Unassociated Document


    
      
        
          Exhibit
            10.85

           

           

          CONSTRUCTION
            LOAN AGREEMENT

           

          by
            and
            between

           

           

          ASF
            of
            Green Hills, LLC,

           

          a
            Tennessee non-profit limited liability company,

           

          as
            Borrower,

           

           

          and

           

           

          American
            Retirement Corporation,

           

          a
            Tennessee corporation,

           

          as
            Lender,

           

           

          with
            respect to

           

          The
            Cumberland at Green Hills

           

          Burton
            Hills, Nashville, Tennessee

          


          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

           

          
            	
                    Article
                      I

                  	
                    General
                      Information.

                  	
                    1

                  
	
                    Section
                      1.1

                  	
                    Conditions
                      to Closing.

                  	
                    1

                  
	
                    Section
                      1.2

                  	
                    Schedules.

                  	
                    1

                  
	
                    Section
                      1.3

                  	
                    Defined
                      Terms.

                  	
                    1

                  
	
                    Article
                      II

                  	
                    Advances
                      of the Loan.

                  	
                    1

                  
	
                    Section
                      2.1

                  	
                    The
                      Loan.

                  	
                    1

                  
	
                    Section
                      2.2

                  	
                    Purpose;
                      Reallocation; Revenues from Property.

                  	
                    2

                  
	
                    Section
                      2.3

                  	
                    Draw
                      Requests.

                  	
                    2

                  
	
                    Section
                      2.4

                  	
                    Additional
                      Terms Regarding Advances.

                  	
                    2

                  
	
                    Section
                      2.5

                  	
                    Liability
                      of Lender.

                  	
                    2

                  
	
                    Article
                      III

                  	
                    Representations
                      and Warranties.

                  	
                    3

                  
	
                    Section
                      3.1

                  	
                    Organization,
                      Power and Authority of Borrower; Loan Documents.

                  	
                    3

                  
	
                    Section
                      3.2

                  	
                    Other
                      Documents; Laws.

                  	
                    3

                  
	
                    Section
                      3.3

                  	
                    Taxes.

                  	
                    3

                  
	
                    Section
                      3.4

                  	
                    Legal
                      Actions.

                  	
                    3

                  
	
                    Section
                      3.5

                  	
                    Nature
                      of Loan.

                  	
                    3

                  
	
                    Section
                      3.6

                  	
                    Trade
                      Names.

                  	
                    3

                  
	
                    Section
                      3.7

                  	
                    Financial
                      Statements.

                  	
                    4

                  
	
                    Section
                      3.8

                  	
                    ERISA
                      and Prohibited Transactions.

                  	
                    4

                  
	
                    Section
                      3.9

                  	
                    Compliance
                      with Zoning and Other Requirements.

                  	
                    4

                  
	
                    Section
                      3.10

                  	
                    Plans
                      and Specifications.

                  	
                    4

                  
	
                    Section
                      3.11

                  	
                    Building
                      Permits; Other Permits.

                  	
                    4

                  
	
                    Section
                      3.12

                  	
                    Utilities.

                  	
                    4

                  
	
                    Section
                      3.13

                  	
                    Access;
                      Roads.

                  	
                    5

                  
	
                    Section
                      3.14

                  	
                    Other
                      Liens.

                  	
                    5

                  
	
                    Section
                      3.15

                  	
                    No
                      Work Commenced.

                  	
                    5

                  
	
                    Section
                      3.16

                  	
                    No
                      Material Adverse Change.

                  	
                    5

                  
	
                    Section
                      3.17

                  	
                    Defaults.

                  	
                    5

                  
	
                    Section
                      3.18

                  	
                    Affirmation
                      of Representations and Warranties.

                  	
                    5

                  
	
                    Article
                      IV

                  	
                    Affirmative
                      Covenants and Agreements.

                  	
                    6

                  
	
                    Section
                      4.1

                  	
                    Commencement
                      and Completion of Construction.

                  	
                    6

                  
	
                    Section
                      4.2

                  	
                    Approval
                      of Construction.

                  	
                    6

                  
	
                    Section
                      4.3

                  	
                    Deposits
                      to Balance Loan.

                  	
                    6

                  
	
                    Section
                      4.4

                  	
                    Compliance
                      with Laws; Encroachments.

                  	
                    7

                  


          

           

           

          
            
              
              

            

            
              i

              
                

              

            

            
              
              

            

          

           

           

          
            	
                    Section
                      4.5

                  	
                    Inspections;
                      Cooperation.

                  	
                    7

                  
	
                    Section
                      4.6

                  	
                    Contracts,
                      Vouchers and Receipts.

                  	
                    7

                  
	
                    Section
                      4.7

                  	
                    Payment
                      and Performance of Contractual Obligations.

                  	
                    7

                  
	
                    Section
                      4.8

                  	
                    Correction
                      of Construction Defects.

                  	
                    7

                  
	
                    Section
                      4.9

                  	
                    Insurance.

                  	
                    8

                  
	
                    Section
                      4.10

                  	
                    Adjustment
                      of Condemnation and Insurance Claims.

                  	
                    9

                  
	
                    Section
                      4.11

                  	
                    Utilization
                      of Net Proceeds.

                  	
                    9

                  
	
                    Section
                      4.12

                  	
                    Management.

                  	
                    10

                  
	
                    Section
                      4.13

                  	
                    Books
                      and Records; Financial Statements.

                  	
                    10

                  
	
                    Section
                      4.14

                  	
                    Estoppel
                      Certificates.

                  	
                    11

                  
	
                    Section
                      4.15

                  	
                    Taxes.

                  	
                    11

                  
	
                    Section
                      4.16

                  	
                    Lender’s
                      Rights to Pay and Perform.

                  	
                    11

                  
	
                    Section
                      4.17

                  	
                    Reimbursement;
                      Interest.

                  	
                    11

                  
	
                    Section
                      4.18

                  	
                    Notification
                      by Borrower.

                  	
                    12

                  
	
                    Section
                      4.19

                  	
                    Indemnification
                      by Borrower.

                  	
                    12

                  
	
                    Section
                      4.20

                  	
                    Fees
                      and Expenses.

                  	
                    12

                  
	
                    Section
                      4.21

                  	
                    Appraisals.

                  	
                    12

                  
	
                    Section
                      4.22

                  	
                    Leasing
                      and Tenant Matters.

                  	
                    12

                  
	
                    Section
                      4.23

                  	
                    Principal
                      Depository.

                  	
                    13

                  
	
                    Section
                      4.24

                  	
                    Existence;
                      Name.

                  	
                    13

                  
	
                    Article
                      V

                  	
                    Negative
                      Covenants.

                  	
                    13

                  
	
                    Section
                      5.1

                  	
                    Conditional
                      Sales.

                  	
                    13

                  
	
                    Section
                      5.2

                  	
                    Changes
                      to Plans and Specifications.

                  	
                    13

                  
	
                    Section
                      5.3

                  	
                    Insurance
                      Policies and Bonds.

                  	
                    13

                  
	
                    Section
                      5.4

                  	
                    Transfer
                      of Assets.

                  	
                    13

                  
	
                    Section
                      5.5

                  	
                    Liens.

                  	
                    13

                  
	
                    Section
                      5.6

                  	
                    Extensions
                      of Credit.

                  	
                    14

                  
	
                    Section
                      5.7

                  	
                    Borrowings.

                  	
                    14

                  
	
                    Section
                      5.8

                  	
                    Debt
                      Service Coverage Ratio.

                  	
                    14

                  
	
                    Section
                      5.9

                  	
                    Restricted
                      Payments; Preemptive Rights.

                  	
                    14

                  
	
                    Section
                      5.10

                  	
                    Investments.

                  	
                    15

                  
	
                    Section
                      5.11

                  	
                    Mergers,
                      Consolidations, Acquisitions and Sales.

                  	
                    15

                  
	
                    Article
                      VI

                  	
                    Events
                      of Default.

                  	
                    16

                  
	
                    Section
                      6.1

                  	
                    Payment
                      Default.

                  	
                    16

                  
	
                    Section
                      6.2

                  	
                    Default
                      Under Other Loan Documents.

                  	
                    16

                  


          

           

           

          
            
              
              

            

            
              ii

              
                

              

            

            
              
              

            

          

           

           

          
            	
                    Section
                      6.3

                  	
                    Accuracy
                      of Information; Representations and Warranties.

                  	
                    16

                  
	
                    Section
                      6.4

                  	
                    Deposits.

                  	
                    16

                  
	
                    Section
                      6.5

                  	
                    Insurance
                      Obligations.

                  	
                    16

                  
	
                    Section
                      6.6

                  	
                    Other
                      Obligations.

                  	
                    16

                  
	
                    Section
                      6.7

                  	
                    Progress
                      of Construction.

                  	
                    17

                  
	
                    Section
                      6.8

                  	
                    Damage
                      to Improvements.

                  	
                    17

                  
	
                    Section
                      6.9

                  	
                    Lapse
                      of Permits or Approvals.

                  	
                    17

                  
	
                    Section
                      6.10

                  	
                    Completion
                      of Construction.

                  	
                    17

                  
	
                    Section
                      6.11

                  	
                    Mechanic’s
                      Lien.

                  	
                    17

                  
	
                    Section
                      6.12

                  	
                    Survey
                      Matters.

                  	
                    17

                  
	
                    Section
                      6.13

                  	
                    General
                      Contractor Default.

                  	
                    17

                  
	
                    Section
                      6.14

                  	
                    Performance
                      Enjoined or Prohibited.

                  	
                    18

                  
	
                    Section
                      6.15

                  	
                    Bankruptcy.

                  	
                    18

                  
	
                    Section
                      6.16

                  	
                    Appointment
                      of Receiver, Trustee, Liquidator.

                  	
                    18

                  
	
                    Section
                      6.17

                  	
                    Judgment.

                  	
                    18

                  
	
                    Section
                      6.18

                  	
                    Dissolution;
                      Change in Business Status.

                  	
                    18

                  
	
                    Section
                      6.19

                  	
                    Default
                      Under Other Indebtedness.

                  	
                    18

                  
	
                    Section
                      6.20

                  	
                    Change
                      in Controlling Interest.

                  	
                    18

                  
	
                    Section
                      6.21

                  	
                    Material
                      Adverse Change.

                  	
                    19

                  
	
                    Article
                      VII

                  	
                    Remedies
                      on Default.

                  	
                    19

                  
	
                    Section
                      7.1

                  	
                    Remedies
                      on Default.

                  	
                    19

                  
	
                    Section
                      7.2

                  	
                    No
                      Release or Waiver; Remedies Cumulative and Concurrent.

                  	
                    20

                  
	
                    Article
                      VIII

                  	
                    Miscellaneous.

                  	
                    20

                  
	
                    Section
                      8.1

                  	
                    Further
                      Assurances; Authorization to File Documents.

                  	
                    20

                  
	
                    Section
                      8.2

                  	
                    No
                      Warranty by Lender.

                  	
                    21

                  
	
                    Section
                      8.3

                  	
                    Standard
                      of Conduct of Lender.

                  	
                    21

                  
	
                    Section
                      8.4

                  	
                    No
                      Partnership.

                  	
                    21

                  
	
                    Section
                      8.5

                  	
                    Severability.

                  	
                    21

                  
	
                    Section
                      8.6

                  	
                    Notices.

                  	
                    21

                  
	
                    Section
                      8.7

                  	
                    Permitted
                      Successors and Assigns; Disclosure of Information.

                  	
                    23

                  
	
                    Section
                      8.8

                  	
                    Modification;
                      Waiver.

                  	
                    24

                  
	
                    Section
                      8.9

                  	
                    Third
                      Parties; Benefit.

                  	
                    24

                  
	
                    Section
                      8.10

                  	
                    Rules
                      of Construction.

                  	
                    24

                  
	
                    Section
                      8.11

                  	
                    Counterparts.

                  	
                    24

                  
	
                    Section
                      8.12

                  	
                    Signs;
                      Publicity.

                  	
                    25

                  


          

           

           

          
            
              
              

            

            
              iii

              
                

              

            

            
              
              

            

          

           

           

          
            	
                    Section
                      8.13

                  	
                    Governing
                      Law.

                  	
                    25

                  
	
                    Section
                      8.14

                  	
                    Time
                      of Essence.

                  	
                    25

                  
	
                    Section
                      8.15

                  	
                    Electronic
                      Transmission of Data.

                  	
                    25

                  
	
                    Section
                      8.16

                  	
                    Dispute
                      Resolution.

                  	
                    25

                  
	
                    Section
                      8.17

                  	
                    Forum.

                  	
                    27

                  
	
                    Section
                      8.18

                  	
                    WAIVER
                      OF JURY TRIAL.

                  	
                    27

                  
	
                    Section
                      8.19

                  	
                    USA
                      Patriot Act Notice.

                  	
                    27

                  
	
                    Section
                      8.20

                  	
                    Entire
                      Agreement.

                  	
                    28

                  


          

          
             

             

             

            
              
                
                

              

              
                iv

                
                  

                

              

              
                
                

              

            

             

             

          

          
            	
                     

                  	
                    Schedules
                      to Construction Loan Agreement

                  
	
                     

                    Schedule
                      1

                  	
                    Definitions

                  
	
                     

                    Schedule
                      2

                  	
                    Form
                      of Draw Request

                  
	
                     

                    Schedule
                      3

                  	
                    Budget

                  
	
                     

                    Schedule
                      4

                  	
                    Project
                      Schedule

                  
	
                     

                    Schedule
                      5

                  	
                    Additional
                      Terms Regarding Advances

                  
	
                     

                    Schedule
                      6

                  	
                    Leasing
                      and Tenant Matters

                  


          

          


           

          
            
              
              

            

            
              v

              
                

              

            

            
              
              

            

          



          Construction
            Loan Agreement

           

          This
            Construction Loan Agreement (this “Agreement”) is made as of the 12th day of
            December, 2005, by and between ASF of Green Hills, LLC, a Tennessee non-profit
            limited liability company (“Borrower”), and American Retirement Corporation, a
            Tennessee corporation, its successors and assigns (collectively, the
            “Lender”).

           

          Recitals

           

          Borrower
            has applied to Lender for a loan to finance certain costs related to
            the
            construction and development of improvements on real property in which
            Borrower
            has acquired or is acquiring an interest from Lender. Lender has agreed
            to make
            the portion of the loan evidenced by the Senior Note from the proceeds
            of a
            second loan being obtained by Lender from Bank of America, N.A. (the
            "Bank of
            America Loan"). This loan will be made and disbursed on the terms and
            conditions
            set forth in this Agreement and in the other documents evidencing and
            securing
            the loan, and will be pledged by Lender as collateral for the Bank of
            America
            Loan.

           

          Now,
            therefore, in consideration of the premises, and in further consideration
            of the
            mutual covenants and agreements herein set forth and of the sum of Ten
            Dollars
            ($10.00) paid by each party to the other, receipt of which is hereby
            acknowledged, the parties covenant and agree as follows:

           

          Agreements

           

          Article
            I

          General
            Information.

           

          Section
            1.1  Conditions
            to Closing.

           

          The
            conditions precedent to closing the Loan and recording the Mortgage are
            set
            forth in the Closing Checklist.

           

          Section
            1.2  Schedules.

           

          The
            Schedules attached to this Agreement are incorporated herein and made
            a part
            hereof.

           

          Section
            1.3  Defined
            Terms.

           

          Capitalized
            terms in this Agreement shall have the meanings ascribed to such terms
            in the
            Preamble hereto and in Schedule 1.

           

           

          Article
            II

          Advances
            of the Loan.

           

          Section
            2.1  The
            Loan.

           

          Borrower
            agrees to borrow the Loan from Lender, and Lender agrees to lend the
            Loan to
            Borrower, subject to the terms and conditions herein set forth, in incremental
            advances which will not exceed, in the aggregate, the Loan Amount. Interest
            shall accrue and be payable in arrears only on sums advanced hereunder
            for the
            period of time outstanding. The Loan is not a revolving loan; amounts
            repaid may
            not be re-borrowed.

           

           

          
            
              
              

            

            
              PAGE
                1

              
                

              

            

            
              
              

            

          

           

           

          Section
            2.2  Purpose;
            Reallocation; Revenues from Property.

           

          The
            Loan
            shall be advanced by Lender in accordance with the terms of this Agreement
            to
            pay those expenses related to the Loan and the Property that are described
            in
            the Budget, but not, in the aggregate with respect to any line item set
            forth in
            the Budget, in excess of the amount of the Loan to be disbursed for such
            line
            item, as set forth in the Budget. Borrower will receive each advance
            in trust
            for the purpose of paying only those costs for which the advance is made
            and
            will utilize the funds advanced for no other purpose. With the prior
            approval of
            Lender, any cost savings, actual or estimated, affecting any approved
            line item
            within the Budget, other than the interest reserve, may be reallocated
            by
            Borrower to any other line item within the Budget. Upon completion of
            the
            Improvements and the payment of all costs in connection therewith, any
            undisbursed proceeds of the Loan shall be allocated to the interest reserve
            or
            to such other line item as Lender shall approve. Each disbursement from
            a
            contingency reserve shall be subject to approval by Lender as to the
            amount and
            purpose for which such disbursement will be used. If and when Available
            Revenues
            are sufficient to pay all or any portion of the interest on the Loan,
            Borrower
            shall apply the same to pay such interest in the order hereinafter set
            forth,
            and Lender, at its sole option, may restrict or prohibit future disbursements
            of
            the Loan for such purposes to the extent that Available Revenues are
            sufficient
            to pay such amounts. Subject to any applicable limitations set forth
            in the
            Note, Borrower shall apply Available Revenues to pay the following items
            in the
            following order: (a) Current Interest accrued in respect of the indebtedness
            evidenced by the Senior Note at the Base Rate, (b) Accumulated Interest
            accrued
            in respect of the indebtedness evidenced by the Senior Note at the Base
            Rate,
            (c) at Borrower's election, Restricted Payments permitted by Section
            5.9(c)
            of this
            Agreement, (d) Current Interest accrued in respect of the indebtedness
            evidenced
            by the Senior Note at the Spread Rate, (e) Current Interest accrued in
            respect of the indebtedness evidenced by the Subordinated Note, (f) at
            Borrower's election, Restricted Payments permitted by Section
            5.9(d)
            of this
            Agreement, (g) Accumulated
            Interest accrued in respect of the indebtedness evidenced by the Senior
            Note at
            the Spread Rate, and (h) Accumulated
            Interest accrued in respect of the indebtedness evidenced by the Subordinated
            Note.

           

          Section
            2.3  Draw
            Requests.

