EX-10.5



 





Exhibit 10.5




REVOLVING CREDIT NOTE




					
	 	 	 	 	 
	$21,000,000.00
	 	 	 	August 10, 2007
	 
	 	 	 	Chicago, Illinois






     FOR VALUE RECEIVED, those certain entities set forth on Schedule 1 hereto, which are
signatories hereto (such entities individually and collectively, the “Revolving Loan
Borrower”), hereby jointly and severally promise to pay to the order of LASALLE BANK NATIONAL
ASSOCIATION, a national banking association (the “Lender”), at its office at 135 South
LaSalle Street, Chicago, Illinois 60603, or at such other place as the holder hereof may designate
in writing, in lawful money of the United States of America, the principal sum of Twenty-One
Million and No/100 Dollars ($21,000,000.00), or such lesser principal sum as may then be owed by
the Revolving Loan Borrower to the Lender hereunder, on or before August 10, 2010 (the “Stated
Maturity Date”); provided, however, on February 10, 2008 (i) the Maximum Revolving Facility (as
defined in the Loan Agreement (as defined below)) shall be reduced to Fifteen Million and No/100
Dollars ($15,000,000.00) and (ii) the outstanding principal amount of all Revolving Loans in excess
of $15,000,000.00 shall be immediately due and payable.



     THE INDEBTEDNESS EVIDENCED HEREBY SHALL BECOME IMMEDIATELY DUE AND PAYABLE UPON THE EARLIEST
TO OCCUR OF (X) THE STATED MATURITY DATE; (Y) THE ACCELERATION OF THE LIABILITIES (AS DEFINED IN
THE LOAN AND SECURITY AGREEMENT OF EVEN DATE HEREWITH AMONG THE BORROWER (AS DEFINED IN THE LOAN
AGREEMENT (AS DEFINED BELOW)) AND THE LENDER (AS AMENDED OR MODIFIED FROM TIME TO TIME, THE
“LOAN AGREEMENT”)) PURSUANT TO SECTION 11.2 OF THE LOAN AGREEMENT; AND (Z) THE
TERMINATION OF THE LOAN AGREEMENT (WHETHER BY PREPAYMENT OR OTHERWISE) IN ACCORDANCE WITH ITS
TERMS. Capitalized terms used but not defined herein shall have the meanings ascribed to such
terms in the Loan Agreement.



     This Revolving Credit Note shall bear interest on the unpaid principal amount hereof from time
to time outstanding from the date hereof until the Stated Maturity Date, or until maturity due to
acceleration or otherwise and, after maturity, until paid, at the rates per annum and upon the
terms specified in the Loan Agreement. Accrued interest on the Revolving Loans shall be due and
payable and shall be made by the Revolving Loan Borrower to the Lender in accordance with
Section 2.7 of the Loan Agreement. Interest payments on such Revolving Loans shall be
computed using the interest rate then in effect pursuant to the Loan Agreement and based on the
outstanding principal balance of the Revolving Loans. Upon maturity, the outstanding principal
balance of the Revolving Loans shall be immediately due and payable, together with any remaining
accrued interest thereon.



     All payments on account of indebtedness evidenced by this Revolving Credit Note shall be first
applied to interest on the unpaid balance and the remainder to principal, unless otherwise
specified in the Loan Agreement. Payments of both principal and interest hereunder are to be made
in same day or immediately available funds.



 









 





     This Revolving Credit Note is the Revolving Credit Note referred to in the Loan Agreement, and
is subject to all of the terms and conditions of the Loan Agreement, as such Loan Agreement may
from time to time be amended, supplemented, or modified, which terms and conditions are hereby made
a part of this Revolving Credit Note to the same extent and with the same force and effect as if
they were fully set forth herein.



     Upon the occurrence or existence of any Event of Default (as such term is defined in the Loan
Agreement), including the failure to pay any principal, interest and/or fees in accordance with the
terms set forth in the Loan Agreement, which shall constitute an Event of Default under this
Revolving Credit Note, the Lender shall be entitled, at its sole option, to accelerate the then
outstanding indebtedness hereunder and take such other action as may be provided for in the Loan
Agreement, any Financing Agreement or otherwise by law.



     The remedies of the holder hereof as provided in this Revolving Credit Note, in the Loan
Agreement, and in any other Financing Agreement shall be cumulative and concurrent, and may be
pursued singly, successively, or together against the Revolving Loan Borrower, and/or against any
collateral or guarantor (including, without limitation, the Guarantor), at the sole discretion of
the holder hereof.



