**Exhibit 10.6****TERM LOAN NOTE**   $16,500,000.00 August 10, 2007  Chicago, Illinois     FOR VALUE RECEIVED, **DIVERSICARE LEASING CORP.**, a Tennessee corporation, **DIVERSICARE ASSISTEDLIVING SERVICES NC I, LLC**, a Delaware limited liability company, **DIVERSICARE ASSISTED LIVINGSERVICES NC II, LLC**, a Delaware limited liability company, **DIVERSICARE LAMPASAS, LLC**, a Delawarelimited liability company, **DIVERSICARE YORKTOWN, LLC**, a Delaware limited liability company,**DIVERSICARE BALLINGER, LLC**, a Delaware limited liability company, **DIVERSICARE DOCTORS, LLC**, aDelaware limited liability company, **DIVERSICARE ESTATES, LLC**, a Delaware limited liability company,**DIVERSICARE HUMBLE, LLC**, a Delaware limited liability company, **DIVERSICARE KATY, LLC**, a Delawarelimited liability company, **DIVERSICARE NORMANDY TERRACE, LLC**, a Delaware limited liability company,**DIVERSICARE TEXAS I, LLC**, a Delaware limited liability company, **DIVERSICARE TREEMONT, LLC**, aDelaware limited liability company, **DIVERSICARE ROSE TERRACE, LLC**, a Delaware limited liabilitycompany (such entities individually and collectively, the “Term Loan Borrower”), herebyjointly and severally promise to pay to the order of **LASALLE BANK NATIONAL ASSOCIATION**, a nationalbanking 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 lawfulmoney of the United States of America, the principal sum of Sixteen Million Five Hundred Thousandand No/100 Dollars ($16,500,000.00), or such lesser principal sum as may then be owed by the TermLoan Borrower to the Lender hereunder, on or before August 10, 2012 (the “Stated MaturityDate”).     THE INDEBTEDNESS EVIDENCED HEREBY SHALL BECOME IMMEDIATELY DUE AND PAYABLE UPON THE EARLIESTTO OCCUR OF (X) THE STATED MATURITY DATE; (Y) THE ACCELERATION OF THE LIABILITIES (AS DEFINED INTHE LOAN AND SECURITY AGREEMENT OF EVEN DATE HEREWITH AMONG THE BORROWER (AS DEFINED IN THE LOANAGREEMENT (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) THETERMINATION OF THE LOAN AGREEMENT (WHETHER BY PREPAYMENT OR OTHERWISE) IN ACCORDANCE WITH ITSTERMS. Capitalized terms used but not defined herein shall have the meanings ascribed to suchterms in the Loan Agreement.     This Term Loan Note shall bear interest on the unpaid principal amount hereof from time totime outstanding from the date hereof until the Stated Maturity Date, or until maturity due toacceleration or otherwise and, after maturity, until paid, at the rates per annum and upon theterms specified in the Loan Agreement. Accrued interest on the Term Loan shall be due and payableand shall be made by the Term Loan Borrower to the Lender in accordance with Section 2.2 ofthe Loan Agreement. Interest payments on such Term Loan shall be computed using the interest ratethen in effect pursuant to the Loan Agreement and based on the outstanding principal balance of theTerm Loan.
 

 
The principal balance of the Term Loan shall be amortized over a ten (10) year period and shall berepaid in consecutive equal monthly installments of One Hundred Thirty Seven Thousand Five Hundredand No/100 Dollars ($137,500.00), together with interest accrued thereon, payable on the first dayof each calendar month commencing on the first day of the calendar month immediately following theClosing Date and ending on the Stated Maturity Date, with a final payment of all remainingprincipal under, and all accrued and unpaid interest on, the Term Loan due and payable on theCredit Termination Date.All payments on account of indebtedness evidenced by this Term Loan Note shall be first applied tointerest on the unpaid balance and the remainder to principal, unless otherwise specified in theLoan Agreement. Payments of both principal and interest hereunder are to be made in same day orimmediately available funds.     This Term Loan Note is the Term Loan Note referred to in the Loan Agreement, and is subject toall of the terms and conditions of the Loan Agreement, as such Loan Agreement may from time to timebe amended, supplemented, or modified, which terms and conditions are hereby made a part of thisTerm Loan Note to the same extent and with the same force and effect as if they were fully setforth herein.     Upon the occurrence or existence of any Event of Default, including, without limitation, thefailure to pay any principal, interest and/or fees in accordance with the terms set forth in theLoan Agreement, which shall constitute an Event of Default under this Term Loan Note, the Lendershall be entitled, at its sole option, to accelerate the then outstanding indebtedness hereunderand take such other action as may be provided for in the Loan Agreement, any Financing Agreements,or otherwise by law.     The remedies of the holder hereof as provided in this Term Loan Note, in the Loan Agreement,and in any other Financing Agreements shall be cumulative and concurrent, and may be pursuedsingly, successively, or together against the Term Loan Borrower, and/or against any Collateral orguarantor (including, without limitation, the Guarantor), at the sole discretion of the holderhereof.     The Term 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 Term Loan Noteand all other notices in connection with the delivery, acceptance, performance, default, orenforcement of the payment of this Term Loan Note, and agrees that its liability shall beunconditional without regard to the liability of any other party or person and shall not in anymanner be affected by any indulgence, extension of time, renewal, waiver or modification granted orconsented to by the holder hereof; and the Term Loan Borrower agrees that additional makers,endorsers, guarantors, or sureties may become parties hereto without notice to the Term LoanBorrower or affecting the Term Loan Borrower’s liability hereunder.     It being the intent of the Lender and the Term Loan Borrower that the rate of interest and allother charges to the Term Loan Borrower be lawful, if for any reason the payment of a portion ofthe interest or other charges otherwise required to be paid under this Term Loan Note would exceedthe limit which the Lender may lawfully charge the Term Loan Borrower, then the obligation to payinterest or other charges shall automatically be reduced to such limit and, if any amounts inexcess of such limit shall have been paid, then such amounts shall at the option of the
- 2 -

