Document:

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                                                                   EXHIBIT 10.15

                     SECURED WORKING CAPITAL PROMISSORY NOTE

$2,000,000                                                   Baltimore, Maryland
                                                                   April 1, 2003

         1.       Promise to Pay. The undersigned, Senior Care Florida Leasing,
LLC, a Delaware limited liability company, Senior Care Golfview, LLC, a Delaware
limited liability company, Senior Care Golfcrest, LLC, a Delaware limited
liability company, Senior Care Southern Pines, LLC, a Delaware limited liability
company, Senior Care Cedar Hills, LLC, a Delaware limited liability company,
(each a "Borrower", and collectively, the "Borrowers") promise to pay, jointly
and severally, to Omega Healthcare Investors, Inc., a Maryland corporation, at
its principal office at 9690 Deereco Road, Suite 100, Timonium, Maryland 21093
(hereinafter "Omega"), or at such other place as Omega may designate in writing,
or to order, in lawful money of the United States of America, the principal sum
of TWO MILLION AND NO/100 DOLLARS ($2,000,000), or such lesser sum as is
indicated on Omega's records, with interest thereon as provided in Section 3
hereof and all other amounts that may become owing hereunder.

         2.       Definitions. For all purposes of this Secured Working Capital
Promissory Note (this "Note") except as otherwise expressly provided or unless
the context otherwise requires, (a) the terms defined in this Section have the
meanings assigned to them in this Section and include the plural as well as the
singular, (b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles as at the time applicable, and (c) the words "herein", "hereof" and
"hereunder" and other words of similar import refer to this Note as a whole and
not to any particular Section or other subdivision:

                  Affiliate: As defined in the Loan Agreement.

                  Business Day: Each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which national banks in the City of New York, New
York, are authorized or obligated, by law or executive order, to close.

                  Default Interest Rate: The Interest Rate plus four percent
(4%).

                  Due Date: The earlier of: (a) Termination Date, and (b) the
date upon which Omega duly accelerates the due date of all unpaid principal and
interest owed by the Borrowers to Omega.

                  Event of Default: The occurrence of any of the following shall
constitute an Event of Default: (a) the Borrowers fail to pay amounts due and
payable under the terms of this Note when due and payable, whether by
acceleration or otherwise, or (b) an Event of Default under the Loan Agreement
or any other Transaction Document.

                  Interest Rate: An annual rate of interest of Eight and
one-half percent (8.5%).

                  Loan Agreement: The Working Capital Loan Agreement dated of
even date herewith between the Borrowers and Omega.

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                  Loan Balance: As defined in the Loan Agreement.

                  Notice: As defined in the Loan Agreement.

                  Payment Date: Any due date for the payment of the installments
of interest or any other sums payable under this Note.

                  Termination Date: As defined in the Loan Agreement.

                  Transaction Documents: As defined in the Loan Agreement.

         3.       Interest and Principal Payments.

                  3.1      Monthly Payment of Interest. Commencing on the first
Business Day of the first calendar month after the date of this Note, and
continuing in each month thereafter until the Due Date on the first Business Day
of each month, the Borrowers shall pay accrued interest on the Loan Balance.

                  3.2      Payments of Principal. The Borrowers shall make all
payments of principal required pursuant to Section 4.3.1 of the Loan Agreement.

                  3.3      Default Interest. Notwithstanding anything to the
contrary contained in this Note, if an Event of Default occurs, then interest
shall be due and payable on the Loan Balance from the date of such default until
the Event of Default is fully cured at the Default Interest Rate.

         4.       Line of Credit. Pursuant to the Loan Agreement, Omega has
authorized a credit facility to the Borrowers in a principal amount not to
exceed the face amount of this Note. The credit facility is in the form of loans
made from time to time by Omega to the Borrowers and evidenced by, among other
things, credits to the Borrowers' accounts. This Note evidences the Borrowers'
obligation to repay those loans. The aggregate principal amount of debt
evidenced by this Note shall be the amount reflected from time to time in the
records of Omega. Subject to the terms and conditions of the Loan Agreement,
until maturity, the Borrowers may borrow, repay, and reborrow under this Note so
long as the aggregate principal amount outstanding at any one time does not
exceed the face amount of this Note.

         5.       Method of Payment. All payments to be paid by the Borrowers to
Omega under this Note shall, unless otherwise specified in writing by Omega to
the Borrowers, be paid by electronic funds transfer debit transactions or
through wire transfer of immediately available funds and shall be initiated by
the Borrowers for payment on or before the first day of each month in which a
payment is due; provided, however, if such day is not a Business Day, then
payment shall be made on the next succeeding day that is a Business Day. Omega
shall provide the Borrowers in writing with appropriate wire transfer
information. Once given, such information shall remain in effect until changed
by subsequent written instructions. The

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Borrowers shall inform Omega of payment by sending to Omega a facsimile
transmission of the Borrowers' wire transfer confirmation as soon as reasonably
practicable.

         6.       Usury Not To Be Collected. In no event shall the interest rate
in effect from time to time under this Note exceed the highest rate allowed by
law. If Omega reasonably shall determine that the interest rate under this Note
has been adjudicated to be usurious or is otherwise limited by statute, interest
in excess of the applicable legal rate paid or collected by Omega shall be
deemed to have been automatically and immediately credited by Omega to the
principal balance under this Note and shall not be charged to interest, it being
the intention of Omega that no interest in excess of the legal rate shall be
taken or received.

         7.       Late Charge. Omega shall have the right, in Omega's
discretion, to charge the Borrowers with a late charge of not more than two
cents ($.02) for each dollar of any payment under this Note that is not paid on
or before the date that is five (5) days after the date on which the payment is
due to defray the costs involved in processing and collecting a late payment and
to compensate Omega for amounts which it may be required to pay to its financing
sources. The Borrowers shall pay such late charge to Omega immediately upon
receipt of notice of same.

         8.       Payment on Due Date. The entire unpaid principal balance
hereof not yet paid, together with all accrued and unpaid interest under Section
3, and any other amounts owing to Omega under this Note, shall be due and
payable on the Due Date.