     The Revolving Loan Borrower hereby waives presentment for payment, demand, notice of
nonpayment, notice of dishonor, protest of any dishonor, notice of protest, and protest of this
Revolving Credit Note and all other notices in connection with the delivery, acceptance,
performance, default, or enforcement of the payment of this Revolving Credit Note, and agrees that
its liability shall be unconditional without regard to the liability of any other party or person
and shall not in any manner be affected by any indulgence, extension of time, renewal, waiver or
modification granted or consented to by the holder hereof; and the Revolving Loan Borrower agrees
that additional makers, endorsers, guarantors, or sureties may become parties hereto without notice
to the Revolving Loan Borrower or affecting the Revolving Loan Borrower’s liability hereunder.



     It being the intent of the Lender and the Revolving Loan Borrower that the rate of interest
and all other charges to the Revolving Loan Borrower be lawful, if for any reason the payment of a
portion of the interest or other charges otherwise required to be paid under this Revolving Credit
Note would exceed the limit which the Lender may lawfully charge the Revolving Loan Borrower, then
the obligation to pay interest or other charges shall automatically be reduced to such limit and,
if any amounts in excess of such limit shall have been paid, then such amounts shall at the option
of the Lender either be refunded to the Revolving Loan Borrower or credited to the principal amount
of this Revolving Credit Note so that under no circumstances shall the interest or other charges
required to be paid by the Revolving Loan Borrower hereunder exceed the maximum rate allowed by
law.



     The holder hereof shall not by any act of omission or commission be deemed to waive any of its
rights or remedies hereunder unless such waiver be in writing and signed by the holder hereof (and
then only to the extent specifically set forth therein). A waiver of any one event shall not be
construed as continuing or as a bar to or waiver of such right or remedy on a subsequent event.



2









 





     Whenever possible, each provision of this Revolving Credit Note and the Loan Agreement shall
be interpreted in such manner as to be effective and valid under Applicable Law, but if any
provision of this Revolving Credit Note or the Loan Agreement shall be prohibited or invalid under
such law, such provision shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions of this Revolving Credit Note or the Loan
Agreement.



     This Revolving Credit Note shall not be amended, supplemented or modified except pursuant to a
writing signed by both Lender and Revolving Loan Borrower.



     Without limiting the expansiveness of any similar provision contained in the Loan Agreement,
if at any time or times, Lender: (a) employs counsel in good faith for advice or other
representation (i) with respect to this Revolving Credit Note, the Loan Agreement, any of the other
Financing Agreements or any collateral securing this Revolving Credit Note, (ii) to represent
Lender in any restructuring, workout, litigation, contest, dispute, suit or proceeding or to
commence, defend or intervene or to take any other action in or with respect to any litigation,
contest, dispute or proceeding (whether instituted by Lender, Revolving Loan Borrower or any other
person or entity) in any way or respect relating to this Revolving Credit Note, the Loan Agreement,
any of the other Financing Agreements, any collateral securing this Revolving Credit Note or
Revolving Loan Borrower’s affairs, or (iii) to enforce any rights of Lender against Revolving Loan
Borrower; (b) takes any action to protect, collect, sell, liquidate or otherwise dispose of any
collateral securing this Revolving Credit Note; and/or (c) attempts to or enforces any of Lender’s
rights and remedies against Revolving Loan Borrower; the costs and expenses incurred by Lender in
any manner or way with respect to the foregoing shall be part of the indebtedness evidenced by this
Revolving Credit Note, payable by Revolving Loan Borrower to Lender on demand. Without limiting
the generality of the foregoing, such expenses and costs include: court costs, reasonable
attorneys’ fees and expenses, and accountants’ fees and expenses.



     Payment of this Revolving Credit Note is secured by the Collateral.



     Payment of this Note has been guaranteed by Advocat Inc., a Delaware corporation
(“Guarantor”), under a certain Guaranty dated of even date herewith. It is a covenant and
condition hereof that in case Guarantor shall be declared a bankrupt, or shall file a petition in
voluntary bankruptcy, or under Title 11 of the United States Code, or under any similar State or
Federal law, or Guarantor files any declaration, answer or pleading admitting Guarantor’s
insolvency or inability to pay or discharge Guarantor’s liabilities, or if a trustee or a receiver
is appointed for Guarantor, or for the property or estate of Guarantor, or should any court take
jurisdiction of Guarantor’s property or estate or should Guarantor make an assignment for the
benefit of Guarantor’s, then upon the occurrence of any such event, the Lender or the holder of
this Revolving Credit Note may declare that a default has occurred hereunder, and in consequences
thereof the entire unpaid principal balance and all accrued and unpaid interest thereon shall be
immediately due and payable; and in addition, the Lender or the holder of this Revolving Credit
Note may avail itself of any other right or remedy reserved to it under or identified in the Loan
Agreement and the Financing Agreements securing this Revolving Credit Note, and as set forth in law
or equity.



