FIFTH AMENDMENT TO
SECOND AMENDED AND RESTATED TERM LOAN AND SECURITY AGREEMENT AND OMNIBUS RELEASE
THIS FIFTH AMENDMENT TO SECOND AMENDED AND RESTATED TERM LOAN AND SECURITY
AGREEMENT AND OMNIBUS RELEASE (this “Amendment”) dated as of May 13, 2019, by
and among CIBC BANK USA, formerly known as The PrivateBank and Trust Company, an
Illinois banking corporation (together with its successors and assigns,
“Administrative Agent”) in its capacity as administrative agent for the Lenders
(as defined below), the Lenders, and the Affiliates of DIVERSICARE HEALTHCARE
SERVICES, INC. identified on the signature pages as “Borrower” (individually and
collectively, “Borrower”).
WHEREAS, Borrower, Administrative Agent, and the financial institutions
signatories thereto (the “Lenders”) are parties to that certain Second Amended
and Restated Term Loan and Security Agreement dated as of February 26, 2016 (as
the same has been, and may hereafter be, amended, restated, supplemented or
otherwise modified from time to time, the “Loan Agreement”; all capitalized
terms used but not defined herein shall have the meanings ascribed thereto in
the Loan Agreement as amended by this Amendment);
WHEREAS, Borrower has requested that DIVERSICARE HILLCREST, LLC, DIVERSICARE
LAMPASAS, LLC, and DIVERSICARE YORKTOWN, LLC (individually and collectively, the
“Released Borrower”) be removed as a party to the Loan Agreement and the
Financing Agreements to which it is a party and Administrative Agent release all
Liens in favor of Administrative Agent, for the benefit of the Lenders, in the
assets and property of the Released Borrower and Administrative Agent and the
Lenders have agreed to such removal and release, in each case as provided in,
and subject to the terms and conditions of, this Agreement;
WHEREAS, Borrower, Administrative Agent and Lenders desire to amend the Loan
Agreement as provided in and subject to the terms and conditions of this
Amendment;
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto (intending to
be legally bound) hereby agree as follows:
1.Amendments to Loan Agreement. Subject to the satisfaction of the conditions
set forth in Section 5 below and in reliance upon the representations and
warranties set forth in Section 4 below, Borrower, Administrative Agent and
Lenders hereby amend the Loan Agreement as follows:
(a)    The following additional definitions are hereby added to Section 1.1 of
the Loan Agreement in alphabetical order:
“Affiliate Revolving Borrowers (QIPP)” means each of the “Borrowers” party to
the Affiliate Revolving Loan Agreement (QIPP) as a “Borrower” from time to time.
“Affiliate Revolving Loan (QIPP)” means, collectively, those certain revolving
loans made by the Lenders to the Affiliate Revolving Borrowers (QIPP) from time
to time pursuant to the Affiliate Revolving Loan Agreement (QIPP).
“Affiliate Revolving Loan Agreement (QIPP)” means that certain Revolving Loan
and Security Agreement dated as of May 13, 2019 by and among DIVERSICARE
MANAGEMENT SERVICES CO., a Tennessee corporation, in its capacity as borrowing
agent for the Affiliate Revolving Borrowers (QIPP), the Affiliate Revolving
Borrowers (QIPP), the Lenders and the Administrative Agent, as the same may be
restated, modified, supplemented or amended from time to time.
“Affiliate Revolving Loan Financing Agreement (QIPP)” means each “Financing
Agreement” as defined in the Affiliate Revolving Loan Agreement (QIPP), as any
of the same may be restated, modified, supplemented or amended from time to
time.
“Affiliate Revolving Loan Liabilities (QIPP)” means the “Liabilities” as defined
in the Affiliate Revolving Loan Agreement (QIPP).
(b)    The definitions of “EBITDA” and “EBIDTAR” in Section 1.1 of the Loan
Agreement are hereby amended and restated in their entirety to read as follows:
“EBITDA” means with respect to the Borrower and the Affiliate Revolving
Borrowers (QIPP), for any period of determination, the sum of the net earnings
of the consolidated Borrower and Affiliate Revolving Borrowers (QIPP) before
nonrecurring items (in accordance with GAAP and as reasonably agreed to by the
Administrative Agent), interest, taxes, depreciation, and amortization
(including amortized transaction expense), in each case without duplication and
all as determined in accordance with GAAP, consistently applied.
“EBITDAR” means with respect to the Borrower and the Affiliate Revolving
Borrowers (QIPP), for any period of determination, the sum of the net earnings
of the consolidated Borrower and Affiliate Revolving Borrower (QIPP) before
nonrecurring items (in accordance with GAAP and as reasonably agreed to by the
Administrative Agent), interest, taxes, depreciation, amortization (including
amortized transaction expense) and rent, in each case without duplication and
all as determined in accordance with GAAP, consistently applied.
(c)    The first sentence of Section 6.6 is hereby amended and restated to read
as follows: “All Liabilities of the Borrowers under this Agreement and each of
the Financing Agreements, and all of the Affiliate Revolving Loan Liabilities
under the Revolving Loan Agreement and each of the Affiliate Revolving Loan
Financing Agreements, are cross-collateralized and (y) all Liabilities of the
Borrowers under this Agreement and each of the Financing Agreements, all of the
