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EXHIBIT 10.9
MASTER AMENDMENT TO LOAN DOCUMENTS
AND AGREEMENT
THIS AGREEMENT is made and entered into by and between AMSOUTH BANK,
successor in interest by merger to First American National Bank (hereinafter
referred to as "AmSouth" or as "First American"), ADVOCAT INC., a Delaware
corporation (herein referred to as "Advocat"), DIVERSICARE MANAGEMENT SERVICES
CO., a Tennessee corporation and wholly-owned subsidiary of Advocat ("DMS"),
ADVOCAT FINANCE, INC., a Delaware corporation and wholly-owned subsidiary of DMS
("AFI"), DIVERSICARE LEASING CORP., a Tennessee corporation and wholly-owned
subsidiary of AFI ("DLC"), ADVOCAT ANCILLARY SERVICES, INC., a Tennessee
corporation and wholly-owned subsidiary of DMS ("AAS"), DIVERSICARE CANADA
MANAGEMENT SERVICES CO., INC., a corporation organized under the laws of Canada
and wholly-owned subsidiary of DLC ("DCMS"), DIVERSICARE GENERAL PARTNER, INC.,
a Texas corporation and wholly-owned subsidiary of DLC ("DGP"), FIRST AMERICAN
HEALTH CARE, INC., an Alabama corporation and wholly-owned subsidiary of DLC
("FAHC"), DIVERSICARE LEASING CORP. OF ALABAMA, an Alabama corporation and
wholly-owned subsidiary of DLC ("DLCA"), ADVOCAT DISTRIBUTION SERVICES, INC., a
Tennessee corporation and wholly-owned subsidiary of DMS ("ADS"), DIVERSICARE
ASSISTED LIVING SERVICES, INC., a Tennessee corporation and a wholly-owned
subsidiary of AFI ("DALS"), DIVERSICARE ASSISTED LIVING SERVICES, NC, LLC, a
Tennessee limited liability company formed by DMS and DALS ("DALS-NC"),
DIVERSICARE ASSISTED LIVING SERVICES, NC I, LLC, a Delaware limited liability
company ("DALS-NC I"), DIVERSICARE ASSISTED LIVING SERVICES, NC II, LLC, a
Delaware limited liability company ("DALS-NC II") both of DALS-NC I and DALS-NC
II being subsidiary entities of DALS-NC, STERLING HEALTH CARE MANAGEMENT, INC.,
a Kentucky corporation and wholly-owned subsidiary of DLC ("SHCM"), DIVERSICARE
XXXXX XXXX, LLC, a Delaware limited liability company ("DAO"), DIVERSICARE GOOD
SAMARITAN, LLC, a Delaware limited liability company ("DGS"), DIVERSICARE
PINEDALE, LLC, a Delaware limited liability company ("DP"), and DIVERSICARE
WINDSOR HOUSE, LLC, a Delaware limited liability company ("DWH"), each of DAO,
DGS, DP and DWH being subsidiary entities of DLC, (Advocat and all of its direct
and indirect subsidiaries, as identified hereinabove, being sometimes referred
to herein collectively as the "Debtors," whether in their capacity as a
Borrower, Guarantor, Pledgor, Subsidiary or otherwise, as defined in the Loan
Documents referred to below), and GMAC COMMERCIAL MORTGAGE CORPORATION, a
California corporation being one and the same as GMAC-CM Commercial Mortgage
Corporation ("GMAC").
W I T N E S S E T H:
WHEREAS, pursuant to the terms of Master Credit and Security Agreement
dated as of December 27, 1996 (the Master Credit and Security Agreement, as
amended as herein set forth, being herein called the "Master Credit and Security
Agreement"), First American and GMAC agreed to provide to DMS the Credit
Facility (as defined therein), to consist of a $10,000,000.00 line of credit for
working capital to be funded by First American (the "Working Capital Line"), and
a $40,000,000.00 non-revolving line of credit for acquisitions and refinancings
of Projects to
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be funded by GMAC, and Advocat and each then-existing direct and indirect
subsidiary of Advocat agreed to and did execute a full and unconditional
Guaranty and Suretyship Agreement of all indebtedness incurred by DMS thereunder
(each party so executing a Guaranty and Suretyship Agreement, together with the
parties thereafter executing a Guaranty and Suretyship Agreement, as hereinafter
set forth, are herein sometimes called a "Guarantor" or collectively
"Guarantors", and the Guaranty and Suretyship Agreements are herein sometimes
called a "Guaranty and Suretyship Agreement" or collectively the "Guaranty and
Suretyship Agreements"); and
WHEREAS, on or about December 31, 1996, the transaction contemplated by
the Master Credit and Security Agreement was closed, and incident thereto, among
other things:
(a) DMS executed and delivered to First American the Revolving
Promissory Note dated December 27, 1996, in the original principal amount of
$10,000,000.00, and maturing December 1, 1999 (the "Original Working Capital
Line Note");
(b) First American disbursed to or for the account of DMS the sum
of $2,436,187.34, and issued the following letters of credit (sometimes referred
to herein collectively as the "Letters of Credit") for the account of DMS or
Advocat, or a direct or an indirect subsidiary of one of them:
(i) No. 1812887 in favor of Texas Diversicare Limited
Partnership in the face amount of $500,000.00, by subsequent amendment dated
April 14, 1999, the face amount having been reduced to $387,000.00;
(ii) No. 1812888 in favor of Omega Healthcare Investors,
Inc. in the face amount of $3,800,000.00;
(iii) No. 1812989 in favor of Omega Healthcare Investors,
Inc. in the face amount of $1,150,000.00; and
(iv) No. 1813094 in favor of Continental Health Properties
of Thomasville, L.L.C. in the face amount of $200,000.00;
(c) Each of the then Guarantors executed and delivered its
Guaranty and Suretyship Agreement in favor of First American;
(d) DMS, Advocat, DLC and AFI, each executed and delivered its
Stock Pledge Agreement (a "Stock Pledge and Security Agreement" and collectively
the "Stock Pledge and Security Agreements") in favor of First American;
(e) Advocat, DMS, DLC, AAS, AFI and ADS executed and delivered
certain UCC-1 Financing Statements to evidence and perfect the security
interests granted in the Master Credit and Security Agreement, which were filed
with the Secretary of State of Tennessee and in other filing offices
(collectively the "Financing Statements"), as collateral security;
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(f) The parties to the Master Credit and Security Agreement
executed and delivered an Intercreditor Agreement, as amended by First Amendment
to Intercreditor Agreement dated June 4, 1999 (the "Intercreditor Agreement");
and
(g) The Master Credit and Security Agreement provides (i) at
Section 4.2 concerning Guaranty and Suretyship Agreements:
To the extent new Subsidiaries are formed or acquired after the date
hereof, the Borrower shall cause such Subsidiaries to execute and
deliver to Lenders Guaranty Agreements, in form and substance
acceptable to the Lenders guaranteeing all then outstanding and future
obligations of Borrower and the Subsidiaries in connection with the
Credit Facility;
and (ii) at Section 4.4 concerning Stock Pledge Agreements:
The Borrower and the Subsidiaries shall execute Stock Pledge
Agreements, in form and substance acceptable to the Lenders, pledging