         The Borrowers acknowledge that the monthly payments required hereunder
will not amortize the indebtedness evidenced hereby by the Due Date, and that
the final payment due hereunder at maturity will be a balloon payment of all
then outstanding principal and accrued interest due hereunder.

         9.       Payments to be Made Without Regard to Setoffs and
Counterclaims. All payments by the Borrowers shall be paid in full without
setoff or counterclaim and without reduction for and free from any and all
taxes, levies, imposts, duties, fees, charges, deductions or withholdings of any
type or nature imposed by any government or any political subdivision or taxing
authority thereof.

         10.      Prepayment. The Borrowers may pre-pay the amounts due under
this Note at any time without premium.

         11.      Acceleration Upon Event of Default. Upon the occurrence of any
Event of Default, the entire principal balance owing under this Note, together
with all accrued and unpaid interest and any other amounts owing under this
Note, at Omega's option, will become immediately due and payable, all without
formal demand, presentment or notice of any kind, all of which are expressly
waived.

         Acceptance by Omega of any payment in an amount less than the amount
then due shall be deemed an acceptance on account only, and Omega's acceptance
of any such partial payment shall not constitute a waiver of Omega's right to
receive the entire amount due. Upon any Event

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of Default, neither the failure of Omega to promptly exercise its right to
declare the outstanding principal and accrued unpaid interest hereunder to be
immediately due and payable, nor the failure of Omega to demand strict
performance of any other obligation of one or more of the Borrowers or any other
person who may be liable hereunder, shall constitute a waiver of any such
rights, nor a waiver of such rights in connection with any future default on the
part of the Borrowers or any other person who may be liable hereunder.

         12.      Application of Payments; Partial Payments. Unless an Event of
Default has occurred and not been fully cured, all payments received by Omega
hereunder shall be applied first against interest that has accrued and not been
paid under Section 3 and second to principal, with the balance applied against
any other amounts that may be owing to Omega hereunder. Following the occurrence
of an Event of Default, and until such Event of Default is fully cured, Omega
may apply any payment that it receives, whether directly from the Borrowers or
as a consequence of realizing upon any security that it holds, in its sole and
absolute discretion, to any amount owing to it under this Note or any other
Transaction Documents.

         13.      Security for Note. This Note is made pursuant to the Loan
Agreement, and is secured by all security interests, liens, assignments and
encumbrances granted concurrently herewith and/or from time to time hereafter
granted by a Borrower or any Affiliate of a Borrower to Omega or any Affiliate
of Omega, including, but not limited to, the security interests and liens
granted pursuant to the other Transaction Documents. Reference is hereby made to
the Loan Agreement and the other Transaction Documents for a complete
description of the collateral securing this Note and for additional terms and
conditions concerning this Note.

         14.      Choice of Law; Venue; Jurisdiction. This Note shall be deemed
to have been made and delivered by the Borrowers to Omega at Omega's principal
place of business in Baltimore, Maryland. This Note shall be governed and
controlled as to validity, enforcement, interpretation, construction, effect and
in all other respects, including, but not limited to, the legality of the
interest charged hereunder, by the statues, laws and decisions of the State of
Maryland. The Borrowers, in order to induce Omega to accept this Note and for
other good and valuable consideration, the receipt and sufficiency of which
hereby are acknowledged, agree that all actions or proceedings arising directly,
indirectly or otherwise in connection with, out of, related to or from this Note
shall be litigated, in Omega's sole discretion and at Omega's sole election,
only in courts having a situs within the State of Maryland. For the purposes of
the foregoing, the Borrowers hereby consent and submit to the jurisdiction of
any local, state or federal court located within the State of Maryland. The
Borrowers hereby waive any right a Borrower may have to transfer or change the
venue of any litigation brought against a Borrower by Omega in accordance with
this paragraph.

         15.      Miscellaneous Provisions.

         15.1     This Note may not be amended or modified, and
revision hereto shall not be effective, except by an instrument in writing
executed by the Borrowers and Omega.

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                  15.2     Any notice to be given hereunder shall be given in
the manner provided in the Loan Agreement.

                  15.3     Nothing contained in this Note or in any other
Transaction Document shall be deemed or construed as creating a partnership or
joint venture between one or more of the Borrowers and Omega or between Omega
and any other person, or cause the holder hereof to be responsible in any way
for the debts or obligations of a Borrower or any other person.

                  15.4     Each Borrower hereby waives presentment, protest and
demand, notice of protest, dishonor and nonpayment of this Note, and expressly
agrees that, without in any way affecting the liability of the Borrowers
hereunder, Omega may extend the time for payment of any amount due hereunder,
accept additional security, release any party liable hereunder and release any
security now or hereafter securing this Note without in any other way affecting
the liability and obligation of the Borrowers. The obligations of the Borrowers
under this Note are joint and several.

                  15.5     Every provision of this Note is intended to be
severable. If any term or provision hereof is declared by a court of competent
jurisdiction to be illegal or invalid for any reason whatsoever, such illegality
or invalidity shall not affect the balance of the terms and provisions hereof,
which shall remain binding and enforceable.

                  15.6     Headings at the beginning of each numbered Section of
this Note are intended solely for convenience of reference and are not to be
deemed or construed to be a part of this Note.

                  15.7     The Borrowers, and any other person who may be liable
hereunder in any capacity, agree to pay all costs of collection, including
reasonable attorney fees, in case the principal of this Note or any payment of
interest thereon is not paid as it becomes due, or in case it becomes necessary
to protect the security for this Note, whether suit is brought or not.

                          Signatures on following page.

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         IN WITNESS WHEREOF, each Borrower has executed this Secured Capital
Expenditure Promissory Note as of the date first set forth above.

