Exhibit 10.47

                               FINANCING AGREEMENT

                                     between

                    THE COUNTY COMMISSION OF HARRISON COUNTY
               BY AND ON BEHALF OF HARRISON COUNTY, WEST VIRGINIA

                                       and

                             SALEM HEALTH CARE CORP.

                          Dated as of September 1, 1996











NOTE:             THIS FINANCING  AGREEMENT AND A PROMISSORY NOTE IN THE FORM AS
                  DESCRIBED  HEREIN HAVE BEEN  ASSIGNED TO, AND ARE SUBJECT TO A
                  SECURITY  INTEREST  IN  FAVOR  OF ONE  VALLEY  BANK,  NATIONAL
                  ASSOCIATION,  AS TRUSTEE  UNDER AN INDENTURE OF TRUST DATED AS
                  OF SEPTEMBER 1, 1996,  WITH THE COUNTY  COMMISSION OF HARRISON
                  COUNTY BY AND ON BEHALF OF HARRISON COUNTY, WEST VIRGINIA,  AS
                  AMENDED  OR  SUPPLEMENTED  FROM  TIME  TO  TIME.   INFORMATION
                  CONCERNING  SUCH  SECURITY  INTEREST MAY BE OBTAINED  FROM THE
                  TRUSTEE AT ITS  PRINCIPAL  TRUST  OFFICE IN  CHARLESTON,  WEST
                  VIRGINIA.

         This FINANCING  AGREEMENT,  made as of the first day of October,  1996,
between THE COUNTY  COMMISSION  OF HARRISON  COUNTY BY AND ON BEHALF OF HARRISON
COUNTY,  WEST VIRGINIA,  a political  subdivision of the State of West Virginia,
(the "Issuer"),  and SALEM HEALTH CARE CORP., a corporation duly organized under
and validly  existing by virtue of the laws of the State of Went  Virginia  (the
"Company");

                                                W I T N E S S E T H :

         WHEREAS,  the Issuer in a duly organized  political  subdivision of the
State of West Virginia and is authorized by Chapter 13, Article 2C, Code of West
Virginia of 1931, as amended (the "Act"), (a) to issue its revenue bonds for the
purpose  of  providing  funds  (i) to pay the cost of  acquiring,  constructing,
furnishing and equipping a commercial facility comprising a health care facility
and (ii) to  refund  one or more  series  of  revenue  bonds  previously  issued
pursuant to the Act to finance any such facility,  in either case by lending the
proceeds of such revenue bonds or otherwise  making such proceeds  available for
such purposes to any person,  firm or private corporation which will operate and
maintain such facility in such a manner as shall  effectuate the purposes of the
Act and (b) to secure its revenue bonds by a trust agreement  between the issuer
and a corporate  trustee including therein the pledge and assignment of revenues
from any such loan to the payment of such revenue bonds; and

         WHEREAS,  pursuant  to such  authorization  and in order to further the
purposes of the Act, the Issuer  intends to issue and sell its Nursing  Facility
Refunding  Revenue Bonds (Salem Health Care Corp.  Project),  Series 1996 in the
original  principal  amount of  $2,185,000  (the "Bonds") and refund in full the
outstanding  principal amount of its $2,670,000 First Mortgage Refunding Revenue
Bonds (Salem Health Care Corp.  Project)  Series 1986 (the "Prior  Bonds"),  the
proceeds of which were used to refinance the costs of acquisition,  construction
and equipping of a 120-bed  intermediate and skilled nursing and  rehabilitation
facility,  owned and operated by the Company,  located at 146 Water  Street,  in
Salem, Harrison County, West Virginia (the "Facility"); and

         WHEREAS, by issuing the Bonds to refund the Prior Bonds, the Issuer and
the Company  expect to finance the  Facility  more  economically  and thereby to
achieve interest cost savings; and

         WHEREAS, in return for the use of the proceeds of the sale of the Bonds
by the Issuer to refund the Prior  Bonds,  the  Company  has agreed to repay the
amounts so used on the terms and conditions hereinafter set forth; and

         WHEREAS, the Company has determined to issue its promissory note to the
Issuer in the  principal  amount of the  Bonds  (the  "Note")  to  evidence  the
Company's  obligation to repay such amounts under the terms and  conditions  set
forth herein; and

         WHEREAS,  all  things  necessary  to  constitute  the Note a valid  and
binding  obligation  and to  constitute  this  Financing  Agreement  a valid and
binding  agreement  securing  the  payments  under  the Note  have been done and
performed  and the  execution  and  delivery  of the  Note  and  this  Financing
Agreement,  subject  to the  terms  hereof,  have  in  all  respects  been  duly
authorized;

         NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants  hereinafter  contained,  the  parties  hereto  covenant  and agree as
follows:

                                    ARTICLE I

                      DEFINITIONS AND RULES OF CONSTRUCTION

         Section 1.1.  Definitions.  The following  terms shall have the meaning
set forth hereinafter. All other defined terms used but not defined herein shall
have the same  meaning  as set forth  elsewhere  herein  or in  Article I of the
Indenture unless the context clearly indicates to the contrary.

         "Agreement"  or  "Financing   Agreement"   shall  mean  this  Financing
Agreement, including any amendments hereto.

         "Financing  Instruments"  shall  mean  this  Financing  Agreement,  the
Indenture, the Note, the Escrow Agreement, the Reimbursement Agreement, the Bond
Purchase Agreement and the Remarketing Agreement.

         "Indenture"  shall  mean the  Indenture  of Trust  dated as of the date
hereof between the Issuer and the Trustee, as amended from time to time.

         "1954 Code" shall mean the Internal Revenue Code of 1954, as amended.

         "1980  Bonds"  shall mean the revenue  bonds issued by the Issuer under
the Act in 1980 in order to finance or refinance  the costs of the  acquisition,
construction  and  equipping  of the  Facility  and  refunded  in full  with the
proceeds of the Prior Bonds.

         "Prime Rate" shall mean the rate per year  announced  from time to time
by the  Trustee,  as its prime  rate,  with any  change in the Prime  Rate being
effective as of the date such announced prime rate is changed.

         "Prior Bonds Trustee" shall mean United National Bank, Charleston, West
Virginia, as indenture trustee for the Prior Bonds.

         "Prior  Indenture"  shall mean the Trust Indenture dated as of November
1, 1986  between  the Issuer and the Prior Bonds  Trustee  pursuant to which the
Prior Bonds were issued and secured.

         "Regulations"  shall  mean  the  income  tax  regulations   promulgated
pursuant  to the 1954 Code,  as such  applicable  proposed,  temporary  or final
regulations may be amended or supplemented from time to time.

         Section 1.2. Rules of  Construction.  Unless the context  clearly  
indicates to the contrary,  the following rules shall apply to the construction 
of this Financing Agreement:

         (a)      Words importing the singular number shall include the plural 
number and vice versa.

         (b) Words  importing the  redemption or calling for redemption of Bonds
shall not be deemed to refer to or connote the payment of Bonds at their  stated
maturity.

         (c) All  references  herein to  particular  articles  or  sections  are
references to articles or sections of this Financing  Agreement unless otherwise
indicated.

         (d)  The  headings  and  Table  of  Contents   herein  are  solely  for
convenience  of  reference  and shall not  constitute  a part of this  Financing
Agreement nor shall they affect its meaning, construction or effect.