           

          Advances
            shall be made not more frequently than monthly based on draw requests
            signed by
            an Authorized Signers in the form attached hereto as Schedule 2
            and
            submitted to Bank of America, N.A. for funding to Lender's disbursement
            account.
            Each draw request for hard costs shall be set forth on AIA Forms G702
            and G703,
            and shall be reviewed by the Construction Consultant, signed by the General
            Contractor and, if requested by Lender, approved by the Architect. Draw
            requests
            for hard costs shall show the percentage of completion of construction
            and shall
            set forth in trade breakdown form and in such detail as may be required
            by
            Lender the amounts expended and/or costs incurred for work done and materials
            incorporated in the Improvements. Retainage will be withheld and released
            in
            accordance with the terms of Schedule 5.
            Each
            draw request shall be supported by such information and documentation
            (such as
            paid receipts, invoices, statements of accounts, lien releases, etc.)
            as Lender
            may require to assure that amounts requested are to be used to reimburse
            Borrower for costs previously paid by Borrower or to pay costs incurred
            by
            Borrower that are to be paid from proceeds of the Loan, as set forth
            in the
            Budget. Unless reasonably requested by Lender in any instance, Borrower
            will not
            be required to provide any individual invoice for an amount less than
            or equal
            to $5,000.00 in support of a draw request; provided, Borrower shall provide
            or
            cause to be provided with each draw request a complete listing of all
            payees and
            the amounts requested for payment by each.

           

          Section
            2.4  Additional
            Terms Regarding Advances.

           

          Advances
            of the Loan shall also be subject to the terms and conditions set forth
            in
Schedule 5.

           

          Section
            2.5  Liability
            of Lender.

           

          Lender
            shall in no event be responsible or liable to any Person other than Borrower
            for
            the disbursement of or failure to disburse the Loan proceeds or any part
            thereof
            and neither the General Contractor, Construction Consultant nor any
            subcontractor, laborer or material supplier shall have any right or claim
            against Lender under this Agreement or the other Loan Documents.

           

           

          
            
              
              

            

            
              PAGE
                2

              
                

              

            

            
              
              

            

          

           

           

          Article
            III

          Representations
            and Warranties.

           

          Borrower
            represents and warrants to Lender that:

           

          Section
            3.1  Organization,
            Power and Authority of Borrower; Loan Documents.

           

          Borrower
            (a) is a non-profit limited liability company duly organized, existing
            and in
            good standing under the laws of the state in which it is organized and
            is duly
            qualified to do business and in good standing in the state in which the
            Land is
            located (if different from the state of its formation) and in any other
            state
            where the nature of Borrower’s business or property requires it to be qualified
            to do business, (b) has the power, authority and legal right to own its
            property
            and carry on the business now being conducted by it and to engage in
            the
            transactions contemplated by the Loan Documents, and (c) is wholly owned
            by
            American Seniors Foundation, Inc., an Ohio non-profit corporation. The
            Loan
            Documents to which Borrower is a party have been duly executed and delivered
            by
            Borrower, and the execution and delivery of, and the carrying out of
            the
            transactions contemplated by, such Loan Documents, and the performance
            and
            observance of the terms and conditions thereof, have been duly authorized
            by all
            necessary organizational action by and on behalf of Borrower. The Loan
            Documents
            to which Borrower is a party constitute the valid and legally binding
            obligations of Borrower and are fully enforceable against Borrower in
            accordance
            with their respective terms, except to the extent that such enforceability
            may
            be limited by laws generally affecting the enforcement of creditors’
rights.

           

          Section
            3.2  Other
            Documents; Laws.

           

          The
            execution and performance of the Loan Documents to which Borrower is
            a party and
            the consummation of the transactions contemplated thereby will not conflict
            with, result in any breach of, or constitute a default under, the organizational
            documents of Borrower, or any contract, agreement, document or other
            instrument
            to which Borrower is a party or by which Borrower or any of its properties
            may
            be bound or affected, and such actions do not and will not violate or
            contravene
            any Law to which Borrower is subject.

           

          Section
            3.3  Taxes.

           

          Borrower
            has filed all federal, state, county and municipal Tax returns required
            to have
            been filed by Borrower and has paid all Taxes which have become due pursuant
            to
            such returns or pursuant to any Tax assessments received by
            Borrower.

           

          Section
            3.4  Legal
            Actions.

           

          There
            are
            no Claims or investigations by or before any court or Governmental Authority,
            pending, or to the best of Borrower’s knowledge and belief, threatened against
            or affecting Borrower, Borrower’s business or the Property. Borrower is not in
            default with respect to any order, writ, injunction, decree or demand
            of any
            court or any Governmental Authority affecting Borrower or the
            Property.

           

          Section
            3.5  Nature
            of Loan.

           

          Borrower
            is a business or commercial organization. The Loan is being obtained
            solely for
            business or investment purposes, and will not be used for personal, family,
            household or agricultural purposes.

           

          Section
            3.6  Trade
            Names.

           

          Borrower
            conducts its business solely under the name set forth in the Preamble
            to this
            Agreement and makes use of no trade names in connection therewith, unless
            such
            trade names have been previously disclosed to Lender in writing.

           

           

          
            
              
              

            

            
              PAGE
                3

              
                

              

            

            
              
              

            

          

           

           

          Section
            3.7  Financial
            Statements.

           

          The
            financial statements heretofore delivered by Borrower and each Guarantor
            to
            Lender and Bank of America, N.A. are true and correct in all respects,
            have been
            prepared in accordance with sound accounting principles consistently
            applied,
            and fairly present the respective financial conditions of the subjects
            thereof
            as of the respective dates thereof.

           

          Section
            3.8  ERISA
            and Prohibited Transactions.

           

          As
            of the
            date hereof and throughout the term of the Loan: (a) Borrower is not and
            will not be (i) an “employee benefit plan,” as defined in Section 3(3) of
            ERISA, (ii) a “governmental plan” within the meaning of Section 3(32) of
            ERISA, or (iii) a “plan” within the meaning of Section 4975(e) of the Code;
            (b) the assets of Borrower do not and will not constitute “plan assets”
within the meaning of the United States Department of Labor Regulations
            set
            forth in Section 2510.3-101 of Title 29 of the Code of Federal Regulations;
            (c) transactions by or with Borrower are not and will not be subject to
            state statutes applicable to Borrower regulating investments of fiduciaries
            with
            respect to governmental plans; and (d) Borrower will not engage in any
            transaction that would cause any Obligation or any action taken or to
            be taken
            hereunder (or the exercise by Lender of any of its rights under the Mortgage
            or
            any of the other Loan Documents) to be a non-exempt (under a statutory
            or
            administrative class exemption) prohibited transaction under ERISA or
            Section
            4975 of the Code. Borrower agrees to deliver to Lender such certifications
            or
            other evidence of compliance with the provisions of this Section as Lender
            may
            from time to time request.

           

          Section
            3.9  Compliance
            with Zoning and Other Requirements.

           

          The
            anticipated use of the Property complies with applicable zoning ordinances,
            regulations and restrictive covenants affecting the Land. All use and
            other
            requirements of any Governmental Authority having jurisdiction over the
            Property
            have been satisfied. No violation of any Law exists with respect to the
            Property.

           

          Section
            3.10  Plans
            and Specifications.

           

          The
            Plans
            and Specifications are complete and adequate for the Construction of
            the
            Improvements. The Plans and Specifications have been approved by all
            Governmental Authorities having or claiming jurisdiction over the Property
            and
            by the beneficiary of each restrictive covenant affecting the Property
            whose
            approval is required. The Plans and Specifications have also been approved
            by
            any tenant and by any prospective purchaser of the Property or provider
            of
            permanent financing for the Property whose approval is required. To the
            best of
            Borrower’s knowledge, the Improvements, if constructed substantially in
            accordance with the Plans and Specifications, will fully comply with
            all
            applicable Laws, including those Laws relating to access and facilities
            for
            disabled persons.

           

          Section
            3.11  Building
            Permits; Other Permits.

           

          All
            building, construction and other permits necessary or required in connection
            with the Construction of the Improvements have been validly issued or
            will be
            issued in a timely manner by a date sufficient to ensure commencement
            of
            construction and Completion of Construction in accordance with the Project
            Schedule. All required fees have been paid and bonds and/or other security
            have
            been posted in connection with all permits that have been issued, and
            adequate
            amounts are included in the Budget to pay all fees and the cost of all
            bonds and
            other security in connection with permits to be issued in the future.
            Following
            the issuance thereof, all permits will remain in full force and
            effect.

           

          Section
            3.12  Utilities.

           

          All
            utility services necessary for the Construction of the Improvements and
            the
            operation thereof for their intended purposes are available at the boundaries
            of
            the Land (or will be available upon the completion of work shown in the
            Plans
            and Specifications), including telephone service, cable television, water
            supply, storm and sanitary sewer facilities, natural gas and electric
            facilities, including cabling for telephonic and data communication,
            and the
            capacity to send and receive wireless communication.

           

           

          
            
              
              

            

            
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                4

              
                

              

            

            
              
              

            

          

           

           

          Section
            3.13  Access;
            Roads.

           

          All
            roads
            and other accesses necessary for the Construction of the Improvements
            and full
            utilization thereof for their intended purposes have either been completed
            or
            the necessary rights of way therefor have either been acquired by the
            appropriate Governmental Authority, or have been dedicated to public
            use and
            accepted by such Governmental Authority and all necessary steps have
            been taken
            by Borrower or such Governmental Authority to assure the complete construction
            and installation thereof by a date sufficient to ensure the Completion
            of
            Construction of the Improvements in accordance with the Project
            Schedule.

           

          Section
            3.14  Other
            Liens.

           

          Except
            for
            contracts for labor, materials and services furnished or to be furnished
            in
            connection with the Construction of the Improvements, Borrower has made
            no
            contract or arrangement of any kind the performance of which by the other
            party
            thereto would give rise to a lien on the Property.

           

          Section
            3.15  No
            Work
            Commenced.

           

          Prior
            to
            the recordation of the Mortgage, except as disclosed to Lender in writing,
            no
            work of any kind (including destruction or removal of any existing improvements,
            site work, clearing, grading, grubbing, draining or fencing of the Land)
            has
            been or will be commenced or performed on the Land, no equipment or material
            has
            been or will be delivered to or placed upon the Land for any purpose
            whatsoever,
            and no contract (or memorandum or affidavit thereof) for the supplying
            of labor,
            materials, or services for the design or construction of the Improvements,
            or
            the surveying of the Land or Improvements, has been entered into which
            could
            cause a mechanic’s or materialman’s lien or similar lien to achieve priority
            over the Mortgage or the rights of Lender thereunder.

           

          Section
            3.16 No
            Material Adverse Change.

           

          No
            material adverse change has occurred in the financial conditions reflected
            in
            the financial statements of Borrower or any Guarantor since the respective
            dates
            of such statements, and no material additional liabilities have been
            incurred by
            Borrower since the dates of such statements other than the borrowings
            contemplated herein or as approved in writing by Lender.

           

          Section
            3.17 Defaults.

           

          There
            is
            no Default or Event of Default under any of the Loan Documents, and there
            is no
            default or event of default under any material contract, agreement or
            other
            document related to the Construction of the Improvements or the operation
            thereof.

           

          Section
            3.18 Affirmation
            of Representations and Warranties.

           

          Each
            draw
            request and each receipt of the funds requested thereby shall constitute
            an
            affirmation that (a) the foregoing representations and warranties of
            Borrower
            are true and correct as of the date of the draw request and, unless Lender
            is
            notified to the contrary prior to the disbursement of the advance requested,
            will be so on the date of the disbursement, (b) the work completed to
            the date
            of the draw request is of quality and in all other respects consistent
            with the
            Plans and Specifications, and (c) if applicable, Construction of the
            Improvements is proceeding in accordance with the Project Schedule.

           

           

          
            
              
              

            

            
              PAGE
                5

              
                

              

            

            
              
              

            

          

           

           

          Article
            IV

          Affirmative
            Covenants and Agreements.

           

          Section
            4.1  Commencement
            and Completion of Construction.

           

          Borrower
            shall cause the Construction of the Improvements to be commenced and
            prosecuted
            in a good and workmanlike manner and shall cause the same to be completed
            in
            accordance with the Project Schedule and substantially in accordance
            with the
            Plans and Specifications.

           

          Section
            4.2  Approval
            of Construction.

           

          No
            work
            associated with the Construction of the Improvements shall be commenced
            by
            Borrower unless and until the Plans and Specifications have been approved
            by
            Lender, by all Governmental Authorities having or claiming jurisdiction
            over the
            Land and Improvements, by the beneficiary of any applicable restrictive
            covenant
            whose approval is required, and by any other party whose approval is
            required
            under applicable agreements, and unless and until all building, construction
            and
            other permits necessary or required in connection with the Construction
            of the
            Improvements have been validly issued and all fees, bonds and any other
            security
            required in connection therewith have been paid or posted.

           

          Section
            4.3  Deposits
            to Balance Loan.

           

          If
            at any
            time Lender shall determine that (a) the proceeds of the Loan remaining
            to be
            advanced for any line item within the Budget, together with any anticipated
            Deferred Equity that Lender determines to its satisfaction is or will
            be
            available for such item, are not or will not be sufficient to pay, in
            a timely
            manner, the amount of such line item remaining to be paid, and (b) the
            deficiency cannot be remedied by a reallocation of budgeted amounts pursuant
            to
Section
            2.2,
            then
            Borrower shall deposit with Lender, within ten (10) days from the effective
            date
            of a Notice from Lender requesting such deposit, funds in an amount equal
            to the
            deficiency. Such funds shall be held by Lender in a Borrower’s Deposit Account,
            which shall be an interest-bearing account at Bank of America, N.A.,
            with all
            accrued interest to become part of Borrower’s deposit. Borrower agrees that it
            shall include all interest and earnings on any such deposit as its income
            (and,
            if Borrower is a partnership or other pass-through entity, the income
            of its
            partners, members or beneficiaries, as the case may be), and shall be
            the owner
            of all funds on deposit in the Borrower’s Deposit Account for federal and
            applicable state and local tax purposes. Lender shall have the exclusive
            right
            to manage and control all funds in the Borrower’s Deposit Account, but Lender
            shall have no fiduciary duty with respect to such funds. Advances of
            the
            deposited funds will be made from time to time for the payment of deficient
            line
            item amounts, prior to the advance of proceeds of the Loan for such amounts.
            Advances of the deposited funds will be subject to the terms of this
            Agreement
            regarding advances of the Loan. Any account fees and charges may be deducted
            from the balance, if any, in the Borrower’s Deposit Account. Borrower grants to
            Lender a security interest in the Borrower’s Deposit Account and all such
            deposited funds hereafter deposited to such deposit account, and any
            proceeds
            thereof, as security for the Obligations. Such security interest shall
            be
            governed by the Uniform Commercial Code of the State, and Lender shall
            have
            available to it all of the rights and remedies available to a secured
            party
            thereunder. The Borrower’s Deposit Account may be established and held in such
            name or names as Lender shall deem appropriate, including in the name
            of Lender.
            Borrower hereby constitutes and appoints Lender and any officer or agent
            of
            Lender (including Bank of America, N.A. and its officers as agents and
            attorneys-in-fact for Lender so long as the Bank of America Loan is outstanding)
            its true and lawful attorneys-in-fact with full power of substitution
            to open
            the Borrower’s Deposit Account and to do any and every act that Borrower might
            do on its own behalf to fulfill the terms of this Section
            4.3.
            To the
            extent permitted by Law, Borrower hereby ratifies all that said attorneys
            shall
            lawfully do or cause to be done by virtue hereof. It is understood and
            agreed
            that this power of attorney, which shall be deemed to be a power coupled
            with an
            interest, cannot be revoked.

           

           

          
            
              
              

            

            
              PAGE
                6

              
                

              

            

            
              
              

            

          

           

           

          Section
            4.4  Compliance
            with Laws; Encroachments.

           

          The
            Improvements shall be constructed in accordance with all applicable (whether
            present or future) Laws. The Improvements shall be constructed entirely
            on the
            Land and shall not encroach upon any easement or right-of-way, or upon
            the land
            of others. Construction of the Improvements shall occur wholly within
            all
            applicable building restriction lines and set-backs, however established,
            and
            shall be in strict compliance with all applicable use or other restrictions
            and
            the provisions of any prior agreements, declarations, covenants and all
            applicable zoning and subdivision ordinances and regulations.

           

          Section
            4.5  Inspections;
            Cooperation.

           

          Borrower
            shall permit representatives of Lender, Bank of America, N.A., and the
            Construction Consultant to enter upon the Land, to inspect the Improvements
            and
            any and all materials to be used in connection with the Construction
            of the
            Improvements, to examine all detailed plans and shop drawings and similar
            materials as well as all records and books of account maintained by or
            on behalf
            of Borrower relating thereto and to discuss the affairs, finances and
            accounts
            pertaining to the Loan and the Improvements with representatives of Borrower.
            Borrower shall at all times cooperate and cause the General Contractor
            and each
            and every one of its subcontractors and material suppliers to cooperate
            with the
            representatives of Lender and the Construction Consultant in connection
            with or
            in aid of the performance of Lender’s functions under this Agreement. Except in
            the event of an emergency, Lender and/or Bank of America, N.A. shall
            give
            Borrower at least twenty-four hours’ notice by telephone in each instance before
            entering upon the Land and/or exercising any other rights granted in
            this
            Section.

           

          Section
            4.6  Contracts,
            Vouchers and Receipts.

           

          Borrower
            shall furnish to Lender and Bank of America, N.A., promptly on demand,
            any
            contracts, subcontracts, bills of sale, statements, receipted vouchers
            or other
            agreements relating to the Construction of the Improvements, including
            any such
            items pursuant to which Borrower has any claim of title to any materials,
            fixtures or other articles delivered or to be delivered to the Land or
            incorporated or to be incorporated into the Improvements. Borrower shall
            furnish
            to Lender and Bank of America, N.A., promptly on demand, a verified written
            statement, in such form and detail as Lender may require, setting forth
            the
            names and addresses of all contractors, subcontractors and suppliers
            furnishing
            labor or materials in the Construction of the Improvements and showing
            all
            amounts paid for labor and materials and all items of labor and materials
            furnished or to be furnished for which payment has not been made and
            the amounts
            to be paid therefor.

           

          Section
            4.7  Payment
            and Performance of Contractual Obligations.

           

          Borrower
            shall perform in a timely manner all of its obligations under the Architect’s
            Contract, the Construction Contract and any and all other contracts and
            agreements related to the Construction of the Improvements or the operation
            thereof, and Borrower will pay when due all bills for services or labor
            performed and materials supplied in connection with the Construction
            of the
            Improvements. Within thirty (30) days after the filing of any mechanic’s lien or
            other lien or encumbrance against the Property, Borrower will promptly
            discharge
            the same by payment or filing a bond or otherwise as permitted by Law.
            So long
            as Lender’s security has been protected by the filing of a bond or otherwise in
            a manner satisfactory to Lender in its sole and absolute discretion,
            Borrower
            shall have the right to contest in good faith any claim, lien or encumbrance,
            provided that Borrower does so diligently and without prejudice to Lender
            or
            delay in completing Construction of the Improvements.