<TABLE>
<S>                                              <C>
SENIOR CARE FLORIDA LEASING, LLC, a                  SENIOR CARE GOLFVIEW, LLC
Delaware limited liability company                   SENIOR CARE GOLFCREST, LLC
                                                     SENIOR CARE SOUTHERN PINES, LLC
By:   Diversicare Leasing Corp., its sole            SENIOR CARE CEDAR HILLS, LLC
      member

By:   /s/ William R. Council, III                By: Senior Care Florida Leasing, LLC, its
      --------------------------------               sole member
Name: William R. Council, III
      --------------------------
Its:  President                                  By: Diversicare Leasing Corp., its sole
      ---------                                      member

                                                 By:   /s/ William R. Council, III
                                                       ---------------------------
                                                 Name: William R. Council, III
                                                       -----------------------
                                                 Its:  President
                                                       ---------
</TABLE>

                                       6<PAGE>
                                                                   EXHIBIT 10.16

                               SECURITY AGREEMENT
                             (Working Capital Loan)

         THIS SECURITY AGREEMENT (the "Security Agreement") is made and entered
into as of April 1, 2003 by and between SENIOR CARE FLORIDA LEASING, LLC, a
Delaware limited liability company ("Lessee"), SENIOR CARE GOLFVIEW, LLC, a
Delaware limited liability company, ("Golfview"), SENIOR CARE GOLFCREST, LLC, a
Delaware limited liability company, ("Golfcrest"), SENIOR CARE SOUTHERN PINES,
LLC, a Delaware limited liability company, ("Southern Pines"), and SENIOR CARE
CEDAR HILLS, LLC, a Delaware limited liability company, ("Cedar Hills", and
together with Lessee, Golfview, Golfcrest and Southern Pines, collectively
referred to herein as "Debtor"), and OMEGA HEALTHCARE INVESTORS, INC., a
Maryland corporation ("Secured Party").

                                    RECITALS:

         A.       Capitalized terms used and not otherwise defined herein shall
have the meanings given them in Article I below.

         B.       Debtor and Secured Party have entered into the Loan Agreement
pursuant to which Secured Party will make certain loans to Debtor in connection
with the Debtor's use and operation of the Facilities.

         C.       As a condition to Secured Party's agreement to enter into the
Loan Agreement, Secured Party has required Debtor to enter into this Security
Agreement and to grant security interests to Secured Party as herein provided.

         NOW, THEREFORE, in order to induce Secured Party to enter into the Loan
Agreement, and for other good and valuable consideration the receipt and
sufficiency of which hereby are acknowledged, the parties agree as follows:

                                   ARTICLE I
                                   DEFINITIONS

         This Security Agreement is executed and delivered in connection with
the Loan Agreement. Terms defined in the Commercial Code (as hereinafter
defined) or in the Loan Agreement and not otherwise defined in this Security
Agreement or in the Loan Agreement shall have the meanings ascribed to those
terms in the Commercial Code. In addition to the other definitions contained
herein, when used in this Security Agreement the following terms shall have the
following meanings:

         "Collateral" means the collateral described in Article II, Section 2
below.

         "Commercial Code" means the Uniform Commercial Code, as enacted and in
force from time to time in the State of Maryland.

         "Facilities" means the healthcare facilities identified on attached
Schedule 1.

         "Loan Agreement" means the Working Capital Loan Agreement executed
concurrently

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<PAGE>

herewith by Secured Party, as lender, and Debtor, as borrowers and pursuant to
which Secured Party will make certain loans to Debtor, in connection with
Debtor's use and operation of the Facilities, in the maximum principal amount of
$2,000,000.00, evidenced by, among other things, a Secured Working Capital
Promissory Note of even date herewith.

                                   ARTICLE II
                                    AGREEMENT

         1.       GRANT OF SECURITY INTEREST.

                  (a)      Debtor hereby grants to Secured Party a security
interest in the Collateral to secure the payment of all amounts now or hereafter
due and owing to Secured Party from Debtor under the Loan Agreement, or any
extension or renewal thereof, and any and all other obligations incurred in
connection therewith, whether direct or indirect, whether primary, secondary,
absolute, contingent or otherwise, now or hereafter existing (including future
advances), due or to become due, plus all interest, costs, out-of-pocket
expenses and reasonable attorneys' fees which may be made or incurred by Secured
Party in the disbursement, administration, and collection thereof, and in the
protection, maintenance, and liquidation of the Collateral (the "Liabilities").

                  (b)      If the Debtor shall at any time acquire a commercial
tort claim, as defined in Article 9 of the Commercial Code ("Article 9"), Debtor
shall immediately notify the Secured Party, in a writing signed by Debtor, of
the details thereof and grant to Secured Party in such writing a security
interest therein and in the proceeds thereof, all upon the terms of this
Security Agreement, with such writing to be in form and substance satisfactory
to Secured Party.

         2.       COLLATERAL. The "Collateral" covered by this Security
Agreement is all of the personal property described below that Debtor now owns
or shall hereafter acquire or create, immediately upon the acquisition or
creation thereof, and that is located at, arises in connection with and/or is
related to the Facilities, consisting of the following:

         All personal and fixture property of every kind and nature including,
         without limitation, all furniture, fixtures, equipment, raw materials,
         inventory, other goods, accounts, accounts receivable, contract rights
         (including rights under any management agreement or franchise agreement
         with respect to the Facilities), rights to the payment of money,
         prepaid items, choses in action, insurance refund claims and all other
         insurance claims and proceeds, commercial tort claims, chattel paper,
         electronic chattel paper, documents, instruments, securities and all
         other investment property, deposits, deposit accounts, rights to
         proceeds of letters of credit, letter-of-credit rights, supporting
         obligations of every nature, and general intangibles, including,
         without limitation, to the extent permitted by applicable law:

         (i)      all tax refund claims, license fees, patents, patent
                  applications, trademarks, trademark applications, trade names,
                  copyrights, copyright applications, rights to sue and recover
                  for past infringement of patents, trademarks and copyrights,
                  computer programs, computer software, engineering drawings,
                  service marks, customer lists, goodwill, and all licenses,
                  permits, agreements of any kind or nature pursuant to which
                  (a) the Debtor operates or has authority to operate, (b) the
                  Debtor possesses,

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                  uses or has authority to possess or use property (whether
                  tangible or intangible) of others, or (c) others possess, use,
                  or have authority to possess or use property (whether tangible
                  or intangible) of the Debtor; and

         (ii)     all recorded data of any kind or nature, regardless of the
                  medium of recording, including, without limitation, all
                  software, writings, plans, specifications, and schematics; and