Affiliate Revolving Loan Liabilities (QIPP) under the Affiliate Revolving Loan
Agreement (QIPP) and each of the Affiliate Revolving Loan Financing Agreements
(QIPP) and all of the Affiliate Revolving Loan Liabilities under the Revolving
Loan Agreement and each of the Affiliate Revolving Loan Financing Agreements are
cross-defaulted.”
(d)    Section 7.28 of the Loan Agreement is hereby amended and restated in its
entirety to read as follows:
7.28    Consideration. Borrower acknowledges that it desires to have this
Agreement and the Financing Agreements to which the Borrower is a party
cross-collateralized and cross-defaulted and have the Collateral serve as
collateral for all of the Liabilities and Affiliate Revolving Loan Liabilities.
The Affiliated Revolving Borrowers, the Affiliate Revolving Borrowers (QIPP) and
the Borrowers are Affiliates of each other. Each Borrower will derive
substantial direct and indirect benefit (financial and otherwise) from funds
made available to the Affiliated Revolving Borrowers pursuant to the Revolving
Loan Agreement and the Affiliate Revolving Borrowers (QIPP) pursuant to the
Affiliate Revolving Loan Agreement (QIPP), and it is and will be to each
Borrower’s, Affiliate Revolving Borrower (QIPP)’s and Affiliated Revolving
Borrower’s advantage to assist each other in procuring such funds from the
Lenders.
(e)    Section 11.1(ee) is hereby amended and restated in its entirety to read
as follows:
(ee)    an “Event of Default” shall occur under or pursuant to the Revolving
Loan Agreement, any Affiliate Revolving Loan Financing Agreement, the Affiliate
Revolving Loan Agreement (QIPP) or any Affiliate Revolving Loan Financing
Agreement (QIPP).
(f)    Section 9.12 (a) is hereby amended by adding “and Affiliate Revolving
Borrowers (QIPP)” immediately after “Borrower”. The final two unnumbered
paragraphs in Section 9.12 are hereby amended and restated in their entirety to
read as follows:
“The Borrower, Affiliate Revolving Borrowers (QIPP) and the Guarantor
acknowledge and agree that the calculation and computation of the foregoing
financial covenants shall be pursuant to and in accordance with the last
sentence of Section 8.1(c) hereof.
Administrative Agent, Lenders, Borrower, Affiliate Revolving Borrowers (QIPP)
and Guarantor acknowledge and agree that for purposes of the calculation and
computation of the foregoing financial covenants in subparagraphs (b), (c) and
(d), the terms “Fixed Charge Coverage Ratio”, “Adjusted EBITDA”, and “Current
Ratio”, for purposes of this Section 9.12, shall all be as defined, calculated
and measured in the Revolving Loan Agreement, on a consolidated basis, for
Guarantor and all Affiliated Revolving Borrowers and Affiliate Revolving
Borrowers ( QIPP) thereunder.”
(g)    Section 12.21(b) is hereby amended to amend and restate the last sentence
therein to read as follows: “Each Borrower has determined that it is in its best
interest to procure the Loan with the credit support of the other Borrowers as
contemplated by this Agreement and the other Financing Agreements as well as
permit the cross-collateralization with the Affiliate Revolving Loan
Liabilities, Revolving Loan Agreement and Affiliate Revolving Loan Financing
Agreements and cross-default with the Affiliate Revolving Loan Liabilities,
Revolving Loan Agreement and Affiliate Revolving Loan Financing Agreements and
Affiliate Revolving Loan Liabilities (QIPP), Affiliate Revolving Loan Agreement
(QIPP) and Affiliate Revolving Loan Financing Agreements (QIPP) as contemplated
hereunder.”
(h)    The notice information for Opus Bank in Annex A (Commitments) is hereby
amended and restated in its entirety as follows:
Opus Bank
2101 Rosecrans Ave.
Suite 4300
El Segundo, CA 90245
Attn.: Sangjin Na, VP, Portfolio Manager, Healthcare Banking
Tel.: (310) 481-6214
Fax: (949) 250-9988, Attn: Kathy Brennan
2.    Release. Subject to the terms and conditions contained herein and
notwithstanding anything contained in the Financing Agreements to the contrary:
(a)    From and after the date hereof, (i) each Released Borrower is released as
a Borrower under the Loan Agreement and Subsidiary under the applicable Pledge
Agreement and all references to “Borrower” in the Loan Agreement or any of the
Financing Agreements to which it is a party or “Subsidiary” under the applicable
Pledge Agreement are amended to remove such Released Borrower from therewith,
and (ii) all Liens in favor of Administrative Agent, for the benefit of the
Lenders, on the assets and property of each Released Borrower are released.
(b)    All obligations of the Released Borrower (other than contingent
indemnification obligations), in its capacity as a Borrower, created by the
Financing Agreements, or in its capacity as a Subsidiary, created under the
applicable Pledge Agreement, are hereby released without any further action by
any party hereto.
3.    No Other Amendments. Borrower acknowledges and expressly agrees that this
Amendment is limited to the extent expressly set forth herein and shall not
constitute a modification or amendment of the Loan Agreement or any other
Financing Agreements or a course of dealing at variance with the terms or
conditions of the Loan Agreement or any other Financing Agreements (other than
