EXHIBIT 10.6
NINTH AMENDMENT TO RENEWAL PROMISSORY NOTE (OVERLINE FACILITY)
THIS NINTH AMENDMENT TO RENEWAL PROMISSORY NOTE (the "Overline
Facility") is made and entered into by and among AMSOUTH BANK (the "Bank") and
DIVERSICARE MANAGEMENT SERVICES, CO., a Tennessee corporation (the "Borrower").
W I T N E S S E T H :
WHEREAS, Borrower executed to Bank that certain Renewal Promissory Note
(Overline Facility) dated October 1, 2000, in the original principal amount of
THREE MILLION FIVE HUNDRED THOUSAND AND NO/100 ($3,500,000.00) DOLLARS as
amended by the First Amendment to Renewal Promissory Note (Overline Facility)
executed by Borrower in December, 2000, as further amended by the Second
Amendment to Renewal Promissory Note (Overline Facility) executed by Borrower
and Bank to be effective as of December 15, 2002, as further amended by that
Third Amendment to Renewal Promissory Note (Overline Facility) executed by
Borrower and Bank to be effective on July 11, 2003, as further amended by that
Fourth Amendment to Renewal Promissory Note (Overline Facility) executed by
Borrower and Bank to be effective on January 4, 2004, as further amended by that
Fifth Amendment to Renewal Promissory Note (Overline Facility) executed by
Borrower and Bank to be effective on April 16, 2004, as further amended by that
Sixth Amendment to Renewal Promissory Note (Overline Facility) to be effective
on July 16, 2004, as further amended by that Seventh Amendment to Renewal
Promissory Note (Overline Facility) to be effective on October 29, 2004, as
further amended by that Eighth Amendment to Renewal Promissory Note (Overline
Facility) to be effective on January 29, 2006 (collectively, the "Note"); and
WHEREAS, Bank has agreed to further modify the Note in accordance with
the terms and conditions set forth herein and as set forth in the Eight
Amendment to Master Amendment to Loan Documents and Agreement executed of even
date herewith by Bank and Debtors as defined therein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in accordance with the terms
and conditions of that Sixth Amendment to Master Amendment and Loan Documents
executed by Bank, and Debtors, as defined therein, to be effective as of January
29, 2006, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. That as of the effective date hereof, the Note has a principal
balance of $3,051,991.67.
2. The first full paragraph of the Note is hereby deleted entirely, and
the following language is substituted instead:
FOR VALUE RECEIVED, the undersigned, DIVERSICARE MANAGEMENT
SERVICES CO., a Tennessee corporation (the "Borrower") promises to pay
to the order of AMSOUTH BANK (the "Bank"), in lawful currency of the
United States of America, at AmSouth Center, 000 Xxxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxx 00000, or at such other place as the holder from
time to time may designate in writing the principal sum of THREE
MILLION FIVE HUNDRED THOUSAND AND NO/100 ($3,500,000.00) DOLLARS, or so
much thereof as may be outstanding hereunder from time to time,
together with interest thereon computed on the unpaid principal balance
from the effective date hereof, at the annual rate equal to the
interest rate designated from time to time by Bank as its "Prime Rate"
plus one half of one percent (.50%) and provided that said interest
rate shall not, during the term hereof and so long as there is no
default hereunder, exceed seven and one half percent (7.50%), with
principal and interest payable as follows, and which rate shall be
adjusted on each day that said Prime Rate changes with principal and
interest payable as follows:
(a) Four (4) monthly payments of principal in the amount
of $11,000.00 plus interest, beginning on February
29, 2006 and continuing on the like day of each month
thereafter through May 29, 2006;
(b) One (1) principal payment of $521,000.00 plus
interest, on June 29, 2006;
(c) Five (5) monthly payments of principal in the amount
of $11,000.00, plus interest, beginning on July 29,
2006 and continuing on the like day of each month
thereafter through November 29, 2006;
(d) One principal payment of $154,000.00 plus interest,
on December 29, 2006;
(e) Three (3) monthly payments of principal in the amount
of $11,000.00, plus interest, beginning on January
29, 2007 and continuing on the like day of each month
thereafter through March 29, 2007;
(f) One principal payment of $49,100.00, plus interest,
on April 29, 2007;
(g) One principal payment of $161,000.00, plus interest,
on May 29, 2007;
(h) One principal payment of $814,000.00, plus interest,
on June 29, 2007;
(i) Five (5) monthly payments of $161,000.00, plus
interest, beginning on July 29, 2007 and continuing
on the like day of each month thereafter through
November 29, 2007;
(j) One principal payment of $291,000.00, plus interest,
on December 29, 2007; and
(k) One final balloon payment of principal and interest
of approximately $125,000.00 toward the remaining
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principal balance, plus all accrued interest, on
January 29, 2008 (the "Maturity Date").
The "Prime Rate" of Bank is the "Prime Rate" in effect from
time to time, as designated by Bank, such rate being one of the base
rates Bank establishes from time to time for lending purposes and not
necessarily being the lowest rate offered by Bank. In the event the
Prime Rate should become unavailable for any reason, then the interest
rate hereunder shall be based upon a reasonably comparable index for
determining variable interest rates chosen by Bank in good faith.
The whole of the principal sum and, to the extent permitted by
law, any accrued interest, shall bear, after default or maturity,
interest at the lesser of (i) the highest lawful rate then in effect
pursuant to applicable law, or (ii) the rate that is four percentage
points (4%) in excess of Lender's Prime Rate, as it varies from time to
time.
3. The Note is amended as stated herein, but no further or otherwise,
and the terms and provisions of the Note, as hereby amended, shall be and
continue to be in full force and effect. Nothing herein is intended to operate
to release or diminish any right of Bank under the Note or with respect to any
collateral securing the Note or with respect to any guaranty or suretyship
agreement for the Note, all of which shall remain in full force and effect. This
instrument constitutes the entire agreement of the parties with respect to the
subject matter hereof.
IN WITNESS WHEREOF, this instrument has been executed to be effective
on the 29th day of January, 2006.
BORROWER:
DIVERSICARE MANAGEMENT SERVICES CO.,
a Tennessee corporation
By: /s/ Xxxxxxx X. Council
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Xxxxxxx X. Council, President
BANK:
AMSOUTH BANK
By: /s/ Xxx XxXxxxxx, Sr.
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Xxx XxXxxxxx, Sr.Vice President
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