrower and its Subsidiaries may terminate contributions to any other employee
benefit plans maintained by them without incurring any material liability to any
Person interested therein; and no Plan has received notice from the Internal
Revenue Service of the failure of such Plan to qualify under Section 401(a) of
the Code.
6.11 CAPITALIZATION. The authorized capital stock of the
Borrower consists of 35,000,000 shares of common stock, $0.01 par value per
share, of which 14,893,576 shares were issued and outstanding as of December 12,
1997 and 5,000,000 shares of preferred stock, $0.01 par value per share, of
which none are issued and outstanding. All such outstanding shares have been
duly and validly issued, are fully paid and non-assessable. The Borrower does
not have outstanding any securities convertible into or exchangeable for its
capital stock or outstanding any rights to subscribe for or to purchase, or any
options for the purchase of, or any agreements providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to, its capital stock except as described on SCHEDULE 6.11 or
as issued under any employee stock option plan of the Borrower and reported to
the Agent each fiscal quarter.
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6.12 SUBSIDIARIES. On the Effective Date, the corporations
listed on SCHEDULE 6.12 and the associations or joint ventures listed on
SCHEDULE 6.21 are the only Subsidiaries of the Borrower. SCHEDULE 6.12 and
SCHEDULE 6.21 correctly set forth, as of the Effective Date, the percentage
ownership (direct and indirect) of the Borrower in each class of capital stock
or partnership interests of each of its Subsidiaries and also identify the
direct owner thereof.
6.13 COMPLIANCE WITH STATUTES, ETC. Except as disclosed on
SCHEDULE 6.13, each of the Borrower and its Subsidiaries is in compliance with
all applicable statutes, regulations and orders of, and all applicable
restrictions imposed by, all governmental bodies, domestic or foreign, in
respect of the conduct of its business and the ownership of its property
(including applicable statutes, regulations, orders and restrictions relating to
environmental standards and controls), except such noncompliances as would not,
in the aggregate, have a material adverse effect on the business, operations,
property, assets, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole.
6.14 INVESTMENT COMPANY ACT. Neither the Borrower nor any of
its Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
6.15 PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Borrower
nor any of its Subsidiaries is a "holding company," or a "subsidiary company" of
a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
6.16 LABOR RELATIONS. Neither the Borrower nor any of its
Subsidiaries nor, to the best of the Borrower's knowledge at the time of any
Acquisition, the Target of such Acquisition, is engaged in any unfair labor
practice that would (upon giving effect to such Acquisition) have a material
adverse effect on the Borrower and its Subsidiaries taken as a whole. There is
(i) no significant unfair labor practice complaint pending or, to the best
knowledge of the Borrower, threatened against the Borrower or any of its
Subsidiaries or, to the best knowledge of the Borrower at the time of any
Acquisition, the Target of such Acquisition, before the National Labor Relations
Board, and no significant grievance or significant arbitration proceeding
arising out of or under any collective bargaining agreement is so pending or, to
the best knowledge of the Borrower, threatened against the Borrower or any of
its Subsidiaries or, to the best of knowledge of the Borrower at the time of any
Acquisition, the Target of such Acquisition, (ii) no significant strike, labor
dispute, slowdown or stoppage pending or, to the best knowledge of the Borrower,
threatened against the Borrower or any of its Subsidiaries or, to the best
knowledge of the Borrower at the time of any Acquisition, the Target of such
Acquisition, and (iii) to the best knowledge of the Borrower, no union
representation question existing with respect to the employees of the Borrower
or any of its Subsidiaries and, to the best knowledge of the Borrower, no union
organizing activities are taking place, except (with respect to any matter
specified in clause (i), (ii) or (iii) above, either individually or in the
aggregate) such as would not (upon giving effect to such Acquisition) have a
material adverse effect on the business, operations, property, assets, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries taken
as a whole.
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6.17 PATENTS, LICENSES, FRANCHISES AND FORMULAS. Except as set
forth on SCHEDULE 6.17, each of the Borrower and its Subsidiaries owns all the
patents, trademarks, permits, service marks, trade names, copyrights, licenses,
franchises and formulas, or rights with respect to the foregoing, and has
obtained assignments of all leases and other rights of whatever nature,
necessary for the present conduct of its business. Except as set forth on
SCHEDULE 6.17, no proceedings, claims, actions or oppositions have been
instituted or are pending or, to the best of the Borrower's and its
Subsidiaries' knowledge, after due inquiry, are threatened that challenge the
validity of the Borrower's or its Subsidiaries' use of such patents, trademarks,
permits, service marks, trade names, copyrights, licenses, franchises and
formulas, or rights with respect to the foregoing, that would result in a
material adverse effect on the business, operations, property, assets, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries taken
as a whole.
6.18 NO MATERIAL ADVERSE CHANGE. Except as set forth on
SCHEDULE 6.18, since December 31, 1996, there has been no material adverse
change in the business, operations, properties, assets, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole
other than change due to action expressly permitted by the terms of this
Agreement; provided, however, that the enactment of legislation on August 6,
1997 providing for reductions in Medicare's reimbursement rates for oxygen
therapy shall not in and of itself be considered a material adverse change for
purposes of this Section.
6.19 FRAUD AND ABUSE. Except as disclosed on SCHEDULE 6.13,
the Borrower and its Subsidiaries, and, to the knowledge of the Borrower and its
Subsidiaries after reasonable inquiry, their respective officers and directors,
and persons who provide professional services under agreements with the Borrower
or any of its Subsidiaries have been and are in material compliance with federal
Medicare and Medicaid statutes, 42 U.S.C. ss.ss. 1320a-7, 1320a-7(a), 1320a-7b
and 1395nn, as amended, and the regulations promulgated thereunder or related
state and local statutes and regulations and rules of professional conduct, and
have not at anytime:
(i) knowingly and willfully made or caused to be made a false
statement or representation of a material fact in any application for
any benefit or payment;
(ii) knowingly and willfully made or caused to be made any
false statement or representation of a material fact for use in
determining rights to any benefit or payment;
(iii) presented or caused to be presented a claim for
reimbursement for services under Medicare or Medicaid, or other state
health care programs that is for an item or service that is known or
should be known to be (a) not provided as claimed, or (b) false or
fraudulent;
(iv) failed to disclose knowledge by a claimant of the
occurrence of any event affecting the initial or continued right to any
benefit or payment on its own behalf or on behalf of another, with
intent fraudulently to secure such benefit or payment;
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(v) knowingly and willfully illegally offered, paid, solicited
or received any remuneration (including any kickback, bribe, or
rebate), directly or indirectly, overtly or covertly, in cash or in
kind (a) in return for referring an individual to a person for the
furnishing or arranging for the furnishing of any item or service for
which payment may be made in whole or in part by Medicare or Medicaid,
or other state health care programs, or (b) in return for purchasing,
leasing or ordering or arranging for or recommending purchasing,
leasing or ordering any good, facility, service, or item for which
payment may be made in whole or in part by Medicare or Medicaid or
other state health care programs;
(vi) knowingly made a payment, directly or indirectly, to a
physician as an inducement to reduce or limit services to individuals
who are under the direct care of the physician and who are entitled to
benefits under Medicare or Medicaid, or other state health care
programs;
(vii) provided to any person information that is known or
should be known to be false or misleading that could reasonably be
expected to influence the decision when to discharge a hospital
in-patient from the hospital;
(viii) knowingly and willfully made or caused to be made or
induced or sought to induce the making of any false statement or
representation (or omitted to state a fact required to be stated
therein or necessary to make the statements contained therein not
misleading) of a material fact with respect to (a) the conditions or
operations of a facility in order that the facility may qualify for
Medicare or Medicaid or other state health care program certification,
or (b) information required to be provided under ss. 1124A of the
Social Security Act (42 U.S.C. ss.1320a-3);
(ix) knowingly and willfully (a) charged for any Medicaid
service, money or other consideration at a rate in excess of the rates
established by the state, or (b) for services covered (in whole or in
part) by Medicaid, charged, solicited, accepted or received, in
addition to amounts paid by Medicaid, any gift, money, donation or
other consideration (other than a charitable, religious or
philanthropic contribution from an organization or from a person
unrelated to the patient) (y) as a precondition of treating the
patient, or (z) as a requirement for the patient's continued treatment;
(x) completed Certificates of Medical Necessity on behalf of
physicians in violation of the Health Care Financing Administration's
carrier directives prohibiting home health care providers from so
doing;
(xi) violated the federal Food, Drug and Cosmetic Act and the
so-called "pharmacy exemption" contained therein and the FDA's
Compliance Policy Guide Number 7132.16 entitled "Manufacture,
Distribution, and Promotion of Adulterated, Misbranded, or Unapproved
New Drugs for Human Use by State-Licensed Pharmacies;" or
(xii) violated the FDA's guidelines or OSHA regulations
including those in
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connection with any oxygen filling stations maintained or operated by
the Borrower or any of its Subsidiaries and 29 C.F.R. 1910, 1030
Occupational Exposure to Bloodborne Pathogens;
such that the actions or inactions in the foregoing clauses (i) through (xii),
individually or in the aggregate, would have a material adverse effect on the
business, operations, property, assets, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries, taken as a whole.
6.20 TITLE TO PROPERTIES; LIENS. The Borrower and its
Subsidiaries have good, sufficient and legal title to all of their respective
properties and assets reflected in the most recent financial statements
delivered pursuant to Sections 7.01(a) and (b) of this Agreement (or, if no such
financial statements have yet been delivered, the most recent financial
statements delivered pursuant to Sections 7.01(a) and (b) of the Existing Credit
Agreement), except for assets disposed of since the date of such financial
statements in the Ordinary Course of Business or as otherwise permitted under
Section 8.02. Except as permitted by this Agreement, all such properties and
assets are free and clear of Liens.
6.21 JOINT VENTURES. Except as set forth on SCHEDULE 6.21, the
Borrower and its Subsidiaries are not party to any Joint Venture other than
Joint Ventures permitted under Section 8.05(vi).
6.22 ACCOUNTS RECEIVABLE COLLATERAL. The Accounts Receivable
and any related reimbursement contracts with the payor of such Accounts
Receivable have not been satisfied, subordinated or rescinded in any manner
(other than settlements in the Ordinary Course of Business with payors of such
Accounts Receivable reached to facilitate collection); such Accounts Receivable
were created through the provision of services or merchandise supplied by either
(a) the Borrower and its Subsidiaries and the related charges were usual,
customary and reasonable, or (b) a Target of an Acquisition prior to such
Acquisition and the Borrower believes, after due investigation, that the related
charges were usual, customary and reasonable; such Accounts Receivable are owned
by the Borrower and its Subsidiaries free and clear of any adverse claim and the
Borrower and its Subsidiaries have the right to assign and transfer such
Accounts Receivable except as such assignment or transfer would be prohibited by
Section 1815(c) of the Social Security Act, 42 U.S.C. ss. 1395g(c) and the
regulations promulgated thereunder; and there are no procedures or
investigations pending or threatened before any Governmental Authority seeking a
determination or ruling that might affect the validity or enforceability of a
material portion of such Accounts Receivable subject to the review or
jurisdiction of such Governmental Authority.
6.23 SELLER DEBT. Except as disclosed on SCHEDULE 8.04(XIII),
the Acquisition Notes represent unsecured Indebtedness of the Borrower.
6.24 SURVIVAL OF RIGHTS CREATED UNDER EXISTING CREDIT
AGREEMENT. Notwithstanding the modification effected by this Agreement of the
representations, warranties and covenants of the Borrower contained in the
Existing Credit Agreement, the Borrower hereby acknowledges and agrees that any
choses in action or other rights created in favor of the Existing
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Banks and the Agent (as defined in the Existing Credit Agreement) and their
respective successors and assigns, if any, arising out of the representations
and warranties of the Borrower contained in or delivered (including
representations and warranties delivered in connection with the making of any
loans thereunder) in connection with the Existing Credit Agreement, including
all amendments and waivers relating thereto, shall survive the execution and
delivery of this Agreement.
SECTION 7. AFFIRMATIVE COVENANTS. The Borrower covenants and
agrees that on and after the Effective Date and until the Loans and the Notes,
together with interest, Fees and all other Obligations incurred hereunder and
thereunder, are paid in full and all Letters of Credit are cancelled, expired or
otherwise provided for to the satisfaction of the Issuing Bank:
7.01 INFORMATION COVENANTS. The Borrower will furnish to each
Bank:
(A) QUARTERLY FINANCIAL STATEMENTS. Within 60 days (or 90 days
in the case of the fourth fiscal quarter) after the close of each
quarterly accounting period in each Fiscal Year, the consolidated
balance sheets of the Borrower and its Subsidiaries as at the end of
such quarterly period and the related consolidated statements of
operations and statements of cash flows for the elapsed portion of the
Fiscal Year ended with the last day of such quarterly period and for
such quarterly period and setting forth comparative figures for the
related periods in the prior Fiscal Year for the statements of
operations and cash flows, all of which shall be certified by the Chief
Executive Officer or the Chief Financial Officer of the Borrower,
subject to normal year-end audit adjustments and, promptly, commencing
with the quarter ended September 30, 1997, the financial review
provided quarterly to the Board of Directors of the Borrower.
(B) ANNUAL FINANCIAL STATEMENTS. Within 90 days after the
close of each Fiscal Year, the consolidated balance sheets of the
Borrower and its Subsidiaries as at the end of such Fiscal Year and the
related consolidated statements of operations and statements of cash
flows for such Fiscal Year, in each case setting forth comparative
figures for the preceding fiscal year and certified, in the case of the
consolidated financial statements, without qualification by independent
certified public accountants of recognized national standing reasonably
acceptable to the Required Banks, together with a report of such
accounting firm stating that in the course of its regular audit of the
financial statements of the Borrower, which audit was conducted in
accordance with generally accepted auditing standards, such accounting
firm obtained no knowledge of any Default or Event of Default related
to accounting or financial reporting matters that has occurred and is
continuing or, if in the opinion of such accounting firm such a Default
or Event of Default has occurred and is continuing, a statement as to
the nature thereof.
(C) MANAGEMENT LETTERS. Promptly after the Borrower's receipt
thereof, a copy of any "management letter" received by the Borrower
from its certified public accountants.
(D) PERFORMANCE PLAN. On or before February 15 of each year
(beginning
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February 15, 1998), a performance plan (a "PERFORMANCE PLAN") for such
year, in a form no less detailed than the financial projections
delivered to the Existing Banks prior to the Effective Date pursuant to
the Existing Credit Agreement, for the Borrower and its Subsidiaries as
a whole (in each case including forecast consolidated statements of
operations and cash flow and balance sheets) and prepared by the
Borrower for each quarter of each Fiscal Year beginning with the
quarter ending March 31, 1998 and for the elapsed portion of such
Fiscal Year ended with the last day of each quarter accompanied by the
statement of the Chief Executive Officer or the Chief Financial Officer
of the Borrower to the effect that, to the best of such officer's
knowledge, the Performance Plan is a reasonable estimate and forecast
for the period covered thereby.
(E) PERFORMANCE REPORTS. Within 60 days after the end of each
fiscal quarter (or 90 days after the end of the Fiscal Year), a
performance report, in a form reasonably satisfactory to the Banks,
containing consolidated balance sheets for the Borrower and its
Subsidiaries as a whole as at the end of that quarter and the related
consolidated statements of operations and cash flows for the quarter
and the elapsed portion of the Fiscal Year then ended, and comparing
actual results of operations and financial position to that forecast in
the Performance Plan for the quarter and for the elapsed portion of the
Fiscal Year ended with the last day of that quarter, as the case may
be, setting forth comparative figures for the related periods in the
prior Fiscal Year and stating the reasons for any variance between the
actual results of operations, financial position and cash flows and
forecasted results of operations, financial position and cash flows and
explanations of the variances that are adverse to the Borrower or any
of its Subsidiaries; provided that with respect to the quarters ended
September 30, 1997 and December 31, 1997, such comparative figures
shall be based upon the financial projections delivered to the Banks
prior to the Effective Date pursuant to Section 7.01(d) of the Second
Amended and Restated Credit Agreement. Such performance report shall
also contain a statement of receivables (including an aging report)
held by the Borrower and its Subsidiaries as a whole.
(F) COMPLIANCE CERTIFICATES. At the time of the delivery of
the financial statements provided for in Sections 7.01(a) and (b) and
the quarterly performance reports provided for in Section 7.01(e), a
Compliance Certificate of the Chief Executive Officer or the Chief
Financial Officer of the Borrower to the effect that, to the best of
such officer's knowledge, no Default or Event of Default has occurred
and is continuing or, if any Default or Event of Default has occurred
and is continuing, specifying the nature and extent thereof, which
Compliance Certificate also shall set forth the calculations required
to establish whether the Borrower was in compliance with those
provisions of Section 8 identified on the Compliance Certificate at the
end of such quarter, fiscal quarter or Fiscal Year, as the case may be.
(G) NOTICE OF DEFAULT, LITIGATION OR HEALTH CARE COMPLIANCE.
Promptly, and in any event within three Business Days after any of the
Chief Executive Officer, Chief Financial Officer or Chief Operating
Officer of the Borrower obtains knowledge thereof, notice of (i) the
occurrence of any event that constitutes a Default or an Event of
Default, (ii) any litigation or governmental or arbitration proceeding
pending (x) against
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the Borrower or any of its Subsidiaries that could reasonably be
expected to materially and adversely affect the business, operations,
property, assets, condition (financial or otherwise) or prospects of
the Borrower and its Subsidiaries, taken as a whole, or (y) with
respect to any Credit Document or any Acquisition then contemplated or
already consummated by the Borrower or its Subsidiaries, (iii) any
material adverse changes in the status of any litigation or other
proceeding reported by the Borrower pursuant to Section 6.06 or this
Section 7.01(g), (iv) any material claim, complaint, notice or request
for information received by the Borrower or any of its Subsidiaries
with respect to compliance with health care regulatory requirements
relating to the delivery of health care services of the type provided
by the Borrower and payment therefor (excluding malpractice claims),
including, but not limited to, any violation or alleged violation of
any federal, state or local statute, regulation, or ordinance relating
to the delivery of medical services and payment therefor, including,
but not limited to, the requirements set forth under federal Medicare
and Medicaid statutes, 42 U.S.C. ss.ss. 1320a-7, 1320a-7a, 1320a-7b and
1395nn, and the regulations promulgated thereunder and related state or
local statutes or regulations and (v) any other event that could
reasonably be expected to materially and adversely affect the business,
operations, property, assets, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries, taken as a whole.
(H) OTHER REPORTS AND FILINGS. Promptly, copies of all
financial information, proxy materials and other information and
reports, if any, that the Borrower or any of its Subsidiaries shall
file with the Securities and Exchange Commission or any governmental
agencies substituted therefor (the "SEC").
(I) REPORTS OF ASSET TRANSFERS TO SUBSIDIARIES OR FORMATION OF
JOINT VENTURES. No later than 10 Business Days after (A) any transfer
to any Joint Venture that is not a Guarantor Subsidiary of (i) any
assets of the Borrower or any of its Subsidiaries having a fair market
value exceeding $1,000,000 in the aggregate or (ii) any intangible
assets material to the business, operations, properties, condition
(financial or otherwise) or prospects of the Borrower and its
Subsidiaries and (B) the formation of any Joint Venture, the Borrower
shall notify the Agent of the nature of such transaction and the
business purpose therefor.
(J) MARGIN RATE DETERMINATION CERTIFICATE. Concurrently with
the delivery of the financial statements required under Sections
7.01(a) and (b), the Borrower shall deliver a Margin Rate Determination
Certificate.
(K) ACQUISITION FINANCIALS. On or before the 15th day of each
month (i) an Officer's Certificate (v) describing in reasonable detail
each Acquisition consummated in the prior month (including the
aggregate consideration paid in such Acquisition), (w) setting forth
any anticipated Divestitures, (x) demonstrating compliance with the
requirements of Section 8.02(v), (y) setting forth the amount of any
notes representing Unsecured Seller Debt and (z) attaching copies of
the documentation regarding any Unsecured Seller Debt, (ii) copies of
all consolidated balance sheets and consolidating balance sheets (to
the extent consolidating balance sheets are available) and related
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statements of operations and statements of cash flows of the Target and
its Subsidiaries, if any, acquired in any such Acquisition, that are
delivered in connection with such Acquisition, and the amount of
Consolidated EBITDA of the Target and its Subsidiaries for each of the
immediately preceding four fiscal quarters that will be included by the
Borrower in its calculation of Consolidated Adjusted EBITDA under this
Agreement, which balance sheets and related statements of operations
and statements of cash flows and historical Consolidated EBITDA of the
Target and its Subsidiaries shall be reasonably satisfactory in
substance to the Agent and the Required Banks (i) to the extent of any
adjustments therein, (ii) if unaudited, or (iii) if both clauses (i)
and (ii) of this Section 7.01(k) are true; provided that, such
financials shall be deemed acceptable to the Required Banks unless
Banks sufficient to prevent the approval of the Required Banks shall
give notice of disapproval to the Agent within ten Business Days of the
delivery of such financials to Banks.
(L) OTHER INFORMATION. From time to time, such other
information or documents (financial or otherwise) as any Bank
reasonably may request.
7.02 BOOKS, RECORDS AND INSPECTIONS. The Borrower will, and
will cause each of its Subsidiaries to, keep proper books of record and account
in which full, true and correct entries in conformity with generally accepted
accounting principles consistently applied and all requirements of law shall be
made of all dealings and transactions in relation to its business and
activities. The Borrower will, and will cause each of its Subsidiaries to,
permit officers and designated representatives of the Agent or any Bank to visit
and inspect, under guidance of officers of the Borrower or such Subsidiary, any
of the properties of the Borrower or such Subsidiary, and to examine the books
of record and account of the Borrower or such Subsidiary and discuss the
affairs, finances and accounts of the Borrower or such Subsidiary with, and be
advised as to the same by, its and their officers and independent accountants,
all at such reasonable times and intervals, with such reasonable notice and to
such reasonable extent as the Agent or such Bank may request.
7.03 MAINTENANCE OF PROPERTY, INSURANCE. SCHEDULE 7.03 sets
forth a true and complete listing of all insurance maintained by the Borrower
and its Subsidiaries as of the Effective Date and the amounts of such insurance.
The Borrower will, and will cause each of its Subsidiaries to, (i) keep all
property useful and necessary in its business in good working order and
condition, (ii) maintain with financially sound and reputable insurance
companies insurance on all its property and its directors and officers in at
least such amounts and against at least such risks as are described in SCHEDULE
7.03; provided that the Borrower and its Subsidiaries may self-insure against
risks consistent with standard industry practices for companies in the same or
similar businesses, and (iii) furnish to each Bank, within 45 days after the end
of each Fiscal Year and otherwise, upon written request, full information as to
the insurance carried.
7.04 CORPORATE FRANCHISES. Except as permitted by Section
8.02, the Borrower will, and will cause each of its Subsidiaries to, do or cause
to be done, all things necessary to preserve and keep in full force and effect
its existence and its material rights, franchises, licenses and patents;
provided, however, that nothing in this Section 7.04 shall prevent (a) the
withdrawal by the Borrower or any of its Subsidiaries of its qualification as a
foreign corporation, association
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or joint venture in any jurisdiction where such withdrawal would not have a
material adverse effect on the business, operations, property, assets, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries taken
as a whole, (b) the merger of AHPT, with and into the Borrower under Section
8.02(vii), or (c) the discontinuance of any Subsidiary of the Borrower if such
discontinuance would not have a material adverse effect on the business,
operations, property, assets, condition (financial or otherwise) or prospects of
the Borrower and its Subsidiaries taken as a whole.
7.05 COMPLIANCE WITH STATUTES, ETC. The Borrower will, and
will cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business, including, without limitation, the laws and regulations referred to in
Section 6.19, and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls), except such noncompliances as could not, in the aggregate, reasonably
be expected to have a material adverse effect on the business, operations,
property, assets, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole.
7.06 ERISA. (a) As soon as possible and, in any event, within
10 days after the Borrower or any of its Subsidiaries or ERISA Affiliates knows
or has reason to know any of the following, the Borrower will deliver to each of
the Banks a certificate of the Chief Executive Officer or the Chief Financial
Officer of the Borrower setting forth details as to such occurrence and such
action, if any, that the Borrower, such Subsidiary or such ERISA Affiliate is
required or proposes to take, together with any notices required or proposed to
be given to or filed with or by the Borrower, the Subsidiary, the ERISA
Affiliate, the PBGC, a Plan participant or the Plan administrator with respect
thereto: that a Reportable Event has occurred; that an accumulated funding
deficiency has been incurred or an application may be or has been made to the
Secretary of the Treasury for a waiver or modification of the minimum funding
standard (including any required installment payments) or an extension of any
amortization period under Section 412 of the Code with respect to a Plan; that a
Plan has been or may be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA; that a Plan has an Unfunded Current Liability
giving rise to a Lien under ERISA or the Code; that proceedings may be or have
been instituted to terminate a Plan; that a proceeding has been instituted
pursuant to Section 515 of ERISA to collect a delinquent contribution to a Plan;
that the Borrower, any of its Subsidiaries or ERISA Affiliates will or may incur
any liability (including any contingent or secondary liability) to or on account
of the termination of or withdrawal from a Plan under Sections 4062, 4063, 4064,
4201 or 4204 of ERISA; that the Borrower, any of its Subsidiaries or ERISA
Affiliates will or may incur any liability under Chapter 43 of the Code or under
Sections 502(c), (i) or (1) or 4071 of ERISA; that there exists a condition that
presents a material risk to the Borrower, any of its Subsidiaries or ERISA
Affiliates of incurring a liability to or on account of a Plan pursuant to the
assertion of a material claim (other than a routine claim for benefits) against
any such Plan; or that any Plan has been determined by the Internal Revenue
Service to fail to qualify under Section 401(a) of the Code.
(b) The Borrower will deliver to each of the Banks a complete
copy of the annual report (Form 5500) of each Plan required to be filed with the
Internal Revenue Service.
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(c) In addition to any certificates or notices delivered to
the Banks pursuant to the clause (a) of this Section 7.06, copies of annual
reports and any other notices received by the Borrower or any of its
Subsidiaries required to be delivered to the Banks hereunder shall be delivered
to the Banks no later than 10 days after the later of the date such report or
notice has been filed with the Internal Revenue Service or the PBGC, given to
Plan participants or received by the Borrower or such Subsidiary.
7.07 END OF FISCAL YEARS; FISCAL QUARTERS. The Borrower shall
cause (i) each of its fiscal years, and the fiscal years of each of its
Subsidiaries other than Joint Ventures, to end on December 31 and (ii) each of
its, and each of its Subsidiaries', fiscal quarters to end on March 31, June 30,
September 30 and December 31; provided that any Subsidiary acquired subsequent
to the Effective Date that has different fiscal year ends, fiscal quarter ends
or both than those set forth in this Section 7.07 shall conform such periods to
those set forth herein in the ordinary course consistent with past practice.
7.08 PERFORMANCE OF OBLIGATIONS. The Borrower will, and will
cause each of its Subsidiaries to, perform all of its obligations under the
terms of each mortgage, indenture, security agreement and other debt instrument
by which it is bound, except such non-performances as could not in the
aggregate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole.
7.09 PAYMENT OF TAXES AND CLAIMS. The Borrower will, and will
cause each of its Subsidiaries to, pay or cause to be paid all taxes,
assessments and other governmental charges imposed upon it or any of its
properties or assets or in respect of any of its franchises, business, income or
property before any material penalty accrues thereon, and all claims (including,
without limitation, claims for labor, services, materials and supplies) for sums
that have become due and payable and that by law have or may become a material
Lien upon any of its properties or assets, prior to the time when any material
penalty or fine shall be incurred with respect thereto; provided that so long as
no property or assets (other than money for such charge or claim and the
interest or penalty accruing thereof) of the Borrower or any of its Subsidiaries
is in danger of being lost or forfeited as a result thereof, no such charge or
claim need be paid if it is being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted and if such reserve or
other appropriate provision, if any, as shall be required in conformity with
generally accepted accounting principles consistently applied shall have been
made therefor.
7.10 LICENSING. The Borrower will and will cause each of its
Subsidiaries to be operated at all times in compliance in all material respects
with all federal, state and local statutes, regulations and ordinances relating
to the licensing of healthcare services of the type provided by the Borrower and
to maintain, at all times, accreditation for no less than 90% of the branches
owned by the Borrower and its Subsidiaries longer than one year with the Joint
Commission on Accreditation of Healthcare Organizations.
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7.11 FURTHER ASSURANCES; NEW SUBSIDIARIES.
(A) At any time and from time to time upon the request of the
Agent, the Borrower shall and shall cause each of its Wholly-Owned Subsidiaries
to execute and deliver such further documents and do such other acts and things
as the Agent reasonably may request in order to effect fully the purposes of
this Agreement and the other Credit Documents and to provide for payment of the
Obligations in accordance with the terms of this Agreement and the other Credit
Documents.
(B) In the event a Person becomes a Subsidiary of the Borrower
(other than as a Joint Venture) after the Effective Date, the Borrower shall,
within 10 Business Days of such event, cause such Subsidiary to execute and
deliver (i) the Subsidiary Guaranty, the Subsidiary Pledge Agreement and a
Subsidiary Partnership Security Agreement and (ii) in the event a Qualified
High-Yield Offering has not been consummated by the Borrower, the Subsidiary
Security Agreement, Collection Bank Agreements (to the extent required by
Section 8.16) and the Subsidiary Trademark Security Agreement, in each case
together with such other agreements, pledges, assignments, documents and
certificates (including, without limitation, any amendments to the Credit
Documents) as may be necessary or desirable or as the Agent may request and do
such other acts and things as the Agent reasonably may request in order to have
such domestic Subsidiary guaranty and/or secure the Obligations and effect fully
the purposes of this Agreement and the other Credit Documents and to provide for
payment of the Obligations in accordance with the terms of this Agreement and
the other Credit Documents.
(C) Notwithstanding any provision contained herein or in any
of the Credit Documents, none of the Borrower nor any of its Guarantor
Subsidiaries shall be deemed to be in default under (or to have breached any
provision of) this Agreement or any Credit Document solely by virtue of
permitting to exist any Lien described in Section 8.01(xvi) until such time as
such Lien is required to be terminated under such Section.
7.12 ACCOUNTS RECEIVABLE. The Borrower and its Subsidiaries
will submit all necessary documentation and supply all necessary information for
payment of all Accounts Receivable (other than settlements in the Ordinary
Course of Business with payors of such Accounts Receivable reached to facilitate
collection to the payor for each of such Accounts Receivable); will not
subordinate or rescind any of the Accounts Receivable; and will notify Agent
promptly if any procedures or investigations are pending or threatened before
any Governmental Authority seeking a determination or ruling that might
materially and adversely affect the validity or enforceability of a material
portion of such Accounts Receivable subject to the review or jurisdiction of
such Governmental Authority.
SECTION 8. NEGATIVE COVENANTS. The Borrower covenants and
agrees that on and after the Effective Date and until the Loans and the Notes,
together with interest, Fees and all other Obligations incurred hereunder and
thereunder, are paid in full and all Letters of Credit are cancelled, expired or
otherwise provided for to the satisfaction of the Issuing Bank:
8.01 LIENS. The Borrower will not, and will not permit any of
its Subsidiaries to,
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create, incur, assume or permit to exist any Lien upon or with respect to any
property or assets (real or personal, tangible or intangible) of the Borrower or
any of its Subsidiaries, whether now owned or hereafter acquired; provided that
the provisions of this Section 8.01 shall not prevent the creation, incurrence,
assumption or existence of:
(i) Liens for taxes not yet due, or Liens for taxes being
contested in good faith and by appropriate proceedings for which
adequate reserves have been established the failure to pay which would
not have a material adverse effect on the business, operations,
property, assets, condition (financial or otherwise) or prospects of
the Borrower and its Subsidiaries taken as a whole;
(ii) Liens in respect of property or assets of the Borrower or
any of its Subsidiaries imposed by law, that were incurred in the
Ordinary Course of Business, such as carriers', warehousemen's and
mechanics' liens and other similar Liens arising in the Ordinary Course
of Business and (x) that do not in the aggregate materially detract
from the value of property or assets having a value individually or in
the aggregate in excess of $50,000, or materially impair the use
thereof in the operation of the business of the Borrower or any of its
Subsidiaries or (y) that are being contested in good faith by
appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or assets subject to
any such Lien;
(iii) Liens in existence on the Effective Date that are
listed, and the property subject thereto described, in SCHEDULE 8.01
(Liens described in this clause (iii), "PERMITTED LIENS");
(iv) Liens in favor of the Agent;
(v) Liens relating to leases and subleases granted to others
not interfering in any material respect with the business of the
Borrower or any of its Subsidiaries;
(vi) Easements, rights-of-way, restrictions, minor defects or
irregularities of title and other similar charges or encumbrances not
interfering in any material respect with the Ordinary Course of
Business of the Borrower or any of its Subsidiaries;
(vii) Liens relating to any interest or title of a lessor
under any lease;
(viii) Liens relating to Interest Rate Agreements permitted
under Section 8.04(xi);
(ix) Liens relating to bankers' liens and other rights of
setoff;
(x) Pledges or deposits in connection with worker's
compensation, unemployment insurance and other social security
legislation;
(xi) Liens on assets purchased using the proceeds of
non-recourse purchase money Indebtedness permitted by Section 8.04(ix);
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(xii) Any attachment or judgment Lien not constituting an
Event of Default under Section 9.09;
(xiii) Any deposit arrangement, made in connection with a
transaction to secure performance of obligations in connection with
such transaction, not in excess (either individually or in the
aggregate) of $5,000,000; provided that such deposit arrangement is
terminated on the date upon which such performance obligations are
required to be discharged under the terms of the document creating such
deposit arrangement;
(xiv) Liens created to secure Indebtedness of the Borrower and
its Subsidiaries incurred after the Effective Date as permitted in
8.04(xiii);
(xv) Liens created to secure Indebtedness of the Target of any
Acquisition outstanding on the date of such Acquisition; provided that
such Liens were created prior to the date of such Acquisition and were
not created in contemplation of such Acquisition and provided that the
aggregate amount of such secured Indebtedness outstanding at any time
shall not exceed $15,000,000;
(xvi) Liens consisting of Uniform Commercial Code financing
statements relating to property or assets acquired (whether in
Acquisitions or otherwise) after the Effective Date, so long as (A)
none of such financing statements shall secure any outstanding
Indebtedness and (B) as soon as practicable but in any event within 45
days of the date of any such acquisition, the Borrower shall take all
action (including without limitation the filing of termination
statements with the appropriate filing offices) necessary to terminate
all such financing statements relating to property or assets acquired
in such acquisition; and
(xvii) Liens in favor of AHPF created pursuant to one or more
Intercompany Acquisition Guaranty/Security Agreements.