3









 





     The Revolving Loan Borrower shall use the proceeds represented by this Revolving Credit Note
solely for proper business purposes, and consistently with all Applicable Laws and statutes and the
Loan Agreement. The Revolving Loan Borrower further covenants with the Lender that the Revolving
Loan Borrower is not in the business of extending credit for the purpose of purchasing or carrying
margin security (within the meaning of Regulation U issued by the Board of Governors of the Federal
Reserve System), and no proceeds represented by this Revolving Credit Note will be used to purchase
or carry any margin securities or to extend credit to others for the purpose of purchasing or
carrying any margin securities.



     Any term or provision of this Revolving Credit Note, the Loan Agreement or any other Financing
Agreement to the contrary notwithstanding, the maximum aggregate amount of the Liabilities for
which any of the Revolving Loan Borrowers (which Liabilities are not direct borrowings or direct
obligations of such Revolving Loan Borrower (the “Non-Direct Obligations”)) shall be liable
shall not exceed the maximum amount for which such Revolving Loan Borrower can be liable without
rendering such Non-Direct Obligations, as they relate to such Revolving Loan Borrower, voidable
under Applicable Law relating to fraudulent conveyance or fraudulent transfer. To the extent that
any Revolving Loan Borrower shall be required hereunder to pay a portion of its Non-Direct
Obligations which shall exceed the greater of (i) the amount of the economic benefit actually
received by such Revolving Loan Borrower from any of the loans evidenced hereby in respect of such
Non-Direct Obligations, and (ii) the amount which such Revolving Loan Borrower would otherwise have
paid if such Revolving Loan Borrower had paid the aggregate amount of the Non-Direct Obligations of
such Revolving Loan Borrower (excluding the amount thereof repaid by the other Revolving Loan
Borrowers) in the same proportion as such Revolving Loan Borrower’s net worth at the date of any
applicable borrowing hereunder is sought bears to the aggregate net worth of all of the Revolving
Loan Borrowers at the date of such applicable borrowing hereunder is sought, then such Revolving
Loan Borrower shall be reimbursed by the other Revolving Loan Borrowers for the amount of such
excess, pro rata based on the respective net worths of the Revolving Loan Borrowers at the date of
such applicable borrowing with respect hereto is sought.



     This Revolving Credit Note shall inure to the benefit of Lender and its successors and assigns
and shall be binding upon the Revolving Loan Borrower and its successors and permitted assigns. As
used herein the term “Lender” shall mean and include the successors and assigns of the identified
payee and the holder or holders of this Revolving Credit Note from time to time.



     THIS REVOLVING CREDIT NOTE SHALL BE CONSTRUED IN ALL RESPECTS IN ACCORDANCE WITH, AND ENFORCED
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES.



     THE REVOLVING LOAN BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY:



          (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
REVOLVING CREDIT NOTE, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO
THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF



4









 






ILLINOIS, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF ILLINOIS AND
APPELLATE COURTS FROM ANY THEREOF;




          (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES TO
THE FULLEST EXTENT PERMITTED BY LAW IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING (i) ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO
PLEAD OR CLAIM THE SAME, (ii) THE RIGHT TO ASSERT OR IMPOSE ANY CLAIM, NONCOMPULSORY SET-OFF,
COUNTERCLAIM OR CROSS-CLAIM IN RESPECT THEREOF IN SUCH PROCEEDING; PROVIDED, HOWEVER, THIS WAIVER
DOES NOT PRECLUDE THE RIGHT TO ASSERT A DEFENSE IN SUCH ACTION OR PROCEEDING OR TO ASSERT OR IMPOSE
ANY CLAIM, COUNTERCLAIM OR CROSS-CLAIM WHICH THE REVOLVING LOAN BORROWER WISHES TO PURSUE IN A
SEPARATE PROCEEDING AT ITS SOLE COST AND EXPENSE, AND (iii) ALL STATUTES OF LIMITATIONS WHICH MAY
BE RELEVANT THERETO; AND




