EXHIBIT 10.14

                            LINE OF CREDIT AGREEMENT

                                   $25,000,000

                                 LINE OF CREDIT

                                      from

                       KEY CORPORATE CAPITAL INC., Lender

                                       to

                           GRAND COURT-GREATWOOD, L.P.

         and Additional Future Borrowers (collectively, the "Borrower")

                          Dated as of October 30, 1998




<PAGE>



                            LINE OF CREDIT AGREEMENT

     GRAND COURT-GREATWOOD, L.P. and such other Persons who become a Borrower
hereunder by execution of a Borrower Addition Amendment, and KEY CORPORATE
CAPITAL INC. ("Lender"), hereby agree as follows:

1.   Definitions.

     1.1  Defined Terms. For purposes of this Agreement the following terms will
          have the following meanings:

          1.1.1    "Advance(s)" will mean disbursements of each of the
                   Non-Revolving Loans made pursuant to this Agreement.

          1.1.2    "Affiliate(s)" will mean, with respect to any Person (i) any
                   other Person directly or indirectly controlling, controlled
                   by or under common control with such Person, or (ii) any
                   Person who is a member, director or officer of such Person
                   or any Subsidiary thereof. A Person will be deemed to
                   control another Person if such Person possesses, directly or
                   indirectly, the power to (a) vote ten percent (10%) or more
                   of the voting equity of such other Person, or (b) direct or
                   cause the direction of the management and policies of such
                   other Person, whether through voting securities, by contract
                   or otherwise.

          1.1.3 "  "Aggregate Outstanding Non-Revolving Credit" will mean an
                   amount equal to the aggregate unpaid principal amount of all
                   Non-Revolving Loans.

          1.1.4    "Agreement" will mean this Line of Credit Agreement
                    and any amendments, supplements or modifications
                    thereto made from time to time in accordance with the
                    terms of this Agreement.

          1.1.5    "Applicable Margin" will mean two and three quarters
                    of one percent (2.75%) per annum.

          1.1.6    "Appraisal" will mean, for each Project, an appraisal
                    of the Project as described in Section 7.8.5 below in
                                                   -------------
                    form and substance acceptable to Lender and completed
                    in accordance with the terms hereof.

          1.1.7     "Attorneys Fees" will mean the reasonable value of the
                    services (and all costs and expenses related thereto) of the
                    attorneys (and all paralegals and other staff employed by
                    such attorneys) employed by Lender from time to time to: (i)
                    take any action, following an Event of Default (after
                    expiration of any applicable cure period), in or with
                    respect to any suit or proceedings (bankruptcy or otherwise)
                    relating to an Event of Default; (ii) enforce any of
                    Lender's rights to collect any of the Obligations; (iii)
                    give Lender advice with respect to this Agreement, including
                    but not limited to advice




<PAGE>



                    in connection with any Event of Default (after
                    expiration of any applicable cure period), workout or
                    bankruptcy of Borrower or Guarantor; and (iv) prepare
                    any amendments, restatements, or waivers to this
                    Agreement or any of the documents executed in
                    connection with any of the Obligations, provided that
                    Borrower or Affiliate of Borrower is a party to such
                    amendments, restatements, or waivers.

          1.1.8    "Base Rate" will mean that interest rate established
                    by Lender as Lender's prime rate, whether or not such
                    rate is publicly announced. The Base Rate may not be
                    the lowest interest rate charged by Lender for
                    commercial or other extensions of credit.

          1.1.9    "Base Rate Advance" will mean any Advance that bears
                    interest at the Base Rate.

          1.1.10   "Borrower(s)" will mean Grand Court-Greatwood, L.P.,
                    and any other Person added to this Agreement and
                    certain other Loan Documents by Borrowers' Designated
                    Officer pursuant to the execution of a document
                    substantially in the form of the Borrower Addition
                    Amendment attached hereto as Exhibit A, jointly and
                                                 ---------
                    severally.

          1.1.11   "Borrower's Account" will mean the account of
                    Borrower at Lender's Affiliate designated by Lender
                    for use hereunder.

          1.1.12   "Borrowers' Designated Officer" will mean Keith
                    Marlowe, secretary of the general partner of each
                    Borrower, in his/her capacity as an officer or
                    manager of each Borrower, and/or any other Person
                    designated by Grand Court-Greatwood, L.P. on behalf
                    of any one or more Borrowers in a writing addressed
                    to Lender.

          1.1.13   "Borrowing" will mean an Advance made on a given
                    Borrowing Date.

          1.1.14   "Borrowing Date" will mean the date on which an Advance is
                    made.

          1.1.15   "Budget" will mean, for each Project, a cost
                   breakdown and itemization of all hard and soft costs
                   for such Project as described in Section 7.8.3 below
                                                    -------------
                   in form and substance acceptable to Lender.

          1.1.16   "Business Day" will mean a day of the year on which
                   banks are not required or authorized to close in
                   Cleveland, Ohio and, if the applicable Business Day
                   relates to any LIBOR Rate Advance, on which dealings
                   are carried on in the London interbank eurodollar
                   market.

          1.1.17   "Capital Expenditure Reserve" will mean, for each
                   Borrower, the sum of $250 for each unit constructed
                   in a Project deposited with Lender's Affiliate in
                   accordance with Section 7.2.18 below.
                                   --------------




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          1.1.18   "CERCLA" will mean the Comprehensive Environmental
                   Response, Compensation, and Liability Act as found in
                   42 U.S.C. ss. 9601 et seq.

          1.1.19   "Closing" will mean, for each Non-Revolving Loan, the
                   execution and delivery of the documents listed on the
                   related Closing Memo.

          1.1.20   "Closing Date" will mean, for each Non-Revolving
                   Loan, the date on which the Loan Documents in
                   connection therewith are executed and delivered to
                   Lender.

          1.1.21   "Closing Memo" will mean, for each Non-Revolving
                   Loan, the Closing Memorandum between Borrower and
                   Lender in connection with the transactions
                   represented by such Loan, which will be substantially
                   in the form delivered by Borrower to Lender at the
                   Line of Credit Closing.

          1.1.22   "Code" will mean the Internal Revenue Code of 1986,
                   as amended or supplemented from time to time.

          1.1.23   "Collateral" will mean any property, real or
                   personal, tangible or intangible, referred to in this
                   Agreement or the Loan Documents or now or in the
                   future securing any of the Obligations.

          1.1.24   "Commitment Fee" will mean the sum of $250,000
                   payable as follows: (i) $150,000 payable in
                   accordance with Section 2.12.2.5 below; and (ii)
                                   ----------------
                   $100,000, the receipt of which is acknowledged by
                   Lender.

          1.1.25   "Completion" will mean, for each Project, the
                   issuance of a final certificate of occupancy for the
                   Project, or similar evidence of completion from the
                   Governmental Authority having jurisdiction over the
                   Project if such a certificate is not available under
                   the laws of the jurisdiction in which the Project is
                   located.

          1.1.26   "Completion Date" will mean, for each Project, the
                   date 15 months after the Closing Date.

          1.1.27   "Compliance Certificate(s)" will mean the Compliance
                   Certification delivered by Borrower to Lender from
                   time to time in the form delivered to Borrower by
                   Lender.

          1.1.28   "Consolidated Indebtedness" will mean, at any date,
                   the Indebtedness of the Consolidated Entities,
                   determined on a consolidated basis as of such date.

          1.1.29   "Consolidated Entities" will mean at any date all
                   Borrowers and Grand Court and excluding any direct or
                   indirect Affiliate of Grand Court that would be
                   consolidated into Grand Court in accordance with
                   GAAP.



<PAGE>



          1.1.30   "Construction Contract" will mean, for each Project,
                   the construction contract entered into between
                   Borrower and General Contractor for the construction,
                   and, if applicable, the design of such Project.

          1.1.31   "Construction Period" will mean, for each
                   Non-Revolving Loan, a period beginning on the Closing
                   Date for such Loan and ending on the Mini-Perm
                   Conversion Date for such Loan.

          1.1.32   "Conversion" or "Converted" will mean the switching
                   from one rate mode to another for a particular
                   Advance or Converted Advance in accordance with the
                   terms of this Agreement.

          1.1.33   "Converted Advance" will mean an Advance where the
                   rate of interest originally elected has been
                   converted by means of a Conversion.

          1.1.34   "Corporate Checking Account" will mean an account
                   maintained by Borrower at Lender or any Affiliate of
                   Lender.

          1.1.35   "Current Audited Financial Statements" will mean
                   Grand Court's audited consolidated balance sheet
                   dated July 31, 1998.

          1.1.36   "Current Financial Statements" will mean the Current Audited
                    Financial Statements and Grand Court's unaudited
                    consolidated balance sheet dated July 31, 1998 (subject to
                    normal year-end adjustments). For the purposes of any future
                    date on which the representations and warranties contained
                    in Section 4 hereof are deemed to be remade, the most
                       ---------
                    current financial statements, tax returns or other documents
                    with respect to Borrower or Guarantor delivered to Lender
                    pursuant to Section 5 hereof will be deemed to be the
                                ---------
                    Current Financial Statements.

          1.1.37   "Debt Service Reserve" will mean an amount equal to
                   the projected debt service set forth on the Budget to
                   become due and payable during the six-month period
                   following the Mini-Perm Conversion Date for each
                   Non-Revolving Loan which is to be deposited with
                   Lender or Lender's Affiliate pursuant to and at the
                   time set forth in Section 7.2.16, below.
                                     --------------

          1.1.38   "Default" will mean any event or condition which,
                   with the passage of time, the giving of notice or
                   both, if applicable, would constitute an Event of
                   Default.

          1.1.39   "Default Rate" will mean the greater of the three
                   percent (3%) in excess of the highest applicable
                   interest rate provided for herein, or sixteen percent
                   (16%).

          1.1.40   "Disclosure Schedules" will mean the schedules to be
                   provided by Borrower to Lender on the Line of Credit
                   Closing Date and each Closing Date.



<PAGE>





          1.1.41   "Dollars" will mean lawful money of the United States
                   of America.

          1.1.42   "Environmental Laws" will mean any and all federal, state,
                    local and foreign statutes, laws, judicial decisions,
                    regulations, ordinances, rules, judgments, orders, decrees,
                    injunctions, permits, concessions, grants, and other
                    governmental restrictions relating to the environment, the
                    effect of the environment on human health or to the
                    emission, discharge or release of pollutants, contaminants,
                    Hazardous Wastes or substances 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, Hazardous Wastes or substances or the clean-up
                    or other remediation thereof.

          1.1.43   "Environmental Report" will mean, for each Project,
                   the environmental site assessment of the Property in
                   form and substance acceptable to and delivered to
                   Lender in connection with the Closing.

          1.1.44   "ERISA" will mean the Employee Retirement Income
                   Security Act of 1974, or any successor statute, as
                   amended or supplemented from time to time.

          1.1.45   "ERISA Affiliate" will mean any person (as defined in
                   Section 3(a) of ERISA) including each trade or
                   ------------
                   business (whether or not incorporated) that together
                   with Borrower, or any Subsidiary thereof, would be
                   deemed to be a "single employer" or member of the
                   same "controlled group" within the meaning of ss. 414
                   of the Code.

          1.1.46   "Event of Default" will mean any of the events listed
                   in Section 8.
                      ---------

          1.1.47   "Eurocurrency Liabilities" will have the meaning
                   assigned to that term in Regulation D of the Board of
                   Governors of the Federal Reserve System, as in effect
                   from time to time.

          1.1.48   "Facility Fee" will have the meaning given to that
                   term in Section 2.12.2.1, below.
                           ----------------

          1.1.49   Intentionally Omitted.

          1.1.50   "Force Majeure" will mean any strikes, lockouts,
                   shortages of labor, fuel or materials, acts of God,
                   significant adverse weather conditions not reasonably
                   anticipated, any enemy act, riot, insurrection or
                   other civil commotion, fire or other casualty or any
                   other cause or circumstance beyond the reasonable
                   control of the affected party.



<PAGE>



          1.1.51   "GAAP" will mean generally accepted accounting
                   principles.

          1.1.52   "General Contractor" will mean, for each Project, the
                   design-build contractor selected by Borrower which
                   Borrower has contracted with to design and construct
                   such Project pursuant to a Construction Contract.

          1.1.53   "Governmental Authority" will mean any nation or
                   government, any state or other political subdivision
                   thereof and any entity exercising executive,
                   legislative, judicial, regulatory or administrative
                   functions of or pertaining to government, including,
                   without limitation, any department, commission,
                   board, bureau, agency, administration, service or
                   other instrumentality of the United States of
                   America, of any state, the District of Columbia,
                   municipality or any other governmental entity having
                   jurisdiction.

          1.1.54   "Grand Court" will mean Grand Court Lifestyles, Inc.

          1.1.55   "Guarantees" will mean the guarantees of the
                   completion of any Project or of all or any part of
                   the Obligations, now existing or hereafter arising,
                   whether on a full, limited or non-recourse basis, and
                   will include any amendments thereto and restatements
                   thereof.

          1.1.56   "Guarantor(s)" will mean any persons or entities that
                   now or in the future that deliver one or more
                   Guarantees to Lender. Initially, Guarantor will mean
                   Grand Court and Borrower.

          1.1.57   "Hazardous Wastes," "hazardous substances" and
                   "pollutants or contaminants" will mean any
                   substances, waste, pollutant or contaminant now or
                   hereafter designated as such under any now existing
                   or hereinafter enacted or amended federal, state or
                   local statute, ordinance, code or regulation designed
                   to protect the environment, including but not limited
                   to CERCLA.

          1.1.58   "Improvements" will mean, for each Project, the
                   structures to be constructed on the Property.