8.02 CONSOLIDATION, MERGER, SALE OF ASSETS, ETC. The Borrower
will not, and will not permit any of its Subsidiaries to, wind up, liquidate or
dissolve its affairs or enter into any transaction of merger or consolidation,
or convey, sell, lease or otherwise dispose of (or agree to do any of the
foregoing at any future time) all or any part of its property or assets, or
purchase or otherwise acquire (in one or a series of related transactions) any
part of the property or assets (other than purchases or other acquisitions of
inventory, materials and equipment in the Ordinary Course of Business) of any
Person, or permit any of its Subsidiaries to do any of the foregoing, except
that:
(i) the Borrower and its Subsidiaries may make sales of
inventory in the Ordinary Course of Business and make Divestitures of
inventory;
(ii) the Borrower and its Subsidiaries may, in the Ordinary
Course of Business, dispose of equipment and capital assets that are
obsolete or in need of replacement and make Divestitures of equipment
and capital assets;
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(iii) the Borrower and its Subsidiaries may, in addition to
any sales permitted in clauses (i) and (ii) above, sell (by way of
merger or otherwise) for cash and/or promissory notes permitted under
Section 8.05(xii), the stock, property or assets of the Borrower or any
of its Subsidiaries having an aggregate fair market value (as
reasonably determined by the board of directors of the Person making
the sale) not to exceed $5,000,000 in any calendar year (without regard
to clause (vii) of this Section 8.02);
(iv) any Subsidiary of the Borrower may merge or consolidate
(a) into the Borrower or (b) with any other domestic Wholly-Owned
Subsidiary of the Borrower, so long as such Wholly-Owed Subsidiary is
the surviving corporation, association or joint venture, and in the
case of any merger or consolidation involving a Guarantor Subsidiary,
the Guarantor Subsidiary (or a Subsidiary of the Borrower that will
become a Guarantor Subsidiary on or before consummation of such merger)
is the surviving corporation;
(v) the Borrower and its Wholly-Owned Subsidiaries may
(without regard to the limitations set forth in Section 8.07) acquire
property and assets of other Persons (including any assets or property
acquired in any Acquisition) provided that the aggregate consideration
paid by the Borrower or such Subsidiaries consisting of cash or any
assets of the Borrower or such Subsidiaries (excluding any common stock
of the Borrower and the proceeds of any Divestiture but including the
principal amount of any Indebtedness described in Section 8.04(xii)
incurred in connection with such Acquisition and the principal amount
of any loans made to the applicable seller in connection with such
Acquisition in accordance with Section 8.05(xi)) shall not, without the
prior written consent of the Required Banks, exceed (if valued at fair
market value at the time of such Acquisition, as reasonably determined
by the board of directors of the Person making such Acquisition)
$30,000,000 per transaction and $100,000,000 in the aggregate over any
twelve-month period commencing with the Effective Date (including in
such calculation any consideration paid by the Borrower to acquire any
Joint Venture to the extent the aggregate book value of all Joint
Ventures exceeds $30,000,000) when added to the aggregate amount of all
investments made pursuant to this Section 8.02(v) in such twelve-month
period; provided further that such per transaction limitation shall not
apply to the National Medical Systems Acquisition, and the
consideration paid in respect of the National Medical Systems
Acquisition shall be excluded from any calculation of the aggregate
amount of consideration paid in all Acquisitions during any
twelve-month period; provided further no such per transaction
limitation on the consideration paid by the Borrower in connection with
such an Acquisition shall exist if the ratio of Total Debt to
Consolidated Adjusted EBITDA for the consecutive four-fiscal quarter
period ending as of the last day of the immediately preceding fiscal
quarter before such Acquisition is less than 1.50:1.00, in each case
calculated on a pro forma basis to give effect to such Acquisition, or
the Acquisition is made under clause (vii) of this Section 8.02;
provided further that the ratio of Total Debt to Consolidated Adjusted
EBITDA shall be in compliance with the requirement of Section 8.08, in
each case calculated on a pro forma basis to give effect to such
Acquisition; provided further, that if such acquisition of property and
assets is an acquisition of stock, then such acquisition shall, except
with respect to Joint Ventures, result in the ownership by the Borrower
or a Wholly-Owned
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Subsidiary of a majority interest in the capital stock of the entity
whose stock is being acquired;
(vi) the Borrower and its Subsidiaries may make capital
expenditures to the extent not in violation of Section 8.07;
(vii) notwithstanding the provisions of clauses (i) through
(vi) of this Section 8.02, AHPT, may merge with and into the Borrower,
provided that the Borrower shall acquire any and all assets of such
entity, and provided such merger will not have a material adverse
effect on (A) the business, operations, property, assets, condition
(financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole, (B) the value of the Collateral, or (C)
the ability of the Borrower to pay or the Banks to collect the
Obligations;
(viii) any Subsidiary of the Borrower may be dissolved if such
dissolution will not have a material adverse effect on the business,
operations, property, assets, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole; and
(ix) (a) the Borrower may convey, sell or otherwise transfer
any assets of the Borrower to any domestic Wholly-Owned Subsidiary and
(b) any Subsidiary of the Borrower may convey, sell or otherwise
transfer any assets of such Subsidiary to the Borrower or to any
domestic Wholly-Owned Subsidiary; provided that, in each case, such
sale, conveyance or transfer will not have a material adverse effect on
(A) the business, operations, property, assets, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries, taken as
a whole, (B) the value of the Collateral, or (C) the ability of the
Borrower to pay or the Banks to collect the Obligations.
8.03 DIVIDENDS.
(A) The Borrower will not declare or pay any dividends (other
than dividends that are payable solely to the holders of any class of stock of
the Borrower in shares of that class of stock), or return any capital, to its
stockholders or authorize or make any other distribution, payment or delivery of
property or cash to its stockholders as such, or redeem, retire, purchase or
otherwise acquire, directly or indirectly, for a consideration, any shares of
any class of its capital stock now or hereafter outstanding (or any options or
warrants issued by the Borrower with respect to its capital stock), or set aside
any funds for any of the foregoing purposes, or permit any of its Subsidiaries
to purchase or otherwise acquire for a consideration any shares of any class of
the capital stock of the Borrower now or hereafter outstanding (or any options
or warrants issued by the Borrower with respect to its capital stock), except
that the Borrower may acquire stock options or restricted stock from its
employees or former employees in an aggregate amount not to exceed $250,000 in
any calendar year.
(B) The Borrower will not permit any of its Subsidiaries to
declare or pay any dividends, or return any capital, to its stockholders or
authorize or make any other distribution, payment or delivery of property or
cash to its stockholders as such, or redeem, retire, purchase or
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otherwise acquire, directly or indirectly, for a consideration, any shares of
any class of its capital stock now or hereafter outstanding (or any options or
warrants issued by such Subsidiary with respect to its capital stock), or set
aside any funds for any of the foregoing purposes, or permit any of its
Subsidiaries to purchase or otherwise acquire for a consideration any shares of
any class of the capital stock of such Subsidiary now or hereafter outstanding
(or any options or warrants issued by such Subsidiary with respect to its
capital stock) (each of the foregoing being a "RESTRICTED SUBSIDIARY PAYMENT"),
except that any Subsidiary of the Borrower may make Restricted Subsidiary
Payments to the Borrower or any Wholly-Owned Subsidiary of the Borrower and any
Joint Venture that is a Subsidiary of the Borrower may make Restricted
Subsidiary Payments in proportion to the ownership interests therein.
8.04 INDEBTEDNESS. The Borrower will not, and will not permit
any of its Subsidiaries to, contract, create, incur, assume or suffer to exist
any Indebtedness, except:
(i) Indebtedness of the Borrower and its Subsidiaries incurred
under the Credit Documents;
(ii) Indebtedness listed on SCHEDULE 8.04(II) ("EXISTING
INDEBTEDNESS") and Indebtedness incurred by the Borrower or any of its
Subsidiaries to renew or refinance the Existing Indebtedness of the
Borrower or such Subsidiary; provided that the new Indebtedness shall
not exceed the principal amount of the Existing Indebtedness so renewed
or refinanced and shall not contain any terms or conditions, taken as a
whole, less favorable to the Borrower and the Banks than the Existing
Indebtedness being renewed or refinanced;
(iii) accrued expenses and current trade accounts payable
incurred in the Ordinary Course of Business and obligations under trade
letters of credit incurred by the Borrower or any of its Subsidiaries
in the Ordinary Course of Business, that are to be repaid in full not
more than one year after the date on which such Indebtedness is
originally incurred to finance the purchase of goods by the Borrower or
such Subsidiary;
(iv) obligations under letters of credit incurred by the
Borrower or any of its Subsidiaries in the Ordinary Course of Business
in support of obligations incurred in connection with worker's
compensation, unemployment insurance and other social security
legislation, or as a result of participation by the Borrower and its
Subsidiaries in Medicare or Medicaid programs;
(v) Indebtedness incurred as a result of loans and advances
permitted under Section 8.05(ii)-(iv);
(vi) obligations under letters of credit incurred by the
Borrower or any of its Subsidiaries in the Ordinary Course of Business
and to the extent consistent with past practice in support of
obligations under leases, bonds posted for judgments being appealed or
as a condition to bringing any action, suit or other proceeding not to
exceed $500,000 other than letters of credit listed on SCHEDULE
8.04(II);
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(vii) non-recourse Indebtedness payable solely from and
secured solely by life insurance policies and annuities (and any
related trusts or escrows) maintained by the Borrower and its
Subsidiaries for their respective officers, employees and directors;
(viii) surety bonds, performance bonds and other completion
bonds in the Ordinary Course of Business and consistent with past
practice or as required by law;
(ix) non-recourse purchase money Indebtedness not exceeding
the purchase price of the asset so purchased and secured solely by such
asset;
(x) capitalized leases;
(xi) Interest Rate Agreements (and guaranties thereof) entered
into by the Borrower and its Subsidiaries with respect to Indebtedness
in an aggregate notional principal amount not to exceed $150,000,000;
(xii) the Borrower and its Subsidiaries may become and remain
liable, either as primary obligor or as guarantor, with respect to
Unsecured Seller Debt owed to the Person selling the capital stock or
assets of any Target in any Acquisition permitted under Section
8.02(v); provided such Indebtedness (A) is unsecured, (B) either (x)
does not exceed 25% of the purchase price paid for such Target or (y)
is subordinated to the Indebtedness created by this Agreement pursuant
to the terms of a Subordination Agreement substantially in the form of
EXHIBIT M, and, in either case, if guaranteed by the Borrower or any
Subsidiary of the Borrower, is guaranteed by a guarantee that is
subordinate to, and under which such guarantor does not have any
obligation prior to the indefeasible payment in full of, the
Obligations and (C) does not at any time exceed $35,000,000 in the
aggregate for all Unsecured Seller Debt outstanding at any time;
provided, however, that Unsecured Seller Debt in the principal amount
of $1,500,000 outstanding as of the date hereof and owed to Respro,
Inc., a Kentucky corporation, in connection with a sale of assets by
Respro, Inc. to the Borrower need not satisfy the requirements of
either clause (x) or (y) of clause (B) of the preceding proviso. The
covenants, default provisions, remedies provisions, subordination
provisions and all other terms of such Unsecured Seller Debt shall be
reasonably satisfactory in form and substance to the Agent; provided
that if the subordination provisions in the documentation representing
such Unsecured Seller Debt are substantially in the form of EXHIBIT M
such subordination provisions shall be deemed satisfactory to the
Agent; provided further that if the documentation representing such
Unsecured Seller Debt contains no covenants and no default provisions
other than default provisions with respect to defaults that arise
because of the bankruptcy of the issuer or guarantor of such debt and
default provisions with respect to defaults that arise because of the
failure to pay such Seller Debt when due, such covenant and default
provisions shall be deemed satisfactory to the Agent;
(xiii) Indebtedness of the Borrower and its Subsidiaries
incurred after the Effective Date in an aggregate amount outstanding at
any time not in excess of $7,500,000;
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(xiv) Indebtedness of the Target of any Acquisition
outstanding on the date of such Acquisition; provided that such
Indebtedness was not incurred in contemplation of such Acquisition;
(xv) Contingent Obligations in respect of any guaranty by the
Borrower or a Subsidiary of any obligations of any of their respective
Subsidiaries permitted under this Agreement;
(xvi) Indebtedness incurred as a result of loans permitted
under Section 8.05(ix);
(xvii) Contingent Obligations created pursuant to any
Intercompany Acquisition Guaranty/Security Agreements; and
(xviii) Indebtedness of the Borrower in respect of Qualified
High-Yield Debt in an aggregate principal amount not to exceed
$275,000,000 outstanding at any time; provided that the proceeds
thereof shall be applied as required under Section 4.02(c)(i).
8.05 ADVANCES, INVESTMENTS AND LOANS. The Borrower will not,
and will not permit any of its Subsidiaries to, lend money or credit or make
advances to any Person, or purchase or acquire any stock or other ownership
interest (other than stock or ownership interests issued as part of the
formation of a Subsidiary of the Borrower for consideration not to exceed
$150,000 in the aggregate with respect to all such Subsidiaries, obligations or
securities of, or any other interest in, or make any capital contribution to,
any other Person, except that the following shall be permitted:
(i) the Borrower and its Subsidiaries may each acquire and
hold receivables owing to it, if created or acquired in the Ordinary
Course of Business and payable or dischargeable in accordance with
customary trade terms to the extent consistent with past practice;
(ii) loans and advances by any Subsidiary of the Borrower to
the Borrower; provided such loans or advances are at all times
subordinated to the Obligations of the Borrower on terms satisfactory
to the Required Banks;
(iii) loans and advances not to exceed $10,000,000 in the
aggregate at any time to Joint Ventures to which the Borrower or any of
its Subsidiaries is a party;
(iv) loans and advances by the Borrower to any Guarantor
Subsidiary (or, in connection with any Acquisition, any Subsidiary of
the Borrower that becomes a Guarantor Subsidiary on or before
consummation of such Acquisition) in the Ordinary Course of Business so
long as after giving effect to such loan or advance there shall not
have occurred a Default or an Event of Default;
(v) loans and advances by any Guarantor Subsidiary to any
other Guarantor Subsidiary in the Ordinary Course of Business so long
as after giving effect to such loan or advance there shall not have
occurred a Default or Event of Default;
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(vi) the Borrower and its Subsidiaries (a) may make new loans
and advances to officers, employees and agents in the Ordinary Course
of Business (for purposes other than purchasing stock or stock options
or exercising stock options) equal, in the aggregate for the Borrower
and its Subsidiaries, to no more than $100,000 at any one time
outstanding and may make loans to officers, directors and employees in
connection with the purchase or exercise of options for the Borrower's
common stock, provided that no cash is advanced and (b) may make
interest-free loans or advances to officers and employees of the
Borrower and its Subsidiaries in the form of payment by the Borrower of
premiums in respect of so-called "split-dollar" life insurance policies
in an amount which shall not in the aggregate exceed $1,000,000 per
annum;
(vii) the Borrower and its Subsidiaries may make equity
investments in other Persons engaged in the businesses in which the
Borrower and its Subsidiaries are engaged as of the Effective Date, in
an aggregate amount that, when added to the aggregate consideration
paid to acquire assets and property pursuant to Section 8.02(v), does
not exceed the amount specified in Section 8.02(v); provided that the
Borrower shall provide notice to the Agent of all such investments in
accordance with Section 7.01(i) and the aggregate book value of all
investments in all Joint Ventures shall not at any time exceed 30% of
the aggregate book value of the equity of the Borrower; provided
further, that such equity investments shall, except with respect to
Joint Ventures, result in the ownership by the Borrower or such
Subsidiary of a majority interest in the capital stock of the entity
issuing such equity;
(viii) the Borrower and its Subsidiaries may make and own
investments in Cash Equivalents; provided that such Cash Equivalents
are not subject to setoff rights in favor of the financial institution
(other than a Bank) issuing or selling any such Cash Equivalents
arising from any banking relationship of the Borrower and its
Subsidiaries;
(ix) cash capital contributions by the Borrower to AHPF to
fund loans by AHPF to AHPT to finance Acquisitions; provided, that the
amount of any such capital contribution is loaned by AHPF to AHPT as
permitted under Section 8.05(x);
(x) loans made by AHPF to AHPT and evidenced by one or more
Intercompany Acquisition Notes;
(xi) in connection with any Acquisition consummated by the
Borrower or any of its Subsidiaries, the Borrower or such Subsidiary
may make loans to the applicable seller, as part of the consideration
payable in connection with such Acquisition, for the purpose of
financing such seller's purchase of so-called "split dollar" life
insurance; provided, that the Borrower or such Subsidiary shall enter
into a split dollar agreement and collateral assignment of life
insurance proceeds with such seller;
(xii) investments consisting of promissory notes, in an
aggregate principal amount not to exceed $1,000,000 at any time
outstanding, received as part of the
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consideration in connection with sales of stock, property or
assets of any of its Subsidiaries permitted under Section 8.02(iii);
and
(xiii) loans to Coronado Health Services, Inc., an Arizona
corporation under management by the Borrower, in an aggregate amount
not to exceed $850,000.
8.06 TRANSACTIONS WITH AFFILIATES. The Borrower will not, and
will not permit any of its Subsidiaries to, enter into any transaction or series
of related transactions, whether or not in the Ordinary Course of Business, with
any Affiliate of the Borrower, other than on terms and conditions substantially
as favorable to the Borrower or such Subsidiary as would be obtainable by the
Borrower or such Subsidiary at the time in a comparable arm's-length transaction
with a Person other than an Affiliate.
8.07 CAPITAL EXPENDITURES. Except for expenditures made by the
Borrower and its Subsidiaries during any Fiscal Year to acquire assets in
Acquisitions permitted under Section 8.02(v) or (vii), the Borrower will not,
and will not permit any of its Subsidiaries to, make any expenditure for fixed
or capital assets (including, without limitation, expenditures for product
development and maintenance and repairs that should be capitalized in accordance
with generally accepted accounting principles consistently applied and including
capitalized lease obligations) during any Fiscal Year set forth below that would
cause the aggregate amount of all such expenditures for the Borrower and its
Subsidiaries to exceed the correlative amount set forth below opposite such
Fiscal Year:
<TABLE>
<CAPTION>
================================================================================
FISCAL YEAR AMOUNT
- - --------------------------------------------------------------------------------
<S> <C>
1997 $35,000,000
- - --------------------------------------------------------------------------------
1998 $38,000,000
- - --------------------------------------------------------------------------------
1999 $43,000,000
- - --------------------------------------------------------------------------------
2000 $46,000,000
- - --------------------------------------------------------------------------------
2001 $49,000,000
- - --------------------------------------------------------------------------------
2002 $53,000,000
================================================================================
</TABLE>
8.08 LEVERAGE RATIO. The Borrower shall not permit the ratio
of Total Debt to Consolidated Adjusted EBITDA for any consecutive four-fiscal
quarter period ending as of the last day of any fiscal quarter of the Borrower
to be more than (i) 3.75:1.00 if the applicable date of determination occurs
prior to the consummation of a Qualified High-Yield Offering and (ii) 4.00:1.00
if the applicable date of determination occurs after the consummation of a
Qualified High-Yield Offering.
8.09 MINIMUM CONSOLIDATED NET WORTH. The Borrower will not
permit Consolidated Net Worth of the Borrower and its Subsidiaries at any time
to be less than the sum of (i) $151,000,000 plus (ii) 75% of Consolidated Net
Income of the Borrower and its
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Subsidiaries for each fiscal quarter in which Consolidated Net Income is a
positive number and which ends during the period from October 1, 1997 to and
including the end of the then most recently ended fiscal quarter of the Borrower
plus (iii) 100% of any additions to Net Worth from any issuance of, or any
exercise of an option to purchase, or any conversion of any debt Securities
into, any equity Securities of the Borrower on or after the Effective Date.
8.10 MINIMUM INTEREST COVERAGE RATIO. The Borrower shall not
permit the ratio of (i) Consolidated EBITDA of the Borrower and its Subsidiaries
to (ii) Consolidated Interest Expense for any consecutive four-fiscal quarter
period to be less than (a) 3.75:1.00 if the applicable date of determination
occurs prior to the consummation of a Qualified High-Yield Offering and (b)
3.50:1.00 if the applicable date of determination occurs after the consummation
of a Qualified High-Yield Offering.
8.11 LIMITATION ON VOLUNTARY PAYMENTS AND MODIFICATIONS OF INDEBTEDNESS;
MODIFICATIONS OF CERTIFICATE OF INCORPORATION, BY-LAWS AND CERTAIN OTHER
AGREEMENTS; ETC. The Borrower will not, and will not permit any of its
Subsidiaries to, (i) make any voluntary or optional payment or prepayment on or
redemption or acquisition for value of (including, without limitation, by way of
depositing with the trustee with respect thereto money or securities before due
for the purpose of paying when due) (x) any Qualified High-Yield Debt or (y) any
other Indebtedness on which it is an obligor which payment, prepayment or
redemption or acquisition for value (in the case of this clause (y)) is in
excess of $100,000 per year in the aggregate except (in the case of this clause
(y)) with respect to payments or prepayments on or redemptions or acquisitions
for value of the (A) Obligations under the terms of this Agreement or (B) any
Indebtedness for which failure to make such payment, prepayment, redemption or
acquisition for value would constitute a violation of a law or regulation
enacted, adopted or becoming effective after the Effective Date, (C) any trade
payables prepaid in the Ordinary Course of Business to take advantage of
favorable prepayment terms, or (D) Indebtedness of the Target of any Acquisition
permitted pursuant to Section 8.04(xiv), (ii) amend or modify, or permit the
amendment or modification of, any provision of any Indebtedness or of any
agreement (including, without limitation, any purchase agreement, indenture,
loan agreement or security agreement) relating to any of the foregoing other
than amendments that (A) only extend the maturity of or lower the interest rate
on Indebtedness and amendments of this Agreement permitted by its terms or (B)
are immaterial and would not have a material adverse effect on the business,
operations, property, assets, liabilities (contingent or otherwise), condition
(financial or otherwise) or prospects of the Borrower or any of its
Subsidiaries, (iii) amend the subordination provisions with respect to any
Qualified High-Yield Debt or make any payment in violation of the terms thereof,
or (iv) amend, modify or change the Certificate or Articles of Incorporation
(including, without limitation, by the filing or modification of any certificate
of designation) or the By-Laws (or any other documents of formation and
governance, as the case may be) of the Borrower or any of its Subsidiaries party
to any of the Credit Documents or any Subsidiary of such Subsidiaries (except to
reflect a name change previously noticed to the Agent, except as permitted under
Section 8.02(vii) and except to amend the Certificate or Articles of
Incorporation or the By-Laws of a Target as the Borrower deems reasonably
necessary, provided that such amendment shall not adversely affect the Banks'
position as creditors hereunder).
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8.12 RESTRICTIONS ON SUBSIDIARY DIVIDENDS AND OTHER
DISTRIBUTIONS. The Borrower will not, and will not permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction, other than as set
forth in this Agreement, on the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by the Borrower or any Subsidiary
of the Borrower, or pay any Indebtedness owed to the Borrower or a Subsidiary of
the Borrower, (b) make loans or advances to the Borrower or (c) transfer any of
its properties or assets to the Borrower, except for such encumbrances or
restrictions existing under or by reasons of (i) applicable law, (ii) this
Agreement, (iii) customary provisions restricting subletting or assignment of
any lease governing a leasehold interest of the Borrower or a Subsidiary of the
Borrower that exists on the Effective Date and (iv) customary provisions
restricting transactions with affiliates of Persons party to a Joint Venture.
The Borrower will not, and will not permit any of its Subsidiaries to, amend,
modify or otherwise change the terms of, or permit the modification of, any
provision of any Restructuring Note, any Intercompany Term Note, the ConPharma
Note, any Intercompany Acquisition Note or any Intercompany Acquisition
Guaranty/Security Agreement if the effect of such change is to change the
subordination provisions thereof (or of any guaranty thereof) or to change any
collateral therefor (other than to release such collateral).
8.13 BUSINESS. The Borrower will not, and will not permit any
of its Subsidiaries to, engage (directly or indirectly) in any business other
than the business in which it was engaged on the Effective Date and any business
directly related to such business.
8.14 TRANSFER OF COPYRIGHTS, PATENTS AND TRADEMARKS. The
Borrower will not, and will not permit any of its Subsidiaries to, transfer any
of their respective copyrights, licenses, patents, trademarks, permits, service
marks, trade names, franchises and formulas, or rights with respect to the
foregoing, except transfers pursuant to licenses granted in the Ordinary Course
of Business that would not have a material adverse effect on the business,
operations, property, assets, condition (financial or otherwise) or prospects of
the Borrower and its Subsidiaries taken as a whole.
8.15 JOINT VENTURES. The Borrower shall not, and shall not
suffer or permit any of its Subsidiaries to enter into any Joint Venture, other
than in the Ordinary Course of Business.
8.16 COLLECTION BANK AGREEMENTS. Prior to the consummation of
a Qualified High-Yield Offering, the Borrower shall not, and shall not suffer
nor permit any of its Subsidiaries that are not Joint Ventures to, (i) maintain
any Deposit Account with an average daily balance in excess of $100,000 in any
given month with any financial institution that has not executed and delivered
to the Agent a Collection Bank Agreement, (ii) maintain amounts in excess of
$5,000,000 in the aggregate at any time outstanding in Deposit Accounts that are
not subject to Collection Bank Agreements, or (iii) deposit any amount into a
Deposit Account that is the subject of a Collection Bank Agreement that does not
represent proceeds of Collateral.
SECTION 9. EVENTS OF DEFAULT. Upon the occurrence of any of
the following specified events (each an "EVENT OF DEFAULT");
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9.01 PAYMENTS. The Borrower shall (i) default in the payment
when due of any principal of any Loan or any Note, (ii) default in the payment
when due of any amount payable to the Issuing Bank in reimbursement of any
drawing under a Letter of Credit, or (iii) default, and such default shall
continue unremedied for two Business Days, in the payment when due of interest
on any Loan, any Fees or any other amounts owing hereunder or under any Note; or
9.02 REPRESENTATIONS, ETC. Any representation, warranty or
statement made by the Borrower or any of its Subsidiaries herein or in any other
Credit Document or in any certificate delivered pursuant hereto or thereto shall
prove to be untrue in any material respect on the date as of which made or
deemed made; or
9.03 COVENANTS. The Borrower shall (i) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 7.01(g)(i) or Section 8 or (ii) default in the due performance or
observance by it of any term, covenant or agreement (other than those referred
to in Sections 9.01 and 9.02 and clause (i) of this Section 9.03) contained in
this Agreement and such default shall continue unremedied for a period of 30
days after written notice to the Borrower by the Agent; or
9.04 DEFAULT UNDER OTHER AGREEMENTS. The Borrower or any of
its Subsidiaries shall (i) default in any payment of Indebtedness in an
aggregate principal amount equal to or exceeding $1,500,000 (other than the
Notes, the Restructuring Notes, the Intercompany Term Notes, the ConPharma Note
and the Intercompany Acquisition Notes) beyond the period of grace (not to
exceed 30 days), if any, provided in the instrument or agreement under which
such Indebtedness was created or (ii) default in the observance or performance
of any agreement or condition relating to Indebtedness in an aggregate principal
amount equal to or exceeding $3,750,000 (other than the Notes, the Restructuring
Notes, the Intercompany Term Notes, the ConPharma Note and the Intercompany
Acquisition Notes) or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or to
permit the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause (determined without regard to whether
any notice is required), any such Indebtedness to become due prior to its stated
maturity; or Indebtedness of the Borrower or any of its Subsidiaries, in an
aggregate principal amount equal to or exceeding $3,750,000, shall be declared
to be due and payable, or required to be prepaid other than by a regularly
scheduled required prepayment, prior to the stated maturity thereof; or
9.05 BANKRUPTCY, ETC. The Borrower or any of its Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the United
States Code entitled "BANKRUPTCY," as now or hereafter in effect, or any
successor thereto (the "BANKRUPTCY CODE"); or an involuntary case is commenced
against the Borrower or any of its Subsidiaries, and the petition is not
controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case (provided that the Borrower expressly authorizes the
Agent and each Bank to appear in any court conducting any such proceeding during
such 60 day period to preserve, protect and defend their rights under this
Agreement and the other Credit Documents); or a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or substantially all
of the property of the Borrower or any of its Subsidiaries; or the Borrower or
any of its Subsidiaries commences any other proceeding under any reorganization,
arrangement,
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adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or
similar law of any jurisdiction whether now or hereafter in effect relating to
the Borrower or any of its Subsidiaries; or there is commenced against the
Borrower or any of its Subsidiaries any such proceeding that remains undismissed
for a period of 60 days; or the Borrower or any of its Subsidiaries is
adjudicated insolvent or bankrupt, or any order of relief or other order
approving any such case or proceeding is entered; or the Borrower or any of its
Subsidiaries suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed for a
period of 30 days; or the Borrower or any of its Subsidiaries makes a general
assignment for the benefit of creditors; or any corporate, partnership or other
action is taken by the Borrower or any of its Subsidiaries for the purpose of
effecting any of the foregoing; or
9.06 ERISA. Any Plan shall fail to maintain the minimum
funding standard required for any plan year or part thereof or a waiver of such
standard or extension of any amortization period is sought or granted under
Section 412 of the Code; any Plan is, shall have been or is likely to be
terminated or the subject of a termination proceeding under ERISA; any Plan
shall have an Unfunded Current Liability, or the Borrower or any of its
Subsidiaries or ERISA Affiliates has incurred or is likely to incur a liability
to or on account of a Plan under Sections 502(c), (i) or (l), 515, 4062, 4063,
4064, 4071, 4201 or 4204 of ERISA or Chapter 43 of the Code; and there shall
result from any such event or events the imposition of a Lien upon or the
granting of a security interest in the assets of the Borrower or any of its
Subsidiaries, or a liability or a material risk of incurring a liability to the
PBGC or a Plan or a trustee appointed under ERISA, that will have a material
adverse effect upon the business, operations, property, assets, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries taken
as a whole; or
9.07 CREDIT DOCUMENTS. Any of the Credit Documents or any
material provision thereof shall cease to be in full force and effect for any
reason, other than the satisfaction in full of all Obligations and the
termination of this Agreement or otherwise in accordance with the provisions of
Section 10.10, or is declared to be null and void, or any Guarantor Subsidiary
shall default in the due performance or observance of any material term,
covenant or agreement on its part to be performed or observed pursuant to any of
the Credit Documents to which it is a party, or any Guarantor Subsidiary denies
that it has any further liability under any of the Credit Documents to which it
is a party or gives notice to such effect, or any junior creditor claims or
asserts the invalidity or unenforceability of any subordination provisions of
any Unsecured Seller Debt; or
9.08 CHANGES OF CONTROL. (i) Any Person or two or more Persons
acting in concert shall have acquired beneficial ownership (within the meaning
of the Rule 13d-3 under the Securities Exchange Act of 1934), directly or
indirectly, of securities of the Borrower representing 20% or more of the
combined voting power of all securities of the Borrower entitled to vote in the
election of directors; or (ii) during any period of up to 12 consecutive months,
commencing before or after the date of this Agreement, individuals who at the
beginning of such 12-month period were directors of the Borrower shall cease for
any reason to constitute a majority of the Board of Directors of the Borrower;
or (iii) any Person or two or more Persons acting in concert shall have acquired
by contract or otherwise, or shall have entered into a contract or arrangement
that upon consummation shall result in its or their acquisition of or
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control over, securities of the Borrower representing 20% or more of the
combined voting power of all securities of the Borrower entitled to vote in the
election of directors; or
9.09 JUDGMENTS. One or more judgments, decrees or arbitration
awards shall be entered against the Borrower or any of its Subsidiaries
involving in the aggregate for the Borrower and its Subsidiaries a liability
(not paid or fully covered by insurance as to which the insurer has acknowledged
coverage in writing) of $3,000,000 or more, and all such judgments, decrees or
awards shall not have been vacated, discharged or stayed or bonded pending
appeal within 30 days after the entry thereof; or
9.10 GOVERNMENTAL POLICIES. Any change shall occur in state or
federal laws, rules or governmental regulations or budgetary allocations that
reasonably could be expected to have a material adverse effect on the business,
operations, properties, assets, condition (financial or otherwise) or prospects
of the Borrower and its Subsidiaries taken as a whole; provided, however, that
the enactment of legislation on August 6, 1997 providing for reductions in
Medicare's reimbursement rates for oxygen therapy shall not in and of itself be
considered an Event of Default hereunder; or
9.11 LOSS OF LICENSES. Any Governmental Authority shall
finally revoke or fail to renew any license, permit or franchise of the Borrower
or the Borrower shall for any reason lose any license, permit or franchise or
the Borrower or any of its Subsidiaries shall suffer the imposition of any
restraining order, escrow, suspension or impound of funds in connection with any
proceeding (judicial or administrative) with respect to any license, permit or
franchise which event could reasonably be expected to have a material adverse
effect on the business, operations, properties, assets, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole;
THEN, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Agent, upon the written request of the Required
Banks, shall by written notice to the Borrower, (provided, that, if an Event of
Default specified in Section 9.05 shall occur with respect to the Borrower, the
result which would occur upon the giving of written notice by the Agent to the
Borrower as hereafter shall occur automatically without the giving of any such
notice) declare the principal of and any accrued interest in respect of all
Loans and the Notes and all Obligations owing hereunder and thereunder to be,
whereupon the same shall become, forthwith due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower, and the obligation of each Bank to make any Loan and the
obligation of the Issuing Bank to issue any Letter of Credit shall thereupon
terminate; provided, that the foregoing shall not affect in any way the
obligations of the Banks to make Revolving Loans to reimburse drawings under
Letters of Credit as provided in Section 2.10(c), to repay Refunded Swing Line
Loans as provided in Section 2.02(c), to purchase participations from the Swing
Line Bank in any unpaid Swing Line Loans as provided in Section 2.02(c), or to
purchase participations from the Issuing Bank in the unreimbursed amount of any
drawings under any Letters of Credit as provided in Section 2.10(d). So long as
any Letter of Credit shall remain outstanding, any amounts received by the Agent
shall be held by the Agent, pursuant to such documentation as the Agent shall
request, as cash collateral for the obligation of the Borrower to reimburse the
Issuing Bank in the event of any drawing under any outstanding
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Letters of Credit, and so much of such funds shall at all times remain on
deposit as cash collateral as aforesaid as shall equal the maximum amount
available at any time for drawing under all Letters of Credit (the "MAXIMUM
AVAILABLE AMOUNT"); provided that in the event of cancellation or expiration of
any Letter of Credit or any reduction in the Maximum Available Amount, the Agent
shall apply the difference between the cash collateral held by the Agent
immediately prior to such cancellation, expiration or reduction and the Maximum
Available Amount immediately after such cancellation, expiration or reduction
first to the payment of any outstanding Obligations, and second to the payment
to whomsoever shall be lawfully entitled to receive such funds.
SECTION 10. THE AGENT.
10.01 APPOINTMENT. The Banks hereby designate Bankers Trust
Company as the Agent (for purposes of this Section 10, the term "AGENT" shall
include Bankers Trust Company in its capacity as the Agent pursuant to the other
Credit Documents) to act as specified herein and in the other Credit Documents.