as expressly set forth in this Amendment and the other instruments, agreements,
certificates and documents required to be executed and delivered in connection
herewith).
4.    Representations and Warranties. In order to induce Administrative Agent
and Lenders to enter into this Amendment, Borrower hereby represents and
warrants to Administrative Agent and Lenders (which representations and
warranties shall survive the execution and delivery hereof), both before and
after giving effect to this Amendment that:
(a)    Each of the representations and warranties of each Borrower contained in
the Loan Agreement and the other Financing Agreements to which Borrower is a
party are true and correct in all material respects (without duplication of any
materiality carve out already provided therein) on and as of the date hereof, in
each case as if made on and as of such date, other than representations and
warranties that expressly relate solely to an earlier date (in which case such
representations and warranties were true and correct on and as of such earlier
date);
(b)    Borrower has the corporate or limited liability company (as applicable)
power and authority (i) to enter into the Loan Agreement as amended by this
Amendment and (ii) to do all acts and things as are required or contemplated
hereunder to be done, observed and performed by Borrower;
(c)    This Amendment has been duly authorized, validly executed and delivered
by one or more duly authorized officers of Borrower, and each of this Amendment,
the Loan Agreement as amended hereby, and each of the other Financing Agreements
to which Borrower is a party, constitutes the legal, valid and binding
obligations of Borrower, enforceable against Borrower in accordance with their
respective terms, subject to bankruptcy, insolvency or other similar laws
affecting the enforcement of creditor’s rights and remedies generally;
(d)    The execution and delivery of this Amendment and performance by Borrower
under this Amendment, the Loan Agreement and each of the other Financing
Agreements to which Borrower is a party do not and will not require the consent
or approval of any regulatory authority or governmental authority or agency
having jurisdiction over Borrower that has not already been obtained, nor be in
contravention of or in conflict with the organizational documents of Borrower,
or any provision of any statute, judgment, order, indenture, instrument,
agreement, or undertaking, to which Borrower is party or by which Borrower’s
respective assets or properties are bound; and
(e)    No Default or Event of Default will result after giving effect to this
Amendment, and no event has occurred that has had or could reasonably be
expected to have a Material Adverse Effect after giving effect to this
Amendment.
5.    Conditions Precedent to Effectiveness of this Amendment. The amendments
contained in Section 1 and the release contained in Section 2 of this Amendment
shall become effective on the date hereof as long as each of the following
conditions precedent is satisfied as determined by Administrative Agent:
(a)    all of the representations and warranties of Borrower under Section 4
hereof, which are made as of the date hereof, are true and correct;
(b)    receipt by Administrative Agent of duly executed signature pages to this
Amendment from Borrower and Lenders;
(c)    Administrative Agent shall have received a duly executed Reaffirmation of
Second Amended and Restated Guaranty in the form attached hereto;
(d)    Administrative Agent shall have received a duly executed Reaffirmation of
Pledge Agreements in the form attached hereto;
(e)    Administrative Agent shall have received the amount of reasonable fees
and out-of-pocket costs and expenses of counsel to Administrative Agent in
connection with the Amendment pursuant to Section 8 hereof and otherwise due and
owing pursuant to the Loan Agreement; and
(f)    Administrative Agent shall have received such other certificates,
schedules, exhibits, documents, opinions, affidavits, instruments,
reaffirmations, amendments, or consents that Administrative Agent may reasonably
require, if any.
1.    Reaffirmation; References to Loan Agreement; Additional Agreements and
Covenants; Etc.
(a)    Borrower acknowledges and agrees that all of Borrower’s obligations and
Liabilities under the Loan Agreement and the other Financing Agreements, as
amended hereby, are and shall be valid and enforceable and shall not be impaired
or limited by the execution or effectiveness of this Amendment. The first
priority perfected security interests and Liens and rights in the Collateral
securing payment of the Liabilities are hereby ratified and confirmed by
Borrower in all respects.
(b)    Upon the effectiveness of this Amendment, each reference in the Loan
Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of like
import shall mean and be a reference to the Loan Agreement, as amended by this
Amendment.
(c)    The failure by Administrative Agent, at any time or times hereafter, to
require strict performance by any Borrower of any provision or term of the Loan
Agreement, this Amendment or any of the Financing Agreements shall not waive,
affect or diminish any right of Administrative Agent hereafter to demand strict
compliance and performance herewith or therewith. Any suspension or waiver by
