AGENCY AGREEMENT

                            Dated as of July 29, 1998

                                     between


                       CENTENNIAL HEALTHCARE CORPORATION,


                            as the Construction Agent

                                       and

            FIRST SECURITY BANK, NATIONAL ASSOCIATION,
         not individually, but solely as the Owner Trustee
          under the Centennial Real Estate Trust 1998-1,
                                  as the Lessor

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                                i

                                TABLE OF CONTENTS

                                                                 Page

ARTICLE I  DEFINITIONS; RULES OF USAGE............................2
      1.1 Definitions.............................................2
      1.2 Interpretation..........................................2

ARTICLE II  APPOINTMENT OF THE CONSTRUCTION AGENT.................2
      2.1 Appointment.............................................2
      2.2 Acceptance and Undertaking..............................3
      2.3 Term....................................................3
      2.4 Scope of Authority......................................3
      2.5 Delegation of Duties....................................4
      2.6 Covenants of the Construction Agent.....................4

ARTICLE III  THE PROPERTIES.......................................6
      3.1 Construction............................................6
      3.2 Amendments; Modifications...............................6
      3.3 Failure to Complete Construction Period Properties and
         Purchase Obligation......................................7

ARTICLE IV  PAYMENT OF FUNDS......................................8
      4.1 Right to Receive Construction Cost......................8

ARTICLE V  EVENTS OF DEFAULT......................................8
      5.1 Events of Default.......................................8
      5.2 Damages.................................................9
      5.3 Remedies; Remedies Cumulative...........................9

ARTICLE VI  THE LESSOR'S RIGHTS..................................11
      6.1 Exercise of the Lessor's Rights........................11
      6.2 The Lessor's Right to Cure the Construction Agent's
         Defaults................................................11

ARTICLE VII  MISCELLANEOUS.......................................11
      7.1 Notices................................................11
      7.2 Successors and Assigns.................................11
      7.3 GOVERNING LAW..........................................12
      7.4 SUBMISSION TO JURISDICTION; VENUE; WAIVERS.............12
      7.5 Amendments and Waivers.................................12
      7.6 Counterparts...........................................12
      7.7 Severability...........................................12
      7.8 Headings and Table of Contents.........................12
      7.9 WAIVER OF JURY TRIAL...................................12




<PAGE>






                                AGENCY AGREEMENT


      THIS AGENCY  AGREEMENT,  dated as of July 29, 1998 (as amended,  modified,
extended,  supplemented,  restated  and/or  replaced  from  time  to  time,  the
"Agreement"),  between FIRST SECURITY  BANK,  NATIONAL  ASSOCIATION,  a national
banking association ("FSB"), not individually, but solely as Owner Trustee under
the Centennial Real Estate Trust 1998-1 (the "Lessor") and CENTENNIAL HEALTHCARE
CORPORATION, a Georgia corporation (the "Construction Agent").


                              PRELIMINARY STATEMENT

      A. The Lessor and the Construction Agent are parties to that certain Lease
Agreement  dated as of even  date  herewith  (as  amended,  modified,  extended,
supplemented, restated and/or replaced from time to time, the "Lease"), pursuant
to which the Construction Agent, as lessee (in such capacity,  the "Lessee") has
agreed to lease certain Land,  Improvements  and Equipment  and/or to sublease a
ground leasehold in certain  Properties subject to one (1) or more Ground Leases
from the Lessor.

      B. In  connection  with the  execution  and delivery of the  Participation
Agreement,  the Lease and the other  Operative  Agreements,  and  subject to the
terms and conditions  hereof, (i) the Lessor desires to appoint the Construction
Agent as its sole and exclusive agent in connection with the  identification and
acquisition or ground lease of the Properties (provided, title to the Properties
shall be held in the name of the Lessor,  except that the interest of the Lessor
in certain of the Properties  shall be a ground leasehold  interest  pursuant to
one (1) or more Ground Leases,  if requested by the Construction  Agent) and the
development,  acquisition,   installation,   construction  and  testing  of  the
Improvements  and the Equipment in accordance with the Plans and  Specifications
and (ii) the  Construction  Agent  desires,  for the benefit of the  Lessor,  to
identify  and  acquire  or  ground  lease  the   Properties  and  to  cause  the
development,  acquisition,   installation,   construction  and  testing  of  the
Improvements,  the  Equipment  and the other  components  of the  Properties  in
accordance  with the  Plans  and  Specifications  and to  undertake  such  other
liabilities and obligations as are herein set forth.