Each Bank hereby irrevocably authorizes, and each holder of any Note by the
acceptance of such Note shall be deemed irrevocably to authorize, the Agent to
take such action on its behalf under the provisions of this Agreement, the other
Credit Documents and any other instruments and agreements referred to herein or
therein and to exercise such powers and to perform such duties hereunder and
thereunder as are specifically delegated to or required of the Agent by the
terms hereof and thereof and such other powers as are reasonably incidental
thereto. The Agent may perform any of its duties hereunder by or through its
officers, directors, agents or employees.
10.02 NATURE OF DUTIES. The Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement and the
other Credit Documents. Neither the Agent nor any of its officers, directors,
agents or employees shall be liable for any action taken or omitted by it or
them hereunder or under any other Credit Document or in connection herewith or
therewith, unless caused by its or their gross negligence or willful misconduct.
The duties of the Agent shall be mechanical and administrative in nature; the
Agent shall not have by reason of this Agreement or any other Credit Document a
fiduciary relationship in respect of any Bank or the holder of any Note; and
nothing in this Agreement or any other Credit Document, expressed or implied, is
intended to or shall be so construed as to impose upon the Agent any obligations
in respect of this Agreement or any other Credit Document except as expressly
set forth herein.
10.03 LACK OF RELIANCE ON THE AGENT. Independently and without
reliance upon the Agent, each Bank and the holder of each Note, to the extent it
deems appropriate, has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of the Borrower in
connection with the making and the continuance of the Loans and the taking or
not taking of any action in connection herewith and (ii) its own appraisal of
the creditworthiness of the Borrower and, except as expressly provided in this
Agreement, the Agent shall have no duty or responsibility, either initially or
on a continuing basis, to provide any Bank or the holder of any Note with any
credit or other information with respect thereto, whether coming into its
possession before the making of the Loans or at any time or times thereafter.
The Agent shall not be responsible to any Bank or the holder of any Note for any
recitals, statements,
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information, representations or warranties herein or in any document,
certificate or other writing delivered in connection herewith or for the
execution, effectiveness, genuineness, validity, enforceability, perfection,
collectibility, priority or sufficiency of this Agreement or any other Credit
Document or the financial condition of the Borrower or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any other Credit Document, or the
financial condition of the Borrower or the existence or possible existence of
any Default or Event of Default.
10.04 CERTAIN RIGHTS OF THE AGENT. If the Agent shall request
instructions from the Required Banks with respect to any act or action
(including failure to act) in connection with this Agreement or any other Credit
Document, the Agent shall be entitled to refrain from such act or taking such
action unless and until the Agent shall have received instructions from the
Required Banks; and the Agent shall not incur liability to any Person by reason
of so refraining. Without limiting the foregoing, no Bank or the holder of any
Note shall have any right of action whatsoever against the Agent as a result of
the Agent acting or refraining from acting hereunder or under any other Credit
Document in accordance with the instructions of the Required Banks unless the
agreement of all Banks is required by the terms of this Agreement.
10.05 RELIANCE. The Agent shall be entitled to rely, and shall
be fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other document or telephone message signed, sent or made by
any Person that the Agent believed to be the proper Person, and, with respect to
all legal matters pertaining to this Agreement and any other Credit Document and
its duties hereunder and thereunder, upon advice of counsel selected by it.
10.06 INDEMNIFICATION. To the extent the Agent is not
reimbursed and indemnified by the Borrower, the Banks will reimburse and
indemnify the Agent, in proportion to their respective proportionate shares of
the aggregate amount of the Revolving Loan Commitments as of the date of
determination, for and against any and all liabilities, obligations, losses,
damages, penalties, claims, actions, judgments, suits, costs, expenses or
disbursements of whatsoever kind or nature which may be imposed on, asserted
against or incurred by the Agent in performing its duties hereunder or under any
other Credit Document, or in any way relating to or arising out of this
Agreement or any other Credit Document; provided that no Bank shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgment, suits, costs, expenses or disbursements resulting from the
Agent's gross negligence or willful misconduct.
10.07 THE AGENT IN ITS INDIVIDUAL CAPACITY. With respect to
its obligation to maintain and make Loans under this Agreement, the Agent shall
have the rights and powers specified herein for a "Bank" and may exercise the
same rights and powers as though it were not performing the duties specified
herein; and the term "BANKS," "REQUIRED BANKS," "HOLDERS OF NOTES" or any
similar terms shall, unless the context clearly otherwise indicates, include the
Agent in its individual capacity. The Agent may accept deposits from, lend money
to, and generally engage in any kind of banking, trust or other business with
the Borrower or any Affiliate of the Borrower as if it were not performing the
duties specified herein, and may accept fees and other consideration from the
Borrower for services in connection with this Agreement and otherwise without
having to account for the same to the Banks.
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10.08 HOLDERS. The Agent may deem and treat the payee of any
Note as the owner thereof for all purposes hereof unless and until a written
notice of the assignment, transfer or endorsement thereof, as the case may be,
shall have been filed with the Agent. Any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee, assignee or indorsee, as the case may be, of such
Note or of any Note or Notes issued in exchange therefor.
10.09 RESIGNATION BY THE AGENT AND THE SWING LINE BANK.
(A) The Agent may resign from the performance of all its
functions and duties hereunder and/or under the other Credit Documents at any
time by giving 15 Business Days prior written notice to the Borrower and the
Required Banks. Such resignation shall take effect upon the appointment of a
successor the Agent pursuant to clauses (b) and (c) below or as otherwise
provided below.
(B) Upon any such notice of resignation, the Banks shall
appoint a successor to the Agent hereunder or thereunder who shall be a
commercial bank or trust company reasonably acceptable to the Borrower.
(C) If no successor to the Agent has been appointed pursuant
to clause (b) above by the 20th Business Day after the date such notice of
resignation was given by the Agent, the Agent's resignation shall become
effective and the Banks shall thereafter perform all the duties of the Agent
hereunder and/or under any other Credit Document until such time, if any, as the
Banks appoint a successor to the Agent as provided above.
(D) Any resignation of the Agent pursuant to Section 10.09(a)
shall also constitute the resignation of Bankers Trust Company or its successor
as Issuing Bank and as Swing Line Bank, and any successor Agent appointed
pursuant to Section 10.09(b) shall, upon its acceptance of such appointment,
become the successor Issuing Bank and Swing Line Bank for all purposes
hereunder. In such event (i) the Borrower shall prepay any outstanding Swing
Line Loans made by the retiring or removed Agent in its capacity as the Swing
Line Bank, (ii) upon such prepayment, the retiring or removed Agent and the
Swing Line Bank shall surrender the Swing Line Note held by it to the Borrower
for cancellation, and (iii) the Borrower shall issue a new Swing Line Note to
the successor Agent and the Swing Line Bank substantially in the form of EXHIBIT
F-2 annexed hereto, in the principal amount of the Swing Line Loan Commitment
then in effect and with other appropriate insertions.
10.10 RELEASE OF COLLATERAL.
(A) Without further written consent or authorization from
Banks, Agent may execute any documents or instruments necessary to release any
Lien encumbering any item of Collateral that is the subject of a sale or other
disposition of assets permitted by this Agreement or otherwise consented to in
accordance with Section 11.13A.
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(B) Anything contained in this Agreement or any of the other
Loan Documents to the contrary notwithstanding, in the event the Borrower
consummates a Qualified High-Yield Offering and applies the proceeds thereof as
provided in Section 4.02(c)(i), (i) the Agent shall, without further written
consent or authorization from the Banks, execute any documents or instruments
necessary to release all Liens encumbering all items of Collateral other than
the Collateral under the Borrower Pledge Agreement, the Subsidiary Pledge
Agreement, the Borrower Partnership Security Agreement and the Subsidiary
Partnership Security Agreement, and (ii) the Borrower Security Agreement, the
Subsidiary Security Agreement, the Collection Bank Agreements, the Concentration
Bank Agreement, the Trademark Security Agreement and the Subsidiary Trademark
Security Agreement shall be terminated.
SECTION 11. MISCELLANEOUS.
11.01 PAYMENT OF EXPENSES, ETC. The Borrower shall: (i)
whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses (x) of the Agent (including, without
limitation, the reasonable fees and disbursements of O'Melveny & Myers, special
counsel to the Agent) in connection with the preparation, execution, delivery
and syndication of this Agreement and the other Credit Documents and the
Existing Credit Agreement and the documents and instruments referred to herein
and therein and any amendment, waiver or consent relating hereto or thereto and
(y) of the Agent and each of the Banks in connection with the enforcement of
this Agreement and the other Credit Documents and the documents and instruments
referred to herein and therein (including, without limitation, the reasonable
fees and disbursements of O'Melveny & Myers, special counsel to the Agent, and
for each of the Banks whose counsel determines in good faith that joint
representation of such Bank along with the other Banks would or reasonably could
be expected to result in a conflict of interest under applicable laws or ethical
principles) and (z) of any consultants or accountants chosen by the Required
Banks, to investigate, test or review such matters relating to the Borrower and
its Subsidiaries as the Agent shall designate; provided that the fees of such
consultants or accountants shall be subject to the prior approval of the
Borrower, which approval shall not be unreasonably withheld; (ii) pay and hold
each of the Banks harmless from and against any and all present and future stamp
and other similar taxes with respect to the foregoing matters and save each of
the Banks harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent attributable to
such Bank) to pay such taxes; and (iii) indemnify the Agent and each Bank, its
officers, directors, employees, representatives and agents from and hold each of
them harmless against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, suits, costs, expenses and disbursements
incurred by any of them as a result of, or arising out of, or in any way related
to, or by reason of, any investigation, litigation or other proceeding (whether
or not the Agent or any Bank is a party thereto) related to the entering into
and/or performance of this Agreement or any other Credit Document or the use of
the proceeds of any Loans or Letters of Credit hereunder or the consummation of
any transactions contemplated herein or in any other Credit Document, including,
without limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other proceeding (but
excluding any such liabilities, obligations, losses, etc., to the extent
incurred by reason of the gross negligence or willful misconduct of the Person
to be indemnified).
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11.02 RIGHT OF SETOFF. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence of an Event of Default, each
Bank is hereby authorized at any time or from time to time, without presentment,
demand, protest or other notice of any kind to the Borrower or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and apply any and all deposits (general or special) and any other
Indebtedness at any time held or owing by such Bank (including without
limitation, by branches and agencies of such Bank wherever located) to or for
the credit or the account of the Borrower against and on account of the
Obligations and liabilities of the Borrower to such Bank under this Agreement or
under any of the other Credit Documents, including, without limitation, all
interests in Obligations purchased by such Bank pursuant to Section 11.05(b),
and all other claims of any nature or description arising out of or connected
with this Agreement or any other Credit Document, irrespective of whether or not
such Bank shall have made any demand hereunder and although said Obligations,
liabilities or claims, or any of them, shall be contingent or unmatured.
11.03 NOTICES. Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to the Borrower, at
its address specified opposite its signature below; if to any Bank, at its
office specified opposite its signature below; and if to the Agent, at its
Notice Office; or, as to the Borrower or the Agent, at such other address as
shall be designated by such party in a written notice to the other parties
hereto and, as to each other party, at such other address as shall be designated
by such party in a written notice to the Borrower and the Agent. In addition, a
copy of all notices sent to the Borrower or the Agent in accordance with
Sections 7.01(g) or 9 shall also be sent to Harwell Howard Hyne Gabbert &
Manner, P.C., 1800 First American Center, 315 Deaderick Street, Nashville,
Tennessee 37238, Attn: Mark Manner, Esq., and to O'Melveny & Myers, Citicorp
Center, 153 East 53rd Street, New York, New York 10022 Attn: Jonathan Williams,
Esq. All such notices and communications shall, when mailed, telegraphed,
telexed, telecopied, or cabled or sent by overnight courier, be effective when
deposited in the mails, delivered to the telegraph company, cable company or
overnight courier, as the case may be, or sent by telex or telecopier, except
that notices and communications to the Agent shall not be effective until
received by the Agent.
11.04 BENEFIT OF AGREEMENT. This Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided, however, that the Borrower may not
assign or transfer any of its rights or obligations hereunder without the prior
written consent of each Bank.
11.05 ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND LETTERS OF
CREDIT.
(A) GENERAL. Each Bank shall have the right at any time to (i)
sell, assign, transfer or negotiate to any Eligible Assignee, or (ii) sell
participations to any Eligible Assignee in, all or any part of any Loan or Loans
made by it or its Commitments or its Letters of Credit or participations therein
or any other interest herein or in any other Obligations owed to it; provided
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that no such sale, assignment, transfer or participation shall, without the
consent of the Borrower, require the Borrower to file a registration statement
with the SEC, apply to qualify such assignment or participation of the Loans,
Letters of Credit or participations therein or the other Obligations under the
securities laws of any state or otherwise become subject to any federal or state
securities laws requirements with respect thereto; provided, further that no
such sale, assignment or transfer described in clause (i) above shall be
effective unless and until an Assignment and Acceptance effecting such sale,
assignment or transfer shall have been accepted by the Agent and recorded in the
Agent's records as provided in Section 11.05(b)(ii); provided, further that no
such sale, assignment, transfer or participation of any Letter of Credit or any
participation therein may be made separately from a sale, assignment, transfer
or participation of a corresponding interest in the Revolving Loans of the Bank
effecting such sale, assignment, transfer or participation; and provided,
further that, anything contained herein to the contrary notwithstanding, the
Swing Line Loan Commitment and the Swing Line Loans of the Swing Line Bank may
not be sold, assigned or transferred as described in clause (i) above to any
Person other than a successor Agent and the Swing Line Bank to the extent
contemplated by Section 10.09(d). Except as otherwise provided in this Section
11.05, no Bank or the Issuing Bank shall, as between the Borrower and such Bank
or the Issuing Bank, be relieved of any of its obligations hereunder as a result
of any sale, assignment, transfer or negotiation of, or any granting of
participations in, all or any part of the Loans, the Commitments, Letters of
Credit or participations therein or the other Obligations owed to such Bank or
the Issuing Bank.
(B) ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Each Loan, Loan
Commitment, Letter of Credit or participation therein or other
Obligation may (A) be assigned in any amount (of a constant and not a
varying percentage) to another Bank, or to an Affiliate of the
assigning Bank or another Bank, with the giving of notice to the
Borrower and the Agent or (B) be assigned in an amount of not less than
$5,000,000 (or such lesser amount as shall constitute the aggregate
amount of the Loans, Commitments, Letters of Credit or participations
therein and other Obligations of the assigning Bank), to any other
Eligible Assignee with the giving of notice to the Borrower and the
Agent and with the consent of the Borrower and the Agent, in the case
of an assignment made by a Bank other than the Agent, or with the
consent of the Borrower, in the case of an assignment made by the Agent
(which consent of the Borrower and the Agent shall not be unreasonably
withheld or delayed). To the extent of any such assignment in
accordance with this Section 11.05, the assigning Bank shall be
relieved of its obligations with respect to its Loans, Commitments,
Letters of Credit or participations therein. The parties to each such
assignment shall execute and deliver to the Agent, for its acceptance
and recording in its records, an Assignment and Acceptance, together
with, with respect to assignments that occur following the Effective
Date, a processing and recordation fee of $3,500, and such
certificates, documents or other evidence, if any, with respect to
United States federal income tax withholding matters as the assignee
under such Assignment and Acceptance may be required to deliver to the
Agent pursuant to Section 2.09(g)(iii). Upon such execution, delivery
and acceptance, from and after the effective date specified in such
Assignment and Acceptance, (y) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such
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Assignment and Acceptance, shall have the rights and obligations of a
Bank hereunder and (z) the assigning Bank thereunder shall, to the
extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and
be released from its obligations under this Agreement (and, in the case
of an Assignment and Acceptance covering all or the remaining portion
of an assigning Bank's rights and obligations under this Agreement,
such Bank shall cease to be a party hereto). The Commitments hereunder
shall be modified to reflect the Commitment of such assignee and any
remaining Commitment of such assigning Bank and new Notes shall, upon
surrender of the assigning Bank's Note, be issued to the assignee and
to the assigning Bank, substantially in the form of EXHIBIT F-1 annexed
hereto with appropriate insertions, to reflect the new Commitments
and/or outstanding Term Loans, as the case may be, of the assignee and
the assigning Bank.
(ii) Acceptance by the Agent; Recordation in Records. Upon its
receipt of an Assignment and Acceptance executed by an assigning Bank
and an assignee representing that it is an Eligible Assignee, together
with the processing and recordation fee referred to in Section
11.05(b)(i) and any certificates, documents or other evidence with
respect to United States federal income tax withholding matters that
such assignee may be required to deliver to the Agent pursuant to
Section 2.09(g)(iii), the Agent shall, if such Assignment and
Acceptance has been completed and is in the form of EXHIBIT P hereto
and if the Agent and the Borrower have consented to the assignment
evidenced thereby (in each case to the extent such consent is required
pursuant to Section 11.05(b)(i)), (a) accept such Assignment and
Acceptance by executing a counterpart thereof as provided therein
(which acceptance shall not be unreasonably withheld or delayed and
shall evidence any required consent of the Agent to such assignment),
(b) record the information contained therein in its records, and (c)
give prompt notice thereof to the Borrower. The Agent shall maintain a
copy of each Assignment and Acceptance delivered to and accepted by it
as provided in this Section 11.05(b)(ii).
(C) PARTICIPATIONS. The holder of any participation, other
than an Affiliate of the Bank granting such participation, shall not be entitled
to require such Bank to take or omit to take any action hereunder except action
directly affecting (i) the extension of the scheduled final maturity of any Loan
allocated to such participation, (ii) a reduction of the principal amount of or
the rate of interest payable on any Loan or payments due in repayment of draws
under Letters of Credit allocated to such participation, and all amounts payable
by the Borrower hereunder shall be determined as if such Bank had not sold such
participation, (iii) the release of the Liens held by Agent on behalf of the
Banks with respect to all or substantially all of the Collateral, or (iv) a
reduction of the amount of any fees payable hereunder to the extent subject to
such participation. The Borrower hereby acknowledges and agrees that, only for
purposes of Sections 2.07, 2.09, 11.02 and 11.07(b), any participation will give
rise to a direct obligation of the Borrower to the participant and the
participant shall be considered to be a "Bank"; provided that no participant
shall be entitled to receive any greater amount pursuant to Section 2.07 or 2.09
than the transferor Bank would have been entitled to receive in respect of the
amount of the participation effected by such transferor Bank to such participant
had no such participation occurred.
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(D) ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the
assignments and participations permitted under the foregoing provisions of this
Section 11.05, any Bank may assign and pledge all or any portion of its Loans,
the other Obligations owed to such Bank, and its Notes to any Federal Reserve
Bank as collateral security pursuant to Regulation A of the Board of Governors
of the Federal Reserve System and any operating circular issued by such Federal
Reserve Bank; provided that (i) no Bank shall, as between the Borrower and such
Bank, be relieved of any of its obligations hereunder as a result of any such
assignment and pledge and (ii) in no event shall such Federal Reserve Bank be
considered to be a "Bank" or be entitled to require the assigning Bank to take
or omit to take any action hereunder.
(E) INFORMATION. Each Bank and the Issuing Bank may furnish
any information concerning the Borrower and its Subsidiaries in the possession
of that Bank or the Issuing Bank from time to time to assignees and participants
(including prospective assignees and participants).
11.06 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on
the part of the Agent or any Bank or the holder of any Note in exercising any
right, power or privilege hereunder or under any other Credit Document and no
course of dealing between the Borrower and the Agent or any Bank or the holder
of any Note shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights, powers and
remedies herein or in any other Credit Document expressly provided are
cumulative and not exclusive of any rights, powers or remedies which the Agent
or any Bank or the holder of any Note would otherwise have. No notice to or
demand on the Borrower in any case shall entitle the Borrower to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Agent or any Bank or the holder of any Note to any
other or further action in any circumstances without notice or demand.
11.07 PAYMENTS PRO RATA.
(A) The Agent agrees that promptly after its receipt of each
payment from or on behalf of the Borrower in respect of any Obligations of the
Borrower hereunder, it shall distribute by the next Business Day such payment to
the Banks pro rata based upon their respective shares, if any, of the
Obligations with respect to which such payment was received.
(B) Each of the Banks agrees that (except as otherwise
specifically provided with respect to Swing Line Loans), if it should receive
any amount hereunder (whether by voluntary payment, by realization upon
security, by the exercise of the right of setoff or banker's lien, by
counterclaim or cross action, by the enforcement of any right under the Credit
Documents, or otherwise), that is applicable to the payment of the principal of,
or interest on, the Loans, or under any Letter of Credit of a sum which with
respect to the related sum or sums received by other the Banks is in a greater
proportion than the total amount of such Obligation then owed and due to such
Bank bears to the total amount of such Obligation then owed and due to all of
the Banks immediately prior to such receipt, then such Bank receiving such
excess payment shall purchase for cash without recourse or warranty from the
other the Banks an interest in the Obligations of the Borrower to such the Banks
in such amount as shall result in a
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proportional participation by all the Banks in such amount; provided, however,
that if all or any portion of such excess amount is thereafter recovered from
such Bank, such purchase shall be rescinded and the purchase price restored to
the extent of such recovery, but without interest.
11.08 CALCULATIONS; COMPUTATIONS. The financial statements to
be furnished to the Banks pursuant hereto shall be made and prepared in
accordance with generally accepted accounting principles in the United States
consistently applied throughout the periods involved (except as set forth in the
notes thereto or as otherwise disclosed in writing by the Borrower to the
Banks); provided that, except as otherwise specifically provided herein, all
computations determining compliance with Section 8 shall utilize accounting
principles and policies in conformity with those used to prepare the historical
financial statements delivered to the Existing Banks pursuant to Section 7.01 of
the Existing Credit Agreement.
11.09 GOVERNING LAW; WAIVER OF JURY TRIAL; SERVICE OF PROCESS.
THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE INTERNAL LAW OF THE STATE OF NEW YORK. THE AGENT, THE BANKS
AND THE BORROWER HEREBY IRREVOCABLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY OTHER CREDIT DOCUMENT. The Borrower hereby agrees that service of all
process in any such proceeding in any such court may be made by registered or
certified mail, return receipt requested, to the Borrower at its address
provided on the signature pages hereto, such service being hereby acknowledged
by the Borrower to be sufficient for personal jurisdiction in any action against
the Borrower in any such court and to be otherwise effective and binding service
in every respect. Nothing herein shall affect the right to serve process in any
other manner permitted by law or shall limit the right of the Agent or any Bank
to bring proceedings against the Borrower in the courts of any other
jurisdiction.
11.10 CONFIDENTIALITY. Each Bank shall hold all non-public
information obtained pursuant to the requirements of this Agreement which has
been identified as confidential by the Borrower in accordance with such Bank's
customary procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices, it being understood and agreed
by the Borrower that in any event a Bank may make disclosures to Affiliates of
such Bank or disclosures reasonably required by any bona fide assignee,
transferee or participant in connection with the contemplated assignment or
transfer by such Bank of any Loans or any participations therein or disclosures
required or requested by any governmental agency or representative thereof or
pursuant to legal process; provided that, unless specifically prohibited by
applicable law or court order, each Bank shall notify the Borrower of any
request by any governmental agency or representative thereof (other than any
such request in connection with any examination of the financial condition of
such Bank by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information; and provided, further that
in no event shall any Bank be obligated or required to return any materials
furnished by the Borrower or any of its Subsidiaries.
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11.11 COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts by facsimile or otherwise, each of which when so executed and
delivered shall be an original, but all of which shall together constitute one
and the same instrument. A set of counterparts executed by all the parties
hereto shall be lodged with the Borrower and the Agent.
11.12 HEADINGS DESCRIPTIVE. The headings of the several
sections and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.
11.13 AMENDMENT OR WAIVER.
A. No approval, consent, amendment or waiver of this Agreement
or any of the Credit Documents shall be effective unless it is in writing signed
by the Agent and the Required Banks; provided, however, that any such approval,
consent, amendment or waiver that (a) reduces the amount of any interest,
principal, fees or other amounts owing to any Bank hereunder, including, without
limitation, amounts payable under Section 4 (but excluding any waiver of any
increase in the interest rate applicable to the Loans pursuant to Section
2.06(e)); (b) releases any Person (except pursuant to any Divestitures and as
set forth in Section 8.02(iii), (iv) and (vii)) from all or any portion of its
liabilities under the Subsidiary Guaranty; (c) amends any provisions of this
Section 11.13; (d) reduces the percentage specified in the definition of the
term "REQUIRED BANKS" or changes the definition of "PRO RATA SHARE" (it being
understood that, with the consent of Required Banks, additional extensions of
credit pursuant to this Agreement may be made on substantially the same basis as
the extensions of the Commitments); (e) postpones the scheduled final maturity
date (but not the date of any scheduled installment of principal) of any of the
Loans or the date on which any interest or any fees are payable under this
Agreement or any of the Credit Documents; (f) releases all or substantially all
of the Collateral (except as set forth in Sections 8.02(i), (ii) or (iii) or
8.14, or if the sale or disposition of such Collateral is permitted under any of
the Credit Documents), or (g) by the terms of any provision of this Agreement
requires the approval of all the Banks shall be effective only if it is in
writing signed by all the Banks directly affected; provided, further, that no
such approval, consent, amendment or waiver shall increase the Commitments of
any Bank over the amount thereof then in effect without the consent of such Bank
(it being understood that approvals, consents, amendments or waivers of
conditions precedent, covenants, defaults or events of default or of a mandatory
prepayment or reduction in the aggregate Commitments shall not constitute an
increase of the Commitment of any Bank); provided further that no amendment,
modification or waiver of any provision of this Agreement relating to Swing Line
Loans or the Swing Line Commitment shall be effective without the written
concurrence of the Swing Line Bank; and provided, further, that no amendment,
modification or waiver of any provision of Section 10 or of any other provision
of this Agreement expressly requiring the approval or concurrence of the Agent
shall be effective without the written concurrence of the Agent.
B. If in connection with any proposed approval, consent,
amendment or waiver with respect to any of the provisions of this Agreement as
contemplated by clauses (a) through (g) of the first proviso of Section 11.13A,
the consent of the Required Banks is obtained but the consent of one or more of
the other Banks whose consent is also required is not obtained, then the
Borrower shall have the right, so long as all non-consenting Banks whose
individual
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consent is required are treated as described in either clause (i) or (ii) below,
to either (i) replace each such non-consenting Bank or Banks with one or more
Replacement Banks (as defined in Section 11.13C) pursuant to Section 11.13C so
long as at the time of such replacement, each such Replacement Bank consents to
the proposed approval, consent, amendment or waiver, or (ii) terminate such
non-consenting Bank's Commitment and repay each outstanding Loan of such Bank,
in accordance with Section 4.02(a); provided that unless the Commitments that
are terminated, and the Loans that are repaid pursuant to the preceding clause
(ii) are immediately replaced in full at such time through the addition of new
Banks or the increase of the Commitments and/or outstanding Loans of existing
Banks (who in each case must specifically consent thereto), then in the case of
any action pursuant to the preceding clause (ii) the Required Banks (determined
before giving effect to the proposed action) shall specifically consent thereto;
provided, further, that in any event the Borrower shall not have the right to
replace a Bank, terminate its Commitment or repay its Loans solely as a result
of the exercise of such Bank's right (and the withholding of any required
consent by such Bank) pursuant to the second proviso to Section 11.13A.
C. In the event of certain refusals by a Bank as provided in
Section 11.13B to consent to certain proposed approvals, amendments, consents or
waivers with respect to this Agreement which have been approved by the Required
Banks, the Borrower may, upon five Business Days' written notice to the Agent
(which notice the Agent shall promptly transmit to each of the Banks) repay all
Loans, together with accrued and unpaid interest, fees and other amounts owing
to such Bank (a "Replaced Bank") in accordance with, and subject to the
requirements of, said subsection 11.13B so long as (i) in the case of the
repayment of Revolving Loans of any Bank pursuant to this Section 11.13C the
Revolving Loan Commitment of such Bank is terminated concurrently with such
repayment (at which time Schedule 1.01(a) shall be deemed modified to reflect
the changed Revolving Loan Commitments) and (ii) in the case of the repayment of
Loans of any Bank the consents required by Section 11.13B in connection with the
repayment pursuant to this Section 11.13C have been obtained.
(a) At the time of any replacement pursuant to this subsection
11.13C, the lender replacing such Replaced Bank (the "Replacement
Bank") shall enter into one or more assignment agreements, in form and
substance satisfactory to the Agent, pursuant to which the Replacement
Bank shall acquire all of the Commitments and outstanding Loans of, and
participations in Swing Line Loans and Letters of Credit by, the
Replaced Bank and, in connection therewith, shall pay to (x) the
Replaced Bank in respect thereof an amount equal to the sum of (A) an
amount equal to the principal of, and all accrued interest on, all
outstanding Loans of the Replaced Bank, (B) an amount equal to all
unpaid drawings with respect to Letters of Credit that have been funded
by (and not reimbursed to) such Replaced Bank, together with all then
unpaid interest with respect thereto at such time, and (C) an amount
equal to all accrued, but theretofore unpaid, fees owing to the
Replaced Bank and (y) the appropriate Issuing Bank an amount equal to
such Replaced Bank's Pro Rata Share of any unpaid drawings with respect
to Letters of Credit (which at such time remains an unpaid drawing), to
the extent such amount was not theretofore funded by such Replaced
Bank; and
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(b) all obligations of the Borrower owing to the Replaced Bank
(excluding those specifically described in clause (a) above in respect
of which the assignment purchase price has been, or is concurrently
being, paid) shall be paid in full to such Replaced Bank concurrently
with such replacement.
Upon the execution of the respective assignment documentation,
the payment of amounts referred to in clauses (a) and (b) above and, if so
requested by the Replacement Bank, delivery to the Replacement Bank of the
appropriate Note or Notes executed by the Borrower, the Replacement Bank shall
become a Bank hereunder and the Replaced Bank shall cease to constitute a Bank
hereunder, except with respect to the Borrower's obligations regarding the
indemnification provisions under this Agreement, which shall survive for the
benefit of such Replaced Bank. Notwithstanding anything to the contrary
contained above, no Issuing Bank may be replaced hereunder at any time while it
has Letters of Credit outstanding hereunder unless arrangements satisfactory to
such Issuing Bank (including the furnishing of a standby letter of credit in
form and substance, and issued by an issuer satisfactory to such Issuing Bank or
the furnishing of cash collateral in amounts and pursuant to arrangements
satisfactory to such Issuing Bank) have been made with respect to such
outstanding Letters of Credit.
11.14 SURVIVAL. All indemnities set forth herein including,
without limitation, in Sections 2.07, 10.06 and 11.01 shall survive the
execution and delivery of this Agreement and the Notes and the making and
repayment of the Loans and the Letters of Credit.
11.15 DOMICILE OF LOANS. Each Bank may transfer and carry its
Loans at, to or for the account of any office, Subsidiary or Affiliate of such
Bank.
11.16 INTEGRATION. This Agreement, together with the exhibits
to this Agreement and the other documents described herein, is intended by the
parties hereto as a complete statement of the terms and conditions of their
agreement.
11.17 SECURED OBLIGATIONS. The Borrower hereby agrees and
confirms that on and after the Effective Date each Credit Document to which the
Borrower is a party, including, as applicable, the Borrower Security Agreement,
the Borrower Pledge Agreement and the Trademark Security Agreement, and all
collateral encumbered thereby shall continue to secure to the fullest extent
possible the payment and performance of all "Secured Obligations" (as defined in
each applicable Credit Document), including without limitation the payment and
performance of all such "Secured Obligations" in respect of the Obligations of
the Borrower now or hereafter existing under or in respect of this Agreement and
the Notes. Without limiting the generality of the foregoing, the Borrower hereby
acknowledges and confirms its understanding and intent that, upon the Effective
Date and as a result thereof, the definition of "Obligations" contained in this
Agreement includes the obligations of the Borrower under the Notes.
The Borrower acknowledges and agrees that any of the Credit
Documents to which it is a party or otherwise bound shall continue in full force
and effect and that all of its respective obligations thereunder shall be valid
and enforceable and shall not be impaired, limited or otherwise affected by the
execution, delivery or effectiveness of this Agreement or any future amendment
or modification of this Agreement. The Borrower represents and warrants that all
representations and warranties contained in each Credit Document to which it is
a party,
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including the Borrower Security Agreement, the Borrower Pledge Agreement and the
Trademark Security Agreement, are true, correct and complete in all material
respects on and as of the Effective Date to the same extent as though made on
and as of that date, except to the extent any such representation or warranty
specifically relates to an earlier date, in which case such representation or
warranty shall have been true, correct and complete in all material respects on
and as of such earlier date.
The Borrower hereby acknowledges and agrees that on and after
the Effective Date, each reference in the Credit Documents to the "Credit
Agreement", "thereunder", "thereof" and words of like import referring to the
Existing Credit Agreement shall mean and be a reference to this Agreement.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
AMERICAN HOMEPATIENT, INC.,
a Delaware corporation
By: /s/ MARY ELLEN RODGERS
------------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
Notice Address: American HomePatient, Inc.
Maryland Farms Office Park
5200 Maryland Way, Suite 400
Brentwood, Tennessee 37027-5018
Attn: Mary Ellen Rodgers
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BANKERS TRUST COMPANY,
Individually and as the Agent
By: /s/ MARY JO JOLLY
------------------------------------
Name: Mary Jo Jolly
Title: Assistant Vice President
Notice Address: BT Alex. Brown Incorporated
One Bankers Trust Plaza, 14th Floor
New York, New York 10006
Attn: Jocelyn Rock
Tel: 212/775-2272
Fax: 212/250-1343
With a copy to: BT Alex. Brown Incorporated
300 S. Grand Ave., 41st Floor
Los Angeles, California 90071
Attn: Kate W. Cook
Tel: 213/775-2272
Fax: 213/250-1343
Lending Office: BT Alex. Brown Incorporated
One Bankers Trust Plaza, 14th Floor
New York, New York 10006
Attn: _______________________
Tel: 212/775-2272
Fax: 212/250-1343
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<PAGE> 109
ABN AMRO BANK, N.V.
By: /s/
------------------------------------
Name:
Title:
By: /s/
------------------------------------
Name:
Title:
Notice Address
and Lending Office: ABN AMRO BANK, N.V.
One Ravinia Drive, Suite 1200
Atlanta, GA 30346
Attn: Judy Chiang
Tel: 312/904-2549
Fax: 312/904-4456
with a copy to:
ABN AMRO N.V., Inc.
One Ravinia Drive, Suite 1200
Atlanta, GA 30346
Attn: Tom Thornhill
Tel: 770/399-7373
Fax: 770/399-7397
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AMSOUTH BANK OF ALABAMA
By: /s/ CATHY WIND
------------------------------------
Name: Cathy Wind
Title: Vice President
Notice Address
and Lending Office: AmSouth Bank of Alabama
333 Union Street, Suite 200
Nashville, TN 37201
Attn: Cathy Wind
Tel: 615/291-5268
Fax: 615/291-5257
S-4
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BANK OF AMERICA
By: /s/
------------------------------------
Name:
Title:
Notice Address
and Lending Office: Bank of America, NT & SA
555 S. Flower Street
11th Floor, Unit 9173
Los Angeles, CA 90071
Attn: Geoff Wilson
Tel: 213/228-2953
Fax:
S-5
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BANK OF MONTREAL
By: /s/ PETER STEELMAN
------------------------------------
Name: Peter Steelman
Title: Director
Notice Address
and Lending Office: Bank of Montreal
115 S. LaSalle, 13 West
Chicago, Illinois 60603
Attn: Peter Steelman
Tel: 312/750-3812
Fax: 312/750-3783
S-6
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CORESTATES BANK, N.A.
