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Previous: ENLIGHTEN SOFTWARE SOLUTIONS INC, 8-K, 1997-10-16 |
Next: FPA MEDICAL MANAGEMENT INC, 424B3, 1997-10-16 |
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
Date of Report (Date of earliest event reported):
October 2, 1997
ADVOCAT INC.
(Exact name of Registrant as specified in its charter)
Delaware 001-12996 62-1559667
-------- --------- ----------
(State or other jurisdiction (Commission File (Employer
of incorporation) Number) Identification Number)
277 Mallory Station Road, Suite 130 Franklin, Tennessee 37067
-------------------------------------------------------------
(Address of principal executive offices)
(615) 771-7575
-----------------------------
(Registrant's telephone number, including area code)
Not applicable
-----------------------------
(Former name or former address,
if changed since last report)
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Advocat Inc. (the "Registrant") reports the following acquisition:
Pursuant to an Asset Purchase Agreement dated July 23, 1997, as amended
September 30, 1997, by and among the Registrant, and Pierce Management Group
First Partnership, Pierce Management Group Third Partnership, Pierce Management
Group Fourth Partnership, Pierce, Pierce & Hall Partnership, Pierce Management
Group Fifth Partnership, Health Care Investments Partnership, Guy Pierce and
Vann Pierce Partnership, Sentry Services LLC, GVC Sentry Services LLC, SCP
Sentry Services LLC, SGP Sentry Services LLC, SVP Sentry Services LLC, VCP
Sentry Services LLC, SVCP Sentry Services LLC, Sentry Care of Newport, Inc.,
Tri-City Haven, Inc., Glen Haven Center of Care, Inc., Kannapolis Village Rest
Home, Pierce Hall Partnership, Health Care Investments, Inc., Midstate
Properties, Inc., Commercial Inspection And Maintenance, Tarheel Institutional
Brokerage, (Collectively "Sellers") and A. Steve Pierce, Mary Lou Pierce, Guy S.
Pierce, Jodi Pierce, C. Vann Pierce, Jacqueline W. Pierce, Candace Pierce
Hammonds, William R. Hammonds,(collectively "Owners"), as assigned to a
wholly-owned subsidiary of the Registrant, the Registrant acquired certain of
the assets of the Sellers consisting of 15 adult care homes in North Carolina
and entered into leases for an additional 14 adult care homes in North Carolina.
Prior to this transaction, no material relationship existed between
Sellers and the Registrant or any of its affiliates, any director or officer of
the Registrant, or any associate of such director or officer.
The consideration for the acquisition comprised approximately
$32,225,000 cash and assumed liabilities of approximately $220,000.
The Registrant funded substantially all of the cash portion of the
consideration by a bridge loan with First American National Bank and AmSouth
Bank in Nashville.
The funding of the acquisition occurred on October 2. The Registrant,
through its subsidiary, intends to continue the operation of the 29 adult care
homes formerly owned by Sellers.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of the business acquired. It is
impracticable at this time to provide the required financial statements of the
acquired business described in Item 2. This information will be provided within
60 days by an amendment to this report.
(b) Pro forma financial information. It is impracticable at this
time to provide the required pro forma financial information of the acquired
business described in Item 2. This information will be provided within 60 days
by an amendment to this report.
(c) Exhibits. The exhibit filed as a part of this report is listed
in the Index to Exhibits immediately following the signature page.
2
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ADVOCAT INC.
By: /s/ Mary Margaret Hamlett
--------------------------
Mary Margaret Hamlett
Chief Financial Officer
Date: October 15, 1997
------------------
3
<PAGE> 4
Exhibit Index
<TABLE>
<CAPTION>
Exhibit No.