         (iii)    to the extent permitted by law, all rights under that certain
                  program of medical assistance, funded jointly by the federal
                  government and the states, for impoverished individuals who
                  are aged, blind and/or disabled, and/or members of families
                  with dependent children, which program is more fully described
                  in Title XIX of the Social Security Act (42 U.S.C. ss.ss. 1396
                  et seq.) and the regulations promulgated thereunder; and

         (iv)     to the extent permitted by law, all rights under that certain
                  federal program providing health insurance for eligible
                  elderly and other individuals, under which physicians,
                  hospitals, skilled nursing homes, home health care, and other
                  providers are reimbursed for certain covered services they
                  provide to the beneficiaries of such program, which program is
                  more fully described in Title XVIII of the Social Security Act
                  (42 U.S.C. ss.ss. 1395 et seq.) and the regulations
                  promulgated thereunder; and

         (v)      any and all contracts, authorizations, agreements or consents
                  made by or on behalf of any patient or resident of any of the
                  Facilities, or any other person seeking or obtaining services
                  or goods from Debtor, pursuant to which Debtor provides
                  skilled nursing care, intermediate care, personal care and/or
                  assisted living facilities, or any form of patient or
                  residential care, as well as related services at any of the
                  Facilities (as such contracts, authorizations, agreements or
                  consents may be amended, supplemented, renewed, replaced,
                  extended or modified from time to time); including consents to
                  treatment and assignments of payment of benefits; and

         (vi)     to the extent permitted by law, the (a) operating licenses for
                  each of the Facilities, any certificate of need, any other
                  license, permit, approval or certificate which from time to
                  time, may be issued or is required to be issued by the United
                  States, any state or local government, or any agency or
                  instrumentality of any of the foregoing with respect to the
                  construction, installation or operation of any of the
                  Facilities or any portion or component of any of the
                  Facilities, the providing of any professional or other
                  services by the Debtor, the purchase, sale, dispensing,
                  storage, prescription or use of drugs, medications or the like
                  by Debtor, or any other operations or businesses of Debtor;
                  and (b) certifications and eligibility for participation by
                  Debtor, in respect of its operation of any of the Facilities
                  and any related businesses or operations, in programs or
                  arrangements of or reimbursement from any third-party payors,
                  including Medicare and Medicaid; and (c) all other licenses
                  permits and certificates used or useful in connection with the
                  ownership, operation, use or occupancy of any of the
                  Facilities; and

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<PAGE>

         (vii)    to the extent permitted by law, all rights to third-party
                  reimbursement contracts for the Facilities which are now or
                  hereafter in effect with respect to residents or patients
                  qualifying for coverage under the same, including Medicare and
                  Medicaid, managed care plans and private insurance agreements,
                  and any successor program or other similar reimbursement
                  program and/or private insurance agreements, now or hereafter
                  existing; and

         (viii)   all ledgers, printouts, papers, data, file materials and
                  information pertaining to any of the above described property,
                  relating to any account debtors in respect thereof, and/or to
                  the operation of the Debtor's business relating to the
                  Facilities, and all rights of access to such books, records,
                  ledgers, printouts, data, file materials and information, and
                  all property in which such books, records, ledgers, printouts,
                  data, file materials and information are stored, including but
                  not limited to any computer readable memory and any computer
                  hardware or software necessary to process such memory,
                  wherever located.

         and all rights, remedies, powers and/or privileges of Debtor with
         respect to any of the foregoing and all proceeds therefrom owned by
         Debtor or in which Debtor has an interest, which are now or at any time
         hereafter in possession or under the control of Secured Party or in
         transit by mail or carrier to or from Secured Party or in the
         possession of any third party acting on behalf of Secured Party,
         without regard to whether Secured Party received the same in pledge,
         for safekeeping, as agent for collection or transmission or otherwise,
         or whether Secured Party has conditionally released the same.

         The Debtor acknowledges and agrees that, with respect to any term used
herein that is defined in either (i) Article 9 in effect as of the date this
Security Agreement is signed by the Debtor, or (ii) Article 9 as in force at any
time hereafter, the meaning ascribed thereto with respect to any particular item
of property shall be that under the more encompassing of the two definitions.

         The description of the Collateral to be included on any financing
statements executed in connection herewith shall be as follows: "All personal
property of Debtor, as described in that certain Security Agreement between
Debtor and Secured Party and that is located at, arises in connection with
and/or is related to the real property described on Exhibit(s) "A" attached
hereto and incorporated herein.

         3.       PERFECTION OF SECURITY INTEREST.

                  (a)      Perfection by Filing. Debtor hereby irrevocably
authorizes Secured Party, at any time and from time to time, pursuant to the
provisions of this Security Agreement, to take any and all actions Secured Party
may reasonably determine to be necessary to assure that the security interests
granted hereby are and remain perfected, including without limitation, filing
financing statements, continuation statements and amendments thereto that
describe the Collateral as all assets of Debtor or words of similar effect and
which contain any other information required by Part 5 of Article 9 for the
sufficiency or filing office acceptance of any financing statement, continuation
statement or amendment, including whether that Debtor is an organization, the
type of organization and any organization identification number(s) issued to the
Debtor. Debtor agrees to furnish any

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<PAGE>

such information to Secured Party promptly upon request. Any such financing
statements, continuation statements or amendments may be signed by Secured Party
on behalf of Debtor, and may be filed at any time in any jurisdiction deemed
appropriate by Secured Party; provided that in any state in which an
indebtedness tax is imposed upon the filing of a financing statement, Secured
Party shall only file in such state if necessary under applicable law to perfect
the security interest created pursuant to this Agreement or if Secured Party
otherwise agrees to pay such indebtedness tax. Debtor further agrees to execute
and deliver to Secured Party, concurrently with Debtor's execution of this
Security Agreement, and at any time or times hereafter at the request of Secured
Party, all financing statements and continuation financing statements (where not
covered by the first sentence of this paragraph), assignments, affidavits,
reports, notices, letters of authority, vehicle title notations and all other
documents that Secured Party may reasonably request, in a form reasonably
satisfactory to Secured Party, to perfect and maintain perfected Secured Party's
security interests in the Collateral. Debtor also agrees to make appropriate
entries on its books and records disclosing Secured Party's security interests
in the Collateral.

