Document:

EX-10.4

 

Exhibit 10.4

GUARANTY

     THIS GUARANTY (“Guaranty”) dated as of August 10, 2007, by ADVOCAT INC., a Delaware
corporation (“Guarantor”), is to and for the benefit of LASALLE BANK NATIONAL ASSOCIATION, a
national banking association (together with its successors and assigns, the “Lender”).

R E C I T A L S:

     A. DIVERSICARE MANAGEMENT SERVICES CO., a Tennessee corporation, (together with each (i) of
the other borrowers set forth on Schedule 1 to the Loan Agreement (as defined below) and (ii)
additional borrowers from time to time party to the Loan Agreement (whether pursuant to an
amendment, written joinder or otherwise), individually and collectively referred to herein as,
“Borrower”, has requested that the Lender make certain revolving loans and a term loan
(individually and collectively, the “Loan”) to Borrower pursuant to and in accordance with that
certain Loan and Security Agreement dated of even date herewith by and among Borrower and the
Lender (as the same may be amended, supplemented, amended and restated or otherwise modified from
time to time, the “Loan Agreement”); capitalized terms used but not defined herein shall have the
meanings ascribed thereto in the Loan Agreement.

     B. As security for repayment of the Loan, in addition to this Guaranty, certain other loan
and security documents have been executed and delivered to the Lender. The Loan Agreement, the
Revolving Credit Note, the Term Loan Note, the Blocked Account Agreements, this Guaranty, each
other guaranty delivered in favor of the Lender in connection with the Loan Agreement, and any and
all other instruments, agreements, and documents executed in conjunction herewith and therewith
(including, without limitation, each of the “Financing Agreements” (as defined in the Loan
Agreement)) are hereinafter sometimes collectively referred to herein as the “Loan Documents.”

     C. The Guarantor and Borrower are Affiliates of each other. Guarantor will derive substantial
direct and indirect benefit (financial and otherwise) from the Loan made to Borrower under the Loan
Agreement. The Guarantor desires to induce the Lender to make the Loan to Borrower.

     D. Lender is unwilling to make the Loan pursuant to the Loan Agreement unless Guarantor
guarantees the payment of the principal and interest and all other amounts due or owing to the
Lender provided in the Loan Agreement and other Loan Documents and the performance by Borrower of
all of the covenants on Borrower’s part to be performed and observed pursuant to the terms thereof,
and Guarantor has agreed to execute and deliver this Guaranty to Lender for its benefit.

     NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION RECEIVED, the adequacy and sufficiency of
which is hereby acknowledged, and in further consideration of any advances, credit or other
financial accommodation heretofore, now or that may hereafter at any time be extended to Borrower
by Lender under, pursuant to or in connection with the Loan Documents, (a) Guarantor hereby,
jointly and severally, together with each Other Guarantor (as defined in Section 3 below), and,
unconditionally and irrevocably, guarantees,

 

 

irrespective of the validity or enforceability of any instrument, writing or agreement
relating to or the subject of any such advances, financial accommodation or loans (including, but
not limited to, the Loan Documents), and whether or not due or to become due before or after any
bankruptcy or insolvency proceeding involving Borrower or would have become due but for Borrower’s
bankruptcy proceeding, (i) the full and prompt payment to Lender at maturity, whether by
acceleration or otherwise, and at all times thereafter of any and all “Liabilities” (as defined in
the Loan Agreement) of every kind and nature of Borrower to Lender (arising out of or in connection
with the Loan, the Loan Agreement, and each of the other Loan Documents to which Borrower (or any
of its Affiliates) is a party, including, without limitation, for principal, interest, charges,
fees, costs, expenses or otherwise), and whether or not due or to become due before or after any
bankruptcy or insolvency proceeding involving Borrower or would have become due but for Borrower’s
bankruptcy proceeding, howsoever evidenced, whether now existing or hereafter created or arising,
directly or indirectly, primary or secondary, absolute or contingent, due or to become due, and
howsoever owned, held or acquired, whether through discount, overdraft, purchase, direct loan or as
collateral, or otherwise, and (ii) the prompt, full and faithful performance and discharge by
Borrower of each and every of the terms, conditions, agreements, covenants, representations and
warranties on the part of Borrower contained in any agreement, the Loan Agreement and each of the
other Loan Documents to which Borrower is a party, and any other promissory notes, loan agreements,
or security agreements, or in any modification or addenda thereto or substitution thereof in
connection with any advance, credit or financial accommodation afforded by Lender to Borrower
(collectively the “Guaranteed Liabilities”); and (b) Guarantor further agrees to pay all costs and
expenses, legal and/or otherwise (including, but not limited to, court costs and reasonable
attorneys’ fees and expenses), paid or incurred by Lender in endeavoring to collect the Guaranteed
Liabilities, the Extraordinary Claims (as hereinbelow defined), or in either case, any part
thereof, or in enforcing this Guaranty or in defending any suit based on any act of commission or
omission of Lender with respect to the Indebtedness, the Collateral (as defined in the Loan
Agreement), or this Guaranty or in connection with any Recovery Claim (as hereinbelow defined) (the
“Enforcement Costs”); and (c) Guarantor further agrees to pay any and all costs, losses, damages
and reasonable attorney’s fees incurred by the Lender in connection with any of the following: (i)
misapplication or misappropriation of any insurance or condemnation proceeds; and (ii) Borrower or
Guarantor institutes or becomes by virtue of a counterclaim a party to any case, action, suit, or
proceeding which reduces, impedes or impairs Lender’s right of recourse to the Collateral or any
part thereof or Borrower or Guarantor engages in any act, omission, or misrepresentation which has
the effect of suspending, delaying, reducing, impeding, or impairing the Lender’s right of recourse
to the Collateral or any part thereof (each of the aforesaid are collectively referred to as an
“Extraordinary Claims”). The Guaranteed Liabilities, the Enforcement Costs, and the Extraordinary
Claims are collectively referred to as the “Guaranteed Obligations.” Capitalized terms used
herein and not otherwise defined herein shall have the meaning given to them in the Loan Agreement.

     Guarantor hereby further agrees as follows:

     1. Continuing Guaranty. This Guaranty includes any and all Guaranteed Obligations
arising under successive transactions continuing, compromising, extending, increasing, modifying,
releasing, or renewing
the Guaranteed Obligations, changing the interest rate, payment terms, or other terms and
conditions thereof, or creating new or additional

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Guaranteed Obligations after prior Guaranteed
Obligations have been satisfied in whole or in part. To the maximum extent permitted by law,
Guarantor hereby waives any right to revoke this Guaranty as to future Liabilities. If such a
revocation is effective notwithstanding the foregoing waiver, Guarantor acknowledges and agrees
that (a) no such revocation shall be effective until written notice thereof has been received by
Lender, (b) no such revocation shall apply to any Guaranteed Obligations in existence on such date
(including, but not limited to, any subsequent continuation, extension, or renewal thereof, or
change in the interest rate, payment terms, or other terms and conditions thereof), (c) no such
revocation shall apply to any Guaranteed Obligations made or created after such date to the extent
made or created pursuant to a legally binding commitment of Lender in existence on the date of such
revocation, (d) no payment by Guarantor, Borrower, or from any other source, prior to the date of
such revocation shall reduce the maximum obligation of Guarantor hereunder, and (e) any payment by
Borrower or from any source other than Guarantor, subsequent to the date of such revocation, shall
first be applied to that portion of the Guaranteed Obligations as to which the revocation is
effective and which are not, therefore, guaranteed hereunder, and to the extent so applied shall
not reduce the maximum obligation of Guarantor hereunder.

