Exhibit 10.4
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 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

 

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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 Default
hereunder, acceptance of a past-due installment or other indulgences granted
from time to time, shall be construed as a novation of this Note or as a waiver
of such right of acceleration or of the right of Holder thereafter to insist
upon strict compliance with the terms of this Note or to prevent the exercise of
such right of acceleration or any other right granted hereunder or by applicable
law. No extension of the time for payment of the indebtedness evidenced hereby
or any installment due hereunder, made by agreement with any person now or
hereafter liable for payment of the indebtedness evidenced hereby, shall operate
to release, discharge, modify, change or affect the original liability of Maker
hereunder or that of any other person now or hereafter liable for payment of the
indebtedness evidenced hereby, either in whole or in part, unless Holder agrees
otherwise in writing. This Note may not be changed orally, but only by an
agreement in writing signed by the party(ies) against whom enforcement of any
waiver, change, modification or discharge is sought.
     The indebtedness and other obligations evidenced by this Note are further
evidenced by (i) the Plan of Reorganization and (ii) all other documents
evidencing the Holders’ security interests and liens on property of Maker.
     All agreements herein made are expressly limited so that in no event
whatsoever shall the amount paid or agreed to be paid to Holder for the use of
the money advanced or to be advanced

 

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hereunder exceed the maximum rate of interest allowed to be charged under
applicable law (the “Maximum Rate”). If, from any circumstances whatsoever, the
fulfillment of any provision of this Note or any other agreement or instrument
now or hereafter evidencing, securing or in any way relating to the indebtedness
evidenced hereby shall involve the payment of interest in excess of the Maximum
Rate, then, ipso facto, the obligation to pay interest hereunder shall be
reduced to the Maximum Rate; and if from any circumstance whatsoever, Holder
shall ever receive interest, the amount of which would exceed the amount
collectible at the Maximum Rate, such amount as would be excessive interest
shall be applied to the reduction of the principal balance remaining unpaid
hereunder and not to the payment of interest. This provision shall control every
other provision in any and all other agreements and instruments existing or
hereafter arising between Maker and Holder with respect to the indebtedness
evidenced hereby.
     This Note is intended as a contract under and shall be construed and
enforceable in accordance with the laws of the State of Tennessee, except to the
extent that federal law may be applicable to the determination of the Maximum
Rate.
     Failure by Maker to pay to Agent on behalf of Holders any amounts due
hereunder within ten (10) business days of the due date thereof shall constitute
an Event of Default hereunder.
     Maker hereby irrevocably consents to the jurisdiction of the United States
District Court for the Middle District of Tennessee and of all Tennessee state
courts sitting in Davidson County, Tennessee, for the purpose of any litigation
to which holder may be a party and which concerns this note. It is further
agreed that venue for any such action shall lie exclusively with courts sitting
in Davidson County, Tennessee.
     HOLDER AND MAKER HEREBY KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF
COUNSEL WAIVE TRIAL BY JURY IN ANY ACTIONS, PROCEEDINGS, CLAIMS OR
COUNTER-CLAIMS, WHETHER IN CONTRACT OR TORT OR OTHERWISE, AT LAW OR IN EQUITY,
ARISING OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT.
     As used herein, the terms “Maker” and “Holder” shall be deemed to include
their respective successors, legal representatives and assigns, whether by
voluntary action of the parties or by operation of law.

           
 
  MAKER:  
 
              AMERICAN HOMEPATIENT, INC., a Delaware corporation  
 
         
 
  By:   /s/ Robert L. Fringer  
 
         
 
      Title: Vice President & Secretary  

 

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                AMERICAN HOMEPATIENT, INC.,
a Tennessee corporation  
 
         
 
  By:   /s/ Robert L. Fringer  
 
         
 
      Title: Vice President & Secretary  
 
              DESIGNATED COMPANIES, INC.  
 
         
 
  By:   /s/ Robert L. Fringer  
 
         
 
      Title: Vice President & Secretary  
 
              AHP FINANCE, INC.  
 