 
Lender either be refunded to the Term Loan Borrower or credited to the principal amount ofthis Term Loan Note so that under no circumstances shall the interest or other charges required tobe paid by the Term 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 itsrights or remedies hereunder unless such waiver be in writing and signed by the holder hereof (andthen only to the extent specifically set forth therein). A waiver of any one event shall not beconstrued as continuing or as a bar to or waiver of such right or remedy on a subsequent event.     Whenever possible, each provision of this Term Loan Note and the Loan Agreement shall beinterpreted in such manner as to be effective and valid under Applicable Law, but if any provisionof this Term Loan Note or the Loan Agreement shall be prohibited or invalid under such law, suchprovision shall be ineffective only to the extent of such prohibition or invalidity, withoutinvalidating the remainder of such provisions of this Term Loan Note or the Loan Agreement.     This Term Loan Note shall not be amended, supplemented or modified except pursuant to awriting signed by both Lender and Term 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 otherrepresentation (i) with respect to this Term Loan Note, the Loan Agreement, any of the otherFinancing Agreements or any collateral securing this Term Loan Note, (ii) to represent Lender inany restructuring, workout, litigation, contest, dispute, suit or proceeding or to commence, defendor intervene or to take any other action in or with respect to any litigation, contest, dispute orproceeding (whether instituted by Lender, Term Loan Borrower or any other person or entity) in anyway or respect relating to this Term Loan Note, the Loan Agreement, any of the other FinancingAgreements, any collateral securing this Term Loan Note or Term Loan Borrower’s affairs, or (iii)to enforce any rights of Lender against Term Loan Borrower; (b) takes any action to protect,collect, sell, liquidate or otherwise dispose of any collateral securing this Term Loan Note;and/or (c) attempts to or enforces any of Lender’s rights and remedies against Term Loan Borrower;the costs and expenses incurred by Lender in any manner or way with respect to the foregoing shallbe part of the indebtedness evidenced by this Term Loan Note, payable by Term Loan Borrower toLender on demand. Without limiting the generality of the foregoing, such expenses and costsinclude: court costs, reasonable attorneys’ fees and expenses, and accountants’ fees and expenses.     Payment of this Term Loan 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 andcondition hereof that in case Guarantor shall be declared a bankrupt, or shall file a petition involuntary bankruptcy, or under Title 11 of the United States Code, or under any similar State orFederal law, or Guarantor files any declaration, answer or pleading admitting Guarantor’sinsolvency or inability to pay or discharge Guarantor’s liabilities, or if a trustee or a receiveris appointed for Guarantor, or for the property or estate of Guarantor, or should any court takejurisdiction of Guarantor’s property or estate or should Guarantor make an assignment for the
- 3 -