      NOW, THEREFORE, in consideration of the foregoing,  and for other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged, the parties hereto covenant and agree as follows:


                                    ARTICLE I

                           DEFINITIONS; RULES OF USAGE

      1.1  Definitions.

           For  purposes  of  this  Agreement,  capitalized  terms  used in this
Agreement and not otherwise  defined herein shall have the meanings  assigned to
them in Appendix A to that certain Participation  Agreement dated as of July 29,
1998 (as amended,  modified,  extended,  supplemented,  restated and/or replaced
from time to time in accordance  with the  applicable  provisions  thereof,  the
"Participation  Agreement")  among the  Construction  Agent, the various parties
thereto from time to time,  as  Guarantors,  the Lessor,  the various  banks and
lending  institutions parties thereto from time to time, as Holders, the various
banks and lending  institutions  parties  thereto from time to time, as Lenders,
First Union  Capital  Markets,  a division of Wheat First  Securities,  Inc., as
Syndication  Agent,  and  NationsBank,  N.A.,  as  agent  for  the  Lenders  and
respecting the Security Documents,  as agent for the Lenders and the Holders, to
the extent of their interests.  Unless otherwise  indicated,  references in this
Agreement to articles, sections, paragraphs, clauses, appendices,  schedules and
exhibits are to the same contained in this Agreement.

      1.2  Interpretation.

           The  rules of usage  set  forth in  Appendix  A to the  Participation
Agreement shall apply to this Agreement.


                                   ARTICLE II

               APPOINTMENT OF THE CONSTRUCTION AGENT

      2.1  Appointment.

      Subject to the terms and conditions  hereof, the Lessor hereby irrevocably
designates and appoints the  Construction  Agent as its exclusive agent, and the
Construction   Agent  accepts  such   appointment,   in   connection   with  the
identification  and acquisition  from time to time of the Properties  (provided,
title to the Properties shall be held in the name of the Lessor, except that the
interest  of the  Lessor  in  certain  Properties  shall be a  ground  leasehold
interest  pursuant  to  one  (1) or  more  Ground  Leases  if  requested  by the
Construction Agent) and the development, acquisition, installation, construction
and testing of the  Improvements,  the Equipment and the other components of the
Properties  in accordance  with the Plans and  Specifications  on the Land,  and
pursuant  to  the  terms  of  the  Operative  Agreements.   Notwithstanding  any
provisions  hereof or in any other  Operative  Agreement  to the  contrary,  the
Construction Agent acknowledges and agrees that the Lessor shall advance no more
than  the  sum of the  aggregate  Lender  Commitment  of the  Lenders  plus  the
aggregate  amount of the  Holder  Commitments  of the  Holders  in regard to the
Properties  (including  without  limitation  for  any and  all  Advances  in the
aggregate from the Lenders under the Credit Agreement and from the Holders under
the Trust Agreement).

      2.2  Acceptance and Undertaking.

      The  Construction   Agent  hereby   unconditionally   accepts  the  agency
appointment  and  undertakes,  for the  benefit of the Lessor,  to identify  and
acquire certain Properties  (provided,  title to the Properties shall be held in
the name of the  Lessor,  except  that the  interest  of the  Lessor in  certain
Properties  shall be a ground  leasehold  interest  pursuant  to one (1) or more
Ground  Leases if  requested  by the  Construction  Agent) and the  development,
acquisition,  installation,  construction and testing of the  Improvements,  the
Equipment  and the other  components of the  Properties  in accordance  with the
Plans and Specifications and the Operative Agreements.

      2.3  Term.

      This Agreement  shall  commence on the date hereof and shall  terminate on
the Construction Period Termination Date.