- -----------
<S> <C>
2.1 Asset Purchase Agreement dated July 23, 1997, by and among
Pierce Management Group First Partnership, Pierce Management
Group Third Partnership, Pierce Management Group Fourth
Partnership, Pierce, Pierce & Hall Partnership, Pierce
Management Group Fifth Partnership, Health Care Investments
Partnership, Guy Pierce And Vann Pierce Partnership, Sentry
Services LLC, GVP Sentry Services LLC, SCP Sentry Services
LLC, SGP Sentry Services LLC, SVP Sentry Services LLC, VCP
Sentry Services LLC, SVCP Sentry Services LLC, Sentry Care of
Newport, Inc., Tri-city Haven, Inc., Glen Haven Center of
Care, Inc., Kannapolis Village Rest Home, Pierce Hall
Partnership, Health Care Investments, Inc., Midstate
Properties, Inc., Commercial Inspection And Maintenance,
Tarheel Institutional Brokerage, (Collectively "Sellers") and
A. Steve Pierce, Mary Lou Pierce, Guy S. Pierce, Jodi Pierce,
C. Vann Pierce, Jacqueline W. Pierce, Candace Pierce Hammonds,
William R. Hammonds, (Collectively "Owners"), and Advocat
Inc., a Delaware corporation ("Buyer"), (incorporated by
reference to the Registrant's Quarterly Report on Form 10-Q
for quarter ended June 30, 1997).
2.2 Amendment No. 1 to Asset Purchase Agreement dated September
30, 1997.
</TABLE>
A copy of the exhibit list to the Agreement has been included. The
exhibits have been omitted but the Registrant shall furnish
supplementally a copy of any omitted exhibit to the Commission upon
request.
4
<PAGE> 1
AMENDMENT NO. 1 TO
ASSET PURCHASE AGREEMENT
This Amendment is an amendment to the Asset Purchase Agreement dated
July 23, 1997 (the "Agreement") by and among, by and among PIERCE MANAGEMENT
GROUP FIRST PARTNERSHIP, PIERCE MANAGEMENT GROUP THIRD PARTNERSHIP, PIERCE
MANAGEMENT GROUP FOURTH PARTNERSHIP, PIERCE, PIERCE & HALL PARTNERSHIP, PIERCE
MANAGEMENT GROUP FIFTH PARTNERSHIP, HEALTH CARE INVESTMENTS PARTNERSHIP, GUY
PIERCE AND VANN PIERCE PARTNERSHIP, SENTRY SERVICES LLC, GVP SENTRY SERVICES
LLC, SCP SENTRY SERVICES LLC, SGP SENTRY SERVICES LLC, SVP SENTRY SERVICES LLC,
VCP SENTRY SERVICES LLC, SVCP SENTRY SERVICES LLC, SENTRY CARE OF NEWPORT, INC.,
TRI-CITY HAVEN, INC., GLEN HAVEN CENTER OF CARE, INC., KANNAPOLIS VILLAGE REST
HOME, PIERCE HALL PARTNERSHIP, HEALTH CARE INVESTMENTS, INC., MIDSTATE
PROPERTIES, INC., COMMERCIAL INSPECTION AND MAINTENANCE, TARHEEL INSTITUTIONAL
BROKERAGE, (collectively "Sellers") and A. STEVE PIERCE, MARY LOU PIERCE, GUY S.
PIERCE, JODI PIERCE, C. VANN PIERCE, JACQUELINE W. PIERCE, CANDACE PIERCE
HAMMONDS, WILLIAM R. HAMMONDS,(collectively "Owners"), and ADVOCAT INC., a
Delaware corporation ("Buyer").
WHEREAS, Section 15.2 of the Agreement provides that prior to Closing,
Buyer may freely assign its rights or delegate its obligations under the
Agreement to one or more entity which is directly or indirectly wholly owned by
Buyer; and
WHEREAS, Section 15.12 of the Agreement provides that it may be modified
only by an agreement in writing signed by Sellers, Owners and Buyer; and
WHEREAS, Closing has not yet occurred and Sellers, Owners and Buyer desire
to amend the Agreement as provided herein.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the undersigned hereby agree as follows:
1. Buyer hereby assigns all of its rights and delegates all of its
obligations as provided in Section 15.2 of the Agreement to Diversicare
Assisted Living Services NC, LLC, a Tennessee limited liability company
and all places in the Agreement and any documents executed in connection
with the Closing which refer to Buyer or Advocat, Inc. shall be deemed to
refer to Diversicare Assisted Living Services NC, LLC.