         (e) Accounting terms not otherwise defined have the meaning assigned to
them in accordance with generally accepted accounting principles.

                                   ARTICLE II

                                 REPRESENTATIONS

         Section 2.1. Representations by Issuer.  The Issuer makes the following
representations:

         (a) The Issuer is a political subdivision of the State of West Virginia
and has the power to enter into the Financing Instruments to which it is a party
and  the  transactions  contemplated  thereby  and to  perform  its  obligations
thereunder, to issue the Bonds to refund the Prior Bonds, and to assign the Note
to the Trustee.

         (b) By proper action in the form of  resolutions  adopted by The County
Commission of Harrison County, West Virginia, the Issuer has duly authorized the
execution and delivery of the Financing  Instruments to which it is a party, and
the Bonds, the performance of its obligations thereunder and the issuance of the
Bonds and,  simultaneously  with the  execution  and delivery of this  Financing
Agreement,  the Issuer has duly executed and delivered the Financing Instruments
to which it is a party and issued and sold the Bonds.

         (c) To the best of its  knowledge,  the Issuer is not in default in the
payment of the principal of or interest on any of its  indebtedness for borrowed
money and is not in default under any  instrument  under or subject to which any
indebtedness for borrowed money has been incurred, and no event has occurred and
is continuing under the provisions of any such instrument that with the lapse of
time or the  giving of notice,  or both,  would  constitute  an event of default
thereunder;  provided,  however,  that no representation is expressed concerning
previously issued revenue bonds for private parties under the Act, the status of
which have no adverse effect on the Issuer's power or authority to carry out the
transactions contemplated by this Financing Agreement.

         (d) The Issuer is not (1) in violation of the Act or any existing  law,
rule or  regulation  applicable  to it or (2) in  default  under any  indenture,
mortgage, deed of trust, lien, lease, contract, note, order, judgment, decree or
other  agreement,  instrument  or  restriction  of any kind to which  any of its
assets are  subject;  provided,  however,  that no  representation  is expressed
concerning  previously  issued revenue bonds for private  parties under the Act,
the status of which have no adverse effect on the Issuer's power or authority to
carry  out the  transactions  contemplated  by  this  Financing  Agreement.  The
execution and delivery by the Issuer of the Financing Instruments to which it is
a party and the Bonds and the compliance  with the terms and conditions  thereof
will not conflict  with or result in the breach of or constitute a default under
any of the above described documents or other restrictions.

         (e) No further  approval,  consent or  withholding  of objection on the
part of any regulatory body, federal,  state or local, is required in connection
with (1) the issuance and delivery of the Bonds by the Issuer, (2) the execution
or delivery of or compliance by the Issuer with the terms and  conditions of the
Financing  Instruments to which it is a party,  or (3) the assignment and pledge
by the Issuer  pursuant  to the  Indenture  of its rights  under this  Financing
Agreement  including  the Note  and the  payments  thereon  by the  Company,  as
security  for  payment  of the  principal  of and  interest  on the  Bonds.  The
consummation by the Issuer of the transactions set forth in the manner and under
the terms and  conditions  as provided  herein  will comply with all  applicable
state,  local  or  federal  laws  and  any  rules  and  regulations  promulgated
thereunder by any regulatory authority or agency.

         (f) No litigation,  inquiry or  investigation  of any kind in or by any
judicial  or  administrative  court or agency is pending  or, to its  knowledge,
threatened against the Issuer with respect to (1) the organization and existence
of the Issuer, (2) its authority to execute or deliver the Financing Instruments
to which it is a party,  the  Indenture  or the Bonds or the  assignment  of the
Note,  (3) the  validity or  enforceability  of any of such  instruments  or the
transactions contemplated hereby or thereby, (4) the title of any officer of the
Issuer who  executed  such  instruments,  or (5) any  authority  or  proceedings
related to the  execution  and  delivery  of such  instruments  on behalf of the
Issuer. No such authority or proceedings have been repealed,  revoked, rescinded
or amended, and all are in full force and effect.

         (g) The Issuer  hereby  finds that the  refunding of the Prior Bonds is
advisable and will serve the purposes of the Act.

         (h) The  issuance  of the Prior  Bonds was  approved by the Issuer at a
meeting duly called and held on November 19, 1986,  notice of which  meeting was
published in a newspaper  having general  circulation in Harrison  County,  West
Virginia on November 5 and November 12, 1986.

         Section 2.2.  Representations by Company.  The Company makes the 
following representations:

         (a) The Company is a corporation  duly  organized and validly  existing
under the laws of the State of West  Virginia;  has the power to enter  into the
Financing  Instruments to which it is a party and the transactions  contemplated
thereunder;  and by proper action has duly authorized the execution and delivery
of  such  Financing  Instruments  and  the  Note  and  the  performance  of  its
obligations thereunder.

         (b) The Company is licensed by the appropriate  West Virginia state and
local  authorities  and is  authorized  to operate the Facility in the manner in
which it is currently operated.

         (c) The Company is not in default in the payment of the principal of or
interest on any of its  indebtedness  for  borrowed  money and is not in default
under any  instrument  under and  subject  to which  any  indebtedness  has been
incurred,  and no event has occurred and is continuing  under the  provisions of
any such agreement that with the lapse of time or the giving of notice, or both,
would constitute an event of default thereunder.

         (d) There is no litigation at law or in equity or any proceeding before
any  governmental  agency  involving the Company pending or, to the knowledge of
the  Company,  threatened  against  the  Company in which any  liability  of the
Company is not adequately  covered by insurance or for which  adequate  reserves
are not  provided  or for which any  judgment  or order  would  have a  material
adverse  effect  upon the  business  or assets  of the  Company  or  affect  its
existence  or  authority to do business,  the  operation  of the  Facility,  the
validity of the Financing  Instruments to which it is a party or the performance
of its obligations thereunder.

         (e) The execution and delivery of the Financing Instruments to which it
is a party, the performance by the Company of its obligations thereunder and the
consummation  of the  transactions  contemplated  therein  do not and  will  not
conflict with, or constitute a breach or result in a violation of, the Company's
articles of incorporation or bylaws,  any agreement or other instrument to which
the  Company  is a party  or by  which  it is  bound  or any  constitutional  or
statutory  provision  or order,  rule,  regulation,  decree or  ordinance of any
court, government or governmental authority having jurisdiction over the Company
or its property.

         (f) The Company has obtained all  consents,  approvals,  authorizations
and orders of any  governmental or regulatory  authority that are required to be
obtained by the Company as a condition  precedent  to the issuance of the Bonds,
the execution and delivery of the Financing  Instruments  to which it is a party
and the  performance by the Company of its obligations  thereunder,  or that are
required for the operation of the Facility.

         (g) The Facility complies with all presently applicable  ordinances and
licensure and environmental  protection laws, the noncompliance with which would
have a material  adverse  effect on the  business or  operations  of the Company
conducted at the Facility.

         (h) To the best of its knowledge,  interest paid or accrued on the 1980
Bonds was at all times exempt from federal income  taxation under Section 103 of
the 1954 Code.  To the best of its  knowledge,  interest  paid or accrued on the
Prior  Bonds  was at all times  excluded  from the  gross  income of the  owners
thereof for purposes of federal income taxation.