By: /s/ ELIZABETH D. MORRIS
------------------------------------
Name: Elizabeth D. Morris
Title:
Notice Address
and Lending Office: CoreStates Bank, N.A.
1339 Chestnut Street
FC 1-8-3-22
Philadelphia, PA 19101
Attn: Elizabeth D. Morris
Tel: 215/786-7275
Fax: 215/973-2738
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<PAGE> 114
FIRST AMERICAN NATIONAL BANK
By: /s/ SANDY HAMRICK
------------------------------------
Name: Sandy Hamrick
Title: Vice-President
Notice Address
and Lending Office: First American National Bank
315 Deadrick Street, 2nd Floor
Nashville, Tennessee 37237-0203
Attn: Sandy Hamrick
Tel: 615/748-2191
Fax: 615/748-8480
S-8
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THE FIRST NATIONAL BANK OF CHICAGO
By: /s/
------------------------------------
Name:
Title:
Notice Address
and Lending Office: The First National Bank of Chicago
One First National Plaza
Mart Suite: 0091
Chicago, IL 60670
Attn: Vincent Kelly
Tel: 312/732-6649
Fax: 312/732-2016
S-9
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THE FUJI BANK, LIMITED
By: /s/
------------------------------------
Name:
Title:
Notice Address
and Lending Office: Fuji Bank
Marquis One Tower
245 Peachtree Center, NE
Suite 2100
Atlanta, GA 30303
Attn: Clarence Mahovhich
Tel: 404/653-2100
Fax: 404/653-2119
S-10
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NATIONSBANK, N.A.
By: /s/ ASHLEY M. CRABTREE
------------------------------------
Name: Ashley M. Crabtree
Title: Senior Vice President
Notice Address: NationsBank of Tennessee, N.A.
One NationsBank Plaza, 5th Floor
Nashville, Tennessee 37239
Attn: Ashley M. Crabtree
Tel: 615/749-3524
Fax: 615/749-4640
Lending Office: NationsBank of Tennessee, N.A.
101 N. Tryon Street
Charlotte, North Carolina 28255
Attn: Corporate Credit Services
[Name]
Tel: ____________
Fax: ____________
S-11
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PNC BANK, KENTUCKY, INC.
By: /s/ KATHRYN M. BOHR
------------------------------------
Name: Kathryn M. Bohr
Title: Vice President
Notice Address
and Lending Office: PNC Bank, Kentucky, Inc.
500 West Jefferson
Louisville, Kentucky 40202
Attn: Katherine M. Bohr
Healthcare Corporate Group
Tel: 502/581-2995
Fax: 502/581-2302
S-12
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COOPERATIEVE CENTRALE RAIFFESEN -
BOERENLEENBANK, B.A., "RABOBANK NEDERLAND",
NEW YORK BRANCH
By: /s/
------------------------------------
Name:
Title:
By:
Name:
Title:
Notice Address
and Lending Office: Rabobank Nederland
245 Park Avenue
New York, New York 10167
Attn: Corporate Services Department
Dave Reisman
Tel: 212/916-7863
Fax: 212/916-7880
with a copy to:
Rabobank Nederland
One Atlantic Center
1201 West Peachtree, Suite 3450
Atlanta, GA 30309-3450
Attn: Terrell Boyle
Tel: 404/877-9106
Fax: 404/877-9150
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THE SAKURA BANK, LIMITED
By: /s/ TAMIHIRO KAWAUCHI
------------------------------------
Name: Tamihiro Kawauchi
Title: Senior Vice President
Notice Address
and Lending Office: Sakura Bank
277 Park Avenue
New York, New York 10172
Attn: Phil Schubert
Tel: 212/756-6945
Fax: 212/888-7651
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SUNTRUST BANK, NASHVILLE, N.A.
By: /s/ MARK MATTSON
------------------------------------
Name: Mark Mattson
Title: Vice President
Notice Address
and Lending Office: SunTrust Bank
201 Fourth Avenue North
Metro Bank Department
MC 411
Nashville, Tennessee 37219
Attn: Mark Mattson
Tel: 615/748-4831
Fax: 615/748-5161
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UNION BANK OF CALIFORNIA, N.A.
By: /s/
------------------------------------
Name:
Title:
Notice Address
and Lending Office: Union Bank of California, N.A.
445 S. Figueroa Street
16th Floor
Los Angeles, CA 90071
Attn: Lynn Vine
Tel: 213/236-6566
Fax: 213/236-7636
S-16
<PAGE> 123
UNION BANK OF SWITZERLAND
By: -----------------------------
Name:
Title:
Notice Address
and Lending Office: Union Bank of Switzerland
299 Park Avenue
New York, New York 10171
Attn: Bob Daum
Tel: 212/821-6168
Fax: 212/821-4964
S-17
<PAGE> 1
Exhibit 10.45
REVOLVING NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$28,437,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware corporation (the
"BORROWER"), being liable hereunder, promises to pay to BANKERS TRUST COMPANY
(the "PAYEE"), on or before the Termination Date, the lesser of (x) TWENTY EIGHT
MILLION FOUR HUNDRED THIRTY SEVEN THOUSAND FIVE HUNDRED DOLLARS AND NO/100
($28,437,500.00) and (y) the unpaid principal amount of all advances made by the
Payee to the Borrower as Revolving Loans under the Credit Agreement referred to
below.
The Borrower also promises to pay interest on the unpaid principal amount
hereof from the date hereof until paid in full at the rates and at the times
that shall be determined, and to make principal prepayments on this Note at the
times that shall be determined, in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among the Borrower, the financial institutions party thereto and
Bankers Trust Company, as the Agent (the "AGENT") (said Fourth Amended and
Restated Credit Agreement, as it may hereafter be amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT").
This Note is one of the Borrower's "Revolving Notes" in the aggregate
principal amount of $325,000,000 and is issued pursuant to and entitled to the
benefits of the Credit Agreement to which reference is hereby made for a more
complete statement of the terms and conditions under which the Revolving Loans
evidenced hereby were made and are to be repaid. Capitalized terms used herein
without definition shall have the meanings set forth in the Credit Agreement.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
office of the Agent located at One Bankers Trust Plaza, New York, New York, or
at such other place as shall be designated in writing for such purpose in
accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by Agent as provided in Section 11.05 (b)(ii) of the
Credit Agreement, the Borrower and the Agent shall be entitled to deem the Payee
as the owner and holder of this Note. Each of the Payee and any subsequent
holder of this Note agrees, by its acceptance hereof, that before disposing of
this Note or any part hereof it will make a notation hereon of all principal
payments previously
1
<PAGE> 2
made hereunder and of the date to which interest hereon has been paid; provided,
however, that the failure to make a notation of any payment made on this Note
shall not limit or otherwise affect the obligation of the Borrower hereunder
with respect to payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day that
is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note; provided, however, that if the day on
which any payment relating to a Eurodollar Rate Loan is due is not a Business
Day but is a day of the month after which no further Business Day occurs in such
month, then the due date thereof shall be the next preceding Business Day;
provided further that if the date of any mandatory prepayment required to be
made under the Credit Agreement is not a Business Day such payment shall be made
on the immediately preceding Business Day.
This Note is subject to mandatory prepayment as provided in Section 4.02(c)
of the Credit Agreement and prepayment at the option of the Borrower as provided
in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued but unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
The terms of this Note are subject to amendment only in the manner provided
in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as provided
in Section 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this Note
or the Credit Agreement shall alter or impair the obligation of the Borrower,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency herein
prescribed.
The Borrower promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in Section 11.01 of the Credit Agreement,
incurred in the collection and
2
<PAGE> 3
enforcement of this Note. The Borrower and endorsers of this Note hereby consent
to renewals and extensions of time at or after the maturity hereof, without
notice, and hereby waive diligence, presentment, protest, demand and notice of
every kind and, to the full extent permitted by law, the right to plead any
statute of limitations as a defense to any demand hereunder. THE BORROWER
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY JUDICIAL PROCEEDING RELATED
TO THIS NOTE.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
and delivered by its officer thereunto duly authorized as of the date and at the
place first above written.
AMERICAN HOMEPATIENT, INC.
By:
-----------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
3
<PAGE> 4
TRANSACTIONS ON REVOLVING NOTE
<TABLE>
<CAPTION>
Amount of Outstanding
Type of Amount of Principal Principal
Loan Made Loan Made Paid Balance Notation
Date This Date This Date This Date This Date Made By
---- --------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
</TABLE>
4
<PAGE> 1
Exhibit 10.46
REVOLVING NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$21,937,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware corporation (the
"BORROWER"), being liable hereunder, promises to pay to ABN AMRO BANK, N.V. (the
"PAYEE"), on or before the Termination Date, the lesser of (x) TWENTY ONE
MILLION NINE HUNDRED THIRTY SEVEN THOUSAND FIVE HUNDRED DOLLARS AND NO/100
($21,937,500.00) and (y) the unpaid principal amount of all advances made by the
Payee to the Borrower as Revolving Loans under the Credit Agreement referred to
below.
The Borrower also promises to pay interest on the unpaid principal amount
hereof from the date hereof until paid in full at the rates and at the times
that shall be determined, and to make principal prepayments on this Note at the
times that shall be determined, in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among the Borrower, the financial institutions party thereto and
Bankers Trust Company, as the Agent (the "AGENT") (said Fourth Amended and
Restated Credit Agreement, as it may hereafter be amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT").
This Note is one of the Borrower's "Revolving Notes" in the aggregate
principal amount of $325,000,000 and is issued pursuant to and entitled to the
benefits of the Credit Agreement to which reference is hereby made for a more
complete statement of the terms and conditions under which the Revolving Loans
evidenced hereby were made and are to be repaid. Capitalized terms used herein
without definition shall have the meanings set forth in the Credit Agreement.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
office of the Agent located at One Bankers Trust Plaza, New York, New York, or
at such other place as shall be designated in writing for such purpose in
accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by Agent as provided in Section 11.05 (b)(ii) of the
Credit Agreement, the Borrower and the Agent shall be entitled to deem the Payee
as the owner and
1
<PAGE> 2
holder of this Note. Each of the Payee and any subsequent holder of this Note
agrees, by its acceptance hereof, that before disposing of this Note or any part
hereof it will make a notation hereon of all principal payments previously made
hereunder and of the date to which interest hereon has been paid; provided,
however, that the failure to make a notation of any payment made on this Note
shall not limit or otherwise affect the obligation of the Borrower hereunder
with respect to payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day that
is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note; provided, however, that if the day on
which any payment relating to a Eurodollar Rate Loan is due is not a Business
Day but is a day of the month after which no further Business Day occurs in such
month, then the due date thereof shall be the next preceding Business Day;
provided further that if the date of any mandatory prepayment required to be
made under the Credit Agreement is not a Business Day such payment shall be made
on the immediately preceding Business Day.
This Note is subject to mandatory prepayment as provided in Section 4.02(c)
of the Credit Agreement and prepayment at the option of the Borrower as provided
in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued but unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
The terms of this Note are subject to amendment only in the manner provided
in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as provided
in Section 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this Note
or the Credit Agreement shall alter or impair the obligation of the Borrower,
which is absolute
2
<PAGE> 3
and unconditional, to pay the principal of and interest on this Note at the
place, at the respective times, and in the currency herein prescribed.
The Borrower promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in Section 11.01 of the Credit Agreement,
incurred in the collection and enforcement of this Note. The Borrower and
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
and delivered by its officer thereunto duly authorized as of the date and at the
place first above written.
AMERICAN HOMEPATIENT, INC.
By:
--------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
3
<PAGE> 4
TRANSACTIONS ON REVOLVING NOTE
<TABLE>
<CAPTION>
Amount of Outstanding
Type of Amount of Principal Principal
Loan Made Loan Made Paid Balance Notation
Date This Date This Date This Date This Date Made By
---- --------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
</TABLE>
4
<PAGE> 1
Exhibit 10.47
REVOLVING NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$28,437,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware corporation (the
"BORROWER"), being liable hereunder, promises to pay to AMSOUTH BANK (the
"PAYEE"), on or before the Termination Date, the lesser of (x) TWENTY EIGHT
MILLION FOUR HUNDRED THIRTY SEVEN THOUSAND FIVE HUNDRED DOLLARS AND NO/100
($28,437,500.00) and (y) the unpaid principal amount of all advances made by the
Payee to the Borrower as Revolving Loans under the Credit Agreement referred to
below.
The Borrower also promises to pay interest on the unpaid principal amount
hereof from the date hereof until paid in full at the rates and at the times
that shall be determined, and to make principal prepayments on this Note at the
times that shall be determined, in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among the Borrower, the financial institutions party thereto and
Bankers Trust Company, as the Agent (the "AGENT") (said Fourth Amended and
Restated Credit Agreement, as it may hereafter be amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT").
This Note is one of the Borrower's "Revolving Notes" in the aggregate
principal amount of $325,000,000 and is issued pursuant to and entitled to the
benefits of the Credit Agreement to which reference is hereby made for a more
complete statement of the terms and conditions under which the Revolving Loans
evidenced hereby were made and are to be repaid. Capitalized terms used herein
without definition shall have the meanings set forth in the Credit Agreement.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
office of the Agent located at One Bankers Trust Plaza, New York, New York, or
at such other place as shall be designated in writing for such purpose in
accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by Agent as provided in Section 11.05 (b)(ii) of the
Credit Agreement, the Borrower and the Agent shall be entitled to deem the Payee
as the owner and holder of this Note. Each of the Payee and any subsequent
holder of this Note agrees, by its
1
<PAGE> 2
acceptance hereof, that before disposing of this Note or any part hereof it will
make a notation hereon of all principal payments previously made hereunder and
of the date to which interest hereon has been paid; provided, however, that the
failure to make a notation of any payment made on this Note shall not limit or
otherwise affect the obligation of the Borrower hereunder with respect to
payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day that
is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note; provided, however, that if the day on
which any payment relating to a Eurodollar Rate Loan is due is not a Business
Day but is a day of the month after which no further Business Day occurs in such
month, then the due date thereof shall be the next preceding Business Day;
provided further that if the date of any mandatory prepayment required to be
made under the Credit Agreement is not a Business Day such payment shall be made
on the immediately preceding Business Day.
This Note is subject to mandatory prepayment as provided in Section 4.02(c)
of the Credit Agreement and prepayment at the option of the Borrower as provided
in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued but unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
The terms of this Note are subject to amendment only in the manner provided
in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as provided
in Section 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this Note
or the Credit Agreement shall alter or impair the obligation of the Borrower,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency herein
prescribed.
2
<PAGE> 3
The Borrower promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in Section 11.01 of the Credit Agreement,
incurred in the collection and enforcement of this Note. The Borrower and
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
and delivered by its officer thereunto duly authorized as of the date and at the
place first above written.
AMERICAN HOMEPATIENT, INC.
By:
--------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
3
<PAGE> 4
TRANSACTIONS ON REVOLVING NOTE
<TABLE>
<CAPTION>
Amount of Outstanding
Type of Amount of Principal Principal
Loan Made Loan Made Paid Balance Notation
Date This Date This Date This Date This Date Made By
---- --------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
</TABLE>
4
<PAGE> 1
Exhibit 10.48
REVOLVING NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$28,437,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware corporation (the
"BORROWER"), being liable hereunder, promises to pay to BANK OF AMERICA (the
"PAYEE"), on or before the Termination Date, the lesser of (x) TWENTY EIGHT
MILLION FOUR HUNDRED THIRTY SEVEN THOUSAND FIVE HUNDRED DOLLARS AND NO/100
($28,437,500.00) and (y) the unpaid principal amount of all advances made by the
Payee to the Borrower as Revolving Loans under the Credit Agreement referred to
below.
The Borrower also promises to pay interest on the unpaid principal amount
hereof from the date hereof until paid in full at the rates and at the times
that shall be determined, and to make principal prepayments on this Note at the
times that shall be determined, in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among the Borrower, the financial institutions party thereto and
Bankers Trust Company, as the Agent (the "AGENT") (said Fourth Amended and
Restated Credit Agreement, as it may hereafter be amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT").
This Note is one of the Borrower's "Revolving Notes" in the aggregate
principal amount of $325,000,000 and is issued pursuant to and entitled to the
benefits of the Credit Agreement to which reference is hereby made for a more
complete statement of the terms and conditions under which the Revolving Loans
evidenced hereby were made and are to be repaid. Capitalized terms used herein
without definition shall have the meanings set forth in the Credit Agreement.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
office of the Agent located at One Bankers Trust Plaza, New York, New York, or
at such other place as shall be designated in writing for such purpose in
accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by Agent as provided in Section 11.05 (b)(ii) of the
Credit Agreement, the Borrower and the Agent shall be entitled to deem the Payee
as the owner and holder of this Note. Each of the Payee and any subsequent
holder of this Note agrees, by its
1
<PAGE> 2
acceptance hereof, that before disposing of this Note or any part hereof it will
make a notation hereon of all principal payments previously made hereunder and
of the date to which interest hereon has been paid; provided, however, that the
failure to make a notation of any payment made on this Note shall not limit or
otherwise affect the obligation of the Borrower hereunder with respect to
payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day that
is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note; provided, however, that if the day on
which any payment relating to a Eurodollar Rate Loan is due is not a Business
Day but is a day of the month after which no further Business Day occurs in such
month, then the due date thereof shall be the next preceding Business Day;
provided further that if the date of any mandatory prepayment required to be
made under the Credit Agreement is not a Business Day such payment shall be made
on the immediately preceding Business Day.
This Note is subject to mandatory prepayment as provided in Section 4.02(c)
of the Credit Agreement and prepayment at the option of the Borrower as provided
in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued but unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
The terms of this Note are subject to amendment only in the manner provided
in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as provided
in Section 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this Note
or the Credit Agreement shall alter or impair the obligation of the Borrower,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency herein
prescribed.
2
<PAGE> 3
The Borrower promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in Section 11.01 of the Credit Agreement,
incurred in the collection and enforcement of this Note. The Borrower and
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
and delivered by its officer thereunto duly authorized as of the date and at the
place first above written.
AMERICAN HOMEPATIENT, INC.
By:
--------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
3
<PAGE> 4
TRANSACTIONS ON REVOLVING NOTE
<TABLE>
<CAPTION>
Amount of Outstanding
Type of Amount of Principal Principal
Loan Made Loan Made Paid Balance Notation
Date This Date This Date This Date This Date Made By
---- --------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
</TABLE>
4
<PAGE> 1
Exhibit 10.49
REVOLVING NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$20,312,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware corporation (the
"BORROWER"), being liable hereunder, promises to pay to BANK OF MONTREAL, NEW
YORK (the "PAYEE"), on or before the Termination Date, the lesser of (x) TWENTY
MILLION THREE HUNDRED TWELVE THOUSAND FIVE HUNDRED DOLLARS AND NO/100
($20,312,500.00) and (y) the unpaid principal amount of all advances made by the
Payee to the Borrower as Revolving Loans under the Credit Agreement referred to
below.
The Borrower also promises to pay interest on the unpaid principal amount
hereof from the date hereof until paid in full at the rates and at the times
that shall be determined, and to make principal prepayments on this Note at the
times that shall be determined, in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among the Borrower, the financial institutions party thereto and
Bankers Trust Company, as the Agent (the "AGENT") (said Fourth Amended and
Restated Credit Agreement, as it may hereafter be amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT").
This Note is one of the Borrower's "Revolving Notes" in the aggregate
principal amount of $325,000,000 and is issued pursuant to and entitled to the
benefits of the Credit Agreement to which reference is hereby made for a more
complete statement of the terms and conditions under which the Revolving Loans
evidenced hereby were made and are to be repaid. Capitalized terms used herein
without definition shall have the meanings set forth in the Credit Agreement.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
office of the Agent located at One Bankers Trust Plaza, New York, New York, or
at such other place as shall be designated in writing for such purpose in
accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by Agent as provided in Section 11.05 (b)(ii) of the
Credit Agreement, the Borrower and the Agent shall be entitled to deem the Payee
as the owner and
1
<PAGE> 2
holder of this Note. Each of the Payee and any subsequent holder of this Note
agrees, by its acceptance hereof, that before disposing of this Note or any part
hereof it will make a notation hereon of all principal payments previously made
hereunder and of the date to which interest hereon has been paid; provided,
however, that the failure to make a notation of any payment made on this Note
shall not limit or otherwise affect the obligation of the Borrower hereunder
with respect to payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day that
is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note; provided, however, that if the day on
which any payment relating to a Eurodollar Rate Loan is due is not a Business
Day but is a day of the month after which no further Business Day occurs in such
month, then the due date thereof shall be the next preceding Business Day;
provided further that if the date of any mandatory prepayment required to be
made under the Credit Agreement is not a Business Day such payment shall be made
on the immediately preceding Business Day.
This Note is subject to mandatory prepayment as provided in Section 4.02(c)
of the Credit Agreement and prepayment at the option of the Borrower as provided
in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued but unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
The terms of this Note are subject to amendment only in the manner provided
in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as provided
in Section 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this Note
or the Credit Agreement shall alter or impair the obligation of the Borrower,
which is absolute
2
<PAGE> 3
and unconditional, to pay the principal of and interest on this Note at the
place, at the respective times, and in the currency herein prescribed.
The Borrower promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in Section 11.01 of the Credit Agreement,
incurred in the collection and enforcement of this Note. The Borrower and
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
and delivered by its officer thereunto duly authorized as of the date and at the
place first above written.
AMERICAN HOMEPATIENT, INC.
By:
--------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
3
<PAGE> 4
TRANSACTIONS ON REVOLVING NOTE
<TABLE>
<CAPTION>
Amount of Outstanding
Type of Amount of Principal Principal
Loan Made Loan Made Paid Balance Notation
Date This Date This Date This Date This Date Made By
---- --------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
</TABLE>
4
<PAGE> 1
Exhibit 10.50
REVOLVING NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$20,312,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware corporation (the
"BORROWER"), being liable hereunder, promises to pay to CORESTATES BANK, N.A.
(the "PAYEE"), on or before the Termination Date, the lesser of (x) TWENTY
MILLION THREE HUNDRED TWELVE THOUSAND FIVE HUNDRED DOLLARS AND NO/100
($20,312,500.00) and (y) the unpaid principal amount of all advances made by the
Payee to the Borrower as Revolving Loans under the Credit Agreement referred to
below.
The Borrower also promises to pay interest on the unpaid principal amount
hereof from the date hereof until paid in full at the rates and at the times
that shall be determined, and to make principal prepayments on this Note at the
times that shall be determined, in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among the Borrower, the financial institutions party thereto and
Bankers Trust Company, as the Agent (the "AGENT") (said Fourth Amended and
Restated Credit Agreement, as it may hereafter be amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT").
This Note is one of the Borrower's "Revolving Notes" in the aggregate
principal amount of $325,000,000 and is issued pursuant to and entitled to the
benefits of the Credit Agreement to which reference is hereby made for a more
complete statement of the terms and conditions under which the Revolving Loans
evidenced hereby were made and are to be repaid. Capitalized terms used herein
without definition shall have the meanings set forth in the Credit Agreement.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
office of the Agent located at One Bankers Trust Plaza, New York, New York, or
at such other place as shall be designated in writing for such purpose in
accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by Agent as provided in Section 11.05 (b)(ii) of the
Credit Agreement, the Borrower and the Agent shall be entitled to deem the Payee
as the owner and
1
<PAGE> 2
holder of this Note. Each of the Payee and any subsequent holder of this Note
agrees, by its acceptance hereof, that before disposing of this Note or any part
hereof it will make a notation hereon of all principal payments previously made
hereunder and of the date to which interest hereon has been paid; provided,
however, that the failure to make a notation of any payment made on this Note
shall not limit or otherwise affect the obligation of the Borrower hereunder
with respect to payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day that
is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note; provided, however, that if the day on
which any payment relating to a Eurodollar Rate Loan is due is not a Business
Day but is a day of the month after which no further Business Day occurs in such
month, then the due date thereof shall be the next preceding Business Day;
provided further that if the date of any mandatory prepayment required to be
made under the Credit Agreement is not a Business Day such payment shall be made
on the immediately preceding Business Day.
This Note is subject to mandatory prepayment as provided in Section 4.02(c)
of the Credit Agreement and prepayment at the option of the Borrower as provided
in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued but unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
The terms of this Note are subject to amendment only in the manner provided
in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as provided
in Section 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this Note
or the Credit Agreement shall alter or impair the obligation of the Borrower,
which is absolute
2
<PAGE> 3
and unconditional, to pay the principal of and interest on this Note at the
place, at the respective times, and in the currency herein prescribed.
The Borrower promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in Section 11.01 of the Credit Agreement,
incurred in the collection and enforcement of this Note. The Borrower and
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
and delivered by its officer thereunto duly authorized as of the date and at the
place first above written.
AMERICAN HOMEPATIENT, INC.
By:
--------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
3
<PAGE> 4
TRANSACTIONS ON REVOLVING NOTE
<TABLE>
<CAPTION>
Amount of Outstanding
Type of Amount of Principal Principal
Loan Made Loan Made Paid Balance Notation
Date This Date This Date This Date This Date Made By
---- --------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
</TABLE>
4
<PAGE> 1
Exhibit 10.51
REVOLVING NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$12,187,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware corporation (the
"BORROWER"), being liable hereunder, promises to pay to FIRST AMERICAN NATIONAL
BANK (the "PAYEE"), on or before the Termination Date, the lesser of (x) TWELVE
MILLION ONE HUNDRED EIGHTY-SEVEN THOUSAND FIVE HUNDRED DOLLARS AND NO/100
($12,187,500.00) and (y) the unpaid principal amount of all advances made by the
Payee to the Borrower as Revolving Loans under the Credit Agreement referred to
below.
The Borrower also promises to pay interest on the unpaid principal amount
hereof from the date hereof until paid in full at the rates and at the times
that shall be determined, and to make principal prepayments on this Note at the
times that shall be determined, in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among the Borrower, the financial institutions party thereto and
Bankers Trust Company, as the Agent (the "AGENT") (said Fourth Amended and
Restated Credit Agreement, as it may hereafter be amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT").
This Note is one of the Borrower's "Revolving Notes" in the aggregate
principal amount of $325,000,000 and is issued pursuant to and entitled to the
benefits of the Credit Agreement to which reference is hereby made for a more
complete statement of the terms and conditions under which the Revolving Loans
evidenced hereby were made and are to be repaid. Capitalized terms used herein
without definition shall have the meanings set forth in the Credit Agreement.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
office of the Agent located at One Bankers Trust Plaza, New York, New York, or
at such other place as shall be designated in writing for such purpose in
accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by Agent as provided in Section 11.05 (b)(ii) of the
Credit Agreement, the Borrower and the Agent shall be entitled to deem the Payee
as the owner and
1
<PAGE> 2
holder of this Note. Each of the Payee and any subsequent holder of this Note
agrees, by its acceptance hereof, that before disposing of this Note or any part
hereof it will make a notation hereon of all principal payments previously made
hereunder and of the date to which interest hereon has been paid; provided,
however, that the failure to make a notation of any payment made on this Note
shall not limit or otherwise affect the obligation of the Borrower hereunder
with respect to payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day that
is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note; provided, however, that if the day on
which any payment relating to a Eurodollar Rate Loan is due is not a Business
Day but is a day of the month after which no further Business Day occurs in such
month, then the due date thereof shall be the next preceding Business Day;
provided further that if the date of any mandatory prepayment required to be
made under the Credit Agreement is not a Business Day such payment shall be made
on the immediately preceding Business Day.
This Note is subject to mandatory prepayment as provided in Section 4.02(c)
of the Credit Agreement and prepayment at the option of the Borrower as provided
in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued but unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
The terms of this Note are subject to amendment only in the manner provided
in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as provided
in Section 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this Note
or the Credit Agreement shall alter or impair the obligation of the Borrower,
which is absolute
2
<PAGE> 3
and unconditional, to pay the principal of and interest on this Note at the
place, at the respective times, and in the currency herein prescribed.
The Borrower promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in Section 11.01 of the Credit Agreement,
incurred in the collection and enforcement of this Note. The Borrower and
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
and delivered by its officer thereunto duly authorized as of the date and at the
place first above written.
AMERICAN HOMEPATIENT, INC.
By:
--------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
3
<PAGE> 4
TRANSACTIONS ON REVOLVING NOTE
<TABLE>
<CAPTION>
Amount of Outstanding
Type of Amount of Principal Principal
Loan Made Loan Made Paid Balance Notation
Date This Date This Date This Date This Date Made By
---- --------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
</TABLE>
4
<PAGE> 1
Exhibit 10.52
REVOLVING NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$12,187,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware corporation (the
"BORROWER"), being liable hereunder, promises to pay to THE FIRST NATIONAL BANK
OF CHICAGO (the "PAYEE"), on or before the Termination Date, the lesser of (x)
TWELVE MILLION ONE HUNDRED EIGHTY-SEVEN THOUSAND FIVE HUNDRED DOLLARS AND NO/100
($12,187,500.00) and (y) the unpaid principal amount of all advances made by the
Payee to the Borrower as Revolving Loans under the Credit Agreement referred to
below.
The Borrower also promises to pay interest on the unpaid principal amount
hereof from the date hereof until paid in full at the rates and at the times
that shall be determined, and to make principal prepayments on this Note at the
times that shall be determined, in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among the Borrower, the financial institutions party thereto and
Bankers Trust Company, as the Agent (the "AGENT") (said Fourth Amended and
Restated Credit Agreement, as it may hereafter be amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT").
This Note is one of the Borrower's "Revolving Notes" in the aggregate
principal amount of $325,000,000 and is issued pursuant to and entitled to the
benefits of the Credit Agreement to which reference is hereby made for a more
complete statement of the terms and conditions under which the Revolving Loans
evidenced hereby were made and are to be repaid. Capitalized terms used herein
without definition shall have the meanings set forth in the Credit Agreement.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
office of the Agent located at One Bankers Trust Plaza, New York, New York, or
at such other place as shall be designated in writing for such purpose in
accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by Agent as provided in Section 11.05 (b)(ii) of the
Credit Agreement, the Borrower and the Agent shall be entitled to deem the Payee
as the owner and
1
<PAGE> 2
holder of this Note. Each of the Payee and any subsequent holder of this Note
agrees, by its acceptance hereof, that before disposing of this Note or any part
hereof it will make a notation hereon of all principal payments previously made
hereunder and of the date to which interest hereon has been paid; provided,
however, that the failure to make a notation of any payment made on this Note
shall not limit or otherwise affect the obligation of the Borrower hereunder
with respect to payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day that
is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note; provided, however, that if the day on
which any payment relating to a Eurodollar Rate Loan is due is not a Business
Day but is a day of the month after which no further Business Day occurs in such
month, then the due date thereof shall be the next preceding Business Day;
provided further that if the date of any mandatory prepayment required to be
made under the Credit Agreement is not a Business Day such payment shall be made
on the immediately preceding Business Day.
This Note is subject to mandatory prepayment as provided in Section 4.02(c)
of the Credit Agreement and prepayment at the option of the Borrower as provided
in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued but unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
The terms of this Note are subject to amendment only in the manner provided
in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as provided
in Section 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this Note
or the Credit Agreement shall alter or impair the obligation of the Borrower,
which is absolute
2
<PAGE> 3
and unconditional, to pay the principal of and interest on this Note at the
place, at the respective times, and in the currency herein prescribed.
The Borrower promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in Section 11.01 of the Credit Agreement,
incurred in the collection and enforcement of this Note. The Borrower and
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
and delivered by its officer thereunto duly authorized as of the date and at the
place first above written.
AMERICAN HOMEPATIENT, INC.
By:
--------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
3
<PAGE> 4
TRANSACTIONS ON REVOLVING NOTE
<TABLE>
<CAPTION>
Amount of Outstanding
Type of Amount of Principal Principal
Loan Made Loan Made Paid Balance Notation
Date This Date This Date This Date This Date Made By
---- --------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
</TABLE>
4
<PAGE> 1
Exhibit 10.53
REVOLVING NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$12,187,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware corporation (the
"BORROWER"), being liable hereunder, promises to pay to THE FUJI BANK, LIMITED,
ATLANTA AGENCY (the "PAYEE"), on or before the Termination Date, the lesser of
(x) TWELVE MILLION ONE HUNDRED EIGHTY-SEVEN THOUSAND FIVE HUNDRED DOLLARS AND
NO/100 ($12,187,500.00) and (y) the unpaid principal amount of all advances made
by the Payee to the Borrower as Revolving Loans under the Credit Agreement
referred to below.
The Borrower also promises to pay interest on the unpaid principal amount
hereof from the date hereof until paid in full at the rates and at the times
that shall be determined, and to make principal prepayments on this Note at the
times that shall be determined, in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among the Borrower, the financial institutions party thereto and
Bankers Trust Company, as the Agent (the "AGENT") (said Fourth Amended and
Restated Credit Agreement, as it may hereafter be amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT").
This Note is one of the Borrower's "Revolving Notes" in the aggregate
principal amount of $325,000,000 and is issued pursuant to and entitled to the
benefits of the Credit Agreement to which reference is hereby made for a more
complete statement of the terms and conditions under which the Revolving Loans
evidenced hereby were made and are to be repaid. Capitalized terms used herein
without definition shall have the meanings set forth in the Credit Agreement.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
office of the Agent located at One Bankers Trust Plaza, New York, New York, or
at such other place as shall be designated in writing for such purpose in
accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by Agent as provided in Section 11.05 (b)(ii) of the
Credit Agreement, the Borrower and the Agent shall be entitled to deem the Payee
as the owner and
1
<PAGE> 2
holder of this Note. Each of the Payee and any subsequent holder of this Note
agrees, by its acceptance hereof, that before disposing of this Note or any part
hereof it will make a notation hereon of all principal payments previously made
hereunder and of the date to which interest hereon has been paid; provided,
however, that the failure to make a notation of any payment made on this Note
shall not limit or otherwise affect the obligation of the Borrower hereunder
with respect to payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day that
is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note; provided, however, that if the day on
which any payment relating to a Eurodollar Rate Loan is due is not a Business
Day but is a day of the month after which no further Business Day occurs in such
month, then the due date thereof shall be the next preceding Business Day;
provided further that if the date of any mandatory prepayment required to be
made under the Credit Agreement is not a Business Day such payment shall be made
on the immediately preceding Business Day.
