Document:

<PAGE>   1

                                                                  EXHIBIT 10.10

                          REIMBURSEMENT PROMISSORY NOTE

$3,000,000.00                                                   October 1, 2000
                                                           Nashville, Tennessee

         FOR VALUE RECEIVED, the undersigned, ADVOCAT INC., a Delaware
corporation, having its principal place of business in the State of Tennessee
(the "Borrower"), promises to pay to the order of AMSOUTH BANK (the "Bank), in
lawful currency of the United States of America, at AmSouth Center, 315
Deaderick Street, Nashville, Tennessee 37237, or at such other place as the
holder from time to time may designate in writing, the principal sum of THREE
MILLION AND NO/100 ($3,000,000.00) DOLLARS, with no interest computed thereon,
prior to maturity or default, on the 15th day of January, 2002 (the "Maturity
Date").

         Prepayment may be made at any time without premium, and the following
shall be mandatory prepayments:

                  (a)      Upon the sale of the Carteret Care nursing facility
of Diversicare Assisted Living Services, NC, LLC, or an affiliate entity
thereof, located in North Carolina (the "Cartaret Property") all net proceeds
after payment of normal, customary and good faith expenses of sale, shall be
paid upon the indebtedness evidenced by this Reimbursement Promissory Note,
pursuant to the existing Deed of Trust and Security Agreement executed by
Diversicare Assisted Living Services, NC, LLC, dated November 15, 1999, it being
anticipated that such sale shall close no later than December 31, 2000;

                  (b)      All payments received under the Wraparound Promissory
Note given as collateral security to Bank made by Texas Diversicare Limited
Partnership, a Texas limited partnership ("TDLP"), dated August 30, 1991, in the
original principal sum of Seven Million Five Hundred Thousand and no/100
($7,500,000.00) Dollars and having a final maturity date of August 31, 2001 (net
of amounts required to retire the balance of the underlying "wrapped"
indebtedness to Bank of America), or collateral related thereto, shall be
applied first to payment of this Reimbursement Promissory Note; and

                  (c)      All cash flow available to Advocat Inc. or any of the
other "Debtors" as defined in the Master Amendment to Loan Documents and
Agreement dated effective October 1, 2000, executed between Bank, Borrower and
other subsidiaries or affiliates of Borrower, and all of which including
Borrower, are defined as "Debtors" therein (the "Master Amendment") after making
the required payments on the Amendment to Renewal Revolving Promissory Note of
even date herewith in the principal amount of $4,500,000.00, the Renewal
Promissory Note in the principal amount of $9,412,383.87 of even date herewith,
and the Renewal Promissory Note (Overline Facility) in the principal amount of
$3,500,000.00 of even date herewith shall be paid upon the indebtedness
evidenced by this Reimbursement Promissory Note until it shall have been paid in
full. "Cash Flow" for purposes of this Section shall be defined as set forth in
the Master Amendment.

         This Reimbursement Promissory Note is executed by the parties hereto to
evidence the reimbursement obligation maturing upon Bank's honor of Omega
Healthcare Investors, Inc.'s

                                       1
<PAGE>   2

("Omega") drawing under letters of credit number 1812888 or 1812989 in
accordance with the Master Amendment. This instrument is executed pursuant to
the Master Amendment. This Reimbursement Promissory Note (and any and all
extensions, modifications, renewals and amendments thereof) is (1) secured by
the Collateral described or referred to the Loan Documents, as defined in the
Master Amendment and (2) the breach or occurrence of a default or event of
default under any of the Loan Documents, at the option of Bank, will constitute
a default hereunder.

         For so long as any indebtedness evidenced by this Reimbursement
Promissory Note shall remain outstanding and unpaid, no cash or funds of the
Debtors, or any of them, shall be used to pay dividends on the Preferred Stock,
as defined in the Master Amendment or to pay interest on the Subordinated Note,
as defined in the Master Amendment.