to the Lenders, as security for the Credit Facility, all of the
outstanding stock of the Subsidiaries of the Borrower and the
Subsidiaries, if any (including any subsidiaries formed or acquired
after the date hereof);
(the Master Credit and Security Agreement, the Original Working Capital Line
Note, the Letters of Credit, the Guaranty and Suretyship Agreements initially
executed, the Stock Pledge and Security Agreements, the Intercreditor Agreement,
the Financing Statements, deeds of trust, mortgages and all other letters,
agreements, statements, resolutions, affidavits, consents, financing statements,
mortgages, deeds of trust or other documents executed or delivered in connection
with the closing of the transaction being sometimes referred to herein
collectively as the "Initial Working Capital Loan Documents"); and
WHEREAS, under date of February 8, 1998, the parties to the Master
Credit and Security Agreement executed and delivered the First Amendment to
Master Credit and Security Agreement, pursuant to which First American agreed to
provide DMS a temporary increase in the Working Capital Line in the amount of
$1,250,000.00 (the "Overline Facility"), which was further evidenced by Line of
Credit Note (Overline Facility) (the "Original Overline Note") of even date
therewith, which was to be administered in accordance with the applicable terms
for advances under the Working Capital Line, and which is secured by the
collateral securing the Working Capital Line, having a maturity date of June 26,
1998, and which is guaranteed by the Guarantors pursuant to the Guaranty and
Suretyship Agreements; and
WHEREAS, as evidenced by subsequent agreements and notes, including
Second Amendment to Master Credit and Security Agreement, Third Amendment to
Master Credit and Security Agreement and Fourth Amendment to Master Credit and
Security Agreement, the Overline Facility was increased to $4,000,000.00, then
reduced on two occasions to its present principal balance of $3,500,000.00, and
the maturity date was extended, successively, to August 31, 1998, January 15,
1999, March 16, 1999, April 14, 1999, July 1, 1999, October 1, 1999, December 1,
1999 and February 28, 2000; and
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WHEREAS, by Fifth Amendment to Master Credit and Security Agreement
dated as of November 30, 1999, DALS, DALS-NC, DALS-NC I and DALS-NC II, became
parties to the Master Credit and Security Agreement as Subsidiaries and as
Guarantors of the Working Capital Line, and granted to First American a security
interest in all of their property as described in Section 4.1, subsection (a) of
the Master Credit and Security Agreement; and
WHEREAS, by Sixth Amendment to Master Credit and Security Agreement
dated as of December 1, 1999, among other things, First American agreed to
extend the maturity date of the Overline Facility and of the Working Capital
Line to February 28, 2000, and incident thereto DMS executed and delivered to
First American:
(a) Revolving Promissory Note dated December 1, 1999, in the
principal amount of $10,000,000.00, which is a renewal of the indebtedness
evidenced by the Original Working Capital Line Note and subsequent notes
executed to evidence such indebtedness; and
(b) Line of Credit Note (Overline Facility) dated December 1,
1999, in the principal amount of $3,500,000.00, which is a renewal of the
indebtedness evidenced by the Original Overline Note and subsequent notes
executed to evidence such indebtedness; and
WHEREAS, all amendments to the Master Credit and Security Agreement,
the Original Overline Note and all subsequent notes evidencing the Overline
Facility, and all other notes, letters, agreements, statements, resolutions,
affidavits, consents, financing statements, mortgages, deeds of trust or other
documents executed or delivered in connection therewith, are sometimes referred
to herein collectively as the "Subsequent Working Capital Loan Documents," and
the Initial Working Capital Loan Documents and the Subsequent Working Capital
Loan Documents are sometimes referred to herein collectively as the "Working
Capital Loan Documents"; and
WHEREAS, pursuant to the terms of the Loan and Negative Pledge
Agreement dated as of October 1, 1997 (the "Loan and Negative Pledge
Agreement"), First American and AmSouth agreed to lend DALS-NC, on a
non-revolving basis, up to $34,100,000.00, to finance the acquisition of fifteen
assisted care living facilities located in North Carolina and more particularly
described therein (the "NC Bridge Loan"); and
WHEREAS, the NC Bridge Loan was evidenced by two promissory notes, each
in the principal amount of $17,050,000.00, and having a maturity date of
December 30, 1997 (one payable to First American and the other payable to
AmSouth), was secured by pledges of one hundred percent (100%) of the membership
interests in DALS-NC pursuant to Collateral Assignment of Membership Interests
dated as of October 1, 1997, was guaranteed by Advocat, DMS, DLC, AAS, DCMS,
DGP, FAHC, ADS, AFI, DLCA, and DALS, and was cross-defaulted with the Working
Capital Loan Documents; and
WHEREAS, by agreements executed under date of December 30, 1997, March
31, 1998, April 1, 1999, October 1, 1999, and December 1, 1999, among other
things, the maturity date of NC Bridge Loan was extended, respectively, to
January 1, 1999, April 1, 1999, July 1, 1999, December 1, 1999, and February 28,
2000; and
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WHEREAS, on the occasion of each amendment of the Loan and Negative
Pledge Agreement, two renewal and modification promissory notes (non-revolving)
were executed and delivered, each in a principal amount equal to one-half of the
then principal balance of the NC Bridge Loan, the most recent notes being the
following:
(a) Renewal and Modification Promissory Note (Non-Revolving),
dated December 1, 1999 in the principal amount of $4,706,191.93, payable to
First American, and
(b) Renewal and Modification Promissory Note (Non-Revolving),
dated December 1, 1999, in the principal amount of $4,706,191.94, payable to
AmSouth; and
WHEREAS, the Loan and Negative Pledge Agreement, all amendments
thereof, and all notes, pledge agreements, other agreements, guaranties,
letters, statements, resolutions, affidavits, consents, financing statements,
mortgages, deeds of trust or other documents executed or delivered in connection
therewith, are sometimes referred to herein collectively as the "NC Bridge Loan
Documents," and the Working Capital Loan Documents and the NC Bridge Loan
Documents are sometimes referred to herein collectively as the "Loan Documents";
and
WHEREAS, the indebtedness owing to AmSouth under the Working Capital
Line is a revolving indebtedness varying daily based upon daily draws and
payments thereon; and