Administrative Agent of a breach of this Amendment or any Event of Default under
or pursuant to the Loan Agreement shall not, except as expressly set forth in a
writing signed by Administrative Agent, suspend, waive or affect any other
breach of this Amendment or any Event of Default under or pursuant to the Loan
Agreement, whether the same is prior or subsequent thereto and whether of the
same or of a different kind or character. None of the undertakings, agreements,
warranties, covenants and representations of any Borrower contained in this
Amendment, shall be deemed to have been suspended or waived by Administrative
Agent unless such suspension or waiver is (i) in writing and signed by
Administrative Agent (and, if applicable, the Required Lenders) and (ii)
delivered to Borrower by Administrative Agent or its counsel.
(d)    In no event shall Administrative Agent’s execution and delivery of this
Amendment establish a course of dealing among Administrative Agent, any
Borrower, pledgor or Guarantor or any other obligor, or in any other way
obligate Administrative Agent to hereafter provide any amendments or
modifications or, if at any time applicable, consents or waivers with respect to
the Loan Agreement or any other Financing Agreement. The terms and provisions of
this Amendment shall be limited precisely as written and shall not be deemed (x)
to be a consent to any amendment or modification of any other term or condition
of the Loan Agreement or of any of the Financing Agreements (except as expressly
provided herein or in any of the other instruments, agreements, certificates and
documents required to be executed and delivered in connection herewith); or (y)
to prejudice any right or remedy which Administrative Agent or the Lenders may
now have under or in connection with the Loan Agreement or any of the other
Financing Agreements. In the event an ambiguity or question of intent or
interpretation arises, this Amendment shall be construed as if drafted jointly
by the parties hereto, and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of the
provisions of this Amendment.
(e)    Except as expressly provided herein (or in any of the other instruments,
agreements, certificates and documents required to be executed and delivered in
connection herewith), the Loan Agreement and all of the other Financing
Agreements shall remain unaltered, and the Loan Agreement and all of the other
Financing Agreements shall remain in full force and effect and are hereby
ratified and confirmed in all respects.
2.    Release.
(a)    In consideration of, among other things, the consent and amendments
provided for herein, and for other good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, Borrower and Guarantor (on behalf
of themselves and their respective subsidiaries, Affiliates, successors and
assigns), and, to the extent permitted by applicable law and the same is claimed
by right of, through or under the above, for their past, present and future
employees, directors, members, managers, partners, agents, representatives,
officers, directors, and equity holders (all collectively, with Borrower and
Guarantor, the “Releasing Parties”), do hereby unconditionally, irrevocably,
fully, and forever remise, satisfy, acquit, release and discharge Administrative
Agent and Lenders and each of Administrative Agent’s and Lender’s past, present
and future officers, directors, agents, employees, attorneys, parent,
shareholders, successors, assigns, subsidiaries and Affiliates and all other
persons and entities to whom Administrative Agent or Lenders would be liable if
such persons or entities were found in any way to be liable to any of the
Releasing Parties (collectively, the “Lender Parties”), of and from any and all
manner of action and actions, cause and causes of action, claims, cross-claims,
charges, demands, counterclaims, suits, proceedings, disputes, debts, dues, sums
of money, accounts, bonds, covenants, contracts, controversies, damages,
judgments, liabilities, damages, costs, expenses, executions, liens, claims of
liens, claims of costs, penalties, attorneys’ fees, or any other compensation,
recovery or relief on account of any liability, obligation, demand, proceedings
or cause of action of whatever nature, whether in law, equity or otherwise
(including, without limitation, those arising under 11 U.S.C. §§ 541-550 and
interest or other carrying costs, penalties, legal, accounting and other
professional fees and expenses, and incidental, consequential and punitive
damages payable to third parties), whether known or unknown, fixed or
contingent, joint and/or several, secured or unsecured, due or not due, primary
or secondary, liquidated or unliquidated, contractual or tortious, direct,
indirect, or derivative, asserted or unasserted, foreseen or unforeseen,
suspected or unsuspected, now existing, heretofore existing or which may have
heretofore accrued against any or all of Lender Parties, whether held in a
personal or representative capacity, that the Releasing Parties (or any of them)
have or may have against the Lender Parties or any of them (whether directly or
indirectly) and which are based on any act, fact, event, action or omission or
any other matter, condition, cause or thing occurring at or from any time prior
