EXHIBIT 10.330

FOURTH MODIFICATION AGREEMENT

THIS FOURTH MODIFICATION AGREEMENT dated as of November 8, 2013 (this
“Agreement”), is entered into by and among LITTLE ROCK HC&R PROPERTY HOLDINGS,
LLC, a Georgia limited liability company (the “Borrower”), ADCARE HEALTH
SYSTEMS, INC., an Ohio corporation (“AdCare”), LITTLE ROCK HC&R NURSING, LLC, a
Georgia limited liability company (the “Operator”) (AdCare and the Operator
being sometimes referred to herein collectively as the “Guarantors”) (Borrower
and the Guarantors being sometimes referred to herein collectively as the
“Borrower/Guarantor Parties”), and THE PRIVATEBANK AND TRUST COMPANY, an
Illinois banking corporation (“Lender”).
RECITALS

A.    The Borrower/Guarantor Parties and Lender heretofore entered into the
following documents:
(i)    Loan Agreement dated as of March 30, 2012 (the “Loan Agreement”), by and
among Borrower, Northridge HC&R Property Holdings, LLC, a Georgia limited
liability company (“Northridge”), Woodland Hills HC Property Holdings, LLC, a
Georgia limited liability company (“Woodland”) and the Lender. Northridge and
Woodland were released from their respective obligations under the Loan
Agreement and the other Documents pursuant to the “Second Modification” (as
defined below).
(ii)    Promissory Note A dated March 30, 2012 (the “Note”), from the Borrower
to the Lender in the principal amount of $13,664,956, which, along with Note B
and Note C described below, replaced the Promissory Note dated March 30, 2012
(the “Original Note”), from the Borrower, Northridge and Woodland to the Lender
in the principal amount of $21,800,000.
(iii)    Promissory Note B dated March 30, 2012 (“Note B”), from Northridge to
the Lender in the principal amount of $4,507,038, which, along with the Note and
Note C described below, replaced the Original Note, and which Note B was repaid
in full pursuant to the Second Modification.
(iv)    Promissory Note C dated March 30, 2012 (“Note C”), from Woodlands to the
Lender in the principal amount of $3,628,006, which, along with the Note and
Note B, replaced the Original Note, and which Note C was repaid in full pursuant
to the Second Modification.
(v)    Mortgage, Security Agreement, Assignment of Rents and Leases and Fixture
Filing dated as of April 1, 2012 (the “Mortgage”), by the Borrower to and for
the benefit of the Lender, recorded in the Official Records of Larry Crane,
Pulaski County Circuit/County Clerk, on April 5, 2012, as Document No.
2012019925.
(vi)    Mortgage, Security Agreement, Assignment of Rents and Leases and Fixture
Filing dated as of April 1, 2012 (“Mortgage 2”), by Northridge to and for the
benefit of the Lender, recorded in the Official Records of Larry Crane, Pulaski
County Circuit/County Clerk, on April 5, 2012, as Document No. 2012019978, and
which Mortgage 2 was released pursuant to the Second Modification.
(vii)    Mortgage, Security Agreement, Assignment of Rents and Leases and
Fixture Filing dated as of April 1, 2012 (“Mortgage 3”), by Woodlands to and for
the benefit of the Lender, recorded in the Official Records of Larry Crane,
Pulaski County Circuit/County Clerk, on April 5, 2012, as Document No.
2012019971, and which Mortgage 3 was released pursuant to the Second
Modification.

