**Exhibit 10.2****LOAN AND SECURITY AGREEMENT**     **THIS LOAN AND SECURITY AGREEMENT**(the “Agreement”), made as of August 10, 2007, betweenDiversicare Leasing Corp., a Tennessee corporation, hereinafter referred to as the “Lender”, andBridge Associates LLC, as trustee for the SMSA Creditors’ Trust, a Texas trust, hereinafterreferred to as “Borrower”.     **WHEREAS,**twenty-four entities (individually the “Debtor” and collectively the “Debtors”) filedvoluntary chapter 11 petitions on January 17, 2007, and these bankruptcy cases are being jointlyadministered in the case of *Senior Management Services of Treemont, Inc.*, Bankruptcy Case No.07-30230, in the U.S. Bankruptcy Court for the Northern District of Texas;     **WHEREAS,**a Liquidating Trust (as defined in the Modified Plan and sometimes referred to hereinas the “SMSA Creditors’ Trust”) has been established pursuant to the terms of the First AmendedChapter 11 Plan Proposed dated June 17, 2007 jointly filed by the Debtors, which plan was modifiedand filed as the *First Amended Modified Chapter 11 Plan Proposed by the Debtors*(the “ModifiedPlan”);     **WHEREAS,**on August 1, 2007, the Bankruptcy Court held a hearing on the Modified Plan andentered an order confirming the Modified Plan on such date (the “Confirmation Order”);     **WHEREAS,**Borrower is the duly appointed and serving trustee of the SMSA Creditors’ Trust, aswell as the Plan Agent (as defined in the Modified Plan);     **WHEREAS**, Lender has agreed to loan to Borrower up to Two Million Two Hundred Thousand Dollars($2,200,000.00) (the “Loan”); and     **WHEREAS,**as a condition to the Loan, Borrower has agreed to grant Lender a first prioritysecurity interest in certain collateral described herein;     **NOW, THEREFORE**, for good and valuable consideration Lender and Borrower hereby agree asfollows:**I. CREDIT FACILITY**     1.1 Subject to the terms and conditions of this Agreement, Lender will loan to Borrower theamount of up to Two Million Two Hundred Thousand Dollars ($2,200,000.00) (the “Indebtedness”).     1.2 This Loan is not a revolving credit facility. Each dollar advanced by the Lender shallreduce the amount available to Borrower regardless of whether or not any monies previously advancedhave been repaid. Lender shall have no obligation to re-advance any amount that has beenpreviously advanced and repaid.     1.3 This Loan shall be evidenced by a promissory note (the “Note”) in favor of the Lenderbearing interest at the rate of twelve and one-half percent (12.5%) per annum. All[***Signature Page —*****Loan and Security Agreement ]**
 

 
amounts of principal, interest, fees and expenses remaining outstanding pursuant to the Noteshall be payable in full by no later than August 10, 2008.     1.4 This Loan is secured by a first priority security interest in certain collateral asdescribed below.     1.5 The monies advanced hereunder shall only be used to pay undisputed or court-approvedAdministrative Expenses, Priority Claims, Priority Tax Claims, Convenience Claims, MiscellaneousSecured Claims and periodic payments due to undisputed or court-approved Class 1 Priority Claimspursuant to the Modified Plan and to pay reasonable and legitimate expenses of the PlanAgent/Trustee, including attorneys’ fees, incurred after the effective date of the Modified Plan.     1.6 The Borrower, may request advances from the Lender to pay when due any of the itemsidentified in paragraph 1.5 hereof when the Debtors and the Borrower do not have sufficient cash topay these claims or expenses. Requests for advances shall be made in writing and delivered toLender by facsimile, email or overnight delivery at the following address:c/o Advocat Inc.