Document:

<PAGE>   1

                                                                  EXHIBIT 10.10

                                 PROMISSORY NOTE

$4,709,000.00                                               Nashville, Tennessee
                                                            March 29, 2001

        FOR VALUE RECEIVED, the undersigned DIVERSICARE WINDSOR HOUSE, LLC, a
Delaware limited liability company, having an address at 277 Mallory Station
Road, Suite 130, Franklin, Tennessee 37067 (the "Borrower"), hereby promises to
pay to the order of GMAC COMMERCIAL MORTGAGE CORPORATION, a California
corporation, having an address at 200 Witmer Road, Horsham, Pennsylvania 19044
(the "Lender"), its successors and assigns as holder of this Note or, if this
Note has then been endorsed "to bearer," to the bearer of this Note (the Lender,
its said successors and assigns, and any such bearer, being hereinafter
sometimes referred to collectively as the "Holder"), at the Lender's said
address or at such other place or to such other person as may be designated in
writing to the Borrower by the Lender, the principal sum of Four Million Seven
Hundred Nine Thousand and No/100 Dollars ($4,709,000.00) (the "Loan"), together
with interest on the unpaid balance thereof at the rate hereinafter set forth.

        ON THE TERMS AND SUBJECT TO THE CONDITIONS which are hereinafter set
forth:

        Section 1. Interest Rate and Payment Dates.

        1.1 Initial Rate and Initial Payment. Interest shall accrue on the
outstanding balance of the principal amount outstanding hereunder from time to
time from and after the date hereof at the rate of 8.5838 percent per annum
until the first Rate Adjustment Date (as defined below). On each successive Rate
Adjustment Date, the rate of interest at which interest accrues shall be
adjusted to the then applicable Note Rate (as defined below). Interest for the
period beginning on the date of this Note and ending on and including the last
day of the month in which this Note is dated shall be payable on the date
hereof. Interest shall be paid in arrears and shall be computed on the basis of
a 360-day year and actual number of days elapsed for any whole or partial month
in which interest on the loan is being calculated and shall be charged on the
principal balance outstanding from time to time.

        1.2 Rate Adjustment Date and Payment Adjustment Dates. The interest rate
shall be adjusted on the dates (each being a "Rate Adjustment Date") described
in this paragraph. The first Rate Adjustment Date shall be April 1, 2001, and
subsequent Rate Adjustment Dates shall fall on the first day of each subsequent
one month anniversary thereafter. The first payment adjustment date shall be May
1, 2001, and subsequent payment adjustment dates shall fall on the first day of
each calendar month thereafter during the term of the Loan.

        1.3 Default Interest Rate. If the Borrower fails to make any payment of
principal, interest or fees on the date on which such payment becomes due and
payable (including applicable grace periods) whether at maturity or by
acceleration or on any other date, such payment shall accrue interest from the
date on which such payment was due (and not the date of the payment

<PAGE>   2

default) until paid at the fluctuating rate ("Default Rate") which is the lesser
of (a) five (5) percentage points above the then applicable LIBOR Rate (as
defined below) and (b) the maximum rate permitted by applicable law.

        1.4 LIBOR Rate. The LIBOR Rate shall mean the average of London
Interbank Offered Rates ("LIBOR") for a term of one month determined solely by
Holder as of each Rate Adjustment Date plus three hundred fifty (350) basis
points per annum, determined in the manner herein set forth below. On each Rate
Adjustment Date, Holder will obtain the one month LIBOR (in U.S. Dollar
deposits) from the appropriate Bloomberg display page available as of the close
of business announced on the last business day of the month immediately
preceding the Rate Adjustment Date. In the event Bloomberg ceases publication or
ceases to publish the one month LIBOR, Holder shall select a comparable
publication to determine the one month LIBOR and provide notice thereof to
Borrower. LIBOR may or may not be the lowest rate based upon the market for U.S.
Dollar deposits in the London Interbank Eurodollar Market at which the Holder
prices loans on the date on which the LIBOR Rate is determined by Holder as set
forth above.

        1.5 LIBOR Rate Adjustments. This Note shall bear interest at the rate
set forth above or at the applicable LIBOR Rate until a new LIBOR Rate is
determined on each Rate Adjustment Date in accordance with the provisions
hereof; provided, however, that, if Holder at any time determines, in the sole
but reasonable exercise of its discretion, that it has miscalculated the amount
of the monthly payment of principal and/or interest (whether because of a
miscalculation of the LIBOR Rate or otherwise), then Holder shall give notice to
Borrower of the corrected amount of such monthly payment (and the corrected
amount of the LIBOR Rate, if applicable) and (a) if the corrected amount of such
monthly payment represents an increase thereof, then Borrower shall, within ten
(10) calendar days thereafter, pay to Holder any sums that Borrower would have
otherwise been obligated under this Note to pay to Holder had the amount of such
monthly payment not been miscalculated, or (b) if the corrected amount of such
monthly payment represents a decrease thereof and Borrower is not otherwise in
breach or default under any of the terms and provisions of the Note or the Loan
Agreement, then Borrower shall, within (10) calendar days thereafter be paid the
sums that Borrower would not have otherwise been obligated to pay to Holder had
the amount of such monthly payment not been miscalculated.

        1.6 LIBOR Unascertainable. If (a) on any date on which the LIBOR Rate
would otherwise be set, Holder shall have determined in good faith (which
determination shall be conclusive) that (i) adequate and reasonable means do not
exist for ascertaining the one month LIBOR, or (ii) a contingency has occurred
which materially and adversely affects the London Interbank Eurodollar Market at
which Holder prices loans on the date on which the LIBOR Rate is determined by
Holder as set forth above, or (b) at any time Holder shall have determined in
good faith (which determination shall be conclusive) that the making,
maintenance or funding of any part of the Loan has been made impracticable or
unlawful by compliance by Holder in good faith with any Law or guideline or
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof or with any request or
directive of any such Governmental Authority (whether or not having the force of
law) then, and in any such event, Holder may notify Borrower of such
determination. Upon such date as shall be specified in such notice (which shall
not be earlier than the date such notice is given) the obligation of Holder to

                                       2
<PAGE>   3

charge interest to Borrower at the LIBOR Rate shall be suspended until Holder
shall have later notified Borrower of Holder's determination in good faith
(which determination shall be conclusive) that the circumstances giving rise to
such previous determination no longer exist.

        1.7 U.S. Treasury Securities. If Holder notifies Borrower of a
determination under subsection 1.6 hereof for purposes of calculating the LIBOR
Rate, the one month LIBOR shall automatically be converted to the "Index" of the
weekly average yield on United States Treasury Securities adjusted to a constant
maturity of one year, as made available by the Federal Reserve Board 45 days
prior to the Rate Adjustment Date.

        1.8 Reimbursement for Increased Costs. If any law or guideline or
interpretation or application thereof by any Governmental Authority charged with
the interpretation or administration thereof or compliance with any request or
directive of any Governmental Authority (whether or not having the force of law)
now existing or hereafter adopted (a) subjects Holder to any tax or changes the
basis of taxation with respect to this Note, the Loan or payments by Borrower of
principal, interest or other amounts due from Borrower hereunder or thereunder
(except for taxes on the overall net income or overall gross receipts of Holder
imposed as a result of a present or former connection between the jurisdiction
of the Governmental Authority imposing such tax on Holder, provided, that this
exclusion shall not apply to a connection arising solely from Holder having
executed, delivered, performed its obligations under or received a payment
under, or enforced any of the Loan Documents (as defined in Section 8.1.1
below)), or (b) imposes upon Holder any other condition or expense with respect
to this Note, the Loan or its making, maintenance or funding of any part of the
Loan or any security therefor, and the result of any of the foregoing is to
increase the cost to, reduce the income receivable by, or impose any expense
(including, without limitation, loss of margin) upon Holder with respect to the
Note, or the making, maintenance or funding of any part of the Loan, by an
amount which Holder deems to be material, Holder may from time to time notify
Borrower of the amount determined in good faith (using any averaging and
attribution methods) by Holder (which determination shall be conclusive) to be
necessary to compensate Holder for such increase, reduction or imposition and,
if Borrower is by law prohibited from paying any such amount, Holder may elect
to declare the unpaid principal balance hereof and all interest accrued thereon
immediately due and payable. Such amount shall be due and payable by Borrower to
Holder ten (10) days after such notice is given.

        Section 2. Payments.

        2.1 Intentionally Deleted.

        2.2 Principal and Interest Payments. Commencing on May 1, 2001 and
continuing on the first day of each calendar month thereafter through and
including the Maturity Date (defined below) monthly payments of principal and
interest in installments in such amount as is necessary, taking into account the
then effective LIBOR Rate to fully amortize the unpaid principal balance of the
Note over an assumed period of 25 years; provided, however, the entire unpaid
principal balance together with interest thereon shall be due and payable in
full on April 1, 2006.

                                       3
<PAGE>   4

        Section 3. Application of Payments. Payments made by Borrower on account
hereof shall be applied, first, toward any Late Fees (hereinafter defined) or
other fees and charges due hereunder, second, toward payment of any interest due
at the Default Rate, third, toward payment of any interest due at the then
applicable LIBOR Rate set forth in Section 1.4 above, and fourth, toward payment
of principal. Notwithstanding the foregoing, if any advances made by Holder
under the terms of any instruments securing this Note have not been repaid, any
payments made may, at the option of Holder, be applied, first, to repay such
advances, and interest thereon, with the balance, if any, applied as set forth
in the preceding sentence.

        Section 4. Maturity. Anything in this Note to the contrary
notwithstanding, the entire unpaid balance of the principal amount hereof and
all interest accrued thereon, to and including the Maturity Date (as defined
below), (including interest accruing at the Default Rate) and all Late Fees (as
defined below) shall, unless sooner paid, and except to the extent that payment
thereof is sooner accelerated, be and become due and payable on April 1, 2006
(the "Maturity Date"). Notwithstanding anything contained herein, if repayment
of the Loan is funded from the proceeds of any refinancing of the Loan pursuant
to which Holder does not receive a contractually agreed upon sum for the
arrangement thereof, then Borrower shall pay to Holder a premium equal to one-
half of one percent (.05%) of the outstanding principal balance of the Note on
the date of such prepayment.

        Section 5. Prepayment.

        Prepayment of the Loan in full or in part shall be permitted at any time
during the term of the Loan without penalty, upon not less than thirty (30) and
not greater than forty (40) days prior written notice to Lender specifying the
date on which prepayment is to be made. Any such prepayment shall be credited,
first, toward any Late Fees due hereunder, second, toward payment of any
interest due at the Default Rate, third, toward payment of any interest due
hereunder at the LIBOR Rate, and, fourth, toward payment of principal; provided,
however, that if any advances made by Holder under the terms of any instruments
securing this Note have not been repaid, any payments made may, at the option of
Holder, be applied, first, to repay such advances, and interest thereon, with
the balance, if any, applied as set forth in the preceding sentence.
Notwithstanding anything contained herein, if such prepayment set forth herein
is funded from the proceeds of any refinancing of the Loan pursuant to which the
Holder does not receive a contractually agreed upon sum for the arrangement
thereof, then Borrower shall pay to Holder a repayment in full as premium equal
to one half of one percent (.05%) of the outstanding principal balance of the
Note on the date of such prepayment (which balance shall be calculated exclusive
of any voluntary partial prepayment).

        Section 6. Method of Payment.

        Each payment of the Loan Obligations (as defined in the Loan Agreement)
shall be paid directly to the Holder in lawful tender of the United States of
America. Each such payment shall be paid by 1:00 p.m. Horsham, Pennsylvania,
time on the date such payment is due, except if such date is not a Business Day
(as defined in the Loan Agreement) such payment shall then be due on the first
Business Day after such date. Any payment received after 1:00 p.m. Horsham,

                                       4
<PAGE>   5

Pennsylvania, time shall be deemed to have been received on the immediately
following Business Day.

        Section 7. Security.

        The debt evidenced by this Note is to be secured by, among other things,
(a) a Mortgage and Security Agreement (the "Mortgage") of even date herewith by
and between Borrower and Holder, and intended to be recorded in the office of
the Judge of Probate of Madison County, Alabama and covering all of that real
property in the said Madison County, Alabama, which is described in Exhibit "A"
thereto (the "Property"), and (b) a Guaranty Agreement of even date herewith
("Guaranty Agreement"), given by Advocat Inc., a Delaware corporation (the
"Guarantor"), for the benefit of Holder.

        Section 8. Default.

        8.1 Events of Default. Anything in this Note to the contrary
notwithstanding, on the occurrence of any of the following events (each of which
is hereinafter referred to as an "Event of Default"), the Holder may, in the
exercise of its sole and absolute discretion, accelerate the debt evidenced by
this Note, in which event the entire outstanding principal balance and all
interest and fees accrued thereon shall immediately be and become due and
payable without further notice:

            8.1.1 Failure to Pay or Perform. If (a) the Borrower fails in making
any payment to the Holder of any or all sums due hereunder within ten (10) days
after such payment becomes due or on the Maturity Date or (b) there exists an
uncured default under any other document or instrument evidencing or securing
the Loan (collectively, the "Loan Documents") which has been executed by
Borrower and/or Guarantor, and such default is not cured within the grace or
cure period, if any, provided in any of such Loan Documents.

            8.1.2 Bankruptcy.

                  (a) If the Borrower or Guarantor (i) applies for or consents
to the appointment of a receiver, trustee or liquidator of the Borrower or
Guarantor, as the case may be, or of all or a substantial part of its assets,
(ii) files a voluntary petition in bankruptcy, or admits in writing its
inability to pay its debts as they come due, (iii) makes an assignment for the
benefit of creditors, (iv) files a petition or an answer seeking a
reorganization or an arrangement with creditors or seeking to take advantage of
any insolvency law, (v) performs any other act of bankruptcy, or (vi) files an
answer admitting the material allegations of a petition filed against the
Borrower or Guarantor in any bankruptcy, reorganization or insolvency
proceeding; or

                  (b) if (i) an order, judgment or decree is entered by any
court of competent jurisdiction adjudicating the Borrower or Guarantor a
bankrupt or an insolvent, or approving a receiver, trustee or liquidator of the
Borrower or Guarantor or of all or a substantial part of its assets, or (ii)
there otherwise commences with respect to the Borrower or Guarantor or any of
its assets any proceeding under any bankruptcy, reorganization, arrangement,
insolvency, readjustment, receivership or like law or statute, and if such
order, judgment, decree or proceeding

                                       5
<PAGE>   6

continues unstayed for any period of sixty (60) consecutive days after the
expiration of any stay thereof.

            8.1.3 Judgments. If any judgment for the payment of money in excess
of $100,000.00 hereafter awarded against the Borrower or Guarantor by any court
of competent jurisdiction remains unsatisfied or otherwise in force and effect
for a period of thirty (30) days after the date of such award.

            8.1.4 Cross-Defaults. Pursuant to that certain
Cross-Collateralization and Cross-Default Agreement of even date herewith by
and among the Borrower, Diversicare Pinedale, LLC, a Delaware limited liability
company ("Pinedale") and the Lender, the Loan shall be cross-defaulted with a
loan made by the Lender to Pinedale.

        8.2 No Impairment of Rights. Nothing in this Section shall be deemed in
any way to alter or impair any right which the Holder has under this Note or the
Mortgage, or any of the other Loan Documents or at law or in equity, to
accelerate such debt on the occurrence of any other Event of Default provided
herein or therein, whether or not relating to this Note.

        8.3 Late Fees. Without limiting the generality of the foregoing
provisions of this Section, if any payment of interest or principal is not made
prior to ten (10) days after the date on which it becomes due, the Borrower
shall thereupon automatically become obligated immediately to pay to the Holder
a late charge equal to the lesser of five percent (5%) of the amount of such
payment or the maximum amount permitted by applicable law ("Late Fees") to
defray the expenses incurred by Holder in handling and processing such
delinquent payment and to compensate Holder for the loss of use of such
delinquent payment, which sum shall be due and payable immediately thereupon.

        Section 9. Costs of Enforcement.

        The Borrower shall pay to the Holder on demand by the latter the amount
of any and all expenses incurred by the Holder (a) in enforcing its rights
hereunder or under the Mortgage and/or the Loan Documents, (b) as the result of
a default by the Borrower in performing its obligations under this Note,
including but not limited to the expense of collecting any amount owed
hereunder, and of any and all reasonable attorneys' fees incurred by Holder in
connection with such default, whether suit be brought or not, or (c) in
protecting the security hereof. Such expenses shall be added to the principal
amount hereof, shall be secured by the Mortgage and shall accrue interest at the
Default Rate.

        Section 10. Borrower's Waiver of Certain Rights.

        The Borrower and any endorser, guarantor or surety hereby waives the
exercise of any and all exemption rights which it holds at law or in equity with
respect to the debt evidenced by this Note, and of any and all rights which it
holds at law or in equity to require any valuation, appraisal or marshalling, or
to have or receive any presentment, protest, demand and notice of dishonor,

                                       6
<PAGE>   7

protest, demand and nonpayment as a condition to the Holder's exercise of any of
its rights under this Note or the Loan Documents.

        Section 11. Extensions.

        The Maturity Date and/or any other date by which any payment is required
to be made hereunder may be extended by the Holder from time to time in the
exercise of its sole discretion, without in any way altering or impairing the
Borrower's or Guarantor's liability hereunder.

        Section 12. General.

        12.1 Applicable Law. This Note shall be given effect and construed by
application of the laws of the State of Alabama (without regard to the
principles thereof governing conflicts of laws), and any action or proceeding
arising hereunder, and each of Holder and Borrower submits (and waives all
rights to object) to non-exclusive personal jurisdiction in the State of
Alabama, for the enforcement of any and all obligations under the Loan Documents
except that if any such action or proceeding arises under the Constitution, laws
or treaties of the United States of America, or if there is a diversity of
citizenship between the parties thereto, so that it is to be brought in a United
States District Court, it shall be brought in the United States District Court
for the Northern District of Alabama or any successor federal court having
original jurisdiction.

        12.2 Headings. The headings of the Sections, subsections, paragraphs and
subparagraphs hereof are provided herein for and only for convenience of
reference, and shall not be considered in construing their contents.

        12.3 Construction. As used herein, (a) the term "person" means a natural
person, a trustee, a corporation, a limited liability company, a partnership and
any other form of legal entity, and (b) all references made (i) in the neuter,
masculine or feminine gender shall be deemed to have been made in all such
genders, (ii) in the singular or plural number shall be deemed to have been
made, respectively, in the plural or singular number as well, and (iii) to any
Section, subsection, paragraph or subparagraph shall, unless therein expressly
indicated to the contrary, be deemed to have been made to such Section,
subsection, paragraph or subparagraph of this Note.

        12.4 Severability. No determination by any court, governmental body or
otherwise that any provision of this Note or any amendment hereof is invalid or
unenforceable in any instance shall affect the validity or enforceability of (a)
any other such provision or (b) such provision in any circumstance not
controlled by such determination. Each such provision shall be valid and
enforceable to the fullest extent allowed by, and shall be construed wherever
possible as being consistent with, applicable law.

        12.5 No Waiver. The Holder shall not be deemed to have waived the
exercise of any right which it holds hereunder unless such waiver is made
expressly and in writing. No delay or omission by the Holder in exercising any
such right (and no allowance by the Holder to the Borrower of an opportunity to
cure a default in performing its obligations hereunder) shall be deemed a waiver
of its future exercise. No such waiver made as to any instance involving the
exercise of any such right

                                       7
<PAGE>   8

shall be deemed a waiver as to any other such instance, or any other such right.
Further, acceptance by Holder of all or any portion of any sum payable under, or
partial performance of any covenant of, this Note, the Mortgage or any of the
other Loan Documents, whether before, on, or after the due date of such payment
or performance, shall not be a waiver of Holder's right either to require prompt
and full payment and performance when due of all other sums payable or
obligations due thereunder or hereunder or to exercise any of Holder's rights
and remedies hereunder or thereunder.

        12.6 Waiver of Jury Trial; Service of Process; Court Costs. BORROWER
HEREBY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THE BORROWER
AND THE HOLDER MAY BE PARTIES ARISING OUT OF, IN CONNECTION WITH, OR IN ANY WAY
PERTAINING TO, THIS NOTE AND/OR ANY OF THE OTHER LOAN DOCUMENTS. IT IS AGREED
AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL
CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS
AGAINST PARTIES WHO ARE NOT PARTIES TO THIS NOTE. THIS WAIVER IS KNOWINGLY,
WILLINGLY AND VOLUNTARILY MADE BY THE BORROWER, UPON CONSULTATION WITH COUNSEL
OF BORROWER'S CHOICE, AND THE BORROWER HEREBY REPRESENTS THAT NO REPRESENTATIONS
OF FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF
TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. THE BORROWER
FURTHER REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF
THIS NOTE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS
HAD THE OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF
ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER
WITH COUNSEL. BORROWER HEREBY IRREVOCABLY DESIGNATES NATIONAL REGISTERED AGENTS,
I NC. (THE "AGENT"), 9 EAST LOOCKERMAN STREET, DOVER, DELAWARE 19901 AS ITS
REGISTERED AGENT FOR THE PURPOSE OF RECEIVING SERVICE OF ALL LEGAL NOTICES AND
PROCESS ISSUED BY ANY COURT IN THE STATE OF ALABAMA AS WELL AS SERVICE OF ALL
PLEADINGS AND OTHER DOCUMENTS RELATED TO ANY LEGAL PROCEEDING OR ACTION ARISING
OUT OF THIS NOTE. BORROWER AGREES THAT SERVICE UPON THE AGENT SHALL BE VALID
REGARDLESS OF BORROWER'S WHEREABOUTS AT THE TIME OF SUCH SERVICE AND REGARDLESS
OF WHETHER BORROWER RECEIVES A COPY OF SUCH SERVICE, PROVIDED THAT THE HOLDER
SHALL HAVE MAILED A COPY TO BORROWER IN ACCORDANCE WITH THE NOTICE PROVISIONS
HEREIN. BORROWER AGREES TO PAY ALL COURT COSTS AND REASONABLE ATTORNEY'S FEES
INCURRED BY HOLDER IN CONNECTION WITH ENFORCING ANY PROVISION OF THIS NOTE.
NOTWITHSTANDING THE FOREGOING, HOLDER AGREES TO USE REASONABLE EFFORTS TO
PROVIDE BORROWER WITH NOTICE OF THE FILING OF ANY LAWSUIT BY HOLDER AGAINST
BORROWER.

        12.7 Offset. Upon the occurrence of an Event of Default, the Holder may
set-off against any principal and interest owing hereunder, any and all credits,
money, stocks, bonds or other

                                       8
<PAGE>   9

security or property of any nature whatsoever on deposit with, or held by, or in
the possession of, the Holder, to the credit of or for the account of the
Borrower, without notice to or consent of the Borrower or Guarantor.

        12.8 Non-Exclusivity of Rights and Remedies. None of the rights and
remedies herein conferred upon or reserved to Holder is intended to be exclusive
of any other right or remedy contained herein or in any of the other Loan
Documents and each and every such right and remedy shall be cumulative and
concurrent, and may be enforced separately, successively or together, and may be
exercised from time to time as often as may be deemed necessary or desirable by
Holder.

        12.9 Incorporation by Reference. All of the agreements, conditions,
covenants and provisions contained in each of the Loan Documents are hereby made
a part of this Note to the same extent and with the same force and effect as if
they were fully set forth herein. Borrower covenants and agrees to keep and
perform, or cause to be kept and performed, all such agreements, conditions,
covenants and provisions strictly in accordance with their terms.

        12.10 Joint and Several Liability. If Borrower consists of more than one
person and/or entity, each such person and/or entity agrees that its liability
hereunder is joint and several.

        12.11 Business Purpose. Borrower represents and warrants that the Loan
evidenced by this Note is being obtained solely for the purpose of acquiring or
carrying on a business, professional or commercial activity and is not for
personal, agricultural, family or household purposes.

        12.12 Interest Limitation. Notwithstanding anything to the contrary
contained herein or in the Mortgage or in any other of the Loan Documents, the
effective rate of interest on the obligation evidenced by this Note shall not
exceed the lawful maximum rate of interest permitted to be paid. Without
limiting the generality of the foregoing, in the event that the interest charged
hereunder results in an effective rate of interest higher than that lawfully
permitted to be paid, then such charges shall be reduced by the sum sufficient
to result in an effective rate of interest permitted and any amount which would
exceed the highest lawful rate already received and held by the Holder shall be
applied to a reduction of principal and not to the payment of interest. Borrower
agrees that for the purpose of determining highest rate permitted by law, any
non-principal payment (including, without limitation, Late Fees and other fees)
shall be deemed, to the extent permitted by law, to be an expense, fee or
premium rather than interest. This provision shall control every other provision
of this Note and the other Loan Documents with respect to the changing,
collecting and payment of interest on the indebtedness evidenced hereby.

        12.13 Modification. This Note may be modified, amended, discharged or
waived only by an agreement in writing signed by the party against whom
enforcement of such modification, amendment, discharge or waiver is sought.

        12.14 Time of the Essence. Time is strictly of the essence of this Note.

                                       9
<PAGE>   10

        12.15 Negotiable Instrument. The Borrower agrees that this Note shall be
deemed a negotiable instrument, even though this Note may not otherwise qualify,
under applicable law, absent this paragraph, as a negotiable instrument.

        12.16 Interest Rate After Judgment. If judgment is entered against the
Borrower on this Note, the amount of the judgment entered (which may include
principal, interest, fees, Late Fees and costs) shall bear interest at the
Default Rate, to be determined on the date of the entry of the judgment.

        12.17 Relationship. Borrower and Holder intend that the relationship
between them shall be solely that of creditor and debtor. Nothing contained in
this Note or in any of the other Loan Documents shall be deemed or construed to
create a partnership, tenancy-in-common, joint tenancy, joint venture or
co-ownership by or between Borrower and Holder.

        12.18 WAIVER OF AUTOMATIC STAY. BORROWER HEREBY AGREES THAT, IN
CONSIDERATION OF LENDER'S AGREEMENT TO MAKE THE LOAN AND IN RECOGNITION THAT THE
FOLLOWING COVENANT IS A MATERIAL INDUCEMENT FOR LENDER TO MAKE THE LOAN, IN THE
EVENT THAT BORROWER SHALL (A) FILE WITH ANY BANKRUPTCY COURT OF COMPETENT
JURISDICTION OR BE THE SUBJECT OF ANY PETITION UNDER ANY SECTION OR CHAPTER OF
TITLE 11 OF THE UNITED STATES CODE, AS AMENDED ("BANKRUPTCY CODE"), OR SIMILAR
LAW OR STATUTE; (B) BE THE SUBJECT OF ANY ORDER FOR RELIEF ISSUED UNDER THE
BANKRUPTCY CODE OR SIMILAR LAW OR STATUTE; (C) FILE OR BE THE SUBJECT OF ANY
PETITION SEEKING ANY REORGANIZATION, ARRANGEMENT, COMPOSITION, READJUSTMENT,
LIQUIDATION, DISSOLUTION, OR SIMILAR RELIEF UNDER ANY PRESENT OR FUTURE FEDERAL
OR STATE ACT OR LAW RELATING TO BANKRUPTCY, INSOLVENCY, OR OTHER RELIEF FOR
DEBTORS; (D) HAVE SOUGHT OR CONSENTED TO OR ACQUIESCED IN THE APPOINTMENT OF ANY
TRUSTEE, RECEIVER, CONSERVATOR, OR LIQUIDATOR; OR (E) BE THE SUBJECT OF AN
ORDER, JUDGMENT OR DECREE ENTERED BY ANY COURT OF COMPETENT JURISDICTION
APPROVING A PETITION FILED AGAINST ANY BORROWER FOR ANY REORGANIZATION,
ARRANGEMENT, COMPOSITION, READJUSTMENT, LIQUIDATION, DISSOLUTION, OR SIMILAR
RELIEF UNDER ANY PRESENT OR FUTURE FEDERAL OR STATE ACT OR LAW RELATING TO
BANKRUPTCY, INSOLVENCY OR RELIEF FOR DEBTORS, THEN, SUBJECT TO COURT APPROVAL,
HOLDER SHALL THEREUPON BE ENTITLED AND BORROWER HEREBY IRREVOCABLY CONSENTS TO,
AND WILL NOT CONTEST, AND AGREES TO STIPULATE TO RELIEF FROM ANY AUTOMATIC STAY
OR OTHER INJUNCTION IMPOSED BY SECTION 362 OF THE BANKRUPTCY CODE, OR SIMILAR
LAW OR STATUTE (INCLUDING, WITHOUT LIMITATION, RELIEF FROM ANY EXCLUSIVE PERIOD
SET FORTH IN SECTION 1121 OF THE BANKRUPTCY CODE) OR OTHERWISE, ON OR AGAINST
THE EXERCISE OF THE RIGHTS AND REMEDIES OTHERWISE AVAILABLE TO HOLDER AS
PROVIDED IN THE LOAN DOCUMENTS, AND AS OTHERWISE PROVIDED BY LAW, AND BORROWER
HEREBY IRREVOCABLY WAIVES ITS RIGHTS TO OBJECT TO SUCH RELIEF.

                                       10
<PAGE>   11

        12.19 Acknowledgment By Guarantor. Guarantor has acknowledged this Note
below for purposes of confirming its obligations all as more specifically set
forth in the Guaranty Agreement.

              [REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

                                       11

<PAGE>   12

        IN WITNESS WHEREOF, the Borrower has executed and sealed this Note or
caused it to be executed and sealed on its behalf by its duly authorized
representatives, the day and year first above written, and the obligations under
this Note shall be binding upon Borrower's successors and assigns.

WITNESS:                                BORROWER:

                                        DIVERSICARE WINDSOR HOUSE, LLC, a
                                        Delaware limited liability company
------------------------------
                                        By:  Diversicare Leasing Corp., a
                                             Tennessee corporation, its sole m
                                             member

[Print Name]                               By:
                                              ----------------------------------
                                              James F. Mills, Jr., Senior Vice
                                              President

ACKNOWLEDGED BY GUARANTOR:

GUARANTOR:

ADVOCAT INC.

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

By:___________________________ (SEAL)
Its:__________________________

STATE OF TENNESSEE )

_________   COUNTY )

        I, the undersigned, a Notary Public in and for said County in said
State, hereby certify that James F. Mills, Jr., whose name as Senior Vice
President of Diversicare Leasing Corp., a Tennessee corporation and the sole
member of Diversicare Windsor House, LLC, a Delaware limited liability company,
is signed to the foregoing instrument and who is known to me, acknowledged
before me on this day that, being informed of the contents of said instrument,
he, as such officer and with full authority, executed the same voluntarily for
and as the act of said limited liability company.

        Given under my hand and official seal this the ____ day of March, 2001.

                                                     -------------------------
                                                     Notary Public

AFFIX SEAL
My commission expires:
                      -----------

                                       12<PAGE>   1
                                                                   EXHIBIT 10.11

                              EMPLOYMENT AGREEMENT

         This Agreement made effective as of March 5, 2001 by and between
ADVOCAT INC., a Delaware corporation (the "Company"), and William R. Council III
(the "Executive").

         In consideration of the mutual covenants contained in this Agreement,
the parties hereby agree as follows:

                                    SECTION I
                                   EMPLOYMENT

         The Company agrees to employ the Executive and the Executive agrees to
be employed by the Company for the Period of Employment as provided in Section
III.A. below and upon the terms and conditions provided in the Agreement.

                                   SECTION II
                          POSITION AND RESPONSIBILITIES

         During the Period of Employment, the Executive agrees to serve as Chief
Financial Officer of the Company and to be responsible for the typical
management responsibilities expected of an officer holding such positions and
such other responsibilities as may be assigned to Executive from time to time by
the Chief Executive Officer or Board of Directors of the Company.

                                   SECTION III
                                TERMS AND DUTIES

         A.       Period of Employment

                  The period of Executive's employment under this Agreement will
commence as of the date hereof and shall continue through February 28, 2002,
subject to extension or termination as provided in this Agreement ("Period of
Employment"). On each anniversary of the commencement of the Period of
Employment, the period of Executive's employment shall be extended for
additional one (1) year periods, unless either party gives notice thirty (30)
days in advance of the expiration of the then current period of employment of
such party's intent not to extend the Period of Employment.

<PAGE>   2

         B.       Duties

                  During the Period of Employment, the Executive shall devote
all of his business time, attention and skill to the business and affairs of the
Company and its subsidiaries. The Executive will perform faithfully the duties
which may be assigned to him from time to time by the Chief Executive Officer or
the Board of Directors.

                                   SECTION IV
                            COMPENSATION AND BENEFITS

         A.       Compensation

                  For all services rendered by the Executive in any capacity
during the Period of Employment, the Executive shall be compensated as follows:

                  1.       Base Salary

                           The Company shall pay the Executive a base salary
("Base Salary") as follows: One Hundred Fifty Thousand Dollars ($150,000) per
annum.

                           Base Salary shall be payable according to the
customary payroll practices of the Company but in no event less frequently than
once each month. The base salary shall be reviewed annually and shall be subject
to increase according to the policies and practices adopted by the Company from
time to time.

         B.       Annual Incentive Awards

                  The Company will pay the Executive annual incentive
compensation awards as may be granted by the Board or a Compensation Committee
to the Executive up to 30% of Base Salary, conditional upon achievement of
pre-agreed goals.

         C.       Additional Benefits

                  The Executive will be entitled to participate in all
compensation or employee benefit plans or programs and receive all benefits and
perquisites for which any salaried employees are eligible under any existing or
future plan or program established by the Company for salaried employees. The
Executive will participate to the extent permissible under the terms and
provisions of such plans or programs in accordance with program provisions.
These may include group hospitalization, health, dental care, life or other
insurance, tax qualified pension, car allowance, savings, thrift and profit
sharing plans, termination pay programs, sick leave plans, travel or accident
insurance, disability insurance, and contingent compensation plans including
capital accumulation programs, Restricted Stock programs, stock purchase
programs

<PAGE>   3

and stock option plans. Nothing in this Agreement will preclude the Company from
amending or terminating any of the plans or programs applicable to salaried or
senior executives as long as such amendment or termination is applicable to all
salaried employees or senior executives. The Executive will be entitled to an
annual four-week paid vacation.

         D.       Stock Option Plan

                  The Company will grant to the Executive options for the
purchase of 50,000 shares of the Company's common stock under the Company's 1994
Incentive and Nonqualified Stock Option Plan for Key Personnel. The exercise
price for these options will be the price on the market close on April 9, 2001.

                                    SECTION V
                                BUSINESS EXPENSES

         The Company will reimburse the Executive for all reasonable travel and
other expenses incurred by the Executive in connection with the performance of
his duties and obligations under this Agreement.

                                   SECTION VI
                                   DISABILITY

         A. In the event of disability of the Executive during the Period of
Employment, the Company will continue to pay the Executive according to the
compensation provisions of this Agreement during the period of his disability,
until such time as Executive's long term disability insurance benefits are
available. However, in the event the Executive is disabled for a continuous
period of six (6) months after the Executive first becomes disabled, the Company
may terminate the employment of the Executive. In this case, normal compensation
will cease except for earned but unpaid Base Salary and Incentive Compensation
Awards which would be payable on a pro-rated basis for the year in which the
disability occurred. In the event of such termination, all unvested stock
options held by Executive shall be deemed fully vested on the date of such
termination.

         B. During the period the Executive is receiving payments of either
regular compensation or disability insurance described in this Agreement and as
long as he is physically and mentally able to do so, the Executive will furnish
information and assistance to the Company and from time to time will make
herself available to the Company to undertake assignments consistent with his
prior position with the Company and his physical and mental health. If the
Company fails to make a payment or provide a benefit required as part of the
Agreement, the Executive's obligation to fulfill information and assistance will
end.

<PAGE>   4

         C. The term "disability" will have the same meaning as under any
disability insurance provided pursuant to this Agreement or otherwise.

                                   SECTION VII
                                      DEATH

         In the event of the death of the Executive during the Period of
Employment, the Company's obligation to make payments under this Agreement shall
cease as of the date of death, except for earned but unpaid Base Salary and
Incentive Compensation Awards which will be paid on a pro-rated basis for that
year. The Executive's designated beneficiary will be entitled to receive the
proceeds of any life or other insurance or other death benefit programs provided
in this Agreement.

                                  SECTION VIII
                       EFFECT OF TERMINATION OF EMPLOYMENT

         A. If the Executive's employment terminates due to either a Without
Cause Termination or a Constructive Discharge, as defined later in this
Agreement, the Company will pay the Executive in a lump sum upon such
Termination or Constructive Discharge an amount equal to 200% of his Base Salary
as in effect at the time of the termination. Earned but unpaid Base Salary and
Incentive Compensation Awards will be paid in a lump sum at such time. The
benefits and perquisites described in this Agreement as in effect at the date of
termination of employment will be continued for eighteen (18) months. If the
Executive's employment terminates due to either a Without Cause Termination or a
Constructive Discharge, or pursuant to Section XI, all stock options ("Options")
granted to the Executive under the Company's 1991 Non-Qualified Stock Option
Plan or other stock option program or plan (the "Plan") shall be deemed vested,
and the Company shall cause the Options to remain exercisable for eighteen (18)
months from the date of termination.

         B. If the Executive's employment terminates due to a Termination for
Cause, earned but unpaid Base Salary will be paid on a pro-rated basis for the
year in which the termination occurs. No other payments will be made or benefits
provided by the Company.

         C. Upon termination of the Executive's employment other than for
reasons due to death, disability, or pursuant to Paragraph A of this Section or
Section XI, the Period of Employment and the Company's obligation to make
payments under this Agreement will cease as of the date of the termination
except as expressly defined in this Agreement.

         D. For this Agreement, the following terms have the following meanings:

<PAGE>   5

                  1. "Termination for Cause" means termination of the
Executive's employment by the Company's Board of Directors acting in good faith
by the Company by written notice to the Executive specifying the event relied
upon for such termination, due to the Executive's serious, willful misconduct
with respect to his duties under this Agreement, including but not limited to
conviction for a felony or perpetration of a common law fraud, which has
resulted or is likely to result in material economic damage to the Company.

                  2. "Constructive Discharge" means termination of the
Executive's employment by the Executive due to a failure of the Company to
fulfill its obligations under this Agreement in any material respect including
any reduction of the Executive's Base Salary or other compensation other than
reductions applicable to all employees of the Company or failure to appoint or
reappoint the Executive to the position specified in Section II hereof, or other
material change by the Company in the functions, duties or responsibilities of
the position which would reduce the ranking or level, responsibility, importance
or scope of the position. The Executive will provide the Company a written
notice which describes the circumstances being relied on for the termination
with respect to the Agreement within ninety (90) days after the event giving
rise to the notice. The Company will have thirty (30) days to remedy the
situation prior to the Termination for Constructive Dismissal.

                  3. "Without Cause Termination" means termination of the
Executive's employment by the Company (a) other than due to death, disability,
Termination for Cause or pursuant to Section XI; or (b) upon expiration of the
Period of Employment as a result of the giving of notice by the Company of its
intent not to extend the Period of Employment as provided in Section III.A.

         E.       Stock Option Repurchase.

                  If the Executive's employment terminates due to either a
Without Cause Termination or a Constructive Discharge or pursuant to Section XI,
Executive may require the Company to repurchase any Options for an amount equal
to the difference between the fair market value of a share of the Company's
common stock on the date of termination and the per share exercise price set
forth in the Options, times the number of shares (whether vested or unvested)
granted to the Executive under the Options.

                                   SECTION IX
                      OTHER DUTIES OF THE EXECUTIVE DURING
                       AND AFTER THE PERIOD OF EMPLOYMENT

         A. The Executive will, with reasonable notice during or after the
Period of Employment, furnish information as may be in his possession and
cooperate with the Company as may reasonably be requested in connection with any
claims or legal actions in which the Company is or may become a party.

<PAGE>   6

         B. The Executive recognizes and acknowledges that all information
pertaining to the affairs, business, clients, customers or other relationships
of the Company, as hereinafter defined, is confidential and is a unique and
valuable asset of the Company. Access to and knowledge of this information are
essential to the performance of the Executive's duties under this Agreement. The
Executive will not during the Period of Employment or after except to the extent
reasonably necessary in performance of the duties under this Agreement, give to
any person, firm, association, corporation or governmental agency any
information concerning the affairs, business, clients, customers or other
relationships of the Company except as required by law. The Executive will not
make use of this type of information for his own purposes or for the benefit of
any person or organization other than the Company. The Executive will also use
his best efforts to prevent the disclosure of this information by others. All
records, memoranda, etc. relating to the business of the Company whether made by
the Executive or otherwise coming into his possession are confidential and will
remain the property of the Company.

         C. During the Period of Employment and for a twelve (12) month period
thereafter, the Executive will not use his status with the Company to obtain
loans, goods or services from another organization on terms that would not be
available to him in the absence of his relationship to the Company. During the
Period of Employment and for a twelve (12) month period following termination of
the Period of Employment, other than termination due to a Without Cause
Termination, a Constructive Discharge or termination pursuant to Section XI: the
Executive will not make any statements or perform any acts intended to advance
the interest of any existing or prospective competitors of the Company in any
way that will injure the interest of the Company; the Executive without prior
express written approval by the Board of Directors of the Company will not
directly or indirectly own or hold any proprietary interest in or be employed by
or receive compensation from any party engaged in the same or any similar
business in the same geographic areas the Company does business; and the
Executive without express prior written approval from the Board of Directors,
will not solicit any members of the then current clients of the Company or
discuss with any employee of the Company information or operation of any
business intended to compete with the Company. For the purposes of the
Agreement, proprietary interest means legal or equitable ownership, whether
through stock holdings or otherwise, of a debt or equity interest (including
options, warrants, rights and convertible interests) in a business firm or
entity, or ownership of more than 5% of any class of equity interest in a
publicly-held company. The Executive acknowledges that the covenants contained
herein are reasonable as to geographic and temporal scope. For a twelve (12)
month period after termination of the Period of Employment for any reason, the
Executive will not directly or indirectly hire any employee of the Company or
solicit or encourage any such employee to leave the employ of the Company.