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(viii)    Absolute Assignment of Rents and Leases dated as of April 1, 2012 (the
“Assignment of Rents”), by the Borrower to and for the benefit of the Lender,
recorded in the Official Records of Larry Crane, Pulaski County Circuit/County
Clerk, on April 5, 2012, as Document No. 2012019926.
(ix)    Absolute Assignment of Rents and Leases dated as of April 1, 2012
(“Assignment of Rents 2”), by Northridge to and for the benefit of the Lender,
recorded in the Official Records of Larry Crane, Pulaski County Circuit/County
Clerk, on April 5, 2012, as Document No. 2012019979, and which Assignment of
Rents 2 was released pursuant to the Second Modification.
(x)    Absolute Assignment of Rents and Leases dated as of April 1, 2012
(“Assignment of Rents 3”), by Woodlands to and for the benefit of the Lender,
recorded in the Official Records of Larry Crane, Pulaski County Circuit/County
Clerk, on April 5, 2012, as Document No. 2012019972, and which Assignment of
Rents 3 was released pursuant to the Second Modification.
(xi)    Environmental Indemnity Agreement dated as of March 30, 2012 (the
“Indemnity Agreement”), by the Borrower, Northridge, Woodlands, the Guarantors,
Northridge HC&R Nursing, LLC, a Georgia limited liability company (the
“Northridge Operator”), and Woodland Hills HC Nursing, LLC, a Georgia limited
liability company (the “Woodland Operator”), to and for the benefit of the
Lender, with the Northridge, Woodland, the Northridge Operator and the Woodland
Operator being released from their respective obligations under the Indemnity
Agreement pursuant to the Second Modification.
(xii)    Guaranty of Payment and Performance dated as of March 30, 2012 (the
“Guaranty”), by the Guarantors, the Northridge Operator and the Woodlands
Operator to and for the benefit of the Lender, with the Northridge Operator and
the Woodland Operator being released from their respective obligations under the
Guaranty pursuant to the Second Modification.
B.    The Loan Agreement, the Note, the Mortgage, the Assignment of Rents, the
Indemnity Agreement and the Guaranty are referred to herein as the “Documents”.
C.    The Documents were previously modified and amended by the following
documents (the “Previous Modifications”): (i) the Modification Agreement dated
as of June 15, 2012, but effective as of March 30, 2012 (the “Modification”), by
and among the Borrower/Guarantor Parties, the Lender and other parties, recorded
in the Official Records of Larry Crane, Pulaski County Circuit/County Clerk, on
June 22, 2012, as Document No. 2012038003, (ii) the Second Modification
Agreement dated as of December 28, 2012 (the “Second Modification”), by and
among the Borrower/Guarantor Parties, the Lender and other parties, a Memorandum
of which Second Modification Agreement was recorded in the Official Records of
Larry Crane, Pulaski County Circuit/County Clerk, on January 4, 2013, as
Document No. 2013001265, and (iii) the Third Modification Agreement dated as of
June 26, 2013 (the “Third Modification”), by and among the Borrower/Guarantor
Parties, the Lender and other parties.
D.    The Documents, as modified and amended by the Previous Modifications,
encumber the real estate described in Exhibit A attached hereto and the personal
property located thereon.
E.    The parties desire to make certain modifications and amendments to the
Documents, as modified and amended by the Previous Modifications, as more fully
provided for herein, all as modifications, amendments and continuations of, but
not as novations of, the Documents.

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AGREEMENTS

In consideration of the premises and the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
Section 1.    Recitals Part of Agreement; Defined Terms; References to
Documents.
(a)    The foregoing Recitals are hereby incorporated into and made a part of
this Agreement.
(b)    All capitalized terms used and not otherwise defined in this Agreement
shall have the meanings set forth in the Loan Agreement.
(c)    Except as otherwise stated herein, all references in this Agreement to
any one or more of the Documents shall be deemed to include the previous
modifications and amendments to the Documents provided for in the Previous
Modifications, whether or not express reference is made to such previous
modifications and amendments.
Section 2.    Reduction of Loan Amount; Payment on Loan on Date of Agreement.
(a)    On the date of this Agreement, prior to the payment referred to below in
this Section, the principal balance outstanding on the Loan and the Note is
$13,664,956. The amount of the Loan and the Note are hereby reduced from
$13,664,956 to $11,874,211.11. Without limitation on the generality of the
foregoing provisions of this paragraph, the amount “$13,664,956” is hereby
changed to “$11,874,211.11” each time it appears in the Documents in reference
to the amount of the Loan and the Note, including, without limitation, in the
definition of the term “Loan Amount” in Section 1.1 of the Loan Agreement, in
the upper left hand corner of page 1 of the Note, in Section 1 of the Note, and
in Recital paragraph A in each of the Mortgage, the Assignment of Rents, the
Indemnity Agreement and the Guaranty, each as modified and amended by the
Previous Modification.
(b)    On the date of this Agreement, and as a condition precedent to the
agreements of Lender contained in this Agreement, Borrower shall make a payment
on the principal of the Loan and the Note in the amount of $1,790,744.89 so as
to cause the principal balance outstanding on the Loan and the Note not to
exceed the new $11,874,211.11 amount of the Loan and Note. No portion of such
payment may be borrowed again.
(c)    All of the Documents, as modified and amended by the Previous
Modifications, are hereby modified and amended to incorporate the foregoing
provisions of this Section.
Section 3.    Release and Elimination of Collateral Account.
(a)    The provisions in the Documents for the Collateral Account are hereby
eliminated and all of the Documents are hereby modified and amended accordingly.
Without limitation on the foregoing provisions of this paragraph --
(i)    The defined term “Collateral Account” is hereby deleted from Section 1.1
of the Loan Agreement, as modified and amended by the Previous Modifications;
and
(ii)    Section 3.4 of the Loan Agreement, as modified and amended by the
Previous Modifications, is hereby deleted.

