Unassociated Document


    
       

      Exhibit
        10.88

      
 

      LOAN
        AGREEMENT

      (AL
        EXPANSION)

      


       

      THIS
        LOAN
        AGREEMENT (this "Agreement")
        is made
        and entered into this ________ day of December, 2005, by and between ARC
        BRANDYWINE, L.P., a Delaware limited partnership (hereinafter called
“Borrower”),
        and
        GUARANTY BANK, a federal savings bank (hereinafter called “Lender”).

       

      W
        I T N E
        S S E T H:

       

      WHEREAS,
        Lender has agreed to make a Loan (as hereinafter defined) to Borrower;
        and

       

      WHEREAS,
        Borrower and Lender wish to enter into this Agreement in order to set forth
        the
        terms and conditions of the disbursement of the Loan;

       

      NOW
        THEREFORE, in consideration of the mutual promises hereinafter contained
        and of
        other valuable consideration, the receipt and sufficiency of which are hereby
        acknowledged, Borrower and Lender hereby agree as follows:

      


       

      DEFINITIONS

       

      1.1.  Defined
        Terms.   As
        used in
        this Agreement, the following terms shall have the meanings shown:

       

      (a)  “Architect”. 
        Richard L. Miller.

       

      (b)  “Architect's
        Consent, Agreement and Certification”. 
        The Architect's Consent, Agreement and Certification as provided for herein
        and
        in the form approved by Lender.

       

      (c)  “Assignment
        of Leases and Rents”. 
        The Assignment of Leases and Rents of even date herewith from Borrower to
        Lender
        covering certain leases described therein, providing a source of future payment
        of the Note.

       

      (d)  “Borrower's
        Equity”. 
        Funds in the amount of $0.00 obtained by Borrower from equity contributions
        or
        other sources approved by Lender and which are to be applied to the payment
        of
        Project Costs.

       

      (e)  “Certificate
        of Non Foreign Status”. 
A
        certificate by Borrower as required by Section 1445 of the Internal Revenue
        Code
        of 1986.

       

      (f)  “Collateral
        Assignment of Contracts and Plans and Other Agreements Affecting Real
        Estate”.
        The
        Collateral Assignment of Contracts and Plans and Other Agreements Affecting
        Real
        Estate as provided for herein and in the form approved by Lender.

       

      
        
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      (g)  “Completion
        Date”. 
        September 1, 2006. 

       

      (h)  “Continuing
        Care Agreement”. 
        Agreement by and between a resident and any Property Related Person executed
        upon resident’s purchase of a residential unit on the CCRC Property which
        provides for personal care services at the CCRC Property.

       

      (i)  “Construction
        Contract”. 
An
        agreement providing for the furnishing of labor and/or materials to be used
        in
        the construction and/or installation of the Improvements, including all
        additions, changes and other amendments thereto.

       

      (j)  “Construction
        Schedule”. 
As
        defined in subsection 4.1(h).

       

      (k)  “Contractor”.
        Warfel
        Construction Company or such other party or parties who, with the prior written
        approval of Lender, enter into a Construction Contract with
        Borrower.

       

      (l)  “Contractor's
        Consent, Agreement and Certification”.
        The
        Contractor's Consent, Agreement and Certification as provided for herein
        and in
        the form approved by Lender.

       

      (m)  “Disbursal
        Schedule”. 
        The schedule of estimated disbursements of the proceeds of the Loan agreed
        upon
        in writing by Lender and Borrower or as modified from time to time upon written
        approval from Lender.

       

      (n)  “Engineer”.
         One or more engineers engaged with respect to the Property.

       

      (o)  “Environmental
        Indemnity Agreement”.
        An
        Environmental Indemnity Agreement of even date herewith executed by Borrower
        in
        favor of Lender.

       

      (p)  “Forecast”.
        As
        defined in subsection 4.1(d).

       

      (q)  “Governmental
        Authority”.
        The
        United States, the state, the county and the city or any other political
        subdivision in which the CCRC Property is located, and any other political
        subdivision, agency or instrumentality having jurisdiction over the CCRC
        Property or any of the Property Related Persons.

       

      (r)  “Governmental
        Requirements”. All
        laws, ordinances, statutes, codes, rules, regulations, orders and decrees
        of any
        Governmental Authority applicable to any of the Property Related Persons
        or the
        CCRC Property.

       

      (s)  “Guarantor”.
        American Retirement Corporation, a Tennessee corporation.

       

      
        
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      (t)  “Guaranty”.
        The
        Guaranty and Suretyship Agreement of even date herewith made by Guarantor
        with
        respect to all of all obligations of the Borrower contained in the Loan
        Documents.

       

      (u)  “Improvements”.
        A
        57-unit assisted living facility expansion to the existing 48-unit healthcare
        center to be constructed on the Land.

       

      (v)  “Initial
        Advance”.
        The
        first amount of the Loan funded by the Lender to the Borrower.

       

      (w)  “Inspecting
        Architect”.
        The
        representative of Lender designated to inspect the construction of the
        Improvements on behalf of Lender.

       

      (x)  “Land”.
        The real
        property described in Exhibit
        A attached
        hereto and made a part hereof. 

       

      (y)  “Loan”.
        The
        $11,424,000 loan made this date by Lender to Borrower and evidenced by the
        Note.


       

      (z)  “Loan
        Documents”.
        This
        Agreement and all other instruments evidencing, securing or related to the
        Loan.

       

      (aa)  “Mortgagee
        Title Policy”
..
        As
        defined in the Security Instrument.

       

      (cc)  “Note”.
        The
        $11,424,000 promissory note dated as of the date hereof from Borrower to
        Lender.

       

      (dd)  “Plans
        and Specifications”.
        Plans
        and specifications prepared or to be prepared by the Architect and the Engineer
        for the construction of the Core Improvements listed in the Collateral
        Assignment of Contracts and Plans and Other Agreements Affecting Real Estate,
        including all additions, changes and other amendments thereto.

       

      (ee)  “Project
        Budget”.
        As
        defined in subsection 4.1(a) and as attached hereto as Exhibit
        B.

       

      (ff)  “Project
        Costs”.
        As
        defined in subsection 4.1(a).

       

      (gg)  “Project
        Revenues”.
        As
        defined in subsection 4.1(a). 

       

      (hh)  “Property”.
        The Land
        and the Improvements.

       

      (ii)  “Purchase
        Agreement”.
        Agreement entered into by any resident and any Property Related Person whereby
        resident agrees to purchase from the Property Related Person a life-estate
        in a
        residential unit located on the CCRC Property.

       

      
        
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      (jj)  “Repurchase
        Agreement”.
        Agreement entered into by and between any resident and any Property Related
        Person whereby resident or resident’s authorized agent is required to convey
        resident’s life-estate interest in the unit to the Property Related Person upon
        becoming a permanent resident of the healthcare facility or when the
        Continuing-Care Agreement is terminated.

       

      (kk)  “Security
        Instrument”.
        That
        certain Open-End Mortgage, Security Agreement and Fixture Filing dated as
        of the
        date hereof made by Borrower for the benefit of Lender. 

       

      (ll)  “Site
        Plan”.
        The
        site plan for the Improvements attached as Exhibit E and made a part
        hereof.

       

      (mm)  “Title
        Company”.
        Land
        Services USA, Inc.

       

      Additional
        definitions are set forth in Exhibit
        C - Healthcare Rider
        to this
        Agreement.

       

      ARTICLE
        II

       

      THE
        LOAN

       

      2.1.  The
        Loan.
        Subject
        to and upon the terms, conditions and limitations contained in this Agreement
        and relying on the representations and warranties contained in this Agreement
        and the other Loan Documents, Lender agrees to lend, and Borrower agrees
        to
        borrow and take down, the Loan, to be evidenced by the Note. All proceeds
        of the
        Loan shall be advanced against the Note as provided in Article VII hereof
        and
        shall be used by Borrower to pay for Project Costs as contained in the Project
        Budget. The principal amount actually owing on the Note from time to time
        shall
        be the aggregate of all advances theretofore made by the Lender against the
        Note
        less all payments theretofore made on the principal of the Note.

       

      2.2.  Security
        for the Loan.
        The
        Loan, as evidenced by the Note, shall be secured, inter alia,
        by the
        Security Instrument, the Assignment of Leases and Rents, the Collateral
        Assignment of Contracts and Plans and Other Agreements Affecting Real Estate,
        the Environmental Indemnity Agreement, the Pledge Agreement and the Security
        Agreement and shall be guaranteed by the Guaranty.

       

      2.3.  Schedule
        of Disbursements.
        Disbursement of the proceeds of the Loan is to be made by Lender to Borrower
        in
        accordance with the Disbursal Schedule and the Project Budget.

       

      
        
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      ARTICLE
        III.

       

      REPRESENTATIONS
        AND WARRANTIES OF BORROWER

       

      3.1.  Representations,
        Warranties and Covenants of Borrower.
        Borrower
        hereby represents, warrants and covenants to Lender that:

       

      (a)  No
        Consents Necessary.
        No
        consent of any other party, and no consent, license, approval or authorization
        of, or registration or declaration with, any Governmental Authority is required
        in connection with the execution, delivery, performance, validity or
        enforceability of the transactions contemplated by this Agreement or the
        Loan
        Documents.

       

      (b)  Availability
        of Utilities.
        All
        utility and municipal services necessary for the proper operation of the
        Improvements for their intended purpose are available at the Property, including
        water supply, storm and sanitary sewer facilities, gas or electricity and
        telephone facilities, or will be available at the Property when constructed
        or
        installed as part of the Improvements, and written permission has been or
        will
        be obtained from the applicable utility companies or municipalities to connect
        the Improvements into each of said services, and Borrower will supply evidence
        thereof satisfactory to Lender. All of such utility and municipal services
        will,
        to Borrower's knowledge, comply with all applicable Governmental
        Requirements.

       

      (c)  Roads.
        All
        roads necessary for the full utilization of the Improvements for their intended
        purposes have been or will be completed in connection with the completion
        of the
        Improvements and the necessary rights-of-way therefor have either been acquired
        by the appropriate Governmental Authority or have been dedicated to the public
        use and accepted by such Governmental Authority and all necessary steps have
        been taken by Borrower and any such Governmental Authority to assure the
        complete construction and installation thereof.

       

      (d)  Building
        Permits.
        All
        zoning, utility, building, health and operating permits (if any) required
        for
        the construction and operation of the Improvements either have been obtained
        or
        will be obtained prior to commencement of construction of the Improvements
        and
        copies of same will be delivered to Lender.

       

      (e)  Condition
        of Property.
        The
        Property is not now damaged or injured as a result of any fire, explosion,
        accident, flood or other casualty.

       

      (f)  Construction
        Contract.
        Except
        for the contracts described in Schedule II of the Collateral Assignment of
        Contracts and Plans and Other Agreements Affecting Real Estate, Borrower
        has not
        entered into any contracts or agreements with third parties (either written
        or
        oral) providing for the furnishing of labor or materials to be used in the
        construction or installation of the Improvements and will enter into no such
        contracts or agreements, except in such form and upon such terms as shall
        be
        approved in writing by Lender.

       

      
        
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      (g)  No
        Prior Work.
        No work
        or construction has been commenced on the Land and no materials have been
        delivered to the Land which could, in either case, result in the imposition
        of a
        mechanic's or materialmen's lien on the Property prior to or on parity with
        the
        lien and security interest created by the Security Instrument.

       

      (h)  Sufficiency
        of Funds.
        Sufficient funds are available to Borrower in addition to proceeds of the
        Note
        and Borrower's Equity to pay all Project Costs. Upon request of Lender, Borrower
        will demonstrate to Lender that such funds are available.

       

      (i)  Executive
        Order 13224.
        Borrower
        and all persons or entities holding any legal or beneficial interest whatsoever
        in Borrower are not included in, owned by, controlled by, acting for or on
        behalf of, providing assistance, support, sponsorship, or services of any
        kind
        to or otherwise associated with, any of the persons or entities referred
        to or
        described in Executive Order 13224 (Blocking Property and Prohibiting
        Transactions with Persons Who Commit, Threaten to Commit or Support Terrorism,
        as amended).

       

        

      ARTICLE
        IV.

       

      COVENANTS
        OF BORROWER

       

      4.1.  Covenants
        of BorrowerBorrower
        hereby covenants and agrees with Lender as follows:

       

      (a)  Project
        Budget and Application of Loan Proceeds.
        The
        Project Budget includes all Project Costs (as hereinafter defined) contemplated
        to be paid from disbursements of the Loan, including categories for
        contingencies and the sources of funds, that is, proceeds of the Loan, Project
        Revenues (as hereinafter defined) and Borrower's Equity. The Project Budget
        shall be promptly supplemented to include a forecast (hereinafter called
        the
“Forecast”)
        of the
        timing of the sources and uses of funds through the maturity date of the
        Loan.
        The Project Budget specifies the interest rate projections and leasing
        assumptions used to determine the Project Costs. “Project
        Costs”
shall
        mean all costs incurred in connection with the acquisition of the Land and
        the
        construction, leasing and operation of the Improvements until maturity of
        the
        Loan, including without limitation interest expense. “Project
        Revenues”
shall
        mean all receipts and revenues generated by or in connection with the Property,
        including without limitation rents, interest income, insurance proceeds,
        condemnation awards and payments received from interest rate hedging or similar
        agreements. Borrower agrees to give Lender prompt written notice of any changes
        made in the Project Costs or the Forecast so that the Project Budget accurately
        and realistically represents the sources and uses of funds for the Property.
        In
        addition, Lender may notify Borrower that, in Lender's reasonable judgment,
        changes need to be made in the Project Budget. If, after consultation and
        consideration of the view of Borrower and supporting documentation, Borrower
        and
        Lender do not agree as to what modifications need to be made in the Project
        Budget, the reasonable determination of Lender shall govern. Lender shall
        confirm to Borrower the most current approved Project Budget. Borrower shall
        use
        the proceeds of the Loan solely for the purpose of paying for the Project
        Costs
        as set forth in the Project Budget and shall in no event use any of the Loan
        proceeds for any other purpose.

       

      
        
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      (b)  Construction
        Documents.
        Borrower
        shall deliver to Lender a copy of the Construction Contract executed by Borrower
        and the Contractor, a copy of any contract executed by Borrower and the
        Architect and the Engineer and executed copies of any other contracts by
        Borrower with architects and engineers. Borrower shall furnish Lender with
        a
        complete list of all persons, firms or entities which the Contractor proposes
        to
        engage to furnish labor and/or materials in constructing the Improvements
        and,
        upon written request of Lender, will furnish Lender with true copies of all
        written agreements (including contracts, subcontracts and purchase orders)
        therefor and the terms of all verbal agreements therefor. All such contracts
        shall be in form and content satisfactory to Lender. If, in the sole judgment
        of
        Lender, such contracts and subcontracts do not cover all of the work necessary
        for completion of construction of the Improvements (exclusive of Tenant
        Improvements), including the installation of such fixtures and equipment
        as are
        required for the operation of the Improvements and including all work required
        by any leases then in effect or to make any portion of the Improvements rentable
        (whether to be done and paid for by Borrower or by lessees under leases),
        Borrower shall cause to be furnished firm bids from responsible parties,
        or
        estimates and other information satisfactory to Lender, for the work not
        so
        covered, to enable Lender to ascertain the total estimated cost of all work
        done
        and to be done. The Construction Contract together with all other contracts,
        subcontracts, lists, agreements and terms of verbal agreements described
        in this
        subparagraph shall herein be called the “Construction
        Documents”.

       

      (c)  Construction
        Contract.
        Borrower
        shall (i) permit no default under the terms of the Construction Contract,
        (ii)
        waive none of the obligations of the Contractor thereunder, (iii) do no act
        which would relieve Contractor from its obligations to construct the
        Improvements according to the Plans and Specifications, and (iv) make no
        amendments to, or change orders with respect to, the Construction Contract
        or
        any other Construction Document, without the prior written consent of Lender,
        except as permitted in Section 5.3 hereof.

       

      (d)  Construction
        Schedule.
        Borrower
        shall furnish to Lender a schedule (herein called the “Construction
        Schedule”)
        showing
        the timing of construction of the Improvements with a breakdown by
        trade.

