EXHIBIT 10.26
AMENDED AND RESTATED BORROWER
PARTNERSHIP SECURITY AGREEMENT
This AMENDED AND RESTATED BORROWER PARTNERSHIP SECURITY AGREEMENT (this
"AGREEMENT") is dated as of July __, 2003 and entered into by and between
AMERICAN HOMEPATIENT, INC., a Delaware corporation ("GRANTOR"), and BANK OF
MONTREAL, as agent for and representative of (in such capacity herein called
"SECURED PARTY") the financial institutions ("BANKS") that hold a promissory
note payable to such Banks as set forth on Exhibit A attached hereto (the
"Promissory Note") and amends and restates the Borrower Partnership Security
Agreement dated as of December 28, 1995 between Grantor and Bankers Trust
Company as the predecessor to the Secured Party (the "Prior Security
Agreement").
PRELIMINARY STATEMENTS
A. Grantor, Bankers Trust Company and Banks previously entered
into that certain Fifth Amended and Restated Credit Agreement dated as of May
25, 2001.
B. Grantor filed a voluntary petition under 11 U.S.C. Sections
101 et seq. on July 30, 2002 in the United States Bankruptcy Court for the
Middle District of Tennessee. On May 27, 2003, the Bankruptcy Court confirmed
Grantor's Second Amended Joint Plan of Reorganization (herein "Joint Plan") in
all respects. The Fifth Amended and Restated Credit Agreement is no longer in
effect and as part of the Joint Plan, the Grantor will execute The Promissory
Note to the Banks on terms and in amounts provided in the Joint Plan to evidence
Grantor's indebtedness and obligations to the Banks.
B. Grantor is or may become a party to certain partnership
agreements in which a majority of all partnership interests in the partnerships
formed pursuant thereto are owned by Grantor and/or its Subsidiaries (each such
partnership agreement, as amended to the date hereof and as it may hereafter be
amended, supplemented or otherwise modified from time to time, a "PARTNERSHIP
AGREEMENT" and collectively, the "PARTNERSHIP AGREEMENTS"), and Grantor is or
may become a general partner of and/or a limited partner in the partnerships
formed pursuant thereto (each a "COMPANY" and collectively, the "COMPANIES").
C. Pursuant to the Joint Plan and the Bankruptcy Court's order
issued May 27, 2003, Grantor is required to amend the Prior Security Agreement
as provided herein.
NOW, THEREFORE, in consideration of the premises set forth herein and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, Grantor hereby agrees with Secured Party as follows:
SECTION 1. GRANT OF SECURITY. Grantor hereby pledges and assigns to
Secured Party, for Secured Party's benefit and the benefit of Banks, and hereby
further grants a security interest in, all of Grantor's right, title and
interest in and to the following (the "COLLATERAL"):
(a) all of Grantor's right, title and interest as a general or
limited partner in each Company, whether now owned or hereafter acquired,
including without limitation all of
Grantor's right, title and interest in, to and under the Partnership Agreement
of such Company (including without limitation Grantor's right to vote and to
manage and administer the business of such Company), together with all other
rights, interests, claims and other property of Grantor in any manner arising
out of or relating to its general and/or limited partnership interest in such
Company, whatever their respective kind or character, whether they are tangible
or intangible property, and wheresoever they may exist or be located, and
further including, without limitation, all of the rights of Grantor as a general
and/or limited partner: (i) to (x) receive money due and to become due
(including without limitation dividends, distributions, interest, income from
partnership properties and operations, proceeds of sale of partnership assets
and returns of capital) under or pursuant to such Partnership Agreement, (y)
receive payments upon termination of such Partnership Agreement, and (z) receive
any other payments or distributions, whether cash or noncash, in respect of
Grantor's general and/or limited partnership interest evidenced by such
Partnership Agreement; (ii) in and with respect to claims and causes of action
arising out of or relating to such Company; and (iii) to have access to such
Company's books and records and to other information concerning or affecting
such Company;
(b) any "certificate of interest" or "certificates of interest"
(or other certificates or instruments however designated or titled) issued by
any Company and evidencing Grantor's interest as a limited partner in such
Company (collectively, the "Certificate" with respect to such Company) and any
interest of Grantor in the entries on the books of such Company or of any
financial intermediary pertaining to Grantor's interest as a limited partner in
such Company;
(c) all books, records, ledger cards, files, correspondence,
computer programs, tapes, disks and related data processing software that at any
time evidence or contain information relating to any of the Collateral or are
otherwise necessary or helpful in the collection thereof or realization
thereupon; and
(d) all proceeds, products, rents and profits of or from any and
all of the foregoing Collateral and, to the extent not otherwise included, all
payments under insurance (whether or not Secured Party is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Collateral. For
purposes of this Agreement, the term "proceeds" includes whatever is receivable
or received when Collateral or proceeds are sold, exchanged, collected or
otherwise disposed of, whether such disposition is voluntary or involuntary.