           

          Section
            4.8  Correction
            of Construction Defects.

           

          Promptly
            following any demand by Lender, Borrower shall correct or cause the correction
            of any structural defects in the Improvements, any work that fails to
            comply
            with the requirements of Section
            4.4
            and any
            material departures or deviations from the Plans and Specifications not
            approved
            in writing by Lender.

           

           

          
            
              
              

            

            
              PAGE
                7

              
                

              

            

            
              
              

            

          

           

           

          Section
            4.9  Insurance.

           

          Borrower
            shall maintain the following insurance at its sole cost and
            expense:

           

           

          (a)  Insurance
            against Casualty to the Property under a policy or policies covering
            such risks
            as are presently included in “special form” (also known as “all risk”) coverage,
            including such risks as are ordinarily insured against by similar businesses,
            but in any event including fire, lightning, windstorm, hail, explosion,
            riot,
            riot attending a strike, civil commotion, damage from aircraft, smoke,
            vandalism, malicious mischief and acts of terrorism. Such insurance shall
            name
            both Lender and Bank of America, N.A. as mortgagees and loss payees.
            Unless
            otherwise agreed in writing by Lender, such insurance shall be for the
            full
            insurable value of the Property, with a deductible amount, if any, satisfactory
            to Lender. No policy of insurance shall be written such that the proceeds
            thereof will produce less than the minimum coverage required by this
            Section by
            reason of co-insurance provisions or otherwise. The term “full insurable value”
means one hundred percent (100%) of the actual replacement cost of the
            Property
            (excluding foundation and excavation costs and costs of underground flues,
            pipes, drains and other uninsurable items).

           

           

          (b)  Comprehensive
            (also known as commercial) general liability insurance on an “occurrence” basis
            against claims for “personal injury” liability and liability for death, bodily
            injury and damage to property, products and completed operations, in
            limits
            satisfactory to Lender with respect to any one occurrence and the aggregate
            of
            all occurrences during any given annual policy period. Such insurance
            shall name
            Lender and Bank of America, N.A. as an additional insured.

           

           

          (c)  Workers’
            compensation insurance for all employees of Borrower in such amount as
            is
            required by Law and including employer’s liability insurance, if required by
            Lender.

           

           

          (d)  During
            any
            period of construction upon the Property, Borrower shall maintain, or
            cause
            others to maintain, builder’s risk insurance (non-reporting form) of the type
            customarily carried in the case of similar construction for one hundred
            percent
            (100%) of the full replacement cost of work in place and materials stored
            at or
            upon the Property.

           

           

          (e)  If
            at any
            time any portion of any structure on the Property is insurable against
            Casualty
            by flood and is located in a Special Flood Hazard Area under the Flood
            Disaster
            Protection Act of 1973, as amended, a flood insurance policy in form
            and amount
            acceptable to Lender but in no amount less than the amount sufficient
            to meet
            the requirements of applicable Law as such requirements may from time
            to time be
            in effect.

           

           

          (f)  Loss
            of
            rental value insurance or business interruption insurance in an amount
            acceptable to Lender.

           

           

          (g)  Such
            other
            and further insurance as may be required from time to time by Lender
            and/or Bank
            of America, N.A. in order to comply with regular requirements and practices
            of
            Lender and/or Bank of America, N.A. in similar transactions including,
            if
            required, wind insurance and earthquake insurance, so long as any such
            insurance
            is generally available at commercially reasonable premiums as determined
            by
            Lender and/or Bank of America, N.A. from time to time.

           

           

          In
            addition to the foregoing, Borrower shall cause the General Contractor
            to
            provide and maintain comprehensive (commercial) general liability insurance
            and
            workers’ compensation insurance for all employees of the General Contractor
            meeting, respectively, the requirements of Subsections
            (b) and (c),
            above.

           

           

          
            
              
              

            

            
              PAGE
                8

              
                

              

            

            
              
              

            

          

           

           

          Each
            policy of insurance (i) shall be issued by one or more insurance companies
            each
            of which must have an A.M. Best Company financial and performance rating
            of A-IX
            or better and are qualified or authorized by the Laws of the State to
            assume the
            risks covered by such policy, (ii) with respect to the insurance described
            under
            the preceding Subsections
            (a), (d), (e) and (f),
            shall
            have attached thereto standard non-contributing, non-reporting mortgagee
            clauses
            in favor of and entitling Lender without contribution to collect any
            and all
            proceeds payable under such insurance, either as sole payee or as joint
            payee
            with Borrower, (iii) shall provide that such policy shall not be canceled
            or
            modified without at least thirty (30) days prior written notice to Lender,
            and
            (iv) shall provide that any loss otherwise payable thereunder shall be
            payable
            notwithstanding any act or negligence of Borrower which might, absent
            such
            agreement, result in a forfeiture of all or a part of such insurance
            payment.
            Borrower shall promptly pay all premiums when due on such insurance and,
            not
            less than thirty (30)
            days
            prior to
            the expiration dates of each such policy, Borrower will deliver to Lender
            acceptable evidence of insurance, such as a renewal policy or policies
            marked
“premium paid” or other evidence satisfactory to Lender reflecting that all
            required insurance is current and in force. Borrower will immediately
            give
            Notice to Lender and Bank of America, N.A. of any cancellation of, or
            change in,
            any insurance policy. Lender shall not, because of accepting, rejecting,
            approving or obtaining insurance, incur any liability for (A) the existence,
            nonexistence, form or legal sufficiency thereof, (B) the solvency of
            any
            insurer, or (C) the payment of losses. Borrower may satisfy any insurance
            requirement hereunder by providing one or more “blanket” insurance policies,
            subject to Lender’s approval in each instance as to limits, coverages, forms,
            deductibles, inception and expiration dates, and cancellation
            provisions.

           

          Section
            4.10  Adjustment
            of Condemnation and Insurance Claims.

           

           

          Borrower
            shall give prompt Notice to both Lender and Bank of America, N.A. of
            any
            Casualty or any Condemnation or threatened Condemnation. Lender, and/or
            Bank of
            America, N.A. so long as the Bank of America Loan is outstanding, is
            authorized,
            at their sole and absolute option, to commence, appear in and prosecute,
            in
            their own respective names or in Borrower’s name, any action or proceeding
            relating to any Condemnation or Casualty, and to make proof of loss for
            and to
            settle or compromise any Claim in connection therewith. In such case,
            Lender
            and/or Bank of America, N.A. shall have the right to receive all Condemnation
            Awards and Insurance Proceeds, and may deduct therefrom any or all of
            their
            respective Expenses. However, so long as no Event of Default has occurred
            and
            Borrower is diligently pursuing its rights and remedies with respect
            to a Claim,
            Lender will obtain Borrower’s written consent (which consent shall not be
            unreasonably withheld or delayed) before making proof of loss for or
            settling or
            compromising such Claim. Borrower agrees to diligently assert its rights
            and
            remedies with respect to each Claim and to promptly pursue the settlement
            and
            compromise of each Claim subject to Lender’s approval, which approval shall not
            be unreasonably withheld or delayed. If, prior to the receipt by Lender
            of any
            Condemnation Award or Insurance Proceeds, the Property shall have been
            sold
            pursuant to the provisions of the Mortgage, Lender shall have the right
            to
            receive such funds (a) to the extent of any deficiency found to be due
            upon such
            sale with interest thereon (whether or not a deficiency judgment on the
            Mortgage
            shall have been sought or recovered or denied), and (b) to the extent
            necessary
            to reimburse Lender for its Expenses. If any Condemnation Awards or Insurance
            Proceeds are paid to Borrower, Borrower shall receive the same in trust
            for
            Lender. Within ten (10) days after Borrower’s receipt of any Condemnation Awards
            or Insurance Proceeds, Borrower shall deliver such awards or proceeds
            to Lender
            in the form in which they were received, together with any endorsements
            or
            documents that may be necessary to effectively negotiate or transfer
            the same to
            Lender. Borrower agrees to execute and deliver from time to time, upon
            the
            request of Lender and/or Bank of America, N.A., such further instruments
            or
            documents as may be requested by either of them to confirm the grant
            and
            assignment of any Condemnation Awards or Insurance Proceeds.

           

          Section
            4.11  Utilization
            of Net Proceeds.

           

           

          (a)  Net
            Proceeds must be utilized either for payment of the Obligations or for
            the
            restoration of the Property. Net Proceeds may be utilized for the restoration
            of
            the Property only if no Default shall exist and only if in the reasonable
            judgment of Lender (i) there has been no material adverse change in the
            financial viability of the construction or operation of the Improvements,
            (ii)
            the Net Proceeds, together with other funds deposited with Lender and/or
            Bank of
            America, N.A. for that purpose, are sufficient to pay the cost of the
            restoration pursuant to a budget and plans and specifications approved
            by Lender
            and Bank of America, N.A., and (iii) the restoration can be completed prior
            to the maturity of the Senior Note. Otherwise, Net Proceeds shall be
            utilized
            for payment of the Obligations.

           

           

          
            
              
              

            

            
              PAGE
                9

              
                

              

            

            
              
              

            

          

           

           

          (b)  If
            Net
            Proceeds are to be utilized for the restoration of the Property, the
            Net
            Proceeds, together with any other funds deposited with Lender for that
            purpose,
            must be deposited in an interest-bearing account with Lender at Bank
            of America,
            N.A., which account will be assigned to Lender as additional security
            for the
            Loan (and reassigned by Lender to Bank of America, N.A. as additional
            security
            for its loan). The account will be opened, managed and controlled in
            a manner
            consistent with, and subject to, the provisions of Section
            4.3
            governing
            a Borrower’s Deposit Account, including those provisions permitting Lender to
            require Borrower to deposit funds in the event of a deficiency in the
            funds
            available to complete restoration as herein contemplated. Disbursements
            of funds
            from the account will be made in a manner consistent with, and subject
            to, the
            requirements for the closing and funding of the Loan and the terms of
            this
            Agreement regarding the disbursement of Loan proceeds.

           

          Section
            4.12  Management.

           

           

          Borrower
            at all times shall provide for the competent and responsible management
            and
            operation of the Property. Any management contract or contracts affecting
            the
            Property must be approved in writing by Lender prior to the execution
            of the
            same.

           

          Section
            4.13  Books
            and Records; Financial Statements.

           

           

          (a) Borrower
            will keep and maintain full and accurate books and records administered
            in
            accordance with sound accounting principles, consistently applied, showing
            in
            detail the earnings and expenses of the Property and the operation thereof.
            Borrower will keep and maintain its books and records, including recorded
            data
            of any kind and regardless of the medium of recording, at the address
            of
            Borrower set forth in Section
            8.6.
            Borrower
            shall permit Lender, or any Person authorized by Lender and specifically
            including officers and/or agents of Bank of America, N.A. so long as
            the Bank of
            America Loan is outstanding, to inspect and examine such books and records
            (regardless of where maintained) and all supporting vouchers and data
            and to
            make copies and extracts therefrom at all reasonable times and as often
            as may
            be requested by Lender. Borrower will furnish or cause to be furnished
            to Lender
            quarter-annual financial statements, including balance sheets, income
            statements, and cash flow statements for the Borrower, the Guarantor
            and the
            Property, within forty-five (45) days after each fiscal quarter-end for
            the
            respective reporting party, including the December 31 fiscal quarter
            end, and
            shall also furnish or cause to be furnished to Lender consolidated and
            consolidating annual financial statements including balance sheets, income
            statements, and cash flow statements for Guarantor and the Borrower within
            one
            hundred twenty (120) days after each fiscal year. In addition, Borrower
            will
            furnish or cause to be furnished to Lender, with reasonable promptness,
            such
            interim financial statements of Borrower, the Guarantor and the Property,
            together with such additional information, reports or statements in connection
            therewith, as Lender may from time to time request. All financial statements
            must be in form and detail acceptable to Lender and must be certified
            as to
            accuracy by Borrower or the respective Guarantor, as the case may be.
            The
            consolidated and consolidating year-end statements of the Guarantor and
            Borrower
            must be audited with an unqualified opinion by an independent certified
            public
            accountant satisfactory to Lender and Bank of America, N.A. Borrower
            shall
            provide, upon Lender’s request, convenient facilities for the audit and
            verification of any such statement. All certifications and signatures
            on behalf
            of corporations, partnerships, limited liability companies and other
            entities
            shall be by a representative of the reporting party satisfactory to Lender.
            

           

          (b) Contemporaneously
            with each quarter annual and fiscal year-end financial report required
            by the
            foregoing paragraph (a), a certificate of the president or chief manager
            of the
            Borrower stating that: (i) such officer has individually reviewed the
            provisions
            of this Agreement; (ii) a review of the activities of the Borrower during
            such
            year or quarter-annual period, as the case may be, has been made by such
            officer
            or under such officer’s supervision, with a view to determining whether the
            Borrower has fulfilled all its obligations under this Agreement; and
            (iii) to
            the best of such officer’s knowledge, the Borrower has observed and performed
            each undertaking contained in this Agreement and is not in default in
            the
            observance or performance of any of the provisions hereof or, if the
            Borrower
            shall be so in default, specifying all such defaults and events of which
            such
            officer may have knowledge. Such certificate shall further set forth
            the
            calculations of the financial ratios and covenants set forth in Section
            5.8,
            including without limitation any antecedent calculations and the source
            of any
            information that was used in such calculations.

           

           

          
            
              
              

            

            
              PAGE
                10

              
                

              

            

            
              
              

            

          

           

           

          Section
            4.14  Estoppel
            Certificates.

           

           

          Within
            ten
            (10) days after any request by Lender or a proposed assignee or purchaser
            of the
            Loan or any interest therein, Borrower shall certify in writing to Lender,
            or to
            such proposed assignee or purchaser, the then unpaid balance of the Loan
            and
            whether Borrower claims any right of defense or setoff to the payment
            or
            performance of any of the Obligations, and if Borrower claims any such
            right of
            defense or setoff, Borrower shall give a detailed written description
            of such
            claimed right.

           

          Section
            4.15  Taxes.

           

           

          Borrower
            shall pay and discharge all Taxes prior to the date on which penalties
            are
            attached thereto unless and to the extent only that such Taxes are contested
            in
            accordance with the terms of the Mortgage.

           

          Section
            4.16  Lender’s
            Rights to Pay and Perform.

           

           

          If,
            after
            any required notice, Borrower fails to promptly pay or perform any of
            the
            Obligations within any applicable grace or cure periods, Lender, without
            Notice
            to or demand upon Borrower, and without waiving or releasing any Obligation
            or
            Default, may (but shall be under no obligation to) at any time thereafter
            make
            such payment or perform such act for the account and at the expense of
            Borrower.
            Lender may enter upon the Property for that purpose and take all action
            thereon
            as Lender considers necessary or appropriate. At the option of Lender,
            following
            the occurrence of an Event of Default, Lender may apply any undisbursed
            Loan
            proceeds to the satisfaction of the conditions of the Loan Documents,
            irrespective of the allocation of such Loan proceeds in the Budget. Without
            limiting the generality of the foregoing, Lender may pay directly from
            the
            proceeds of the Loan all interest bills rendered by Lender in connection
            with
            the Loan, and following the occurrence of an Event of Default may make
            advances
            directly to the General Contractor, the title insurance company, any
            subcontractor or material supplier, or to any of them jointly. The execution
            hereof by Borrower shall, and hereby does, constitute an irrevocable
            authorization so to advance the proceeds of the Loan. No further direction
            or
            authorization from Borrower shall be necessary to warrant such direct
            advances.
            Each advance shall be secured by the Mortgage and shall satisfy the obligations
            of Lender hereunder to the extent of the amount of the advance. All of
            the
            foregoing provisions in favor of Lender shall also apply to Bank of America,
            N.A. or any other holder form time to time of the Bank of America Loan
            so long
            as the Bank of America Loan is outstanding.

           

          Section
            4.17  Reimbursement;
            Interest.

           

           

          If
            Lender
            or Bank of America, N.A. on Lender's behalf shall incur any Expenses
            or pay any
            Claims by reason of the Loan or the rights and remedies provided under
            the Loan
            Documents (regardless of whether or not any of the Loan Documents expressly
            provide for an indemnification by Borrower against such Claims), the
            payment of
            such Expenses and Claims shall constitute advances to Borrower which
            shall be
            paid by Borrower to Lender on demand, together with interest thereon
            from the
            date incurred until paid in full at the rate of interest then applicable
            to the
            Loan under the terms of the Note. Each advance shall be secured by the
            Mortgage
            and the other Loan Documents as fully as if made to Borrower, regardless
            of the
            disposition thereof by the party or parties to whom such advance is made.
            Notwithstanding the foregoing, however, in any action or proceeding to
            foreclose
            the Mortgage or to recover or collect the Obligations, the provisions
            of Law
            governing the recovery of costs, disbursements and allowances shall prevail
            unaffected by this Section.

           

           

          
            
              
              

            

            
              PAGE
                11

              
                

              

            

            
              
              

            

          

           

           

          Section
            4.18  Notification
            by Borrower.

           

           

          Borrower
            will promptly give Notice to Lender (and also to Bank of America, N.A.
            so long
            as the Bank of America Loan is outstanding) of the occurrence of any
            Default or
            Event of Default hereunder or under any of the other Loan Documents.
            Borrower
            will also promptly give Notice to Lender (and also to Bank of America,
            N.A. so
            long as the Bank of America Loan is outstanding) of any claim of a default
            by
            Borrower, or any claim by Borrower of a default by any other party, under
            the
            Architect’s Contract, the Construction Contract or any Lease.

           

          Section
            4.19  Indemnification
            by Borrower.

           

          Borrower
            agrees to indemnify Lender and to hold Lender harmless from and against,
            and to
            defend Lender by counsel approved by Lender against, any and all Claims
            directly
            or indirectly arising out of or resulting from any transaction, act,
            omission,
            event or circumstance in any way connected with the Property or the Loan,
            including any Claim arising out of or resulting from (a) Construction
            of the
            Improvements, including any defective workmanship or materials; (b) any
            failure
            by Borrower to comply with the requirements of any Laws or to comply
            with any
            agreement that applies or pertains to the Property, including any agreement
            with
            a broker or “finder” in connection with the Loan or other financing of the
            Property; (c) any failure by Borrower to observe and perform any of the
            obligations imposed upon the landlord under the Leases; (d) any other
            Default or
            Event of Default hereunder or under any of the other Loan Documents;
            or (e) any
            assertion or allegation that Lender is liable for any act or omission
            of
            Borrower or any other Person in connection with the ownership, development,
            financing, leasing, operation or sale of the Property; provided, however,
            that
            Borrower shall not be obligated to indemnify Lender with respect to any
            Claim
            arising solely from the gross negligence or willful misconduct of Lender.
            The
            agreements and indemnifications contained in this Section shall apply
            to Claims
            arising both before and after the repayment of the Loan and shall survive
            the
            repayment of the Loan, any foreclosure or deed, assignment or conveyance
            in lieu
            thereof and any other action by Lender to enforce the rights and remedies
            of
            Lender hereunder or under the other Loan Documents.

