EXHIBIT 10.7
SECOND AMENDMENT TO REPLACEMENT REDUCED AND MODIFIED
RENEWAL REVOLVING PROMISSORY NOTE
THIS SECOND AMENDMENT TO REPLACEMENT REDUCED AND MODIFIED RENEWAL
REVOLVING PROMISSORY NOTE is made and entered into by and among AMSOUTH BANK
(the "Bank") and DIVERSICARE MANAGEMENT SERVICES, CO., a Tennessee corporation
(the "Borrower").
W I T N E S S E T H :
WHEREAS, Borrower executed to Bank that certain Replacement Reduced and
Modified Renewal Revolving Promissory Note dated October 29, 2004, in the
original principal amount of TWO MILLION FIVE HUNDRED THOUSAND AND NO/100
($2,500,000.00) DOLLARS, as further amended, extended and lowered to
$2,300,000.00 pursuant to that First Amendment to Replacement Reduced and
Modified Renewal Revolving Promissory Note dated January 29, 2005 (the "Note");
and
WHEREAS, Borrower has requested, and Bank has agreed, to extend the
Maturity Date under the Note.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in accordance with the terms
and conditions of that Eighth Amendment to Master Amendment and Loan Documents
executed by Bank, and Debtors, as defined therein, to be effective as of January
29, 2006, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. That as of the effective date hereof, the Note has a principal
balance of $0.00.
2. The first and second full paragraphs of the Note are hereby deleted
entirely, and the following language is substituted instead:
FOR VALUE RECEIVED, the undersigned, DIVERSICARE MANAGEMENT
SERVICES CO., a Tennessee corporation (the "Borrower"), promises to pay
to the order of AMSOUTH BANK (the "Bank"), in lawful currency of the
United States of America, at AmSouth Center, 000 Xxxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxx 00000, or at such other place as the holder from
time to time may designate in writing, the principal sum of TWO MILLION
THREE HUNDRED THOUSAND AND NO/100 ($2,300,000.00) DOLLARS, or so much
thereof as may be advanced hereunder in accordance with the terms of a
Master Amendment to Loan Documents and Agreement dated effective
October 1, 2000 executed between Bank, Borrower, and other
subsidiaries, or affiliates of Borrower, all of which, including
Borrower, are defined as "Debtors" therein, as amended (the "Master
Amendment"). Interest shall accrue on the principal balance outstanding
from and after the effective date hereof at the Bank's Prime
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Rate plus one half of one percent (0.50%) per annum, provided that the
interest rate shall not, during the term hereof, exceed nine and
one-half percent (9.5%) per annum so long as there is no default
hereunder, after which time interest shall accrue at the default rate
as set forth below (the "Default Rate"). Interest shall be due and
payable monthly commencing on the first (1st) day of each month
commencing on May 29, 2005. All principal and unpaid interest shall be
payable at maturity on the 29th day of January 2008 (the "Maturity
Date"). The "Prime Rate" of Bank is the "Prime Rate" in effect from
time to time, as designated by Bank, such rate being one of the base
rates Bank establishes from time to time for lending purposes and not
necessarily being the lowest rate offered by Bank. In the event the
Prime Rate should become unavailable for any reason, then the interest
rate hereunder shall be based upon a reasonably comparable index for
determining variable interest rates chosen by Bank in good faith.
The whole of the principal sum and, to the extent permitted by
law, any accrued interest, shall bear, after default or maturity,
interest at the lesser of (i) the highest lawful rate then in effect
pursuant to applicable law, or (ii) the rate that is four percentage
points (4%) in excess of Lender's Prime Rate, as it varies from time to
time.
3. The Note is amended as stated herein, but no further or otherwise,
and the terms and provisions of the Note, as hereby amended, shall be and
continue to be in full force and effect. Nothing herein is intended to operate
to release or diminish any right of Bank under the Note or with respect to any
collateral securing the Note or with respect to any guaranty or suretyship
agreement for the Note, all of which shall remain in full force and effect. This
instrument constitutes the entire agreement of the parties with respect to the
subject matter hereof.
IN WITNESS WHEREOF, this instrument has been executed to be effective
on the 29th day of January, 2006.
BORROWER:
DIVERSICARE MANAGEMENT SERVICES CO.,
a Tennessee corporation
By: /s/ Xxxxxxx X. Council
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Xxxxxxx X. Council, President
BANK:
AMSOUTH BANK
By: /s/ Xxx XxXxxxxx, Sr.
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Xxx XxXxxxxx, Sr. Vice President
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