         D. The Executive acknowledges that his breach or threatened or
attempted breach of any provision of Section IX would cause irreparable harm to
the Company not compensable in monetary damages and that the Company shall be
entitled, in addition to all other applicable remedies, to a temporary and
permanent injunction and a decree for specific performance of the

<PAGE>   7

terms of Section IX without being required to prove damages or furnish any bond
or other security.

         E. The Executive shall not be bound by the provisions of Section IX in
the event of the default by the Company in its obligations under this Agreement
which are to be performed upon or after termination of this Agreement.

                                    SECTION X
                           INDEMNIFICATION, LITIGATION

         The Company will indemnify the Executive to the fullest extent
permitted by the laws of the state of incorporation in effect at that time, or
certificate of incorporation and by-laws of the Company whichever affords the
greater protection to the Executive. The Executive will be entitled to any
insurance proceeds related to any award, or any fees or expenses incurred in
connection with any action, suit or proceeding to which he may be made a party
by reason of being a director or officer of the Company.

                                   SECTION XI
                                CHANGE IN CONTROL

         In the event there is a Change in Control of the ownership of the
Company, the Executive may at any time immediately resign upon written notice to
the Company. In this event, the Company shall pay to the Executive in a lump sum
upon such resignation an amount equal to 200% of his Base Salary as in effect at
the time of such resignation. In addition, earned but unpaid Base Salary and
Incentive Compensation Awards will be paid on a pro-rated basis for the year in
which resignation occurs. Any stock options granted to the Executive prior to
termination pursuant to the Plan, but subject to vesting restrictions, will be
fully vested upon a Change in Control whether or not the Executive resigns. The
benefits and perquisites described in this Agreement as in effect at the date of
termination of employment will also be continued for eighteen (18) months from
the effective date of termination pursuant to Change of Control.

         A "Change in Control" shall be deemed to have occurred if (i) a tender
offer shall be made and consummated for the ownership of more than 50% of the
outstanding voting securities of the Company, (ii) the Company shall be merged
or consolidated with another corporation and as a result of such merger or
consolidation less than 75% of the outstanding voting securities of the
surviving or resulting corporation shall be owned in the aggregate by the former
shareholders of the Company, as the same shall have existed immediately prior to
such merger or consolidation, (iii) the Company shall sell all or substantially
all of its assets to another corporation which is not a wholly-owned subsidiary,
or (iv) a person, within the meaning of Section 3(a)(9) or of Section 13(d)(3)
(as in effect on the date hereof) of the Securities and Exchange Act of 1934
("Exchange "Act")), shall acquire more than 50% of the outstanding

<PAGE>   8

voting securities of the Company (whether directly, indirectly, beneficially or
of record). For purposes hereof, ownership of voting securities shall take into
account and shall include ownership as determined by applying the provisions of
Rule 13d-3(d)(1)(i) (as in effect on the date hereof) pursuant to the Exchange
Act.

                                   SECTION XII
                                WITHHOLDING TAXES

         The Company may directly or indirectly withhold from any payments under
this Agreement all federal, state, city or other taxes that shall be required
pursuant to any law or governmental regulation.

                                  SECTION XIII
                           EFFECTIVE PRIOR AGREEMENTS

         This Agreement contains the entire understanding between the Company
and the Executive with respect to the subject matter and supersedes any prior
employment or severance agreements between the Company and its affiliates, and
the Executive.

                                   SECTION XIV
                     CONSOLIDATION, MERGER OR SALE OF ASSETS

         Nothing in this Agreement shall preclude the Company from consolidating
or merging into or with, or transferring all or substantially all of its assets
to, another corporation which assumes this Agreement and all obligations and
undertakings of the Company hereunder. Upon such a Consolidation, Merger or Sale
of Assets, the term "the Company" as used will mean the other corporation and
this Agreement shall continue in full force and effect. This Section XIV is not
intended to modify or limit the rights of the Executive hereunder, including
without limitation, the rights of Executive under Section XI.

                                   SECTION XV
                                  MODIFICATION

         This Agreement may not be modified or amended except in writing signed
by the parties. No term or condition of this Agreement will be deemed to have
been waived except in writing by the party charged with waiver. A waiver shall
operate only as to the specific term or condition waived and will not constitute
a waiver for the future or act on anything other than that which is specifically
waived.

<PAGE>   9

                                   SECTION XVI
                           GOVERNING LAW; ARBITRATION

         This Agreement has been executed and delivered in the State of
Tennessee and its validity, interpretation, performance and enforcement shall be
governed by the laws of that state.

         Any dispute among the parties hereto shall be settled by arbitration in
Nashville, Tennessee, in accordance with the rules then obtaining of the
American Arbitration Association and judgment upon the award rendered may be
entered in any court having jurisdiction thereof.

                                  SECTION XVII
                                     NOTICES

         All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been made when delivered or
mailed first-class postage prepaid by registered mail, return receipt requested,
or if delivered by hand, overnight delivery service or confirmed facsimile
transmission, to the following:

                  (a) If to the Company, at 277 Mallory Station Road, Suite 130,
Franklin, Tennessee 37067, Attention: President or Chief Executive Officer, or
at such other address as may have been furnished to the Executive by the Company
in writing; or

                  (b) If to the Executive, at 5161 Ravens Glen, Nashville,
Tennessee 37211, or such other address as may have been furnished to the Company
by the Executive in writing.

                                  SECTION XVIII
                                BINDING AGREEMENT

         This Agreement shall be binding on the parties' successors, heirs and
assigns.

<PAGE>   10

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

                                    ADVOCAT INC.

                                    By: /s/ Charles H. Rinne
                                        ----------------------------------------
                                    President and Chief Operating Officer

                                    EXECUTIVE:

                                    /s/ William R. Council III
                                    --------------------------------------------
                                    William R. Council III

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00028-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00028-of-00352.parquet"}]]