          1.1.59   "Indebtedness" will mean, for any Person at any date,
                    without duplication: (i) all obligations of such Person for
                    borrowed money, (ii) all obligations of such Person
                    evidenced by bond, debentures, notes or other similar
                    instruments, (iii) all obligations of such Person to pay the
                    deferred purchase price of property or services, except
                    trade accounts payable arising in the ordinary course of
                    business, (iv) all obligations of such Person as lessee that
                    are capitalized in accordance with generally accepted
                    accounting principles, (v) all Indebtedness of others
                    guaranteed by such Person and (vi) all contingent or
                    non-contingent obligations of such Person to reimburse any
                    bank or other Person in respect of amounts paid or payable
                    (currently or in the future, on a contingent or
                    non-contingent basis)



<PAGE>



                   under a letter of credit or similar instrument.

          1.1.60   "Indemnity" will mean, for each Project, the
                   environmental indemnity agreement to be executed and
                   delivered by Borrower and Grand Court in favor of
                   Lender in form and substance acceptable to Lender.

          1.1.61   "Inspector" will mean, for each Project, the
                   inspector hired by Lender to inspect and monitor the
                   construction of the Project.

          1.1.62   "Interest Period" will mean, for each Advance or
                   Converted Advance bearing interest at the LIBOR Rate
                   under a Note, the thirty-day period commencing on the
                   date of such Advance or Converted Advance; provided,
                                                              --------
                   however, that:
                   -------

                   1.1.62.1 Borrower may not select the LIBOR Rate for
                            any Advance where the Interest Period for
                            any such Advance would end after the
                            Maturity Date of such Note;

                   1.1.62.2 whenever the last day of any Interest
                            Period would otherwise occur on a day other
                            than a Business Day, the last day of such
                            Interest Period shall occur on the next
                            succeeding Business Day, provided that if
                            such extension of time would cause the last
                            day of such Interest Period for a LIBOR Rate
                            Advance to occur in the next following
                            calendar month, the last day of such
                            Interest Period shall occur on the next
                            preceding Business Day; and

                   1.1.62.3 Borrower may not select as to the amount
                            of any principal payment due hereunder or
                            under a Note, any Interest Period which both
                            begins before and ends after any principal
                            installment payment date set forth herein.

          1.1.63   "Lease Reserve" will mean, for each Project, a lease
                   reserve described in Section 7.2.17 below deposited
                                        --------------
                   with Lender's Affiliate in the amount set forth in
                   the Budget approved by Lender.

          1.1.64   "Legal Requirements" will mean all applicable laws,
                   statutes, ordinances, rules, regulations and
                   restrictive covenants.

          1.1.65   "Levies" will have the meaning given that term in
                   Section 2.13 of this Agreement.
                   ------------

          1.1.66   "LIBOR Rate" will mean, for any Interest Period with
                   respect to a LIBOR Rate Advance, the quotient
                   (rounded upwards, if necessary, to the nearest one
                   sixteenth of one percent (1/16th of 1%) of: (x) the
                   per annum rate of interest, determined by the Lender
                   in accordance with its usual procedures (which
                   determination shall be conclusive absent manifest
                   error) as of




<PAGE>



                   approximately 11:00 a.m. (London time) two Business
                   Days prior to the beginning of such Interest Period
                   pertaining to such LIBOR Rate Advance, appearing on
                   Page 3750 of the Telerate Service (or any successor
                   or substitute page of such Service, or any successor
                   to or substitute for such Service providing rate
                   quotations comparable to those currently provided on
                   such page of such Service, as determined by the
                   Lender from time to time for purposes of providing
                   quotations of interest rates applicable to dollar
                   deposits in the London interbank market) as the rate
                   in the London interbank market for dollar deposits in
                   immediately available funds with a maturity
                   comparable to such Interest Period divided by (y) a
                                                      ----------
                   number equal to 1.00 minus the LIBOR Rate Reserve
                                        -----
                   Percentage. In the event that such rate quotation is
                   not available for any reason, then the rate (for
                   purposes of clause (x) hereof) shall be the rate,
                   determined by the Lender as of approximately 11:00
                   a.m. (London time) two Business Days prior to the
                   beginning of such Interest Period pertaining to such
                   LIBOR Rate Advance, to be the average (rounded
                   upwards, if necessary, to the nearest one sixteenth
                   of one percent (1/16th of 1%) of the per annum rates
                   at which dollar deposits in immediately available
                   funds in an amount comparable to such LIBOR Rate
                   Advance and with a maturity comparable to such
                   Interest Period are offered to the prime banks by
                   leading banks in the London interbank market. The
                   LIBOR Rate shall be adjusted automatically on and as
                   of the effective date of any change in the LIBOR Rate
                   Reserve Percentage.

          1.1.67   "LIBOR Rate Advance(s)" will mean any Advance or
                   Converted Advance that bears interest based upon the
                   LIBOR Rate.

          1.1.68   "LIBOR Rate Reserve Percentage" will mean, for any
                    Interest Period in respect of any LIBOR Rate Advance, as of
                    any date of determination, the aggregate of the then stated
                    maximum reserve percentages (including any marginal,
                    special, emergency or supplemental reserves), expressed as a
                    decimal, applicable to such Interest Period (if more than
                    one such percentage is applicable, the daily average of such
                    percentages for those days in such Interest Period during
                    which any such percentage shall be so applicable) by the
                    Board of Governors of the Federal Reserve System, any
                    successor thereto, or any other banking authority, domestic
                    or foreign, to which the Lender may be subject in respect to
                    eurocurrency funding (currently referred to as "Eurocurrency
                    Liabilities" in Regulation D of the Federal Reserve Board)
                    or in respect of any other category of liabilities including
                    deposits by reference to which the interest rate on LIBOR
                    Rate Advances is determined or any category of extension of
                    credit or other assets that include the LIBOR Rate Advances.
                    For purposes hereof, such reserve requirements shall
                    include, without limitation, those imposed under Regulation
                    D of the Federal Reserve Board and the LIBOR Rate Advances
                    shall be deemed to constitute Eurocurrency Liabilities
                    subject to such


<PAGE>



                   reserve requirements without benefit of credits for
                   proration, exceptions or offsets which may be
                   available from time to time to any Bank under said
                   Regulation D.

          1.1.69   "Lien" will mean any mortgage, pledge, lien, charge,
                   security or other encumbrance of any kind whatsoever
                   on any property, including but not limited to, the
                   Property and Collateral, belonging to Borrower.

          1.1.70   "Line of Credit" will mean the Non-Revolving Line of
                   Credit as described in Section 2, below.
                                          ---------

          1.1.71   "Line of Credit Closing" will mean the execution and
                   delivery of the documents listed on the Line of
                   Credit Closing Memo.

          1.1.72   "Line of Credit Closing Date" will mean the date on
                   which this Agreement and the other Loan Documents
                   listed on the Line of Credit Closing Memo are
                   executed.

          1.1.73   "Line of Credit Closing Memo" will mean the Closing
                   Memorandum between Borrower and Lender in connection
                   with the transactions represented by this Agreement.

          1.1.74   "Liquidity" will mean the total of all cash and cash
                   equivalents held by the Consolidated Entities.

          1.1.75   "Loan Documents" will mean this Agreement, the Notes,
                   and the documents listed on the Line of Credit
                   Closing Memo and each Closing Memo.

          1.1.76   "Loan(s)" will mean any and all advances of funds
                   under this Agreement or any of the Notes.

          1.1.77   "Management Contract" will mean, for each Project,
                   the contract for the management and operation of the
                   Project between Grand Court and Borrower.

          1.1.78   "Material Adverse Effect" will mean an effect on the
                   business, financial condition, assets or liabilities of
                   Borrower and its Consolidated Entities, considered on a
                   consolidated basis, which, when combined on a cumulative
                   basis with other changes in the business, financial
                   condition, assets and liabilities of Borrower and its
                   Consolidated Entities, considered on a consolidated basis:
                   (i) would have a material adverse effect on the ability
                   of Borrower to perform its obligations under the Loan
                   Documents or (ii) would result in a material adverse change
                   in the financial condition of Borrower and its
                   Consolidated Entities, considered on a consolidated basis.

<PAGE>



          1.1.79   "Maturity Date" will mean the maturity date specified
                   in each of the Notes, including all amendments,
                   extensions, and renewals made thereto from time to
                   time.

          1.1.80   "Mini-Perm Conversion Date" will mean, for each
                   Non-Revolving Loan, the earlier of: (i) the first day
                   of the month in the fifteenth month after the month
                   of the Closing Date of such Loan, or (ii) the first
                   day of the month in the month after the Completion
                   Date for the Project funded by such Loan.

          1.1.81   "Mini-Perm Period" will mean, for each Non-Revolving
                   Loan, the twenty four (24) month period following the
                   Mini-Perm Conversion Date.

          1.1.82   "Mortgage" will mean the mortgage or deed of trust
                   securing the applicable Note for each Project.

          1.1.83   "Multiemployer Plan" will mean a multiemployer plan
                   as defined in ss. 4001(a)(3) of ERISA to which
                   Borrower or any ERISA Affiliate (other than one
                   considered an ERISA Affiliate only pursuant to
                   subsection (m) or (o) of Code ss. 414) is making or
                   accruing an obligation to make contributions, or has
                   within any of the preceding five plan years made or
                   accrued an obligation to make contributions.

          1.1.84   "Net Worth," at any particular time, will mean the
                   shareholders equity as determined in accordance with
                   GAAP. Unless otherwise specified herein, Net Worth
                   will be calculated in a consolidated basis for the
                   Consolidated Entities, excluding any items for direct
                   or indirect Affiliates of Grand Court that would be
                   consolidated into Grand Court in accordance with
                   GAAP.

          1.1.85   "Non-Revolving Conditions" will mean the conditions
                   set forth in Section 2.1.2.
                                -------------

          1.1.86   "Non-Revolving Line of Credit" will mean the credit
                   line described in Section 2.1.
                                     -----------

          1.1.87   "Non-Revolving Loans" will mean each of the Loans
                   described in Section 2.1 and represented by a Note.
                                -----------

          1.1.88   Intentionally Omitted.

          1.1.89   "Note(s)" will mean collectively the promissory notes
                   of Borrowers to the Lender evidencing the
                   Non-Revolving Loans, and will include any amendments,
                   extensions and renewals made thereto from time to
                   time.

          1.1.90   "Notice(s) of Pricing Election" will mean the notice required




<PAGE>



                   under Section 2.4.2, below, in the form attached to the
                         -------------
                   Notes.

          1.1.91   "Notice(s) of Prepayment" will mean the notice
                   required under Section 2.8.2, below, in connection
                                          -----
                   with a prepayment of any of the Loans.

          1.1.92   "Notices" will mean all Notices of Pricing Election,
                   Notices of Prepayment, any notice of termination or
                   reduction of the Total Commitment, and any other
                   notices under this Agreement.

          1.1.93   "Obligations" will mean and include all loans, advances,
                    debts, liabilities, obligations, covenants and duties owing
                    to Lender from Borrower of any kind or nature arising under
                    this Agreement, the Notes or any of the Loan Documents,
                    whether direct or indirect, absolute or contingent, joint or
                    several, due or to become due, now existing or hereafter
                    arising, and all charges, expenses, fees, including but not
                    limited to reasonable Attorneys' Fees, and any other sums
                    chargeable to Borrower under any of the Obligations.

          1.1.94    "Operating Cash Flow" will mean: (i) net income, as
                    determined in accordance with generally accepted accounting
                    principles; plus (ii) income taxes; plus (iii) depreciation
                                ----                    ----
                    and amortization; plus (iv) interest; plus (v) other items
                                      ----                ----
                    which would be classified as non-cash charges; plus (vi)
                                                                   ----
                    management fees; minus (vii) 5% of gross revenues; minus
                                     -----                             -----
                    (viii) current contributions to the Capital Expenditure
                    Reserve; and excluding extraordinary items including but not
                    limited to gain or loss from the sale or disposition of
                    capital assets. Operating Cash Flow will be determined in
                    accordance with generally accepted accounting principles
                    applied on a consistent basis.

          1.1.95   "PBGC" will mean the Pension Benefit Guaranty
                   Corporation referred to and defined in ERISA.

          1.1.96   "Permitted Liens" will mean:

                    1.1.96.1 liens securing the payment of taxes,
                             either not yet due or the validity of which
                             is being contested by the Person being
                             charged in good faith by appropriate
                             proceedings, and as to which it has set
                             aside on its books adequate reserves to the
                             extent required by GAAP;

                    1.1.96.2 deposits under workers' compensation,
                             unemployment insurance and social security
                             laws, or to secure the performance of bids,
                             tenders, contracts (other than for the
                             repayment of borrowed money) or leases, or
                             to secure statutory obligations or surety or
                             appeal bonds, or to secure indemnity,
                             performance or other similar bonds in the
                             ordinary course of business;



<PAGE>



                   1.1.96.3 liens imposed by law, such as carriers',
                            warehousemen's or mechanics' liens, incurred
                            by it in good faith in the ordinary course
                            of business;

                   1.1.96.4 liens in favor of Lender under this Agreement or
                            the Loan Documents;

                   1.1.96.5 purchase money liens incurred in the
                            connection with the acquisition of capital
                            assets limited to the specific assets
                            acquired with such financing (subject to the
                            acquisition of such assets and incurrence of
                            such debt being otherwise permitted by the
                            terms of this Agreement);

                   1.1.96.6 any lien existing on any asset of any
                            corporation at the time such corporation
                            becomes a Subsidiary and not created in
                            contemplation of such event;

                   1.1.96.7 any lien on any asset of any corporation
                            existing at the time such corporation is
                            merged or consolidated with or into Borrower
                            or a Subsidiary and not created in
                            contemplation of such event;

                   1.1.96.8 any lien existing on any asset prior to
                            the acquisition thereof by Borrower or a
                            Consolidated Entity and not created in
                            contemplation of such event;

                   1.1.96.9 any lien arising out of the refinancing,
                            extension, renewal or refunding of any
                            Indebtedness secured by any lien permitted
                            by any of the foregoing clauses (4)-(8) of
                            this Section 1.1.96, provided that such
                                 ---------------
                            Indebtedness is not increased and is not
                            secured by any additional Collateral;

                   1.1.96.10 any attachment lien being contested in
                             good faith and by proceedings promptly
                             initiated and diligently conducted, unless
                             the attachment giving rise thereto will not,
                             within sixty days after the entry thereof,
                             have been discharged or fully bonded or will
                             not have been discharged within sixty days
                             after the termination of any such bond;

                   1.1.96.11 any judgment lien, unless the judgment it
                             secures will not, within sixty days after
                             the entry thereof, have been discharged or
                             execution thereof stayed pending appeal, or
                             will not have been discharged within sixty
                             days after the expiration of any such stay;
                             and

                   1.1.96.12 easements, rights-of-way, zoning restrictions and
                             other restrictions, charges or encumbrances
                             existing on the Closing Date



<PAGE>



                             or otherwise incurred in the ordinary course of
                             business and not materially interfering with the
                             ordinary conduct of the business.

