Exhibit 10.1
TENTH AMENDMENT TO
CONSOLIDATED AMENDED AND RESTATED MASTER LEASE
     This Tenth Amendment to Amended and Restated Master Lease (this
“Amendment”) is executed and delivered as of September 8, 2009 by and between
STERLING ACQUISITION CORP., a Kentucky corporation (“Lessor”), the address of
which is 9690 Deereco Road, Suite 100, Timonium, MD 21093, and DIVERSICARE
LEASING CORP., a Tennessee corporation, the address of which is 1621 Galleria
Boulevard, Brentwood, TN 37027.
RECITALS:
     A. Lessee has executed and delivered to Lessor a Consolidated Amended and
Restated Master Lease dated as of November 8, 2000, but effective as of
October 1, 2000, as amended by a First Amendment to Consolidated Amended and
Restated Master Lease dated as of September 30, 2001, a Second Amendment to
Consolidated Amended and Restated Master Lease dated as of June 15, 2005, a
Third Amendment to Consolidated Amended and Restated Master Lease dated as of
October 20, 2006, a Fourth Amendment to Consolidated Amended and Restated Master
Lease dated as of April 1, 2007, a Fifth Amendment to Consolidated Amended and
Restated Master Lease dated as of August 10, 2007, a Sixth Amendment to
Consolidated Amended and Restated Master Lease dated as of March 14, 2008 (the
“Sixth Amendment”), a Seventh Amendment to Consolidated Amended and Restated
Master Lease dated as of October 24, 2008, an Eighth Amendment to Consolidated
Amended and Restated Master Lease dated as of March 31, 2009, and a Ninth
Amendment to Consolidated Amended and Restated Master Lease dated as of May 5,
2009 (collectively, the “Existing Master Lease”) pursuant to which Lessee leases
from Lessor certain healthcare facilities.
     B. Pursuant to the Sixth Amendment, Lessor and Lessee agreed to construct
the Paris Facility on the Paris Land and for Lessee to lease the Paris Facility
from Lessor pursuant to the Existing Master Lease.
     C. Lessor and Lessee desire to confirm the Paris Base Rent Commencement
Date and the Initial Paris Base Rent and to amend the Existing Master Lease to
permit certain additional advances of the Funded Amount with respect to the
Paris Facility after the Paris Base Rent Commencement date, all on the terms and
conditions of this Amendment.
     NOW THEREFORE, the parties agree as follows:
     1. Definitions. Any capitalized term used but not defined in this Amendment
will have the meaning assigned to such term in the Existing Master Lease.
     2. Paris Base Rent Commencement Date. Lessor and Lessee hereby confirm that
the Paris Base Rent Commencement Date is August 15, 2009.
     3. Initial Paris Base Rent.
     (a) Effective as of August 15, 2009, Lessor and Lessee hereby confirm that
the Initial Paris Base Rent (which is an annual amount) is Five Hundred Seventy
Five Thousand Six Hundred Thirty Three and 13/100 Dollars ($575,633.13).

 

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     (b) Effective as of September 15, 2009, Lessor and Lessee hereby confirm
that the Initial Paris Base Rent (which is an annual amount) will be increased
to Six Hundred Seventy Two Thousand Three Hundred Twenty and 61/100 Dollars
($672,320.61).
     (c) Notwithstanding the provisions of Section 2(a) of the Sixth Amendment,
but subject to all of the other terms and provisions of the Existing Master
Lease, Lessor shall make advances of the Funded Amount after the Paris Base Rent
Commencement Date with regard to: (1) services performed at, and goods delivered
to, the Paris Facility prior to the Paris Base Rent Commencement Date,
(2) delivery of the “as built” survey of the Paris Facility, (3) delivery of
endorsements to Lessor’s Owners Title Policy, (4) Lessor’s legal fees and
expenses, and (5) the State Surveyor Items (defined below); provided, however,
that Lessee may, at its option, pay directly for items (2), (3), and (4). Any
such advances of the Funded Amount shall result in an increase in the Initial
Paris Base Rent effective as of the first day of the next month after each such
advance pursuant to the formula contained in the Sixth Amendment. The amount of
the Initial Paris Base Rent after all such advances have been made shall be used
in calculating the Paris Base Rent for the 12 month period commencing on the
first anniversary of the Paris Base Rent Commencement Date. Except as provided
in this Section 3(c) of this Amendment, Lessor and Lessee hereby confirm that
Lessor has no further obligation to make further advances of the Funded Amount
on or after the date of this Amendment.
     (d) As used in this Amendment, the “State Surveyor Items” mean (1) Sod hill
at back of Paris Facility to stop erosion, (2) Three 2’x4’ benches for main
showers, and (3) two additional sidewalks, and (4) such other minor items as may
be required by the State in connection with the initial licensing of the Paris
Facility.
     4. Certification by Lessee. Pursuant to Section 7(a)(ii) of the Sixth
Amendment, Lessee hereby certifies to Lessor that, as of the date of this
Certificate, no Event of Default exists under the Master Lease or any of the
Transaction Documents, all representations and warranties set forth in the
Master Lease and all of the other Transaction Documents are accurate and
complete, and there are no actions, suits or proceedings pending, or to the
knowledge of Lessee, threatened or involving (or that could involve) Lessee, the
Paris Sublessee or all or any part of the Facilities and that could impair the
Facilities or the ability of Lessee and the Paris Sublessee to perform under
this Amendment or any of the other Transaction Documents.
     5. Representations and Warranties of Lessee. Lessee hereby represents and
warrants to Lessor that (i) it has the right and power and is duly authorized to
enter into this Amendment; (ii) the execution of this Amendment does not and
will not constitute a breach of any provision contained in any agreement or
instrument to which Lessee is or may become a party or by which Lessee is or may
be bound or affected; and (iii) the Paris Sublessee has acquired all Licenses
needed to operate the Paris Facility for its Primary Intended Use.
     6. Expenses of Lessor. Lessee shall pay all reasonable expenses of Lessor
incurred in connection with this Amendment, including reasonable attorneys fees
and expenses.

