Document:

Exhibit

CONSENT AND SECOND AMENDMENT TO THIRD  
AMENDED AND RESTATED REVOLVING LOAN AND SECURITY AGREEMENT

THIS CONSENT AND SECOND AMENDMENT TO THIRD AMENDED AND RESTATED REVOLVING LOAN AND SECURITY AGREEMENT (this “Amendment”) dated as of October 1, 2016, and effective as of October 3, 2016, is by and among THE PRIVATEBANK AND TRUST COMPANY, an Illinois banking corporation (together with its successors and assigns, “Administrative Agent”) in its capacity as administrative agent for the Lenders (as defined below), the Lenders, DIVERSICARE MANAGEMENT SERVICES CO., a Tennessee corporation, and certain of its affiliates parties hereto identified on the signature pages as “Original Borrower” (individually and collectively, “Original Borrower”), and DIVERSICARE LEASING COMPANY III, LLC, and each of the limited liability companies identified on Appendix 1 attached hereto, each a Delaware limited liability company (individually and collectively, “New Borrower”).  New Borrower and Original Borrower are hereinafter referred to individually and collectively as, “Borrower”.  
RECITALS:
WHEREAS, Original Borrower, Administrative Agent, and the financial institutions signatories thereto (the “Lenders”) are parties to that certain Third Amended and Restated Revolving Loan and Security Agreement dated as of February 26, 2016 (as the same has been, and may hereafter be, amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”; all capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Loan Agreement as amended by this Amendment); and
WHEREAS, Borrower, Administrative Agent and Lenders desire to amend the Loan Agreement as provided in and subject to the terms and conditions of this Amendment.
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto (intending to be legally bound) hereby agree as follows:
1.Consents.  Subject to the satisfaction of the conditions set forth in Section 7 below and in reliance upon the representations and warranties set forth in Section 6 below, Administrative Agent and the Lenders (as the Required Lenders pursuant to the Loan Agreement) hereby consent to each of the following:
(a)    the formation by Advocat Finance, Inc. (“AFI”) of Diversicare Leasing Company III, LLC, a Delaware limited liability company (“DLC III”) and a wholly-owned subsidiary of AFI; 
(b)    the formation by DLC III, of each of the limited liability companies identified on Appendix 1 hereto, each a wholly-owned subsidiary of DLC III; and 
(c)    the amendment and restatement of the Golden Living Lease on or about November 1, 2016, which amendment and restatement shall be in form and substance reasonably satisfactory to Administrative Agent, as so long as such Golden Living Lease is subject to the Golden Living Intercreditor Agreement (AL).
2.    Joinder and Assumption.  From and after the date hereof, New Borrower hereby absolutely and unconditionally (i) joins as and becomes a party to the Loan Agreement as a Borrower thereunder and to each Financing Agreement to which Original Borrower is a party, (ii) assumes, as a joint and several obligor thereunder, all of the obligations, liabilities and indemnities of a Borrower under the Loan Agreement and all other Financing Agreements, (iii) covenants and agrees to be bound by and adhere to all of the terms, covenants, waivers, releases, agreements and conditions of or respecting a Borrower with respect to the Loan Agreement and the other Financing Agreements and all of the representations and warranties contained in the Loan Agreement and the other Financing Agreements with respect to a Borrower, and (iv) collaterally assigns and transfers to Administrative Agent (for the benefit of Lenders and itself) and hereby grants to Administrative Agent (for the benefit of Lenders and itself) a continuing first-priority security interest in all of New Borrower’s now owned and existing and hereafter acquired and arising Collateral, as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of all of the Liabilities, subject to any applicable Intercreditor Agreements.  New Borrower hereby authorizes Administrative Agent to file at any time uniform commercial code financing statements in such jurisdictions and offices as Administrative Agent deems necessary in connection with the perfection of a security interest in all of New Borrower’s now owned or hereafter arising or acquired Collateral, including, without limitation, Accounts and Deposit Accounts of New Borrower, and all proceeds and products thereof.  From and after the date hereof, any reference to the term “Borrower” in the Loan Agreement and the Financing Agreements shall also include New Borrower.
3.    Supplementation of Certain Disclosure Schedules.  In connection with the joinder of New Borrower to the Loan Agreement, Schedule 1.1(a) (Borrowers), Schedule 1.1(f) (Facilities, Locations, Real Property, Operators, Owners, Leases), Schedule 7.8 (Names), Schedule 7.12 (Organizational Chart), Schedule 7.33 (Capitalization) and Schedule 7.36 (Commercial Leases) of the Loan Agreement shall be supplemented from and after the date of this Amendment as set forth on the applicable and respective schedules attached hereto and made a part hereof so that such schedules shall reflect the matters intended to be shown thereon as of the date of this Amendment.
4.    Amendments to Loan Agreement.  Subject to the satisfaction of the conditions set forth in Section 7 below and in reliance upon the representations and warranties set forth in Section 6 below, Borrower, Administrative Agent and Lenders hereby amend the Loan Agreement as follows:
(a)    The following definitions shall be inserted in correct alphabetical order in Section 1.1 of the Loan Agreement:
“Carthage Facility” means that certain skilled nursing and/or assisted living facility located in Carthage, Mississippi and operated by Diversicare of Carthage, LLC as identified on Schedule 1.1(f) attached hereto.
“Carthage Lease” means that certain Lease Agreement between Leake County Nursing Home, Ltd., as Lessor, and Diversicare of Carthage, LLC, as Lessee, with respect to the Carthage Facility, originally dated October 1, 1977, the leasehold interest of the lessee thereunder being assigned to and assumed by Diversicare of Carthage, LLC by assignment from Beverly Enterprises-Mississippi, Inc. dated as of October 1, 2016, as the same may be from time to time amended and restated in conformance with Section 9.16 hereof.
“Carthage Lease Documents” means, collectively, the Carthage Lease and the security agreements, documents, instruments and agreements executed in connection therewith, in each case as the same may be amended or modified in conformity with Section 9.16 hereof.
“DLC III” means Diversicare Leasing Company III, a Delaware limited liability company and a wholly-owned subsidiary of Advocat Finance, Inc.
“DLC III (AL) Subsidiaries” means Diversicare of Arab, LLC, Diversicare of Boaz, LLC, Diversicare of Foley, LLC, Diversicare of Hueytown, LLC, Diversicare of Lanett, LLC, Diversicare of Bessemer, LLC, Diversicare of Montgomery, LLC, Diversicare of Oneonta, LLC, Diversicare of Oxford, LLC, Diversicare of Pell City, LLC, Diversicare of Riverchase, LLC, and Diversicare of Winfield, LLC, each a Delaware limited liability company and a wholly-owned subsidiary of DLC III.
“DLC III (MS) Subsidiaries” means Diversicare of Amory, LLC, Diversicare of Batesville, LLC, Diversicare of Brookhaven, LLC, Diversicare of Carthage, LLC, Diversicare of Eupora, LLC, Diversicare of Meridian, LLC, Diversicare of Ripley, LLC, Diversicare of Southaven, LLC, Diversicare of Tupelo, LLC, and Diversicare of Tylertown, LLC, each a Delaware limited liability company and a wholly-owned subsidiary of DLC III.
“DLC III Subsidiaries” means, collectively, the DLC III (MS) Subsidiaries and the DLC III (AL) Subsidiaries.
“Golden Living (AL) Facilities” means those certain skilled nursing and/or assisted living facilities identified on Schedule 1.1(f) attached hereto as the “Golden Living (AL) Facilities”, which are operated by DLC III (AL) Subsidiaries.
“Golden Living (AL) Lessors” means, collectively, GPH Arab, LLC, GPH Boaz, LLC, GPH Foley, LLC, GPH Hueytown, LLC, GPH Lanett, LLC, GPH Bessemer, LLC, GPH Montgomery, LLC, GPH Oneonta, LLC, GPH Oxford, LLC, GPH Pell City, LLC, GPH Riverchase, LLC, and GPH Winfield, LLC, as lessors under the Golden Living Lease.
“Golden Living (MS) Facilities” means those certain skilled nursing and/or assisted living facilities identified on Schedule 1.1(f) attached hereto as the “Golden Living (MS) Facilities”, which are operated by certain of the DLC III (MS) Subsidiaries.
“Golden Living (MS) Lessors” means, collectively, GPH Amory LLC, GPH Batesville LLC, GPH Brookhaven LLC, GPH Eupora LLC, GPH Ripley LLC, GPH Southaven LLC, GPH Tupelo LLC, and GPH Tylertown LLC, as lessors under the Golden Living Lease.
“Golden Living Facilities” means, collectively, the Golden Living (AL) Facilities and the Golden Living (MS) Facilities.
“Golden Living Intercreditor Agreement (AL)” means a Subordination and Intercreditor Agreement made by and among Administrative Agent (on behalf of itself and the Lenders), the DLC III (AL) Subsidiaries and the Golden Living (AL) Lessors in connection with the Golden Living Lease in form and substance reasonably satisfactory to Administrative Agent.  For further clarity, the Golden Living Intercreditor Agreement (AL) may include an amended and restated Golden Living Intercreditor Agreement (MS) that includes certain of the DLC III (MS) Subsidiaries and the DLC III (AL) Subsidiaries, the Golden Living (AL) Lessors and the Golden Living (MS) Lessors. 
“Golden Living Intercreditor Agreement (MS)” means that certain Subordination and Intercreditor Agreement made by and among Administrative Agent (on behalf of itself and the Lenders), certain of the DLC III (MS) Subsidiaries and the Golden Living (MS) Lessors executed as of October 1, 2016, in connection with the Golden Living Lease.
“Golden Living Lease” means that certain Master Lease executed by and among DLC III (MS) Subsidiaries and Golden Living (MS) Lessors with respect to the Golden Living (MS) Facilities, as the same may be amended and restated on or about November 1, 2016 to include the DLC III (AL) Subsidiaries and the Golden Living (AL) Lessors with respect to the Golden Living (AL) Facilities, as the same may be further amended or modified in conformity with Section 9.16 hereof.
“Golden Living Lease Documents” means, collectively, the Golden Living Lease and the security agreements, documents, instruments and agreements executed in connection therewith, in each case as the same may be amended or modified in conformity with Section 9.16 hereof.
“Golden Living Lessor Security Interest” means, collectively, the security interests of (a) the applicable Golden Living (AL) Lessor under the Golden Living Lease in certain assets of the applicable Borrower, the rights pertaining to and priorities of which are as specified in the Golden Living Intercreditor Agreement (AL) and (b) the applicable Golden Living (MS) Lessor under the Golden Living Lease in certain assets of the applicable Borrower, the rights pertaining to and priorities of which are as specified in the Golden Living Intercreditor Agreement (MS).
“Meridian Facility” means that certain skilled nursing and/or assisted living facility located in Meridian, Mississippi and operated by Diversicare of Meridian as identified on Schedule 1.1(f) attached hereto.
“Meridian Lease” means that certain Lease Agreement between Broadmoor Nursing Home  Ltd., as Lessor, and Diversicare of Meridian, LLC, as Lessee, with respect to the Meridian Facility, originally dated October 1, 1977, the leasehold interest of the lessee thereunder being assigned to and assumed by Diversicare of Meridian, LLC by assignment from Beverly Enterprises-Mississippi, Inc. dated as of October 1, 2016, and amended by First Amendment to Lease Agreement dated as of October 1, 2016, as the same may be from time to time amended and restated in conformance with Section 9.16 hereof.
“Meridian Lease Documents” means, collectively, the Meridian  Lease and the security agreements, documents, instruments and agreements executed in connection therewith, in each case as the same may be amended or modified in conformity with Section 9.16 hereof.
(b)    The definition of “Change of Control” in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety as follows:
“Change of Control” means the occurrence of any one or more of the following events or conditions, except as the result of a merger or consolidation with, or merger into, a Borrower (and such Borrower is the surviving entity) or the dissolution of an inactive subsidiary as permitted in accordance with Section 9.3: (a) Guarantor shall at any time after the Closing Date have control and voting power over less than all of the issued and outstanding Stock of Diversicare Management Services Co., (b) Diversicare Management Services Co. shall at any time after the Closing Date have control and voting power over less than all of the issued and outstanding Stock of Advocat Finance, Inc., (c) Advocat Finance, Inc. shall at any time after the Closing Date have control and voting power over less than all of the issued and outstanding Stock of DLC, DLC II, DLC III, Diversicare Holding Company, LLC and Diversicare Property Co., LLC, (d) Diversicare Holding Company, LLC shall at any time after the Closing Date have control and voting power over less than all of the issued and outstanding Stock of Diversicare Kansas, LLC, Diversicare of Glasgow, LLC and Diversicare of Fulton, LLC, (e) Diversicare Kansas, LLC shall at any time after the Closing Date have control and voting power over less than all of the issued and outstanding Stock of the Kansas Opco Borrowers, (f) Diversicare Property Co., LLC shall at any time after the Closing Date have control and voting power over less than all of the issued and outstanding Stock of the Propco Borrowers, (g) DLC II shall at any time after the Closing Date have voting control over less than all of the issued and outstanding Stock of the DLC II Subsidiaries, (h) Diversicare Texas I, LLC shall at any time after the Closing Date have voting control over less than all of the issued and outstanding Stock of the OHI Entities (other than Diversicare Texas I, LLC), (i) Senior Care Florida Leasing, LLC shall at any time after the Closing Date have voting control over less than all of the issued and outstanding Stock of the Senior Care Subsidiaries, (j) DLC III shall at any time after July 1, 2016, have voting control over less than all of the issued and outstanding Stock of the DLC III Subsidiaries, (k) DLC shall at any time after the Closing Date have control and voting power, directly or indirectly, over less than all of the issued and outstanding Stock of any other Borrower not mentioned in (a) through (j) above or (l) Guarantor shall cease to directly or indirectly possess the right to elect (through contract, ownership of voting securities or otherwise) at all times a majority of the board of directors or managers (or similar governing body) of each Borrower and Pledgor and to direct the management policies and decisions of each Borrower and Pledgor.
(c)    The definition of “Commercial Leases” in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety as follows:
“Commercial Leases” means the collective reference to all Leases other than (a) admission agreements or residency agreements or (b) any Lease for real property solely used for office space with a term not to exceed five (5) years and for 5,000 square feet or less.
(d)    The definition of “Eligible Accounts” in Section 1.1 of the Loan Agreement is hereby amended by amending and restating subsection (2) at the end of subsection (h) thereof as follows:
(2)    notwithstanding the ninety (90) day periods prescribed by subsection (a) above, (i) solely for the nine (9) month period beginning November 1, 2016 through and including August 1, 2017 with respect to the Accounts of Borrower generated by the operations of the Golden Living (AL) Facilities, the Golden Living (MS) Facilities, the Carthage Facility and/or the Meridian Facility and (ii) solely for the six (6) month period beginning on the commencement date of operations by a Borrower with respect to the Accounts generated by the operations of a Facility or Facilities acquired or leased by such Borrower after the date of this Agreement (other than the Golden Living (AL) Facilities and the Golden Living (MS) Facilities, each a “New Facility”) through and including the date that is six (6) months after such commencement date, Accounts that are to be paid pursuant to a Medicare Provider Agreement or a Medicaid Provider Agreement, Private Insurance Managed Care Accounts, or any otherwise Eligible Accounts, which do not remain unpaid more than one hundred eighty (180) days from the invoice date, shall be Eligible Accounts; provided, however, Private Pay Accounts and Medicaid pending Accounts shall not be considered Eligible Accounts; and, provided further, one hundred percent (100%) of all credit amounts in any of the foregoing Eligible Account categories shall be deducted from the “current” Accounts as reasonably determined by the Administrative Agent in its reasonable credit judgment;
(e)    The definition of “Financing Agreements” in Section 1.1 of the Loan Agreement shall hereafter be deemed to also include this Amendment and each of the documents identified in Sections 7(c), (d), (e), (f), (o), (p), (q) and (r) in this Amendment.
(f)    The definition of “Indiana IGT Arrangement” in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety as follows:
“Indiana IGT Arrangement” means the Indiana Inter-Governmental Transfer Program entered into by a Borrower after the date of this Agreement for a Facility or Facilities located in the State of Indiana with respect to the Medicaid reimbursement for such Facility or Facilities, as permitted in accordance with Section 9.6 hereof.
(g)    The definition of “Intercreditor Agreements” in Section 1.1 of the Loan Agreement is hereby modified by also inserting a reference to the Golden Living Intercreditor Agreement (AL) and the Golden Living Intercreditor Agreement (MS).
(h)    The definition of “Maximum Revolving Facility” in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety as follows:
“Maximum Revolving Facility” means an amount equal to Fifty-Two Million Two Hundred Fifty Thousand and No/100 Dollars ($52,250,000.00); provided, however, that the Maximum Revolving Facility shall be automatically and permanently reduced to Forty-Two Million Two Hundred Fifty Thousand and No/100 Dollars ($42,250,000.00) (with such reduction to be applied as indicated on Annex A attached hereto), on August 1, 2017 without any further action by Administrative Agent, any Lender or any Borrower.
(i)    The definition of “OHI Entities” in Section 1.1 of the Loan Agreement is hereby amended by deleting the phrase “, and Sterling Health Care Management Inc., a Kentucky corp” contained therein.
(j)    The definition of “Restricted Agreements” in Section 1.1 of the Loan Agreement shall hereafter be deemed to also include the Golden Living Lease Documents, Carthage Lease Documents and Meridian Lease Documents.
(k)    The phrase “Subject only to the Omega Security Interests and the Aviv Lessor Security Interests (the priorities with respect to each of which shall be as set forth in the Omega Intercreditor Agreement),” contained in the first sentence of Section 6.1 of the Loan Agreement is hereby amended and restated in its entirety as follows: 
Subject only to the Omega Security Interests and the Aviv Lessor Security Interests (the priorities with respect to each of which shall be as set forth in the Omega Intercreditor Agreement) and the Golden Living Lessor Security Interests (the priorities with respect to each of which shall be as set forth in the Golden Living Intercreditor Agreement (AL) and the Golden Living Intercreditor Agreement (MS), as applicable),
(l)    Section 8.1(b) of the Loan Agreement is hereby amended and restated in its entirety as follows:
(b)    Borrowing Base Certificates.  On or before the fifteenth (15th) day after the end of each calendar month, four (4) borrowing base certificates, one for each of (i) the OHI Entities and DLC (exclusive of the Martin, Tennessee Facility operated by DLC), (ii) the DLC III (AL) Subsidiaries and the DLC III (MS) Subsidiaries (other than Diversicare of Carthage, LLC and Diversicare of Meridian, LLC), (iii) all Borrowers other than the OHI Entities, DLC (but inclusive of the Martin, Tennessee Facility operated by DLC), the DLC III (AL) Subsidiaries and the DLC III (MS) Subsidiaries (other than Diversicare of Carthage, LLC and Diversicare of Meridian, LLC), and (iv) for all Borrowers on a consolidated basis, each signed on behalf of such Borrower (as applicable) by a Duly Authorized Officer, each of which must be in form, scope and substance reasonably satisfactory to Administrative Agent and the Required Lenders.
(m)    Section 9.1(viii) of the Loan Agreement is hereby amended and restated in its entirety as follows:
(viii) Liens in favor of (1) the Aviv Lessor, Omega and the Omega Senior Lessor, subject in all cases to the provisions of the Omega Intercreditor Agreement, (2) the Golden Living (AL) Lessors, subject to the provisions of the Golden Living Intercreditor Agreement (AL), and (3) the Golden Living (MS) Lessors, subject to the provisions of the Golden Living Intercreditor Agreement (MS); 
(n)    Section 9.10(a) of the Loan Agreement is hereby amended and restated in its entirety as follows:
(a)    The Borrower shall not make any payment, directly or indirectly, to (x) the Aviv Lessor or Omega (or any Affiliate or Subsidiary thereof) in contravention of the Omega Intercreditor Agreement or (y) to the Golden Living (AL) Lessors or the Golden Living (MS) Lessors (or any Affiliate or Subsidiary thereof) in contravention of the Golden Living Intercreditor Agreement (AL) or the Golden Living Intercreditor Agreement (MS), as applicable.
(o)    Section 9.12(b) of the Loan Agreement is hereby amended and restated in its entirety as follows:
(b)    Minimum Adjusted EBITDA.  The Parent and Borrowers, taken as a whole, shall not permit their Adjusted EBITDA to be less than (i) $8,500,000 for the Fiscal Quarter ending September 30, 2016, (ii) $9,500,000 for the Fiscal Quarter ending December 31, 2016, (iii) $10,000,000 for the Fiscal Quarter ending March 31, 2017, (iv) $11,500,000 for the Fiscal Quarter ending June 30, 2017, and (v) $13,000,000 for the Fiscal Quarter ending September 30, 2017 and for each Fiscal Quarter thereafter, each measured on the last day of the applicable Fiscal Quarter on a trailing twelve (12) month basis.
(p)    The first sentence of Section 12.22 of the Loan Agreement is hereby amended and restated in its entirety as follows:
Borrower shall not disclose the contents of this Agreement and the other Financing Agreements to any third party (including, without limitation, any financial institution or intermediary), unless required by applicable Laws or by any subpoena, judicial order or similar legal process, without Administrative Agent’s prior written consent, other than to Borrower’s officers, lawyers and other professional advisors on a need-to-know basis, Omega, the Aviv Lessor, the Golden Living (AL) Lessors, the Golden Living (MS) Lessors and in connection with any filings required to be made under any applicable federal or state securities laws or regulations (“Securities Laws”).
(q)    Annex A (Lenders, Pro Rata Shares/Dollar Allocations, and Notice Information) to the Loan Agreement is hereby amended and restated and replaced with Annex A Attached hereto.  
5.    No Other Amendments.  Borrower acknowledges and expressly agrees that this Amendment is limited to the extent expressly set forth herein and shall not constitute a modification or amendment of the Loan Agreement or any other Financing Agreements or a course of dealing at variance with the terms or conditions of the Loan Agreement or any other Financing Agreements (other than as expressly set forth in this Amendment and the other instruments, agreements, certificates and documents required to be executed and delivered in connection herewith, including those identified in Sections 7(c), (d), (e), (f), (o), (p), (q) and (r)).
6.    Representations and Warranties.  In order to induce Administrative Agent and Lenders to enter into this Amendment, Borrower hereby represents and warrants to Administrative Agent and Lenders (which representations and warranties shall survive the execution and delivery hereof), both before and after giving effect to this Amendment that:
(a)    Each of the representations and warranties of each Borrower (including Original Borrower and New Borrower) contained in the Loan Agreement and the other Financing Agreements to which Borrower is a party are true and correct in all material respects (without duplication of any materiality carve out already provided therein) on and as of the date hereof, in each case as if made on and as of such date, other than representations and warranties that expressly relate solely to an earlier date (in which case such representations and warranties were true and correct on and as of such earlier date); the principal place of business and chief executive office for New Borrower is as set forth on Schedule 1.1(a) (as revised pursuant to Section 3 hereof);
(b)    Borrower has the corporate or limited liability company (as applicable) power and authority (i) to enter into the Loan Agreement as amended by this Amendment and (ii) to do all acts and things as are required or contemplated hereunder to be done, observed and performed by Borrower;
(c)    This Amendment has been duly authorized, validly executed and delivered by one or more Duly Authorized Officers of Borrower, and each of this Amendment, the Loan Agreement as amended hereby, and each of the other Financing Agreements to which Borrower is a party, constitutes the legal, valid and binding obligations of Borrower, enforceable against Borrower in accordance with their respective terms, subject to bankruptcy, insolvency or other similar laws affecting the enforcement of creditor’s rights and remedies generally;
(d)    The execution and delivery of this Amendment and performance by Borrower under this Amendment, the Loan Agreement and each of the other Financing Agreements to which Borrower is a party do not and will not require the consent or approval of any regulatory authority or governmental authority or agency having jurisdiction over Borrower that has not already been obtained, nor be in contravention of or in conflict with the organizational documents of Borrower, or any provision of any statute, judgment, order, indenture, instrument, agreement, or undertaking, to which Borrower is party or by which Borrower’s respective assets or properties are bound; and
(e)    No Default or Event of Default will result after giving effect to this Amendment, and no event has occurred that has had or could reasonably be expected to have a Material Adverse Effect after giving effect to this Amendment. 
7.    Conditions Precedent to Effectiveness of this Amendment.  The consents set forth in Section 1 hereof and the amendments contained in Section 4 of this Amendment shall become effective on the date hereof as long as each of the following conditions precedent is satisfied as determined by Administrative Agent:
(a)    all of the representations and warranties of Borrower under Section 6 hereof, which are made as of the date hereof, are true and correct;
(b)    receipt by Administrative Agent of duly executed signature pages to this Amendment from Borrower and Lenders;
(c)    receipt by Administrative Agent of duly executed signature pages to (collectively, the “Note Modifications”) the modifications to promissory notes dated as of the date hereof by Borrower in favor of each Lender;
(d)    Administrative Agent shall have received a duly executed Reaffirmation of Second Amended and Restated Guaranty in the form attached hereto;
(e)    receipt by Administrative Agent of duly executed signature pages to the First Amendment to Second Amended and Restated Pledge Agreement dated as of the date hereof, among AFI, DLC III and Administrative Agent (the “First AFI Pledge Amendment”);
(f)    receipt by Administrative Agent of duly executed signature pages to the Pledge Agreement dated as of the date hereof, among DLC III, the DLC III Subsidiaries and Administrative Agent (the “DLC III Pledge Agreement”)
(g)    receipt by Administrative Agent of copies of resolutions of the governing body of New Borrower authorizing the execution, delivery and performance by New Borrower of the Loan Agreement, as amended by this Amendment, and each of the other instruments, agreements and documents entered into in connection with this Amendment to which New Borrower is a party (including with respect to the security interest and equity pledge provided in favor of Administrative Agent), certified by a Duly Authorized Officer of New Borrower;
(h)    receipt by Administrative Agent of copies of resolutions of the governing body of Original Borrower authorizing the execution, delivery and performance by Original Borrower of this Amendment and each of the other instruments, agreements and documents entered into in connection with this Amendment to which Original Borrower is a party, certified by a Duly Authorized Officer of Original Borrower;
(i)    receipt by Administrative Agent of UCC tax, lien, pending suit, bankruptcy and judgment searches on New Borrower, each as of a recent date, the results of which must be in form and substance acceptable to Administrative Agent;
(j)    receipt by Administrative Agent of good standing certificates for New Borrower from the Delaware Secretary of State and certificates of authorization for New Borrower from the Secretary of State of the States of Alabama and Mississippi, as applicable (as of a recent date);
(k)    receipt by Administrative Agent of an opinion of Bass Berry & Sims, PLC, the legal counsel to Borrower and Guarantor, in form and substance reasonably satisfactory to Administrative Agent;
(l)    receipt by Administrative Agent of a certified copy of New Borrower’s certificate of formation, certified by the Delaware Secretary of State (as of a recent date);
(m)    receipt by Administrative Agent of a true, correct and complete copy of the operating agreement of New Borrower, certified by a Duly Authorized Officer of New Borrower;
(n)    UCC Financing Statements, as requested by Administrative Agent, naming New Borrower as debtor and Administrative Agent as secured party with respect to the Collateral, together with such UCC termination statements necessary to release all Liens (other than Permitted Liens) in any of the Collateral except Administrative Agent, and other documents as Administrative Agent deems necessary or appropriate, shall have been filed in all jurisdictions that Administrative Agent deems necessary or advisable;
(o)    receipt of a duly executed Fourth Amendment to the Blocked Account Agreement, in form and substance reasonably acceptable to Administrative Agent;
(p)    receipt by Administrative Agent of duly executed signature pages to the Golden Living Intercreditor Agreement (AL) from Golden Living (AL) Lessors and the DLC III (AL) Subsidiaries;
(q)    receipt by Administrative Agent of duly executed signature pages to the Golden Living Intercreditor Agreement (MS) from Golden Living (MS) Lessors and the DLC III (MS) Subsidiaries;
(r)    receipt by Administrative Agent of duly executed signature pages to that certain fee letter dated as of September 30, 2016, by Borrower in favor of Administrative Agent, and receipt by Administrative Agent in immediately available funds of all fees payable thereunder;
(s)    receipt of certificates from Borrower’s insurance carriers evidencing Administrative Agent as additional insured with respect to New Borrower’s general liability insurance;