 
benefit of Guarantor’s creditors, then upon the occurrence of any such event, the Lender orthe holder of this Term Loan Note may declare that a default has occurred hereunder, and inconsequences thereof the entire unpaid principal balance and all accrued and unpaid interestthereon shall be immediately due and payable; and in addition, the Lender or the holder of thisTerm Loan Note may avail itself of any other right or remedy reserved to it under or identified inthe Loan Agreement and the Financing Agreements securing this Term Loan Note, and as provided inlaw or equity.     The Term Loan Borrower shall use the proceeds represented by this Term Loan Note solely forproper business purposes, and consistently with all Applicable Laws and statutes. The Term LoanBorrower further covenants with the Lender that the Term Loan Borrower is not in the business ofextending credit for the purpose of purchasing or carrying margin security (within the meaning ofRegulation U issued by the Board of Governors of the Federal Reserve System), and no proceedsrepresented by this Term Loan Note will be used to purchase or carry any margin securities or toextend credit to others for the purpose of purchasing or carrying any margin securities.     This Term Loan Note shall inure to the benefit of Lender and its successors and assigns andshall be binding upon the Term Loan Borrower and its successors and permitted assigns. As usedherein the term “Lender” shall mean and include the successors and assigns of the identified payeeand the holder or holders of this Term Loan Note from time to time.     THIS TERM LOAN NOTE SHALL BE CONSTRUED IN ALL RESPECTS IN ACCORDANCE WITH, AND ENFORCED ANDGOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICTS OF LAWPRINCIPLES.     THE TERM LOAN BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY:     (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THISAMENDED AND RESTATED TERM LOAN NOTE, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECTTHEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS, THECOURTS OF THE UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF ILLINOIS AND APPELLATE COURTSFROM ANY THEREOF;     (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES TOTHE FULLEST EXTENT PERMITTED BY LAW IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING (i) ANYOBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANYSUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TOPLEAD 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 WAIVERDOES NOT PRECLUDE THE RIGHT TO ASSERT A DEFENSE IN SUCH ACTION OR PROCEEDING
- 4 -

 
OR TO ASSERT OR IMPOSE ANY CLAIM, COUNTERCLAIM OR CROSS-CLAIM WHICH THE TERM LOAN BORROWERWISHES TO PURSUE IN A SEPARATE PROCEEDING AT ITS SOLE COST AND EXPENSE, AND (iii) ALL STATUTES OFLIMITATIONS WHICH MAY BE RELEVANT THERETO; AND     (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILINGA COPY THEREOF BY CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID,RETURN RECEIPT REQUESTED, TO THE TERM LOAN BORROWER AT ITS ADDRESS SET FORTH IN THE LOAN AGREEMENTOR AT SUCH OTHER ADDRESS OF WHICH THE LENDER SHALL HAVE BEEN NOTIFIED PURSUANT THERETO. THE TERMLOAN BORROWER AGREES THAT SUCH SERVICE, TO THE FULLEST EXTENT PERMITTED BY LAW (i) SHALL BE DEEMEDIN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE TERM LOAN BORROWER IN ANY SUIT, ACTION ORPROCEEDING, AND (ii) SHALL BE TAKEN AND HELD TO BE VALID PERSONAL SERVICE UPON AND PERSONALDELIVERY TO THE TERM LOAN BORROWER. SOLELY TO THE EXTENT PROVIDED BY APPLICABLE LAW, SHOULD THETERM LOAN BORROWER, AFTER BEING SERVED, FAIL TO APPEAR OR ANSWER TO ANY SUMMONS, COMPLAINT, PROCESSOR PAPERS SO SERVED WITHIN THE NUMBER OF DAYS PRESCRIBED BY LAW AFTER THE DELIVERY OR MAILINGTHEREOF, THE TERM LOAN BORROWER SHALL BE DEEMED IN DEFAULT AND AN ORDER AND/OR JUDGMENT MAY BEENTERED BY THE COURT AGAINST THE TERM 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 INANY OTHER MANNER PERMITTED BY LAW, OR LIMIT THE LENDER’S RIGHT TO BRING PROCEEDINGS AGAINST THETERM LOAN BORROWER OR ITS PROPERTY IN ANY COURT OR ANY OTHER JURISDICTION.     **THE TERM LOAN BORROWER (AND THE LENDER) HEREBY IRREVOCABLY AND KNOWINGLY WAIVE (TO THE FULLESTEXTENT PERMITTED BY LAW) ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING (INCLUDING,WITHOUT LIMITATION, ANY COUNTERCLAIM) ARISING OUT OF THIS TERM LOAN NOTE, ANY OF THE FINANCINGAGREEMENTS OR ANY OTHER AGREEMENTS OR TRANSACTIONS RELATED HERETO OR THERETO, INCLUDING, WITHOUTLIMITATION, ANY ACTION OR PROCEEDING (A) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN CONNECTIONWITH THIS TERM LOAN NOTE OR ANY INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THEFUTURE BE DELIVERED IN CONNECTION HEREWITH, OR (B) ARISING FROM ANY DISPUTE OR CONTROVERSY INCONNECTION WITH OR RELATED TO THIS TERM LOAN NOTE AND THE FINANCING AGREEMENTS. THE LENDER AND THETERM LOAN BORROWER AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT AJURY.****[Signature Page Follows.]**
- 5 -

 
**Exhibit 10.6**     **IN WITNESS WHEREOF**, the Term Loan Borrower has caused this Term Loan Note to be duly executedby its authorized officer as of the date first above written.         **DIVERSICARE LEASING CORP.**, a Tennesseecorporation           By: