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EXHIBIT 10.11
SECOND AMENDMENT TO INTERCREDITOR AGREEMENT
THIS AGREEMENT is made and entered into between and among AMSOUTH BANK,
successor in interest by merger to First American National Bank (hereinafter
referred to as "AmSouth" or as "First American"), GMAC COMMERCIAL MORTGAGE
CORPORATION, a California corporation, being one and the same as GMAC-CM
Commercial Mortgage Corporation ("GMAC"), 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 set forth in the
instruments and documents evidencing indebtedness owing by some or all of such
entities to AmSouth and/or GMAC-CM). Wherever "GMAC" appears herein, it shall
mean and refer to "GMAC-CM" as set forth in the Intercreditor Agreement, as
defined herein.
WITNESSETH:
WHEREAS, First American and GMAC, as Lenders, and Advocat and certain
of its subsidiaries entered into an Intercreditor Agreement dated December 27,
1996 as amended by First Amendment to Intercreditor Agreement dated as of June
4, 1999 (the "Intercreditor Agreement"), setting forth the relative rights and
priorities between First American and GMAC as to collateral for indebtedness
owing to such parties, as more particularly set forth therein; and
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WHEREAS, in connection with restructuring of indebtedness owing by the
Debtors to AmSouth, which is successor in interest to First American, and GMAC,
the parties have agreed to amend the Intercreditor Agreement, as set forth
herein.
NOW, THEREFORE, for and in consideration of the premises, the mutual
benefit to the parties hereto, and of other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereby
covenant, amend and agree as follows:
1. GMAC consents to the entering into between AmSouth and Debtors
of the Master Amendment to Loan Documents and Agreement of even date herewith
(the "Master Amendment"), and to the undertakings, covenants and agreements
contained therein. GMAC shall join as a party to the Master Amendment.
2. AmSouth and Debtors have agreed in the Master Amendment that
all collateral held by AmSouth as security for indebtedness shall secure all
indebtedness and obligations now or hereafter owing by any, some or all of
Debtors to AmSouth, whether now existing or hereafter arising. In order to
conform the Intercreditor Agreement to this understanding, and to restate and
clarify the relative priorities of AmSouth and GMAC in the collateral which is
the subject of the Intercreditor Agreement, the Intercreditor Agreement is
amended as follows:
(a) The definition of "Debtors," set forth in Section 1,
"Definitions," is expanded to include, in addition to the parties originally
contained within such definition, all additional parties defined as one of the
Debtors as set forth in this instrument.
(b) The definition of "First American Claim," set forth
in Section 1, "Definitions," is expanded to include, in addition to the
indebtedness and obligations originally included within such definition, the
following:
and any and all indebtedness and obligations now or hereafter owing to
AmSouth by any, some or all of Debtors.
(c) Schedule A-1 to the Intercreditor Agreement is the
"Description of First American Collateral." Schedule A-1 lists all "First
American Collateral" in seven numbered items. Schedule A-1 further identifies
the first five of these seven numbered items as "First American Priority
Collateral" by placement of an asterisk ("*") before such five items. Item 2,
which is equipment, furnishings and furniture of Debtors, item 3, which is
general intangibles and other personal property of Debtors, and item 4, which is
inventory of Debtors, each contain the following exclusion from the Description
of First American Collateral:
but excluding the GMAC Priority Collateral.
It was the intention of the parties in the Credit Agreement, as defined
in the Intercreditor Agreement, that AmSouth would have a first priority
security interest in equipment, furnishings and furniture, general intangibles
and other personal property, and inventory of Debtors, except that AmSouth would
have a second priority security interest in such items located at Projects
financed under the Acquisition Line of GMAC, subject to the first priority
security interest in favor of GMAC. This understanding is expressed in Section
4.1, subsection (a), of the Credit Agreement. Accordingly, items 2, 3 and 4 of
the Description of First American Collateral contained in Schedule A-1 are
modified to delete the following language from the end of each of such items:
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but excluding the GMAC Priority Collateral
and to replace such deleted language with the following:
provided, however, those of such items which are located at the
Projects financed under the Acquisition Line of GMAC, whether now
existing or hereafter acquired or arising, shall not be First American
Priority Collateral and shall be subject to the prior security interest
of GMAC.
(d) Schedule A-2, of the Intercreditor Agreement is the
"Description of GMAC Collateral." Schedule A-2 lists the GMAC Collateral in
seven items and specifies that items 2 through 6 are GMAC Priority Collateral by
placement of an asterisk ("*") at the beginning of these items.