       

      (e)  Commencement
        and Completion of Construction.
        Borrower
        has commenced construction and shall diligently pursue said construction
        to
        completion, and shall supply such moneys required in excess of the Loan and
        Borrower's Equity and perform such duties as may be necessary to complete
        the
        construction of the Improvements pursuant to and in conformity with the Plans
        and Specifications and in accordance with good building practice and in full
        compliance with all terms and conditions of the Loan Documents, all of which
        shall be accomplished on or before the Completion Date, and without liens,
        claims or assessments (actual or contingent) asserted against the Property
        for
        any material, labor or other items furnished in connection therewith, and
        all in
        full compliance with all Governmental Requirements. Borrower will provide
        to
        Lender upon request therefor evidence of satisfactory compliance with all
        of the
        foregoing. 

       

      
        
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      (f)  Intentionally
        Omitted.
        

       

      (g)  Right
        of Lender to Inspect Property.
        During
        normal business hours and upon reasonable notice, Borrower shall permit Lender
        and its representatives and agents, including the Inspecting Architect, to
        enter
        upon the Property and to inspect the Improvements and all materials to be
        used
        in the construction thereof and all books, records, contracts, statements,
        invoices, bills, plans and specifications, shop drawings, appraisals, title
        and
        other insurance, reports, lien waivers and all other instruments and documents
        of any kind relating to the construction, leasing and operation of the
        Improvements; shall cooperate and cause Architect, Engineer and Contractor
        to
        cooperate with Lender and its representatives and agents during such inspections
        and shall maintain all of the foregoing for said inspections; shall permit
        the
        photographing of any portions of the Property or any materials thereon; and
        shall, if requested by Lender or its representatives or agents, move, remove
        or
        uncover such materials or portions of the Improvements as shall be reasonably
        necessary to fully and completely inspect the Property; provided, however,
        that
        this provision shall not be deemed to impose upon Lender any duty or obligation
        whatsoever to undertake such inspections, to correct any defects in the
        Improvements or to notify any person with respect thereto.

       

      (h)  Correction
        of Defects.
        Borrower
        shall promptly correct any material structural defect in the Improvements
        or any
        material departure from the Plans and Specifications not previously approved
        by
        Lender and any violation of any requirement of any Governmental Authority.
        The
        advance of any Loan proceeds shall not constitute a waiver of Lender's right
        to
        require compliance with this covenant.

       

      (i)  Off-Site
        Work.
        To the
        extent required by the Plans and Specifications, Borrower shall promptly
        commence and complete any and all off-site improvements (including public
        streets, walks and like areas adjoining the Improvements) as and if required
        and
        provide any and all utilities and other facilities required, all in accordance
        with the requirements of all Governmental Authorities having jurisdiction
        thereof. Unless otherwise provided for, such off-site improvements shall
        be
        deemed part of the work of construction of the Improvements. Borrower expressly
        agrees to indemnify Lender and to hold it harmless against any claim of surety
        furnishing bond for such work to the Governmental Authorities having
        jurisdiction, whether such claims be founded upon existing or future liability,
        and whether such liability be expressed or implied.

       

      
        
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      (j)  Storage
        of Materials.
        Borrower
        shall cause all materials supplied for or intended to be utilized in the
        construction of the Improvements but not affixed to or incorporated into
        the
        Property to be stored on the Property or at such other location as may be
        approved by Lender in writing, with adequate safeguards to prevent loss,
        theft,
        damage or commingling with other materials not intended to be utilized in
        the
        construction of the Improvements.

       

      (k)  Vouchers.
        Borrower
        shall deliver to Lender, on written demand, any contracts, bills of sale,
        statements, receipted vouchers or agreements under which Borrower claims
        title
        to any materials, fixtures or articles incorporated in the Improvements or
        otherwise subject to the lien of the Security Instrument.

       

      (l)  Encroachments.
        Borrower
        agrees that (i) the Improvements shall be constructed entirely on the Land;
        (ii)
        until the Loan is discharged, no conveyances of any portion of or interest
        in
        the Property will be made by Borrower which will cause any encroachment above,
        on, or under the surface of the Property; (iii) such construction will not
        encroach upon or overhang any easement or right-of-way upon the land of others;
        (iv) the Improvements when erected shall be wholly within applicable building
        restriction lines however established; and (v) upon written request Borrower
        will, from time to time, furnish satisfactory evidence of the
        foregoing.

       

      (m)  Liens.
        Borrower
        will not install nor otherwise incorporate in the Improvements any materials,
        equipment or fixtures under any conditional sales agreements or security
        agreement whereby the right is reserved or accrued to anyone to remove or
        repossess any such items. Borrower will not cause or permit any lien or claim
        for lien for any labor and/or material to be filed or to become valid or
        effective against the Property; provided, however, that the existence of
        any
        unperfected and unrecorded mechanic's lien shall not constitute a violation
        of
        this subsection if payment is not yet due for the work giving rise to the
        lien.
        Notwithstanding the foregoing, Borrower may in good faith, by appropriate
        proceedings, contest the validity, applicability or amount of any asserted
        mechanic's or materialmen's lien in accordance with the provisions set forth
        in
        the Security Instrument; provided, however, that in any event each such contest
        shall be concluded and the lien, interest and costs shall be paid, bonded
        around
        or otherwise removed upon completion of construction of the
        Improvements.

       

      (n)  Cooperation
        with Inspecting Architect.
        Borrower
        shall cooperate with the Inspecting Architect and will cause the Architect,
        the
        Engineer, the Contractor and the employees of each of them to cooperate with
        the
        Inspecting Architect and, upon request, will furnish the Inspecting Architect
        whatever he may consider necessary or useful in connection with the performance
        of his duties including but not limited to permits, subcontracts, purchase
        orders, lien waivers and other documents relating to the construction of
        the
        Improvements. Borrower acknowledges that the duties of the Inspecting Architect
        run solely to Lender and that the Inspecting Architect shall have no obligations
        or responsibilities whatsoever to Borrower, the Architect, the Engineer,
        the
        Contractor or to any of their respective agents or employees.

       

      
        
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      (o)  Sign
        Regarding Construction Financing.
        Borrower
        shall include on any sign erected by Borrower at or near the Property setting
        forth the names of the Contractor and/or any subcontractors of the construction
        of the Improvements a statement in conspicuous lettering that construction
        financing is being provided by Lender, all to the reasonable satisfaction
        of
        Lender. If such sign is not erected, Borrower shall, upon request by and
        at the
        expense of Lender, erect and maintain on a suitable site on the Property
        a sign
        indicating that construction financing is being provided by Lender, all to
        the
        reasonable satisfaction of Lender.

       

      (p)  Appraisal.
        Borrower
        shall submit from time to time, within thirty (30) days following written
        request of Lender, which request may not be made earlier than one (1) year
        after
        the date of the Appraisal furnished in connection with the making of the
        Loan
        and not more often than annually thereafter (unless required by a governmental
        agency having jurisdiction over Lender), an MAI appraisal of the Property
        and
        the proposed Improvements by a licensed appraiser satisfactory to Lender,
        such
        appraisal to be in form satisfactory to Lender. In lieu of obtaining an
        appraisal from Borrower hereunder, but subject to the limitation set forth
        in
        the previous sentence, Lender may itself obtain the appraisal and Borrower
        shall
        pay the reasonable cost thereof to Lender within thirty (30) days following
        written request of Lender. 

       

      (q)  Cooperation
        Regarding Financial Condition.
        Borrower
        shall cooperate with Lender and its representatives to the end that Lender
        shall
        be fully apprised regarding the continuing financial condition of Borrower
        and,
        upon request of Lender or any of its representatives, will furnish Lender
        or
        such representatives such documents, instruments, financial statements or
        other
        information considered necessary or useful by Lender or its representatives
        in
        connection with the review and understanding of the financial condition of
        Borrower as it may exist from time to time. Borrower shall maintain such
        documents, instruments and financial statements which relate to its financial
        condition.

       

      (r)  Additional
        Expenditures by Lender.
        Borrower
        agrees that all sums paid or expended by Lender under the terms of this
        Agreement in excess of the amount of the Loan shall be considered to be an
        additional loan to Borrower and the repayment thereof, together with interest
        thereon at the Default Rate, shall be secured by the Security Instrument
        and the
        other Loan Documents and shall be immediately due and payable upon demand,
        and
        Borrower agrees to pay such sum upon demand. Nothing contained herein, however,
        shall obligate Lender to make such advances.

       

      (s)  Indemnity
        of Lender.
        Borrower
        shall indemnify and hold harmless Lender (for purposes of this subsection,
        the
        term “Lender”
shall
        include the directors, officers, employees and agents of Lender and any persons
        or entities owned or controlled by, owning or controlling, or under common
        control or affiliated with Lender) from and against, and reimburse them for,
        all
        claims, demands, liabilities, losses, damages, causes of action, judgments,
        penalties, costs and expenses (including, without limitation, reasonable
        attorney's fees) which may be imposed upon, asserted against or incurred
        or paid
        by them by reason of, on account of or in connection with any bodily injury
        or
        death or property damage occurring in or upon or in the vicinity of the Property
        through any cause whatsoever or asserted against them on account of any act
        performed or omitted to be performed hereunder or on account of any transaction
        arising out of or in any way connected with the Property or with this Agreement
        or any other Loan Document. WITHOUT
        LIMITATION, IT IS THE INTENTION OF BORROWER AND BORROWER AGREES THAT THE
        FOREGOING INDEMNITIES SHALL APPLY TO EACH INDEMNIFIED PARTY WITH RESPECT
        TO
        CLAIMS, DEMANDS, LIABILITIES, LOSSES, DAMAGES, CAUSES OF ACTION, JUDGMENTS,
        PENALTIES, COSTS AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE
        ATTORNEY'S FEES) WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF
        THE
        NEGLIGENCE OF SUCH (AND/OR ANY OTHER) INDEMNIFIED PARTY OR ANY STRICT LIABILITY.
        HOWEVER, SUCH INDEMNITIES SHALL NOT APPLY TO ANY INDEMNIFIED PARTY TO THE
        EXTENT
        THE SUBJECT OF THE INDEMNIFICATION IS CAUSED BY OR ARISES OUT OF THE GROSS
        NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNIFIED PARTY.
        The
        foregoing indemnities shall survive the termination of this Agreement, the
        foreclosure of the Security Instrument or conveyance in lieu of foreclosure
        and
        the repayment of the Loan and the discharge and release of the Loan Documents.
        Any amount to be paid hereunder shall be subject to and governed by the
        provisions of Section 4.2 hereof.

       

      
        
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      (t)  Expenses
        and Approval of Documents.
        Borrower
        shall pay all costs of closing the Loan and all expenses of Lender with respect
        thereto, including but not limited to, reasonable legal fees (including legal
        fees incurred by Lender subsequent to the closing of the Loan but incurred
        in
        connection with the disbursement, administration, collection or transfer
        of the
        Loan), title insurance premiums and other charges of the title company issuing
        the Mortgagee Title Policy, appraisal fees, consulting architect fees,
        consulting inspection fees, advances, recording expenses, surveys, intangible
        taxes, expenses of foreclosure (including reasonable attorneys' fees) and
        similar items, and shall allow all closing papers, Loan Documents and other
        legal matters to be subject to the approval of Lender's attorneys.

       

      (u)  Additional
        Documents.
        Borrower
        shall:

       

      (i)  Regarding
        Construction-
        furnish
        to Lender all instruments, documents, initial surveys, footing or foundation
        surveys after installation of all foundations, certificates, plans and
        specifications, appraisals, title and other insurance, reports and agreements
        and each and every other document and instrument required to be furnished
        by the
        terms of the Loan Documents, all at Borrower's expense;

       

      
        
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      (ii)  Regarding
        Preservation of Security-
        sign and
        deliver to Lender such documents, instruments, assignments and other writings,
        and to do such other acts necessary or desirable, to preserve and protect
        the
        collateral at any time securing or intended to secure the Note, as Lender
        may
        require;

       

      (iii)  Regarding
        this Agreement-
        do and
        execute all and such further lawful and reasonable acts, conveyances and
        assurances for the better and more effective carrying out of the intents
        and
        purposes of this Agreement as Lender shall reasonably require from time to
        time;
        and

       

      (iv)  Regarding
        Permits and Approvals-
        furnish
        to Lender evidence satisfactory to Lender (x) that the Plans and Specifications
        and construction pursuant thereto and the use of the Property contemplated
        thereby comply with all applicable utility requirements, restrictive covenants,
        Governmental Requirements and all standards and regulations of appropriate
        supervising boards of fire underwriters and similar agencies, (y) that the
        engineering specifications contained in the Plans and Specifications are
        within
        applicable environmental standards, and (z) all permits and approvals issued
        by
        applicable Governmental Authorities pursuant to Governmental Requirements,
        approving the Plans and Specifications and the commencement of construction
        of
        the Improvements.

       

      (v)  Executive
        Order 13224.
        Neither
        Borrower, nor any person or entity holding any legal or beneficial interest
        whatsoever in Borrower, shall hereafter be included in, owned by, or controlled
        by, or act for or on behalf of, or provide assistance, support, sponsorship,
        or
        services of any kind to or otherwise associated with, any of the persons
        or
        entities referred to or described in Executive Order 13224 (Blocking Property
        and Prohibiting Transactions with Persons Who Commit, Threaten to Commit
        or
        Support Terrorism, as amended).

       

      (w)  Authorization
        to Transact Business.
        Within
        ninety (90) days from the date hereof, Borrower shall provide Lender
        satisfactory evidence that the Borrower is authorized to transact business
        in
        the commonwealth of Pennsylvania.

       

      4.2.  Failure
        to Perform.
        If
        Borrower fails to perform any act or to take any action or to pay any amount
        provided to be paid by it under the provisions of any of the covenants and
        agreements contained in this Agreement, Lender may but shall not be obligated
        to
        perform or cause to be performed such act or take such action or pay such
        money,
        and any expenses so incurred by Lender and any money so paid by Lender shall
        be
        an advance against the Note and shall bear interest from the date of making
        such
        payment until paid at the Default Rate and shall be secured by the Security
        Instrument and the other Loan Documents, and Lender upon making any such
        payment
        shall be subrogated to all rights of the person, corporation or body politic
        receiving such payment.

       

      
        
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      ARTICLE
        V.


      PLANS
        AND SPECIFICATIONS

       

      5.1.  Plans
        and Specifications.
        Borrower
        has furnished (or will furnish when finalized) Lender the Plans and
        Specifications for construction of the Improvements, including the engineering
        plans, complete architectural plans, specifications and work drawings, projected
        costs and related information, site plans, proposed plat dedications and
        proposed development restrictions and conditions and all requisite building
        permits authorizing construction of the Improvements. Borrower has also
        furnished Lender with a detailed listing of the Plans and Specifications.
        The
        Plans and Specifications and the Improvements constructed pursuant thereto
        will
        comply with all applicable restrictive covenants and Governmental Requirements
        and all standards and regulations of appropriate supervising boards of fire
        underwriters and similar agencies (and the engineering specifications contained
        in the Plans and Specifications shall be within applicable environmental
        standards). The Plans and Specifications as approved will not be modified
        or
        supplemented in any respect without the prior written approval of Lender
        except
        as permitted under Section 5.3 hereof.

       

      5.2.  Supplemental
        Data.
        Borrower
        shall submit to Lender a statement of the projected cost of constructing
        the
        Improvements, including a description of all contracts let or to be let by
        Borrower for the design, engineering, construction and equipping of the
        Improvements, setting forth the name or names of the contractor or contractors,
        the date of the contracts and of any supplements or amendments thereto, the
        scope of the work covered thereby, and the aggregate amounts payable to the
        contractors thereunder, and further stating whether said contract or contracts
        embrace all of the work required to be done and all of the material necessary
        for completion of construction, and, if not, setting forth sufficient
        information to enable Lender to determine the estimated cost of any work
        or
        materials not so covered.

