SECOND AMENDED AND RESTATED SUBSIDIARY PLEDGE AGREEMENT

 

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                                                                   EXHIBIT 10.29

 

                           SECOND AMENDED AND RESTATED

                           SUBSIDIARY PLEDGE AGREEMENT

 

         This SECOND AMENDED AND RESTATED SUBSIDIARY PLEDGE AGREEMENT (as

amended, amended and restated or otherwise modified from time to time, this

"AGREEMENT") is dated as of July __, 2003 and entered into by and between the

undersigned, each a subsidiary of AMERICAN HOMEPATIENT, INC., a Delaware

corporation, (collectively and/or individually, "PLEDGOR"), 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 replaces the Amended and Restated Subsidiary Pledge

Agreement dated as of December 28, 1995 between Pledgor and Bankers Trust

Company as the predecessor to the Secured Party (the "Prior Pledge Agreement").

 

                             PRELIMINARY STATEMENTS

 

         A.        Pledgor is the legal and beneficial owner of (i) the shares of

stock (the "PLEDGED SHARES") described in Part A of Schedule I annexed hereto

and issued by the corporations named therein and (ii) the indebtedness (the

"PLEDGED DEBT") described in Part B of said Schedule I and issued by the

obligors named therein.

 

         B.        Pledgor, Bankers Trust Company and Banks previously entered

into that certain Fifth Amended and Restated Credit Agreement dated as of May

25, 2001.

 

         C.        AHP 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 AHP'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 The Fifth Amended and Restated Credit Agreement is no longer in effect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, Pledgor will execute the Promissory Note to the

Banks on terms and in amounts provided in the Joint Plan to evidence Pledgor's

indebtedness and obligations to the Banks.

 

         D.        Pursuant to the Joint Plan and the Bankruptcy Court's order

issued May 27, 2003, Pledgor is required to amend the Prior Pledge 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, Pledgor hereby agrees with Secured Party as follows:

 

         SECTION 1. PLEDGE OF SECURITY. Pledgor hereby pledges and assigns to

Secured Party, for Secured Party's benefit and the benefit of Banks, and hereby

grants to Secured Party, for Secured Party's benefit and the benefit of Banks, a

security interest in, all of Pledgor's right, title and interest in and to the

following (the "PLEDGED COLLATERAL"):

 

         (a)       the Pledged Shares and the certificates representing the

Pledged Shares and any interest of Pledgor in the entries on the books of any

financial intermediary pertaining to the Pledged Shares, and all dividends,

cash, warrants, rights, instruments and other property or

 

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proceeds from time to time received, receivable or otherwise distributed in

respect of or in exchange for any or all of the Pledged Shares;

 

         (b)       the Pledged Debt and the instruments evidencing the Pledged

Debt, and all interest, cash, instruments and other property or proceeds from

time to time received, receivable or otherwise distributed in respect of or in

exchange for any or all of the Pledged Debt, and all guarantees of the

obligations under the Pledged Debt and all security interests granted to secure

the obligations under such guarantees or under the Pledged Debt;

 

          (c)       all additional shares of, and all securities convertible into

and warrants, options and other rights to purchase or otherwise acquire, stock

of any issuer of the Pledged Shares from time to time acquired by Pledgor in any

manner (which shares shall be deemed to be part of the Pledged Shares), the

certificates or other instruments representing such additional shares,

securities, warrants, options or other rights and any interest of Pledgor in the

entries on the books of any financial intermediary pertaining to such additional

shares, and all dividends, cash, warrants, rights, instruments and other

property or proceeds from time to time received, receivable or otherwise

distributed in respect of or in exchange for any or all of such additional

shares, securities, warrants, options or other rights;

 

         (d)       all additional indebtedness from time to time owed to Pledgor

by any obligor of the Pledged Debt and the instruments evidencing such

indebtedness, and all interest, cash, instruments and other property or proceeds

from time to time received, receivable or otherwise distributed in respect of or

in exchange for any or all of such indebtedness, and all guarantees of the

obligations under such indebtedness and all security interests granted to secure

the obligations under such guarantees or under such indebtedness;

 

         (e)       all shares of, and all securities convertible into and

warrants, options and other rights to purchase or otherwise acquire, stock of

any person that, after the date of this Agreement, becomes, as a result of any

occurrence, a direct subsidiary of Pledgor (which shares shall be deemed to be

part of the Pledged Shares), the certificates or other instruments representing

such shares, securities, warrants, options or other rights and any interest of

Pledgor in the entries on the books of any financial intermediary pertaining to

such shares, and all dividends, cash, warrants, rights, instruments and other

property or proceeds from time to time received, receivable or otherwise

distributed in respect of or in exchange for any or all of such shares,

securities, warrants, options or other rights;

 

         (f)       all indebtedness from time to time owed to Pledgor by any

person that is now, or after the date of this Agreement becomes, as a result of

any occurrence, a direct or indirect subsidiary of Pledgor, and all interest,

cash, instruments and other property or proceeds from time to time received,

receivable or otherwise distributed in respect of or in exchange for any or all

of such indebtedness, and all guarantees of the obligations under such

indebtedness and all security interests granted to secure the obligations under

such guarantees or under such indebtedness; and

 

         (g)       to the extent not covered by clauses (a) through (f) above,

all proceeds of any or all of the foregoing Pledged Collateral. For purposes of

this Agreement, the term "PROCEEDS" includes whatever is receivable or received

when Pledged Collateral or proceeds are sold,

 

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exchanged, collected or otherwise disposed of, whether such disposition is

voluntary or involuntary, and includes, without limitation, proceeds of any

indemnity or guaranty payable to Pledgor or Secured Party from time to time with

respect to any of the Pledged Collateral.