     2. Performance Under This Guaranty. If Borrower fails to make any payment of any
Guaranteed Obligations on or before the due date thereof and after the expiration of the applicable
notice and cure period, if any, or if Borrower shall fail, after the expiration of the applicable
notice and cure period, if any, to perform, keep, observe, or fulfill any other obligation,
covenant or agreement referred to or contained in any instrument, writing, document or agreement
relating to the Guaranteed Obligations, Guarantor immediately shall cause such payment to be made
or each of such obligations to be performed, kept, observed, or fulfilled to the extent such
obligations constitute Guaranteed Obligations.

     3. Primary Obligations. This Guaranty is a primary and original obligation of
Guarantor, is not merely the creation of a surety relationship, and is an absolute, unconditional,
and continuing guaranty of payment and performance and not of collection which shall remain in full
force and effect without respect to future changes in conditions, including any change of law or
any invalidity or irregularity with respect to the issuance of any instrument, writing or agreement
relating to the Guaranteed Obligations. Guarantor agrees that Guarantor is directly and severally
with any other guarantors of the Guaranteed Obligations liable to Lender, that the obligations of
Guarantor hereunder are independent of the obligations of Borrower or any other guarantor, and that
a separate action may be brought against Guarantor whether such action is brought against Borrower
or any other guarantor of Borrower’s Indebtedness, obligations or liabilities to Lender (each an
“Other Guarantor”) or whether Borrower or any such Other Guarantor is joined in such action.
Guarantor agrees that Guarantor’s liability hereunder shall be immediate and shall not be
contingent upon the exercise or enforcement of any lien, security interest, mortgage or realization
upon any security or collateral Lender may at any time possess. Guarantor agrees that any release
which may be given by Lender to Borrower or any Other Guarantor shall not release Guarantor.
Guarantor consents and agrees that Lender shall be under no obligation to marshal
any assets of Borrower or any Other Guarantor in favor of said Guarantor, or against or in
payment of any or all of the Guaranteed Obligations.

     4. Return of Payments. Guarantor agrees that, if at any time all or any part of any
payment theretofore applied by Lender to any amounts due under the Loan or the Loan

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Agreement is
rescinded or returned by Lender for any reason whatsoever (including, without limitation, the
insolvency, bankruptcy, liquidation or reorganization of any party), such amounts shall, for the
purposes of this Guaranty, be deemed to have continued in existence to the extent of such payment,
notwithstanding such application by Lender and this Guaranty shall continue to be effective or be
reinstated, as the case may be, as to such amounts due under the Loan and the Loan Agreement, all
as though such application by Lender had not been made.

     5. Waivers.

     (a) Guarantor hereby waives: (1) notice of acceptance hereof; (2) notice of any Loan or other
financial accommodations made or extended to Borrower or the creation or existence of any
Guaranteed Obligations; (3) notice of the amount of the Guaranteed Obligations, subject, however,
to Guarantor’s right to make inquiry of Lender to ascertain the amount of the Guaranteed
Obligations at any reasonable time; (4) notice of any adverse change in the financial condition of
Borrower or of any other fact that might increase Guarantor’s risk hereunder; (5) notice of
presentment for payment, demand, protest, and notice thereof as to any promissory notes or other
instruments, writing or agreements evidencing Guaranteed Obligations; (6) notice of any event of
default by Borrower under any instrument, writing or agreement with Lender including the Loan
Documents; and (7) all other notices (except if such notice is specifically required to be given to
Guarantor hereunder) and demands to which Guarantor might otherwise be entitled.

     (b) Guarantor hereby waives the right by statute or otherwise to require Lender to institute
suit against Borrower or under any other guaranty; or to exhaust any rights and remedies which
Lender has or may have against Borrower or under any other guaranty; provided,
however, that nothing herein contained shall prevent Lender from suing on the Loan
Agreement or foreclosing any security interest or lien created by any of the other Loan Documents,
or from exercising any other rights thereunder, and if such commercial code sale or other remedy is
availed of, only the net proceeds therefrom, after deduction of all charges and expenses of every
kind and nature whatsoever relating to the proceedings or sale, shall be applied in reduction of
the amount due on the Loan Agreement and other Loan Documents, and Lender shall not be required to
institute or prosecute proceedings to cover any deficiency as a condition of any payment hereunder
or enforcement hereof. At any sale of the security or collateral for the Loan, or any part
thereof, whether by commercial code sale or otherwise, Lender may, at its discretion, purchase all
or any part of such collateral offered for sale, for its own account, and may apply against the
amount bid therefore the balance due it pursuant to the terms of the Loan Agreement and other Loan
Documents. Guarantor further agrees that Guarantor is bound to the payment of all Guaranteed
Obligations, whether now existing or hereafter accruing, as fully as if such Guaranteed Obligations
were directly owing to Lender by Guarantor. Guarantor further waives
any defense arising by reason of any disability or other defense (other than the defense that
the Guaranteed Obligations shall have been fully and finally performed and indefeasibly paid) of
Borrower or by reason of the cessation from any cause whatsoever of the liability of Borrower in
respect thereof. Guarantor consents to any and all forbearances and extensions of the time of
payment of the Loan Agreement or any of the other Loan Documents, and to any and all changes in the
terms, covenants and conditions thereof hereafter made or granted, and to any part of the
collateral therefor; it being the intention and agreement hereof that Guarantor shall remain
unconditionally liable as a principal as, to and until the Guaranteed Obligations shall have been

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fully repaid to Lender, and the terms, covenants and conditions of the Loan Agreement and of the
other Loan Documents and all other notes, instruments, writing or agreements evidencing or securing
the Guaranteed Obligations shall have been fully performed and observed, notwithstanding any act,
omission or thing which might otherwise operate as a legal or equitable discharge of Borrower or
Guarantor.

     (c) Guarantor hereby waives: (1) any rights to assert against Lender any defense (legal or
equitable), setoff, counterclaim, or claim which Guarantor may now or at any time hereafter have
against Borrower or any other party liable to Lender (other than the defense that the Guaranteed
Obligations shall have been fully and finally performed and indefeasibly paid); and (2) any
defense, setoff, counterclaim, or claim, of any kind or nature, arising directly or indirectly from
the present or future lack of perfection, sufficiency, validity, or enforceability of the
Guaranteed Obligations or any security therefor (including, but not limited to, any of the Loan
Documents). Without limiting the generality of the foregoing or any other provisions of this
Guaranty, Guarantor agrees that this Guaranty shall not be discharged, limited, impaired or
affected by: (a) the transfer of all or any part of the personal property or real property
described in any of the Loan Documents; (b) any sale, pledge, surrender, indulgence, alteration,
substitution, exchange, modification or other disposition of any of the Guaranteed Obligations, all
of which Lender is expressly authorized to make from time to time; (c) any failure, neglect or
omission on the part of Lender to realize or protect any of the Guaranteed Obligations, or any
personal property or real property or lien security given as security therefor, or to exercise any
lien upon or right of appropriation of monies, credits or property of Borrower toward liquidation
of the Indebtedness, or performance of the covenants guaranteed hereby; and (d) any proceedings
with respect to the voluntary or involuntary liquidation, dissolution, sale or other disposition of
all or substantially all the assets, the marshaling of assets and liabilities, receivership,
insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement,
imposition or readjustment of, or other similar proceedings affecting Borrower or any Other
Guarantor or any of their respective assets, it being expressly understood and agreed that no such
proceeding shall affect, modify, limit or discharge the liability or obligation of Guarantor
hereunder in any manner whatsoever, and that Guarantor shall continue to remain absolutely liable
under this Guaranty to the same extent, and in the same manner, as if such proceedings had not been
instituted.