          1.1.97   "Person" will mean an individual, partnership,
                   corporation (including a business trust), joint stock
                   company, trust, unincorporated association, joint
                   venture or other entity, or a government or any
                   political subdivision or agency thereof.

          1.1.98   "Plan(s)" will mean any pension plan subject to the
                   provisions of Title IV of ERISA or ss. 412 of the
                   Code and which is maintained for employees of
                   Borrower or any ERISA Affiliate.

          1.1.99   "Plans and Specifications" will mean, for each
                   Project, the architectural, structural, mechanical,
                   and electrical plans and specifications for the
                   Improvements.

          1.1.100  "Prepayment Premium" will mean the following and will
                   be applicable regardless of whether or not such
                   prepayment is in full or in part, or voluntary or on
                   default or otherwise:

                   1.1.100.1 as to LIBOR Rate Advances, three percent
                             (3%) of the portion of each Non-Revolving
                             Loan prepaid (unless prepayment occurs
                             within 60 days prior to the last day of the
                             Mini-Perm Period for such Loan), plus, in
                             the case of any LIBOR Rate Advances prepaid
                             prior to the last day of its Interest
                             Period, an amount equal to the excess of the
                             interest that would have been received from
                             Borrower by Lender for the account of Lender
                             at the rate applicable to the portion of the
                             Advance prepaid during the remaining portion
                             of the relevant Interest Period, over the
                             return which Lender could have obtained if
                             it invested the amount of such prepayment at
                             the LIBOR Rate that would have been in
                             effect if an Interest Period began on the
                             date of such prepayment; and such funds had
                             remained invested until the expiration of
                             the relevant Interest Period; and

                   1.1.100.2 as to Base Rate Advances, three percent
                             (3%) of the portion of each Non-Revolving
                             Loan prepaid, unless prepayment occurs
                             within 60 days prior to the last day of the
                             Mini-Perm Period for such Loan.

          1.1.101  "Project" will mean, for each Non-Revolving Loan, the
                   construction of an independent and/or assisted living
                   facility on the Property with Advances of such Loan.

          1.1.102  "Project Architect" will mean, for each Project,
                   either the architect hired by Borrower to complete
                   the Plans and Specifications for the Project,



<PAGE>



                   or the architect hired by the General Contractor for the
                   same purpose.

          1.1.103  "Property" will mean, for each Project, the real
                   estate encumbered by and defined in the Mortgage
                   securing the Note for such Project.

          1.1.104  "Reportable Event" will mean any reportable event as
                   defined in ss. 4043(b) of ERISA or the regulations
                   issued thereunder with respect to a Plan (other than
                   a Plan maintained by an ERISA Affiliate which is
                   considered an ERISA Affiliate only pursuant to
                   subsection (m) or (o) of Code ss. 414).

          1.1.105  "Responsible Officer" will mean, with respect to any
                   Person its chairman, chief executive officer,
                   president, chief financial officer, controller,
                   treasurer or an assistant treasurer with respect to
                   Compliance Certificates and notices of termination or
                   reduction of the Total Commitment and with respect to
                   any other Notices hereunder, any officers or
                   employees authorized by resolutions delivered by
                   Borrower to Lender from time to time.

          1.1.106  "Retainage" will mean, for each Project, ten percent
                   (10%) of the "hard costs" of each requested Advance,
                   as adjusted pursuant to Section 7.6.2 below.
                                           -------------

          .1.107   "Subsidiary" will mean, any corporation or other
                   entity whose securities or other ownership interests
                   having ordinary voting power to elect a majority of
                   the board of directors or other persons performing
                   similar functions are at the time directly or
                   indirectly owned by Borrower.

          1.1.108  "Taxes" will have the meaning given that term in
                   Section 2.13 of this Agreement.
                   ------------

          1.1.109  "Tenant Improvements" will mean (i) for those
                   portions of the Project for which Tenant leases have
                   been executed and delivered, the work and
                   improvements required to be performed by Borrower as
                   landlord thereunder; and (ii) for those portions of
                   the Project which are to be leased but for which
                   leases have not yet been obtained, Borrower's
                   standard landlord finish work in such areas.

          1.1.110  "Termination Date" will mean October 30, 1999.

          1.1.111  "Total Commitment" will mean $25,000,000 as such
                   amount may be reduced, from time to time, in
                   accordance with the terms of this Agreement.

          1.1.112  "UCC" will mean the Uniform Commercial Code as
                   adopted by the applicable state or states.



<PAGE>



          1.1.113  "Withdrawal Liability" will mean liability to a
                   Multiemployer Plan as a result of a complete or
                   partial withdrawal from such Multiemployer Plan, as
                   such terms are defined in Part I of Subtitle E of
                   Title IV of ERISA.

     1.2  Other Definitional Provisions. Capitalized terms used herein
          and not otherwise defined herein will have the meanings given
          such terms in the Notes. Unless otherwise specified, all
          accounting terms used herein will be interpreted, all
          accounting determinations hereunder will be made, and all
          financial statements required to be delivered hereunder will
          be prepared in accordance with GAAP as in effect from time to
          time, applied on a basis consistent (except for changes
          concurred in by Borrower's independent public accountants)
          with the Current Audited Financial Statements; provided that,
          if Borrower notifies the Lender that Borrower wishes to amend
          any covenant in Section 6 to eliminate a material variation in
                          ---------
          the operation of such covenant by virtue of a change in GAAP,
          then Borrower's compliance with such covenant will be
          determined on the basis of GAAP in effect immediately before
          the relevant change in GAAP became effective, until either
          such notice is withdrawn or such covenant is amended in a
          manner satisfactory to Borrower and Lender.

     1.3  Additional Definitional Provisions. All terms defined in this
          Agreement in the singular will have comparable meanings when
          used in the plural and vice-versa. The words "hereof,"
          "herein" and "hereunder" and words of similar import when used
          in this Agreement will mean this Agreement as a whole and not
          any particular provision of this Agreement.

2.   Line of Credit.

     2.1  The Non-Revolving Line of Credit.

          2.1.1 Individual Notes. Each Non-Revolving Loan under the Line of
               Credit shall be represented by a separate Note for each Project.
               A maximum of three Notes shall be delivered under the Line of
               Credit. The principal amount of any one Note shall not exceed the
               lesser of: (i) $10,000,000; (ii) 85% of the cost of the Project
               to be constructed with the Non-Revolving Loan under the Note;
               (iii) 75% of the stabilized appraised value of such Project; and
               (iv) the Total Commitment minus the aggregate amount of Notes
                                         -----
               then issued under the Line of Credit (regardless of the amount
               advanced thereunder). The Termination Date of the Line of Credit
               shall have no effect on the Maturity Date of each of the Notes.
               2.1.2 Borrowings. Lender agrees to make subject to the terms and
               conditions of this Agreement and each Note, Non-Revolving Loans
               to Borrower on any Business Day during the period from the date
               hereof through the Termination Date upon the request of Borrower
               in an amount not to exceed the Total Commitment; provided that:


<PAGE>



                    2.1.2.1 the Aggregate Outstanding Non-Revolving Credit will
                            not exceed at any time the Total Commitment;

                    2.1.2.2 Advances will be made as specified in this Agreement
                            and each Note;

                    2.1.2.3 each Non-Revolving Loan will be evidenced by
                            a Note executed and delivered by Borrower to
                            Lender on or prior to the Termination Date
                            and will bear interest and be payable in the
                            manner set forth herein and therein; and

                    2.1.2.4 no Borrower or Guarantor has suffered a
                            Material Adverse Effect (in which event
                            Lender may elect not to make any new
                            Non-Revolving Loans to Borrower not
                            theretofore closed, but Lender shall in any
                            event continue to make Advances of all
                            Non-Revolving Loans theretofore closed,
                            provided all other conditions to such
                            Advances shall have been satisfied, unless
                            Borrower knew of the existence of the event
                            or condition that has a Material Adverse
                            Effect at the time of the Closing of such
                            Non-Revolving Loans and failed to disclose
                            the same to Lender).

     2.2  Intentionally Omitted.

     2.3  Intentionally Omitted.

     2.4  Rates of Interest.

          2.4.1    Construction Periods. During any Construction Period,
                   Borrower will pay Lender interest on the outstanding
                   principal balance of each Advance under each
                   Non-Revolving Loan from the date of each such Advance
                   at a rate of interest equal to the Base Rate.

          2.4.2     Mini-Perm Periods. During any Mini-Perm Period, Borrower
                    will pay Lender interest on the outstanding principal
                    balance of each Advance or Converted Advance of each
                    Non-Revolving Loan from the date of each such Advance or
                    Converted Advance at a rate of interest equal to: (i) the
                    Base Rate or (ii) the Applicable Margin plus the LIBOR Rate,
                    as such rate may be selected by Borrower in each Notice of
                    Pricing Election. Notwithstanding any of the foregoing to
                    the contrary, for each Non- Revolving Loan, in the event
                    that: (i) no interest rate is selected, or (ii) an Interest
                    Period expires and no new interest rate is selected in a
                    Notice of Pricing Election with respect to an Advance or
                    Converted Advance, the rate of interest payable on such
                    Advance or Converted Advance under the applicable
                    Non-Revolving Loan will be the rate for Base Rate Advances
                    until otherwise elected in connection with a Conversion.




<PAGE>



     2.5  Conversions. During any Mini-Perm Period, Borrower may on any
           Business Day, upon delivering to Lender a Notice of Pricing
           Election specifying a "Conversion" not later than 11:00 a.m.
           (Cleveland time) on the third Business Day prior to the
           proposed conversion, convert all or any portion of LIBOR Rate
           Advances or Base Rate Advances under any Non-Revolving Loan
           into an Advance or Advances in a different rate mode;
           provided, however, that: (i) any conversion of any Advances
           will be in a minimum amount of $3,000,000 and integral
           multiples of $500,000 or greater in excess thereof or will be
           a Conversion of the entire outstanding principal amount of the
           Loan; (ii) any conversion of any Advances will be made
           effective only on the last day of the Interest Period for such
           Advances; (iii) no more than one (1) LIBOR Rate Advance may be
           outstanding with respect to each Non-Revolving Loan at any one
           time (however, Borrower may aggregate multiple Advances of a
           Non-Revolving Loan into a single LIBOR Rate Advance on the
           first day of any Interest Period). No conversion will be
           effective unless a proper, timely and fully completed Notice
           of Pricing Election specifying a Conversion is delivered to
           Lender. Notwithstanding the foregoing provisions of this
          Section, if Borrower elects a Conversion to a LIBOR Rate
          Advance, only so much of the outstanding principal amount of
          the Loan as would not become due and payable during the
          Interest period shall be designated as a LIBOR Rate Advance.

     2.6  Interest Payments. Interest will accrue from the date of each
          Advance or Converted Advance of each Loan. Accrued interest on
          each Advance or Converted Advance will be due and payable
          monthly commencing on the first day of each calendar month
          following such Advance or Converted Advance; provided,
          however, that interest on Advances or Converted Advances will
          be due and payable upon payment in full of all such Advances
          or Converted Advances.

     2.7  Intentionally Omitted.

     2.8  Principal Payments.

          2.8.1     Loans. Borrower will pay: (i) to Lender the outstanding
                    principal amount of, and all accrued and unpaid interest on,
                    each Loan on its Maturity Date; (ii) to Lender, during the
                    final twelve months of each Mini-Perm Period, monthly
                    principal payments on the first day of each calendar month
                    on each Non-Revolving Loan in an amount specified on a
                    schedule attached to the each Note which amount will be
                    calculated by Lender (which calculation, absent manifest
                    error, will be conclusive) as follows: 1/12th of the
                    aggregate payment of principal which would be made by
                    Borrower during the final twelve months of such Mini-Perm
                    Period (assuming approximately level monthly principal
                    payments) if the maximum amount of such Non-Revolving Loan,
                    including principal, interest, late charges, and all other
                    sums due under the applicable Note were to accrue interest
                    at an assumed fixed rate equal to the rate fixed by the
                    Interest Rate Hedge Agreement executed in connection with
                    the Closing and such balance were


<PAGE>



                   amortized over an assumed 20-year period beginning on such
                   date.

