EXHIBIT 10.31
SECOND AMENDMENT TO SECURITY AGREEMENT
THIS SECOND AMENDMENT TO SECURITY AGREEMENT (this "Amendment") dated as of
November 13, 1998 is made between Apria Healthcare Group Inc., Apria Healthcare,
Inc., ApriaCare Management Systems, Inc., Apria Number Two, Inc., Apria
Healthcare of New York State, Inc. (collectively, the "Obligors") and Bank of
America National Trust and Savings Association, as Administrative and Collateral
Agent for the Banks (as defined below) (the "Agent").
RECITALS
I. The Obligors, the Banks, the Syndication Agent and the Administrative
Agent are parties to the Credit Agreement dated as of August 9, 1996, as amended
by the First Amendment to Credit Agreement, dated as of April 22, 1997, the
Second Amendment to Credit Amendment, dated as of August 8, 1997, the Third
Amendment to Credit Agreement and Waiver, dated as of January 30, 1998, the
Fourth Amendment to Credit Agreement and Waiver, dated as of March 13, 1998, and
the Fifth Amendment to Credit Agreement and Waiver, dated as of April 15, 1998
(as so amended, the "Existing Credit Agreement") pursuant to which the Banks
extended certain credit to the Obligors.
II. The Obligors and the Administrative and Collateral Agent are parties to
the Security Agreement, dated as of March 13, 1998 (the "Security Agreement")
pursuant to which the Obligors granted the Administrative and Collateral Agent a
security interest in certain assets of the Obligors to secure the Obligors'
obligations under the Existing Credit Agreement.
III. At the request of the Obligors, the Administrative and Collateral
Agent, the Banks and the Obligors have entered into an Amended and Restated
Credit Agreement, dated of even date herewith (the "Credit Agreement") pursuant
to which the parties have restructured the terms of the Existing Credit
Agreement.
IV. The Security Agreement currently grants the Administrative and
Collateral Agent a security interest in the Obligor's receivables.
V. As a condition precedent to the Banks entering into the Credit
Agreement, the Obligors have agreed to amend the Security Agreement to grant the
Administrative and Collateral Agent a security interest in the Obligors'
operating accounts, deposit accounts and investment accounts into which the
Obligors' receivables are deposited.
AGREEMENT
In consideration of the foregoing premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties to this Amendment agree as follows:
1. Amendment to Section 1.01. Section 1.01 of the Security Agreement is
hereby amended to include the following new definition in its correct
alphabetical order:
"Securities Account Control Agreement" shall mean the Securities Account
Control Agreement, dated as of November 13, 1998 between the Obligors, the
Administrative and Collateral Agent and Bank of America NT & SA as the
securities intermediary..
2. Amendment to Section 2.01. Section 2.01 of the Security Agreement is
hereby amended by (a) deleting the "and" at the end of paragraph "(i)", (b)
relettering the current paragraph "(j)" to paragraph "(k)" and (c), adding the
following new paragraph "(j)":
(j) all investment property, security entitlements, cash, deposit accounts
and investment accounts of such Obligor, including but not limited to the
Securities Accounts (as defined in the Securities Account Control
Agreement) and the investment accounts described on Annex 6; and
3. Representations. Each of the Obligors represents and warrants to the
Administrative and Collateral Agent that it has the corporate or partnership
power to execute, deliver and perform the terms and provisions of this Amendment
and has taken all necessary corporate or partnership action to authorize the
execution, delivery and performance by it of this Amendment. Each of Apria and
its Material Subsidiaries has duly executed and delivered this Amendment and
this Amendment constitutes its legal, valid and binding obligation enforceable
in accordance with its terms, except as enforceability may be limited by
bankruptcy, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability.
4. Conditions Precedent. The effectiveness of this Amendment is subject to
the following:
(a) the effectiveness of the Credit Agreement; and
(b) the receipt by the Administrative and Collateral Agent of this
Amendment, duly executed and delivered by each of the Obligors.
5. Reference to and Effect on the Security Agreement.
(a) Except as specifically amended by this Amendment, the Security
Agreement shall remain in full force and effect and is hereby ratified and
confirmed.
(b) This Amendment shall be construed as one with the Security Agreement
and the Security Agreement shall, where the context requires, be read and
construed throughout so as to incorporate this Amendment.
6. Entire Agreement. This Amendment, together with the Security Agreement
and the other documents referred to herein, or executed in connection with, the
Security Agreement supersedes all prior agreements and understandings, written
or oral, among the parties with respect to the subject matter of this Amendment.
7. Expenses. The Obligors shall reimburse the Administrative and Collateral
Agent on demand for all reasonable costs, expenses and charges (including,
without limitation, reasonable fees and charges of legal counsel and other
consultants for the Administrative and Collateral Agent) incurred by the
Administrative and Collateral Agent in connection with the preparation,
performance or enforcement of this Amendment.
8. Successors and Assigns. This Amendment shall be binding upon and inure
to the benefit of its parties and their respective successors and permitted
assigns.
9. Severability. Any provision of this Amendment that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Amendment and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10. Captions. The captions and section headings appearing in this Amendment
are included solely for convenience of reference and are not intended to affect
the interpretation of any provision of this Amendment.
11. Counterparts. This Amendment may be executed in any number of
counterparts all of which when taken together shall constitute one and the same
instrument and any of the parties to this Amendment may execute this Amendment
by signing any such counterpart; signature pages may be detached from multiple
separate counterparts and attached to a single counterpart so that all
signatures are physically attached to the same document.
12. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND INTERPRETED AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA.
IN WITNESS WHEREOF, the parties to this Amendment have caused
their duly authorized officers to execute and deliver this Amendment as of the
date first above written.
APRIA HEALTHCARE GROUP INC.
APRIA HEALTHCARE, INC.
APRIACARE MANAGEMENT SYSTEMS, INC.
APRIA NUMBER TWO, INC.
APRIA HEALTHCARE OF NEW YORK STATE, INC.
By:
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Name: Xxxxxxx Xxxxxx
Title: Chief Financial Officer
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
as Administrative and Collateral Agent
By:
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Name: Xxxxxxxxx Xxxxx
Title: Vice President
ANNEX 6
1. Bank of America National Trust and Savings Association Account Number
781-0000000 in the name of Apria Healthcare Group, Inc.
2. Bank of America National Trust and Savings Association Account Number
201982001 in the name of Apria Healthcare, Inc.
3. Provident Fund Processing Company Account Number 480-895871 in the name of
Apria Healthcare, Inc.