      2.4  Scope of Authority.

           (a) The Lessor hereby expressly authorizes the Construction Agent, or
      any agent or contractor of the  Construction  Agent,  and the Construction
      Agent  unconditionally  agrees for the benefit of the  Lessor,  subject to
      Section  2.4(b),  to  take  all  action  necessary  or  desirable  for the
      performance and  satisfaction  of any and all of the Lessor's  obligations
      under any construction  agreement and to fulfill all of the obligations of
      the Construction Agent including without limitation:

                (i) the  identification  and assistance  with the acquisition of
           Properties  in  accordance  with  the  terms  and  conditions  of the
           Participation Agreement;

                (ii)  all  design  and  supervisory  functions  relating  to the
           development, acquisition,  installation,  construction and testing of
           the  related  Improvements,  Equipment  and other  components  of the
           applicable  Property  and  performing  all  engineering  work related
           thereto;

                (iii)(A)  negotiating,  entering into,  performing and enforcing
           all  contracts  and  arrangements  to  acquire  or  ground  lease the
           Properties  and to procure the  equipment  necessary to construct the
           Properties and (B) negotiating,  executing,  performing and enforcing
           all  contracts  and  arrangements  to  develop,   acquire,   install,
           construct  and test the  Improvements,  the  Equipment  and the other
           components  of the  Properties  on such terms and  conditions  as are
           customary and reasonable in light of local and national standards and
           practices and the businesses in which the Lessee is engaged;

                (iv)  obtaining  all  necessary  permits,  licenses,   consents,
           approvals,  entitlements and other authorizations,  including without
           limitation  all of the foregoing  required for the Properties and the
           use and occupancy  thereof and those  required  under  applicable Law
           (including   without   limitation   Environmental   Laws),  from  all
           Governmental   Authorities  in  connection   with  the   development,
           acquisition,   installation,   construction   and   testing   of  the
           Improvements,   the  Equipment  and  the  other   components  of  the
           Properties in accordance with the Plans and Specifications;

                (v)  maintaining  all  books and  records  with  respect  to the
           Properties and the  construction,  operation and management  thereof;
           and

                (vi)  performing any other acts necessary in connection with the
           identification  and  acquisition  or ground leasing of the Properties
           and the  development,  acquisition,  installation,  construction  and
           testing  of  the  related  Improvements,   Equipment  and  all  other
           additional  components of the Properties in accordance with the Plans
           and Specifications.

           (b)  Neither  the  Construction  Agent nor any of its  Affiliates  or
      agents  shall enter into any  contract  or consent to any  contract in the
      name of the Lessor  without  the  Lessor's  prior  written  consent,  such
      consent to be given or withheld in the exercise of the Lessor's reasonable
      discretion; provided, however, that (i) no such contract will increase the
      obligations  of the  Lessor  beyond the  obligations  of the Lessor as are
      expressly  set  forth  in the  Operative  Agreements  and (ii)  each  such
      contract  shall be  expressly  non-recourse  to the  Lessor  on terms  and
      conditions that are reasonably acceptable to the Lessor.

           (c) Subject to the terms and  conditions  of this  Agreement  and the
      other  Operative  Agreements,  the  Construction  Agent  shall  have  sole
      management  and control over the  installation,  construction  and testing
      means, methods, sequences and procedures with respect to the Properties.

      2.5  Delegation of Duties

      The Construction  Agent may execute any of its duties under this Agreement
by or through agents,  contractors,  employees or  attorneys-in-fact;  provided,
however,  that  no  such  delegation  shall  limit  or  reduce  in any  way  the
Construction Agent's duties and obligations under this Agreement.

      2.6  Covenants of the Construction Agent.

      The Construction Agent hereby covenants and agrees that it will:

           (a) following the Construction  Commencement  Date for each Property,
      cause the development, acquisition, installation, construction and testing
      of such Property to be prosecuted in a good and  workmanlike  manner,  and
      respecting  each Property in  substantial  accordance  with the applicable
      Plans  and  Specifications,   the  Construction   Budget,  the  applicable
      contracts relating to the Improvements, the Equipment, other components of
      such Property and  procurement of construction  materials,  the applicable
      construction contracts,  the applicable  construction schedule,  prevalent
      industry practices and otherwise in accordance with Section 3.1 hereof;