          2.8.2     Optional Prepayment. Subject to the terms and conditions of
                    Agreement, Borrower may elect to prepay all or any part of
                    an Advance during any Mini-Perm Period by delivering to
                    Lender a Notice of Prepayment, at least one (1) Business Day
                    prior to the proposed prepayment date in the case of a Base
                    Rate Advance, and at least three (3) Business Days prior to
                    the proposed date of prepayment in the case of any LIBOR
                    Rate Advance, provided that each partial prepayment of any
                    Advance will be in an aggregate principal amount of
                    $3,000,000 or in multiples of $500,000 or greater in excess
                    thereof or (that such prepayment will be of the entire
                    outstanding principal amount of the applicable Non-
                    Revolving Loan) and provided further that each prepayment of
                    any LIBOR Rate Advance will be accompanied by payment of the
                    accrued interest to the date of prepayment on the principal
                    amount prepaid and all prepayment amounts will be
                    accompanied by any applicable Prepayment Premium. Each
                    Notice of Prepayment must specify, as to each Advance being
                    prepaid, the proposed prepayment date, the Advance being
                    prepaid and the aggregate principal amount of the
                    prepayment. No optional prepayment shall be permitted during
                    any Construction Period. Upon any optional prepayment, a
                    termination event shall occur under any agreement entered
                    into pursuant to Section 3.3.4 below. Except as specifically
                                     -------------
                    provided for in the Loan Documents, no prepayment charges or
                    premiums shall be payable by Borrower.

     2.9  Interest on the Advances.

          2.9.1    Interest Rates on Non-Revolving Loans. Each
                   Non-Revolving Loan will bear interest from the
                   Borrowing Date thereof on the principal amount
                   thereof from time to time outstanding until due and
                   payable (whether at the stated maturity, by
                   acceleration or otherwise) as set forth in Section
                                                              -------
                   2.4.
                   ----

          2.9.2    Interest Payment Dates. Accrued interest will be
                   payable (a) monthly on the first day of each month
                   commencing on the first day of the month following
                   the first disbursement under the Non-Revolving Loan
                   for interest accrued for the prior month or any part
                   thereof, as the case may be, (b) on the Maturity
                   Date, and (c) to the extent any of the Obligations
                   remain unpaid after the Maturity Date, on demand.

          2.9.3    Default Rate. At the option of the Lender, upon the
                   occurrence of any Event of Default, the unpaid
                   principal amount of each Advance, and to the extent
                   not paid when due, the unpaid amount of all interest,
                   fees, expenses and other amounts payable hereunder,
                   will bear interest at the Default Rate in effect from
                   time to time until such Event of Default is cured.
                   After maturity (whether by acceleration or
                   otherwise), the principal of the Loan



<PAGE>



                   and the unpaid interest and fees thereon shall bear interest
                   at the Default Rate.

     2.10 Records. Lender is hereby authorized by Borrower to record in
          its books and records, the date, amount, Interest Rate, and
          applicable Interest Period, if any, of each Advance made to
          Borrower, the date and amount of each payment of principal or
          interest thereon, which books and records will constitute
          prima facie evidence of the accuracy of the information so
          -----------
          recorded, provided, however, that failure of Lender to record,
                    --------
          or any error in recording, any such information will not
          relieve Borrower of its obligations to repay the outstanding
          principal amount of the Advances, all accrued interest
          thereon, and other amounts payable with respect thereto in
          accordance with the terms of the Notes and this Agreement. The
          information as reflected by records maintained by Lender
          related to Advances will prevail, absent manifest error, in
          the event that the information as reflected by the records
          maintained by Borrower differs from Lender's records in any
          respect.

     2.11 Assumptions Regarding Notices.

          2.11.1    Responsible Officers. Any Responsible Officer of Borrower
                    may submit a Notice on behalf of Borrower. Lender will be
                    entitled to rely conclusively on each Responsible Officer's
                    authority to submit a Notice on behalf of Borrower until
                    Lender receives written notice from Borrower to the
                    contrary. Except in the case where Lender has reasonable
                    cause to believe a written or oral notice is unauthorized,
                    Lender will have no duty to verify the authenticity of the
                    signature appearing on any written Notice and, with respect
                    to an oral Notice, Lender will have no duty to verify the
                    identity of any Person representing himself as one of the
                    Responsible Officers entitled to make such a request on
                    behalf of Borrower. 2.11.2 No Liability. Lender will not
                    incur any liability to Borrower in acting upon any Notice
                    which Lender believes in good faith to have been given by a
                    Responsible Officer or for otherwise acting in good faith in
                    accordance with this Section 2 and, upon Lender's accepting
                                         ---------
                    any Notice in accordance with this Section 2 pursuant to any
                                                        --------
                    such Notice, Borrower will have effectively elected the
                    Borrowing, conversion, continuation, prepayment, reduction
                    or termination thereunder.

          2.11.3   Notice Irrevocable. Any Notice (whether telephonic,
                   telecopy, or facsimile or otherwise) given or deemed
                   to have been given pursuant to this Section will be
                   irrevocable, provided that any refinancing
                   transaction related to a Notice of Prepayment may be
                   delayed or rescheduled for a reasonable period of
                   time notwithstanding the date proposed for such
                   prepayment in the Notice of Prepayment.

     2.12 Computations, Fees, Payments, Etc.



<PAGE>



          2.12.1   Computations. All computations of interest and of fees
                    hereunder will be made by Lender, on the basis of: (i) for
                    Base Rate Advances, and fees and expenses due hereunder, a
                    360 day year, and (ii) in the case of LIBOR Rate Advances a
                    360 day year, in each case for the actual number of days
                    (including the first day but excluding the last day)
                    occurring in the period for which such interest or fees are
                    payable. Each determination by Lender of an Interest Rate or
                    fee hereunder will be conclusive and binding for all
                    purposes, absent manifest error. Whenever any payment to be
                    made by Borrower hereunder or under any of the other Loan
                    Documents is stated to be due on a day other than a Business
                    Day, such payment will be made on the next succeeding
                    Business Day, and such extension of time will in such case
                    be included in the computation of payment of interest or
                    fees, as the case may be.


          2.12.2    Fees. The fees described in this subsection represent
                    compensation for services rendered and to be rendered
                    separate and apart from the lending of money or the
                    provision of credit and do not constitute compensation for
                    the use or forbearance of money, and the obligation of
                    Borrower to pay such fees will be in addition to and not in
                    lieu of the obligation of Borrower to pay interest, other
                    fees and expenses otherwise described herein or in the other
                    Loan Documents. The following fees will be paid
                    by Borrower:

                   2.12.2.1 Facility Fee. Borrower will pay to Lender
                            a Facility Fee equal to one-half of one
                            percent (0.5%) of the maximum principal
                            amount of each of the Non-Revolving Loans on
                            the first Business Day after the date 12
                            months from the Closing Date for each
                            Non-Revolving Loan.

                   2.12.2.2 Lender Closing Expenses. All out-of-pocket
                            expenses, plus reasonable legal expenses not
                            to exceed $8000 for each Closing, incurred
                            by Lender in connection with the
                            preparation, negotiation, execution and
                            delivery of this Agreement and the other
                            Loan Documents will be paid by Borrower to
                            Lender on each Closing Date.

                   2.12.2.3 Construction Montitoring Fee. Borrower
                            will pay to Lender, for its own account, on
                            demand, a Construction Monitoring Fee of
                            $10,000 for each Note on each Closing Date.



<PAGE>



                   2.12.2.4 Late Fee. Following Notice of non-payment
                            of any obligation due hereunder given by
                            Lender and the expiration of any applicable
                            cure period, Borrower will pay a late fee
                            equal to the greater of $25.00 or ten
                            percent (10%) of the amount of principal and
                            interest not timely paid by Borrower.

                   2.12.2.5 Commitment Fee.  Borrower will pay to Lender any
                            unpaid portion of the Commitment Fee on the earlier
                            of: (i) the first Closing Date; or (ii) November
                            30, 1998.

          2.12.3    Payments. Borrower will make each payment hereunder and
                    under the Notes, as the case may be, not later than 11:00
                    a.m. (Cleveland time) on the day when due by deposit,
                    including electronic transfers, to Lender's Account for
                    Non-Revolving Loans, in same day funds. Amounts received by
                    Lender, as the case may be, after 11:00 a.m. (Cleveland
                    time) on any Business Day will be deemed to have been
                    received on the next Business Day. Subject to the foregoing,
                    Lender will apply payments in the following order: (i) to
                    charges, fees and expenses (including Attorneys' Fees)
                    payable to Lender which are payable by Borrower as provided
                    in this Agreement or the Loan Documents, (ii) to accrued
                    interest, and (iii) to principal.

          2.12.4    Charge to Accounts. Lender is hereby authorized to make any
                    payment of principal, interest, fees, expenses or other
                    Obligations specified or referred to in this Agreement or
                    the Loan Documents to Lender when due, on Borrower's behalf
                    by charging any Corporate Checking Account, and/or drawing a
                    Non-Revolving Loan, in the appropriate amount and each such
                    draw will constitute a Non-Revolving Loan and a Borrowing
                    hereunder and part of the Obligations, secured by all of the
                    Collateral; provided, however, that Lender will not be
                    obligated to make any such charge or draw. Lender may, in
                    Lender's discretion, either (a) so charge the Corporate
                    Checking Account for such amount and/or draw an Advance or
                    (b) require Borrower to pay such amount; provided that if
                                                             --------
                    Borrower does not pay such amount upon demand therefor by
                    Lender, such amount will bear interest at the Default Rate.
                    Borrower also does hereby authorize Lender, if and to the
                    extent payment of any of the Obligations owed such by
                    Borrower is not made when due hereunder, to charge any
                    amount so due from time to time against any or all accounts
                    of Borrower with Lender. Lender shall provide the applicable
                    Borrower with 5 days prior Notice of any payment or charge
                    to be made pursuant to this Section 2.12.4.
                                                --------------

     2.13 Taxes. Any and all payments by Borrower hereunder or under
          the Loan Documents will be made free and clear of and
          without deduction for any and all present or future taxes,
          levies, imposts, deductions, charges or withholdings, and
          all liabilities with respect thereto, other than any tax on
          or measured by the net



<PAGE>



          income of Lender pursuant to the income tax laws of the United
          States or any state or political subdivisions thereof (all
          such non-excluded items being hereinafter referred to as the
          "Taxes"). Borrower agrees to pay any future stamp, recording
          or documentary taxes or similar levies which arise from any
          payment made hereunder or under the Loan Documents or from the
          execution, delivery or registration of, or otherwise with
          respect to, this Agreement or the Loan Documents (hereinafter
          referred to as the "Levies"). Borrower will indemnify Lender
          for the full amount of Taxes or Levies paid by Lender (as the
          case may be) and any liability (including penalties, interest,
          additions to tax and expenses) arising therefrom or with
          respect thereto, whether or not such Taxes or Levies were
          correctly or legally asserted. A certificate of Lender as to
          any additional amounts payable to Lender under this Section
          submitted to Borrower will be conclusive absent manifest
          error. Borrower will pay to Lender for the account of Lender
          the amount shown as due on any such certificate within five
          (5) days after receipt of the same. The agreements and
          obligations contained in this Section will survive the payment
          in full of the Obligations and any termination of this
          Agreement.

     2.14 Additional Costs.

          2.14.1    Taxes, Reserve Requirements, Etc. In the event that any
                    applicable law, rule or regulation first in effect after the
                    date hereof, or any interpretation or administration thereof
                    of an applicable law, rule or regulation by any Governmental
                    Authority charged with the interpretation or administration
                    thereof, or compliance by Lender with any guideline, request
                    or directive of any such authority (whether or not having
                    the force of law), will (i) subject Lender to any tax or
                    affect the basis of taxation of payments to Lender of any
                    amounts payable by Borrower under this Agreement (other than
                    taxes imposed on the overall net income of Lender, by the
                    jurisdiction, or by any political subdivision or taxing
                    authority of any such jurisdiction, in which Lender has its
                    principal office), or (ii) will impose, modify or deem
                    applicable any reserve, special deposit or similar
                    requirement against assets of, deposits with or for the
                    account of, or credit extended by Lender (including but not
                    limited to a request or requirement which affects the manner
                    in which Lender allocates capital resources to its
                    commitments or obligations, including without limitation its
                    obligations under this Agreement, the Loans, and other
                    obligations) or (iii) will impose any other condition
                    affecting this Agreement, any of the Obligations or any of
                    the Loan Documents, and the result of any of the foregoing
                    is to increase the direct or indirect cost of making,
                    funding or maintaining the Loans or other Obligations or to
                    reduce the amount of any sum received or receivable by
                    Lender thereon, calculated on a net basis for any one or
                    related series of the foregoing events, then Borrower will
                    pay to Lender from time to time, upon request by Lender,
                    with a copy of such request to be provided to Lender,
                    additional amounts sufficient to compensate Lender




<PAGE>



                           for such increased cost or reduced sum receivable.

          2.14.2    Capital Adequacy. If either: (i) the introduction, after the
                    date hereof, of, or any change after the date hereof in, or
                    in the interpretation or administration of, any United
                    States or foreign law, rule or regulation, or (ii)
                    compliance with any directive, guidelines or request from
                    any central bank or other Governmental Authority (whether or
                    not having the force of law), promulgated, or made after the
                    date hereof requiring that the amount of capital required or
                    expected to be maintained by Lender or any corporation
                    directly or indirectly owning or controlling Lender be
                    materially altered and Lender determines that such
                    introduction, change or compliance has or would have the
                    effect of reducing the rate of return on Lender's capital or
                    on the capital of such owning or controlling corporation as
                    a consequence of its obligations hereunder or under any of
                    the Loans or other Obligations or any commitment to lend
                    thereunder or relating thereto, calculated on a net basis
                    for any one or related series of the foregoing events, to a
                    level below that which Lender or such owning or controlling
                    corporation could have achieved but for such introduction,
                    change or compliance by an amount deemed by Lender (in its
                    sole discretion) to be material, then, from time to time,
                    Borrower will pay to Lender such additional amount or
                    amounts as will compensate Lender for such reduction. In the
                    event that Borrower is required by Lender to pay such
                    additional amounts pursuant to this Section, Borrower shall
                    be entitled to prepay the outstanding principal balance and
                    all accrued but unpaid interest thereon without a Prepayment
                    Premium, provided that Borrower shall make such prepayment
                    within 90 days following Lender's first request for such
                    additional amounts pursuant to this Section.