       

      5.3  Changes
        in Plans.
        All
        requests for approval of changes in the Plans and Specifications or any other
        Construction Document must be in writing, signed by Borrower, and shall be
        conditioned upon acceptance by Lender, which acceptance shall be subject
        to such
        conditions and qualifications as Lender in its sole and absolute discretion
        may
        reasonably prescribe. Notwithstanding the foregoing, Lender's approval shall
        not
        be required if all of the following conditions are satisfied:

       

      (a)     
        Said
        changes do not have a material effect on the structural portions or the exterior
        appearance of the Improvements or the architectural design concept
        thereof;

       

      (b)     
        None
        of
        said changes increases the cost of construction by more than
        $100,000;

       

      (c)    
        The
        aggregate of all of said changes does not increase the cost of construction
        by
        more than $500,000; and

       

      
        
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      (d)    
        At
        the end
        of each month Borrower submits to Lender copies of all change orders effecting
        said changes made in such month.

       

      ARTICLE
        VI.


      LOAN
        FUNDING

       

      6.1 
 Loan
        Funding.
        The
        Initial Advance shall be in such amount agreed to by Borrower and Lender
        and
        shall take place in the offices of Lender or at such other place as Lender
        may
        designate.

       

      6.2   
          Conditions
        Precedent to Loan Funding .
        Except
        as otherwise provided herein, the following shall be conditions precedent
        to
        Lender's obligations to make the Initial Advance under the Loan and any other
        funding or disbursal of the Loan:

       

      (a)  Representations
        and Warranties.
        On the
        date of disbursal of the Loan (hereinafter called the “Loan
        Funding Date”),
        all of
        Borrower's representations and warranties contained herein or in any other
        Loan
        Document shall be true and correct in all material respects.

       

      (b)  Covenants
        and Agreements.
        On the
        Loan Funding Date, Borrower shall have performed each covenant and agreement
        to
        be performed by Borrower on or before the Loan Funding Date pursuant to this
        Agreement, any other Loan Document within the time specified.

       

      (c)  Other
        Conditions.
        The
        conditions to each disbursement described in Section 7.2 hereof shall be
        satisfied.

       

      (d)  Due
        Execution and Recording of Loan Documents.
        Borrower
        shall have delivered to Lender evidence, in form satisfactory to Lender,
        that
        the Loan Documents have each been duly executed and constitute valid, binding
        documents, enforceable in accordance with their respective terms and have
        been
        filed or recorded, as appropriate, in all proper offices.

       

      (e)  Mortgagee
        Title Policy.
        Borrower
        shall have furnished Lender with the Mortgagee Title Policy.

       

      (f)  Insurance.
        Borrower
        shall have obtained the insurance and delivered the policies and certificates
        to
        Lender as required by subsection 2.4 of the Security Instrument.

       

      (g)  Project
        Budget.
        Lender
        shall have approved the Project Budget and all changes thereto.

       

      
        
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      (h)  Final
        Plans and Specifications.
        Lender
        shall have approved the final Plans and Specifications.

       

      (i)  Construction
        Contract and Other Construction Documents.
        Lender
        shall have approved the Construction Contract and all other Construction
        Documents and all changes to any thereof.

       

      (j)  Construction
        Schedule.
        Lender
        shall have approved the Construction Schedule and all changes
        thereto.

       

      (k)  Contractor's
        Consent, Agreement and Certification.
        Borrower
        shall have furnished Lender with the executed Contractor's Consent, Agreement
        and Certification.

       

      (l)  Architect's
        Consent, Agreement and Certification.
        Borrower
        shall have furnished Lender with the executed Architect's Consent, Agreement
        and
        Certification.

       

      (m)  Intentionally
        Omitted.
        

       

      (n)  Appraisal.
        Subject
        to Section 4.1(p) above, Borrower shall have furnished Lender or paid Lender's
        cost of acquiring an MAI appraisal of the Property and the proposed Improvements
        by a licensed appraiser satisfactory to Lender, such appraisal to be in the
        form
        and amount satisfactory to Lender.

       

      (o)  Survey.
        Borrower
        shall have furnished to Lender a certified plat of survey of the Property
        made
        by a licensed surveyor or civil engineer satisfactory to Lender meeting the
        requirements contained in the Pre-Closing Document List furnished Borrower
        by
        Lender.

       

      (p)  Zoning
        and Compliance With Laws.
        Borrower
        shall have delivered to Lender evidence, in form satisfactory to Lender,
        that
        the Property are zoned for the use for which the proposed Improvements are
        designed and are otherwise in compliance with all applicable Governmental
        Requirements, including, if applicable, all provisions of environmental
        statutes.

       

      (q)  Utilities.
        Borrower
        shall have furnished Lender with evidence satisfactory to Lender that all
        utilities services (including such utilities as are necessary to secure a
        certificate of occupancy or equivalent) will in a timely manner be supplied
        to
        the Property upon completion of construction, including commitment letters
        from
        the agencies or entities supplying such services.

       

      (r)  Permits.
        Borrower
        shall have furnished Lender (A) copies of the building permits and any other
        permits, licenses or certificates which are required in connection with
        construction of the Improvements in accordance with the Plans and
        Specifications, issued by the appropriate Governmental Authorities with
        jurisdiction over the Property, and (B) a certificate by Borrower that no
        proceedings of any kind are pending or threatened by any person, firm,
        corporation or public agency with respect to the revocation or suspension
        of any
        permits, licenses or certificates.

       

      
        
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      (s)  Soils
        Report.
        Borrower
        shall have furnished Lender a soils report, prepared by a licensed soil
        engineer, showing that the condition of the soil of the land is adequate
        to
        support the Improvements which soils report shall have been approved by
        Lender.

       

      (t)  Management
        Agreement.
        Lender
        shall have received and approved the Management Agreement. All modifications
        and
        amendments to the Management Agreement or any termination of the Management
        Agreement must be approved by Lender; provided, however, so long as no Event
        of
        Default exists, Borrower may extend the term of the Management Agreement
        without
        Lender’s consent.

       

      (u)  Subordination
        of Management Agreement.
        Borrower
        shall have furnished Lender with the executed Subordination of Management
        Agreement.

       

      (v)  Tax
        Service.
        If
        required by Lender, Borrower shall have furnished Lender a real estate tax
        reporting service contract in form satisfactory to Lender by which Lender
        shall
        receive periodic notices of all taxes, assessments and bonds encumbering
        the
        Property.

       

      (w)  Other
        Documents.
        Borrower
        shall have delivered to Lender such other documents and certificates as Lender
        or Lender's counsel may reasonably request.

       

      (x)  Commitment
        Fee.
        Borrower
        shall have paid to Lender the loan commitment fee in the sum of
        $114,240.

       

      (y)  Borrower's
        Equity.
        Borrower
        shall have applied Borrower's Equity to pay certain Project Costs included
        in
        the Project Budget approved by Lender, and Borrower shall have furnished
        Lender
        with a schedule showing the payment of such funds for Project Costs and evidence
        of such payment.

       

      ARTICLE
        VII.

       

      METHOD
        AND
        CONDITIONS OF DISBURSEMENTS

      OF
        LOAN
        PROCEEDS

       

      7.1       
        Disbursement
        Procedure.
        Disbursement of the proceeds of the Loan shall be made by Lender to Borrower
        in
        accordance with the following procedure:

       

      (a)  Certificate
        for Payment.
        At such
        time as Borrower shall desire to obtain, subject to the requirements contained
        herein, a disbursement of any portion of the Loan proceeds, Borrower shall
        complete, execute and deliver to Lender a request for an advance in the form
        of
        the Certificate for Payment approved by the Lender (Lender hereby approving
        AIA
        Form G-702).

       

      
        
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      (b)  Evidence
        of Progress of Construction.
        Each
        Certificate for Payment shall, upon the request of Lender, be accompanied
        by
        evidence in form and content satisfactory to Lender, including but not limited
        to certificates and affidavits of Borrower, Architect and/or Contractor or
        such
        other person as Lender may require, showing:

       

      (i)  The
        value
        of that portion of the Improvements completed at that time;

       

      (ii)  That
        all
        outstanding claims for labor, materials and fixtures have been paid or will
        be
        paid from the proceeds of such disbursement;

       

      (iii)  That
        there
        are no liens outstanding against the Property, except for Lender's lien and
        security interest evidenced by the Security Instrument, other than inchoate
        liens for property taxes not yet due;

       

      (iv)  That
        Borrower has complied with all of Borrower's obligations, as of the date
        thereof, under the Loan Documents;

       

      (v)  That
        all
        construction prior to the date of the request for an advance has been performed
        and completed in accordance with the Plans and Specifications;

       

      (vi)  That
        all
        funds previously disbursed by Lender have been applied directly to the payment
        of Project Costs, as set forth in the Project Budget or otherwise as Lender
        shall have approved in writing;

       

      (vii)  That
        all
        change orders in any amount whatsoever shall have been approved in writing
        by
        Lender, and, if required by Lender, by any surety and any Guarantor, except
        as
        provided in Section 5.3;

       

      (viii)  In
        reasonable detail but only if applicable, all tangible personal property
        installed in or appurtenant to the Improvements, but not considered to be
        fixtures, and the value thereof;

       

      (ix)  That
        the
        amount of undisbursed Loan proceeds is sufficient to pay the cost of completing
        the Improvements in accordance with the Plans and Specifications;

       

      (x)  That
        the
        location of the Improvements will not encroach upon any adjoining properties
        or
        interfere with any easement;

       

      
        
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      (xi)  That
        all
        of Borrower's representations and warranties contained herein or in any other
        Loan Document remain true and correct in all material respects as of the
        date of
        such advance;

       

      (xii)  That
        Borrower has performed each covenant and agreement to be performed by Borrower
        pursuant to this Agreement or any other Loan Document within the time
        specified;

       

      (xiii)  That,
        if
        payments are to be made on account of materials or equipment not incorporated
        in
        the work but delivered and suitably stored on the Property, or at some other
        location agreed upon in writing, such payments shall be conditioned upon
        submission to Lender by Borrower of bills of sale or such other procedures
        satisfactory to Lender to establish Borrower's title to, and Lender's lien
        upon,
        such materials or equipment or otherwise protect Lender's interest;
        and

       

      (xiv)  That
        neither the Property nor the Improvements are the subject of any litigation
        which adversely affects or could adversely affect the title thereof and/or
        the
        validity or priority of the Security Instrument or the right of the Borrower
        to
        construct the Improvements;

       

      and
        shall
        be accompanied by copies of all bills or statements for expenses for which
        the
        advance is requested.

       

      (c)  Certificate
        of Inspecting Architect.
        Each
        Certificate for Payment shall be accompanied by written certification from
        Lender's Inspecting Architect or inspection engineer indicating the status
        of
        construction, compliance with the Plans and Specifications, and approval
        of the
        disbursement request. Borrower shall pay all reasonable fees and expenses
        of
        such architect or engineer for monthly inspections, or more frequently if
        such
        inspections result from more frequent disbursement requests from
        Borrower.

       

      (d)  Continuation
        of Title Insurance Coverage.
        Each
        Certificate for Payment shall, at the request of Lender, be accompanied by
        a
        satisfactory down date endorsement to the previously delivered Mortgagee
        Title
        Policy which endorsement shall (i) extend the effective date of the Mortgagee
        Title Policy to the date of advancement and show that since the effective
        date
        of said Policy (or the effective date of the last such endorsement, if any)
        there has been no change in the status of the title to the Property and no
        new
        encumbrance thereon and (ii) state the amount of coverage then existing under
        the Mortgagee Title Policy which shall be the total of all disbursements
        of the
        Loan including the disbursement which is made concurrently with the down
        date
        endorsement.

       

      7.2.  Conditions
        to Each Disbursement.
        At no
        time and in no event shall Lender be obligated to disburse funds:

       

      
        
          18

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (a)  In
        excess
        of the amount recommended by the Lender's Inspecting Architect;

       

      (b)  If
        any
        Event of Default shall have occurred;

       

      (c)  If
        Lender
        in its reasonable discretion is not satisfied that the construction of the
        Improvements will be completed on or before the date specified
        herein;

       

      (d)  If
        the
        Loan is not “in balance” as provided in Section 7.3 following; or

       

      (e)  If
        the
        Property shall have been damaged by fire or other casualty and Lender shall
        not
        have received insurance proceeds sufficient in the sole judgment of Lender
        to
        effect the restoration of the Improvements in accordance with Plans and
        Specifications and to permit the completion of the Improvements on or before
        the
        Completion Date set forth herein.

       

      7.3.  Balancing
        of Loan and Borrower's Deposit.

       

      (a)  The
        Loan
        shall be deemed to be “in balance” only at such time as Borrower has paid a
        sufficient amount of Project Costs from its own funds so that the undisbursed
        portion of the Loan, together with projected Project Revenues as set forth
        in
        the Project Budget, are sufficient to pay all Project Costs until maturity
        of
        the Loan. In determining whether the Loan is in balance, Lender shall determine,
        among other things, whether the amounts allocated for each category of Project
        Costs in the Project Budget are sufficient and whether the timing of receipts
        and expenditures set forth in the Forecast are realistic and
        achievable.

       

      (b)  Within
        ten
        (10) days after written notice from Lender to Borrower that the Loan is not
        in
        balance, Borrower shall deposit with Lender sufficient funds (herein called
        “Borrower's
        Deposit”)
        with
        Lender to bring the Loan in balance. The Borrower's Deposit will be held
        by
        Lender in a non-interest bearing account collaterally assigned to secure
        the
        Loan and will be disbursed by Lender to pay Project Costs pursuant to this
        Agreement, prior to the disbursement of any additional proceeds of the Loan.
        Upon the occurrence of an Event of Default under this Agreement, Lender may
        apply Borrower's Deposit against the unpaid indebtedness evidenced by the
        Note,
        principal, accrued interest or attorney's fees, in such order as Lender may
        determine. Upon the payment in full of the Loan and all other obligations
        of
        Borrower to Lender hereunder, Lender shall return the remaining balance of
        Borrower's Deposit, if any, to Borrower. 

       

      (c)  Borrower
        agrees to use all Project Revenues for payment of Project Costs and to provide
        Lender with satisfactory evidence of such payment. Project Revenues may not
        be
        distributed to partners or shareholders of Borrower, or used for anything
        other
        than Project Costs, prior to payment in full of the Loan.

       

      
        
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      (d)  Borrower
        will provide Lender with draw request documents, satisfactory title endorsements
        and other information required hereunder with respect to funds used to pay
        Project Costs under subsections (b) and (c) above, on a monthly basis, as
        if
        such funds were disbursements of the Loan.

       

      7.4.  Retainage
        and Final Disbursement.
        Ten
        percent (10%) of each Loan disbursement for costs of construction of the
        Improvements shall be withheld by Lender, which ten percent (10%) shall be
        disbursed only upon compliance with the following requirements (in addition
        to
        the requirements for all other disbursements):

       

      (a)  Receipt
        by
        Lender of satisfactory evidence of the substantial completion of the
        Improvements in accordance with Plans and Specifications and approval of
        such
        completion by Governmental Authorities having jurisdiction and approval of
        such
        completion by the representative of Lender;

       

      (b)  Receipt
        by
        Lender of a satisfactory “as-built” blueprint or survey reflecting the location
        of the Improvements on the Land in accordance with the Plans and
        Specifications;

       

      (c)  Receipt
        by
        Lender of (i) lien waivers or lien subordinations or releases from all
        contractors, subcontractors, laborers and materialmen employed in furnishing
        labor or materials in connection with the construction of the Improvements
        and
        (ii) an endorsement to the Mortgagee Title Policy covering the Property
        previously issued to Lender removing any exception with respect to liens
        arising
        by reason of unpaid bills or claims for work performed or materials furnished
        in
        connection with the Improvements;
        and

       

      (d)  Receipt
        by
        Lender of such other certificates, assurances and opinions as Lender shall
        reasonably require.

       

      7.5. 
Notice,
        Frequency and Place of Disbursements.
        The
        Certificate for Payment shall be submitted to Lender at least ten (10) business
        days prior to the date of the requested advance. Disbursements shall be made
        no
        more frequently than monthly and in amounts of not less than Twenty Five
        Thousand Dollars ($25,000). All disbursements shall be made at the principal
        office of Lender at Dallas, Texas or at such other place as Lender may
        designate.

       

      7.6.  Deposit
        of Funds Advanced.
        Borrower
        will immediately deposit all Loan proceeds advanced by Lender in a separate
        and
        exclusive account, to be withdrawn and used solely for the purposes permitted
        under the provisions of this Agreement, and will promptly furnish Lender
        with
        evidence thereof.