It was the intention of the parties in the Credit Agreement that First
American shall have a first priority security interest in all accounts
receivable of the Debtors. Section 4.1, subsection (a), of the Credit Agreement
sets forth the agreement of the parties with respect to the priority of security
interests in accounts receivable. This agreement of the parties as to accounts
receivable is reflected in the fact that item 1, which relates to accounts
receivable generated by Projects financed under the Acquisition Line of GMAC, is
not GMAC Priority Collateral. However, item 5 includes as GMAC Priority
Collateral "Accounts..., Medicaid contracts, [and] Medicare contracts" arising
from Projects financed by the Acquisition Line of GMAC. In order to clarify that
these items are not a part of the GMAC Priority Collateral, the following is
added at the end of item 5:
provided that Accounts, and receivables under Medicaid contracts and
Medicare contracts shall not be a part of the GMAC Priority Collateral
(it being the intent of the parties that the actual Medicaid and
Medicare contracts shall remain GMAC Priority Collateral).
(e) Notices to AmSouth and GMAC as set forth in Section
9, subsection (b), "Miscellaneous," shall be to the following addresses, in lieu
of those originally set forth:
as to AmSouth: AmSouth Bank
Attention: Xxxxxx Xxxx
AmSouth Center
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
with a copy to: G. Xxxx Xxxx, Esq.
Gullett, Sanford, Xxxxxxxx & Xxxxxx, PLLC
Third Floor
230 Fourth Avenue North
P.O. Box 198888
Nashville, TN 37219-8888
and as to GMAC:
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with a copy to: Xxx X. Xxxxx, Esq.
Walston, Wells, Xxxxxxxx & Xxxxx, LLP
000 00xx Xxxxxx, Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000-0000
3. 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 a subsequent agreement in writing executed between the parties hereto,
provided that any agreement modifying the relative priority or rights to
exercise of remedies as to any collateral held by AmSouth or GMAC may be
modified solely by an instrument executed between AmSouth and GMAC without
joinder of any of Debtors. This Agreement shall be governed by the laws of the
State of Tennessee. 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. This Agreement shall be binding upon
the parties hereto, their successors and lawful assigns. This Agreement is
solely for the benefit of AmSouth and GMAC and may not be relied upon by Debtors
or by any third parties, none of whom shall have any rights hereunder. Debtors
have executed this Agreement solely to facilitate the terms hereof and to
further acknowledge the security interests which are the subject hereof. 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.
IN WITNESS WHEREOF, the parties hereto have executed this instrument
this ____ day of November, 2000.
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AMSOUTH BANK, successor in interest by
merger to First American National Bank
By: /s/ Xxxxxx Xxxx
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Xxxxxx Xxxx, Senior Vice President
GMAC COMMERCIAL MORTGAGE
CORPORATION, a California corporation
By:
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Name:
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Title:
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DIVERSICARE MANAGEMENT
SERVICES CO., a Tennessee corporation
By: /s/ Xxxxx X. Xxxxx, Xx.
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Name: Xxxxx X. Xxxxx, Xx.
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Title: SR VP & CFO
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ADVOCAT INC., a Delaware corporation
By: /s/ Xxxxx X. Xxxxx, Xx.
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Name: Xxxxx X. Xxxxx, Xx.
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Title: SR VP & CFO
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DIVERSICARE LEASING CORP.,
a Tennessee corporation
By: /s/ Xxxxx X. Xxxxx, Xx.
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Name: Xxxxx X. Xxxxx, Xx.
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Title: SR VP & CFO
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ADVOCAT ANCILLARY SERVICES,
INC., a Tennessee corporation
By: /s/ Xxxxx X. Xxxxx, Xx.
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Name: Xxxxx X. Xxxxx, Xx.
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Title: SR VP & CFO
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DIVERSICARE CANADA
MANAGEMENT SERVICES CO.,
INC., an Ontario, Canada corporation
By: /s/ Xxxxx X. Xxxxx, Xx.
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Name: Xxxxx X. Xxxxx, Xx.
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Title: SR VP & CFO
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DIVERSICARE GENERAL PARTNER,
INC., a Texas corporation
By: /s/ Xxxxx X. Xxxxx, Xx.
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Name: Xxxxx X. Xxxxx, Xx.
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Title: SR VP & CFO
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FIRST AMERICAN HEALTH CARE,
INC., an Alabama corporation
By: /s/ Xxxxx X. Xxxxx, Xx.
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Name: Xxxxx X. Xxxxx, Xx.
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Title: SR VP & CFO
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ADVOCAT DISTRIBUTION SERVICES,
INC., a Tennessee corporation
By: /s/ Xxxxx X. Xxxxx, Xx.