          2.14.3    Certificate of Lender. To the extent reasonably practicable,
                    Lender will give Borrower prompt written notice of any claim
                    under this Section and will take steps to minimize the
                    impact of any of the events described in Sections 2.14.1
                                                             ---------------
                    and/or 2.14.2, above, by transferring the Non-Revolving
                    --------------
                    Loans outstanding hereunder to another office, branch,
                    subsidiary or affiliate of Lender, so long as such action is
                    not disadvantageous to Lender. A certificate of a Lender
                    setting forth such amount or amounts as will be necessary to
                    compensate Lender as specified in Sections 2.14.1 and/or
                                                      -----------------------
                    2.14.2, above which will include detailed explanations and
                    ------
                    calculations, will be delivered to Borrower and will be
                    conclusive absent manifest error. Borrower will pay Lender
                    for the account of Lender the amount shown as due on any
                    such certificate within five (5) days after its receipt of
                    the same. Failure on the part of Lender to deliver any such
                    certificate will not constitute a waiver of Lender's rights
                    to demand compensation for any particular period or any
                    future period. The protection of this Section will be
                    available to Lender regardless of any possible contention of
                    invalidity or inapplicability of the law, regulation,



<PAGE>



                    etc., that results in the claim for compensation under this
                    Section, but if any law, regulation, etc., is later found to
                    be invalid or inapplicable, Lender promptly will return to
                    Borrower any sums received under this Section. The
                    agreements and obligations contained in this Section will
                    survive the payment in full of the Obligations and any
                    termination of this Agreement.

     2.15    Obligation to Indemnity.

             2.15.1    Events. In the event of Borrower's failure to
                       accept the proceeds from an Advance after making a
                       request therefor, Lender will, following Notice to
                       Borrower and expiration of 5 Business Days: (i) at
                       the request of Borrower, deposit such funds into a
                       reserve account; or (ii) immediately prepay such
                       Advance and Borrower will pay to Lender on written
                       demand an amount equal to the interest that would
                       have accrued on such Advance plus any applicable
                       Prepayment Premium calculated through the date of
                       such prepayment by Lender of such amounts. The
                       obligations of Borrower under this Section will
                       survive the payment in full of the Obligations and
                       any termination of this Agreement.

3.   Conditions Precedent.

          3.1       Line of Credit Closing. Lender's obligation to close this
                    Agreement are subject to the fulfillment of each of the
                    following conditions:

          3.1.1     Line of Credit Closing Memo. Lender has received each of the
                    documents listed on the Line of Credit Closing Memo, all in
                    form and substance reasonably satisfactory to Lender.

          3.1.2     Other Conditions. The conditions set forth in
                    Sections 3.2.2, 3.2.3, and 3.2.5, below, will have
                    --------------------------------
                    been fully satisfied whether or not a Closing occurs
                    or an initial Advance is taken.

     3.2  Closing. Lender's obligations to close any Non-Revolving Loan
          are subject to the fulfillment of each of the following conditions:

          3.2.1     Closing Memo. Lender has received each of the documents
                    listed on the Closing Memo, all in form and substance
                    reasonably satisfactory to Lender.

          3.2.2     No Defaults. No Default or Event of Default, or any event or
                    condition which with the lapse of time or giving of notice
                    or both would constitute an Event of Default exists on the
                    Closing Date.

          3.2.3     Accuracy. The representations and warranties contained in
                    this Agreement and in the other Loan Documents are true,
                    correct and complete in all material respects on and as of
                    the day hereof and of any Closing.




<PAGE>



          3.2.4     Intentionally Omitted.

          3.2.5     Material Adverse Effect. No Borrower or Guarantor has
                    suffered a Material Adverse Effect to its business or
                    financial condition.

          3.2.6     Construction Items. Lender has received the items identified
                    in Sections 7.3 and 7.8 below.
                       --------------------

     3.3  Each Advance. The obligation of Lender to make any Advance
          under a Note is subject to the fulfillment of each of the
          following conditions to the reasonable satisfaction of
          Lender:

          3.3.1     No Defaults. No Default or Event of Default, or any event or
                    condition which with the lapse of time or giving of notice
                    or both would constitute an Event of Default exists on the
                    date of each Advance, except that the occurrence of an event
                    or the existence of a condition that has a Material Adverse
                    Effect shall not entitle Lender to refuse to make Advances
                    of an existing Non-Revolving Loan provided that all of the
                    other conditions to such Advances pursuant to this Agreement
                    and the Loan Documents shall have been satisfied.

          3.3.2     Accuracy. The representations and warranties contained in
                    this Agreement and in the other Loan Documents are true,
                    correct and complete in all respects on the date of each
                    Advance, except that an inaccuracy in any representation or
                    warranty that relates to the occurrence of an event or
                    existence of a condition that has a Material Adverse Effect
                    shall not entitle Lender to refuse to make Advances of an
                    existing Non-Revolving Loan provided that all of the other
                    conditions to such Advances pursuant to this Agreement and
                    the Loan Documents shall have been satisfied, unless
                    Borrower knew of the existence of the event or condition
                    that has a Material Adverse Effect at the time of the
                    Closing of such Non-Revolving Loans and failed to disclose
                    the same to Lender.

          3.3.3     Notices. Lender will have received all required Notices.

          3.3.4     Fixed Rate. Within 14 days after each Closing, the Borrower
                    will have entered into an Interest Rate Swap Agreement or
                    Treasury Rate Lock Agreement.

          3.3.5     Mortgage. The Mortgage securing the applicable Note
                    will have been filed for record with the appropriate
                    county recorder or clerk.

          3.3.6     Construction Items. Lender has received the items identified
                    in Section 7.4 below with respect to each Advance, and
                       -----------
                    Section 7.5 below with respect to the final Advance of each
                    -----------
                    Loan.



<PAGE>



4.   Representations and Warranties. To induce Lender to extend the Line of
     Credit and Loans and make the Advances herein contemplated, Borrower
     hereby represents and warrants as to itself, themselves and Grand
     Court as follows:

     4.1  Organization. It is duly organized, and in good standing under
          the laws of the state of its organization, is duly qualified
          in all jurisdictions where required by the conduct of its
          business or ownership of its assets, except where the failure
          to so qualify would not have a Material Adverse Effect on its
          condition, financial or otherwise, and has the power and
          authority to own and operate its assets and to conduct its
          business as is now done.

     4.2  Latest Financials. The Current Financial Statements as
          delivered to Lender are true, complete and accurate in all
          material respects and fairly present its financial condition,
          assets and liabilities, whether accrued, absolute, contingent
          or otherwise and the results of its operations for the periods
          specified therein. The annual financial statements of all
          business entities included in the Current Financial Statements
          have been prepared in accordance with generally accepted
          accounting principles applied consistently with preceding
          periods subject to any comments and notes contained therein.

     4.3  Recent Adverse Changes. Except as specifically disclosed in the
          Disclosure Schedule or disclosed to Lender in writing, since the dates
          of its Current Financial Statements, to its knowledge, it has not
          suffered an event or condition that has a Material Adverse Effect, and
          it has no knowledge of any event or condition which may have a
          Material Adverse Effect, provided that no such Material Adverse
          Effect, in and of itself, shall entitle the Lender to refuse to make
          Advances under an existing Non-Revolving Loan unless Borrower knew of
          the existence of such event or condition that has a Material Adverse
          Effect at the time of the Closing of such Non-Revolving Loan and
          failed to disclose the same to Lender.

     4.4  Recent Actions. Except as disclosed in the Disclosure Schedule, since
          the dates of its Current Financial Statements, its business has been
          conducted in the ordinary course and it has not: (a) incurred any
          obligations or liabilities, whether accrued, absolute, contingent or
          otherwise, other than liabilities incurred and obligations under
          contracts entered into in the ordinary course of business and other
          than liabilities to Lender; (b) as to Borrower only, discharged or
          satisfied any lien or encumbrance or paid any obligations, absolute or
          contingent, other than current liabilities, in the ordinary course of
          business; (c) mortgaged, pledged or subjected to lien or any other
          encumbrance any of its assets, tangible or intangible, or cancelled
          any debts or claims except in the ordinary course of business; or (d)
          made any loans or otherwise conducted its business other than in the
          ordinary course of business. For the purposes of this Section 4, the
                                                                ---------
          "ordinary course of business" shall be deemed to include Guarantor's
          syndication business.

     4.5  Title. It has good and marketable title to the assets reflected on its
          Current



<PAGE>



          Financial Statements, free and clear from all liens and encumbrances
          except for: (i) current taxes and assessments not yet due and payable,
          (ii) liens and encumbrances, if any, reflected or noted on said
          balance sheet or notes, (iii) any security interests, pledges or
          mortgages to Lender in connection with the closing of this Agreement,
          (d) assets disposed of in the ordinary course of business, and (e)
          Permitted Liens.

     4.6  Litigation, Etc. Except as disclosed on the Disclosure Schedule, as of
          the date hereof, there are no actions, suits, proceedings or
          governmental investigations pending or, to its knowledge, threatened
          against it which, if adversely determined could result in a Material
          Adverse Effect; and there is no basis known to it for any such
          actions, suits, proceedings or investigations, provided that no such
          Material Adverse Effect shall entitle Lender not to make Advances of
          an existing Non-Revolving Loan.

     4.7  Taxes. Except as to taxes not yet due and payable, it has filed all
          returns and reports that are now required to be filed by it in
          connection with any federal, state or local tax, duty or charge
          levied, assessed or imposed upon it or its property, including
          unemployment, social security and similar taxes; and all of such taxes
          have been either paid or adequate reserve or other provision has been
          made therefor. It has filed for no extension of time for the payment
          of any tax or for the filing of any tax return.

     4.8  Authority. It has full power and authority to enter into the
          transactions provided for in this Agreement. The documents to be
          executed by it in connection with this Agreement, when executed and
          delivered by it will constitute the legal, valid and binding
          obligations of it enforceable in accordance with their respective
          terms except as such enforceability may be limited by applicable
          bankruptcy, reorganization, insolvency, moratorium or similar laws in
          effect from time to time affecting the rights of creditors generally
          and except as such enforceability may be subject to general principles
          of equity (regardless of whether such enforceability is considered in
          a proceeding in law or in equity).

     4.9  Other Defaults. There does not now exist any material default or
          material violation by it of or under any of the terms, conditions or
          obligations of: (i) its Articles or Certificate of Incorporation and
          Regulations or Bylaws or Articles of Organization and Operating
          Agreement, as applicable; (ii) any indenture, mortgage, deed of trust,
          franchise, permit, contract, agreement, or other instrument to which
          it is a party or by which it is bound; or (iii) any law, regulation,
          ruling, order, injunction, decree, condition or other requirement
          applicable to or imposed upon it by any law or by any Governmental
          Authority, court or agency; and the transactions contemplated by this
          Agreement and the Loan Documents will not result in any such default
          or violation.

     4.10 Conflicts. Neither the execution, delivery and performance of this
          Agreement nor the



<PAGE>



          consummation and any of the transactions herein contemplated will: (i)
          result in any default or violation by Borrower of or under any of the
          terms, conditions or obligation of (a) its respective articles or
          certificates of Incorporation or ByLaws/Regulations, Articles or
          Certificates of Organization or Operating Agreement, as applicable;
          (b) any indenture, or deed of trust or mortgage to which it is a party
          or by which it is bound; (c) any agreement or instrument evidencing
          debt to which it is a party or by which it is bound; (d) any other
          franchise, permit, contract, agreement or other instrument to which it
          is a party or by which it is bound; or (e) any law, regulation,
          ruling, order, injunction, decree, condition or other requirement
          applicable to or imposed upon it or affecting any of its assets by any
          law or by any Governmental Authority, court or agency or (ii) result
          in or require the creation of any Lien (except for a Permitted Lien)
          upon any of the assets of Borrower.

     4.11 Investment Company Act. It is not, nor is it directly or
          indirectly controlled by, or acting on behalf of, a person
          which is an "investment company" within the meaning of the
          Investment Company Act of 1940, as amended.

     4.12 Membership Interests of Borrower. If it is not a publicly traded
          entity, all of the issued and outstanding equity interests of Borrower
          are owned by the parties listed on the Disclosure Schedule in the
          amount specified by the name of each such equity holder, and, except
          as listed on the Disclosure Schedule, Borrower has no outstanding
          options, warrants or contracts to issue additional equity interests of
          any kind.

     4.13 Subsidiaries, Partnerships and Joint Ventures. Except as listed on the
          Disclosure Schedule, Borrower has no Subsidiaries and is not a party
          to any partnership agreement or joint venture agreement.

     4.14 Licenses, Etc. It has obtained or will obtain any and all licenses,
          permits, franchises or other governmental authorizations necessary for
          the ownership of its properties and the conduct of its business. It
          possesses or will possess adequate licenses, patents, patent
          applications, copyrights, trademarks, trademark applications, and
          trade names to continue to conduct its business as heretofore
          conducted by it, without any conflict with the rights of any other
          person or entity.

     4.15 Name, Places of Business and Location of Collateral. The address of
          its principal place of business and every other place from which it
          conducts business is as specified in the Disclosure Schedule. The
          Collateral and all books and records pertaining to the Collateral are
          and will be located at the addresses indicated on the Disclosure
          Schedule. In the five years preceding the date hereof, it has not
          conducted business under any name other than its current name nor
          maintained any place of business or any assets in any jurisdiction
          other than those disclosed on the Disclosure Schedule.

