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EXHIBIT 10.54
FIFTH AMENDMENT TO CREDIT
AND SECURITY AGREEMENT
This Fifth Amendment to Credit and Security Agreement, made and entered
into as of the 1st day of May, 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 May 1, 1996, and the
$10,000,000 Line which converts to a term facility on May 1, 1996; and,
WHEREAS, by Fourth Amendment to Credit and Security Agreement dated as of
April 1, 1996 (the "Fourth Amendment"), Bank agreed to permit Borrower to
continue 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 May 1, 1996, subject to the terms and conditions contained in the Third
Amendment to Credit and Security Agreement dated as of December 1, 1995; and,
WHEREAS, the Borrower has requested (i) that the maturity date of the
$7,500,000 Line be extended from May 1, 1996, to July 1, 1996, (ii) that the
date on which the right of Borrower to request funds under the $10,000,000 Line
be extended from May 1, 1996, to July 1, 1996, and (iii) that the Termination
Date, as defined in Section 2 of the Third Amendment be extended through July
1, 1996; and,
WHEREAS, the parties desire to execute this Fifth Amendment to extend the
maturity date of the $7,500,000 Line and the Termination Date through July 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:
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1. Extension of Maturity Date - $7,500,000 Line. The maturity date of
the $7,500,000 Line is hereby extended from May 1, 1996, to July 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 May 1, 1996,
to July 1, 1996. In addition, the date on which the monthly amortization
payments due under the $10,000,000 Line commence is hereby extended from June
1, 1996, to August 1, 1996.
3. Extension of Termination Date. Section 2 of the Third Amendment (as
amended by the Fourth Amendment) is hereby modified to delete the reference to
May 1, 1996, and substitute in its place, July 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) July 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. Letters of Credit. Bank and Borrower acknowledge that the parties
are negotiating possible changes in the pricing for the Credit Facility,
including the fees for letters of credit issued by Bank. Borrower acknowledges
that, to the extent pricing changes are instituted, the fees for any letters of
credit issued or outstanding after May 1, 1996, shall be adjusted to reflect the
new pricing schedule, effective as of the date the pricing change is instituted
through the expiration date of such Letters of Credit.
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 Fifth Amendment
as of the day and date first above written.
NATIONSBANK OF TENNESSEE, ADVOCAT INC., a Delaware corporation
N.A.
By: ______________________ By:______________________________
Roy Haisley, Vice President Title:___________________________
"BANK"" BORROWER"
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:___________________________
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DIVERSICARE CANADA MANAGEMENT
SERVICES CO., a Canada corporation
By:______________________________
Title:___________________________
DIVERSICARE GENERAL PARTNER, INC.,
a Texas corporation
By:______________________________
Title:___________________________
FIRST AMERICAN HEALTH CARE, INC.,
an Alabama corporation
By:______________________________
Title:___________________________
DAUPHIN HEALTH CARE FACILITY, INC.,
an Alabama corporation
By:______________________________
Title:___________________________
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