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EXHIBIT 10.74
AMERICAN HOMEPATIENT, INC.
THIRD AMENDMENT AND LIMITED WAIVER TO FOURTH
AMENDED AND RESTATED CREDIT AGREEMENT
This THIRD AMENDMENT AND LIMITED WAIVER TO FOURTH AMENDED AND
RESTATED CREDIT AGREEMENT (this "AMENDMENT") is dated as of March 30, 2000 and
entered into by and among American HomePatient, Inc., a Delaware corporation
(the "BORROWER"), the financial institutions listed on the signature pages
hereof (each a "BANK" and collectively, the "BANKS"), and Bankers Trust Company,
as agent for the Banks (in such capacity, the "AGENT"), and, for purposes of
Sections 5 and 6, the Credit Support Parties (as defined in Section 5 hereof)
listed on the signature pages hereof, and is made with reference to that certain
Fourth Amended and Restated Credit Agreement dated as of December 19, 1997, as
amended to the date hereof (as so amended, the "CREDIT AGREEMENT"). Capitalized
terms used herein without definition shall have the same meanings herein as set
forth in the Credit Agreement.
RECITALS
WHEREAS, the Borrower has advised the Banks that the Borrower
was not in compliance with the provisions of the negative covenants set forth in
Sections 8.07, 8.08, 8.09, 8.10 and 8.17 of the Credit Agreement for the four
fiscal quarter period ending December 31, 1999, which non-compliance constituted
Events of Default under the Credit Agreement (the Events of Default resulting
from such non-compliance with such enumerated covenants for such particular
period being the "EXISTING DEFAULTS"); and
WHEREAS, the Borrower has requested that the Banks waive the
Existing Defaults, such waiver to be effective as of the Third Amendment
Effective Date (as hereinafter defined) for the period prior to such date; and
WHEREAS, the Banks have agreed to grant such limited waivers
with respect to the Existing Defaults resulting from the Borrower's failure to
comply with Sections 8.07, 8.08, 8.09, 8.10 and 8.17 of the Credit Agreement for
the four fiscal quarter period ending December 31, 1999 (and only for such
particular period) on the terms and conditions set forth herein; and
WHEREAS, the Borrower and the Banks desire to amend certain of
the terms and provisions of the Credit Agreement as set forth below:
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
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SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1 AMENDMENTS TO SECTION 1: DEFINITIONS AND PRINCIPLES OF
CONSTRUCTION.
A. (i) Section 1.01 of the Credit Agreement is hereby
amended by deleting "and" immediately before clause "(c)" of the definition of
"Consolidated EBIT" and by adding the following after such clause:
"and (d) the engagement of the Bank Financial Advisor by the
Banks, at the Borrower's expense,"
(ii) Section 1.01 of the Credit Agreement is hereby
further amended by:
(a) restating subclause (a) of clause (i) of
the definition of "Consolidated Excess Cash Flow" as
follows:
"(a) Consolidated EBITDA plus any and all
noncash losses (however characterized,
whether usual, unusual, extraordinary or
any other write-off of any kind or nature)
to the extent such noncash losses were
given effect in the calculation of
Consolidated EBIT and Consolidated EBITDA,"
and
(b) adding to the end of the definition of
"Consolidated Excess Cash Flow" the following new
sentence:
"The calculation of Consolidated Excess
Cash Flow for any fiscal year shall be
based upon actual results for such fiscal
year; provided that for purposes of
calculating Consolidated Excess Cash Flow,
in no event shall the deductions set forth
in clause (ii) of the definition of
"Consolidated Excess Cash Flow" exceed the
amounts permitted under this Agreement or
otherwise breach the terms hereof."
(iii) Section 1.01 of the Credit Agreement is hereby
further amended by restating the definition of "Interest
Payment Date" as follows:
"INTEREST PAYMENT DATE" means, with respect to any
Eurodollar Rate Loan, the last day of the Interest
Period applicable to such Loan; provided that in the
case of each Interest Period of longer than one month
"Interest Payment Date" shall mean the date that is
one month after the commencement of such Interest
Period and each successive date that is one month
after that."
B. Section 1.01 of the Credit Agreement is hereby further
amended by adding thereto the following definitions, which shall be inserted in
proper alphabetical order:
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"BANK FINANCIAL ADVISOR" means Zolfo Xxxxxx, LLC, and shall
include any successor or replacement therefor.
"THIRD AMENDMENT" means that certain Third Amendment and
Limited Waiver to Fourth Amended and Restated Credit Agreement dated as
of March 30, 200 by and among the Borrower, and for purposes of
Sections 5 and 6 thereof, the Credit Support Parties (as such term is
defined therein), the Banks listed on the signature pages thereof and
the Agent.
"THIRD AMENDMENT EFFECTIVE DATE" has the meaning assigned to
that term in Section 3 of the Third Amendment.
1.2 AMENDMENTS TO SECTION 2: AMOUNT AND TERMS OF CREDIT.
A. Section 2.01(a) of the Credit Agreement is hereby amended
by (i) deleting the reference therein to "253,600,000" and replacing it with
"$249,243,329" and (ii) restating clause (ii) of the second paragraph thereof in
its entirety a follows:
"(ii) In no event shall the Total Utilization of Revolving
Loan Commitments at any time exceed the lesser of (1) the
Total Utilization of Revolving Loan Commitments as of the
Third Amendment Effective Date and (2) the Total Revolving
Loan Commitments then in effect."