         Both principal and interest due on this Reimbursement Promissory Note
are payable in Nashville, Tennessee, at par in lawful money of the United States
of America.

         Time is of the essence of this Reimbursement Note. It is expressly
agreed that, at the option of Bank in the event of default hereunder or under
any of the Loan Documents, the entire unpaid principal sum evidenced by this
Reimbursement Note, together with interest accruing after the Maturity Date on
the unpaid sum at the lesser of fifteen percent (15%) per annum, or the maximum
rate then allowed by applicable law shall at the option of any holder, without
further notice, become due and payable forthwith. All such interest shall be
paid at the time of and as a condition precedent to the curing of any default.
Failure of the holder to exercise this right of accelerating the maturity of the
debt, or indulgence granted from time to time, shall in no event be considered
as a waiver of said right of acceleration or stop the holder from exercising
said right. Interest shall be computed for the actual number of days elapsed on
the basis of a year consisting of three hundred and sixty (360) days.

         If default is made in the payment of any payment due hereunder,
including but not limited to mandatory prepayments as set forth herein, when the
same shall become due or mature, or if default is made in the payment of the
indebtedness hereunder at maturity, or in the event of default in or breach of
any of the terms, provisions or conditions of any of the Loan Documents or any
instrument(s) given to evidence or secure this Reimbursement Promissory Note,
then at the election of the legal holder hereof, at any time thereafter made and
without demand or notice, the owner and holder of this Reimbursement Promissory
Note shall have the right to declare all sums unpaid hereon at once due and
payable. In the event of such default, and the same is placed in the hands of an
attorney for collection, or a suit is filed hereon, or if the proceedings are
held in bankruptcy, receivership, or the reorganization of Borrower, or any
person or entity constituting Borrower if Borrower is, or is composed of, more
than one person or entity, or any guarantor or surety of this Reimbursement
Promissory Note, or other legal or judicial proceedings for the collection
hereof, the undersigned shall pay in addition to the owner and holder of this
Reimbursement Promissory Note, all court costs and costs of collection,
enforcement or protection of the rights or collateral of Bank hereunder,
including reasonable attorney's fees.

         Borrower and all endorsers and signers hereof, and each of them,
expressly waive demand, presentment for payment, notice of dishonor, protest,
notice of protest, and diligence in collection and all other notices or demands
whatsoever with respect to this Reimbursement Promissory Note

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<PAGE>   3

or the enforcement hereof and consent that the time of said payments or any part
thereof may be extended by the holder hereof and as sent to any substitution,
exchange, or release of collateral permitted by the holder hereof, all without
and anywise modifying, altering, releasing, affecting or limiting their
respective liability. This Reimbursement Promissory Note may not be changed
orally, but only by an agreement in writing signed by the party against whom
enforcement of any waiver, change, modification or discharge is sought.

         The term obligor, as used in this Reimbursement Promissory Note, shall
mean all parties, and each of them, directly or indirectly obligated for the
indebtedness that this Reimbursement Promissory Note evidences, whether as
principal, maker, endorser, surety, guaranty, or otherwise.

         In no event (including but not limited to prepayment, default, demand
for payment, or acceleration of maturity) shall the interest taken, reserved,
contracted for, charged or received in connection herewith, under the Loan
Documents or otherwise, exceed the maximum amount permitted by applicable law
(the "Maximum Amount"). If, from any possible construction of any document,
interest would otherwise be payable in excess of the Maximum Amount, then ipso
facto, such document shall be reformed and the interest payable reduced to the
Maximum Amount, without necessity of execution of any amendment or new document.
If Bank ever receives interest in an amount which apart from this provision
would exceed the maximum amount, the excess shall, without penalty, be applied
to the unpaid principal balance of the loan obligations in inverse order of
maturity of installments and not to the payment of interest, or be refunded to
the Borrower, at the election of the Bank in its full discretion or as required
by applicable law.

         This instrument shall be governed by the laws of the State of
Tennessee, except as such may be preempted by applicable laws of the United
States of America governing the charging or receiving of interest.