(t)    receipt by Administrative Agent of a true, correct and complete copy of the Management Agreements between New Borrower and Manager available as of the date hereof, certified by a Duly Authorized Officer of New Borrower;
(u)    receipt by Administrative Agent of a true, correct and complete copy of the Golden Living Lease Documents solely with respect to the Golden Living (MS) Facilities, the Carthage Lease Documents and the Meridian Lease Documents available as of the date hereof, and each certified by a Duly Authorized Officer of New Borrower;
(v)    receipt by Administrative Agent of a duly signed and completed perfection certificate with respect to New Borrower;
(w)    UCC Amendment Statement naming AFI as debtor and Administrative Agent as secured party with respect to the equity of DLC III pledged pursuant to the First AFI Pledge Amendment shall have been filed in all jurisdictions that Administrative Agent deems necessary or advisable (including the Delaware Secretary of State);
(x)    UCC Financing Statement naming DLC III as debtor and Administrative Agent as secured party with respect to the equity of each of the limited liability companies identified on Appendix 1 hereto pledged pursuant to the DLC III Pledge Agreement shall have been filed in all jurisdictions that Administrative Agent deems necessary or advisable (including the Delaware Secretary of State);
(y)    receipt by Administrative Agent of copies of resolutions of the governing body of AFI authorizing the execution, delivery and performance by AFI of the First AFI Pledge Amendment, certified by a Duly Authorized Officer of AFI;
(z)    receipt by Administrative Agent of copies of resolutions of the governing body of DLC III authorizing the execution, delivery and performance by DLC III of the DLC III Pledge Agreement, certified by a Duly Authorized Officer of DLC III;
(aa)    receipt by Administrative Agent of copies of resolutions of the governing body of Guarantor authorizing the execution, delivery and performance by Guarantor of the Guaranty Reaffirmation, certified by a Duly Authorized Officer of Guarantor;
(bb)    receipt by Administrative Agent of copies of the supplemented Schedule 1.1(a) (Borrowers), Schedule 1.1(f) (Facilities, Locations, Real Property, Operators, Owners, Leases), Schedule 7.8 (Names), Schedule 7.12 (Organizational Chart), Schedule 7.33 (Capitalization) and Schedule 7.36 (Commercial Leases) of the Loan Agreement;
(cc)    receipt of any applicable Letter of Credit Document (including an amendment to the Master Letter of Credit Agreement or an entirely new Master Letter of Credit Agreement) as Administrative Agent may require in connection with this Amendment; and
(dd)    receipt by Administrative Agent of such other certificates, schedules, exhibits, documents, opinions, instruments, reaffirmations, amendments or consents Administrative Agent may reasonably require, if any.
8.    Reaffirmation; References to Loan Agreement; Additional Agreements and Covenants; Etc.
(a)    Borrower acknowledges and agrees that all of Borrower’s obligations and Liabilities under the Loan Agreement and the other Financing Agreements, as amended hereby, are and shall be valid and enforceable and shall not be impaired or limited by the execution or effectiveness of this Amendment.  The first priority perfected security interests and Liens and rights in the Collateral securing payment of the Liabilities are hereby ratified and confirmed by Borrower in all respects.
(b)    Upon the effectiveness of this Amendment, each reference in the Loan Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of like import shall mean and be a reference to the Loan Agreement, as amended by this Amendment.
(c)    The failure by Administrative Agent, at any time or times hereafter, to require strict performance by any Borrower of any provision or term of the Loan Agreement, this Amendment or any of the Financing Agreements shall not waive, affect or diminish any right of Administrative Agent hereafter to demand strict compliance and performance herewith or therewith.  Any suspension or waiver by Administrative Agent of a breach of this Amendment or any Event of Default under or pursuant to the Loan Agreement shall not, except as expressly set forth in a writing signed by Administrative Agent, suspend, waive or affect any other breach of this Amendment or any Event of Default under or pursuant to the Loan Agreement, whether the same is prior or subsequent thereto and whether of the same or of a different kind or character.  None of the undertakings, agreements, warranties, covenants and representations of any Borrower contained in this Amendment, shall be deemed to have been suspended or waived by Administrative Agent unless such suspension or waiver is (i) in writing and signed by Administrative Agent (and, if applicable, the Required Lenders) and (ii) delivered to Borrower by Administrative Agent or its counsel.
(d)    In no event shall Administrative Agent’s execution and delivery of this Amendment establish a course of dealing among Administrative Agent, any Borrower, pledgor or Guarantor or any other obligor, or in any other way obligate Administrative Agent to hereafter provide any amendments or modifications or, if at any time applicable, consents or waivers with respect to the Loan Agreement or any other Financing Agreement.  The terms and provisions of this Amendment shall be limited precisely as written and shall not be deemed (x) to be a consent to any amendment or modification of any other term or condition of the Loan Agreement or of any of the Financing Agreements (except as expressly provided herein or in any of the other instruments, agreements, certificates and documents required to be executed and delivered in connection herewith, including those identified in Sections 7(c), (d), (e), (f), (o), (p), (q) and (r)); or (y) to prejudice any right or remedy which Administrative Agent may now have under or in connection with the Loan Agreement or any of the other Financing Agreements.  In the event an ambiguity or question of intent or interpretation arises, this Amendment shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Amendment.
(e)    Except as expressly provided herein (or in any of the other instruments, agreements, certificates and documents required to be executed and delivered in connection herewith, including those identified in Sections 7(c), (d), (e), (f), (o), (p), (q) and (r)), the Loan Agreement and all of the other Financing Agreements shall remain unaltered, and the Loan Agreement and all of the other Financing Agreements shall remain in full force and effect and are hereby ratified and confirmed in all respects.
(f)    Borrower shall deliver to Administrative Agent when available true, correct and complete copies of the applicable Licenses for the Golden Living (AL) Facilities, the Golden Living (MS) Facilities, the Carthage Facility and the Meridian Facility for New Borrower promptly upon receipt.
(g)    Borrower shall deliver to Administrative Agent when available true, correct and complete copies of the Golden Living Lease Documents relating to the Golden Living (AL) Facilities promptly upon effectiveness of the same.
(h)    Each Lender hereby authorizes Administrative Agent to execute the Golden Living Intercreditor Agreement (AL) and the Golden Living Intercreditor Agreement (MS) on behalf of each Lender.
9.    Release.
(a)    In consideration of, among other things, the consent and amendments provided for herein, and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, Borrower and Guarantor (on behalf of themselves and their respective subsidiaries, Affiliates, successors and assigns), and, to the extent permitted by applicable law and the same is claimed by right of, through or under the above, for their past, present and future employees, directors, members, managers, partners, agents, representatives, officers, directors, and equity holders (all collectively, with Borrower and Guarantor, the “Releasing Parties”), do hereby unconditionally, irrevocably, fully, and forever remise, satisfy, acquit, release and discharge Administrative Agent, Issuing Lender, and Lenders and each of Administrative Agent’s, Issuing Lender’s and Lender’s past, present and future officers, directors, agents, employees, attorneys, parent, shareholders, successors, assigns, subsidiaries and Affiliates and all other persons and entities to whom Administrative Agent or Lenders would be liable if such persons or entities were found in any way to be liable to any of the Releasing Parties (collectively, the “Lender Parties”), of and from any and all manner of action and actions, cause and causes of action, claims, cross-claims, charges, demands, counterclaims, suits, proceedings, disputes, debts, dues, sums of money, accounts, bonds, covenants, contracts, controversies, damages, judgments, liabilities, damages, costs, expenses, executions, liens, claims of liens, claims of costs, penalties, attorneys’ fees, or any other compensation, recovery or relief on account of any liability, obligation, demand, proceedings or cause of action of whatever nature, whether in law, equity or otherwise (including, without limitation, those arising under 11 U.S.C. §§ 541-550 and interest or other carrying costs, penalties, legal, accounting and other professional fees and expenses, and incidental, consequential and punitive damages payable to third parties), whether known or unknown, fixed or contingent, joint and/or several, secured or unsecured, due or not due, primary or secondary, liquidated or unliquidated, contractual or tortious, direct, indirect, or derivative, asserted or unasserted, foreseen or unforeseen, suspected or unsuspected, now existing, heretofore existing or which may have heretofore accrued against any or all of Lender Parties, whether held in a personal or representative capacity, that the Releasing Parties (or any of them) have or may have against the Lender Parties or any of them (whether directly or indirectly) and which are based on any act, fact, event, action or omission or any other matter, condition, cause or thing occurring at or from any time prior to and including the date hereof in any way, directly or indirectly arising out of, connected with or relating to this Amendment, the Loan Agreement or any other Financing Agreement and the transactions contemplated hereby and thereby, the Collateral or the Liabilities, and all other agreements, certificates, instruments and other documents and statements (whether written or oral) related to any of the foregoing, other than any applicable good faith claim as to which a final determination is made in a judicial proceeding (in which Administrative Agent and any of the Released Parties have had an opportunity to be heard) which determination includes a specific finding that Administrative Agent acted in a grossly negligent manner or with actual willful misconduct or illegal activity.  Borrower and Guarantor each acknowledges that Administrative Agent and Lenders are specifically relying upon the representations, warranties and agreements contained herein and that such representations, warranties and agreements constitute a material inducement to Administrative Agent and Lenders in entering into this Amendment.
(b)    Borrower and Guarantor each understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.
(c)    To the furthest extent permitted by law, Borrower and Guarantor each hereby knowingly, voluntarily, intentionally and expressly waives and relinquishes any and all rights and benefits that it respectively may have as against Lender Parties under any law, rule or regulation of any jurisdiction that would or could have the effect of limiting the extent to which a general release extends to claims which a Lender Party or Releasing Party does not know or suspect to exist as of the date hereof.  Borrower and Guarantor each hereby acknowledges that the waiver set forth in the prior sentence was separately bargained for and that such waiver is an essential term and condition of this Amendment (and without which the consent in Section 1 and the amendments in Section 4 hereof would not have been agreed to by Administrative Agent and Lenders).
10.    Supplementation of Schedule 1.1(c) to Term Loan Agreement.  Certain of the Borrowers party hereto are also Affiliated Term Loan Borrowers under the Term Loan Agreement.  Each of the Administrative Agent and Lenders party hereto are also the Administrative Agent and Lenders (each as defined in the Term Loan Agreement) under the Term Loan Agreement.  Such parties hereby supplement Schedule 1.1(c) to the Term Loan Agreement with the information contained on the Supplement to Schedule 1.1(c) to the Second Amended and Restated Term Loan and Security Agreement attached hereto.
11.    Costs and Expenses.  Without limiting the obligation of Borrower to reimburse Administrative Agent for all costs, fees, disbursements and expenses incurred by Administrative Agent as specified in the Loan Agreement, Borrower agrees to and shall pay on demand all reasonable costs, fees, disbursements and expenses of Administrative Agent in connection with the preparation, negotiation, revision, execution and delivery of this Amendment and the other agreements, amendments, modifications, reaffirmations, instruments and documents contemplated hereby, including, without limitation, reasonable attorneys’ fees and out-of-pocket expenses. All obligations provided herein shall survive any termination of this Amendment and the Loan Agreement as amended hereby.
12.    Financing Agreement.  This Amendment shall constitute a Financing Agreement.
13.    Titles.  Titles and section headings herein shall be without substantive meaning and are provided solely for the convenience of the parties.
14.    Severability; Etc.  Whenever possible, each provision of this Amendment shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Amendment shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Amendment.  The parties hereto have participated jointly in the negotiation and drafting of this Amendment.  In the event an ambiguity or question of intent or interpretation arises, this Amendment shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Amendment.
15.    Successors and Assigns.  This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, no Borrower may assign any of its respective rights or obligations under this Amendment without the prior written consent of Administrative Agent.
16.    Further Assurances.  Borrower shall, at its own cost and expense, cause to be promptly and duly taken, executed, acknowledged and delivered all such further acts, certificates, instruments, reaffirmations, amendments, documents and assurances as may from time to time be necessary or as Administrative Agent may from time to time reasonably request in order to more fully carry out the intent and purposes of this Amendment or any of the other instruments, agreements, certificates and documents required to be executed and delivered in connection herewith, including those identified in Sections 7(c), (d), (e), (f), (o), (p), (q) and (r).
17.    Counterparts; Faxes.  This Amendment may be executed in multiple counterparts, each of which shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.  A signature hereto sent or delivered by facsimile or other electronic transmission shall be as legally binding and enforceable as a signed original for all purposes.
18.    Governing Law.  This Amendment shall be governed by and construed and enforced in accordance with the internal laws of the State of Illinois, without regard to conflict of law principles that would require the application of any other laws.
[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have duly executed this Consent and Second Amendment to Third Amended and Restated Revolving Loan and Security Agreement as of the day and year first above written.