B. Section 2.06(b) of the Credit Agreement is hereby amended
by restating the first paragraph thereof in its entirety as follows:
"In connection with each Eurodollar Rate Loan, the Borrower
may, pursuant to the applicable Notice of Revolver Borrowing or Notice
of Conversion/Continuation, as the case may be, select an interest
period (each an "Interest Period") to be applicable to such Loan, which
Interest Period shall be, at the Borrower's option, either a one, two
or three month period; provided that:"
C. Section 2.06(e) of the Credit Agreement is hereby amended
by deleting "Post Maturity Interest" as the heading thereof and substituting
therefor the heading "Default Rate".
D. Section 2.06(g)(ii) of the Credit Agreement is hereby
amended by deleting the reference therein to "Section 2.06(f)" and substituting
therefor "Section 2.06(g)".
1.3 AMENDMENTS TO SECTION 7: AFFIRMATIVE COVENANTS.
A. INFORMATION COVENANTS.
(i) Section 7.01(g) of the Credit Agreement is hereby
amended by adding to the end thereof the following new
sentence:
Borrower shall furnish the Agent (with sufficient
copies for each Bank) no later than 5 days after the
end of each month, a narrative report
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summarizing all negotiations and other discussions
among the Borrower and the Subsidiaries (including
their respective counsel and representatives) and
representatives of the O.I.G. or any other
Governmental Authority since the last report
submitted to the Agent regarding (x) any
investigation and/or audit of the Borrower and/or its
Subsidiaries that is pending as of the Third
Amendment Effective Date and (y) any material claim,
complaint, notice or request for information that the
Borrower or any of its Subsidiaries receives from any
Governmental Authority after the Third Amendment
Effective Date."
(ii) Section 7.01(l) of the Credit Agreement is
hereby amended by deleting "and" immediately before clause
(vi) and inserting immediately after clause (vi) the
following:
"and (vii) an employee head count trend analysis for
the Borrower and its Subsidiaries for such month,
together with a comparison to the assumptions set
forth in the Performance Plan"
(iii) Section 7.01(m) of the Credit Agreement is
hereby amended by deleting therefrom the following:
"and (iv) an employee headcount report for the
Borrower and its Subsidiaries for such month,"
and adding thereto the following:
", (iv) a report, in form and substance satisfactory
to the Banks, setting forth the location and account
number of each bank account of Borrower and each of
its Subsidiaries and the closing balance thereof at
the end of the preceding month, (v) a report, in form
and substance satisfactory to the Banks, on the
status of the implementation of the modifications to
be made by Borrower to its registration,
authorization and billing procedures pursuant to the
plan provided by Borrower to Banks, Agent and the
Bank Financial Advisor, and (vi) a report, in form
and substance satisfactory to the Banks, on the
status of the consolidation and closure by Borrower
of 9 billing centers (leaving a total of 47 billing
centers) in calendar year 2000 and the consolidation
and closure of an additional 22 billing centers in
the aggregate during calendar years 2001 and 2002
(leaving a total of 25 billing centers) in accordance
with the plan provided by Borrower to Banks, Agent
and the Bank Financial Advisor."
(iv) Section 7.01 of the Credit Agreement is hereby further
amended by adding the following subsection thereto:
(q) ADDITIONAL DOCUMENTATION. Borrower shall deliver
(i) to the Banks and their respective counsel within five
Business Days after the Third Amendment Effective Date
originally executed copies of one or more favorable written
opinions of Xxxxxxx Xxxxxx Xxxx Xxxxxxx & Manner, P.C.,
counsel for
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the Borrower, in form and substance reasonably satisfactory to
Agent and its counsel, with respect to the enforceability of
the Amended Agreement and as to such other matters as Agent
acting on behalf of the Banks may reasonably request, (ii) to
each Bank within three Business Days after the Third Amendment
Effective Date a report, in form and substance satisfactory to
the Banks, setting forth the location and account number of
each bank account of Borrower and each of its Subsidiaries and
the closing balance thereof as of December 31, 1999, and (iii)
to the Agent within 30 days after the Third Effective Date an
Officer's Certificate signed by the President or Vice
President of the Borrower and attested to by the Secretary or
Assistant Secretary of the Borrower, in form and substance
satisfactory to Agent, to the effect that (w) Borrower is in
good standing as a foreign corporation in the State of New
York, (x) each of American HomePatient East, Inc.and Volunteer
Medical Oxygen and Hospital Equipment Company, Inc. is in good
standing under the laws of its jurisdiction of incorporation,
(y) American HomePatient of New York, Inc. is a validly
existing corporation and in good standing under the laws of
its jurisdiction of incorporation and has all requisite
corporate power and authority to enter into the Amendment and
to carry out the transactions contemplated by, and perform its
obligations under, the Credit Agreement as amended by the
Amendment and the other Credit Documents, and (z) American
HomePatient, Inc. a Tennessee corporation, American
HomePatient East, Inc., The National Medical Rentals, Inc. and
National I.V., Inc. are duly qualified and in good standing as
a foreign corporation in each 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 Borrower and its Subsidiaries taken as a whole.
B. BOOKS, RECORDS AND INSPECTIONS.
Section 7.02 of the Credit Agreement is hereby amended by
restating it in its entirety as follows:
"7.02 BOOKS, RECORDS AND INSPECTIONS.
(a) 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 (including, without limitation, Section
13(b)(2) of the Securities Exchange Act of 1934, as amended)
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 the officers and
designated representatives of the Agent or any Bank to visit
and inspect 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 (including, without
limitation, any cost or other reimbursement reports submitted
to a Governmental Authority in contemplation of any
receivable, any responses, statements or reports relating
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thereto prepared by any Person and any medical record audits)
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 management, officers and independent accountants,
all at reasonable times and upon reasonable notice, as the
Agent or such Bank or any of their officers or designated
representatives may request.