           

          Section
            4.20  Fees
            and Expenses.

           

           

          Borrower
            shall pay all fees, charges, costs and expenses required to satisfy the
            conditions of the Loan Documents. Without limitation of the foregoing,
            Borrower
            will pay, when due, and if paid by Lender will reimburse Lender on demand
            for,
            all fees and expenses of the Construction Consultant, the title insurer,
            environmental engineers, appraisers, surveyors and Lender’s counsel in
            connection with the closing, administration, modification or any “workout” of
            the Loan, or the enforcement of Lender’s rights and remedies under any of the
            Loan Documents.

           

          Section
            4.21  Appraisals.

           

           

          Lender
            may
            obtain from time to time an appraisal of all or any part of the Property,
            prepared in accordance with written instructions from Lender, from a
            third-party
            appraiser satisfactory to, and engaged directly by, Lender and/or Bank
            of
            America, N.A.. The cost of one such appraisal obtained by Lender in each
            calendar year and the cost of each such appraisal obtained by Lender
            following
            the occurrence of an Event of Default shall by borne by Borrower and
            shall be
            paid by Borrower on demand. Notwithstanding anything to the contrary
            contained
            in this Section 4.21, Lender shall not require an appraisal unless required
            by
            Bank of America, N.A.

           

          Section
            4.22  Leasing
            and Tenant Matters.

           

           

          Borrower
            shall comply with the terms and conditions of Schedule 6
            in
            connection with the leasing of space within the Improvements.

           

           

          
            
              
              

            

            
              PAGE
                12

              
                

              

            

            
              
              

            

          

           

           

          Section
            4.23  Principal
            Depository.

           

           

          Borrower
            shall maintain Bank of America, N.A. as its principal depository bank,
            including
            for the maintenance of business, cash management, operating and administrative
            deposit accounts so long as the Bank of America Loan is outstanding.
            Borrower
            acknowledges and agrees that (a) if Bank of America, N.A. determines
            that it is
            not Lender's principal depository bank, the interest rate charged on
            the Bank of
            America Loan shall be increased by forty-two and one half (42.5) basis
            points
            per annum upon five (5) days' prior written notice from Bank of America,
            N.A. to
            Lender, and (b) upon such notice from Bank of America, N.A. to Lender,
            the Base
            Rate shall automatically increase by forty-two and one half (42.5) basis
            points
            at the same time the interest rate charged on the Bank of America Loan
            is
            increased.

           

          Section
            4.24  Existence;
            Name. 

           

           

          Borrower
            shall maintain its limited liability company existence and good standing
            in the
            state of its organization, and its qualification and good standing in
            each
            jurisdiction in which a failure to be so qualified would have a Material
            Adverse
            Effect. Borrower shall not change its name without giving Lender thirty
            (30)
            days prior written notice.

           

           

          Article
            V

          Negative
            Covenants.

           

          Section
            5.1  Conditional
            Sales.

           

           

          Borrower
            shall not incorporate in the Improvements any property acquired under
            a
            conditional sales contract or lease or as to which the vendor retains
            title or a
            security interest, without the prior written consent of Lender.

           

          Section
            5.2  Changes
            to Plans and Specifications.

           

           

          Borrower
            shall not make or permit any changes in the Plans and Specifications,
            including
            any such changes that alter, diminish or add to the work to be performed
            or
            change the design of the Improvements, without the prior written consent
            of
            Lender and under such reasonable conditions as Lender may establish.
            Lender’s
            prior written consent shall not be required, however, as to any change
            order
            which (a) individually does not cause the fixed or guaranteed maximum
            price of
            the Construction Contract to be increased or decreased by more than Fifty
            Thousand Dollars ($50,000.00) and, when added to all previous change
            orders,
            does not cause such price to be increased or decreased by more than Five
            Hundred
            Thousand Dollars ($500,000.00) in the aggregate, (b) does not result in a
            material change to the design of the Improvements, and (c) has been approved
            in
            writing by the Architect and any Governmental Authority, tenant or other
            party
            whose approval is required.

           

          Section
            5.3  Insurance
            Policies and Bonds.

           

           

          Borrower
            shall not do or permit to be done anything that would affect the coverage
            or
            indemnities provided for pursuant to the provisions of any insurance
            policy,
            performance bond, labor and material payment bond or any other bond given
            in
            connection with the Construction of the Improvements.

           

           

          
            
              
              

            

            
              PAGE
                13

              
                

              

            

            
              
              

            

          

           

           

          Section
            5.4  Transfer
            of Assets.

           

           

          Borrower
            shall not sell, lease, transfer, assign or otherwise dispose of any assets,
            except used equipment in the ordinary course of business, or enter into
            any
            merger or consolidation, or transfer control or ownership of Borrower
            or form or
            acquire any subsidiary.

           

          Section
            5.5  Liens.

           

           

          Borrower
            shall not grant, suffer or permit any contractual or non-contractual
            lien on or
            security interest in its assets other than to Lender, or fail to promptly
            pay
            when due all lawful claims, whether for labor, materials, or otherwise,
            except
            for mechanics liens which are bonded over or discharged as and when required
            by
            the terms of the Mortgage, and except for Liens securing Purchase Money
            Debt
            and/or Indebtedness arising under Capitalized Leases.

           

          Section
            5.6  Extensions
            of Credit.

           

           

          Borrower
            shall not make any loan or advance to any individual, partnership, limited
            liability company, corporation or other entity.

           

          Section
            5.7  Borrowings.

           

          Borrower
            shall not create, incur, assume or suffer to exist, any Indebtedness,
            except:

          


          (a)  Indebtedness
            of Borrower under or pursuant to this Agreement, the Note and the other
            Loan
            Documents and Indebtedness of Borrower set forth in the Budget;

          


          (b)  Contingent
            Obligations consisting of the indorsement by Borrower of negotiable instruments
            payable to such Person for deposit or collection in the ordinary course
            of
            business;

          


          (c)  Contingent
            Obligations consisting of the indemnification by Borrower of (1) the
            officers,
            directors, employees and agents of Borrower, to the extent permissible
            under the
            limited liability company law of the jurisdiction in which Borrower is
            organized, (2) commercial banks, investment bankers and other independent
            consultants or professional advisors pursuant to agreements relating
            to the
            underwriting of Borrower's securities or the rendering of banking or
            professional services to Borrower and (3) landlords, licensors, licensees
            and
            other parties pursuant to agreements entered into in the ordinary course
            of
            business by Borrower;

          


          (d)  Indebtedness
            with respect to financed insurance premiums not past due;

          


          (e)  Indebtedness
            with respect to any state or federal taxes not delinquent or that are
            being
            contested by Borrower in good faith; and

          


          (f)  Purchase
            Money Debt and Capitalized Lease Obligations in an aggregate amount not
            to
            exceed $100,000.00 outstanding
            at any one time.

          


          Section
            5.8  Debt
            Service Coverage Ratio.

           

           

          [Intentionally
            Deleted]. 

           

          Section
            5.9  Restricted
            Payments; Preemptive Rights. 

           

          Borrower
            shall not declare, pay or make, any Restricted Payments or grant any
            preemptive
            rights with respect to its ownership interest of Borrower, except:

          


          (a) Borrower
            may declare and deliver dividends and make distributions payable solely
            in the
            ownership interests in Borrower;

           

           

          
            
              
              

            

            
              PAGE
                14

              
                

              

            

            
              
              

            

          

          
 

          (b) Borrower
            may purchase or otherwise acquire ownership interests in Borrower by
            exchange
            for or out of the proceeds received from a substantially concurrent issue
            of new
            ownership interests; 

          


          (c) Beginning
            on the first (1st)
            day of
            the thirty-first (31st)
            month
            following the date of this Agreement and continuing thereafter until
            the date
            that Borrower first achieves a Debt Service Coverage Ratio greater than
            or equal
            to 1.1 to 1.0, Borrower may make distributions to its member with respect
            to the
            member's ownership interest in Borrower in an amount not to exceed $4,000.00
            in
            any given month, provided that at the time of any such distribution
            (1) Borrower is making payments with respect to the indebtedness evidenced
            by the Note from Available Revenues, (2) Borrower has paid the Current
            Interest accrued in respect of the indebtedness evidenced by the Senior
            Note at
            the Base Rate, (3) Borrower has paid the Accumulated Interest accrued
            in respect
            of the indebtedness evidenced by the Senior Note at the Base Rate, (4) no
            Default or Event of Default exists, and (5) no Default or Event of Default
            shall
            exist after giving effect to such distribution or distributions;

          


          (d) In
            lieu of
            and not in addition to the Restricted Payments permitted by Section
            5.9(c),
            Borrower
            may make distributions to its member with respect to the member's ownership
            interest in Borrower in an amount not to exceed $25,000.00 in any given
            month,
            provided that at the time of any such distribution (1) Borrower's Debt
            Service Coverage Ratio is greater than or equal to 1.1 to 1.0, (2) Borrower
            is making payments with respect to the indebtedness evidenced by the
            Note from
            Available Revenues, (3) Borrower has paid the Current Interest accrued in
            respect of the indebtedness evidenced by the Senior Note at the Base
            Rate, (4)
            Borrower has paid the Accumulated Interest accrued in respect of the
            indebtedness evidenced by the Senior Note at the Base Rate, (5) Borrower
            has paid the Current Interest accrued in respect of the indebtedness
            evidenced
            by the Senior Note at the Spread Rate, (6) Borrower has paid the Current
            Interest accrued in respect of the indebtedness evidenced by the Subordinated
            Note, and (7) no Default or Event of Default exists, and (8) no Default or
            Event of Default shall exist after giving effect to such distribution
            or
            distributions; and

          


          (e) Borrower
            may make unlimited distributions to its member with respect to its ownership
            interest in Borrower provided that at the time of any such distribution
            (1) Borrower's Debt Service Coverage Ratio is greater than or equal to 1.1
            to 1.0, (2) Borrower is making payments with respect to the indebtedness
            evidenced by the Note from Available Revenues, (3) Borrower has made
            and is
            current in all payments due with respect to its Indebtedness, including
            but not
            limited to all payments under the Note, regardless of whether the nonpayment
            of
            any such amount shall constitute a default or event of default thereunder,
            (4)
            Borrower has, after giving effect to such distribution or distributions,
            cash or
            Cash Equivalents in an amount not less than $250,000.00, (5) no Default
            or Event
            of Default exists, and (6) no Default or Event of Default shall exist
            after
            giving effect to such distribution or distributions.

          


          Section
            5.10  Investments. 

           

          Borrower
            shall not make, commit to make or suffer to exist any Investment
            except:

          


          (a) cash
            on
            hand and Cash Equivalents;

          


          (b) accounts
            receivable representing trade credit extended in the ordinary course
            of
            business; and

          


          (c) advances
            in reasonable amounts made by Borrower to their respective employees
            for
            reimbursable expenses incurred or to be incurred by such employees in
            the
            ordinary course performance of their duties.

           

           

          
            
              
              

            

            
              PAGE
                15

              
                

              

            

            
              
              

            

          

          
 

          Section
            5.11  Mergers,
            Consolidations, Acquisitions and Sales. 

           

           

          Borrower
            shall not (a) be a party to any merger, consolidation or business
            reorganization, nor (b) purchase or otherwise acquire all or substantially
            all
            of the assets or stock of, or any partnership or joint venture interest
            in, any
            other person, firm or entity, nor (c) create any Subsidiaries nor convey
            any of
            its assets to any Subsidiary.

           

           

          Article
            VI

          Events
            of Default.

           

          The
            occurrence or happening, from time to time, of any one or more of the
            following
            shall constitute an Event of Default under this Agreement:

           

          Section
            6.1  Payment
            Default.

           

           

          Borrower
            fails to pay any Obligation under this Agreement within three (3) days
            after the
            date such Obligation is due or upon acceleration, maturity or
            otherwise.

           

          Section
            6.2  Default
            Under
            Other Loan Documents.

           

           

          An
            Event
            of Default (as defined therein) occurs under the Note or the Mortgage,
            or
            Borrower or Guarantor fails to promptly pay, perform, observe or comply
            with any
            term, obligation or agreement contained in any of the other Loan Documents
            (within any applicable grace or cure period).

           

          Section
            6.3  Accuracy
            of Information; Representations and Warranties.

           

           

          Any
            information contained in any financial statement, schedule, report or
            any other
            document delivered by Borrower, Guarantor or any other Person to Lender
            in
            connection with the Loan proves at any time not to be in all material
            respects
            true and accurate, or Borrower, Guarantor or any other Person shall have
            failed
            to state any material fact or any fact necessary to make such information
            not
            misleading, or any representation or warranty contained in this Agreement
            or in
            any other Loan Document or other document, certificate or opinion delivered
            to
            Lender in connection with the Loan, proves at any time to be incorrect
            or
            misleading in any material respect either on the date when made or on
            the date
            when reaffirmed pursuant to the terms of this Agreement.

           

          Section
            6.4  Deposits.

           

           

          Borrower
            fails to deposit funds with Lender and Bank of America, N.A., in the
            amount
            requested by Lender, pursuant to the provisions of Section
            4.3
            or
Section
            4.11,
            within
            ten (10) days from the effective date of a Notice from Lender requesting
            such
            deposit, or Borrower fails to deliver to Lender and Bank of America,
            N.A. any
            Condemnation Awards or Insurance Proceeds within ten (10) days after
            Borrower’s
            receipt thereof.

           

          Section
            6.5  Insurance
            Obligations.

           

           

          Borrower
            fails to promptly perform or comply with any of the covenants contained
            in the
            Loan Documents with respect to maintaining insurance, including the covenants
            contained in Section
            4.9.

           

           

          
            
              
              

            

            
              PAGE
                16

              
                

              

            

            
              
              

            

          

           

           

          Section
            6.6  Other
            Obligations.

           

           

          Borrower
            fails to promptly perform or comply with any of the covenants or other
            Obligations set forth in this Agreement and such failure continues uncured
            for a
            period of thirty (30) days after Notice from Lender to Borrower, other
            than
            those expressly described in other Sections of this Article
            VI
            and those
            covenants set forth in Sections 4.13, 5.3 and 5.5, for which no notice
            and cure
            rights shall be applicable and the occurrence of any of which shall constitute
            an immediate Event of Default. Notwithstanding the foregoing, if Lender
            determines, in Lender's sole discretion, that such failure, by its nature,
            is
            not capable of being cured within the thirty (30) day period after the
            initial
            Notice from Lender to Borrower (other than a failure to comply with any
            of the
            Obligations expressly described in other Sections of this Article VI
            and/or
            the covenants set forth in Sections 4.13, 5.3 and 5.5), it shall not
            be an Event
            of Default hereunder if (a) Borrower commences to cure such failure and
            thereafter diligently prosecutes the cure thereof, and (b) Borrower causes
            such
            failure to be cured no later than ninety (90) days after the date of
            such
            initial Notice from Lender.

           

          Section
            6.7  Progress
            of Construction.

           

           

          Construction
            of the Improvements is abandoned or is discontinued for a period of more
            than
            twenty (20) consecutive days.

           

          Section
            6.8  Damage
            to Improvements.

           

           

          The
            Improvements are substantially damaged or destroyed by fire or other
            casualty
            and Lender determines that the Improvements cannot be restored and completed
            in
            accordance with the terms and provisions of this Agreement and the
            Mortgage.

           

          Section
            6.9  Lapse
            of Permits or Approvals.

           

           

          Any
            permit, license, certificate or approval that Borrower is required to
            obtain
            with respect to the construction, operation, development, leasing or
            maintenance
            of the Improvements or the Property lapses or ceases to be in full force
            and
            effect.

           

          Section
            6.10  Completion
            of Construction.

           

           

          Completion
            of Construction does not occur in accordance with the Project Schedule,
            or
            Lender determines that Completion of Construction will not occur in accordance
            with the Project Schedule.

           

          Section
            6.11  Mechanic’s
            Lien.

           

           

          A
            lien for
            the performance of work or the supply of materials filed against the
            Property,
            or any stop notice served on Borrower, the General Contractor or Lender,
            remains
            unsatisfied or unbonded for a period of thirty (30) days after the date
            of
            filing or service.

           

          Section
            6.12  Survey
            Matters.

           

           

          Any
            Survey
            required by Lender during the period of construction shows any matter
            which in
            Lender’s reasonable judgment would interfere with the Construction of the
            Improvements or the operation or use of the Property, and such matter
            is not
            removed within a period of thirty (30) days after Notice thereof by Lender
            to
            Borrower.

           

           

          
            
              
              

            

            
              PAGE
                17

              
                

              

            

            
              
              

            

          

           

           

          Section
            6.13  General
            Contractor Default.

           

           

          The
            General Contractor defaults under the Construction Contract in a manner
            which
            Lender deems in Lender's reasonable judgment to be material, and, unless
            otherwise agreed in writing by Lender, Borrower fails promptly to exercise
            its
            rights and remedies under the Construction Contract with respect to such
            default.

           

          Section
            6.14  Performance
            Enjoined or Prohibited.

           

           

          Borrower
            is enjoined or prohibited from performing any of its obligations under
            any of
            the Loan Documents for a period of more than fifteen (15) consecutive
            days.

           

          Section
            6.15  Bankruptcy.

           

           

          Borrower
            or any Guarantor files a bankruptcy petition or makes a general assignment
            for
            the benefit of creditors, or a bankruptcy petition is filed against Borrower
            or
            any Guarantor and such involuntary bankruptcy petition continues undismissed
            for
            a period of sixty (60) days after the filing thereof.

           

          Section
            6.16  Appointment
            of Receiver, Trustee, Liquidator.

           

           

          Borrower
            or any Guarantor applies for or consents in writing to the appointment
            of a
            receiver, trustee or liquidator of Borrower, any Guarantor, the Property,
            or all
            or substantially all of the other assets of Borrower or any Guarantor,
            or an
            order, judgment or decree is entered by any court of competent jurisdiction
            on
            the application of a creditor appointing a receiver, trustee or liquidator
            of
            Borrower, any Guarantor, the Property, or all or substantially all of
            the other
            assets of Borrower or any Guarantor.

           

          Section
            6.17  Judgment.

           

           

          A
            final
            nonappealable judgment for the payment of money involving more than $50,000.00
            is entered against Borrower or any Guarantor, and
            Borrower or such Guarantor
            fails to discharge the same, or causes it to be discharged or bonded
            off to
            Lender’s satisfaction, within thirty (30) days from the date of the entry of
            such judgment.

           

          Section
            6.18  Dissolution;
            Change in Business Status.

           

           

          Unless
            the
            written consent of Lender is previously obtained, all or substantially
            all of
            the business assets of Borrower or any Guarantor are sold, Borrower or
            any
            Guarantor is dissolved, or there occurs any change in the form of business
            entity through which Borrower or any Guarantor presently conducts its
            business
            or any merger or consolidation involving Borrower or any Guarantor.