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures, and the
Collateral is collateral security for, the prompt payment or performance in full
when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including the payment of amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. Section 362(a)), of all obligations and
liabilities of every nature of Grantor now or hereafter existing under or
arising out of or in connection with the Promissory Note, and all or any portion
of such obligations or liabilities that are paid to the extent all or any part
of such payment is avoided or recovered directly or indirectly from Secured
Party or any Bank as a preference, fraudulent transfer or otherwise (all such
obligations and liabilities being the "UNDERLYING DEBT"), and all obligations of
every nature of Grantor now or hereafter existing under this Agreement (all such
obligations of Grantor, together with the Underlying Debt, being the "SECURED
OBLIGATIONS").
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SECTION 3. NO ASSUMPTION. Notwithstanding any of the foregoing, this
Agreement shall not in any way be deemed to obligate Secured Party, any Bank or
any purchaser at a foreclosure sale under this Agreement to assume any of
Grantor's obligations, duties, expenses or liabilities under any Partnership
Agreement (including without limitation Grantor's obligations as a general
partner for the debts and obligations of any respective Company and to manage
the business and affairs of such Company) or under any and all other agreements
now existing or hereafter drafted or executed (collectively, the "GRANTOR
OBLIGATIONS") unless Secured Party, such Bank or such purchaser otherwise
expressly agrees to assume any or all of said Grantor Obligations in writing. In
the event of foreclosure by Secured Party on behalf of Banks, Grantor shall
remain bound and obligated to perform the Grantor Obligations and neither
Secured Party nor any Bank shall be deemed to have assumed any of such Grantor
Obligations except as provided in the preceding sentence. Without limiting the
generality of the foregoing, neither the grant of the security interest in the
Collateral in favor of Secured Party as provided herein nor the exercise by
Secured Party of any of its rights hereunder nor any action by Secured Party in
connection with a foreclosure on the Collateral shall be deemed to constitute
Secured Party or any Bank a general partner of any Company; provided, however,
that in the event Secured Party or any purchaser of Collateral at a foreclosure
sale elects to become a substituted general partner of any Company in place of
Grantor, Secured Party or such purchaser, as the case may be, shall adopt in
writing the respective Partnership Agreement and agree to be bound by the terms
and provisions thereof.
SECTION 4. DELIVERY OF CERTIFICATE; INSTRUCTIONS TO COMPANY REGARDING
REGISTRATION OF PLEDGE. Any certificate shall be delivered to and held by or on
behalf of Secured Party pursuant hereto and shall be in suitable form for
transfer by delivery or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to
Secured Party. Upon request by Secured Party, Grantor, at its own expense, shall
deliver to each Company an order, satisfactory in form and substance to Secured
Party, requesting that the pledge of Grantor's interest as a limited partner in
such Company be registered on the books of such Company.
SECTION 5. REPRESENTATIONS AND WARRANTIES. Grantor represents and
warrants as follows:
(a) Partnership Interests in Companies. Schedule A annexed hereto,
as amended from time to time, correctly sets forth (i) all Partnership
Agreements and (ii) the partnership interests of all partners of each Company.
The partnership interests described in Schedule A annexed hereto constitute 100%
of the partnership interests in each Company.
(b) Partnership Agreement. Each Partnership Agreement, a true and
complete copy of which has been furnished to Secured Party, has been duly
authorized, executed and delivered by Grantor and is in full force and effect
and has not been amended or modified except as disclosed in writing to Secured
Party.
(c) Ownership of Collateral. Grantor is the legal and beneficial
owner of the Collateral free and clear of any Lien except for the security
interest created by this Agreement. No effective financing statement or other
instrument similar in effect covering all or any part of
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the Collateral is on file in any filing or recording office except such as may
have been filed in favor of Secured Party relating to this Agreement.