(b) Without limiting the generality of clause (a) of this
Section 7.02, the Borrower will, and will cause each of its
Subsidiaries to, permit the Bank Financial Advisor to visit
and inspect, on a daily basis, 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 to be advised as to the same by, its
and their management, officers and independent accountants in
order to, among other things (w) render accounting and
reporting assistance to the Agent and the Banks in connection
with the Borrower's compliance or noncompliance with the
covenants set forth in this Agreement, (x) review monthly,
quarterly, annual and any other financial information
delivered to the Agent and the Banks or included in reports to
be filed with the Securities and Exchange Commission, (y)
review, evaluate and provide the Agent and the Banks
recommendations regarding the Borrower's and its Subsidiaries'
short and long term financial projections and (z) develop for
the Agent and the Banks strategies and initiatives and perform
such other duties as the Agent or the Banks may request from
time to time."
C. COLLATERAL QUESTIONNAIRE, ETC. Section 7 of the Credit
Agreement is hereby further amended by adding to the end thereof the following
new Section 7.16:
"7.16 COLLATERAL QUESTIONNAIRE; THIRD AMENDMENT CERTIFICATES,
etc. (a) Within 30 days after the Third Amendment Effective
Date, the Borrower shall complete and deliver to the Agent an
updated collateral questionnaire, substantially in the form of
the collateral questionnaire dated November 20, 1998 and in
any case in form and substance satisfactory to the Agent and
its counsel. The Borrower will, and will cause its
Subsidiaries to, cooperate with the Agent and deliver to the
Agent all such documents and instruments that the Agent deems
necessary or desirable to perfect, preserve and protect the
Liens created under the Credit Documents.
(b) Within 10 days after the Third Amendment Effective Date,
the Borrower shall, and shall cause each Subsidiary set forth
on Schedule 1 to the Third Amendment, to deliver to the Banks
(or to Agent for the Banks with sufficient originally executed
copies, where appropriate, for each Bank and its counsel) (i)
resolutions of the Board of Directors of each Subsidiary
approving, authorizing and ratifying the execution, delivery,
and performance of the Third Amendment, signed by the
President or Vice President of such Subsidiary and attested to
by the Secretary or any Assistant Secretary of such
Subsidiary, and in form and substance satisfactory to the
Banks, and (ii) a good standing certificate for each
Subsidiary from the Secretary of State of its jurisdiction of
incorporation, dated a date acceptable to the Agent."
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1.4 AMENDMENTS TO SECTION 8: NEGATIVE COVENANTS.
A. LEVERAGE RATIO. Section 8.08 of the Credit Agreement
is hereby amended by restating it in its entirety as follows:
"8.08 LEVERAGE RATIO. The Borrower shall not permit the ratio
of (i) Total Debt to (ii) Consolidated Adjusted EBITDA for any
consecutive four-fiscal quarter period ending as of the last
day of any fiscal quarter of the Borrower set forth below to
be more than the correlative amount set forth below (it being
understood and agreed that for purposes of determining
compliance with this covenant, 1999 FQ4 Consolidated EBITDA
shall be deemed to be $12,510,000):
FISCAL QUARTER LEVERAGE RATIO
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2000 FQ1 6.84:1.00
2000 FQ2 7.29:1.00
2000 FQ3 7.70:1.00
2000 FQ4 7.88:1.00
2001 FQ1 5.00:1.00
2001 FQ2 5.00:1.00
2001 FQ3 5.00:1.00
2001 FQ4 5.00:1.00
2002 FQ1 4.75:1.00
B. MINIMUM CONSOLIDATED NET WORTH. Section 8.09 is hereby
amended by deleting it in its entirety and substituting the following therefor:
"8.09 MINIMUM CONSOLIDATED NET WORTH. The Borrower shall not
permit Consolidated Net Worth of the Borrower and its Subsidiaries to
be less than $26,679,000 (i) at December 31, 2000 for Fiscal Year 2000
and (ii) on the last day of any fiscal quarter after December 31, 2000,
for any consecutive four-fiscal quarter period ending as of the last
day of such fiscal quarter."
C. MINIMUM INTEREST COVERAGE RATIO. Section 8.10 of the Credit
Agreement is hereby amended by restating it in its entirety as follows:
"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
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ending as of the last day of any fiscal quarter of the
Borrower set forth below to be less than the correlative
amount set forth below (it being understood and agreed that
for purposes of determining compliance with this covenant,
1999 FQ4 Consolidated EBITDA shall be deemed to be
$12,510,000):
FISCAL QUARTER MINIMUM INTEREST COVERAGE RATIO
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2000 FQ1 1.57:1.00
2000 FQ2 1.44:1.00
2000 FQ3 1.32:1.00
2000 FQ4 1.19:1.00
2001 FQ1 2.00:1.00
2001 FQ2 2.10:1.00
2001 FQ3 2.20:1.00
2001 FQ4 2.30:1.00
2002 FQ1 2.30:1.00
D. MINIMUM CONSOLIDATED EBITDA. Section 8.17 of the Credit
Agreement is hereby amended by deleting it in its entirety and substituting the
following therefor:
"8.17. MINIMUM CONSOLIDATED EBITDA. The Borrower shall not
permit Consolidated EBITDA for the three-month period ending on the
last day of any month set forth below to be less than the correlative
amount indicated (it being understood and agreed that for purposes of
determining compliance with this covenant, November 1999 Consolidated
EBITDA shall be deemed to be $3,868,000 and December 1999 Consolidated
EBITDA shall be deemed to be $4,862,000):
MONTH ENDING MINIMUM CONSOLIDATED EBITDA
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January 2000 $11,793,000
February 2000 $10,993,000
March 2000 $ 8,833,000
April 2000 $ 8,953,000
May 2000 $ 9,067,000
June 2000 $ 9,548,000
July 2000 $ 9,598,000
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MONTH ENDING MINIMUM CONSOLIDATED EBITDA
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August 2000 $ 9,647,000
September 2000 $ 9,697,000
October 2000 $10,186,000
November 2000 $10,676,000
December 2000 $11,165,000
January 2001 $15,750,000
February 2001 $14,750,000
March 2001 $13,500,000
April 2001 $14,750,000
May 2001 $14,750,000
June 2001 $15,000,000
July 2001 $15,250,000
August 2001 $15,750,000
September 2001 $16,000,000
October 2001 $16,500,000
November 2001 $16,750,000
December 2001 $17,250,000
January 2002 $16,000,000
February 2002 $15,000,000
March 2002 $13,750,000
April 2002 $14,750,000
E. MONTHLY ACCOUNTS RECEIVABLE COVENANT. Section 8 of the
Credit Agreement is hereby further amended by amending and restating Section
8.18 in its entirety as follows:
"8.18 ACCOUNTS RECEIVABLE COLLECTIONS.