         The provisions hereof shall be binding upon the parties, their
successors and assigns. The provisions hereof are severable such that the
invalidity or unenforceability of any provision hereof shall not affect the
validity or enforceability of the remaining provisions.

         IN WITNESS WHEREOF, this instrument has been executed on the day and
year first above written.

                                       BORROWER:

                                       ADVOCAT INC., a Delaware corporation

                                       By: /s/ James F. Mills, Jr.
                                          -------------------------------------
                                          Name: James F. Mills, Jr.
                                               --------------------------------
                                          Title: Senior Vice President
                                                -------------------------------

                                       3<PAGE>   1
                                                                  EXHIBIT 10.11

                   SECOND AMENDMENT TO INTERCREDITOR AGREEMENT

         THIS AGREEMENT is made and entered into between and among AMSOUTH BANK,
successor in interest by merger to First American National Bank (hereinafter
referred to as "AmSouth" or as "First American"), GMAC COMMERCIAL MORTGAGE
CORPORATION, a California corporation, being one and the same as GMAC-CM
Commercial Mortgage Corporation ("GMAC"), ADVOCAT INC., a Delaware corporation
(herein referred to as "Advocat"), DIVERSICARE MANAGEMENT SERVICES CO., a
Tennessee corporation and wholly-owned subsidiary of Advocat ("DMS"), ADVOCAT
FINANCE, INC., a Delaware corporation and wholly-owned subsidiary of DMS
("AFI"), DIVERSICARE LEASING CORP., a Tennessee corporation and wholly-owned
subsidiary of AFI ("DLC"), ADVOCAT ANCILLARY SERVICES, INC., a Tennessee
corporation and wholly-owned subsidiary of DMS ("AAS"), DIVERSICARE CANADA
MANAGEMENT SERVICES CO., INC., a corporation organized under the laws of Canada
and wholly-owned subsidiary of DLC ("DCMS"), DIVERSICARE GENERAL PARTNER, INC.,
a Texas corporation and wholly-owned subsidiary of DLC ("DGP"), FIRST AMERICAN
HEALTH CARE, INC., an Alabama corporation and wholly-owned subsidiary of DLC
("FAHC"), DIVERSICARE LEASING CORP. OF ALABAMA, an Alabama corporation and
wholly-owned subsidiary of DLC ("DLCA"), ADVOCAT DISTRIBUTION SERVICES, INC., a
Tennessee corporation and wholly-owned subsidiary of DMS ("ADS"), DIVERSICARE
ASSISTED LIVING SERVICES, INC., a Tennessee corporation and a wholly-owned
subsidiary of AFI ("DALS"), DIVERSICARE ASSISTED LIVING SERVICES, NC, LLC, a
Tennessee limited liability company formed by DMS and DALS ("DALS-NC"),
DIVERSICARE ASSISTED LIVING SERVICES, NC I, LLC, a Delaware limited liability
company ("DALS-NC I"), DIVERSICARE ASSISTED LIVING SERVICES, NC II, LLC, a
Delaware limited liability company ("DALS-NC II") both of DALS-NC I and DALS-NC
II being subsidiary entities of DALS-NC, STERLING HEALTH CARE MANAGEMENT, INC.,
a Kentucky corporation and wholly-owned subsidiary of DLC ("SHCM"), DIVERSICARE
AFTON OAKS, LLC, a Delaware limited liability company ("DAO"), DIVERSICARE GOOD
SAMARITAN, LLC, a Delaware limited liability company ("DGS"), DIVERSICARE
PINEDALE, LLC, a Delaware limited liability company ("DP"), and DIVERSICARE
WINDSOR HOUSE, LLC, a Delaware limited liability company ("DWH"), each of DAO,
DGS, DP and DWH being subsidiary entities of DLC (Advocat and all of its direct
and indirect subsidiaries, as identified hereinabove, being sometimes referred
to herein collectively as the "Debtors," whether in their capacity as a
Borrower, Guarantor, Pledgor, Subsidiary or otherwise, as set forth in the
instruments and documents evidencing indebtedness owing by some or all of such
entities to AmSouth and/or GMAC-CM). Wherever "GMAC" appears herein, it shall
mean and refer to "GMAC-CM" as set forth in the Intercreditor Agreement, as
defined herein.