WHEREAS, as of October 1, 2000, the indebtedness owing to AmSouth under
the Overline Facility is in the principal amount of $3,500,000.00, plus interest
accrued from and after October 1, 2000, plus costs and attorneys' fees; and
WHEREAS, the Letters of Credit, as described hereinabove, remain issued
and outstanding; and
WHEREAS, as of October 1, 2000, the indebtedness owing to AmSouth under
the NC Bridge Loan is in the principal amount of $9,412,383.87, plus interest
accrued from and after October 1, 2000, plus costs and attorney's fees; and
WHEREAS, the indebtedness and obligations evidenced by the Letters of
Credit, the Working Capital Line, the Overline Facility and the NC Bridge Loan,
together with the indebtedness evidenced by the Reimbursement Note as defined
hereinafter, are herein sometimes referred to collectively as the
"Indebtedness"; and
WHEREAS, the Indebtedness and Loan Documents are fully enforceable and
are not subject to any defense or counterclaim, or any claim of setoff or
recoupment; and
WHEREAS, DMS and DALS-NC each represented to AmSouth that because of
their financial conditions, they were unable to pay the full amount of their
liability for the Indebtedness, and the parties entered into a Forbearance
Agreement dated as of May 15, 2000, as amended by First Amendment to Forbearance
Agreement dated June 29, 2000, and further amended by Second Amendment to
Forbearance Agreement dated September 12, 2000 extending the forbearance period
to October 1, 2000, in order to induce AmSouth to forbear from exercising its
remedies following default; and
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WHEREAS, pursuant to the Forbearance Agreement, DALS, DALS-NC, DALS-NC
I, and DALS-NC II entered into Guaranty and Suretyship Agreement as set forth
therein; and
WHEREAS, Advocat and Omega Healthcare Investors, Inc. ("Omega") entered
into a letter of intent dated August 11, 2000 (the "Omega Letter of Intent")
concerning proposed restructuring of certain agreements between Advocat, certain
of its subsidiaries and Omega; and
WHEREAS, the parties hereto entered into a Letter of Intent dated
September 7, 2000 pursuant to which the parties have entered into this
Agreement; and
WHEREAS, each of the parties acknowledges that it has been represented
by counsel in connection with the negotiation and execution of this Agreement,
that the same represents an arms-length transaction, and that each of the other
parties has acted in good faith in the making of this Agreement; and
WHEREAS, all terms capitalized herein, but not specially defined
herein, are intended to have the meanings ascribed to them in the Loan
Documents, unless the context clearly indicates otherwise; and
WHEREAS, the parties stipulate and agree that the facts recited
hereinabove are true and correct; and
WHEREAS, the parties have agreed to modify the Indebtedness, and Loan
Documents, and have otherwise agreed all as more particularly set forth herein.
NOW, THEREFORE, for and in consideration of the foregoing recitals (all
of which are incorporated herein as agreements, representations, warranties or
covenants of the Debtor), of the mutual covenants and promises contained herein,
and of other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by the parties hereto, the parties hereby
covenant, amend and agree as follows:
1. In order to accommodate the agreement between Advocat and
Omega pursuant to the Omega Letter of Intent, and evidence the further agreement
of the parties, the parties agree as follows:
(a) Immediately upon the execution hereof, Advocat shall
cause Omega to present to AmSouth drafts and other necessary documentation to
draw the sum of $3,000,000.00 on Letters of Credit No. 1812888 and 1812989.
AmSouth shall fund such amount pursuant to these Letters of Credit. Upon such
funding these Letters of Credit shall be cancelled and terminated and AmSouth
shall have no further obligation thereunder. Advocat shall cause Omega to enter
into an agreement with AmSouth providing that no further drawings shall be made
under such Letters of Credit, and that the rights of Omega thereunder are
terminated in full.
(b) In order to evidence the reimbursement obligation to
AmSouth by virtue of such disbursement under the above Letters of Credit,
Advocat shall execute and deliver to AmSouth a Reimbursement Promissory Note
dated October 1, 2000 payable to AmSouth in the
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original principal amount of $3,000,000.00, and in form and substance required
by AmSouth (the "Reimbursement Note"), which shall have the following terms:
(i) A final maturity date of January 15, 2002,
with no interest accruing thereon prior to the earlier of maturity or default.
After maturity or default, interest shall accrue at a default rate equal to the
lesser of fifteen percent (15%) per annum or the maximum rate allowed by
applicable law.
(ii) Prepayment may be made at any time without
premium, and the following shall be mandatory prepayments:
(1) Upon sale of the Carteret Care
nursing facility of DALS-NC, or an affiliate entity thereof, located in North
Carolina, all net proceeds after payment of normal, customary and good faith
expenses of sale, shall be paid upon the indebtedness evidenced by the
Reimbursement Note, pursuant to the existing Deed of Trust and Security
Agreement executed by DALS-NC dated November 15, 1999, it being anticipated that
such sale shall close no later than December 31, 2000;
(2) All payments received under the
Wraparound Note, as hereinafter defined, or collateral related thereto, which
shall be given as collateral security hereunder shall be applied first to
payment of the Reimbursement Note, but only net of amounts required to retire
the balance of the underlying wrapped indebtedness held by Bank of America; and
(3) Until payment in full of the
Reimbursement Note, all Surplus Cash Flow available to Advocat or any of the
other Debtors, as defined herein, shall be paid upon the indebtedness evidenced
by the Reimbursement Note. Surplus Cash Flow shall be defined as all cash
remaining after paying or reserving for (a) indebtedness owing to AmSouth
evidenced by the Working Capital Line, the Overline Facility, and the NC Bridge
Loan, (b) indebtedness owing to Omega or Sterling Acquisition Corp. pursuant to
the Amended and Restated Master Lease entered into or to be entered into between
either or both of such parties and some or all of Debtors, (c) indebtedness
owing to GMAC pursuant to the GMAC-CM Claim as defined in the Intercreditor
Agreement, and the GMAC Facility, as defined in the Loan and Negative Pledge
Agreement, and (d) and all reasonable and necessary costs and expenses incurred
in the usual and ordinary course and conduct of Debtors' business or operation
of Debtors' properties.