     (d) Guarantor hereby waives any right of subrogation Guarantor has or may have as against
Borrower until all preference periods under all applicable laws have expired. In addition,
Guarantor hereby waives any right to proceed against Borrower, now or hereafter for contribution,
indemnity, reimbursement and any other suretyship rights and claims, whether direct or indirect,
liquidated or contingent, whether arising under express or implied contract or
by operation of law, which Guarantor may now have or hereafter have as against Borrower.
Until the Guaranteed Obligations are indefeasibly paid in full hereunder, Guarantor also hereby
waives any right to recourse to or with respect to any asset of Borrower. Guarantor agrees that in
light of the immediately foregoing waivers, the execution of the Guaranty shall not be deemed to
make Guarantor a “creditor” of Borrower, and that for purposes of Sections 547 and 550 of the
Bankruptcy Code, Guarantor shall not be deemed a “creditor” of Borrower.

     6. Releases. No release or discharge of the Other Guarantor, or of any other person
or entity, whether primarily or secondarily liable for or obligated with respect to the Guaranteed

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Obligations, or the institution of bankruptcy, receivership, insolvency, reorganization,
dissolution or liquidation proceedings by or against the Other Guarantor or any other person or
entity, or the entry of any restraining or other order in any such proceeding, shall release or
discharge Guarantor, unless and until all of the Guaranteed Obligations shall have been fully paid.
Notwithstanding anything to the contrary contained herein, Lender agrees that the obligations of
Guarantor under this Guaranty shall terminate, subject to Sections 4 and 8 hereof, at the earlier
of such time as (a) Lender shall have received indefeasible payment in full in cash of all
Guaranteed Liabilities and all other Guaranteed Obligations under this Guaranty and all financing
arrangements and accommodations between Borrower and Lender shall have been irrevocably terminated
and Lender has no obligations to make any loans, financial accommodations or advance any funds to
Borrower which could constitute Liabilities. Release of this Guaranty, if it occurs, however,
shall not affect, in any respect, the Loan or any other instrument securing or guarantying the
Loan.

     7. Right of Setoff. Guarantor agrees that Lender has all rights of setoff and
banker’s liens provided by applicable law. Following any default by Guarantor hereunder or an
Event of Default by Borrower under the Loan Agreement, any and all moneys, credits, deposits,
accounts, or other property belonging to the Guarantor in transit to or in the possession or under
the control of Lender, or any agent or bailee of Lender, may, without notice and opportunity to be
heard, be setoff against, and appropriated and applied against and towards the payment of any and
all of the liabilities of Guarantor under this Guaranty. Following any default by Guarantor
hereunder or an Event of Default by Borrower under the Loan Agreement, subject to the terms of the
Intercreditor Agreements, Guarantor does hereby assign and transfer to Lender any and all cash,
negotiable instruments, documents of title, chattel paper, securities, certificates of deposit,
deposit accounts, other cash equivalents and other assets of said Guarantor in transit to, or in
the possession or control of Lender, or any agent or bailee of Lender for any purpose and to apply
the same on any or all of the Guaranteed Obligations. The rights of the Lender under this Section
are in addition to all other rights and remedies which the Lender may otherwise have in equity or
at law.

     8. Recovery Claim. Should a claim (“Recovery Claim”) be made upon Lender at any time
for recovery of any amount received by Lender in payment of the Guaranteed Obligations (whether
received
from Borrower, Guarantor pursuant hereto, or otherwise) and should Lender repay all or part of
said amount by reason of (a) any judgment, decree, or order of any court or administrative body
having jurisdiction over Lender or any of its property; or (b) any reasonable settlement or
compromise of any such Recovery Claim effected by Lender with the claimant (including Borrower),
Guarantor shall remain liable to Lender for the amount so repaid to the same extent as if such
amount had never originally been received by Lender, notwithstanding any termination hereof or the
return of this document to Guarantor or the cancellation of any note or other instrument evidencing
any of the Indebtedness.

     9. Assignments. In the event Lender shall sell, assign or transfer the Guaranteed
Obligations, or any part hereof, or grant participations therein, each and every immediate or
remote successive assignee, transferee, holder of or participant or other interests therein, of all
or any part of the Guaranteed Obligations shall have the right to enforce this Guaranty by suit or
otherwise for the benefit of such assignee, transferee, holder or participant, as fully as if such
assignee, transferee, holder or participant were herein by name specifically given such rights,

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powers and benefits; but Lender shall have an unimpaired, prior and superior right to enforce this
Guaranty for its benefit as to so much of the guaranteed debt as it has not sold, assigned or
transferred.

     10. Representations and Warranties. Guarantor agrees that the following shall
constitute representations and warranties of Guarantor to Lender, which shall survive the execution
and delivery hereof, and that Lender intends to make the Loan and other financial accommodations,
if any, guaranteed hereby in reliance thereon:

     (a) Guarantor is not in default under any agreement to which Guarantor is a party, the effect
of which will materially impair performance by the Guarantor of Guarantor’s obligations pursuant to
and as contemplated by the terms of this Guaranty, and neither the execution and delivery of this
Guaranty nor compliance with the terms and provisions of this Guaranty, will violate any law or any
presently existing regulation, order, writ, injunction or decree of any court or governmental
department, commission, board, bureau, agency or instrumentality, will conflict or will be
inconsistent with, or will result in any breach of, any of the terms, covenants, conditions or
provisions of, or constitute a default under, any indenture, mortgage, deed of trust, instrument,
document, agreement or contract of any kind which creates, represents, evidences or provides for
any lien, charge or encumbrance upon any of the property or assets of the Guarantor, or any other
indenture, mortgage, deed of trust, instrument, document, agreement or contract of any kind to
which Guarantor is a party or by which Guarantor may be bound of which the Guarantor is a party or
by which Guarantor may be bound, or in the event of any such conflict, the required consent or
waiver of the other party or parties thereto has been validly granted, is in full force and effect
and is valid and sufficient therefor. This Guaranty is the legal, valid and binding obligation of
the Guarantor and is enforceable against the Guarantor in accordance with its terms.

     (b) Except as set forth on Schedule 10(b) hereof, there are no actions, suits or
proceedings pending or to the best of Guarantor’s knowledge threatened against the Guarantor
before any court or any governmental, administrative, regulatory, adjudicatory or
arbitrational body or agency of any kind which will materially adversely affect performance by the
Guarantor of Guarantor’s obligations pursuant to and as contemplated by the terms and provisions of
this Guaranty.

     (c) Neither this Guaranty nor any document, financial statement (other than those of the SMSA
Parties), credit information, written certificate or written statement heretofore furnished or
required herein to be furnished to Lender by the Guarantor contains any untrue statement of
material fact or omits to state a fact material to this Guaranty.

     (d) Guarantor is currently informed of the financial condition of Borrower and of all other
circumstances which a diligent inquiry would reveal and which would bear upon the risk of
nonpayment of the Guaranteed Obligations. Guarantor will continue to keep informed of the
financial condition of Borrower and of all other circumstances which bear upon the risk of
nonpayment or nonperformance of the Guaranteed Obligations.

     (e) As of the date hereof, the present fair saleable value of Guarantor’s assets is greater
than the amount required to pay Guarantor’s total Indebtedness (contingent or otherwise),

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and is
greater than the amount that will be required to pay such Indebtedness as it matures and as it
becomes absolute and matured. The transactions contemplated hereby were effectuated without actual
intent to hinder, delay or defraud present or future creditors of Guarantor; it is Guarantor’s
express intention that Guarantor will maintain a Solvent financial condition, giving effect to the
Guaranteed Obligations incurred hereunder, as long as any of the Guaranteed Obligations remain
outstanding or Guarantor is obligated to Lender in any other manner whatsoever. At all times until
the Guaranteed Obligations remain satisfied and paid in full, the Guarantor shall keep and maintain
assets sufficient to honor and pay any and all of the Guaranteed Obligations as and when due,
subject to any express monetary limitation set forth herein.

     11. Subordination. Any rights of Guarantor, whether now existing or later arising, to
receive payment on account of any Indebtedness (including interest) owed to Guarantor by Borrower,
or to withdraw capital invested by Guarantor in Borrower, if any, or to receive and retain
distributions from Borrower if and solely as expressly provided in the Loan Agreement, shall at all
times be subordinate as to Lien and time of payment, and in all other respects to the full and
prior repayment to Lender of all of the Liabilities owing to Lender pursuant to the Loan Agreement
and the other Loan Documents (including, without limitation, the Loan). Except for dividends or
distributions permitted by Section 9.9 of the Loan Agreement, Guarantor shall not be entitled to
enforce or receive payment of any sums hereby subordinated until the Loan have been paid and
performed in full, and any such sums received in violation of this Guaranty shall not be commingled
with other monies of Guarantor and shall be received by Guarantor in trust for Lender.

     12. Payments; Application. All payments to be made hereunder by Guarantor shall be made in lawful money of the United
States of America at the time of payment, shall be made in immediately available funds, and shall
be made without deduction (whether for taxes or otherwise) or offset. All payments made by
Guarantor hereunder shall be applied as follows; first, to all costs and expenses (including, but
not limited to, reasonable attorneys’ fees, expenses and court costs) incurred by Lender in
enforcing this Guaranty or in collecting the Guaranteed Obligations; second, to all accrued and
unpaid interest and fees owing to Lender constituting Guaranteed Obligations; and third, to the
balance of the Guaranteed Obligations.

     13. [Intentionally Omitted]

     14. Notices. Any notice or other communication required or permitted under this
Guaranty shall be in writing and personally delivered, mailed by registered or certified U.S. mail
(return receipt requested and postage prepaid), sent by telecopier (with a confirming copy sent by
regular mail), or sent by prepaid nationally recognized overnight courier service, and addressed to
the relevant party at its address set forth below, or at such other address as such party may, by
written notice, designate as its address for purposes of notice under this Guaranty:

If to Lender, at:

LaSalle Bank National Association

135 South LaSalle Street

Chicago, Illinois 60603

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Attention: Adam Panos

Telephone No.: 312-992-2871

Facsimile No.: 312-904-1294

With a copy to:

Duane Morris LLP

227 West Monroe St. — Suite 3400

Chicago, Illinois 60606

Attention: Brian P. Kerwin

Telephone No: 312-499-6737

Facsimile No: 312-499-6701

If to Guarantor, at:

Advocat Inc.

1621 Galleria Boulevard

Brentwood, Tennessee 37027

Attention: Glynn Riddle

Telephone No.: 615-771-7575

Facsimile No.: 615-771-7409

With a copy to:

Harwell Howard Hyne Gabbert & Manner

315 Deaderick Street, Suite 1800

Nashville, Tennessee 37238

Attention: John N. Popham IV

Telephone No.: 615-251-1093

Facsimile No.: 615-251-1059

If mailed, notice shall be deemed to be given three (3) days after being sent, and if sent by
personal delivery, telecopier, or prepaid courier, notice shall be deemed to be given when
delivered.

     15. Cumulative Remedies. No remedy under this Guaranty is intended to be exclusive of
any other remedy, but each and every remedy shall be cumulative and in addition to any and every
other remedy given hereunder and those provided by law or in equity. No delay or omission by
Lender to exercise any right under this Guaranty shall impair any such right nor be construed to be
a waiver thereof. No failure on the part of Lender to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise of any other right.

     16. Financial Information. Without limiting anything contained in this Guaranty,
Guarantor agrees that, so long as any of the Guaranteed Obligations remain outstanding, Guarantor
shall deliver to Lender, upon Lender’s written request and to the extent not included in

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the
Guarantor’s public filings with the United States Securities and Exchange Commission, on at least
an annual basis, and at such other times as Lender may reasonably request, (i) financial statements
(showing all changes in Guarantor’s financial condition which occurred during the preceding fiscal
year and Guarantor’s current financial position), (ii) federal and state tax returns of Guarantor,
as applicable, and (iii) such other financial information as Lender may reasonably request. Copies
of annual tax returns shall be delivered to Lender upon Lender’s written request therefore. The
failure of Guarantor to perform or observe any of its obligations hereunder within the period of
time specified in any notice from Lender to Guarantor, which notice shall in no event be less than
five (5) business days, advising Guarantor of such failure, shall constitute a default under this
Guaranty and an Event of Default under the Loan Agreement and the other Loan Documents.

     17. Books and Records. Guarantor agrees that Lender’s books and records showing the
Liabilities between Lender and Borrower shall be admissible in any action or proceeding and shall
be binding upon Guarantor for the purpose of establishing the items therein set forth and shall
constitute prima facie proof thereof absent manifest error.

     18. Interpretation and Severability of Provisions. The headings of sections and
paragraphs in this Guaranty are for convenience of reference only and shall not be construed in any
way to limit or define the content, scope or intent of the provisions hereof. As used in this
Guaranty, the singular shall include the plural, and masculine, feminine and neuter pronouns shall
be fully interchangeable, where the context so requires. Whenever the words “including”, “include
or includes” are used in this Guaranty, they should be interpreted in a non-exclusive manner as
though the words “, without limitation,” immediately followed the same. Wherever possible, each
provision of this Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law. If any provision of this Guaranty is prohibited or unenforceable under applicable
law, such provision shall be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof. As used herein, except in circumstances
where under the Loan Documents the term is intended to mean or refer to all of the Borrowers or all
of the Credit Parties on a consolidated basis, the term “Borrower” refers to any one or all of the
Borrowers under the Loan Agreement, as applicable, provided, however, in the event of any
disagreement between Lender and Guarantor as to whether or not a reference to Borrower means any or
all of such Borrower(s) individually or collectively herein, and the circumstances are not covered
by the Loan Documents, the Lender shall in reasonable good faith make such determination.

     19. Bankruptcy. So long as any Guaranteed Obligations shall be owing to Lender,
Guarantor shall file in any bankruptcy or other proceeding against Borrower in which the filing of
claims is required or permitted by law all claims which Guarantor may have against Borrower
relating to any Indebtedness of Borrower to Guarantor and will assign to Lender all rights of
Guarantor thereunder. If Guarantor does not file any such claim, Lender, as attorney-in-fact for
Guarantor, is hereby authorized to do so in the name of Guarantor or, in Lender’s discretion, to
assign the claim to a nominee and to cause proof of claim to be filed in the name of Lender’s
nominee. The foregoing power of attorney is coupled with an interest and cannot be revoked.
Lender or its nominee shall have the sole right to accept or reject any plan proposed in such
proceeding and to take any other action which a party filing a claim is entitled to do. In all
such cases, whether in administration, bankruptcy or otherwise, the person or persons authorized to

10

 

pay such claim shall pay to Lender the amount payable on such claim and, to the full extent
necessary for that purpose, Guarantor hereby assigns to Lender all of Guarantor’s rights to any
such payments or distributions to which Guarantor would otherwise be entitled; provided, however,
Guarantor’s obligations hereunder shall not be satisfied except to the extent that Lender receives
cash by reason of any such payment or distribution. If Lender receives anything hereunder other
than cash, the same shall be held as collateral for amounts due under this Guaranty. At such time
as all Guaranteed Obligations have been fully paid, any sums or other collateral received by Lender
pursuant to this Section 19 remaining in the possession of Lender shall be paid or delivered to
Guarantor.

     20. Additional and Independent Obligations. Guarantor’s obligations under this
Guaranty are in addition to Guarantor’s obligations under any other existing or future guaranties,
each of which shall remain in full force and effect until it is expressly modified or released in a
writing signed by Lender. Guarantor’s obligations under this Guaranty are independent of those of
Borrower and any Other Guarantor. Lender may
bring a separate action against Guarantor without first proceeding against Borrower, any Other
Guarantor, any other person or entity or any security that Lender may hold, and without pursuing
any other remedy. Lender’s rights under this Guaranty shall not be exhausted by any action by
Lender until all of the Indebtedness, liabilities and obligations owing to Lender pursuant to the
Loan Agreement and the other Loan Documents (including, without limitation, the Loan and other
Liabilities) have been indefeasibly paid in full in cash and otherwise performed in full and all
financing arrangements and accommodations between Borrower and Lender shall have been irrevocably
terminated and Lender has no obligations to make any loans, financial accommodations or advance any
funds to Borrower which could constitute Liabilities.

     21. Costs and Expenses. If any lawsuit is commenced which arises out of or which
relates to this Guaranty, the Loan Documents or the Loan, including, without limitation, any
insolvency, bankruptcy or similar proceeding, Guarantor agrees to pay all of Lender’s costs and
expenses, including, without limitation, reasonable attorneys’ fees which may be incurred in any
effort to collect or enforce any term of this Guaranty. From the time(s) incurred until paid in
full to Lender, all sums shall bear interest at the “Default Rate” set forth in the Loan Agreement.

     22. Entire Agreement; Amendments; Other Agreements. This Guaranty constitutes the
entire agreement between Guarantor and Lender pertaining to the subject matter contained herein,
and may not be altered, amended, or modified, nor may any provision hereof be waived or
noncompliance therewith consented to, except by means of a writing executed by Guarantor as to
which such consent or waiver is applicable and by Lender. Any such alteration, amendment,
modification, waiver, or consent shall be effective only to the extent specified therein and for
the specific purpose for which it is given. No course of dealing and no delay or waiver of any
right or default under this Guaranty shall be deemed a waiver of any other similar or dissimilar
right or default or otherwise prejudice the rights and remedies hereunder. The Guarantor shall not
enter into any agreement containing any provision which would be violated or breached by the
performance of Guarantor’s obligations hereunder or which would violate or breach any provision
hereof, or that would or is reasonably likely to adversely affect the Lender’s interests or rights
under this Guaranty. Time is of the essence for the payment and performance of this Guaranty. The
recitals hereto are hereby made a part of and incorporated into this Guaranty by this reference
thereto. A signature delivered or sent by facsimile or other

11

 

electronic transmission shall be as
legally binding and enforceable as a signed original for any and all purposes.

     23. Successors and Assigns. This Guaranty shall be binding upon Guarantor’s
representatives, heirs, legal beneficiaries, successors, and assigns, as applicable, and shall
inure to the benefit of the successors and assigns of Lender; provided, however, Guarantor shall
not be permitted to assign this Guaranty or any of Guarantor’s rights, liabilities or obligations
hereunder without the prior written consent of the Lender. In the event of the dissolution,
bankruptcy or failure to maintain a Solvent financial condition, as applicable, of the Guarantor,
the Loan Agreement and any and all
sums due thereunder, along with all of the other Guaranteed Obligations, shall at once,
without any notice or demand from Lender, be due and payable.

     24. SUBMISSION OF JURISDICTION. THE GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY:

     (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
GUARANTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT HEREOF, TO THE
NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS, THE COURTS OF THE UNITED
STATES OF AMERICA FOR THE NORTHERN DISTRICT OF ILLINOIS AND APPELLATE COURTS FROM ANY THEREOF;

     (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES TO
THE FULLEST EXTENT PERMITTED BY LAW IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING (i) ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO
PLEAD OR CLAIM THE SAME, (ii) THE RIGHT TO ASSERT OR IMPOSE ANY CLAIM, NONCOMPULSORY SET-OFF,
COUNTERCLAIM OR CROSS-CLAIM IN RESPECT THEREOF IN SUCH PROCEEDING; PROVIDED, HOWEVER, THIS WAIVER
DOES NOT PRECLUDE THE RIGHT TO ASSERT A DEFENSE IN SUCH ACTION OR PROCEEDING OR TO ASSERT OR IMPOSE
ANY CLAIM, COUNTERCLAIM OR CROSS-CLAIM WHICH THE GUARANTOR WISHES TO PURSUE IN A SEPARATE
PROCEEDING AT ITS SOLE COST AND EXPENSE, AND (iii) ALL STATUTES OF LIMITATIONS WHICH MAY BE
RELEVANT THERETO; AND

     (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING
A COPY THEREOF BY CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID,
RETURN RECEIPT REQUESTED, TO THE GUARANTOR AT ITS ADDRESS SET FORTH ABOVE OR AT SUCH OTHER ADDRESS
OF WHICH THE LENDER SHALL HAVE BEEN NOTIFIED PURSUANT THERETO. THE GUARANTOR AGREES THAT SUCH
SERVICE, TO THE FULLEST EXTENT PERMITTED BY LAW (i) SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE
SERVICE OF PROCESS UPON THE GUARANTOR IN ANY SUIT, ACTION OR PROCEEDING, AND (ii) SHALL BE TAKEN
AND HELD TO BE VALID PERSONAL SERVICE UPON AND PERSONAL DELIVERY TO THE GUARANTOR.

12

 

NOTHING HEREIN
SHALL AFFECT THE LENDER’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR LIMIT THE
LENDER’S RIGHT TO BRING PROCEEDINGS AGAINST THE GUARANTOR OR ITS PROPERTY IN ANY COURT OR ANY OTHER
JURISDICTION.

     25. GOVERNING LAW. THIS GUARANTY SHALL BE CONSTRUED IN ALL RESPECTS IN ACCORDANCE
WITH, AND ENFORCED AND GOVERNED BY THE INTERNAL LAWS
OF THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.

     26. JURY TRIAL. THE GUARANTOR AND THE LENDER HEREBY IRREVOCABLY AND KNOWINGLY WAIVE
(TO THE FULLEST EXTENT PERMITTED BY LAW) ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
(INCLUDING, WITHOUT LIMITATION, ANY COUNTERCLAIM) ARISING OUT OF THIS GUARANTY OR ANY OTHER
AGREEMENTS OR TRANSACTIONS RELATED HERETO, INCLUDING, WITHOUT LIMITATION, ANY ACTION OR PROCEEDING
(A) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN CONNECTION WITH THIS GUARANTY OR ANY INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH, OR
(B) ARISING FROM ANY DISPUTE OR CONTROVERSY IN CONNECTION WITH OR RELATED TO THIS GUARANTY. THE
LENDER AND THE GUARANTOR AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT A JURY.

     27. No Pledge of Equity. Guarantor agrees that, so long as any of the Guaranteed
Obligations remain outstanding, Guarantor shall remain the owner (either directly or through one of
its Subsidiaries) of 100% of the equity in each Borrower; and without the prior written consent of
Lender, Guarantor shall not assign, sell, convey, gift, transfer, pledge, hypothecate, grant a
security interest in, encumber or in any other manner permit any lien (other than Permitted Liens)
to exist in or on, all or any portion of the equity in or of any Borrower, except for those pledges
to Capmark and the Omega Senior Lessors in effect on the date hereof.

     28. REVIEW BY GUARANTOR. The Guarantor acknowledges that Guarantor has thoroughly
read and reviewed the terms and provisions of this Guaranty, and that such terms and provisions are
clearly understood by the Guarantor, and has been fully and unconditionally consented to by the
Guarantor with the full benefit and advice of counsel chosen by the Guarantor.

[Signature Page Follows]

13

 

Exhibit 10.4

     IN WITNESS WHEREOF, Guarantor has executed and delivered this Guaranty as of the date set
forth in the first paragraph hereof.

	 	 	 	 	 
	 

	 	Guarantor:	 	 
	 
	 	 	 	 
	 

	 	ADVOCAT INC.	 	 
	 
	 	 	 	 
	 

	 	/s/ Glynn Riddle
 

Name: Glynn Riddle
	 	 
	 

	 	Title: EVP & CFO	 	 

[Signature Page — Guaranty]EX-10.5

 

Exhibit 10.5

REVOLVING CREDIT NOTE

					
	 	 	 	 	 
	$21,000,000.00
	 	 	 	August 10, 2007
	 
	 	 	 	Chicago, Illinois

     FOR VALUE RECEIVED, those certain entities set forth on Schedule 1 hereto, which are
signatories hereto (such entities individually and collectively, the “Revolving Loan
Borrower”), hereby jointly and severally promise to pay to the order of LASALLE BANK NATIONAL
ASSOCIATION, a national banking association (the “Lender”), at its office at 135 South
LaSalle Street, Chicago, Illinois 60603, or at such other place as the holder hereof may designate
in writing, in lawful money of the United States of America, the principal sum of Twenty-One
Million and No/100 Dollars ($21,000,000.00), or such lesser principal sum as may then be owed by
the Revolving Loan Borrower to the Lender hereunder, on or before August 10, 2010 (the “Stated
Maturity Date”); provided, however, on February 10, 2008 (i) the Maximum Revolving Facility (as
defined in the Loan Agreement (as defined below)) shall be reduced to Fifteen Million and No/100
Dollars ($15,000,000.00) and (ii) the outstanding principal amount of all Revolving Loans in excess
of $15,000,000.00 shall be immediately due and payable.

     THE INDEBTEDNESS EVIDENCED HEREBY SHALL BECOME IMMEDIATELY DUE AND PAYABLE UPON THE EARLIEST
TO OCCUR OF (X) THE STATED MATURITY DATE; (Y) THE ACCELERATION OF THE LIABILITIES (AS DEFINED IN
THE LOAN AND SECURITY AGREEMENT OF EVEN DATE HEREWITH AMONG THE BORROWER (AS DEFINED IN THE LOAN
AGREEMENT (AS DEFINED BELOW)) AND THE LENDER (AS AMENDED OR MODIFIED FROM TIME TO TIME, THE
“LOAN AGREEMENT”)) PURSUANT TO SECTION 11.2 OF THE LOAN AGREEMENT; AND (Z) THE
TERMINATION OF THE LOAN AGREEMENT (WHETHER BY PREPAYMENT OR OTHERWISE) IN ACCORDANCE WITH ITS
TERMS. Capitalized terms used but not defined herein shall have the meanings ascribed to such
terms in the Loan Agreement.

     This Revolving Credit Note shall bear interest on the unpaid principal amount hereof from time
to time outstanding from the date hereof until the Stated Maturity Date, or until maturity due to
acceleration or otherwise and, after maturity, until paid, at the rates per annum and upon the
terms specified in the Loan Agreement. Accrued interest on the Revolving Loans shall be due and
payable and shall be made by the Revolving Loan Borrower to the Lender in accordance with
Section 2.7 of the Loan Agreement. Interest payments on such Revolving Loans shall be
computed using the interest rate then in effect pursuant to the Loan Agreement and based on the
outstanding principal balance of the Revolving Loans. Upon maturity, the outstanding principal
balance of the Revolving Loans shall be immediately due and payable, together with any remaining
accrued interest thereon.

     All payments on account of indebtedness evidenced by this Revolving Credit Note shall be first
applied to interest on the unpaid balance and the remainder to principal, unless otherwise
specified in the Loan Agreement. Payments of both principal and interest hereunder are to be made
in same day or immediately available funds.

 

 

     This Revolving Credit Note is the Revolving Credit Note referred to in the Loan Agreement, and
is subject to all of the terms and conditions of the Loan Agreement, as such Loan Agreement may
from time to time be amended, supplemented, or modified, which terms and conditions are hereby made
a part of this Revolving Credit Note to the same extent and with the same force and effect as if
they were fully set forth herein.

     Upon the occurrence or existence of any Event of Default (as such term is defined in the Loan
Agreement), including the failure to pay any principal, interest and/or fees in accordance with the
terms set forth in the Loan Agreement, which shall constitute an Event of Default under this
Revolving Credit Note, the Lender shall be entitled, at its sole option, to accelerate the then
outstanding indebtedness hereunder and take such other action as may be provided for in the Loan
Agreement, any Financing Agreement or otherwise by law.

     The remedies of the holder hereof as provided in this Revolving Credit Note, in the Loan
Agreement, and in any other Financing Agreement shall be cumulative and concurrent, and may be
pursued singly, successively, or together against the Revolving Loan Borrower, and/or against any
collateral or guarantor (including, without limitation, the Guarantor), at the sole discretion of
the holder hereof.

     The Revolving Loan Borrower hereby waives presentment for payment, demand, notice of
nonpayment, notice of dishonor, protest of any dishonor, notice of protest, and protest of this
Revolving Credit Note and all other notices in connection with the delivery, acceptance,
performance, default, or enforcement of the payment of this Revolving Credit Note, and agrees that
its liability shall be unconditional without regard to the liability of any other party or person
and shall not in any manner be affected by any indulgence, extension of time, renewal, waiver or
modification granted or consented to by the holder hereof; and the Revolving Loan Borrower agrees
that additional makers, endorsers, guarantors, or sureties may become parties hereto without notice
to the Revolving Loan Borrower or affecting the Revolving Loan Borrower’s liability hereunder.

     It being the intent of the Lender and the Revolving Loan Borrower that the rate of interest
and all other charges to the Revolving Loan Borrower be lawful, if for any reason the payment of a
portion of the interest or other charges otherwise required to be paid under this Revolving Credit
Note would exceed the limit which the Lender may lawfully charge the Revolving Loan Borrower, then
the obligation to pay interest or other charges shall automatically be reduced to such limit and,
if any amounts in excess of such limit shall have been paid, then such amounts shall at the option
of the Lender either be refunded to the Revolving Loan Borrower or credited to the principal amount
of this Revolving Credit Note so that under no circumstances shall the interest or other charges
required to be paid by the Revolving Loan Borrower hereunder exceed the maximum rate allowed by
law.

     The holder hereof shall not by any act of omission or commission be deemed to waive any of its
rights or remedies hereunder unless such waiver be in writing and signed by the holder hereof (and
then only to the extent specifically set forth therein). A waiver of any one event shall not be
construed as continuing or as a bar to or waiver of such right or remedy on a subsequent event.

2

 

     Whenever possible, each provision of this Revolving Credit Note and the Loan Agreement shall
be interpreted in such manner as to be effective and valid under Applicable Law, but if any
provision of this Revolving Credit Note or the Loan Agreement shall be prohibited or invalid under
such law, such provision shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions of this Revolving Credit Note or the Loan
Agreement.

     This Revolving Credit Note shall not be amended, supplemented or modified except pursuant to a
writing signed by both Lender and Revolving Loan Borrower.

     Without limiting the expansiveness of any similar provision contained in the Loan Agreement,
if at any time or times, Lender: (a) employs counsel in good faith for advice or other
representation (i) with respect to this Revolving Credit Note, the Loan Agreement, any of the other
Financing Agreements or any collateral securing this Revolving Credit Note, (ii) to represent
Lender in any restructuring, workout, litigation, contest, dispute, suit or proceeding or to
commence, defend or intervene or to take any other action in or with respect to any litigation,
contest, dispute or proceeding (whether instituted by Lender, Revolving Loan Borrower or any other
person or entity) in any way or respect relating to this Revolving Credit Note, the Loan Agreement,
any of the other Financing Agreements, any collateral securing this Revolving Credit Note or
Revolving Loan Borrower’s affairs, or (iii) to enforce any rights of Lender against Revolving Loan
Borrower; (b) takes any action to protect, collect, sell, liquidate or otherwise dispose of any
collateral securing this Revolving Credit Note; and/or (c) attempts to or enforces any of Lender’s
rights and remedies against Revolving Loan Borrower; the costs and expenses incurred by Lender in
any manner or way with respect to the foregoing shall be part of the indebtedness evidenced by this
Revolving Credit Note, payable by Revolving Loan Borrower to Lender on demand. Without limiting
the generality of the foregoing, such expenses and costs include: court costs, reasonable
attorneys’ fees and expenses, and accountants’ fees and expenses.

     Payment of this Revolving Credit Note is secured by the Collateral.

     Payment of this Note has been guaranteed by Advocat Inc., a Delaware corporation
(“Guarantor”), under a certain Guaranty dated of even date herewith. It is a covenant and
condition hereof that in case Guarantor shall be declared a bankrupt, or shall file a petition in
voluntary bankruptcy, or under Title 11 of the United States Code, or under any similar State or
Federal law, or Guarantor files any declaration, answer or pleading admitting Guarantor’s
insolvency or inability to pay or discharge Guarantor’s liabilities, or if a trustee or a receiver
is appointed for Guarantor, or for the property or estate of Guarantor, or should any court take
jurisdiction of Guarantor’s property or estate or should Guarantor make an assignment for the
benefit of Guarantor’s, then upon the occurrence of any such event, the Lender or the holder of
this Revolving Credit Note may declare that a default has occurred hereunder, and in consequences
thereof the entire unpaid principal balance and all accrued and unpaid interest thereon shall be
immediately due and payable; and in addition, the Lender or the holder of this Revolving Credit
Note may avail itself of any other right or remedy reserved to it under or identified in the Loan
Agreement and the Financing Agreements securing this Revolving Credit Note, and as set forth in law
or equity.

3

 

     The Revolving Loan Borrower shall use the proceeds represented by this Revolving Credit Note
solely for proper business purposes, and consistently with all Applicable Laws and statutes and the
Loan Agreement. The Revolving Loan Borrower further covenants with the Lender that the Revolving
Loan Borrower is not in the business of extending credit for the purpose of purchasing or carrying
margin security (within the meaning of Regulation U issued by the Board of Governors of the Federal
Reserve System), and no proceeds represented by this Revolving Credit Note will be used to purchase
or carry any margin securities or to extend credit to others for the purpose of purchasing or
carrying any margin securities.

     Any term or provision of this Revolving Credit Note, the Loan Agreement or any other Financing
Agreement to the contrary notwithstanding, the maximum aggregate amount of the Liabilities for
which any of the Revolving Loan Borrowers (which Liabilities are not direct borrowings or direct
obligations of such Revolving Loan Borrower (the “Non-Direct Obligations”)) shall be liable
shall not exceed the maximum amount for which such Revolving Loan Borrower can be liable without
rendering such Non-Direct Obligations, as they relate to such Revolving Loan Borrower, voidable
under Applicable Law relating to fraudulent conveyance or fraudulent transfer. To the extent that
any Revolving Loan Borrower shall be required hereunder to pay a portion of its Non-Direct
Obligations which shall exceed the greater of (i) the amount of the economic benefit actually
received by such Revolving Loan Borrower from any of the loans evidenced hereby in respect of such
Non-Direct Obligations, and (ii) the amount which such Revolving Loan Borrower would otherwise have
paid if such Revolving Loan Borrower had paid the aggregate amount of the Non-Direct Obligations of
such Revolving Loan Borrower (excluding the amount thereof repaid by the other Revolving Loan
Borrowers) in the same proportion as such Revolving Loan Borrower’s net worth at the date of any
applicable borrowing hereunder is sought bears to the aggregate net worth of all of the Revolving
Loan Borrowers at the date of such applicable borrowing hereunder is sought, then such Revolving
Loan Borrower shall be reimbursed by the other Revolving Loan Borrowers for the amount of such
excess, pro rata based on the respective net worths of the Revolving Loan Borrowers at the date of
such applicable borrowing with respect hereto is sought.

     This Revolving Credit Note shall inure to the benefit of Lender and its successors and assigns
and shall be binding upon the Revolving Loan Borrower and its successors and permitted assigns. As
used herein the term “Lender” shall mean and include the successors and assigns of the identified
payee and the holder or holders of this Revolving Credit Note from time to time.

     THIS REVOLVING CREDIT NOTE SHALL BE CONSTRUED IN ALL RESPECTS IN ACCORDANCE WITH, AND ENFORCED
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES.

     THE REVOLVING LOAN BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY:

          (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
REVOLVING CREDIT NOTE, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO
THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF

4

 

ILLINOIS, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF ILLINOIS AND
APPELLATE COURTS FROM ANY THEREOF;

          (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES TO
THE FULLEST EXTENT PERMITTED BY LAW IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING (i) ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO
PLEAD OR CLAIM THE SAME, (ii) THE RIGHT TO ASSERT OR IMPOSE ANY CLAIM, NONCOMPULSORY SET-OFF,
COUNTERCLAIM OR CROSS-CLAIM IN RESPECT THEREOF IN SUCH PROCEEDING; PROVIDED, HOWEVER, THIS WAIVER
DOES NOT PRECLUDE THE RIGHT TO ASSERT A DEFENSE IN SUCH ACTION OR PROCEEDING OR TO ASSERT OR IMPOSE
ANY CLAIM, COUNTERCLAIM OR CROSS-CLAIM WHICH THE REVOLVING LOAN BORROWER WISHES TO PURSUE IN A
SEPARATE PROCEEDING AT ITS SOLE COST AND EXPENSE, AND (iii) ALL STATUTES OF LIMITATIONS WHICH MAY
BE RELEVANT THERETO; AND

          (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING
A COPY THEREOF BY CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID,
RETURN RECEIPT REQUESTED, TO THE REVOLVING LOAN BORROWER AT ITS ADDRESS SET FORTH IN THE LOAN
AGREEMENT OR AT SUCH OTHER ADDRESS OF WHICH THE LENDER SHALL HAVE BEEN NOTIFIED PURSUANT THERETO.
THE REVOLVING LOAN BORROWER AGREES THAT SUCH SERVICE, TO THE FULLEST EXTENT PERMITTED BY LAW (i)
SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE REVOLVING LOAN BORROWER IN
ANY SUIT, ACTION OR PROCEEDING, AND (ii) SHALL BE TAKEN AND HELD TO BE VALID PERSONAL SERVICE UPON
AND PERSONAL DELIVERY TO THE REVOLVING LOAN BORROWER. SOLELY TO THE EXTENT PROVIDED BY APPLICABLE
LAW, SHOULD THE REVOLVING LOAN BORROWER, AFTER BEING SERVED, FAIL TO APPEAR OR ANSWER TO ANY
SUMMONS, COMPLAINT, PROCESS OR PAPERS SO SERVED WITHIN THE NUMBER OF DAYS PRESCRIBED BY LAW AFTER
THE DELIVERY OR MAILING THEREOF, THE REVOLVING LOAN BORROWER SHALL BE DEEMED IN DEFAULT AND AN
ORDER AND/OR JUDGMENT MAY BE ENTERED BY THE COURT AGAINST THE REVOLVING LOAN BORROWER AS DEMANDED
OR PRAYED FOR IN SUCH SUMMONS, COMPLAINT, PROCESS OR PAPERS. NOTHING HEREIN SHALL AFFECT THE
LENDER’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR LIMIT THE LENDER’S RIGHT
TO BRING PROCEEDINGS AGAINST THE REVOLVING LOAN BORROWER OR ITS PROPERTY IN ANY COURT OR ANY OTHER
JURISDICTION.

     THE REVOLVING LOAN BORROWER (AND THE LENDER) HEREBY IRREVOCABLY AND KNOWINGLY WAIVE (TO THE
FULLEST EXTENT PERMITTED BY LAW) ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
(INCLUDING, WITHOUT LIMITATION, ANY COUNTERCLAIM) ARISING OUT OF THIS REVOLVING CREDIT NOTE, ANY OF
THE FINANCING

5

 

AGREEMENTS OR ANY OTHER AGREEMENTS OR TRANSACTIONS RELATED HERETO OR THERETO, INCLUDING,
WITHOUT LIMITATION, ANY ACTION OR PROCEEDING (A) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN
CONNECTION WITH THIS REVOLVING CREDIT NOTE OR ANY INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR
WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH, OR (B) ARISING FROM ANY DISPUTE OR
CONTROVERSY IN CONNECTION WITH OR RELATED TO THIS REVOLVING CREDIT NOTE AND THE FINANCING
AGREEMENTS. THE LENDER AND THE REVOLVING LOAN BORROWER AGREE THAT ANY SUCH ACTION OR PROCEEDING
SHALL BE TRIED BEFORE A COURT AND NOT A JURY.

6

 

     IN WITNESS WHEREOF, each Revolving Loan Borrower has caused this Revolving Credit Note to be
duly executed by its authorized officer as of the date first above written.

	 	 	 	 	 	 	 
	 	 	ADVOCAT ANCILLARY SERVICES, INC., a Tennessee
corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President
& Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	ADVOCAT FINANCE, INC., a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President
& Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE MANAGEMENT SERVICES CO., a
Tennessee corporation	 	 
	 
	 	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President
& Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	ADVOCAT DISTRIBUTION SERVICES, INC., a
Tennessee corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President
& Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE ASSISTED LIVING SERVICES, INC., a
Tennessee corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President
& Chief Financial Officer	 	 

7

 

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

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE LEASING CORP., a Tennessee
corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	STERLING HEALTH CARE MANAGEMENT, INC., a
Kentucky corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	SENIOR CARE CEDAR HILLS, LLC, a Delaware
limited liability company	 	 
	 
	 	 	BY:	 	SENIOR CARE FLORIDA LEASING, LLC,
its sole member	 
	 
	 	 	 	 	BY:  DIVERSICARE LEASING CORP., its sole member	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	SENIOR CARE GOLFCREST, LLC, a Delaware limited
liability company	 	 
	 
	 	 	BY:	 	SENIOR CARE FLORIDA LEASING, LLC,
its sole member	 
	 
	 	 	 	 	BY:  DIVERSICARE LEASING CORP., its sole member	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 

8

 

	 	 	 	 	 	 	 
	 	 	SENIOR CARE GOLFVIEW, LLC, a Delaware limited
liability company	 	 
	 
	 	 	BY:	 	SENIOR CARE FLORIDA LEASING, LLC,
its sole member	 
	 
	 	 	 	 	BY:  DIVERSICARE LEASING CORP., its sole member	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	SENIOR CARE FLORIDA LEASING, LLC, a Delaware
limited liability company	 	 
	 
	 	 	BY:	 	DIVERSICARE LEASING CORP.,
its sole member	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	SENIOR CARE SOUTHERN PINES, LLC, a Delaware
limited liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	SENIOR CARE FLORIDA LEASING, LLC,
its sole member	 
	 
	 	 	 	 	BY:  DIVERSICARE LEASING CORP., its sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE AFTON OAKS, LLC, a Delaware
limited liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE LEASING CORP.,
its sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE ASSISTED LIVING SERVICES NC I,
LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE ASSISTED
LIVING SERVICES NC, LLC, its sole member 	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 

9

 

	 	 	 	 	 	 	 
	 	 	DIVERSICARE ASSISTED LIVING SERVICES NC II,
LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	 
	 	 	BY:	 	DIVERSICARE ASSISTED LIVING SERVICES NC, LLC,its sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE BRIARCLIFF, LLC, a Delaware
limited liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE LEASING CORP., its
sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE CHISOLM, LLC, a Delaware limited
liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE LEASING CORP., its
sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE HARTFORD, LLC, a Delaware limited
liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE LEASING CORP.,
its sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE HILLCREST, LLC, a Delaware limited
liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE LEASING CORP.,
its sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 

10

 

	 	 	 	 	 	 	 
	 	 	DIVERSICARE LAMPASAS, LLC, a Delaware limited
liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE LEASING CORP.,
its sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE PINEDALE, LLC, a Delaware limited
liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE LEASING CORP., its
sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE WINDSOR HOUSE, LLC, a Delaware
limited liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE LEASING CORP., its
sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE YORKTOWN, LLC, a Delaware limited
liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE LEASING CORP., its
sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE BALLINGER, LLC, a Delaware limited
liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE TEXAS I, LLC., its sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 

11

 

	 	 	 	 	 	 	 
	 	 	DIVERSICARE DOCTORS, LLC, a Delaware limited
liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE TEXAS I, LLC, its
sole
member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE ESTATES, LLC, a Delaware limited
liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE TEXAS I, LLC, its
sole
member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief
Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE HUMBLE, LLC, a Delaware limited
liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE TEXAS I, LLC, its
sole
member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE KATY, LLC, a Delaware limited
liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE TEXAS I, LLC, its
sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE NORMANDY TERRACE, LLC, a Delaware
limited liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE TEXAS I, LLC, its
sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 

12

 

	 	 	 	 	 	 	 
	 	 	DIVERSICARE TEXAS I, LLC, a Delaware limited
liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE TREEMONT, LLC, a Delaware limited
liability company	 	 
	 
	 	 	 	 	 	 
	 	 	BY:	 	DIVERSICARE TEXAS I, LLC, its
sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DIVERSICARE ROSE TERRACE, LLC, a Delaware
limited liability company	 	 
	 
	 	 	 	 	 	 
	 
	 	 	BY:	 	DIVERSICARE LEASING CORP.,
its sole member	 
	 
	 

	 	By:

Name:
	 	/s/ Glynn Riddle
 

Glynn Riddle
	 	 
	 

	 	Its:
	 	Executive Vice President &
Chief Financial Officer	 	 

13

 

Schedule 1

REVOLVING LOAN BORROWERS

Advocat Ancillary Services, Inc.

Advocat Finance, Inc.

Diversicare Management Services Co.

Advocat Distribution Services, Inc.

Diversicare Assisted Living Services, Inc.

Diversicare Assisted Living Services NC, LLC

Diversicare Leasing Corp.

Sterling Health Care Management, Inc.

Senior Care Cedar Hills, LLC

Senior Care Golfcrest, LLC

Senior Care Golfview, LLC

Senior Care Florida Leasing, LLC

Senior Care Southern Pines, LLC

Diversicare Afton Oaks, LLC

Diversicare Assisted Living Services NC I, LLC

Diversicare Assisted Living Services NC II, 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 Ballinger, LLC

Diversicare Doctors, LLC

Diversicare Estates, LLC

Diversicare Humble, LLC

Diversicare Katy, LLC

Diversicare Normandy Terrace, LLC

14

 

Diversicare Texas I, LLC

Diversicare Treemont, LLC

Diversicare Rose Terrace, LLC

15

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