EXHIBIT 10.23
SCHEDULE
TO THE
MASTER AGREEMENT
dated as of December 3, 2002
between
CREDIT LYONNAIS NEW YORK BRANCH ("PARTY A")
the New York Branch of Credit Lyonnais S.A., a banking corporation
organized and existing under the laws of the Republic of France
and
APRIA HEALTHCARE GROUP INC. ("PARTY B")
a corporation organized and existing under the laws of the State of Delaware
PART 1. TERMINATION PROVISIONS
(a) "SPECIFIED ENTITY" means in relation to Party A for the purpose of:
Section 5(a)(v), None
Section 5(a)(vi), None
Section 5(a)(vii), None
Section 5(b)(iv), None
and in relation to Party B for the purpose of:
Section 5(a)(v), None
Section 5(a)(vi), None
Section 5(a)(vii), None
Section 5(b)(iv), None.
(b) "SPECIFIED TRANSACTION" will have the meaning specified in Section 14
of this Agreement.
(c) The "CROSS DEFAULT" provisions of Section 5(a)(vi) of this Agreement
will apply to both parties, but shall exclude any payment default that
results solely from wire transfer difficulties or an error or omission
of an administrative or operational nature (so long as sufficient funds
are available to the relevant party on the relevant date), but only if
payment is made within three Business Days after such transfer
difficulties have been corrected or the error or omission has been
discovered.
If such provisions apply:
"SPECIFIED INDEBTEDNESS" will have the meaning specified in Section 14
of this Agreement, except that such term shall not include any
obligation in respect of deposits received in the ordinary course of
Party A's banking business.
"THRESHOLD AMOUNT" means for Party A USD 10,000,000 and for Party B USD
5,000,000 (or its equivalent in any other currency, currency unit or
combination thereof).
(d) "TERMINATION CURRENCY" means United States Dollars.
(e) The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv) of this
Agreement will apply to Party A and to Party B.
(f) The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a) of this
Agreement will not apply to Party A and will not apply to Party B.
(g) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e) of this
Agreement:
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(h) ADDITIONAL TERMINATION EVENT will apply to Party B. The following event
shall constitute Additional Termination Events and Party B shall be the
Affected Party:
In the event that the Credit Agreement is paid in full, amended,
assigned or transferred and this Agreement is no longer secured by the
Collateral Documents, as such term is defined in the Credit Agreement
and/or this Agreement is no longer one of the Guaranty Obligations as
such term is defined in the Credit Agreement.
(i) ADDITIONAL EVENT OF DEFAULT. The occurrence of any of the following
shall constitute an additional "Event of Default" pursuant to Section
5(a) of the Agreement with respect to Party B:
Any Events of Default as such term is defined in Section 9 of the
Credit Agreement shall occur and be continuing. For purposes hereof,
"Credit Agreement" shall mean the Third Amended and Restated Credit
Agreement dated as of June 7, 2002 among Party B, as Borrower certain
of its Subsidiaries, as Guarantors, the Lenders identified therein,
Bank of America, N.A., as Agent and Party A, The Bank of Nova Scotia
and Fleet National Bank, as Co-Syndication Agents, arranged by Banc of
America Securities LLC, as sole Lead Arranger and sole Book Manager as
such Credit Agreement may be amended or supplemented from time to time.
PART 2. TAX REPRESENTATIONS
(a) PAYER REPRESENTATIONS. For the purpose of Section 3(e) of this
Agreement, each of Party A and Party B represents that it is not
required by any applicable law, as modified by the practice of any
relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from
any payment (other than interest under Section 2(e), 6(d)(ii) or 6(e)
of this Agreement) to be made by it to the other party under this
Agreement. In making this representation, it may rely on(i) the
accuracy of any representation made by the other party pursuant to
Section 3(f) of this Agreement; (ii) the satisfaction of the agreement
of the other party contained in Section 4(a)(i) or 4(a)(iii) of this
Agreement and the accuracy and effectiveness of any document provided
by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of this
Agreement; and (iii) the satisfaction of the agreement of the other
party contained in Section 4(d) of this Agreement; provided, that it
shall not be a breach of this representation where reliance is placed
on clause (ii) and the other party does not deliver a form or document
under Section 4(a)(iii) of this Agreement by reason of material
prejudice to its legal or commercial position.