       

      7.7.  Advances
        to Contractor.
        After an
        Event of Default, Lender may make any or all advances of the Loan directly
        to
        Contractor for deposit in an appropriately designated special bank account
        and
        the execution of this Agreement by the Borrower shall, and hereby does,
        constitute an irrevocable direction and authorization to so advance the funds.
        No further direction or authorization from Borrower shall be necessary to
        warrant such direct advances to Contractor and all such advances shall satisfy
        pro tanto
        the
        obligations of Lender hereunder and shall be secured by the Security Instrument
        and the other Loan Documents as fully as if made to Borrower, regardless
        of the
        disposition thereof by Contractor.

       

      
        
          20

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      7.8.  Advances
        Do Not Constitute a Waiver.
        No
        advance of Loan proceeds hereunder shall constitute a waiver of any of the
        conditions of Lender's obligation to make further advances nor, in the event
        Borrower is unable to satisfy any such condition, shall any such advance
        have
        the effect of precluding Lender from thereafter declaring such inability
        to be
        an Event of Default hereunder.

       

      7.9  Interest
        Reserve Account.
        The
        amount of the Loan was determined on the basis of the Project Budget prepared
        by
        Borrower and submitted to Lender, setting forth, among other things, the
        accrued
        interest on the disbursed principal of the Note during the term of the Note,
        estimated not to exceed, after the application of Project Revenues, if any,
        as
        provided in Section 7.10 hereof the amount set forth on the Project Budget
        (hereinafter called the “Interest
        Reserve Account”).
        Subject to the conditions set forth in this Article VII, Lender will disburse
        on
        the first day of each month a portion of the Loan sufficient to pay accrued
        interest then due and payable on the Note, and the amount thereof shall increase
        the principal of the Note and shall reduce the balance of the Interest Reserve
        Account. Under no circumstances shall the undisbursed Loan be disbursed to
        pay
        accrued interest thereon after depletion of the balance of the Interest Reserve
        Account. In lieu of disbursing Loan proceeds to Borrower for payment of accrued
        interest thereon, Lender may handle such disbursement and payment by making
        appropriate entries on the books and records of Lender, whereupon a statement
        summarizing such entries shall be furnished to Borrower.

       

      7.10.  Advances
        of Interest.
        Notwithstanding anything to the contrary contained in Section 7.9 or elsewhere
        in this Agreement, at such time as the Interest Reserve Account has been
        fully
        funded, Lender shall have no obligation to disburse any portion of the Loan
        to
        pay accrued interest then due and payable on the Note. At such time as the
        Interest Reserve Account has been fully funded Borrower hereby agrees to
        apply
        Project Revenues, to the extent available after application of the same to
        the
        normal operating expenses of the Property, to the payment of accrued interest
        then due and payable on the Note. Borrower hereby agrees to apply all such
        rents, issues and profits of the Property to payment of accrued interest
        and any
        installment of principal due and payable on the Note to the full extent that
        such rents, issues and profits are not exhausted by payment of normal operating
        expenses of the Property, regardless of the existence of any remaining balance
        of the Interest Reserve Account.

       

      7.11.  Lease-Up
        Reserve.
        The
        amount of the Loan was determined on the basis of the Borrower's projection
        of
        interest on the Loan and expenses of the Project anticipated after the
        construction phase (the “Lease-Up Expenses”), for which Project Revenues will
        not be sufficient to pay in full, which Lease-Up Expenses are estimated not
        to
        exceed $696,338 (such amount being referred to as the “Lease-Up Reserve”).
        Borrower hereby agrees to apply Project Revenues to the payment of Lease-Up
        Expenses, regardless of the existence of any remaining balance of the Lease-Up
        Reserve. Borrower may only request a disbursement from the Lease-Up Reserve
        to
        the extent that Project Revenues are insufficient to pay Lease-Up Expenses.
        At
        its option, Lender may disburse on the first day of a calendar month a portion
        of the Loan sufficient to pay accrued interest then due and payable on the
        Note
        after the construction phase, and the amount thereof shall increase the
        principal of the Note and shall reduce the balance of the Lease-Up Reserve.
        In
        lieu of disbursing Loan proceeds to Borrower for payment of accrued interest
        after the construction phase, Lender may handle such disbursement and payment
        by
        making appropriate entries on the books and records of Lender, whereupon
        a
        statement summarizing such entries shall be furnished to Borrower.

       

      
        
          21

        

        
          
          

          
            

          

        

        
          
          

        

      

        

      ARTICLE
        VIII.


      DEFAULTS

       

      8.1.  Event
        of Default.
        An
“Event
        of Default”
shall
        be
        deemed to have occurred hereunder if:

       

      (a)  Default
        Under Security
        Instrument.
        An Event
        of Default occurs under the Security Instrument; or

       

      (b)  Failure
        to Obtain an Advance.
        Borrower
        is unable to satisfy any condition of its right to the receipt of any advance
        hereunder for a period in excess of fifteen (15) days; or

       

      (c)  Litigation.
        Any suit
        shall be filed against Borrower or Guarantor, which if adversely determined,
        would substantially impair the ability of Borrower or Guarantor to perform
        each
        and every one of its obligations under and by virtue of the Loan Documents;
        or

       

      (d)  Levy
        Upon
        the Property.
        A levy
        be made under any process on, or a receiver be appointed for, the Property
        or
        any other property of Borrower; or

       

      (e)  Noncompliance
        with Laws.
        The
        Improvements are not constructed in compliance with all Governmental
        Requirements and regulations of appropriate supervising boards of fire
        underwriters and similar agencies; or

       

      (f)  Deviation
        from Plans and Specifications.
        There is
        any substantial deviation in the work of construction from the Plans and
        Specifications without the prior written approval of Lender, or there is
        incorporated in the Improvements any substantially defective workmanship
        or
        materials, which said deviation or defect is not commenced to be corrected
        within ten (10) days after written notice thereof and such correction diligently
        continued to its conclusion; or

       

      
        
          22

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (g)  Cessation
        of Work.
        Once
        commenced, there occurs cessation of the work of construction prior to
        completion of the Improvements for a continuous period of ten (10) days or
        more
        for causes other than those beyond the control of Borrower or consented to
        in
        writing by Lender; or

       

      (h)  Injunction.
        Any
        person obtains an order or decree in any court of competent jurisdiction
        enjoining the construction of the Improvements or enjoining or prohibiting
        Borrower or Lender from performing this Agreement, and such proceedings are
        not
        properly contested or such decree is not vacated within sixty (60) days after
        the granting thereof; or

       

      (i)  Lapse
        of Permit.
        Borrower
        neglects, fails, or refuses to keep in full force and effect any required
        material permit or approval with respect to the construction of the
        Improvements.

       

      ARTICLE
        IX.

       

      REMEDIES

       

      9.1  Remedies.
        Upon the
        occurrence of any one or more of the events of default set out in Article
        VIII
        hereof, Lender shall at its option be entitled to proceed to exercise any
        of the
        following remedies:

       

      (a)  Borrower
        agrees that the occurrence of such Event of Default shall constitute a default
        under each of the Loan Documents, thereby entitling Lender (i) to exercise
        any
        of the various remedies therein provided including the acceleration of the
        indebtedness evidenced by the Note and the foreclosure of the Security
        Instrument and (ii) cumulatively to exercise all other rights, options and
        privileges provided by law.

       

      (b)  Lender
        shall have the right:

       

      (i)  to
        take
        whatever action is necessary or appropriate by the use of legal proceedings
        or
        otherwise (a) to cause Borrower to vacate the Property and (b) to take
        possession of the Property;

       

      (ii)  to
        perform
        or cause to be performed any and all work and labor necessary to complete
        the
        Improvements in accordance with Plans and Specifications;

       

      (iii)  to
        employ
        security watchmen to protect the Property; and

       

      (iv)  to
        disburse that portion of the Loan proceeds not previously disbursed (including
        any retainage) and the Borrower's Deposit to the extent necessary to complete
        construction of the Improvements in accordance with the Plans and
        Specifications, and if the completion requires a larger sum than the remaining
        undisbursed portion of the Loan, to disburse such additional funds, all of
        which
        funds so disbursed by Lender shall be deemed to have been disbursed to Borrower
        and shall be secured by the Security Instrument and the other Loan Documents,
        and to take all actions necessary in connection therewith, including but
        not
        limited to the following: to use any funds of Borrower including the Borrower's
        Deposit and any balance which may be held in escrow and any Loan or other
        funds
        which may remain unadvanced hereunder for the purpose of completing the
        Improvements in the manner called for by the Plans and Specifications; to
        make
        such additions and changes and corrections in the Plans and Specifications
        which
        shall be necessary or desirable to complete the Improvements in substantially
        the manner contemplated by the Plans and Specifications; to employ such
        contractors, subcontractors, agents, architects and inspectors as shall be
        required for said purposes; to pay, settle or compromise all existing or
        future
        bills and claims which are or may be liens against said Property or as may
        be
        necessary or desirable for the completion of the Improvements or the clearance
        of title to the Property; to execute all applications and certificates in
        the
        name of Borrower which may be required by any construction contract and to
        do
        any and every act with respect to the construction of the Improvements which
        Borrower may do in its own behalf. In accordance therewith Borrower hereby
        assigns and quitclaims to Lender upon an Event of Default, all sums to be
        advanced hereunder including retainage and the Borrower's Deposit and any
        sums
        in escrow conditioned upon the use of said sums, if any, for the completion
        of
        the Improvements. Lender shall have no obligation to undertake any of the
        foregoing actions and if Lender shall do so, it shall have no liability to
        Borrower for the sufficiency or adequacy of any such actions taken by
        Lender.

       

      
        
          23

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (c)  Lender
        may
        declare all indebtedness secured by the Security Instrument immediately due
        and
        payable, and Lender shall be relieved from all obligations to Borrower under
        this Agreement.

       

      (d)  Lender
        shall have the right at any time and from time to time, without notice to
        Borrower (any such notice being expressly waived), to set-off and apply any
        and
        all deposits (general or special, time or demand, provisional or final) at
        any
        time held, and any other indebtedness at any time owing by Lender to or for
        the
        credit or the account of Borrower, against any and all of the indebtedness
        of
        Borrower evidenced by the Note or this Agreement and/or secured by the Security
        Instrument, irrespective of whether or not Lender shall have made any demand
        under this Agreement or the Note and although such indebtedness may be
        unmatured. Lender agrees to notify Borrower promptly after any such set-off
        and
        application, provided that the failure to give such notice shall not affect
        the
        validity of such set-off and application. The rights of Lender under this
        subsection are in addition to any other rights and remedies (including, without
        limitation, other rights of set-off) which Lender may have under the Note
        or the
        other Loan Documents or otherwise.

       

      
        
          24

        

        
          
          

          
            

          

        

        
          
          

        

      

        

      ARTICLE
        X.


      GENERAL
        CONDITIONS.

       

      10.1.  Rights
        of Third Parties.
        All
        conditions of the obligations of Lender hereunder, including the obligation
        to
        make advances, are imposed solely and exclusively for the benefit of Lender
        and
        its successors and assigns and no other person shall have standing to require
        satisfaction of such conditions in accordance with their terms or be entitled
        to
        assume that Lender will make advances or 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 a beneficiary of such conditions, any
        and all
        of which may be freely waived in whole or in part by Lender at any time if
        in
        its sole discretion it deems it desirable to do so. In particular, Lender
        makes
        no representations and assumes no duties or obligations as to third parties
        concerning the quality of the construction by Borrower of the Improvements
        or
        the absence therefrom of defects. Failure to inspect the construction of
        the
        Improvements or any part thereof or inspection not followed by notice of
        default
        shall not constitute a waiver of any of Lender's rights hereunder nor shall
        it
        constitute a representation that there has been compliance with the Plans
        and
        Specifications or that the construction of the Improvements is free from
        defective materials or workmanship. In this connection Borrower agrees to
        and
        shall indemnify Lender from any liability, claims or losses resulting from
        the
        disbursement of the Loan proceeds or from the condition of the Property whether
        related to the quality of construction or otherwise and whether arising during
        or after the term of the Loan. This provision shall survive the repayment
        of the
        Loan and shall continue in full force and effect so long as the possibility
        of
        such liability, claims or losses exists.

       

      10.2.  Waivers.
        No
        waiver of or consent to any departure from any provision hereof shall be
        effective unless in writing and signed by Lender and shall be effective only
        in
        the specific instance for the purpose for which given and to the extent
        specified in such writing. No advance of Loan proceeds hereunder shall
        constitute a waiver of any of the conditions to Lender's obligation to make
        further advances nor, in the event Borrower fails to satisfy any such condition,
        shall any advance have the effect of precluding Lender from thereafter declaring
        such failure to be an Event of Default. No waiver of any default hereunder
        shall
        affect or constitute a waiver of any later default. No delay or omission
        of
        Lender to exercise any right or remedy upon the happening of any Event of
        Default shall impair any such right or remedy or be deemed to be a waiver
        of
        such Event of Default.

       

      10.3.  Evidence
        of Satisfaction of Conditions.
        Any
        condition of this Agreement which requires the submission of evidence of
        the
        existence or nonexistence of a specified fact or facts implies as a condition
        the existence or nonexistence, as the case may be, of such fact or facts,
        and
        Lender shall, at all times, be free independently to establish to its
        satisfaction and in its absolute discretion such existence or
        nonexistence.

       

      10.4.  Assignment
        by Borrower.
        Anything
        to the contrary herein notwithstanding, Borrower shall have no right to assign
        its rights hereunder or the proceeds of the Loan without the written consent
        of
        Lender and any such assignment or purported assignment shall, at Lender's
        option, relieve Lender from all further obligations hereunder and shall
        constitute a default under this Agreement.

       

      
        
          25

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      10.5.  Successors
        and Assigns Included in Parties.
        Whenever
        in this Agreement one of the parties hereto is named or referred to, the
        heirs,
        legal representatives, successors and assigns of such party shall be included
        and all covenants and agreements contained in this Agreement by or on behalf
        of
        the Borrower or by or on behalf of Lender shall bind and inure to the benefit
        of
        their respective heirs, legal representatives, successors and assigns, whether
        so expressed or not.

       

      10.6.  Exercise
        of Rights and Remedies.
        All
        rights and remedies of Lender hereunder or under the Note or under the Security
        Instrument or under any other Loan Document shall be separate, distinct and
        cumulative and no single, partial or full exercise of any right or remedy
        shall
        exhaust the same or preclude Lender from thereafter exercising in full or
        in
        part the same right or remedy or from concurrently or thereafter exercising
        any
        other right or remedy which Lender may have hereunder, under the Note or
        Security Instrument or any other Loan Document, or at law or in equity, and
        each
        and every such right and remedy may be exercised at any time or from time
        to
        time.

       

      10.7.  Headings.
        The
        headings of the sections and subsections of this Agreement are for the
        convenience of reference only, are not to be considered a part hereof and
        shall
        not limit or otherwise affect any of the terms hereof.

       

      10.8.  Applicable
        Law;
        Jurisdiction; Waiver of Jury Trial.
        Sections
        5.30 - 5.32 of the Security Instrument are incorporated herein by
        reference.

       

      10.9.  Usury.
        Section
        8 of the Note is incorporated herein by reference.

       

      
        10.10.   
          Invalid
          Provisions to Affect No Others.
          If
          fulfillment of any provision hereof or any transaction related hereto at
          the
          time performance of such provisions shall be due, shall involve transcending
          the
          limit of validity prescribed by law, then ipso facto,
          the
          obligation to be fulfilled shall be reduced to the limit of such validity;
          and
          if any clause or provisions herein contained operates or would prospectively
          operate to invalidate this Agreement in whole or in part, then such clause
          or
          provision only shall be held for naught, as though not herein contained,
          and the
          remainder of this Agreement shall remain operative and in full force and
          effect.

         

      

      10.11.  
        Number
        and Gender.
        Whenever
        the singular or plural number, masculine or feminine or neuter gender is
        used
        herein, it shall equally include the other.

       

      10.12.  
        Amendments.
        Neither
        this Agreement nor any provision hereof may be changed, waived, discharged
        or
        terminated orally, but only by an instrument in writing signed by the party
        against whom enforcement of the change, waiver, discharge or termination
        is
        sought.