           

          Section
            6.19  Default
            Under Other Indebtedness.

           

           

          Borrower
            or any Guarantor fails to pay any indebtedness (other than the Loan)
            owed by
            Borrower or such Guarantor to Lender when and as due and payable (whether
            by
            acceleration or otherwise).

           

           

          
            
              
              

            

            
              PAGE
                18

              
                

              

            

            
              
              

            

          

           

           

          Section
            6.20  Change
            in Controlling Interest.

           

           

          Without
            the prior written consent of Lender (which consent may be conditioned,
            among
            other matters, on the issuance of a satisfactory endorsement to the title
            insurance policy insuring Lender’s interest under the Mortgage), the controlling
            interest in Borrower ceases to be owned by American Seniors Foundation,
            Inc.

           

          Section
            6.21  Material
            Adverse Change.

           

           

          In
            the
            reasonable opinion of Lender, the prospect of payment or performance
            of all or
            any part of the Obligations has been impaired because of a material adverse
            change in the financial condition, results of operations, business or
            properties
            of Borrower, Guarantor or any other Person liable for the payment or
            performance
            of any of the Obligations.

           

           

          Article
            VII

          Remedies
            on Default.

           

          Section
            7.1  Remedies
            on Default.

           

           

          Upon
            the
            happening of any Event of Default, Lender shall have the right, in addition
            to
            any other rights or remedies available to Lender under the Mortgage or
            any of
            the other Loan Documents or under applicable Law, to exercise any one
            or more of
            the following rights and remedies:

           

           

          (a)  Lender
            may
            terminate its obligation to advance any further principal of the Loan
            pursuant
            to this Agreement by Notice to Borrower.

           

           

          (b)  Lender
            may
            accelerate all of Borrower’s Obligations under the Loan Documents whereupon such
            Obligations shall become immediately due and payable, without notice
            of default,
            acceleration or intention to accelerate, presentment or demand for payment,
            protest or notice of nonpayment or dishonor, or notices or demands of
            any kind
            or character (all of which are hereby waived by Borrower).

           

           

          (c)  Lender
            may
            apply to any court of competent jurisdiction for, and obtain appointment
            of, a
            receiver for the Property.

           

           

          (d)  Lender
            may
            set off the amounts due Lender under the Loan Documents against any and
            all
            accounts, credits, money, securities or other property of Borrower now
            or
            hereafter on deposit with, held by or in the possession of Lender to
            the credit
            or for the account of Borrower, without notice to or the consent of
            Borrower.

           

           

          (e)  Lender
            may
            enter into possession of the Property and perform any and all work and
            labor
            necessary to complete the Construction of the Improvements (whether or
            not in
            accordance with the Plans and Specifications) and to employ watchmen
            to protect
            the Property and the Improvements. All sums expended by Lender for such
            purposes
            shall be deemed to have been advanced to Borrower under the Note and
            shall be
            secured by the Mortgage. For this purpose, Borrower hereby constitutes
            and
            appoints Lender its true and lawful attorney-in-fact with full power
            of
            substitution, which power is coupled with an interest, to complete the
            work in
            the name of Borrower, and hereby empowers said attorney or attorneys,
            in the
            name of Borrower or Lender:

           

          (i) To
            use any
            funds of Borrower including any balance which may be held by Lender and
            any
            funds which may remain unadvanced hereunder for the purpose of completing
            the
            Construction of the Improvements, whether or not in the manner called
            for in the
            Plans and Specifications;

           

           

          
            
              
              

            

            
              PAGE
                19

              
                

              

            

            
              
              

            

          

           

           

          (ii) To
            make
            such additions and changes and corrections to the Plans and Specifications
            as
            shall be necessary or desirable in the judgment of Lender to complete
            the
            Construction of the Improvements;

           

          (iii) To
            employ
            such contractors, subcontractors, agents, architects and inspectors as
            shall be
            necessary or desirable for said purpose;

           

          (iv) To
            pay,
            settle or compromise all existing bills and claims which are or may be
            liens
            against the Property, or may be necessary or desirable for the completion
            of the
            work or the clearance of title to the Property;

           

          (v) To
            execute
            all applications and certificates which may be required in the name of
            Borrower;

           

          (vi) To
            enter
            into, enforce, modify or cancel Leases and to fix or modify Rents on
            such terms
            as Lender may consider proper;

           

          (vii) To
            file
            for record, at Borrower’s cost and expense and in Borrower’s name, any notices
            of completion, notices of cessation of labor, or any other notices that
            Lender
            in its sole and absolute discretion may consider necessary or desirable
            to
            protect its security; and

           

          (viii) To
            do any
            and every act with respect to the Construction of the Improvements which
            Borrower may do in its own behalf.

           

           

          It
            is
            understood and agreed that this power of attorney shall be deemed to
            be a power
            coupled with an interest which cannot be revoked. Said attorney-in-fact
            shall
            also have the power to prosecute and defend all actions or proceedings
            in
            connection with the Construction of the Improvements and to take such
            actions
            and to require such performance as Lender may deem necessary.

           

          Section
            7.2  No
            Release or Waiver; Remedies Cumulative and Concurrent.

           

           

          Borrower
            shall not be relieved of any Obligation by reason of the failure of Lender
            to
            comply with any request of Borrower or of any other Person to take action
            to
            foreclose on the Property under the Mortgage or otherwise to enforce
            any
            provision of the Loan Documents, or by reason of the release, regardless
            of
            consideration, of all or any part of the Property. No delay or omission
            of
            Lender to exercise any right, power or remedy accruing upon the happening
            of an
            Event of Default shall impair any such right, power or remedy or shall
            be
            construed to be a waiver of any such Event of Default or any acquiescence
            therein. No delay or omission on the part of Lender to exercise any option
            for
            acceleration of the maturity of the Obligations, or for foreclosure of
            the
            Mortgage following any Event of Default as aforesaid, or any other option
            granted to Lender hereunder in any one or more instances, or the acceptance
            by
            Lender of any partial payment on account of the Obligations shall constitute
            a
            waiver of any such Event of Default and each such option shall remain
            continuously in full force and effect. No remedy herein conferred upon
            or
            reserved to Lender is intended to be exclusive of any other remedies
            provided
            for in the Loan Documents, and each and every such remedy shall be cumulative,
            and shall be in addition to every other remedy given hereunder, or under
            the
            Loan Documents, or now or hereafter existing at Law or in equity or by
            statute.
            Every right, power and remedy given by the Loan Documents to Lender shall
            be
            concurrent and may be pursued separately, successively or together against
            Borrower or the Property or any part thereof, and every right, power
            and remedy
            given by the Loan Documents may be exercised from time to time as often
            as may
            be deemed expedient by Lender.

           

           

          
            
              
              

            

            
              PAGE
                20

              
                

              

            

            
              
              

            

          

           

           

          Article
            VIII

          Miscellaneous.

           

          Section
            8.1  Further
            Assurances; Authorization to File Documents.

           

           

          At
            any
            time, and from time to time, upon request by Lender, Borrower will, at
            Borrower’s expense, (a) correct any defect, error or omission which may be
            discovered in the form or content of any of the Loan Documents, and
            (b) make, execute, deliver and record, or cause to be made, executed,
            delivered and recorded, any and all further instruments, certificates
            and other
            documents as may, in the opinion of Lender, be necessary or desirable
            in order
            to complete, perfect or continue and preserve the lien of the Mortgage.
            Upon any
            failure by Borrower to do so, Lender may make, execute and record any
            and all
            such instruments, certificates and other documents for and in the name
            of
            Borrower, all at the sole expense of Borrower, and Borrower hereby appoints
            Lender the agent and attorney-in-fact of Borrower to do so, this appointment
            being coupled with an interest and being irrevocable. Without limitation
            of the
            foregoing, Borrower irrevocably authorizes Lender at any time and from
            time to
            time to file any initial financing statements, amendments thereto and
            continuation statements deemed necessary or desirable by Lender to establish
            or
            maintain the validity, perfection and priority of the security interests
            granted
            in the Mortgage, and Borrower ratifies any such filings made by Lender
            prior to
            the date hereof.

           

          Section
            8.2  No
            Warranty by Lender.

           

           

          By
            accepting or approving anything required to be observed, performed or
            fulfilled
            by Borrower or to be given to Lender pursuant to this Agreement, including
            any
            certificate, Survey, receipt, appraisal or insurance policy, Lender shall
            not be
            deemed to have warranted or represented the sufficiency, legality, effectiveness
            or legal effect of the same, or of any term, provision or condition thereof
            and
            any such acceptance or approval thereof shall not be or constitute any
            warranty
            or representation with respect thereto by Lender.

           

          Section
            8.3  Standard
            of Conduct of Lender.

           

           

          Nothing
            contained in this Agreement or any other Loan Document shall limit the
            right of
            Lender to exercise its business judgment or to act, in the context of
            the
            granting or withholding of any advance or consent under this Agreement
            or any
            other Loan Document, in a subjective manner, whether or not objectively
            reasonable under the circumstances, so long as Lender’s exercise of its business
            judgment or action is made or undertaken in good faith. Borrower and
            Lender
            intend by the foregoing to set forth and affirm their entire understanding
            with
            respect to the standard pursuant to which Lender’s duties and obligations are to
            be judged and the parameters within which Lender’s discretion may be exercised
            hereunder and under the other Loan Documents. As used herein, “good faith” means
            honesty in fact in the conduct and transaction concerned.

           

          Section
            8.4  No
            Partnership.

           

           

          Nothing
            contained in this Agreement shall be construed in a manner to create
            any
            relationship between Borrower and Lender other than the relationship
            of borrower
            and lender and Borrower and Lender shall not be considered partners or
            co-venturers for any purpose on account of this Agreement.

           

          Section
            8.5  Severability.

           

           

          In
            the
            event any one or more of the provisions of this Agreement or any of the
            other
            Loan Documents shall for any reason be held to be invalid, illegal or
            unenforceable, in whole or in part or in any other respect, or in the
            event any
            one or more of the provisions of any of the Loan Documents operates or
            would
            prospectively operate to invalidate this Agreement or any of the other
            Loan
            Documents, then and in either of those events, at the option of Lender,
            such
            provision or provisions only shall be deemed null and void and shall
            not affect
            the validity of the remaining Obligations, and the remaining provisions
            of the
            Loan Documents shall remain operative and in full force and effect and
            shall in
            no way be affected, prejudiced or disturbed thereby.

           

           

          
            
              
              

            

            
              PAGE
                21

              
                

              

            

            
              
              

            

          

           

           

          Section
            8.6  Notices.

           

           

          All
            Notices required or which any party desires to give hereunder or under
            any other
            Loan Document shall be in writing and, unless otherwise specifically
            provided in
            such other Loan Document, shall be deemed sufficiently given or furnished
            if
            delivered by personal delivery, by nationally recognized overnight courier
            service or by certified United States mail, postage prepaid, addressed
            to the
            party to whom directed at the applicable address set forth below (unless
            changed
            by similar notice in writing given by the particular party whose address
            is to
            be changed) or by facsimile. Any Notice shall be deemed to have been
            given
            either at the time of personal delivery or, in the case of courier or
            mail, as
            of the date of first attempted delivery at the address and in the manner
            provided herein, or, in the case of facsimile, upon receipt; provided
            that
            service of a Notice required by any applicable statute shall be considered
            complete when the requirements of that statute are met. Notwithstanding
            the
            foregoing, no notice of change of address shall be effective except upon
            actual
            receipt. This Section shall not be construed in any way to affect or
            impair any
            waiver of notice or demand provided in this Agreement or in any other
            Loan
            Document or to require giving of notice or demand to or upon any Person
            in any
            situation or for any reason.

           

           

          The
            address and fax number of Borrower are:

           

          ASF
            of
            Green Hills, LLC

          205
            Powell
            Place

          Brentwood,
            TN 37027 

          Contact
            Name: Christopher J. Coates

          Telephone:
            (615) 221-2262

          Fax:
            (615)
            371-3912 

          E-mail
            Address: ccoates@arclp.com

          and

          Contact
            Name: Murray Hatcher, Sr.

          Telephone:
            (615) 369-0621

          Fax:
            (615)
            369-0622 

          E-mail
            Address: murray@chesapeakecentre.com

          


          With
            a
            copy to:

          


          D.
            Reed
            Houk

          Adams
            and
            Reese / Stokes Bartholomew LLP

          424
            Church
            Street, Suite 2800

          Nashville,
            Tennessee 37219

          Telephone:
            (615) 259-1450

          Fax:
            (615)
            259-1470

          reed.houk@arlaw.com

          


           

          The
            address and fax number of Lender are:

           

          American
            Retirement Corporation

          Address:
            111 Westwood Place, Suite 200

           

           

          
            
              
              

            

            
              PAGE
                22

              
                

              

            

            
              
              

            

          

           

           

          City/State/Zip:
            Brentwood, TN 37027

          Contact
            Person: George Hicks

          Telephone:
            (615)-221-2260

          Fax:
            (615)-221-2269

          E-mail
            Address (if applicable): ghicks@arclp.com

          


          With
            a
            copy to:

          


          Andrew
            Smith

          Bass,
            Berry & Sims

          315
            Deaderick Street, Suite 2700

          Nashville,
            Tennessee 37238

          Telephone:
            (615)-742-6266

          Fax:
            (615)-742-6293

           

          And
            further copies to:

           

          Bank
            of
            America, N.A. Bank of America, N.A.

          414
            Union
            Street

          Nashville,
            TN 37219-1697

          Senior
            Underwriter: Ms. Hope Walker

          Phone:
            (615) 749-3023

          Fax:
            (615)
            749-4951

          E-mail
            Address: hope.walker@bankofamerica.com

          


          Construction
            Administration: Kathryn V. Traylor

          1111
            E.
            Main Street, 6th Floor

          Richmond,
            VA. 23219

          E-mail
            address: Kathryn.v.traylor@bankofamerica.com

          Phone
            (804) 788-3873

          Fax:
            (804)
            788-2248

          


          William
            W.
            Earthman, III

          Boult,
            Cummings, Conners & Berry, PLC

          1600
            Division Street, Suite 700

          Nashville,
            Tennessee 37203

          Telephone:
            (615)-252-2304

          Fax:
            (615)-252-6304

          


          Section
            8.7  Permitted
            Successors and Assigns; Disclosure of Information.

           

           

          (a) Each
            and
            every one of the covenants, terms, provisions and conditions of this
            Agreement
            and the Loan Documents shall apply to, bind and inure to the benefit
            of
            Borrower, its successors and those assigns of Borrower consented to in
            writing
            by Lender, and shall apply to, bind and inure to the benefit of Lender
            and the
            endorsees, transferees, successors and assigns of Lender, and all Persons
            claiming under or through any of them.

           

          (b) Borrower
            agrees not to transfer, assign, pledge or hypothecate any right or interest
            in
            any payment or advance due pursuant to this Agreement, or any of the
            other
            benefits of this Agreement, without the prior written consent of Lender,
            which
            consent may be withheld by Lender in its sole and absolute discretion.
            Any such
            transfer, assignment, pledge or hypothecation made or attempted by Borrower
            without the prior written consent of Lender shall be void and of no effect.
            No
            consent by Lender to an assignment shall be deemed to be a waiver of
            the
            requirement of prior written consent by Lender with respect to each and
            every
            further assignment and as a condition precedent to the effectiveness
            of such
            assignment.

           

           

          
            
              
              

            

            
              PAGE
                23

              
                

              

            

            
              
              

            

          

           

           

          (c) Lender
            may
            sell or offer to sell the Loan or interests therein to one or more assignees
            or
            participants. Borrower shall execute, acknowledge and deliver any and
            all
            instruments reasonably requested by Lender in connection therewith, and
            to the
            extent, if any, specified in any such assignment or participation, such
            assignee(s) or participant(s) shall have the same rights and benefits
            with
            respect to the Loan Documents as such Person(s) would have if such Person(s)
            were Lender hereunder. Lender may disseminate any information it now
            has or
            hereafter obtains pertaining to the Loan, including any security for
            the Loan,
            any credit or other information on the Property (including environmental
            reports
            and assessments), Borrower, any of Borrower’s principals or any Guarantor, to
            any actual or prospective assignee or participant, to Lender’s affiliates,
            including Banc of America Securities LLC, to any regulatory body having
            jurisdiction over Lender, to any actual or prospective counterparty (or
            its
            advisors) to any swap or derivative transaction relating to Borrower
            and the
            Loan, or to any other party as necessary or appropriate in Lender’s reasonable
            judgment.

           

          Section
            8.8  Modification;
            Waiver.

           

           

          None
            of
            the terms or provisions of this Agreement may be changed, waived, modified,
            discharged or terminated except by instrument in writing executed by
            the party
            or parties against whom enforcement of the change, waiver, modification,
            discharge or termination is asserted. None of the terms or provisions
            of this
            Agreement shall be deemed to have been abrogated or waived by reason
            of any
            failure or failures to enforce the same.

           

          Section
            8.9  Third
            Parties; Benefit.

           

           

          All
            conditions to the obligation of Lender to make advances hereunder are
            imposed
            solely and exclusively for the benefit of Lender and its assigns (including
            Bank
            of America, N.A.) and no other Persons shall have standing to require
            satisfaction of such conditions in accordance with their terms or be
            entitled to
            assume that Lender will refuse to make advances in the absence of strict
            compliance with any or all thereof and no other Person shall, under any
            circumstances, be deemed to be the beneficiary of such conditions, any
            or all of
            which may be freely waived in whole or in part by Lender at any time
            in the sole
            and absolute exercise of its discretion. The terms and provisions of
            this
            Agreement are for the benefit of the parties hereto and, except as herein
            specifically provided, no other Person shall have any right or cause
            of action
            on account thereof.

           

          Section
            8.10  Rules
            of Construction.

           

           

          The
            words
“hereof,” “herein,” “hereunder,” “hereto,” and other words of similar import
            refer to this Agreement in its entirety. The terms “agree” and “agreements” mean
            and include “covenant” and “covenants.” The words “include” and “including”
shall be interpreted as if followed by the words “without limitation.” The
            captions and headings contained in this Agreement are included herein
            for
            convenience of reference only and shall not be considered a part hereof
            and are
            not in any way intended to define, limit or enlarge the terms hereof.
            All
            references (a) made in the neuter, masculine or feminine gender shall
            be deemed
            to have been made in all such genders, (b) made in the singular or plural
            number
            shall be deemed to have been made, respectively, in the plural or singular
            number as well, (c) to the Loan Documents are to the same as extended,
            amended,
            restated, supplemented or otherwise modified from time to time unless
            expressly
            indicated otherwise, (d) to the Land, the Improvements or the Property
            shall
            mean all or any portion of each of the foregoing, respectively, and (e)
            to
            Articles, Sections and Schedules are to the respective Articles, Sections
            and
            Schedules contained in this Agreement unless expressly indicated
            otherwise.

