PROMISSORY NOTE


$15,750,000                                                     January 24, 1997

         FOR VALUE RECEIVED,  INTEGRATED  LIVING  COMMUNITIES,  INC., a Delaware
corporation,  INTEGRATED  LIVING  COMMUNITIES  OF  PORTSMOUTH,  INC., a Delaware
corporation,   INTEGRATED  LIVING  COMMUNITIES  OF  REDGATE,  INC.,  a  Delaware
corporation,  INTEGRATED  LIVING  COMMUNITIES  OF  GLOUCESTER,  INC., a Delaware
corporation,  INTEGRATED LIVING  COMMUNITIES OF VIRGINIA BEACH, INC., a Delaware
corporation  and  INTEGRATED  MANAGEMENT-CARRINGTON  POINTE,  INC.,  a  Delaware
corporation  (collectively,  the  "Borrowers"  and  individually  a "Borrower"),
jointly and severally, promise to pay to the order of

         NATIONSBANK, N.A. (SOUTH), a national banking association (the "Bank"),
at its  offices in  Sarasota,  Florida  (or at such other place or places as the
Bank may designate) the principal sum of up to

         FIFTEEN  MILLION  SEVEN HUNDRED FIFTY  THOUSAND  DOLLARS  ($15,750,000)
under the terms and conditions of this  promissory  note (as amended,  modified,
supplemented, restated and/or replaced from time to time, the "Note").

         DEFINITIONS.  For purposes hereof:

         (a) "Business Day" shall mean any day other than a Saturday,  a Sunday,
a legal  holiday  or a day on  which  banking  institutions  are  authorized  or
required  by law or other  governmental  action to close in  Sarasota,  Florida;
provided such day is also a day on which  dealings  between banks are carried on
in Dollar deposits in the London interbank market.

         (b)  "Dollars"  shall  mean  dollars  in  lawful currency of the United
States of America.

         (c)  "Environmental  Laws" shall mean any and all lawful and applicable
Federal,  state  and  local  statutes,  laws,  regulations,  ordinances,  rules,
judgments,  orders, decrees,  permits or licenses relating to the environment or
to  emissions,  discharges,  releases  or  threatened  releases  of  pollutants,
contaminants,  toxic or  hazardous  substances  or wastes  into the  environment
including,  without  limitation,  ambient air,  surface water,  ground water, or
land, or otherwise relating to the manufacture,  processing,  distribution, use,
treatment,   storage,   disposal,   transport,   or  handling   of   pollutants,
contaminants, toxic or hazardous substances or wastes.

         (d) "Events of Default"  shall mean (i) failure by the Borrowers to pay
any part of the principal or interest when due on this Note, (ii) failure by any
of the  Borrowers  to comply  with any of the terms of this Note,  the  Mortgage
Documents  or any other  agreement,  document  or  instrument  now or  hereafter
existing  relating to this Note,  (iii) with  respect to any other  indebtedness
(other  than  the  indebtedness  outstanding  under  this  Note)  of  any of the
Borrowers,  (A) a default in any payment with respect to any such  indebtedness,
(B) default in the observance or performance of any term,  covenant or agreement
relating to such indebtedness or (C) any other event or condition shall occur or
exist, the effect of which is to cause, or permit, the holder or holders of such
indebtedness to cause any such indebtedness to become due prior to its stated
<PAGE>

maturity,  or  (iv)  in the  event  that  any  bankruptcy  or  other  insolvency
proceeding is filed by or against any of the Borrowers.

         (e)  "Floating  LIBOR Rate" shall mean for any day,  the rate per annum
(rounded  upwards,  if  necessary,  to the  nearest  1/100 of 1%)  appearing  on
Telerate Page 3750 (or any successor page) as the London interbank  offered rate
for deposits of Dollars at  approximately  11:00 a.m. (London time) on such day,
or if such day is not a Business Day, on the immediately preceding Business Day,
for a one month  term.  If for any reason such rate is not  available,  the term
"Floating  LIBOR  Rate"  shall  mean for any day,  the rate per  annum  (rounded
upwards,  if necessary,  to the nearest 1/100 of 1%) appearing on Reuters Screen
LIBO Page as the  London  interbank  offered  rate for  deposits  in  Dollars at
approximately  11:00  a.m.  (London  time) on such day,  or if such day is not a
Business Day, on the immediately  preceding  Business Day, for a one month term;
provided, however, if more than one such rate is specified on the Reuters Screen
LIBO Page, the applicable  rate shall be the arithmetic  mean of all such rates.
The Floating LIBOR Rate shall be adjusted on a daily basis to reflect changes in
the rate determined in accordance with the foregoing,  effective on the date the
change occurs.