       

      
        
          26

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      10.13.  Notice.
        Any
        notice or communication required or permitted hereunder shall be given in
        writing in the manner set forth in the Security Instrument.

       

      10.14.  Legal
        Proceedings.
        Lender
        shall have the right to commence, appear in, or to defend any action or
        proceeding purporting to affect the rights or duties of the parties hereunder
        or
        the payment of any funds, and in connection therewith pay necessary expenses,
        employ counsel and pay its reasonable fees. Any such expenditures shall be
        considered additional advances hereunder and shall bear interest at the rate
        payable under the Note for installments of principal and/or interest after
        maturity shall be secured by the Loan Documents and shall be paid by Borrower
        to
        Lender upon demand.

       

      10.15.  Assignment
        by Lender.
        Lender
        shall have the right to assign any portion of this Agreement and/or the Loan
        and
        to disseminate to such assignee any information it has pertaining to the
        Loan,
        including without limitation, complete and current credit information on
        Borrower, any of its principals and any Guarantor. In the event of such an
        assignment, Borrower will agree to such modifications to this Agreement as
        will
        facilitate such assignment, provided that such modifications will not materially
        add to the obligations of Borrower. It is understood that any assignment
        by
        Lender will not result in additional cash expense to Borrower. Neither the
        shareholders, nor the trustees of a real estate investment trust assignee
        shall
        be personally liable for the obligations of such trust and Borrower will
        agree
        to look solely to the trust property for the payment of any claim
        hereunder.

       

      10.16.  Lender
        Not a Joint Venturer.
        Notwithstanding anything to the contrary herein contained, Lender, by entering
        into this Agreement or by any action taken pursuant hereto, will not be deemed
        a
        partner or joint venturer with Borrower, and Borrower will indemnify and
        hold
        Lender harmless from any and all damages resulting from such a construction
        of
        the parties and their relationship.

       

      10.17.  Survival
        of Covenants.
        All
        covenants of either party contained herein shall continue and survive until
        the
        Loan has been fully paid and discharged.

       

      10.18.  Time
        Is
        of the Essence.
        Time is
        of the essence of this Agreement.

       

      10.19.  Loan
        Participation.
        Borrower
        acknowledges and agrees that Lender may, from time to time, sell or offer
        to
        sell interests in the Loan and Loan Documents to one or more participants.
        Borrower authorizes Lender to disseminate to such participant or prospective
        participant, any information it has pertaining to the Loan, including without
        limitation, complete and current credit information on Borrower, any of its
        principals and Guarantor. Upon request, Borrower shall execute and deliver
        new
        or replacement promissory notes to Lender and the assignee of Lender evidencing
        their respective prorata share of the Loan.

       

      10.20.  USA
        Patriot Act.
        Lender
        hereby notifies Borrower that pursuant to the requirements of the USA Patriot
        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
        USA Patriot Act.

       

      
        
          27

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      10.21.  Exhibits.
        All
        Exhibits attached to this Agreement are hereby incorporated by reference
        and
        made a part of this Agreement for all purposes.

       

      10.22.  Confidential
        Information. During the term of the Loan, Lender, its agents or employees
        may encounter individually identifiable healthcare information or
        other

      confidential
        information relating to the residents at the Facility or the CCRC Property
        (collectively, the "Confidential
        Information").
        Unless
        otherwise required by law, Lender, its agents and employees shall not disclose,
        compile, aggregate, remove from the Facility, the Improvements or record
        in any
        manner any Confidential Information, and shall not cause Borrower, any Property
        Related Person, the Facility, the Improvements or the CCRC Property to violate
        any laws, regulations or ordinances intended to protect the privacy rights
        of
        the residents at the Property, including, without limitation, HIPAA or its
        implementing regulations.

       

      IN
        WITNESS
        WHEREOF, Borrower and Lender have hereunto caused these presents to be executed
        on the date first above written.

       

      


      REMAINDER
        OF PAGE INTENTIONALLY BLANK

      SIGNATURE
        PAGES FOLLOW

       

      
        
          28

        

        
          
          

          
            

          

        

        
          
          

        

      

      
SIGNATURE
        PAGE OF BORROWER TO 

      CONSTRUCTION
        LOAN AGREEMENT

       

      
        	 	 	 
	 	
                ARC
                  BRANDYWINE, L.P., a Delaware limited

                partnership

              
	 
 	 
 	 
 
	 	By:  	ARC
                Brandywine GP, LLC, a Tennessee 
                limited
                  liability company, its general partner

              
	 	 	 
	 	 	 
	 	 	By:
                
                

                Name:
                  

                
Title:
                

              


      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      SIGNATURE
        PAGE OF LENDER TO 

      CONSTRUCTION
        LOAN AGREEMENT

       

      
        	 	 	 
	 	GUARANTY
                BANK, a federal savings bank
	 
 	 
 	 
 
	 	By:  	 
	 	
                

                Name:
                  

                
Title:
                

              


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      EXHIBITS

      TO

      LOAN
        AGREEMENT

       

      

        
          	
                  EXHIBIT
                    A

                	
                  -

                	
                  Land

                
	
                  EXHIBIT
                    B

                	
                  -

                	
                  Project
                    Budget

                
	
                  EXHIBIT
                    C

                	
                  -

                	
                  Healthcare
                    Rider

                
	
                  EXHIBIT
                    D 

                	
                  -

                	
                  CCRC
                    Property

                
	
                  EXHIBIT
                    E 

                	
                  -

                	
                  Site
                    Plan

                


        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        A

       

      LEGAL
        DESCRIPTION FOR THE
        HEALTHCARE EXPANSION

      


      


      Commercial
        Unit “3” as defined in the Amended and Restated Declaration of Condominium for
        Freedom Village II at Brandywine Condominium of record in Record Book 6463,
        page1155, records of Chester County, Pennsylvania, being a proposed expansion
        of
        the health care facility comprising Commercial Unit “1” as defined in said
        Declaration. Commercial Unit “3” is to be constructed upon the following
        described land:

      


      ALL
        THAT CERTAIN
        piece of
        ground situated in the Township of West Brandywine, County of Chester,
        Commonwealth of Pennsylvania being a portion of Freedom Village at Brandywine
        and shown on a "Condominium Plat of Freedom Village at Brandywine", prepared
        by
        Littlejohn Engineering Associates Nashville, Tennessee, dated March 30, 2005
        and
        being a more fully described as follows:

      


      BEGINNING
        at an
        interior point in the lands of the now or late Freedom Village at Brandywine
        said point being the easterly most point of this herein described piece of
        ground and being measures the following two (2) courses and distances from
        a
        spike found in the bed of Caln Meeting House road (T-413) along the extension
        of
        the line common to the lands of said Freedom Village at Brandywine to the
        west
        and the lands of the now or late Bradley A. Conquest to the east:

      


      
        	(1)  	
                along
                  said common line of said Freedom Village at Brandywine and said
                  Conquest,
                  said line being the dividing line between East Brandywine Township
                  and
                  West Brandywine Township, South 00 degrees 21 minutes 14 seconds
                  West
                  361.08 feet; 

              


      

      
        	(2)  	
                over
                  the lands of said Freedom Village at Brandywine, North 89 degrees
                  38
                  minutes 46 seconds East 97.08 feet;

              


      

      


      thence
        from the point of beginning over the lands of said Freedom Village at Brandywine
        the following six (6) courses and distances:

      


      
        	(1)  	
                South
                  34 degrees 08 minutes 56 seconds West 204.17 feet to a
                  point;

              


      

      
        	(2)  	
                North
                  55 degrees 51 minutes 04 seconds West 230.71 feet to the
                  point;

              


      

      
        	(3)  	
                North
                  34 degrees 08 minutes 56 seconds East 81.17 feet to a
                  point;

              


      

      
        	(4)  	
                South
                  55 degrees 51 minutes 04 seconds East 52.83 feet to a
                  point;

              


      

      
        	(5)  	
                North
                  34 degrees 08 minutes 56 seconds East 122.75 feet to a point;
                  

              


      

      
        	(6)  	
                partly
                  along the exterior wall of an existing building, South 55 degrees
                  55
                  minutes 51 seconds East 177.88 feet to a point and place of beginning.
                  

              


      

      


      CONTAINING:
        40,584
        square feet (0.932 acres) of land be the same, more or less.

       

      
        
          1

        

        
          
          

          
            

          

        

        
          
          

        

      



      EXHIBIT
        B

      
 

      
        
          
            	 	 	 	 	 	 	 	 	 	 	
                     

                  	 	 	 	 	 	 	 	 	 
	 	 	 	 	
                    PROJECT
                      BUDGET

                  	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	
                    FVB
                      - AL Expansion

                  	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	
                    Brandywine,
                      PA

                  	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	
                     55,800
                      S.F.

                  	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	
                    57
                      Units

                  	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	
                     

                  	 	 	 	 	 	 	 	 	 	
                    Equity/

                  	 	
                    Loan

                  	 	
                     

                  	 	 	 
	
                    Category

                  	 	 	
                    Cost

                  	 	 	 	 	
                    $

                  	
                    /Unit

                  	 	 	 	 	
                    $

                  	
                    /PSF

                  	 	 	
                    Exposure

                  	 	 	
                    Budget

                  	 	
                    $

                  	
                    /Unit

                  	 	
                    $

                  	
                    /PSF

                  	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Land
                      

                  	 	
                    $

                  	
                    0

                  	 	 	 	 	
                    $

                  	
                    0

                  	 	 	
                    
                    

                  	 	
                    $

                  	
                    0.00

                  	 	
                    $

                  	
                    0

                  	 	
                    $

                  	
                    0

                  	 	
                    $

                  	
                    0

                  	 	
                    $

                  	
                    0.00

                  	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Construction:

                  	 	 	
                    
                    

                  	 	 	 	 	 	
                    
                    

                  	 	 	 	 	 	
                    
                    

                  	 	 	 	 	 	
                    
                    

                  	 	 	
                    
                    

                  	 	 	
                    
                    

                  	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Hard
                      Costs

                  	 	
                    $

                  	
                    8,775,821

                  	 	 	 	 	
                    $

                  	
                    153,962

                  	 	 	 	 	
                    $

                  	
                    157.27

                  	 	
                    $

                  	
                    0

                  	 	
                    $

                  	
                    8,775,821

                  	 	
                    $

                  	
                    153,962

                  	 	
                    $

                  	
                    157.27

                  	 
	
                    FF&E
                      

                  	 	
                    $

                  	
                    400,000

                  	 	 	 	 	
                    $

                  	
                    7,018

                  	 	 	 	 	
                    $

                  	
                    7.17

                  	 	
                    $

                  	
                    0

                  	 	
                    $

                  	
                    400,000

                  	 	
                    $

                  	
                    7,018

                  	 	
                    $

                  	
                    7.17

                  	 
	
                    Hard
                      Cost Contingency

                  	 	
                    $

                  	
                    925,000

                  	 	 	 	 	
                    $

                  	
                    16,228

                  	 	 	 	 	
                    $

                  	
                    16.58

                  	 	
                    $

                  	
                    0

                  	 	
                    $

                  	
                    925,000

                  	 	
                    $

                  	
                    16,228

                  	 	
                    $

                  	
                    16.58

                  	 
	
                    Sitework

                  	 	
                    $

                  	
                    0

                  	 	 	 	 	
                    $

                  	
                    0

                  	 	 	 	 	
                    $

                  	
                    0.00

                  	 	
                    $

                  	
                    0

                  	 	
                    $

                  	
                    0

                  	 	
                    $

                  	
                    0

                  	 	
                    $

                  	
                    0.00

                  	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Sub-Total
                      Construction

                  	 	
                    $

                  	
                    10,100,821

                  	 	 	 	 	
                    $

                  	
                    177,207

                  	 	 	 	 	
                    $

                  	
                    181.02

                  	 	
                    $

                  	
                    0

                  	 	
                    $

                  	
                    10,100,821

                  	 	
                    $

                  	
                    177,207

                  	 	
                    $

                  	
                    181.02

                  	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Soft
                      Cost:

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Financing
                      Costs

                  	 	
                    $

                  	
                    110,000

                  	 	 	 	 	
                    $

                  	
                    1,930

                  	 	 	 	 	
                    $

                  	
                    1.97

                  	 	
                    $

                  	
                    4,240

                  	 	
                    $

                  	
                    105,760

                  	 	
                    $

                  	
                    1,855

                  	 	
                    $

                  	
                    1.90

                  	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Permits
                      & Fees

                  	 	
                    $

                  	
                    0

                  	 	 	 	 	
                    $

                  	
                    0

                  	 	 	 	 	
                    $

                  	
                    0.00

                  	 	
                    $

                  	
                    0

                  	 	
                    $

                  	
                    0

                  	 	
                    $

                  	
                    0

                  	 	
                    $

                  	
                    0.00

                  	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Developer
                      Fees

                  	 	
                    $

                  	
                    0

                  	 	 	 	 	
                    $

                  	
                    0

                  	 	 	 	 	
                    $

                  	
                    0.00

                  	 	
                    $

                  	
                    0

                  	 	
                    $

                  	
                    0

                  	 	
                    $

                  	
                    0

                  	 	
                    $

                  	
                    0.00

                  	 
	
                    Architecture/Engineering

                  	 	
                    $

                  	
                    610,000

                  	 	 	 	 	
                    $

                  	
                    10,702

                  	 	 	 	 	
                    $

                  	
                    10.93

                  	 	
                    $

                  	
                    433,584

                  	 	
                    $

                  	
                    176,416

                  	 	
                    $

                  	
                    3,095

                  	 	
                    $

                  	
                    3.16

                  	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Pre
                      Opening/Mrktg

                  	 	
                    $

                  	
                    115,000

                  	 	 	 	 	
                    $

                  	
                    2,018

                  	 	 	 	 	
                    $

                  	
                    2.06

                  	 	
                    $

                  	
                    0

                  	 	
                    $

                  	
                    115,000

                  	 	
                    $

                  	
                    2,018

                  	 	
                    $

                  	
                    2.06

                  	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Taxes
                      & Insurance

                  	 	
                    $

                  	
                    0

                  	 	 	 	 	
                    $

                  	
                    0

                  	 	 	 	 	
                    $

                  	
                    0.00

                  	 	
                    $

                  	
                    0

                  	 	
                    $

                  	
                    0

                  	 	
                    $

                  	
                    0

                  	 	
                    $

                  	
                    0.00

                  	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Lease
                      Up Reserve (3mos)

                  	 	
                    $

                  	
                    0

                  	 	 	 	 	
                    $

                  	
                    0

                  	 	 	 	 	
                    $

                  	
                    0.00

                  	 	
                    $

                  	
                    0

                  	 	
                    $

                  	
                    0

                  	 	
                    $

                  	
                    0

                  	 	
                    $

                  	
                    0.00

                  	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Construction
                      Interest

                  	 	
                    $

                  	
                    225,424

                  	 	 	 	 	
                    $

                  	
                    3,955

                  	 	 	 	 	
                    $

                  	
                    4.04

                  	 	
                    $

                  	
                    0

                  	 	
                    $

                  	
                    225,424

                  	 	
                    $

                  	
                    3,955

                  	 	
                    $

                  	
                    4.04

                  	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Operating
                      Deficit Reserve 

                  	 	
                    $

                  	
                    696,338

                  	 	 	 	 	
                    $

                  	
                    12,216

                  	 	 	 	 	
                    $

                  	
                    12.48

                  	 	
                    $

                  	
                    0

                  	 	
                    $

                  	
                    696,338

                  	 	
                    $

                  	
                    12,216

                  	 	
                    $

                  	
                    12.48

                  	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Total
                      Project Cost

                  	 	
                    $

                  	
                    11,857,583

                  	 	 	 	 	
                    $

                  	
                    208,028

                  	 	 	 	 	
                    $

                  	
                    212.50

                  	 	
                    $

                  	
                    437,824

                  	 	
                    $

                  	
                    11,419,759

                  	 	
                    $

                  	
                    200,347

                  	 	
                    $

                  	
                    204.66

                  	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Borrower's
                      Budget

                  	 	
                    $

                  	
                    11,857,583

                  	 	 	 	 	
                    $

                  	
                    208,028

                  	 	 	 	 	
                    $

                  	
                    212.50

                  	 	
                    $

                  	
                    437,824

                  	 	
                    $

                  	
                    11,419,759

                  	 	
                    $

                  	
                    200,347

                  	 	
                    $

                  	
                    204.66

                  	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 


          

        

      

       

      
        
          1

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        C 

       

      HEALTHCARE
        RIDER

      


      THIS
        HEALTHCARE RIDER (this "Rider")
        is
        attached to and made a part of that certain Loan Agreement (the "Loan
        Agreement")
        between
        ARC BRANDYWINE, L.P., a Delaware limited partnership, and GUARANTY BANK.
        Terms
        used but not defined herein are defined in the Loan Agreement and shall have
        the
        meaning given such terms in the Loan Agreement.

