Document:

3.31.2015 - Ex 10.29 Stone County unsecured note

                                            
	
		
	 
	Exhibit 10.29

EXECUTION VERSION

PROMISSORY NOTE

(Stone County)

$108,861.00                                               April 3, 2015

FOR VALUE RECEIVED, ADCARE HEALTH SYSTEMS, INC., a Georgia corporation (“Borrower”), hereby promises to pay to the order of KEYBANK NATIONAL ASSOCIATION, a national banking association (together with any and all of its successors and assigns and/or any other holder of this Note, “Lender”), without offset, in immediately available funds in lawful money of the United States of America, at 1200 Abernathy Road, NE, Suite 1550, Atlanta, Georgia 30328 (or such other address as Lender may designate in written notice to Borrower from time to time), the principal sum of ONE HUNDRED EIGHT THOUSAND EIGHT HUNDRED SIXTY-ONE AND NO/100 DOLLARS ($108,861.00) (the “Indebtedness”), as hereinafter provided.
Section 1.    Indebtedness.  The Indebtedness represents the portion of certain deferred “exit fees” allocated by Borrower and Lender to the skilled nursing facility and assisted living facility identified as the “Facilities” on Schedule 1 attached hereto and incorporated herein by this reference, which fees are owing by Borrower to Lender in connection with a mortgage loan in the original principal amount of $16,500,000 (the “Mortgage Loan”), made by Lender to the subsidiaries of Borrower identified on Schedule 1 hereto as the “Mortgage Loan Borrowers,” pursuant to that certain Secured Loan Agreement dated as of December 28, 2012, as amended (the “Mortgage Loan Agreement”), executed by and among Lender, the Mortgage Loan Borrowers, and the guarantors of the Mortgage Loan (including Borrower), and guaranteed by Borrower pursuant to that certain Payment Guaranty dated as of December 28, 2012, as amended.  The Mortgage Loan was refinanced by a third-party lender as of February 25, 2015.  This Note is being executed and delivered by Borrower to Lender in connection with the other promissory notes, each dated the date hereof, executed by Borrower, payable to the order of Lender and being more particularly described on Schedule 1 hereto (as the same may be modified, amended, extended, renewed, restated, reallocated or replaced from time to time, collectively, the “Other Notes,” and each individually, an “Other Note”).  This Note and the Other Notes are collectively given in place of the obligations of Borrower and the Mortgage Borrowers to pay any “exit fees” pursuant to the terms of the Loan Documents (as defined in the Mortgage Loan Agreement) with respect to the Projects (as defined in the Mortgage Loan Agreement), the Facilities, and the Sumter Valley Facility (as defined in Schedule 1 hereto).  

Section 2.    Repayment of the Indebtedness.  

(a)    The entire principal balance of this Note then unpaid shall be finally due and payable upon the Maturity Date (as hereinafter defined).  The term “Maturity Date,” as used in this Note shall mean the earliest to occur of the following: (i) August 25, 2016, as such date may be extended as provided in Section 2(b) hereof (the “Scheduled Maturity Date”), (ii) the date on which a Transfer (as hereinafter defined) shall occur, (iii) the date on which Borrower or any subsidiary of Borrower engages any Person (as hereinafter defined) other than Lender or an affiliate of Lender to originate or otherwise obtain mortgage loan financing (an “Agency Financing”) for the Facilities that is to be insured or guaranteed by the U.S. Department of Health and Urban Development (“HUD”), and (iv) the date on which the maturity of this Note is accelerated as provided in Section 7 hereof.  The term, “Person,” as used in this Note, means any natural person, firm, corporation, limited liability company, trust, joint venture, 

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association, company, unlimited liability company, partnership, Governmental Authority or other entity (whether or not having separate legal personality).
(b)    In the event Lender or any Lender affiliate shall have submitted a loan package for the Facilities to HUD for approval, and the date on which such loan package is submitted (the “Agency Financing Submission Date”) is less than one hundred twenty (120) days prior to the original Scheduled Maturity Date, then the original Scheduled Maturity Date shall automatically be deemed to have been extended, on a one-time basis only, to the one hundred twentieth (120th) day after the Agency Financing Submission Date, without the necessity of any further action on the part of Borrower or Lender.