 

         The foregoing pledge and grant of security interest confirms the pledge

and grant of a first priority security interest in the Pledged Collateral to

secure the Secured Obligations made in the Prior Pledge Agreement and continues

in all respects the pledge and grant therein without in any way causing any

interruption in continuity from such original pledge and grant.

 

         SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures, and the

Pledged 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 Pledgor 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 Pledgor now or hereafter existing under this Agreement (all such

obligations of Pledgor, together with the Underlying Debt, being the "SECURED

OBLIGATIONS").

 

         SECTION 3. DELIVERY OF PLEDGED COLLATERAL. All certificates or

instruments representing or evidencing the Pledged Collateral 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, as applicable, shall be accompanied

by Pledgor's endorsement, when necessary, or duly executed instruments of

transfer or assignment in blank, all in form and substance satisfactory to

Secured Party. . In addition, Secured Party shall have the right at any time to

exchange certificates or instruments representing or evidencing Pledged

Collateral for certificates or instruments of smaller or larger denominations.

 

         SECTION 4. REPRESENTATIONS AND WARRANTIES. Pledgor represents and

warrants as follows:

 

         (a)       Due Authorization. etc. of Pledged Collateral. All of the

Pledged Shares have been duly authorized and validly issued and are fully paid

and non-assessable. All of the Pledged Debt has been duly authorized,

authenticated or issued, and delivered and is the legal, valid and binding

obligation of the issuers thereof and is not in default.

 

         (b)       Description of Pledged Collateral. The Pledged Shares

constitute all of the issued and outstanding shares of stock of each issuer

thereof, except as otherwise set forth in Schedule I annexed hereto, and there

are no outstanding warrants, options or other rights to purchase, or other

agreements outstanding with respect to, or property that is now or hereafter

convertible into, or that requires the issuance or sale of, any Pledged Shares.

The Pledged Debt constitutes all of the issued and outstanding intercompany

indebtedness evidenced by a promissory note of the respective issuers thereof

owing to Pledgor.

 

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         (c)       Ownership of Pledged Collateral. Pledgor is the legal, record

and beneficial owner of the Pledged Collateral free and clear of any lien except

for the security interest created by this Agreement.

 

          (d)       Governmental Authorizations. 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 pledge by Pledgor of the Pledged

Collateral pursuant to this Agreement and the grant by Pledgor of the security

interest granted hereby, (ii) the execution, delivery or performance of this

Agreement by Pledgor, or (iii) the exercise by Secured Party of the voting or

other rights, or the remedies in respect of the Pledged Collateral, provided for

in this Agreement (except as may be required in connection with a disposition of

Pledged Collateral by laws affecting the offering and sale of securities

generally).

 

         (e)       Perfection. The pledge of the Pledged Collateral pursuant to

this Agreement creates a valid and perfected first priority security interest in

the Pledged Collateral, securing the payment of the Secured Obligations.

 

         (f)       Margin Regulations. The pledge of the Pledged Collateral

pursuant to this Agreement does not violate Regulation G, T, U or X of the Board

of Governors of the Federal Reserve System.

 

         (g)       Other Information. All information heretofore, herein or

hereafter supplied to Secured Party by or on behalf of Pledgor with respect to

the Pledged Collateral was, is and will be accurate and complete in all material

respects.

 

         SECTION 5. TRANSFERS AND OTHER LIENS; ADDITIONAL PLEDGED COLLATERAL

Pledgor shall:

 

         (a)       not (i) sell, assign (by operation of law or otherwise) or

otherwise dispose of, or grant any option with respect to, any of the Pledged

Collateral, (ii) create or suffer to exist any lien upon or with respect to any

of the Pledged Collateral, except for the security interest under this Agreement

and except for (A) liens in existence on the date hereof, (B) liens for taxes

not yet due or being contested in good faith, (C) liens imposed by law, in the

ordinary course of business that are being contested in good faith or do not

materially detract from the value of the Collateral, and (D) liens relating to

bankers liens and other rights of setoff; or (iii) permit any issuer of Pledged

Shares to merge or consolidate unless all the outstanding capital stock of the

surviving or resulting corporation is, upon such merger or consolidation,

pledged hereunder and no cash, securities or other property is distributed in

respect of the outstanding shares of any other constituent corporation.

