1
EXHIBIT 10.53
FOURTH AMENDMENT TO CREDIT
AND SECURITY AGREEMENT
This Fourth Amendment to Credit and Security Agreement, made and entered
into as of the 1st day of April, 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;
and,
WHEREAS, Borrower has certain short-term working capital needs which may
exceed the Borrower's availability as defined by the Borrowing Base under the
Credit Facility; and,
WHEREAS, by Third Amendment to Credit and Security Agreement dated as of
December 1, 1995 (the "Third Amendment"), Bank agreed to permit Borrower to
request and receive funds under the 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 April 1, 1995, subject to the terms and conditions contained
in the Third Amendment; and,
WHEREAS, the Borrower has requested that the Termination Date, as defined
in Section 2 of the Third Amendment be extended through May 1, 1996; and,
WHEREAS, the parties desire to execute this Fourth Amendment to extend the
Termination Date through May 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 Termination Date. Section 2 of the Third Amendment is
hereby modified to delete the reference to April 1, 1996, and substitute in its
place, May 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) May 1, 1996.
-1-
2
2. Waiver of Covenant Default. Borrower acknowledges that Borrower failed
to meet the requirements for the Fixed Charge Coverage Ration set forth in
Section 5.2(r)(iii) for the period ending December 31, 1995, resulting in
Borrower being in default under the terms of the Loan Agreement. Bank hereby
waives the default created by the failure of Borrower to comply with Section
5.2(r)(iii) as of December 31, 1995. Such waiver by Bank is limited to the
period ending December 31, 1995, and shall not be deemed to be a waiver of any
other default by Borrower under the terms of the Loan Agreement.
3. 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.
4. 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.
5. 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 Fourth Amendment
as of the day and date first above written.
NATIONSBANK OF TENNESSEE ADVOCAT INC., a Delaware
N.A. Corporation
BY: BY:
----------------------- --------------------------
Roy Haisley
Vice President TITLE:
-----------------------
"BANK" "BORROWER"
-2-
3
DIVERSICARE LEASING CORP.,
a Tennessee Corporation
BY:
--------------------------
TITLE:
-----------------------
DIVERSICARE MANAGEMENT
SERVICES CO., a Tennessee Corporation
BY:
--------------------------
TITLE:
-----------------------
ADVOCAT ANCILLARY SERVICES,
INC., a Tennessee Corporation
BY:
--------------------------
TITLE:
-----------------------
DIVERSICARE CANADA
MANAGEMENT SERVICES CO., a
Canada Corporation
BY:
--------------------------
TITLE:
-----------------------
DIVERSICARE GENERAL
PARTNER, INC., a Texas Corporation
BY:
--------------------------
TITLE:
-----------------------
-3-
4
FIRST AMERICAN HEALTH CARE,
INC., an Alabama Corporation
BY:
--------------------------
TITLE:
-----------------------
DAUPHIN HEALTH CARE FACILITY,
INC., an Alabama Corporation
BY:
--------------------------
TITLE:
-----------------------
-4-