1
EXHIBIT 10.55
SIXTH AMENDMENT TO CREDIT
AND SECURITY AGREEMENT
This Sixth Amendment to Credit and Security Agreement, made and entered
into as of the 28th day of June, 1996, by and between NationsBank of Tennessee,
N.A., a national banking association (the "Bank"), Advocate 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 term 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 July 1, 1996, and
the $10,000,000 Line which converts to a term facility on July 1, 1996; and,
WHEREAS, by Fifth Amendment to Credit and Security Agreement dated as
of May 1, 1996 (the "Fifth 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 July 1, 1996, subject to the terms and conditions contained in
the Fifth Amendment; and,
WHEREAS, Borrower has represented to Bank that Borrower intends to
close on or before September 1, 1996, (i) the refinancing of the TDLP First
Mortgage Indebtedness with Bank, and (ii) a credit facility with First American
National Bank and GMAC - Health Care which will pay off the Credit Facility
(the "First American Financing"); and
WHEREAS, the Borrower has requested (i) that the maturity date of the
$7,500,000 Line be extended from July 1, 1996, to September 1, 1996, (ii) that
the date on which the right of Borrower to request funds under the $10,000,000
Line be extended from July 1, 1996 to September 1, 1996 and (iii) that the
Termination Date, as defined in Section 2 of the Third Amendment to Credit and
Security Agreement dated of December 1, 1995 (the "Third Amendment") be
extended through September 1, 1996; and,
WHEREAS, based on the representations of Borrower regarding the
refinancing of the TDLP First Mortgage Indebtedness and the First American
Financing, Bank has agreed to extend the Credit Facility through September 1,
1996; and
WHEREAS, the parties desire to execute this Sixth Amendment to extend
the maturity date of the $7,500,000 Line and the Termination Date through
September 1, 1996, and to set forth certain other agreements between the
parties, as more particularly described herein.
-1-
2
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 Maturity Date - $7,500,000 Line. The maturity
date of the $7,500,000 Line is hereby extended from July 1, 1996, to September
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 July 1,
1996, to September 1, 1996. In addition, the date on which the monthly
amortization payments due under the $10,000,000 Line commence is hereby extended
from August 1, 1996, to October 1, 1996.
3. Extension of Termination Date. Section 2 of the Third
Amendment (as amended) is hereby modified to delete the reference to July 1,
1996, and substitute in its place, September 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) September 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. Acquisitions. Bank acknowledges that Borrower has acquired
interests in (i) the nursing home facility located in Hartford, Alabama
utilizing bond financing coordinated by Colonial Bank, and (ii) the Pine Dale
nursing home facility located in Arkansas, which was financed by First
American Bank, to the extent required by the Loan Agreement, consents to such
acquisitions.
5. First American Financing. Borrower represents to Bank that
Borrower has received a commitment from First American for the First American
Financing and anticipates closing the facility on or before September 1, 1996.
6. 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.
7. 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.
-2-
3
8. 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 Sixth
Amendment as of the day and date first above written.
NATIONSBANK OF TENNESSEE ADVOCATE INC., a Delaware
N.A. corporation
BY: /s/ Roy Haisley BY: /s/ Mary Margaret Hamlett
---------------------------- -----------------------------
Roy Haisley TITLE: Executive Vice President
Vice President ---------------------------
"BANK" "BORROWER"
DIVERSICARE LEASING CORP.,
a Tennessee corporation
By: /s/ Mary Margaret Hamlett
-----------------------------
Title: Executive Vice President
-------------------------
DIVERSICARE MANAGEMENT
SERVICES CO., a Tennessee corporation
BY: /s/ Mary Margaret Hamlett
-----------------------------
TITLE: Executive Vice President
-------------------------
-3-
4
ADVOCAT ANCILLARY SERVICES,
INC., a Tennessee corporation
BY: /s/ Mary Margaret Hamlett
-----------------------------
TITLE: Executive Vice President
---------------------------
DIVERSICARE CANADA
MANAGEMENT SERVICES CO., a
Canada corporation
BY: /s/ Mary Margaret Hamlett
-----------------------------
TITLE: Executive Vice President
--------------------------
DIVERSICARE GENERAL
PARTNER, INC., a Texas corporation
BY: /s/ Mary Margaret Hamlett
-----------------------------
TITLE: Executive Vice President
-------------------------
FIRST AMERICAN HEALTH CARE.
INC., an Alabama corporation
BY: /s/ Mary Margaret Hamlett
----------------------------
TITLE: Executive Vice President
------------------------
-4-
5
DAUPHIN HEALTH CARE FACILITY,
INC., an Alabama corporation
BY: /s/ Mary Margaret Hamlett
----------------------------
TITLE: Executive Vice President
------------------------
-5-