(d) Consents or Governmental Authorizations. No consent of any
other Person (including, without limitation any other partner of any Company or
any creditor of Grantor), and no authorization, approval or other action by, and
no notice to or filing with, any governmental authority or regulatory body is
required for either (i) the grant by Grantor of the security interest granted
hereby, (ii) the execution, delivery or performance of this Agreement by
Grantor, or (iii) the perfection of or the exercise by Secured Party of its
rights and remedies hereunder (except as may have been taken by or at the
direction of Grantor).
(e) Other Information. All information heretofore, herein or
hereafter supplied to Secured Party by or on behalf of Grantor with respect to
the Collateral is accurate and complete in all material respects.
SECTION 6. FURTHER ASSURANCES; AMENDMENTS.
(a) Grantor agrees that from time to time, at the expense of
Grantor, Grantor will promptly execute and deliver all further instruments and
documents, and take all further action, that reasonably may be necessary or
desirable, or that the Secured Party may request, in order to perfect and
protect any security interest granted hereby or purported to be granted hereby
or to enable Secured Party to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. Without limiting the generality of the
foregoing, Grantor will: (i) at the request of Secured Party, xxxx conspicuously
each of its records pertaining to the Collateral with a legend, in form and
substance satisfactory to Secured Party, indicating that such Collateral is
subject to the security interest granted hereby, (ii) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as Secured Party
may request. in order to perfect and preserve the security interests granted or
purported to be granted hereby, and (iii) at Secured Party's request, appear in
and defend any action or proceeding that may affect Grantor's title to or
Secured Party's security interest in all or any part of the Collateral.
(b) Grantor hereby authorizes Secured Party to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of Grantor. Grantor agrees that
a carbon, photographic or other reproduction of this Agreement or of a financing
statement signed by Grantor shall be sufficient as a financing statement and may
be filed as a financing statement in any and all jurisdictions.
(c) Grantor will furnish to Secured Party from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as Secured Party may
reasonably request, all in reasonable detail.
(d) Grantor further agrees that it will, upon obtaining any
interests required to be pledged hereunder as provided in Section 7(h), promptly
(and in any event within ten Business Days) deliver to Secured Party an
amendment to this Agreement (a "SECURITY AMENDMENT"), duly executed by Grantor
in respect of the additional Collateral to be pledged pursuant to this
Agreement. Grantor hereby authorizes Secured Party to attach each Security
Amendment to this
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Agreement and agrees that all additional Collateral listed on any Security
Amendment shall for all purposes hereunder be considered Collateral; provided
that the failure of Grantor to execute a Security Amendment with respect to any
additional Collateral shall not impair the security interest of Secured Party
therein or otherwise adversely affect the rights and remedies of Secured Party
hereunder with respect thereto.
SECTION 7. CERTAIN COVENANTS OF GRANTOR. Grantor shall:
(a) not without the prior written consent of Secured Party, which
consent shall not be unreasonably withheld, (i) cancel or terminate any
Partnership Agreement or consent to or accept any cancellation or termination
thereof, (ii) sell, assign (by operation of law or otherwise) or otherwise
dispose of any part of its general or limited partnership interest in any
Company, (iii) amend, supplement or otherwise modify any Partnership Agreement
(if now held, as in effect on the date hereof or, if hereinafter acquired, as in
effect on the date of such acquisition) except amendments that are immaterial
and would not have a material adverse effect on the business, operations,
property, assets, liability (contingent or otherwise), condition (financial or
otherwise), or prospects of the respective Company, (iv) waive any default under
or breach of any Partnership Agreement or waive, fail to enforce, forgive or
release any right, interest or entitlement of any kind, howsoever arising, under
or in respect of any Partnership Agreement or vary or agree to the variation in
any respect of any of the provisions of any Partnership Agreement or of the
performance of any other Person under any Partnership Agreement, or (v)
petition, request or take any other legal or administrative action which seeks,
or may reasonably be expected, to rescind, terminate or suspend any Partnership
Agreement or to amend or modify any Partnership Agreement;
(b) at its expense (i) perform and comply in all material respects
with all terms and provisions of each Partnership Agreement required to be
performed or complied with by it, (ii) maintain each Partnership Agreement in
full force and effect, (iii) enforce each Partnership Agreement in accordance
with its terms, and (iv) take all such action to that end as from time to time
may be reasonably requested by Secured Party;
(c) not create or suffer to exist any lien upon or with respect to
any of the Collateral to secure the indebtedness or other obligations of any
person, except for the security interest created by this Agreement;