         
 
  By:   /s/ Robert L. Fringer  
 
         
 
      Title: Vice President & Secretary  
 
              AMERICAN HOMEPATIENT OF NEW YORK, INC.  
 
         
 
  By:   /s/ Robert L. Fringer  
 
         
 
      Title: Vice President & Secretary  
 
              NATIONAL MEDICAL SYSTEMS, INC.  
 
         
 
  By:   /s/ Robert L. Fringer  
 
         
 
      Title: Vice President & Secretary  
 
              SOUND MEDICAL EQUIPMENT, INC.  
 
         
 
  By:   /s/ Robert L. Fringer  
 
         
 
      Title: Vice President & Secretary  

 

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                THE NATIONAL MEDICAL RENTALS, INC.  
 
         
 
  By:   /s/ Robert L. Fringer  
 
         
 
      Title: Vice President & Secretary  
 
              NATIONAL I.V., INC.  
 
         
 
  By:   /s/ Robert L. Fringer  
 
         
 
      Title: Vice President & Secretary  
 
              AMERICAN HOMEPATIENT OF ARKANSAS, INC.,  
 
         
 
  By:   /s/ Robert L. Fringer  
 
         
 
      Title: Vice President & Secretary  
 
              AMERICAN HOMEPATIENT OF NEVADA, INC.  
 
         
 
  By:   /s/ Robert L. Fringer  
 
         
 
      Title: Vice President & Secretary  
 
              VOLUNTEER MEDICAL OXYGEN & HOSPITAL EQUIPMENT CO.  
 
         
 
  By:   /s/ Robert L. Fringer  
 
         
 
      Title: Vice President & Secretary  
 
              ALLEGHENY RESPIRATORY ASSOCIATES, INC.  
 
         
 
  By:   /s/ Robert L. Fringer  
 
         
 
      Title: Vice President & Secretary  

 

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                AMERICAN HOMEPATIENT OF ILLINOIS, INC.  
 
         
 
  By:   /s/ Robert L. Fringer  
 
         
 
      Title: Vice President & Secretary  
 
              AMERICAN HOMEPATIENT OF TEXAS, L.P.,
a Texas limited partnership  
 
              By: AMERICAN HOMEPATIENT, INC.,
its general partner  
 
         
 
  By:   /s/ Robert L. Fringer  
 
         
 
      Title: Vice President & Secretary  
 
              By: AMERICAN HOMEPATIENT OF ILLINOIS, INC.,
its limited partner  
 
         
 
  By:   /s/ Robert L. Fringer  
 
         
 
      Title: Vice President & Secretary  
 
              AHP, L.P.,
a Tennessee limited partnership  
 
              By: AMERICAN HOMEPATIENT, INC.,
its general partner  
 
         
 
  By:   /s/ Robert L. Fringer  
 
         
 
      Title: Vice President & Secretary  
 
              By: AMERICAN HOMEPATIENT OF ILLINOIS, INC.,
its limited partner  
 
         
 
  By:   /s/ Robert L. Fringer  
 
         
 
      Title: Vice President & Secretary  

 

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              AHP HOME MEDICAL EQUIPMENT
PARTNERSHIP OF TEXAS,
a Texas general partnership
 
            By: AHP, L.P.,
a general partner
 
            By: AMERICAN HOMEPATIENT, INC.,
its general partner
 
       
 
  By:   /s/ Robert L. Fringer
 
       
 
      Title: Vice President & Secretary
 
            By: AMERICAN HOMEPATIENT VENTURES,
INC., a general partner
 
       
 
  By:   /s/ Robert L. Fringer
 
       
 
      Title: Vice President & Secretary
 
            COLORADO HOME MEDICAL EQUIPMENT
ALLIANCE, LLC,
a Colorado limited liability company
 
            By: AMERICAN HOMEPATIENT VENTURES,
INC., its sole member
 
       
 
  By:   /s/ Robert L. Fringer
 
       
 
      Title: Vice President & Secretary
 
            NORTHEAST PENNSYLVANIA ALLIANCE,
LLC,
a Pennsylvania limited liability company
 
            By: AMERICAN HOMEPATIENT VENTURES,
INC. its sole member
 
       
 