    4.16  ERISA. It and each of its ERISA Affiliates are in compliance in all
          material



<PAGE>



          respects  with the applicable provisions of ERISA and the regulations
          and published interpretations thereunder. No Reportable
          Event has occurred as to which it or any such ERISA
          Affiliate was required to file a report with the PBGC, and,
          as of the Line of Credit Closing Date and each Closing Date,
          the present value of all benefit liabilities under all the
          Plans (based on those assumptions used to fund such Plans)
          did not, as of the last annual valuation date applicable
          thereto, exceed by more than $25,000 the aggregate value of
          the assets of such Plans. Neither it nor any such ERISA
          Affiliate has incurred any Withdrawal Liability that
          materially adversely affects the financial condition of it
          and its ERISA Affiliates taken as a whole. Neither it nor
          any such ERISA Affiliate has received any notification that
          any Multiemployer Plan is in reorganization or has been
          terminated, within the meaning of Title IV of ERISA, and no
          Multiemployer Plan is reasonably expected to be in
          reorganization or to be terminated, where such
          reorganization has resulted or can reasonably be expected to
          result in an increase in the contributions required to be
          made to such Plan that would materially and adversely affect
          the financial condition of it and its ERISA Affiliates taken
          as a whole.

     4.17 Regulation U. No part of the proceeds of any Loans will be used to
          purchase or carry any margin stock (as such term is defined in
          Regulation U of the Board of Governors of the Federal Reserve System).

     4.18 Closing Memos. The information contained in each of the documents
          listed on the Line of Credit, Closing Memo, and each Closing Memo to
          be executed or delivered by it or relating to it is complete and
          correct in all material respects.

     4.19 Environmental Matters. Qualified, however, as to Section 4.19.3,
                                                           --------------
          below, by those matters, if any, set forth in the Environmental
          Report:

          4.19.1    The activities or operations on the Property are in
                    compliance in all material respects with all Environmental
                    Laws.

          4.19.2    Borrower has obtained or will obtain all approvals, permits,
                    licenses, certificates, or satisfactory clearances from all
                    governmental authorities required under Environmental Laws
                    with respect to the Property and any activities or
                    operations at the Property.

          4.19.3    To the best of Borrower's knowledge, after and based solely
                    upon an investigation meeting the standard set forth at 42
                    U.S.C. Section 9601 (35)(B)(1986) and any similar standards
                    for environmental investigations under state Environmental
                    Laws ("Due Investigation"), there have not been and are not
                    now any solid waste, hazardous waste, hazardous or toxic
                    substances, pollutants, contaminants, or petroleum in, on,
                    under or about the Property. The use which Borrower makes
                    and intends to make of the Property will not result in the
                    deposit or other release of any hazardous or toxic
                    substances, solid waste, pollutants, contaminants or
                    petroleum on, to or from the Property.




<PAGE>



          4.19.4    To the best of Borrower's knowledge, after and based solely
                    upon Due Investigation, there have been no complaints,
                    citations, claims, notices, information requests, orders or
                    directives on environmental grounds or under Environmental
                    Laws (collectively "Environmental Claims") made or delivered
                    to, pending or served on, or anticipated by Borrower or its
                    agents, or of which Borrower or its agents, are aware or
                    should be aware (i) issued by any governmental department or
                    agency having jurisdiction over the Property or the
                    activities or operations at the Property, or (ii) issued or
                    claimed by any third party relating to the Property or the
                    activities or operations at the Property.

          4.19.5    To the best of Borrower's knowledge, after and based solely
                    upon Due Investigation, no asbestos-containing materials are
                    installed, used or incorporated into the Property, and no
                    asbestos-containing materials have been disposed of on the
                    Property.

          4.19.6    To the best of Borrower's knowledge, after and based solely
                    upon Due Investigation, no polychlorinated biphenyls
                    ("PCBs") are located at, on or in the Property in the form
                    of electrical equipment or devices, including, but not
                    limited to, transformers, capacitors, fluorescent light
                    fixtures with ballasts, cooling oils or any other device or
                    form.

          4.19.7    To the best of Borrower's knowledge, after and based
                    solely upon Due Investigation, there have not been
                    and are not now any underground storage tanks located
                    within or about the Property.

          4.19.8    The Property does not contain any wetlands as that
                    term is defined by relevant governmental agencies
                    under Environmental Laws and, to the best of
                    Borrower's knowledge, after and based solely upon Due
                    Investigation, there has been no filling of wetlands
                    on the Property in violation of Environmental Laws.

          4.19.9    Borrower has provided or will provide the Lender with copies
                    of all environmental reports, studies and audits relating to
                    the Property of which Borrower is aware and to which
                    Borrower has access.

     4.20 Labor Matters. There are no material strikes or other
          material labor disputes against it pending or, to its
          knowledge, threatened. The hours worked and payment made to
          its employees in all material respects have not been in
          violation of the Fair Labor Standards Act or any other
          applicable law dealing with such matters. All payments due
          from it, or for which any claim may be made against it, on
          account of wages and employee health and welfare insurance
          and other benefits, have been paid or accrued as a liability
          on its books. The consummation of the transactions
          contemplated herein will not give rise to a right of
          termination or



<PAGE>



          right of renegotiation on the part of any union under any collective
          bargaining agreement to which it is a party or by which it is bound.

     4.21 Year 2000. It has reviewed the areas within each of its
          businesses and operations that could be adversely affected
          by, and have developed or are developing a detailed plan and
          timeline to address in a timely manner the risk that certain
          computer applications used by it may be unable to recognize
          and perform properly date sensitive functions involving
          dates prior to and after December 31, 1999 (the "Year 2000
          Problem"). The Year 2000 Problem will not result in any
          Material Adverse Effect to it.

5.   Affirmative Covenants. From the date of execution of this Agreement
     until all Obligations to Lender have been fully paid, Borrower will
     and will cause Guarantor:

     5.1  Books, Records and Access to the Collateral. Maintain proper books of
          account and other records in the form currently maintained by Borrower
          and previously furnished to Lender and enter therein complete and
          accurate entries and records of all of its transactions and give
          representatives of Lender access thereto at all reasonable times,
          including permission to examine, copy and make abstracts from any of
          such books and records and such other information as it may from time
          to time reasonably request. It will give Lender reasonable access to
          the Collateral for the purposes of examining the Collateral and
          verifying its existence. It will make available to Lender for
          examination copies of any reports, statements or returns which it may
          make to or file with any governmental department, bureau or agency,
          federal or state and will furnish to Lender copies of any reports,
          statements or returns and exhibits thereto that Borrower may make to
          or file with the Securities Exchange Commission. In addition, it will
          be available to Lender, or cause its officers or general partners, as
          applicable, to be available from time to time upon reasonable notice
          to discuss the status of the Loans, its business and any statements,
          records or documents furnished or made available to Lender in
          connection with this Agreement.

     5.2  SEC Filings and Shareholders Reports. Deliver to Lender within 14 days
          of the filing or distribution thereof: (i) copies of all periodic
          reports on Forms 10-K, 10-Q and 8-K which it may make to or file with
          the Securities Exchange Commission, and with its 10-K and 10-Q
          filings, a Compliance Certificate and (ii) its quarterly and annual
          reports to its shareholders.

     5.3  Monthly Statements. Furnish Lender within 45 days after the end of
          each calendar month internally prepared financial statements of
          Borrower in the form currently maintained by Borrower and previously
          furnished to Lender with respect to such calendar month, which
          financial statements will: (i) be in reasonable detail and in form
          reasonably satisfactory to Lender; (ii) include profit and loss and
          surplus statements for such period, a statement of cash flows for such
          period, and an occupancy report for Borrower's Project; (iii) include
          prior year comparisons;



<PAGE>



          and (iv) be on a consolidating and consolidated basis for Borrower and
          its Subsidiaries, if any.

     5.4  Quarterly Statements. Furnish Lender within 45 days after the end of
          each fiscal quarter internally prepared financial statements of the
          Consolidated Entities in the form currently maintained by Borrower and
          previously furnished to Lender with respect to such fiscal quarter,
          which financial statements will: (i) be in reasonable detail and in
          form reasonably satisfactory to Lender; (ii) be accompanied by a
          Compliance Certificate; (iii) include a balance sheet as of the end of
          such period, profit and loss and surplus statements for such period
          and a statement of cash flows for such period; and (iv) include prior
          year comparisons. To the extent that the documents identified in
          Section 5.2 above are not provided to Lender, Borrower will cause to
          -----------
          be delivered to Lender quarterly consolidated financial statements of
          Grand Court which will: (i) include, as of the end of each fiscal
          quarter, a balance sheet, and earnings, shareholders' equity and cash
          flow statements for such quarter, and profit and loss statements; and
          (ii) include prior year comparisons.

     5.5  Annual Statements. Furnish Lender within 120 days after the end of
          each fiscal year of Borrower annual audited financial statements of
          the Consolidated Entities which will: (i) include, as of the end of
          such period, a balance sheet, and earnings, shareholders' equity and
          cash flow statements for such year, profit and loss statements, and an
          unaudited occupancy report for any Borrower's Project; and (ii) be
          accompanied by a Compliance Certificate, and (iii) contain the
          unqualified opinion of an independent certified public accountant
          acceptable to Lender and its examination will have been made in
          accordance with generally accepted auditing standards and such opinion
          will contain a report reasonably satisfactory to Lender of any
          inconsistency in the application of generally accepted accounting
          principles with the preceding years' statements, if any. To the extent
          that the documents identified in Section 5.2 above are not provided to
                                           -----------
          Lender, Borrower will cause to be delivered to Lender annual audited
          consolidated financial statements of Grand Court which will: (i)
          include, as of the end of each fiscal year, a balance sheet, and
          earnings, shareholders' equity and cash flow statements for such year,
          and profit and loss statements; and (ii) contain the unqualified
          opinion of an independent certified public accountant acceptable to
          Lender and its examination will have been made in accordance with
          generally accepted auditing standards and such opinion will contain a
          report reasonably satisfactory to Lender of any inconsistency in the
          application of generally accepted accounting principles with the
          preceding years' statements, if any.

     5.6  Auditor's Letters, Etc. Furnish any letter, other than routine
          correspondence, directed to it by its auditors or independent
          accountants, relating to its financial statements, accounting
          procedures, financial condition, tax returns or the like since the
          date of the Current Financial Statements to Lender.



<PAGE>



     5.7  Taxes. Pay and discharge prior to the imposition of penalties for late
          payments, all indebtedness and all taxes, assessments, charges, levies
          and other liabilities imposed upon it, its income, profits, property
          or business, except those which currently are being contested in good
          faith by appropriate proceedings and for which it has set aside
          adequate reserves or made other adequate provision with respect
          thereto, but any such disputed item will be paid forthwith upon the
          commencement of any proceeding for the foreclosure of any lien which
          may have attached with respect thereto, unless Lender has received an
          opinion in form and substance and from legal counsel acceptable to it
          that such proceeding is without merit. Borrower shall submit to Lender
          annual Federal Income Tax Returns for Borrower and Guarantor within 30
          days of filing same

     5.8  Operations. Operate its business in substantially the same manner as
          presently operated or intended to be operated, except where such
          operations are rendered impossible by a fire, strike or other events
          beyond its control; keep its real and personal properties in good
          operating condition and repair; make all necessary and proper repairs,
          renewals, replacements, additions and improvements thereto and comply
          with the provisions of all leases to which it is or will be a party or
          under which it occupies or holds real or personal property so as to
          prevent any loss or forfeiture thereof or thereunder.

     5.9  Insurance. At all times, comply with the insurance requirements of the
          Loan Documents. Prior to the Completion Date, maintain builders' risk
          insurance for each Project in an amount greater than or equal to
          amount of the Obligations. On and after the Completion Date, keep its
          insurable real and personal property insured with responsible
          insurance companies against loss or damage by fire, windstorm and
          other hazards which are commonly insured against in an extended
          coverage endorsement in an amount equal to not less than 80% of the
          insurable value thereof on a replacement cost basis. At all times,
          maintain public liability insurance coverage (including "umbrella
          coverage") of $5,000,000 per occurrence and $10,000,000 in the
          aggregate. All insurance policies shall be issued by carriers with a
          Best's Insurance Reports policy holder's rating of A and a financial
          size category of Class VII. The current insurer of Guarantor, Alliance
          Insurance is acceptable to Lender. In addition, the parties delivering
          to Lender insurance certificates as listed on each Closing Memo will
          maintain extended liability insurance and property insurance of at
          least the amounts and coverages listed on such certificates delivered
          in connection with each Closing and in a form and with companies
          reasonably satisfactory to Lender. Notwithstanding the foregoing, such
          property insurance will at all times be in an amount so that such
          party will not be deemed a "co-insurer" under any co-insurance
          provisions of such policies. It shall also deposit all renewal
          policies with Lender as evidence of coverage. Borrower shall obtain
          flood hazard insurance for any Project located in an area identified
          by the federal government as a flood hazard area. Borrower shall
          obtain rent loss or business interruption insurance coverage in a
          minimum amount of not less than the appraised rentals of each Project
          for a minimum of six (6) months. All insurance



<PAGE>



          policies  will name Lender as an additional insured and, where
          applicable, as lender's loss payee under a loss payable
          endorsement satisfactory to Lender. All such policies will
          provide that thirty (30) days prior written notice must be
          given to Lender before such policy is cancelled or coverage
          thereunder reduced in any way. Schedules of all insurance
          will be submitted to Lender upon request. Such schedules
          will contain a description of the risks covered, the amounts
          of insurance carried on each risk, the name of the insurer
          and the cost of such insurance. Such schedules will be
          supplemented from time to time promptly to reflect any
          change in insurance coverage.

