Document:

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                                                                    EXHIBIT 10.8

                      SEVENTH AMENDMENT TO PROMISSORY NOTE

         THIS SEVENTH AMENDMENT TO PROMISSORY NOTE (this "Seventh Amendment") is
entered into as of the 30th day of June, 2004, by and between DIVERSICARE
ASSISTED LIVING SERVICES NC I, LLC, a Delaware limited liability company (the
"Borrower"), and GMAC COMMERCIAL MORTGAGE CORPORATION, a California corporation
(the "Lender").

                                    RECITALS

         A. The Borrower executed to the order of the Lender that certain
Promissory Note dated June 4, 1999, in the principal amount of $12,770,000 as
amended by that certain First Amendment to Promissory Note dated July 1, 2002,
as amended by that Second Amendment to Promissory Note dated as of October 1,
2002, as amended by that Third Amendment to Promissory Note dated as of December
1, 2002, as amended by that certain Fourth Amendment to Promissory Note dated
January 1, 2003, as amended by that certain Fifth Amendment to Promissory Note
dated as of June 18, 2003, and as further amended by that certain Sixth
Amendment to Promissory Note dated July 1, 2003 (the "Note"). Unless otherwise
defined herein, capitalized terms shall have the meaning assigned to them in the
Note.

         B. The Borrower has requested that the Lender extend the Maturity Date
of the Note, and the Lender has agreed, upon certain conditions, one of which is
the execution of this Seventh Amendment.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the above Recitals and other good
and valuable consideration, the Borrower and the Lender hereby amend the Note as
follows:

         Section 4.1 of the Note, Maturity Date, is hereby amended to extend the
Maturity Date from June 30, 2004 until January 1, 2005. All references in the
Note to the "Maturity Date" are hereby amended to mean January 1, 2005.

         Except as expressly amended herein, the Note shall remain in full force
and effect in accordance with its terms and conditions.

         Notwithstanding the execution of this Seventh Amendment, the
indebtedness evidenced by the Note shall remain in full force and effect, and
nothing contained herein shall be interpreted or construed as resulting in a
novation of such indebtedness. The Borrower acknowledges and agrees that there
are no offsets or defenses to payment of the obligations evidenced by the Note,
as hereby amended, and hereby waives any defense, claim or counterclaim of the
Borrower regarding the obligations of the Borrower under the Note, as hereby
amended. The Borrower represents that there are no conditions of default or
facts or consequences which will or could lead to a default under the
obligations due from the Borrower under the Note, as amended herein, except as
any such default has been expressly

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waived in writing by the Beneficiary, or the Beneficiary has provided an express
written forbearance.

         Notwithstanding the execution of this Seventh Amendment, the
indebtedness evidenced by the Note shall remain in full force and effect, and
nothing contained herein shall be interpreted or construed as resulting in a
novation of such indebtedness. The Borrower acknowledges and agrees that there
are no offsets or defenses to payment of the obligations evidenced by the Note,
as hereby amended, and hereby waives any defense, claim or counterclaim of the
Borrower regarding the obligations of the Borrower under the Note, as hereby
amended. The Borrower represents that there are no conditions of default or
facts or consequences which will or could lead to a default under the
obligations due from the Borrower under the Note, as amended herein, except as
disclosed by Borrower and Diversicare Management Services Co. in that certain
Quarterly Compliance Statement & Census Data report and that certain Compliance
Certificate, each for the period ending March 31, 2004, and signed by Borrower's
Chief Financial Officer and Vice President.

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         IN WITNESS WHEREOF, the Borrower and Lender have caused this Seventh
Amendment to be executed by their respective duly authorized representatives, as
of the date first set forth above.

                                        BORROWER:

                                        DIVERSICARE ASSISTED LIVING SERVICES
                                        NC I, LLC, a Delaware limited
                                        liability company

                                        By: Diversicare Assisted Living
                                            Services NC, LLC
                                        Its: Sole Member

                                        By: /s/ Glynn Riddle
                                            ------------------------------------
                                            Glynn Riddle, Vice President and
                                            Chief Financial Officer

                                        LENDER:

                                        GMAC COMMERCIAL MORTGAGE CORPORATION,
                                        a California corporation

                                        By: /s/ Laura Y. McDonald
                                            ------------------------------------
                                        Its: Senior Vice President

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                                                                    EXHIBIT 10.9

                        SIXTH AMENDMENT TO LOAN AGREEMENT

            This Sixth Amendment to Loan Agreement is effective as of June 30,
2004, by and between DIVERSICARE ASSISTED LIVING SERVICES NC I, LLC, a Delaware
limited liability company (together with its successors and assigns, the
"Borrower"), and GMAC COMMERCIAL MORTGAGE CORPORATION, a California corporation
(together with its successors and assigns, the "Lender").