           (b)  not  commence  construction  with  respect  to any  Improvements
      budgeted to exceed  $500,000 on a date that is within six (6) months prior
      to the Construction Period Termination Date;

           (c) cause the  Completion  Date for any  Improvements  to occur on or
      before the earlier of (i) the date that is twelve  (12)  months  after the
      initial  Construction Advance made in connection with such Improvements or
      (ii) the Construction Period Termination Date, in each case free and clear
      (by removal or bonding) of Liens  (other than  Permitted  Liens and Lessor
      Liens) or claims for materials  supplied or labor or services performed in
      connection with the development, acquisition,  installation,  construction
      or testing thereof;

           (d) cause all  outstanding  punch  list  items  with  respect to such
      Improvements to be completed by the Completion Date;

           (e) at all times  subsequent  to the  initial  Advance  respecting  a
      Property (i) cause good and marketable title to the applicable Property to
      vest in the Owner  Trustee  (except  that the  interest  of the  Lessor in
      certain  Properties shall be a ground leasehold  interest  pursuant to one
      (1) or more Ground  Leases if  requested by the  Construction  Agent) (ii)
      cause a valid, perfected,  first priority Lien (other than Permitted Liens
      and Lessor  Liens) on the  applicable  Property to be in place in favor of
      the Agent (for the benefit of the Lenders and the Holders), (iii) file all
      necessary  documents  under the applicable real property law and Article 9
      of the Uniform  Commercial  Code to perfect  such title and Liens and (iv)
      not permit Liens (other than Permitted Liens and Lessor Liens) to be filed
      or maintained respecting the applicable Property;

           (f) no less than five (5) Business Days prior to the  scheduled  date
      for the initial  Construction  Advance to be made in  connection  with any
      Property,  the  Construction  Agent  shall  deliver  to the Agent (for the
      benefit  of  the  Lessor)  true,   complete  and  correct  copies  of  the
      Construction  Budget therefor.  Thereafter,  the Construction  Agent, on a
      monthly  basis,  shall  deliver to the Lessor  true,  correct and complete
      copies  of any  material  modifications  of the  Construction  Budget  and
      progress  reports  regarding the development,  acquisition,  installation,
      construction and testing of the Properties;

           (g) procure  insurance  for the  Properties  during the  Construction
      Period in accordance with the provisions of Article XIV of the Lease; and

           (h) on or before the Construction  Period Termination Date, cause the
      Rent Commencement Date to occur with respect to all Properties or purchase
      any such  Properties  for an amount equal to the sum referenced in Section
      5.3(b)  hereof  and  otherwise  in  compliance  with the  other  terms and
      provisions of the Operative Agreements.


                                   ARTICLE III

                                 THE PROPERTIES

      3.1  Construction.

      The Construction Agent shall cause the Improvements, the Equipment and all
other  components  of  the  Properties  to be  developed,  acquired,  installed,
constructed and tested in compliance with all Legal Requirements,  all Insurance
Requirements,  all manufacturer's specifications and standards and the standards
maintained by the Construction Agent for similar properties owned or operated by
the Construction Agent, unless non-compliance, individually or in the aggregate,
shall not have and could not be reasonably  expected to have a Material  Adverse
Effect.

      3.2  Amendments; Modifications.

           (a) The  Construction  Agent may at any time revise,  amend or modify
      (i) the  Plans and  Specifications  without  the  consent  of the  Lessor;
      provided, that any such amendment to the Plans and Specifications does not
      (x) result in the  Completion  Date of the  Improvements  occurring  on or
      after the Construction  Period  Termination Date or (y) result in the cost
      of all  Improvements  exceeding the amount  specified in the  Construction
      Budget, as amended from time to time, or an amount equal to the sum of the
      then  Available  Commitments  plus the then Available  Holder  Commitments
      (reduced  by the  amount,  if  any,  necessary  to pay  for  the  cost  of
      construction and development of Improvements on other Properties which are
      currently under  construction but have not yet been completed (such amount
      the "Unfunded  Amount")),  and (ii) the Construction Budget and enter into
      any related  amendments,  modifications or supplements without the consent
      of the Lessor; provided, that such revisions,  amendments or modifications
      to the Plans and  Specifications or related  amendments,  modifications or
      supplements  to the  Construction  Budget do not result in any increase in
      total Property Costs greater than the amount specified in the Construction
      Budget,  as amended from time to time, or the then  Available  Commitments
      and Available Holder Commitment (reduced by the Unfunded Amount).