         (f)  "GAAP" shall mean generally accepted accounting  principles in the
United States applied on a consistent basis.

         (g) "Governmental  Authority" shall mean any Federal,  state,  local or
foreign court or governmental agency,  authority,  instrumentality or regulatory
body.

         (h) "LTV  Ratio"  shall  mean the  ratio of (i) the  principal  balance
outstanding under this Note to (ii) the consolidated appraised value of the real
property  described  in Exhibit A-1  through  Exhibit  A-5  attached  hereto and
encumbered by the Mortgage  Documents,  as  determined  in  accordance  with the
appraisals provided to the Bank pursuant to the terms hereof.

         "Materials  of  Environmental  Concern"  shall  mean  any  gasoline  or
petroleum (including crude oil or any fraction thereof) or petroleum products or
any hazardous or toxic substances,  materials or wastes, defined or regulated as
such  in  or  under  any  Environmental  Laws,  including,  without  limitation,
asbestos, polychlorinated biphenyls and urea formaldehyde foam insulation.

         "Mortgage Documents" shall mean collectively,  (i) that certain Deed of
Trust,  Fixture  Filing and  Security  Agreement  dated as of the date hereof by
Integrated  Management-Carrington  Pointe,  Inc. (ii) that certain Deed of Trust
and  Security  Agreement  dated  as of the  date  hereof  by  Integrated  Living
Communities of Portsmouth,  Inc.,  (iii) that certain Deed of Trust and Security
Agreement  dated as of the date  hereof  by  Integrated  Living  Communities  of
Redgate,  Inc., (iv) that certain Deed of Trust and Security  Agreement dated as
of the date hereof by Integrated Living Communities of Gloucester,  Inc. and (v)
that certain Deed of Trust and Security Agreement dated as of the date hereof by
Integrated Living Communities of Virginia Beach, Inc.

         "Requirement of Law" shall mean, as to any Borrower, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Borrower,  and any law,  treaty,  rule or  regulation  or  determination  of any
arbitrator or a court or other Governmental  Authority,  in each case applicable
to or binding  upon such  Borrower or to which any of its  material  property is
subject.

                                       2
<PAGE>
REPRESENTATIONS AND WARRANTIES.
-------------------------------

         (a) Financial Condition.  The financial statements provided to the Bank
by the Borrowers  are complete and correct in all material  respects and present
fairly the financial  condition and results from operations of the Borrowers for
the periods specified.

         (b) No Change.  Since  September 30, 1996 there has been no development
or event which has had a material adverse effect on the condition  (financial or
otherwise),  operations,  business  or  prospects  of the  Borrowers  and  their
subsidiaries taken as a whole.

         (c) Corporate Organization.  Each of the Borrowers (i) is a corporation
duly  organized,  validly  existing and in good  standing  under the laws of the
State of Delaware,  (ii) is qualified to do business in each jurisdiction  where
failure  to so  qualify  would  have a  material  adverse  effect  on any of the
Borrowers and (iii) is in compliance with all  Requirements of Law except to the
extent that the failure to comply  therewith  would not,  in the  aggregate,  be
reasonably expected to have a material adverse effect on such Borrower.

