Exhibit 10.1
FOURTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
     This Fourth Amendment to Consolidated Amended and Restated Master Lease
(this “Amendment”) is executed and delivered as of April 1, 2007 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, and a
Third Amendment to Consolidated Amended and Restated Master Lease dated as of
October 20, 2006 (the “Existing Master Lease”) pursuant to which Lessee leased
from Lessor certain healthcare facilities.
     B. Pursuant to that certain Agreement of Purchase and Sale (the “Purchase
Agreement”) dated as of January 23, 2007 among Lessor, as seller, Lessee, as
current operator, and VICTORIA EUREKA SPRINGS, LLC, an Arkansas limited
liability company (“Purchaser”), Lessor has agreed to sell skilled nursing
facility commonly known as Eureka Springs Nursing and Rehab Center (the “Eureka
Springs Facility”), whose address is 235 Huntsville Road, Eureka Springs,
Carroll County, Arkansas.
     C. Lessor and Lessee desire to terminate the Existing Master Lease as to
the Eureka Springs Facility effective as of the date that the Eureka Springs
Facility is sold pursuant to the Purchase Agreement.
     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. From
and after the date of this Amendment, each reference in the Existing Master
Leases or the other Transaction Documents to the “Lease” or “Master Lease”
means, as applicable, the Existing Master Lease or Existing Master Leases as
modified by this Amendment.

 

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     2. Termination of the Existing Lease as to the Eureka Springs Facility.
Effective as of, and conditioned upon, the sale of the Eureka Springs Facility
pursuant to the Purchase Agreement, (a) the Master Lease is terminated as to the
Eureka Springs Facility, and only as to the Eureka Springs Facility; and
(b) Exhibit A-7 of the Master Lease is amended and restated in its entirety as
follows:
Exhibit A-7
Intentionally Omitted.
     3. No Reduction in Base Rent. Notwithstanding the termination of the Master
Lease as to the Eureka Springs Facility, the Base Rent payable under the Master
Lease shall not be reduced or abated.
     4. 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 Agreement; and (ii) the execution of this Agreement 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
     5. 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.
     6. Headings. Section headings used in this Amendment are for reference only
and shall not affect the construction of the Amendment.
     7. 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, ACKNOWLEDGEMENTS, AND JOINDER FOLLOW]

2

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

                  LESSOR:    
 
                STERLING ACQUISITION CORP., a         Kentucky corporation    
 
           
 
  By:   /s/ Taylor Pickett    
 
           
 
  Name:   Taylor Pickett    
 
           
 
  Title:   Chief Executive Officer    
 
           

     
STATE OF MARYLAND
  ) 
 
  ) ss.
COUNTY OF BALTIMORE
  ) 

     This instrument was acknowledged before me on the 26th day of March, 2007,
by Taylor Pickett, the CEO of STERLING ACQUISITION CORP., a Kentucky
corporation, on behalf of said company.

                  /s/ Judith A Jacobs       Notary Public, Baltimore County,
Maryland      My commission expires: May 1, 2008     

Signature Page 1 of 2

 

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Signature Page to
FOURTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
LESSEE:

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

     
STATE OF Tennessee
  ) 
 
  ) SS
COUNTY OF Williamson
  ) 

     This instrument was acknowledged before me on the 28th day of March, 2007,
by Glynn Riddle, the EVP & CFO of DIVERSICARE LEASING CORP., a Tennessee
corporation, on behalf of said company

                  /s/ Brenda Wimsatt       Notary Public, Williamson County,
Tennessee      My commission expires: 7/25/2009     

Signature Page 2 of 2

 

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Acknowledgement to
FOURTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
     The undersigned hereby consent to the transactions contemplated by this
Third Amendment to Consolidated Amended and Restated Master Lease (the “Third
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 Amendment.
The undersigned hereby join in the execution of this Third Amendment for the
limited purpose of agreeing to the provisions of Section 6 and for no other
purpose.

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

     
STATE OF Tennessee
  ) 
 
  ) SS
COUNTY OF Williamson
  ) 

     This instrument was acknowledged before me on the 28th day of March, 2007,
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/ Brenda Wimsatt       Notary Public, Williamson County,
Tennessee      My commission expires: 7/25/2009     

Acknowledgement — Page 1 of 4

 

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Acknowledgement to
FOURTH 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
  ) 
 
  ) SS
COUNTY OF Williamson
  ) 

     The foregoing instrument was acknowledged before me this 28th day of March,
2007, 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/ Brenda Wimsatt       Notary Public, Williamson County,
Tennessee      My commission expires: 7/25/2009     

Acknowledgement — Page 2 of 4

 

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Acknowledgement to
FOURTH 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
  ) 
 
  ) SS
COUNTY OF Williamson
  ) 

     The foregoing instrument was acknowledged before me this 28th day of March,
2007, 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/ Brenda Wimsatt       Notary Public, Williamson County,
Tennessee      My commission expires: 7/25/2009     

Acknowledgement — Page 3 of 4

 

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Acknowledgement to
FOURTH 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
  ) 
 
  ) SS
COUNTY OF Williamson
  ) 

     This foregoing instrument was acknowledged before me on 28th day of March,
2007, by Glynn Riddle, who is EVP & CFO of STERLING HEALTH CARE MANAGEMENT,
INC., a Kentucky corporation, on behalf of said corporation, who acknowledged
the same to be his or her free act and deed and the free act and deed of the
corporation.

                  /s/ Brenda Wimsatt       Notary Public, Williamson County,
Tennessee      My commission expires: 7/25/2009     

Acknowledgement — Page 4 of 4