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     7. Execution and Counterparts. This Amendment may be executed in any number
of counterparts, each of which, when so executed and delivered, shall be deemed
to be an original, but when taken together shall constitute one and the same
Amendment.
     8. Headings. Section headings used in this Amendment are for reference only
and shall not affect the construction of the Amendment.
     9. Enforceability. Except as expressly and specifically set forth herein,
the Existing Master Lease remains unmodified and in full force and effect. In
the event of any discrepancy between the Existing Master Lease and this
Amendment, the terms and conditions of this Amendment will control and the
Existing Master Lease is deemed amended to conform hereto.
[SIGNATURE PAGES AND ACKNOWLEDGEMENTS FOLLOW]

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Signature Page to
TENTH AMENDMENT TO
CONSOLIDATED AMENDED AND RESTATED MASTER LEASE

         
 
  LESSOR:
 
       
 
  STERLING ACQUISITION CORP.,
a Kentucky corporation
 
       
 
  By:   /s/ Daniel J. Booth
 
       
 
  Name:   Daniel J. Booth
 
  Title:   Chief Operating Officer
 
       

           
STATE OF MARYLAND
    )  
 
       
COUNTY OF BALTIMORE
    )  

     This instrument was acknowledged before me on the 3rd day of September,
2009, by Daniel J. Booth, the COO of STERLING ACQUISITION CORP., a Kentucky
corporation, on behalf of said company.

     
 
  /s/ Judith A. Jacobs
 
   
 
  Notary Public, Baltimore County, MD
My commission expires: May 12, 2012

Signature Page 1 of 2

 

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Signature Page to
TENTH AMENDMENT TO
CONSOLIDATED AMENDED AND RESTATED MASTER LEASE

         
 
  LESSEE:
 
       
 
  DIVERSICARE LEASING CORP.,
a Tennessee corporation
 
       
 
  By:   /s/ Glynn Riddle
 
       
 
  Name:   Glynn Riddle
 
  Title:   EVP and CFO

           
STATE OF TENNESSEE
    )  
 
       
COUNTY OF WILLIAMSON
    )  

     This instrument was acknowledged before me on the 2nd day of September,
2009, by Glynn Riddle, the EVP & CFO of DIVERSICARE LEASING CORP., a Tennessee
corporation, on behalf of said company

     
 
  /s/ Jacqueline S. Reed
 
   
 
  Notary Public, Tenn. County, Williamson
My commission expires: 1/24/2010

Signature Page 2 of 2

 

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Acknowledgment to
TENTH AMENDMENT TO
CONSOLIDATED AMENDED AND RESTATED MASTER LEASE
     The undersigned hereby consent to the transactions contemplated by this
Tenth Amendment to Consolidated Amended and Restated Master Lease (the “Tenth
Amendment”), ratify and affirm their respective Guaranties, Pledge Agreements,
Security Agreements, Subordination Agreements and other Transaction Documents,
and acknowledge and agree that the performance of the Master Lease and
obligations described therein are secured by their Guaranties, Pledge
Agreements, Security Agreement, Subordination Agreement and other Transaction
Documents on the same terms and conditions in effect prior to this Tenth
Amendment.

         
 
  ADVOCAT, INC. a Delaware corporation
 
       
 
  By:   /s/ Glynn Riddle
 
       
 
  Name:   Glynn Riddle
 
  Title:   EVP & CFO

           
STATE OF TENNESSEE
    )  
 
       
COUNTY OF WILLIAMSON
    )  

     The foregoing instrument was acknowledged before me this 2nd day of
September, 2009, by Glynn Riddle, who is EVP & CFO of ADVOCAT, INC. a Delaware
corporation, on behalf of the corporation, who acknowledged the same to be his
or her free act and deed and the free act and deed of the corporation.