         (i) The  Company  intends  to  continue  to cause  the  Facility  to be
operated as a nursing home facility  meeting all of the  requirements of the Act
for so long as the Bonds are outstanding.

         (j) To the best of its  knowledge,  at least 98% of the proceeds of the
Prior Bonds,  together with other available  moneys,  were applied to redeem the
1980 Bonds in full  within 90 days of the date the Prior Bonds were  issued.  To
the best of its  knowledge,  no more than 2% of the  proceeds of the Prior Bonds
were applied to pay their costs of issuance.

                                   ARTICLE III

                   ISSUANCE OF THE BONDS AND USE OF PROCEEDS;
                       EXECUTION AND DELIVERY OF THE NOTE


         Section 3.1.  Agreement to Issue Bonds;  Application  of Bond Proceeds.
The Issuer,  concurrently  with the  execution  and  delivery of this  Financing
Agreement,  will issue, sell and deliver the Bonds and will deposit the proceeds
thereof with the Trustee.  In accordance  with the  Indenture,  the Trustee will
deliver or will cause the  Underwriter  to deliver  all of such  proceeds to the
Prior Bonds Trustee to be applied,  together  with other moneys  provided by the
Company,  to defease and redeem the Prior Bonds in full and  discharge the Prior
Indenture.

         Section 3.2. Refunding by the Issuer.  Upon the terms and conditions of
this  Financing  Agreement  and the  Indenture,  the  Issuer  agrees  to use the
proceeds of the sale of the Bonds to refund the Prior Bonds.

         Section  3.3.   Execution   and  Delivery  of  the  Note  prior  to  or
simultaneously  with the  issuance  of the  Bonds,  to  evidence  its  repayment
obligations  hereunder,  the  Company  shall  execute  and  deliver  the Note in
substantially  the form of Exhibit A to the Issuer for assignment to the Trustee
as security for the payment of the Bonds.

         Section  3.4.  No  Lien  on or  Security  Interest  in  Facility.  This
Financing  Agreement  is not intended to create and does not create a lien on or
security  interest in any part of the  Facility  as security  for the payment of
amounts payable hereunder or under the Note.

                                   ARTICLE IV

                              PAYMENTS ON THE NOTE

         Section 4.1.  Amounts  Payable. (a) The Company shall make all payments
required by the Note as and when they become due and shall promptly pay all 
other amounts necessary to enable the Trustee to make the transfers required by 
Article IV of the Indenture.

         (b)      The Company shall also pay, as and when the same become due:

         (1) To the Trustee,  its reasonable fees for services  rendered and for
expenses reasonably incurred by it as Trustee under the Indenture, including the
reasonable  fees and  disbursements  of its  counsel,  the  reasonable  fees and
expenses  of the  Remarketing  Agent and any other  paying  agents and all other
amounts that the Company herein assumes or agrees to pay,  including any cost or
expense  necessary to cancel and  discharge  the  Indenture  upon payment of the
Bonds.

         (2) To the  Issuer  and its  reasonable  costs  and  expenses  directly
related  to the  Bonds  and the  Facility,  including  the  reasonable  fees and
expenses of Bond Counsel and the Issuer's counsel (provided,  however, that such
amounts so paid to the Issuer  shall not equal or exceed an amount  which  would
cause the "yield" on the Note,  this Financing  Agreement or any other "acquired
purpose  obligation" to be "materially higher" than the "yield" on the Bonds, as
such terms are defined in the Code).

         (3)      Amounts described in Section 4.6.

         (4)      All other amounts that the Company agrees to pay under the 
terms of this Financing Agreement and the Indenture.

         Section 4.2. Payments Assigned.  The Company consents to the assignment
made by the  Indenture  of the Note and of the rights of the  Issuer  under this
Financing  Agreement to the Trustee and agrees to pay to the Trustee all amounts
payable by the Company pursuant to the Note and this Financing Agreement, except
for payments made to the Issuer pursuant to Sections 4.1(b)(2) and 5.6.

         Section  4.3.  Default in  Payments.  If the Company  fails to make any
payments required by the Note or this Financing  Agreement when due, the Company
shall pay to the  Trustee  interest  thereon  until  paid at a rate equal to the
highest  rate on any Bonds then  outstanding  or, in case of the  payment of any
amounts not to be used to pay principal of or interest on Bonds, at a rate equal
to the Prime Rate plus one percent per year.

         Section 4.4.  Obligations of Company  Unconditional.  The obligation of
the  Company to make the  payments  on the Note and to observe  and  perform all
other  covenants,  conditions  and  agreements  hereunder  shall be absolute and
unconditional,  irrespective of any rights of setoff, recoupment or counterclaim
it might otherwise have against the Issuer,  the Bank, the Remarketing  Agent or
the Trustee.  Subject to the  prepayment  of the Note as provided  therein,  the
Company shall not suspend or discontinue any payment on the Note or hereunder or
fail to observe and perform any of its other covenants, conditions or agreements
hereunder for any cause, including without limitation, any acts or circumstances
that  may  constitute  an  eviction  or   constructive   eviction,   failure  of
consideration, failure of title to any part or all of the Facility or commercial
frustration of purpose,  or any damage to or destruction or  condemnation of all
or any part of the  Facility,  or any  change  in the tax or  other  laws of the
United  States  of  America,  the  State  of  West  Virginia  or  any  political
subdivision of either,  or any failure of the Issuer,  the Bank, the Remarketing
Agent  or the  Trustee  to  observe  and  perform  any  covenant,  condition  or
agreement,  whether  express or implied,  or any duty,  liability or  obligation
arising out of or in connection with any Financing Instrument.  The Company may,
after giving to the Issuer and the Trustee 10 days'  notice of its  intention to
do so, at its own expense  and in its own name,  or in the name of the Issuer if
procedurally required,  prosecute or defend any action or proceeding or take any
other action involving third persons that the Company reasonably deems necessary
to secure or protect any of its rights hereunder. In the event the Company takes
any such  action,  the Issuer shall  cooperate  fully with the Company and shall
take all  necessary  action to  substitute  the  Company  for the Issuer in such
action or proceeding if the Company shall so request.

         Section  4.5.  Advances by Issuer or Trustee.  If the Company  fails to
make any payment or perform any act required of it hereunder,  the Issuer or the
Trustee,  without  prior notice or demand on the Company and without  waiving or
releasing any  obligation or default,  may (but shall be under no obligation to)
make such  payment or perform such act. All amounts so paid by the Issuer or the
Trustee and all costs,  fees and  expenses  so incurred  shall be payable by the
Company on demand as an  additional  obligation  under the Note,  together  with
interest thereon at the Prime Rate plus one percent per year until paid.

         Section 4.6. Rebate  Requirement.  (a) At its sole expense on behalf of
the Issuer,  the Company shall determine and pay to the United States the Rebate
Amount,  hereinafter  defined,  as and when due in  accordance  with the "rebate
requirement" described in Section 148(f) of the Code and Regulations thereunder,
including without  limitation,  Regulations  Section 1.148-3.  The Company shall
retain records of all such  determinations  until six years after Payment of the
Bonds.

         (b) Reference is made to Exhibit B hereto for additional details of the
rebate  requirement.  Exhibit B may be amended or substituted without compliance
with Article XI of the Indenture or Section 8.3 hereof and without any action of
the Issuer upon the Company's  delivery to the Trustee of the proposed amendment
or  substitution  together with an opinion of Bond Counsel that  compliance with
this section and Exhibit B, as amended,  will not adversely affect the exclusion
of interest on the Bonds from gross income for federal income tax purposes.

