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EXHIBIT 10.118
REPLACEMENT REDUCED AND MODIFIED RENEWAL REVOLVING PROMISSORY
NOTE
$2,500,000.00
October 29, 2004
Nashville, Tennessee
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, 315 Deaderick Street,
Nashville, Tennessee 37237, or at such
other place as the holder from time to time
may designate in writing, the
principal sum of TWO MILLION FIVE HUNDRED
THOUSAND AND NO/100 ($2,500,000.00)
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 December 15, 2002 at the Bank's
Prime Rate plus one half of one percent
(0.5%) (fifty basis points) per annum,
provided that the interest rate shall in no
event exceed nine and one-half
percent (9.5%) per annum until after
default or maturity, after which time
interest shall accrue at the Default Rate
defined in the Master Credit Agreement
dated December 27, 1996, between First
American National Bank, predecessor to
Bank, Borrower and affiliates of Borrower
(the "Default Rate"). Interest shall
be due and payable monthly commencing on
the first (1st) day of each month
commencing on November 1, 2004. All
principal and unpaid interest shall be
payable at maturity on the 29th day of
January 2005 (the "Maturity Date").
Notwithstanding that the maximum principal face amount hereunder
is
$2,500,000.00, he undersigned acknowledges
that the Letter of Credit Number
1813094 in favor of Continental Health
Properties of Thomasville, LLC (the
"Letter of Credit") in the amount of
$200,000.00 has been drawn. Therefore, for
so long as the Letter of Credit remains
outstanding and drawn, the maximum
amount which may be outstanding at any time
hereunder shall be limited as
follows:
1. As
of November 1, 2004, the maximum amount which may be
outstanding at any time hereunder shall be reduced to
$2,466,666.67;
2. As
of December 1, 2004, the maximum amount which may be
outstanding at any time hereunder shall be reduced to
$2,433,333.34; and
3. As
of January, 1, 2005, and for any time thereafter, be
outstanding at any time hereunder shall be reduced to
$2,400,000.01.
The further covenants, agreements, restrictions and limitations
set
forth in the Master Amendment, as amended,
are incorporated by reference herein
and made a part hereof.
This Replacement Reduced and Modified Renewal Revolving Promissory
Note
is a reduction and modification of the
Revolving Promissory Note dated December
27, 1996, in the original amount of
$10,000,000.00, as amended, and is a
reduction and replacement of that
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Reduced and Modified Renewal Revolving
Promissory Note dated December 15, 2002
and is being executed in accordance with
the terms of the Fifth Amendment to
Master Amendment to Loan Documents and
Agreement dated October 29, 2004. This
Replacement Reduced and Modified Renewal
Revolving Promissory Note (and any and
all extensions, modifications, renewals or
amendments thereof) is (1) secured by
the collateral described or referred to in
the Loan Documents, as defined in the
Master Amendment, and (2) the breach or
occurrence of a default under the Loan
Documents, at the option of the Bank, will
constitute a default hereunder.
Both principal and interest due on this Replacement Reduced and
Modified Renewal Revolving Promissory Note
are payable in