(c)    If, prior to the Maturity Date, the Facilities shall have been refinanced either (i) by a permanent loan from Lender or an affiliate of Lender, or (ii) by an Agency Financing originated by Lender or any affiliate of Lender, then and in such an event the entire remaining principal amount of this Note then outstanding shall be forgiven, this Note shall be cancelled and no further amounts shall be payable by Borrower hereunder.

Section 3.    Interest.  The Indebtedness evidenced by this Note shall not bear interest, except for Default Interest (as hereinafter defined).  If Borrower fails to pay the Indebtedness on the Maturity Date, the delinquent Indebtedness shall bear interest at the rate of fifteen percent (15%) per annum, calculated on the basis of a three hundred sixty (360)-day year for the actual number of days elapsed, which interest shall be due and payable on demand.

Section 4.    Prepayment.  Borrower may prepay the principal balance of this Note, in full at any time or in part from time to time, without fee, premium or penalty.

Section 5.    Certain Provisions Regarding Payments.  All payments made under this Note shall be applied, to the extent thereof, to Lender’s Expenses (as hereinafter defined), to Default Interest (if any), and to unpaid principal, in such manner and order as Lender may elect in its sole discretion, any instructions from Borrower or anyone else to the contrary notwithstanding.  Remittances shall be made without offset, demand, counterclaim, deduction, or recoupment (each of which is hereby waived) and shall be accepted subject to the condition that any check or draft may be handled for collection in accordance with the practice of the collecting bank or banks.  Acceptance by Lender of any payment in an amount less than the amount then due on any indebtedness shall be deemed an acceptance on account only, notwithstanding any notation on or accompanying such partial payment to the contrary, and shall not in any way (a) waive or excuse the existence of an Event of Default (as hereinafter defined), (b) waive, impair or extinguish any right or remedy available to Lender hereunder, or (c) waive the requirement of punctual payment and performance or constitute a novation in any respect.  Whenever any payment under this Note falls due on a day which is not a Business Day, such payment may be made on the next succeeding Business Day.

Section 6.    Events of Default.  The occurrence of any one or more of the following shall constitute an “Event of Default” under this Note:

(a)    Borrower fails to pay when and as due and payable any amounts payable by Borrower to Lender under the terms of this Note or any of the Other Notes;

(b)    Borrower fails to perform, observe or keep any covenant or agreement not referred to in Section 6(a), and such failure is not cured within ten (10) days after written notice of such failure is given by Lender to Borrower;

(c)    the occurrence of any Transfer without the prior written consent of Lender;

(d)    Borrower shall commence a voluntary case concerning any Borrower under Title 11 of the United States Code entitled “Bankruptcy” as now or hereafter in effect, or any successor thereto or any other present or future bankruptcy or insolvency statute (the “Bankruptcy Code”); or an involuntary 

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proceeding is commenced against Borrower under the Bankruptcy Code and relief is ordered against Borrower, or the petition is controverted but not dismissed or stayed within sixty (60) days after the commencement of the ease, or a custodian (as defined in the Bankruptcy Code) is appointed for or takes charge of all or substantially all of the property of Borrower; or Borrower commences any other proceedings under any reorganization, arrangement, readjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to Borrower; or there is commenced against Borrower any such proceeding which remains undismissed or unstayed for a period of sixty (60) days; or Borrower fails to controvert in a timely manner any such case under the Bankruptcy Code or any such proceeding, or any order of relief or other order approving any such case or proceeding is entered; or Borrower by any act or failure to act indicates its consent to, approval of, or acquiescence in any such case or proceeding or the appointment of any custodian or the like of or for it for any substantial part of its property or suffers any such appointment to continue undischarged or unstayed for a period of sixty (60) days;
(e)    Borrower shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due, or shall consent to the appointment of a receiver or trustee or liquidator of all of its property or the major part thereof or if all or a substantial part of the assets of Borrower are attached, seized, subjected to a writ or distress warrant, or are levied upon, or come into the possession of any receiver, trustee, custodian or assignee for the benefit of creditors.