A. The Borrower shall not permit the average daily amount
collected by the Borrower and its Subsidiaries in respect of Accounts
Receivable for each Collection Day during any consecutive three-month
period (the "CURRENT THREE-MONTH PERIOD") to be less than the Applicable
Three-Month Percentage (as hereinafter defined) of the average daily
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Adjusted Net Revenues for each Collection Day during the consecutive
three-month period immediately preceding the commencement of such Current
Three-Month Period. For purposes of this Section 8.18A, the term
"APPLICABLE THREE-MONTH PERCENTAGE" shall mean (i) for any Current
Three-Month Period ending during the first-two fiscal quarters of 2000,
85%, (ii) for any Current Three-Month Period ending during the third fiscal
quarter of 2000, 86%, (iii) for any Current Three-Month Period ending
during the fourth fiscal quarter of 2000, 87%, and (iv) for any Current
Three-Month Period ending during the first fiscal quarter of 2001 or
thereafter, 90%.
B. The Borrower shall not permit the average daily
amount collected by the Borrower and its Subsidiaries in respect of
Accounts Receivable for each Collection Day during any month (the "CURRENT
MONTH") to be less than the Applicable Monthly Percentage (as hereinafter
defined) of the average daily Adjusted Net Revenues for each Collection Day
during the third month immediately preceding such Current Month. For
purposes of this Section 8.18B, the term "APPLICABLE MONTHLY PERCENTAGE"
shall mean (i) for any Current Month ending during the first-two fiscal
quarters of 2000, 83%, (ii) for any Current Month ending during the third
fiscal quarter of 2000, 84%, (iii) for any Current Month ending during the
fourth fiscal quarter of 2000, 85%, and (iv) for any Current Month ending
during the first fiscal quarter of 2001 or thereafter, 86%."
1.5 AMENDMENT TO SECTION 9: EVENTS OF DEFAULT.
A. O.I.G. INVESTIGATION.
Section 9.12 of the Credit Agreement is hereby amended by
restating it in its entirety as follows:
"9.12 O.I.G. INVESTIGATION. Any investigation and/or audit of
the Borrower and its Subsidiaries by the O.I.G. or any other Governmental
Authority that (x) is pending as of the Third Amendment Effective Date or
(y) arises or is pending at any time on or after the Third Amendment
Effective Date, shall result in a liability (whether or not being
contested) on the part of the Borrower and its Subsidiaries and/or a
reduction or set-off in respect of future Accounts Receivable of the
Borrower and its Subsidiaries in an aggregate amount which, in the opinion
of the Required Banks, 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 or there shall have been a development in any such
investigation and/or audit that the Required Banks determine could
reasonably be expected to have 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;"
1.6 AMENDMENT TO SECTION 11: MISCELLANEOUS.
A. PAYMENT OF EXPENSES, ETC. Section 11.01 of the
Credit Agreement is hereby amended by restating it in its entirety as follows:
"11.01 PAYMENT OF EXPENSES, ETC. The Borrower shall: (i) pay
all the actual costs and reasonable expenses (w) of the Agent
(including, without limitation, the
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reasonable fees and disbursements of O'Melveny & Xxxxx LLP, 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, (x) 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 & Xxxxx LLP, special counsel to the
Agent, and such other counsel as any other Bank may retain from time to
time in connection herewith), (y) of the Agent (including, without
limitation, the reasonable fees and disbursements of O'Melveny & Xxxxx
LLP, special counsel to the Agent) in connection with the custody or
preservation of any of the Collateral or in connection with creating,
perfecting and preserving Liens in favor of the Agent on behalf of the
Banks pursuant to any Credit Document, including any filing and
recording fees, expenses and taxes, stamp or documentary taxes, search
fees and title insurance premiums and (z) of the Bank Financial Advisor
and any other consultants, advisors, agents, auditors or accountants
chosen by the Agent or the Required Banks, to perform, investigate,
test or review such matters relating to the Borrower and its
Subsidiaries as the Agent or the Required Banks shall designate
(including, without limitation, any review, investigation or evaluation
conducted pursuant to Section 7.02); (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). After the
occurrence of an Event of Default or upon the acceleration of the
Obligations (whether pursuant to the terms hereof or applicable law),
the Borrower shall pay all costs and expenses, including reasonable
attorneys' fees (including, without limitation, allocated costs of
internal counsel) and costs of settlement, incurred by the Agent and/or
the Banks in enforcing any Obligations of, or in collecting any
payments due from, the Borrower or any Subsidiary hereunder or under
the other Credit Documents by reason of such Event of Default
(including in connection with the sale of, collection from, or other
realization upon any of the Collateral or the enforcement of the
Subsidiary Guaranty) or in connection with any refinancing or
restructuring of the credit
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arrangements provided under this Agreement in the nature of a
"work-out" or pursuant to any insolvency or bankruptcy proceedings."
B. ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND LETTERS OF
CREDIT. Section 11.05(b)(i)(B) is hereby amended by adding immediately after the
parenthetical "(which consent of the Borrower and the Agent shall not be
unreasonably withheld or delayed)" the following:
"; provided that in no event shall the Borrower's consent be
required if a Default or an Event of Default has occurred and
is continuing."
SECTION 2. LIMITED WAIVER
A. WAIVERS. Subject to the terms and conditions set forth
herein and in reliance on the representations and warranties of the Borrower
herein contained, the Banks hereby waive (i) the Existing Defaults, such waiver
to be effective as of the Third Amendment Effective Date for the period prior to
the Third Amendment Effective Date and, for purposes of clarity, such limited
waiver shall be solely with respect to the Existing Defaults caused by the
Borrower's non-compliance with Sections 8.07, 8.08, 8.09, 8.10 and 8.17 of the
Credit Agreement for the four fiscal quarter period ending December 31, 1999
(and only for such period), (ii) payment of the Default Rate of interest
provided for under Section 2.06(c) of the Credit Agreement that would otherwise
have been due through the Third Amendment Effective Date, and (iii) compliance
with any provisions of the Credit Agreement based on the revisions to the
definition of "Consolidated Excess Cash Flow" set forth herein for Fiscal Year
1999.
B. LIMITATION OF WAIVER. Without limiting the generality of
the provisions of subsection 11.13 of the Credit Agreement, the waiver set forth
in Section 2A shall be limited precisely as written and relates solely to the
waiver of the Existing Defaults for the period prior to the Third Amendment
Effective Date in the manner and to the extent described above, and nothing in
this Amendment shall be deemed to:
(a) constitute a waiver of compliance by the Borrower with
respect to (i) Sections 8.07, 8.08, 8.09, 8.10 and 8.17 of the Credit
Agreement in any other instance or for any other period or (ii) any
other term, provision or condition of the Credit Agreement, the other
Credit Documents or any other instrument or agreement referred to
therein; or
(b) prejudice any right or remedy that the Agent or any Bank
may now have or may have in the future under or in connection with the
Credit Agreement (including, without limitation, rights and remedies
relating to the Borrower's failure to comply with the covenants amended
hereby), the other Credit Documents or any other instrument or
agreement referred to therein.
SECTION 3. CONDITIONS TO EFFECTIVENESS
Sections 1 and 2 of this Amendment shall become effective only
upon the satisfaction of all of the following conditions precedent (the date of
satisfaction of such conditions being referred to herein as the "THIRD AMENDMENT
EFFECTIVE DATE"):
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A. On or before the Third Amendment Effective Date, the
Borrower shall deliver to the Banks (or to Agent for the Banks with sufficient
originally executed copies, where appropriate, for each Bank and its counsel)
resolutions of the Board of Directors of the Borrower approving and
authorizing the execution, delivery, and performance of this Amendment, signed
by the President or Vice President of the Borrower and attested to by the
Secretary or any Assistant Secretary of the Borrower, and dated the Third
Amendment Effective Date.
B. On or before the Third Amendment Effective Date, the
Borrower shall have delivered to the Agent:
(i) for distribution to each Bank that executes and
delivers this Amendment to the Agent on or before the Third Amendment
Effective Date, a non-refundable amendment fee equal to 1/4 of 1% of
the sum of the outstanding principal amount of the Term Loan of such
Bank as of the Third Amendment Effective Date (and prior to giving
effect to the payment set forth in clause (ii) below) plus the
Revolving Loan Commitment prior to giving effect to the Third
Amendment;
(ii) for distribution to each Bank, in accordance
with its Pro Rata Share, $5,000,000 to be applied to prepay in inverse
order of maturity the scheduled installments of principal of the Term
Loans as set forth in Section 4.01; and
(iii) for distribution to the Agent and the
applicable Banks, all of their respective costs and expenses
(including, without limitation, attorneys' fees and disbursements, the
fees and costs of the Bank Financial Advisor and the fees and costs of
any other consultant or advisor retained by the Agent or the Banks in
connection herewith) incurred as of the Third Amendment Effective Date
in connection with the administration of the Credit Agreement and the
negotiation, preparation, execution and delivery of this Amendment and
the other documents, agreements, certificates and instruments delivered
hereunder or in connection herewith.
The payments made pursuant to Section 3B(i), (ii) and (iii) hereof
shall be made in Dollars in immediately available funds at the Payment Office of
the Agent.
SECTION 4. BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to enter into this Amendment and
to amend the Credit Agreement in the manner provided herein, the Borrower
represents and warrants to each Bank that the following statements are true,
correct and complete:
A. CORPORATE POWER AND AUTHORITY. The Borrower and each
Subsidiary (as applicable), other than American HomePatient of New York, Inc.,
has all requisite corporate, partnership or other power and authority to enter
into this Amendment and to carry out the transactions contemplated by, and
perform its obligations under, the Credit Agreement as amended by this Amendment
(the "AMENDED AGREEMENT") and the other Credit Documents.