         (c) Notwithstanding  anything contained herein to the contrary, no such
payment will be required if the Company  receives and delivers to the Issuer and
the Trustee an opinion of Bond Counsel  that such payment is not required  under
the Code to prevent any Bonds from becoming "arbitrage bonds" within the meaning
of Section 148 of the Code.

         (d)  The  Issuer  shall  not  be  liable  to  the  Company  by  way  of
contribution,  indemnification,  counterclaim,  set-off  or  otherwise  for  any
payment made or expense  incurred by the Company pursuant to this section or the
Indenture.

         Section  4.7.  Letter of Credit.  The  Company  shall  provide  for the
payment of amounts due under Section 4.1 (a) from Available  Moneys,  including,
delivery to the Trustee on the date of initial  authentication  and  delivery of
the Bonds of a Letter of Credit in favor of the  Trustee  and for the benefit of
the holders of the Bonds.  The Company shall be entitled to provide a Substitute
Letter of Credit under certain  circumstances as provided in the Indenture.  Any
extension of the Letter of Credit shall be for a period of at least one year or,
if less, the fifteenth day after the maturity date of the Bonds.



<PAGE>


                                    ARTICLE V

                                SPECIAL COVENANTS

         Section  5.1.  Operation  of  Facility by the  Company;  No Warranty of
Condition  or  Suitability  by the  Issuer.  (a) The Company  shall  operate the
Facility,  or cause it to be  operated,  as a  nursing  home  facility  or other
purposes contemplated by the Act.

         (b) The Issuer makes no warranty,  either express or implied, as to the
Facility or the  condition  thereof,  or that the  Facility  has been or will be
suitable for the purposes or needs of the Company.

         Section 5.2.  Reference to Bonds Ineffective after Bonds Paid and Other
Obligations  Satisfied.  Upon  payment  of the  Bonds  and upon  payment  of all
obligations under this Financing Agreement and the Note, subject to Section 8.1,
all  references in this  Financing  Agreement to the Bonds,  the Trustee and the
Issuer shall be  ineffective,  and neither the Trustee,  the holder of the Note,
the Issuer nor the holders of any of the Bonds shall  thereafter have any rights
hereunder except as provided in Sections 4.1(b), 4.6 and 5.6.

         Section 5.3. Certificate as to No Default. The Company shall deliver to
the Issuer and the Trustee within 120 days after the close of each of its Fiscal
Years  a  certificate  signed  by  the  chief  executive   officer,   the  chief
administrative  officer or the chief financial  officer of its corporate general
partner  stating  that (a) (1) the  Company is not in default  under the Note or
this Financing Agreement,  and (2) the Company has no knowledge of any violation
of any of the terms or provisions of the Note or this Financing  Agreement or of
the  occurrence of any condition,  event or act that,  with or without notice or
lapse of time or  both,  would  constitute  an event  of  default  hereunder  or
thereunder,  or (b) if it is in  default,  specifying  the  nature and period of
default and what  action the Company is taking or proposes to take with  respect
thereto.

         Section 5.4. [Reserved)

         Section 5.5. Tax Exemption. (a) Unless the Company shall deliver to the
Trustee an opinion of Bond  Counsel to the effect that such use,  occupation  or
ownership will not adversely  affect the exclusion of interest on the Bonds from
gross income for federal income tax purposes, the Company shall not:

         (1) take any action or approve the Trustees taking any action or making
any investment or use of the proceeds of the Bonds that would cause the Bonds to
be "arbitrage bonds" within the meaning of Section 148 of the Code.

         (2) barring unforeseen  circumstances,  approve the use of the proceeds
of  any  Bonds  or  any  other   funds  other  than  in   accordance   with  its
"non-arbitrage"  certificate with respect to such use given immediately prior to
the delivery of the Bonds;

         (3) take or permit any action that would  result in more than 5% of the
proceeds of the 1980 Bonds,  the Prior Bonds or the Bonds being used directly or
indirectly to make or finance loans to any person who is not an "exempt  person"
within  the  meaning of Section  103(b)(3)  of the 1954 Code or a  "governmental
unit" within the meaning of Section  141(c) of the Code or  otherwise  cause the
1980 Bonds,  the Prior Bonds or the Bonds to be or become  "consumer loan bonds"
within the meaning of Section 103(o) of the 1954 Code.

         (4) permit any  component of the Facility to be used or occupied by the
United States of America or an agency or  instrumentality  thereof in any manner
for compensation,  including any entity with statutory  authority to borrow from
the United States of America in any case within the meaning of Section 149(b) of
the Code, or in any way cause the Bonds to be "federally  guaranteed" within the
meaning of Section 103(h) of the 1954 Code or Section 149(b) of the Code.

         (5)      permit the addition of any "principal user" of the Facility 
within the meaning of Section  103(b)(6) of the 1954 Code or Section 144(a) of 
the Code; or
         (6)      take any other action that would adversely affect the 
exclusion of interest on the Bonds from gross income.

         (b) The Company shall not take or omit to take any action the taking or
omission of which would result in any of the  proceeds of the Bonds,  within the
meaning  of  Section  147(g) of the Code,  being  used to  finance  the costs of
issuance of the Bonds.

         (c) The Company represents and warrants that (i) the original principal
amount of the Prior  Bonds,  plus any amounts held as a sinking fund for payment
of the  principal of the 1980 Bonds,  did not exceed the  aggregate  outstanding
principal  amount of the 1980 Bonds as determined on the date of issuance of the
Prior Bonds, and (ii) the principal  amount of the Bonds,  plus any amounts held
by the Prior Bonds Trustee as a sinking fund for payment of the principal of the
Prior Bonds, do not exceed the outstanding  principal  amount of the Prior Bonds
as determined on the date of issuance of the Bonds.

         (d) The Company  represents  and warrants  that,  within the meaning of
Section  147(b) of the Code and  comparable  provisions  of the 1954  Code,  the
"average  maturity" of the Bonds does not exceed 120% of the remaining  "average
reasonably expected economic life" of the Facility,  such "average maturity" and
remaining  "average  reasonably  expected  economic  life" being computed in the
manner  contemplated by Section 147(b) of the Code and comparable  provisions of
the 1954 Code.  The Company  further  represents  and warrants that the "average
maturity"  of the Bonds is less than the  remaining  "average  maturity"  of the
Prior Bonds.

         (e) The Company represents, covenants and agrees that not more than 25%
of the  proceeds  of the 1980  Bonds,  the Prior Bonds or the Bonds have been or
will be used to provide a facility  the  primary  purpose of which is one of the
following:  retail food and beverage services,  automobile sales or service,  or
the provision of recreation or entertainment.  The Company further covenants and
agrees that no part of the  proceeds  of the 1980 Bonds,  the Prior Bonds or the
Bonds have been or will be used to provide any of the following and that no part
of the Facility  will be used for any of the following  purposes or  activities:
any airplane, skybox or other private luxury box, health club facility, facility
used primarily for gambling,  store the principal  business of which is the sale
of alcoholic beverages for consumption off premises,  private or commercial golf
course,  country club, massage parlor,  tennis club, skating facility (including
roller  skating,   skateboard  and/or  ice  skating),  racquet  sports  facility
(including  any  handball  or  racquetball  court),  hot  tub  facility,  suntan
facility, racetrack or residential real property for family units.