           

           

          
            
              
              

            

            
              PAGE
                24

              
                

              

            

            
              
              

            

          

           

           

          Section
            8.11  Counterparts.

           

           

          This
            Agreement may be executed in any number of counterparts, each of which
            shall be
            considered an original for all purposes; provided, however, that all
            such
            counterparts shall together constitute one and the same instrument.

           

          Section
            8.12  Signs;
            Publicity.

           

           

          At
            Lender’s request, Borrower shall place a sign at a location on the Property
            satisfactory to Lender, which sign shall recite, among other things,
            that Lender
            is financing the Construction of the Improvements. Borrower expressly
            authorizes
            Lender to prepare and to furnish to the news media for publication from
            time to
            time news releases with respect to the Property, specifically to include
            releases detailing Lender’s involvement with the financing of the
            Property.

           

          Section
            8.13  Governing
            Law.

           

           

          This
            Agreement shall be governed by and construed, interpreted and enforced
            in
            accordance with the laws of the State.

           

          Section
            8.14  Time
            of
            Essence.

           

           

          Time
            shall
            be of the essence for each and every provision of this Agreement of which
            time
            is an element.

           

          Section
            8.15  Electronic
            Transmission of Data.

           

           

          Lender
            and
            Borrower agree that certain data related to the Loan (including confidential
            information, documents, applications and reports) may be transmitted
            electronically, including transmission over the Internet. This data may
            be
            transmitted to, received from or circulated among agents and representatives
            of
            Borrower and/or Lender and their affiliates and other Persons involved
            with the
            subject matter of this Agreement. Borrower acknowledges and agrees that
            (a)
            there are risks associated with the use of electronic transmission and
            that
            Lender does not control the method of transmittal or service providers,
            (b)
            Lender has no obligation or responsibility whatsoever and assumes no
            duty or
            obligation for the security, receipt or third party interception of any
            such
            transmission, and (c) Borrower will release, hold harmless and indemnify
            Lender
            from any claim, damage or loss, including that arising in whole or part
            from
            Lender’s strict liability or sole, comparative or contributory negligence, which
            is related to the electronic transmission of data.

           

          Section
            8.16  Dispute
            Resolution.

           

           

          (a)  Arbitration.
            Except
            to the extent expressly provided below, any Dispute shall, upon the request
            of
            either party, be determined by binding arbitration in accordance with
            the
            Federal Arbitration Act, Title 9, United States Code (or if not applicable,
            the
            applicable state law), the then-current rules for arbitration of financial
            services disputes of AAA and the “Special Rules” set forth below. In the event
            of any inconsistency, the Special Rules shall control. The filing of
            a court
            action is not intended to constitute a waiver of the right of Borrower
            or
            Lender, including the suing party, thereafter to require submittal of
            the
            Dispute to arbitration. Any party to this Agreement may bring an action,
            including a summary or expedited proceeding, to compel arbitration of
            any
            Dispute in any court having jurisdiction over such action. For the purposes
            of
            this Dispute Resolution Section only, the terms “party” and “parties” shall
            include any
            parent
            corporation, subsidiary or affiliate of Lender involved in the servicing,
            management or administration of any obligation described in or evidenced
            by this
            Agreement, together with the officers, employees, successors and assigns
            of each
            of the foregoing.

           

           

          
            
              
              

            

            
              PAGE
                25

              
                

              

            

            
              
              

            

          

           

           

          (b)  Special
            Rules.

           

          (i) The
            arbitration shall be conducted in any U.S. state where real or tangible
            personal
            property collateral is located, or if there is no such collateral, in
            the City
            and County where Lender is located pursuant to its address for notice
            purposes
            in this Agreement.

           

          (ii) The
            arbitration shall be administered by AAA, who will appoint an arbitrator.
            If AAA
            is unwilling or unable to administer or legally precluded from administering
            the
            arbitration, or if AAA is unwilling or unable to enforce or legally precluded
            from enforcing any and all provisions of this Dispute Resolution Section,
            then
            any party to this Agreement may substitute another arbitration organization
            that
            has similar procedures to AAA and that will observe and enforce any and
            all
            provisions of this Dispute Resolution Section. All
            Disputes shall be determined by one arbitrator; however, if the amount
            in
            controversy in a Dispute exceeds Five Million Dollars ($5,000,000), upon
            the
            request of any party, the Dispute shall be decided by three arbitrators
            (for
            purposes of this Agreement, referred to collectively as the
“arbitrator”).

           

          (iii) All
            arbitration hearings will be commenced within ninety (90) days of the
            demand for
            arbitration and completed within ninety (90) days from the date of commencement;
            provided, however, that upon a showing of good cause, the arbitrator
            shall be
            permitted to extend the commencement of such hearing for up to an additional
            sixty (60) days.

           

          (iv) The
            judgment and the award, if any, of the arbitrator shall be issued within
            thirty
            (30) days of the close of the hearing. The arbitrator shall provide a
            concise
            written statement setting forth the reasons for the judgment and for
            the award,
            if any. The
            arbitration award, if any, may be submitted to any court having jurisdiction
            to
            be confirmed and enforced, and such confirmation and enforcement shall
            not be
            subject to arbitration.

           

          (v) The
            arbitrator will give effect to statutes of limitations and any waivers
            thereof
            in determining the disposition of any Dispute and may dismiss one or
            more claims
            in the arbitration on the basis that such claim or claims is or are barred.
            For
            purposes of the application of the statute of limitations, the service
            on
AAA
            under
            applicable AAA
            rules of
            a notice of Dispute is the equivalent of the filing of a lawsuit.

           

          (vi) Any
            dispute concerning this arbitration provision, including any such dispute
            as to
            the validity or enforceability of this provision, or whether a Dispute
            is
            arbitrable, shall be determined by the arbitrator; provided, however,
            that the
            arbitrator shall not be permitted to vary the express provisions of these
            Special Rules or the Reservations of Rights in subsection (c)
            below.

           

          (vii) The
            arbitrator shall have the power to award legal fees and costs pursuant
            to the
            terms of this Agreement.

           

          (viii) The
            arbitration will take place on an individual basis without reference
            to, resort
            to, or consideration of any form of class or class action.

           

           

          (c)  Reservations
            of Rights.
            Nothing
            in this Agreement shall be deemed to (i) limit the applicability of any
            otherwise applicable statutes of limitation and any waivers contained
            in this
            Agreement, or (ii) apply to or limit the right of Lender (A) to exercise
            self help remedies such as (but not limited to) setoff, or (B) to foreclose
            judicially or nonjudicially against any real or personal property collateral,
            or
            to exercise judicial or nonjudicial power of sale rights, (C) to obtain
            from a court provisional or ancillary remedies such as (but not limited
            to)
            injunctive relief, writ of possession, prejudgment attachment, or the
            appointment of a receiver, or (D) to pursue rights against a party to
            this
            Agreement in a third-party proceeding in any action brought against Lender
            in a
            state, federal or international court, tribunal or hearing body (including
            actions in specialty courts, such as bankruptcy and patent courts). Lender
            may
            exercise the rights set forth in clauses (A) through (D), inclusive,
            before,
            during or after the pendency of any arbitration proceeding brought pursuant
            to
            this Agreement. Neither the exercise of self help remedies nor the institution
            or maintenance of an action for foreclosure or provisional or ancillary
            remedies
            shall constitute a waiver of the right of any party, including the claimant
            in
            any such action, to arbitrate the merits of the Dispute occasioning resort
            to
            such remedies. No provision in the Loan Documents regarding submission
            to
            jurisdiction and/or venue in any court is intended or shall be construed
            to be
            in derogation of the provisions in any Loan Document for arbitration
            of any
            Dispute.

           

           

          
            
              
              

            

            
              PAGE
                26

              
                

              

            

            
              
              

            

          

           

           

          (d)  Conflicting
            Provisions for Dispute Resolution.
            If there
            is any conflict between the terms, conditions and provisions of this
            Section and
            those of any other provision or agreement for arbitration or dispute
            resolution,
            the terms, conditions and provisions of this Section shall prevail as
            to any
            Dispute arising out of or relating to (i) this Agreement, (ii) any
            other Loan Document, (iii) any related agreements or instruments, or
            (iv) the transaction contemplated herein or therein (including any claim
            based on or arising from an alleged personal injury or business tort).
            In any
            other situation, if the resolution of a given Dispute is specifically
            governed
            by another provision or agreement for arbitration or dispute resolution,
            the
            other provision or agreement shall prevail with respect to said
            Dispute.

           

           

          (e)  Jury
            Trial Waiver in Arbitration.
            By
            agreeing to this Section, the parties irrevocably and voluntarily waive
            any
            right they may have to a trial by jury in respect of any Dispute.

           

          Section
            8.17  Forum.

           

          Borrower
            hereby irrevocably submits generally and unconditionally for itself and
            in
            respect of its property to the jurisdiction of any state court or any
            United
            States federal court sitting in the State specified in the governing
            law section
            of this Agreement and to the jurisdiction of any state court or any United
            States federal court sitting in the state in which any of the Property
            is
            located, over any Dispute. Borrower hereby irrevocably waives, to the
            fullest
            extent permitted by Law, any objection that Borrower may now or hereafter
            have
            to the laying of venue in any such court and any claim that any such
            court is an
            inconvenient forum. Borrower hereby agrees and consents that, in addition
            to any
            methods of service of process provided for under applicable law, all
            service of
            process in any such suit, action or proceeding in any state court or
            any United
            States federal court sitting in the state specified in the governing
            law section
            of this Agreement may be made by certified or registered mail, return
            receipt
            requested, directed to Borrower at its address for notice set forth in
            this
            Agreement, or at a subsequent address of which Lender received actual
            notice
            from Borrower in accordance with the notice section of this Agreement,
            and
            service so made shall be complete five (5) days after the same shall
            have been
            so mailed. Nothing herein shall affect the right of Lender to serve process
            in
            any manner permitted by Law or limit the right of Lender to bring proceedings
            against Borrower in any other court or jurisdiction.

          


          Section
            8.18      WAIVER OF JURY
            TRIAL.

           

          WITHOUT
            INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO ARBITRATE ANY “DISPUTE”
(FOR PURPOSES OF THIS SECTION, AS DEFINED IN SCHEDULE
            1)
            AS SET FORTH IN THIS AGREEMENT, TO THE EXTENT ANY “DISPUTE” IS NOT SUBMITTED TO
            ARBITRATION OR IS DEEMED BY THE ARBITRATOR OR BY ANY COURT WITH JURISDICTION
            TO
            BE NOT ARBITRABLE OR NOT REQUIRED TO BE ARBITRATED, BORROWER AND LENDER
            WAIVE
            TRIAL BY JURY IN RESPECT OF ANY SUCH “DISPUTE” AND ANY ACTION ON SUCH “DISPUTE.”
THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY BORROWER
            AND LENDER,
            AND BORROWER AND LENDER HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT
            OR
            OPINION HAVE BEEN MADE BY ANY PERSON OR ENTITY TO INDUCE THIS WAIVER
            OF TRIAL BY
            JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. THIS PROVISION IS
            A MATERIAL
            INDUCEMENT FOR THE PARTIES ENTERING INTO THE LOAN DOCUMENTS. BORROWER
            AND LENDER
            ARE EACH HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION IN ANY PROCEEDING
            AS
            CONCLUSIVE EVIDENCE OF THIS WAIVER OF JURY TRIAL. BORROWER FURTHER REPRESENTS
            AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT
            AND
            IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS HAD
            THE
            OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF
            ITS OWN
            FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER
            WITH
            COUNSEL.

           

           

          
            
              
              

            

            
              PAGE
                27

              
                

              

            

            
              
              

            

          

           

           

          Section
            8.19  USA
            Patriot Act Notice.

           

          Lender
            hereby notifies Borrower that pursuant to the requirements of the USA
            Patriot
            Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
            (the
“Act”), Lender is required to obtain, verify and record information that
            identifies Borrower, which information includes the name and address
            of Borrower
            and other information that will allow Lender to identify Borrower in
            accordance
            with the Act.

           

          Section
            8.20  Entire
            Agreement.

           

           

          The
            Loan
            Documents constitute the entire understanding and agreement between Borrower
            and
            Lender with respect to the transactions arising in connection with the
            Loan, and
            supersede all prior written or oral understandings and agreements between
            Borrower and Lender with respect to the matters addressed in the Loan
            Documents.
            In particular, and without limitation, the terms of any commitment by
            Lender to
            make the Loan are merged into the Loan Documents. Except as incorporated
            in
            writing into the Loan Documents, there are no representations, understandings,
            stipulations, agreements or promises, oral or written, with respect to
            the
            matters addressed in the Loan Documents. If there is any conflict between
            the
            terms, conditions and provisions of this Agreement and those of any other
            instrument or agreement, including any other Loan Document, the terms,
            conditions and provisions of this Agreement shall prevail.

           

           

          [Signature
            Page Follows]

           

           

          
            
              
              

            

            
              PAGE
                28

              
                

              

            

            
              
              

            

          

           

           

          IN
            WITNESS
            WHEREOF, Borrower and Lender have caused this Agreement to be executed
            under
            seal
            as of the
            date first above written.

           

              
            
              	 	BORROWER:
	 	
                       

                      ASF
                        of Green Hills, LLC,

                      a
                        Tennessee non-profit limited liability company

                       

                    
	 	By:	
                      American
                        Seniors Foundation, Inc.,

                      its
                        sole member 

                    
	 	 	 
	 	 	By:	 
	 	 	Name:	 
	
                       

                    	 	Title:	 
	 	 	 	 


            

          

          


           

              
            
              	 	LENDER:
	 	
                       

                      American
                        Retirement Corporation, 

                      a
                        Tennessee corporation

                       

                    
	 	 	 
	 	By:	 
	 	Name:	 
                      
	 	Title:	 
	 	 	 	 


            

          

           

           

          
            
              
              

            

            
              PAGE
                29

              
                

              

            

            
              
              

            

          



          Schedule
            1

           

          Definitions

           

          Unless
            the
            context otherwise specifies or requires, the following terms shall have
            the
            meanings herein specified, such definitions to be applicable equally
            to the
            singular and the plural forms of such terms and to all genders:

           

          “AAA”
means
            the American Arbitration Association, or any successor thereof.

           

          "Accumulated
            Interest"
            shall
            mean, as of any date of determination, and with respect to either the
            Senior
            Note or the Subordinated Note, all unpaid interest accrued in respect
            of the
            indebtedness evidenced by such Note other than Current Interest.

           

          “Act”
means
            the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October
            26,
            2001)).

           

          “Architect”
means
            Earl Swensson Associates, its successors and permitted assigns.

           

          “Architect’s
            Contract”
means
            the agreement dated September 1, 2005, by and between Borrower, as owner,
            and
            the Architect, as architect, and any other contract for architectural
            services
            relating to the Construction of the Improvements between Borrower and
            an
            architect, and approved in writing by Lender, as the same may be amended
            from
            time to time with the prior written approval of Lender.

           

          “Authorized
            Signers”
means
            Christopher Coates or R. Murray Hatcher, or any other representative
            of Borrower
            duly designated and authorized by Borrower to sign draw requests in a
            writing
            addressed to Lender, which writing may include a draw request in the
            form
            attached hereto as Schedule 2
            and which
            must be approved and consented to by George T. Hicks or H. Todd Kaestner
            of
            Lender prior to delivery to Bank of America, N.A.

           

          "Available
            Revenues"
            shall
            mean, for Borrower for any period, the sum of cash and Cash Equivalents
            at the
            beginning of such period plus
            Cash Flow
plus
            Interest
            Expense (including, but not limited to, interest expense with respect
            to the
            indebtedness evidenced by the Subordinated Note), excluding,
            however,
            after
            such time as Borrower first achieves a Debt Service Coverage Ratio greater
            than
            or equal to 1.1 to 1.0, a reserve of cash and Cash Equivalents in an
            amount not
            to exceed $150,000.00.

           

          “Banking
            Day”
means
            any day that is not a Saturday, Sunday or banking holiday in the
            State.

           

          "Base
            Rate"
            shall
            mean an annual rate of interest equal to the BBA LIBOR Daily Floating
            Rate (as
            defined in the Senior Note) plus
            two and
            one-fourth percentage points (2.25%) per annum, as adjusted from time
            to time in
            the manner provided for in the Senior Note.

           

          “Borrower’s
            Deposit Account”
means
            an
            account established by Lender with Bank of America, N.A. pursuant to
            the terms
            of Section
            4.3.

           

          “Budget”
means
            the breakdown of hard costs and soft costs attached hereto as Schedule
            3,
            as the
            same may be revised from time to time with the written approval of
            Lender.

           

          "Capital
            Expenditures"
            shall
            mean for any period, the aggregate capital expenditures recorded by Borrower
            (including charges in respect of Capitalized Lease Obligations exclusive
            of
            imputed interest on such Capitalized Lease Obligations) that are made
            in
            accordance with a budget reviewed and approved by Lender, all determined
            in
            accordance with GAAP. 

           

           

          
            
              
              

            

            
              SCHEDULE
                1 - PAGE
                1

              
                

              

            

            
              
              

            

          

           

           

          "Capitalized
            Lease"
            shall
            mean, as to any Person, any lease of property by such Person as lessee
            that, in
            accordance with GAAP, either would be required to be classified and accounted
            for as a capital lease on a consolidated balance sheet of such Person
            or
            otherwise be disclosed as such in a note to such balance sheet.

           

          "Capitalized
            Lease Obligations"
            shall
            mean, as to any Person as of any date, the amount of the obligation of
            the
            lessee under a Capitalized Lease that, in accordance with GAAP, would
            appear on
            a consolidated balance sheet of such Person in respect of such Capitalized
            Lease
            or otherwise be disclosed as such in a note to such balance sheet.

           

          "Cash
            Equivalents"
            shall
            mean, at any time, certificates of deposit or time deposits having a
            maturity
            not exceeding ninety (90) days, and demand deposits, that are fully insured
            by
            the Federal Deposit Insurance Corporation and that are maintained with
            commercial banks organized and existing under, or chartered or otherwise
            qualified to do business under, the laws of the United States of America
            or any
            State thereof.

           

          "Cash
            Flow"
            shall
            mean, for Borrower for any period, net income plus
            depreciation plus
            amortization of intangible assets minus
            Capital
            Expenditures, all determined in accordance with GAAP. 

           

          “Casualty”
means
            any act or occurrence of any kind or nature that results in damage, loss
            or
            destruction to the Property.

           

          “Claim”
means
            any liability, suit, action, claim, demand, loss, expense, penalty, fine,
            judgment or other cost of any kind or nature whatsoever, including fees,
            costs
            and expenses of attorneys, consultants, contractors and experts.

           

          “Closing
            Checklist”
means
            that certain Closing Requirements and Checklist setting forth the conditions
            for
            closing the Loan and recording the Mortgage.

           

          “Code”
means
            the Internal Revenue Code of 1986, as amended.