         (d)  Enforceable  Obligation.  Each of the  Borrowers has the power and
authority and legal right to enter into, deliver and perform under this Note and
the  Mortgage  Document  to  which it is a party  and has  taken  all  necessary
corporate  action to authorize the execution,  delivery and performance by it of
this  Note and the  Mortgage  Document  to which it is a party.  No  consent  or
authorization  of, filing with,  notice to or other similar act by or in respect
of, any  Governmental  Authority or any other person or entity is required to be
obtained or made by or behalf of any Borrower in connection  with the borrowings
hereunder  or  with  the  execution,  delivery,  or  performance,   validity  or
enforceability  of the Note or Mortgage  Documents  to which such  Borrower is a
party. This Note constitutes a legal,  valid and binding  obligation of the each
of the Borrowers enforceable against them in accordance with its terms except as
enforceability   may  be   limited   by   applicable   bankruptcy,   insolvency,
reorganization,   moratorium  or  similar  laws  affecting  the  enforcement  of
creditors'  rights  generally  or  by  general  equitable   principles  (whether
enforcement is sought by proceedings in equity or at law).

         (e) No Default.  No Events of Default or event or condition  which with
notice  or  lapse  of  time,  or both,  would  constitute  an Event of  Default,
presently exists.

         (f) No Legal Bar. The execution,  delivery and  performance of the Note
and the Mortgage Documents by the Borrowers, the borrowings and other extensions
of credit hereunder and the use of the proceeds thereof (a) will not violate any
Requirement of Law or  contractual  obligation of any of the Borrowers or any of
their  subsidiaries  in any respect that would  reasonably be expected to have a
material  adverse  effect on any of the  Borrowers,  (b) will not  result in, or
require,  the creation or  imposition  of any lien on any of the  properties  or
revenues of any of the  Borrowers or any of their  subsidiaries  pursuant to any
such Requirement of Law or contractual  obligation,  and (c) will not violate or
conflict  with any  provision of any  Borrower's  articles of  incorporation  or
by-laws.

         (g) No Material  Litigation.  No claim,  litigation,  investigation  or
proceeding of or before any arbitrator or Governmental  Authority is pending or,
to the best  knowledge  of the  Borrowers,  threatened  by or against any of the
Borrowers  or any of  their  subsidiaries  or  against


                                       3
<PAGE>
any of their  respective  properties or revenues  which (a) would  reasonably be
expected to relate to any of the Operative  Documents or any of the transactions
contemplated  hereby or thereby in any material  adverse  manner or (b) would be
reasonably expected to have a material adverse effect on any of the Borrowers.

         (h) Taxes.  Each of the Borrowers and their  subsidiaries  has filed or
caused to be filed all United  States  federal  income tax returns and all other
material tax returns which, to the best knowledge of the Borrowers, are required
to be filed  and has  paid (a) all  taxes  shown to be due and  payable  on said
returns or (b) all taxes shown to be due and payable on any assessments of which
it has  received  notice made  against it or any of its  property  and all other
taxes,  fees  or  other  charges  imposed  on it or any of its  property  by any
Governmental Authority which are due and payable (other than any (i) taxes, fees
or other  charges  with  respect to which the failure to pay, in the  aggregate,
would not have a material  adverse effect on any of the Borrowers or (ii) taxes,
fees or other  charges  the  amount or  validity  of which are  currently  being
contested and with respect to which  reserves in conformity  with GAAP have been
provided on the books of such entity),  and no tax lien has been filed,  and, to
the best knowledge of the Borrowers, no claim is being asserted, with respect to
any such tax, fee or other charge.

         (i) Ownership of Property. Each of the Borrowers and their subsidiaries
has good  record and  marketable  title in fee  simple to, or a valid  leasehold
interest  in,  all its  material  real  property,  and good title to, or a valid
leasehold interest in, all its other material property.

         (j) Purpose of Loan.  The  proceeds of the Loan shall be used solely in
connection with the acquisition of the land (and  improvements  located thereon)
described on Exhibit A-1 through A-4 attached hereto (the "Virginia Properties";
the  Virginia  Properties  together  with the  land  (and  improvements  located
thereon)   described  on  Exhibit  A-5  attached   hereto  may  be  referred  to
collectively herein as the "Properties").

         (k) Chief Executive  Office.  The chief executive  office and principal
place of  business  of each of the  Borrowers  is 24850  Old 41 Road,  Suite 10,
Bonita Springs, Florida 34135.

COVENANTS
---------

         (a) Appraisals.  The Borrowers hereby agree that they shall provide the
Bank (at the Borrowers'  expense) with one (1) current appraisal for each of the
parcels of land  described  on Exhibit  A-1 through  A-5  attached  hereto on or
before forty-five (45) days from the date hereof.  Such appraisals shall be by a
qualified  appraiser  satisfactory  to the Bank and must be satisfactory in form
and substance to the Bank, in its sole discretion.