  By:   /s/ Robert L. Fringer
 
       
 
      Title: Vice President & Secretary

 

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              NORTHWEST WASHINGTON ALLIANCE,
LLC, a Washington limited liability company
 
            By: AMERICAN HOMEPATIENT VENTURES,
INC. its sole member
 
       
 
  By:   /s/ Robert L. Fringer
 
       
 
      Title: Vice President & Secretary
 
            AHP HOME CARE ALLIANCE OF TENNESSEE,
a Tennessee general partnership
 
            By: AMERICAN HOMEPATIENT, INC.,
its general partner
 
       
 
  By:   /s/ Robert L. Fringer
 
       
 
      Title: Vice President & Secretary
 
            By: AMERICAN HOMEPATIENT VENTURES,
INC., its general partner
 
       
 
  By:   /s/ Robert L. Fringer
 
       
 
      Title: Vice President & Secretary
 
            AHP ALLIANCE OF COLUMBIA,
a South Carolina general partnership
 
            By: AMERICAN HOMEPATIENT, INC.,
its general partner
 
       
 
  By:   /s/ Robert L. Fringer
 
       
 
      Title: Vice President & Secretary

 

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              By: AMERICAN HOMEPATIENT VENTURES,
INC., its general partner
 
       
 
  By:   /s/ Robert L. Fringer
 
       
 
      Title: Vice President & Secretary
 
            AHP KNOXVILLE PARTNERSHIP,
a Tennessee general partnership
 
            By: AMERICAN HOMEPATIENT, INC.,
its general partner
 
       
 
  By:   /s/ Robert L. Fringer
 
       
 
      Title: Vice President & Secretary
 
            By: AMERICAN HOMEPATIENT VENTURES,
INC., its general partner
 
       
 
  By:   /s/ Robert L. Fringer
 
       
 
      Title: Vice President & Secretary
 
            AHP HOME CARE ALLIANCE OF
GAINESVILLE, a Florida general partnership
 
            By: AMERICAN HOMEPATIENT, INC.,
its general partner
 
       
 
  By:   /s/ Robert L. Fringer
 
       
 
      Title: Vice President & Secretary
 
            By: AMERICAN HOMEPATIENT VENTURES,
INC., its general partner
 
       
 
  By:   /s/ Robert L. Fringer
 
       
 
      Title: Vice President & Secretary

 

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              AHP HOME CARE ALLIANCE OF VIRGINIA,
a Virginia general partnership
 
            By: AMERICAN HOMEPATIENT, INC.,
its general partner
 
       
 
  By:   /s/ Robert L. Fringer
 
       
 
      Title: Vice President & Secretary
 
            By: AMERICAN HOMEPATIENT VENTURES,
INC., its general partner
 
       
 
  By:   /s/ Robert L. Fringer
 
       
 
      Title: Vice President & Secretary

 

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SCHEDULE 1
LENDERS
See attached document.

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Allstate-AIMCO CDO Series 2000-A
Allstate Life Insurance Company
Bank of America, N.A.
Bank of Montreal
Barclays Bank PLC
Bear Stearns & Co., Inc.
Deutsche Bank Trust Company Americas f/k/a Bankers Trust Company
Endeavor LLC
Everest Capital Master Fund L.P.
Fernwood Associates L.P.
General Electric Capital Corporation
California Public Employees’ Retirement System (Highland)
Highland Crusader Offshore Partners, L.P. (Highland)
ML CBO IV (Cayman)/Protective (Highland)
PAM Capital Funding, L.P. (Highland)
Pamco Cayman Ltd. (Highland)
HCM/Z Special Opportunities LLC a/ka/ HZ Special Opportunities, LLC (Highbridge
Capital)
Long Lane Master Trust IV
Morgan Stanley Prime Income Trust
PPM America Special Investments Funds, L.P.
Fuqua Family Fund, L.P. (Tennenbaum)
Special Value Bond Fund II, LLC (Tennenbaum)
Van Kampen VKM Prime Rate Income Trust
Van Kampen Senior Income Trust

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