(d) not without the prior written consent of Secured Party, which
consent shall not be unreasonably withheld, (i) vote to permit any Company in
which it holds a limited partnership interest to enter into any transaction of
merger or consolidation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution) and (ii) not permit any Company in which it holds a
general partnership interest to enter into any transaction of merger or
consolidation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution)
(e) notify Secured Party of any change in Grantor's name, identity
or corporate structure within 15 days of such change;
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(f) give Secured Party 30 days' prior written notice of any change
in Grantor's chief place of business, chief executive office or residence or the
office where Grantor keeps its records regarding the Collateral;
(g) pay promptly when due all taxes, assessments and governmental
charges or levies imposed upon, and all claims against, the Collateral, except
to the extent the validity thereof is being contested in good faith; provided
that Grantor shall in any event pay such taxes, assessments, charges, levies or
claims not later than five days prior to the date of any proposed sale under any
judgment, writ or warrant of attachment entered or filed against Grantor or any
of the Collateral as a result of the failure to make such payment;
(h) pledge hereunder, immediately upon the acquisition thereof,
(i) any and all additional general and/or limited partnership interests acquired
after the date of this Agreement in, to and under any Partnership Agreement, and
(ii) any and all general and/or limited partnership interests in partnerships,
that become, after the date of this Agreement, partnerships in which a majority
of all partnership interests are owned by Grantor and/or its Subsidiaries.
SECTION 8. VOTING RIGHTS; PROFITS, INTEREST AND DIVIDENDS.
(a) So long as no Event of Default shall have occurred and be
continuing (for the purposes of this Agreement, "Default" or "Event of Default"
shall mean Grantor's failure to pay when due any amounts owed to any Bank under
the Promissory Note):
(i) Grantor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Collateral or any
part thereof (including without limitation rights of approval arising
under each Partnership Agreement and any and all right to manage and
administer the business of each Company) for any purpose not
inconsistent with the terms of this Agreement; and
(ii) Grantor shall be entitled to receive and retain, and
to utilize free and clear of the lien of this Agreement, any and all
payments, including but not limited to profits, dividends and other
distributions, paid in respect of the Collateral; provided, however,
that any and all
(A) profits, dividends, and other distributions
paid or payable other than in cash in respect of, and
instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, any
Collateral,
(B) profits, dividends and other distributions
paid or payable in cash in respect of any Collateral in
connection with a partial or total liquidation or dissolution
or in connection with a reduction of capital, and
(C) cash paid, payable or otherwise distributed
in redemption of or in exchange for any Collateral,
(iii) shall be, and shall forthwith be delivered to Secured
Party to hold as, Collateral and shall, if received by Grantor, be
received in trust for the benefit of Secured Party, be segregated from
the other property or funds of Grantor and be forthwith delivered to
Secured Party as Collateral in
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the same form as so received (with all necessary endorsements); and
Secured Party shall execute and deliver (or cause to be executed and
delivered) to Grantor all such proxies and other instruments as Grantor
may from time to time reasonably request for the purpose of enabling
Grantor to exercise the voting and other consensual rights that it is
entitled to exercise pursuant to Section 8(a)(i) and to receive the
profits, dividends and other distributions that it is authorized to
receive and retain pursuant to Section 8(a)(ii)
(b) Upon the occurrence and during the continuation of an Event of
Default:
(i) upon written notice from Secured Party to Grantor,
any or all rights of Grantor to exercise the voting and other
consensual rights, and any or all rights to manage and administer the
business and affairs of each Company, that it would otherwise be
entitled to exercise pursuant to Section 8(a)(a)(i) shall cease, and
all such rights (or such of those rights as Secured Party may have
elected) shall thereupon become vested in Secured Party who shall
thereupon have the sole right to exercise such voting and other
consensual rights;
(ii) all rights of Grantor to receive any and all payments
under or in connection with each Partnership Agreement, including but
not limited to the profits, dividends, and other distributions which it
would otherwise be authorized to receive and retain pursuant to Section
8(a)(a)(ii), shall cease, and all such rights shall thereupon become
vested in Secured Party who shall thereupon have the sole right to
receive and hold such payments as Collateral; and
(iii) all payments which are received by Grantor contrary
to the provisions of Section 8(a)(a)(ii) shall be received in trust for
the benefit of Secured Party, shall be segregated from other funds of
Grantor and shall be forthwith paid over to Secured Party as Collateral
in the same form as so received (with any necessary endorsement).