           (b) The  Construction  Agent  agrees that it will not  implement  any
      revision,  amendment or modification to the Plans and  Specifications  for
      any  Property  if the  aggregate  effect of such  revision,  amendment  or
      modification,  when taken  together  with any previous or  contemporaneous
      revision,  amendment or modification to the Plans and  Specifications  for
      any Property,  would cause a material  reduction in value in excess of the
      cost reduction of such revision, amendment or modification of the Property
      when  completed,  unless  such  revision,  amendment  or  modification  is
      required by Legal Requirements.

      3.3  Failure to Complete Construction Period Properties and
Purchase Obligation.

      If at  any  time  prior  to  the  Completion  Date  with  respect  to  any
Construction Period Property (a) there occurs a Casualty,  or Condemnation,  the
proceeds from which exceed or are expected to exceed  twenty-five  percent (25%)
of the aggregate  Construction  Budget for such Construction  Period Property or
that will prevent such Construction  Period Property from being completed by the
Construction  Period  Termination  Date, (b) there shall occur any Environmental
Violation  which the Lessor  deems,  in its  reasonable  discretion,  reasonably
likely to have a Material  Adverse  Effect (c) there shall occur a Force Majeure
Event which lasts  beyond three (3) months or (d) the  Construction  Agent shall
abandon or permanently  discontinue  the  construction  and  development of such
Construction  Period  Property  (which  abandonment or permanent  discontinuance
shall be deemed to have occurred if no work at such Construction Period Property
site is undertaken or completed  during a period of (i) thirty (30) days or more
for reasons  other than a Force  Majeure Event and (ii) three (3) months or more
if such is due to a Force Majeure Event),  then the Construction Agent shall pay
to Lessor,  on a date designated by the Lessor, an aggregate amount equal to the
liquidated  damages  amount  referenced  in  Section  5.3(b)  of this  Agreement
regarding  such  Construction  Period  Property  and on such date  Lessor  shall
transfer and convey to the Construction  Agent all right,  title and interest of
Lessor in and to such Construction  Period Property.  At the cost and expense of
the  Construction  Agent,  the Lessor  shall  convey  such  Construction  Period
Property  "AS-IS,  WHERE-IS" and in its then present  physical  condition to the
Construction  Agent or its  designee  free and  clear of  Lessor  Liens.  If the
Construction  Agent is not  required to pay such  liquidated  damages,  it shall
promptly and  diligently  complete the  development,  acquisition,  refinancing,
installation,  construction and testing of such Construction  Period Property in
accordance with the Plans and Specifications and with the terms hereof and cause
the Completion Date with respect to such  Construction  Period Property to occur
on or prior to the Construction  Period Termination Date. Any determination that
an  Environmental  Violation is immaterial for purposes of this Agreement  shall
not limit the  obligations of Lessee  respecting  such  Environmental  Violation
under the Lease.


                                   ARTICLE IV

                                PAYMENT OF FUNDS

      4.1  Right to Receive Construction Cost.

           (a) In connection with the  development,  acquisition,  installation,
      construction  and  testing  of any  Property  and during the course of the
      construction of the Improvements on any Property,  the Construction  Agent
      may  request  that the Lessor  advance  funds for the  payment of Property
      Acquisition Costs or other Property Costs, and the Lessor will comply with
      such request to the extent provided for under the Participation Agreement.
      The  Construction  Agent and the  Lessor  acknowledge  and agree  that the
      Construction  Agent's  right  to  request  such  funds  and  the  Lessor's
      obligation  to advance such funds for the payment of Property  Acquisition
      Costs or other  Property Costs is subject in all respects to the terms and
      conditions of the Participation  Agreement and each of the other Operative
      Agreements.  Without  limiting  the  generality  of  the  foregoing  it is
      specifically  understood  and agreed that in no event shall the  aggregate
      amounts  advanced by the Lenders and the Holders for Property  Acquisition
      Costs  or  other  Property  Costs  and any  other  amounts  due and  owing
      hereunder or under any of the other Operative Agreements exceed the sum of
      the aggregate Lender  Commitments  plus the aggregate Holder  Commitments,
      including  without  limitation  such  amounts  owing for (i)  development,
      acquisition,  installation,  construction  and testing of the  Properties,
      (ii)  additional  amounts  which  accrue or become due and owing under the
      Credit  Agreement or Trust Agreement as obligations of the Lessor prior to
      any Completion Date or (iii) any other purpose.