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this Amendment, the performance of the Amended Agreement and the consummation of
the
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transactions contemplated hereby have been duly authorized by all necessary
corporate, partnership or other action (as applicable) on the part of the
Borrower and each Subsidiary.
C. NO CONFLICT. The execution and delivery by the Borrower and
each Subsidiary of this Amendment, the performance by the Borrower and each such
Subsidiary of the Amended Agreement and the consummation of the transactions
contemplated hereby do not and will not (i) violate any provision of any law or
any governmental rule or regulation applicable to the Borrower or any of its
Subsidiaries, the Certificate or Articles of Incorporation or Bylaws (or other
documents of formation and governance, as the case may be) of the Borrower or
any of its Subsidiaries, or any order, judgment or decree of any court or other
agency of government binding on the Borrower or any of its Subsidiaries, (ii)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any Contractual Obligation of the Borrower or any
of its Subsidiaries, (iii) result in or require the creation or imposition of
any Lien upon any of the properties or assets of the Borrower or any of its
Subsidiaries, or (iv) require any approval of stockholders or any approval or
consent of any Person under any Contractual Obligation of the Borrower or any of
its Subsidiaries except for such approvals or consents which will be obtained on
or before the Third Amendment Effective Date (as hereinafter defined).
D. GOVERNMENTAL CONSENTS. The execution and delivery by the
Borrower and each Subsidiary of this Amendment, the performance by the Borrower
and each such Subsidiary of the Amended Agreement and the consummation of the
transactions contemplated hereby do not and will not require any registration
with, consent or approval of, or notice to, or other action to, with or by, any
federal, state or other governmental authority or regulatory body.
E. BINDING OBLIGATION. This Amendment and the Amended
Agreement have been duly executed and delivered by the Borrower and each
Subsidiary and are the legally valid and binding obligations of the Borrower and
each such Subsidiary, enforceable against the Borrower and each such Subsidiary
in accordance with their respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles relating to
enforceability.
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
DOCUMENTS. All representations and warranties of the Borrower or any of its
Subsidiaries contained in the Credit Documents are and will be true, correct and
complete in all material respects on and as of the Third Amendment Effective
Date to the same extent as though made on and as of that date, except (i) to the
extent such representations and warranties specifically relate to an earlier
date, in which case they were true, correct and complete in all material
respects on and as of such earlier date, (ii) the failure of American
HomePatient East, Inc. to be in good standing in its jurisdiction of
incorporation, to be in good standing as a foreign corporation in Connecticut or
to be in good standing or duly qualified as a foreign corporation in Michigan,
(iii) the failure of American HomePatient of New York, Inc. to be validly
existing and in good standing under the laws of its jurisdiction of
incorporation, (iv) the failure of American HomePatient, Inc., a Tennessee
corporation, to be in good standing as a foreign corporation in New Mexico, (v)
the failure of Borrower to be in good standing as a foreign corporation in New
York, (vi) the failure of The National Medical Rentals, Inc. to be in good
standing or duly qualified as a foreign corporation in Missouri, (vii) the
failure of National I.V., Inc. to be in good
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standing or duly qualified as a foreign corporation in Missouri, or (viii) the
failure of Volunteer Medical Oxygen and Hospital Equipment Company, Inc. to be
in good standing in its jurisdiction of incorporation. Without limiting the
generality of the foregoing, all information supplied to the Agent by or on
behalf of the Borrower or any Subsidiary with respect to any of the Collateral
is accurate and complete in all material respects, including, without
limitation, the information supplied in any of the schedules to the Credit
Documents.
G. ABSENCE OF DEFAULT. No event has occurred and is continuing
or will result from the consummation of the transactions contemplated by this
Amendment that would constitute an Event of Default or a Potential Event of
Default.
H. ACKNOWLEDGEMENT OF DEBT. As of the Third Amendment
Effective Date, prior to the effectiveness of the limited waivers and amendments
herein and prior to giving effect to the payment made pursuant to Section 3C(ii)
of this Amendment, the aggregate Term Loan Exposure is $63,264,691.09 and the
Total Utilization of Revolving Loan Commitments is $249,243,329. The
Obligations, including, without limitation, the amounts set forth in the
preceding sentence, are jointly and severally payable by the Borrower and the
Credit Support Parties without defense, offset, presentment, protest, demand or
notice of any kind and interest, fees, costs and expenses continue to accrue
with respect thereto.
I. SUBSIDIARIES; JOINT VENTURES. Schedule 1 annexed hereto
sets forth, as of the Third Amendment Effective Date, each Subsidiary of the
Borrower and each Joint Venture. Except as set forth on Schedule 2 annexed
hereto, the Borrower and its Subsidiaries have not created and/or acquired any
Subsidiaries since the Third Amendment Effective Date.
J. SUBSIDIARY MERGERS. The Subsidiaries set forth on Schedule
3 annexed hereto have merged with other Subsidiaries in accordance with the
terms of the Credit Agreement as provided therein.
SECTION 5. ACKNOWLEDGEMENT AND CONSENT
Each Subsidiary set forth on Schedule 1 annexed hereto is a
party to the Subsidiary Guaranty and one or more of the following: (i) the
Subsidiary Partnership Security Agreement, (ii) the Subsidiary Pledge Agreement,
(iii) the Subsidiary Security Agreement and (iv) the Subsidiary Trademark
Security Agreement, in each case as amended through the Third Amendment
Effective Date, pursuant to which each such Subsidiary has (x) irrevocably
guarantied the prompt payment and performance of the Obligations and (y) granted
to the Agent (for the benefit of the Banks) valid and perfected first priority
security interests in and liens on the Collateral (subject to Liens consented to
by the Required Banks with respect to such Collateral and other Liens permitted
by Section 8.01 of the Credit Agreement) to secure the obligations of such
Subsidiary under the Subsidiary Guaranty. The Subsidiaries set forth on Schedule
A annexed hereto are collectively referred to herein as the "CREDIT SUPPORT
PARTIES", and the Subsidiary Guaranty, the Subsidiary Partnership Security
Agreement, the Subsidiary Pledge Agreement, the Subsidiary Security Agreement
and the Subsidiary Trademark Security Agreement are collectively referred to
herein as the "CREDIT SUPPORT DOCUMENTS".