SECTION 9. SECURED PARTY APPOINTED ATTORNEY-IN-FACT. Upon the
occurrence and during the continuation of an Event of Default, Grantor hereby
irrevocably appoints Secured Party as Grantor's attorney-in-fact, with full
authority in the place and stead of Grantor and in the name of Grantor, Secured
Party or otherwise, take any action and to execute any instrument that Secured
Party may deem necessary or advisable to accomplish the purposes of this
Agreement, including without limitation:
(a) to ask, demand, collect, xxx for, recover, compound, receive
and give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(b) to receive, endorse and collect all instruments made payable
to Grantor representing any payment of profits, dividends or any other
distribution in respect of any of the Collateral;
(c) to file any claims or take any action or institute any
proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
Secured Party with respect to any of the Collateral; and
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(d) to do, at Secured Party's option and Grantor's expense, at any
time or from time to time, all acts and things that Secured Party deems
reasonably necessary to protect, preserve or realize upon the Collateral and
Secured Party's security interest therein in order to effect the intent of this
Agreement, all as fully and effectively as Grantor might do.
SECTION 10. SECURED PARTY MAY PERFORM. If Grantor fails to perform any
agreement contained herein., Secured Party upon ten (10) days prior written
notice to Grantor may itself perform, or cause performance of, such agreement,
and the reasonable expenses of Secured Party incurred in connection therewith
shall be payable by Grantor.
SECTION 11. STANDARD OF CARE. The powers conferred on Secured Party
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the exercise of
reasonable care in the custody of any Collateral in its possession and the
accounting for monies actually received by it hereunder, Secured Party shall
have no duty as to any Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral. Secured Party shall be deemed to have exercised reasonable care in
the custody and preservation of any Collateral in its possession if such
Collateral is accorded treatment substantially equal to that which Secured Party
accords its own property of a similar nature.
SECTION 12. REMEDIES.
(a) If any Event of Default shall have occurred and be continuing,
Secured Party may exercise in respect of the Collateral, in addition to all
other rights and remedies provided for herein or otherwise available to it, all
the rights and remedies of a secured party on default under the Uniform
Commercial Code as in effect in the State of Tennessee (the "Code') (whether or
not the Code applies to the affected Collateral), and Secured Party may also in
its sole discretion, without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any exchange or broker's board or at any of Secured Party's offices or
elsewhere, for cash, on credit or for future delivery, at such time or times and
at such price or prices and upon such other terms as Secured Party may deem
commercially reasonable, irrespective of the impact of any such sales on the
market price of the Collateral. Secured Party or any Bank may be the purchaser
of any or all of the Collateral at any such sale and Secured Party, as agent for
and representative of Banks (but not any Bank or Banks in its or their
respective individual capacities unless Requisite Banks shall otherwise agree in
writing), shall be entitled, for the purpose of bidding and making settlement or
payment of the purchase price for all or any portion of the Collateral sold at
any such public sale, to use and apply any of the Secured Obligations as a
credit on account of the purchase price for any Collateral payable by Secured
Party at such sale. Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of Grantor, and Grantor
hereby waives (to the extent permitted by applicable law) all rights of
redemption, stay and/or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
Grantor agrees that, to the extent notice of sale shall be required by law, at
least ten days' notice to Grantor of the time and place of any public sale or
the time after which any private sale is to be made shall constitute reasonable
notification. Secured Party shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. Secured Party may
adjourn any public or private sale from time to time by announcement at the time
and
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place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned. Grantor hereby waives any claims
against Secured Party arising by reason of the fact that the price at which any
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if Secured Party accepts
the first offer received and does not offer such Collateral to more than one
offeree. If the proceeds of any sale or other disposition of the Collateral are
insufficient to pay all the Secured Obligations, Grantor shall be liable for the
deficiency and the fees of any attorneys employed by Secured Party to collect
such deficiency.