           (b) The  proceeds  of any funds made  available  to the Lessor to pay
      Property Acquisition Costs or other Property Costs shall be made available
      to the  Construction  Agent in accordance  with the  Requisition  relating
      thereto and the terms of the  Participation  Agreement.  The  Construction
      Agent will use such proceeds only to pay the Property Acquisition Costs or
      other Property Costs set forth in the Requisition relating to such funds.


                                    ARTICLE V

                                EVENTS OF DEFAULT

      5.1  Events of Default.

      If any  one (1) or  more  of the  following  events  (each  an  "Event  of
Default") shall occur:

           (a) the  Construction  Agent  fails to apply  any  funds  paid by the
      Lessor  to  the  Construction  Agent  in  a  manner  consistent  with  the
      requirements   of  the  Operative   Agreements  and  consistent  with  the
      applicable  Requisition for the  development,  acquisition,  installation,
      construction  and testing of the Properties and related  Improvements  and
      Equipment  or  otherwise  respecting  the  Properties  to the  payment  of
      Property Acquisition Costs or other Property Costs;

           (b) the  Completion  Date with respect to any Property  shall fail to
      occur for any reason on or prior to the  Construction  Period  Termination
      Date;

           (c) any Event of Default  (as such term is  defined in  Appendix A to
      the  Participation  Agreement) shall have occurred and not be cured within
      any cure  period  expressly  permitted  under the terms of the  applicable
      Operative Agreement; and

           (d) any  representation or warranty made by the Construction Agent or
      any other  Credit  Party set forth in this  Agreement  (including  without
      limitation  the  Incorporated  Representations  and  Warranties) or in any
      other  Operative  Agreement or in any document  entered into in connection
      herewith or  therewith  or in any  document,  certificate  or financial or
      other  statement  delivered in connection  herewith or therewith  shall be
      false or inaccurate in any material way when made; or  Construction  Agent
      or any other  Credit  Party  shall fail to  observe  or perform  any term,
      covenant or condition of any Operative  Agreement  other than as set forth
      in  paragraphs  (a),  (b) or (c) of this  Section 5.1 and such  failure to
      observe or perform any such term, covenant or condition shall continue for
      more than twenty (20) days after notice thereof to the Construction Agent;

then,  in any such event,  the Lessor  may, in addition to the other  rights and
remedies provided for in this Agreement,  terminate this Agreement by giving the
Construction Agent written notice of such termination and upon the expiration of
the time  fixed in such  notice  and the  payment  of all  amounts  owing by the
Construction Agent hereunder (including without limitation any amounts specified
under Section 5.3 hereof),  this Agreement  shall  terminate.  The  Construction
Agent shall pay all costs and  expenses  incurred by or on behalf of the Lessor,
including without limitation reasonable fees and expenses of outside counsel, as
a result of any Event of Default hereunder.

      5.2  Damages.

      The  termination  of this  Agreement  pursuant  to Section 5.1 shall in no
event relieve the Construction Agent of its liability and obligations hereunder,
all of which shall survive any such termination.

      5.3  Remedies; Remedies Cumulative.

           (a) If an Event of Default shall have occurred and be continuing, the
      Lessor  shall have all rights  available to the Lessor under the Lease and
      the other Operative Agreements and all other rights otherwise available at
      law, equity or otherwise.