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(b)    On the date of this Agreement, Lender shall release the amount on deposit
in the previously existing Collateral Account to the Borrower, which amount the
parties acknowledge to be $1,349,950.82. The Borrower shall use such amount on
deposit in the previously existing Collateral Account as a part of the payment
on the principal of the Loan and the Note which is required by Section 2(b) of
this Agreement.
Section 4.    Release and Elimination of Sinking Fund Account.
(a)    The provisions in the Documents for the Sinking Fund Account are hereby
eliminated and all of the Documents are hereby modified and amended accordingly.
Without limitation on the foregoing provisions of this paragraph --
(i)    The defined term “Sinking Fund Account” is hereby deleted from Section
1.1 of the Loan Agreement, as modified and amended by the Previous
Modifications;
(ii)    Section 3.6 of the Loan Agreement, as modified and amended by the
Previous Modifications, is hereby deleted; and
(iii)    Section 10.1(a) of the Loan Agreement, as modified and amended by the
Previous Modifications, is hereby modified and amended in its entirety to read
as follows:
(a)    Borrower fails to pay (i) any installment of principal or interest
payable pursuant to the Note on the date when due, or (ii) any other amount
payable to Lender under the Note, this Agreement or any of the other Loan
Documents when any such payment is due in accordance with the terms hereof or
thereof;
(b)    Section 5(a) the Note, as modified and amended by the Previous
Modifications, is hereby modified and amended in its entirety to read as
follows:
(a)    the failure by Borrower to pay (i) any installment of principal or
interest payable pursuant to this Note on the date when due, or (ii) any other
amount payable to Lender under this Note, the Loan Agreement, the Mortgage or
any of the other Loan Documents on the date when any such payment is due in
accordance with the terms hereof or thereof; or
(c)    On the date of this Agreement, the Lender shall release the amount on
deposit in the previously existing Sinking Fund Account to the Borrower, which
amount the parties acknowledge to be $440,794.07. The Borrower shall use such
amount on deposit in the previously existing Sinking Fund Account as a part of
the payment on the principal of the Loan and the Note which is required by
Section 2(b) of this Agreement.
Section 5.    Change in Principal Payment Provisions. Section 3.1(b) of the
Note, as modified and amended by the Previous Modifications, is hereby modified
and amended in its entirety to read as follows effective as of the date of this
Agreement, with the existing Section 3.1(b) of the Note to continue to be
effective for periods prior to the date of this Agreement:
(b)    On the first day of December, 2013, and on the first day of each month
thereafter through and including the month in which the Maturity Date occurs, in
addition to accrued interest on this Note payable as provided in paragraph (a)
above, a payment of principal on this Note shall be due and payable in the
amount $19,000.
Section 6.    Debt Service Reserve Account.
(a)    The following new defined term is hereby added to Section 1.1 of the Loan
Agreement:

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Debt Service Reserve Account: The account so designated that is provided for in
Section 3.7 of this Agreement.
(b)    The following new Section 3.7 is hereby added to the Loan Agreement:
3.7    Debt Service Reserve Account.
(a)    Borrower shall establish and maintain a cash collateral account in the
name of Borrower held by Lender to be known as the “Debt Service Reserve
Account”. The Debt Service Reserve Account shall be held as additional security
for the payment and performance of all of the obligations of Borrower under this
Agreement and the other Loan Documents, and Borrower hereby pledges and assigns
to Lender, and grants to Lender a first lien on and a first priority security
interest in, the Debt Service Reserve Account, all cash and investments from
time to time on deposit in the Debt Service Reserve Account, and all proceeds of
all of the foregoing. Amounts on deposit in the Debt Service Reserve Account
shall be held in an interest bearing account at Lender. Earnings on amounts held
in the Debt Service Reserve Account shall be added to the Debt Service Reserve
Account. On November 8, 2013, Borrower shall deposit the sum of $942,000 into
the Debt Service Reserve Account.
(b)    When both of the following conditions have been satisfied, the amount on
deposit in the Debt Service Reserve Account shall be reduced to $471,000, and
Borrower shall be entitled to withdraw from the Debt Service Reserve Account any
amount on deposit therein in excess of $471,000. The conditions referred to
above are as follows:
(i)    No Default or Event of Default under this Agreement or any of the other
Loan Documents has occurred and is continuing.
(ii)    For each of two consecutive fiscal quarters ending on or after December,
2013, the ratio of (A) the amount of EBITDAR/Management Fee Adjusted for
Operator for such quarter, to (B) the total amount of principal and interest
required to be paid on the Loan for such quarter, shall be not less than 1.35 to
1.00, determined based on financial statements of Operator delivered to Lender
in accordance with Section 7.4 of this Agreement and a certificate delivered to
Lender containing a correct computation of such ratio and certified as true and
correct by a financial officer of Operator.
(c)    When both of the following conditions have been satisfied, the Debt
Service Reserve Account shall no longer be required, and Borrower shall be
entitled to withdraw from the Debt Service Reserve Account the entire remainder
of the funds on deposit therein. The conditions referred to above are as
follows:
(i)    No Default or Event of Default under this Agreement or any of the other
Loan Documents has occurred and is continuing.
(ii)    For each of two consecutive fiscal quarters ending after the fiscal
quarters for which Borrower satisfies the condition set forth in Section
3.7(b)(ii) above, the ratio of (A) the amount of EBITDAR/Management Fee Adjusted
for Operator for such quarter, to (B) the total amount of principal and interest
required to be paid on the Loan for such quarter, shall be not less than 1.35 to
1.00, determined based on financial statements of Operator delivered to Lender
in accordance with Section 7.4

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of this Agreement and a certificate delivered to Lender containing a correct
computation of such ratio and certified as true and correct by a financial
officer of Operator.
Section 7.    Change in Distribution Provisions. Section 7.11(c) of the Loan
Agreement, as modified and amended by the Previous Modifications, is hereby
further modified and amended in its entirety to read as follows effective as of
the date of this Agreement, with the existing Section 7.11(c) of the Loan
Agreement, as modified and amended by the Previous Modifications, to continue to
be effective for periods prior to the date of this Agreement:
(c)    Borrower shall not at any time make any Distribution which is in
violation of any of the following provisions:
(i)    On and after November 8, 2013, Borrower shall not, directly or
indirectly, at any time make any Distribution until such time as the conditions
for the withdrawal of the remainder of the funds on deposit in the Debt Service
Reserve Account which are provided for in Section 3.7(c) of this Agreement have
been satisfied. For purposes of this subparagraph, such conditions shall be
deemed to have been “satisfied” at such time as the condition set forth in
Section 3.7(c)(i) of this Agreement is satisfied and Borrower has delivered to
Lender the financial statements and certificate which are required by Section
3.7(c)(ii) of this Agreement.
(ii)    If any Default or Event of Default shall occur and be continuing under
this Agreement or any of the other Loan Documents, Borrower shall not, directly
or indirectly, make any Distribution.
(iii)    Borrower shall not, directly or indirectly, at any time make any
Distribution that would cause its cash and cash equivalents remaining after such
Distribution to be less than an amount equal to the aggregate of (A) the total
amount of the security and other deposits received by Borrower from tenants of
its Project, (B) the total amount of accrued but unpaid real estate taxes on its
Project, based on the last full year tax bill or bills received by Borrower,
minus any amount held in a real estate tax escrow by Lender, and (C) a
reasonable working capital reserve.
Section 8.    Change in Minimum Fixed Charge Coverage Ratio
Requirement.  Section 7.15 of the Loan Agreement, as modified and amended by the
Previous Modification, is hereby modified and amended by adding the following
provisions at the end of such Section:
Notwithstanding the foregoing provisions of this Section, Borrower shall not be
required to comply with the financial covenant set forth in this Section for the
fiscal quarter ending September, 2013, or for any fiscal quarter thereafter,
until the fiscal quarter during which the conditions for the withdrawal of the
remainder of the funds on deposit in the Debt Service Reserve Account which are
provided for in Section 3.7(c) of this Agreement have been satisfied, and
commencing with the fiscal quarter in which such conditions are satisfied and
for each fiscal quarter thereafter, Borrower shall be required to comply with
the financial covenant set forth in this Section. For purposes of the foregoing
provisions, such conditions shall be deemed to have been “satisfied” at such
time as the condition set forth in Section 3.7(c)(i) of this Agreement is
satisfied and Borrower has delivered to Lender the financial statements and
certificate which are required by Section 3.7(c)(ii) of this Agreement.