(b) Grantor recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as from time to time amended (the
"SECURITIES ACT"), and applicable state securities laws, Secured Party may be
compelled, with respect to any sale of all or any part of the Collateral
conducted without prior registration or qualification of such Collateral under
the Securities Act and/or such state securities laws, to limit purchasers to
those who will agree, among other things, to acquire the Collateral for their
own account, for investment and not with a view to the distribution or resale
thereof. Grantor acknowledges that any such private sales may be at prices and
on terms less favorable than those obtainable through a public sale without such
restrictions (including, without limitation, a public offering made pursuant to
a registration statement under the Securities Act) and, notwithstanding such
circumstances, Grantor agrees that any such private sale shall be deemed to have
been made in a commercially reasonable manner and that Secured Party shall have
no obligation to engage in public sales and no obligation to delay the sale of
any Collateral for the period of time necessary to permit the respective Company
to register it for a form of public sale requiring registration under the
Securities Act or under applicable state securities laws, even if such Company
would, or should, agree to so register it.
(c) If Secured Party determines to exercise its right to sell any
or all of the Collateral, upon written request, Grantor shall and shall cause
each Company from time to time to furnish to Secured Party all such information
as Secured Party may request in order to determine the number and nature of the
interests included in the Collateral which may be sold by Secured Party in
exempt transactions under the Securities Act and the rules and regulations of
the Securities and Exchange Commission thereunder, as the same are from time to
time in effect.
SECTION 13. APPLICATION OF PROCEEDS. Except as expressly provided
elsewhere in this Agreement, all proceeds received by Secured Party in respect
of any sale of, collection from, or other realization upon all or any part of
the Collateral may, in the discretion of Secured Party, be held by Secured Party
as Collateral for, and/or then, or at any other time thereafter, applied in full
or in part by Secured Party against, the Secured Obligations in the following
order of priority:
FIRST: To the payment of all reasonable costs and expenses
of such sale, collection or other realization, including reasonable
compensation to Secured Party and its agents and counsel, and all other
expenses, liabilities and advances made or incurred by Secured Party in
connection therewith, and all advances made by Secured Party hereunder
for the account of Grantor, and to the payment of all reasonable costs
and expenses paid or incurred by Secured Party in connection with the
exercise of any right or remedy hereunder;
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SECOND: To the payment of all other Secured Obligations (for
the ratable benefit of the holders thereof) in such order as Secured
Party shall elect; and
THIRD: To the payment to or upon the order of Grantor, or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
SECTION 14. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS. This
Agreement shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until the payment in full of the
Secured Obligations, (b) be binding upon Grantor, its successors and assigns,
and (c) inure, together with the rights and remedies of Secured Party hereunder,
to the benefit of Secured Party and its successors, transferees and assigns. Any
Bank may assign or otherwise transfer any Loans held by it to any other person,
and such other person shall thereupon become vested with all the benefits in
respect thereof granted to Banks herein or otherwise. Upon the payment in full
of all Secured Obligations, the security interest granted hereby shall terminate
and all rights to the Collateral shall revert to Grantor. Upon any such
termination Secured Party will, at Secured Party's expense, execute and deliver
to Grantor such documents as Grantor shall reasonably request to evidence such
termination.
SECTION 15. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured Party
hereunder by Banks. Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including,
without limitation, the release or substitution of Collateral), solely in
accordance with this Agreement.
(b) Secured Party shall have the right to resign its duties
hereunder by giving Grantor and the Banks fifteen (15) days written. Upon notice
of any Secured Party's resignation, the Banks shall appoint a successor to the
Secured Party who shall be a commercial bank or trust company reasonably
acceptable to Grantor. If no successor is appointed by the Banks and found
acceptable to Grantor by the twentieth (20th) business day after the date of
such notice of resignation, the Secured Party's resignation shall become
effective and the Banks shall thereafter perform all the duties of the Secured
Party hereunder until such time, if any, as the Banks appoint a successor to the
Secured Party as provided above and provided further that Banks' collective
expenses, costs and fees payable by Grantor while acting as Secured Party
hereunder may not materially exceed those of the initial Secured Party. Upon the
acceptance of any appointment as Secured Party hereunder, a successor Secured
Party shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Secured Party under this
Agreement, and the retiring or removed Secured Party under this Agreement shall
promptly (i) transfer to such successor Secured Party all sums, securities and
other items of Collateral held hereunder, together with all records and other
documents necessary or appropriate in connection with the performance of the
duties of such successor Secured Party under this Agreement, and (ii) execute
and deliver to such successor Secured Party such amendments to financing
statements, and take such other actions, as may be necessary or appropriate in
connection with the assignment to such successor Secured Party of the security
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interests created hereunder, whereupon such retiring or removed Secured Party
shall be discharged from its duties and obligations under this Agreement. After
any retiring or removed Secured Party's resignation or removal hereunder as
Secured Party, the provisions of this Agreement shall inure to its benefit as to
any actions taken or omitted to be taken by it under this Agreement while it was
Secured Party hereunder.