                                  WITNESSETH:

         WHEREAS, First American and GMAC, as Lenders, and Advocat and certain
of its subsidiaries entered into an Intercreditor Agreement dated December 27,
1996 as amended by First Amendment to Intercreditor Agreement dated as of June
4, 1999 (the "Intercreditor Agreement"), setting forth the relative rights and
priorities between First American and GMAC as to collateral for indebtedness
owing to such parties, as more particularly set forth therein; and

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<PAGE>   2

         WHEREAS, in connection with restructuring of indebtedness owing by the
Debtors to AmSouth, which is successor in interest to First American, and GMAC,
the parties have agreed to amend the Intercreditor Agreement, as set forth
herein.

         NOW, THEREFORE, for and in consideration of the premises, the mutual
benefit to the parties hereto, and of other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereby
covenant, amend and agree as follows:

         1.       GMAC consents to the entering into between AmSouth and Debtors
of the Master Amendment to Loan Documents and Agreement of even date herewith
(the "Master Amendment"), and to the undertakings, covenants and agreements
contained therein. GMAC shall join as a party to the Master Amendment.

         2.       AmSouth and Debtors have agreed in the Master Amendment that
all collateral held by AmSouth as security for indebtedness shall secure all
indebtedness and obligations now or hereafter owing by any, some or all of
Debtors to AmSouth, whether now existing or hereafter arising. In order to
conform the Intercreditor Agreement to this understanding, and to restate and
clarify the relative priorities of AmSouth and GMAC in the collateral which is
the subject of the Intercreditor Agreement, the Intercreditor Agreement is
amended as follows:

                  (a)      The definition of "Debtors," set forth in Section 1,
"Definitions," is expanded to include, in addition to the parties originally
contained within such definition, all additional parties defined as one of the
Debtors as set forth in this instrument.

                  (b)      The definition of "First American Claim," set forth
in Section 1, "Definitions," is expanded to include, in addition to the
indebtedness and obligations originally included within such definition, the
following:

         and any and all indebtedness and obligations now or hereafter owing to
         AmSouth by any, some or all of Debtors.

                  (c)      Schedule A-1 to the Intercreditor Agreement is the
"Description of First American Collateral." Schedule A-1 lists all "First
American Collateral" in seven numbered items. Schedule A-1 further identifies
the first five of these seven numbered items as "First American Priority
Collateral" by placement of an asterisk ("*") before such five items. Item 2,
which is equipment, furnishings and furniture of Debtors, item 3, which is
general intangibles and other personal property of Debtors, and item 4, which is
inventory of Debtors, each contain the following exclusion from the Description
of First American Collateral:

         but excluding the GMAC Priority Collateral.

         It was the intention of the parties in the Credit Agreement, as defined
in the Intercreditor Agreement, that AmSouth would have a first priority
security interest in equipment, furnishings and furniture, general intangibles
and other personal property, and inventory of Debtors, except that AmSouth would
have a second priority security interest in such items located at Projects
financed under the Acquisition Line of GMAC, subject to the first priority
security interest in favor of GMAC. This understanding is expressed in Section
4.1, subsection (a), of the Credit Agreement. Accordingly, items 2, 3 and 4 of
the Description of First American Collateral contained in Schedule A-1 are
modified to delete the following language from the end of each of such items:

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<PAGE>   3

         but excluding the GMAC Priority Collateral

and to replace such deleted language with the following:

         provided, however, those of such items which are located at the
         Projects financed under the Acquisition Line of GMAC, whether now
         existing or hereafter acquired or arising, shall not be First American
         Priority Collateral and shall be subject to the prior security interest
         of GMAC.