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Section 9.    Change in Minimum EBITDAR of Operator. Section 7.16 of the Loan
Agreement, as modified and amended by the Previous Modifications, is hereby
modified and amended in its entirety to read as follows effective for the fiscal
quarter ended September 30, 2013, and subsequent fiscal quarters, with the
existing Section 7.16 of the Loan Agreement, as modified and amended by the
Previous Modifications, to continue to be effective for periods ended prior to
the fiscal quarter ended September 30, 2013:
7.16    Minimum EBITDAR of Operator. It is a condition of this Agreement and the
Loan that the EBITDAR/Management Fee Adjusted for Operator for each fiscal
quarter set forth in the table below, shall be not less than the amount set
forth opposite such quarter in the table below:
 
Fiscal Quarters Ending
Minimum EBITDAR
for Operator
 
 
September 30, 2013
No Requirement
 
 
December, 2013
$215,000
 
 
March, 2014
$250,000
 
 
June, 2014
$310,500
 
 
September, 2014 and Each Fiscal Quarter Thereafter
$358,350
 

Section 10.    Additional AdCare Covenants and Agreements.
(a)    AdCare hereby covenants and agrees with the Lender that within 45 days
after the end of each fiscal quarter commencing with the fiscal quarter ending
December 31, 2013, AdCare will make a loan to the Operator in an amount which is
not less than the amount of any loss incurred by the Operator during the
immediately preceding fiscal quarter, as shown on an income statement of the
Operator furnished to Lender pursuant to Section 7.4(a)(iii) of the Loan
Agreement. Such loans made by AdCare as required by this Section shall be
reflected in the “due to affiliated entities” account on AdCare’s balance sheet
furnished to Lender pursuant to Section 7.4(a)(vi) of the Loan Agreement. Any
failure by AdCare to comply with the foregoing provisions of this Section shall
constitute an Event of Default under the Loan Agreement.
(b)    AdCare hereby covenants and agrees with the Lender that any and all
present and future debts and obligations of the Operator to AdCare hereby are
subordinated to any and all claims of the Lender against the Operator.
(c)    The Documents, as modified and amended by the Previous Modifications, are
hereby modified and amended to incorporate the foregoing provisions of this
Section.
Section 11.    Representations and Warranties. The term “Signing Entity” as used
in this Section means any entity (other than a Borrower/Guarantor Party itself)
that appears in the signature block of any Borrower/Guarantor Party in this
Agreement, any of the Documents or the Previous Modifications, if any. In order
to induce Lender to enter into this Agreement, the Borrower/Guarantor Parties
hereby represent and warrant to Lender as follows as of the date of this
Agreement and if different, as of the date of the execution and delivery of this
Agreement:
(a)    Borrower is a limited liability company duly organized, validly existing
and in good standing under the laws of the State of Georgia, has all necessary
power and authority to carry on its present business, and has full right, power
and authority to enter into this Agreement, each of the Documents to which it is
a