         (b) Environmental Assessment. The Borrowers hereby agree to provide the
Bank (at the Borrowers' expense) with a current environmental  assessment report
or other reports requested by the Bank for each of the parcels of land described
on Exhibit A-1 through A-5  attached  hereto on or before  forty-five  (45) days
from  the  date  hereof.  Such  assessments  shall  be in a form  and  substance
satisfactory  to the Bank in its  sole  discretion,  and  from an  environmental
engineer or consultant reasonably satisfactory to the Bank.

         (c)  Environmental  Indemnity.  The  Borrowers  agree  that  they  will
reimburse  the Bank for and  hereby  hold the Bank  harmless  from all  fines or
penalties  made or levied  against the

                                       4
<PAGE>

Bank by any Governmental  Authority as a result of or in connection with (i) the
use of Materials of  Environmental  Concern at the  Properties,  (ii) the use of
Materials of Environmental  Concern at the facilities thereon, or (iii) the use,
generation,  storage,  transportation,  discharge,  release or  handling  of any
Materials  of  Environmental  Concern at the  Properties,  or as a result of any
release of any  Materials of  Environmental  Concern onto the ground or into the
water or air from or upon the  Properties at any time.  The Borrowers also agree
that they will  reimburse  the Bank for and indemnify and hold the Bank harmless
from any and all costs,  expenses (including reasonably attorneys' fees) and for
all civil judgments or penalties incurred entered,  assessed,  or levied against
the Bank as a result of the Borrowers' use of Materials of Environmental Concern
at  the  Properties  or  as  a  result  of  any  release  of  any  Materials  of
Environmental  Concern  on the  ground  or into  the  water or air by any of the
Borrowers from or upon the Properties.  Such  reimbursement  or  indemnification
shall  include  but not be  limited to any and all  judgments  or  penalties  to
recover the costs of cleanup of any such release by any of the Borrowers from or
upon Properties and all reasonable  expenses incurred by the Bank as a result of
such a civil action,  including but not limited to reasonable  attorneys'  fees.
The Borrowers  obligations under this section shall survive the repayment of the
Loan and any deed in lieu of  foreclosure  or any  foreclosure  of the  Mortgage
Documents.  The environmental  indemnities set forth in this paragraph shall not
be  extended  to any  claim or  liability  of the Bank  arising  from the  gross
negligence  or willful  misconduct of the Bank  occurring  during the Bank's (i)
actual  possession of the Properties prior to foreclosure or exercise of a power
of sale or (ii) ownership of the  Properties  after a foreclosure or exercise of
such power of sale.

RATE AND PAYMENT SCHEDULE
-------------------------

         Interest. The principal balance outstanding hereunder from time to time
shall bear  interest  at the  Floating  LIBOR Rate plus three  percent  (3%) per
annum.  Interest  shall be computed on the basis of a 360-day year on the actual
number of days the principal is outstanding.

         Payment of Interest.  Installments  of interest for each calendar month
shall be due and  payable in arrears on the  fifteenth  (15th) day of each month
beginning with the interest  installment due on the fifteenth  (15th) day of the
month next following the month in which the date hereof  occurs,  and continuing
on the fifteenth (15th) day of each month thereafter until the Maturity Date

         Maturity Date. The outstanding  principal  balance plus all accrued but
unpaid  interest  on this Note shall be due and  payable on April 27,  1997 (the
"Maturity Date").

         Prepayment.  This Note may be  prepaid  in whole or in part at any time
and from time to time without prepayment penalty or fee. Any such amount prepaid
may not be  reborrowed.  If the LTV Ratio shall be greater than 0.75 to 1.0, the
Borrowers shall  immediately  make a prepayment on the outstanding  indebtedness
hereunder  in an amount  sufficient  to make the LTV Ratio less than or equal to
0.75 to 1.0.