                                    RECITALS:

            A.    Borrower and the Lender entered that certain Loan Agreement
dated June 4, 1999, as amended by that certain First Amendment to Loan Agreement
dated as of July 1, 2002, as amended by that certain Second Amendment to Loan
Agreement dated as of October 1, 2002, as amended by that certain Third
Amendment to Loan Agreement dated as of January 1, 2003, as amended by that
certain Fourth Amendment to Loan Agreement dated as of June 18, 2003, and as
further amended by that certain Fifth Amendment to Loan Agreement dated July 1,
2003 (the "Agreement"). Unless otherwise defined in this Sixth Amendment,
capitalized terms shall have the meaning given to them in the Agreement.

            B.    The Borrower and the Lender desire to amend the Agreement and
have agreed to execute this Sixth Amendment to evidence such modification.

                                    AGREEMENT

            NOW, THEREFORE, in consideration of the above Recitals, the Borrower
and the Lender hereby amend the Agreement as follows:

            1.    Paragraph 1.1, "Maturity Date" is hereby amended by changing
the date to "January 1, 2005".

            Except as expressly amended hereby, the Agreement shall remain in
full force and effect in accordance with its terms.

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            IN WITNESS WHEREOF, the Borrower and the Lender have caused this
Sixth Amendment to be properly executed by their respective duly authorized
officers as of the date first above written.

                                         DIVERSICARE ASSISTED LIVING SERVICES
                                         NC I, LLC, a Delaware limited
                                         liability company

                                         By: Diversicare Assisted Living
                                             Services NC, LLC
                                         Its: Sole Member

                                            By: /s/ Glynn Riddle
                                                --------------------------------
                                                Glynn Riddle, Vice President
                                                and Chief Financial Officer

                                         GMAC COMMERCIAL MORTGAGE
                                         CORPORATION, a California corporation

                                         By: /s/ Laura Y. McDonald
                                             -----------------------------------
                                             Its: Senior Vice President

                                        2<PAGE>

                                                                   EXHIBIT 10.10

                   SEVENTH AMENDMENT TO PROJECT LOAN AGREEMENT

      THIS SEVENTH AMENDMENT TO PROJECT LOAN AGREEMENT (the "Seventh Amendment")
is effective as of March 31, 2004, by and between GMAC COMMERCIAL MORTGAGE
CORPORATION, a California corporation (the "Lender") and DIVERSICARE AFTON OAKS,
LLC, a Delaware limited liability company (the "Borrower").

                                    RECITALS

      A.    The Lender, ADVOCAT INC., a Delaware corporation ("Advocat"),
DIVERSICARE MANAGEMENT SERVICES CO., a Tennessee corporation and wholly-owned
subsidiary of Advocat ("DMSC"), DIVERSICARE LEASING CORP. ("DLC"), a Tennessee
corporation and wholly-owned subsidiary of AFI (defined below), ADVOCAT
ANCILLARY SERVICES, INC. ("AAS"), a Tennessee corporation and wholly-owned
subsidiary of DMSC, DIVERSICARE CANADA MANAGEMENT SERVICES CO., INC. ("DCMS"), a
corporation organized under the laws of Canada and wholly-owned subsidiary of
DLC, FIRST AMERICAN HEALTH CARE, INC. ("FAHC"), an Alabama corporation and
wholly-owned subsidiary of DLC, DIVERSICARE LEASING CORP. OF ALABAMA ("DLCA"),
an Alabama corporation and wholly-owned subsidiary of DLC, ADVOCAT DISTRIBUTION
SERVICES, INC. ("ADS"), a Tennessee corporation and wholly-owned subsidiary of
DMS, and ADVOCAT FINANCE, INC. ("AFI"), a Delaware corporation and wholly-owned
subsidiary of DMS (DLC, AAS, DCMS, DGP, FAHC, ADS, DLCA and AFI, together with
any other subsidiaries of Advocat or of the Subsidiaries formed or acquired
after the date hereof, are sometimes hereinafter referred to collectively as the
"Subsidiaries") entered into that certain Project Loan Agreement dated December
27, 1996, as amended by that certain First Amendment to Project Loan Agreement
dated April 30, 2000, by that certain Second Amendment to Project Loan Agreement
dated June 30, 2000, by Memorandum dated September 8, 2000, by that certain
Third Amendment to Project Loan Agreement dated September 29, 2000, by that
certain Fourth Amendment to Project Loan Agreement dated December 31, 2000, and
by that certain Fifth Amendment to Project Loan Agreement and Comprehensive
Amendment of All Other Loan Documents dated February 28, 2001, as amended by
that certain Sixth Amendment to Project Loan Agreement dated December 23, 2002
(the "Loan Agreement"). Pursuant to the terms of the Fifth Amendment to Project
Loan Agreement and Comprehensive Amendment of All Other Loan Documents dated
February 28, 2001, the Borrower assumed all rights, obligations and benefits of
DMSC in, to and under the Loan Document and all Other Loan Documents.