       

      DEFINITIONS

       

      1.1. Defined
        Terms.
        As used
        in this Healthcare Rider and the Loan Agreement, the following terms shall
        have
        the meanings shown: 

      


      “Agency”.
        The
        Health Care Financing Administration, the Drug Enforcement Administration,
        the
        Environmental Protection Agency, any other state or federal licensing or
        regulatory authority (including any licensing or regulatory authority
        responsible for administering or dispensing Medicaid or Medicare payments
        or any
        other third party payor billing policies, procedures, limitations or
        restrictions), or any other public or private agency or organization, including
        without limitation, any public or private accreditation agency or
        organization.

      


      “CCRC
        Property”.
        The
        continuing care retirement community which includes the Facility as well
        as the
        other facilities located on the property described on Exhibit D
        attached
        hereto and made a part hereof.

      


      “Deficiency
        Notices”.
        All
        notices and other written communications from any Agency or Governmental
        Authority which licenses, regulates, certifies, accredits or evaluates the
        Property Related Persons, the Property or the operation of the Property by
        the
        Property Related Persons alleging that the Property Related Persons, the
        Property or the operation of the Property by the Property Related Persons
        in
        whole or in part fails to comply or, if corrective action is not taken, shall
        fail to comply with, any or all of the Agency's or Governmental Authority's
        requirements for and conditions of licensing, regulation, certification or
        accreditation by or participation in programs of the Agency or Governmental
        Authority or otherwise relating to the continuous operation of all or any
        portion of the Property or the programs of the Property Related Persons or
        the
        eligibility or entitlement of the Property Related Persons to receive
        reimbursement from any Agency or Governmental Authority.

      


      “Facility”.
        The 57
        unit assisted living facility located upon the Property, which is an expansion
        of the healthcare facility on adjacent property.

      


      “GAAP”.
        Generally accepted accounting principles, as from time-to-time in effect
        in the
        United States of America, or such alternative accounting standard as may
        be
        acceptable to the Lender, consistently applied.

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      “General
        Partner”
ARC
        Brandywine GP, LLC, a Tennessee limited liability company.

      


      “Healthcare
        Information Laws”.
        As
        defined in Section 3.1(i) of this Healthcare Rider.

      


      “HIPAA”.
        As
        defined in Section 3.1(i) of this Healthcare Rider.

      


      “Licenses”.
        Any and
        all licenses, operating permits, franchises, and other licenses, authorizations,
        certifications, permits, or approvals, other than construction permits, issued
        by, or on behalf of, any Governmental Authority now existing or at any time
        hereafter issued, with respect to the acquisition, construction, renovation,
        expansion, leasing, ownership and/or operation of the CCRC Property,
        accreditation of the CCRC Property, any and all operating licenses issued
        by any
        Governmental Authority, any and all pharmaceutical licenses and other licenses
        related to the purchase, dispensing, storage, prescription or use of drugs,
        medications, and other “controlled substances,” and any and all licenses
        relating to the operation of food or beverage facilities or amenities, if
        any.

      


      “Managed
        Care Plans”.
        Any
        health maintenance organization, preferred provider organization, individual
        practice association, competitive medical plan, referral service or similar
        arrangement, entity, organization, or Person.

      


      “Management
        Agreement”.
        The
        Management Agreement by and between Manager and the Borrower, applicable
        to the
        Facility, as the same may be amended from time to time.

      


      “Manager”.
        ARC
        Management, LLC, a Tennessee limited liability company, and any successor
        manager of the Facility approved by Lender in writing.

      


      “Material
        Adverse Change”.
        As to
        the specified Person, a material adverse change in the business, operations,
        property, condition (financial or otherwise) or prospects of such Person
        and, in
        addition, as to the Borrower, any material adverse change in (i) the ability
        of
        the Borrower to perform its obligations under this Agreement or any of the
        other
        Loan Documents or (ii) the validity or enforceability of this Agreement or
        any
        of the other Loan Documents or the rights or remedies of the Lender hereunder
        or
        thereunder.

      


      “Net
        Operating Income”.
        The
        gross income received by Borrower from the operation of the CCRC Property
        for
        the calendar quarter in question, less expenses incurred and/or paid by Borrower
        in connection with the operation and maintenance of the CCRC Property that
        are
        allocable to such period (other than management fee expenses), computed on
        an
        accrual basis without regard to depreciation or debt service, but otherwise
        in
        accordance with generally accepted accounting principles consistently applied.
        Included within the expenses shall be annual capital expenditures equal to
        $300
        per Unit. Documentation of Net Operating Income and expenses shall be certified
        by an officer of Borrower with detail satisfactory to Lender and shall be
        subject to the approval of Lender. 

      


      “Operating
        Agreements and Management Contracts”.
        Any and
        all contracts and agreements previously, now or at any time hereafter entered
        into by the Property Related Persons with respect to the acquisition,
        construction, renovation, expansion, ownership, operation, maintenance, use
        or
        management of the CCRC Property or otherwise concerning the operations and
        business of the CCRC Property, including, without limitation, the Management
        Agreement, any and all service and maintenance contracts, any employment
        contracts, any and all management and operating agreements, any and all
        consulting agreements, laboratory servicing agreements, pharmaceutical
        contracts, physician, other clinician or other professional services provider
        contracts, therapy referral, food and beverage service contracts, and other
        contracts for the operation and maintenance of, or provision of services
        to, the
        CCRC Property.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      “Participation
        Agreements”.
        Any and
        all third party payor participation or reimbursement agreements now or at
        any
        time hereafter existing for the benefit of the Property Related Persons relating
        to rights to payment or reimbursement from, and claims against, private
        insurers, Managed Care Plans, employee assistance programs, Blue Cross and/or
        Blue Shield, federal, state and local Governmental Authorities, including
        without limitation, Medicare, Medicaid, TRICARE, VA and other third party
        payors.

      


      “Person”.
        An
        individual, a general or limited partnership, a limited liability company,
        a
        limited liability partnership, a corporation, a business trust, a joint stock
        company, a trust, an unincorporated association, a joint venture, a Governmental
        Authority or other entity of whatever nature.

      


      “Pledge
        Agreement”.
        Collectively, the Pledge Agreements dated as of the date hereof made by
        Guarantor, ARCPI Holdings, Inc., a Delaware corporation, and General Partner,
        for the benefit of Lender.

      


      “Property
        Related Persons”.
        Borrower, Manager and General Partner.

      


      “Replacement
        Reserve Escrow Account”.
        As
        defined in Section 3.1(j) of this Healthcare Rider.

      


      “Resident
        Agreements”.
        Any and
        all contracts and agreements executed by, or on behalf of any resident or
        other
        Person seeking residency or occupancy in the CCRC Property and related services
        from the Property Related Person. The term Resident Agreements shall also
        include any and all contracts, authorizations, agreements and/or consents
        executed by, or on behalf of any patient or other Person seeking services
        from
        the Property Related Persons pursuant to which the Property Related Persons
        provide or furnish long-term care and related services at the CCRC Property,
        including the consent to treatment and assignment of the payment of benefits
        by
        a third party.

      


      “Security
        Agreement”.
        The
        Security Agreement dated as of the date hereof made by Borrower, Manager
        and
        General Partner for the benefit of Lender.

      


      “Unit”.
        A fully
        constructed unit at the CCRC Property, for which a certificate of occupancy
        has
        been issued by the applicable Governmental Authority.

      


      “Work
        Inspector”.
        As
        defined in Section 3.1(j) of this Healthcare Rider.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Capitalized
        terms not otherwise defined herein have the meaning assigned such terms in
        the
        Security Instrument or the Note, as the case may be.

      


      REPRESENTATIONS
        AND WARRANTIES

       

      2.1. Representations
        and Warranties of the Borrower.
        To
        induce the Lender to make the Loan, the Borrower hereby represents and warrants
        to the Lender as of the date hereof as follows:

       

      (a) Litigation.
        With respect to the CCRC Property, there is no threatened or pending revocation,
        suspension, termination, probation, restriction, limitation or non-renewal
        of
        any material License or any similar accreditation or approval by or from
        any
        organization or Governmental Authority for healthcare providers, including,
        without limitation, the issuance of any provisional License or other License
        with a term of less than twelve (12) months, as a consequence of any sanctions
        imposed by any Governmental Authority. There is no threatened or pending
        assessment of any civil or criminal penalties by any Governmental
        Authority.

       

      (b) Compliance
        with Laws. No Property Related Person is in violation of any Governmental
        Requirement pertaining to the operation of the CCRC Property, patient rights,
        resident rights, employment practices, health standards or controls. Except
        as
        disclosed to the Lender prior to the date hereof, the Property Related Persons
        are in compliance with all accreditation standards and requirements to which
        each is subject. The Property Related Persons have obtained or applied for
        all
        Licenses necessary to the ownership of their property and to the conduct
        of
        their activities which, if not obtained, could materially adversely affect
        the
        ability of the Property Related Persons to conduct the activities of the
        CCRC
        Property, including, without limitation, as appropriate, the dispensing,
        storage, prescription, disposal, and use of drugs, medications and other
        “controlled substances” and the maintenance of cafeteria and other food and
        beverage facilities or services. To the extent the Property Related Persons
        have
        applied for any required Licenses which have not yet been issued, the operation
        and conduct of the CCRC Property by the Property Related Persons is nonetheless
        in compliance with all Governmental Requirements. The Property Related Persons
        currently have obtained all Licenses materially necessary under Governmental
        Requirements for the operation of the Facility.

       

      (c) Licenses
        and Certifications. With respect to each License the Property Related
        Persons possess or have applied for, (i) no material default has occurred
        or is
        continuing under the terms thereof, and no event has occurred which, with
        the
        giving of notice or the lapse of time, or both, would constitute a material
        breach of any condition to the issuance, maintenance, renewal and/or continuance
        thereof, (ii) the Property Related Persons have paid all fees, charges and
        other
        expenses to the extent due and payable with respect to, and have provided
        all
        information and otherwise complied with all material conditions precedent
        to,
        the issuance, maintenance, renewal, and continuance of such License, (iii)
        none
        of the Licenses are conditional, provisional, probationary or restricted
        in any
        material way, (iv) the Property Related Persons have not received any notice
        from any Governmental Authority relating to any actual or pending suspension,
        revocation, restriction, or imposition of any probationary use of such License,
        nor has any License been materially amended, supplemented, rescinded,
        terminated, or otherwise modified except as otherwise disclosed in writing
        to,
        and approved by, the Lender, (v) no Property Related Person has made any
        previous assignment of any of the Licenses to any Person, except as security
        for
        loans and other financial accommodations, if any, which are to be paid with
        the
        proceeds of the Loan and are to be terminated promptly following the date
        hereof, (vi) no financing statement covering any of the Licenses has been
        executed by a Property Related Person or is on file in any public office,
        except
        for those financing statements relating to loans and other financial
        accommodations, if any, which are to be paid with the proceeds of the Loan
        and
        are to be terminated promptly following the date hereof, and (vii) each License
        has been issued for a period of at least twelve (12) months from the date
        of
        issuance or for such lesser time to the extent the issuance for less than
        twelve
        (12) months is not the consequence of any sanctions imposed by any Governmental
        Authority.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (d) Certain
        Payments. Neither the Borrower nor any director, officer, member, partner,
        employee or agent of the Borrower acting for or on behalf of the Borrower
        has
        knowingly and willfully paid or caused to be paid, directly or indirectly,
        in
        connection with the business of the Borrower:

       

      (i)  any
        bribe,
        kickback or similar payment to any Governmental Authority or any agent of
        any
        supplier; or

       

      (ii)  any
        contribution to any political party or candidate (other than personal funds
        of
        directors, officers, members, partners, employees or agents not reimbursed
        by
        their respective employers or as otherwise permitted by applicable
        laws).

       

      To
        the
        best of Borrower's knowledge, the above representation is true and correct
        with
        respect to the other Property Related Persons.

       

      (e) Operating
        Agreements and Management Contracts. The Borrower has furnished to the
        Lender photocopies of all material Operating Agreements and Management Contracts
        entered into with the Property Related Persons, and all amendments, supplements
        and modifications thereto. With respect to each such Operating Agreement
        and
        Management Contract, (i) such Operating Agreement and Management Contract
        is or
        will be at the time of execution and delivery thereof valid and binding on
        the
        parties thereto and in full force and effect, (ii) no material default has
        occurred or is continuing under the terms thereof, and no event has occurred
        which, with the giving of notice or the lapse of time, or both, would constitute
        a material default thereunder, and no party thereto has attempted or threatened
        to terminate any such Operating Agreement and Management Contracts, (iii)
        the
        Property Related Persons have not made any previous assignment of the Operating
        Agreements and Management Contracts to any Person, except as security for
        loans
        and other financial accommodations, if any, which are to be paid with the
        proceeds of the Loan and are to be terminated promptly following the date
        hereof, and (iv) no financing statement covering any of the Operating Agreements
        and Management Contracts is on file in any public office, except for those
        financing statements relating to loans and other financial accommodations
        which
        are to be paid with the proceeds of the Loan and are to be terminated promptly
        following the date hereof.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (f) Participation
        Agreements. The Borrower hereby represents that the CCRC Property is a
        private pay retirement community and as such, no Property Related Person
        has
        entered into any Participation Agreement with respect to the CCRC
        Property.

       

      (g) Hill-Burton
        Act. The Borrower has not, nor to the best of the Borrower's knowledge,
        has
        any prior owner of the CCRC Property during the twenty (20) year period
        immediately preceding the date hereof, received any funds to finance the
        construction and/or acquisition of the CCRC Property pursuant to Title VI
        of the
        Public Health Service Act (commonly referred to as the Hill-Burton Act) or
        Title
        XVI of the Public Health Service Act.

       

      (h) Fraud
        and Abuse. To the Borrower's knowledge, each Property Related Person, its
        directors, officers and employees have not engaged in any activities which
        are
        in violation of Sections 1128A, 1128C or 1877 of the Social Security Act
        (42
        U.S.C. §§ 1320a-7a, 1320a-7c and 1395nn), the False Claims Act (31 U.S.C. § 3729
        et seq.), the Program Fraud Civil Remedies Act of 1986 (31 U.S.C. § 3801 et
        seq.) or other federal or state laws and regulations, including, but not
        limited
        to, the following:

       

      (i) knowingly
        and willfully making or causing to be made a false statement or representation
        of a material fact in any application for any benefit or payment;

       

      (ii) knowingly
        and willfully making or causing to be made a false statement or representation
        of a material fact for use in determining rights to any benefit or
        payment;

       

      (iii) failing
        to
        disclose knowledge of the occurrence of any event affecting the initial or
        continued right to any benefit or payment on its own behalf or on behalf
        of
        another, with intent to fraudulently secure such benefit or
        payment;

       

      (iv) knowingly
        and willfully offering, paying, soliciting, or receiving any remuneration
        (including any kickback, bribe or rebate), directly or indirectly, overtly
        or
        covertly, in cash or in kind (A) in return for referring an individual to
        a
        Person for the furnishing or arranging for the furnishing of any item or
        service, (B) in return for purchasing, leasing or ordering, or arranging
        for or
        recommending, purchasing, leasing or ordering any good, facility, service
        or
        item; or

       

      (v) billing
        a
        patient, resident or payor for health services specified in 42 U.S.C. § 1395nn
        or any other similar or comparable federal or state laws, or providing such
        health services to a patient or resident, upon a referral from a physician
        where
        such physician has a financial relationship with the Property Related Person
        to
        which no exception applies under each of the applicable laws.