                  (d)      Schedule A-2, of the Intercreditor Agreement is the
"Description of GMAC Collateral." Schedule A-2 lists the GMAC Collateral in
seven items and specifies that items 2 through 6 are GMAC Priority Collateral by
placement of an asterisk ("*") at the beginning of these items.

         It was the intention of the parties in the Credit Agreement that First
American shall have a first priority security interest in all accounts
receivable of the Debtors. Section 4.1, subsection (a), of the Credit Agreement
sets forth the agreement of the parties with respect to the priority of security
interests in accounts receivable. This agreement of the parties as to accounts
receivable is reflected in the fact that item 1, which relates to accounts
receivable generated by Projects financed under the Acquisition Line of GMAC, is
not GMAC Priority Collateral. However, item 5 includes as GMAC Priority
Collateral "Accounts..., Medicaid contracts, [and] Medicare contracts" arising
from Projects financed by the Acquisition Line of GMAC. In order to clarify that
these items are not a part of the GMAC Priority Collateral, the following is
added at the end of item 5:

         provided that Accounts, and receivables under Medicaid contracts and
         Medicare contracts shall not be a part of the GMAC Priority Collateral
         (it being the intent of the parties that the actual Medicaid and
         Medicare contracts shall remain GMAC Priority Collateral).

                  (e)      Notices to AmSouth and GMAC as set forth in Section
9, subsection (b), "Miscellaneous," shall be to the following addresses, in lieu
of those originally set forth:

         as to AmSouth:    AmSouth Bank
                           Attention: Robert Hart
                           AmSouth Center
                           315 Deaderick Street
                           Nashville, TN 37237

         with a copy to:   G. Rhea Bucy, Esq.
                           Gullett, Sanford, Robinson & Martin, PLLC
                           Third Floor
                           230 Fourth Avenue North
                           P.O. Box 198888
                           Nashville, TN 37219-8888

         and as to GMAC:
                           -------------------------------------------

                           -------------------------------------------

                           -------------------------------------------

                           -------------------------------------------

                                       3
<PAGE>   4

         with a copy to:   Kay K. Bains, Esq.
                           Walston, Wells, Anderson & Bains, LLP
                           505 20th Street, North, Suite 500
                           Birmingham, AL 35203-2605

         3.       This instrument contains the entire agreement of the parties
with respect to the subject matter hereof and may not be amended or modified
except by a subsequent agreement in writing executed between the parties hereto,
provided that any agreement modifying the relative priority or rights to
exercise of remedies as to any collateral held by AmSouth or GMAC may be
modified solely by an instrument executed between AmSouth and GMAC without
joinder of any of Debtors. This Agreement shall be governed by the laws of the
State of Tennessee. This agreement is severable such that the invalidity or
unenforceability of any provision hereof shall not impair the validity or
enforceability of the remaining provisions. This Agreement shall be binding upon
the parties hereto, their successors and lawful assigns. This Agreement is
solely for the benefit of AmSouth and GMAC and may not be relied upon by Debtors
or by any third parties, none of whom shall have any rights hereunder. Debtors
have executed this Agreement solely to facilitate the terms hereof and to
further acknowledge the security interests which are the subject hereof. This
Agreement may be executed in multiple counterparts, which when taken as a whole
shall constitute a complete instrument. Facsimile signatures shall be effective
as originals.

         IN WITNESS WHEREOF, the parties hereto have executed this instrument
this ____ day of November, 2000.