(c) As additional collateral security for the
Indebtedness, as well as any and all other indebtedness now or hereafter owing
by any or all of Debtors to AmSouth, whether now existing or hereafter arising,
including but not limited to the indebtedness evidenced by the Reimbursement
Note, the Letters of Credit remaining outstanding, the Working Capital Line, the
Overline Facility and the NC Bridge Loan, DLC, DMS, DALS, DALS-NC and all other
parties holding an interest in the following collateral, shall assign as
collateral to AmSouth all their right, title and interest in, to and under:
(i) Wraparound Promissory Note made by Texas
Diversicare Limited Partnership, a Texas limited partnership ("TDLP") dated
August 30, 1991 in the original
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principal amount of $7,500,000.00 having a final maturity date of August 30,
2001 (the "Wraparound Note");
(ii) Wraparound Deed of Trust dated August 30,
1991 encumbering six (6) nursing facilities located in the state of Texas and
owned by TDLP, securing the Wraparound Note (the "Wraparound Deed of Trust");
(iii) Vendor's Liens (the "Vendor's Liens")
retained and set forth in the special warranty deeds conveying the six (6)
nursing homes to TDLP, all of the forgoing having been conveyed to DLC by six
(6) separate Assignment(s) of Note, Deed of Trust and Vendor's Lien dated May
10, 1994 by Counsel Nursing Properties, Inc., a Delaware corporation. The
assignment of the Wraparound Note, Wraparound Deed of Trust and Vendor's Liens
shall be subject only to the prior assignment made in favor of Bank of America;
(iv) All right title and interest of DLC in and
to the Participation Agreement dated August 30, 1991 entered into between TDLP
and DGP, on the first part, and Diversicare Corporation of America, on the
second part;
(v) The interest of DMS in and to the Management
Agreement dated August 31, 1991 between TDLP and DGP, on the first part, and
Diversicare Corporation of America, on the second part; and
(vi) All of the outstanding capital stock in DALS
and SHCM and all of the ownership interests in DALS-NC I, DALS-NC II, DAO, DGS,
DP and DWH.
Debtors shall cause Collateral Assignments and Security Agreements in form and
substance required by AmSouth (the "Collateral Assignments"), as well as all
additional instruments and documents which AmSouth may deem necessary or proper
to evidence or perfect such collateral security, to be executed by all necessary
or appropriate parties, delivered, and recorded if necessary, all at the cost
and expense of Debtors. Without limitation the Collateral Assignments shall
provide that DLC may not further assign its interest in the Wraparound Note, the
Wraparound Deed of Trust or the Vendor's Liens, or extend the maturity of the
Wraparound Note, without the prior written consent of AmSouth. Debtors shall
obtain from Bank of America, holder of the underlying indebtedness of the
Wraparound Note and Wraparound Deed of Trust, written consent to and
acknowledgement of the assignments and grants of security interest contained
herein.
(d) Effective October 1, 2000, the security interest
granted to AmSouth in the Omega Receivables, as defined in the Master Credit and
Security Agreement, shall be subject to the first priority security interest
held by Omega, such that AmSouth shall thereafter have a second priority
security interest in the Omega Receivables. The priority of AmSouth in all other
accounts receivable shall continue as set forth in the Master Credit and
Security Agreement. Simultaneous with the execution hereof, AmSouth shall enter
into an agreement with Omega modifying the provisions of the prior letter
agreement dated December 30, 1996 between Omega and AmSouth with respect to
priority of accounts receivable to reflect the agreement set forth herein (the
"Omega Priority Agreement").
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(e) The Omega Letter of Intent provides in Section 5 that
Advocat shall issue to Omega (i) certain Preferred Stock, as defined therein
(the "Preferred Stock") and (ii) a Subordinated Note, which is defined in the
Omega Letter of Intent as the "Note" (the "Subordinated Note"). For as long as
any indebtedness evidenced by the Reimbursement Note shall remain outstanding
and unpaid, no cash or funds of the Debtors, or any of them, shall be used (i)
to pay dividends on the Preferred Stock or to pay interest, principal or other
amounts on the Subordinated Note, or (ii) to pay to redeem any of the Preferred
Stock.
(f) Letters of Credit No. 1812887 in favor of TDLP in the
amended amount of $387,000.00 and 1813094 in favor of Continental Health
Properties of Thomasville, LLC in the amount of $200,000.00 shall continue in
accordance with their terms, unless earlier terminated pursuant to an agreement
between the account party and beneficiary thereunder. The outstanding amounts of
these Letters of Credit shall continue to be charged against and to reduce the
maximum principal amount which may be advanced under the Working Capital Line,
as set forth herein. Any sums drawn under these Letters of Credit shall be
deemed an advance under the Working Capital Line, subject to the limitation of
amounts which may be disbursed thereunder as set forth herein.
2. Concerning the Working Capital Line:
(a) The maximum amount which may be outstanding at any
time under the Working Capital Line shall be reduced to $4,500,000.00, subject
to the following additional restrictions:
(i) The maximum amount which may be outstanding
at any time under the Working Capital Line shall be further reduced by the
outstanding amounts of Letters of Credit No. 1812887 and 1813094, which shall
continue as outstanding Letters of Credit after the execution hereof as set
forth herein above.
(ii) The total amount of the Working Capital Line
outstanding at any time, including the amounts of the Letters of Credit which
shall remain outstanding as set forth above, shall never exceed $3,500,000.00
for more than thirty (30) consecutive days (any day or period of consecutive
days during which the $3,500,000.00 limit is exceeded being herein referred to
as a "Spike Period"), nor may any Spike Period be allowed unless at the
beginning of the Spike Period, during the immediately preceding period of thirty
(30) consecutive days, the $3,500,000.00 limit has not been exceeded.
(iii) Certain definitions set forth in the Master
Credit and Security Agreement are amended as follows:
(1) The definition of Qualified
Accounts Receivable at Section 1.1, subsection (b)(m) shall hereafter exclude
all Omega Receivables, but shall include all other accounts receivable as set
forth therein; and
(2) The definition of Working Capital
Borrowing Base in Section 1.1, subsection (b)(w) shall hereafter mean eighty
percent (80%) of Qualified Accounts Receivable.
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The total amount outstanding under the Working Capital Line, including the
Letters of Credit which shall remain outstanding as set forth above, shall not
exceed at any time the Working Capital Borrowing Base, the definition of which
is modified as set forth herein. Without limiting any other sections of the
Master Credit and Security Agreement which may be amended as set forth herein,
Section 2.1, subsection (a), "Working Capital Line," is amended to reflect the
foregoing.