                  (b)      Other Perfection, etc. Debtor shall at any time and
from time to time take such steps as Secured Party may reasonably request for
Secured Party (i) to obtain an acknowledgment, in form and substance
satisfactory to Secured Party, of any bailee having possession of any of the
Collateral that the bailee holds such Collateral for the benefit of Secured
Party, (ii) to obtain "control" of any investment property, deposit accounts,
letter-of-credit rights or electronic chattel paper, with any agreements
establishing control to be in form and substance satisfactory to Secured Party,
and (iii) otherwise to insure the continued perfection and priority of Secured
Party's security interest in any of the Collateral and of the preservation of
its rights therein. Debtor authorizes Secured Party to file financing statements
describing any statutory liens held by Secured Party.

         4.       WARRANTIES AND COVENANTS. In addition to the warranties and
representations, if any, made in the Loan Agreement, Debtor warrants, represents
and agrees that:

         (a)      To the extent permitted by law, Debtor has rights in or the
                  power to transfer the Collateral, and is and will be the
                  lawful owner or lessee of all of the Collateral, with the
                  right, to the extent permitted by law, to subject the
                  Collateral to the security interests of Secured Party
                  hereunder;

         (b)      Except for the security interests in the Collateral herein
                  granted to Secured Party, there are no other adverse claims,
                  liens, restrictions on transfer or pledge, or security
                  interests in the Collateral that are known to Debtor, and
                  there are no financing statements covering any of the
                  Collateral filed in any public office created by or known to
                  Debtor prior to the date hereof. Debtor shall defend Secured
                  Party against any claims and demands of any and all other
                  persons to the Collateral inconsistent with this Security
                  Agreement;

         (c)      All of the Collateral that constitutes tangible personal
                  property is or will be (upon delivery) located at the
                  Facilities or at the chief executive offices of Debtor;

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<PAGE>

         (d)      Except as permitted under the Loan Agreement or hereunder,
                  Debtor shall not remove the Collateral from the Facilities or
                  its chief executive offices without Secured Party's prior
                  written consent and shall not use or permit the Collateral to
                  be used for any unlawful purpose whatsoever. Except as
                  permitted under the Loan Agreement or hereunder, Debtor shall
                  not remove any Collateral from the state in which the
                  Facilities or its chief executive offices are located, without
                  the prior written consent of Secured Party;

         (e)      Except as permitted under the Loan Agreement, Debtor shall not
                  conduct business under any name at the Facilities other than
                  that given above or set forth on attached Schedule 1, nor will
                  Debtor change or reorganize the type of business entity under
                  which it presently does business, except upon prior and
                  express written approval of Secured Party, and, if such
                  approval is granted, Debtor agrees that all documents,
                  instruments and agreements reasonably requested by Secured
                  Party and relating to such change shall be prepared, filed and
                  recorded at Debtor's expense before the change occurs;

         (f)      Debtor shall not remove any records concerning the Collateral
                  located at the Facilities or its chief executive offices nor
                  keep any of its records concerning the same at any other
                  location unless written notice thereof is given to Secured
                  Party at least ten (10) days prior to the removal of such
                  records to any new addresses;

         (g)      Debtor has the right and power and is duly authorized to enter
                  into this Security Agreement. The execution of this Security
                  Agreement does not and will not constitute a breach of any
                  provision contained in any agreement or instrument to which
                  Debtor is or may become a party or by which Debtor is or may
                  be bound or affected;

         (h)      Debtor shall not change its location (as that term is defined
                  in Section 9.307 of the Commercial Code). Debtor shall not
                  change its corporate name without providing Secured Party
                  thirty (30) days prior written notice;

         (i)      Debtor's (i) chief executive office is located in the state of
                  Tennessee; (ii) location (as that term is defined in Section
                  9.307 of the Commercial Code) is the State of Delaware (the
                  "Debtor State"); (iii) exact legal name is as set forth in the
                  first paragraph of this Security Agreement, (iv) Taxpayer
                  Identification Number is 62-1873941 (for Lessee), 62-1873941
                  (for Lessee), 62-1873944 (for Golfview), 62-1873943 (for
                  Golfcrest), 62-1873947 for (Southern Pines) and 62-1873948 for
                  (Cedar Hills); and (v) filing number with the Debtor State is
                  3429591 (for Lessee), 3429599 (for Golfview), 3429597 (for
                  Golfcrest), 3429600 for (Southern Pines) and 3429592 for
                  (Cedar Hills);

         (j)      The Debtor shall maintain the Collateral in good order and
                  repair and with reasonable promptness make all necessary and
                  appropriate repairs thereto of every kind and nature whether
                  ordinary or extraordinary, foreseen or unforeseen, or arising
                  by reason of a condition whether or not existing prior to the
                  date of this Security Agreement. It

                                       6
<PAGE>

                  is the intention of this provision that the level of
                  maintenance of the Collateral shall be not less than that of a
                  first class nursing home operator making use of the Collateral
                  for its intended use;

         (k)      All agreements and papers required to be filed, registered or
                  recorded in order to create in favor of the Secured Party a
                  perfected lien in the Collateral are true and correct, have
                  been, or will be, filed, registered or recorded in the
                  appropriate filing offices, and to the best of Debtor's no
                  further or subsequent filing, refiling, registration,
                  reregistration, recorded or rerecording is necessary in any
                  jurisdiction, except as provided under applicable law with
                  respect to the filing of continuation statements;

         (l)      Except as otherwise permitted pursuant to the terms of this
                  Security Agreement or the Loan Agreement, Debtor will not
                  sell, lease assign, transfer, grant any other security
                  interest in, pledge, license or otherwise dispose of or
                  encumber any Collateral to any third party while this Security
                  Agreement is in effect without the prior and express written
                  consent of Secured Party; and