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<PAGE>   5

                                    AMSOUTH BANK, successor in interest by
                                    merger to First American National Bank

                                    By:  /s/ Robert Hart
                                        ---------------------------------------
                                        Robert Hart, Senior Vice President

                                    GMAC COMMERCIAL MORTGAGE
                                    CORPORATION, a California corporation

                                    By:
                                        ---------------------------------------
                                        Name:
                                              ---------------------------------
                                        Title:
                                               --------------------------------

                                    DIVERSICARE MANAGEMENT
                                    SERVICES CO., a Tennessee corporation

                                    By:  /s/ James F. Mills, Jr.
                                        ---------------------------------------
                                        Name:   James F. Mills, Jr.
                                              ---------------------------------
                                        Title:  SR VP & CFO
                                               --------------------------------

                                    ADVOCAT INC., a Delaware corporation

                                    By:  /s/ James F. Mills, Jr.
                                        ---------------------------------------
                                        Name:   James F. Mills, Jr.
                                              ---------------------------------
                                        Title:  SR VP & CFO
                                               --------------------------------

                                    DIVERSICARE LEASING CORP.,
                                    a Tennessee corporation

                                    By:  /s/ James F. Mills, Jr.
                                        ---------------------------------------
                                        Name:   James F. Mills, Jr.
                                              ---------------------------------
                                        Title:  SR VP & CFO
                                               --------------------------------

                                    ADVOCAT ANCILLARY SERVICES,
                                    INC., a Tennessee corporation

                                    By:  /s/ James F. Mills, Jr.
                                        ---------------------------------------
                                        Name:   James F. Mills, Jr.
                                              ---------------------------------
                                        Title:  SR VP & CFO
                                               --------------------------------

                                       5
<PAGE>   6

                                    DIVERSICARE CANADA
                                    MANAGEMENT SERVICES CO.,
                                    INC., an Ontario, Canada corporation

                                    By:  /s/ James F. Mills, Jr.
                                        ---------------------------------------
                                        Name:   James F. Mills, Jr.
                                              ---------------------------------
                                        Title:  SR VP & CFO
                                               --------------------------------

                                    DIVERSICARE GENERAL PARTNER,
                                    INC., a Texas corporation

                                    By:  /s/ James F. Mills, Jr.
                                        ---------------------------------------
                                        Name:   James F. Mills, Jr.
                                              ---------------------------------
                                        Title:  SR VP & CFO
                                               --------------------------------

                                    FIRST AMERICAN HEALTH CARE,
                                    INC., an Alabama corporation

                                    By:  /s/ James F. Mills, Jr.
                                        ---------------------------------------
                                        Name:   James F. Mills, Jr.
                                              ---------------------------------
                                        Title:  SR VP & CFO
                                               --------------------------------

                                    ADVOCAT DISTRIBUTION SERVICES,
                                    INC., a Tennessee corporation

                                    By:  /s/ James F. Mills, Jr.
                                        ---------------------------------------
                                        Name:   James F. Mills, Jr.
                                              ---------------------------------
                                        Title:  SR VP & CFO
                                               --------------------------------

                                    ADVOCAT FINANCE, INC.,
                                    a Delaware corporation

                                    By:  /s/ James F. Mills, Jr.
                                        ---------------------------------------
                                        Name:   James F. Mills, Jr.
                                              ---------------------------------
                                        Title:  SR VP & CFO
                                               --------------------------------

                                       6
<PAGE>   7

                                    DIVERSICARE LEASING CORP. OF
                                    ALABAMA, INC., an Alabama corporation

                                    By:  /s/ James F. Mills, Jr.
                                        ---------------------------------------
                                        Name:   James F. Mills, Jr.
                                              ---------------------------------
                                        Title:  SR VP & CFO
                                               --------------------------------

                                    DIVERSICARE ASSISTED LIVING
                                    SERVICES, INC., a Tennessee corporation

                                    By:  /s/ James F. Mills, Jr.
                                        ---------------------------------------
                                        Name:   James F. Mills, Jr.
                                              ---------------------------------
                                        Title:  SR VP & CFO
                                               --------------------------------

                                    DIVERSICARE ASSISTED LIVING
                                    SERVICES, NC, LLC,
                                    a Tennessee limited liability company

                                    By:  /s/ James F. Mills, Jr.
                                        ---------------------------------------
                                        Name:   James F. Mills, Jr.
                                              ---------------------------------
                                        Title:  SR VP & CFO
                                               --------------------------------