	
			
	BORROWER: 
 
ORIGINAL BORROWER:
ADVOCAT FINANCE, INC.
DIVERSICARE MANAGEMENT SERVICES CO.
DIVERSICARE LEASING CORP.
STERLING HEALTH CARE MANAGEMENT, INC.
DIVERSICARE TEXAS I, LLC
DIVERSICARE HOLDING COMPANY, LLC
DIVERSICARE KANSAS, LLC
DIVERSICARE LEASING COMPANY II, LLC
DIVERSICARE PROPERTY CO., LLC

	By:
	/s/ James R. McKnight, Jr.

	Name:
	James R. McKnight, Jr.

	Its:
	Executive Vice President & Chief Financial Officer

	
				
	SENIOR CARE CEDAR HILLS, LLC
SENIOR CARE GOLFCREST, LLC
SENIOR CARE GOLFVIEW, LLC
SENIOR CARE SOUTHERN PINES, LLC

	BY:
	SENIOR CARE FLORIDA LEASING, LLC, its sole member

	 
	BY:
	DIVERSICARE LEASING CORP., its sole member

	 
	By:
	/s/ James R. McKnight, Jr.

	 
	Name:
	James R. McKnight, Jr.

	 
	Its:
	Executive Vice President & Chief Financial Officer

Signature Page to Consent and Second Amendment to  
Third Amended and Restated Revolving Loan and Security Agreement

	
				
	SENIOR CARE FLORIDA LEASING, LLC
DIVERSICARE AFTON OAKS, LLC
DIVERSICARE BRIARCLIFF, LLC
DIVERSICARE CHISOLM, LLC
DIVERSICARE HARTFORD, LLC
DIVERSICARE HILLCREST, LLC
DIVERSICARE LAMPASAS, LLC
DIVERSICARE PINEDALE, LLC
DIVERSICARE WINDSOR HOUSE, LLC
DIVERSICARE YORKTOWN, LLC
DIVERSICARE ROSE TERRACE, LLC
DIVERSICARE THERAPY SERVICES, LLC
DIVERSICARE CLINTON, LLC 
DIVERSICARE HIGHLANDS, LLC

	BY:
	DIVERSICARE LEASING CORP., its sole member

	 
	By:
	/s/ James R. McKnight, Jr.

	 
	Name:
	James R. McKnight, Jr.

	 
	Its:
	Executive Vice President & Chief Financial Officer

	 

	
				
	DIVERSICARE BALLINGER, LLC
DIVERSICARE DOCTORS, LLC
DIVERSICARE ESTATES, LLC
DIVERSICARE HUMBLE, LLC
DIVERSICARE KATY, LLC
DIVERSICARE NORMANDY TERRACE, LLC DIVERSICARE TREEMONT, LLC
DIVERSICARE PARIS, LLC 

	BY:
	DIVERSICARE TEXAS I, LLC, its sole member

	 
	By:
	/s/ James R. McKnight, Jr.

	 
	Name:
	James R. McKnight, Jr.

	 
	Its:
	Executive Vice President & Chief Financial Officer

	
				
	DIVERSICARE OF CHANUTE, LLC
DIVERSICARE OF COUNCIL GROVE, LLC
DIVERSICARE OF HAYSVILLE, LLC
DIVERSICARE OF SEDGWICK, LLC 
DIVERSICARE OF HUTCHINSON, LLC
DIVERSICARE OF LARNED, LLC

	BY:
	DIVERSICARE KANSAS, LLC
its sole member

	 
	 

	 
	By:
	/s/ James R. McKnight, Jr.

	 
	Name:
	James R. McKnight, Jr.

	 
	Its:
	Executive Vice President & Chief Financial Officer

DIVERSICARE OF SENECA PLACE, LLC
DIVERSICARE OF BRADFORD PLACE, LLC
DIVERSICARE OF PROVIDENCE, LLC
DIVERSICARE OF SIENA WOODS, LLC
DIVERSICARE OF ST. THERESA, LLC
DIVERSICARE OF BIG SPRINGS, LLC
DIVERSICARE OF NICHOLASVILLE, LLC
DIVERSICARE OF AVON, LLC
DIVERSICARE OF MANSFIELD, LLC
DIVERSICARE OF RIVERSIDE, LLC
DIVERSICARE OF CHATEAU, LLC
DIVERSICARE OF ST. JOSEPH, LLC 
DIVERSICARE OF GREENVILLE, LLC 

		
	By:
	DIVERSICARE LEASING COMPANY II, LLC, its sole member

By:  /s/ James R. McKnight, Jr.        
	
		
	Name:
	James R. McKnight, Jr.

	Its:
	Executive Vice President & Chief Financial Officer

DIVERSICARE AFTON OAKS PROPERTY, LLC
DIVERSICARE BRIARCLIFF PROPERTY, LLC
DIVERSICARE CHANUTE PROPERTY, LLC
DIVERSICARE CHISOLM PROPERTY, LLC
DIVERSICARE COUNCIL GROVE PROPERTY, LLC
DIVERSICARE HAYSVILLE PROPERTY, LLC
DIVERSICARE HARTFORD PROPERTY, LLC
DIVERSICARE HILLCREST PROPERTY, LLC
DIVERSICARE HUTCHINSON PROPERTY, LLC
DIVERSICARE LAMPASAS PROPERTY, LLC
DIVERSICARE LARNED PROPERTY, LLC
DIVERSICARE SEDGWICK PROPERTY, LLC
DIVERSICARE WINDSOR HOUSE PROPERTY, LLC
DIVERSICARE YORKTOWN PROPERTY, LLC
DIVERSICARE GLASGOW PROPERTY, LLC
DIVERSICARE CLINTON PROPERTY, LLC
DIVERSICARE FULTON PROPERTY, LLC

		
	By:
	DIVERSICARE PROPERTY CO., LLC, its sole member

By:   /s/ James R. McKnight, Jr._________    
Name: James R. McKnight, Jr.
		
	Its:
	Executive Vice President  & Chief 

Financial Officer

DIVERSICARE OF GLASGOW, LLC
DIVERSICARE OF FULTON, LLC 

		
	By:
	DIVERSICARE HOLDING COMPANY, LLC, its sole member

		
	By: /s/ James R. McKnight, Jr.
	 

Name: James R. McKnight, Jr.
		
	Its:
	Executive Vice President  & Chief 

Financial Officer

NEW BORROWER:

DIVERSICARE LEASING COMPANY III, LLC

By:  /s/ James R. McKnight, Jr._________
	
		
	Name:
	James R. McKnight, Jr.

	Its:
	Executive Vice President & Chief Financial Officer

DIVERSICARE OF ARAB, LLC
DIVERSICARE OF BOAZ, LLC
DIVERSICARE OF FOLEY, LLC
DIVERSICARE OF HUEYTOWN, LLC
DIVERSICARE OF LANETT, LLC
DIVERSICARE OF BESSEMER, LLC
DIVERSICARE OF MONTGOMERY, LLC
DIVERSICARE OF ONEONTA, LLC
DIVERSICARE OF OXFORD, LLC
DIVERSICARE OF PELL CITY, LLC
DIVERSICARE OF RIVERCHASE, LLC
DIVERSICARE OF WINFIELD, LLC
DIVERSICARE OF AMORY, LLC
DIVERSICARE OF BATESVILLE, LLC
DIVERSICARE OF BROOKHAVEN, LLC
DIVERSICARE OF CARTHAGE, LLC
DIVERSICARE OF EUPORA, LLC
DIVERSICARE OF MERIDIAN, LLC
DIVERSICARE OF RIPLEY, LLC
DIVERSICARE OF SOUTHAVEN, LLC
DIVERSICARE OF TUPELO, LLC
DIVERSICARE OF TYLERTOWN, LLC 

		
	By:
	DIVERSICARE LEASING COMPANY III, LLC, its sole member

By:  /s/ James R. McKnight, Jr.________
	
		
	Name:
	James R. McKnight, Jr.

	Its:
	Executive Vice President & Chief Financial Officer

	
			
	Acknowledged and Agreed:
DIVERSICARE HEALTHCARE SERVICES, INC. 

	/s/ Kelly J. Gill
	 

	Name:
	Kelly J. Gill
	 

	Its:
	President and Chief Executive Officer
	 

ADMINISTRATIVE AGENT:

THE PRIVATEBANK AND TRUST COMPANY, in its capacity as administrative agent

By:    /s/ Adam D. Panos__________
Name:  Adam D. Panos
Its:  Managing Director

LENDER:

THE PRIVATEBANK AND TRUST COMPANY

By:  /s/ Adam D. Panos_________
Name:  Adam D. Panos
Its:  Managing Director

	
			
	LENDER:
BANKERS TRUST COMPANY

	By: /s/Jon M. Doll___________
	 

	Name:
	Jon M. Doll
	 

	Its:
	Vice President
	 

	
			
	LENDER:
BOKF, NA D/B/A BANK OF OKLAHOMA

	By: /s/ Ryan Kirk______________
	 

	Name:
	Ryan Kirk
	 

	Its:
	Vice President
	 

	
			
	LENDER:
CIT BANK N.A.

	By: /s/ Edward Shuster__________
	 

	Name:
	Edward Shuster
	 

	Its:
	Director
	 

	
			
	LENDER:
OPUS BANK,  
a California commercial bank

	By: /s/ Bryan Nance___________
	 

	Name:
	Bryan Nance
	 

	Its:
	VP, Portfolio Manager Healthcare Banking
	 

	
			
	LENDER:
FRANKLIN SYNERGY BANK

	By: /s/ Lisa Fletcher____________
	 

	Name:
	Lisa Fletcher
	 

	Its:
	Senior Vice President
	 

REAFFIRMATION OF SECOND AMENDED AND RESTATED GUARANTY

Dated as of:  October 3, 2016
The undersigned (“Guarantor”) hereby: (i) confirms and agrees with The PrivateBank and Trust Company, an Illinois banking corporation in its capacity as administrative agent (together with its successors and assigns, “Administrative Agent”) that Guarantor’s Second Amended and Restated Guaranty dated as of February 26, 2016 made in favor of Administrative Agent (as amended or modified, “Guaranty”), remains in full force and effect and is hereby ratified and confirmed in all respects, including with regard to the Third Amended and Restated Revolving Loan and Security Agreement dated as of February 26, 2016, as amended by the foregoing Consent and Second Amendment to Third Amended and Restated Revolving Loan and Security Agreement (“Amendment”), and each reference to the term “Borrower” in the Guaranty shall also include New Borrower (as defined in the Amendment) and each reference to the “Loan Agreement” shall refer to the Loan Agreement as amended by the Amendment; (ii) represents and warrants to Administrative Agent, which representations and warranties shall survive the execution and delivery hereof, that Guarantor’s representations and warranties contained in the Guaranty are true and correct as of the date hereof, with the same effect as though made on the date hereof, except to the extent that such representations expressly related solely to an earlier date, in which case such representations were true and correct on and as of such earlier date (and except for the representations in Section 10(b) thereof which were true and correct on and as of the date when made); (iii) agrees and acknowledges that such ratification and confirmation is not a condition to the continued effectiveness of the Amendment or the Guaranty; and (iv) agrees that neither such ratification and confirmation, nor Administrative Agent’s solicitation of such ratification and confirmation, constitutes a course of dealing giving rise to any obligation or condition requiring a similar or any other ratification or confirmation from the undersigned with respect to subsequent amendments or modifications, if any, to the Loan Agreement, as amended by the Amendment or any other Financing Agreement (as defined in the Loan Agreement, as amended by the Amendment).  The execution, delivery and effectiveness of this instrument shall not operate as a waiver of any right, power or remedy of Administrative Agent under or pursuant to the Guaranty.  Guarantor acknowledges and agrees that Guarantor has received and reviewed a fully-executed copy of the Amendment (and any other instrument, document or agreement executed or delivered in connection therewith) and understands the contents thereof.  A signature hereto sent or delivered by facsimile or other electronic transmission shall be as legally binding and enforceable as a signed original for all purposes.  This instrument shall be governed by and construed and enforced in accordance with the internal laws of the State of Illinois, without regard to conflict of law principles that would require the application of any other laws.
[Signature Page Follows]

DIVERSICARE HEALTHCARE SERVICES, INC. 

By:  /s/  Kelly J. Gill            
Name:    Kelly J. Gill
Its:    President and Chief Executive Officer

APPENDIX 1
Subsidiaries of Diversicare Leasing Company III, LLC

	
		
	1.    
	Diversicare of Arab, LLC

	2.    
	Diversicare of Boaz, LLC

	3.    
	Diversicare of Foley, LLC

	4.    
	Diversicare of Hueytown, LLC

	5.    
	Diversicare of Lanett, LLC

	6.    
	Diversicare of Bessemer, LLC

	7.    
	Diversicare of Montgomery, LLC

	8.    
	Diversicare of Oneonta, LLC

	9.    
	Diversicare of Oxford, LLC

	10.    
	Diversicare of Pell City, LLC

	11.    
	Diversicare of Riverchase, LLC

	12.    
	Diversicare of Winfield, LLC

	13.    
	Diversicare of Amory, LLC

	14.    
	Diversicare of Batesville, LLC

	15.    
	Diversicare of Brookhaven, LLC

	16.    
	Diversicare of Carthage, LLC

	17.    
	Diversicare of Eupora, LLC

	18.    
	Diversicare of Meridian, LLC

	19.    
	Diversicare of Ripley, LLC

	20.    
	Diversicare of Southaven, LLC

	21.    
	Diversicare of Tupelo, LLC

	22.    
	Diversicare of Tylertown, LLC

SCHEDULE 1.1(a) 
to Third Amended and Restated Revolving Loan and Security Agreement 
(Second Amendment)

BORROWERS

	
					
	 
	Name
	State of Incorporation or Formation
	Principal Place of Business and Chief Executive Office
	Organizational Number

