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FIRST AMENDMENT TO LOAN AGREEMENT
 Amendment Schedule 1 Borrower LASALLE BANK NATIONAL ASSOCIATION Lender
 RECITALS
 Loan Agreement
  NOW, THEREFORE
 Definitions
 Amendments to Loan Agreement
     Section 2.10(b) Section 2.15(a) Section 2.15(b)




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Conditions Precedent Section 2
   Reference to and Effect on the Loan Agreement.
   Costs, Expenses and Taxes
 2




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Representations and Warranties of the Borrower
    Reference to Loan Agreement; No Waiver.
   Successors and Assigns
 3




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provided however
 Severability
 Governing Law
 Counterparts; Facsimile or Other Electronic Transmission
 Signature Page Follows
 4




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IN WITNESS WHEREOF
 BORROWER:DIVERSICARE MANAGEMENT
SERVICES CO., a Tennessee corporation,
as Borrower AgentBy:
    /s/ Glynn RiddleName:
    Glynn RiddleIts:  Executive Vice President & Chief Financial
Officer ADVOCAT ANCILLARY SERVICES,
INC., a Tennessee corporationBy:
    /s/ Glynn RiddleName:
    Glynn RiddleIts: Executive Vice President & Chief Financial
Officer ADVOCAT FINANCE, INC., a Delaware
corporationBy:
    /s/ Glynn RiddleName:
    Glynn RiddleIts:  Executive Vice President & Chief Financial
Officer DIVERSICARE MANAGEMENT
SERVICES CO., a Tennessee corporationBy:
    /s/ Glynn RiddleName:
    Glynn RiddleIts: Executive Vice President & Chief Financial
Officer




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ADVOCAT DISTRIBUTION
SERVICES, INC., a Tennessee corporationBy:
    /s/ Glynn RiddleName:
    Glynn RiddleIts: Executive Vice President & Chief Financial
Officer DIVERSICARE ASSISTED LIVING
SERVICES, INC., a Tennessee corporationBy:
    /s/ Glynn RiddleName:
    Glynn RiddleIts: Executive Vice President & Chief Financial
Officer DIVERSICARE ASSISTED LIVING
SERVICES NC, LLC, a Tennessee limited
liability companyBy:
    /s/ Glynn RiddleName:
    Glynn RiddleIts: Executive Vice President & Chief Financial
Officer DIVERSICARE LEASING CORP., a
Tennessee corporationBy:
    /s/ Glynn RiddleName:
    Glynn RiddleIts: Executive Vice President & Chief Financial
Officer STERLING HEALTH CARE
MANAGEMENT, INC., a Kentucky corporationBy:
    /s/ Glynn RiddleName:
    Glynn RiddleIts: Executive Vice President & Chief Financial
Officer




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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:
    /s/ Glynn RiddleName:
    Glynn RiddleIts: 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:
    /s/ Glynn RiddleName:
    Glynn RiddleIts: Executive Vice President & Chief
Financial Officer 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:
    /s/ Glynn RiddleName:
    Glynn RiddleIts:  Executive Vice President & Chief
Financial Officer




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SENIOR CARE FLORIDA LEASING, 
LLC, a Delaware limited liability company BY:
    
    DIVERSICARE LEASING CORP., its sole member
 By:
    /s/ Glynn RiddleName:
    Glynn RiddleIts: 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:
    /s/ Glynn RiddleName:
    Glynn RiddleIts: Executive Vice President & Chief
Financial Officer DIVERSICARE AFTON OAKS, LLC, a
Delaware limited liability company BY:
    
    DIVERSICARE LEASING CORP., its sole member
 By:
    /s/ Glynn RiddleName:
    Glynn RiddleIts: Executive Vice President & Chief
Financial Officer




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DIVERSICARE ASSISTED LIVING
SERVICES NC I, LLC, a Delaware limited
liability company BY:
    
    DIVERSICARE ASSISTED LIVING SERVICES NC, LLC,
its sole member
 By:
    /s/ Glynn RiddleName:
    Glynn RiddleIts: Executive Vice President & Chief
Financial Officer DIVERSICARE ASSISTED LIVING
SERVICES NC II, LLC, a Delaware limited
liability company BY:
    
    DIVERSICARE ASSISTED LIVING SERVICES NC, LLC,
its sole member
 By:
    /s/ Glynn RiddleName:
    Glynn RiddleIts: Executive Vice President & Chief
Financial Officer DIVERSICARE BRIARCLIFF, LLC, a
Delaware limited liability company BY:
    
    DIVERSICARE LEASING CORP., its sole member
 By:
    /s/ Glynn RiddleName:
    Glynn RiddleIts: Executive Vice President & Chief
Financial Officer DIVERSICARE CHISOLM, LLC, a
Delaware limited liability company BY:
    