(b) The Working Capital Line shall bear interest from and
after October 1, 2000 at the Prime Rate of interest, designated by AmSouth from
time to time as such, plus one half of one percent (0.5%) (fifty basis points)
per annum, provided that the interest rate shall in no event exceed nine and one
half percent (9.5%) per annum until after default or maturity, at which time the
default rate of interest set forth in the instruments and documents evidencing
the Working Capital Line shall be applicable. Interest shall be payable monthly.
All principal and unpaid interest shall be payable at maturity on January 15,
2004. The Working Capital Line shall be evidenced by Renewal Revolving
Promissory Note dated October 1, 2000 in the maximum amount of $4,500,000.00
executed by DMS to AmSouth (the "Current Working Capital Line Note"), which
shall be a renewal and replacement of the existing promissory note or notes
evidencing the Working Capital Line.
(c) Subsections (a), (b), (c) and (d) of Section 5.6 of
the Master Credit and Security Agreement, which set forth certain of the
financial covenants, are amended to read as follows:
a. The Current Ratio must be maintained at the
following levels for the periods indicated:
(i) At December 31, 2000 (and quarterly
through September 30, 2001), not less than .70 to 1.
(ii) At December 31, 2001 (and quarterly
through September 30, 2002), not less than .83 to 1.
(iii) At December 31, 2002 (and quarterly
through September 30, 2003), not less than .90 to 1.
(iv) At December 31, 2003 (and quarterly
through September 30, 2004), not less than .94 to 1.
b. EBITDAR must be maintained at the following
levels for the periods indicated:
(i) For the twelve (12) month periods
ending December 31, 2000, March 31, 2001, June 30, 2001 and September
30, 2001, not less than $30,295,000.00.
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(ii) For the twelve (12) month periods
ending December 31, 2001, March 31, 2002, June 30, 2002 and September
30, 2002, not less than $33,139,000.00.
(iii) For the twelve (12) month periods
ending December 31, 2002, March 31, 2003, June 30, 2003 and September
30, 2003, not less than $33,500,000.00.
(iv) For the twelve (12) month periods
ending December 31, 2003, March 31, 2004, June 30, 2004 and September
30, 2004, not less than $34,571,000.00.
c. Net Income after Taxes must be maintained at
the following levels for the periods indicated:
(i) For the twelve (12) month periods
ending December 31, 2000, March 31, 2001, June 30, 2001 and September
30, 2001, the loss shall not exceed $291,500.00.
(ii) For the twelve (12) month periods
ending December 31, 2001, March 31, 2002, June 30, 2002 and September
30, 2002, not less than $4,301,000.00.
(iii) For the twelve (12) month periods
ending December 31, 2002, March 31, 2003, June 30, 2003 and September
30, 2003, not less than $4,840,000.00.
(iv) For the twelve (12) month periods
ending December 31, 2003, March 31, 2004, June 30, 2004 and September
30, 2004, not less than $5,239,000.00.
"Net Income after Taxes" shall mean the sum of earnings before taxes
(excluding the TDLP homes) calculated for the immediately preceding
twelve (12) month period.
d. Tangible Net Worth must be maintained at the
following levels for the periods indicated:
(i) At December 31, 2000 (and quarterly
through September 30, 2001), not less than ($8,600,000.00) (deficit).
(ii) At December 31, 2001 (and quarterly
through September 30, 2002), not less than $163,000.00.
(iii) At December 31, 2002 (and quarterly
through September 30, 2003), not less than $4,751,000.00.
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(iv) At December 31, 2003 (and quarterly
through September 30, 2004), not less than $9,738,000.00.
(d) Debtors shall procure the written consent to this
Agreement and the transactions contemplated hereby, of GMAC. Debtors shall also
procure the written consent of Omega to this Agreement and the transactions
contemplated herein.
3. With respect to the Overline Facility, such indebtedness shall
be evidenced by a Renewal Promissory Note (Overline Facility) executed by DMS to
AmSouth dated October 1, 2000 in the principal amount of $3,500,000.00 (the
"Current Overline Note"). The Current Overline Note shall bear interest from and
after October 1, 2000 at the rate of nine and one half percent (9.5%) per annum
and shall require equal monthly installments of principal and interest in the
amount of $32,624.59 each, commencing November 1, 2000, which payments are based
upon an amortization period of twenty five (25) years, and shall have a final
maturity date of January 15, 2004, at which time all remaining principal and
interest shall be due and payable in a balloon payment. The Current Overline
Note shall be a renewal and replacement of the prior promissory note or notes
evidencing the Overline Facility.
4. Concerning the NC Bridge Loan, such indebtedness shall be
evidenced by a Renewal Promissory Note executed by DALS-NC to AmSouth dated
October 1, 2000 in the original principal amount of $9,412,383.87 (the "Current
NC Bridge Loan Note"). The Current NC Bridge Loan Note shall bear interest from
and after October 1, 2000 at the rate of nine and one half (9.5%) per annum and
shall require equal monthly installments of principal and interest in the amount
of $87,735.76 each, which payments are based upon an amortization period of
twenty five (25) years, commencing November 1, 2000, and shall have a final
maturity of September 30, 2004, at which time all remaining principal and
interest shall be due and payable in a balloon payment. The Current NC Bridge
Loan Note shall be a renewal and replacement of the promissory note or notes
previously evidencing the NC Bridge Loan.
5. All indebtedness and obligations now or hereafter owing to
AmSouth by Advocat, DMS, DALS-NC, or any other of the Debtors, or any
combination thereof, including but not limited to the Indebtedness, whether
evidenced by the Reimbursement Note, the Letters of Credit remaining
outstanding, the Working Capital Line, the Overline Facility or the NC Bridge
Loan, shall be guaranteed by all of Debtors. Each of Debtors shall execute and
deliver to AmSouth an additional Continuing Guaranty and Suretyship Agreement to
further evidence such guaranty (the "Additional Continuing Guaranty and
Suretyship Agreements"). The Additional Continuing Guaranty and Suretyship
Agreements shall be supplemental and in addition to the existing Guaranty and
Suretyship Agreements, which shall continue in full force and effect.
6. All property, rights and interest of any, some or all of
Debtors which now or hereafter serve as collateral security for any of the
Indebtedness, shall hereafter secure all indebtedness and obligations now or
hereafter owing by Advocat, DMS, DALS-NC, or any other of the Debtors to
AmSouth, whether now existing or hereafter arising, including but not limited to
the indebtedness evidenced by the Reimbursement Note, Letters of Credit
remaining outstanding, Working Capital Line, Overline Facility, NC Bridge Loan,
and all renewals, extensions, replacements and modifications thereof. The
collateral affected by this cross-
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collateralization includes, but is not limited to, the collateral in which a
security interest is granted in Section 4 of the Master Loan and Security
Agreement.