           

          “Completion
            of Construction”
means,
            with respect to the Construction of the Improvements or any component
            thereof,
            the satisfaction of all of the conditions of Section
            5
            of
Schedule
            5.

           

          “Condemnation”
means
            any taking of title to, use of, or any other interest in the Property
            under the
            exercise of the power of condemnation or eminent domain, whether temporarily
            or
            permanently, by any Governmental Authority or by any other Person acting
            under
            or for the benefit of a Governmental Authority.

           

          “Condemnation
            Awards”
means
            any and all judgments, awards of damages (including severance and consequential
            damages), payments, proceeds, settlements, amounts paid for a taking
            in lieu of
            Condemnation, or other compensation heretofore or hereafter made, including
            interest thereon, and the right to receive the same, as a result of,
            or in
            connection with, any Condemnation or threatened Condemnation.

           

          “Construction
            Consultant”
means
            a
            person or firm appointed or designated by Lender from time to time to
            inspect
            the progress of the Construction of the Improvements and the conformity
            of
            construction with the Plans and Specifications, the Budget and the Project
            Schedule, and to perform such other acts and duties for such other purposes
            as
            Lender may from time to time deem appropriate or as may be required by
            the terms
            of this Agreement.

           

          “Construction
            Contract”
means
            the agreement dated October 20, 2005, by and between Borrower, as owner,
            and the
            General Contractor, as general contractor, and any other contract for
            the
            Construction of the Improvements between Borrower and a contractor, and
            approved
            in writing by Lender, as the same may be amended from time to time with
            the
            prior written approval of Lender.

           

          “Construction
            of the Improvements”
means
            the development of the Land and/or the construction of the
            Improvements.

           

           

          
            
              
              

            

            
              SCHEDULE
                1 - PAGE
                2

              
                

              

            

            
              
              

            

          

           

           

          "Contingent
            Obligations"
            shall
            mean, for any Person, any contingent obligation calculated in accordance
            with
            GAAP, and in any event shall include (without duplication) all indebtedness,
            obligations or other liabilities of such Person guaranteeing or in effect
            guaranteeing the payment or performance of any indebtedness, obligation
            or other
            liability, regardless of whether contingent (collectively, the "primary
            obligations"),
            of any
            other Person (the "primary
            obligor")
            in any
            manner, whether directly or indirectly, including any indebtedness, obligation
            or other liability of such Person, (a) to purchase any such primary obligation
            or any property constituting direct or indirect security therefor, (b)
            to
            advance or supply funds (1) for the purchase or payment of any such primary
            obligation or (2) to maintain working capital or equity capital of the
            primary
            obligor or otherwise to maintain the net worth or solvency of the primary
            obligor, (c) to purchase property, securities or services primarily for
            the
            purpose of assuring the owner of any such primary obligation of the ability
            of
            the primary obligor to make payment of such primary obligation, or (d)
            otherwise
            to assure or hold harmless the owner of such primary obligation against
            loss
            with respect thereto.

           

          "Current
            Interest"
            shall
            mean, as of any date of determination, and with respect to either the
            Senior
            Note or the Subordinated Note, the interest accrued in respect of the
            indebtedness evidenced by such Note during the calendar month then most
            recently
            ended.

           

          "Debt
            Service Coverage Ratio"
            shall
            mean, for Borrower as of any date of determination, the ratio of (i)
            net income
plus
            depreciation plus
            amortization of intangible assets, all determined in accordance with
            GAAP, to
            (ii) Interest Expense (including, but not limited to, interest expense
            with
            respect to the indebtedness evidenced by Subordinated Note) plus
            any
            scheduled principal payments due on the Subordinated Note, calculated
            for the
            two (2) calendar quarters then most recently ended.

           

          "Default”
means
            an
            event or circumstance that, with the giving of Notice or lapse of time,
            or both,
            would constitute an Event of Default under the provisions of this
            Agreement.

           

          “Deferred
            Equity”
has
            the
            meaning ascribed to such term in Schedule
            5.

           

          “Dispute”
means
            any controversy, claim or dispute between or among the parties to this
            Agreement, including any such controversy, claim or dispute arising out
            of or
            relating to (a) this Agreement, (b) any other Loan Document,
            (c) any related agreements or instruments, or (d) the transaction
            contemplated herein or therein (including any claim based on or arising
            from an
            alleged personal injury or business tort).

           

          “Environmental
            Agreement”
means
            the Environmental Indemnification and Release Agreement of even date
            herewith by
            and between Borrower and Lender pertaining to the Property, as the same
            may from
            time to time be extended, amended, restated or otherwise modified. 

           

          “ERISA”
means
            the Employee Retirement Income Security Act of 1974, as amended.

           

          “Event
            of Default”
means
            any event or circumstance specified in Article
            VI
            and the
            continuance of such event or circumstance beyond the applicable grace
            and/or
            cure periods therefor, if any, set forth in Article
            VI.

           

          “Expenses”
means
            all fees, charges, costs and expenses of any nature whatsoever incurred
            at any
            time and from time to time (whether before or after an Event of Default)
            by
            Lender in making, funding, administering or modifying the Loan, in negotiating
            or entering into any “workout” of the Loan, or in exercising or enforcing any
            rights, powers and remedies provided in the Mortgage or any of the other
            Loan
            Documents, including attorneys’ fees, court costs, receiver’s fees, management
            fees and costs incurred in the repair, maintenance and operation of,
            or taking
            possession of, or selling, the Property.

           

          “Force
            Majeure”
means
            strikes, lock-outs, war, civil disturbance, natural disaster, acts of
            terrorism
            or acts of God which cause a delay in Borrower’s performance of an Obligation
            related to the work of construction; provided, however, that (a) Borrower
            must
            give Notice to Lender within ten (10) days after the occurrence of an
            event
            which it believes to constitute Force Majeure, (b) in no event shall
            Force
            Majeure extend the time for the performance of an Obligation by more
            than sixty
            (60) days, and (c) circumstances that can be remedied or mitigated through
            the
            payment of money shall not constitute Force Majeure hereunder to the
            extent such
            remedy or mitigation is deemed reasonable by Lender in its sole
            discretion.

           

           

          
            
              
              

            

            
              SCHEDULE
                1 - PAGE
                3

              
                

              

            

            
              
              

            

          

           

           

          "GAAP"
            shall
            mean generally accepted accounting principles in the United States of
            America in
            effect from time to time.

           

          “General
            Contractor”
means
            American Constructors, Inc., its successors and permitted assigns.

           

          “Governmental
            Authority”
means
            any governmental or quasi-governmental entity, including any court, department,
            commission, board, bureau, agency, administration, service, district
            or other
            instrumentality of any governmental entity.

           

          “Guarantor” means
            American Seniors Foundation, Inc., an Ohio non-profit corporation, and
            its
            successors and assigns.

           

          “Guaranty”
means
            the Guaranty Agreement of even date herewith executed by Guarantor for
            the
            benefit of Lender, as the same may from time to time be extended, amended,
            restated, supplemented or otherwise modified.

           

          "Indebtedness"
            shall
            mean, as to any Person, all items that in accordance with GAAP would
            be shown on
            the balance sheet of such Person as a liability and in any event shall
            include
            (without duplication) (a) indebtedness for borrowed money or for notes,
            debentures or other debt securities, (b) notes payable and drafts accepted
            representing extensions of credit whether or not representing obligations
            for
            borrowed money, (c) reimbursement obligations in respect of letters of
            credit
            issued for the account of such Person (including any such obligations
            in respect
            of any drafts drawn thereunder), (d) liabilities for all or any part
            of the
            deferred purchase price of property or services, including any such liabilities
            in the form of deferred compensation payable to the sellers thereof,
            (e)
            liabilities secured by any Lien on any property or asset owned or held
            by such
            Person regardless of whether the indebtedness secured thereby shall have
            been
            assumed by or is a primary liability of such Person, (f) Capitalized
            Lease
            Obligations, and (g) Contingent Obligations.

           

          “Improvements”
means
            all on-site and off-site improvements to the Land for a 93 unit assisted
            living
            center together with an 18 unit Alzheimers' facility to be constructed
            on the
            Land, together with all fixtures, tenant improvements and appurtenances
            now or
            later to be located on the Land and/or in such improvements.

           

          “Insurance
            Proceeds”
means
            the insurance claims under and the proceeds of any and all policies of
            insurance
            covering the Property or any part thereof, including all returned and
            unearned
            premiums with respect to any insurance relating to such Property, in
            each case
            whether now or hereafter existing or arising.

           

          "Interest
            Expense"
            shall
            mean, for Borrower for any period, interest expense with respect to the
            Note
            (including, but not limited to, interest expense with respect to the
            indebtedness evidenced by the Subordinated Note), all determined in accordance
            with GAAP.

           

          "Investment"
            shall
            mean the making of any loan, advance, extension of credit or capital
            contribution to, or the acquisition of any stock, bonds, notes, debentures
            or
            other obligations or securities of, or the acquisition of any other interest
            in
            or the making of any other investment in, any Person.

           

          “Land”
means
            the approximately 4.674 acre tract of land described in and encumbered
            by the
            Mortgage.

           

          “Laws”
means
            all federal, state and local laws, statutes, rules, ordinances, regulations,
            codes, licenses, authorizations, decisions, injunctions, interpretations,
            orders
            or decrees of any court or other Governmental Authority having jurisdiction
            as
            may be in effect from time to time.

           

           

          
            
              
              

            

            
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          “Leases”
means
            all leases, license agreements and other occupancy or use agreements
            (whether
            oral or written), now or hereafter existing, which cover or relate to
            the
            Property or any part thereof, together with all options therefor, amendments
            thereto and renewals, modifications and guaranties thereof, including
            any cash
            or security deposited under the Leases to secure performance by the tenants
            of
            their obligations under the Leases, whether such cash or security is
            to be held
            until the expiration of the terms of the Leases or applied to one or
            more of the
            installments of rent coming due thereunder.

           

          “Letter
            of Credit”
means
            any letter of credit issued by Lender for the account of Borrower or
            its nominee
            in connection with the Construction of the Improvements, together with
            any and
            all extensions, renewals or modifications thereof, substitutions therefor
            or
            replacements thereof.

           

          "Lien"
            shall
            mean as to any asset, (a) any lien, charge, claim, mortgage, security
            interest, pledge, hypothecation or other encumbrance of any kind with
            respect to
            such asset, (b) any interest of a vendor or lessor under any conditional
            sale agreement, Capitalized Lease or other title retention agreement
            relating to
            such asset, (c) any reservation, exception, encroachment, easement,
            right-of-way, covenant, condition, restriction, lease or other title
            exception
            affecting such asset, or (d) any assignment, deposit, preference, priority
            or other security agreement or preferential arrangement of any kind or
            nature
            whatsoever (including any conditional sale or other title retention agreement,
            any financing lease having substantially the same economic effect as
            any of the
            foregoing, and the filing of any financing statement under the Uniform
            Commercial Code or comparable law of any jurisdiction).

           

          “Loan”
means
            the loan from Lender to Borrower, the repayment obligations in connection
            with
            which are evidenced by the Note.

           

          “Loan
            Amount”
means
            sum of (a) the maximum principal amount of the Senior Note and (b) the
            maximum
            principal amount of the Subordinated Note.

           

          “Loan
            Documents”
means
            this Agreement, the Note, the Mortgage, the Environmental Agreement,
            the
            Guaranty, any application or reimbursement agreement executed in connection
            with
            any Letter of Credit,
            and any
            and all other documents which Borrower, Guarantor or any other party
            or parties
            have executed and delivered, or may hereafter execute and deliver, to
            evidence,
            secure or guarantee the Obligations, or any part thereof, as the same
            may from
            time to time be extended, amended, restated, supplemented or otherwise
            modified.


           

          "Material
            Adverse Effect"
            shall
            mean a material adverse effect on (a) the properties, business, operations,
            or
            financial condition of Borrower or (b) the ability of Borrower to perform
            its
            obligations under this Agreement, the Note and the other Loan Documents
            to which
            it is a party.

           

          “Mortgage”
means
            collectively the Senior Mortgage and the Subordinated Mortgage.

           

          “Net
            Proceeds,”
when
            used with respect to any Condemnation Awards or Insurance Proceeds, means
            the
            gross proceeds from any Condemnation or Casualty remaining after payment
            of all
            expenses, including attorneys’ fees, incurred in the collection of such gross
            proceeds.

           

          “Note”
means
            collectively the Senior Note and the Subordinated Note.

           

          “Notice”
means
            a
            notice, request, consent, demand or other communication given in accordance
            with
            the provisions of Section
            8.6
            of this
            Agreement.

           

          “Obligations”
means
            all present and future debts, obligations and liabilities of Borrower
            to Lender
            arising pursuant to, or on account of, the provisions of this Agreement,
            the
            Note or any of the other Loan Documents, including the obligations: (a)
            to pay
            all principal, interest, late charges, prepayment premiums (if any) and
            other
            amounts due at any time under the Note; (b) to pay all Expenses, indemnification
            payments, fees and other amounts due at any time under the Mortgage or
            any of
            the other Loan Documents, together with interest thereon as provided
            in the
            Mortgage or such Loan Document; (c) to pay and perform all obligations
            of
            Borrower (or its affiliate) under any Swap Contract; and (d) to perform,
            observe
            and comply with all of the terms, covenants and conditions, expressed
            or
            implied, which Borrower is required to perform, observe or comply with
            pursuant
            to the terms of the Mortgage or any of the other Loan Documents.

           

           

          
            
              
              

            

            
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          “Person”
means
            an
            individual, a corporation, a partnership, a joint venture, a limited
            liability
            company, a trust, an unincorporated association, any Governmental Authority
            or
            any other entity.

           

          “Plans
            and Specifications”
means
            any and all plans and specifications prepared in connection with the
            Construction of the Improvements and approved in writing by Lender, as
            the same
            may from time to time be amended with the prior written approval of
            Lender.

           

          “Project
            Schedule”
means
            the schedule for commencement and completion of the Construction of the
            Improvements attached hereto as Schedule 4,
            as the
            same may be revised from time to time with the written approval of
            Lender.

           

          “Property”
means
            the real and personal property conveyed and encumbered by the
            Mortgage.

           

          "Purchase
            Money Debt"
            shall
            mean (a) Indebtedness of Borrower that, within thirty (30) days of the
            purchase
            of real property, equipment or other tangible personal property in which
            Borrower at any time prior to such purchase had no interest, is incurred
            to
            finance part or all of (but not more than) the purchase price of such
            property,
            and that bears interest at a rate per annum that is commercially reasonable
            at
            the time, and (b) Indebtedness that constitutes a renewal, extension,
            refunding
            or refinancing of, but not an increase in the principal amount of, Purchase
            Money Debt that is such by virtue of clause
            (a),
            is
            binding only upon the obligor or obligors under the Purchase Money Debt
            being
            renewed, extended or refunded and bears interest at a rate per annum
            that is
            commercially reasonable at the time.

           

          “Rents”
means
            all of the rents, royalties, issues, profits, revenues, earnings, income
            and
            other benefits of the Property or any part thereof, or arising from the
            use or
            enjoyment of the Property or any part thereof, including all such amounts
            paid
            under or arising from any of the Leases and all fees, charges, accounts
            or other
            payments for the use or occupancy of rooms or other public facilities
            within the
            Property or any part thereof.

           

          "Restricted
            Payments"
            shall
            mean, as to any Person for any period:

           

          (a) dividends,
            other distributions and other payments or deliveries of property on account
            of
            the ownership interests in, or any warrants, options or other rights
            in respect
            of any ownership interests in, such Person or its Subsidiaries, now or
            hereafter
            outstanding, that are recorded by such Person and its Subsidiaries on
            a
            consolidated basis (excluding any such dividends, distributions and other
            payments made solely to such Person or a wholly-owned Subsidiary of such
            Person
            by a Subsidiary of such Person),

           

          


          (b) amounts
            paid to purchase, redeem, retire or otherwise acquire for value ownership
            interests in, or any warrants, options or other rights in respect of
            the
            ownership interests in, such Person or its Subsidiaries, now or hereafter
            outstanding (excluding any such amounts paid solely to such Person or
            a
            wholly-owned Subsidiary of such Person by a Subsidiary of such
            Person),

          


          (c) any
            assets
            segregated or set apart (including any money or property deposited with
            a
            trustee or other paying agent) by such Person or any of its Subsidiaries
            for a
            sinking or analogous fund for the purchase, redemption or retirement
            or other
            acquisition of any ownership interests in, or any warrants, options or
            other
            rights in respect of any capital stock of or other ownership interests
            in, such
            Person or its Subsidiaries, now or hereafter outstanding (excluding any
            assets
            so segregated or set apart with respect to any stock, warrants, options
            or other
            rights held by a wholly-owned Subsidiary of such Person),

           

           

          
            
              
              

            

            
              SCHEDULE
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          (d) payments
            made or required to be made by such Person with respect to any stock
            appreciation rights plan, equity incentive or achievement plan or any
            similar
            plan and any assets segregated or set apart for such purposes (including
            any
            money or property deposited with a trustee or other paying agent),
            and

          


          (e) any
            payment, purchase, redemption or acquisition of Indebtedness subordinated
            to the
            Indebtedness evidenced by the Note and any assets segregated or set apart
            for
            such purposes (including any money or property deposited with a trustee
            or other
            paying agent), excluding, however, regularly scheduled payments made
            according
            to the stated terms of such subordinated Indebtedness;

          


          all
            as
            determined in accordance with GAAP.

          


          “Senior
            Mortgage”
means
            the Deed of Trust, Assignment, Security Agreement and Fixture Filing
            of even
            date herewith given by Borrower to Lender to secure the Senior Note and
            the
            Obligations, as the same may from time to time be extended, amended,
            restated,
            supplemented or otherwise modified.

           

          “Senior
            Note”
means
            the Promissory Note of even date herewith, in the maximum principal amount
            of
            $26,250,000.00, made by Borrower payable to the order of Lender, as the
            same may
            from time to time be extended, amended, restated, supplemented or otherwise
            modified.

           

          "Spread
            Rate"
            shall
            mean an annual rate of interest equal to one-fourth of one percentage
            point
            (0.25%) per annum.

           

          “State”
means
            the State of Tennessee.

           

          “Stored
            Materials”
means
            building materials or furnishings that have not yet been incorporated
            into the
            Improvements.

           

          "Subordinated
            Indebtedness"
            means
            the indebtedness evidenced by the Subordinated Note.

           

          “Subordinated
            Mortgage”
means
            the Deed of Trust, Assignment, Security Agreement and Fixture Filing
            of even
            date herewith given by Borrower to Lender to secure the Subordinated
            Note and
            the Subordinated Obligations, as the same may from time to time be extended,
            amended, restated, supplemented or otherwise modified.

           

          “Subordinated
            Note”
means
            the Promissory Note of even date herewith, in the maximum principal amount
            of
            $6,050,000.00, made by Borrower payable to the order of Lender, as the
            same may
            from time to time be extended, amended, restated, supplemented or otherwise
            modified.