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Each Credit Support Party hereby acknowledges that it has
reviewed the terms and provisions of the Credit Agreement and this Amendment and
consents to the amendment of the Credit Agreement effected pursuant to this
Amendment. Each Credit Support Party hereby confirms that each Credit Support
Document to which it is a party or otherwise bound and all Collateral encumbered
thereby will continue to guaranty or secure, as the case may be, to the extent
set forth in such Credit Support Document the payment and performance of all
"Guarantied Obligations" and "Secured Obligations", as the case may be (in each
case as such terms are defined in the applicable Credit Support Document),
including, without limitation, the payment and performance of all such
"Guarantied Obligations" or "Secured Obligations", as the case may be, in
respect of the Obligations of the Borrower now or hereafter existing under or in
respect of the Amended Agreement and the Notes defined therein.
Each Credit Support Party acknowledges and agrees that any of
the Credit Support Documents to which it is a party or otherwise bound shall
continue in full force and effect and that all of its obligations thereunder
shall be valid and enforceable and shall not be impaired or limited by the
execution or effectiveness of this Amendment. Each Credit Support Party
represents and warrants that all representations and warranties contained in the
Amended Agreement and the Credit Support Documents to which it is a party or
otherwise bound are true, correct and complete in all material respects on and
as of the Third Amendment Effective Date to the same extent as though made on
and as of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true, correct
and complete in all material respects on and as of such earlier date.
Each Credit Support Party acknowledges and agrees that
notwithstanding the conditions to effectiveness set forth in this Amendment,
such Credit Support Party is not required by the terms of the Credit Agreement
or any other Credit Document to consent to the amendments to the Credit
Agreement effected pursuant to this Amendment.
SECTION 6. MISCELLANEOUS
A. RELEASE.
The Borrower, each of the Credit Support Parties, their
respective successors and assigns and any Person that may derivatively or
otherwise assert a claim through or by any of the foregoing to the fullest
extent permitted by applicable law (collectively, the "RELEASORS") hereby
releases, remises, acquits and forever discharges the Agent, each Bank and each
of their respective employees, agents representatives, consultants, attorneys,
fiduciaries, servants, officers, directors, partners, predecessors, successors
and assigns, subsidiary corporations, parent corporations, related corporate
divisions, participants and assigns (all of the foregoing hereinafter called the
"RELEASED PARTIES"), from any and all actions and causes of action, judgments,
executions, suits, debts, claims, demands, liabilities, obligations, setoffs,
recoupments, counterclaims, defenses, damages and expenses of any and every
character, known or unknown, suspected or unsuspected, direct and/or indirect,
at law or in equity, of whatsoever kind or nature, whether heretofore or
hereafter arising, for or because of any matter or things done, omitted or
suffered to be done by any of the Released Parties prior to and including the
Third Amendment Effective Date, and in any way directly or indirectly arising
out of or in any way connected to this Amendment, the Credit Agreement or the
other Credit Documents (all of the
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foregoing hereinafter called the "RELEASED MATTERS"). Each Releasor acknowledges
that the agreements in this Section 6A are intended to be in full satisfaction
of all or any alleged injuries or damages arising in connection with the
Released Matters and constitute a complete waiver of any right of setoff or
recoupment, counterclaim or defense of any nature whatsoever which arose prior
to the Third Amendment Effective Date to payment or performance of the
Obligations. Each Releasor represents and warrants that it has no knowledge of
any claim by it against the Released Parties or of any facts, or acts or
omissions of the Released Parties which on the Third Amendment Effective Date
would be the basis of a claim by the Releasors against the Released Parties
which is not released hereby. Each Releasor represents and warrants that it has
not purported to transfer, assign, pledge or otherwise convey any of its right,
title or interest in any Released Matter to any other Person and that the
foregoing constitutes a full and complete release of all Released Matters.
Releasors have been advised by counsel of their choosing and have granted this
release freely, and voluntarily and without duress.
The foregoing release shall be effective as a bar to any and
all actions, fees, damages, losses, claims, liabilities and demands of
whatsoever character, nature and kind, known or unknown, suspected or
unsuspected, notwithstanding any provisions of applicable law restricting the
effect of such a release. In furtherance thereof, the Releasors expressly waive
any and all rights conferred upon them by any provisions of applicable law to
the effect that a general release does not extend to claims which the creditor
does not know or suspect to exist in its factor at the time of executing the
release, which if known by it must have materially affected its settlement with
the debtor.
B. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND
THE OTHER CREDIT DOCUMENTS.
(i) The Borrower hereby agrees and confirms that on and after
the Third Amendment Effective Date each Credit Document 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 the Amended Agreement and the
Notes.
(ii) On and after the Third Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the Credit
Agreement, and each reference in the other Credit Documents to the
"Credit Agreement", "thereunder", "thereof" or words of like import
referring to the Credit Agreement shall mean and be a reference to the
Amended Agreement.
(iii) 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 are hereby ratified and
confirmed, 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
Amendment or any future amendment or modification of the Amended
Agreement.
