Diversicare Healthcare Services Inc (NASDAQ:DVCR) entered into a Master Lease Agreement (the “Lease”) with Golden Living (the “Lessor”) to directly lease eight facilities. The Lease has an initial term of ten years. The Company also assumed two individual leases of facilities from Golden Living that are privately owned with lease terms of ten and two years. The ten facilities (the “Facilities”) are located in Mississippi and were previously operated by Golden Living. These Facilities are expected to contribute in excess of $80 million in annual revenues. A copy of the press release describing the transaction is attached as Exhibit 99.1 to this Current Report on Form 8-K, which is also contained on its website, DVCR.com.
On October 3, 2016 (the “Amendment Effective Date”), the Company executed an Amendment to the Amended and Restated Revolving Loan and Security Agreement (“the Amended Revolver”) with a syndicate of financial institutions and banks, including The PrivateBank and Trust Company, the administering agent, which modifies the terms of the Amended and Restated Revolving Loan and Security Agreement (“Original Revolver”), dated February 26, 2016. The Amended Revolver increases the Company’s maximum revolving facility to $52,250,000; provided that the maximum revolving facility be reduced to $42,250,000 on August 1, 2017.
The Amended Revolver amends certain provisions to our financial covenants including the following: the minimum Adjusted EBITDA shall not be less than $8,500,000 for the quarter ending September 30, 2016; $9,500,000 for the quarter ending December 31, 2016; $10,000,000 for the quarter ending March 31, 2017; $11,500,000 for the quarter ending June 30, 2017; and $13,000,000 for the quarter ending September 30, 2017 and for each quarter thereafter.