	1.    
	Diversicare Leasing Company III, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027
	6080735

	2.    
	Diversicare of Arab, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027
	6084416

	3.    
	Diversicare of Boaz, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027
	6084424

	4.    
	Diversicare of Foley, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027
	6084437

	5.    
	Diversicare of Hueytown, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027
	6084440

	6.    
	Diversicare of Lanett, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027
	6084441

	7.    
	Diversicare of Bessemer, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027
	6084422

	8.    
	Diversicare of Montgomery, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027
	6084445

	9.    
	Diversicare of Oneonta, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027
	6084447

	10.    
	Diversicare of Oxford, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027
	6084453

	11.    
	Diversicare of Pell City, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027
	6084456

	12.    
	Diversicare of Riverchase, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027
	6084464

	13.    
	Diversicare of Winfield, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027
	6084498

	14.    
	Diversicare of Amory, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027
	6084418

	15.    
	Diversicare of Batesville, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027
	6084421

	16.    
	Diversicare of Brookhaven, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027
	6080735

	17.    
	Diversicare of Carthage, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027
	6084416

	18.    
	Diversicare of Eupora, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027
	6084424

	19.    
	Diversicare of Meridian, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027
	6084437

	20.    
	Diversicare of Ripley, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027
	6084440

	21.    
	Diversicare of Southaven, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027
	6084441

	22.    
	Diversicare of Tupelo, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027
	6084422

	23.    
	Diversicare of Tylertown, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027
	6084445

SCHEDULE 1.1(f)
to Third Amended and Restated Revolving Loan and Security Agreement 
(Second Amendment)

FACILITIES; LOCATIONS; REAL PROPERTY; OPERATORS; OWNERS; LEASES

	
						
	 
	Facility Name
	Real Property / Location Address
	Owner / Lessor
	Operator / Lessee
	Lease Expiration Date and Options to Extend (if applicable)

	Golden Living (AL) Facilities

	1.    
	Diversicare of Arab
	235 Third Street, Southeast, Arab, Alabama  35016
	GPH Arab LLC
	Diversicare of Arab, LLC
	October 31, 2026; 
two 5-year renewals

	2.    
	Diversicare of Boaz
	600 Corley Avenue, Boaz, Alabama  35957
	GPH Boaz LLC
	Diversicare of Boaz, LLC
	October 31, 2026; 
two 5-year renewals

	3.    
	Diversicare of Foley
	1701 North Alston, Foley, Alabama  36535
	GPH Foley LLC
	Diversicare of Foley, LLC
	October 31, 2026; 
two 5-year renewals

	4.    
	Diversicare of Hueytown
	190 Brooklane Drive, Hueytown, Alabama  35023
	GPH Hueytown LLC
	Diversicare of Hueytown, LLC
	October 31, 2026; 
two 5-year renewals

	5.    
	Diversicare of Lanett
	702 South 13th Street, Lanett, Alabama  36863
	GPH Lanett LLC
	Diversicare of Lanett, LLC
	October 31, 2026; 
two 5-year renewals

	6.    
	Diversicare of Bessemer
	820 Golf Course Road, Bessemer, Alabama  35023
	GPH Bessemer LLC
	Diversicare of Bessemer, LLC
	October 31, 2026; 
two 5-year renewals

	7.    
	Diversicare of Montgomery
	2020 North Country Club Drive, Montgomery, Alabama  36106
	GPH Montgomery LLC
	Diversicare of Montgomery, LLC
	October 31, 2026; 
two 5-year renewals

	8.    
	Diversicare of Oneonta
	215 Valley Road, Oneonta, Alabama  35121
	GPH Oneonta LLC
	Diversicare of Oneonta, LLC
	October 31, 2026; 
two 5-year renewals

	9.    
	Diversicare of Oxford
	1130 South Hale Street, Oxford, Alabama  36203
	GPH Oxford LLC
	Diversicare of Oxford, LLC
	October 31, 2026; 
two 5-year renewals

	10.    
	Diversicare of Pell City
	510 Wolf Creek Road North, Pell City, Alabama  35125
	Beverly Enterprises-Alabama, Inc.
	Diversicare of Pell City, LLC
	October 31, 2026; 
two 5-year renewals

	11.    
	Diversicare of Riverchase
	2500 Riverhaven Drive, Birmingham, Alabama  35244
	GPH Birmingham LLC
	Diversicare of Riverchase, LLC
	October 31, 2026; 
two 5-year renewals

	12.    
	Diversicare of Winfield
	144 County Highway 14, Winfield, Alabama  35594
	GPH Winfield LLC
	Diversicare of Winfield, LLC
	October 31, 2026; 
two 5-year renewals

	Golden Living (MS) Facilities

	13.    
	Diversicare of Amory
	1215 Earl Frye Drive, Amory, Mississippi  38821
	GPH Amory LLC
	Diversicare of Amory, LLC
	October 31, 2026; 
two 5-year renewals

	14.    
	Diversicare of Batesville
	154 Woodland Road, Batesville, Mississippi  38606
	GPH Batesville LLC
	Diversicare of Batesville, LLC
	October 31, 2026; 
two 5-year renewals

	15.    
	Diversicare of Brookhaven
	519 Brookman Drive, Brookhaven, Mississippi  39601
	GPH Brookhaven LLC
	Diversicare of Brookhaven, LLC
	October 31, 2026; 
two 5-year renewals

	16.    
	Diversicare of Eupora
	156 E. Walnut Avenue, Eupora, Mississippi  39744
	GPH Eupora LLC
	Diversicare of Eupora, LLC
	October 31, 2026; 
two 5-year renewals

	17.    
	Diversicare of Ripley
	101 Cunningham Drive, Ripley Mississippi  38663
	GPH Ripley LLC
	Diversicare of Ripley, LLC
	October 31, 2026; 
two 5-year renewals

	18.    
	Diversicare of Southaven
	1730 Dorchester Drive, Southaven, Mississippi  38671
	GPH Southaven LLC
	Diversicare of Southaven, LLC
	October 31, 2026; 
two 5-year renewals

	19.    
	Diversicare of Tupelo
	2273 South Eason Boulevard, Tupelo, Mississippi  38804
	GPH Tupelo LLC
	Diversicare of Tupelo, LLC
	October 31, 2026; 
two 5-year renewals

	20.    
	Diversicare of Tylertown
	200 Medical Circle, Tylertown, Mississippi  39667
	GPH Tylertown LLC
	Diversicare of Tylertown, LLC
	October 31, 2026; 
two 5-year renewals

	Other  (MS) Facilities

	21.    
	Diversicare of Carthage
	1101 E. Franklin Street, Carthage, Mississippi 39051
	Leake County Nursing Home, Ltd.
	Diversicare of Carthage, LLC
	September 30, 2018

	22.    
	Diversicare of Meridian
	4728 Hwy 39 North, Meridian Mississippi  39301
	Broadmoor Nursing Home, Ltd.
	Diversicare of Meridian, LLC
	September 30, 2026; 
two 5-year renewals

SCHEDULE 7.8
to Third Amended and Restated Revolving Loan and Security Agreement 
(Second Amendment)

OTHER NAMES

Alabama: 

Diversicare of Arab, LLC will do business in the state of Alabama as Diversicare of Arab.

Diversicare of Bessemer, LLC will do business in the state of Alabama as Diversicare of Bessemer.

Diversicare of Boaz, LLC will do business in the state of Alabama as Diversicare of Boaz.

Diversicare of Foley, LLC will do business in the state of Alabama as Diversicare of Foley.

Diversicare of Hueytown, LLC will do business in the state of Alabama as Baron House of Hueytown.

Diversicare of Lanett, LLC will do business in the state of Alabama as Diversicare of Lanett.

Diversicare of Montgomery, LLC will do business in the state of Alabama as Diversicare of Montgomery.

Diversicare of Oneonta, LLC will do business in the state of Alabama as Diversicare of Oneonta.

Diversicare of Oxford, LLC will do business in the state of Alabama as Diversicare of Oxford.

Diversicare of Pell City, LLC will do business in the state of Alabama as Diversicare of Pell City.

Diversicare of Riverchase, LLC will do business in the state of Alabama as Diversicare of Riverchase.

Diversicare of Winfield, LLC will do business in the state of Alabama as Diversicare of Winfield.

Mississippi:

Diversicare of Amory, LLC will do business in the state of Mississippi as Diversicare of Amory.

Diversicare of Batesville, LLC will do business in the state of Mississippi as Diversicare of Batesville.

Diversicare of Brookhaven, LLC will do business in the state of Mississippi as Diversicare of Brookhaven. 

Diversicare of Carthage, LLC will do business in the state of Mississippi as Diversicare of Carthage.

Diversicare of Eupora, LLC will do business in the state of Mississippi as Diversicare of Eupora.

Diversicare of Meridian, LLC will do business in the state of Mississippi as Diversicare of Meridian.

Diversicare of Ripley, LLC will do business in the state of Mississippi as Diversicare of Ripley.

Diversicare of Southaven, LLC will do business in the state of Mississippi as Diversicare of Southaven.

Diversicare of Tupelo, LLC will do business in the state of Mississippi as Diversicare of Tupelo.

Diversicare of Tylertown, LLC will do business in the state of Mississippi as Diversicare of Tylertown.

SCHEDULE 7.12
to Third Amended and Restated Revolving Loan and Security Agreement 
(Second Amendment)

ORGANIZATIONAL CHART

See attached.

SCHEDULE 7.33
to Third Amended and Restated Revolving Loan and Security Agreement 
(Second Amendment)

CAPITALIZATION

	
				
	Borrower
	Number of Authorized Stock/LLC Interests
	Holder of Equity Securities
	Ownership Percentage

	Diversicare Leasing Company III, LLC
	N/A
	Advocat Finance, Inc.
	100%

	Diversicare of Arab, LLC
	N/A
	Diversicare Leasing Company III, LLC
	100%

	Diversicare of Boaz, LLC
	N/A
	Diversicare Leasing Company III, LLC
	100%

	Diversicare of Foley, LLC
	N/A
	Diversicare Leasing Company III, LLC
	100%

	Diversicare of Hueytown, LLC
	N/A
	Diversicare Leasing Company III, LLC
	100%

	Diversicare of Lanett, LLC
	N/A
	Diversicare Leasing Company III, LLC
	100%

	Diversicare of Bessemer, LLC
	N/A
	Diversicare Leasing Company III, LLC
	100%

	Diversicare of Montgomery, LLC
	N/A
	Diversicare Leasing Company III, LLC
	100%

	Diversicare of Oneonta, LLC
	N/A
	Diversicare Leasing Company III, LLC
	100%

	Diversicare of Oxford, LLC
	N/A
	Diversicare Leasing Company III, LLC
	100%

	Diversicare of Pell City, LLC
	N/A
	Diversicare Leasing Company III, LLC
	100%

	Diversicare of Riverchase, LLC
	N/A
	Diversicare Leasing Company III, LLC
	100%

	Diversicare of Winfield, LLC
	N/A
	Diversicare Leasing Company III, LLC
	100%

	Diversicare of Amory, LLC
	N/A
	Diversicare Leasing Company III, LLC
	100%

	Diversicare of Batesville, LLC
	N/A
	Diversicare Leasing Company III, LLC
	100%

	Diversicare of Brookhaven, LLC
	N/A
	Diversicare Leasing Company III, LLC
	100%

	Diversicare of Carthage, LLC
	N/A
	Diversicare Leasing Company III, LLC
	100%

	Diversicare of Eupora, LLC
	N/A
	Diversicare Leasing Company III, LLC
	100%

	Diversicare of Meridian, LLC
	N/A
	Diversicare Leasing Company III, LLC
	100%

	Diversicare of Ripley, LLC
	N/A
	Diversicare Leasing Company III, LLC
	100%

	Diversicare of Southaven, LLC
	N/A
	Diversicare Leasing Company III, LLC
	100%

	Diversicare of Tupelo, LLC
	N/A
	Diversicare Leasing Company III, LLC
	100%

	Diversicare of Tylertown, LLC
	N/A
	Diversicare Leasing Company III, LLC
	100%

SCHEDULE 7.36
to Third Amended and Restated Revolving Loan and Security Agreement 
(Second Amendment)

COMMERCIAL LEASES

1.    Master Lease Agreement dated as of October 1, 2016 by and between, collectively, the Golden Living (MS) Lessors listed and identified on Schedule 1.1 (f) as Owner/Lessor, each as Lessor, and the DLC III (MS) Subsidiaries listed and identified as Operator/ Lessee, each as Lessee, with respect to each of the Facilities listed and identified on Schedule 1.1 (f)  as the Golden Living ( MS) Facilities and located at the Mississippi addresses shown thereon, set opposite their respective names. Upon the closing on or about  November 1, 2016 of the transactions for the lease by the DLC III ( AL) Subsidiaries of the Facilities listed and identified on Schedule 1.1(f) as the Golden Living (AL) Facilities and located at the addresses in Alabama shown thereon, the Golden Living (AL) Lessors listed and identified the Owner/Lessor on Schedule 1.1 (f), each as Lessor, and the DLC III (AL) Subsidiaries listed and identified on as Operator/Lessee on Schedule 1.1 (f), each as Lessee, will be joined, collectively, to the Master Lease Agreement by an amendment and restatement of the  Master lease Agreement (the “Amended and Restated Lease”), to include, collectively, each of the Golden Living (AL) Facilities listed on Schedule 1.1 (f) set opposite their respective names as of the demised premises under the Master Lease Agreement.  The expiration date of the initial term of the Amended and Restated Lease shall be the date that is ten (10) years after the commencement of the Amended and Restated Lease.

2.    Lease Agreement between Broadmoor Nursing Home  Ltd., as Lessor, and Diversicare of Meridian, LLC, as Lessee, with respect to the Meridian Facility located in Meridian, Mississippi as listed and identified on Schedule 1.1.(f),  originally dated October 1, 1977, the leasehold interest of the current lessee thereunder being assigned to and assumed by Diversicare of Meridian, LLC by Assignment and Assumption Agreement by and between Beverly Enterprises-Mississippi, Inc., as Assignor, and Diversicare of Meridian, LLC, as Assignee, dated as of October 1, 2016, such Lease Agreement being amended by First Amendment to Lease Agreement dated as of October 1, 2016, by and between Lessor and Diversicare of Meridian, LLC, as Lessee. The expiration date of the current term of this lease is September 30, 2026.