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(iv) The execution, delivery and performance of this Amendment
shall not, except as expressly provided herein or therein, constitute a
waiver of any provision of, or operate as a waiver of any right, power
or remedy of the Agent or any Bank under, the Credit Agreement or any
of the other Credit Documents.
C. HEADINGS. Section and subsection headings in this
Amendment are included herein for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose or be given any
substantive effect.
D. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE 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.
E. COUNTERPARTS; EFFECTIVENESS. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Amendment (other than the
provisions of Sections 1 and 2 hereof, the effectiveness of which is governed by
Section 3 hereof) shall become effective upon the execution of a counterpart
hereof by the Borrower, the Agent and the Required Banks and receipt by the
Borrower and the Agent of written or telephonic notification of such execution
and authorization of delivery thereof.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
BORROWER:
AMERICAN HOMEPATIENT, INC.,
a Delaware corporation
By:
------------------------------
Name:
------------------------
Title:
-----------------------
S-1
20
CREDIT SUPPORT PARTIES:
AHP, L.P.
AHP FINANCE, INC.
ALLEGHENY RESPIRATORY ASSOCIATES, INC.
AMERICAN HOMEPATIENT, INC.
AMERICAN HOMEPATIENT OF ARKANSAS, INC.
AMERICAN HOMEPATIENT OF ILLINOIS, INC.
AMERICAN HOMEPATIENT OF IOWA, INC.
AMERICAN HOMEPATIENT OF NEVADA, INC.
AMERICAN HOMEPATIENT OF TEXAS, L.P.
AMERICAN HOMEPATIENT VENTURES, INC.
AMERICAN HOMEPATIENT EAST, INC.
AMERICAN HOMEPATIENT OF NEW YORK, INC.
BREATHING EQUIPMENT INC. D/B/A XXXXXXXX MEDICAL AND BREATHING EQUIPMENT
COLUMBIA-AHP HOME CARE ALLIANCE OF GAINESVILLE, GAINESVILLE, FL
COLUMBIA-AHP HOME CARE ALLIANCE, NASHVILLE AND JACKSON TN
DESIGNATED COMPANIES, INC. D/B/A CAREPLAN
DOWNEAST MEDICAL SHOPPE
HAPPY HARRY'S HEALTHCARE, INC.
MEDICAL EQUIPMENT SERVICES, INC.
NATIONAL I.V., INC.
THE NATIONAL MEDICAL RENTALS, INC.
NATIONAL MEDICAL SYSTEMS, INC.
PARAGON HOME MEDICAL EQUIPMENT PARTNERSHIP, DALLAS, IRVING AND GRAND
PRAIRIE, TX
SOUND MEDICAL EQUIPMENT, INC.
UNITED CLINICAL SERVICES, INC.
VOLUNTEER MEDICAL OXYGEN AND HOSPITAL EQUIPMENT COMPANY, INC.
On behalf of all of the above:
By:
---------------------------------
Name:
---------------------------
Title:
---------------------------
S-2
21
BANKERS TRUST COMPANY,
Individually and as the Agent
By:
------------------------------
Name:
------------------------
Title:
------------------------
S-3
22
ABN AMRO BANK, N.V.
By:
-------------------------------
Name:
-------------------------
Title:
-------------------------
By:
-------------------------------
Name:
-------------------------
Title:
-------------------------
X-0
00
XXXXXXX XXXX
By:
-------------------------------
Name:
----------------------------
Title
----------------------------
S-5
24
BANK OF AMERICA, N.T. & S.A.
(including the former NationsBank, N.A.)
By:
------------------------------
Name:
------------------------
Title:
------------------------
S-6
25
BANK OF MONTREAL
By:
------------------------------
Name:
-------------------------
Title:
-------------------------
S-7
26
FIRST UNION NATIONAL BANK
(formerly Corestates Bank, N.A.)
By:
-------------------------------
Name:
-------------------------
Title:
-------------------------
S-8
27
[Intentionally left blank]
S-9
28
BANK ONE
(formerly The First National Bank of Chicago)
By:
-------------------------------
Name:
------------------------
Title:
-----------------------
S-10
29
BEAR XXXXXXX & CO. INC.
By:
-------------------------------
Name:
------------------------
Title:
-----------------------
X-00
00
XXXXXXXX, N.A.
By:
-------------------------------
Name:
------------------------
Title:
-----------------------
S-12
31
THE FUJI BANK, LIMITED, NEW YORK BRANCH
By:
-------------------------------
Name:
------------------------
Title:
-----------------------
X-00
00
XXXXXXXXXXXX XXXXXXXX RAIFFESEN -
BOERENLEENBANK, B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH
By:
-------------------------------
Name:
------------------------
Title:
-----------------------
By:
-------------------------------
Name:
------------------------
Title:
-----------------------
S-14
33
THE SAKURA BANK, LIMITED
By:
-------------------------------
Name:
------------------------
Title:
-----------------------
X-00
00
XXXXXXXX XXXX, NASHVILLE, N.A.
By:
-------------------------------
Name:
------------------------
Title:
-----------------------
S-16
00
XXXXX XXXX XX XXXXXXXXXX, N.A.
By:
-------------------------------
Name:
------------------------
Title:
-----------------------
S-17
36
XXXXXXX X. XXXXX & SONS SPECIAL
SITUATIONS PARTNERS, L.P.
By:
-------------------------------
Name:
------------------------
Title:
-----------------------
S-18
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SCHEDULE 1
SUBSIDIARIES
38
SCHEDULE 2
NEW SUBSIDIARIES
