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EXHIBIT 3
SECOND AMENDMENT TO
LOAN AND NEGATIVE PLEDGE AGREEMENT
This Second Amendment to Loan and Negative Pledge Agreement, made and
entered into as of the 31st day of March, 1998, between First American National
Bank, a national banking association, as Agent for AmSouth Bank, an Alabama
banking corporation ("AmSouth"), First American National Bank ("FANB")
(individually, a "Bank" and, collectively, the "Banks"), and Diversicare
Assisted Living Services NC, LLC, a Tennessee limited liability company (the
"Borrower"),
W I T N E S S E T H:
WHEREAS, pursuant to the terms of a Loan and Negative Pledge Agreement
dated as of October 1, 1997, by and between FANB, AmSouth and Borrower (the
"Loan Agreement"), the Banks agreed to make available to the Borrower, on a
nonrevolving basis, up to $34,100,000, to finance the acquisition of the
Facilities (capitalized terms not otherwise defined herein shall have the
meaning ascribed to such terms in the Loan Agreement); and,
WHEREAS, Borrower has requested, and the Banks have agreed, to extend
the Maturity Date of the Credit Facility to April 1, 1999, subject to the terms
and conditions contained herein; and,
WHEREAS, the Banks, the Borrower and the Guarantors desire to amend the
Loan Agreement to reflect the extension of the Maturity Date, as set forth
herein,
NOW, THEREFORE, in consideration of the foregoing premises, and other
good and valuable consideration, the receipt and legal sufficiency of which are
hereby acknowledged, the parties hereto hereby amend the Loan Agreement as
follows:
1. Definitions. The following definitions set forth in Section 1 of the
Loan Agreement are amended to read as follows:
"Maturity Date" means April 1, 1999.
"Notes" means the Renewal and Modification Promissory Notes of
even date herewith, executed by the Borrower in favor of the Banks, together
with all renewals, amendments and extensions thereof.
2. Credit Facility. The references to the monthly interest payment
dates in Section 2.1 of the Loan Agreement are hereby modified to refer to April
20, 1998, as the first payment date. The Maturity Date referred to in Section
2.1 of the Loan Agreement is hereby modified to refer to April 1, 1999.
3. Section 2.5 of the Loan Agreement is hereby deleted, and the
following is substituted as new Section 2.5:
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2.5 Fees. In consideration for the Bank's agreements to extend
the Maturity Date and to fund monies under the Loan in accordance with
the Loan Agreement, Borrower shall pay the Agent a closing fee of 0.5%
of the face amount of the Loan, to be distributed fifty percent (50%)
to AmSouth and fifty percent (50%) to FANB.
4. Guarantors. The Guarantors have joined in the execution of this
Second Amendment to acknowledge the renewal and extension of the Loan and to
confirm to the Banks that the terms and provisions of the Guaranty Agreements
remain in full force and effect and to confirm that that the Guaranty Agreements
continue to secure the obligations under the Loan Agreement, in accordance with
the terms of the Guaranty Agreements.
5. Collateral Assignment of Membership Interests. The undersigned,
Diversicare Management Services Co. ("DMS") and Diversicare Assisted Living
Services, Inc. ("DALS"), have joined in this Second Amendment for purposes of
acknowledging the renewal and extension of the Loan and to further acknowledge
that the terms and conditions of the Collateral Assignment of Membership
Interests dated as of October 1, 1997, by and among the Banks, DMS and DALS (the
"Collateral Assignment"), remain in full force and effect and to confirm that
the Collateral Assignment continues to secure the Borrower's obligations under
the Loan Agreement, in accordance with the terms of the Collateral Assignment.
6. Closing Expenses. In consideration for the extension of the Maturity
Date and the other agreements of the Banks set forth herein, Borrower agrees to
pay all out-of-pocket expenses incurred by the Banks in connection with the
renewal and extension of the Loan, including, without limitation, reasonable
attorneys fees.
7. Ratification. The Borrower hereby restates and ratifies all of the
terms and conditions contained in the Loan Agreement as of the date hereof, and
confirms that the Loan Agreement, as amended hereby, remains in full force and
effect.
(Remainder of Page Intentionally Left Blank)
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IN WITNESS WHEREOF, the parties hereto have executed this Second
Amendment as of the day and date first above written.
FIRST AMERICAN NATIONAL BANK DIVERSICARE ASSISTED LIVING
SERVICES NC, LLC
BY: /s/Xxxxxxx Xxxxxx, III BY: /s/Xxxx Xxxxxxxx Xxxxxxx
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TITLE: Senior Vice President TITLE: Executive Vice President
-------------------------- ---------------------------
First American Center Chief Executive Office:
Xxxxxxxxx, XX 00000 000 Xxxxxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
BANKS:
FIRST AMERICAN NATIONAL BANK
BY: /s/Xxxxxxx Xxxxxx, III
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TITLE: Senior Vice President
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AMSOUTH BANK
BY: /s/Xxxxx Wind
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TITLE: Vice President
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GUARANTORS:
ADVOCAT, INC., a Delaware corporation
BY: /s/Xxxx Xxxxxxxx Xxxxxxx
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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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DIVERSICARE LEASING CORP.,
a Tennessee corporation
BY: /s/Xxxx Xxxxxxxx Xxxxxxx
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TITLE: Executive Vice President
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ADVOCAT ANCILLARY SERVICES,
INC., 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.,
INC., an Ontario, Canada corporation
BY: /s/Xxxx Xxxxxxxx Xxxxxxx
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TITLE: Executive Vice President
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DIVERSICARE GENERAL
PARTNER, INC., a Texas corporation
BY: /s/Xxxx Xxxxxxxx Xxxxxxx
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TITLE: Executive Vice President
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FIRST AMERICAN HEALTH CARE,
INC., an Alabama corporation
BY: /s/Xxxx Xxxxxxxx Xxxxxxx
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TITLE: Executive Vice President
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ADVOCAT DISTRIBUTION SERVICES,
INC., a Tennessee corporation
BY: /s/Xxxx Xxxxxxxx Xxxxxxx
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TITLE: Executive Vice President
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ADVOCAT FINANCE, INC., a
Delaware corporation
BY: /s/Xxxx Xxxxxxxx Xxxxxxx
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TITLE: Executive Vice President
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DIVERSICARE LEASING CORP. OF
ALABAMA, INC., an
Alabama corporation
BY: /s/Xxxx Xxxxxxxx Xxxxxxx
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TITLE: Executive Vice President
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DIVERSICARE ASSISTED LIVING
SERVICES, INC., a Tennessee
corporation
BY: /s/Xxxx Xxxxxxxx Xxxxxxx
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TITLE: Executive Vice President
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