For purposes of this Note, the term “Transfer” shall mean (a) the sale, transfer or conveyance of the Facilities (or either of them) by the applicable Property Subsidiary, or (b) the occurrence of an event or series of events by which (i) Borrower ceases to be the direct or indirect owner of the Property Subsidiaries, or either of them, or (ii) any Person or group of Persons acting in concert as a partnership or other group shall, as a result of a tender or exchange offer, open market purchases, privately negotiated purchases, merger, consolidation, sale of all or substantially all assets, or otherwise, have become, after the date hereof, the “beneficial owner” (within the meaning of such term under Rule 13d-3 under the federal Securities and Exchange Act of 1934, as amended) of equity interests of Borrower representing voting power having the right to elect at least 49% of the members of Borrower’s board of directors.

Section 7.    Remedies.  Upon the occurrence of an Event of Default, Lender may at any time thereafter exercise any one or more of the following rights, powers and remedies:

(a)    Lender may accelerate the Maturity Date and declare the unpaid principal balance and accrued but unpaid interest (if any) on this Note, and all other amounts payable hereunder, at once due and payable, and upon such declaration the same shall at once be due and payable; and.

(b)    Lender may exercise any of its other rights, powers and remedies available at law or in equity.

Notwithstanding the foregoing, upon the occurrence of any Event of Default under Section 6(d) hereof, all amounts evidenced by this Note shall automatically become due and payable, without any presentment, demand, protest or notice of any kind to Borrower.

Section 8.    Remedies Cumulative.  All of the rights and remedies of Lender under this Note are cumulative of each other and of any and all other rights at law or in equity, and the exercise by Lender of any one or more of such rights and remedies shall not preclude the simultaneous or later exercise by Lender of any or all such other rights and remedies.  No single or partial exercise of any right or remedy shall exhaust it or preclude any other or further exercise thereof, and every right and remedy may be exercised at any time and from time to time.  No failure by Lender to exercise, nor delay in exercising, any right or remedy shall operate as a waiver of such right or remedy or as a waiver of any Event of Default.

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Section 9    Costs and Expenses of Enforcement and Preparation.  Borrower agrees to pay to Lender on demand all costs and expenses incurred by Lender in seeking to collect this Note, including court costs and reasonable attorneys’ fees and expenses actually incurred, whether or not suit is filed hereon, or whether in connection with bankruptcy, insolvency or appeal.  Borrower agrees to pay Lender on demand for all costs incurred (including, but not limited to, Lender’s counsel’s attorney’s fees) in preparing this Note and all other documents.

Section 10.    Service of Process.  Borrower hereby consents to process being served in any suit, action, or proceeding instituted in connection with this Note by serving of a copy thereof by certified mail, postage prepaid, return receipt requested, to Borrower.  Borrower irrevocably agrees that such service shall be deemed to be service of process upon Borrower in any such suit, action, or proceeding.  Nothing in this Note shall affect the right of Lender to serve process in any manner otherwise permitted by law and nothing in this Note will limit the right of Lender otherwise to bring proceedings against Borrower in the courts of any jurisdiction or jurisdictions.

Section 11.    Successors and Assigns.  The terms of this Note shall bind and inure to the benefit of the permitted successors and assigns of the parties; provided, however, that in no event shall Borrower delegate or assign its rights or obligations under this Note to any other Person (whether by operation of law or otherwise), without Lender’s prior written consent, and any such delegation or assignment by Borrower (or attempted by Borrower) in violation of the terms of this Note shall be void.