3.    Lease Agreement between Leake County Nursing Home  Ltd., as Lessor, and Diversicare of Carthage, LLC, as Lessee, with respect to the Carthage Facility located in Carthage, Mississippi as listed and identified on Schedule 1.1.(f),  originally dated October 1, 1977, the leasehold interest of the current lessee thereunder being assigned to and assumed by Diversicare of Carthage, LLC by Assignment and Assumption Agreement by and between Beverly Enterprises-Mississippi, Inc., as Assignor, and Diversicare of Carthage, LLC, as Assignee, dated as of October 1, 2016, such Lease Agreement being amended by First Amendment to Lease Agreement dated as of October 1, 2016, by and between Lessor and Diversicare of Carthage, LLC, as Lessee. The expiration date of the current term of this lease is September 30, 2018.

4.    Commercial Sublease effective as of the 1st day of October, by and between GGNSC Administrative Services, LLC, DBA Golden Living, as Tenant, and  Diversicare of Tupelo, LLC, as Subtenant, for the sublet to Subtenant of approximately 2227 sq. ft. of commercial office space in Spanish Village complex located at 144 South Thomas Street, Suite 204-205, Tupelo, Mississippi 38801, for purposes of an employee training center, which premises Tenant leases pursuant to  a lease agreement with Hancock Family LLC, as Landlord, dated the 27th day of April, 1998, and amended through the Eighth Amendment, dated the 21st day of August, 2014, the current expiration date of the term of this sublease is December 31, 2016.

ANNEX A
(LENDERS, PRO RATA SHARES/DOLLAR ALLOCATIONS, AND NOTICE INFORMATION)
	
			
	Lender
	Contact Information
	

Pro Rata Shares

	 
	 
	 

	The PrivateBank and Trust Company
	120 South LaSalle Street
Chicago, IL  60603
Attn.:  Adam D. Panos
Managing Director
Tel.:  (312) 564-1278
Fax:  (312) 683-0446

Initial Dollar Allocation (through July 31, 2017):
$19,250,000.00

Adjusted Dollar Allocation (from and after August 1, 2017)

$15,565,789.47

	36.84210526%

	CIT Bank N.A.
	

11 West 42nd Street
New York, NY  10036
Attn.:  Edward Shuster
Director
Tel.:  (212) 771-9303

Initial Dollar Allocation (through July 31, 2017):
$11,000,000.00

Adjusted Dollar Allocation (from and after August 1, 2017)

$8,894,736.84

	21.05263158%

	Bankers Trust Company
	453 7th Street
Des Moines, IA  50304-0897
Attn.:  Jon M. Doll
Vice President
Tel.:  (515) 245-2837
Fax:  (515) 245-5216

Initial Dollar Allocation (through July 31, 2017):
$8,250,000.00

Adjusted Dollar Allocation (from and after August 1, 2017)

$6,671,052.63

	15.78947368%

	 
	 
	 

	BOKF, NA d/b/a Bank of Oklahoma
	

One Williams Center, 8th Floor
Tulsa, OK  74172
Attn.:  Ryan Kirk
Vice President
Tel.:  (918) 588-6743
Fax:  (918) 280-3368

Initial Dollar Allocation (through July 31, 2017):
$2,750,000.00

Adjusted Dollar Allocation (from and after August 1, 2017)

$2,223,684.21

	5.26315789%

	
			
	Opus Bank
	

19900 MacArthur Blvd.
12th Floor
Irvine, CA 92612
Attn.:  Bryan Nance
VP, Portfolio Manager Healthcare Banking
Tel.:  (949) 251-8123
Fax:  (949) 250-9988

Initial Dollar Allocation (through July 31, 2017):
$5,500,000.00

Adjusted Dollar Allocation (from and after August 1, 2017)

$4,447,368.42

	10.52631579%

	Franklin Synergy Bank
	

722 Columbia Ave.
Franklin, TN 37064
Chicago, IL  60606
Attn.:  Lisa Fletcher
Senior Vice President
Tel.:  (615) 564-6374
Fax:  (312) 564-7375

Initial Dollar Allocation (through July 31, 2017):
$5,500,000.00

Adjusted Dollar Allocation (from and after August 1, 2017)

$4,447,368.42

	10.52631579%

SCHEDULE 1.1(c) 
to Second Amended and Restated Term Loan and Security Agreement 

AFFILIATED REVOLVING BORROWERS

	
				
	 
	Name
	State of Incorporation or Formation
	Principal Place of Business and Chief Executive Office

	1.    
	Diversicare Leasing Company III, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027

	2.    
	Diversicare of Arab, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027

	3.    
	Diversicare of Boaz, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027

	4.    
	Diversicare of Foley, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027

	5.    
	Diversicare of Hueytown, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027

	6.    
	Diversicare of Lanett, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027

	7.    
	Diversicare of Bessemer, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027

	8.    
	Diversicare of Montgomery, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027

	9.    
	Diversicare of Oneonta, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027

	10.    
	Diversicare of Oxford, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027

	11.    
	Diversicare of Pell City, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027

	12.    
	Diversicare of Riverchase, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027

	13.    
	Diversicare of Winfield, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027

	14.    
	Diversicare of Amory, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027

	15.    
	Diversicare of Batesville, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027

	16.    
	Diversicare of Brookhaven, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027

	17.    
	Diversicare of Carthage, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027

	18.    
	Diversicare of Eupora, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027

	19.    
	Diversicare of Meridian, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027

	20.    
	Diversicare of Ripley, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027

	21.    
	Diversicare of Southaven, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027

	22.    
	Diversicare of Tupelo, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027

	23.    
	Diversicare of Tylertown, LLC
	Delaware limited liability company
	1621 Galleria Blvd., Brentwood, TN  37027

Signature Page to Consent and Second Amendment to  
Third Amended and Restated Revolving Loan and Security AgreementExhibit

AUTOMATIC DATA PROCESSING, INC.
DEFERRED COMPENSATION PLAN
As Amended and Restated Effective September 15, 2016
The Automatic Data Processing, Inc. Deferred Compensation Plan is intended to provide a select group of management or highly-compensated employees the ability to defer certain compensation earned by such employees.  This restated Plan document applies to all deferrals made or vested under the Plan on or after January 1, 2005 that are subject to the provisions of Section 409A of the Internal Revenue Code.  All other deferrals made and vested prior to January 1, 2005 are subject to the rules in effect at the time the compensation was deferred.  It is intended that this Plan will be supplemented by annual summaries describing the Plan and participation in the Plan for the applicable Plan Year; in the event of a conflict between the Plan and an annual summary, the terms of the Plan shall control. 
ARTICLE I
DEFINITIONS

Capitalized terms used in this Plan, shall have the meanings specified below.
1.1“Account” or “Accounts” shall mean all of the Bonus Deferral Subaccounts, Company Matching Contribution Subaccounts or Company Stock Unit Subaccounts that are specifically provided in this Plan.
1.2“Affiliate” means (i) any person or entity that directly or indirectly controls, is controlled by or is under common control with the Company and/or (ii) to the extent provided by the Committee, any person or entity in which the Company has a significant interest.  The term “control” (including, with correlative meaning, the terms “controlled by” and “under common control with”), as applied to any person or entity, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person or entity, whether through the ownership of voting or other securities, by contract or otherwise. 
1.3“Annual Bonus Payments” shall mean, with respect to any Eligible Employee who does not qualify as a sales associate, the compensation earned pursuant to any annual cash incentive plan or annual cash bonus plan or program adopted by the Company; provided, however, that the following compensation shall not qualify as “Annual Bonus Payments” hereunder: spot bonuses, hiring bonuses, separation payments, retention payments, or other special or extraordinary payments. For the sake of clarity, payments of amounts under such annual cash incentive plan or annual cash bonus plan or program in connection with such Participant’s separation from service or termination of employment from the Company are to be treated for purposes of the Plan as an Annual Bonus Payment (and not a separation payment), even if the amounts are fixed and/or accelerated in connection with such separation or termination (provided that the timing of the payment and the extent to which the amount is substantially certain shall be taken into account in determining whether a deferral in respect of such payments shall be permitted under the Plan).  Annual Bonus Payments shall only include compensation that is contingent on the satisfaction of pre-established organizational or individual performance criteria relating to the Company’s fiscal year, and the performance criteria in respect of which was established in writing no later than 90 days after the commencement of the performance period to which such criteria relate.
1.4“Annual Incentive Amounts” shall mean, as applicable, Annual Bonus Payments and Qualifying Sales Bonuses. 

1.5“Beneficiary” or “Beneficiaries” shall mean the person or persons designated in writing by a Participant in accordance with procedures established by the Committee or the Plan Administrator to receive the benefits specified hereunder in the event of the Participant’s death.  No Beneficiary designation shall become effective until it is filed with the Committee or the Plan Administrator.  If there is no such designation or if there is no surviving designated Beneficiary, then the Participant’s surviving spouse shall be the Beneficiary.  If there is no surviving spouse to receive any benefits payable in accordance with the preceding sentence, the duly appointed and currently acting personal representative of the Participant’s estate (which shall include either the Participant’s probate estate or living trust) shall be the Beneficiary.
1.6“Board of Directors” or “Board” shall mean the Board of Directors of Automatic Data Processing, Inc.
1.7“Bonus Deferral Subaccount” shall mean the bookkeeping account maintained by the Company or the Plan Administrator for each Participant that is credited with amounts equal to (i) the portion of the Participant’s Annual Incentive Amounts that he or she elects to defer, and (ii) earnings and losses (based on the Investment Rate) attributable thereto.
1.8“Code” shall mean the Internal Revenue Code of 1986, as amended.  Reference in the Plan to any section of the Code shall be deemed to include any regulations or other interpretative guidance under such section, and any amendments or successor provisions to such section, regulations or guidance.
1.9“Committee” shall mean a committee as the Compensation Committee may appoint to administer the Plan or, if no such committee has been appointed by the Compensation Committee, then it shall be the Compensation Committee. As of the effective date of this Plan, the Committee shall consist of (i) the person occupying the position of General Counsel of the Company, and (ii) the person occupying the position of Chief Human Resources Officer of the Company. In the event of a vacancy in either the position of General Counsel or Chief Human Resources Officer, then unless the Compensation Committee otherwise determines, the Committee shall consist of the remaining person until such vacant position is filled. 
1.10“Company” shall mean Automatic Data Processing, Inc., a Delaware corporation.
1.11“Company Common Stock” means the common stock, par value $.10 per share, of the Company. 
1.12“Company Matching Contribution” shall mean the amount, if any, contributed by the Company for a Participant with respect to a Plan Year under Section 4.2.  
1.13“Company Matching Contribution Subaccount” shall mean the bookkeeping account maintained by the Company or the Plan Administrator for each Participant that is credited with an amount equal to (i) the Company Matching Contribution, if any, and (ii) earnings and losses (based on the Investment Rate) attributable thereto.
1.14“Company Stock Unit Subaccount” shall mean the bookkeeping account maintained by the Company or the Plan Administrator for each Participant that is credited with (i) a number of Company stock units equal to the PBRS Awards that he or she elects to defer, if any, and (ii) an amount equal to the Dividend Equivalents (and earnings and losses (based on the Investment Rate) attributable to such Dividend Equivalents).  
1.15“Compensation Committee” shall mean the Compensation Committee of the Board.
1.16“Disability” shall mean a circumstance where the Company shall have cause to terminate a Participant’s employment or service on account of “disability,” as defined in any then-existing employment, consulting or other similar agreement between the Participant and the Company or, in the 

absence of such an employment, consulting or other similar agreement, a condition entitling the Participant to receive benefits under a long-term disability plan of the Company, or, in the absence of such a plan, as determined by the Committee based upon medical evidence acceptable to it; provided, however, that a Participant shall not have a Disability for purposes of the Plan unless the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or the Participant is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering the Company’s employees.
1.17“Distributable Amount” shall mean the vested balance in a Participant’s Accounts subject to distribution in a given Plan Year.
1.18“Dividend Equivalents” shall mean, for any Participant who defers PBRS Awards, an amount equal to the product of (a) the dividends (including extraordinary dividends, if so determined by the Committee) declared and paid to other stockholders of the Company in respect of one share of Company Common Stock, multiplied by (b) the number of Company stock units in such Participant’s Company Stock Unit Subaccount on the date such dividends are so declared.
1.19“Eligible Employee” shall mean those employees selected by the Committee in accordance with the procedures set forth in Article II.
1.20“Enrollment Period” shall mean a period of time, as determined by the Committee with respect to each Plan Year, ending no later than the December 31 preceding the end of the performance period with respect to which the Annual Incentive Amounts or PBRS Awards, as applicable, for such Plan Years relate; provided, however, that if the relevant performance period does not end on June 30, the Enrollment Period shall end at least six months before the conclusion of the applicable performance period.
1.21“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.
1.22“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor thereto.  Reference in the Plan to any section of (or rule promulgated under) the Exchange Act shall be deemed to include any rules, regulations or other interpretative guidance under such section or rule, and any amendments or successor provisions to such section, rules, regulations or guidance.
1.23“Fund” or “Funds” shall mean one or more of the investment funds selected by the Committee, or its designee, to which Participants may elect to make deemed investments pursuant to Section 3.3.
1.24“In-Service Distribution Date” shall mean, in the case of a distribution to be made while the Participant is still employed by the Company, September 9th of any Plan Year elected by the Participant.
1.25“Investment Rate” shall mean, (i) for each Fund with a fixed rate of return, the annual interest rate applicable to such Fund, as determined by the Committee from time to time, and (ii) for any Fund that does not have a fixed rate of return, any appreciation or depreciation in the value of the investment in which the Participant is deemed invested.
1.26“Participant” shall mean any Eligible Employee who becomes a Participant in this Plan in accordance with Article II.
1.27“PBRS Awards” shall mean, for any Plan Year, the number of shares of Company Common Stock earned by a Participant under the PBRS Program.

