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EXHIBIT 10.23
SECURED PROMISSORY NOTE
$250,000,000.00
July 1, 2003
FOR VALUE RECEIVED, the undersigned, American HomePatient, Inc.,
a
Delaware corporation, American HomePatient,
Inc., a Tennessee corporation,
Designated Companies, Inc., AHP Finance,
Inc., American HomePatient of New York,
Inc., National Medical Systems, Inc., Sound
Medical Equipment, Inc., The
National Medical Rentals, Inc., National
I.V., Inc., American HomePatient of
Arkansas, Inc., American HomePatient of
Nevada, Inc., Volunteer Medical Oxygen &
Hospital Equipment Co., Allegheny
Respiratory Associates, Inc., American
HomePatient of Illinois, Inc., American
HomePatient of Texas, L.P., AHP, L.P.,
AHP Home Medical Equipment Partnership of
Texas, Colorado Home Medical Equipment
Alliance, LLC, Northeast Pennsylvania
Alliance, LLC, Northwest Washington
Alliance, LLC, AHP Home Care Alliance of
Tennessee, AHP Alliance of Columbia,
AHP Knoxville Partnership, AHP Home Care
Alliance of Gainesville, AHP Home Care
Alliance of Virginia (individually and
collectively, "Makers"), jointly and
severally promise to pay to BANK OF
MONTREAL (Bank of Montreal or its duly
appointed successor being referred to
herein as the "Agent"), as agent for each
of the lender's listed on Schedule 1
hereto, as such schedule is amended from
time to time hereafter by Agent (each
individually, a "Payee" and collectively,
the "Payees"; the Payees and any subsequent
holders hereof are hereinafter
referred to collectively as the "Holders"),
at the office of Agent located at
115 S. LaSalle Street, 12 W, Chicago,
Illinois 60603 (attention: Heather Turf)
or at such other place as Agent may
designate to Maker in writing from time to
time, the principal sum of TWO HUNDRED
FIFTY MILLION AND NO/100THS DOLLARS
($250,000,000.00), together with interest
on the outstanding principal balance
hereof from the date hereof at the rate of
6.785 percent (6.785%) per annum
(computed on the basis of a 360-day year).
All capitalized terms used but not
defined herein shall have the meaning given
to such terms in the Second Amended
Joint Plan of Reorganization for Maker
dated January 2, 2003 (as amended from
time to time thereafter, the "Plan of
Reorganization").
Interest only on the outstanding principal balance hereof shall be
due
and payable monthly, in arrears, with the
first installment being payable on the
first (1st) day of August, 2003, and
subsequent installments being payable on
the first (1st) business day of each
succeeding month thereafter until August 1,
2009 (the "Maturity Date"), at which time
the entire outstanding principal
balance, together with all accrued and
unpaid interest, shall be immediately due
and payable in full.
Prior to the Maturity Date, Maker shall, in addition to the
payments
required above, make periodic payments of
principal (the "Mandatory
Pre-Payments") to Agent, on behalf of the
Holders, as follows: (i) until the
Class 5 and Class 8 Claimants are paid in
full, for the fiscal years ending
December 31, 2004 and thereafter, Maker
shall make principal payments hereunder
equal to one-third (1/3) of the amount of
cash (as determined by Maker's
independent auditors) in excess of
$7,000,000 that is available to Maker as of
the end of such year after accounting for
all of Maker's
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expenditures and expenses during that
calendar year, including without
limitation a reserve for payment of any
Contested Claims, and (ii) after the
Class 5 and Class 8 Claimants are paid in
full, for the fiscal years ending
prior to maturity, Maker shall make
principal payments hereunder equal to 100%
of the amount of cash (as determined by
Maker's independent auditors) in excess
of $7,000,000 that is available to Maker as
of the end of such year after
accounting for all of Maker's expenditures
and expenses during that calendar
year, including without limitation a
reserve for payment of any Contested
Claims. All determinations of excess cash
flow made by the Maker's independent
auditors shall be final, conclusive, and
binding on Maker and Holders absent
manifest error.
Any Mandatory Pre-Payments shall be paid in full to Agent, on
behalf of
the Holders, by no later than March 31 of
the year following the fiscal year
with respect to which such payments are
required; provided, however, that Maker
shall make an estimated payment related to
the Mandatory Pre-Payments on
September 30 of each fiscal year commencing
September 30, 2004. The estimated
payment shall be in an amount equal to
one-half (1/2) of Maker's good-faith
estimate of the Required Pre-Payments for
such fiscal year based on Maker's cash
on hand at June 30 and anticipated cash
needs during the remainder of the fiscal
year.
The indebtedness evidenced hereby may be prepaid in whole or in
part,
at any time and from time to time, without
premium or penalty. Any such
prepayments shall be credited first to any
accrued and unpaid interest and then
to the outstanding principal balance
hereof.
Time is of the essence of this Note.
In the event this Note is placed in the hands of an attorney
for
collection, or if Holder incurs any
external costs incident to the collection of
the indebtedness evidenced hereby, Maker
and any endorsers hereof agree to pay
to Holder an amount equal to all such
costs, including without limitation all
reasonable attorneys' fees and all court
costs.
Presentment for payment, demand, protest and notice of demand,
protest
and nonpayment are hereby waived by Maker
and all other parties hereto. No
failure to accelerate the indebtedness
evidenced hereby by reason of an Event of
De