Section 12.    General Provisions.  Time is of the essence with respect to Borrower’s obligations under this Note.  If more than one Person executes this Note as Borrower, all of said parties shall be jointly and severally liable for payment of the indebtedness evidenced hereby.  Borrower and each party executing this Note as Borrower hereby severally (a) waive demand, presentment for payment, notice of dishonor and of nonpayment, protest, notice of protest, notice of intent to accelerate, notice of acceleration and all other notices (except any notices which are specifically required by this Note), filing of suit and diligence in collecting this Note or enforcing any of the security herefor; (b) agree to any substitution, subordination, exchange or release of any such security or the release of any party primarily or secondarily liable hereon; (c) agree that Lender shall not be required first to institute suit or exhaust its remedies hereon against Borrower or others liable or to become liable hereon or to perfect or enforce its rights against them or any security herefor; (d) consent to any extensions or postponements of time of payment of this Note for any period or periods of time and to any partial payments, before or after maturity, and to any other indulgences with respect hereto, without notice thereof to any of them; and (e) submit (and waive all rights to object) to non-exclusive personal jurisdiction of any state or federal court sitting in the State of Georgia for the enforcement of any and all obligations under this Note; (f) waive the benefit of all homestead and similar exemptions as to this Note; (g) agree that their liability under this Note shall not be affected or impaired by any determination that any title, security interest or lien taken by Lender to secure this Note is invalid or unperfected; and (h) hereby subordinate to the Indebtedness any and all rights against Borrower and any security for the payment of this Note, whether by subrogation, agreement or otherwise, until this Note is paid in full.  A determination that any provision of this Note is unenforceable or invalid shall not affect the enforceability or validity of any other provision and the determination that the application of any provision of this Note to any Person or circumstance is illegal or unenforceable shall not affect the enforceability or validity of such provision as it may apply to other Persons or circumstances.  This Note may not be amended except in a writing specifically intended for such purpose and executed by the party against whom enforcement of the amendment is sought.  Captions and headings in this Note are for convenience only and shall be disregarded in construing it.  This Note and its validity, enforcement and interpretation shall be governed by the laws of the State of Georgia (without regard to any principles of conflicts of laws) and applicable United States federal law.  Whenever a time of day is referred to herein, unless otherwise specified such time shall be the local time of the place where payment of this Note is to be made.  The term “Business Day” shall mean a day of the year on which banks are not required or authorized to close in Atlanta, Georgia.  The words “include” and “including” shall be interpreted as if followed by the words “without limitation.”

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Section 13.    Notices.  Any notice, demand, request or other communication which any party hereto may be required or may desire to give hereunder shall be in writing and shall be deemed to have been properly given (a) if hand delivered, when delivered; (b) if mailed by United States Certified Mail (postage prepaid, return receipt requested), three (3) Business Days after mailing (c) if by Federal Express or other reliable overnight courier service, on the next Business Day after delivered to such courier service or (d) if by telecopier, on the day of transmission so long as copy is sent on the same day by overnight courier as set forth below:

If to Borrower:

AdCare Health Systems, Inc.
1145 Hembree Road
Roswell, Georgia  30076
Attention:    E. Clinton Cain, CPA, MAcc
Vice President of Finance
Telephone:    (404) 781-2896
Facsimile:    (404) 842-1899

With a courtesy copy to:

Holt, Ney, Zatcoff & Wasserman, LLP
100 Galleria Parkway, Suite 1800
Atlanta, Georgia  30339
Attention:    Gregory P. Youra, Esq.
Telephone:    (770) 956-9600
Facsimile:    (770) 956-1490

If to Lender:
KeyBank National Association
1200 Abernathy Road, NE
Suite 1550
Atlanta, Georgia  30328
Attention: Paul F. Di Vito, SVP
Telephone: (770) 510-2085
Facsimile: (770) 510-2195

With a courtesy copy to:

Bryan Cave LLP
One Atlantic Center, Fourteenth Floor
1201 West Peachtree Street, NW
Atlanta, Georgia  30309-3488
Attention: Robert C. Lewinson, Esq.
Telephone:    (404) 572-6623
Facsimile:    (404) 420-0623  

Section 14.    No Usury.  It is expressly stipulated and agreed to be the intent of Borrower and Lender at all times to comply with applicable state law or applicable United States federal law (to the extent that it permits Lender to contract for, charge, take, reserve, or receive a greater amount of interest than under state law) and that this Section shall control every other covenant and agreement in this Note.  If applicable state or federal law should at any time be judicially interpreted so as to render usurious any amount called for under this Note, or contracted for, charged, taken, reserved, or received with respect to the Indebtedness, or if Lender’s exercise of the option to accelerate the Maturity Date, 

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or if any prepayment by Borrower results in Borrower having paid any interest in excess of that permitted by applicable law, then it is Lender’s express intent that all excess amounts theretofore collected by Lender shall be credited on the principal balance of this Note, and the provisions of this Note shall immediately be deemed reformed and the amounts thereafter collectible hereunder and thereunder reduced, without the necessity of the execution of any new documents, so as to comply with the applicable law, but so as to permit the recovery of the fullest amount otherwise called for hereunder or thereunder.  All sums paid or agreed to be paid to Lender for the use or forbearance of the Indebtedness shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full stated term of the Indebtedness.