(b) PAYEE REPRESENTATIONS
(i) Party A /Payee Tax Representation. For the purpose of Section 3(f)
of this Agreement, Party A represents that each payment received or to
be received by it in connection with this Agreement will be effectively
connected with its conduct of a trade or business in the United States
of America.
(ii) Party B/ Payee Tax Representation. For the purpose of Section 3(f)
of this Agreement, Party B represents that it is a corporation
organized and existing under the laws of the State of Delaware.
PART 3. AGREEMENT TO DELIVER DOCUMENTS
For the purpose of Sections 4(a)(i) and (ii) of this Agreement:
Other documents to be delivered are:
COVERED BY
PARTY REQUIRED TO DATE BY WHICH SECTION 3(D)
DELIVER DOCUMENT FORM/DOCUMENT/CERTIFICATE TO BE DELIVERED REPRESENTATION
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Certified copies of all documents evidencing Upon execution of Yes
Party B necessary corporate or partnership or other Agreement
authorizations and approvals with respect to the
execution, delivery and performance by the party
or any Credit Support Provider of this Agreement,
each Confirmation and any applicable Credit
Support Document.
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A certificate of an authorized officer of the Upon execution of Yes
Party A and party or Credit Support Provider in respect of Agreement
Party B such party, if any, certifying the names, true
signatures and authority of the officers of the
party signing this Agreement, each Confirmation
and any applicable Credit Support Document.
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Party B Legal opinion substantially in the form of Exhibit Upon execution of No
I attached hereto. this Agreement
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Party B The Credit Support Documents Already provided No
by Party B under
the Credit Agreement.
PART 4. MISCELLANEOUS
(a) ADDRESSES FOR NOTICES. For the purpose of Section 12(a) of this
Agreement:
Address for notices or communications to Party A:
Address: 1301 Avenue of the Americas, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Treasury Department
Telex No.: 62410 Answerback: CREDW
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Address for notices or communications to Party B
Address: Apria Healthcare Group Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No: ▇▇▇-▇▇▇-▇▇▇▇
(b) PROCESS AGENT. For the purpose of Section 13(c) of this Agreement,
Party B appoints as its Process Agent: Registered Mail.
(c) OFFICES. The provisions of Section 10(a) will apply to Party A and
Party B.
(d) MULTIBRANCH PARTY. For the purpose of Section 10(c), (i) Party A is not
a Multibranch Party, and (ii) Party B is not a Multibranch Party.
(e) CALCULATION AGENT. The Calculation Agent shall be Party A.
(f) CREDIT SUPPORT DOCUMENT. The Credit Support Document in respect of
Party A is None and in respect of Party B: The Collateral Documents as
such term is defined in the Credit Agreement.
(g) CREDIT SUPPORT PROVIDER. Credit Support Provider means: (i) in relation
to Party A: None; (ii) in relation to Party B: each Subsidiary that
acts as Guarantor as such terms are defined in the Credit Agreement
(h) GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
(i) NETTING OF PAYMENTS. Subparagraph (ii) of Section 2(c) of this
Agreement will not apply to any Transaction.
(j) "AFFILIATE" will have the meaning specified in Section 14 of this
Agreement, except that for purposes of Section 3(c), "Affiliate" means
with respect to Party A, any entity controlled, directly or indirectly
by Party A. For this purpose, "control of a majority of person" means
ownership of a majority of the voting power of the entity or person.