ADDITIONAL TERMS AND PROVISIONS
-------------------------------

         Defaults.  Upon the occurrence and during the continuance of any of the
Events of Default,  then this Note, and all other  indebtedness of the Borrowers
to the Bank arising out of or


                                       5
<PAGE>
in connection with this Note,  shall  immediately  become due and payable at the
option of the Bank, without presentation, demand, protest or notice of any kind,
all of which are hereby waived by the Borrowers.

         Acceleration. If payment of all sums due hereunder is accelerated under
the terms  hereof,  the then  outstanding  principal  and all accrued but unpaid
interest  shall bear  interest  at the rate  provided  for  hereunder  plus four
percent (4%) per annum until such principal and interest have been paid in full;
provided,  however,  that in no event shall this or any other  provision  herein
permit the  collection  of any  interest  which would be usurious  under the law
governing this  transaction,  and if any such interest is collected,  the amount
above the  maximum  rate  permitted  by law  shall be  deemed to be a  principal
payment hereunder.

         Late  Charges.  In the event any payment of interest  or  principal  is
delinquent  more than fifteen (15) days,  the  Borrowers  will pay to the Bank a
late  charge of two  percent  (2%) of the amount of the  overdue  payment.  This
provision for late charges shall not be deemed to extend the time for payment or
be a "grace  period" or "cure period" that gives the Borrowers a right to cure a
default hereunder.  Imposition of late charges is not contingent upon the giving
of any notice or lapse of any cure period provided for herein.

         Fees.  The Borrowers  will pay a  non-refundable  fee of $30,000 to the
Bank on the date hereof.

         Application of Payments.  All sums received by the Bank for application
to this Note may be applied by the Bank to late charges, fees, expenses,  costs,
interest,  principal and other amounts owing to the Bank in connection with this
Note in the order selected by the Bank in its sole discretion.

         Expenses.  The Borrowers shall pay all reasonable  out-of-pocket costs,
fees and expenses of the Bank in connection with the  negotiation,  preparation,
execution,  delivery and  modification of this Note, and all related  documents,
instruments  and/or  agreements  including  without  limitation  all  reasonable
attorneys'  fees and expenses.  In addition,  in the event this Note is not paid
when due at any stated or  accelerated  maturity,  the  Borrowers  will pay,  in
addition to principal and interest,  all costs of collection,  including without
limitation reasonable attorneys' fees and expenses.

         Assignment.  It is  expressly  recognized  and agreed that the Bank may
assign  this Note,  in whole or in part,  to any other  person,  firm,  or legal
entity provided that all the provisions  hereof shall continue in full force and
effect  and,  in the event of such  assignment,  the Bank  shall  thereafter  be
relieved of all liabilities hereunder.

         Severability.  If any  provision  of  this  Note  is  determined  to be
illegal,  invalid or unenforceable,  such provision shall be fully severable and
the  remaining  provisions  shall  remain in full  force and effect and shall be
construed  without  giving  effect  to the  illegal,  invalid  or  unenforceable
provisions.

         Governing Law;  Submission To Jurisdiction;  Venue.  This Note shall be
governed by, and construed in accordance with, the laws of the State of Florida.
In any litigation in connection  with or to enforce this Note or any indorsement
or guaranty of this Note or any other document 

                                       6
<PAGE>
related  thereto,  the  Borrowers  irrevocably  consent to and  confer  personal
jurisdiction  on the courts of the State of Florida or the United States located
within the State of Florida and  expressly  waive any  objections as to venue in
any such courts. Nothing contained herein shall, however,  prevent the Bank from
bringing  any  action  or  exercising  any  rights  within  any  other  state or
jurisdiction  or  from  obtaining  personal  jurisdiction  by  any  other  means
available under applicable law.

         TRIAL BY JURY.  TO THE EXTENT  PERMITTED BY LAW, THE  BORROWERS  HEREBY
IRREVOCABLY  WAIVE  ALL  RIGHT  TO TRIAL BY JURY IN ANY  ACTION,  PROCEEDING  OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS NOTE, ANY OF THE OTHER OPERATIVE
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.