to and including the date hereof in any way, directly or indirectly arising out
of, connected with or relating to this Amendment, the Loan Agreement or any
other Financing Agreement and the transactions contemplated hereby and thereby,
the Collateral or the Liabilities, and all other agreements, certificates,
instruments and other documents and statements (whether written or oral) related
to any of the foregoing, other than any applicable good faith claim as to which
a final determination is made in a judicial proceeding (in which Administrative
Agent and any of the Released Parties have had an opportunity to be heard) which
determination includes a specific finding that Administrative Agent acted in a
grossly negligent manner or with actual willful misconduct or illegal activity.
Borrower and Guarantor each acknowledges that Administrative Agent and Lenders
are specifically relying upon the representations, warranties and agreements
contained herein and that such representations, warranties and agreements
constitute a material inducement to Administrative Agent and Lenders in entering
into this Amendment.
(b)    Borrower and Guarantor each understands, acknowledges and agrees that the
release set forth above may be pleaded as a full and complete defense and may be
used as a basis for an injunction against any action, suit or other proceeding
which may be instituted, prosecuted or attempted in breach of the provisions of
such release.
(c)    To the furthest extent permitted by law, Borrower and Guarantor each
hereby knowingly, voluntarily, intentionally and expressly waives and
relinquishes any and all rights and benefits that it respectively may have as
against Lender Parties under any law, rule or regulation of any jurisdiction
that would or could have the effect of limiting the extent to which a general
release extends to claims which a Lender Party or Releasing Party does not know
or suspect to exist as of the date hereof. Borrower and Guarantor each hereby
acknowledges that the waiver set forth in the prior sentence was separately
bargained for and that such waiver is an essential term and condition of this
Amendment (and without which the amendment in Section 1 and the release in
Section 2 hereof would not have been agreed to by Administrative Agent and
Lenders).
3.    Costs and Expenses. Without limiting the obligation of Borrower to
reimburse Administrative Agent for all costs, fees, disbursements and expenses
incurred by Administrative Agent as specified in the Loan Agreement, Borrower
agrees to and shall pay on demand all reasonable costs, fees, disbursements and
expenses of Administrative Agent in connection with the preparation,
negotiation, revision, execution and delivery of this Amendment and the other
agreements, amendments, modifications, reaffirmations, instruments and documents
contemplated hereby, including, without limitation, reasonable attorneys’ fees
and out-of-pocket expenses. All obligations provided herein shall survive any
termination of this Amendment and the Loan Agreement as amended hereby.
4.    Financing Agreement. This Amendment shall constitute a Financing
Agreement.
5.    Titles. Titles and section headings herein shall be without substantive
meaning and are provided solely for the convenience of the parties.
6.    Severability; Etc. Whenever possible, each provision of this Amendment
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Amendment shall be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provisions or the remaining provisions of this Amendment. The parties
hereto have participated jointly in the negotiation and drafting of this
Amendment. In the event an ambiguity or question of intent or interpretation
arises, this Amendment shall be construed as if drafted jointly by the parties
hereto, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Amendment.
7.    Successors and Assigns. This Amendment shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns;
provided, however, no Borrower may assign any of its respective rights or
obligations under this Amendment without the prior written consent of
Administrative Agent.
8.    Further Assurances. Borrower shall, at its own cost and expense, cause to
be promptly and duly taken, executed, acknowledged and delivered all such
further acts, certificates, instruments, reaffirmations, amendments, documents
and assurances as may from time to time be necessary or as Administrative Agent
may from time to time reasonably request in order to more fully carry out the
intent and purposes of this Amendment or any of the other instruments,
agreements, certificates and documents required to be executed and delivered in
connection herewith.
9.    Counterparts; Faxes. This Amendment may be executed in multiple
counterparts, each of which shall be deemed to be an original and all of which
when taken together shall constitute one and the same agreement. A signature
hereto sent or delivered by facsimile or other electronic transmission shall be
as legally binding and enforceable as a signed original for all purposes.
10.    Governing Law. This Amendment shall be governed by and construed and
enforced in accordance with the internal laws of the State of Illinois, without
regard to conflict of law principles that would require the application of any
other laws.
[Signature Pages Follow]