         (f) The Company represents, covenants and agrees that (i) substantially
all (90% or more) of the proceeds of the 1980 Bonds  (exclusive of such proceeds
applied to redeem other 1980 Bonds) were used for the acquisition, construction,
reconstruction  or improvement of land or property of a character subject to the
allowance for depreciation  within the meaning of Section  103(b)(6) of the 1954
Code,  (ii) less than 25% of the proceeds of the 1980 Bonds,  the Prior Bonds or
the Bonds have been or will be used directly or indirectly  for the  acquisition
of land or an interest in land,  including mineral  reserves,  and (iii) none of
such proceeds were or will be used for the acquisition of land or an interest in
land to be used for farming purposes.

         (g) The Company represents and warrants that except for the Prior Bonds
and the Bonds, no bonds,  notes or other  obligations of any state,  territorial
possession or any political  subdivision  of the United States of America or any
political  subdivision  of any of the  foregoing  or of the District of Columbia
have been issued since April 30, 1968, and are now outstanding,  the proceeds of
which have been or are to be used  primarily  with  respect to projects  (i) the
"principal user" of which is or will be the Company or any "related persons," as
defined in Section  103(b)(6) of the 1954 Code or Section 144(a) of the Code and
(ii) that are located within  Harrison  County,  West Virginia or are integrated
facilities  located  outside of  Harrison  County  within  one-half  mile of the
Facility.  The Company further represents and warrants that (i) obligations have
not been assumed, expenditures have not been made and outstanding obligations do
not exist, including,  without limitation, the leasing of equipment (pursuant to
leases  which do not qualify as "true"  leases  within the meaning of the Code),
which would cause the "aggregate face amount" of the Bonds as computed under the
provisions  of Section  103(b)(6)  of the 1954 Code or 144(a)(4) of the Code and
the Regulations to exceed  $10,000,000  and (ii) that,  within three years after
the date any of the 1980 Bonds or the Prior Bonds were  issued,  the Company did
not make nor permit any user of the Facility to make any expenditure, assume any
obligations  or take or permit  any other  action to be taken  which  caused the
"aggregate  face amount" of any of the 1980 Bonds or the Prior Bonds as computed
under  the  provisions  of  Section   103(b)(6)  of  the  1954  Code  to  exceed
$10,000,000.

         (h) The Company  represents  and warrants  that the Facility is located
only at the place or places specified in the notice of public hearing  published
with respect to the Prior Bonds  pursuant to Section  103(k)(2) of the 1954 Code
and Section 147(f) of the Code.

         (i) The  Company  represents  and  warrants  that  neither  the Company
(including any "related  person," within the meaning of Section 144(a)(3) of the
Code) nor any other  "principal  user" of the  Facility  (including  any related
person),  within the meaning of Section  144(a)(2)  of the Code,  is a principal
user of any  facility  other  than the  Facility  that is  financed  with (i) an
"industrial  development bond," within the meaning of Section 103(b) of the 1954
Code, (ii) a "qualified  small issue bond," within the meaning of Section 144(a)
of the Code, or (iii) any other "outstanding tax-exempt facility-related bonds,"
within the meaning of Section  144(a)(10) of the Code. The Company covenants and
agrees that the aggregate  authorized  face amount of the bonds described in the
preceding  sentence  (including  the Bonds)  which can be allocated to any "test
period  beneficiary" as such term is defined either in Section  103(b)(15)(D) of
the  1954  Code or in  Section  144(a)(10)(D)  of the Code  (including,  but not
limited  to the  Company)  will not  exceed  $40,000,000.  The  Company  further
covenants  and agrees  that it will not permit  the use of the  Facility  by any
person  (other  than the  Company or a "related  person"  within the  meaning of
Section  103(b)(6) of the 1954 Code or Section 144 of the Code) to whom any part
of the 1980 Bonds,  the Prior Bonds or the Bonds would be allocated  pursuant to
Section  103(b)(15)  of the 1954 Code or Section  144(a)(10) of the Code, if the
amount  allocated,  when increased as provided in Section  103(b)(15)(A)  of the
1954 Code or Section 144(a)(10)(A) of the Code, would exceed $40,000,000.

         (j) The Company  represents  and warrants  that none of the proceeds of
the 1980 Bonds issued subsequent to 1983 were used to acquire any property or an
interest therein (other than land or an interest in land) unless:

         (i)      the first use of such property was pursuant to such 
acquisition; or

         (ii)     "rehabilitation  expenditures,"  within the meaning of Section
103(b)(17)(c)  of the 1954 Code with  respect to that part of such property 
constituting:

         (A) a building  (and the  equipment  therefor),  equalled  or  exceeded
fifteen  percent  (15%) of that portion of the cost of acquiring  such  building
(and the  equipment  therefor)  that was financed with the proceeds of such 1980
Bonds; and

         (B) a facility other than a building,  equalled or exceeded one hundred
percent  (100%) of that portion of the cost of acquiring  such facility that was
financed with the proceeds of such 1980 Bonds.

         (1) The Issuer  covenants and agrees that, prior to the issuance of the
Bonds, it shall duly elect to have the provisions of Section 103(b)(6)(D) of the
1954  Code and  Section  144(a)(4)  of the Code  apply  to such  issue  and such
election  shall  be  made in  accordance  with  the  applicable  Regulations  or
procedures of the Internal  Revenue  Service.  The Company  covenants and agrees
that it shall furnish to the Issuer  whatever  information  is necessary for the
Issuer to make such election and shall compile such supplemental  statements and
other  information as required by the applicable  Regulations  and procedures of
the Internal Revenue Service.

         (l) The Company will comply with, and make all filings required by, all
effective  rules,  rulings or  Regulations  promulgated by the Department of the
Treasury or the Internal  Revenue  Service,  with respect to obligations  issued
under  Section  103(b)(6)  of  the  1954  Code  as  a  "small  issue  industrial
development  bond" the interest on which is exempt from federal income  taxation
or issued under Section 144(a) of the Code as a "qualified small issue bond" the
interest  on which is  excludable  from  gross  income  for  federal  income tax
purposes.

         (m) The Company  represents  and warrants  that the  Facility  does not
share  common  facilities  (such  as  an  enclosed  mall,  heating  and  cooling
facilities  or parking  facilities)  with any other  part of the same  building,
other  portions of an enclosed  shopping  mall or a strip of offices,  stores or
warehouses that were financed with tax-exempt small issue industrial development
bonds under  Section  103(b)(6) of the 1954 Code or qualified  small issue bonds
under Section 144(a) of the Code.

         (n) The Company  represents and warrants that no rebate with respect to
the Prior Bonds is payable to the United  States  pursuant to the  provisions of
Section 148 of the Code.

         (o)  The Issuer will comply with the information reporting requirements
of Section 149(e) of the Code with respect to the Bonds.

         (p) The Company represents and warrants that the information  contained
in  the  certificates  or  representations  for  the  Company  with  respect  to
compliance with the  requirements  of Section 149(e) of the Code,  including the
information in Form 8038, is true and correct in all material respects.