1.28“PBRS Program” shall mean the Company’s performance-based restricted stock program, performance-based stock unit program or any similar performance-based equity arrangement under the Company’s 2008 Omnibus Award Plan (or any successor plan), as in effect from time to time.
1.29“Plan” shall mean this Automatic Data Processing, Inc. Deferred Compensation Plan.
1.30“Plan Administrator” shall mean, if applicable, any record keeper appointed by the Company (which may include an Affiliate of the Company) to perform administrative and other functions associated with the Plan. 
1.31“Plan Year” shall mean the Company’s fiscal year, which runs from July 1 to June 30.
1.32“Qualifying Sales Bonuses” shall mean, with respect to any Eligible Employee who qualifies as a sales associate and (i) receives sales bonuses on a quarterly basis, the bonus paid to such person related to the Company’s fourth fiscal quarter in any Plan Year or (ii) receives sales bonuses on a monthly basis, the bonus paid to such person related to the last month in any Plan Year.
1.33“Separation from Service” shall mean that the employment or service provider relationship with the Company and any entity that is to be treated as a single employer with the Company for purposes of Treasury Regulations Section 1.409A-1(h) (the “Single Employer”) terminates such that the facts and circumstances indicate it is reasonably anticipated that no further services will be performed or that the level of bona fide services the Participant would perform after the termination (whether as an employee or as an independent contractor) would permanently decrease to no more than 20 percent of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month period (or the full period of services to the Single Employer if the Participant has been providing services to the Single Employer less than 36 months).
1.34“Separation from Service Distribution Date” shall, except as set forth in Section 3.2(f)(iv), mean, in the case of a distribution on account of a Separation from Service, the ninth day of the seventh month following the month in which the Separation from Service occurs.
1.35“Unforeseeable Emergency” shall mean a severe unforeseeable financial hardship as defined in Section 409A and the regulations thereunder, including a severe financial hardship resulting from (i) an illness or accident of the Participant, the Participant’s spouse, the Participant’s designated Beneficiary, or the Participant’s dependent (as defined in Section 152 of the Code, without regard to section 152(b)(1), (b)(2), and (d)(1)(B)), (ii) the loss of the Participant’s property due to casualty, or (iii) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the Participant’s control.

ARTICLE II

ELIGIBILITY FOR PARTICIPATION

2.1Determination of Eligible Employee.  With respect to all Plan Years commencing on or after July 1, 2011, Eligible Employees (with respect to both Annual Incentive Amounts and PBRS Awards) shall consist of all employees of the Company (or of any subsidiary that is incorporated in any State in the United States of America), determined as of July 1 of each Plan Year, that are (x) in executive letter grade positions, and (y) eligible to receive compensation pursuant to an annual cash incentive plan, or annual cash bonus plan or program; provided, however, that any employee whose home country is not the United States of America shall not be considered an Eligible Employee hereunder.    
2.2Participation.  An Eligible Employee shall become a Participant in the Plan by electing to make a deferral of Annual Incentive Amounts or PBRS Awards in a Plan Year in accordance with Article 

III.  
2.3Amendment of Eligibility Criteria.  The Committee may, in its discretion, change which employees are Eligible Employees under the Plan for any reason, including to comply with any applicable laws relating to the operation of the Plan. Eligibility for participation in one Plan Year does not guarantee eligibility to participate in any future Plan Year.
ARTICLE III
ELECTIONS

3.1Election to Defer Annual Incentive Amounts and PBRS Awards.
(a)Timing of Election to Defer Annual Incentive Amounts and PBRS Awards.  An Eligible Employee may elect to defer Annual Incentive Amounts and/or PBRS Awards only during the Enrollment Period.  
(b)Amount Eligible for Deferral.  
(1)An Eligible Employee may elect to defer between 0% and 100% of his Annual Incentive Amounts and/or his PBRS Awards, as may be determined by the Committee.  The Committee may change the amount or percentage that may be deferred in respect of any Plan Year at any time, or from time to time.
(2)If necessary, the total amount deferred by a Participant shall be reduced in 1% increments in order to satisfy Social Security Tax (including Medicare), income tax withholding for compensation that cannot be deferred, employee benefit plan withholding requirements and any other withholding requirements.
(c)Irrevocable Elections.  Elections to defer Annual Incentive Amounts and PBRS Awards shall become irrevocable as of the date for such Plan Year set by the Committee in its sole discretion, which (i) in the case of an Annual Bonus Payment shall in no event be later than six months before the conclusion of the performance period with respect to which the Annual Bonus Payment relates, (ii) in the case of a Qualifying Sales Bonus shall in no event be later than the December 31 of the calendar year preceding the calendar year in which the Qualifying Sales Bonus will be earned, and (iii) in case of a PBRS Award shall in no event be later than six months before the conclusion of the performance period with respect to which the PBRS Award relates.
(d)Duration of Election.  An Eligible Employee’s election to defer Annual Incentive Amounts and/or PBRS Awards for any Plan Year is effective only for such Plan Year.
(e)Method of Election.  Elections to participate may be made in writing, through an electronic medium such as a website enrollment window or an email enrollment form or through a Plan Administrator, provided that the election is binding when made and there is sufficient record of when such election is made.
3.2Elections as to Time and Form of Payment.  During the Enrollment Period, a Participant shall make an election regarding the time and form of payment of the Annual Incentive Amounts and PBRS Awards deferred for that Plan Year (and all earnings and losses (based on the Investment Rate) attributable thereto, including in respect of Dividend Equivalents).  
(a)Elections as to Time.  A Participant shall elect to receive a distribution of his Annual Incentive Amounts and PBRS Awards to be deferred for a Plan Year (and all earnings and losses (based on the Investment Rate) attributable thereto, including in respect of Dividend Equivalents) (i) on an In-Service Distribution Date, (ii) on a Separation from Service Distribution Date or (iii) a portion on an In-Service Distribution Date and a portion on a Separation from Service Distribution Date; provided, 

however, that a Participant’s In-Service Distribution Date may occur no earlier than the fifth year following the year in which the deferral of Annual Incentive Amounts and PBRS Awards, as applicable, is made.
(b)Elections as to Form.  A Participant shall elect the form of the distribution of his Annual Incentive Amounts and PBRS Awards, whether in a lump sum payment or in annual installments.  If no such election is made, the Participant shall be deemed to have elected to receive payment in a lump sum.  A Participant may elect annual installments to be paid over a period not to exceed fifteen years.  A Participant’s election to receive payment in annual installments on a Separation from Service is subject to the terms of Section 6.2(a)(2). 
(c)Application of Election.  An election as to time and form of payment made with respect to a given Plan Year shall apply only to the Annual Incentive Amounts and PBRS Awards deferred for such Plan Year. 
(d)No Changes Permitted.  Except as permitted by Section 3.2(e) below, elections as to time and form of payment shall become irrevocable as of December 31 of the Plan Year for which Annual Incentive Amounts and PBRS Awards, as applicable, are deferred.
(e)Subsequent Changes in Time and Form of Payment.  A Participant may delay the timing of a previously-scheduled payment or may change the form of a payment only if such subsequent deferral election meets all of the following requirements and the election rules set forth in Section 3.2(f):
(i)the subsequent deferral election shall not take effect until at least 12 months after the date on which it is made;
(ii)the election must be made at least 12 months prior to the date the payment is scheduled to be made, or for installment payments, at least 12 months prior to the date the first of such installments is scheduled to be made; and
(iii)the subsequent deferral election must delay the payment for at least five years from the date the payment would otherwise have been made.  For installment payments, the delay is measured from the date the first payment was scheduled to be made.
(f)Election Rules.
(i)Initial elections and subsequent elections, if any, may be made in writing or through an electronic medium such as a website enrollment window or through an email enrollment form or through a Plan Administrator, provided that there is sufficient record of when such election is made. 
(ii)A Participant may make only one subsequent deferral election with respect to deferrals made for a specific Plan Year.
(iii)Á Participant whose initial deferral election was for payment upon a Separation from Service Distribution Date may not make a subsequent deferral election for payment on an In-Service Distribution Date; however, such Participant may make a subsequent deferral election to change the form of payment from lump sum to installments or vice versa, or to change the number of installment payments previously elected.
(iv)If a Participant makes an effective subsequent deferral election pursuant to Section 3.2(e) to change the form of payment from lump sum to installments or vice versa, or to change the number of installment payments initially elected, the term “Separation from Service Distribution Date” shall, with respect to the amounts subject to such subsequent deferral election (and solely for purposes of Section 6.2(a)(1)), thereafter mean either (x) if the Participant’s initial election provided for payment upon an In-Service Distribution Date, the later of (A) the fifth anniversary of such In-Service Distribution Date and (B) the ninth day of the seventh month following the month in which the Separation 

from Service occurs, or (y) if the Participant’s initial election provided for payment upon a Separation from Service Distribution Date, the fifth anniversary of the ninth day of the seventh month following the month in which the Separation from Service occurs.
3.3Elections as to Deemed Investment Choices.
(a)Prior to the date on which the actual deferral of an Annual Incentive Amount in respect of Plan Year is made by the Company, a Participant shall make an election regarding how such Annual Incentive Amount shall be deemed to be invested for purposes of determining the amount of earnings or losses to be credited to the Participant’s Accounts.  If no such election is made in respect of Annual Incentive Amounts deferred in any Plan Year, then (i) the Participant shall be deemed to have made the same election made by such Participant in respect of the most recent Plan Year in which there was a deferral of Annual Incentive Amounts, and (ii) if no election contemplated by clause (i) has been made, the deferred Annual Incentive Amounts shall be deemed invested in the most risk-free type of Fund, as determined by the Committee in its sole and absolute discretion.
(b)Dividend Equivalents shall be deemed to be invested in the Fund specified for such purpose by the Committee from time to time and communicated to the Participant, and if no such communication is made, in the most risk-free type of Fund, as determined by the Committee in its sole and absolute discretion.
(c)The Committee shall select from time to time, in its sole and absolute discretion, investments of various types that shall be communicated to the Participant.  The Investment Rate applicable to each Fund shall be used to determine the amount of earnings or losses to be credited to Participant’s Bonus Deferral Subaccount and Company Matching Contribution Subaccount (and the portion of the Company Stock Unit Subaccount attributable solely to Dividend Equivalents).  Deemed investment choices shall not be changed unless the Committee promulgates a rule of general application permitting such changes.

ARTICLE IV
DEFERRAL ACCOUNTS

4.1Bonus Deferral Subaccount.  The Company or Plan Administrator shall establish and maintain a Bonus Deferral Subaccount for each Participant under the Plan.  Each Participant’s Bonus Deferral Subaccount shall be further divided into separate subaccounts (“investment fund subaccounts”), each of which corresponds to a Fund elected by the Participant.  A Participant’s Bonus Deferral Subaccount shall be credited as follows:
(a)on the day the amounts are withheld and/or deferred from a Participant’s Annual Incentive Amounts, with an amount equal to the Annual Incentive Amounts deferred by the Participant; and
(b)on a daily basis, each investment fund subaccount of a Participant’s Bonus Deferral Subaccount shall be credited with earnings or losses based on the applicable Investment Rate.
4.2Company Matching Contributions.  The Company shall match 50% of the first $20,000 of Annual Incentive Amounts deferred by a Participant with respect to a Plan Year, but only if the Participant has elected for such Annual Incentive Amounts to be distributed following the Participant’s Separation from Service; provided, however, that this matching contribution shall not be made with respect to any Participant who is either (i) an “officer” of the Company (as such term is defined under Rule 3b-7 of the Exchange Act) or (ii) a Corporate Vice President of the Company, in either case, determined as of the first day of the Plan Year.  Notwithstanding the foregoing, Eligible Employees whose first day of active employment with the Company is on or after January 1, 2015 are not eligible to receive any Company 

Matching Contributions.
4.3Company Matching Contribution Subaccount.  The Company or Plan Administrator shall establish and maintain a Company Matching Contribution Subaccount for each Participant who receives a Company Matching Contribution under the Plan.  A Participant’s Company Matching Contribution Subaccount shall be further divided into separate investment fund subaccounts, each of which corresponds to a Fund elected by the Participant. A Participant’s Company Matching Contribution Subaccount shall be credited as follows:
(a)on the day such amount is deemed contributed, with an amount equal to the Company Matching Contribution Amount, if any; and
(b)on a daily basis, each investment fund subaccount of a Participant’s Company Matching Contribution Subaccount shall be credited with earnings or losses based on the applicable Investment Rate.
4.4Company Stock Unit Subaccount.  The Company or Plan Administrator shall establish and maintain a Company Stock Unit Subaccount for each Participant who elects to defer receipt of a PBRS Award.  A Participant’s Company Stock Unit Subaccount shall be credited as follows:
(a)on the day shares of Company Common Stock would otherwise be issued to the Participant under the PBRS Program, with a number of Company stock units equal to the number of shares of Company Common Stock earned by the Participant under the PBRS Program; and
(b)on the day dividends are paid to stockholders of the Company in respect of shares of Company Common Stock, an amount equal to the Dividend Equivalents; and
(c)on a daily basis, the investment fund subaccount of a Participant’s Company Stock Unit Subaccount shall be credited with earnings or losses on the Dividend Equivalents based on the applicable Investment Rate.

ARTICLE V
VESTING

5.1Vesting.  A Participant shall be 100% vested at all times in his or her Bonus Deferral Subaccount.  A Participant shall vest in his or her Company Matching Contribution Account at the time such Participant either (i) attains 65 years of age, or (ii) attains ten (10) years of service credited with the Company and its subsidiaries.  The Committee in its sole discretion may credit a Participant with additional periods of service solely for purposes of vesting in his or her Company Matching Contribution Account.  A Participant shall vest in his or her Company Stock Unit Subaccount with respect to the Company stock units therein attributable to a PBRS Award on the date on which such PBRS Award would otherwise have vested had the Participant not elected to defer receipt of the Company Common Stock issuable pursuant to such PBRS Award.  A Participant shall be 100% vested at all times in the portion of his or her Company Stock Unit Subaccount attributable to Dividend Equivalents (and earnings and losses attributable thereto), notwithstanding that the underlying Company stock units in respect of which such Dividend Equivalents are credited may not yet have vested  
5.2Vesting Upon Death or Disability.  Upon death or the Disability of a Participant, the Participant shall be 100% vested in his or her Company Matching Contribution Subaccount.