       

      (i) Certificate
        of Need Conditions. The Borrower covenants that it has developed and operated
        the CCRC Property and is providing services in a manner consistent with the
        representations made in the certificate of need application filed in connection
        with the CCRC Property and within the project scope and the conditions placed
        on
        the certificate of need, if any.

       

      COVENANTS
        AND WARRANTIES

       

      3.1. Affirmative
        Covenants of the Borrower.
        The
        Borrower agrees as follows:

      


      (a) Resident
        Agreements. The Borrower will submit to the Lender when requested by the
        Lender, all information requested by the Lender with respect to all Resident
        Agreements, excluding, however any medical information or other protected
        health
        information as defined in 45 CFR §160-103.

      


      (b) Conduct
        of Business and Compliance with Laws. The Borrower covenants and agrees that
        it or the Property Related Persons will (i) materially comply with all
        Governmental Requirements, including, without limitation, the Occupational
        Safety and Health Act of 1970, regulations issued under the Omnibus Budget
        Reconciliation Act of 1987, any Governmental Requirement relating to “informed
        consents” and rights of patients and residents, qualifications of staff,
        staffing requirements and delivery of services in a manner sufficient to
        protect
        the health and safety of patients and residents, (ii) maintain in full force
        and
        effect all Licenses necessary to the ownership and/or operation of the CCRC
        Property, including, without limitation, the license to operate the CCRC
        Property, Licenses and other approvals related to the storage, dispensation,
        use, prescription and disposal of drugs, medications and other “controlled
        substances” and, to the extent offered by the Borrower, the maintenance of
        cafeteria and other food and beverage facilities or services, (iii) maintain
        or
        cause to be maintained the standard of care for the patients and residents
        of
        the CCRC Property at all times at a level necessary to ensure a level of
        quality
        care and services for the patients and residents of the CCRC Property no
        less
        than prudent industry standard for a similar facility, (iv) maintain or cause
        to
        be maintained a standard of care in the storage, use, transportation and
        disposal of all medical equipment, medical supplies, medical products and
        medical waste, of any kind and in any form, that is in accordance with, at
        least, that of the prudent industry standard and in conformity with all
        Governmental Requirements, (v) operate or cause to be operated the CCRC Property
        in a prudent manner in material compliance with Governmental Requirements
        relating thereto and cause all Licenses, permits, certificates of need, and
        any
        other agreements materially necessary for the use and operation of the CCRC
        Property remain in effect, (vi) correct or cause to be corrected any deficiency
        set forth in any Agency statement of deficiencies, the curing of which is
        a
        condition of continued licensure or for accreditation of the CCRC Property,
        (vii) maintain or cause to be maintained sufficient inventory and equipment
        of
        types and quantities at the CCRC Property to enable the Property Related
        Persons
        to operate the CCRC Property adequately and in a manner which will enable
        the
        Borrower to comply with the provisions of the Loan Documents, and (viii)
        maintain or cause to be maintained all deposits, including, without limitation,
        deposits relating to residents, patients or Resident Agreements in accordance
        with customary and prudent business practices and all Governmental
        Requirements.

       

      (c)
         Insurance.
        The Borrower shall ensure that all healthcare providers with whom the Property
        Related Persons contract to provide services at the CCRC Property are insured
        against claims arising from such services (including, without limitation,
        malpractice coverage) with the same limits, if any, as applicable to the
        Borrower pursuant to the Loan Documents or otherwise acceptable to the
        Lender.

       

      (d) Notices.
        The Borrower shall promptly notify the Lender in writing upon obtaining
        knowledge of the occurrence of:

       

      (i) the
        receipt by any Property Related Person of any notice, claim or demand from
        any
        Governmental Authority which alleges that a Property Related Person is in
        violation of any of the terms of, or has failed to comply with any material
        Governmental Requirement regulating its operation and business, including,
        but
        not limited to, the Health Care Financing Administration or any division
        thereof, the Occupational Safety and Health Act and the Environmental Protection
        Act;

       

      (ii) the
        actual, threatened or pending (A) revocation, suspension, probation,
        restriction, limitation, forfeiture or refusal to renew of any material License,
        or (B) the issuance or pending issuance of any material License for a period
        of
        less than twelve (12) months, as a consequence of sanctions imposed by any
        Governmental Authority, or (C) the assessment or threatened or pending
        assessment, of any civil or criminal penalties by any Governmental Authority
        or
        agent, or any accreditation organization;

       

      (iii) any
        action, including, but not limited to the amendment of any License, or the
        issuance of any new License or certification for the CCRC Property, under
        which
        a Property Related Person proposes (A) to develop a new facility or service,
        (B)
        change any existing facility or service, or (C) to eliminate any existing
        or
        proposed service, which action requires the Property Related Person to seek
        either a certificate of need approval or exemption from certificate of need
        review or which requires amendment of any License or the issuance of any
        new
        License or certificate for the CCRC Property; 

       

      (iv) any
        other
        development in the business or affairs of the Property Related Persons which
        could have a Material Adverse Change; or

       

      (v) any
        actual, threatened or pending litigation with respect to the CCRC Property
        or
        the Property Related Persons;

       

      in
        each
        case describing in detail satisfactory to the Lender in its reasonable
        discretion the nature thereof and the action the Borrower proposes to take
        with
        respect thereto.

       

      (e) Deficiency
        Notices. Without implying any limitation on any other provisions of this
        Agreement or any of the other Loan Documents, the Borrower will furnish or
        cause
        to be furnished to the Lender reasonably promptly after receipt thereof copies
        of all (A) Deficiency Notices, (B) Agency inspection reports, audits, surveys,
        investigations, reviews or evaluations, (C) relevant notices and written
        communications from any state or any Agency relating to material adjustments
        in
        reimbursement amounts or to rate reviews, modifications of rates, inflation
        adjustments, rate agreements or the like, and (D) responses by, or on behalf
        of,
        the Property Related Persons with respect to any of the foregoing. The Borrower
        shall or shall cause the Property Related Persons to promptly commence and
        diligently pursue the correction of the subject of each Deficiency Notice,
        and
        shall correct the subject of the Deficiency Notice promptly, but in any event
        prior to the expiration of any period allowed by the Agency for correction.
        The
        Borrower shall, at the Lender's request, promptly provide from time to time
        such
        cost estimates, reports and other information as the Lender may require to
        demonstrate to the Lender's satisfaction that the Property Related Persons
        have
        the financial and other ability to effect the correction and are taking the
        actions required by this Section.

       

      (f) Census
        Report and Surveys. To the extent permitted by all laws governing the
        privacy and confidentiality of individually identifiable information, the
        Borrower will furnish to the Lender promptly following the request of the
        Lender
        reports of the CCRC Property periodic patient or resident census with a
        breakdown with respect to the source of payment, licensure survey results,
        accreditation survey results and such other information relating to the
        operation of the CCRC Property as may reasonably be requested by the Lender
        from
        time to time.

       

      (g) Renewal
        of Agreements. The Borrower will or will cause the Property Related Persons
        to take any and all steps necessary to renew all Resident Agreements, and
        Operating Agreements and Management Contracts, except to the extent that
        the
        Borrower deems such renewal to be, in the exercise of prudent business judgment,
        contrary to the best interests of the Borrower.

       

      (h) Financial
        Statements. The Borrower shall provide Lender the following financial
        statements and information on a continuing basis during the term of the
        Loan:

       

      (i) Within
        one
        hundred twenty (120) days after the end of each calendar year, unaudited
        financial statements of Borrower and audited financial statements of Guarantor,
        prepared by a nationally recognized accounting firm or independent certified
        public accountant acceptable to Lender, which statements shall be prepared
        in
        accordance with GAAP, and shall include a balance sheet and statement of
        income
        and expenses for the year then ended. Lender reserves the right to require,
        after an Event of Default, annual audited financial statements of
        Borrower.

       

      (ii) Within
        thirty (30) days after the end of each calendar month, unaudited monthly
        financial statements of the operations of the CCRC Property, prepared in
        accordance with GAAP, which statements shall include a balance sheet and
        statement of income and expenses for the calendar month then ended, together
        with a rent roll/census of the CCRC Property as of the end of such month,
        certified by a representative of Borrower to be true and correct to the best
        of
        the representative's knowledge and belief. 

       

      (iii) Within
        forty-five (45) days of the end of each calendar quarter, a balance sheet
        and
        statement of income and expenses of Borrower and Guarantor for the quarter
        then
        ended, certified by a representative of Borrower and Guarantor, as applicable,
        to be true and correct.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (iv) The
        Lender
        further reserves the right to require such other financial information of
        Borrower, Guarantor and/or the CCRC Property in such form and at such other
        times (including monthly or more frequently) as Lender shall reasonably deem
        necessary, and Borrower agrees promptly to provide or to cause to be provided,
        such information to Lender. All financial statements must be in the form
        and
        detail as Lender may from time to time reasonably request.

       

      (v) Within
        forty-five (45) days after the end of each calendar quarter, a Compliance
        Certificate in the form of Schedule I attached hereto and certified by a
        representative of the Borrower to be true and correct to the best of the
        representative's knowledge and belief.

       

      (i) Compliance
        with Healthcare Information Laws. Without limiting the generality of any
        other provision of this Agreement including, without limitation, any other
        representation or warranty made herein, each of the Property Related Persons
        and
        the CCRC Property is in material compliance with all applicable statutes,
        laws,
        ordinances, rules and regulations of any federal, state or local governmental
        authority primarily relating to the confidentiality of patient healthcare
        information, including without limitation the Health Insurance Portability
        and
        Accountability Act of 1996, as amended, and the rules and regulations
        promulgated thereunder (“HIPAA”)
        (collectively, “Healthcare
        Information Laws”).
        The
        Property Related Persons have maintained in all material respects all records
        required to be maintained by any governmental agency or authority or otherwise
        under the Healthcare Information Laws and there are presently no material
        violations of the Healthcare Information Laws. Throughout the term of the
        Loan,
        the Property Related Persons will comply in all material respects with the
        Healthcare Information Laws.

       

      (j) Replacement
        Reserve Escrow Account. As additional security for the Loan, upon request of
        Lender, Borrower shall establish and maintain a capital repair reserve (the
        “Replacement
        Reserve Escrow Account”)
        with
        Lender for payment of certain non-recurring types of costs and expenses incurred
        by Borrower for interior and exterior work to the Facility, including, without
        limitation, performance of work to the roofs, chimneys, gutters, downspouts,
        paving, curbs, driveways, ramps, balconies, porches, patios, exterior walls,
        exterior doors and doorways, floor coverings, windows, elevators and mechanical
        and HVAC equipment (collectively, the “Repairs”)
        provided such costs and expenses are incurred for repairs (A) not incurred
        for
        ordinary wear and tear at the Facility and (B) categorized under generally
        accepted accounting principles as a capital expense and not as an operating
        expense. Upon Lender's request that the Replacement Reserve Escrow Account
        be
        established and on each and every monthly payment date thereafter under the
        Note
        until the Note is fully paid and performed, Borrower shall deposit in the
        Replacement Reserve Escrow Account concurrently with and in addition to the
        monthly payment due under the Note a deposit to the Replacement Reserve Escrow
        Account in an amount equal to one twelfth (1/12th) of $300 per Unit at the
        Facility per annum.

       

      All
        sums
        in the Replacement Reserve Escrow Account shall be held by Lender in the
        Replacement Reserve Escrow Account to pay the costs and expenses of the Repairs
        and Lender shall, to the extent funds are available for such purpose in the
        Replacement Reserve Escrow Account, disburse to Borrower the amount incurred
        and
        paid by Borrower in performing such Repairs within 10 days following: (A)
        the
        receipt by Lender of a written request from Borrower for disbursement from
        the
        Replacement Reserve Escrow Account and a certification by Borrower that the
        applicable item of Repair has been completed; (B) the delivery to Lender
        of paid
        invoices, receipts or other evidence satisfactory to Lender, verifying the
        cost
        and payment of performing the Repairs; (C) for disbursement requests in excess
        of $10,000, the delivery to Lender of (1) affidavits, lien waivers or other
        evidence reasonably satisfactory to Lender showing that all materialmen,
        laborers, subcontractors and any other parties who might or could claim
        statutory or common law liens and are furnishing or have furnished material
        or
        labor to the Facility have been paid all amounts due for labor and materials
        furnished to the Facility; and (2) a certification from an inspecting architect,
        engineer or other consultant reasonably acceptable to Lender (the “Work
        Inspector”)
        describing the completed Repairs and verifying the completion of the Repairs
        and
        the value of the completed Repairs.

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Lender
        shall not be required to make advances from the Replacement Reserve Escrow
        Account more frequently than once in any 30 day period or in an amount less
        than
        the lesser of $5,000 or the total cost of the Repairs for which the disbursement
        is requested. In making any payment from the Replacement Reserve Escrow Account,
        Lender shall be entitled to rely on such request from Borrower without any
        inquiry into the accuracy, validity or contestability of any such
        amount.

      


      The
        Replacement Reserve Escrow Account shall not, unless otherwise explicitly
        required by applicable law, be or be deemed to be escrow or trust funds.
        The
        Replacement Reserve Escrow Account shall be held in a separate account. Interest
        on the funds contained in the Replacement Reserve Escrow Account shall be
        paid
        by Lender to Borrower upon payment in full of the Loan.

      


      Upon
        the
        occurrence of an Event of Default, Lender may, but shall not be obligated,
        to
        apply at any time the balance then remaining in the Replacement Reserve Escrow
        Account against the Loan in whatever order Lender shall subjectively determine,
        together with the Make-Whole Breakage Amount arising on account of such payment.
        Upon full payment of the Loan in accordance with its terms or at such earlier
        time as Lender may elect, the balance of the Replacement Reserve Escrow Account
        plus all interest thereon then in Lender's possession shall be paid over
        to
        Borrower and no other party shall have any right or claim thereto. Lender
        shall
        have a perfected security interest in the Replacement Reserve Escrow Account
        as
        additional security to secure payment of the Note and Borrower shall execute
        and
        deliver to Lender such further financing statements and take such other action
        as Lender may require to evidence and/or perfect its security interest in
        the
        Replacement Reserve Escrow Account, including, without limitation, the execution
        and delivery to Lender of a pledge and security agreement in form reasonably
        satisfactory to Lender.

      


      Funds
        held
        in the Replacement Reserve Escrow Account are solely for the protection of
        Lender and entail no responsibility on Lender's part beyond the payment of
        the
        respective items for which they are held following receipt of bills, invoices
        or
        statements therefor in accordance with the terms hereof and beyond the allowing
        of due credit for the sums actually received. Upon assignment of the Loan
        by
        Lender, any funds in the Replacement Reserve Escrow Account shall be turned
        over
        to the assignee and any responsibility of Lender, as assignor, with respect
        thereto shall terminate.

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (k) Management
        of the CCRC Property. The management of the CCRC Property shall be by
        either: (i) Borrower or an entity affiliated with Borrower approved by Lender
        for so long as Borrower or said affiliated entity is managing the CCRC Property
        in a first class manner; or (ii) a professional property management company
        approved by Lender. Such management by an affiliated entity or a professional
        property management company shall be pursuant to a written agreement approved
        by
        Lender. Any management agreement shall provide for a maximum allowable
        management fee of 5% of gross revenues. In no event shall any manager be
        removed
        or replaced or the terms of any management agreement modified or amended
        without
        the prior written consent of Lender. After an Event of Default or a default
        under any management agreement then in effect, which default is not cured
        within
        any applicable grace or cure period, Lender shall have the right to terminate,
        or to direct Borrower to terminate, such management agreement upon 30 days'
        notice and to retain, or to direct Borrower to retain, a new management agent
        approved by Lender. It shall be a condition of Lender's consent to any
        management agreement, whether with an affiliate of Borrower or otherwise,
        that
        such manager enter into an agreement with Lender whereby the manager
        acknowledges and agrees to the aforesaid rights of Lender and as to such
        other
        matters as Lender may reasonably require.