IN WITNESS WHEREOF, the parties hereto have duly executed this Fifth Amendment
to Second Amended and Restated Term Loan and Security Agreement and Omnibus
Release as of the day and year first above written.
BORROWER:

DIVERSICARE AFTON OAKS, LLC
DIVERSICARE BRIARCLIFF, LLC
DIVERSICARE CHISOLM, LLC
DIVERSICARE HARTFORD, LLC
DIVERSICARE WINDSOR HOUSE, LLC
 
By:
Diversicare Leasing Corp., its sole member
 
By:
/s/Kerry D. Massey
 
Name: Kerry D. Massey
 
Its: Executive Vice President and Chief Financial Officer
DIVERSICARE OF CHANUTE, LLC
DIVERSICARE OF COUNCIL GROVE, LLC
DIVERSICARE OF HAYSVILLE, LLC
DIVERSICARE OF SEDGWICK, LLC
DIVERSICARE OF HUTCHINSON, LLC
DIVERSICARE OF LARNED, LLC
By:

Diversicare Kansas, LLC, its sole member

 
By:
/s/Kerry D. Massey
 
Name: Kerry D. Massey
 
Its: Executive Vice President and Chief Financial Officer

DIVERSICARE PROPERTY CO., LLC
 
 
 
By:
/s/Kerry D. Massey
 
Name: Kerry D. Massey
 
Its: Executive Vice President and Chief Financial Officer

DIVERSICARE AFTON OAKS PROPERTY, LLC
DIVERSICARE BRIARCLIFF PROPERTY, LLC
DIVERSICARE CHANUTE PROPERTY, LLC
DIVERSICARE CHISOLM PROPERTY, LLC
DIVERSICARE COUNCIL GROVE PROPERTY, LLC
DIVERSICARE HAYSVILLE PROPERTY, LLC
DIVERSICARE HARTFORD PROPERTY, LLC
DIVERSICARE HILLCREST PROPERTY, LLC
DIVERSICARE LAMPASAS PROPERTY, LLC
DIVERSICARE LARNED PROPERTY, LLC
DIVERSICARE SEDGWICK PROPERTY, LLC
DIVERSICARE WINDSOR HOUSE PROPERTY, LLC
DIVERSICARE YORKTOWN PROPERTY, LLC
DIVERSICARE HUTCHINSON PROPERTY, LLC
DIVERSICARE SELMA PROPERTY, LLC
By:
Diversicare Property Co., LLC, its sole member
 
By:
/s/Kerry D. Massey
 
Name: Kerry D. Massey
 
Its: Executive Vice President and Chief Financial Officer

DIVERSICARE OF SELMA, LLC
By:
Diversicare Holding Company, LLC, its sole member
 
By:
/s/Kerry D. Massey
 
Name: Kerry D. Massey
 
Its: Executive Vice President and Chief Financial Officer

RELEASED BORROWER:

DIVERSICARE HILLCREST, LLC
DIVERSICARE LAMPASAS, LLC
DIVERSICARE YORKTOWN, LLC

By:
DIVERSICARE LEASING CORP., its sole member

By: /s/Kerry D. Massey            
    Name: Kerry D. Massey
Its:
Executive Vice President and Chief Financial Officer

Acknowledged and Agreed:
DIVERSICARE HEALTHCARE SERVICES, INC.
 
By: /s/James R. McKnight, Jr.        
Name: James R. McKnight, Jr.
Its: President and Chief Executive Officer

ADMINISTRATIVE AGENT:

CIBC BANK USA, formerly known as The PrivateBank and Trust Company, in its
capacity as administrative agent

By:_/s/Adam D. Panos____________________
Name: Adam D. Panos
Its: Managing Director

LENDER:

CIBC BANK USA, formerly known as The PrivateBank and Trust Company

By: _/s/Adam D. Panos____________________
Name: Adam D. Panos
Its: Managing Director

LENDER:

BANKERS TRUST COMPANY

By: /s/Jon M. Doll___________________________
Name: Jon M. Doll
Its: Vice President

LENDER:

BOKF, NA D/B/A BANK OF OKLAHOMA

By: /s/Ky Chaffin                
Name: Ky Chaffin
Its: Senior Vice President

LENDER:

CIT BANK, N.A.

By: /s/Richard Reynoso            
Name: Richard Reynoso
Its: Vice President

LENDER:
OPUS BANK,  
a California commercial bank 

By:
/s/Sangjin Na
 
Name: Sangjin Na
 
Its: Vice President

LENDER:
FRANKLIN SYNERGY BANK
By:
/s/Lisa Fletcher
 
Name: Lisa Fletcher
 
Its: Senior Vice President
 
 