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party and the Previous Modifications, and to perform and consummate the
transactions contemplated hereby and thereby.
(b)    AdCare is a corporation duly organized, validly existing and in good
standing under the laws of the State of Ohio, has all necessary power and
authority to carry on its present business, and has full right, power and
authority to enter into this Agreement, each of the Documents to which it is a
party and the Previous Modifications, and to perform and consummate the
transactions contemplated hereby and thereby.
(c)    Operator is a limited liability company duly organized, validly existing
and in good standing under the laws of the State of Georgia and duly registered
to transact business and in good standing in the state of Arkansas. Operator has
full power and authority to carry on its present business, and has full right,
power and authority to enter into this Agreement and each of the Documents to
which it is a party and to perform and consummate the transactions contemplated
hereby and thereby.
(d)    Each Signing Entity is duly organized, validly existing and in good
standing under the laws of the State in which it is organized, has all necessary
power and authority to carry on its present business, and has full right, power
and authority to execute this Agreement, the Documents and the Previous
Modifications in the capacity shown in each signature block contained in this
Agreement, the Documents and the Previous Modifications in which its name
appears, and such execution has been duly authorized by all necessary legal
action applicable to such Signing Entity.
(e)    This Agreement, each of the Documents and the Previous Modifications have
been duly authorized, executed and delivered by such of the Borrower/Guarantor
Parties as are parties thereto, and this Agreement, each of the Documents and
the Previous Modifications constitute a valid and legally binding obligation
enforceable against such of the Borrower/Guarantor Parties as are parties
thereto. The execution and delivery of this Agreement, the Documents and the
Previous Modifications and compliance with the provisions thereof under the
circumstances contemplated therein do not and will not conflict with or
constitute a breach or violation of or default under the organizational
documents of any Borrower/Guarantor Party or any Signing Entity, or any
agreement or other instrument to which any of the Borrower/Guarantor Parties or
any Signing Entity is a party, or by which any of them is bound, or to which any
of their respective properties are subject, or any existing law, administrative
regulation, court order or consent decree to which any of them is subject.
(f)    The Borrower/Guarantor Parties are in full compliance with all of the
terms and conditions of the Documents to which they are a party and the Previous
Modifications, and no Default or Event of Default has occurred and is continuing
with respect to any of the Documents or the Previous Modifications.
(g)    There is no litigation or administrative proceeding pending or threatened
to restrain or enjoin the transactions contemplated by this Agreement or any of
the Documents or the Previous Modifications, or questioning the validity
thereof, or in any way contesting the existence or powers of any of the
Borrower/Guarantor Parties or any Signing Entity, or in which an unfavorable
decision, ruling or finding would adversely affect the transactions contemplated
by this Agreement or any of the Documents or the Previous Modifications, or
would result in any material adverse change in the financial condition,
properties, business or operations of any of the Borrower/Guarantor Parties.
(h)    The statements contained in the Recitals to this Agreement are true and
correct.
Section 12.    Documents to Remain in Effect; Confirmation of Obligations;
References. The Documents shall remain in full force and effect as originally
executed and delivered by the parties, except as previously modified and amended
by the Previous Modifications and as expressly modified and amended

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herein. In order to induce Lender to enter into this Agreement, the
Borrower/Guarantor Parties hereby (i) confirm and reaffirm all of their
obligations under the Documents, as previously modified and amended by the
Previous Modifications and as modified and amended herein; (ii) acknowledge and
agree that Lender, by entering into this Agreement, does not waive any existing
or future default or event of default under any of the Documents, or any rights
or remedies under any of the Documents, except as expressly provided herein;
(iii) acknowledge and agree that Lender has not heretofore waived any default or
event of default under any of the Documents, or any rights or remedies under any
of the Documents; and (iv) acknowledge and agree that they do not have any
defense, setoff or counterclaim to the payment or performance of any of their
obligations under, or to the enforcement by Lender of, the Documents, as
previously modified and amended by the Previous Modifications and as modified
and amended herein, including, without limitation, any defense, setoff or
counterclaim based on the covenant of good faith and fair dealing. All
references in the Documents to any one or more of the Documents, or to the “Loan
Documents,” shall be deemed to refer to such Document, Documents or Loan
Documents, as the case may be, as previously modified and amended by the
Previous Modifications and as modified and amended by this Agreement. Electronic
records of executed documents maintained by Lender shall be deemed to be
originals thereof.
Section 13.    Certifications, Representations and Warranties. In order to
induce Lender to enter into this Agreement, the Borrower/Guarantor Parties
hereby certify, represent and warrant to Lender that all certifications,
representations and warranties contained in the Documents and the Previous
Modifications and in all certificates heretofore delivered to Lender are true
and correct as of the date of this Agreement and if different, as of the date of
the execution and delivery of this Agreement, and all such certifications,
representations and warranties are hereby remade and made to speak as of the
date of this Agreement and if different, as of the date of the execution and
delivery of this Agreement.
Section 14.    Entire Agreement; No Reliance. This Agreement sets forth all of
the covenants, promises, agreements, conditions and understandings of the
parties relating to the subject matter of this Agreement, and there are no
covenants, promises, agreements, conditions or understandings, either oral or
written, between them relating to the subject matter of this Agreement other
than as are herein set forth. The Borrower/Guarantor Parties acknowledge that
they are executing this Agreement without relying on any statements,
representations or warranties, either oral or written, that are not expressly
set forth herein.
Section 15.    Successors. This Agreement shall inure to the benefit of and
shall be binding upon the parties and their respective successors, assigns and
legal representatives.
Section 16.    Severability. In the event any provision of this Agreement shall
be held invalid or unenforceable by any court of competent jurisdiction, such
holding shall not invalidate or render unenforceable any other provision hereof.
Section 17.    Amendments, Changes and Modifications. This Agreement may be
amended, changed, modified, altered or terminated only by a written instrument
executed by all of the parties hereto.
Section 18.    Construction.
(a)    The words “hereof,” “herein,” and “hereunder,” and other words of a
similar import refer to this Agreement as a whole and not to the individual
Sections in which such terms are used.
(b)    References to Sections and other subdivisions of this Agreement are to
the designated Sections and other subdivisions of this Agreement as originally
executed.