         (q) The Company shall take all action necessary to ensure that interest
on the Bonds,  for federal income tax purposes,  is not included in gross income
of the owners thereof.

         Section  5.6.  Indemnification.  (a) The  Company  shall  at all  times
protect, indemnify and save harmless the Issuer, the Trustee and the Remarketing
Agent  (collectively,  the  "Indemnitees")  from and  against  all  liabilities,
obligations,  claims, damages,  penalties,  causes of action, costs and expenses
(hereinafter  referred to as "Damages"),  including  without  limitation (1) all
amounts paid in settlement of any litigation commenced or threatened against the
Indemnitees,  if such  settlement  is effected  with the written  consent of the
Company,   (2)  all  expenses  reasonably  incurred  in  the  investigation  of,
preparation for or defense of any litigation, proceeding or investigation of any
nature whatsoever,  commenced or threatened against the Company, the Facility or
the Indemnitees,  (3) any judgments,  penalties,  fines,  damages,  assessments,
indemnities  or  contributions,  and  (4)  the  reasonable  fees  of  attorneys,
auditors, and consultants, provided that the Damages arise out of:

         (A) failure by the Company or its  partners,  employees  or agents,  to
comply  with  the  terms  of  this  Financing  Agreement  or the  Note,  and any
agreements, covenants, obligations, or prohibitions set forth therein;

         (B)      any action, suit, claim or demand contesting or affecting the 
title of the Facility;

         (C) any breach by the Company of any  representation  or  warranty  set
forth in this Financing  Agreement or the Note, or any certificate  delivered by
the Company pursuant thereto,  and any claim that any representation or warranty
of the Company contains or contained any untrue or misleading  statement of fact
or omits or omitted to state any material facts necessary to make the statements
made therein not misleading in light of the circumstances  under which they were
made;

         (D) any action, suit, claim, proceeding or investigation of a judicial,
legislative,  administrative  or regulatory nature arising from or in connection
with the ownership, operation, occupation or use of the Facility; or

         (E) any suit, action, administrative proceeding, enforcement action, or
governmental  or private  action of any kind  whatsoever  commenced  against the
Company,  the  Facility  or the  Indemnitees  that  might  adversely  affect the
validity,  enforceability  or  tax-exempt  status of the Bonds,  this  Financing
Agreement or the Note, or the  performance  by the Company or any  Indemnitee of
any of their respective obligations thereunder;

provided that such  indemnity  shall be effective only to the extent of any loss
that may be  sustained by the  Indemnitees  in excess of the proceeds net of any
expenses of  collection,  received by them or from any  insurance  carried  with
respect to such loss and  provided  further  that the  benefits of this  section
shall not inure to any person other than the Indemnitees.

         (b)  If  any  action,   suit  or  proceeding  is  brought  against  the
Indemnitees  for any loss or damage for which the Company is required to provide
indemnification  under this section,  the Company,  upon  request,  shall at its
expense resist and defend such action, suit or proceeding,  or cause the same to
be resisted  and defended by counsel  designated  by the Company and approved by
the  Indemnitees,  which approval shall not be unreasonably  withheld,  provided
that such  approval  shall not be  required  in the case of  defense  by counsel
designated by any insurance  company  undertaking  such defense  pursuant to any
applicable policy of insurance. If an Indemnitee shall have reasonably concluded
that  there may be  defenses  available  to it that are in  conflict  with those
available  to the  Company or to other  Indemnitees  (in which case the  Company
shall not have the right to direct the  defense of such action on behalf of such
Indemnitee),  such  Indemnitee  may engage  separate  counsel and the reasonable
legal and  other  expenses  incurred  by such  Indemnitee  shall be borne by the
Company.  The  obligations  of the Company  under this section shall survive any
termination of this Agreement, including prepayment of the Note.

         (c) Nothing contained herein shall require the Company to indemnify the
Issuer for any claim or liability  resulting from its willful,  wrongful acts or
the Trustee or the Remarketing  Agent for any claim or liability  resulting from
its  negligence  (under  the  standard  of care set forth in  Article  IX of the
Indenture) or its willful, wrongful acts.

         (d) All  references in this section to the Issuer,  the Trustee and the
Remarketing  Agent,  including  references to  Indemnitees,  shall include their
members,  commissioners,  directors,  officers,  employees,  representatives and
agents.

         Section 5.7.  Maintenance  and  Insurance of Facility.  (a) The Company
shall, at its own expense,  keep the Facility in as reasonably safe condition as
its  operations  shall  permit and shall keep the  Facility  in good  repair and
operating condition,  ordinary wear and tear excepted,  making from time to time
all necessary repairs,  renewals and replacements.  The Company shall comply, in
all material respects, with all laws applicable to the Facility.

         (b) The  Company  shall,  at its  own  expense,  continuously  maintain
insurance in connection with the Facility and the Company's  operations  against
such  risks as are  customarily  insured  against by  organizations  of the same
general  type,  including  without  limitation  insurance  for property  damage,
liability  for  bodily  injury,  liability  for  property  damage  and  workers'
compensation.

         Section  5.8.  Corporate  Existence.  The Company  shall  maintain  its
existence  as a West  Virginia  corporation  and shall  not,  without  the prior
consent of the Trustee,  dissolve or otherwise  dispose of all or  substantially
all of its assets,  consolidate with or merge into another domestic  partnership
or corporation (i.e. a partnership or corporation  created under the laws of the
United States of America, one of the states thereof or the District of Columbia)
or permit one or more other domestic partnerships or corporations to consolidate
with or merge into it; provided, however, that with the prior written consent of
the Bank,  the  Company  may  consolidate  with or merge into  another  domestic
partnership  or  corporation,  or permit one or more  domestic  partnerships  or
corporations to consolidate with or merge into it, or sell or otherwise transfer
to another domestic  partnership or corporation all or substantially  all of its
assets and thereafter  dissolve,  or sell or assign all or substantially  all of
its assets to a governmental unit, if after giving effect to such consolidation,
merger,  transfer,  sale or assignment  the  surviving,  resulting or transferee
partnership, corporation or governmental unit:

         (1)      will not be in default under any covenant under this Financing
Agreement;

         (2)      if it is not the  Company,  has the power to assume and  
assumes in writing  all of the  obligations  of the  Company herein and in the 
Note; and

         (3)  if it is not a  West  Virginia  partnership  or  corporation  or a
political  subdivision  of the State of West  Virginia,  either  qualifies to do
business  in West  Virginia  or files  with the  Trustee a consent to service of
process reasonably acceptable to the Trustee.

         Section 5.9.  Obligations  Under the  Indenture.  The Company shall  
undertake all actions and carry out all  responsibilities prescribed for it 
under the Indenture.



