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SEVENTH AMENDMENT TO CREDIT
AND SECURITY AGREEMENT
This Seventh Amendment to Credit and Security Agreement, made and entered
into as of the 1st day of September, 1996, by and between NationsBank of
Tennessee, N.A., a national banking association (the "Bank"), Advocat Inc., a
Delaware corporation ("Borrower"), and the Subsidiaries, as defined in the
Credit and Security Agreement by and between the Bank, the Borrower and the
Subsidiaries, dated as of October 12, 1994, as amended from time to time (the
"Loan Agreement"). Capitalized terms not otherwise described herein shall have
the meanings ascribed to such terms in the Loan Agreement.
W I T N E S S E T H:
WHEREAS, pursuant to the terms of the Loan Agreement, the Bank committed
to loan to the Borrower and the Subsidiaries amounts not to exceed $17,500,000,
including the $7,500,000 Line, which matures on September 1, 1996, and the
$10,000,000 Line which converts to a term facility on September 1, 1996; and,
WHEREAS, by Sixth Amendment to Credit and Security Agreement dated as of
June 28, 1996 (the "Sixth Amendment"), Bank agreed to permit Borrower to
continue to request and receive funds under Credit Facility in excess of the
amount available under the Credit Facility, calculated in accordance with the
Borrowing Base, pending the closing of the refinancing of the TDLP First
Mortgage Indebtedness; and,
WHEREAS, Bank agreed to permit such overadvances under the Credit Facility
through September 1, 1996, subject to the terms and conditions contained in the
Sixth Amendment; and,
WHEREAS, Borrower has represented to Bank that Borrower intends to close
on or before November 1, 1996, (i) the refinancing of the TDLP First Mortgage
Indebtedness with Bank, and (ii) a credit facility with First American National
Bank and GMAC - Health Care which will pay off the Credit Facility (the "First
American Financing"); and,
WHEREAS, the Borrower has requested (i) that the maturity date of the
$7,500,000 Line be extended from September 1, 1996, to November 1, 1996 (ii)
that the date on which the right of Borrower to request funds under the
$10,000,000 Line be extended from September 1, 1996, to November 1, 1996, and
(iii) that the Termination Date, as defined in Section 2 of the Third Amendment
to Credit and Security Agreement dated of December 1, 1995 (the "Third
Amendment") be extended through November 1, 1996; and,
WHEREAS, based on the representations of Borrower regarding the
refinancing of the TDLP First Mortgage Indebtedness, and the First American
Financing, Bank has agreed to extend the Credit Facility through November 1,
1996; and,
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WHEREAS, the parties desire to execute this Seventh Amendment to extend
the maturity date of the $7,500,000 Line and the Termination Date through
November 1, 1996, and to set forth certain other agreements between the
parties, as more particularly described herein,
NOW, THEREFORE, in consideration of the foregoing premises, and other good
and valuable consideration, the receipt and legal sufficiency of which is
hereby acknowledged, the Bank, the Borrower and the Subsidiaries hereby agree
as follows:
1. Extension of Maturity Date - $7,500,000 Line. The maturity date of
the $7,500,000 Line is hereby extended from September 1, 1996, to November 1,
1996. Borrower agrees to execute a renewal note and such other documents as
Bank may reasonably request to evidence such extension of the maturity date.
2. Extension of Revolving Period - $10,000,000 Line. The date through
which the Borrower may request funds under the $10,000,000 Line, as set forth
in Section 2.1(b) of the Loan Agreement, is hereby extended from September 1,
1996, to November 1, 1996. In addition, the date on which the monthly
amortization payments due under the $10,000,000 Line commence is hereby
extended from October 1, 1996, to December 1, 1996.
3. Extension of Termination Date. Section 2 of the Third Amendment (as
amended) is hereby modified to delete the reference to September 1, 1996, and
substitute in its place, November 1, 1996, it being the intent of the parties
that the Termination Date shall be the earlier of (i) the date on which the
refinancing of the TDLP First Mortgage Indebtedness is completed, or (ii)
November 1, 1996. Overadvances, if any, shall continue to be available under
the $10,000,000 Line, subject to the provisions of Section 2 of the Third
Amendment.
4. First American Financing. Borrower represents to Bank that Borrower
has received a commitment from First American for the First American Financing
and anticipates closing the facility on or before November 1, 1996.
5. Joinder of Guarantors. The Guarantors, by executing this Amendment,
hereby confirm that the terms and conditions of the Guaranty Agreements
executed by each of the Guarantors dated as of October 12, 1994, continue in
full force and effect, and the Obligations (as defined in the Guaranty
Agreements) shall include any amounts advanced as an Overadvance, pursuant to
the terms of the Loan Agreement. This Amendment shall be deemed to be an
amendment to the Guaranty Agreements, to the extent required, to confirm that
the Guarantors' obligations under the Guaranty Agreements include, without
limitation, any Overadvance funded pursuant to the terms of the Loan Agreement.
6. No Default. The Borrower and the Subsidiaries hereby confirm that no
Event of Default currently exists, and, to the best of the Borrower's and the
Subsidiaries' knowledge, no condition presently exists or is anticipated which,
with the passage of time, the giving of notice, or both, would constitute an
Event of Default.
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7. Ratification. The Borrower and the Subsidiaries hereby restate and
ratify the terms and conditions of the Loan Agreement as of the date hereof, and
each acknowledge that the terms and conditions of the Loan Agreement, as amended
hereby, remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Seventh
Amendment as of the day and date first above written.
NATIONSBANK OF TENNESSEE, ADVOCAT INC., A DELAWARE CORPORATION
N.A.
By: /s/Xxx Xxxxxxx By: /s/Xxxx Xxxxxxxx Xxxxxxx
------------------------- ------------------------------------
Xxx Xxxxxxx
Vice President Title: Executive Vice President
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"BANK" "BORROWER"
DIVERSICARE LEASING CORP., A
TENNESSEE CORPORATION
By: /s/Xxxx Xxxxxxxx Xxxxxxx
------------------------------------
Title: Executive Vice President
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DIVERSICARE MANAGEMENT SERVICES
CO., A TENNESSEE CORPORATION
By: /s/Xxxx Xxxxxxxx Xxxxxxx
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Title: Executive Vice President
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ADVOCAT ANCILLARY SERVICES, A
TENNESSEE CORPORATION
By: /s/Xxxx Xxxxxxxx Xxxxxxx
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Title: Executive Vice President
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DIVERSICARE CANADA
MANAGEMENT SERVICES CO.,
A CANADA CORPORATION
By: /s/Xxxx Xxxxxxxx Xxxxxxx
------------------------------------
Title: Executive Vice President
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DIVERSICARE GENERAL PARTNER, INC.,
A TEXAS CORPORATION
By: /s/Xxxx Xxxxxxxx Xxxxxxx
------------------------------------
Title: Executive Vice President
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FIRST AMERICAN HEALTH CARE, INC.,
AN ALABAMA CORPORATION
By: /s/Xxxx Xxxxxxxx Xxxxxxx
------------------------------------
Title: Executive Vice President
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DAUPHIN HEALTH CARE FACILITY,
INC., AN ALABAMA CORPORATION
By: /s/Xxxx Xxxxxxxx Xxxxxxx
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Title: Executive Vice President
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