Exhibit



EXECUTION VERSION



SEVENTH AMENDMENT TO  
SECOND AMENDED AND RESTATED TERM LOAN AND SECURITY AGREEMENT
THIS SEVENTH AMENDMENT TO SECOND AMENDED AND RESTATED TERM LOAN AND SECURITY AGREEMENT (this “Amendment”) dated as of April 3, 2020, 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 Required 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, Administrative Agent and Required Lenders (to the extent consent of the Required Lenders is required pursuant to the Loan Agreement) 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 4 below and in reliance upon the representations and warranties set forth in Section 3 below, Borrower, Administrative Agent and Required Lenders (to the extent consent of the Required Lenders is required pursuant to the Loan Agreement), hereby amend the Loan Agreement as follows:
(a)    The definition of “Benchmark Replacement” contained in Section 1.1 of the Loan Agreement is hereby amended by adding the following sentence at the end of such definition:  “Notwithstanding anything contained herein to the contrary, at no time shall the Benchmark Replacement be less than one half of one percent (0.50%).”.
(b)    The definition of “Acquisition Loan Reserve” contained in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:
““Acquisition Loan Reserve” means a reserve in an amount established by Administrative Agent from time to time in the Administrative Agent’s reasonable discretion.  As of April 3, 2020, the amount of the Acquisition Loan Reserve is $0.”.
(c)    The definition of “Libor Base Rate” contained in Section 1.1 of the Loan Agreement is hereby amended by adding the following sentence at the end of such definition:  “Notwithstanding anything contained herein to the contrary, at no time shall the Libor Base Rate be less than one half of one percent (0.50%).”.
2.    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).
3.    Representations and Warranties.  In order to induce Administrative Agent and Required 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. 
4.    Conditions Precedent to Effectiveness of this Amendment.  The amendments contained in Section 1 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 3 hereof, which are made as of the date hereof, are true and correct;
(b)    Administrative Agent shall have received duly executed signature pages to this Amendment from Borrower and Required 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 this Amendment pursuant to Section 7 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 Lender 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 the Required 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 the Required 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 amendments in Section 1 hereof would not have been agreed to by Administrative Agent and the Required Lenders (to the extent consent of the Required Lenders is required pursuant to the Loan Agreement)).
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 Seventh Amendment to Second Amended and Restated Term Loan and Security Agreement 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














	
	
	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/Mike Wilson                
Name:  Mike Wilson
Its:  EVP & Chief Lending Officer




LENDER:


BOKF, NA D/B/A BANK OF OKLAHOMA
 

By: /s/Bria Colgan                    
Name:  Bria Colgan
Its:  Senior Vice President





LENDER:


CIT BANK, N.A.




By: /s/Edward Shuster_______________________
Name:   Edward Shuster
		
	Its:  
	  Director









	
	
	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

	 
	 








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