Section 15.  Reinstatement.  To the extent that any payment or payments made to Lender, or any payment or proceeds of any property received by Lender, in the reduction of the principal indebtedness or as payment of accrued interest are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, to a surety, or any other Person liable for any of the repayment of principal or accrued interest, whether directly or indirectly, as a debtor in possession or to a receiver or any other Person under the Bankruptcy Code, or any other state or federal law, common law or equitable cause (collectively, the “Invalidated Payments”) whether pursuant to a settlement or a judgment by a court of competent jurisdiction, then the portion of such principal repayment or accrued interest payment equal to the Invalidated Payments and the lien or security title, if any, given to secure this Note will be revived and will continue in full force and effect as if such payment or proceeds had never been received by Lender. 
Section 16.  Reallocation.  THE INDEBTEDNESS EVIDENCED HEREBY DOES NOT CONSTITUTE A NOVATION OR A NEW DEBT, BUT REPRESENTS A CONTINUATION AND REALLOCATION OF THE INDEBTEDNESS EVIDENCED BY THIS NOTE AND THE OTHER NOTES AND CONSTITUTES A RENEWAL AND RESTRUCTURING OF SUCH INDEBTEDNESS.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, Borrower has duly executed this Note under seal as of the date first above written.

PROMISSORY NOTE (STONE COUNTY)

SCHEDULE 1
TO PROMISSORY NOTE

(Stone County)

Mortgage Loan 
		
	Borrowers:
	Woodland Hills Property Holdings, LLC, Northridge HC&R Property Holdings, LLC, APH&R Property Holdings, LLC, Woodland Hills HC Nursing, LLC, Northridge HC&R Nursing, LLC, APH&R Nursing, LLC, each a Georgia limited liability company 

		
	Facilities:
	Stone County Nursing and Rehabilitation Center

706 Oak Grove Street
Mountain View, AR 72560

Stone County Residential Care Center
414 Massay Avenue
Mountain View, AR 72560
Property
		
	Subsidiary:
	Mt. V Property Holdings, LLC (Stone County Nursing and Rehabilitation Center) and Mountain Top Property Holdings, LLC (Stone County Residential Care Center), each a Georgia limited liability company

		
	Other Notes:           1.
	Promissory Note dated February 25, 2015 in the original principal amount of $170,000.00, as amended and restated by that certain Amended and Restated Promissory Note dated April 3, 2015 in the reallocated principal amount of $154,038.00, relating to the skilled nursing facility known as Northridge Healthcare and Rehabilitation, 2501 John Ashley Drive, North Little Rock, AR  72114, the owner of which is Northridge HC&R Property Holdings, LLC, a Georgia limited liability company.

		
	2.
	Promissory Note dated February 25, 2015 in the original principal amount of $170,000.00, as amended and restated by that certain Amended and Restated Promissory Note dated April 3, 2015 in the reallocated principal amount of $93,133.00, relating to the skilled nursing facility known as Cumberland Health and Rehabilitation Center, 1516 South Cumberland Street, Little Rock, AR  72202, the owner of which is APH&R HC Property Holdings, LLC, a Georgia limited liability company

		
	3.
	Promissory Note dated February 25, 2015 in the original principal amount of $170,000.00, as amended and restated by that certain Amended and Restated Promissory Note dated April 3, 2015 in the reallocated principal amount of $138,877.00, relating to the skilled nursing facility known as River Valley Health and Rehabilitation Center, 5301 Wheeler Avenue, Fort Smith, AR  72901, the owner of which is River Valley Property Holdings, LLC, a Georgia limited liability company.