         ARBITRATION.  ANY  CONTROVERSY  OR CLAIM  BETWEEN OR AMONG THE  PARTIES
HERETO  INCLUDING  BUT NOT  LIMITED TO THOSE  ARISING OUT OF OR RELATING TO THIS
NOTE OR ANY RELATED  INSTRUMENTS,  AGREEMENTS OR DOCUMENTS,  INCLUDING ANY CLAIM
BASED ON OR  ARISING  FROM AN  ALLEGED  TORT,  SHALL BE  DETERMINED  BY  BINDING
ARBITRATION  IN  ACCORDANCE  WITH  THE  FEDERAL   ARBITRATION  ACT  (OR  IF  NOT
APPLICABLE,  THE APPLICABLE  STATE LAW), THE RULES OF PRACTICE AND PROCEDURE FOR
THE ARBITRATION OF COMMERCIAL  DISPUTES OF  J.A.M.S./ENDISPUTE  OR ANY SUCCESSOR
THEREOF  ("J.A.M.S."),  AND THE "SPECIAL RULES" SET FORTH BELOW, IN THE EVENT OF
ANY  INCONSISTENCY,   THE  SPECIAL  RULES  SHALL  CONTROL.   JUDGMENT  UPON  ANY
ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION.  ANY PARTY TO
THIS NOTE MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED PROCEEDINGS,  TO
COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS NOTE APPLIES IN ANY
COURT HAVING JURISDICTION OVER SUCH ACTION.

         SPECIAL RULES. THE ARBITRATION  SHALL BE CONDUCTED IN THE COUNTY OF ANY
BORROWER'S  DOMICILE AT THE TIME OF THE  EXECUTION OF THIS NOTE,  OR IF THERE IS
REAL OR PERSONAL PROPERTY COLLATERAL,  IN THE COUNTY WHERE SUCH REAL OR PERSONAL
PROPERTY IS LOCATED AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN ARBITRATOR:
IF J.A.M.S.  IS UNABLE OR LEGALLY PRECLUDED FROM  ADMINISTERING THE ARBITRATION,
THEN THE AMERICAN  ARBITRATION  ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS
WILL BE COMMENCED  WITHIN 90 DAYS OF THE DEMAND FOR  ARBITRATION;  FURTHER,  THE
ARBITRATOR  SHALL  ONLY,  UPON A SHOWING OF CAUSE,  BE  PERMITTED  TO EXTEND THE
COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL 60 DAYS.

         RESERVATION OF RIGHTS.  NOTHING IN THIS ARBITRATION  PROVISION SHALL BE
DEEMED TO (I) LIMIT THE  APPLICABILITY OF ANY OTHERWISE  APPLICABLE  STATUTES OF
LIMITATION  OR  REPOSE  AND ANY  WAIVERS  CONTAINED  IN THIS  NOTE OR ANY  OTHER
DOCUMENTS  RELATED  THERETO;  OR (II) BE A WAIVER BY THE BANK OF THE  PROTECTION
AFFORDED TO IT BY 12 U.S.C. SEC. 91 OR ANY  SUBSTANTIALLY  EQUIVALENT STATE LAW;
OR (III) LIMIT THE RIGHT OF THE BANK HERETO (A) TO EXERCISE  SELF HELP  REMEDIES
SUCH AS (BUT NOT  LIMITED TO) SETOFF,  OR (B) TO  FORECLOSE  AGAINST ANY REAL OR
PERSONAL  PROPERTY  COLLATERAL,  OR (C) TO OBTAIN  FROM A COURT  PROVISIONAL  OR
ANCILLARY  REMEDIES  SUCH


                                       7
<PAGE>

AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT
OF A RECEIVER. THE BANK MAY EXERCISE SUCH SELF HELP RIGHTS,  FORECLOSE UPON SUCH
PROPERTY,  OR OBTAIN SUCH PROVISIONAL OR ANCILLARY  REMEDIES  BEFORE,  DURING OR
AFTER THE PENDENCY OF ANY ARBITRATION  PROCEEDING  BROUGHT PURSUANT TO THIS NOTE
OR ANY OTHER  DOCUMENTS  RELATED  THERETO.  NEITHER  THIS  EXERCISE OF SELF HELP
REMEDIES NOR THE  INSTITUTION  OR  MAINTENANCE  OF AN ACTION FOR  FORECLOSURE OR
PROVISIONAL OR ANCILLARY  REMEDIES SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY
PARTY, INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO ARBITRATE THE MERITS OF THE
CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES.