          (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING
A COPY THEREOF BY CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID,
RETURN RECEIPT REQUESTED, TO THE REVOLVING LOAN BORROWER AT ITS ADDRESS SET FORTH IN THE LOAN
AGREEMENT OR AT SUCH OTHER ADDRESS OF WHICH THE LENDER SHALL HAVE BEEN NOTIFIED PURSUANT THERETO.
THE REVOLVING LOAN BORROWER AGREES THAT SUCH SERVICE, TO THE FULLEST EXTENT PERMITTED BY LAW (i)
SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE REVOLVING LOAN BORROWER IN
ANY SUIT, ACTION OR PROCEEDING, AND (ii) SHALL BE TAKEN AND HELD TO BE VALID PERSONAL SERVICE UPON
AND PERSONAL DELIVERY TO THE REVOLVING LOAN BORROWER. SOLELY TO THE EXTENT PROVIDED BY APPLICABLE
LAW, SHOULD THE REVOLVING LOAN BORROWER, AFTER BEING SERVED, FAIL TO APPEAR OR ANSWER TO ANY
SUMMONS, COMPLAINT, PROCESS OR PAPERS SO SERVED WITHIN THE NUMBER OF DAYS PRESCRIBED BY LAW AFTER
THE DELIVERY OR MAILING THEREOF, THE REVOLVING LOAN BORROWER SHALL BE DEEMED IN DEFAULT AND AN
ORDER AND/OR JUDGMENT MAY BE ENTERED BY THE COURT AGAINST THE REVOLVING LOAN BORROWER AS DEMANDED
OR PRAYED FOR IN SUCH SUMMONS, COMPLAINT, PROCESS OR PAPERS. NOTHING HEREIN SHALL AFFECT THE
LENDER’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR LIMIT THE LENDER’S RIGHT
TO BRING PROCEEDINGS AGAINST THE REVOLVING LOAN BORROWER OR ITS PROPERTY IN ANY COURT OR ANY OTHER
JURISDICTION.




     THE REVOLVING LOAN BORROWER (AND THE LENDER) HEREBY IRREVOCABLY AND KNOWINGLY WAIVE (TO THE
FULLEST EXTENT PERMITTED BY LAW) ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
(INCLUDING, WITHOUT LIMITATION, ANY COUNTERCLAIM) ARISING OUT OF THIS REVOLVING CREDIT NOTE, ANY OF
THE FINANCING



5









 







AGREEMENTS OR ANY OTHER AGREEMENTS OR TRANSACTIONS RELATED HERETO OR THERETO, INCLUDING,
WITHOUT LIMITATION, ANY ACTION OR PROCEEDING (A) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN
CONNECTION WITH THIS REVOLVING CREDIT NOTE OR ANY INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR
WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH, OR (B) ARISING FROM ANY DISPUTE OR
CONTROVERSY IN CONNECTION WITH OR RELATED TO THIS REVOLVING CREDIT NOTE AND THE FINANCING
AGREEMENTS. THE LENDER AND THE REVOLVING LOAN BORROWER AGREE THAT ANY SUCH ACTION OR PROCEEDING
SHALL BE TRIED BEFORE A COURT AND NOT A JURY.



6









 





     IN WITNESS WHEREOF, each Revolving Loan Borrower has caused this Revolving Credit Note to be
duly executed by its authorized officer as of the date first above written.



	 	 	 	 	 	 	 
	 	 	ADVOCAT ANCILLARY SERVICES, INC., a Tennessee
corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President
& Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	ADVOCAT FINANCE, INC., a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President
& Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE MANAGEMENT SERVICES CO., a
Tennessee corporation	 	 
	 
	 	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President
& Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	ADVOCAT DISTRIBUTION SERVICES, INC., a
Tennessee corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President
& Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE ASSISTED LIVING SERVICES, INC., a
Tennessee corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President
& Chief Financial Officer	 	 






7









 








	 	 	 	 	 	 	 
	 	 	DIVERSICARE ASSISTED LIVING SERVICES NC, LLC,
a Tennessee limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE LEASING CORP., a Tennessee
corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	STERLING HEALTH CARE MANAGEMENT, INC., a
Kentucky corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	SENIOR CARE CEDAR HILLS, LLC, a Delaware
limited liability company	 	 
	 
	 	 	BY:	 	SENIOR CARE FLORIDA LEASING, LLC,
its sole member	 
	 
	 	 	 	 	BY:  DIVERSICARE LEASING CORP., its sole member	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	SENIOR CARE GOLFCREST, LLC, a Delaware limited
liability company	 	 
	 
	 	 	BY:	 	SENIOR CARE FLORIDA LEASING, LLC,
its sole member	 
	 
	 	 	 	 	BY:  DIVERSICARE LEASING CORP., its sole member	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 






8









 