      


      (l) Net
        Operating Income Test. Subject to the cure rights set forth below, it shall
        be an immediate Event of Default if the Net Operating Income is less than
        $1,000,000, to be tested as of the end of each calendar quarter. Borrower
        may
        cure a default under this Section 3.1(n) upon payment to the Lender, within
        45
        days of the end of the calendar quarter upon which the default occurs, of
        (i) in
        the case of the first such default, (x) $100,000, which amount shall be applied
        to reduce the outstanding principal balance of the Note (as defined in the
        Security Instrument), in such order as Lender shall determine, and (y) $10,000,
        which amount shall be paid to Lender as a waiver fee and shall not be applied
        to
        payment of the Note, and (ii) in the case of the second such default, (x)
        $500,000, which amount shall be applied to reduce the outstanding principal
        balance of the Note (as defined in the Security Instrument), in such order
        as
        Lender shall determine, and (ii) $20,000, which amount shall be paid to Lender
        as a waiver fee and shall not be applied to payment of the Note. No cure
        shall
        be available in the case of the third such default. Borrower will provide
        Lender
        with satisfactory evidence confirming compliance with the provisions of this
        Section 3.1(n) within forty-five (45) days after the close of each calendar
        quarter in the form of the Compliance Certificate attached hereto as Schedule
        I.
        No Make-Whole Breakage Amount shall be due on account of the payments under
        this
        Section 3.1(l).

       

      (m) State
        Mandated Reserve Account. Borrower shall maintain with Lender at all times
        while the Loan is outstanding, the State of Pennsylvania mandated reserve
        account (the “State
        Mandated Reserve Account”)
        for the
        CCRC Property.

       

      (n) Transfer
        of License.
        Borrower
        shall apply to the State of Pennsylvania to transfer the current Certificate
        of
        Licensure, issued by the Pennsylvania Department of Health, from ARC Brandywine
        GP, LLC, the current license holder, to Borrower and shall provide Lender
        a copy
        of the new license upon issuance, but in any case, no later than June 30,
        2006.
        Such transfer shall not require the consent of Lender. 

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      3.2. Negative
        Covenants of the Borrower. The Borrower agrees as follows:

       

      (a) Licenses.
        The Borrower will not allow any breach, withdrawal, rating reduction,
        restriction, suspension, probation, failure to renew, cancellation, rescission,
        termination, lapse or forfeiture of any License, permit, right, franchise
        or
        privilege materially necessary for the ownership or operation of the CCRC
        Property for the purposes for which the CCRC Property is intended.

       

      (b) Agreements.
        The Borrower will not allow any breach, withdrawal, restriction, suspension,
        probation, failure to renew, cancellation, rescission, termination, lapse,
        alteration, forfeiture or modification of any material Operating Agreements
        and
        Management Contracts.

       

      (c)
         Participation
        Agreements. Neither the Borrower nor any Property Related Persons will be
        a
        party to a Participation Agreement with respect to the CCRC
        Property.

       

      (d) Amendments;
        Terminations. The Borrower will not amend or terminate or agree to amend
        or
        terminate any material License or consent to a waiver of, or waive, any material
        provisions thereof or amend or terminate or agree to amend or terminate,
        any
        material Operating Agreements and Management Contracts.

       

      EVENTS
        OF DEFAULT

       

      4.1. Events
        of Default. Each of the following shall be an Event of Default under the
        Loan Agreement:

       

      (a) Any
        involuntary, imposed, required, actual, threatened or pending revocation,
        suspension, termination, probation, restriction, limitation, forfeiture or
        refusal to renew, any License necessary or material to the operation of the
        CCRC
        Property.

       

      (b) If
        the
        United States Department of Health and Human Services, Office of the Inspector
        General, or any federal, state or local Agency brings a claim, demand or
        cause
        of action against a Property Related Person or any shareholders, partners,
        members, directors, officers, employees or agents of a Property Related Person
        for violation of Section 1128A, 1128C or 1877 of the Social Security Act
        (42
        U.S.C. §§ 1320a-7a, 1320a-7c and 1395nn), the False Claims Act (31 U.S.C. § 3729
        et seq.), or the Program Fraud Civil Remedies Act of 1986 (31 U.S.C. §3801 et
        seq.).

       

      (c)
         The
        occurrence of a default under Section 3.1(l) of this Healthcare Rider that
        is
        not cured pursuant to the terms set forth in such Section.

       

      (e) The
        occurrence of a default under the Pledge Agreement or Security Agreement
        which
        remains uncured after any applicable notice and cure periods.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      SCHEDULE
        I

       

      COMPLIANCE
        CERTIFICATE

      Quarterly
        Net Operating Income Test

       

      


      Guaranty
        Bank

      8333
        Douglas Avenue, Suite 1100

      Dallas,
        TX
        75225

      Attn:
        Healthcare Finance Lending Division

       

      
        	 	
                RE:

              	
                Loan
                  Agreement dated December ___, 2005 (the “Agreement”),
                  by and between ARC Brandywine, L.P. (the “Borrower”),
                  and Guaranty Bank

              


      

       

      The
        undersigned officer of Borrower does hereby certify, to the best of his
        knowledge and belief, that for the calendar quarter ending ____________,
        20___(the “Calendar
        Quarter”):

       

      1. No
        Event
        of Default has occurred or exists except ____________________
        ___________________________________________.

       

      2. The
        CCRC
        Property quarterly Net Operating Income was:

       

      
        	 	
                Required:

              	
                $1,000,000

              


      

      
         

        
          	 	
                  Actual:

                	
                  $__________

                


        

      

       

      3. The
        financial statements of Borrower and the CCRC Property and the rent roll/census
        attached hereto are true and correct. Copies of the financial statements
        of
        Guarantor are attached.

      


      4. Attached
        hereto are copies of all matters with respect to which Borrower is required
        to
        give Lender notice under Section 3.1(d) of the Healthcare Rider to the Loan
        Agreement.

      


      5. Capitalized
        terms not defined herein shall have the meanings given to such terms in the
        Agreement.

       

      6. The
        manner
        of calculation of the above is attached.

       

      
        	 	 	 
	 	
                ARC
                  BRANDYWINE, L.P., a Delaware limited

                partnership

              
	 
 	 
 	 
 
	 	By:  	
                ARC
                  Brandywine GP, LLC, a Tennessee

                limited
                  liability company, its general partner

              
	 	 	 
	 	
                By:
                  
                  

                  Name:

                  

                
Title:

                

              




      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

          

      EXHIBIT
        D 

       

      LEGAL
        DESCRIPTION

       

      CCRC
        PROPERTY

       

       

      


       

       

      PREMISES
        A

       

       

      ALL
        THAT
        CERTAIN LOT OR PIECE OF GROUND SITUATE IN WEST BRANDYWINE TOWNSHIP, CHESTER
        COUNTY, PENNSYLVANIA, BOUNDED AND DESCRIBED ACCORDING TO ALTA/ASCM LAND TITLE
        SURVEY FOR FREEDOM VILLAGE AT BRANDYWINE, PREPARED BY EDWARD B. WALSH AND
        ASSOCIATES, INC., 125 DOWLIN FORGE ROAD, LIONVILLE PROFESSIONAL CENTER, EXTON,
        PA, DATED MAY 16, 2005, AS FOLLOWS: 

       

       

      BEGINNING
        AT A SPIKE ON THE TITLE LINE IN THE BED OF CALN MEETINGHOUSE ROAD (T-413),
        A
        CORNER OF LANDS NOW OR FORMERLY OF WILLIAM F. HAMMELL AND DIANE H. HAMMELL,
        HIS
        WIFE; THENCE EXTENDING ALONG SAID TITLE LINE IN THE BED OF SAID ROAD THE
        SIX (6)
        FOLLOWING COURSES AND DISTANCES: (1) SOUTH 83 DEGREES 00 MINUTES 14 SECONDS
        EAST
        101.67 FEET TO A PK NAIL; (2) SOUTH 81 DEGREES 46 MINUTES 14 SECONDS EAST
        160.73
        FEET TO A PK NAIL: (3) SOUTH 72 DEGREES 08 MINUTES 14 SECONDS EAST 180.25
        FEET
        TO A PK NAIL; (4) SOUTH 70 DEGREES 14 MINUTES 14 SECONDS EAST 179.80 FEET
        TO A
        PK NAIL; (5) SOUTH 69 DEGREES 21 MINUTES 14 SECONDS EAST 295.20 FEET TO A
        PK
        NAIL; (6) SOUTH 71 DEGREES 03 MINUTES 57 SECONDS EAST 431.61 FEET TO A SPIKE
        ON
        THE LINE DIVIDING EAST BRANDYWINE AND WEST BRANDYWINE TOWNSHIPS; THENCE
        EXTENDING THE ALONG SAME, CROSSING THE SOUTHERLY SIDE OF CALN MEETINGHOUSE
        ROAD
        AND ALONG LANDS NOW OR FORMERLY OF KEVIN AND LYNNE M. SASKA AND JEFFREY S.
        CHAMBERLAIN, RESPECTIVELY, SOUTH 00 DEGREES 21 MINUTES 14 SECONDS WEST 609.79
        FEET, TO A REBAR IN THE NORTH LINE OF LANDS NOW OR FORMERLY OF WILLIAM F.
        HAMMELL AND DIANE H. HAMMELL; THENCE EXTENDING ALONG SAID LANDS THE THREE
        (3)
        FOLLOWING COURSES AND DISTANCES: (1) LEAVING THE TOWNSHIP DIVIDING LINE,
        SOUTH
        85 DEGREES 10 MINUTES 24 SECONDS WEST 15.86 FEET TO A REBAR; (2) SOUTH 04
        DEGREES 49 MINUTES 36 SECONDS EAST 174.90 FEET TO AN IRON PIN; (3) SOUTH
        85
        DEGREES 11 MINUTES 30 SECONDS WEST 1161.31 FEET TO A CORNER OF LANDS NOW
        OR
        FORMERLY OF COATESVILLE HOSPITAL CORPORATION; THENCE EXTENDING ALONG SAME,
        ALONG
        LANDS OF PREMISES "B" - TRACT I (AS SHOWN ON SAID PLAN), AND ALONG LANDS
        NOW OR
        FORMERLY OF WILLIAM F. AND DIANE H. HAMMELL, NORTH 05 DEGREES 30 MINUTES
        14
        SECONDS WEST, CROSSING A DRAINAGE EASEMENT AND RECROSSING THE SOUTHERLY SIDE
        OF
        CALN MEETINGHOUSE ROAD, 1284.26 FEET TO THE FIRST MENTIONED POINT AND PLACE
        OF
        BEGINNING. CONTAINING: 29.368 ACRES OF LAND, BE THE SAME MORE OR LESS.


       

       

      PREMISES
        B

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      ALL
        THOSE
        CERTAIN LOTS OR PIECES OF GROUND SITUATE IN WEST BRANDYWINE TOWNSHIP, CHESTER
        COUNTY, PENNSYLVANIA, BOUNDED AND DESCRIBED ACCORDING TO AN ALTA/ASCM LAND
        TITLE
        SURVEY FOR FREEDOM VILLAGE AT BRANDYWINE, PREPARED BY EDWARD B. WALSH AND
        ASSOCIATES, INC.,125 DOWLIN FORGE ROAD, LIONVILLE PROFESSIONAL CENTER, EXTON,
        PA, DATED MAY 16, 2005, AS FOLLOWS: 

       

       

      TRACT
        I

       

       

      BEGINNING
        AT A MAG NAIL SET ON THE TITLE LINE IN THE BED OF REECEVILLE ROAD (S.R. 4005),
        THE SOUTHWESTERLY CORNER OF LANDS NOW OR FORMERLY OF JOHN AND MARY J. MAX;
        THENCE EXTENDING ALONG SAID LANDS AND CROSSING THE EASTERLY SIDE OF SAID
        ROAD,
        ALONG THE SOUTHERLY SIDE OF A SIGN/GRADING EASEMENT, NORTH 84 DEGREES 48
        MINUTES
        04 SECONDS EAST CROSSING A MONUMENT AT 30.14 FEET, A TOTAL DISTANCE OF 240.05
        FEET TO A POINT 0.60' SOUTHWEST OF A MONUMENT FOUND, A CORNER OF LANDS NOW
        OR
        FORMERLY OF WILLIAM F. HAMMELL AND DIANE H. HAMMELL; THENCE EXTENDING ALONG
        SAME, CROSSING A 20 FOOT WIDE WATER EASEMENT, NORTH 84 DEGREES 46 MINUTES
        59
        SECONDS EAST 509.84 FEET TO A REBAR SET IN THE WEST LINE OF PREMISES A,
        HEREINABOVE DESCRIBED; THENCE EXTENDING ALONG SAID LANDS, SOUTH 05 DEGREES
        30
        MINUTES 14 SECONDS EAST 60.00 FEET TO A REBAR SET, A CORNER OF LANDS NOW
        OR LATE
        OF COATESVILLE HOSPITAL CORPORATION; THENCE EXTENDING ALONG SAID LANDS, THE
        FOLLOWING TWO (2) COURSES AND DISTANCES: (1) RECROSSING SAID WATER EASEMENT,
        SOUTH 84 DEGREES 46 MINUTES 59 SECONDS WEST 512.44 FEET TO AN IRON PIN; (2)
        ALONG THE NORTHERLY SIDE OF A SIGN/GRADING EASEMENT, SOUTH 84 DEGREES 48
        MINUTES
        04 SECONDS WEST, CROSSING OVER A MAG NAIL SET ON THE EASTERLY SIDE OF PREMISES
        B
        - TRACT II HEREINBELOW DESCRIBED, ALONG THE NORTHERLY LINE OF THE SAME, CROSSING
        OVER ANOTHER MAG NAIL SET ON THE EASTERLY SIDE OF SAID REECEVILLE ROAD, 239.05
        FEET TO A MAG NAIL SET ON THE TITLE LINE IN THE BED OF SAID ROAD; THENCE
        EXTENDING ALONG SAME, NORTH 03 DEGREES 58 MINUTES 08 SECONDS WEST 60.01 FEET
        TO
        THE FIRST MENTIONED POINT AND PLACE OF BEGINNING.

       

       

      CONTAINING:
        1.034 ACRES OF LAND, BE THE SAME MORE OR LESS.

       

       

      TRACT
        II

       

       

      BEGINNING
        AT A MAG NAIL SET ON THE EASTERN LEGAL RIGHT-OF-WAY LINE OF REECEVILLE ROAD
        (S.R. 4005), 40 FEET WIDE AND ON THE SOUTH LINE OF TRACT I, HEREINABOVE
        DESCRIBED; THENCE FROM SAID POINT OF BEGINNING, ALONG TRACT I, NORTH 84 DEGREES
        48 MINUTES 04 SECONDS EAST 10.00 FEET TO A MAG NAIL SET; THENCE LEAVING SAID
        LINE OF TRACT I, ALONG LANDS NOW OR LATE OF WILLIAM D. AND MARY R. HUTTINGER,
        THE FOLLOWING TWO (2) COURSES AND DISTANCES: (1) IN A SOUTHERLY DIRECTION,
        SOUTH
        03 DEGREES 58 MINUTES 08 SECONDS EAST 250.00 FEET TO AN IRON PIN; (2) SOUTH
        84
        DEGREES 48 MINUTES 04 SECONDS WEST 10.00 FEET TO A POINT ON THE EASTERN LEGAL
        RIGHT-OF-WAY LINE OF REECEVILLE ROAD (S.R. 4005) 40 FEET WIDE; THENCE CONTINUING
        ALONG SAID RIGHT-OF-WAY LINE IN A NORTHERN DIRECTION, NORTH 03 DEGREES 58
        MINUTES 08 SECONDS WEST250.00 FEET TO THE POINT AND PLACE OF BEGINNING.


       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      CONTAINING:
        2,500 SQUARE FEET OF LAND, BE THE SAME MORE OR LESS.

       

       

      BEING:
        CHESTER COUNTY TAX PARCEL 29-7-172

       

      EXCEPTING
        THEREOUT AND THEREFROM: ALL THOSE LIFE ESTATE INTERESTS CONVEYED IN CONDOMINIUM
        UNITS (FREEDOM VILLAGE AT BRANDYWINE, A CONDOMINIUM) IN VARIOUS DEEDS OUT
        OF
        FREEDOM VILLAGEAT BRANDYWINE LIMITED PARTNERSHIP (DECLARANT).

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


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        E 

       

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