Exhibit 10.61
FIRST AMENDMENT TO LOAN AGREEMENT
     This First Amendment to Loan Agreement (this “First Amendment”) is
effective as of the 23rd day of December, 2008, by and between DIVERSICARE AFTON
OAKS, LLC, a Delaware limited liability company (the “Afton Oaks Borrower”),
DIVERSICARE BRIARCLIFF, LLC, a Delaware limited liability company (the
“Briarcliff Borrower”), DIVERSICARE CHISOLM, LLC, a Delaware limited liability
company (the “Chisolm Borrower”), DIVERSICARE HARTFORD, LLC, a Delaware limited
liability company (the “Hartford Borrower”), DIVERSICARE HILLCREST, LLC, a
Delaware limited liability company (the “Hillcrest Borrower”), DIVERSICARE
PINEDALE, LLC, a Delaware limited liability company (the “Newport Borrower”) and
DIVERSICARE WINDSOR HOUSE, LLC, a Delaware limited liability company (the
“Windsor Borrower”; the Afton Oaks Borrower, the Briarcliff Borrower, the
Chisolm Borrower, the Hartford Borrower, the Hillcrest Borrower, the Newport
Borrower and the Windsor Borrower, together with their successors and/or
assigns, may be referred to collectively herein as the “Borrowers” or
individually as a “Borrower”), and CAPMARK FINANCE INC., a California
corporation (together with its successors and assigns, the “Lender”).
Recitals
     A. The Borrowers and the Lender executed that certain Loan Agreement dated
August 7, 2006 (the “Loan Agreement”; capitalized terms not further defined
herein shall have the meaning assigned to them in the Loan Agreement) governing
a loan in the original principal amount of $30,625,000.00 (the “Loan”).
     B. The Borrowers have requested that the Lender modify certain provisions
of the Loan Agreement. The Lender has agreed to such requests on certain
conditions, one of which is the execution of this Amendment by the Borrowers.
Agreement
          NOW, THEREFORE, in consideration of the Recitals, the Borrower and the
Lender hereby amend the Loan Agreement as follows:
     1. Section 4.15 of the Loan Agreement is hereby deleted in its entirety and
replaced with the following:
     “4.15 Occupancy. Beginning with the quarter ending December 31, 2008,
maintain or cause to be maintained at all times, a daily average annual combined
occupancy for the Facilities, as tested quarterly (on the basis of a calendar
year), of eighty percent (80%) or more (based on the number of available beds at
the Facilities). Notwithstanding anything in the preceding sentence to the
contrary, if the daily average annual combined occupancy for the Facilities, as
tested quarterly (on the basis of a calendar year), drops below eighty-percent
(80%) or more (based on the number of available beds at the Facilities),
commencing with the quarter ending December 31, 2008, the Lender shall not
declare an Event of Default so long as the daily average annual combined
occupancy for the Facilities, as tested quarterly (on the basis of a calendar
year), is seventy-five percent (75%) or more (based on the number of available
beds at the Facilities) and the Combined Debt Service Coverage for the
Facilities, after deduction

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     of Assumed Management Fees and Actual Cost of Professional and General
Liability and before the provision (benefit) for self-insured professional and
general liability to the extent deducted in determining net income, based on a
rolling twelve (12) month period, tested quarterly, is not less than 1.4 to 1.0.
For purposes of this Section 4.15, the minimum number of available beds at the
Facilities must remain at or in excess of the number of beds set forth on
Schedule 4.15 herein.”
     2. Borrowers shall be prohibited from altering the number of licensed beds
as set forth in Article I of the Loan Agreement or available beds as set forth
on Schedule 4.15 herein without the prior written consent of Lender in its sole
discretion.
     Except as expressly amended hereby, all other terms and conditions of the
Loan Agreement shall remain unchanged and shall continue in full force and
effect.
     The Borrower represents that (a) no Event of Default has occurred that is
continuing on the date hereof; and (b) the representations and warranties
included in Article III of the Loan Agreement are as true and correct on the
date hereof as when originally made, except as such representation or warranty
expressly relates to an earlier date.

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     IN WITNESS WHEREOF, the Borrower and the Lender have caused this First
Amendment to be executed by their duly authorized respective representatives as
of the date set forth above.

                      WITNESSES:       BORROWER:    
 
                            DIVERSICARE AFTON OAKS, LLC, a             Delaware
limited liability company    
/s/ Jacqueline Reed
 
                            By:   Diversicare Leasing Corp., a     Jacqueline
Reed           Tennessee corporation, its sole     [Print Name]           member
   
 
                   
 
          By:   /s/ L. Glynn Riddle    
 
                   
 
              L. Glynn Riddle,    
 
              its Chief Financial Officer    
 
                            DIVERSICARE BRIARCLIFF, LLC, a             Delaware
limited liability company    
/s/ Jacqueline Reed
 
                            By:   Diversicare Leasing Corp., a     Jacqueline
Reed           Tennessee corporation, its sole     [Print Name]           member
   
 
                   
 
          By:   /s/ L. Glynn Riddle    
 
                   
 
              L. Glynn Riddle,    
 
              its Chief Financial Officer    
 
                            DIVERSICARE CHISOLM, LLC, a             Delaware
limited liability company    
/s/ Jacqueline Reed
 
                            By:   Diversicare Leasing Corp., a     Jacqueline
Reed           Tennessee corporation, its sole     [Print Name]           member
   
 
                   
 
          By:   /s/ L. Glynn Riddle    
 
                   
 
              L. Glynn Riddle,    
 
              its Chief Financial Officer    

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                              DIVERSICARE HARTFORD, LLC, a             Delaware
limited liability company    
/s/ Jacqueline Reed
 
                            By:   Diversicare Leasing Corp., a     Jacqueline
Reed           Tennessee corporation, its sole     [Print Name]           member
   
 
                   
 
          By:   /s/ L. Glynn Riddle    
 
                   
 
              L. Glynn Riddle,    
 
              its Chief Financial Officer    
 
                            DIVERSICARE HILLCREST, LLC, a             Delaware
limited liability company    
/s/ Jacqueline Reed
 
                            By:   Diversicare Leasing Corp., a     Jacqueline
Reed           Tennessee corporation, its sole     [Print Name]           member
   
 
                   
 
          By:   /s/ L. Glynn Riddle    
 
                   
 
              L. Glynn Riddle,    
 
              its Chief Financial Officer    
 
                            DIVERSICARE PINEDALE, LLC, a             Delaware
limited liability company    
/s/ Jacqueline Reed
 
                            By:   Diversicare Leasing Corp., a     Jacqueline
Reed           Tennessee corporation, its sole     [Print Name]           member
   
 
                   
 
          By:   /s/ L. Glynn Riddle    
 
                   
 
              L. Glynn Riddle,    
 
              its Chief Financial Officer    
 
                            DIVERSICARE WINDSOR HOUSE,             LLC, a
Delaware limited liability company    
/s/ Jacqueline Reed
 
                            By:   Diversicare Leasing Corp., a     Jacqueline
Reed           Tennessee corporation, its sole     [Print Name]           member
   
 
                   
 
          By:   /s/ L. Glynn Riddle    
 
                   
 
              L. Glynn Riddle,    
 
              its Chief Financial Officer    

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            LENDER:

CAPMARK FINANCE INC., a California
corporation
      /s/ Laura Y. McDonald       By:   Laura Y. McDonald      Its:   Senior
Vice Presiden   

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