7. A default in any of the Loan Documents, this instrument, any
additional instruments and documents executed pursuant hereto, or in any
indebtedness or obligation now or hereafter owing by any, some or all of Debtors
to AmSouth, shall, at the option of AmSouth, constitute a default in any or all
of the Loan Documents or indebtedness now or hereafter owing by any, some or all
of the Debtors to AmSouth, provided that as between AmSouth and GMAC the further
provisions of the Intercreditor Agreement shall be applicable.
8. Immediately upon the execution hereof, Advocat shall pay to
AmSouth the sum of $51,030.96, as a commitment fee for the commitment and
obligations of AmSouth as expressed herein.
9. The indebtedness evidenced by the Reimbursement Note, Working
Capital Line, Overline Facility and NC Bridge Loan, may be prepaid at any time
without premium.
10. The parties acknowledge and agree (a) that all current and
future subsidiary corporations, limited liability companies and other entities
of any of Debtors shall execute and deliver Continuing Guaranty and Suretyship
Agreements guaranteeing all indebtedness and obligations, whether now existing
or hereafter arising, of any, some, or all of Debtors, to AmSouth, immediately
upon formation or acquisition of any future subsidiary, and (b) that the capital
stock or other ownership interest in all future subsidiaries of any of Debtors
shall be pledged and a security interest therein shall be granted, to AmSouth as
security for all indebtedness, whether now existing or hereafter arising, of
any, some or all of Debtors, to AmSouth, immediately upon formation or
acquisition of any such subsidiary. Notwithstanding the foregoing, the parties
acknowledge and agree that AmSouth shall hold the pledge and security interest
in the capital stock and ownership interest in all future subsidiaries as agent
for both AmSouth and GMAC as set forth in the Master Credit and Security
Agreement and Intercreditor Agreement, said stock and ownership interest being
"Proportionate Collateral" as defined in the Intercreditor Agreement. Without
limiting the foregoing or any other provision of the Master Credit and Security
Agreement, the provisions of Sections 4.2 and Sections 4.4 of the Master Credit
and Security Agreement shall continue in full force and effect. Debtors shall
give ten (10) days advance written notice to AmSouth of the creation of any
future subsidiary, provided that in an emergency situation where advance notice
cannot practicably be given, notice shall not be required provided AmSouth is
given an immediate pledge and security interest in the ownership interest in the
new entity and an immediate Continuing Guaranty and Suretyship Agreement by the
entity as set forth herein.
11. The Master Credit and Security Agreement, Loan and Negative
Pledge Agreement, and any other Loan Documents affected hereby, are amended to
the extent necessary to conform such instruments and documents to the provisions
set forth herein.
12. Debtors shall execute such further and additional instruments
and documents, and take such further actions, as may be required by AmSouth or
its counsel from time to time to further evidence, perfect or carry out the
terms and provisions hereof. Debtor shall pay all costs and expenses of AmSouth
incurred in connection with the documentation, perfection or
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implementation of the provisions hereof, including but not limited to attorney
fees, filing fees, UCC search and examination fees and out of pocket expenses.
All such known expenses shall be paid immediately upon the execution hereof.
Additional expenses shall be paid upon presentation of statements therefor by
AmSouth. The representations, covenants, warranties and other provisions set
forth in the Loan Documents made by any, some or all of Debtors, as amended
hereby, shall continue in full force and effect and shall be fully enforceable
in accordance with all of their terms. Together with the execution hereof, an
opinion of counsel to Debtors shall be delivered for the benefit of AmSouth with
respect to the transactions contemplated herein in the form required by AmSouth
and its counsel. Debtors shall deliver to AmSouth current financial statements
for Debtors in form and substance acceptable to AmSouth, resolutions, incumbency
certificates, charters, articles of organization, by-laws, operating agreements,
certificates of existence, certificates of authorization, UCC searches, real
estate record searches, and such other instruments, documents and information as
AmSouth or its counsel may require to evidence the authority of any of Debtors
to enter into or be bound to the transaction contemplated hereby or to evidence
or perfect the collateral given as security hereunder. Debtors shall further
cause to be delivered to AmSouth evidence satisfactory to AmSouth that Debtors
are in compliance with all licensing and governmental regulations applicable to
Debtors' business operations and that Debtors have received all consents and
other approvals from landlords, GMAC, Omega, and any other parties which may be
deemed necessary by AmSouth to carry out the provisions hereof. Debtors shall
further deliver to AmSouth the Certificate and Affidavit attached hereto as
Exhibit A as an inducement to AmSouth to enter into the transactions
contemplated hereby. There is no litigation pending or threatened against any of
Debtors affecting the collateral security for the Indebtedness or which
materially affects the ability of any Debtor to perform its obligations to
AmSouth.
13. Debtors hereby acknowledge and stipulate that none of them has
any claims or causes of action against AmSouth of any kind whatsoever. Debtors
hereby release AmSouth from any and all claims, causes of action, demands and
liabilities of any kind whatsoever, whether direct or indirect, fixed or
contingent, liquidated or non-liquidated, disputed or undisputed, known or
unknown, which Debtors, or any of them, has or which arises out of any acts or
omissions occurring prior to the execution of this Agreement relating in any way
to any event, circumstances, action or failure to act from the beginning of time
to the execution of this Agreement.
14. This instrument contains the entire agreement of the parties
with respect to the subject matter hereof and may not be amended or modified
except by an agreement in writing executed between the parties hereto. This
Agreement shall be governed by the law of the State of Tennessee, except as such
may be preempted by law or regulation of the United States of America governing
the charging or receiving of interest. This agreement is severable such that the
invalidity or unenforceability of any provision hereof shall not impair the
validity or enforceability of the remaining provisions. Time is of the essence
of this agreement, and all its provisions. This Agreement shall be binding upon
the parties hereto, their successors and assigns. This Agreement may be executed
in multiple counterparts, which when taken as a whole shall constitute a
complete instrument. Facsimile signatures shall be effective as originals.
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IN WITNESS WHEREOF, the parties hereto have executed this instrument
this 8th day of November, 2000, to be effective October 1, 2000.
AMSOUTH BANK, successor in interest by
merger to First American National Bank
By: /s/ Xxxxxx Xxxx
----------------------------------------------
Xxxxxx Xxxx, Senior Vice President
DIVERSICARE MANAGEMENT SERVICES CO.,
a Tennessee corporation
By: /s/ Xxxxx X. Xxxxx, Xx.
----------------------------------------------
Name: Xxxxx X. Xxxxx, Xx.