		
	4.
	Promissory Note dated February 25, 2015 in the original principal amount of $170,000.00, as amended and restated by that certain Amended and Restated Promissory Note dated April 3, 2015 in the reallocated principal amount of $185,092.00, relating to the skilled nursing facility known as Sumter Valley Nursing and Rehab Center, 1761 Pinewood Road, Sumter, SC  29154 (the “Sumter Valley Facility”), the owner of which is Sumter Valley Property Holdings, LLC, a Georgia limited liability company.

                            83.31.2015 - Ex 10.30 Bonterra/Parkview Eighth amendment

                                            
	
		
	 
	Exhibit 10.30

EIGHTH AMENDMENT TO CREDIT AGREEMENT

THIS EIGHTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is made and entered into as of the 25th day of March, 2015, by and between ADK BONTERRA/PARKVIEW, LLC, a Georgia limited liability company (hereinafter referred to as "Borrower"), with its chief executive office at 1145 Hembree Road, Roswell, Georgia 30076, and GEMINO HEALTHCARE FINANCE, LLC, a Delaware limited liability company (hereinafter referred to as "Lender") with an office at One International Plaza, Suite 220, Philadelphia, Pennsylvania  19113.

Recitals:

Lender and Borrower are parties to a certain Credit Agreement dated April 27, 2011 (as at any time amended, restated, modified or supplemented, the "Credit Agreement") pursuant to which Lender has made certain revolving credit loans to Borrower.

The parties desire to amend the Credit Agreement as hereinafter set forth.

Events of Default under (and as defined in) the Credit Agreement have occurred. Borrower has requested a waiver of such Events of Default. Lender is willing to waive such Events of Default, subject to the terms and conditions set forth herein.

NOW, THEREFORE, for TEN DOLLARS ($10.00) in hand paid and other good and valuable consideration, the receipt and sufficiency of which are hereby severally acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

1.Definitions. All capitalized terms used in this Amendment, unless otherwise defined herein, shall have the meaning ascribed to such terms in the Credit Agreement.

		
	2.
	Amendments to Credit Agreement. The Credit Agreement is hereby amended as follows:

(a)By deleting the reference to "March 31, 2015" from Section 2.01(d) of the Credit Agreement and by substituting in lieu thereof a reference to "April 30, 2015".

		
	(b)
	By deleting Section 6.06(a) of the Credit Agreement in its entirety and by substituting

in lieu thereof the following:

(a)    Minimum Fixed Charge Coverage Ratio. Borrowers shall cause ADK to maintain at all times a Fixed Charge Coverage Ratio measured quarterly (i) at the end of the fiscal quarter ending March 31, 2014, of at least 1.00:1, (ii) at the end of the fiscal quarter ending June 30, 20I4, of at least I.05: I, (iii) at the end of the fiscal quarters ending September 30, 2014 and December 31, 2014, of at least 1.10:I, (iv) at the end of the fiscal quarter ending March 3I, 20I5, of at least 0.80: I, and (v) at the end of each fiscal quarter thereafter, of at least 1.10:1.

3.Limited Waiver of Default. Borrower acknowledges that Events of Default have occurred and currently exist under the Credit Agreement as a result of (i) Borrower's breach of Section 6.06(a) of the Credit Agreement , due to the failure of ADK to maintain a Fixed Charge Coverage Ratio of at least 

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1.10to 1.0 at the end of the fiscal quarter ending December 31, 2014, and (ii) the occurrence of defaults by certain of Borrower's affiliates in violation of Section 8.01(y) of the Credit Agreement as a result of  the same circumstances that resulted in Borrower's breach of Section 6.06(a) of the Credit Agreement (collectively, the "Designated Defaults"). Borrower represent s and warrants that the Designated Defaults are the only Defaults or Events of Default that exist under the Credit Agreement and the other Loan Documents as of the date hereof. Subject to the satisfaction of the conditions precedent set forth in Section 9 hereof,Lender waives the Designated Defaults as in existence on the date hereof . In no event shall such waiver be deemed to constitute a waiver of (a) any Default or Event of Default other than the Designated Defaults in existence on the date of this Amendment or (b) Borrower's obligation to comply with all of the terms and conditions of the Credit Agreement and the other Loan Documents from and after the date hereof. Notwithstanding any prior, temporary mutual disregard of the terms of any contracts between the parties, Borrower hereby agrees that it shall be required strictly to comply with all of the terms of the Loan Documents on and after the date hereof.