     5.10 Compliance with Laws. Except for those laws or regulations, the
          application of which are being diligently contested by Borrower and/or
          Guarantor in good faith, comply with all laws and regulations
          applicable to it and to the operation of its business, including
          without limitation those relating to environmental and health matters,
          and do all things necessary to maintain, renew and keep in full force
          and effect all rights, permits, licenses, certificates, satisfactory
          clearances and franchises necessary to enable it to continue its
          business.

     5.11 Environmental Violations.

          5.11.1    In the event that any hazardous or toxic substances,
                    pollutants, contaminants, solid waste or hazardous waste, or
                    petroleum are released (as that term is defined under
                    Environmental Laws) at or from the Property, or are
                    otherwise found to be in, on, under, about or migrating to
                    or from the Property in violation of Environmental Laws or
                    in excess of cleanup levels established under Environmental
                    Laws applicable to the Property, immediately upon becoming
                    aware of same will notify Lender in writing and will
                    promptly commence such action as may be appropriate or
                    required with respect to such conditions, including, but not
                    limited to, investigation, removal and cleanup thereof, and
                    upon failure to commence such actions or to diligently
                    prosecute same, deposit with Lender cash collateral, letter
                    of credit, bond or other assurance of performance in form,
                    substance and amount reasonably acceptable to Lender to
                    cover the cost of such action. Upon request, it will provide
                    Lender with updates on the status of Borrower's actions to
                    resolve or otherwise address such conditions, until such
                    time as the Property is in compliance with all Environmental
                    Laws as determined by Lender.

          5.11.2    In the event it receives notice of an Environmental Claim
                    from any governmental agency or other third party alleging a
                    violation of or liability under Environmental Laws with
                    respect to the Property or Borrower's activities or
                    operations at the Property, immediately notify Lender in
                    writing and will commence such action as may be appropriate
                    or required with respect to such Environmental Claim. Upon
                    request, Borrower will provide Lender with updates on the
                    status of Borrower's actions to resolve



<PAGE>



                    or otherwise address such Environmental Claim until
                    such claim has been fully resolved as determined
                    by Lender in the exercise of its reasonable
                    discretion.

     5.12 Environmental Audit and Other Environmental Information. Provide
          copies of all environmental reports, audits and studies obtained by it
          from work conducted by it or any other person or entity on its
          Property or property adjacent thereto as soon as such reports, audits
          and studies become available to it. If the submissions are considered
          inadequate or insufficient in order for Lender to adequately consider
          the environmental condition of the Property or the status of
          Borrower's environmental compliance or if the submissions are in
          error, then Lender may require it, at its sole expense, at any time
          after an Event of Default, and not more than 2 times per calendar year
          at any other time, to engage an independent engineering firm
          acceptable to Lender to conduct a complete environmental report,
          study, or audit in as timely as fashion as is reasonably possible. In
          addition, it will provide Lender with information related to remedial
          action at its Property or adjacent to its Property as soon as such
          information becomes available to it.

     5.13 Business Names and Locations. Immediately notify Lender of any change
          in the name under which it conducts its business and, unless Lender
          otherwise consents in writing, keep and maintain all of the Collateral
          supplied by it only at its addresses listed in the Disclosure
          Schedule, keep its principal place of business at the address
          specified in the Disclosure Schedule and notify Lender immediately
          upon the opening or closing of any of Guarantor's principal offices.

     5.14 Acquisition of Assets. Borrower will not acquire any assets, real or
          personal, unless such assets are automatically covered perfected liens
          granted by the existing Loan Documents or within 10 days of such
          acquisition, Borrower delivers to Lender a mortgage, pledge or
          security agreement to encumber such asset in favor of Lender.

     5.15 ERISA Compliance. Comply in all material respects with the applicable
          provisions of ERISA and furnish to Lender: (i) as soon as possible,
          and in any event within 30 days after any officer of it or any ERISA
          Affiliate knows or has reason to know that any Reportable Event has
          occurred that alone or together with any other Reportable Event could
          reasonably be expected to result in liability of it to the PBGC in an
          aggregate amount exceeding $25,000, a statement of a financial officer
          setting forth details as to such Reportable Event and the action that
          it proposes to take with respect thereto, together with a copy of the
          notice of such Reportable Event, if any, given to the PBGC, (ii)
          promptly after receipt thereof, a copy of any notice it or any ERISA
          Affiliate may receive from the PBGC relating to the intention of the
          PBGC to terminate any Plan or Plans (other than a Plan maintained by
          an ERISA Affiliate which is considered an ERISA Affiliate only
          pursuant to subsection (m) or (o) of Code Section 414) or to appoint a



<PAGE>



          trustee to administer any such Plan, (iii) within 10 days after the
          due date for filing with the PBGC pursuant to Section 412(n) of the
                                                        -------------
          Code of a notice of failure to make a required installment or other
          payment with respect to a Plan, a statement of its financial officer
          setting forth details as to such failure and the action that it
          proposes to take with respect thereto together with a copy of any such
          notice given to the PBGC and (iv) promptly and in any event within 30
          days after receipt thereof by it or any ERISA Affiliate from the
          sponsor of a Multiemployer Plan, a copy of each notice received by
          Borrower or any ERISA Affiliate concerning (A) the imposition of
          Withdrawal Liability in an amount exceeding $25,000, or (B) a
          determination that a Multiemployer Plan is, or is expected to be,
          terminated or in reorganization, both within the meaning of Title IV
          of ERISA, and which, in each case, is expected to result in an
          increase in annual contributions of it or an ERISA Affiliate to such
          Multiemployer Plan in an amount exceeding $25,000.

     5.16  Notice of Default. Notify Lender in writing within five days after it
          knows of the occurrence of an Event of Default.

     5.17 Sale and Leaseback. Not directly or indirectly enter into any
          arrangement to sell or transfer all or any part of the
          Collateral then owned by it and thereupon or within one year
          thereafter rent or lease any of the Collateral so sold or
          transferred.

     5.18 Line of Business. Not enter into any lines or areas of business
          substantially different from the business or activities in which it is
          presently engaged.

     5.19 Business Opportunities. Except for the Consolidated Entities, not
          divert (or permit anyone to divert) any of its business or
          opportunities to any other corporate or business entity in which it or
          its Subsidiaries may hold a direct or indirect interest.

     5.20 Waivers. Not waive any right or rights of substantial value which,
          singly or in the aggregate, is or are material to its condition
          (financial or other), properties or business.

     5.21 Use of Proceeds. Use the proceeds of each Non-Revolving Loan for the
          construction of a Project.

6.   Negative Covenants. From the date of execution of this Agreement until
     all of the Obligations have been fully paid and this Agreement
     terminated, each Borrower will not:

     6.1  Debt. Incur any Indebtedness other than: (a) the Loans and
          any subsequent Indebtedness to Lender; (b) open account
          obligations incurred in the ordinary course of business
          having maturities of less than 90 days; (c) rental and lease
          payments for real or personal property whose aggregate
          annual rental payments would exceed $25,000 when added to
          Borrower's rental or lease agreements existing on the date
          hereof.



<PAGE>



     6.2  Liens. Incur, create, assume, become or be liable in any
          way, or suffer to exist any Lien on any of its assets, now
          or hereafter owned, other than Permitted Liens.

     6.3  Guarantees. Guarantee, endorse or become contingently liable for the
          obligations of any person, firm or corporation, except in connection
          with the endorsement and deposit of checks in the ordinary course of
          business for collection.

     6.4  Ownership and Management. Fail to give Lender notice within five (5)
          days and pay to Lender upon Lender's written demand given within sixty
          (60) days after receipt of notice and payable 90 days after such
          demand without any other grace period or notice, the entire unpaid
          balance of all of the Obligations, if: Grand Court ceases to own 100%
          of the membership interest of each Borrower.

     6.5  Project Debt Service Coverage. Permit the ratio of Operating
          Cash Flow of Borrower to the sum of: (i) current period
          required principal payments of long-term debt by Borrower
          (which will include capitalized lease payments) plus (ii)
          interest expense of Borrower, each to be calculated for the
          same fiscal quarter to be less than:

          6.5.1     1.0 to 1.0 at the end of both the 5th and 6th quarters
                    following the quarter of the Completion Date;

          6.5.2     1.2 to 1.0 at the end of both the 7th and 8th quarters
                    following the quarter of the Completion Date.

                    and, if any Borrower permits this ratio to fall below 1.0 to
                    1.0 for a full fiscal quarter at any time after the end of
                    the 6th quarter following the Completion Date of its
                    Project, then Lender shall have the right to replace the
                    Manager of such Project, in addition to the rights granted
                    to Lender under Section 8 below upon the occurrence of such
                                    ---------
                    an Event of Default.

     6.6  Total Liabilities to Net Worth. Permit the ratio of the
          total liabilities of the Consolidated Entities to Net Worth
          at any time to be greater than or equal to 10 to 1, tested
          quarterly.

     6.7  Net Worth. Permit the Consolidated Entities to have a minimum
          Net Worth of less than $20,000,000, plus 100% of all net cash
          proceeds of future equity issues of such Consolidated
          Entities, plus 50% of positive net income of such Consolidated
          Entities (with no deductions for net losses), calculated in
          accordance with generally accepted accounting principles, on a
          cumulative basis for all periods since July 31, 1998.

     6.8  Distributions. Declare or pay any payment or distributions of
          any kind to any Affiliate except distributions of net cash
          flow to Grand Court.

     6.9  Additional Securities. Issue any additional membership interests of
          any



<PAGE>



          description or issue warrants, options or rights to purchase its
          interests.

     6.10 Liquidity. Permit the minimum Liquidity of the Consolidated Entities
          at any time to be less than $5,000,000.00.

     6.11 Redemptions. Purchase, retire, redeem or otherwise acquire for
          value, directly or indirectly, any membership interest now or
          hereafter outstanding.

     6.12 Investments. Purchase or hold beneficially any stock, other securities
          or evidences of indebtedness of, or make any investment or acquire any
          interest whatsoever in, any other person, firm or corporation other
          than short term investments of excess working capital invested in one
          or more of the following: (a) investments (of one year or less) in
          direct or guaranteed obligations of the United States, or any agencies
          thereof; (b) investments (of one year or less) in certificates of
          deposit of banks or trust companies organized under the laws of the
          United States or any jurisdiction thereof, provided that such banks or
          trust companies are insured by the Federal Deposit Insurance
          Corporation and have capital in excess of $25,000,000; and (c) money
          market mutual funds with average maturities of less than 90 days.

     6.13 Merger, Acquisition or Sale of Assets. Merge or consolidate
          with or into any other entity or acquire all or substantially
          all the assets of any person, firm, partnership, joint venture
          or corporation, or sell, lease or otherwise dispose of any of
          its assets except for dispositions in the ordinary course of
          business.

     6.14 Advances and Loans. Lend or commit to lend money, give credit or make
          advances (other than advances not to exceed $1,000.00 for any one
          employee and other reasonable and ordinary advances to cover
          reasonable expenses of employees, such as travel expenses) to any
          Person, including, without limitation, Affiliates.

     6.15 Subsidiaries. Acquire any Subsidiaries, create any Subsidiaries or
          enter into any partnership or joint venture agreements.

     6.16 Transactions with Affiliates. Except for each Management Contract,
          enter into any transaction, including, without limitation, any
          purchase, sale, lease or exchange of property or the rendering of any
          service, with any Affiliate unless such transaction is otherwise
          permitted under this Agreement, is in the ordinary course of its
          business, and is on fair and reasonable terms no less favorable to it
          than it would obtain in a comparable arm's length transaction with a
          non-Affiliate.

     6.17 Transfer of Collateral. Transfer, or permit the transfer, to another
          location of any of the Collateral or the books and records related to
          any of the Collateral outside of the counties of the addresses listed
          on the Disclosure Schedule; provided, however, that Borrower may
                                      --------
          transfer Collateral or the books and records related thereto to
          another county with the prior written consent of Lender and if



<PAGE>



          Borrower has provided to Lender prior to such transfer an opinion
          addressed to Lender in the form and substance and written by counsel
          acceptable to Lender to the effect that the perfection and priority of
          Lender's security interest in the Collateral will not be affected by
          such move or if it will be affected, setting forth the steps necessary
          to continue the perfection and priority of Lender's security interest
          together with the commencement of such steps by Borrower at its
          expense.

     6.18 Excess Borrowing. Permit the Advances or Non-Revolving Loans
          to violate any of the applicable Non-Revolving Conditions.

7.   CONSTRUCTION.

     7.1  Construction of Project. Borrower will cause construction of
          each Project to be carried on continuously and to reach
          Completion, be lien free and ready for occupancy not later
          than the Completion Date, subject to Force Majeure, time
          being of the essence in this Agreement. The Project will be
          constructed substantially in accordance with the Plans and
          Specifications, and all Legal Requirements. The Project will
          be constructed entirely on the Property and the Improvements
          will not encroach upon or overhang any easement, building
          line or right of way and, when erected, will not violate
          applicable use or other restrictions of record. If, in
          Lender's reasonable judgment, the Project is not in
          substantial conformity with the foregoing, Lender shall have
          the right to stop the work and order repair or
          reconstruction in accordance therewith and to withhold its
          consent to all further Advances, in accordance with the
          terms hereof, until the work is in satisfactory compliance
          with the Plans and Specifications and all Legal
          Requirements. Upon Notice from Lender to Borrower, or
          Borrower's discovery irrespective of such Notice, that the
          work is not in substantial conformity with the Plans and
          Specifications and/or all Legal Requirements, Borrower shall
          commence correcting the deviation, as promptly as is
          practicable, and in any event within ten (10) days after the
          Notice or discovery and shall prosecute such work diligently
          to completion. No other Notice shall be required to render
          such deviation an Event of Default under Section 8 hereof.
                                                   ---------
          All materials incorporated in the construction of a Project
          will be purchased so that absolute ownership and title vest
          in Borrower upon payment for such materials.