-------------------------------------
Title: Sr. Vice President
------------------------------------
ADVOCAT INC., a Delaware corporation
By: /s/ Xxxxx X. Xxxxx, Xx.
----------------------------------------------
Name: Xxxxx X. Xxxxx, Xx.
-------------------------------------
Title: Sr. Vice President
------------------------------------
DIVERSICARE LEASING CORP.,
a Tennessee corporation
By: /s/ Xxxxx X. Xxxxx, Xx.
----------------------------------------------
Name: Xxxxx X. Xxxxx, Xx.
-------------------------------------
Title: Sr. Vice President
------------------------------------
ADVOCAT ANCILLARY SERVICES, INC.,
a Tennessee corporation
By: /s/ Xxxxx X. Xxxxx, Xx.
----------------------------------------------
Name: Xxxxx X. Xxxxx, Xx.
-------------------------------------
Title: Sr. Vice President
------------------------------------
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DIVERSICARE CANADA MANAGEMENT SERVICES CO.,
INC., an Ontario, Canada corporation
By: /s/ Xxxxx X. Xxxxx, Xx.
----------------------------------------------
Name: Xxxxx X. Xxxxx, Xx.
-------------------------------------
Title: Sr. Vice President
------------------------------------
DIVERSICARE GENERAL PARTNER, INC.,
a Texas corporation
By: /s/ Xxxxx X. Xxxxx, Xx.
----------------------------------------------
Name: Xxxxx X. Xxxxx, Xx.
-------------------------------------
Title: Sr. Vice President
------------------------------------
FIRST AMERICAN HEALTH CARE, INC.,
an Alabama corporation
By: /s/ Xxxxx X. Xxxxx, Xx.
----------------------------------------------
Name: Xxxxx X. Xxxxx, Xx.
-------------------------------------
Title: Sr. Vice President
------------------------------------
ADVOCAT DISTRIBUTION SERVICES,
INC., a Tennessee corporation
By: /s/ Xxxxx X. Xxxxx, Xx.
----------------------------------------------
Name: Xxxxx X. Xxxxx, Xx.
-------------------------------------
Title: Sr. Vice President
------------------------------------
ADVOCAT FINANCE, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxx, Xx.
----------------------------------------------
Name: Xxxxx X. Xxxxx, Xx.
-------------------------------------
Title: Sr. Vice President
------------------------------------
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DIVERSICARE LEASING CORP. OF ALABAMA, INC.,
an Alabama corporation
By: /s/ Xxxxx X. Xxxxx, Xx.
----------------------------------------------
Name: Xxxxx X. Xxxxx, Xx.
-------------------------------------
Title: Sr. Vice President
------------------------------------
DIVERSICARE ASSISTED LIVING SERVICES, INC.,
a Tennessee corporation
By: /s/ Xxxxx X. Xxxxx, Xx.
----------------------------------------------
Name: Xxxxx X. Xxxxx, Xx.
-------------------------------------
Title: Sr. Vice President
------------------------------------
DIVERSICARE ASSISTED LIVING SERVICES, NC, LLC,
a Tennessee limited liability company
By: /s/ Xxxxx X. Xxxxx, Xx.
----------------------------------------------
Name: Xxxxx X. Xxxxx, Xx.
-------------------------------------
Title: Sr. Vice President
------------------------------------
DIVERSICARE ASSISTED LIVING
SERVICES NC I, LLC,
a Delaware limited liability company
By: /s/ Xxxxx X. Xxxxx, Xx.
----------------------------------------------
Name: Xxxxx X. Xxxxx, Xx.
-------------------------------------
Title: Sr. Vice President
------------------------------------
DIVERSICARE ASSISTED LIVING
SERVICES NC II, LLC,
a Delaware limited liability company
By: /s/ Xxxxx X. Xxxxx, Xx.
----------------------------------------------
Name: Xxxxx X. Xxxxx, Xx.
-------------------------------------
Title: Sr. Vice President
------------------------------------
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STERLING HEALTH CARE MANAGEMENT, INC.,
a Kentucky corporation
By: /s/ Xxxxx X. Xxxxx, Xx.
----------------------------------------------
Name: Xxxxx X. Xxxxx, Xx.
-------------------------------------
Title: Sr. Vice President
------------------------------------
DIVERSICARE XXXXX XXXX, LLC,
a Delaware limited liability company
By: /s/ Xxxxx X. Xxxxx, Xx.
----------------------------------------------
Name: Xxxxx X. Xxxxx, Xx.
-------------------------------------
Title: Sr. Vice President
------------------------------------
DIVERSICARE GOOD SAMARITAN, LLC, a Delaware
limited liability company
By: /s/ Xxxxx X. Xxxxx, Xx.
----------------------------------------------
Name: Xxxxx X. Xxxxx, Xx.
-------------------------------------
Title: Sr. Vice President
------------------------------------
DIVERSICARE PINEDALE, LLC,
a Delaware limited liability company
By: /s/ Xxxxx X. Xxxxx, Xx.
----------------------------------------------
Name: Xxxxx X. Xxxxx, Xx.
-------------------------------------
Title: Sr. Vice President
------------------------------------
DIVERSICARE WINDSOR HOUSE, LLC,
a Delaware limited liability company
By: /s/ Xxxxx X. Xxxxx, Xx.
----------------------------------------------
Name: Xxxxx X. Xxxxx, Xx.
-------------------------------------
Title: Sr. Vice President
------------------------------------
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GMAC COMMERCIAL MORTGAGE CORPORATION, a California
corporation
By:
----------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
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CERTIFICATE & AFFIDAVIT
STATE OF TENNESSEE
COUNTY OF _____________
The undersigned, being duly sworn, according to law, certifies and
deposes and states as follows:
1. I have personal knowledge of the facts stated herein;
2. I am over the age of eighteen (18) years and am competent to
execute this Affidavit.
3. I am the Senior Vice Pres. of Diversicare Canada Management
-----------------
Services Co., Inc.
