FOURTH AMENDMENT TO CONSOLIDATED AMENDED AND RESTATED MASTER LEASE

Exhibit 10.1

FOURTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE

     This Fourth Amendment to Consolidated Amended and Restated Master Lease (this “Amendment”) is executed and delivered as of April 1, 2007 by and between STERLING ACQUISITION CORP., a Kentucky corporation (“Lessor”), the address of which is 0000 Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, XX 00000, and DIVERSICARE LEASING CORP., a Tennessee corporation, the address of which is 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxxx, XX 00000.

RECITALS:

     A. Lessee has executed and delivered to Lessor a Consolidated Amended and Restated Master Lease dated as of November 8, 2000, but effective as of October 1, 2000, as amended by a First Amendment to Consolidated Amended and Restated Master Lease dated as of September 30, 2001, a Second Amendment to Consolidated Amended and Restated Master Lease dated as of June 15, 2005, and a Third Amendment to Consolidated Amended and Restated Master Lease dated as of October 20, 2006 (the “Existing Master Lease”) pursuant to which Lessee leased from Lessor certain healthcare facilities.

     B. Pursuant to that certain Agreement of Purchase and Sale (the “Purchase Agreement”) dated as of January 23, 2007 among Lessor, as seller, Lessee, as current operator, and VICTORIA EUREKA SPRINGS, LLC, an Arkansas limited liability company (“Purchaser”), Lessor has agreed to sell skilled nursing facility commonly known as Eureka Springs Nursing and Rehab Center (the “Eureka Springs Facility”), whose address is 000 Xxxxxxxxxx Xxxx, Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxxxxx.

     X. Xxxxxx and Lessee desire to terminate the Existing Master Lease as to the Eureka Springs Facility effective as of the date that the Eureka Springs Facility is sold pursuant to the Purchase Agreement.

     NOW THEREFORE, the parties agree as follows:

     1. Definitions. Any capitalized term used but not defined in this Amendment will have the meaning assigned to such term in the Existing Master Lease. From and after the date of this Amendment, each reference in the Existing Master Leases or the other Transaction Documents to the “Lease” or “Master Lease” means, as applicable, the Existing Master Lease or Existing Master Leases as modified by this Amendment.

     2. Termination of the Existing Lease as to the Eureka Springs Facility. Effective as of, and conditioned upon, the sale of the Eureka Springs Facility pursuant to the Purchase Agreement, (a) the Master Lease is terminated as to the Eureka Springs Facility, and only as to the Eureka Springs Facility; and (b) Exhibit A-7 of the Master Lease is amended and restated in its entirety as follows:

Exhibit A-7

Intentionally Omitted.

     3. No Reduction in Base Rent. Notwithstanding the termination of the Master Lease as to the Eureka Springs Facility, the Base Rent payable under the Master Lease shall not be reduced or abated.

     4. Representations and Warranties of Lessee. Lessee hereby represents and warrants to Lessor that (i) it has the right and power and is duly authorized to enter into this Agreement; and (ii) the execution of this Agreement does not and will not constitute a breach of any provision contained in any agreement or instrument to which Lessee is or may become a party or by which Lessee is or may be bound or affected

     5. Execution and Counterparts. This Amendment may be executed in any number of counterparts, each of which, when so executed and delivered, shall be deemed to be an original, but when taken together shall constitute one and the same Amendment.

     6. Headings. Section headings used in this Amendment are for reference only and shall not affect the construction of the Amendment.

     7. Enforceability. Except as expressly and specifically set forth herein, the Existing Master Lease remains unmodified and in full force and effect. In the event of any discrepancy between the Existing Master Lease and this Amendment, the terms and conditions of this Amendment will control and the Existing Master Lease is deemed amended to conform hereto.

[SIGNATURE PAGES, ACKNOWLEDGEMENTS, AND JOINDER FOLLOW]

2

Signature Page to
FOURTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE

		LESSOR:
		STERLING ACQUISITION CORP., a
		Kentucky corporation
		By:		/s/ Xxxxxx Xxxxxxx
		Name:		Xxxxxx Xxxxxxx
		Title:		Chief Executive Officer

STATE OF MARYLAND		)
		) ss.
COUNTY OF BALTIMORE		)

     This instrument was acknowledged before me on the 26th day of March, 2007, by Xxxxxx Xxxxxxx, the CEO of STERLING ACQUISITION CORP., a Kentucky corporation, on behalf of said company.