         5.       COLLECTION OF ACCOUNTS.

                  (a)      Secured Party conditionally authorizes Debtor to
collect accounts from Debtor's account debtors provided, however, this privilege
may be terminated by Secured Party at any time upon an Event of Default and,
upon such Event of Default, Secured Party shall have all of Debtor's rights,
title, and interest in the accounts (to the extent permitted under applicable
law), including a right of stoppage in transit. After the occurrence of an Event
of Default, Secured Party (to the extent permitted under applicable law) may
notify any account debtor(s) of Secured Party's security interest in Debtor's
accounts and shall be entitled to collect same, and Debtor will thereafter
receive all accounts payments as the agent of and as trustee for Secured Party
and will deliver to Secured Party on the day of receipt, all checks, cash,
drafts, acceptances, notes and other accounts payments and, until such delivery,
Debtor shall not use or commingle any accounts payments and shall at all times
keep all such remittances separate and apart from Debtor's own funds, capable of
identification as the Secured Party's property. Secured Party and its
representatives are hereby authorized to endorse in Debtor's name, any item
received by the Secured Party representing any payment on or proceeds of any of
the Collateral, and may sign Debtor's name upon all accounts, invoices,
assignments, financing statements, notices to debtors, bills of lading, storage
receipts, or other instruments or documents in respect to the account debtors,
the proceeds therefrom, or property related thereto. Debtor shall promptly give
Secured Party copies of all accounts statements, accompanied by such additional
information, documents, or copies thereof, as Secured Party may request. Debtor
shall maintain all records with respect to the accounts and with respect to the
general conduct and operation of Debtor's business, including balance sheets,
operating statements and other financial information, in accordance with
generally accepted accounting principles and as Secured Party may request.

                  (b)      Until such time as Secured Party shall notify Debtor
of the revocation of such power and authority by reason of an Event of Default
(and effective only during the continuance thereof), Debtor (i) may, only in the
ordinary course of business, at its own expense, sell, lease or

                                       7
<PAGE>

furnish under contracts of service any of the inventory normally held by Debtor
for such purpose; (ii) may use and consume any raw materials, work in process or
materials, the use and consumption of which is necessary in order to carry on
Debtor's business; (iii) replace equipment in accordance with the provisions of
the Loan Agreement; and (iv) shall, at its own expense, endeavor to collect, as
and when due, all amounts due with respect to any of the Collateral, including
the taking of such action with respect to such collection as Secured Party may
request or, in the absence of such request, as Debtor may deem advisable. A
sale, lease, furnishing of services or other transfer of the Collateral as a
partial or total satisfaction of any debt of Debtor shall not constitute a sale
in the ordinary course of business.

         6.       INSPECTIONS/INFORMATION. Debtor shall permit Secured Party or
its agents upon reasonable written request and during business hours to have
access to and to inspect any of the Collateral. Secured Party may from time to
time inspect, check, make copies of, or extracts from the books, records and
files of Debtor relating to the Collateral, and Debtor shall make the same
available to Secured Party upon reasonable written notice and during business
hours. Secured Party's right of access and inspection shall be subject to any
prohibitions or limitations on disclosure under applicable law, including any
so-called "Patient's Bill of Rights" or similar legislation, including such
limitations as may be necessary to preserve the confidentiality of the
Facility-patient relationship and the physician-patient relationship. Debtor
agrees to promptly supply Secured Party with such financial and other
information concerning its financial and business affairs, assets and
liabilities as Secured Party may from time to time request, and Debtor agrees
that Secured Party or its agents may from time to time verify Debtor's
continuing compliance with any of Debtor's warranties and covenants made in
Paragraph 4 above, at Debtor's cost and expense.

         7.       DEFAULT/REMEDIES.

                  (a)      The occurrence of any of the following shall
constitute an Event of Default under this Security Agreement without any
additional notice or grace period:

                           (i)      An Event of Default as defined in the Loan
                  Agreement;

                           (ii)     Debtor fails to observe or perform any term,
                  covenant or condition of this Security Agreement and the
                  failure is not cured by Debtor within a period of fifteen (15)
                  days after written notice thereof from Secured Party, unless
                  the failure cannot with due diligence be cured within a period
                  of fifteen (15) days, in which case such failure shall not be
                  deemed an Event of Default if and for so long as Debtor
                  proceeds promptly and with due diligence to cure the failure
                  and completes the cure prior to the time that the same causes
                  a default under the Loan Agreement and prior to the time that
                  the same results in civil or criminal penalties to Secured
                  Party, Debtor, any affiliates of either or to the Facilities,
                  however in no event to exceed a period of sixty (60) days; or

                           (iii)    Any of the representations or warranties of
                  the Debtor contained herein prove to be untrue when made in
                  any material respect, the Secured Party or Collateral is
                  materially and adversely affected thereby, and same is not
                  cured within fifteen (15) days after written notice from
                  Secured Party thereof.

                                       8
<PAGE>

                  (b)      Whenever an Event of Default shall have occurred and
so long as its continues, Secured Party may exercise from time to time any
rights and remedies, including the right to immediate possession of the
Collateral, available to it under the Loan Agreement, this Security Agreement or
applicable law. Secured Party shall have the right to hold any property then in
or upon the Facilities (but excluding any property belonging to patients at the
Facilities) at the time of repossession not covered by this Security Agreement
until return is demanded in writing by Debtor. Debtor agrees, in case of the
occurrence of an Event of Default and upon the request of Secured Party, to
assemble, at its expense, all of the Collateral at a convenient place acceptable
to Secured Party and to pay all costs of Secured Party of collection of all the
Liabilities, and enforcement of rights hereunder, including reasonable
attorneys' fees and legal expenses, including participation in bankruptcy
proceedings, and the expenses of locating the Collateral and the expenses of any
repairs to any realty or other property to which any of the Collateral may be
affixed or be a part. If the Collateral is disposed of at a public sale, the
parties agree that (i) a public sale with at least ten (10) calendar days prior
notice to Debtor and notice to the public by one publication in a local
newspaper is commercially reasonable, and (ii) a disclaimer of warranties at a
public or private sale is commercially reasonable. If any notification of
intended disposition of any of the Collateral is required by law, such
notification, if mailed, shall be deemed reasonably and properly given if sent
at least ten (10) days before such disposition, by first class mail, postage
prepaid, addressed to the Debtor either at the address set forth in the notice
section hereof, or at any other address of the Debtor appearing on the records
of Secured Party.