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

                                    By:  /s/ James F. Mills, Jr.
                                        ---------------------------------------
                                        Name:   James F. Mills, Jr.
                                              ---------------------------------
                                        Title:  SR VP & CFO
                                               --------------------------------

                                       7
<PAGE>   8

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

                                    By:  /s/ James F. Mills, Jr.
                                        ---------------------------------------
                                        Name:   James F. Mills, Jr.
                                              ---------------------------------
                                        Title:  SR VP & CFO
                                               --------------------------------

                                    STERLING HEALTH CARE
                                    MANAGEMENT, INC., a Kentucky corporation

                                    By:  /s/ James F. Mills, Jr.
                                        ---------------------------------------
                                        Name:   James F. Mills, Jr.
                                              ---------------------------------
                                        Title:  SR VP & CFO
                                               --------------------------------

                                    DIVERSICARE AFTON OAKS, LLC,
                                    a Delaware limited liability company

                                    By:  /s/ James F. Mills, Jr.
                                        ---------------------------------------
                                        Name:   James F. Mills, Jr.
                                              ---------------------------------
                                        Title:  SR VP & CFO
                                               --------------------------------

                                    DIVERSICARE GOOD SAMARITAN,
                                    LLC, a Delaware limited liability company

                                    By:  /s/ James F. Mills, Jr.
                                        ---------------------------------------
                                        Name:   James F. Mills, Jr.
                                              ---------------------------------
                                        Title:  SR VP & CFO
                                               --------------------------------

                                    DIVERSICARE PINEDALE, LLC,
                                    a Delaware limited liability company

                                    By:  /s/ James F. Mills, Jr.
                                        ---------------------------------------
                                        Name:   James F. Mills, Jr.
                                              ---------------------------------
                                        Title:  SR VP & CFO
                                               --------------------------------

                                    DIVERSICARE WINDSOR HOUSE, LLC,
                                    a Delaware limited liability company

                                    By:  /s/ James F. Mills, Jr.
                                        ---------------------------------------
                                        Name:   James F. Mills, Jr.
                                              ---------------------------------
                                        Title:  SR VP & CFO
                                               --------------------------------

                                       8

<PAGE>   9
                                  SCHEDULE A-2

                       DESCRIPTION OF GMAC-CM COLLATERAL

         The following described property and interests in property, together
with all proceeds and products thereof and all accessions thereto, as
applicable:

         1.   All of the right, title and interest of the Pledgors in and to the
accounts receivable of the Pledgor generated by the Projects financed under the
Acquisition Line, whether now existing or hereafter arising.

         2.*  All of the right, title and interest of the Pledgor in and to all
equipment, furnishings, and furniture of the Pledgor located at the Projects
financed under the Acquisition Line, whether now owned or hereafter acquired
(excluding equipment leased by the Pledgors).

         3.*  All of the general intangibles and other personal property of the
Pledgor related to or located at the Projects financed under the Acquisition
Line, whether now existing or hereafter acquired or arising.

         4.*  All of the right, title and interest of the Debtors in and to all
inventory located at the Projects financed under the Acquisition Line, whether
now owned or hereafter acquired.

         5.*  A deed of trust/mortgage or other appropriate security instruments
granting to GMAC-CM a lien on the applicable Project real property and assets,
including furniture, fixtures, Equipment, Inventory, General Intangibles,
Accounts, licenses, Medicaid contracts, Medicare contracts and other personal
property of the Project, whether now owned or hereafter acquired by the
Borrower.

         6.*  A collateral assignment in favor of GMAC-CM of all right, title
and interest in and to management contracts related to the management of the
Project financed by the Project Loan.

         7.   A pledge of all of the outstanding stock of DLC, DMS, Borrower and
the Subsidiaries, and of any subsidiaries of any Subsidiary (including any
subsidiaries formed or acquired after the date hereof).

----------------------------
* GMAC-CM Priority Collateral

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