	 	 	 	 	 	 	 
	 	 	SENIOR CARE GOLFVIEW, LLC, a Delaware limited
liability company	 	 
	 
	 	 	BY:	 	SENIOR CARE FLORIDA LEASING, LLC,
its sole member	 
	 
	 	 	 	 	BY:  DIVERSICARE LEASING CORP., its sole member	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	SENIOR CARE FLORIDA LEASING, LLC, a Delaware
limited liability company	 	 
	 
	 	 	BY:	 	DIVERSICARE LEASING CORP.,
its sole member	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	SENIOR CARE SOUTHERN PINES, LLC, a Delaware
limited liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	SENIOR CARE FLORIDA LEASING, LLC,
its sole member	 
	 
	 	 	 	 	BY:  DIVERSICARE LEASING CORP., its sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE AFTON OAKS, LLC, a Delaware
limited liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE LEASING CORP.,
its sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE ASSISTED LIVING SERVICES NC I,
LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE ASSISTED
LIVING SERVICES NC, LLC, its sole member 	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 






9









 






	 	 	 	 	 	 	 
	 	 	DIVERSICARE ASSISTED LIVING SERVICES NC II,
LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	 
	 	 	BY:	 	DIVERSICARE ASSISTED LIVING SERVICES NC, LLC,its sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE BRIARCLIFF, LLC, a Delaware
limited liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE LEASING CORP., its
sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE CHISOLM, LLC, a Delaware limited
liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE LEASING CORP., its
sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE HARTFORD, LLC, a Delaware limited
liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE LEASING CORP.,
its sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE HILLCREST, LLC, a Delaware limited
liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE LEASING CORP.,
its sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 






10









 






	 	 	 	 	 	 	 
	 	 	DIVERSICARE LAMPASAS, LLC, a Delaware limited
liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE LEASING CORP.,
its sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE PINEDALE, LLC, a Delaware limited
liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE LEASING CORP., its
sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE WINDSOR HOUSE, LLC, a Delaware
limited liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE LEASING CORP., its
sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE YORKTOWN, LLC, a Delaware limited
liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE LEASING CORP., its
sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE BALLINGER, LLC, a Delaware limited
liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE TEXAS I, LLC., its sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 






11









 







	 	 	 	 	 	 	 
	 	 	DIVERSICARE DOCTORS, LLC, a Delaware limited
liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE TEXAS I, LLC, its
sole
member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE ESTATES, LLC, a Delaware limited
liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE TEXAS I, LLC, its
sole
member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief
Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE HUMBLE, LLC, a Delaware limited
liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE TEXAS I, LLC, its
sole
member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE KATY, LLC, a Delaware limited
liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE TEXAS I, LLC, its
sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE NORMANDY TERRACE, LLC, a Delaware
limited liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE TEXAS I, LLC, its
sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 






12









 






	 	 	 	 	 	 	 
	 	 	DIVERSICARE TEXAS I, LLC, a Delaware limited
liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE TREEMONT, LLC, a Delaware limited
liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE TEXAS I, LLC, its
sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE ROSE TERRACE, LLC, a Delaware
limited liability company	 	 
	 
	 	 	 	 	 	 
	 
	 	 	BY:	 	DIVERSICARE LEASING CORP.,
its sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 






13









 






Schedule 1




REVOLVING LOAN BORROWERS




Advocat Ancillary Services, Inc.

Advocat Finance, Inc.

Diversicare Management Services Co.

Advocat Distribution Services, Inc.

Diversicare Assisted Living Services, Inc.

Diversicare Assisted Living Services NC, LLC

Diversicare Leasing Corp.

Sterling Health Care Management, Inc.

Senior Care Cedar Hills, LLC

Senior Care Golfcrest, LLC

Senior Care Golfview, LLC

Senior Care Florida Leasing, LLC

Senior Care Southern Pines, LLC

Diversicare Afton Oaks, LLC

Diversicare Assisted Living Services NC I, LLC

Diversicare Assisted Living Services NC II, LLC

Diversicare Briarcliff, LLC

Diversicare Chisolm, LLC

Diversicare Hartford, LLC

Diversicare Hillcrest, LLC,

Diversicare Lampasas, LLC

Diversicare Pinedale, LLC

Diversicare Windsor House, LLC

Diversicare Yorktown, LLC

Diversicare Ballinger, LLC

Diversicare Doctors, LLC

Diversicare Estates, LLC

Diversicare Humble, LLC

Diversicare Katy, LLC

Diversicare Normandy Terrace, LLC




14









 





Diversicare Texas I, LLC

Diversicare Treemont, LLC

Diversicare Rose Terrace, LLC





15