                  (c)      TO THE EXTENT PERMITTED BY LAW, DEBTOR AGREES THAT
SECURED PARTY SHALL, UPON THE OCCURRENCE OF ANY EVENT OF DEFAULT, HAVE THE RIGHT
TO PEACEFULLY RETAKE ANY OF THE COLLATERAL. DEBTOR WAIVES ANY RIGHT IT MAY HAVE,
IN SUCH INSTANCE, TO A JUDICIAL HEARING PRIOR TO SUCH RETAKING.

                  (d)      The obligations of Debtor under this Security
Agreement, the Loan Agreement and other agreements and instruments executed by
Debtor and its Affiliates in connection with the Loan Agreement are
cross-defaulted and cross-collateralized such that upon an Event of Default
under the Loan Agreement, this Security Agreement and/or any such other
agreements and instruments, the Secured Party has the right to declare such
Event of Default to be an Event of Default without the benefit of any notice or
grace periods contained under any or all of this Security Agreement, the Loan
Agreement and such other agreements and instruments and without limitation to
resort to any or all of the Collateral and the other collateral securing such
obligations in pursuit of its remedies thereunder.

                  (e)      Debtor acknowledges and agrees that in the event that
any of the Collateral is sold by the Secured Party for credit, then credit shall
be made against the Liabilities only as, if and when cash payments are actually
received by the Secured Party for such Collateral.

         8.       INDEMNITY. In addition to the indemnities set forth in the
Loan Agreement, Debtor shall protect (except to the extent same is caused by the
gross negligence or willful misconduct of Secured Party), indemnify and hold
harmless Secured Party and its officers, employees, directors and agents from
and against all liabilities, obligations, claims, damages, penalties, causes of
action, and out-of-pocket costs and expenses whatsoever (including, without

                                       9
<PAGE>

limitation, reasonable attorneys' fees and expenses) imposed upon or incurred by
or asserted against Secured Party or its officers, employees, directors or
agents, by reason of the ownership, use, construction and operation of the
Collateral by Debtor, its officers, directors, servants, agents and employees or
by reason of enforcement of Secured Party's rights hereunder or under the Loan
Agreement. As used in this Security Agreement, the term "attorneys' fees"
includes fees incurred in any appeal and/or enforcement proceedings. In case any
action, suit or proceeding is brought against Secured Party by reason of the
enforcement of Secured Party's rights hereunder or under the Loan Agreement,
Debtor, upon request of Secured Party, shall at Debtor's expense cause such
action, suit or proceeding to be resisted and defended by counsel approved by
Secured Party with respect to proceedings and matters involving Secured Party.
Any amounts payable to Secured Party under this Section 8 which are not paid
within thirty (30) days after written demand therefor shall bear interest at the
Default Interest Rate as specified in the Loan Agreement from the date of such
demand, and such amounts, together with such interest, shall be indebtedness
secured by this Security Agreement. The obligations of Secured Party under this
Section 8 shall survive the expiration or earlier termination of the Term of the
Loan Agreement for a period of three (3) years; provided, however, if Secured
Party has delivered notice to Debtor of a claim or potential claim under this
Section 8, then the obligations of Debtor shall be extended with respect to such
claim or potential claim until the final resolution of such claim or potential
claim by the parties thereto.

         9.       GENERAL.

                  (a)      Time. Time shall be deemed of the essence with
respect to this Security Agreement.

                  (b)      Condition of Collateral. Secured Party shall be
deemed to have exercised reasonable care in the custody and preservation of any
Collateral in its possession if it takes such action for that purpose as Debtor
requests in writing, but failure of Secured Party to comply with any such
request shall not of itself be deemed a failure to exercise reasonable care.
Failure of Secured Party to preserve or protect any rights with respect to such
Collateral against any prior parties shall not be deemed a failure to exercise
reasonable care in the custody and preservation of such Collateral.

                  (c)      Waivers. Any delay on the part of Secured Party in
exercising any power, privilege or right under the Loan Agreement, this Security
Agreement or under any other instrument or document executed by Debtor in
connection herewith shall not operate as a waiver thereof. No single or partial
exercise thereof, or the exercise of any other power, privilege or right shall
preclude other or further exercise thereof, or the exercise of any other power,
privilege or right. The waiver by Secured Party in writing of any default by
Debtor shall not constitute a waiver of any subsequent defaults but shall be
restricted to the default so waived.

                  (d)      Rights Cumulative. All rights, remedies and powers of
Secured Party hereunder are irrevocable and cumulative, and nothing contained
herein shall be construed as in any way modifying, limiting, creating an
alternative to or exclusive of, and shall be in addition to all rights, remedies
and power is given by the Loan Agreement or the Commercial Code, or any other
applicable rules of decision, regulations or laws now existing or hereafter
enacted.

                                       10
<PAGE>

                  (e)      Rules of Construction. In this Security Agreement,
words in the singular include the plural, and in the plural include the
singular; words of the masculine gender include the feminine and the neuter, and
when the sense so indicates words of the neuter gender may refer to any gender
and the word "or" is disjunctive but not exclusive; and the words "include",
"including" or "includes" are not limiting terms. The captions and section
numbers appearing in this Security Agreement are inserted only as a matter of
convenience. They do not define, limit or describe the scope or intent of the
provisions of this Security Agreement.

                  (f)      Severability. If any term or provision set forth in
this Security Agreement shall be held invalid or unenforceable, the remainder of
this Security Agreement, or the application of such terms or provisions to
persons or circumstances, other than those to which it is held invalid or
unenforceable, shall be construed in all respects as if such invalid or
unenforceable term or provision were omitted.

                  (g)      Counterparts. This Security Agreement may be executed
in any number of counterparts, all of which shall constitute one and the same
instrument, and any party hereto may execute this Security Agreement by signing
and delivering one or more counterparts.

                  (h)      Successors. The terms of this Security Agreement
shall be binding upon the Debtor, its successors, assigns, heirs, executors and
personal representatives, including all "new debtors" within the meaning of the
Commercial Code, and shall inure to the benefit of Secured Party, its successors
and any holder, owner or assignee of any rights in the Loan Agreement and will
be enforceable by them as their interest may appear.