           (b) Upon the occurrence of an Event of Default, the Lessor shall have
      (in  addition  to its rights  otherwise  described  in this  Agreement  or
      existing  at law,  equity or  otherwise)  the option  (and shall be deemed
      automatically,  and without any further  action,  to have  exercised  such
      option upon the  occurrence  of any Lease Event of Default  arising  under
      Sections  17.1(g),  (h) or (i) of the Lease) to transfer and convey to the
      Construction  Agent upon a date designated by the Lessor all right,  title
      and interest of the Lessor in and to any Property or Properties (including
      without  limitation any Land and/or any Improvements,  any interest in any
      Improvements,  any Equipment and any Property then under construction) for
      which the Rent  Commencement  Date has not yet  occurred (a  "Construction
      Period  Property").  On any transfer and conveyance  date specified by the
      Lessor pursuant to this Section 5.3(b),  (i) the Lessor shall transfer and
      convey  (at the cost of the  Construction  Agent)  all  right,  title  and
      interest  of the  Lessor  in and to any or all  such  Construction  Period
      Properties  free and clear of the Lien of the Lease and all Lessor  Liens,
      (ii) the  Construction  Agent  hereby  covenants  and agrees  that it will
      accept such transfer and conveyance of right, title and interest in and to
      the  respective   Construction  Period  Property  or  Construction  Period
      Properties and (iii) the Construction  Agent hereby promises to pay to the
      Lessor, as liquidated damages (it being agreed that it would be impossible
      accurately to determine actual damages),  an aggregate amount equal to the
      Termination Value of any or all such Construction  Period Properties.  The
      Construction   Agent   specifically   acknowledges  and  agrees  that  its
      obligations under this Section 5.3(b),  including  without  limitation its
      obligations to accept the transfer and conveyance of  Construction  Period
      Properties and its payment obligations  described in subparagraph (iii) of
      this Section 5.3(b), shall be absolute and unconditional under any and all
      circumstances  and shall be  performed  and/or  paid,  as the case may be,
      without notice or demand and without any abatement, reduction, diminution,
      setoff,  defense,  counterclaim or recoupment whatsoever.  Notwithstanding
      the foregoing provisions of this Section 5.3(b), the Lessor shall have the
      right in its sole  discretion  to rescind any exercise of its option under
      this Section  5.3(b) upon the giving of its written  confirmation  of such
      rescission to the  Construction  Agent on or prior to the earlier to occur
      of (a) the actual date of transfer and (b) the date one hundred and twenty
      (120) days  after the date the  Lessor  has given  notice of its intent to
      transfer and convey any Property to the  Construction  Agent as referenced
      above in this Section 5.3(b).

           (c) The  Construction  Agent shall have the right to cure an Event of
      Default  hereunder with respect to any given  Property by purchasing  such
      Property from the Lessor (to the extent such Event of Default is no longer
      continuing  with respect to any other Property  remaining  subject to this
      Agreement  after  such  purchase)  for an amount  equal to the  liquidated
      damages amount set forth in Section 5.3(b) of this Agreement.

           (d) No failure to exercise and no delay in exercising, on the part of
      the Lessor, any right,  remedy, power or privilege under this Agreement or
      under the other  Operative  Agreements  shall operate as a waiver thereof;
      nor shall any single or partial  exercise  of any right  remedy,  power or
      privilege  under this  Agreement  preclude  any other or further  exercise
      thereof or the exercise of any other right,  remedy,  power or  privilege.
      The rights, remedies, powers and privileges provided in this Agreement are
      cumulative  and  not  exclusive  of  any  rights,  remedies,   powers  and
      privileges provided by law.


                                   ARTICLE VI

                               THE LESSOR'S RIGHTS

      6.1  Exercise of the Lessor's Rights.

      Subject to the Excepted  Payments,  the Construction  Agent and the Lessor
hereby  acknowledge and agree that,  subject to and in accordance with the terms
of the Security  Agreement made by the Lessor in favor of the Agent,  the rights
and powers of the Lessor under this Agreement have been assigned to the Agent.

      6.2  The Lessor's Right to Cure the Construction Agent's
Defaults.

      The  Lessor,  without  waiving or  releasing  any  obligation  or Event of
Default,  may (but shall be under no obligation  to) remedy any Event of Default
for the account of and at the sole cost and expense of the  Construction  Agent.
All out-of-pocket  costs and expenses so incurred  (including without limitation
fees and expenses of counsel),  together  with  interest  thereon at the Overdue
Rate from the date on which such sums or expenses are paid by the Lessor,  shall
be paid by the Construction Agent to the Lessor on demand.


