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EXHIBIT 10.2
FOURTH AMENDMENT TO
LOAN AND NEGATIVE PLEDGE AGREEMENT
This fourth Amendment to Loan and Negative Pledge Agreement, made and
entered into as of the 1st day of October, 1999, 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, as
amended from time to time (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, the balance outstanding under the Credit Facility is
$9,412,383.87; and,
WHEREAS, Borrower has requested, and the Banks have agreed, to extend the
Maturity Date of the Credit Facility to December 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 foregoing,
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 December 1, 1999.
"Notes" means the Renewal and Modification Promissory Notes of even
date herewith in the amount of $4,706,191.94 each, 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 October
20, 1999, as the first payment date. The Maturity Date referred to in Section
2.1 of the Loan Agreement is hereby modified to refer to December 1, 1999.
3. Reporting. In addition to the reporting requirements in the Loan
Agreement, Borrower shall provide to Banks:
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a. monthly balance sheet and income statement, in form and substance
acceptable to Bank, such statement to be supplied within forty-five (45) days of
month end;
b. weekly cash flow report, in form and substance acceptable to Bank,
to be supplied each Friday;
c. a fourth quarter budget forecast;
d. a budget for fiscal year 2000 in form and substance acceptable to
Bank;
e. cooperate with Bank in completing a field audit of the Borrower's
and affiliates' accounts receivable, at Borrower's expense.
4. Conditions. As a condition to the Banks' extension of the Maturity
Date, Borrower and the Guarantors agree to execute and deliver to the Banks, on
or before November 15, 1999, any and all documents which the Banks deem
necessary to effectuate granting liens on the following properties:
a. a first priority lien on the property located in North Carolina
known as Carteret Care.
b. subject to the approval of GMAC, a second priority lien on the
so-called "Pool B" facilities.
c. subject to the consent of the partners of Texas Diversicare
Limited Partnership and Bank of America, a second priority lien on the six (6)
properties located in Texas and commonly referred to as the "TDLP Properties"
and consisting of (i) Xxxxxxx Trail Nursing & Rehab, (ii) Goliad Nursing &
Rehab, (iii) Hillcrest Nursing & Rehab, (iv) Lampasas Nursing & Rehab, (v)
Xxxxxxx Nursing & Rehab, and (vi) Yorktown Nursing & Rehab.
d. subject to the approval of Bank of America, a second priority
security interest in the "Wrap Note" related to the TDLP Properties.
e. subject to the consents required in the TDLP Partnership
Agreement, if any, a pledge by Diversicare General Partner, Inc. of its limited
partner interest in TDLP.
Borrower will cause Banks to be furnished with such due diligence as Banks
may request in connection with such liens, including current title reports
and/or title policies, surveys and environmental site assessments. Subject to
the conditions set forth above, including the inability of Borrower to obtain
the consent of the partners of TDLP, failure of Borrower to execute the
documents necessary to grant the liens and security interests described above on
or before November 15, 1999, shall be deemed to be a default under the Loan
Agreement.
5. Fees. Section 2.5 of the Loan Agreement is hereby deleted, and the
following is substituted as new Section 2.5:
2.5 Fees. In consideration for the Bank's agreements to extend the
Maturity Date, Borrower shall pay the Agent a closing fee of $5,000.00, to
be distributed fifty percent (50%) to AmSouth and fifty percent (50%) to
FANB.
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6. Guarantors. The guarantors have joined in the execution of this
Fourth 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.
7. 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.
8. 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 Fourth
Amendment as of the day and date first above written.
FIRST AMERICAN NATIONAL BANK DIVERSICARE ASSISTED LIVING
SERVICES NC, LLC
BY: /s/ Xxxxxxx X. Xxxxxxxx BY: /s/ Xxxxxxx X. Xxxxx, Xx.
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TITLE: Senior Vice President TITLE: Executive Vice President
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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 X. Xxxxxxxx
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TITLE: Senior Vice President
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AMSOUTH BANK:
BY: /s/ Xxxxxx X. Xxxxxxxxxxx
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TITLE: Senior Vice President
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GUARANTORS:
ADVOCAT, INC., a Delaware
corporation
BY: /s/ Xxxxxxx X. Xxxxx, Xx.
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TITLE: Executive Vice President
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DIVERSICARE MANAGEMENT SERVICES
CO., a Tennessee corporation
BY: /s/ Xxxxxxx X. Xxxxx, Xx.
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TITLE: Executive Vice President
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DIVERSICARE LEASING CORP.,
a Tennessee corporation
BY: /s/ Xxxxxxx X. Xxxxx, Xx.
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TITLE: Executive Vice President
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ADVOCAT ANCILLARY SERVICES,
INC., a Tennessee corporation
BY: /s/ Xxxxxxx X. Xxxxx, Xx.
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TITLE: Executive Vice President
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DIVERSICARE CANADA
MANAGEMENT SERVICES CO.,
INC., an Ontario, Canada corporation
BY: /s/ Xxxxxxx X. Xxxxx, Xx.
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TITLE: Executive Vice President
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DIVERSICARE GENERAL
PARTNER, INC., a Texas corporation
BY: /s/ Xxxxxxx X. Xxxxx, Xx.
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TITLE: Executive Vice President
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FIRST AMERICAN HEALTH CARE,
INC., an Alabama corporation
BY: /s/ Xxxxxxx X. Xxxxx, Xx.
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TITLE: Executive Vice President
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ADVOCAT DISTRIBUTION SERVICES,
INC., a Tennessee corporation
BY: /s/ Xxxxxxx X. Xxxxx, Xx.
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TITLE: Executive Vice President
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ADVOCAT FINANCE, INC., a
Delaware corporation
BY: /s/ Xxxxxxx X. Xxxxx, Xx.
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TITLE: Executive Vice President
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DIVERSICARE LEASING CORP. OF
ALABAMA, INC., an
Alabama corporation
BY: /s/ Xxxxxxx X. Xxxxx, Xx.
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TITLE: Executive Vice President
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DIVERSICARE ASSISTED LIVING
SERVICES, INC., a Tennessee
corporation
BY: /s/ Xxxxxxx X. Xxxxx, Xx.
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TITLE: Executive Vice President
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