           

          "Subsidiary"
            shall
            mean, as to any Person (a) a corporation, limited liability company or
            other
            entity of which shares of stock or other ownership interests having ordinary
            voting power (other than stock having such power only by reason of the
            occurrence of a contingency) to elect a majority of the board of directors
            or
            other managers thereof are at the time owned, or the management of which
            is
            otherwise controlled, directly or indirectly, through one or more
            intermediaries, or both, by such Person, or (b) a partnership in which
            such
            Person is a general partner or the management of which is otherwise controlled,
            directly or indirectly, through one or more intermediaries or both, by
            such
            Person.

           

          “Survey”
means
            a
            map or plat of survey of the Land which conforms with Lender’s survey
            requirements set forth in the Closing Checklist and with the “Minimum Standard
            Detail Requirements for ALTA/ACSM Land Title Surveys” jointly established and
            adopted by ALTA, ACSM and NSPS in 1999, and pursuant to Accuracy Standards
            as
            adopted by ALTA, ACSM and NSPS and in effect on the date when the Survey
            is
            certified to Lender in the form specified in the Closing Checklist.

           

           

          
            
              
              

            

            
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          “Taxes”
means
            all taxes and assessments whether general or special, ordinary or extraordinary,
            or foreseen or unforeseen, which at any time may be assessed, levied,
            confirmed
            or imposed by any Governmental Authority or any communities facilities
            or other
            private district on Borrower or on any of its properties or assets or
            any part
            thereof or in respect of any of its franchises, businesses, income or
            profits.

           

          


          
            
              
              

            

            
              SCHEDULE
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          Schedule
            2

           

          Form
            of
            Draw Request

           

          


           

          DRAW
            REQUEST NO. _________

           

           

          
            	TO:
                    BANK OF AMERICA, N.A. ("Lender")
	 	 	 
	LOAN
                    NO.	 	 
	PROJECT	The
                    Cumberland at Green Hills
	LOCATION	Burton
                    Hills, Nashville, Tennessee
	BORROWER 	
                    American
                      Retirement Corporation

                    ASF
                      of Green Hills, LLC

                     

                  
	FOR
                    PERIOD ENDING	 	 
	 	 	 
	 	 	 


          

           

           

          In
            accordance with those two (2) certain Construction Loan Agreements in
            the amount
            of $_____________ dated ________, 2005, with one being between ASF of
            Green
            Hills, LLC and American Retirement Corporation and the second between
            American
            Retirement Corporation and Bank of America, N.A., the undersigned jointly
            request that $______________________ be advanced from Loan proceeds.
            The
            proceeds should be credited to the account of American Retirement Corporation,
            Account No. 3253194544, at Bank of America, N.A.

           

           

          
            	 	1.	CURRENT
                    DRAW REQUEST FOR HARD COSTS	$	 	
                  
	 	 	 	
                  	 	 
	 	2.	CURRENT
                    DRAW REQUEST FOR SOFT COSTS	$	 	 
	 	 	 	
                  	 	 
	 	3.	TOTAL
                    DRAW REQUEST	$	 	 
	 	 	 	 	 	 


          

           

           

          
            	 	
                    AUTHORIZED
                      SIGNERS:

                  	 
	 	
                     

                    ASF
                      of Green Hills, LLC

                  	 
	 	 	
                    Dated:

                  	 	 
	 	
                     

                    Approved:

                  	 
	 	
                     

                    American
                      Retirement Corporation

                  	 
	 	 
	
                    Dated:

                  	 	 
	 	 	 	 	 


          

           

           

          
            
              
              

            

            
              SCHEDULE
                2

              
                

              

            

            
              
              

            

          

          


           

          Schedule
            3

           

          Budget

           

           

           

          
            
              
              

            

            
              SCHEDULE
                3

              
                

              

            

            
              
              

            

          



          Schedule
            4

           

          Project
            Schedule

           

          


           

          1.  Commencement.

           

          Subject
            to
            Force Majeure, Borrower shall cause development of the Land to commence
            no later
            than December 31, 2005, and shall cause Construction of the Improvements
            to
            commence no later than February 7, 2006. In connection with the foregoing,
            Borrower shall obtain from the appropriate government officials (i) a
            grading
            permit on or before February 7, 2006 and (ii) a building permit on or
            before
            February 7, 2006.

           

          2.  Completion
            of Construction of All Improvements.

           

          Subject
            to
            Force Majeure, Borrower shall cause Completion of Construction of all
            of the
            Improvements to occur no later than August 27, 2007.

           

          3.  Outside
            Date for Completion of Construction.

           

          Regardless
            of the existence or non-existence or occurrence or non-occurrence of
            Force
            Majeure, in no event shall Completion of Construction of the Improvements
            occur
            later than the earliest of (i) the date of the maturity of the Loan,
            (ii)
            November 27, 2007.

           

          


          
            
              
              

            

            
              SCHEDULE
                4

              
                

              

            

            
              
              

            

          



          Schedule
            5

           

          Additional
            Terms Regarding Advances

           

          The
            conditions precedent to closing the Loan, recording the Mortgage and
            making the
            first advance are set forth in the Closing Checklist. Subsequent advances
            of the
            Loan shall be subject to the following additional terms and
            conditions:

           

          1.  Advances
            Under the Budget.

           

           As
            listed in the Budget: (a) the “Total
            Costs”
are
            the
            maximum costs anticipated by Borrower for each item specified; (b) the
            “Total
            Budget”
is
            the
            maximum cost anticipated by Borrower for the Construction of the Improvements
            and Borrower’s satisfaction of the other requirements of the Loan; (c) the
“Loan
            Proceeds”
are
            the
            maximum amount to be advanced under the Loan; (d) “Upfront
            Equity”
is
            the
            amount that Borrower is required to pay toward the Total Costs; and (e)
            “Deferred
            Equity”
is
            an
            additional amount that Borrower is required to pay toward the Total Costs
            as of
            the date indicated. Whenever Borrower is required to pay any items from
            Upfront
            Equity or Deferred Equity, Lender, at its option, may restrict or prohibit
            advances of the Loan for such items to the extent that Upfront Equity
            or
            Deferred Equity is sufficient to pay such amounts. Whenever Borrower’s Upfront
            Equity or Deferred Equity is on deposit with Lender, Lender shall make
            all
            advances first from such equity based on the allocations thereof set
            forth in
            the Budget. After the exhaustion of Upfront Equity or Deferred Equity
            allocated
            to a given line item, Lender will advance Loan proceeds for that line
            item
            pursuant to the Budget. Lender acknowledges and agrees that the Upfront
            Equity
            and the Deferred Equity will be funded by Borrower from proceeds under
            the
            Subordinated Note.

           

          2. 
Special
            Conditions to Second Advance [First
            Advance for Hard Costs].

           

           
            Prior to the second advance of the Loan [first
            advance for hard costs],
            Borrower
            shall furnish the following items to Lender, all of which must be satisfactory
            to Lender:

           

           (a)  The original
            title insurance policy insuring Lender’s interest under the Mortgage, issued
            pursuant to the commitment for title insurance approved by Lender prior
            to the
            closing of the Loan;

           

           (b)  Evidence
            of Borrower’s Upfront Equity investment in the Property of not less than Three
            Million Six Hundred Thousand and No/100 Dollars ($3,600,000.00), from
            sources
            other than proceeds from the Senior Note, in accordance with the
            Budget;

           

          3.  Additional
            Items Required for Each Advance.

           

           Lender
            shall not be obligated to make an advance of Loan proceeds until and
            unless the
            following additional items shall have been received and approved by Lender,
            as
            and to the extent required by Lender, prior to the date of the
            advance:

           

           (a)  A
            notice
            of title continuation or an endorsement to the title insurance policy
            with
            respect to the Land theretofore delivered to Lender, showing that since
            the last
            preceding advance, there has been no change in the status of title and
            no other
            exception not theretofore approved by Lender, which endorsement shall
            have the
            effect of advancing the effective date of the policy to the date of the
            advance
            then being made and increasing the coverage of the policy by an amount
            equal to
            the advance then being made, if the policy does not by its terms provide
            automatically for such an increase.

           

           (b)  Interim
            acknowledgments of payment and releases of liens from all Persons who
            have
            furnished labor, materials and/or services in the Construction of the
            Improvements, covering work performed, materials supplied and services
            rendered
            through the date of the last preceding advance.

           

           

          
            
              
              

            

            
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           (c)  Soil
            compaction test reports, bearing capacity test reports and concrete test
            reports.

           

           (d)  A
            foundation Survey and such other current Surveys as Lender may reasonably
            request, in each instance disclosing no violation, encroachment or other
            variance from applicable set-backs or other restrictions unless approved
            in
            writing by Lender.

           

           (e)  Evidence
            that the Improvements have not been materially damaged by fire or other
            Casualty
            unless Lender shall have received Insurance Proceeds, or satisfactory
            assurance
            that it will receive such proceeds in a timely manner pursuant to Section
            4.10,
            sufficient in the judgment of Lender to effect a satisfactory restoration
            and
            completion of the Improvements in accordance with the terms of the Mortgage
            and
            this Agreement.

           

           (f)  Evidence
            that all work requiring inspection by any Governmental Authority having
            or
            claiming jurisdiction has been duly inspected and approved by such authority
            and
            by any rating or inspection organization, bureau, association or office
            having
            or claiming jurisdiction.

           

           (g)  Evidence,
            including a report from the Construction Consultant, that all work completed
            at
            the time of the application for an advance has been performed in a good
            and
            workmanlike manner, that all materials and fixtures usually furnished
            and
            installed at that stage of construction have been so furnished and installed,
            that the Improvements can be completed in accordance with the Project
            Schedule,
            and that the balance of the Loan proceeds then held by Lender and available
            for
            advance pursuant to the terms of this Agreement, together with other
            funds which
            Lender determines to be available to Borrower for such purpose, are and
            will be
            sufficient to pay the cost of such completion.

           

          4.  Conditions
            Precedent to All Advances.

           

           
            Lender shall not be obligated to make an advance of Loan proceeds unless
            the
            following additional conditions shall have been satisfied or waived in
            writing
            by Lender as of the date of each advance:

           

           
            (a)  No
            lien
            for the performance of work or supplying of labor, materials or services
            shall
            have been filed against the Land and remain unsatisfied or
            unbonded.

           

           
            (b)  No
            condition or situation shall exist at the Land which, in the reasonable
            determination of Lender, constitutes a danger to or impairment of the
            Property
            or presents a danger or hazard to the public.

           

           
            (c)  The
            representations and warranties made in Article III
            shall be
            true and correct on and as of the date of the advance with the same effect
            as if
            made on such date.

           

           
            (d)  All
            terms
            and conditions of the Loan Documents required to be met as of the date
            of the
            applicable advance shall have been met to the satisfaction of
            Lender.

           

           
            (e)  No
            Default
            or Event of Default shall have occurred and be continuing.

           

          5.  Advances
            for Hard Costs.

           

           
            Lender shall make periodic advances for hard and soft costs as construction
            progresses. Each advance shall be equal to Borrower’s total costs as reflected
            in the applicable draw request, net of retainage in the amount of 10%
            for hard
            costs, until Lender has disbursed an amount equal to 50% of all hard
            cost line
            items in the Budget. Thereafter, each advance shall be equal to Borrower’s total
            costs as reflected in the applicable draw request, net of retainage in
            the
            amount of 5% for hard costs. The total costs of each request shall be
            funded by
            (i) an advance under the Senior Note in an amount equal to the total
            costs of
            each request, net of retainage as set forth above, multiplied by
            91.2646%,
            and (ii) an advance under the Subordinated Note in an amount equal to
            the total
            costs of each request, net of retainage as set forth above, multiplied by
            8.7354%.
            Lender shall not be obligated to make the final advance of the Loan for
            hard
            costs unless the following additional conditions shall have been satisfied,
            to
            the extent required by Lender:

           

           

          
            
              
              

            

            
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            (a)  The
            Construction Consultant and the Architect shall have certified to Lender
            that
            construction has been completed in a good and workmanlike manner, in
            accordance
            with applicable requirements of all Governmental Authorities and substantially
            in accordance with the Plans and Specifications;

           

           
            (b)  To
            the
            extent required by applicable Governmental Authorities for the use and
            occupancy
            of the Improvements, certificates of occupancy and other applicable permits
            and
            releases shall have been issued with respect to the Improvements and
            copies
            thereof have been furnished to Lender;

           

           
            (c)  Lender
            shall have received a satisfactory as-built Survey showing the location
            of the
            Improvements;

           

           
            (d)  Lender
            shall have received a satisfactory final affidavit from the General Contractor
            and full and complete releases of lien from the General Contractor and
            each
            subcontractor of and supplier to the General Contractor with respect
            to work
            performed and/on materials supplied in the Construction of the
            Improvements;

           

           
            (e)  Lender
            shall have received a satisfactory set of as-built plans and specifications
            for
            the Improvements;

           

           
            (f)  A
            valid
            notice of completion shall have been recorded;

           

           
            (g)  Lender
            shall have received a satisfactory endorsement to its title insurance
            policy;
            and

           

           
            (h)  All
            other
            terms and conditions of this Agreement and the other Loan Documents required
            to
            be met as of the date of the final advance of the Loan for hard costs
            shall have
            been met to the satisfaction of Lender.

           

          6.  Advances
            for Stored
            Materials.

           

           

           No
            advances will be made for Stored Materials unless (a) Borrower has good
            title to
            the Stored Materials and has furnished satisfactory evidence of such
            title to
            Lender, to the extent required by Lender, (b) the Stored Materials are
            components in a form ready for incorporation into the Improvements and
            will be
            so incorporated within a period of forty-five (45) days from the date
            of the
            advance for the Stored Materials, (c) the Stored Materials are in Borrower’s
            possession and are satisfactorily stored on the Land or at such other
            location
            as Lender may approve, in each case with adequate safeguards to prevent
            commingling with materials for other projects, (d) the Stored Materials
            are
            protected and insured against loss, theft and damage in a manner and
            amount
            satisfactory to Lender, (e) the Stored Materials have been paid for in
            full or
            will be paid for in full from the funds to be advanced, (f) Lender has
            or will
            have upon the payment for the Stored Materials from the advanced funds
            a
            perfected, first priority security interest in the Stored Materials,
            (g) all
            lien rights and claims of the supplier have been released or will be
            released
            upon payment with the advanced funds, and (h) following the advance for the
            Stored Materials, the aggregate amount of advances for Stored Materials
            that
            have not yet been incorporated into the Improvements will not exceed
            Two Hundred
            Thousand Dollars ($200,000.00).

           

          7.   Advances
            for Soft
            Costs.

           

           
            Lender shall make periodic advances for soft costs, each in the amount
            requested
            in the applicable draw request, without retainage.

           

           

          
            
              
              

            

            
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          8.  Advances
            for
            Interest.

           

           

           Lender
            shall make periodic advances to pay interest as and when it becomes due.
            Borrower hereby irrevocably authorizes Lender to make any interest payment
            on
            Borrower’s behalf by debiting the interest reserve in the amount of the payment
            and applying the debited amount to accrued and unpaid interest on the
            Loan.


           

          9.  Account
            for Funding
            Advances.

           

           

           Subject
            to Lender’s right to advance Loan proceeds as provided in this Agreement, Lender
            may make advances into Borrower’s Deposit Account. Borrower hereby irrevocably
            authorizes Lender to deposit any advance to the credit of Borrower in
            that
            account, by wire transfer or other deposit. Borrower further irrevocably
            authorizes Lender to pay and reimburse itself for any Expenses incurred
            by
            Lender by debit to such account. This account shall be used solely for
            the
            payment of costs and other purposes associated with the Construction
            of the
            Improvements, the Property and/or the Loan, and shall not be used for
            any other
            purpose.

           

          


          
            
              
              

            

            
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          Schedule
            6

           

          Leasing
            and Tenant Matters

           

          1.  Representations
            and Warranties of Borrower Regarding Leases.

           

           Borrower
            represents and warrants that Borrower has delivered to Lender Borrower’s
            standard form of tenant lease, and no Lease or lease guaranty contains
            any
            option or right of first refusal to purchase all or any portion of the
            Property
            or any present or future interest therein.

           

          2.  Covenants
            of Borrower Regarding Leases and Rents.

           

           Borrower
            covenants that Borrower (a) will observe and perform all of the obligations
            imposed upon the landlord in the Leases and will not do or permit to
            be done
            anything to impair the security thereof; (b) will use its best efforts to
            enforce or secure, or cause to be enforced or secured, the performance
            of each
            and every obligation and undertaking of the respective tenants under
            the Leases
            and will appear in and defend, at Borrower’s sole cost and expense, any action
            or proceeding arising under, or in any manner connected with, the Leases;
            (c) will not collect any of the Rents in advance of the time when the same
            become due under the terms of the Leases; (d) will not discount any future
            accruing Rents; (e) without the prior written consent of Lender, will not
            execute any assignment of the Leases or the Rents; (f) other than in the
            ordinary course of business, will not alter, modify or change the terms
            of the
            Leases, or surrender, cancel or terminate the same without the prior
            written
            consent of Lender; and (g) will execute and deliver, at the request of
            Lender, all such assignments of the Leases and Rents in favor of Lender
            as
            Lender may from time to time require.

           

          3.  Leasing
            Guidelines.

           

           Borrower
            shall not enter into any Lease of space in the Improvements unless approved
            or
            deemed approved by Lender prior to execution. The standard form of tenant
            lease,
            and any revisions thereto, must have the prior written approval of Lender.
            Lender shall be “deemed” to have approved any Lease that: (a) is on the standard
            form lease approved by Lender with no deviations except as approved by
            Lender;
            (b) is entered into in the ordinary course of business with a bona fide
            unrelated third party tenant, and ASF, acting in good faith and exercising
            due
            diligence, has determined that the tenant is financially capable of performing
            its obligations under the Lease; (c) reflects an arm’s length transaction at
            then-current market rate for comparable space; and (d) contains no right
            or
            option to purchase the Property or any present or future interest therein.
            If
            requested by Lender, Borrower shall provide to Lender a correct and complete
            copy of each existing and future Lease, including any exhibits, and any
            guaranty(ies) thereof, within seven (7) days after Lender’s request (for
            existing Leases) or seven (7) days after execution (for future
            Leases).

           

          4.  Delivery
            of Leasing Information and Documents.

           

           From
            time to time upon Lender’s request, Borrower shall promptly deliver to Lender
            (a) complete executed originals of each Lease, including any exhibits
            thereto
            and any guaranty(ies) thereof, (b) a complete rent roll of the Property
            in such
            detail as Lender may require, together with such operating statements
            and
            leasing schedules and reports as Lender may require, and (c) such other
            information regarding tenants and prospective tenants and other leasing
            information as Lender may request.

           

          


          
            
              
              

            

            
              SCHEDULE
                6