         USURY SAVINGS PROVISION. IT IS THE INTENT OF THE BORROWERS AND THE BANK
TO CONFORM TO AND CONTRACT IN STRICT  COMPLIANCE WITH APPLICABLE  USURY LAW FROM
TIME TO TIME IN EFFECT.  TO THE EXTENT ANY PAYMENTS  HEREUNDER  ARE  HEREINAFTER
CHARACTERIZED  BY ANY  COURT  OF  COMPETENT  JURISDICTION  AS THE  REPAYMENT  OF
PRINCIPAL AND INTEREST  THEREON,  THIS USURY SAVINGS  PROVISION SHALL APPLY. ANY
SUCH  PAYMENTS  SO  CHARACTERIZED  AS  INTEREST  MAY BE  REFERRED  TO  HEREIN AS
"INTEREST."  ALL AGREEMENTS  AMONG THE BORROWERS AND THE BANK ARE HEREBY LIMITED
BY THE  PROVISIONS  OF THIS USURY  SAVINGS  PROVISION  WHICH SHALL  OVERRIDE AND
CONTROL ALL SUCH  AGREEMENTS,  WHETHER NOW  EXISTING  OR  HEREAFTER  ARISING AND
WHETHER  WRITTEN OR ORAL. IN NO WAY, NOR IN ANY EVENT OR CONTINGENCY  (INCLUDING
WITHOUT   LIMITATION   PREPAYMENT  OR   ACCELERATION  OF  THE  MATURITY  OF  ANY
OBLIGATION),  SHALL ANY INTEREST TAKEN,  RESERVED,  CONTRACTED FOR, CHARGED,  OR
RECEIVED  UNDER THIS NOTE OR OTHERWISE,  EXCEED THE MAXIMUM  NONUSURIOUS  AMOUNT
PERMISSIBLE UNDER APPLICABLE LAW. TO THE EXTENT ANY POSSIBLE CONSTRUCTION OF ANY
OPERATIVE  AGREEMENT  (AS SUCH TERM IS  HEREINAFTER  DEFINED)  PROVIDES  FOR THE
PAYMENT OF INTEREST IN EXCESS OF THE MAXIMUM  NONUSURIOUS  AMOUNT,  (A) ANY SUCH
CONSTRUCTION  SHALL BE SUBJECT TO THE PROVISIONS OF THIS USURY SAVINGS PROVISION
AND (B) SUCH AMOUNTS UNDER SUCH DOCUMENTS OR AGREEMENTS  SHALL BE  AUTOMATICALLY
REDUCED TO THE  MAXIMUM  NONUSURIOUS  AMOUNT  PERMITTED  UNDER  APPLICABLE  LAW,
WITHOUT  THE  NECESSITY  OF  EXECUTION  OF  ANY  AMENDMENT  OR NEW  DOCUMENT  OR
AGREEMENT.  (FOR PURPOSES OF THIS NOTE,  (X) "OPERATIVE  AGREEMENTS"  SHALL MEAN
THIS NOTE,  THE  MORTGAGE  DOCUMENTS  AND ANY AND ALL RELATED  DOCUMENTS  AND/OR
AGREEMENTS AND (Y) "OPERATIVE AGREEMENT" SHALL MEAN,  INDIVIDUALLY,  EACH OF THE
OPERATIVE AGREEMENTS.) IF THE BANK SHALL EVER RECEIVE ANYTHING OF VALUE WHICH IS
CHARACTERIZED  AS INTEREST  WITH RESPECT TO THE  OBLIGATIONS  OWED  HEREUNDER OR
UNDER APPLICABLE LAW AND WHICH WOULD,  APART FROM THIS USURY SAVINGS  PROVISION,
BE IN EXCESS OF THE MAXIMUM LAWFUL  AMOUNT,  AN AMOUNT EQUAL TO THE AMOUNT WHICH
WOULD HAVE BEEN