REAFFIRMATION OF SECOND AMENDED AND RESTATED GUARANTY

Dated as of May 13, 2019
The undersigned (“Guarantor”) hereby (i) confirms and agrees with CIBC BANK USA,
formerly known as The PrivateBank and Trust Company, an Illinois banking
corporation, in its capacity as administrative agent (together with its
successors and assigns, “Administrative Agent”) that Guarantor’s Second Amended
and Restated Guaranty dated as of February 26, 2016 made in favor of
Administrative Agent (as amended or modified, “Guaranty”), remains in full force
and effect and is hereby ratified and confirmed in all respects, including with
regard to the Second Amended and Restated Term Loan and Security Agreement dated
as of February 26, 2016, as amended prior to the date hereof and as further
amended by the foregoing Fifth Amendment to Second Amended and Restated Term
Loan and Security Agreement and Omnibus Release (“Amendment”), and each
reference to the “Loan Agreement” shall refer to the Loan Agreement as amended
by the Amendment; (ii) represents and warrants to Administrative Agent, which
representations and warranties shall survive the execution and delivery hereof,
that Guarantor’s representations and warranties contained in the Guaranty are
true and correct as of the date hereof, with the same effect as though made on
the date hereof, except to the extent that such representations expressly
related solely to an earlier date, in which case such representations were true
and correct on and as of such earlier date (and except for the representations
in Section 10(b) thereof which were true and correct on and as of the date when
made); (iii) agrees and acknowledges that such ratification and confirmation is
not a condition to the continued effectiveness of the Amendment or the Guaranty;
and (iv) agrees that neither such ratification and confirmation, nor
Administrative Agent’s solicitation of such ratification and confirmation,
constitutes a course of dealing giving rise to any obligation or condition
requiring a similar or any other ratification or confirmation from the
undersigned with respect to subsequent amendments or modifications, if any, to
the Loan Agreement, as amended by the Amendment or any other Financing Agreement
(as defined in the Loan Agreement, as amended by the Amendment). The execution,
delivery and effectiveness of this instrument shall not operate as a waiver of
any right, power or remedy of Administrative Agent under or pursuant to the
Guaranty. Guarantor acknowledges and agrees that Guarantor has received and
reviewed a fully-executed copy of the Amendment (and any other instrument,
document or agreement executed or delivered in connection therewith) and
understands the contents thereof. A signature hereto sent or delivered by
facsimile or other electronic transmission shall be as legally binding and
enforceable as a signed original for all purposes. This instrument shall be
governed by and construed and enforced in accordance with the internal laws of
the State of Illinois, without regard to conflict of law principles that would
require the application of any other laws.
[Signature Page Follows]

IN WITNESS WHEREOF, the undersigned has duly executed this Reaffirmation of
Second Amended and Restated Guaranty on and as of the date above.

DIVERSICARE HEALTHCARE SERVICES, INC. (F/K/A ADVOCAT INC.)

By:/s/James R. McKnight, Jr.                
Name: James R. McKnight, Jr.
Its:    President and Chief Executive Officer

    