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Name: Xxxxx X. Xxxxx, Xx.
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Title: SR VP & CFO
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ADVOCAT FINANCE, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxx, Xx.
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Name: Xxxxx X. Xxxxx, Xx.
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Title: SR VP & CFO
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DIVERSICARE LEASING CORP. OF
ALABAMA, INC., an Alabama corporation
By: /s/ Xxxxx X. Xxxxx, Xx.
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Name: Xxxxx X. Xxxxx, Xx.
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Title: SR VP & CFO
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DIVERSICARE ASSISTED LIVING
SERVICES, INC., a Tennessee corporation
By: /s/ Xxxxx X. Xxxxx, Xx.
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Name: Xxxxx X. Xxxxx, Xx.
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Title: SR VP & CFO
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DIVERSICARE ASSISTED LIVING
SERVICES, NC, LLC,
a Tennessee limited liability company
By: /s/ Xxxxx X. Xxxxx, Xx.
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Name: Xxxxx X. Xxxxx, Xx.
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Title: SR VP & CFO
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DIVERSICARE ASSISTED LIVING
SERVICES NC I, LLC,
a Delaware limited liability company
By: /s/ Xxxxx X. Xxxxx, Xx.
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Name: Xxxxx X. Xxxxx, Xx.
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Title: SR VP & CFO
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DIVERSICARE ASSISTED LIVING
SERVICES NC II, LLC,
a Delaware limited liability company
By: /s/ Xxxxx X. Xxxxx, Xx.
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Name: Xxxxx X. Xxxxx, Xx.
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Title: SR VP & CFO
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STERLING HEALTH CARE
MANAGEMENT, INC., a Kentucky corporation
By: /s/ Xxxxx X. Xxxxx, Xx.
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Name: Xxxxx X. Xxxxx, Xx.
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Title: SR VP & CFO
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DIVERSICARE XXXXX XXXX, LLC,
a Delaware limited liability company
By: /s/ Xxxxx X. Xxxxx, Xx.
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Name: Xxxxx X. Xxxxx, Xx.
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Title: SR VP & CFO
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DIVERSICARE GOOD SAMARITAN,
LLC, a Delaware limited liability company
By: /s/ Xxxxx X. Xxxxx, Xx.
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Name: Xxxxx X. Xxxxx, Xx.
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Title: SR VP & CFO
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DIVERSICARE PINEDALE, LLC,
a Delaware limited liability company
By: /s/ Xxxxx X. Xxxxx, Xx.
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Name: Xxxxx X. Xxxxx, Xx.
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Title: SR VP & CFO
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DIVERSICARE WINDSOR HOUSE, LLC,
a Delaware limited liability company
By: /s/ Xxxxx X. Xxxxx, Xx.
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Name: Xxxxx X. Xxxxx, Xx.
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Title: SR VP & CFO
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SCHEDULE A-2
DESCRIPTION OF GMAC-CM COLLATERAL
The following described property and interests in property, together
with all proceeds and products thereof and all accessions thereto, as
applicable:
1. All of the right, title and interest of the Pledgors in and to the
accounts receivable of the Pledgor generated by the Projects financed under the
Acquisition Line, whether now existing or hereafter arising.
2.* All of the right, title and interest of the Pledgor in and to all
equipment, furnishings, and furniture of the Pledgor located at the Projects
financed under the Acquisition Line, whether now owned or hereafter acquired
(excluding equipment leased by the Pledgors).
3.* All of the general intangibles and other personal property of the
Pledgor related to or located at the Projects financed under the Acquisition
Line, whether now existing or hereafter acquired or arising.
4.* All of the right, title and interest of the Debtors in and to all
inventory located at the Projects financed under the Acquisition Line, whether
now owned or hereafter acquired.
5.* A deed of trust/mortgage or other appropriate security instruments
granting to GMAC-XX x xxxx on the applicable Project real property and assets,
including furniture, fixtures, Equipment, Inventory, General Intangibles,
Accounts, licenses, Medicaid contracts, Medicare contracts and other personal
property of the Project, whether now owned or hereafter acquired by the
Borrower.
6.* A collateral assignment in favor of GMAC-CM of all right, title
and interest in and to management contracts related to the management of the
Project financed by the Project Loan.
7. A pledge of all of the outstanding stock of DLC, DMS, Borrower and
the Subsidiaries, and of any subsidiaries of any Subsidiary (including any
subsidiaries formed or acquired after the date hereof).
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* GMAC-CM Priority Collateral