 

         (b)       (i) cause each issuer of Pledged Shares not to issue any stock

or other securities in addition to or in substitution for the Pledged Shares

issued by such issuer, except to Pledgor, and (ii) pledge hereunder, immediately

upon its acquisition (directly or indirectly) thereof, any and all additional

shares of stock or other securities of each issuer of Pledged Shares, and (iii)

pledge hereunder, immediately upon its acquisition (directly or indirectly)

thereof, any and all shares of stock of any Person that, after the date of this

Agreement, becomes, as a result of any occurrence, a direct subsidiary of

Pledgor;

 

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         (c)       (i) pledge hereunder, immediately upon their issuance, any and

all instruments or other evidences of additional indebtedness from time to time

owed to Pledgor by any obligor on the Pledged Debt, and (ii) pledge hereunder,

immediately upon their issuance, any and all instruments or other evidences of

indebtedness from time to time owed to Pledgor by any Person that after the date

of this Agreement becomes, as a result of any occurrence, a direct or indirect

subsidiary of Pledgor;

 

         (d)       promptly notify Secured Party of any event of which Pledgor

becomes aware causing material loss or material depreciation in the value of the

Pledged Collateral;

 

         (e)       promptly deliver to Secured Party all written notices received

by it with respect to the Pledged Collateral; and

 

         (f)       pay promptly when due all taxes, assessments and governmental

charges or levies imposed upon, and all claims against, the Pledged Collateral,

except to the extent the validity thereof is being contested in good faith;

provided that Pledgor 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 judgement, writ or warrant of attachment entered or filed against

Pledgor or any of the Pledged Collateral as a result of the failure to make such

payment.

 

         SECTION 6. FURTHER ASSURANCES; PLEDGE AMENDMENTS.

 

         (a)       Pledgor agrees that from time to time, at the expense of

Pledgor, Pledgor will promptly execute and deliver all further instruments and

documents, and take all further action, that reasonably may be necessary or

desirable, or that Secured Part may request in order to perfect and protect any

security interest granted or purported to be granted hereby or to enable Secured

Party to exercise and enforce its rights and remedies hereunder with respect to

any Pledged Collateral. Without limiting the generality of the foregoing,

Pledgor will: (i) 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 (ii) at

Secured Party's request, appear in and defend any action or proceeding that may

affect Pledgor's title to or Secured Party's security interest in all or any

part of the Pledged Collateral.

 

         (b)       Pledgor further agrees that it will, upon obtaining any

additional shares of stock or other securities required to be pledged hereunder

as provided in Section 5(b) or Section 7(c), promptly (and in any event within

ten Business Days) deliver to Secured Party a Pledge Amendment (a "PLEDGE

AMENDMENT"), in respect of the additional Pledged Shares or Pledged Debt to be

pledged pursuant to this Agreement. Pledgor hereby authorizes Secured Party to

attach each Pledge Amendment to this Agreement and agrees that all Pledged

Shares or Pledged Debt listed on any Pledge Amendment delivered to Secured Party

shall for all purposes hereunder be considered Pledged Collateral; provided that

the failure of Pledgor to execute a Pledge Amendment with respect to any

additional Pledged Shares or Pledged Debt pledged pursuant to this Agreement

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.

 

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         SECTION 7. VOTING RIGHTS; DIVIDENDS.

 

         (a)       So long as no Event of Default (for the purposes of this

Agreement, "Default" or "Event of Default" shall mean Pledgor's failure to pay

when due any amounts owed to any Bank under the Promissory Note) shall have

occurred and be continuing:

 

                  (i)       Pledgor shall be entitled to exercise any and all

         voting and other consensual rights pertaining to the Pledged Collateral

         or any part thereof for any purpose not inconsistent with the terms of

         this Agreement; provided, however, that Pledgor shall not exercise or

         refrain from exercising any such right if Secured Party shall have

         notified Pledgor that, in Secured Party's judgment, such action would

         have a material adverse effect on the value of the Pledged Collateral

         or any part thereof; and provided, further, that Pledgor shall give

         Secured Party at least five Business Days' prior written notice of the

         manner in which it intends to exercise, or the reasons for refraining

         from exercising, any such right. It is understood, however, that

         neither (A) the voting by Pledgor of any Pledged Shares for or

         Pledgor's consent to the election of directors at a regularly scheduled

         annual or other meeting of stockholders or with respect to incidental

         matters at any such meeting nor (B) Pledgor's consent to or approval of

         any action in the ordinary course of business or otherwise permitted

         under this Agreement shall be deemed inconsistent with the terms of

         this Agreement within the meaning of this Section 7(a)(i), and no

         notice of any such voting or consent need be given to Secured Party;

 

                  (ii)      Pledgor shall be entitled to receive and retain, and

         to utilize free and clear of the lien of this Agreement, any and all

         dividends and interest paid in respect of the Pledged Collateral;

         provided, however, that any and all

 

                           (A)       dividends and interest 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 Pledged Collateral,

 

                           (B)       dividends and other distributions paid or

                  payable in cash in respect of any Pledged Collateral in

                  connection with a partial or total liquidation or dissolution

                  or in connection with a reduction of capital, capital surplus

                  or paid-in-surplus, and

 

                           (C)       cash paid, payable or otherwise distributed

                  in respect of principal or in redemption of or in exchange for

                  any Pledged Collateral,

 

shall be, a