SECTION 16. AMENDMENTS No amendment, modification, termination or
waiver of any provision of this Agreement, and no consent to any departure by
Grantor therefrom, shall in any event be effective unless the same shall be in
writing and signed by Secured Party and, in the case of any such amendment or
modification, by Grantor. Any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which it was given.
SECTION 17. NOTICES. Any notice or other communication herein required
or permitted to be given shall be in writing and may be personally served,
telexed or sent by telefacsimile or United States mail or courier service and
shall be deemed to have been given when delivered in person or by courier
service, upon. receipt of telefacsimile or telex, or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed. For the purposes hereof, the address of each party hereto shall be as
set forth under such party's name on the signature pages hereof or, as to either
party, such other address as shall be designated by such party in a written
notice delivered to the other party hereto.
SECTION 18. FAILURE OR INDULGENCE NOT WAIVER: REMEDIES CUMULATIVE. No
failure or delay on the part of Secured Party in the exercise of any power,
right or privilege hereunder shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude any
other or further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
SECTION 19. SEVERABILITY. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
SECTION 20. HEADINGS. Section and subsection headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
SECTION 21. GOVERNING LAW: TERMS. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
TENNESSEE, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT
THAT THE CODE PROVIDES THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
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TENNESSEE. Unless otherwise defined herein, terms used in Articles 8 and 9 of
the Uniform Commercial Code in the State of Tennessee are used herein as therein
defined.
SECTION 22. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST GRANTOR ARISING OUT OF OR RELATING TO THIS
AGREEMENT MUST BE BROUGHT IN AN APPROPRIATE FORUM IN NASHVILLE, DAVIDSON COUNTY,
TENNESSEE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT GRANTOR ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM
NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH THIS AGREEMENT. Grantor 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 Grantor at its address provided
below, such service being hereby acknowledged by Grantor to be sufficient for
personal jurisdiction in any action against Grantor 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.
SECTION 23. WAIVER OF JURY TRIAL. GRANTOR AND SECURED PARTY HEREBY
AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this waiver is
intended to be all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this transaction, including
without limitation contract claims, tort claims, breach of duty claims, and all
other common law and statutory claims. Grantor and Secured Party each
acknowledge that this waiver is a material inducement for Grantor and Secured
Party to enter into a business relationship, that Grantor and Secured Party have
already relied on this waiver in entering into this Agreement and that each will
continue to rely on this waiver in their related future dealings. Grantor and
Secured Party further warrant and represent that each has reviewed this waiver
with its legal counsel, and that each knowingly and voluntarily waives its jury
trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement
may be filed as a written consent to a trial by the court.
SECTION 24. COUNTERPARTS. This Agreement may be executed in one or more
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.
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IN WITNESS WHEREOF, Secured Party and Grantor have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
BANK OF MONTREAL, AS SECURED PARTY
By: _____________________________________
Name: ______________________________
Title: ______________________________
Notice Address: Attn: Xxxxxxx Turf
000 XxXxxxx Xxxxxx, 00X
Xxxxxxx, Xxxxxxxx 00000
AMERICAN HOMEPATIENT, INC.,
A DELAWARE CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
Title: Vice President & Secretary
Notice Address:
Maryland Farms Office Park
0000 Xxxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Attn: Chief Executive Officer
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SCHEDULE A
TO AMENDED AND RESTATED
BORROWER PARTNERSHIP SECURITY AGREEMENT
PARTNERSHIP INTERESTS
Partnership Agreement Partner Partnership Interest Certificate No.
--------------------- ------- -------------------- ---------------
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EXHIBIT A
BANKS
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