This Note is subject to mandatory prepayment as provided in Section 4.02(c)
of the Credit Agreement and prepayment at the option of the Borrower as provided
in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued but unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
The terms of this Note are subject to amendment only in the manner provided
in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as provided
in Section 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this Note
or the Credit Agreement shall alter or impair the obligation of the Borrower,
which is absolute
2
<PAGE> 3
and unconditional, to pay the principal of and interest on this Note at the
place, at the respective times, and in the currency herein prescribed.
The Borrower promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in Section 11.01 of the Credit Agreement,
incurred in the collection and enforcement of this Note. The Borrower and
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
and delivered by its officer thereunto duly authorized as of the date and at the
place first above written.
AMERICAN HOMEPATIENT, INC.
By:
--------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
3
<PAGE> 4
TRANSACTIONS ON REVOLVING NOTE
<TABLE>
<CAPTION>
Amount of Outstanding
Type of Amount of Principal Principal
Loan Made Loan Made Paid Balance Notation
Date This Date This Date This Date This Date Made By
---- --------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
</TABLE>
4
<PAGE> 1
Exhibit 10.54
REVOLVING NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$28,437,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware corporation (the
"BORROWER"), being liable hereunder, promises to pay to NATIONSBANK, N.A. (the
"PAYEE"), on or before the Termination Date, the lesser of (x) TWENTY EIGHT
MILLION FOUR HUNDRED THIRTY SEVEN THOUSAND FIVE HUNDRED DOLLARS AND NO/100
($28,437,500.00) and (y) the unpaid principal amount of all advances made by the
Payee to the Borrower as Revolving Loans under the Credit Agreement referred to
below.
The Borrower also promises to pay interest on the unpaid principal amount
hereof from the date hereof until paid in full at the rates and at the times
that shall be determined, and to make principal prepayments on this Note at the
times that shall be determined, in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among the Borrower, the financial institutions party thereto and
Bankers Trust Company, as the Agent (the "AGENT") (said Fourth Amended and
Restated Credit Agreement, as it may hereafter be amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT").
This Note is one of the Borrower's "Revolving Notes" in the aggregate
principal amount of $325,000,000 and is issued pursuant to and entitled to the
benefits of the Credit Agreement to which reference is hereby made for a more
complete statement of the terms and conditions under which the Revolving Loans
evidenced hereby were made and are to be repaid. Capitalized terms used herein
without definition shall have the meanings set forth in the Credit Agreement.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
office of the Agent located at One Bankers Trust Plaza, New York, New York, or
at such other place as shall be designated in writing for such purpose in
accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by Agent as provided in Section 11.05 (b)(ii) of the
Credit Agreement, the Borrower and the Agent shall be entitled to deem the Payee
as the owner and holder of this Note. Each of the Payee and any subsequent
holder of this Note agrees, by its
1
<PAGE> 2
acceptance hereof, that before disposing of this Note or any part hereof it will
make a notation hereon of all principal payments previously made hereunder and
of the date to which interest hereon has been paid; provided, however, that the
failure to make a notation of any payment made on this Note shall not limit or
otherwise affect the obligation of the Borrower hereunder with respect to
payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day that
is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note; provided, however, that if the day on
which any payment relating to a Eurodollar Rate Loan is due is not a Business
Day but is a day of the month after which no further Business Day occurs in such
month, then the due date thereof shall be the next preceding Business Day;
provided further that if the date of any mandatory prepayment required to be
made under the Credit Agreement is not a Business Day such payment shall be made
on the immediately preceding Business Day.
This Note is subject to mandatory prepayment as provided in Section 4.02(c)
of the Credit Agreement and prepayment at the option of the Borrower as provided
in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued but unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
The terms of this Note are subject to amendment only in the manner provided
in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as provided
in Section 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this Note
or the Credit Agreement shall alter or impair the obligation of the Borrower,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency herein
prescribed.
2
<PAGE> 3
The Borrower promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in Section 11.01 of the Credit Agreement,
incurred in the collection and enforcement of this Note. The Borrower and
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
and delivered by its officer thereunto duly authorized as of the date and at the
place first above written.
AMERICAN HOMEPATIENT, INC.
By:
--------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
3
<PAGE> 4
TRANSACTIONS ON REVOLVING NOTE
<TABLE>
<CAPTION>
Amount of Outstanding
Type of Amount of Principal Principal
Loan Made Loan Made Paid Balance Notation
Date This Date This Date This Date This Date Made By
---- --------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
</TABLE>
4
<PAGE> 1
Exhibit 10.55
REVOLVING NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$28,437,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware corporation (the
"BORROWER"), being liable hereunder, promises to pay to PNC BANK, KENTUCKY, INC.
(the "PAYEE"), on or before the Termination Date, the lesser of (x) TWENTY EIGHT
MILLION FOUR HUNDRED THIRTY SEVEN THOUSAND FIVE HUNDRED DOLLARS AND NO/100
($28,437,500.00) and (y) the unpaid principal amount of all advances made by the
Payee to the Borrower as Revolving Loans under the Credit Agreement referred to
below.
The Borrower also promises to pay interest on the unpaid principal amount
hereof from the date hereof until paid in full at the rates and at the times
that shall be determined, and to make principal prepayments on this Note at the
times that shall be determined, in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among the Borrower, the financial institutions party thereto and
Bankers Trust Company, as the Agent (the "AGENT") (said Fourth Amended and
Restated Credit Agreement, as it may hereafter be amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT").
This Note is one of the Borrower's "Revolving Notes" in the aggregate
principal amount of $325,000,000 and is issued pursuant to and entitled to the
benefits of the Credit Agreement to which reference is hereby made for a more
complete statement of the terms and conditions under which the Revolving Loans
evidenced hereby were made and are to be repaid. Capitalized terms used herein
without definition shall have the meanings set forth in the Credit Agreement.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
office of the Agent located at One Bankers Trust Plaza, New York, New York, or
at such other place as shall be designated in writing for such purpose in
accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by Agent as provided in Section 11.05 (b)(ii) of the
Credit Agreement, the Borrower and the Agent shall be entitled to deem the Payee
as the owner and
1
<PAGE> 2
holder of this Note. Each of the Payee and any subsequent holder of this Note
agrees, by its acceptance hereof, that before disposing of this Note or any part
hereof it will make a notation hereon of all principal payments previously made
hereunder and of the date to which interest hereon has been paid; provided,
however, that the failure to make a notation of any payment made on this Note
shall not limit or otherwise affect the obligation of the Borrower hereunder
with respect to payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day that
is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note; provided, however, that if the day on
which any payment relating to a Eurodollar Rate Loan is due is not a Business
Day but is a day of the month after which no further Business Day occurs in such
month, then the due date thereof shall be the next preceding Business Day;
provided further that if the date of any mandatory prepayment required to be
made under the Credit Agreement is not a Business Day such payment shall be made
on the immediately preceding Business Day.
This Note is subject to mandatory prepayment as provided in Section 4.02(c)
of the Credit Agreement and prepayment at the option of the Borrower as provided
in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued but unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
The terms of this Note are subject to amendment only in the manner provided
in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as provided
in Section 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this Note
or the Credit Agreement shall alter or impair the obligation of the Borrower,
which is absolute
2
<PAGE> 3
and unconditional, to pay the principal of and interest on this Note at the
place, at the respective times, and in the currency herein prescribed.
The Borrower promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in Section 11.01 of the Credit Agreement,
incurred in the collection and enforcement of this Note. The Borrower and
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
and delivered by its officer thereunto duly authorized as of the date and at the
place first above written.
AMERICAN HOMEPATIENT, INC.
By:
--------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
3
<PAGE> 4
TRANSACTIONS ON REVOLVING NOTE
<TABLE>
<CAPTION>
Amount of Outstanding
Type of Amount of Principal Principal
Loan Made Loan Made Paid Balance Notation
Date This Date This Date This Date This Date Made By
---- --------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
</TABLE>
4
<PAGE> 1
Exhibit 10.56
REVOLVING NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$26,812,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware corporation (the
"BORROWER"), being liable hereunder, promises to pay to COOPERATIVE CENTRALE
RAIFFEISEN-BOERENLEENBANK, B.A. "RABOBANK NEDERLAND", NEW YORK (the "PAYEE"), on
or before the Termination Date, the lesser of (x) TWENTY SIX MILLION EIGHT
HUNDRED TWELVE THOUSAND FIVE HUNDRED DOLLARS AND NO/100 ($26,812,500.00) and (y)
the unpaid principal amount of all advances made by the Payee to the Borrower as
Revolving Loans under the Credit Agreement referred to below.
The Borrower also promises to pay interest on the unpaid principal amount
hereof from the date hereof until paid in full at the rates and at the times
that shall be determined, and to make principal prepayments on this Note at the
times that shall be determined, in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among the Borrower, the financial institutions party thereto and
Bankers Trust Company, as the Agent (the "AGENT") (said Fourth Amended and
Restated Credit Agreement, as it may hereafter be amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT").
This Note is one of the Borrower's "Revolving Notes" in the aggregate
principal amount of $325,000,000 and is issued pursuant to and entitled to the
benefits of the Credit Agreement to which reference is hereby made for a more
complete statement of the terms and conditions under which the Revolving Loans
evidenced hereby were made and are to be repaid. Capitalized terms used herein
without definition shall have the meanings set forth in the Credit Agreement.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
office of the Agent located at One Bankers Trust Plaza, New York, New York, or
at such other place as shall be designated in writing for such purpose in
accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by Agent as provided in Section 11.05 (b)(ii) of the
Credit Agreement, the Borrower and the Agent shall be entitled to deem the Payee
as the owner and
1
<PAGE> 2
holder of this Note. Each of the Payee and any subsequent holder of this Note
agrees, by its acceptance hereof, that before disposing of this Note or any part
hereof it will make a notation hereon of all principal payments previously made
hereunder and of the date to which interest hereon has been paid; provided,
however, that the failure to make a notation of any payment made on this Note
shall not limit or otherwise affect the obligation of the Borrower hereunder
with respect to payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day that
is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note; provided, however, that if the day on
which any payment relating to a Eurodollar Rate Loan is due is not a Business
Day but is a day of the month after which no further Business Day occurs in such
month, then the due date thereof shall be the next preceding Business Day;
provided further that if the date of any mandatory prepayment required to be
made under the Credit Agreement is not a Business Day such payment shall be made
on the immediately preceding Business Day.
This Note is subject to mandatory prepayment as provided in Section 4.02(c)
of the Credit Agreement and prepayment at the option of the Borrower as provided
in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued but unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
The terms of this Note are subject to amendment only in the manner provided
in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as provided
in Section 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this Note
or the Credit Agreement shall alter or impair the obligation of the Borrower,
which is absolute
2
<PAGE> 3
and unconditional, to pay the principal of and interest on this Note at the
place, at the respective times, and in the currency herein prescribed.
The Borrower promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in Section 11.01 of the Credit Agreement,
incurred in the collection and enforcement of this Note. The Borrower and
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
and delivered by its officer thereunto duly authorized as of the date and at the
place first above written.
AMERICAN HOMEPATIENT, INC.
By:
--------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
3
<PAGE> 4
TRANSACTIONS ON REVOLVING NOTE
<TABLE>
<CAPTION>
Amount of Outstanding
Type of Amount of Principal Principal
Loan Made Loan Made Paid Balance Notation
Date This Date This Date This Date This Date Made By
---- --------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
</TABLE>
4
<PAGE> 1
Exhibit 10.57
REVOLVING NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$4,062,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware corporation (the
"BORROWER"), being liable hereunder, promises to pay to THE SAKURA BANK, LIMITED
(the "PAYEE"), on or before the Termination Date, the lesser of (x) FOUR MILLION
SIXTY-TWO THOUSAND FIVE HUNDRED DOLLARS AND NO/100 ($4,062,500.00) and (y) the
unpaid principal amount of all advances made by the Payee to the Borrower as
Revolving Loans under the Credit Agreement referred to below.
The Borrower also promises to pay interest on the unpaid principal amount
hereof from the date hereof until paid in full at the rates and at the times
that shall be determined, and to make principal prepayments on this Note at the
times that shall be determined, in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among the Borrower, the financial institutions party thereto and
Bankers Trust Company, as the Agent (the "AGENT") (said Fourth Amended and
Restated Credit Agreement, as it may hereafter be amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT").
This Note is one of the Borrower's "Revolving Notes" in the aggregate
principal amount of $325,000,000 and is issued pursuant to and entitled to the
benefits of the Credit Agreement to which reference is hereby made for a more
complete statement of the terms and conditions under which the Revolving Loans
evidenced hereby were made and are to be repaid. Capitalized terms used herein
without definition shall have the meanings set forth in the Credit Agreement.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
office of the Agent located at One Bankers Trust Plaza, New York, New York, or
at such other place as shall be designated in writing for such purpose in
accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by Agent as provided in Section 11.05 (b)(ii) of the
Credit Agreement, the Borrower and the Agent shall be entitled to deem the Payee
as the owner and holder of this Note. Each of the Payee and any subsequent
holder of this Note agrees, by its
1
<PAGE> 2
acceptance hereof, that before disposing of this Note or any part hereof it will
make a notation hereon of all principal payments previously made hereunder and
of the date to which interest hereon has been paid; provided, however, that the
failure to make a notation of any payment made on this Note shall not limit or
otherwise affect the obligation of the Borrower hereunder with respect to
payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day that
is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note; provided, however, that if the day on
which any payment relating to a Eurodollar Rate Loan is due is not a Business
Day but is a day of the month after which no further Business Day occurs in such
month, then the due date thereof shall be the next preceding Business Day;
provided further that if the date of any mandatory prepayment required to be
made under the Credit Agreement is not a Business Day such payment shall be made
on the immediately preceding Business Day.
This Note is subject to mandatory prepayment as provided in Section 4.02(c)
of the Credit Agreement and prepayment at the option of the Borrower as provided
in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued but unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
The terms of this Note are subject to amendment only in the manner provided
in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as provided
in Section 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this Note
or the Credit Agreement shall alter or impair the obligation of the Borrower,
which is absolute
2
<PAGE> 3
and unconditional, to pay the principal of and interest on this Note at the
place, at the respective times, and in the currency herein prescribed.
The Borrower promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in Section 11.01 of the Credit Agreement,
incurred in the collection and enforcement of this Note. The Borrower and
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
and delivered by its officer thereunto duly authorized as of the date and at the
place first above written.
AMERICAN HOMEPATIENT, INC.
By:
--------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
3
<PAGE> 4
TRANSACTIONS ON REVOLVING NOTE
<TABLE>
<CAPTION>
Amount of Outstanding
Type of Amount of Principal Principal
Loan Made Loan Made Paid Balance Notation
Date This Date This Date This Date This Date Made By
---- --------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
</TABLE>
4
<PAGE> 1
Exhibit 10.58
REVOLVING NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$28,437,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware corporation (the
"BORROWER"), being liable hereunder, promises to pay to SUNTRUST BANK,
NASHVILLE, N.A. (the "PAYEE"), on or before the Termination Date, the lesser of
(x) TWENTY EIGHT MILLION FOUR HUNDRED THIRTY SEVEN THOUSAND FIVE HUNDRED DOLLARS
AND NO/100 ($28,437,500.00) and (y) the unpaid principal amount of all advances
made by the Payee to the Borrower as Revolving Loans under the Credit Agreement
referred to below.
The Borrower also promises to pay interest on the unpaid principal amount
hereof from the date hereof until paid in full at the rates and at the times
that shall be determined, and to make principal prepayments on this Note at the
times that shall be determined, in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among the Borrower, the financial institutions party thereto and
Bankers Trust Company, as the Agent (the "AGENT") (said Fourth Amended and
Restated Credit Agreement, as it may hereafter be amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT").
This Note is one of the Borrower's "Revolving Notes" in the aggregate
principal amount of $325,000,000 and is issued pursuant to and entitled to the
benefits of the Credit Agreement to which reference is hereby made for a more
complete statement of the terms and conditions under which the Revolving Loans
evidenced hereby were made and are to be repaid. Capitalized terms used herein
without definition shall have the meanings set forth in the Credit Agreement.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
office of the Agent located at One Bankers Trust Plaza, New York, New York, or
at such other place as shall be designated in writing for such purpose in
accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by Agent as provided in Section 11.05 (b)(ii) of the
Credit Agreement, the Borrower and the Agent shall be entitled to deem the Payee
as the owner and
1
<PAGE> 2
holder of this Note. Each of the Payee and any subsequent holder of this Note
agrees, by its acceptance hereof, that before disposing of this Note or any part
hereof it will make a notation hereon of all principal payments previously made
hereunder and of the date to which interest hereon has been paid; provided,
however, that the failure to make a notation of any payment made on this Note
shall not limit or otherwise affect the obligation of the Borrower hereunder
with respect to payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day that
is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note; provided, however, that if the day on
which any payment relating to a Eurodollar Rate Loan is due is not a Business
Day but is a day of the month after which no further Business Day occurs in such
month, then the due date thereof shall be the next preceding Business Day;
provided further that if the date of any mandatory prepayment required to be
made under the Credit Agreement is not a Business Day such payment shall be made
on the immediately preceding Business Day.
This Note is subject to mandatory prepayment as provided in Section 4.02(c)
of the Credit Agreement and prepayment at the option of the Borrower as provided
in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued but unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
The terms of this Note are subject to amendment only in the manner provided
in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as provided
in Section 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this Note
or the Credit Agreement shall alter or impair the obligation of the Borrower,
which is absolute
2
<PAGE> 3
and unconditional, to pay the principal of and interest on this Note at the
place, at the respective times, and in the currency herein prescribed.
The Borrower promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in Section 11.01 of the Credit Agreement,
incurred in the collection and enforcement of this Note. The Borrower and
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
and delivered by its officer thereunto duly authorized as of the date and at the
place first above written.
AMERICAN HOMEPATIENT, INC.
By:
--------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
3
<PAGE> 4
TRANSACTIONS ON REVOLVING NOTE
<TABLE>
<CAPTION>
Amount of Outstanding
Type of Amount of Principal Principal
Loan Made Loan Made Paid Balance Notation
Date This Date This Date This Date This Date Made By
---- --------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
</TABLE>
4
<PAGE> 1
Exhibit 10.59
REVOLVING NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$12,187,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware corporation (the
"BORROWER"), being liable hereunder, promises to pay to UNION BANK OF
CALIFORNIA, N.A. (the "PAYEE"), on or before the Termination Date, the lesser of
(x) TWELVE MILLION ONE HUNDRED EIGHTY-SEVEN THOUSAND FIVE HUNDRED DOLLARS AND
NO/100 ($12,187,500.00) and (y) the unpaid principal amount of all advances made
by the Payee to the Borrower as Revolving Loans under the Credit Agreement
referred to below.
The Borrower also promises to pay interest on the unpaid principal amount
hereof from the date hereof until paid in full at the rates and at the times
that shall be determined, and to make principal prepayments on this Note at the
times that shall be determined, in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among the Borrower, the financial institutions party thereto and
Bankers Trust Company, as the Agent (the "AGENT") (said Fourth Amended and
Restated Credit Agreement, as it may hereafter be amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT").
This Note is one of the Borrower's "Revolving Notes" in the aggregate
principal amount of $325,000,000 and is issued pursuant to and entitled to the
benefits of the Credit Agreement to which reference is hereby made for a more
complete statement of the terms and conditions under which the Revolving Loans
evidenced hereby were made and are to be repaid. Capitalized terms used herein
without definition shall have the meanings set forth in the Credit Agreement.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
office of the Agent located at One Bankers Trust Plaza, New York, New York, or
at such other place as shall be designated in writing for such purpose in
accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by Agent as provided in Section 11.05 (b)(ii) of the
Credit Agreement, the Borrower and the Agent shall be entitled to deem the Payee
as the owner and holder of this Note. Each of the Payee and any subsequent
holder of this Note agrees, by its
1
<PAGE> 2
acceptance hereof, that before disposing of this Note or any part hereof it will
make a notation hereon of all principal payments previously made hereunder and
of the date to which interest hereon has been paid; provided, however, that the
failure to make a notation of any payment made on this Note shall not limit or
otherwise affect the obligation of the Borrower hereunder with respect to
payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day that
is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note; provided, however, that if the day on
which any payment relating to a Eurodollar Rate Loan is due is not a Business
Day but is a day of the month after which no further Business Day occurs in such
month, then the due date thereof shall be the next preceding Business Day;
provided further that if the date of any mandatory prepayment required to be
made under the Credit Agreement is not a Business Day such payment shall be made
on the immediately preceding Business Day.
This Note is subject to mandatory prepayment as provided in Section 4.02(c)
of the Credit Agreement and prepayment at the option of the Borrower as provided
in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued but unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
The terms of this Note are subject to amendment only in the manner provided
in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as provided
in Section 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this Note
or the Credit Agreement shall alter or impair the obligation of the Borrower,
which is absolute
2
<PAGE> 3
and unconditional, to pay the principal of and interest on this Note at the
place, at the respective times, and in the currency herein prescribed.
The Borrower promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in Section 11.01 of the Credit Agreement,
incurred in the collection and enforcement of this Note. The Borrower and
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
and delivered by its officer thereunto duly authorized as of the date and at the
place first above written.
AMERICAN HOMEPATIENT, INC.
By:
--------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
3
<PAGE> 4
TRANSACTIONS ON REVOLVING NOTE
<TABLE>
<CAPTION>
Amount of Outstanding
Type of Amount of Principal Principal
Loan Made Loan Made Paid Balance Notation
Date This Date This Date This Date This Date Made By
---- --------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
</TABLE>
4
<PAGE> 1
Exhibit 10.60
REVOLVING NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$12,187,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware corporation (the
"BORROWER"), being liable hereunder, promises to pay to UNION BANK OF
SWITZERLAND, NEW YORK BRANCH (the "PAYEE"), on or before the Termination Date,
the lesser of (x) TWELVE MILLION ONE HUNDRED EIGHTY-SEVEN THOUSAND FIVE HUNDRED
DOLLARS AND NO/100 ($12,187,500.00) and (y) the unpaid principal amount of all
advances made by the Payee to the Borrower as Revolving Loans under the Credit
Agreement referred to below.
The Borrower also promises to pay interest on the unpaid principal amount
hereof from the date hereof until paid in full at the rates and at the times
that shall be determined, and to make principal prepayments on this Note at the
times that shall be determined, in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among the Borrower, the financial institutions party thereto and
Bankers Trust Company, as the Agent (the "AGENT") (said Fourth Amended and
Restated Credit Agreement, as it may hereafter be amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT").
This Note is one of the Borrower's "Revolving Notes" in the aggregate
principal amount of $325,000,000 and is issued pursuant to and entitled to the
benefits of the Credit Agreement to which reference is hereby made for a more
complete statement of the terms and conditions under which the Revolving Loans
evidenced hereby were made and are to be repaid. Capitalized terms used herein
without definition shall have the meanings set forth in the Credit Agreement.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
office of the Agent located at One Bankers Trust Plaza, New York, New York, or
at such other place as shall be designated in writing for such purpose in
accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by Agent as provided in Section 11.05 (b)(ii) of the
Credit Agreement, the Borrower and the Agent shall be entitled to deem the Payee
as the owner and holder of this Note. Each of the Payee and any subsequent
holder of this Note agrees, by its
1
<PAGE> 2
acceptance hereof, that before disposing of this Note or any part hereof it will
make a notation hereon of all principal payments previously made hereunder and
of the date to which interest hereon has been paid; provided, however, that the
failure to make a notation of any payment made on this Note shall not limit or
otherwise affect the obligation of the Borrower hereunder with respect to
payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day that
is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note; provided, however, that if the day on
which any payment relating to a Eurodollar Rate Loan is due is not a Business
Day but is a day of the month after which no further Business Day occurs in such
month, then the due date thereof shall be the next preceding Business Day;
provided further that if the date of any mandatory prepayment required to be
made under the Credit Agreement is not a Business Day such payment shall be made
on the immediately preceding Business Day.
This Note is subject to mandatory prepayment as provided in Section 4.02(c)
of the Credit Agreement and prepayment at the option of the Borrower as provided
in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued but unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
The terms of this Note are subject to amendment only in the manner provided
in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as provided
in Section 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this Note
or the Credit Agreement shall alter or impair the obligation of the Borrower,
which is absolute
2
<PAGE> 3
and unconditional, to pay the principal of and interest on this Note at the
place, at the respective times, and in the currency herein prescribed.
The Borrower promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in Section 11.01 of the Credit Agreement,
incurred in the collection and enforcement of this Note. The Borrower and
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
and delivered by its officer thereunto duly authorized as of the date and at the
place first above written.
AMERICAN HOMEPATIENT, INC.
By:
--------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
3
<PAGE> 4
TRANSACTIONS ON REVOLVING NOTE
<TABLE>
<CAPTION>
Amount of Outstanding
Type of Amount of Principal Principal
Loan Made Loan Made Paid Balance Notation
Date This Date This Date This Date This Date Made By
---- --------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
</TABLE>
4
<PAGE> 1
Exhibit 10.61
TERM NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$6,562,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware
corporation ("BORROWER"), promises to pay to the order of BANKERS TRUST COMPANY
("PAYEE") the principal amount of SIX MILLION FIVE HUNDRED SIXTY-TWO THOUSAND
FIVE HUNDRED DOLLARS AND NO/100 ($6,562,500.00) in the installments referred to
below.
Borrower also promises to pay interest on the unpaid principal
amount hereof, from the date hereof until paid in full, at the rates and at the
times which shall be determined in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among Borrower, the financial institutions listed therein as
Lenders, and Bankers Trust Company, as Agent (said Fourth Amended and Restated
Credit Agreement, as it may be amended, supplemented or otherwise modified from
time to time, being the "CREDIT AGREEMENT", the terms defined therein and not
otherwise defined herein being used herein as therein defined).
Commencing on September 15, 1999 and ending on December 16,
2002, Borrower shall make principal payments on this Note in consecutive
quarterly installments. Each such installment shall be due on the date specified
in the Credit Agreement and in an amount determined in accordance with the
provisions thereof; provided that the last such installment shall be in an
amount sufficient to repay the entire unpaid principal balance of this Note,
together with all accrued and unpaid interest thereon.
This Note is one of Borrower's "Notes" in the aggregate
principal amount of $75,000,000.00 and is issued pursuant to and entitled to the
benefits of the Credit Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Loan evidenced
hereby was made and is to be repaid.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same day funds
at the office of the Agent located at One Bankers Trust Plaza, New York, New
York, or at such other place as shall be designated in writing for such purpose
in accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by the Agent as provided in Section 11.05(b)(ii) of the
Credit Agreement, the Borrower and Agent shall be entitled to treat Payee as the
owner and holder of this Note. Payee hereby agrees, by its acceptance hereof,
that before disposing of this Note or any part hereof it will make a notation
hereon of all principal payments previously made hereunder and of the date to
which interest hereon
<PAGE> 2
has been paid; provided, however, that the failure to make a notation of any
payment made on this Note shall not limit or otherwise affect the obligations of
Borrower hereunder with respect to payments of principal or interest on this
Note.
Whenever any payment on this Note shall be stated to be due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in
Section 4.02(c) of the Credit Agreement and to prepayment at the option of
Borrower as provided in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note, together with all accrued and unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment
as provided in Sections 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision
of this Note or the Credit Agreement shall alter or impair the obligations of
Borrower, which are absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the currency
herein prescribed.
The Borrower promises to pay all costs and expenses, including
reasonable attorneys' fees, all as provided in Section 11.01 of the Credit
Agreement, incurred in the collection and enforcement of this Note. The Borrower
and any endorsers of this Note hereby consent to renewals and extensions of time
at or after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
<PAGE> 3
IN WITNESS WHEREOF, Borrower has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.
AMERICAN HOMEPATIENT, INC.
By:
---------------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
<PAGE> 1
Exhibit 10.62
TERM NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$5,062,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware
corporation ("BORROWER"), promises to pay to the order of ABN AMRO BANK, N.V.
("PAYEE") the principal amount of FIVE MILLION SIXTY-TWO THOUSAND FIVE HUNDRED
AND NO/100 ($5,062,500.00) in the installments referred to below.
Borrower also promises to pay interest on the unpaid principal
amount hereof, from the date hereof until paid in full, at the rates and at the
times which shall be determined in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among Borrower, the financial institutions listed therein as
Lenders, and Bankers Trust Company, as Agent (said Fourth Amended and Restated
Credit Agreement, as it may be amended, supplemented or otherwise modified from
time to time, being the "CREDIT AGREEMENT", the terms defined therein and not
otherwise defined herein being used herein as therein defined).
Commencing on September 15, 1999 and ending on December 16,
2002, Borrower shall make principal payments on this Note in consecutive
quarterly installments. Each such installment shall be due on the date specified
in the Credit Agreement and in an amount determined in accordance with the
provisions thereof; provided that the last such installment shall be in an
amount sufficient to repay the entire unpaid principal balance of this Note,
together with all accrued and unpaid interest thereon.
This Note is one of Borrower's "Notes" in the aggregate
principal amount of $75,000,000.00 and is issued pursuant to and entitled to the
benefits of the Credit Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Loan evidenced
hereby was made and is to be repaid.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same day funds
at the office of the Agent located at One Bankers Trust Plaza, New York, New
York, or at such other place as shall be designated in writing for such purpose
in accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by the Agent as provided in Section 11.05(b)(ii) of the
Credit Agreement, the Borrower and Agent shall be entitled to treat Payee as the
owner and holder of this Note. Payee hereby agrees, by its acceptance hereof,
that before disposing of this Note or any part hereof it will make a notation
hereon of all principal payments previously made hereunder and of the date to
which interest hereon
<PAGE> 2
has been paid; provided, however, that the failure to make a notation of any
payment made on this Note shall not limit or otherwise affect the obligations of
Borrower hereunder with respect to payments of principal or interest on this
Note.
Whenever any payment on this Note shall be stated to be due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in
Section 4.02(c) of the Credit Agreement and to prepayment at the option of
Borrower as provided in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note, together with all accrued and unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment
as provided in Sections 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision
of this Note or the Credit Agreement shall alter or impair the obligations of
Borrower, which are absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the currency
herein prescribed.
The Borrower promises to pay all costs and expenses, including
reasonable attorneys' fees, all as provided in Section 11.01 of the Credit
Agreement, incurred in the collection and enforcement of this Note. The Borrower
and any endorsers of this Note hereby consent to renewals and extensions of time
at or after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
<PAGE> 3
IN WITNESS WHEREOF, Borrower has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.
AMERICAN HOMEPATIENT, INC.
By:
---------------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
<PAGE> 1
Exhibit 10.63
TERM NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$6,562,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware
corporation ("BORROWER"), promises to pay to the order of AMSOUTH BANK ("PAYEE")
the principal amount of SIX MILLION FIVE HUNDRED SIXTY-TWO THOUSAND FIVE HUNDRED
DOLLARS AND NO/100 ($6,562,500.00) in the installments referred to below.
Borrower also promises to pay interest on the unpaid principal
amount hereof, from the date hereof until paid in full, at the rates and at the
times which shall be determined in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among Borrower, the financial institutions listed therein as
Lenders, and Bankers Trust Company, as Agent (said Fourth Amended and Restated
Credit Agreement, as it may be amended, supplemented or otherwise modified from
time to time, being the "CREDIT AGREEMENT", the terms defined therein and not
otherwise defined herein being used herein as therein defined).
Commencing on September 15, 1999 and ending on December 16,
2002, Borrower shall make principal payments on this Note in consecutive
quarterly installments. Each such installment shall be due on the date specified
in the Credit Agreement and in an amount determined in accordance with the
provisions thereof; provided that the last such installment shall be in an
amount sufficient to repay the entire unpaid principal balance of this Note,
together with all accrued and unpaid interest thereon.
This Note is one of Borrower's "Notes" in the aggregate
principal amount of $75,000,000.00 and is issued pursuant to and entitled to the
benefits of the Credit Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Loan evidenced
hereby was made and is to be repaid.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same day funds
at the office of the Agent located at One Bankers Trust Plaza, New York, New
York, or at such other place as shall be designated in writing for such purpose
in accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by the Agent as provided in Section 11.05(b)(ii) of the
Credit Agreement, the Borrower and Agent shall be entitled to treat Payee as the
owner and holder of this Note. Payee hereby agrees, by its acceptance hereof,
that before disposing of this Note or any part hereof it will make a notation
hereon of all principal payments previously made hereunder and of the date to
which interest hereon
<PAGE> 2
has been paid; provided, however, that the failure to make a notation of any
payment made on this Note shall not limit or otherwise affect the obligations of
Borrower hereunder with respect to payments of principal or interest on this
Note.
Whenever any payment on this Note shall be stated to be due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in
Section 4.02(c) of the Credit Agreement and to prepayment at the option of
Borrower as provided in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note, together with all accrued and unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment
as provided in Sections 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision
of this Note or the Credit Agreement shall alter or impair the obligations of
Borrower, which are absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the currency
herein prescribed.
The Borrower promises to pay all costs and expenses, including
reasonable attorneys' fees, all as provided in Section 11.01 of the Credit
Agreement, incurred in the collection and enforcement of this Note. The Borrower
and any endorsers of this Note hereby consent to renewals and extensions of time
at or after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
<PAGE> 3
IN WITNESS WHEREOF, Borrower has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.
AMERICAN HOMEPATIENT, INC.
By:
---------------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
<PAGE> 1
Exhibit 10.64
TERM NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$6,562,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware
corporation ("BORROWER"), promises to pay to the order of BANK OF AMERICA NT &
SA ("PAYEE") the principal amount of SIX MILLION FIVE HUNDRED SIXTY-TWO THOUSAND
FIVE HUNDRED DOLLARS AND NO/100 ($6,562,500.00) in the installments referred to
below.
Borrower also promises to pay interest on the unpaid principal
amount hereof, from the date hereof until paid in full, at the rates and at the
times which shall be determined in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among Borrower, the financial institutions listed therein as
Lenders, and Bankers Trust Company, as Agent (said Fourth Amended and Restated
Credit Agreement, as it may be amended, supplemented or otherwise modified from
time to time, being the "CREDIT AGREEMENT", the terms defined therein and not
otherwise defined herein being used herein as therein defined).
Commencing on September 15, 1999 and ending on December 16,
2002, Borrower shall make principal payments on this Note in consecutive
quarterly installments. Each such installment shall be due on the date specified
in the Credit Agreement and in an amount determined in accordance with the
provisions thereof; provided that the last such installment shall be in an
amount sufficient to repay the entire unpaid principal balance of this Note,
together with all accrued and unpaid interest thereon.
This Note is one of Borrower's "Notes" in the aggregate
principal amount of $75,000,000.00 and is issued pursuant to and entitled to the
benefits of the Credit Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Loan evidenced
hereby was made and is to be repaid.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same day funds
at the office of the Agent located at One Bankers Trust Plaza, New York, New
York, or at such other place as shall be designated in writing for such purpose
in accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by the Agent as provided in Section 11.05(b)(ii) of the
Credit Agreement, the Borrower and Agent shall be entitled to treat Payee as the
owner and holder of this Note. Payee hereby agrees, by its acceptance hereof,
that before disposing of this Note or any part hereof it will make a notation
hereon of all principal payments previously made hereunder and of the date to
which interest hereon
<PAGE> 2
has been paid; provided, however, that the failure to make a notation of any
payment made on this Note shall not limit or otherwise affect the obligations of
Borrower hereunder with respect to payments of principal or interest on this
Note.