     
 
  /s/ Jacqueline S. Reed
 
   
 
  Notary Public, Tenn. County, Williamson
My Commission Expires: 1/24/2010

Acknowledgement Page 1 of 5

 

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Acknowledgment to
TENTH AMENDMENT TO
CONSOLIDATED AMENDED AND RESTATED MASTER LEASE

         
 
  DIVERSICARE MANAGEMENT SERVICES CO.,
a Tennessee corporation
 
       
 
  By:   /s/ Glynn Riddle
 
       
 
  Name:   Glynn Riddle
 
  Title:   EVP & CFO

           
STATE OF TENNESSEE
    )  
 
       
COUNTY OF WILLIAMSON
    )  

     The foregoing instrument was acknowledged before me this 2nd day of
September, 2009, by Glynn Riddle, who is EVP & CFO of DIVERSICARE MANAGEMENT
SERVICES CO., a Tennessee corporation, on behalf of the corporation, who
acknowledged the same to be his or her free act and deed and the free act and
deed of the corporation.

     
 
  /s/ Jacqueline S. Reed
 
   
 
  Notary Public, Tenn. County, Williamson
My Commission Expires: 1/24/2010

Acknowledgement Page 2 of 5

 

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Acknowledgment to
TENTH AMENDMENT TO
CONSOLIDATED AMENDED AND RESTATED MASTER LEASE

         
 
  ADVOCAT FINANCE INC.,
a Delaware corporation
 
       
 
  By:   /s/ Glynn Riddle
 
       
 
  Name:   Glynn Riddle
 
  Title:   EVP & CFO

           
STATE OF TENNESSEE
    )  
 
       
COUNTY OF WILLIAMSON
    )  

     The foregoing instrument was acknowledged before me this 2nd day of
September, 2009, by Glynn Riddle, who is EVP & CFO of ADVOCAT FINANCE INC., a
Delaware corporation, on behalf of the corporation, who acknowledged the same to
be his or her free act and deed and the free act and deed of the corporation.

     
 
  /s/ Jacqueline S. Reed
 
   
 
  Notary Public, Tenn. County, Williamson
My Commission Expires: 1/24/2010

Acknowledgement Page 3 of 5

 

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Acknowledgment to
TENTH AMENDMENT TO
CONSOLIDATED AMENDED AND RESTATED MASTER LEASE

         
 
  STERLING HEALTH CARE MANAGEMENT, INC.,
a Kentucky corporation
 
       
 
  By:   /s/ Glynn Riddle
 
       
 
  Name:   Glynn Riddle
 
  Title:   EVP & CFO

           
STATE OF TENNESSEE
    )  
 
       
COUNTY OF WILLIAMSON
    )  

     The foregoing instrument was acknowledged before me this 2nd day of
September, 2009, by Glynn Riddle, who is EVP & CFO of STERLING HEALTH CARE
MANAGEMENT, INC., a Kentucky corporation, on behalf of the corporation, who
acknowledged the same to be his or her free act and deed and the free act and
deed of the corporation.

     
 
  /s/ Jacqueline S. Reed
 
   
 
  Notary Public, Tenn. County, Williamson
My Commission Expires: 1/24/2010

Acknowledgement Page 4 of 5

 

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Acknowledgment to
TENTH AMENDMENT TO
CONSOLIDATED AMENDED AND RESTATED MASTER LEASE

         
 
  DIVERSICARE TEXAS I, LLC
 
       
 
  By:   /s/ Glynn Riddle
 
       
 
  Name:   Glynn Riddle
 
  Title:   EVP & CFO
 
       
 
  DIVERSICARE BALLINGER, LLC
DIVERSICARE DOCTORS, LLC
DIVERSICARE ESTATES, LLC
DIVERSICARE HUMBLE, LLC
DIVERSICARE KATY, LLC
DIVERSICARE NORMANDY TERRACE, LLC
DIVERSICARE TREEMONT, LLC
DIVERSICARE PARIS, LLC
 
       
 
  BY:   DIVERSICARE TEXAS I, LLC,
its sole member
 
       
 
  By:   /s/ Glynn Riddle
 
       
 
  Name:   Glynn Riddle
 
  Title:   EVP & CFO

           
STATE OF TENNESSEE
    )  
 
       
COUNTY OF WILLIAMSON
    )  

     The foregoing instrument was acknowledged before me this 2nd day of
September, 2009, by Glynn Riddle, who is EVP & CFO of DIVERSICARE TEXAS I, LLC,
on behalf of itself and as the sole member of each of DIVERSICARE BALLINGER,
LLC, DIVERSICARE DOCTORS, LLC, DIVERSICARE ESTATES, LLC, DIVERSICARE HUMBLE,
LLC, DIVERSICARE KATY, LLC, DIVERSICARE NORMANDY TERRACE, LLC, DIVERSICARE
TREEMONT, LLC, and DIVERSICARE PARIS, LLC, each a Delaware limited liability
company, on behalf of the limited liability companies, who acknowledged the same
to be his or her free act and deed and the free act and deed of the limited
liability companies.

     
 
  /s/ Jacqueline S. Reed
 
   
 
  Notary Public, Tenn. County, Williamson
My Commission Expires: 1/24/2010

Acknowledgement Page 5 of 5