<PAGE> 2
2. Section 3.1 of the Agreement is hereby deleted in its entirety and
replace with the following:
3.1 Purchase Price. The purchase price payable by Buyer
to Sellers and Owners for the Assets and in consideration for the
agreements contained herein, including the agreements contained in
Article XIV hereof, will be payable as provided in Section 7.1 hereof
and shall be Thirty Two Million Four Hundred Eighty-nine Thousand and
No/100 Dollars ($32,489,000.00), subject to adjustment pursuant to the
terms of this Agreement (the "Purchase Price"), and shall be payable in
the following manner:
(1) Thirty Two Million Two Hundred Twenty-Five
Thousand and No/100 Dollars ($32,225,000.00), in cash in
immediately available funds at Closing;
(2) Two Hundred Sixty Four Thousand and No/100
Dollars ($264,000.00) payable in thirty-six equal monthly
installments of $ 7,333.33 each; and
(3) Assumption of the Assumed Liabilities at
Closing.
3. Exhibit 1.4 Assumed Liabilities is hereby amended to add Severance
Payment to Ben Phelps of $20,000.00.
4. Exhibit 1.2 Excluded Assets is hereby amended to delete the Managers
Home, Clayton, NC 22169 Dairy Road, NC 27520, and said property is
hereby included as a part of the Real Estate described in Section
1.1(1) to be purchased by the Buyer and shall be deemed to be a part of
the Purchased Assets for all purposes under the Agreement.
5. Exhibit 1.3(1) is hereby deleted in its entirety and replaced with
Revised Exhibit 1.3(1) attached hereto.
6. Current Exhibits 1.1(1) and 4.12(2) attached to the Agreement are
hereby deleted and replaced in their entirety with Exhibits 1.1(1) and
4.12(2) in the form attached hereto.
7. The parties hereto agree that with respect to the improved real
property located near the Heritage, Seven Lakes facility described on
Exhibit ____ attached hereto, such improved real property is included
as part of the Purchased Assets, however, the parties will complete the
transfer of the improved real property within 90 days after closing
upon the receipt of Title Evidence and Environmental Reports
satisfactory to Buyer. At the time of the transfer of the improved real
property, Sellers and Owners will convey fee simple title to the
property to Buyer by a general warranty deed as provided in the
Agreement with only such Permitted Exceptions as acceptable to Buyer
and Buyer will payoff the outstanding balance currently
2
<PAGE> 3
owed to First Union National Bank of North Carolina on the property.
The payoff amount for such loan on September 30, 1997 is $60,382.46
with interest accruing at $13.97 per day.
8. The parties hereto agree that with respect to Hazardous Substances, any
post-closing environmental testing required by Buyer's lender or
voluntarily undertaken by Buyer based upon the Environmental Reports
obtained by Buyer with respect to any underground storage tanks now or
heretofore located on the Real Estate or Leased Property, or any
property adjacent thereto, will be at Buyer's cost and expense;
provided however, that if the tank closure report for the Christian
Care of Smithville property is not accepted by the State of North
Carolina and any further testing is required by the State of North
Carolina or any other applicable governmental agency having
jurisdiction, then such testing shall be at the expense of Sellers and
Owners. In the event any such testing reveals any Hazardous Substances
on the Real Property or Leased Property which would constitute a breach
of Sellers' or Owners' representations and warranties hereunder or as
to which Sellers or Owners would otherwise be responsible at law, the
Sellers and Owners shall be responsible for all remediation or cleanup
and any penalties, fines, costs or expenses incurred in connection
therewith in accordance with the provisions of Section 4.14
Environmental Matters and the indemnification provisions of Section 13.