                                   ARTICLE VII

                                  MISCELLANEOUS

      7.1  Notices.

      All notices  required or permitted to be given under this Agreement  shall
be in writing and  delivered  as provided in Section  12.2 of the  Participation
Agreement.

      7.2  Successors and Assigns.

      This  Agreement  shall be  binding  upon and inure to the  benefit  of the
Lessor, the Construction  Agent and their respective  successors and the assigns
of the Lessor.  The  Construction  Agent may not assign this Agreement or any of
its rights or obligations  hereunder or with respect to any Property in whole or
in part to any Person  without  the prior  written  consent  of the  Agent,  the
Lenders, the Holders and the Lessor.

      7.3  GOVERNING LAW.

      THIS  AGREEMENT AND THE RIGHTS AND  OBLIGATIONS  OF THE PARTIES UNDER THIS
AGREEMENT  SHALL BE GOVERNED  BY, AND  CONSTRUED,  INTERPRETED  AND  ENFORCED IN
ACCORDANCE  WITH,  THE LAW OF THE  STATE OF NORTH  CAROLINA,  WITHOUT  REGARD TO
CONFLICTS OF LAWS PRINCIPLES.

      7.4  SUBMISSION TO JURISDICTION; VENUE; WAIVERS.

      THE  PROVISIONS OF THE  PARTICIPATION  AGREEMENT  RELATING TO
SUBMISSION TO  JURISDICTION  AND VENUE ARE HEREBY  INCORPORATED  BY
REFERENCE HEREIN, MUTATIS MUTANDIS.

      7.5  Amendments and Waivers.

      This Agreement may not be  terminated,  amended,  supplemented,  waived or
modified  except  in  accordance  with the  provisions  of  Section  12.4 of the
Participation Agreement.

      7.6  Counterparts.

      This Agreement may be executed in any number of separate  counterparts and
all of said  counterparts  taken  together shall be deemed to constitute one (1)
and the same instrument.

      7.7  Severability.

      Any provision of this Agreement  which is prohibited or  unenforceable  in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such  prohibition  or  unenforceability   without   invalidating  the  remaining
provisions  hereof,  and  any  such  prohibition  or   unenforceability  in  any
jurisdiction shall not invalidate or render  unenforceable such provision in any
other jurisdiction.

      7.8  Headings and Table of Contents.

      The headings and table of contents  contained  in this  Agreement  are for
convenience  of  reference  only and  shall not limit or  otherwise  affect  the
meaning hereof.

      7.9  WAIVER OF JURY TRIAL.

      TO THE  FULLEST  EXTENT  ALLOWED  BY  APPLICABLE  LAW,  THE LESSOR AND THE
CONSTRUCTION  AGENT IRREVOCABLY AND  UNCONDITIONALLY  WAIVE TRIAL BY JURY IN ANY
LEGAL  ACTION OR  PROCEEDING  RELATING TO THIS  AGREEMENT  AND ANY  COUNTERCLAIM
THEREUNDER.

                            [signature page follows]


<PAGE>



                                                   Agency Agreement
                                    Centennial Real Estate Trust 1998-1

                                                   Agency Agreement
                                Centennial Real Estate Trust 1998-1
      IN WITNESS  WHEREOF,  the parties  hereto have caused this Agreement to be
duly executed and delivered by their proper and duly  authorized  officers as of
the day and year first above written.


                               CENTENNIAL HEALTHCARE CORPORATION,
                               as the Construction Agent


                               By: /s/    Alan C. Dahl
                               Name:      Alan C. Dahl
                               Title:     V.P.


                               FIRST SECURITY BANK,  NATIONAL  ASSOCIATION,  not
                               individually,  but solely as Owner  Trustee under
                               the Centennial  Real Estate Trust 1998-1,  as the
                               Lessor


                               By:/s/     Val T. Orton
                               Name:Val T. Orton
                               Title:     V.P.