      B.    Pursuant to the terms of the Loan Agreement, Lender made a Loan to
DMSC, which was assumed by Borrower, in the principal amount of $3,750,000.00
(the "Loan"). Unless otherwise defined herein, capitalized terms shall have the
meanings assigned to them in the Loan Agreement.

      C.    The Loan has matured.

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      D.    The Borrower has requested that the Lender extend the Maturity Date,
and the Lender has agreed subject to the conditions and terms evidenced herein.

                                    AGREEMENT

      NOW THEREFORE, in consideration of the above Recitals, the Borrower and
the Lender hereby amend the Loan Agreement as follows:

      1.    In Article I, the definition of Maturity Date is hereby amended to
state "Maturity Date means April 1, 2005."

      2.    The Nursing Home has failed to meet the (a) Debt Service Coverage
Requirements described in Section 4.3 of the Loan Agreement. This covenant
violation is an Event of Default. So long as no additional Event of Default
occurs, the Lender has agreed to forebear from taking action relating to
Borrower's failure to achieve and maintain the March 31, 2004 Debt Service
Coverage Requirements. The forbearance described herein shall cease immediately,
and Lender may pursue its remedies related to the defaults described above,
should the Borrower fail to comply with the terms set forth herein or should
Borrower fail again to meet the Debt Service Coverage Requirements so long as
the Loan is outstanding.

      3.    The Borrower does not currently maintain the insurance coverages
required pursuant to Section 5.7(f) of the Master Loan Agreement; specifically,
the following delinquencies exist:

            a.    Section 4.4(a) requires professional liability insurance in
the amount of at least $1,000,000.00 per occurrence, $3,000,000 aggregate, with
a $5,000,000 umbrella coverage which includes coverage for professional
liability.

            b.    Section 4.4(b) requires general liability insurance in an
amount equal to at least $1,000,000 per occurrence, $3,000,000 aggregate, with a
$5,000,000 umbrella policy.

            Advocat currently maintains professional and general liability
insurance in the amount of $250,000 claims made and $500,000 in the aggregate,
with no umbrella coverage, for all facilities affiliated with Advocat, including
the Nursing Home. These deficiencies constitute an Event of Default under the
Loan Agreement; however, on the following conditions, the Lender is willing to
forebear from pursuing its remedies related to this Event of Default:

                  i.    At such time as the Lender, in its sole discretion,
determines that it is commercially reasonable for the Borrower to obtain the
coverages described above, the Borrower shall obtain the insurance coverages
described.

                  ii.   Commencing with the month ending on 4/30/2004 and
continuing on a monthly basis through the Maturity Date, the Borrower shall
report to Lender all claims, potential claims, medical record requests, and
self-reported incidents along with the status of each item reported, in a
reporting form acceptable to Lender. Additionally, the Borrower shall provide to
the Lender, on a monthly basis, a summary of all insurance claims relating to
the Nursing Home for the month then ended.

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                  iii.  Commencing with the quarter ending on 6/30/2004 and
continuing on a quarterly basis through the Maturity Date, Advocat shall report
to Lender all claims, potential claims, medical record requests, and
self-reported incidents along with the status of each item reported, in a
reporting form acceptable to Lender. Additionally, Advocat shall provide to the
Lender, on a quarterly basis, a summary of all insurance claims relating to
Advocat or any affiliated entity for the quarter then ended.

                  iv.   Commencing with the period ending on 6/30/2004, the
Borrower shall maintain an insurance risk management program at the Nursing
Home, which program must be reviewed by the Lender and/or its insurance
consultant and must describe in detail the methods to control or limit possible
insurance claims and the methods to manage or compromise existing and future
claims. On a quarterly basis, the Borrower shall provide a full report detailing
the foregoing to the Lender.

            The forbearance described herein shall cease immediately should the
Borrower fail to comply with the terms set forth herein.

            Except as expressly amended hereby, the Loan Agreement shall remain
unchanged and shall continue in full force and effect.

            IN WITNESS WHEREOF, the Borrower and the Lender have caused this
Seventh Amendment to be executed by their duly authorized representatives, as of
the date first set forth above.

                                         BORROWER:

                                         DIVERSICARE AFTON OAKS, LLC, a
                                         Delaware limited liability company

                                         By:  Diversicare Leasing Corp., a
                                         Tennessee corporation, its sole member

                                         /s/ Glynn Riddle
                                         _______________________________________
                                         Glynn Riddle, Vice President and
                                         Chief Financial Officer

                                         LENDER:

                                         GMAC COMMERCIAL MORTGAGE CORPORATION, a
                                         California corporation

                                         By: /s/ Laura Y. McDonald
                                             ___________________________________
                                         Its: Senior Vice President
                                              __________________________________

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