PART 5. OTHER PROVISIONS
(a) PROCEDURES FOR ENTERING INTO TRANSACTIONS. With respect to each
Transaction entered into pursuant to this Agreement, Party A will, on
or promptly after the Trade Date thereof (by mail, telex, telecopier or
other electronic means), send Party B a Confirmation of each
Transaction between them on the standard form used by Party A or in
such other form as is mutually agreed upon by the parties. Party B will
promptly thereafter accept the terms thereof by executing and returning
to Party A an executed copy or request the correction of such
Confirmation. If Party B fails to accept or dispute the Confirmation in
the manner set forth above within three Local Business Days after
receipt from Party A, such failure shall constitute its agreement to
the terms of the Transaction set out in such Confirmation, absent
manifest error, and the requirement of this Agreement that the parties
exchange Confirmations shall for all purposes be deemed satisfied by a
Confirmation sent and an agreement deemed given as provided herein.
(b) DEFINITIONS. Unless otherwise specified in a Confirmation, this
Agreement and each Transaction between the parties shall be subject to
the 2000 ISDA Definitions (the "2000 Definitions") the 1998 Supplement
to the ISDA 1991 Definitions, the 1998 FX and Currency Options
Definitions (the "FX Definitions") and the 1996 ISDA Equity Derivatives
Definitions (the "Equity Derivatives Definitions"), each as published
by the International Swap and Derivatives Association, Inc. ("ISDA")
without reference to any amendment subsequent to the date hereof. For
these purposes, (i) all references in the 2000 Definitions and Equity
Derivatives Definitions to a "Swap Transaction" and all references in
the FX Definitions to an FX Transaction or Currency Option shall be
deemed to apply to each Transaction under this Agreement and (ii) all
references in the 2000 Definitions to a Business Day shall be deemed
references to a Local Business Day under this Agreement. The provisions
of the 2000 Definitions and Equity Derivatives Definitions relating to
Market Disruption Events and Adjustments to Indices and Extraordinary
Events Affecting Shares (and their effects as well) will apply to a
Transaction under this Agreement only to the extent not inconsistent
with the provisions of the applicable Confirmation. In the event of any
inconsistency between the 2000 Definitions and the FX Definitions, the
FX Definitions will prevail with respect to an FX Transaction or a
Currency Option. In the event of any inconsistency between the
provisions of this Agreement, the 2000 Definitions, the FX Definitions
and the Equity Derivatives Definitions, the provisions of this
Agreement will prevail. Any definition incorporated into a Confirmation
shall prevail over the provisions of this Agreement, the 2000
Definitions, the FX Definitions and the Equity Derivatives Definitions.
(c) INDEMNIFIABLE TAX. For purposes of Section 14 of this Agreement, the
following shall be added at the end of the definition of "Indemnifiable
Tax":
"Notwithstanding the foregoing, "Indemnifiable Tax" also means any Tax
imposed in respect of payment under this Agreement by reason of a
Change in Tax Law by a government or taxing authority of a Relevant
Jurisdiction with respect to the party making such payment, unless the
other party is incorporated, organized, managed and controlled or
considered to have its seat in such jurisdiction, or is acting for
purposes of this Agreement through a branch office located in such
jurisdiction."
(d) ADDITIONAL AGREEMENT. For purposes of Section 4(a)(iii) of this
Agreement, the following shall be added immediately prior to the
existing text: "upon learning that such form or document is required
or".
(e) RIGHT OF SET-OFF. Any amount (the "Early Termination Amount") payable
to one party (the "Payee") by the other party (the "Payer") under
Section 6(e), in circumstances where there is (i) a Defaulting Party
or (ii) one Affected Party in the case where a Termination Event under
Section 5(b) (iv) has occurred, will, at the option of the party ("X")
other than the Defaulting Party or the Affected Party (and without
prior notice to the Defaulting Party or the Affected party), be reduced
by its set-off against any amount(s) (the "Other Agreement Amount")
payable (whether at such time or in the future or upon the occurrence
of a contingency) by the Payee to the Payer (irrespective of the
currency, place of payment or booking office of the obligation) under
any other agreement(s) between the Payee and the Payer or instrument(s)
or undertaking(s) issued or executed by one party to, or in favor of,
the other party, except as otherwise specified in those agreement(s)
instruments(s), or undertaking(s) or separately agreed between the
Payer and the Payee (and the Other Agreement Amount will be discharged
promptly and in all respects to the extent it is so set-off).