/s/ Xxxxxx X Xxxxxx  

Notary Public, Baltimore County, Maryland 

My commission expires: May 1, 2008 

Signature Page 1 of 2

Signature Page to
FOURTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE

LESSEE:

		DIVERSICARE LEASING CORP., a Tennessee
		corporation
		By:		/s/Xxxxx Xxxxxx
		Name:		Xxxxx Xxxxxx
		Title:		EVP & CFO

STATE OF Tennessee		)
		) SS
COUNTY OF Xxxxxxxxxx		)

     This instrument was acknowledged before me on the 28th day of March, 2007, by Xxxxx Xxxxxx, the EVP & CFO of DIVERSICARE LEASING CORP., a Tennessee corporation, on behalf of said company

/s/ Xxxxxx Xxxxxxx  

Notary Public, Xxxxxxxxxx County, Tennessee 

My commission expires: 7/25/2009 

Signature Page 2 of 2

Acknowledgement to
FOURTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE

     The undersigned hereby consent to the transactions contemplated by this Third Amendment to Consolidated Amended and Restated Master Lease (the “Third Amendment”), ratify and affirm their respective Guaranties, Pledge Agreements, Security Agreements, Subordination Agreements and other Transaction Documents, and acknowledge and agree that the performance of the Master Lease and obligations described therein are secured by their Guaranties, Pledge Agreements, Security Agreement, Subordination Agreement and other Transaction Documents on the same terms and conditions in effect prior to this Amendment. The undersigned hereby join in the execution of this Third Amendment for the limited purpose of agreeing to the provisions of Section 6 and for no other purpose.

		ADVOCAT, INC. a Delaware corporation
		By:		/s/Xxxxx Xxxxxx
		Name:		Xxxxx Xxxxxx
		Title:		EVP & CFO

STATE OF Tennessee		)
		) SS
COUNTY OF Xxxxxxxxxx		)

     This instrument was acknowledged before me on the 28th day of March, 2007, by Xxxxx Xxxxxx, who is EVP & CFO of ADVOCAT, INC. a Delaware corporation, on behalf of the corporation, who acknowledged the same to be his or her free act and deed and the free act and deed of the corporation.

/s/ Xxxxxx Xxxxxxx  

Notary Public, Xxxxxxxxxx County, Tennessee 

My commission expires: 7/25/2009 

Acknowledgement — Page 1 of 4

Acknowledgement to
FOURTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE

		DIVERSICARE MANAGEMENT SERVICES
		CO., a Tennessee corporation
		By:		/s/Xxxxx Xxxxxx
		Name:		Xxxxx Xxxxxx
		Title:		EVP & CFO

STATE OF Tennessee		)
		) SS
COUNTY OF Xxxxxxxxxx		)

     The foregoing instrument was acknowledged before me this 28th day of March, 2007, by Xxxxx Xxxxxx, who is EVP & CFO of DIVERSICARE MANAGEMENT SERVICES CO., a Tennessee corporation, on behalf of the corporation, who acknowledged the same to be his or her free act and deed and the free act and deed of the corporation.

/s/ Xxxxxx Xxxxxxx  

Notary Public, Xxxxxxxxxx County, Tennessee 

My commission expires: 7/25/2009 

Acknowledgement — Page 2 of 4

Acknowledgement to
FOURTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE

		ADVOCAT FINANCE INC., a Delaware
		corporation
		By:		/s/Xxxxx Xxxxxx
		Name:		Xxxxx Xxxxxx
		Title:		EVP & CFO

STATE OF Tennessee		)
		) SS
COUNTY OF Xxxxxxxxxx		)

     The foregoing instrument was acknowledged before me this 28th day of March, 2007, by Xxxxx Xxxxxx, who is EVP & CFO of ADVOCAT FINANCE INC., a Delaware corporation, on behalf of the corporation, who acknowledged the same to be his or her free act and deed and the free act and deed of the corporation.

/s/ Xxxxxx Xxxxxxx  

Notary Public, Xxxxxxxxxx County, Tennessee 

My commission expires: 7/25/2009 

Acknowledgement — Page 3 of 4

Acknowledgement to
FOURTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE

		STERLING HEALTH CARE
		MANAGEMENT, INC., a Kentucky
		corporation
		By:		/s/Xxxxx Xxxxxx
		Name:		Xxxxx Xxxxxx
		Title:		EVP & CFO

STATE OF Tennessee		)
		) SS
COUNTY OF Xxxxxxxxxx		)

     This foregoing instrument was acknowledged before me on 28th day of March, 2007, by Xxxxx Xxxxxx, who is EVP & CFO of STERLING HEALTH CARE MANAGEMENT, INC., a Kentucky corporation, on behalf of said corporation, who acknowledged the same to be his or her free act and deed and the free act and deed of the corporation.

/s/ Xxxxxx Xxxxxxx  

Notary Public, Xxxxxxxxxx County, Tennessee 

My commission expires: 7/25/2009 

Acknowledgement — Page 4 of 4