REAFFIRMATION OF PLEDGE AGREEMENTS

Dated as of May 13, 2019
For good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the undersigned, respectively and as applicable hereby (a)
confirms and agrees with CIBC BANK USA, formerly known as The PrivateBank and
Trust Company, an Illinois banking corporation, in its capacity as
administrative agent (together with its successors and assigns, “Administrative
Agent”), that (i) Second Amended and Restated Pledge Agreement by and between
Diversicare Management Services Co. and Administrative Agent dated as of
February 26, 2016, (ii) Second Amended and Restated Pledge Agreement by and
between Advocat Finance, Inc. and Administrative Agent dated as of February 26,
2016, (iii) Second Amended and Restated Pledge Agreement by and between
Diversicare Leasing Corp. and Administrative Agent dated as of February 26,
2016, (iv) Second Amended and Restated Pledge Agreement by and between Senior
Care Florida Leasing Corp. and Administrative Agent dated as of February 26,
2016, (v) Amended and Restated Pledge Agreement by and between Diversicare
Leasing Company II, LLC and Administrative Agent dated as of February 26, 2016,
(vi) Amended and Restated Pledge Agreement by and between Diversicare Kansas,
LLC and Administrative Agent dated as of February 26, 2016, (vii) Second Amended
and Restated Pledge Agreement by and between Diversicare Healthcare Services,
Inc. (f/k/a Advocat Inc.) and Administrative Agent dated as of February 26,
2016, (viii) Pledge Agreement by and between Diversicare Leasing Company III,
LLC and Administrative Agent dated as of October 1, 2016 and effective as of
October 3, 2016, (ix) Amended and Restated Pledge Agreement by and between
Diversicare Property Co., LLC and Administrative Agent dated as of February 26,
2016 and (x) Amended and Restated Pledge Agreement by and between Diversicare
Holding Company, LLC and Administrative Agent dated as of February 26, 2016 (the
foregoing, as the same may be amended, restated, supplemented or otherwise
modified from time to time, individually, “Pledge Agreement” and, collectively,
“Pledge Agreements”), each remains in full force and effect and is hereby
ratified and confirmed in all respects, including with regard to the Second
Amended and Restated Term Loan and Security Agreement dated as of February 26,
2016 by and among those certain affiliates of Diversicare Healthcare Services,
Inc. that are signatories thereto as borrowers, Administrative Agent and the
Lenders, as the same has been amended prior to the date hereof and as amended by
the foregoing Fifth Amendment to Second Amended and Restated Term Loan and
Security Agreement and Omnibus Release dated of even date herewith
(“Amendment”), and each reference to the “Loan Agreement” shall refer to the
Loan Agreement as amended by the Amendment, and all of the undersigned’s
respective liabilities and obligations under and pursuant to the respective
Pledge Agreement, as modified by the Amendment (if and as applicable), are and
shall be valid and enforceable and shall not be impaired or limited in any way
by the execution, delivery or effectiveness of the Amendment; (b) represents and
warrants to Administrative Agent and Lenders, which representations and
warranties shall survive the execution and delivery hereof, that each of the
undersigned’s representations and warranties contained in the Pledge Agreement
are true and correct as of the date hereof, with the same effect as though made
on the date hereof, except to the extent that such representations expressly
related solely to an earlier date, in which case such representations were true
and correct on and as of such earlier date, each of the undersigned has the full
right, authority and power to enter into this Reaffirmation and this
Reaffirmation constitutes the legal, valid and binding obligation of each of the
undersigned, enforceable against each of the undersigned in accordance with its
terms, subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar law affecting creditor’s rights generally and general
principles of equity; (c) agrees and acknowledges that such ratification and
confirmation is not a condition to the continued effectiveness of the Amendment
or the Pledge Agreement; and (d) agrees that neither such ratification and
confirmation, nor the solicitation of such ratification and confirmation by
Administrative Agent and Lenders, constitutes a course of dealing giving rise to
any obligation or condition requiring a similar or any other ratification or
confirmation from the undersigned with respect to subsequent amendments or
modifications, if any, to the Loan Agreement, as amended by the Amendment or any
other Financing Agreement (as defined in the Loan Agreement). The execution,
delivery and effectiveness of this instrument shall not operate as a waiver of
any right, power or remedy of Administrative Agent or Lenders under the Pledge
Agreements. Each of the undersigned acknowledges and agrees that it has received
and reviewed a fully-executed copy of the Amendment and understands the contents
thereof. A signature hereto sent or delivered by facsimile or other electronic
transmission shall be as legally binding and enforceable as a signed original
for all purposes. Illinois law shall govern the construction, interpretation and
enforcement of this instrument.
[Signature Page Follows]

IN WITNESS WHEREOF, each of the undersigned has duly executed this Reaffirmation
of Pledge Agreements on and as of the date above.
DIVERSICARE MANAGEMENT SERVICES CO., a Tennessee corporation

By: /s/Kerry D. Massey            
Name: Kerry D. Massey
Its:
Executive Vice President and Chief Financial Officer

ADVOCAT FINANCE INC., a Delaware corporation

By: /s/Kerry D. Massey            
Name: Kerry D. Massey
Its:
Executive Vice President and Chief Financial Officer

DIVERSICARE LEASING CORP.,
a Tennessee corporation

By: /s/Kerry D. Massey            
Name: Kerry D. Massey
Its:
Executive Vice President and Chief Financial Officer

SENIOR CARE FLORIDA LEASING, LLC, a Delaware limited liability company

By: Diversicare Leasing Corp., its sole member

By: /s/Kerry D. Massey            
Name: Kerry D. Massey
Its:
Executive Vice President and Chief Financial Officer

DIVERSICARE LEASING COMPANY II, LLC, a Delaware limited liability company

By: /s/Kerry D. Massey            
Name: Kerry D. Massey
Its:
Executive Vice President and Chief Financial Officer

DIVERSICARE KANSAS, LLC, a Delaware limited liability company

By:    DIVERSICARE HOLDING COMPANY, LLC, its sole member

By: /s/Kerry D. Massey            
Name: Kerry D. Massey
Its:
Executive Vice President and Chief Financial Officer

DIVERSICARE LEASING COMPANY III, LLC,
a Delaware limited liability company

By: /s/Kerry D. Massey            
Name: Kerry D. Massey
Its:
Executive Vice President and Chief Financial Officer

DIVERSICARE HEALTHCARE SERVICES, INC., a Delaware corporation

By: /s/James R. McKnight, Jr.        
Name: James R. McKnight, Jr.
Its:
President and Chief Executive Officer

DIVERSICARE PROPERTY CO., LLC,
a Delaware limited liability company

By: /s/Kerry D. Massey            
Name: Kerry D. Massey
Its:
Executive Vice President and Chief Financial Officer

DIVERSICARE HOLDING COMPANY, LLC, a Delaware limited liability company

    By: /s/Kerry D. Massey            
Name: Kerry D. Massey
Its:
Executive Vice President and Chief Financial Officer

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