<PAGE>


                                   ARTICLE VI

                         EVENTS OF DEFAULT AND REMEDIES

         Section 6.1. Event of Default Defined.  Each of the following events 
shall be an Event of Default:

         (a)      Failure of the Company to make any payment on the Note when 
due and payable;

         (b)  Failure of the  Company to observe  and  perform  any of its other
covenants,  conditions  or  agreements  hereunder  for a period of 30 days after
notice specifying such failure and requesting that it be remedied,  given by the
Issuer or the Trustee to the Company;

         (c) (1)  Failure  of the  Company  to pay  generally  its debts as they
become  due,  (2)  commencement  by the  Company of a  voluntary  case under the
federal  bankruptcy  laws,  as  now  or  hereafter  constituted,  or  any  other
applicable  federal or state bankruptcy,  insolvency or similar law, (3) consent
by the Company to the appointment of a receiver, liquidator,  assignee, trustee,
custodian,  sequestrator  or  other  similar  official  for the  Company  or any
substantial  part of its  property,  or to the  taking  possession  by any  such
official of any substantial  part of the property of the Company,  (4) making by
the Company of any  assignment  for the benefit of creditors  generally,  or (5)
taking  of  corporate  action  by  the  Company  in  furtherance  of  any of the
foregoing;

         (d) The (1) entry of any decree or order for  relief by a court  having
jurisdiction  over the Company or its property in an involuntary  case under the
federal  bankruptcy  laws,  as  now  or  hereafter  constituted,  or  any  other
applicable  federal  or  state  bankruptcy,   insolvency  or  similar  law,  (2)
appointment   of  a  receiver,   liquidator,   assignee,   trustee,   custodian,
sequestrator or similar  official for the Company or any substantial part of its
property,  or (3) entry of any order for the  termination  or liquidation of the
Company or its affairs;

         (e) Failure of the Company within 60 days after the commencement of any
proceedings  against it under the federal  bankruptcy  laws or other  applicable
federal or state bankruptcy, insolvency or similar law, to have such proceedings
dismissed or stayed;

         (f)      Abandonment of the Facility by the Company for a period in 
excess of thirty (30) days; or

         (g)      An Event of Default under the Indenture.

         The  foregoing   provisions  of  subsection  (b)  are  subject  to  the
limitation  that if by reason of force majeure the Company is unable in whole or
in part to observe and perform any of its  covenants,  conditions  or agreements
hereunder,  other than its obligations contained in Sections 4.1, 4.6, 4.7, 5.1,
5.5,  5.6 and 5.8,  the  Company  shall  not be  deemed in  default  during  the
continuance  of such  inability.  The term "force  majeure" as used herein shall
include without limitation acts of God; strikes, lockouts or other disturbances;
acts of public  enemies;  orders  of any kind of the  government  of the  United
States of America or the State of West  Virginia  or any  political  subdivision
thereof or any of their  departments,  agencies  or  officials,  or any civil or
military authority;  insurrections;  riots;  epidemics;  landslides;  lightning;
earthquakes;  fires; hurricanes;  tornadoes; storms; floods; washouts; droughts;
arrests;  restraint of government and people;  civil  disturbances;  explosions;
breakage or  accident to  machinery,  transmission  pipes or canals;  partial or
entire failure of utilities;  or any other cause or event not reasonably  within
the  control of the  Company.  The  Company  shall  remedy  with all  reasonable
dispatch  the cause or causes  preventing  the  Company  from  carrying  out its
covenants,  conditions and agreements,  provided that the settlement of strikes,
lockouts  and  other  industrial  disturbances  shall  be  entirely  within  the
discretion  of the  Company,  and the  Company  shall  not be  required  to make
settlement of strikes, lockouts and other industrial disturbances by acceding to
the demands of any  opposing  party when such  course is in the  judgment of the
Company not in its best interests.

         Section  6.2.  Remedies on Default.  Whenever  any Event of Default  
hereunder  shall have  occurred  and is  continuing, the Trustee as the assignee
of the Issuer:

         (a) May,  and at the written  direction of the holders of not less than
25% in aggregate  principal amount of Bonds then outstanding,  shall declare all
amounts  payable as principal and interest on the Note to be immediately due and
payable,  whereupon the same shall become  immediately  due and payable,  except
that the Trustee  shall not make such a  declaration  unless the Bank has either
(1) consented to such  declaration or (2) has failed to honor any proper drawing
under the Letter of Credit.

         (b)      Have access to and inspect,  examine and copy the financial 
books,  records and accounts of the Company pertaining to the Facility.

         (c) Take  whatever  action at law or in equity may appear  necessary or
desirable  to collect the amounts  then due and  thereafter  to become due or to
enforce observance or performance of any covenant, condition or agreement of the
Company under the Note or this Financing Agreement.

         Section  6.3.   Application  of  Amounts  Realized  in  Enforcement  of
Remedies.  Any  amounts  collected  pursuant to action  taken under  Section 6.2
hereof shall be applied in accordance with the provisions of the Indenture,  or,
if payment of the Bonds shall have been made, shall be applied  according to the
provisions of Section 8.06 of the Indenture.

         Section 6.4. No Remedy  Exclusive.  No remedy herein  conferred upon or
reserved to the Trustee is intended to be  exclusive  of any other  remedy,  and
every remedy shall be cumulative and in addition to every other remedy herein or
now or hereafter existing at law, in equity or by statute.  No delay or omission
to exercise any right or power  accruing  upon an Event of Default  shall impair
any such right or power or shall be  construed to be a waiver  thereof,  but any
such  right or power may be  exercised  from time to time and as often as may be
deemed expedient.

         Section  6.5.  Attorney  Fees  and  Other  Expenses.  Upon an  Event of
Default,  the  Company on demand  shall pay to the Issuer  and the  Trustee  the
reasonable  fees and expenses of their  attorneys and other  reasonable fees and
expenses incurred by any of them in the collection of payments under the Note or
the enforcement of any other obligations of the Company.

         Section  6.6. No  Additional  Waiver  Implied by One Waiver.  If either
party or its  assignee  waives a default by the other party under any  covenant,
condition or agreement  herein,  such waiver shall be limited to the  particular
breach so waived and shall not be deemed to waive any other default hereunder.

                                   ARTICLE VII

                             PREPAYMENT OF THE NOTE

         Section 7.1. Option To Prepay in Full.  Subject to  requirements  under
the Indenture for Available Moneys in certain instances,  the Company may prepay
in full the Note,  without  penalty or premium,  and  terminate  this  Financing
Agreement  prior to payment of the Bonds by (a) paying to the  Trustee an amount
of cash or U.S. Government  Obligations that, together with existing investments
in the Bond Fund,  will comply with the  requirements  for the defeasance of the
Bonds set forth in Article VII of the Indenture,  and (b) by making arrangements
satisfactory to the Trustee for giving any required notice of redemption.

         Section 7.2.  Mandatory  Payment.  The Company shall prepay the Note in
full or in part (a) upon the  occurrence  of a  Determination  of  Taxability as
defined in the  Indenture,  or (b) as otherwise  provided in Section 3.01 of the
Indenture.

         Section 7.3.  Option To Prepay in Part. The Company may prepay the Note
in part,  and the Issuer  agrees that the Trustee may accept such payments to be
paid to the Trustee for deposit in the Bond Fund and used for  redemption or, at
the election of the Company, purchase of outstanding Bonds, in the manner and to
the extent  provided  in the  Indenture.  The  principal  amount of each Bond so
purchased,  delivered or credited shall be appropriately credited by the Trustee
against the obligation of the Company to make future payments on the Note.

         Section 7.4.  Relation of Options to Indenture.  The options granted to
the Company in this  Article may be  exercised  whether or not the Company is in
default under this Financing Agreement,  provided that any such default will not
result  in the  nonfulfillment  of any  condition  to the  exercise  of any such
option.

