EXHIBIT 10.12
SECOND AMENDED AND RESTATED COLLECTION BANK AGREEMENT
     This SECOND AMENDED AND RESTATED COLLECTION BANK AGREEMENT (this
“AGREEMENT”) is dated as of July 1, 2003, among __________________ (the
“COLLECTION BANK”), AMERICAN HOMEPATIENT, INC. (the “PLEDGOR”), and BANK OF
MONTREAL, as agent for and representative of (the “AGENT”) the financial
institutions (the “LENDERS”) that hold a promissory note payable to such Lenders
as set forth on Exhibit A attached hereto (the “Promissory Note”) and amends and
restates the Amended and Restated Collection Bank Agreement dated as of ___,
______ among the Collection Bank, the Pledgor and Agent.
W I T N E S S E T H :
     WHEREAS, Pledgor presently maintains, or has established concurrently
herewith, at the Collection Bank the accounts described on Schedule I hereto
(each individually, a “COLLECTION ACCOUNT” and collectively, the “COLLECTION
ACCOUNTS”);
     WHEREAS, Pledgor and the Agent entered into that certain Second Amended and
Restated Assignment and [Borrower][Subsidiary] Security Agreement dated as of
July 1, 2003 amending and restating the [Borrower][Subsidiary] Security
Agreement dated as of July 31, 2001 (the “COLLATERAL AGREEMENT”), pursuant to
which the Pledgor granted to the Agent a security interest in all of the
Pledgor’s right, title and interest in and to the Pledgor’s accounts receivable
and the proceeds thereof (including, without limitation, the Collection
Account(s)) and all amounts from time to time on deposit therein;
     WHEREAS, it is a requirement of the Collateral Agreement that the parties
hereto execute and deliver this Agreement;
     NOW, THEREFORE, the parties hereto hereby agree as follows:
     1. The Pledgor agrees that all accounts receivable received by the Pledgor
shall be deposited by the Pledgor in the Collection Account(s) or into similar
accounts subject to a Collection Bank Agreement and that no funds from any other
source other than proceeds of Accounts Receivable shall be deposited in any such
account. .
     2. The Pledgor hereby irrevocably authorizes and directs the Collection
Bank to transfer the available balance (as determined by the Collection Bank) in
the Pledgor’s Collection Account(s) on each Business Day to the concentration
account (the “CONCENTRATION ACCOUNT”) at such bank (initially, Account No.
__________________ at PNC Bank, National Association, at _________), or, after
the occurrence and during the continuance of an Event of Default under the
Collateral Agreement (an “Event of Default”), as the Agent may, in its sole
discretion, direct in writing. After Agent gives written notice to the
Collection Bank (with a copy to the Pledgor) that an Event of Default has
occurred and is continuing, the Pledgor hereby irrevocably authorizes and
directs the Collection Bank, and the Collection Bank hereby agrees, to comply
with instructions from the Agent, without further consent from the Pledgor,
directing the disposition of the funds in the Collection Account(s).

 

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     3. The parties agree that all funds deposited in the Collection Account(s)
from time to time shall, as between the Pledgor and the Agent, be subject to the
security interests in favor of the Agent, shall be held by the Collection Bank
subject to the security interest of the Agent and, upon the occurrence of an
Event of Default, may be withdrawn at any time or from time to time at the
direction of the Agent without further consent from the Pledgor, by check,
draft, wire transfer or otherwise as the Agent shall determine and applied by
the Agent in accordance with the Collateral Agreement. The Pledgor hereby agrees
that it shall cause forwarding daily of all of the prior day’s available funds
deposited in the Collection Account(s) to the Concentration Account until such
time as the Agent gives written notice to the Collection Bank (with a copy to
the Pledgor) that an Event of Default has occurred and is continuing. After
Agent gives such written notice to the Collection Bank, the Collection Bank
hereby agrees to comply with instructions from the Agent, without further
consent from the Pledgor, directing the disposition of the funds in the
Collection Account(s). The Collection Bank hereby agrees that it will provide
the Agent with written notice on or before the date that it terminates any of
the Collection Account(s).
     4. The Collection Bank’s charges for the services to be performed pursuant
to this Agreement shall be at the Collection Bank’s customary rate unless and
until different rates are separately agreed to between the Collection Bank and
the Pledgor. To the extent that the Collection Bank’s charges are not paid when
due and to the extent deposits made to the Collection Account(s) are returned or
otherwise not collected, the Agent and the Pledgor agree that the Collection
Bank shall have a lien and right of offset against the funds in the applicable
Collection Account.
     5. The Collection Bank agrees that it shall furnish to the Agent a copy of
the original of all bank statements with respect to, and, upon Notice by the
Agent, all daily debit advices of, the Collection Account(s), and promptly upon
the issuance or receipt thereof, copies of all notices and other communications
with respect to the Collection Account(s) issued or received by the Collection
Bank.
     6. This Agreement, and the covenants, agreements, authorizations and
directions contained herein, are irrevocable and cannot be changed or modified
without the prior written consent of the Agent.
     7. All checks, money orders and other evidences of payment received by the
Collection Bank and all proceeds thereof are at all times to be considered
subject to the security interests granted by the Collateral Agreements and this
Agreement and are further subject to the requirement that, in accordance with
the terms hereof, such amounts shall be duly transferred to the Concentration
Account and the Collection Bank shall not have any rights or claims to, or
interest in, such property or any funds in the Collection Account(s), including
any right to offset except as provided in Section 4 hereof. The Collection Bank
agrees that it will not obtain, nor seek to obtain, any security interest or
lien against the funds contained in the Collection Account(s) except as provided
in Section 4 hereof and the Pledgor agrees that it will not grant any security
interest in or lien on the funds contained in the Collection Account(s), except
as provided in Section 4 hereof. Except as otherwise required by law, any notice
of legal process of any kind relating to the Pledgor that the Collection Bank
may receive shall have no effect whatsoever on such property or the Collection
Account(s) or on the Collection Bank’s