ARTICLE VI
DISTRIBUTIONS

Distributions from the Plan shall be made only in accordance with this Article VI.  All distributions shall be in cash, except as otherwise may occur pursuant to Section 6.3, or as provided in Section 6.5, in either case, in respect of PBRS Awards.
6.1Distribution of Accounts While Employed.
(a)Scheduled Distributions.  
(1)In respect of all Distributable Amounts payable in a lump sum on an In-Service Distribution Date, the value thereof shall be determined as of such In-Service Distribution Date occurs, and the distribution thereof shall be made as soon as administratively possible (and in no event later than 90 days) thereafter. In respect of all Distributable Amounts payable in installments on an In-Service Distribution Date, all installments shall be valued as of the ninth day of the month of September in each applicable year, and the distribution thereof shall be made as soon as administratively practicable (and in no event later than 90 days) thereafter.  Upon the death of a Participant, any Distributable Amounts of the Participant then in pay status pursuant to this Section 6.1(a)(1) shall thereafter be payable in accordance with Section 6.2(b).
(2)In the event a Participant has a Separation from Service prior to such Participant’s In-Service Distribution Date, then the provisions of Section 6.2 shall instead apply to such distribution.  For the avoidance of doubt, if a Participant has elected an In-Service Distribution Date with respect to Distributable Amounts under the Plan and such Participant has a Separation from Service (other than on account of death) following such In-Service Distribution Date, the provisions of this Section 6.1(a) shall govern the payment of such amounts, and the provisions of Section 6.2(a) shall not apply.
(b)Except as provided in Section 6.3, no unscheduled in-service distributions are permitted.
6.2Distribution of Accounts after Separation from Service.  If a Participant has a Separation from Service, the provisions of this Section 6.2 shall apply to the distribution of the Participant’s Accounts.
(a)Separation from Service.
(1)Age 55 with Ten Years of Service, or Age 65.  At the time of the Participant’s Separation from Service, if the Participant has either (i) attained age 55 and has completed ten years of service, or (ii) attained age 65, then the Participant’s Account shall be distributed in accordance with the Participant’s election as to form of payment.
(A)Lump Sum.  For Distributable Amounts for which the Participant has elected (or is deemed to have elected) a lump sum, the value thereof shall be determined as of the Participant’s Separation from Service Distribution Date, and the distribution thereof shall be made as soon as administratively possible (and in no event later than 90 days) thereafter.  If (i) a Participant has made an irrevocable election to defer his Annual Incentive Amounts, (ii) such Annual Incentive Amounts are deferred after the Participant’s Account has been distributed, and (iii) the Participant had elected to receive a lump sum distribution, then the additional Account balance shall be valued and distributed on the ninth day of the month immediately following the date the Annual Incentive Amounts are deferred. 
(B)Installment Payments.  For Distributable Amounts for which the Participant has elected installments, (i) the first installment shall be valued as of the Participant’s 

Separation from Service Distribution Date, and the distribution thereof shall be made as soon as administratively possible (and in no event later than 90 days) thereafter, and (ii) each subsequent installment shall be valued as of the ninth day of September of each of the following calendar years, and the distribution thereof shall be made as soon as administratively possible (and in no event later than 90 days) thereafter. For the avoidance of doubt, under no circumstances shall two installments be paid in a single calendar year. If (x) a Participant has made an irrevocable election to defer his Annual Incentive, (y) such Annual Incentive is deferred after the Participant’s Account has started to be distributed, and (z) the Participant had elected to receive installment payments, the additional deferral shall be added to the Participant’s balance in his Bonus Deferral Subaccount and shall be distributed in accordance with the installment election. 
(2)All other Separations from Service.  If, at the time of the Participant’s Separation from Service, a Participant has neither (i) attained age 55 and has completed ten years of service nor (ii) attained age 65, then the Participant’s entire Account balance shall be distributed in a single lump sum.  In any such case, the Distributable Amounts shall be valued as of the Participant’s Separation from Service Distribution Date, and the distribution thereof shall be made as soon as administratively possible (and in no event later than 90 days) thereafter. 
(b)Death.  In the case of the death of a Participant, either while employed by the Company or prior to distribution of the Participant’s entire Account balance (including on account of an In-Service Distribution Date, the Participant’s Account balance shall be distributed to the Participant’s Beneficiary as soon as administratively possible and in no event later than 90 days following the death of the Participant.  The value of the Participant’s Account shall be determined as of the date on which the Participant dies.
(c)Disability.  In the case of the Disability of a Participant prior to the commencement of distribution of the Participant’s Account balance, the Participant’s Account balance shall be distributed to the Participant in a lump sum as soon as administratively possible (and in no event later than 90 days) after it has been determined by the Committee that the Participant suffers from a Disability.  The value of the Participant’s Account shall be determined as of the date on which it has been determined by the Committee that the Participant suffers from a Disability.
6.3Unforeseeable Emergency.  A Participant shall be permitted to elect a distribution from his Bonus Deferral Subaccount, vested Company Matching Contribution Subaccount and/or vested Company Stock Unit Subaccount, if any, prior to the date the Accounts were otherwise to be distributed in the event of an Unforeseeable Emergency, subject to the following restrictions:
(a)the election to take a distribution due to an Unforeseeable Emergency shall be made by requesting such a distribution in writing to the Committee, including the amount requested and a description of the need for the distribution;
(b)the Committee shall make a determination, in its sole discretion, that the requested distribution is on account of an Unforeseeable Emergency; and
(c)the Unforeseeable Emergency cannot be relieved (i) through reimbursement or compensation by insurance or otherwise, (ii) by liquidation of the Participant’s assets, to the extent the liquidation of assets would not itself cause severe financial hardship, or (iii) by cessation of deferrals under this Plan.
The amount determined by the Committee as distributable due to an Unforeseeable Emergency shall be paid within 30 days after the request for the distribution is approved by the Committee.  The value of the Participant’s Account shall be determined as of the date on which the distribution request was made.

6.4Valuation Date. In the event that any valuation date contemplated by Section 6.1 or Section 6.2 is not a business day, then the valuation date shall be the immediately preceding business day.
6.5PBRS Awards.  All distributions from the Company Stock Unit Subaccount attributable to deferrals of PBRS Awards (but not Dividend Equivalents or earnings and losses attributable to such Dividend Equivalents) shall be made in the form of one share of Company Common Stock for each Company stock unit therein.  All shares of Company Common Stock ultimately distributed in respect of Company stock units under the Company Stock Unit Subaccount will be issued under the 2008 Omnibus Award Plan (or any successor plan).  

ARTICLE VII
ADMINISTRATION

7.1Committee.  A Committee shall be appointed by, and serve at the pleasure of, the Compensation Committee.  The number of members comprising the Committee shall be determined by the Compensation Committee, which may from time to time vary the number of members.  A member of the Committee may resign by delivering a written notice of resignation to the Compensation Committee.  The Compensation Committee or the Board may remove any member, with or without cause, by delivering a copy of its resolution of removal to such member.
7.2Committee Action.  The Committee shall act at meetings by affirmative vote of a majority of the members of the Committee.  Any action permitted to be taken at a meeting may be taken without a meeting if, prior to such action, a written consent to the action is signed by a majority of members of the Committee and such written consent is filed with the minutes of the proceedings of the Committee.  A member of the Committee shall not vote or act upon any matter which relates solely to himself or herself as a Participant.  Any member of the Committee may execute any certificate or other written direction on behalf of the Committee.
7.3Powers of the Committee.  The Committee, on behalf of the Participants and their Beneficiaries, shall enforce the Plan in accordance with its terms, shall be charged with the general administration of the Plan, and shall have all powers necessary to accomplish its purposes, including, but not limited to, the following:
(a)    to select the Funds;
(b)    to construe and interpret the terms and provisions of this Plan;
(c)    to compute and certify to the amount and kind of benefits payable to Participants and their Beneficiaries;
(d)    to maintain all records that may be necessary for the administration of the Plan;
(e)    to provide for the disclosure of all information and the filing or provision of all reports and statements to Participants, Beneficiaries or governmental agencies as shall be required by law;
(f)    to make and publish such rules for the regulation of the Plan and procedures for the administration of the Plan as are not inconsistent with the terms hereof;
(g)    to appoint a Plan Administrator, or any other agent, and to delegate to them such powers and duties in connection with the administration of the Plan as the Committee may from time to time prescribe; and
(h)    to take all actions necessary for the administration of the Plan.
7.4Construction and Interpretation.  The Committee shall have full discretion to construe and 

interpret the terms and provisions of this Plan, which interpretations or construction shall be final and binding on all parties, including but not limited to the Company and any Participant or Beneficiary.
7.5Compensation, Expenses and Indemnity.
(a)The members of the Committee shall serve without compensation for their services hereunder.
(b)The Committee is authorized at the expense of the Company to employ such legal counsel as it may deem advisable to assist in the performance of its duties hereunder.  Expenses and fees in connection with the administration of the Plan shall be paid by the Company.

ARTICLE VIII
MISCELLANEOUS

8.1Unsecured General Creditor.  Participants and their Beneficiaries, heirs, successors, and assigns shall have no legal or equitable rights, claims, or interest in any specific property or assets of the Company.  No assets of the Company shall be held in any way as collateral security for the fulfilling of the obligations of the Company under this Plan.  Any and all of the Company’s assets shall be, and remain, the general unpledged, unrestricted assets of the Company.  The Company’s obligation under the Plan shall be merely that of an unfunded and unsecured promise of the Company to pay money in the future, and the rights of the Participants and Beneficiaries shall be no greater than those of unsecured general creditors.  It is the intention of the Company that this Plan be unfunded for purposes of the Code and for purposes of Title I of ERISA.
8.2Restriction Against Assignment.  The Company shall pay all amounts payable hereunder only to the person or persons designated by the Plan and not to any other person or corporation.  No part of a Participant’s Accounts shall be liable for the debts, contracts, or engagements of any Participant, his or her Beneficiary, or successors in interest, nor shall a Participant’s Accounts be subject to execution by levy, attachment, or garnishment or by any other legal or equitable proceeding, nor shall any such person have any right to alienate, anticipate, sell, transfer, commute, pledge, encumber, or assign any benefits or payments hereunder in any manner whatsoever. Notwithstanding anything in the Plan to the contrary, a Participant shall be permitted to instruct the Committee (which instruction shall be effective unless the Committee disapproves the instruction) that all or a portion of his or her Accounts be assigned and conveyed to another person or entity pursuant to a domestic relations order (as defined in Section 414(p)(1)(B) of the Code), and payments pursuant to any such Accounts (or portion thereof) that have been so assigned and conveyed may be paid to such other person or entity in accordance therewith (and to the extent permitted under Section 409A of the Code).
8.3Withholding.  There shall be deducted from each payment made under the Plan or any other compensation payable to the Participant (or Beneficiary) all taxes which are required to be withheld by the Company in respect to such payment or this Plan.  The Company shall have the right to reduce any payment (or compensation), or the amount credited to a Participant’s Account, by the amount of cash (or equivalent value of Company stock units, as applicable, as determined by the Committee) sufficient to provide the amount of said taxes.
8.4Amendment, Modification, Suspension or Termination.  The Compensation Committee may amend, modify, suspend or terminate the Plan in whole or in part, except that no amendment, modification, suspension or termination shall have any retroactive effect to reduce any amounts allocated to a Participant’s Accounts.  The Committee may also amend the Plan, provided that the Committee may only adopt amendments that (i) do not have a negative material financial impact on the Company; or (ii) are required by tax or legal statutes, regulations or pronouncements.

8.5Governing Law.  Except to extent preempted by Federal law, this Plan shall be governed by and construed in accordance with the internal laws of the State of Delaware applicable to contracts made and performed wholly within the State of Delaware, without giving effect to the conflict of laws provisions thereof.
8.6Receipt or Release.  Any payment to a Participant or the Participant’s Beneficiary in accordance with the provisions of the Plan shall, to the extent thereof, be in full satisfaction of all claims against the Committee and the Company.  The Committee may require such Participant or Beneficiary, as a condition precedent to such payment, to execute a receipt and release to such effect.
8.7Limitation of Rights and Employment Relationship.  Neither the establishment of the Plan nor any modification thereof, nor the creating of any fund or account, nor the payment of any benefits shall be construed as giving to any Participant, or Beneficiary or other person any legal or equitable right against the Company except as provided in the Plan; and in no event shall the terms of employment of any Employee or Participant be modified or in any way be affected by the provisions of the Plan.
8.8Headings.  Headings and subheadings in this Plan are inserted for convenience of reference only and are not to be considered in the construction of the provisions hereof.
8.9Section 409A.  All provisions of the Plan shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A of the Code (“Section 409A”).  If the Committee determines that any amounts payable hereunder may be taxable to a Participant under Section 409A, the Company may (i) adopt such amendments to the Plan and appropriate policies and procedures, including amendments and policies with retroactive effect, that the Committee determines necessary or appropriate to preserve the intended tax treatment of the benefits provided by the Plan and/or (ii) take such other actions as the Committee determines necessary or appropriate to avoid or limit the imposition of an additional tax under Section 409A; provided, that the Company shall have no liability to a Participant or Beneficiary with respect to the tax imposed by Section 409A.
As evidence of the amendment and restatement of this Plan, effective September 15, 2016, by Automatic Data Processing, Inc., this document is signed by a duly authorized officer.
AUTOMATIC DATA PROCESSING, INC.
By: /s/ Michael A. Bonarti      
Name: Michael A. Bonarti
Title: Vice President, General Counsel and Secretary

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