Whenever any payment on this Note shall be stated to be due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in
Section 4.02(c) of the Credit Agreement and to prepayment at the option of
Borrower as provided in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note, together with all accrued and unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment
as provided in Sections 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision
of this Note or the Credit Agreement shall alter or impair the obligations of
Borrower, which are absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the currency
herein prescribed.
The Borrower promises to pay all costs and expenses, including
reasonable attorneys' fees, all as provided in Section 11.01 of the Credit
Agreement, incurred in the collection and enforcement of this Note. The Borrower
and any endorsers of this Note hereby consent to renewals and extensions of time
at or after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
<PAGE> 3
IN WITNESS WHEREOF, Borrower has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.
AMERICAN HOMEPATIENT, INC.
By:
---------------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
<PAGE> 1
Exhibit 10.65
TERM NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$4,687,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware
corporation ("BORROWER"), promises to pay to the order of BANK OF MONTREAL
("PAYEE") the principal amount of FOUR MILLION SIX HUNDRED EIGHTY-SEVEN THOUSAND
FIVE HUNDRED DOLLARS AND NO/100 ($4,687,500.00) in the installments referred to
below.
Borrower also promises to pay interest on the unpaid principal
amount hereof, from the date hereof until paid in full, at the rates and at the
times which shall be determined in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among Borrower, the financial institutions listed therein as
Lenders, and Bankers Trust Company, as Agent (said Fourth Amended and Restated
Credit Agreement, as it may be amended, supplemented or otherwise modified from
time to time, being the "CREDIT AGREEMENT", the terms defined therein and not
otherwise defined herein being used herein as therein defined).
Commencing on September 15, 1999 and ending on December 16,
2002, Borrower shall make principal payments on this Note in consecutive
quarterly installments. Each such installment shall be due on the date specified
in the Credit Agreement and in an amount determined in accordance with the
provisions thereof; provided that the last such installment shall be in an
amount sufficient to repay the entire unpaid principal balance of this Note,
together with all accrued and unpaid interest thereon.
This Note is one of Borrower's "Notes" in the aggregate
principal amount of $75,000,000.00 and is issued pursuant to and entitled to the
benefits of the Credit Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Loan evidenced
hereby was made and is to be repaid.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same day funds
at the office of the Agent located at One Bankers Trust Plaza, New York, New
York, or at such other place as shall be designated in writing for such purpose
in accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by the Agent as provided in Section 11.05(b)(ii) of the
Credit Agreement, the Borrower and Agent shall be entitled to treat Payee as the
owner and holder of this Note. Payee hereby agrees, by its acceptance hereof,
that before disposing of this Note or any part hereof it will make a notation
hereon of all principal payments previously made hereunder and of the date to
which interest hereon
<PAGE> 2
has been paid; provided, however, that the failure to make a notation of any
payment made on this Note shall not limit or otherwise affect the obligations of
Borrower hereunder with respect to payments of principal or interest on this
Note.
Whenever any payment on this Note shall be stated to be due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in
Section 4.02(c) of the Credit Agreement and to prepayment at the option of
Borrower as provided in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note, together with all accrued and unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment
as provided in Sections 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision
of this Note or the Credit Agreement shall alter or impair the obligations of
Borrower, which are absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the currency
herein prescribed.
The Borrower promises to pay all costs and expenses, including
reasonable attorneys' fees, all as provided in Section 11.01 of the Credit
Agreement, incurred in the collection and enforcement of this Note. The Borrower
and any endorsers of this Note hereby consent to renewals and extensions of time
at or after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
<PAGE> 3
IN WITNESS WHEREOF, Borrower has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.
AMERICAN HOMEPATIENT, INC.
By:
---------------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
<PAGE> 1
Exhibit 10.66
TERM NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$4,687,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware
corporation ("BORROWER"), promises to pay to the order of CORESTATES BANK, N.A.
("PAYEE") the principal amount of FOUR MILLION SIX HUNDRED EIGHTY-SEVEN THOUSAND
FIVE HUNDRED DOLLARS AND NO/100 ($4,687,500.00) in the installments referred to
below.
Borrower also promises to pay interest on the unpaid principal
amount hereof, from the date hereof until paid in full, at the rates and at the
times which shall be determined in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among Borrower, the financial institutions listed therein as
Lenders, and Bankers Trust Company, as Agent (said Fourth Amended and Restated
Credit Agreement, as it may be amended, supplemented or otherwise modified from
time to time, being the "CREDIT AGREEMENT", the terms defined therein and not
otherwise defined herein being used herein as therein defined).
Commencing on September 15, 1999 and ending on December 16,
2002, Borrower shall make principal payments on this Note in consecutive
quarterly installments. Each such installment shall be due on the date specified
in the Credit Agreement and in an amount determined in accordance with the
provisions thereof; provided that the last such installment shall be in an
amount sufficient to repay the entire unpaid principal balance of this Note,
together with all accrued and unpaid interest thereon.
This Note is one of Borrower's "Notes" in the aggregate
principal amount of $75,000,000.00 and is issued pursuant to and entitled to the
benefits of the Credit Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Loan evidenced
hereby was made and is to be repaid.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same day funds
at the office of the Agent located at One Bankers Trust Plaza, New York, New
York, or at such other place as shall be designated in writing for such purpose
in accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by the Agent as provided in Section 11.05(b)(ii) of the
Credit Agreement, the Borrower and Agent shall be entitled to treat Payee as the
owner and holder of this Note. Payee hereby agrees, by its acceptance hereof,
that before disposing of this Note or any part hereof it will make a notation
hereon of all principal payments previously made hereunder and of the date to
which interest hereon
<PAGE> 2
has been paid; provided, however, that the failure to make a notation of any
payment made on this Note shall not limit or otherwise affect the obligations of
Borrower hereunder with respect to payments of principal or interest on this
Note.
Whenever any payment on this Note shall be stated to be due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in
Section 4.02(c) of the Credit Agreement and to prepayment at the option of
Borrower as provided in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note, together with all accrued and unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment
as provided in Sections 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision
of this Note or the Credit Agreement shall alter or impair the obligations of
Borrower, which are absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the currency
herein prescribed.
The Borrower promises to pay all costs and expenses, including
reasonable attorneys' fees, all as provided in Section 11.01 of the Credit
Agreement, incurred in the collection and enforcement of this Note. The Borrower
and any endorsers of this Note hereby consent to renewals and extensions of time
at or after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
<PAGE> 3
IN WITNESS WHEREOF, Borrower has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.
AMERICAN HOMEPATIENT, INC.
By:
---------------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
<PAGE> 1
Exhibit 10.67
TERM NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$2,812,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware
corporation ("BORROWER"), promises to pay to the order of FIRST AMERICAN
NATIONAL BANK ("PAYEE") the principal amount of TWO MILLION EIGHT HUNDRED TWELVE
THOUSAND FIVE HUNDRED DOLLARS AND NO/100 ($2,812,500.00) in the installments
referred to below.
Borrower also promises to pay interest on the unpaid principal
amount hereof, from the date hereof until paid in full, at the rates and at the
times which shall be determined in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among Borrower, the financial institutions listed therein as
Lenders, and Bankers Trust Company, as Agent (said Fourth Amended and Restated
Credit Agreement, as it may be amended, supplemented or otherwise modified from
time to time, being the "CREDIT AGREEMENT", the terms defined therein and not
otherwise defined herein being used herein as therein defined).
Commencing on September 15, 1999 and ending on December 16,
2002, Borrower shall make principal payments on this Note in consecutive
quarterly installments. Each such installment shall be due on the date specified
in the Credit Agreement and in an amount determined in accordance with the
provisions thereof; provided that the last such installment shall be in an
amount sufficient to repay the entire unpaid principal balance of this Note,
together with all accrued and unpaid interest thereon.
This Note is one of Borrower's "Notes" in the aggregate
principal amount of $75,000,000.00 and is issued pursuant to and entitled to the
benefits of the Credit Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Loan evidenced
hereby was made and is to be repaid.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same day funds
at the office of the Agent located at One Bankers Trust Plaza, New York, New
York, or at such other place as shall be designated in writing for such purpose
in accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by the Agent as provided in Section 11.05(b)(ii) of the
Credit Agreement, the Borrower and Agent shall be entitled to treat Payee as the
owner and holder of this Note. Payee hereby agrees, by its acceptance hereof,
that before disposing of this Note or any part hereof it will make a notation
<PAGE> 2
hereon of all principal payments previously made hereunder and of the date to
which interest hereon has been paid; provided, however, that the failure to make
a notation of any payment made on this Note shall not limit or otherwise affect
the obligations of Borrower hereunder with respect to payments of principal or
interest on this Note.
Whenever any payment on this Note shall be stated to be due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in
Section 4.02(c) of the Credit Agreement and to prepayment at the option of
Borrower as provided in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note, together with all accrued and unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment
as provided in Sections 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision
of this Note or the Credit Agreement shall alter or impair the obligations of
Borrower, which are absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the currency
herein prescribed.
The Borrower promises to pay all costs and expenses, including
reasonable attorneys' fees, all as provided in Section 11.01 of the Credit
Agreement, incurred in the collection and enforcement of this Note. The Borrower
and any endorsers of this Note hereby consent to renewals and extensions of time
at or after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
<PAGE> 3
IN WITNESS WHEREOF, Borrower has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.
AMERICAN HOMEPATIENT, INC.
By:
---------------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
<PAGE> 1
Exhibit 10.68
TERM NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$2,812,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware
corporation ("BORROWER"), promises to pay to the order of THE FIRST NATIONAL
BANK OF CHICAGO ("PAYEE") the principal amount of TWO MILLION EIGHT HUNDRED
TWELVE THOUSAND FIVE HUNDRED DOLLARS AND NO/100 ($2,812,500.00) in the
installments referred to below.
Borrower also promises to pay interest on the unpaid principal
amount hereof, from the date hereof until paid in full, at the rates and at the
times which shall be determined in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among Borrower, the financial institutions listed therein as
Lenders, and Bankers Trust Company, as Agent (said Fourth Amended and Restated
Credit Agreement, as it may be amended, supplemented or otherwise modified from
time to time, being the "CREDIT AGREEMENT", the terms defined therein and not
otherwise defined herein being used herein as therein defined).
Commencing on September 15, 1999 and ending on December 16,
2002, Borrower shall make principal payments on this Note in consecutive
quarterly installments. Each such installment shall be due on the date specified
in the Credit Agreement and in an amount determined in accordance with the
provisions thereof; provided that the last such installment shall be in an
amount sufficient to repay the entire unpaid principal balance of this Note,
together with all accrued and unpaid interest thereon.
This Note is one of Borrower's "Notes" in the aggregate
principal amount of $75,000,000.00 and is issued pursuant to and entitled to the
benefits of the Credit Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Loan evidenced
hereby was made and is to be repaid.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same day funds
at the office of the Agent located at One Bankers Trust Plaza, New York, New
York, or at such other place as shall be designated in writing for such purpose
in accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by the Agent as provided in Section 11.05(b)(ii) of the
Credit Agreement, the Borrower and Agent shall be entitled to treat Payee as the
owner and holder of this Note. Payee hereby agrees, by its acceptance hereof,
that before disposing of this Note or any part hereof it will make a notation
<PAGE> 2
hereon of all principal payments previously made hereunder and of the date to
which interest hereon has been paid; provided, however, that the failure to make
a notation of any payment made on this Note shall not limit or otherwise affect
the obligations of Borrower hereunder with respect to payments of principal or
interest on this Note.
Whenever any payment on this Note shall be stated to be due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in
Section 4.02(c) of the Credit Agreement and to prepayment at the option of
Borrower as provided in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note, together with all accrued and unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment
as provided in Sections 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision
of this Note or the Credit Agreement shall alter or impair the obligations of
Borrower, which are absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the currency
herein prescribed.
The Borrower promises to pay all costs and expenses, including
reasonable attorneys' fees, all as provided in Section 11.01 of the Credit
Agreement, incurred in the collection and enforcement of this Note. The Borrower
and any endorsers of this Note hereby consent to renewals and extensions of time
at or after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
<PAGE> 3
IN WITNESS WHEREOF, Borrower has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.
AMERICAN HOMEPATIENT, INC.
By:
---------------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
<PAGE> 1
Exhibit 10.69
TERM NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$2,812,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware
corporation ("BORROWER"), promises to pay to the order of THE FUJI BANK,
LIMITED, ATLANTA AGENCY ("PAYEE") the principal amount of TWO MILLION EIGHT
HUNDRED TWELVE THOUSAND FIVE HUNDRED DOLLARS AND NO/100 ($2,812,500.00) in the
installments referred to below.
Borrower also promises to pay interest on the unpaid principal
amount hereof, from the date hereof until paid in full, at the rates and at the
times which shall be determined in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among Borrower, the financial institutions listed therein as
Lenders, and Bankers Trust Company, as Agent (said Fourth Amended and Restated
Credit Agreement, as it may be amended, supplemented or otherwise modified from
time to time, being the "CREDIT AGREEMENT", the terms defined therein and not
otherwise defined herein being used herein as therein defined).
Commencing on September 15, 1999 and ending on December 16,
2002, Borrower shall make principal payments on this Note in consecutive
quarterly installments. Each such installment shall be due on the date specified
in the Credit Agreement and in an amount determined in accordance with the
provisions thereof; provided that the last such installment shall be in an
amount sufficient to repay the entire unpaid principal balance of this Note,
together with all accrued and unpaid interest thereon.
This Note is one of Borrower's "Notes" in the aggregate
principal amount of $75,000,000.00 and is issued pursuant to and entitled to the
benefits of the Credit Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Loan evidenced
hereby was made and is to be repaid.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same day funds
at the office of the Agent located at One Bankers Trust Plaza, New York, New
York, or at such other place as shall be designated in writing for such purpose
in accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by the Agent as provided in Section 11.05(b)(ii) of the
Credit Agreement, the Borrower and Agent shall be entitled to treat Payee as the
owner and holder of this Note. Payee hereby agrees, by its acceptance hereof,
that before disposing of this Note or any part hereof it will make a notation
<PAGE> 2
hereon of all principal payments previously made hereunder and of the date to
which interest hereon has been paid; provided, however, that the failure to make
a notation of any payment made on this Note shall not limit or otherwise affect
the obligations of Borrower hereunder with respect to payments of principal or
interest on this Note.
Whenever any payment on this Note shall be stated to be due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in
Section 4.02(c) of the Credit Agreement and to prepayment at the option of
Borrower as provided in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note, together with all accrued and unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment
as provided in Sections 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision
of this Note or the Credit Agreement shall alter or impair the obligations of
Borrower, which are absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the currency
herein prescribed.
The Borrower promises to pay all costs and expenses, including
reasonable attorneys' fees, all as provided in Section 11.01 of the Credit
Agreement, incurred in the collection and enforcement of this Note. The Borrower
and any endorsers of this Note hereby consent to renewals and extensions of time
at or after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
<PAGE> 3
IN WITNESS WHEREOF, Borrower has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.
AMERICAN HOMEPATIENT, INC.
By:
---------------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
<PAGE> 1
Exhibit 10.70
TERM NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$6,562,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware
corporation ("BORROWER"), promises to pay to the order of NATIONSBANK, N.A.
("PAYEE") the principal amount of SIX MILLION FIVE HUNDRED SIXTY-TWO THOUSAND
FIVE HUNDRED DOLLARS AND NO/100 ($6,562,500.00) in the installments referred to
below.
Borrower also promises to pay interest on the unpaid principal
amount hereof, from the date hereof until paid in full, at the rates and at the
times which shall be determined in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among Borrower, the financial institutions listed therein as
Lenders, and Bankers Trust Company, as Agent (said Fourth Amended and Restated
Credit Agreement, as it may be amended, supplemented or otherwise modified from
time to time, being the "CREDIT AGREEMENT", the terms defined therein and not
otherwise defined herein being used herein as therein defined).
Commencing on September 15, 1999 and ending on December 16,
2002, Borrower shall make principal payments on this Note in consecutive
quarterly installments. Each such installment shall be due on the date specified
in the Credit Agreement and in an amount determined in accordance with the
provisions thereof; provided that the last such installment shall be in an
amount sufficient to repay the entire unpaid principal balance of this Note,
together with all accrued and unpaid interest thereon.
This Note is one of Borrower's "Notes" in the aggregate
principal amount of $75,000,000.00 and is issued pursuant to and entitled to the
benefits of the Credit Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Loan evidenced
hereby was made and is to be repaid.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same day funds
at the office of the Agent located at One Bankers Trust Plaza, New York, New
York, or at such other place as shall be designated in writing for such purpose
in accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by the Agent as provided in Section 11.05(b)(ii) of the
Credit Agreement, the Borrower and Agent shall be entitled to treat Payee as the
owner and holder of this Note. Payee hereby agrees, by its acceptance hereof,
that before disposing of this Note or any part hereof it will make a notation
hereon of all principal payments previously made hereunder and of the date to
which interest hereon
<PAGE> 2
has been paid; provided, however, that the failure to make a notation of any
payment made on this Note shall not limit or otherwise affect the obligations of
Borrower hereunder with respect to payments of principal or interest on this
Note.
Whenever any payment on this Note shall be stated to be due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in
Section 4.02(c) of the Credit Agreement and to prepayment at the option of
Borrower as provided in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note, together with all accrued and unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment
as provided in Sections 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision
of this Note or the Credit Agreement shall alter or impair the obligations of
Borrower, which are absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the currency
herein prescribed.
The Borrower promises to pay all costs and expenses, including
reasonable attorneys' fees, all as provided in Section 11.01 of the Credit
Agreement, incurred in the collection and enforcement of this Note. The Borrower
and any endorsers of this Note hereby consent to renewals and extensions of time
at or after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
<PAGE> 3
IN WITNESS WHEREOF, Borrower has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.
AMERICAN HOMEPATIENT, INC.
By:
---------------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
<PAGE> 1
Exhibit 10.71
TERM NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$6,562,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware
corporation ("BORROWER"), promises to pay to the order of PNC BANK, KENTUCKY,
INC. ("PAYEE") the principal amount of SIX MILLION FIVE HUNDRED SIXTY-TWO
THOUSAND FIVE HUNDRED DOLLARS AND NO/100 ($6,562,500.00) in the installments
referred to below.
Borrower also promises to pay interest on the unpaid principal
amount hereof, from the date hereof until paid in full, at the rates and at the
times which shall be determined in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among Borrower, the financial institutions listed therein as
Lenders, and Bankers Trust Company, as Agent (said Fourth Amended and Restated
Credit Agreement, as it may be amended, supplemented or otherwise modified from
time to time, being the "CREDIT AGREEMENT", the terms defined therein and not
otherwise defined herein being used herein as therein defined).
Commencing on September 15, 1999 and ending on December 16,
2002, Borrower shall make principal payments on this Note in consecutive
quarterly installments. Each such installment shall be due on the date specified
in the Credit Agreement and in an amount determined in accordance with the
provisions thereof; provided that the last such installment shall be in an
amount sufficient to repay the entire unpaid principal balance of this Note,
together with all accrued and unpaid interest thereon.
This Note is one of Borrower's "Notes" in the aggregate
principal amount of $75,000,000.00 and is issued pursuant to and entitled to the
benefits of the Credit Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Loan evidenced
hereby was made and is to be repaid.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same day funds
at the office of the Agent located at One Bankers Trust Plaza, New York, New
York, or at such other place as shall be designated in writing for such purpose
in accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by the Agent as provided in Section 11.05(b)(ii) of the
Credit Agreement, the Borrower and Agent shall be entitled to treat Payee as the
owner and holder of this Note. Payee hereby agrees, by its acceptance hereof,
that before disposing of this Note or any part hereof it will make a notation
hereon of all principal payments previously made hereunder and of the date to
which interest hereon
<PAGE> 2
has been paid; provided, however, that the failure to make a notation of any
payment made on this Note shall not limit or otherwise affect the obligations of
Borrower hereunder with respect to payments of principal or interest on this
Note.
Whenever any payment on this Note shall be stated to be due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in
Section 4.02(c) of the Credit Agreement and to prepayment at the option of
Borrower as provided in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note, together with all accrued and unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment
as provided in Sections 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision
of this Note or the Credit Agreement shall alter or impair the obligations of
Borrower, which are absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the currency
herein prescribed.
The Borrower promises to pay all costs and expenses, including
reasonable attorneys' fees, all as provided in Section 11.01 of the Credit
Agreement, incurred in the collection and enforcement of this Note. The Borrower
and any endorsers of this Note hereby consent to renewals and extensions of time
at or after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
<PAGE> 3
IN WITNESS WHEREOF, Borrower has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.
AMERICAN HOMEPATIENT, INC.
By:
---------------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
<PAGE> 1
Exhibit 10.72
TERM NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$6,187,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware
corporation ("BORROWER"), promises to pay to the order of COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK, B.A. "RABOBANK NEDERLAND", NEW YORK ("PAYEE") the
principal amount of SIX MILLION ONE HUNDRED EIGHTY-SEVEN THOUSAND FIVE HUNDRED
DOLLARS AND NO/100 ($6,187,500.00) in the installments referred to below.
Borrower also promises to pay interest on the unpaid principal
amount hereof, from the date hereof until paid in full, at the rates and at the
times which shall be determined in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among Borrower, the financial institutions listed therein as
Lenders, and Bankers Trust Company, as Agent (said Fourth Amended and Restated
Credit Agreement, as it may be amended, supplemented or otherwise modified from
time to time, being the "CREDIT AGREEMENT", the terms defined therein and not
otherwise defined herein being used herein as therein defined).
Commencing on September 15, 1999 and ending on December 16,
2002, Borrower shall make principal payments on this Note in consecutive
quarterly installments. Each such installment shall be due on the date specified
in the Credit Agreement and in an amount determined in accordance with the
provisions thereof; provided that the last such installment shall be in an
amount sufficient to repay the entire unpaid principal balance of this Note,
together with all accrued and unpaid interest thereon.
This Note is one of Borrower's "Notes" in the aggregate
principal amount of $75,000,000.00 and is issued pursuant to and entitled to the
benefits of the Credit Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Loan evidenced
hereby was made and is to be repaid.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same day funds
at the office of the Agent located at One Bankers Trust Plaza, New York, New
York, or at such other place as shall be designated in writing for such purpose
in accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by the Agent as provided in Section 11.05(b)(ii) of the
Credit Agreement, the Borrower and Agent shall be entitled to treat Payee as the
owner and holder of this Note. Payee hereby agrees, by
<PAGE> 2
its acceptance hereof, that before disposing of this Note or any part hereof it
will make a notation hereon of all principal payments previously made hereunder
and of the date to which interest hereon has been paid; provided, however, that
the failure to make a notation of any payment made on this Note shall not limit
or otherwise affect the obligations of Borrower hereunder with respect to
payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in
Section 4.02(c) of the Credit Agreement and to prepayment at the option of
Borrower as provided in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note, together with all accrued and unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment
as provided in Sections 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision
of this Note or the Credit Agreement shall alter or impair the obligations of
Borrower, which are absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the currency
herein prescribed.
The Borrower promises to pay all costs and expenses, including
reasonable attorneys' fees, all as provided in Section 11.01 of the Credit
Agreement, incurred in the collection and enforcement of this Note. The Borrower
and any endorsers of this Note hereby consent to renewals and extensions of time
at or after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER
<PAGE> 3
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY JUDICIAL PROCEEDING RELATED
TO THIS NOTE.
IN WITNESS WHEREOF, Borrower has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.
AMERICAN HOMEPATIENT, INC.
By:
---------------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
<PAGE> 1
Exhibit 10.73
TERM NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$937,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware
corporation ("BORROWER"), promises to pay to the order of THE SAKURA BANK,
LIMITED ("PAYEE") the principal amount of NINE HUNDRED THIRTY-SEVEN THOUSAND
FIVE HUNDRED DOLLARS AND NO/100 ($937,500.00) in the installments referred to
below.
Borrower also promises to pay interest on the unpaid principal
amount hereof, from the date hereof until paid in full, at the rates and at the
times which shall be determined in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among Borrower, the financial institutions listed therein as
Lenders, and Bankers Trust Company, as Agent (said Fourth Amended and Restated
Credit Agreement, as it may be amended, supplemented or otherwise modified from
time to time, being the "CREDIT AGREEMENT", the terms defined therein and not
otherwise defined herein being used herein as therein defined).
Commencing on September 15, 1999 and ending on December 16,
2002, Borrower shall make principal payments on this Note in consecutive
quarterly installments. Each such installment shall be due on the date specified
in the Credit Agreement and in an amount determined in accordance with the
provisions thereof; provided that the last such installment shall be in an
amount sufficient to repay the entire unpaid principal balance of this Note,
together with all accrued and unpaid interest thereon.
This Note is one of Borrower's "Notes" in the aggregate
principal amount of $75,000,000.00 and is issued pursuant to and entitled to the
benefits of the Credit Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Loan evidenced
hereby was made and is to be repaid.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same day funds
at the office of the Agent located at One Bankers Trust Plaza, New York, New
York, or at such other place as shall be designated in writing for such purpose
in accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by the Agent as provided in Section 11.05(b)(ii) of the
Credit Agreement, the Borrower and Agent shall be entitled to treat Payee as the
owner and holder of this Note. Payee hereby agrees, by its acceptance hereof,
that before disposing of this Note or any part hereof it will make a notation
hereon of all principal payments previously made hereunder and of the date to
which interest hereon
<PAGE> 2
has been paid; provided, however, that the failure to make a notation of any
payment made on this Note shall not limit or otherwise affect the obligations of
Borrower hereunder with respect to payments of principal or interest on this
Note.
Whenever any payment on this Note shall be stated to be due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in
Section 4.02(c) of the Credit Agreement and to prepayment at the option of
Borrower as provided in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note, together with all accrued and unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment
as provided in Sections 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision
of this Note or the Credit Agreement shall alter or impair the obligations of
Borrower, which are absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the currency
herein prescribed.
The Borrower promises to pay all costs and expenses, including
reasonable attorneys' fees, all as provided in Section 11.01 of the Credit
Agreement, incurred in the collection and enforcement of this Note. The Borrower
and any endorsers of this Note hereby consent to renewals and extensions of time
at or after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
<PAGE> 3
IN WITNESS WHEREOF, Borrower has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.
AMERICAN HOMEPATIENT, INC.
By:
---------------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
<PAGE> 1
Exhibit 10.74
TERM NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$6,562,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware
corporation ("BORROWER"), promises to pay to the order of SUNTRUST BANK,
NASHVILLE, N.A. ("PAYEE") the principal amount of SIX MILLION FIVE HUNDRED
SIXTY-TWO THOUSAND FIVE HUNDRED DOLLARS AND NO/100 ($6,562,500.00) in the
installments referred to below.
Borrower also promises to pay interest on the unpaid principal
amount hereof, from the date hereof until paid in full, at the rates and at the
times which shall be determined in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among Borrower, the financial institutions listed therein as
Lenders, and Bankers Trust Company, as Agent (said Fourth Amended and Restated
Credit Agreement, as it may be amended, supplemented or otherwise modified from
time to time, being the "CREDIT AGREEMENT", the terms defined therein and not
otherwise defined herein being used herein as therein defined).
Commencing on September 15, 1999 and ending on December 16,
2002, Borrower shall make principal payments on this Note in consecutive
quarterly installments. Each such installment shall be due on the date specified
in the Credit Agreement and in an amount determined in accordance with the
provisions thereof; provided that the last such installment shall be in an
amount sufficient to repay the entire unpaid principal balance of this Note,
together with all accrued and unpaid interest thereon.
This Note is one of Borrower's "Notes" in the aggregate
principal amount of $75,000,000.00 and is issued pursuant to and entitled to the
benefits of the Credit Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Loan evidenced
hereby was made and is to be repaid.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same day funds
at the office of the Agent located at One Bankers Trust Plaza, New York, New
York, or at such other place as shall be designated in writing for such purpose
in accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by the Agent as provided in Section 11.05(b)(ii) of the
Credit Agreement, the Borrower and Agent shall be entitled to treat Payee as the
owner and holder of this Note. Payee hereby agrees, by its acceptance hereof,
that before disposing of this Note or any part hereof it will make a notation
<PAGE> 2
hereon of all principal payments previously made hereunder and of the date to
which interest hereon has been paid; provided, however, that the failure to make
a notation of any payment made on this Note shall not limit or otherwise affect
the obligations of Borrower hereunder with respect to payments of principal or
interest on this Note.
Whenever any payment on this Note shall be stated to be due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in
Section 4.02(c) of the Credit Agreement and to prepayment at the option of
Borrower as provided in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note, together with all accrued and unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment
as provided in Sections 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision
of this Note or the Credit Agreement shall alter or impair the obligations of
Borrower, which are absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the currency
herein prescribed.
The Borrower promises to pay all costs and expenses, including
reasonable attorneys' fees, all as provided in Section 11.01 of the Credit
Agreement, incurred in the collection and enforcement of this Note. The Borrower
and any endorsers of this Note hereby consent to renewals and extensions of time
at or after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
<PAGE> 3
IN WITNESS WHEREOF, Borrower has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.
AMERICAN HOMEPATIENT, INC.
By:
---------------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
<PAGE> 1
Exhibit 10.75
TERM NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$2,812,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware
corporation ("BORROWER"), promises to pay to the order of UNION BANK OF
CALIFORNIA, N.A. ("PAYEE") the principal amount of TWO MILLION EIGHT HUNDRED
TWELVE THOUSAND FIVE HUNDRED DOLLARS AND NO/100 ($2,812,500.00) in the
installments referred to below.
Borrower also promises to pay interest on the unpaid principal
amount hereof, from the date hereof until paid in full, at the rates and at the
times which shall be determined in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among Borrower, the financial institutions listed therein as
Lenders, and Bankers Trust Company, as Agent (said Fourth Amended and Restated
Credit Agreement, as it may be amended, supplemented or otherwise modified from
time to time, being the "CREDIT AGREEMENT", the terms defined therein and not
otherwise defined herein being used herein as therein defined).
Commencing on September 15, 1999 and ending on December 16,
2002, Borrower shall make principal payments on this Note in consecutive
quarterly installments. Each such installment shall be due on the date specified
in the Credit Agreement and in an amount determined in accordance with the
provisions thereof; provided that the last such installment shall be in an
amount sufficient to repay the entire unpaid principal balance of this Note,
together with all accrued and unpaid interest thereon.
This Note is one of Borrower's "Notes" in the aggregate
principal amount of $75,000,000.00 and is issued pursuant to and entitled to the
benefits of the Credit Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Loan evidenced
hereby was made and is to be repaid.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same day funds
at the office of the Agent located at One Bankers Trust Plaza, New York, New
York, or at such other place as shall be designated in writing for such purpose
in accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by the Agent as provided in Section 11.05(b)(ii) of the
Credit Agreement, the Borrower and Agent shall be entitled to treat Payee as the
owner and holder of this Note. Payee hereby agrees, by its acceptance hereof,
that before disposing of this Note or any part hereof it will make a notation
hereon of all principal payments previously made hereunder and of the date to
which interest
<PAGE> 2
hereon has been paid; provided, however, that the failure to make a notation of
any payment made on this Note shall not limit or otherwise affect the
obligations of Borrower hereunder with respect to payments of principal or
interest on this Note.
Whenever any payment on this Note shall be stated to be due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in
Section 4.02(c) of the Credit Agreement and to prepayment at the option of
Borrower as provided in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note, together with all accrued and unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment
as provided in Sections 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision
of this Note or the Credit Agreement shall alter or impair the obligations of
Borrower, which are absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the currency
herein prescribed.
The Borrower promises to pay all costs and expenses, including
reasonable attorneys' fees, all as provided in Section 11.01 of the Credit
Agreement, incurred in the collection and enforcement of this Note. The Borrower
and any endorsers of this Note hereby consent to renewals and extensions of time
at or after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
<PAGE> 3
IN WITNESS WHEREOF, Borrower has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.
AMERICAN HOMEPATIENT, INC.
By:
---------------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
<PAGE> 1
Exhibit 10.76
TERM NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$2,812,500.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware
corporation ("BORROWER"), promises to pay to the order of UNION BANK OF
SWITZERLAND, NEW YORK BRANCH ("PAYEE") the principal amount of TWO MILLION EIGHT
HUNDRED TWELVE THOUSAND FIVE HUNDRED DOLLARS AND NO/100 ($2,812,500.00) in the
installments referred to below.
Borrower also promises to pay interest on the unpaid principal
amount hereof, from the date hereof until paid in full, at the rates and at the
times which shall be determined in accordance with the provisions of that
certain Fourth Amended and Restated Credit Agreement dated as of December 19,
1997 by and among Borrower, the financial institutions listed therein as
Lenders, and Bankers Trust Company, as Agent (said Fourth Amended and Restated
Credit Agreement, as it may be amended, supplemented or otherwise modified from
time to time, being the "CREDIT AGREEMENT", the terms defined therein and not
otherwise defined herein being used herein as therein defined).
Commencing on September 15, 1999 and ending on December 16,
2002, Borrower shall make principal payments on this Note in consecutive
quarterly installments. Each such installment shall be due on the date specified
in the Credit Agreement and in an amount determined in accordance with the
provisions thereof; provided that the last such installment shall be in an
amount sufficient to repay the entire unpaid principal balance of this Note,
together with all accrued and unpaid interest thereon.
This Note is one of Borrower's "Notes" in the aggregate
principal amount of $75,000,000.00 and is issued pursuant to and entitled to the
benefits of the Credit Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Loan evidenced
hereby was made and is to be repaid.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same day funds
at the office of the Agent located at One Bankers Trust Plaza, New York, New
York, or at such other place as shall be designated in writing for such purpose
in accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by the Agent as provided in Section 11.05(b)(ii) of the
Credit Agreement, the Borrower and Agent shall be entitled to treat Payee as the
owner and holder of this Note. Payee hereby agrees, by its acceptance hereof,
that before disposing of this Note or any part hereof it will make a notation
<PAGE> 2
hereon of all principal payments previously made hereunder and of the date to
which interest hereon has been paid; provided, however, that the failure to make
a notation of any payment made on this Note shall not limit or otherwise affect
the obligations of Borrower hereunder with respect to payments of principal or
interest on this Note.
Whenever any payment on this Note shall be stated to be due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in
Section 4.02(c) of the Credit Agreement and to prepayment at the option of
Borrower as provided in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note, together with all accrued and unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment
as provided in Sections 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision
of this Note or the Credit Agreement shall alter or impair the obligations of
Borrower, which are absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the currency
herein prescribed.
The Borrower promises to pay all costs and expenses, including
reasonable attorneys' fees, all as provided in Section 11.01 of the Credit
Agreement, incurred in the collection and enforcement of this Note. The Borrower
and any endorsers of this Note hereby consent to renewals and extensions of time
at or after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder. THE BORROWER IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING RELATED TO THIS NOTE.