         Section  7.5.  Obligations  After  Payment of Note and  Termination  of
Financing  Agreement.  Anything  contained  in this  Article VII to the contrary
notwithstanding, the obligations of the Company contained in Section 5.6 and the
obligation  of the  Company to pay the costs and  expenses  of the  Issuer,  the
Trustee and the  Remarketing  Agent shall continue after payment of the Note and
termination of this Financing Agreement.

                                    ARTICLE X

                                  MISCELLANEOUS

         Section  8.1.  Term of Financing  Agreement;  Amounts  Remaining  After
Payment of the Bonds. This Financing Agreement shall be effective upon execution
and delivery hereof, and subject to earlier  termination upon prepayment in full
of the Note and all other amounts  required to be paid hereunder,  including all
amounts  payable under the  Indenture,  shall expire at midnight on September 1,
2010,  or if such  payment  of the  Note has not been  made on such  date,  when
payment in full of the Note and all other amounts  required to be paid hereunder
shall have been made, except that, notwithstanding the foregoing, the obligation
of the Company to indemnify  and pay the costs and  expenses of the Issuer,  the
Remarketing Agent and the Trustee shall survive the expiration of this Financing
Agreement.  Any amounts  remaining after payment of the Bonds and payment of the
fees and  expenses  of the  Trustee,  the  Remarketing  Agent and the  Issuer in
accordance  with the Indenture shall be distributed as set forth in Section 4.07
of the Indenture.

         Section 8.2.  Notices,  etc.  Unless  otherwise  provided  herein,  all
demands,  notices,  approvals,   consents,  requests  and  other  communications
hereunder  shall be in  writing  and shall be deemed  to have  been  given  when
delivered  in person or mailed by first  class  registered  or  certified  mail,
postage prepaid, addressed:

         (a)      if to the Issuer, to Harrison County,  West Virginia, Harrison
County Courthouse,  Clarksburg,  West Virginia 26301, Attention: President of 
Harrison County Commission;

         (b)      if to the  Trustee,  to One Valley Bank, National Association,
P.O. Box 1793,  Charleston,  West  Virginia  25326, Attention: Corporate Trust 
Department;

         (c)      if to the Company, to Salem Health Care Corp., 146 Water 
Street, Salem, West Virginia 26426;

         (d)      if to the  Underwriter or Remarketing  Agent,  to Crews and  
Associates,  Inc. 2000 Union  National  Plaza,  124 West Capitol, Little Rock, 
Arkansas 72201;

         (e)      if to the Bank, to NationsBank of Texas, N.A, 901 Main Street,
13th Floor,  Dallas,  Texas 75202,  Attention:  Marie
Lancanster; and

         A duplicate copy of each demand, notice, approval,  consent, request or
other  communication  given hereunder by either the Issuer or the Company to the
other shall also be given to the Trustee,  the Bank and the  Remarketing  Agent.
The Company, the Issuer, the Trustee, the Bank and the Remarketing Agent may, by
notice given  hereunder,  designate any further or different  addresses to which
subsequent   demands,   notices,   approvals,   consents,   requests   or  other
communications  shall be sent or  persons to whose  attention  the same shall be
directed.

         Section 8.3.  Amendments to financing  Agreement and Note. Neither this
Financing  Agreement  nor the  Note  shall be  amended  or  supplemented  and no
substitution  shall be made for the Note subsequent to the issuance of the Bonds
and before  payment of the Bonds,  without the consent of the Trustee,  given in
accordance with Article XI of the Indenture.

         Section 8.4. Successors and Assigns.  This Financing Agreement shall be
binding  upon,  inure to the  benefit of and be  enforceable  by the parties and
their  respective  successors and assigns.  Without the prior written consent of
the Issuer, the Trustee and the Bank, no assignment by the Company shall relieve
the Company of its obligations hereunder.

         Section 8.5.  Severability.  If any  provision  of this  Financing  
Agreement  shall be held invalid by any court of competent jurisdiction, such 
holding shall not invalidate any other provision hereof.

         Section  8.6.  Applicable  Law.  This  Financing  Agreement  shall be  
governed  by the  applicable  laws of the State of West Virginia.

         Section 8.7. Counterparts.  This Financing Agreement may be executed in
counterparts,  each of  which  shall  be an  original  and all of  which,  taken
together,  shall constitute but one and the same instrument;  except that to the
extent,  that this Financing  Agreement shall constitute personal property under
the Uniform  Commercial  Code of West  Virginia,  no  security  interest in this
Financing  Agreement  may be  created  or  perfected  through  the  transfer  or
possession  of any  counterpart  of this  Financing  Agreement  other  than  the
original  counterpart,  which shall be the  counterpart  containing  the receipt
therefor  executed by the Trustee  following the  signatures  to this  Financing
Agreement.

         Section  8.8.  Bank May  Perform  Company's  Obligations.  The Bank may
perform or observe any covenant, condition or agreement of the Company hereunder
and such  performance or observance  shall be treated in all respects as the act
of the Company.

         Section 8.9. Entire Agreement.  This Financing  Agreement together with
the Indenture and the Note  constitute the entire  agreement  between the Issuer
and the Company and supersede all prior agreements and understandings, both oral
and  written,  between  the Issuer and the Company  with  respect to the subject
matter hereof.

         IN WITNESS WHEREOF,  the Issuer has caused this Financing  Agreement to
be executed on its behalf and its seal to be affixed  hereto and attested by the
duly  authorized  officers of The County  Commission  of Harrison  County,  West
Virginia,  and the Company has caused this Financing Agreement to be executed in
its name by the duly authorized  officer of its general  partner,  all as of the
date first above written.

                              THE COUNTY COMMISSION OF HARRISON COUNTY BY AND ON
                              BEHALF OF HARRISON COUNTY, WEST (SEAL) VIRGINIA

                              By                                         
                                 -----------------------------------------------
President

ATTEST:

By

Its

                             SALEM HEALTH CARE CORP., a West Virginia
                             corporation

                             By

                             Its
ATTEST:

By

Its


<PAGE>


                              RECEIPT

         Receipt  of  the  foregoing  original   counterpart  of  the  Financing
Agreement  dated as of  September  1, 1996,  between  The County  Commission  of
Harrison  County by and on behalf of Harrison  County,  West  Virginia and Salem
Health Care Corp., is hereby acknowledged as of the 30th day of September, 1996.

                                    ONE VALLEY BANK, NATIONAL ASSOCIATION,
                                    as Trustee

                                    By
                                    Vice President



<PAGE>


The material  exhibits to this document are as follows,  and are available  upon
request:

CONTINUING  DISCLOSURE  AGREEMENT  executed  and  delivered by SALEM HEALTH CARE
CORP., a West Virginia limited partnership, as the borrower and ONE VALLEY BANK,
NATIONAL  ASSOCIATION  in connection  with the issuance of  $2,185,000  Harrison
County,  West Virginia First Mortgage Refunding Revenue Bonds, Series 1996 being
issued  pursuant to a Trust  Indenture  dated as of  September  1, 1996,  by and
between  the  Harrison  County,  West  Virginia  and One Valley  Bank,  National
Association.

Official Statement regarding exemption from taxation.

TAX  REGULATORY  AGREEMENT AND NO ARBITRAGE  CERTIFICATE  by and among  Harrison
County,  West Virginia,  Salem Health Care Corp.  and One Valley Bank,  National
Association, Charleston, West Virginia, as Trustee.