                                       8
<PAGE>


EXCESSIVE  INTEREST SHALL,  WITHOUT PENALTY,  BE APPLIED TO THE REDUCTION OF THE
COMPONENT OF PAYMENTS DEEMED TO BE PRINCIPAL AND NOT TO THE PAYMENT OF INTEREST,
OR REFUNDED TO THE  BORROWERS OR ANY OTHER PAYOR  THEREOF,  IF AND TO THE EXTENT
SUCH AMOUNT WHICH WOULD HAVE BEEN  EXCESSIVE  EXCEEDS THE  COMPONENT OF PAYMENTS
DEEMED TO BE PRINCIPAL.  THE RIGHT TO DEMAND PAYMENT OF ANY AMOUNTS EVIDENCED BY
ANY OF THE  OPERATIVE  AGREEMENTS  DOES NOT  INCLUDE  THE RIGHT TO  RECEIVE  ANY
INTEREST  WHICH HAS NOT  OTHERWISE  ACCRUED ON THE DATE OF SUCH DEMAND,  AND THE
BANK DOES NOT INTEND TO CHARGE OR RECEIVE ANY UNEARNED  INTEREST IN THE EVENT OF
SUCH DEMAND.  ALL INTEREST  PAID OR AGREED TO BE PAID TO THE BANK SHALL,  TO THE
EXTENT  PERMITTED BY APPLICABLE  LAW, BE  AMORTIZED,  PRORATED,  ALLOCATED,  AND
SPREAD THROUGHOUT THE FULL STATED TERM (INCLUDING WITHOUT LIMITATION ANY RENEWAL
OR  EXTENSION)  OF THIS NOTE SO THAT THE AMOUNT OF  INTEREST  ON ACCOUNT OF SUCH
PAYMENTS DOES NOT EXCEED THE MAXIMUM  NONUSURIOUS AMOUNT PERMITTED BY APPLICABLE
LAW.

         ENTIRE  AGREEMENT.  THIS NOTE  REPRESENTS  THE FINAL  AGREEMENT  OF THE
BORROWERS  AND THE  BANK  AND MAY NOT BE  CONTRADICTED  BY  EVIDENCE  OF  PRIOR,
CONTEMPORANEOUS  OR SUBSEQUENT  ORAL  AGREEMENTS  OF SUCH PARTIES.  THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN SUCH PARTIES.

                            [Signature page follows]



                                       9
<PAGE>

         IN WITNESS  WHEREOF,  the  Borrowers  have  caused this Note to be duly
executed under seal as of the day and year first above written.




                                   INTEGRATED LIVING COMMUNITIES, INC.,         
                                   a Delaware corporation                       
                                                                                
                                                                                
                                   By: ---------------------------------------  
                                                                                
                                   Name: -------------------------------------  
                                                                                
                                   Title: ------------------------------------  
                                                                                
                                                                                
                                   INTEGRATED LIVING COMMUNITIES OF             
                                   PORTSMOUTH, INC., a Delaware corporation     
                                                                                
                                                                                
                                   By: ---------------------------------------  
                                                                                
                                   Name: -------------------------------------  
                                                                                
                                   Title: ------------------------------------  
                                                                                
                                                                                
                                   INTEGRATED LIVING COMMUNITIES OF             
                                   REDGATE, INC., a Delaware corporation        
                                                                                
                                                                                
                                   By: ---------------------------------------  
                                                                                
                                   Name: -------------------------------------  
                                                                                
                                   Title: ------------------------------------  
                                                                                
                                                                                
                                   INTEGRATED LIVING COMMUNITIES OF             
                                   GLOUCESTER, INC., a Delaware corporation     
                                                                                
                                                                                
                                   By: ---------------------------------------  
                                                                                
                                   Name: -------------------------------------  
                                                                                
                                   Title: ------------------------------------  
                                                                                
                                                                                
                                   INTEGRATED LIVING COMMUNITIES OF             
                                   VIRGINIA BEACH, INC., a Delaware corporation 
                                                                                
                                                                                
                                   By: ---------------------------------------  
                                                                                
                                   Name: -------------------------------------  
                                                                                
                                   Title: ------------------------------------  
                                                                                
                                                                                
                                   INTEGRATED MANAGEMENT-CARRINGTON             
                                   POINTE, INC., a Delaware corporation         
                                                                                
                                                                                
                                   By: ---------------------------------------  
                                                                                
                                   Name: -------------------------------------  
                                                                                
                                   Title: ------------------------------------