4.Ratification and Reaffirmation. Borrower hereby ratifies and reaffirms the Obligations, each of the Loan Documents and all of Borrower's covenants, duties, indebtednes s and liabilities under the Loan Documents.

5.Acknowledgments and Stipulations. Borrower acknowledges and stipulates that the Credit Agreement and the other Loan Documents executed by Borrower are legal, valid and binding obligations of Borrower that are enforceable against Borrower in accordance with the terms thereof; all of the Obligation s are owing and payable without defense, offset or counterclaim (and to the extent there exists any such defense, offset or counterclaim on the date hereof , the same is hereby waived by Borrower); the security interests and liens granted by Borrower in favor of Lender are duly perfected, first priority security interests and liens; and the unpaid principal amount of the Loans on and as of March 25, 2015, totaled $1,266.601.20.

6.Representations and Warranties. Borrower represents and warrants to Lender, to induce Lender to enter into this Amendment, that no Event of Default or Unmatured Event of Default exists on the date hereof other than the Designated Defaults; the execution, delivery and performance of this Amendment have been duly authorized by all requisite company action on the part of Borrower and this Amendment has been duly executed and delivered by Borrower ; and all of the representations and warranties made by Borrower in the Credit Agreement are true and correct on and as of the date hereof.

7.Reference to Credit Agreement. Upon the effectiveness of this Amendment, each reference in the Credit Agreement to "this Agreement," "hereunder," or words of like import shall mean and be a reference to the Credit Agreement, as amended by this Amendment.

8.Breach of Amendment. This Amendment shall be part of the Credit Agreement and a breach of any representation, warranty or covenant herein shall constitute an Event of Default.

9.Conditions Precedent.  The effectiveness of the amendments contained in Section 2 hereof and the limited waiver contained in Section 3 hereof are subject to the satisfaction of each of the following conditions precedent, in form and substance satisfactory to Lender, unless satisfaction thereof is specifically waived in writing by Lender:

(a)        Lender shall have received  a counterpart  of  this Amendment  duly executed  by Borrower; and
(b)        Lender shall have received a Consent and Reaffirmation to this Amendment duly executed by ADK.

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1.Amendment Fees; Expenses of Lender.   In consideration  of Lender's willingness to enter into this Amendment, Borrower agrees to pay to Lender (i) a waiver and amendment fee in the amount of
$5,000 in immediately available funds on the date hereof and (ii) an extension fee in the amount of $3,333 in immediately available funds on the date hereof . Additionally, Borrower agrees to pay, on demand, all costs and expenses incurred by Lender in connection with the preparation, negotiation and execution of this Amendment and any other Loan Documents executed pursuant hereto and any and all amendments, modifications, and supplements thereto, including, without limitation, the costs and fees of Lender's legal counsel and any taxes or expenses associated with or incurred in connection with any instrument or agreement referred to herein or contemplated hereby.

2.Governing Law. This Amendment shall be governed by and construed in accordance with the internal laws of the Commonwealth of Pennsylvania .
. "

		
	3.
	Successors and Assigns.  This Amendment shall be binding upon and inure to the benefit of

the parties hereto and their respective successors and assigns.

4.No Novation, etc. Except as otherwise expressly provided in this Amendment, nothing herein shall be deemed to amend or modify any provision of the Credit Agreement or any of the other Loan Documents, each of which shall remain in full force and effect. This Amendment is not intended to be, nor shall it be construed to create, a novation or accord and satisfaction, and the Credit Agreement as herein modified shall continue in full force and effect.

5.Counterparts; Electronic Signatures. This Amendment may be executed in any number of counterparts and by different parties to this Amendment on separate counterpart s, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same agreement. Any manually executed signature page to this Amendment delivered by a party by facsimile or other electronic transmi ssion shall be deemed to be an original signature hereto.