    DIVERSICARE LEASING CORP., its sole member
 By:
    /s/ Glynn RiddleName:
    Glynn RiddleIts: Executive Vice President & Chief
Financial Officer




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DIVERSICARE HARTFORD, LLC, a
Delaware limited liability company BY:
    
    DIVERSICARE LEASING CORP., its sole member
 By:
    /s/ Glynn RiddleName:
    Glynn RiddleIts: Executive Vice President & Chief
Financial Officer DIVERSICARE HILLCREST, LLC, a
Delaware limited liability company BY:
    
    DIVERSICARE LEASING CORP., its sole member
 By:
    /s/ Glynn RiddleName:
    Glynn RiddleIts:  Executive Vice President & Chief
Financial Officer DIVERSICARE LAMPASAS, LLC, a
Delaware limited liability company BY:
    
    DIVERSICARE LEASING CORP., its sole member
 By:
    /s/ Glynn RiddleName:
    Glynn RiddleIts: Executive Vice President & Chief
Financial Officer DIVERSICARE PINEDALE, LLC, a
Delaware limited liability company BY:
    
    DIVERSICARE LEASING CORP., its sole member
 By:
    /s/ Glynn RiddleName:
    Glynn RiddleIts: Executive Vice President & Chief
Financial Officer




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DIVERSICARE WINDSOR HOUSE,
LLC, a Delaware limited liability company BY:
    
    DIVERSICARE LEASING CORP., its sole member
 By:
    /s/ Glynn RiddleName:
    Glynn RiddleIts: Executive Vice President & Chief
Financial Officer DIVERSICARE YORKTOWN, LLC, a
Delaware limited liability company BY:
    
    DIVERSICARE LEASING CORP., its sole member
 By:
    /s/ Glynn RiddleName:
    Glynn RiddleIts: Executive Vice President & Chief
Financial Officer DIVERSICARE BALLINGER, LLC, a
Delaware limited liability company BY:
    
    DIVERSICARE TEXAS I, LLC, its sole member
 By:
    /s/ Glynn RiddleName:
    Glynn RiddleIts: Executive Vice President & Chief
Financial Officer DIVERSICARE DOCTORS, LLC, a
Delaware limited liability company BY:
    
    DIVERSICARE TEXAS I, LLC, its sole member
 By:
    /s/ Glynn RiddleName:
    Glynn RiddleIts: Executive Vice President & Chief
Financial Officer




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DIVERSICARE ESTATES, LLC, a
Delaware limited liability company BY:
    
    DIVERSICARE TEXAS I, LLC, its sole member
 By:
    /s/ Glynn RiddleName:
    Glynn RiddleIts: Executive Vice President & Chief
Financial Officer DIVERSICARE HUMBLE, LLC, a
Delaware limited liability company BY:
    
    DIVERSICARE TEXAS I, LLC, its sole member
 By:
    /s/ Glynn RiddleName:
    Glynn RiddleIts:  Executive Vice President & Chief
Financial Officer DIVERSICARE KATY, LLC, a Delaware
limited liability company BY:
    
    DIVERSICARE TEXAS I, LLC, its sole member
 By:
    /s/ Glynn RiddleName:
    Glynn RiddleIts: Executive Vice President & Chief
Financial Officer DIVERSICARE NORMANDY
TERRACE, LLC, a Delaware limited
liability company BY:
    
    DIVERSICARE TEXAS I, LLC, its sole member
 By:
    /s/ Glynn RiddleName:
    Glynn RiddleIts:  Executive Vice President & Chief
Financial Officer




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DIVERSICARE TEXAS I, LLC, a
Delaware limited liability companyBy:
    /s/ Glynn RiddleName:
    Glynn RiddleIts: Executive Vice President & Chief Financial
Officer DIVERSICARE TREEMONT, LLC, a
Delaware limited liability company BY:
    
    DIVERSICARE TEXAS I, LLC, its sole member
 By:
    /s/ Glynn RiddleName:
    Glynn RiddleIts: Executive Vice President & Chief
Financial Officer DIVERSICARE ROSE TERRACE, LLC,
a Delaware limited liability company BY:
    
    DIVERSICARE LEASING CORP., its sole member
 By:
    /s/ Glynn RiddleName:
    Glynn RiddleIts: Executive Vice President & Chief
Financial Officer LENDER:
LASALLE BANK NATIONAL ASSOCIATIONBy:
    /s/ Joshua KochekJoshua KochekVice President




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SCHEDULE 1




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SCHEDULE 1.1(g)
  Alabama
 
 Arkansas
  Tennessee
  Texas