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(c)    The headings of this Agreement are for convenience only and shall not
define or limit the provisions hereof.
(d)    Where the context so requires, words used in singular shall include the
plural and vice versa, and words of one gender shall include all other genders.
(e)    The Borrower/Guarantor Parties and Lender, and their respective legal
counsel, have participated in the drafting of this Agreement, and accordingly
the general rule of construction to the effect that any ambiguities in a
contract are to be resolved against the party drafting the contract shall not be
employed in the construction and interpretation of this Agreement.
Section 19.    Counterparts; Electronic Signatures. This Agreement may be
executed in any number of counterparts and by the different parties hereto on
separate counterparts and each such counterpart shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same document. Receipt of an executed signature page to this Agreement by
facsimile or other electronic transmission shall constitute effective delivery
thereof. An electronic record of this executed Agreement maintained by Lender
shall be deemed to be an original.
Section 20.    Governing Law. This Agreement is prepared and entered into with
the intention that the law of the State of Illinois shall govern its
construction and enforcement, except that insofar as this Agreement relates to a
Document which by its terms is governed by the law of the State of Arkansas,
this Agreement shall also be governed by the law of the State of Arkansas.

[SIGNATURE PAGE(S) AND EXHIBIT(S),
IF ANY, FOLLOW THIS PAGE]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
 
Little Rock HC&R Property Holdings, LLC
 
 
 
 
By
/s/ Ronald W. Fleming
 
 
Ronald W. Fleming, Manager
 
 
 
 
 
 
 
 
 
 
ADCARE HEALTH SYSTEMS, INC.
 
 
 
 
By
/s/ Ronald W. Fleming
 
 
Ronald W. Fleming, Secretary and Chief Financial Officer
 
 
 
 
 
 
 
 
 
 
LITTLE ROCK HC&R NURSING, LLC
 
 
 
 
By
/s/ Ronald W. Fleming
 
 
Ronald W. Fleming, Authorized Signatory

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THE PRIVATEBANK AND TRUST COMPANY
 
 
 
 
By
/s/ Amy K. Hallberg
 
 
Amy K. Hallberg, Managing Director

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EXHIBIT A

LEGAL DESCRIPTION

Commonly known as 5720 West Markham Street, Little Rock, Pulaski County,
Arkansas, improved with a skilled nursing facility containing 154 beds, and
known as Little Rock Healthcare and Rehab a/k/a West Markham Sub Acute and
Rehabilitation Center and legally described as follows:

Lot 13, Except the South 25 feet thereof; the West 10 feet of the South 30 feet
and the North 20 feet of Lot 9; the West 10 feet of Lots 10, 11 and the North
one half of Lot 12, and all of Lots 8, 14, 15, 16, 17 and 18, all in Block 2 of
Strong & Waters Addition to the City of Little Rock, Pulaski County, Arkansas.
Also a strip of ground formerly platted as an alley being 15 feet wide and lying
immediately East of and contiguous to the North one-half of Lots 13 and 14, 15,
16 and 17 and a 7.5 foot strip lying immediately East of and contiguous to Lot
18, all in Block 2, Strong & Waters Addition to the City of Little Rock, Pulaski
County, Arkansas, which was closed by Ordinance No. 10,127, a certified copy of
which is recorded in Book 600 at page 631 and Ordinance No, 11,645, a certified
copy of which is recorded in Book 933 page 557, records of Pulaski County,
Arkansas.