6.Further Assurances. Borrower agrees to take such further actions as Lender shall reasonably request from time to time in connection herewith to evidence or give effect to the amendments set forth herein or any of the transaction s contemplated hereby.

7.Section Titles. Section titles and references used in this Amendment shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreements among the parties hereto.

8.Manager Certification of Borrower. By his execution and delivery of this Amendment, William McBride, III hereby certifies that: (a) the Unanimous Consent in Lieu of a Special Meeting of the Sole Member and the Managers of Borrower dated as of February 21, 2011 (the "Consent"), remains in full force and effect, except that the current Manager of Borrower is now William McBride, III, the individual currently serving as the Chief Executive Officer of ADK; (b) pursuant to the Consent, the Managers or designees of Borrower are authorized and empowered (either alone or in conjunction with any one or more of the other Managers of Borrower) to take, from time to time, all or any part of the following actions on or in behalf of Borrower , as applicable: (i) to make, execute and deliver to Lender this Amendment and all other agreements, documents and instruments contemplated by or referred to herein or executed by Borrower in connection herewith; and (ii) to carry out, modify, amend or terminate any arrangements or agreements at any time existing between Lender and Borrower; (c) any arrangements, agreements, security agreements, or other instruments or documents referred to or executed pursuant to this Amendment by William McBride, III,or any other Manager of Borrower or an employee of ADK acting pursuant to delegation of authority, may be attested by such person and may contain such terms 

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and provisions as such person shall, in his or her sole discretion , determine; and

(d) set forth below is the name and signature of the current Chief Executive Officer of ADK and Manager of Borrower, William McBride, Ill'    

William McBride, III    Chief Executive Officer    of ADK and Manager of Borrower
/s/ William McBride, III

1.Release of Claims. To induce Lender to enter into this Amendment, Borrower hereby releases, acquits and forever discharges Lender,and all officers, directors, agents, employees, successors and assigns of Lender, from any and all liabilities, claims, demands, actions or causes of action of any kind or nature (if there be any), whether absolute or contingent, disputed or undisputed, at law or in equity, or known or unknown, that Borrower now has or ever had against Lender arising under or in connection with any of the Loan Documents or otherwise. Borrower represents and warrants to Lender that Borrower has not transferred or assigned to any Person any claim that Borrower ever had or claimed to have against Lender.

2.Waiver of Jury Trial. To the fullest extent permitted by applicable law, the parties hereto each hereby waives the right to trial by jury in any action, suit, counterclaim or proceeding arising out of or related to this Amendment.

[Remainder of page intentionally left blank; signatures begin on following page .]

IN WITNESS WHEREOF, the parties hereto have cau sed this Amendment to be duly executed and delivered by their respectiv e duly .authorized officers on the date first written above.

For purposes of the Manager Certification of Borrower in Section 17 above:

/s/ William McBride, III   (SEAL)
William McBride, III

BORROWER:        ADK BONTERRA/PARKVIEW, LLC

                
By:    /s/ William McBride, III
Name: William McBride, III
Title: Manager

LENDER:            GEMINO HEALTHCARE FINANCE, LLC
        
By:    /s/ Jeffrey M. Joslin
Jeffrey M. Joslin, Vice President

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CONSENT  AND REAFFIRMATION

Each  undersigned guarantor of the Obligation s of Borrower at any time owing to Lender hereby
(i) acknowledge s receipt of a copy of the foregoing Eighth Amendment to Credit Agreement; (ii) consents to Borrower's execution and delivery thereof and of the other documents, instruments or agreements Borrower agrees to execute and deliver pursuant thereto; (iii) agrees to be bound thereby; and (iv) affirms that nothing contained therein shall modify in any respect whatsoever its respective guaranty of the Obligations and reaffirms that such guaranty is and shall remain in full force and effect.

IN WITNESS WHEREOF, the undersigned has executed this Consent and Reaffirmation  as of the date of such Eighth Amendment to Credit Agreement.

 

ADCARE HEALTH SYSTEMS, INC

By:    /s/ William McBride, III
Name:  William McBride, III
Title:    Chief Executive Officer

NW 61ST NURSING, LLC

By:    /s/ William McBride, III
Name:  William McBride, III
Title:    Manager

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