9. Sellers and Owners agree that within 30 days of Closing, Sellers and
Owners will deliver an easement, license or other agreement
satisfactory to Buyer, in recordable form, providing that Sellers and
Owners will continue to make available to Buyer the right to use the
private water system from the well and pump station and sewage
treatment facility owned by Sellers and Owners which currently serve
the Creekside Manor facility and the office building in Kernersville,
North Carolina which will be leased by Buyer after closing. Pursuant to
the Lease Agreements for the Creekside Manor facility and the office
building, Buyer will be responsible for the maintenance and repair of
the well and pump station and sewage treatment facility during the term
of such leases.
10. This Amendment may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original and all of
which together shall constitute but one and the same instrument. A
facsimile signature shall be deemed the same as an original signature.
11. Except as expressly amended hereby, the terms of the Agreement shall
remain in full force and effect.
3
<PAGE> 4
IN WITNESS WHEREOF, the parties have executed this Amendment to the
Agreement as of the _____ day of September, 1997.
"SELLERS"
PIERCE MANAGEMENT GROUP FIRST
PARTNERSHIP
By:
--------------------------
Its:
--------------------------
PIERCE MANAGEMENT GROUP THIRD
PARTNERSHIP
By:
--------------------------
Its:
--------------------------
PIERCE MANAGEMENT GROUP FOURTH
PARTNERSHIP
By:
--------------------------
Its:
--------------------------
PIERCE, PIERCE & HALL PARTNERSHIP
By:
--------------------------
Its:
--------------------------
PIERCE MANAGEMENT GROUP FIFTH
PARTNERSHIP
By:
--------------------------
Its:
--------------------------
HEALTH CARE INVESTMENTS PARTNERSHIP
By:
--------------------------
Its:
--------------------------
<PAGE> 5
GUY PIERCE AND VANN PIERCE
PARTNERSHIP
By:
--------------------------
Its:
--------------------------
SENTRY SERVICES LLC
By:
--------------------------
Its:
--------------------------
GVP SENTRY SERVICES LLC
By:
--------------------------
Its:
--------------------------
SCP SENTRY SERVICES LLC
By:
--------------------------
Its:
--------------------------
SGP SENTRY SERVICES LLC
By:
--------------------------
Its:
--------------------------
SGP SENTRY SERVICES LLC
By:
--------------------------
Its:
--------------------------
SVP SENTRY SERVICES LLC
By:
--------------------------
Its:
--------------------------
<PAGE> 6
VCP SENTRY SERVICES LLC
By:
--------------------------
Its:
--------------------------
SVCP SENTRY SERVICES LLC
By:
--------------------------
Its:
--------------------------
SENTRY CARE OF NEWPORT, INC.
By:
--------------------------
Its:
--------------------------
TRI-CITY HAVEN, INC.
By:
--------------------------
Its:
--------------------------
GLEN HAVEN CENTER OF CARE, INC.
By:
--------------------------
Its:
--------------------------
KANNAPOLIS VILLAGE REST HOME
By:
--------------------------
Its:
--------------------------
PIERCE HALL PARTNERSHIP
By:
--------------------------
Its:
--------------------------
HEALTH CARE INVESTMENTS, INC.
By:
--------------------------
Its:
--------------------------
<PAGE> 7
MIDSTATE PROPERTIES, INC.
By:
--------------------------
Its:
--------------------------
TARHEEL INSTITUTIONAL BROKERAGE
By:
--------------------------
Its:
--------------------------
COMMERCIAL INSPECTION AND
MAINTENANCE
By:
--------------------------
Its:
--------------------------
"OWNERS"
-------------------------------
A. STEVE PIERCE
-------------------------------
MARY LOU PIERCE
-------------------------------
GUY S. PIERCE
-------------------------------
JODI PIERCE
-------------------------------
C. VANN. PIERCE
-------------------------------
JACQUELINE W. PIERCE
<PAGE> 8
-------------------------------
CANDACE PIERCE HAMMONDS
-------------------------------
WILLIAM R. HAMMONDS
"BUYER"
ADVOCAT INC.
By:
--------------------------
Its:
--------------------------
DIVERSICARE ASSISTED
LIVING SERVICES NC, LLC.
By:
--------------------------
Its:
--------------------------
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