X will give notice to the other party of any set-off so effected.
For this purpose, either the Early Termination Amount or the Other
Agreement Amount (or the relevant portion of such amounts) may be
converted by X into the currency in which the other is denominated at
the rate of exchange at which such party would be able, acting in a
reasonable manner and in good faith, to purchase the relevant amount of
such currency.
If an obligation is unascertained, X may in good faith estimate that
obligation and set-off in respect of the estimate, subject to the
relevant party accounting to the other when the obligation is
ascertained.
Nothing herein shall be effective to create a charge or other security
interest. This provision shall be without prejudice and in addition to
any right of set-off, combination of accounts, lien or other right to
which any party is at any time otherwise entitled (whether by operation
of law, contract or otherwise).
(f) ESCROW. If either party in its reasonable judgment determines at
any time that there has been a material adverse change that is likely
to affect the other party's ability to perform its ensuing payment
obligation in connection with a Transaction or Transactions involving
payments due from each of the parties on the same day in different
currencies, the party that has formed that judgment may notify the
other that the payments due on that day in connection with that
Transaction or those Transactions are to be made in escrow, to a major
commercial bank selected by that party in good faith and that has
offices in the cities in which both payments are to be made. If such an
election is made, each party shall make the payment due from it on that
day by deposit into escrow with that escrow agent, for value on that
day, with irrevocable instructions (i) to release the payment to the
intended payee upon receipt by the escrow agent of the required counter
payment due from that payee on the same day in connection with that
Transaction accompanied by irrevocable instructions to the same effect,
or (ii) if the required deposit in escrow of the counter payment due is
not so made on the same day, for value on that day, to return the
payment deposited in escrow to the party that made the escrow deposit.
The party that elects to have payments made in escrow shall pay the
costs of the escrow arrangements and cause those arrangements to
provide that the escrow agent will pay interest on each amount
deposited in escrow with it in either of the relevant cities, for each
day such amount remains in escrow past 5:00 p.m. local time in the
city, at the same rate per annum, and calculated in the same way, as it
would pay on overnight deposits placed with it in the relevant currency
and city for value on such day. The escrow arrangements shall also
provide that such interest on any amount in escrow shall be payable to
the intended payee of that amount, provided that it has deposited the
counter payment due from it into escrow as contemplated herein, and
that, if it has not done so, such interest shall be payable to the
other party.
(g) JURY TRIAL. Each party hereby waives its respective right to jury trial
with respect to any litigation arising under, or in connection with,
this Agreement or any Transaction.
(h) REPRESENTATIONS. Section 3 is hereby amended by adding at the end
thereof the following Subparagraphs (g), (h), and (i):
(g) LINE OF BUSINESS. It has entered into this Agreement (including
each Transaction evidenced hereby) in conjunction with its line of
business (including financial intermediation services) or the financing
of its business.
(h) ELIGIBLE CONTRACT PARTICIPANT. It constitutes an "eligible Contract
participant" as such term is defined in Section 1a(12) of the Commodity
Exchange Act (2000)
(i) RELATIONSHIP BETWEEN PARTIES. Each party will be deemed to
represent to the other party on the date on which it enters into a
Transaction that (absent written agreement between the parties that
expressly imposes affirmative obligations to the contrary for that
Transaction):
(a) NON- RELIANCE. It is acting for its own account, and it has
made its own independent decisions to enter into that Transaction
and as to whether that Transaction is appropriate or proper for it
based upon its own judgment and upon advice from such advisers as
it has deemed necessary. It is not relying on any communication
(written or oral) of the other party as investment advice or as a
recommendation to enter into that Transaction; it being understood
that information and explanations related to the terms and
conditions of a Transaction shall not be considered investment
advice or a recommendation to enter into that Transaction. No
communication (written or oral) received from the other party shall
be deemed to be an assurance or guarantee as to the expected
results of that Transaction.