                  (i)      Enforcement Expenses. In the event of any action to
enforce this Security Agreement or to protect the security interest of Secured
Party in the Collateral, or to protect, preserve, maintain, process, assemble,
develop, insure, market or sell any Collateral, Debtor agrees to pay the costs
owed and expenses thereof, together with reasonable and documented attorneys'
fees (including fees incurred in appeals and post judgment enforcement
proceedings).

                  (j)      Choice of Law. THIS SECURITY AGREEMENT SHALL BE
CONSTRUED, AND THE RIGHTS AND OBLIGATIONS OF THE DEBTOR AND SECURED PARTY SHALL
BE DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE STATE OF MARYLAND, EXCEPT THAT
THE LAWS OF THE STATE WHERE THE COLLATERAL IS LOCATED SHALL GOVERN THIS SECURITY
AGREEMENT (A) TO THE EXTENT NECESSARY TO PERFECT AND/OR ENFORCE THE LIENS
CREATED BY THIS SECURITY AGREEMENT AND TO THE EXTENT NECESSARY TO OBTAIN THE
BENEFIT OF THE RIGHTS AND REMEDIES SET FORTH HEREIN WITH RESPECT TO THE
COLLATERAL, AND (B) FOR PROCEDURAL REQUIREMENTS THAT MUST BE GOVERNED BY THE
LAWS OF THE STATE IN WHICH THE COLLATERAL IS LOCATED.

                  (k)      Jurisdiction, Venue, Service of Process. DEBTOR
CONSENTS TO IN PERSONAM JURISDICTION BEFORE THE STATE AND FEDERAL COURTS OF THE
STATE IN WHICH THE COLLATERAL IS LOCATED AND MARYLAND AND AGREES THAT ALL
DISPUTES CONCERNING THIS SECURITY AGREEMENT BE HEARD IN THE STATE AND FEDERAL
COURTS LOCATED IN THE STATE IN WHICH THE COLLATERAL IS LOCATED

                                       11
<PAGE>

OR IN MARYLAND. DEBTOR AGREES THAT SERVICE OF PROCESS MAY BE EFFECTED UPON IT
UNDER ANY METHOD PERMISSIBLE UNDER THE LAWS OF THE STATE IN WHICH THE COLLATERAL
IS LOCATED OR MARYLAND, AND DEBTOR IRREVOCABLY WAIVES ANY OBJECTION TO VENUE IN
THE STATE AND FEDERAL COURTS OF THE STATE IN WHICH THE COLLATERAL IS LOCATED AND
MARYLAND.

                  (l)      Amendments. No amendment to this Security Agreement
shall be effective unless the same shall be in writing and signed by the party
to be charged.

                  (m)      Notices. All notices, demands or requests required or
permitted to be given to any party hereto shall be given and deemed effective as
provided in the Loan Agreement. The parties hereby agree that a notice sent as
specified in this paragraph at least ten (10) days before the date of any
intended public sale or the date after which any private sale or other intended
disposition of the Collateral is to be made shall be deemed to be reasonable
notice of such sale or other disposition.

                  (n)      Joint Preparation. This Security Agreement shall be
deemed to have been prepared jointly by the parties hereto. Any ambiguity herein
shall not be interpreted against any party hereto and shall be interpreted as if
each of the parties hereto had prepared this Security Agreement.

                  (o)      Entire Agreement. This Security Agreement, the
schedules and exhibits hereto and the agreements and instruments required to be
executed and delivered hereunder set forth the entire agreement of the parties
with respect to the subject matter hereof and supersede and discharge all prior
agreements (written or oral) and negotiations and all contemporaneous oral
agreements concerning such subject matter and negotiations. There are no oral
conditions precedent to the effectiveness of this Security Agreement.

                  (p)      Joint and Several. If more than one Debtor has signed
this Security Agreement, their obligations shall be joint and several.

                            [Signature Page Follows]

                                       12
<PAGE>

                   SIGNATURE PAGE TO LESSEE SECURITY AGREEMENT

         IN WITNESS WHEREOF, the parties have executed this Security Agreement
as of the date first written above.

SECURED PARTY:

                                      OMEGA HEALTHCARE INVESTORS, INC., a
                                      Maryland corporation

                                      By: /s/ Taylor Pickett
                                          --------------------------------

                                      Its: CEO
                                           -------------------------------

DEBTOR:

<TABLE>
<S>                                              <C>
SENIOR CARE FLORIDA LEASING, LLC, a By:          SENIOR CARE GOLFVIEW, LLC
Delaware limited liability company               SENIOR CARE GOLFCREST, LLC
                                                 SENIOR CARE SOUTHERN PINES, LLC
By:   Diversicare Leasing Corp., its sole        SENIOR CARE CEDAR HILLS, LLC
      member
By:   /s/ William R. Council, III
      ----------------------------------
Name: William R. Council, III                    By: Senior Care Florida Leasing, LLC, its
      -----------------------                        sole member
Its:  President
      ------------------------------
                                                 By: Diversicare Leasing Corp., its sole
                                                     member
                                                 By: /s/ William R. Council, III
                                                     ---------------------------
                                                 Name: William R. Council, III
                                                       -----------------------
                                                 Its:  President
                                                       ---------
</TABLE>

<PAGE>

                                   SCHEDULE 1

DEBTOR:                    OMEGA HEALTHCARE INVESTORS, INC.

SECURED PARTY:             SENIOR CARE FLORIDA LEASING, LLC
                           SENIOR CARE GOLFVIEW, LLC
                           SENIOR CARE GOLFCREST, LLC
                           SENIOR CARE SOUTHERN PINES, LLC
                           SENIOR CARE CEDAR HILLS, LLC

FACILITIES:                1.       Golfview Nursing Home, 3636 10th Avenue
                                    North, St. Petersburg, Florida 33713
                           2.       Golfcrest Nursing Home, 600 North 17th
                                    Avenue, Hollywood, Florida 33020
                           3.       Southern Pines Nursing Center, 6140 Congress
                                    Street, New Port Richey, Florida 34653
                           4.       Cedar Hills Nursing Center, 2061 Hyde Park
                                    Road, Jacksonville, Florida 32210

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