<PAGE> 3
IN WITNESS WHEREOF, Borrower has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.
AMERICAN HOMEPATIENT, INC.
By:
---------------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
<PAGE> 1
Exhibit 10.77
SWING LINE NOTE
AMERICAN HOMEPATIENT, INC.
PROMISSORY NOTE
$15,000,000.00 New York, New York
December 23, 1997
FOR VALUE RECEIVED, AMERICAN HOMEPATIENT, INC., a Delaware
corporation (the "BORROWER"), promises to pay to BANKERS TRUST COMPANY (the
"PAYEE"), on or before the second day prior to the Termination Date, the lesser
of (x) FIFTEEN MILLION AND NO/100 DOLLARS ($15,000,000.00) and (y) the unpaid
principal amount of all advances made by the Payee to the Borrower as Swing Line
Loans under the Credit Agreement referred to below.
The Borrower also promises to pay interest on the unpaid
principal amount hereof from the date hereof until paid in full, at the rates
and at the times that shall be determined, and to make principal prepayments on
this Note at the times that shall be determined, in accordance with the
provisions of that certain Fourth Amended and Restated Credit Agreement dated as
of December 19, 1997 by and among the Borrower, the financial institutions party
thereto and Bankers Trust Company, as the Agent (the "AGENT") (said Fourth
Amended and Restated Credit Agreement, as it may hereafter be amended,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT").
This Note is Borrower's "Swing Line Note" and is issued
pursuant to and entitled to the benefits of the Credit Agreement, to which
reference is hereby made for a more complete statement of the terms and
conditions under which the Swing Line Loans evidenced hereby were made and are
to be repaid. Capitalized terms used herein without definition shall have the
meanings set forth in the Credit Agreement.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same day funds
at the office of the Agent located at One Bankers Trust Plaza, New York, New
York, or at such other place as shall be designated in writing for such purpose
in accordance with the terms of the Credit Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by the Agent as provided in Section 11.05(b)(ii) of the
Credit Agreement, the Borrower and the Agent shall be entitled to treat the
Payee as the owner and holder of this Note. Each of the Payee and any subsequent
holder of this Note agrees, by its acceptance hereof, that before disposing of
this Note or any part hereof it will make a notation hereon of all principal
payments previously made hereunder and of the date to which interest hereon has
been paid; provided, however, that the failure
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<PAGE> 2
to make a notation of any payment made on this Note shall not limit or otherwise
affect the obligation of the Borrower hereunder with respect to payments of
principal or interest on this Note; provided, however, that if the date of any
mandatory prepayment required to be made under the Credit Agreement is not a
Business Day such payment shall be made on the immediately preceding Business
Day.
Whenever any payment on this Note shall be stated to be due on
a day that is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest on this Note; provided, however, that if
the date of any mandatory prepayment required to be made under the Credit
Agreement is not a Business Day such payment shall be made on the immediately
preceding Business Day.
This Note is subject to mandatory prepayment as provided in
Section 4.02(c) of the Credit Agreement and to prepayment at the option of
Borrower as provided in Section 4.02(a) of the Credit Agreement.
THIS NOTE AND THE OBLIGATIONS OF THE BORROWER AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK) WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note, together with all accrued and unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Credit Agreement.
This Note is subject to restrictions on transfer as assignment
as provided in Sections 11.05 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision
of this Note or the Credit Agreement shall alter or impair the obligation of
Borrower, which is absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the currency
herein prescribed.
The Borrower promises to pay all costs and expenses, including
reasonable attorneys' fees, all as provided in Section 11.01 of the Credit
Agreement, incurred in the collection and enforcement of this Note. The Borrower
and any endorsers of this Note hereby consent to renewals
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<PAGE> 3
and extensions of time at or after the maturity hereof, without notice, and
hereby waive diligence, presentment, protest, demand and notice of every kind
and, to the full extent permitted by law, the right to plead any statute of
limitations as a defense to any demand hereunder. THE BORROWER IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY JUDICIAL PROCEEDING RELATED TO THIS
NOTE.
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<PAGE> 4
IN WITNESS WHEREOF, the Borrower has caused this Note to be
duly executed and delivered by its officer thereunto duly authorized as of the
date and at the place first above written.
AMERICAN HOMEPATIENT, INC.
By:
---------------------------------------
Name: Mary Ellen Rodgers
Title: Senior Vice President and
Chief Financial Officer
<PAGE> 5
TRANSACTIONS
ON
SWING LINE NOTE
<TABLE>
<CAPTION>
Outstanding
Amount of Amount of Principal
Loan Made Principal Paid Balance Notation
Date This Date This Date This Date Made By
---- --------- --------- --------- -------
<S> <C> <C> <C> <C>
</TABLE>
<PAGE> 1
Exhibit 10.78
(MULTICURRENCY--CROSS BORDER)
IDSDA(R)
INTERNATIONAL SWAP DEALERS ASSOCIATION, INC.
MASTER AGREEMENT
dated as of October 11, 1996
------------------
AMERICAN HOMEPATIENT, INC. and BANK OF MONTREAL
- - --------------------------------- -----------------------------------
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows:-
1. INTERPRETATION
(a) DEFINITIONS. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) INCONSISTENCY. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) SINGLE AGREEMENT. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.
<PAGE> 2
2. OBLIGATIONS
(a) GENERAL CONDITIONS.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for
value on that date in the place of the account specified in the
relevant Confirmation or otherwise pursuant to this Agreement, in
freely transferable funds and in the manner customary for payments in
the required currency. Where settlement is by delivery (that is, other
than by payment), such delivery will be made for receipt on the due
date in the manner customary for the relevant obligation unless
otherwise specified in the relevant Confirmation or elsewhere in this
Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to
(1) the condition precedent that no Event of Default or Potential Event
of Default with respect to the other party has occurred and is
continuing, (2) the condition precedent that no Early Termination Date
in respect of the relevant Transaction has occurred or been effectively
designated and (3) each other applicable condition precedent specified
in this Agreement
(b) CHANGE OF ACCOUNT. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change
(c) NETTING. If on any date amounts would otherwise be payable:-
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii)
2 IDSDA(R) 1992
<PAGE> 3
above will not apply to the Transactions identified as being subject to the
election, together with the starting date (in which case subparagraph (ii) above
will not, or will cease to, apply to such Transactions from such date). This
election may be made separately for different groups of Transactions and will
apply separately to each pairing of Offices through which the parties make and
receive payments or deliveries.
(d) DEDUCTION OR WITHHOLDING FOR TAX.
(i) GROSS-UP. All payments under this Agreement will be made without
any deduction or withholding for or on account of any Tax unless such
deduction or withholding is required by any applicable law, as modified
by the practice of any relevant governmental revenue authority, then in
effect. If a party is so required to deduct or withhold, then that
party ("X") will:-
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required
to be deducted or withheld (including the full amount required
to be deducted or withheld from any additional amount paid by
X to Y under this Section 2(d)) promptly upon the earlier of
determining that such deduction or withholding is required or
receiving notice that such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified
copy), or other documentation reasonably acceptable to Y,
evidencing such payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition
to the payment to which Y is otherwise entitled under this
Agreement, such additional amount as is necessary to ensure
that the net amount actually received by Y (free and clear of
Indemnifiable Taxes, whether assessed against X or Y) will
equal the full amount Y would have received had no such
deduction or withholding been required. However, X will not be
required to pay any additional amount to Y to the extent that
it would not be required to be paid but for:-
(A) the failure by Y to comply with or perform any
agreement contained in Section 4(a)(i), 4(a)(iii) or
4(d); or
(B) the failure of a representation made by Y
pursuant to Section 3(f) to be accurate and true
unless such failure would not have occurred but for
(I) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or
after the date on which a Transaction is entered into
(regardless of whether such action is taken or
brought with respect to a party to this Agreement) or
(II) a Change in Tax Law.
3 IDSDA(R) 1992
<PAGE> 4
(ii) LIABILITY. If:-
(1) X is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, to
make any deduction or withholding in respect of which X would
not be required to pay an additional amount to Y under Section
2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly
against X,
then, except to the extent Y has satisfied or then satisfies the
liability resulting from such Tax, Y will promptly pay to X the amount
of such liability (including any related liability for interest, but
including any related liability for penalties only if Y has failed to
comply with or perform any agreement contained in Section 4(a)(i),
4(a)(iii) or 4(d)).
(e) DEFAULT INTEREST; OTHER AMOUNTS. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
3. REPRESENTATIONS
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that;-
(a) BASIC REPRESENTATIONS.
(i) STATUS. It is duly organized and validly existing under the laws of
the jurisdiction of its organization or incorporation and, if relevant
under such laws, in good standing;
(ii) POWERS. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to
perform its obligations under this Agreement and any obligations it has
under any Credit
4 IDSDA(R) 1992
<PAGE> 5
Support Document to which it is a party and has taken all necessary
action to authorize such execution, delivery and performance;
(iii) NO VIOLATION OR CONFLICT. Such execution, delivery and
performance do not violate or conflict with any law applicable to it,
any provision of its constitutional documents, any order or judgment of
any court or other agency of government applicable to it or any of its
assets or any contractual restriction binding on or affecting it or any
of its assets;
(iv) CONSENTS. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in
full force and effect and all conditions of any such consents have been
complied with; and
(v) OBLIGATIONS BINDING. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal,
valid and binding obligations, enforceable in accordance with their
respective terms (subject to applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws affecting creditors' rights
generally and subject, as to enforceability, to equitable principles of
general application (regardless of whether enforcement is sought in a
proceeding in equity or at law)).
(b) ABSENCE OF CERTAIN EVENTS. No Event of Default or Potential Event of Default
or, to its knowledge, Termination Event with respect to it has occurred and is
continuing and no such event or circumstance would occur as a result of its
entering into or performing its obligations under this Agreement or any Credit
Support Document to which it is a party.
(c) ABSENCE OF LITIGATION. There is not pending or, to its knowledge, threatened
against it or any of its Affiliates any action, suit or proceeding at law or in
equity or before any court, tribunal, governmental body, agency or official or
any arbitrator that is likely to affect the legality, validity or enforceability
against it of this Agreement or any Credit Support Document to which it is a
party or its ability to perform its obligations under this Agreement or such
Credit Support Document.
(d) ACCURACY OF SPECIFIED INFORMATION. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) PAYER TAX REPRESENTATION. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.
(f) PAYEE TAX REPRESENTATIONS. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(f) is accurate and true.
5 IDSDA(R) 1992
<PAGE> 6
4. AGREEMENTS
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:-
(a) FURNISH SPECIFIED INFORMATION. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:-
(i) any forms, documents or certificates relating to taxation specified
in the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation;
and
(iii) upon reasonable demand by such other party, any form or document
that may be required or reasonably requested in writing in order to
allow such other party or its Credit Support Provider to make a payment
under this Agreement or any applicable Credit Support Document without
any deduction or withholding for or on account of any Tax or with such
deduction or withholding at a reduced rate (so long as the completion,
execution or submission of such form or document would not materially
prejudice the legal or commercial position of the party in receipt of
such demand), with any such form or document to be accurate and
completed in a manner reasonably satisfactory to such other party and
to be executed and to be delivered with any reasonably required
certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) MAINTAIN AUTHORIZATIONS. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) COMPLY WITH LAWS. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) TAX AGREEMENT. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.
(e) PAYMENT OF STAMP TAX. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated, organized, managed and
controlled, or considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement is located ("Stamp
Tax
6 IDSDA(R) 1992
<PAGE> 7
Jurisdiction") and will indemnify the other party against any Stamp Tax levied
or imposed upon the other party or in respect of the other party's execution or
performance of this Agreement by any such Stamp Tax Jurisdiction which is not
also a Stamp Tax Jurisdiction with respect to the other party.
5. EVENTS OF DEFAULT AND TERMINATION EVENTS
(a) EVENTS OF DEFAULT. The occurrence at any time with respect to a party or, if
applicable, any Credit Support Provider of such party or any Specified Entity of
such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party:-
(i) FAILURE TO PAY OR DELIVER. Failure by the party to make, when due,
any payment under this Agreement or delivery under Section 2(a)(i) or
2(e) required to be made by it if such failure is not remedied on or
before the third Local Business Day after notice of such failure is
given to the party;
(ii) BREACH OF AGREEMENT. Failure by the party to comply with or
perform any agreement or obligation (other than an obligation to make
any payment under this Agreement or delivery under Section 2(a)(i) or
2(e) or to give notice of a Termination Event or any agreement or
obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied
with or performed by the party in accordance with this Agreement if
such failure is not remedied on or before the thirtieth day after
notice of such failure is given to the party;
(iii) CREDIT SUPPORT DEFAULT.
(1) Failure by the party or any Credit Support Provider of
such party to comply with or perform any agreement or
obligation to be complied with or performed by it in
accordance with any Credit Support Document if such failure is
continuing after any applicable grace period has elapsed;
(2) the expiration or termination of such Credit Support
Document or the failing or ceasing of such Credit Support
Document to be in full force and effect for the purpose of
this Agreement (in either case other than in accordance with
its terms) prior to the satisfaction of all obligations of
such party under each Transaction to which such Credit Support
Document relates without the written consent of the other
party; or
(3) the party or such Credit Support Provider disaffirms,
disclaims, repudiates or rejects, in whole or in part, or
challenges the validity of, such Credit Support Document;
(iv) MISREPRESENTATION. A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been made
or repeated by the party or any Credit Support Provider of such party
in this Agreement or any Credit Support Document proves
7 IDSDA(R) 1992
<PAGE> 8
to have been incorrect or misleading in any material respect when made
or repeated or deemed to have been made or repeated;
(v) DEFAULT UNDER SPECIFIED TRANSACTION. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party
(I) defaults under a Specified Transaction and, after giving effect to
any applicable notice requirement or grace period, there occurs a
liquidation of, an acceleration of obligations under, or an early
termination of, that Specified Transaction, (2) defaults, after giving
effect to any applicable notice requirement or grace period, in making
any payment or delivery due on the last payment, delivery or exchange
date of, or any payment on early termination of, a Specified
Transaction (or such default continues for at least three Local
Business Days if there is no applicable notice requirement or grace
period) or (3) disaffirms, disclaims, repudiates or rejects, in whole
or in part, a Specified Transaction (or such action is taken by any
person or entity appointed or empowered to operate it or act on its
behalf);
(vi) CROSS DEFAULT. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (I) a default,
event of default or other similar condition or event (however
described) in respect of such party, any Credit Support Provider of
such party or any applicable Specified Entity of such party under one
or more agreements or instruments relating to Specified Indebtedness of
any of them (individually or collectively) in an aggregate amount of
not less than the applicable Threshold Amount (as specified in the
Schedule) which has resulted in such Specified Indebtedness becoming,
or becoming capable at such time of being declared, due and payable
under such agreements or instruments, before it would otherwise have
been due and payable or (2) a default by such party, such Credit
Support Provider or such Specified Entity (individually or
collectively) in making one or more payments on the due date thereof in
an aggregate amount of not less than the applicable Threshold Amount
under such agreements or instruments (after giving effect to any
applicable notice requirement or grace period);
(vii) BANKRUPTCY. The party, any Credit Support Provider of such party
or any applicable Specified Entity of such party:-
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to
pay its debts or fails or admits in writing its inability
generally to pay its debts as they become due; (3) makes a
general assignment, arrangement or composition with or for the
benefit of its creditors; (4) institutes or has instituted
against it a proceeding seeking a judgment of insolvency or
bankruptcy or any other relief under any bankruptcy or
insolvency law or other similar law affecting creditors'
rights, or a petition is presented for its winding-up or
liquidation, and, in the case of any such proceeding or
petition instituted or presented against it, such proceeding
or petition (A) results in a judgment of insolvency or
bankruptcy or the entry of an order for relief or the making
of an order for its winding-up or liquidation or (B) is not
dismissed, discharged, stayed or restrained in
8 IDSDA(R) 1992
<PAGE> 9
each case within 30 days of the institution or presentation
thereof; (5) has a resolution passed for its winding-up,
official management or liquidation (other than pursuant to a
consolidation, amalgamation or merger); (6) seeks or becomes
subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its
assets; (7) has a secured party take possession of all or
substantially all its assets or has a distress, execution,
attachment, sequestration or other legal process levied,
enforced or sued on or against all or substantially all its
assets and such secured party maintains possession, or any
such process is not dismissed, discharged, stayed or
restrained, in each case within 30 days thereafter; (8) causes
or is subject to any event with respect to it which, under the
applicable laws of any jurisdiction, has an analogous effect
to any of the events specified in clauses (I) to (7)
(inclusive); or (9) takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in,
any of the foregoing acts; or
(viii) MERGER WITHOUT ASSUMPTION. The party or any Credit Support
Provider of such party consolidates or amalgamates with, or merges with
or into, or transfers all or substantially all its assets to, another
entity and, at the time of such consolidation, amalgamation, merger or
transfer:-
(1) the resulting, surviving or transferee entity fails to
assume all the obligations of such party or such Credit
Support Provider under this Agreement or any Credit Support
Document to which it or its predecessor was a party by
operation of law or pursuant to an agreement reasonably
satisfactory to the other party to this Agreement or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by
such resulting, surviving or transferee entity of its
obligations under this Agreement.
(b) TERMINATION EVENTS. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii) below and,
if specified to be applicable, a Credit Event Upon Merger if the event is
specified pursuant to (iv) below or an Additional Termination Event if the event
is specified pursuant to (v) below:-
(i) ILLEGALITY. Due to the adoption of, or any change in, any
applicable law after the date on which a Transaction is entered into,
or due to the promulgation of, or any change in, the interpretation by
any court, tribunal or regulatory authority with competent jurisdiction
of any applicable law after such date, it becomes unlawful (other than
as a result of a breach by the party of Section 4(b)) for such party
(which will be the Affected Party):-
9 IDSDA(R) 1992
<PAGE> 10
(1) to perform any absolute or contingent obligation to make a
payment or delivery or to receive a payment or delivery in
respect of such Transaction or to comply with any other
material provision of this Agreement relating to such
Transaction; or
(2) to perform, or for any Credit Support Provider of such
party to perform, any contingent or other obligation which the
party (or such Credit Support Provider) has under any Credit
Support Document relating to such Transaction;
(ii) TAX EVENT. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on
which a Transaction is entered into (regardless of whether such action
is taken or brought with respect to a party to this Agreement) or (y) a
Change in Tax Law, the party (which will be the Affected Party) will,
or there is a substantial likelihood that it will, on the next
succeeding Scheduled Payment Date (1) be required to pay to the other
party an additional amount in respect of an Indemnifiable Tax under
Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) or (2) receive a payment from which an amount is
required to be deducted or withheld for or on account of a Tax (except
in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) and no
additional amount is required to be paid in respect of such Tax under
Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or
(B));
(iii) TAX EVENT UPON MERGER. The party (the "Burdened Party") on the
next succeeding Scheduled Payment Date will either (1) be required to
pay an additional amount in respect of an Indemnifiable Tax under
Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) or (2) receive a payment from which an amount has
been deducted or withheld for or on account of any Indemnifiable Tax in
respect of which the other party is not required to pay an additional
amount (other than by reason of Section 2(d)(i)(4)(A) or (B)), in
either case as a result of a party consolidating or amalgamating with,
or merging with or into, or transferring all or substantially all its
assets to, another entity (which will be the Affected Party) where such
action does not constitute an event described in Section 5(a)(viii);
(iv) CREDIT EVENT UPON MERGER. If "Credit Event Upon Merger" is
specified in the Schedule as applying to the party, such party ("X"),
any Credit Support Provider of X or any applicable Specified Entity of
X consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and
such action does not constitute an event described in Section 5(a)(vii)
but the creditworthiness of the resulting, surviving or transferee
entity is materially weaker than that of X, such Credit Support
Provider or such Specified Entity, as the case may be, immediately
prior to such action (and, in such event, X or its successor or
transferee, as appropriate, will be the Affected Party); or
(v) ADDITIONAL TERMINATION EVENT. If any "Additional Termination Event
is specified in the Schedule or any Confirmation as applying, the occurrence of
such event (and, in such
10 IDSDA(R) 1992
<PAGE> 11
event, the Affected Party or Affected Parties shall be as specified for
such Additional Termination Event in the Schedule or such
Confirmation).
(c) EVENT OF DEFAULT AND ILLEGALITY. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.
6. EARLY TERMINATION
(a) RIGHT TO TERMINATE FOLLOWING EVENT OF DEFAULT. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(l), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) RIGHT TO TERMINATE FOLLOWING TERMINATION EVENT.
(i) NOTICE. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying
the nature of that Termination Event and each Affected Transaction and
will also give such other information about that Termination Event as
the other party may reasonably require.
(ii) TRANSFER TO A VOID TERMINATION EVENT. If either an Illegality
under Section 5(b)(i)(1) or a Tax Event occurs and there is only one
Affected Party, or if a Tax Event Upon Merger occurs and the Burdened
Party is the Affected Party, the Affected Party will, as a condition to
its right to designate an Early Termination Date under Section
6(b)(iv), use all reasonable efforts (which will not require such party
to incur a loss, excluding immaterial, incidental expenses) to transfer
within 20 days after it gives notice under Section 6(b)(i) all its
rights and obligations under this Agreement in respect of the Affected
Transactions to another of its Offices or Affiliates so that such
Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days
after the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be
subject to and conditional upon the prior written consent of the other
party, which consent will not be withheld if such
11 IDSDA(R) 1992
<PAGE> 12
other party's policies in effect at such time would permit it to enter
into transactions with the transferee on the terms proposed.
(iii) TWO AFFECTED PARTIES. If an Illegality under Section 5(b)(i)( 1)
or a Tax Event occurs and there are two Affected Parties, each party
will use all reasonable efforts to reach agreement within 30 days after
notice thereof is given under Section 6(b)(i) on action to avoid that
Termination Event.
(iv) RIGHT TO TERMINATE. If:-
(1) a transfer under Section 6(b)(ii) or an agreement under
Section 6(b)(iii), as the case may be, has not been effected
with respect to all Affected Transactions within 30 days after
an Affected Party gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event
Upon Merger or an Additional Termination Event occurs, or a
Tax Event Upon Merger occurs and the Burdened Party is not the
Affected Party,
either party in the case of an Illegality, the Burdened Party in the
case of a Tax Event Upon Merger, any Affected Party in the case of a
Tax Event or an Additional Termination Event if there is more than one
Affected Party, or the party which is not the Affected Party in the
case of a Credit Event Upon Merger or an Additional Termination Event
if there is only one Affected, Party may, by not more than 20 days
notice to the other party and provided that the relevant Termination
Event is then continuing, designate a day not earlier than the day such
notice is effective as an Early Termination Date in respect of all
Affected Transactions.
(c) EFFECT OF DESIGNATION.
(i) If notice designating an Early Termination Date is given under
Section 6(a) or (b), the Early Termination Date will occur on the date
so designated, whether or not the relevant Event of Default or
Termination Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early
Termination Date, no further payments or deliveries under Section
2(a)(i) or 2(e) in respect of the Terminated Transactions will be
required to be made, but without prejudice to the other provisions of
this Agreement. The amount, if any, payable in respect of an Early
Termination Date shall be determined pursuant to Section 6(e).
(d) CALCULATIONS.
(i) STATEMENT. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in
12 IDSDA(R) 1992
<PAGE> 13
reasonable detail, such calculations (including all relevant quotations
and specifying any amount payable under Section 6(e)) and (2) giving
details of the relevant account to which any amount payable to it is to
be paid. In the absence of written confirmation from the source of a
quotation obtained in determining a Market Quotation, the records of
the party obtaining such quotation will be conclusive evidence of the
existence and accuracy of such quotation.
(ii) PAYMENT DATE. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day
that notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event
of Default) and on the day which is two Local Business Days after the
day on which notice of the amount payable is effective (in the case of
an Early Termination Date which is designated as a result of a
Termination Event). Such amount will be paid together with (to the
extent permitted under applicable law) interest thereon (before as well
as after judgment) in the Termination Currency, from (and including)
the relevant Early Termination Date to (but excluding) the date such
amount is paid, at the Applicable Rate. Such interest will be
calculated on the basis of daily compounding and the actual number of
days elapsed.
(e) PAYMENTS ON EARLY TERMINATION. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) EVENTS OF DEFAULT. If the Early Termination Date results from an
Event of Default:-
(1) First Method and Market Quotation If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A)
the sum of the Settlement Amount (determined by the
Non-defaulting Party) in respect of the Terminated
Transactions and the Termination Currency Equivalent of the
Unpaid Amounts owing to the Non- defaulting Party over (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to
the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply,
the Defaulting Party will pay to the Non-defaulting Party, if
a positive number, the Non-defaulting Party's Loss in respect
of this Agreement.
(3) Second Method and Market Quotation. If the Second Method
and Market Quotation apply, an amount will be payable equal to
(A) the sum of the Settlement Amount (determined by the
Non-defaulting Party) in respect of the Terminated
13 IDSDA(R) 1992
<PAGE> 14
Transactions and the Termination Currency Equivalent of the
Unpaid Amounts owing to the Non-defaulting Party less (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to
the Defaulting Party. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if
it is a negative number, the Non-defaulting Party will pay the
absolute value of that amount to the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss
apply, an amount will be payable equal to the Non-defaulting
Party's Loss in respect of this Agreement. If that amount is a
positive number, the Defaulting Party will pay it to the Non-
defaulting Party; if it is a negative number, the
Non-defaulting Party will pay the absolute value of that
amount to the Defaulting Party.
(ii) TERMINATION EVENTS. If the Early Termination Date results from a
Termination Event:-
(1) One Affected Party. If there is one Affected Party, the
amount payable will be determined in accordance with Section
6(e)(i)(3), if Market Quotation applies, or Section
6(e)(i)(4), if Loss applies, except that, in either case,
references to the Defaulting Party and to the Non-defaulting
Party will be deemed to be references to the Affected Party
and the party which is not the Affected Party, respectively,
and, if Loss applies and fewer than all the Transactions are
being terminated, Loss shall be calculated in respect of all
Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties:-
(A) if Market Quotation applies, each party will
determine a Settlement Amount in respect of the
Terminated Transactions, and an amount will be
payable equal to (I) the sum of (a) one-half of the
difference between the Settlement Amount of the party
with the higher Settlement Amount ("X") and the
Settlement Amount of the party with the lower
Settlement Amount ("Y") and (b) the Termination
Currency Equivalent of the Unpaid Amounts owing to X
less (II) the Termination Currency Equivalent of the
Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine its
Loss in respect of this Agreement (or, if fewer than
all the Transactions are being terminated, in respect
of all Terminated Transactions) and an amount will be
payable equal to one-half of the difference between
the Loss of the party with the higher Loss ("X") and
the Loss of the party with the lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to
X; if it is a negative number, X will pay the absolute value
of that amount to Y.
14 IDSDA(R) 1992
<PAGE> 15
(iii) ADJUSTMENT FOR BANKRUPTCY. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies
in respect of a party, the amount determined under this Section 6(e)
will be subject to such adjustments as are appropriate and permitted by
law to reflect any payments or deliveries made by one party to the
other under this Agreement (and retained by such other party) during
the period from the relevant Early Termination Date to the date for
payment determined under Section 6(d)(ii).
(iv) PRE-ESTIMATE. The parties agree that if Market Quotation applies
an amount recoverable under this Section 6(e) is a reasonable
pre-estimate of loss and not a penalty. Such amount is payable for the
loss of bargain and the loss of protection against future risks and
except as otherwise provided in this Agreement neither party will be
entitled to recover any additional damages as a consequence of such
losses.
7. TRANSFER
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that:-
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
8. CONTRACTUAL CURRENCY
(a) PAYMENT IN THE CONTRACTUAL CURRENCY. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that payment
(the "Contractual Currency"). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
15 IDSDA(R) 1992
<PAGE> 16
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) JUDGMENTS. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c) SEPARATE INDEMNITIES. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) EVIDENCE OF LOSS. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.
9. MISCELLANEOUS
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) AMENDMENTS. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) SURVIVAL OF OBLIGATIONS. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
16 IDSDA(R) 1992
<PAGE> 17
(d) REMEDIES CUMULATIVE. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) COUNTERPARTS AND CONFIRMATIONS.
(i) This Agreement (and each amendment, modification and waiver in
respect of it) may be executed and delivered in counterparts (including
by facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of
each Transaction from the moment they agree to those terms (whether
orally or otherwise). A Confirmation shall be entered into as soon as
practicable and may be executed and delivered in counterparts
(including by facsimile transmission) or be created by an exchange of
telexes or by an exchange of electronic messages on an electronic
messaging system, which in each case will be sufficient for all
purposes to evidence a binding supplement to this Agreement. The
parties will specify therein or through another effective means that
any such counterpart, telex or electronic message constitutes a
Confirmation.
(f) NO WAIVER OF RIGHTS. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) HEADINGS. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. OFFICES; MULTIBRANCH PARTIES
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organization of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
17 IDSDA(R) 1992
<PAGE> 18
11. EXPENSES
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document to
which the Defaulting Party is a party or by reason of the early termination of
any Transaction, including, but not limited to, costs of collection.
12. NOTICES
(a) EFFECTIVENESS. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:-
(i) if in writing and delivered in person or by courier, on the date
it is delivered;
(ii) if sent by telex, on the date the recipient's answerback is
received;
(iii) if sent by facsimile transmission, on the date that transmission
is received by a responsible employee of the recipient in legible form
(it being agreed that the burden of proving receipt will be on the
sender and will not be met by a transmission report generated by the
sender's facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or
the equivalent (return receipt requested), on the date that mail is
delivered or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) CHANGE OF ADDRESSES. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
18 IDSDA(R) 1992
<PAGE> 19
13. GOVERNING LAW AND JURISDICTION
(a) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) JURISDICTION. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:-
(i) submits to the jurisdiction of the English courts, if this
Agreement is expressed to be governed by English law, or to the
non-exclusive jurisdiction of the courts of the State of New York and
the United States District Court located in the Borough of Manhattan in
New York City, if this Agreement is expressed to be governed by the
laws of the State of New York; and
(ii) waives any objection which it may have at any time to the laying
of venue of any Proceedings brought in any such court, waives any claim
that such Proceedings have been brought in an inconvenient forum and
further waives the right to object, with respect to such Proceedings,
that such court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) SERVICE OF PROCESS. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any reason any party's
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable to
the other party. The parties irrevocably consent to service of process given in
the manner provided for notices in Section 12. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted
by law.
(d) WAIVER OF IMMUNITIES. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agree, to the extent permitted by applicable
law, that it will not claim any such immunity in any Proceedings.
19 IDSDA(R) 1992
<PAGE> 20
14. DEFINITIONS
As used in this Agreement:-
"ADDITIONAL TERMINATION EVENT" has the meaning specified in Section 5(b).
"AFFECTED PARTY" has the meaning specified in Section 5(b).
"AFFECTED TRANSACTIONS" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"AFFILIATE" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"APPLICABLE RATE" means:-
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and
(d) in all other cases, the Termination Rate.
"BURDENED PARTY" has the meaning specified in Section 5(b).
"CHANGE IN TAX LAW" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.
"CONSENT" includes a consent, approval, action, authorization, exemption,
notice, filing, registration or exchange control consent.
"CREDIT EVENT UPON MERGER" has the meaning specified in Section 5(b).
20 IDSDA(R) 1992
<PAGE> 21
"CREDIT SUPPORT DOCUMENT" means any agreement or instrument that is specified as
such in this Agreement.
"CREDIT SUPPORT PROVIDER" has the meaning specified in the Schedule.
"DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
"DEFAULTING PARTY" has the meaning specified in Section 6(a).
"EARLY TERMINATION DATE" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"EVENT OF DEFAULT" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"ILLEGALITY" has the meaning specified in Section 5(b).
"INDEMNIFIABLE TAX" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organized, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
"LAW" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"LAWFUL" and "UNLAWFUL" will be construed accordingly.
"LOCAL BUSINESS DAY" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
21 IDSDA(R) 1992
<PAGE> 22
"LOSS" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(l) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
"MARKET QUOTATION" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market- makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have been required after that date. For this
purpose, Unpaid Amounts in respect of the Terminated Transaction or group of
Terminated Transactions are to be excluded but, without limitation, any payment
or delivery that would, but for the relevant Early Termination Date, have been
required (assuming satisfaction of each applicable condition precedent) after
that Early Termination Date is to be included. The Replacement Transaction would
be subject to such documentation as such party and the Reference Market-maker
may, in good faith, agree. The party making the determination (or its agent)
will request each Reference Market-maker to provide its quotation to the extent
reasonably practicable as of the same day and time (without regard to different
time zones) on or as soon as reasonably practicable after the relevant Early
Termination Date. The day and time as of which those quotations are to be
obtained will be selected in good faith by the party obliged to make a
determination under Section 6(e), and, if each party is so obliged, after
consultation with the other. If more than three quotations are provided, the
Market Quotation will be the arithmetic mean of the quotations, without regard
to the quotations having the highest and lowest values. If exactly three such
quotations are provided, the Market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if more
than one quotation has the same highest value or lowest value, then one of such
quotations shall be disregarded. If fewer than three quotations are provided,
22 IDSDA(R) 1992
<PAGE> 23
it will be deemed that the Market Quotation in respect of such Terminated
Transaction or group of Terminated Transactions cannot be determined.
"NON-DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.
"NON-DEFAULTING PARTY" has the meaning specified in Section 6(a).
"OFFICE" means a branch or office of a party, which may be such party's head or
home office.
"POTENTIAL EVENT OF DEFAULT" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"REFERENCE MARKET-MAKERS" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"RELEVANT JURISDICTION" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organized, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.
"SCHEDULED PAYMENT DATE" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"SET-OFF" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"SETTLEMENT AMOUNT" means, with respect to a party and any Early Termination
Date, the sum of:-
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to any
Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
23 IDSDA(R) 1992
<PAGE> 24
"SPECIFIED ENTITY" has the meaning specified in the Schedule.
"SPECIFIED INDEBTEDNESS" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"SPECIFIED TRANSACTION" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other patry to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
"STAMP TAX" means any stamp, registration, documentation or similar tax.
"TAX" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"TAX EVENT" has the meaning specified in Section 5(b).
"TAX EVENT UPON MERGER" has the meaning specified in Section 5(b).
"TERMINATED TRANSACTIONS" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, ail Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"TERMINATION CURRENCY" has the meaning specified in the Schedule.
"TERMINATION CURRENCY EQUIVALENT" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign
24 IDSDA(R) 1992
<PAGE> 25
exchange agent (selected as provided below) for the purchase of such Other
Currency with the Termination Currency at or about 11:00 am. (in the city in
which such foreign exchange agent is located) on such date as would be customary
for the determination of such a rate for the purchase of such Other Currency for
value on the relevant Early Termination Date or that later date. The foreign
exchange agent will, if only one party is obliged to make a determination under
Section 6(e), be selected in good faith by that party and otherwise will be
agreed by the parties.
"TERMINATION EVENT" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
"TERMINATION RATE" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"UNPAID AMOUNTS" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market value of that which was (or would have been) required to be
delivered as of the originally scheduled date for delivery, in each case
together with (to the extent permitted under applicable law) interest, in the
currency of such amounts, from (and including) the date such amounts or
obligations were or would have been required to have been paid or performed to
(but excluding) such Early Termination Date, at the Applicable Rate. Such
amounts of interest will be calculated on the basis of daily compounding and the
actual number of days elapsed. The fair market value of any obligation referred
to in clause (b) above shall be reasonably determined by the party obliged to
make the determination under Section 6(e) or, if each party is so obliged, it
shall be the average of the Termination Currency Equivalents of the fair market
values reasonably determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
AMERICAN HOMEPATIENT, INC. BANK OF MONTREAL
(Name of Party) (Name of Party)
By: /s/ By: /s/
-------------------------------- ----------------------------
Name: Mary Ellen Rodgers Name: R.J. Mailloux
Title: Sr. V.P. and Chief Title: Senior Manager,
Financial Officer Documentation
Date: March 20, 1997 Date: April 11, 1997
25 IDSDA(R) 1992
<PAGE> 26
(MULTICURRENCY - CROSS BORDER)
ISDA
SCHEDULE
TO THE
MASTER AGREEMENT
dated as of October 11, 1996
between AMERICAN HOMEPATIENT, INC., a Delaware Corporation ("Party A")
and
BANK OF MONTREAL, a Canadian Chartered Bank ("Party B")
PART 1
TERMINATION PROVISIONS
(a) "SPECIFIED ENTITY" means in relation to Party A for the purpose of:-
Section 5(a)(v), Affiliates
Section 5(a)(vi), Affiliates
Section 5(a)(vii), Affiliates
Section 5(b)(iv), Not Applicable
and in relation to Party B for the purpose of:-
Section 5(a)(v), Not Applicable Section 5(a)(vi), Not Applicable
Section 5(a)(vii), Not Applicable Section 5(b,)(iv), Not Applicable.
(b) "SPECIFIED TRANSACTION" will have the meaning specified in Section 14 of
this Agreement.
(c) The "CROSS DEFAULT" provisions of Section 5(a)(vi) will apply to Party A and
Party B.
26
<PAGE> 27
"SPECIFIED INDEBTEDNESS" will have the meaning specified in Section 14
but it will not include indebtedness in respect of deposits received or
any payment obligation not made because of any event similar to
Illegality.
"THRESHOLD AMOUNT" means 5% of stockholders' equity (including retained
earnings).
(d) The "CREDIT EVENT UPON MERGER" provisions of Section 5)(iv) Will apply
to Party A and Party B.
(e) The "AUTOMATIC EARLY TERMINATION" provisions of Section 6(a) will not
apply to Party A or Party B.
(f) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e) of this
Agreement:-
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(g) "TERMINATION CURRENCY" means U.S. Dollars.
(h) ADDITIONAL TERMINATION EVENT will not apply.
PART 2
TAX REPRESENTATIONS
(a) PAYER REPRESENTATION. For the purpose of Section 3(e) of this
Agreement, Party A and Party B will each make the following
representation:-
It is not required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, of any Relevant
Jurisdiction to make any deduction or withholding for or on account of
any Tax from any payment (other than interest under Section 2(e), 6(d)
(ii) or 6(e) of this Agreement) to be made by it to the other party
under this Agreement. In making this representation, it may rely on:-
(i) the accuracy of any representations made by the other party
pursuant to Section 3(f) of this Agreement;
(ii) the satisfaction of the agreement contained in Section 4(a)(i)
or 4(a)(iii) of this Agreement and the accuracy and effectiveness
of any document provided by the other party pursuant to Section
4(a)(i) or 4(a)(iii) of this Agreement; and
27
<PAGE> 28
(iii) the satisfaction of the agreement of the other party contained
in Section 4(d) of this Agreement;
provided that it shall not be a breach of this representation where
reliance is placed on clause (ii) and the other party does not deliver
a form or document under Section 4(a)(iii) by reason of material
prejudice to its legal or commercial position.
(b) PAYEE TAX REPRESENTATIONS. For the purpose of Section 3(f) of this
Agreement, Party A and Party B make the representations specified
below, if any:-
(i) The following representation will not apply to Party A and
will apply to Party B:-
Each payment received or to be received by it in connection
with this Agreement will be effectively connected with its
conduct of a trade or business in the Specified Jurisdiction.
If such representation applies, then:-
"SPECIFIED JURISDICTION" means with respect to Party A: Not Applicable
"SPECIFIED JURISDICTION" means with respect to Party B: United States
of America
(ii) The following representation will apply to Party A and will not
apply to Party B:-
It has been duly incorporated, created or organized under the
laws of the United States of America or of any State of the
United States of America, and that it is validly existing
under those laws.
(iii) Other Payee Representations: - None made.
PART 3
AGREEMENT TO DELIVER DOCUMENTS
For the purpose of Section 4(a)(i) and (ii) of this Agreement, each party agrees
to deliver the following documents, as applicable:-
(a) Each party shall, as soon as practicable after demand, deliver to the
other party any form or document reasonably requested by the other
party, including without limitation, any form or document required to
enable such other party to make payments hereunder without withholding
for or on account of Taxes or with such withholding at a reduced rate.
28
<PAGE> 29
(b) Other documents to be delivered by each party concurrently with the
execution and delivery of this Agreement are:
<TABLE>
<CAPTION>
Party Form/Document Date by which to Covered by
- - ----- ------------- ---------------- ----------
required to Certificate be delivered Section 3(d)
- - ----------- ----------- ------------ ------------
deliver Representation
- - ------- --------------
document
- - --------
<S> <C> <C> <C>
Party A and Certificate of Incumbency containing Upon execution Yes
Party B specimen signatures of each person of this
executing the Agreement Agreement, and if
requested, each
Confirmation
Party B Certified copy of a resolution of the Upon execution Yes
directors authorizing the execution of this Agreement
and delivery of the Agreement
Party A Legal opinion substantially in the Upon execution No
form of Exhibit I attached herein of this Agreement
evidencing capacity and authority to
enter into and deliver this Agreement
Party B Internal Revenue Service Form 4224, Upon execution N/A
or any successor form, completed of this Agreement
fully, accurately and in a manner
reasonably satisfactory to Party A
</TABLE>
29
<PAGE> 30
PART 4
MISCELLANEOUS
(a) ADDRESSES FOR NOTICES. For the purposes of Section 12(a) of this
Agreement:-
Address(es) for notices or communications to Party A:-
Address: 5200 Maryland Way
Suite 400
Brentwood, TN 37027
Attention: Mary Ellen Rodgers
Facsimile: (615) 373-1847
Telephone: (615) 221-8884
Address(es) for notices or communications to Party B:-
With respect to Swap Transactions:
Address: Specialized Deals
B-1 Level
First Canadian Place
Toronto, Ontario M5X lAl
Canada
Attention: Manager, Confirmations
Facsimile: (416) 867-4778/6827
Telephone: (416) 867-7173
Telex: 06-217774 Answerback: MONTFOREX TOR
Any notice sent to Party B in connection with this Master Agreement
including any notice pursuant to Sections 5, 6 or 9) shall be sent to
the following address:
Address: Bank of Montreal
Treasury Credit
B-1 Level
First Canadian Place
Toronto, Ontario M5X lAl
Attention: Director, Documentation
Telephone: (416) 867-4178
30
<PAGE> 31
(b) PROCESS AGENT. For purposes of Section 13(c) of this Agreement:-
Party A appoints as its Process Agent The Prentice-Hall Corporation
System, Inc. 500 Central Avenue, Albany, N.Y. 12206-2290.
Party B appoints as its Process Agent its Office at 430 Park Avenue,
New York, N.Y. 10022.
(c) OFFICES. The provisions of Section 10(a) will apply to this Agreement.
(d) MULTIBRANCH PARTY. For the purpose of Section 10(c) of this Agreement:-
Party A is not a Multibranch Party.
Party B is not a Multibranch Party and, for purposes of this Agreement
and each Transaction entered into pursuant hereto, will act through its
Chicago Office.
(e) CALCULATION AGENT. The Calculation Agent is Party B, unless otherwise
specified in a Confirmation in relation to the relevant Transaction.
(f) CREDIT SUPPORT DOCUMENT. N/A
(g) CREDIT SUPPORT PROVIDER means in relation to Party A, None.
(h) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York (without reference to
choice of law doctrine).
(i) NETTING OF PAYMENTS. Subparagraph (ii) of Section 2(c) of this
Agreement will apply.
(j) "AFFILIATE" will have the meaning specified in Section 14 of this
Agreement.
PART 5
OTHER PROVISIONS
(a) 1991 ISDA DEFINITIONS. The provisions of the 1991 ISDA Definitions
(the "Definitions'), published by the International Swaps and
Derivatives Association, Inc., are incorporated by reference in, and
will be deemed to be part of, this Agreement and each Confirmation as
if set forth in full in this Agreement or in such Confirmation,
without regard to any revision or subsequent edition thereof. In the
event of any inconsistency between the provisions of this Agreement
and the Definition this Agreement will prevail. In the event of any
inconsistency between the provisions of any Confirmation and this
Agreement or the Definitions, such Confirmation will prevail for the
purpose of the relevant Transaction.
31
<PAGE> 32
(b) SUPERVENING ILLEGALITY. Without prejudice to a party's right to
terminate in the event of Illegality, a party shall not be excused
from performance hereunder by supervening illegality (whether by
reason of passage or promulgation of a new law, regulation or
interpretation or of failure to obtain any required governmental
consent or approval), impossibility or frustration, with the effect
that, while neither party shall be obligated to violate any applicable
law by reason of this Section, each party shall retain its right to
payment pursuant to Section 6(e) if the other party does not perform
because of supervening illegality, impossibility or frustration.
(c) SET-OFF. Any amount (the "Early Termination Amount') payable to one
party (the "Payee") by the other party (the "Payer") under Section
6(e), in circumstances where there is a Defaulting Party or one
Affected Party in the case where a Termination Event under Section
(5)(iv) or 5(b)(v) has occurred, will, at the option of the party
('X') other than the Defaulting Party or the Affected Party (and
without prior notice to the Defaulting Party or the Affected Party),
be reduced by its set-off against any amount(s) (the 'Other Agreement
Amount') payable (whether at such time or in the future or upon the
occurrence of a contingency) by the Payee to the Payer (irrespective
of the currency, place of payment or booking office of the obligation)
under any other agreement(s) between the Payee and the Payer or
instrument(s) or undertaking(s) issued or executed by one party to, or
in favour of, the other party (and the Other Agreement Amount will be
discharged promptly and in all respects to the extent it is so
set-off). X will give notice to the other party of any set-off
effected under this Section.
For this purpose, either the Early Termination Amount or the Other
Agreement Amount (or the relevant portion of such amounts) may be
converted by X into the currency in which the other is denominated at
the rate of exchange at which such party would be able, acting in a
reasonable manner and in good faith, to purchase the relevant amount of
such currency.
Nothing in this Section shall be effective to create a charge or other
security interest. This Section shall be without prejudice and in
addition to any right of setoff, combination of accounts, lien or other
right to which any party is at any time otherwise entitled (whether by
operation of law, contract or otherwise).
(d) RELATIONSHIP BETWEEN THE PARTIES. Each party will be deemed to
represent to the other party on the date on which it enters into a
Transaction that (absent a written agreement between the parties that
expressly imposes affirmative obligations to the contrary for that
Transaction):
NON-RELIANCE. It is acting for its own account, and it has made its own
independent decisions to enter into that Transaction and as to whether
that Transaction is appropriate or proper for it based upon its own
judgment and upon advice from such advisors as it has deemed necessary.
It is not relying on any communication (written or oral) of the other
party as investment advice or as a recommendation to enter into that
Transaction; it being
32
<PAGE> 33
understood that information and explanations related to the terms and
conditions of a Transaction shall not be considered investment advice
or a recommendation to enter into that Transaction. No communication
(written or oral) received from the other party shall be deemed to be
an assurance or guarantee as to the expected results of that
Transaction.
ASSESSMENT AND UNDERSTANDING. It is capable of assessing the merits of
and understanding (on its own behalf or through independent
professional advice), and understands and accepts, the terms,
conditions and risks of that Transaction. It is also capable of
assuming, and assumes, the risks of that Transaction.
STATUS OF PARTIES. The other party is not acting as a fiduciary for or
an advisor to it in respect of that Transaction.
(e) PAN PASSU. Party A hereby covenants that if, after the date of this
Agreement, it secures any Swap Transaction under any other agreement,
now or hereafter existing (an "Obligation") by any mortgage, lien,
pledge or other charge upon any of its present or future assets or
revenues (a "Lien"), it shall immediately take the necessary steps to
ensure that its obligations under this Agreement shall share in and be
secured by such Lien equally and rateably with such other Obligation
and that in the creation of such Lien express provision shall be made
to such effect
AMERICAN HOMEPATIENT, INC. BANK OF MONTREAL
By: /s/ By: /s/
------------------------------- ------------------------------
Name: Mary Ellen Rodgers Name: R.J. Mailloux
----------------------------- ----------------------------
Title: Sr. V.P. and Chief Financial Title: Senior Manager,
Officer Documentation
---------------------------- ---------------------------
Date: March 20, 1997 Date: April 11, 1997
------------------------------ ----------------------------
33
<PAGE> 1
Exhibit 10.79
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT is made and entered into this _____ day of
December, 1997 by and between AMERICAN HOMEPATIENT, INC., a Delaware corporation
(the "Employer") and THOMAS E. MILLS, a resident of the State of Tennessee (the
"Employee").
W I T N E S S E T H:
WHEREAS, Employee was previously employed pursuant to that certain
February 21, 1992 Employment Agreement with American Home Patient Centers, Inc.,
a Tennessee corporation and wholly-owned subsidiary of Employer; and
WHEREAS, the parties replaced the 1992 Employment Agreement with an
Employment Agreement dated February 8, 1995 between Employer and Employee, which
Employment Agreement was amended in 1994 (such Agreement, as amended, is
hereinafter referred to as the "Employment Agreement"); and
WHEREAS, the parties have mutually agreed that Employee's employment
with Employer will terminate on December 31, 1997 in connection with the
organizational restructuring announced by the Employer on September 25, 1997
(the "Restructuring") and, accordingly, the parties desire to replace the
Employment Agreement with this Agreement.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements made herein and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound hereby, agree as follows:
1. EMPLOYMENT. Employer and Employee agree that Employee will remain in
the employ of Employer through December 31, 1997 (the "Termination Date"). Until
such time, Employee shall have the title Senior Vice President - Strategic
Alliances. In such capacity, Employee shall, among other things, be responsible
for certain assigned aspects of Employer's general business operations and
perform such duties as assigned from time to time in accordance with the
policies and objectives established by the Board of Directors and Chief
Executive Officer of Employer, which duties shall include directing certain
aspects of and managing strategic alliances involving the Employer and directing
certain aspects of the Restructuring. Employee agrees to devote his full time,
attention and skill to his duties hereunder through the Termination Date.
2. COMPENSATION AND BENEFITS. Until the Termination Date, Employee
shall receive the same base salary which he is receiving as of the date hereof
and will be entitled to such medical, dental, disability and life insurance, and
other employee benefits as are provided to employees of similar rank.
Notwithstanding the foregoing, Employee will not receive any incentive
compensation for services performed during Employer's 1997 fiscal year.
<PAGE> 2
3. SEVERANCE PAYMENT. Upon termination of Employee's employment by the
Employer pursuant to the Restructuring, Employee will be entitled to receive a
severance payment in an amount equal to ten (10) months of Employee's base
monthly salary payable in equal monthly installments for a ten (10) month period
following such termination. In addition, the Employer agrees to provide medical
insurance and life insurance benefits in an amount equal to those enjoyed by the
Employee during the Employer's 1997 fiscal year for the ten (10) month period
following the termination.
4. NONCOMPETE, ETC. In consideration of the covenants of Employer
contained herein, Employee agrees as follows:
(a) Employee will, with reasonable notice during or after his
employment, furnish information as may be in his possession and cooperate with
Employer as may reasonably be requested in connection with any claims or legal
actions in which Employer is or may become a party. Employee agrees to not
disparage or otherwise comment in a negative way on the Employer or its affairs
after the Termination Date.
(b) Employee recognizes and acknowledges that all information
pertaining to the affairs, business, clients, customers or other relationships
of Employer, as hereinafter defined, is confidential and is a unique and
valuable asset of Employer. Access to and knowledge of this information are
essential to the performance of Employee's duties under this Agreement. Employee
will not during his employment or after except to the extent reasonably
necessary in performance of the duties under this Agreement, give to any person,
firm, association, corporation or governmental agency any information concerning
the affairs, business, clients, customers or other relationships of Employer
except as required by law. Employee will not make use of this type of
information for his own purposes or for the benefit of any person or
organization other than Employer. Employee will also use his best efforts to
prevent the disclosure of this information by others. All records, memoranda,
etc. relating to the Business whether made by Employee or otherwise coming into
his possession are confidential and will remain the property of Employer.
(c) During his employment and thereafter, Employee will not
use his status with Employer to obtain loans, goods or services from another
organization on terms that would not be available to him in the absence of his
relationship to Employer. During his employment and for a twelve (12) month
period following the Termination Date, Employee will not make any statements or
perform any acts intended to advance the interest of any existing or prospective
competitors of Employer in any way that will injure the interest of Employer;
Employee, without express prior written approval by the Board of Directors of
Employer, will not directly or indirectly own or hold any proprietary or other
interest in, otherwise participate in, be employed by, or receive compensation
from any party engaged in the same or any similar business within a one hundred
(100) mile radius of any location of Employer as of the Termination Date; and
Employee, without express prior written approval from the Board of Directors,
will not solicit any members of the then current clients of Employer or discuss
with any employee of Employer or of an affiliate of Employer, unless such
employee has not been employed by Employer or an affiliate for at least twelve
(12) months,
<PAGE> 3
information or operation of any business intended to compete with Employer. For
the purposes of this Agreement, proprietary interest means legal or equitable
ownership, whether through stock holdings or otherwise, of a debt or equity
interest (including options, warrants, rights and convertible interests) in a
business firm or entity, or ownership of more than five percent (5%) of any
class of equity interest in a publicly-held company. For a twelve (12) month
period after the Termination Date, Employee will not directly or indirectly hire
any employee of Employer or solicit or encourage any such employee to leave the
employ of Employer or an affiliate of Employer, unless such employee has not
been employed by Employer or an affiliate for at least six (6) months.
(d) Employee acknowledges that his breach or threatened or
attempted breach of any provision of Section 4 would cause irreparable harm to
Employer not compensable in monetary damages and that Employer shall be
entitled, in addition to all other applicable remedies, to a temporary and
permanent injunction and a decree for specific performance of the terms of
Section 4 without being required to prove damages or furnish any bond or other
security.
(e) The parties hereby acknowledge the necessity of protection
against the competition of, and certain other possible adverse actions by,
Employee and that the nature and scope of such protection has been carefully
considered by the parties. The period provided and the area covered are
expressly represented and agreed to be fair, reasonable and necessary. If,
however, any court determines that the foregoing restrictions are not
reasonable, the court may modify, rewrite or interpret such restrictions to
include as much of their nature and scope as will render them enforceable.
5. RELEASE. In exchange for the promises described herein, Employee
releases and discharges Employer, its employees, officers, directors,
shareholders, agents, attorneys, affiliates, and all related persons or entities
("Releasees"), from any and all losses, causes of action, claims, demands,
liabilities, deficiencies, damages or expenses, known or unknown, arising or
accruing in favor of Employee including but not limited to those arising in
connection with his employment, the Employment Agreement and all related
matters, except for obligations expressly set out herein. This release includes,
but is not limited to, claims arising under Title VII of the Civil Copyrights
Act of 1964, 42 U.S.C. Section 2000e, as amended; the Civil Rights Act of 1991;
the Employee Retirement Income Security Act, 29 U.S.C. Sections 1001 - 1461, as
amended; any claims for breach of contract, tort, or personal injury of any
sort; and any claims under any other state or federal statute, regulation, or
common law.
6. MISCELLANEOUS. The rights and obligations of Employee hereunder are
non-assignable or delegable, and any assignment or delegation will be deemed
null and void. Employer may assign this Agreement. The provisions hereof shall
inure to the benefit of and be binding upon the permitted successors and assigns
of the parties. The invalidity or unenforceability of any provision of this
Agreement will not affect any other provision hereof, and this Agreement will be
construed in all respects as if such invalid or unenforceable provision was
omitted. Furthermore, in lieu of such illegal, invalid or unenforceable
provision, there will be automatically added as a part of this Agreement a
provision as similar in terms to such illegal, invalid or unenforceable
<PAGE> 4
provision as may be possible and be legal, valid and enforceable. The waiver of
a breach by either party of a term or provision of this Agreement will not be
deemed or construed to be a waiver of any subsequent breach of the same or of
any other terms or provisions of this Agreement. This Agreement constitutes the
entire understanding and agreement between the parties with respect to the
employment of Employee and supersedes all other employment contracts and
severance arrangements, including, without limitation, the Employment Agreement.
No waiver, modification or amendment to this Agreement will be valid unless it
is evidence by a written instrument executed by both parties. This Agreement
will be interpreted under subject to and governed by, the substantive laws of
the State of Tennessee.
IN WITNESS WHEREOF, the parties have executed this Severance Agreement
as of the date first above written.
AMERICAN HOMEPATIENT, INC.
By:
------------------------------- -----------------------------------
THOMAS E. MILLS
Title:
---------------------------
<PAGE> 1
Exhibit 10.80
AMENDMENT NO. 3 TO EMPLOYMENT AGREEMENT
THIS AMENDMENT NO. 3 to Employment Agreement is made and entered into
as of 23rd day of December, 1997 by and between AMERICAN HOMEPATIENT, INC., a
Delaware corporation (the "Company") and EDWARD K. WISSING, a resident of the
State of Tennessee (the "Executive").
WHEREAS, the Executive and the Company, as the successor of
Diversicare, Inc., are parties to that certain Employment Agreement dated
October 1, 1991 as amended on June 10, 1994 and December 1, 1995 (the Employment
Agreement as so amended is hereinafter referred to as the "Employment
Agreement"); and
WHEREAS, the parties desire to further amend the Employment Agreement
as set forth herein.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements set forth herein and in the Employment Agreement, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound hereby, agree as
follows:
1. Section VIII(A) is hereby amended by deleting the current clause in
its entirety and substituting in it instead the following:
If the Executive's employment terminates due to either a
Without Cause Termination or a Constructive Discharge as
defined later in this Agreement, the Company will pay the
Executive in a lump sum upon such Termination or Constructive
Discharge an amount equal to the sum of (1) three hundred
percent (300%) of his Base Salary as in effect at the time of
such termination, plus (2) the annual incentive compensation
Executive received for performance during the Company's
immediately preceding fiscal year, multiplied by a fraction,
the numerator of which is the total number of full calendar
months during which the Executive was employed by the Company
during the Company's current fiscal year prior to termination
and the denominator of which is twelve (12); provided,
however, that if such termination occurs during the first six
(6) months of the Company's then current fiscal year, that
portion of the severance payment referenced in clause (2) will
be reduced by twenty percent (20%) to eighty percent (80%)
thereof. For example, if Executive's incentive compensation
for the prior fiscal year was Sixty Thousand and No/100
Dollars ($60,000.00) and his employment with the Company was
terminated as a result of a Without Cause Termination or a
Constructive Discharge five and one-half (5-1/2) months after
the beginning of the current fiscal year, that portion of the
severance
<PAGE> 2
payment due to Executive pursuant to clause (2) above would be
Twenty Thousand and No/100 Dollars ($20,000.00), calculated as
follows: 80% x $60,000.00 x 5/12 = $20,000.00. Earned but
unpaid base salary and any accrued vacation will also be paid
in a lump sum at such time. All benefits and perquisites to
which Executive was entitled immediately prior to termination,
including without limitation, health insurance, participation
in the Company's Supplemental Executive Retirement Plan and
all other benefits and perquisites described in this
Agreement, will be continued for thirty-six (36) months. If
the Executive's employment terminates due to either a Without
Cause Termination or a Constructive Discharge, or pursuant to
Section XI, all stock options ("Options") granted to the
Executive under the Company's 1991 Nonqualified Stock Option
Plan, the Company's 1995 Nonqualified Stock Option Plan for
Directors or any other stock option program or plan (each and
collectively, the "Plan") shall be deemed vested, and the
Company shall cause the Options to remain exercisable for
thirty-six (36) months from the date of termination, subject
to the ten (10) year term limit set forth in the governing
Plan.
2. The first paragraph of Section XI shall be amended by deleting in
its entirety and substituting the following in it instead:
In the event there is a Change in Control of the ownership of
the Company, the Executive may at any time within 12 months of
the Change of Control resign upon written notice to the
Company. In this event, the Company shall pay to the Executive
in a lump sum upon such resignation an amount equal to the sum
of: (1) three hundred percent (300%) of his Base Salary as in
effect of the time of such resignation, plus (2) the annual
incentive compensation Executive received for performance
during the Company's immediately preceding fiscal year,
multiplied by a fraction, the numerator of which is the total
number of full calendar months during which the Executive was
employed by the Company during the Company's current fiscal
year prior to termination and the denominator of which is
twelve (12); provided, however, that if such termination
occurs within six (6) months following such Change of Control,
that portion of the severance payment referenced in clause (2)
will be reduced by twenty percent (20%) to eighty percent
(80%) thereof. For example, if Executive's incentive
compensation for the prior fiscal year was Sixty Thousand and
No/100 Dollars ($60,000.00) and his employment with the
Company was terminated as a result of a Change in Control five
and one-half (5-1/2) months after the beginning of the current
fiscal year, that portion of the
2
<PAGE> 3
severance payment due to Executive pursuant to clause (2)
above would be Twenty Thousand and No/100 Dollars
($20,000.00), calculated as follows: 80% x $60,000.00 x 5/12 =
$20,000.00. In addition, earned but unpaid Base Salary and any
accrued vacation will be paid on a pro-rata basis for the year
in which resignation occurs. Any options granted to the
Executive prior to the Change of Control will be fully vested
upon a Change in Control regardless of whether Executive is
terminated or resigns. All benefits and perquisites to which
Executive was entitled immediately prior to resignation,
including without limitation, health insurance, participation
in the Company's Supplemental Retirement Plan and all other
benefits and perquisites described in this Agreement, will
also be continued for thirty-six (36) months from the
effective date of termination pursuant to a Change in Control.
3. Section XI shall be further amended by adding the following as a new
third paragraph:
Notwithstanding the above, no amount shall be payable
hereunder to the extent that it would result in the imposition
of an excise tax under Internal Revenue Code Section 4999, and
the severance amount payable above shall be automatically
reduced to the extent necessary to avoid such result.
4. The Company and Executive agree that, except as expressly set forth
herein, the terms and conditions of the Employment Agreement remain unchanged
and in full force and effect.
This Amendment shall be governed by and construed in accordance with
the substantive laws of the State of Tennessee.
3
<PAGE> 4
IN WITNESS WHEREOF, the parties have executed this Amendment No. 3 to
Employment Agreement as of the date first above written.
AMERICAN HOMEPATIENT, INC.
By:
--------------------------------------------
Title:
-----------------------------------------
------------------------------------------------
EDWARD K. WISSING
4
<PAGE> 1
Exhibit 10.81
DCAMERICA, INC.
August 7, 1997
Edward K. Wissing
American HomePatient, Inc.
5200 Maryland Way, Suite 400
Brentwood, TN 37027-5018
Dear Ed:
Pursuant to our recent discussions concerning American HomePatient,
Inc. (the "Company"), I have outlined below a suggestion for a working
relationship and fee arrangements with DCAmerica, Inc. and its affiliates
("DCA").
DCA is willing to assist the Company in connection with specific
significant and strategic transactions and initiatives upon written request from
time to time (a "Transaction"). With respect to significant Transactions, our
engagement would be on a case by case basis upon written request by the Company
to DCA, and we would anticipate entering into a formal engagement letter for
each such Transaction. A Transaction of this type may include, but not be
limited to, situations involving strategic acquisitions, combinations,
dispositions and extraordinary financing transactions related thereto. We would
assist in a Transaction in the areas of due diligence, legal, tax, accounting,
employment, and other matters. In doing so would utilize numerous individual
experts in the DCA and Counsel family of companies. This assistance would
include conversations and negotiations in the early stages of a Transaction,
extensive financial analysis, valuation analysis, global transaction structuring
advice, discussions with key personnel at the target company, price analysis,
and structuring of earnout, delayed or contingent payments, and mix of stock or
debt consideration. The assistance would not include the provision of a fairness
opinion, although we will assist the Company in obtaining one if requested.
<PAGE> 2
Edward K. Wissing
American HomePatient, Inc.
Page 2
Upon completion of a Transaction, we would anticipate a cash fee based
on the following:
<TABLE>
<CAPTION>
TRANSACTION VALUE PERCENTAGE FEE
----------------- --------------
<S> <C>
On the first $1,000,000 5%
On the amount between $1,000,000 - 4%
$2,000,000
On the amount between $2,000,000 - 3%
$3,000,000
on the amount between $3,000,000 - 2%
$4,000,000
On the amount above $4,000,000 1%
</TABLE>
"Transaction Value" shall include the gross value of all cash,
securities and other properties paid or payable directly or indirectly in one
transaction or a series or combination of transactions in connection with a
Transaction, including, without limitation, the amounts paid pursuant to
covenants not to compete, non-standard employment contracts, amounts paid to
holders of warrants, stock purchase rights, convertible securities, options or
stock appreciation rights, and the value of long-term liabilities including the
principal amount of debt for borrowed money, preferred stock obligations and
other liabilities, in each case indirectly or directly assumed or acquired or
otherwise repaid or retired in connection with the Transaction. If the
Transaction takes the form of a purchase of assets, Transaction Value shall also
include the value of current assets not purchased minus the value of current
liabilities not assumed. Transaction Value will also include the aggregate
amount of any extraordinary dividend or distribution made by the Company from
the date of engagement through the closing of the Transaction. The Transaction
Value shall include amounts paid into escrow and contingent payments payable in
connection with any Transaction, when paid.
The Company also will agree to indemnify and hold harmless DCA and its
affiliates and each other person, if any, controlling DCA or any of its
affiliates from and against any losses, claims, damages or liabilities
(including reasonable counsel fees) or actions in respect thereof related to or
arising out of such engagement or DCA's role in connection therewith. The
Company will not, however, be responsible for any claims, liabilities, losses,
damage or expenses that result from the bad faith or gross negligence of DCA or
any other party indemnified hereunder.
<PAGE> 3
Edward K. Wissing
American HomePatient, Inc.
Page 3
The Company will also agree that neither DCA, nor any of its
affiliates, nor any person, director, employee or agent of DCA or any of its
affiliates, nor any person controlling DCA or any of its affiliates shall have
any liability (whether direct or indirect, in contract or tort or otherwise) to
the Company or in connection with such engagement except for any such liability
for losses, claims, damages, or liabilities or expenses incurred by the Company
that result from bad faith or gross negligence of DCA or any other party
identified hereunder.
Please indicate if this proposal is acceptable to you.
Sincerely,
DCAMERICA, INC.
By:
----------------------------------
AGREED and ACCEPTED:
AMERICAN HOMEPATIENT, INC.
By:
---------------------------------
Date:
-------------------------------
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES OF AMERICAN HOMEPATIENT, INC.
<TABLE>
<CAPTION>
NAME OF STATE OF D/B/A
SUBSIDIARY INCORPORATION NAME
<S> <C> <C>
Designated Companies, Inc. New York CarePlan
Total HomeCare of East Alabama (LLC) Alabama
AHP Finance, Inc. Delaware
American HomePatient of Iowa, Inc. Delaware
American HomePatient, Inc. Tennessee
American HomePatient of Texas, L.P. Texas
AHP, L.P. Tennessee
Pronetics Health Care Group, Inc. North Carolina
HomeCare Pharmacy, Inc. Alabama
Schofield Medical Services, Inc. Alabama
Breathing Equipment Incorporated Pennsylvania Hazelton Medical & Breathing
Equipment
Happy Harry's HealthCare, Inc. Delaware
Carter's Homecare, Inc. Florida
The Medical Store Connecticut
Roy's Pharmacy Texas Lake's Medical
The Medical Mart Connecticut
RNH, Inc. Connecticut Bonneville
General Holdings, Inc. Pennsylvania
AM-TEX Medical Corporation Texas
Medical Equipment Services, Inc. Illinois
ConPharma Home Healthcare, Inc. Massachusetts
Critical Care Associates, Inc. New York
TPN Pharmacy, Inc. Massachusetts
Penn Oxygen Services, Inc. West Virginia
Mobile Medical Services, Inc. Pennsylvania
Stoll's Medical Rentals, Inc. Connecticut
AHP of Illinois, Inc. Illinois
Home Medical Services, Inc. Alabama
Patient Care Plus, Inc. Alabama
Medical Equipment of Southwest Florida Florida
ProCare Medical Supply Co., Inc. Missouri
American HomePatient of Arkansas, Inc. Arkansas
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
NAME OF STATE OF D/B/A
SUBSIDIARY INCORPORATION NAME
<S> <C> <C>
Clasen Health Services, Inc. Missouri
Missouri Home Health Care Consortium, Inc. Missouri
Neogenesis, Inc. South Carolina
American HomePatient Ventures, Inc. Tennessee
American HomePatient of Texas, L.P. Texas limited
partnership
AHP, L.P. Tennessee limited
partnership
</TABLE>
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our reports included in this Form 10-K into American HomePatient, Inc.'s
previously filed registration statements No. 33-58310 (1993 Employee Stock
Purchase Plan), No. 33-64292 (1991 Non-Qualified Stock Option Plan) and No.
33-93094 (1995 Non-qualified Stock Option Plan for Directors).
ARTHUR ANDERSEN LLP
Nashville, Tennessee
March 20, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF AMERICAN HOMEPATIENT, INC. FOR THE YEAR ENDED DECEMBER
31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 12,100,000
<SECURITIES> 0
<RECEIVABLES> 158,248,000
<ALLOWANCES> 43,862,000
<INVENTORY> 25,824,000
<CURRENT-ASSETS> 170,830,000
<PP&E> 146,803,000
<DEPRECIATION> 66,729,000
<TOTAL-ASSETS> 558,366,000
<CURRENT-LIABILITIES> 58,109,000
<BONDS> 301,324,000
0
0
<COMMON> 149,000
<OTHER-SE> 193,940,000
<TOTAL-LIABILITY-AND-EQUITY> 558,366,000
<SALES> 180,176,000
<TOTAL-REVENUES> 387,277,000
<CGS> 97,418,000
<TOTAL-COSTS> 97,418,000
<OTHER-EXPENSES> 308,215,000
<LOSS-PROVISION> 30,541,000
<INTEREST-EXPENSE> 16,494,000
<INCOME-PRETAX> (34,850,000)
<INCOME-TAX> (8,942,000)
<INCOME-CONTINUING> (25,908,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (25,908,000)
<EPS-PRIMARY> (1.75)
<EPS-DILUTED> (1.75)
</TABLE>