(b) ASSESSMENT AND UNDERSTANDING. It is capable of assessing the
merits of and understanding (on its own behalf or through
independent professional advice), and understands and accepts, the
terms, conditions and risks of that Transaction. It is also capable
of assuming, and assumes, the risks of that Transaction.
(c) STATUS OF PARTIES. The other party is not acting as a fiduciary
for or an adviser to it in respect of that Transaction.
(i) MONITORING AND RECORDING. Each party (i) consents to the monitoring or
recording, at any time and from time to time, by the other party of any
and all communications between officers or employees of the parties,
(ii) waives any further notice of such monitoring or recording, (iii)
agrees to notify its officers and employees of such monitoring and
recording, and (iv) agrees that any such recordings may be submitted in
evidence to any court or in any proceeding relating to this Agreement.
(j) SEVERABILITY. In the event any one or more of the provisions contained
in this Agreement should be held invalid, illegal, or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or
impaired thereby. The parties shall endeavor, in good faith
negotiations, to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as
close as possible to that of the invalid, illegal or unenforceable
provisions.
(k) SCOPE OF AGREEMENT. Notwithstanding anything contained in the Agreement
to the contrary, upon the effectiveness of the Agreement (unless
otherwise agreed to in writing by the parties) (i) any Specified
Transaction then outstanding and (ii) any Specified Transaction
subsequently entered into by the parties shall be "Transactions" for
purposes of and be subject to, governed by and construed in accordance
with the terms of this Agreement and each related confirmation shall be
a "Confirmation" for purposes of, and be read and construed as one
with, this Agreement.
(l) PARI PASSU. Party B's obligations under this Agreement shall rank pari
passu with the obligations of Party B under the Credit Agreement.
(m) This Agreement shall deem to be a Hedging Agreement as such term is
defined in the Credit Agreement.
Please confirm your agreement to the terms of the foregoing Schedule by signing
below.
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President & Treasurer
APRIA HEALTHCARE GROUP INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
EXHIBIT I
[Letterhead of Counsel for the Party B]
Re: Master Agreement, dated as of _____________, 2002
(the "Agreement"), between Credit Lyonnais
New York Branch ("Party A") and ____________
(the "Party B")
Dear Sirs:
I am an attorney admitted to practice in ____________ and am counsel to the
Party B, and as such am generally familiar with its affairs. I have examined the
Agreement and such other records and instruments as I deemed advisable.
Based upon the foregoing, and having regard for legal considerations which
I deem relevant, I am of the opinion that:
The Party B is duly organized and validly existing under the laws of the
jurisdiction of its organization or incorporation and, if relevant under such
laws, in good standing.
The Party B has the power (a) to execute and deliver the Agreement, any
other required documentation relating to the Agreement and any Credit Support
Document to which it is a party, and (b) to perform its obligations under the
Agreement and any obligations it has under any Credit Support Document to which
it is a party, and has taken all necessary action to authorize such execution,
delivery and performance.
Such execution, delivery and performance do not violate or conflict with
any law applicable to the Party B, any provision of its constitutional
documents, any order or judgment of any court or other agency of government
applicable to it or any of its assets or any contractual restriction binding on
or affecting the Party B.
All governmental and other consents that are required to have been obtained
by it with respect to the Agreement or any Credit Support Document to which the
Party B is a party have been obtained and are in full force and effect and it
has complied with all conditions of any such consents.
The obligations of the Party B under the Agreement and any Credit Support
Document to which it is a party constitute its legal, valid and binding
obligations, enforceable in accordance with their respective terms (subject as
to enforceability to applicable bankruptcy, reorganization, insolvency,
moratorium or similar laws affecting creditors' rights generally and to
equitable principles of general application (regardless of whether enforcement
is sought in a proceeding in equity or at law)).
Very truly yours,