4. This Certificate and Affidavit is being provided to, and may be relied upon
by AmSouth Bank (the "Bank"), its counsel, employees, officers, directors,
agents, successors and assigns, in connection with the closing of a loan
transaction (the "Closing") between the Bank and Advocat Inc., a Delaware
corporation (herein referred to as "Advocat"), Diversicare Management Services
Co., a Tennessee corporation ad wholly-owned subsidiary of Advocat ("DMS"),
Advocat Finance, Inc., a Delaware corporation and wholly-owned subsidiary of the
DMS ("AFI"), Diversicare Leasing Corp., a Tennessee corporation and wholly-owned
subsidiary of AFI ("DLC"), Advocat Ancillary Services, Inc., a Tennessee
corporation and wholly-owned subsidiary of DMS ("AAS"), Diversicare Canada
Management Services Co., Inc., a corporation organized under the laws of Canada
and wholly-owned subsidiary of DLC ("DCMS"), Diversicare General Partner, Inc.,
a Texas corporation and wholly-owned subsidiary of DLC ("DGP"), First American
Health Care, Inc., an Alabama corporation and wholly-owned subsidiary of DLC
("FAHC"), Diversicare Leasing Corp. of Alabama, an Alabama corporation and
wholly-owned subsidiary of DLC ("DLCA"), Advocat Distribution Services, Inc., a
Tennessee corporation and wholly-owned subsidiary of DMS ("ADS"), Diversicare
Assisted Living Services, Inc., a Tennessee corporation and a wholly-owned
subsidiary of AFI ("DALS"), Diversicare Assisted Living Services, NC, LLC, a
Tennessee limited liability company formed by DMS and DALS ("DALS-NC"),
Diversicare Assisted Living Services, NC I, LLC, a Tennessee limited liability
company ("DALS-NC I"), and Diversicare Assisted Living Services, NC II, LLC, a
Tennessee limited liability company ("DALS-NC II"), subsidiary entities of
DALS-NC (Advocat and all of its direct and indirect subsidiaries, as identified
hereinabove, being sometimes referred to herein collectively as the "Debtors,"
whether in their capacity as a Borrower, Guarantor, Pledgor, Subsidiary or
otherwise, as defined in the Loan Documents as set forth in the Master Amendment
to Loan Documents and Agreement entered into between the Bank and Debtors of
even date herewith (the documents executed in connection with the indebtedness
are hereinafter referred to as the "Loan Documents"). All capitalized terms used
herein, if not otherwise defined herein, shall have the meanings ascribed to
such terms in the Loan Documents.
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5. No articles of dissolution or termination have been filed with
respect to DCMS, and there has been no other action taken to dissolve or
terminate the existence of DCMS, whether voluntarily or involuntarily.
6. All factual representations and covenants made by the DCMS, in
the Loan Documents are true, complete and accurate on the date hereof, as if
made on the date hereof. The terms and conditions of the Loan as reflected in
the Loan Documents have not been amended, modified or supplemented, directly or
indirectly, by any other agreement or understanding of the parties or waiver of
any material provisions of the Loan Documents and there is no usage of trade
or course of prior dealing between DCMS and Bank or Debtors and Banks that
would, in either case, define, supplement, or qualify the terms of the Loan
Documents.
7. The Charter of DCMS that is being provided to Bank in connection
with the Closing, is true, correct and complete copy of such documents,
together with any amendments thereto, as such documents are in effect as of the
date hereof.
8. The bylaws of DCMS that are being provided to the Bank in
connection with the Closing, are true, correct and complete copies of such
bylaws, together with any amendments thereto, as such bylaws are in effect as
of the date hereof.
9. The copies of the resolutions of the Board of Directors of DCMS,
authorizing the transactions described in the Loan Documents provided to the
Bank in connection with the Closing, are true, correct and complete copies of
such resolutions, and such resolutions remain in place and effect, without
amendment, as of the date hereof.
10. There are no actions, suits or proceedings, including
administrative proceedings, pending, or to the best knowledge of DCMS
threatened, against DCMS before any court, arbitrator or administrative or
governmental body or threatened (i) to acquire through the exercise of any
power of condemnation, eminent domain, or similar proceeding any part of a
Project, any Improvements or any interest herein, or to enjoin or similarly
prevent or restrict the use or operation of a Project in any manner, or (ii)
before or by any court or administrative agency which might result in any
material adverse change in the financial condition, operations or prospects of
DCMS or any lower reimbursement rate under any Reimbursement Contract or (iii)
that is not covered by insurance and seeks damages in excess of $100,000.00 (or
seeks unspecified damages) or (iv) that would result in decertification of any
of DCMS's businesses by applicable governmental or licensing authorities. DCMS
is not subject to any outstanding court or administrative order which would
materially impact the ability of DCMS to perform its obligations under the Loan
Documents.
11. There has been no material, adverse change in the financial
conditions of DCMS since the date of the most recent financial statements that
were delivered to Bank in connection with indebtedness evidenced by the Loan
Documents.
12. That DCMS is in compliance with all licensing requirements and
all governmental laws, regulations, ordinances and requirements applicable to
DCMS's businesses.
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13. That DCMS has obtained all requisite consents and approvals
from landlords, owners of nursing home facilities, and other entities
consenting to the assignments and grants of security interests referred to in
the Loan Documents.
14. The chief executive office of Diversicare Canada Management
Services Co., Inc., all of its corporate books, records and all chief decision
making activities occur in or are located at 0000 Xxxxxxxx Xx, Xxx 000, xx
Xxxxxxxxxxx, Xxxxxxx, Xxxxxx.
15. No authorization, consent, approval, or other action by, or
filing with, any Tennessee or federal court or governmental authority or
Canadian authority is required in connection with the execution and delivery by
DCNS, of the Loan Documents.
16. The execution and delivery of the Loan Documents will not (i)
cause DCMS, the Debtors, or any of them, to be in material violation of, or
constitute a material default under the provisions of any material agreement to
which any Debtor is a party or by which any Debtor is bound, (ii) conflict
with, or result in the breach of, any court judgment, decree or order of any
governmental body to any Debtor is subject, and (iii) result in the creation or
imposition of any lien, charge, or encumbrance of any nature whatsoever upon
any of the property or assets of any Debtor, except as specifically contemplated
by the Loan Documents.
The undersigned person is executing this Certificate and
Affidavit on behalf of the entities set forth above and verifies and states
that the foregoing matters are true to the best of the knowledge and belief of
the undersigned individually, and binds the entities set forth above to certify
as to the truth and accuracy of the matters set forth herein.
/s/ Xxxxx X. Xxxxx, Xx.
------------------------------------------
Xxxxx X. Xxxxx, Xx., Senior Vice President
STATE OF TENNESSEE )
COUNTY OF XXXXXXXXXX )
Personally appeared before me, the undersigned, a Notary Public in and
for said County and State, Xxxxx X. Xxxxx, Xx., with whom I am personally
acquainted, and who upon oath acknowledged that he/she executed the within
instrument for the purposes therein contained.
WITNESS my hand, at office, this 22nd day of November, 2000.
/s/ Xxxxxx Xxxxxxx
-------------------------------------------
Notary Public
My Commission Expires: 11/24/01
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