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responsibility under this Agreement unless and until the Collection Bank
receives written instructions from the Agent to the contrary; upon receipt of
legal process relating to the Pledgor, the Collection Bank promptly shall give
notice thereof to the Agent.
     8. All notices, requests or other communications given to the Pledgor, the
Agent or the Collection Bank shall be given in writing (including facsimile
transmission or similar writing) at the address or telecopy number specified
below:

             
 
  Agent:   Bank of Montreal    
 
      Attn: Heather Turf    
 
      115 S. La Salle, 12W    
 
      Chicago, IL 60603    
 
           
 
  Collection Bank:  
 
   
 
     
 
   
 
     
 
   
 
     
 
   

             
 
  Attention:        
 
  Telecopy:        
 
           

         
 
  Pledgor:   American HomePatient, Inc.
 
      5200 Maryland Way, Suite 400
 
      Brentwood, TN 37027
 
      Attention: Marilyn A. O’Hara

Any party may change its address or telecopy number for notices hereunder by
notice to each other party hereunder. Each notice, request or other
communication shall be effective (a) if given by mail, 48 hours after such
communication is deposited in the mails with registered first class postage
prepaid, addressed as aforesaid, or (b) if given by any other means, when
delivered at the address specified in this Section 8.
     9. In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality or
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.
     10. 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
taken 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 attached physically to the same
document. This Agreement shall become effective as of the date first set forth
above upon the execution of a counterpart hereof by the Pledgor, the Collection
Bank and the Agent and receipt by the Agent of written or telephonic
notification of such execution and authorization of delivery thereof. Delivery
of an executed counterpart to this Agreement by facsimile transmission shall be
effective as delivery of a manually executed counterpart of this Agreement.

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     11. Deleted
     12. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST PLEDGOR ARISING OUT OF OR
RELATING TO THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE NASHVILLE, DAVIDSON COUNTY, TENNESSEE, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT THE PLEDGOR 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. The Pledgor 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 the Pledgor at its address provided
in Section 8, such service being hereby acknowledged by the Pledgor to be
sufficient for personal jurisdiction in any action against the Pledgor 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 or shall limit the right of the Agent or the Collection Bank to
bring proceedings against the Pledgor in the courts of any other jurisdiction.
     13. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS 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. Each of the parties to this Agreement acknowledges that this
waiver is a material inducement to enter into a business relationship, that each
other party 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.
Each of the parties to this Agreement further warrants and represents that it
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.
     14. EXCEPT TO THE EXTENT THAT THE LAWS OF THE STATE IN WHICH THE COLLECTION
BANK IS LOCATED GOVERN THE COLLECTION ACCOUNT(S),THIS AGREEMENT 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. The Borrower, the Agent, and the Collection Bank agree that for
purposes of Article 9, of ___’s version of the Uniform Commercial Code,
[CITATION], the jurisdiction of the Collection Bank is _____.
     15. In addition to the payment of expenses pursuant to Section 4, the
Pledgor and the Agent each agrees to indemnify and hold the officers, directors,
employees and agents of the

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Collection Bank (collectively the “INDEMNITEES”) harmless from and against, any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, expenses and disbursements of any kind or
nature whatsoever (including, the reasonable fees and disbursements of counsel
for all of such Indemnitees collectively in connection with any investigative,
administrative or judicial proceeding, whether or not such Indemnitee shall be
designated a party thereto and for each of such Indemnitees whose counsel
determines in good faith that joint representation of such Indemnitee along with
the other Indemnitees would or reasonably could be expected to result in a
conflict of interest under applicable laws or ethical principles) that may be
imposed on, incurred, directly or indirectly, by, or asserted against such
Indemnitee, as a consequence of the Collection Bank executing this Agreement and
performing its obligations hereunder (the “INDEMNIFIED LIABILITIES”); provided
that neither the Agent nor the Pledgor shall have any obligation to an
Indemnitee hereunder with respect to indemnified liabilities arising from the
gross negligence or willful misconduct of any such Indemnitee. Each Indemnitee,
as soon as reasonably practicable, shall notify the Pledgor and the Agent of the
commencement of any legal proceeding by a third Person under which any
indemnified liability might arise. The Pledgor and the Agent shall have the
option to participate in the defense of all claims under which any indemnified
liability might arise, but neither the Pledgor nor the Agent shall have the
option to compel any Indemnitee to employ counsel not of the Indemnitee’s
choosing.
[Remainder of page intentionally left blank]

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     IN WITNESS WHEREOF, each of the parties hereto has caused this agreement to
be executed and delivered by its duly authorized officer on the date first set
forth above.

          PLEDGOR:   AMERICAN HOMEPATIENT, INC.  
 
  By:   /s/ Robert L. Fringer
 
     
 
    Title:  Vice President & Secretary
 
        AGENT:   BANK OF MONTREAL     as the Agent
 
       
 
  By:    
 
     
 
    Name:   
 
       
 
    Title:  
 
       
 
       
COLLECTION BANK:
             
 
  By:    
 
       
 
    Name:  
 
       
 
    Title:  
 
       

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EXHIBIT A
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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