          7.2       Covenants. Borrower covenants as follows:

                    7.2.1     Each request by Borrower to Lender for an Advance
                              shall constitute Borrower's representation and
                              warranty to Lender that: (i) all completed
                              construction is substantially in accordance with
                              the Plans and Specifications, and (ii) all
                              construction and other costs and expenses for the
                              payment of which Lender has previously advanced
                              funds have in fact been paid.

                    7.2.2     For each Project, Borrower will comply with the
                              requirement of filing a Notice of Commencement or
                              similar requirement, if any, of the state in




<PAGE>



                              which the Project is located. Borrower shall not
                              file a Notice of Commencement with the Recorder of
                              the county in which the Project is located prior
                              to the recording of the Mortgage. Borrower shall
                              indemnify and hold Lender harmless from any and
                              all claims for unpaid amounts due for work or
                              labor performed, or materials furnished, to the
                              Project prior to the filing of the Notice of
                              Commencement.

                    7.2.3     No material change will be made in the Plans and
                              Specifications for the Improvements, the terms and
                              conditions of the Construction Contract for the
                              Improvements previously delivered to and approved
                              by Lender, or the identity of the General
                              Contractor without the prior written consent of
                              Lender, which will not be unreasonably withheld or
                              delayed; provided, that changes in the Plans and
                              Specifications and the Construction Contract
                              (including change orders thereunder) which do not
                              materially modify the scope or use of the
                              Improvements contemplated by the Plans and
                              Specifications and which do not result in an
                              increase or decrease in the aggregate cost of the
                              Improvements by more than $100,000 in any twelve
                              (12) month period shall be permitted hereunder
                              without the prior written consent of Lender;

                    7.2.4     The construction of the Improvements shall
                              commence within ninety (90) days of the Closing
                              Date and shall be carried forward with reasonable
                              diligence and, subject to Force Majeure, will be
                              completed on or before the Completion Date; title
                              to said Property and Improvements will, during the
                              entire Construction Period and upon the Completion
                              Date, be free from all filed liens, claims, and
                              encumbrances, except for Permitted Liens, taxes
                              and assessments which are a lien but not yet due
                              and payable, and any other liens or exceptions
                              which are approved in writing by Lender;

                    7.2.5     Borrower will make available for inspection by a
                              duly authorized representative of Lender, upon
                              reasonable prior written notice from Lender, any
                              of Borrower's contracts, books and records insofar
                              as they relate to the Project when requested by
                              Lender and will furnish to Lender any information
                              regarding Borrower's business affairs and
                              financial condition as Lender may, from time to
                              time, reasonably request;

                    7.2.6     Borrower will reimburse Lender promptly following
                              written notice from Lender for all reasonable out
                              of pocket costs and expenses of Lender incidental
                              to the Loans, including but not limited to the
                              costs of title insurance policies, title
                              examinations, recording fees, surveys, appraisal
                              fees, fees of any professionals hired by Lender
                              for review of Plans and Specifications, including
                              engineers and architects, attorneys' fees (subject
                              to a maximum of $8000 for attorneys' fees for each
                              Closing), and out-of- pocket expenses, all of
                              which Lender is authorized to deduct as an Advance
                              under the Note of Borrower;



<PAGE>



                    7.2.7     Following an Event of Default, in the event
                              extraordinary services are required by Lender for
                              inspections, appraisals, or for securing estimates
                              of costs which, in Lender's reasonable judgment
                              are not regular or routine, Lender may deduct the
                              reasonable expense of such extraordinary services
                              as an Advance under the Note of Borrower;

                    7.2.8     Borrower will immediately upon demand reimburse
                              Lender for the cost and expense of any Appraisal
                              of the Project obtained by Lender prior to, on, or
                              after the date hereof;

                    7.2.9     No materials, equipment, personal property, or
                              fixtures of any kind will be purchased or acquired
                              by Borrower for installation or use in or about
                              the Improvements under any conditional sales
                              contract or security agreement or any lease
                              agreement, and, provided Lender makes Advances
                              when due, all such materials, equipment, personal
                              property, and fixtures will be fully paid for
                              before payment therefor becomes past due or in any
                              event within fifty (50) days after delivery
                              thereof; provided, however, that the foregoing
                              shall not apply to an amount withheld and unpaid
                              on account of a bona fide dispute with a supplier;

                    7.2.10    Borrower will furnish or cause to be furnished to
                              the Title Company, approved by Lender, which
                              issues a loan policy hereunder and Lender any
                              affidavits, lien waivers, releases, or other
                              evidences requested by the Title Company, from
                              time to time, to establish that all bills then due
                              and payable for labor and materials entering into
                              said construction and all bills then due and
                              payable of the General Contractor, subcontractors,
                              laborers, and materialmen in said construction
                              have been paid in full except for those bills
                              which have become due and payable since the next
                              preceding Advance by Lender hereunder;

                    7.2.11    Borrower will not without the prior written
                              consent of Lender materially modify or amend any
                              contract of Borrower for which Lender's approval
                              is required relating to the development or
                              financing of the Improvements, including any such
                              contracts described herein, except as set
                              specifically set forth herein;

                    7.2.12    Borrower will allow Lender and its agents, until
                              the Obligations are fully paid: (i) the right of
                              entry and access to the site of the Improvements
                              upon reasonable prior notice; (ii) the right to
                              inspect all work done, labor performed and
                              materials furnished in and about the Improvements
                              upon reasonable prior notice; and (iii) to require
                              to be replaced or otherwise corrected any material
                              or work that does not materially comply with the
                              Plans and Specifications in the reasonable opinion
                              of the Inspector;

                    7.2.13    Borrower shall maintain with Lender or Lender's
                              Affiliate throughout the term of the Loans, and
                              any extension thereof, a Commercial Checking




<PAGE>



                              Account for each Loan. All Advances of Loans shall
                              be made by Lender crediting Advances directly into
                              such a Commercial Checking Account;

                    7.2.14    Borrower authorizes Lender to automatically make
                              Advances of Loans by debiting each Commercial
                              Checking Account to pay any principal or interest
                              upon the Notes when and as same shall become due
                              under the terms thereof;

                    7.2.15    Borrower shall permit Lender on or after the
                              Closing
                           Date to erect on the Property a temporary Project
                           sign, stating that financing for the Project is being
                           provided by Lender (but not stating the amount of the
                           Loan). Borrower hereby agrees that Lender may release
                           written publicity or advertisements concerning the
                           financing of the Project.

                    7.2.16    Borrower shall, on or before the Mini-Perm
                              Conversion Date, deposit in an interest-bearing
                              account at Lender's Affiliate, the Debt Service
                              Reserve. Borrower shall pledge the Debt Service
                              Reserve as Collateral and it shall not be released
                              unless and until: (1) the related Project achieves
                              50% occupancy during the first six months after
                              Completion; or (2) the related Project achieves,
                              at any time, a Project Debt Service Coverage
                              Ratio, as defined in Section 6.5, based upon the
                                                   -----------
                              amortization of principal in the manner set forth
                              in Section 2.8.1, equal to or greater than 1:1 for
                                 -------------
                              any two consecutive calendar months.

                    7.2.17    Borrower shall, on or before the Mini-Perm
                              Conversion Date, deposit in an interest-bearing
                              account at Lender's Affiliate, the Lease Reserve.
                              Borrower shall pledge the Lease Reserve as
                              Collateral and shall only be entitled to withdraw
                              any portion of the Lease Reserve at Borrower's
                              discretion for the purpose of funding Project
                              costs set forth on the applicable Budget.

                    7.2.18    Borrower shall, on or before the end of the
                              twelfth month following the Mini-Perm Conversion
                              Date, deposit in an interest-bearing account at
                              Lender's Affiliate, the Capital Expenditure
                              Reserve. Borrower shall pledge the Capital
                              Expenditure Reserve as Collateral and shall only
                              be entitled to withdraw any portion of the Capital
                              Expenditure Reserve at Borrower's discretion for
                              the purpose of funding capital expenditures
                              approved by Lender.

          7.3       Construction Related Items Prior to Closing. Borrower will,
                    at least five (5) days prior to the Closing Date, deliver or
                    cause to be delivered to Lender the following, all in form
                    and substance satisfactory to Lender for each Project:

                    7.3.1     Intentionally Omitted.

                    7.3.2     Evidence which may be in the form of a
                              certification from the Project


4/CRED-AGR/374817.1

<PAGE>



                              Architect that the Project will comply with the
                              Americans with Disabilities Act;

                    7.3.3     Intentionally Omitted.

                    7.3.4     Evidence that Borrower has met the insurance
                              requirements of Lender set forth in Section 5.9
                                                                  -----------
                              hereof and in the Loan Documents;

                    7.3.5     A current survey and site plan showing the outline
                              of the Property and meeting all of the
                              requirements of the "Property Survey" set forth in
                              Exhibit C attached hereto. Said survey shall be
                              ---------
                              currently dated and shall be prepared in
                              accordance with (A) the Minimum Standard Detail
                              Requirements for ALTA/ACSM Land Title Surveys (the
                              "Minimum Requirements"), as jointly adopted by the
                              American Land Title Association and the American
                              Congress on Surveying and Mapping in 1992 (or as
                              amended); (B) requirements of the statutes of the
                              state in which the Project is located; and (C)
                              standards of the Society of Professional Land
                              Surveyors for the state in which the Project is
                              located, bearing a proper certificate by the
                              surveyor, which certificate shall include the
                              legal description of the Property, shall be made
                              in favor of Lender and the Title Company, be
                              substantially in the form of Exhibit D attached
                                                           ---------
                              hereto, and contain such other certifications as
                              are contemplated by the Minimum Requirements and
                              applicable state statutes. The survey shall also
                              contain such additional information as may
                              reasonably be required by Lender or the Title
                              Company. The survey shall be subject to the
                              approval of Lender and certified by a registered
                              land surveyor approved by Lender;

                    7.3.6     A fixed-price, Construction Contract, including
                              payment and performance bonds with dual obligee
                              riders, with the General Contractor acceptable to
                              Lender;

                    7.3.7     A list of all known and proposed contractors to be
                              used for development of the Project and copies of
                              any of Borrower's contracts with same;

                    7.3.8     Intentionally Omitted.

                    7.3.9     A letter from the Project Architect or an
                              appropriate officer of the municipality in which
                              the Project is located regarding zoning and
                              building code compliance or Borrower's attorney's
                              certification of same;

                    7.3.10    Evidence that all utility services necessary for
                              construction and use of the Improvements
                              (including without limitation, electric, gas,
                              telephone, water and sewer service) are available
                              to the Property, and Borrower has the right to
                              connect into and use all utility services without
                              restriction; and that all necessary easements to
                              provide such utility services to the Property have
                              been obtained;




<PAGE>



                    7.3.11    A Notice of Commencement, or similar notice
                              required, if any, by the state in which the
                              project is located, which shall be recorded
                              immediately following the recording of the
                              Mortgage;

                    7.3.12    A certified statement of the General Contractor
                              confirming itemized and estimated costs of the
                              entire Project consistent with the Budget approved
                              by Lender and certifying that the Project complies
                              with the Legal Requirements;

                    7.3.13    Intentionally Omitted.

                    7.3.14    Certified copy of Borrower's Articles of
                              Organization, Certificate of Existence of Borrower
                              and certified resolutions of Borrower authorizing
                              the Non-Revolving Loan;

                    7.3.15    The Federal Tax Identification number of Borrower
                              and Guarantor;

                    7.3.16    A commitment or proforma policy for an ALTA
                              mortgagee's policy of title insurance (the "Title
                              Commitment") issued by the Title Company for the
                              full aggregate amount of the Non-Revolving Loan
                              with a pending disbursements endorsement
                              establishing that the Title Company is prepared to
                              insure the related Mortgage as of the time of its
                              filing for record as a first and prior lien upon
                              the Property and on the Improvements to be erected
                              thereon, subject only to the Permitted Liens and
                              pending actual disbursements. Each Title
                              Commitment shall meet the requirements set forth
                              in Exhibit B attached hereto to the extent that
                                 ---------
                              the compliance with such requirements is possible
                              under the law of the state in which the Project is
                              located. Contemporaneously with the delivery to
                              Lender of a Title Commitment, Borrower shall also
                              deliver to Lender copies of all documents
                              constituting the Permitted Liens. Borrower shall
                              deliver to Lender a final policy of title
                              insurance (the "Title Policy") within a reasonable
                              period of time after each Closing;

                    7.3.17    A development schedule for the Project setting
                              forth the approximate start and finish dates of
                              all major stages of the Project;

                    7.3.18    Evidence of building, zoning, and other permits
                              covering construction of the proposed Improvements
                              to the extent such items are available under the
                              laws of the jurisdiction in which the Project is
                              located. Lender shall also have been furnished
                              with evidence satisfactory to Lender that the
                              Property is not included in a special flood hazard
                              area as designated by the Federal Emergency
                              Management Agency ("FEMA") as Flood Zone C or
                              worse or in the 100-year flood plan on its Flood
                              Hazard Boundary Map ("FHBMs") and Flood Insurance
                              Rate Maps ("FIRMs"), and the Department of Housing
                              and Urban Development, Federal Insurance
                              Administration, Special Flood Hazard Area Maps;




<PAGE>



                    7.3.19    A copy of the Current Financial Statements of
                              Borrower and Guarantor, indicating no Material
                              Adverse Effect upon Borrower or Guarantor since
                              January 31, 1998;

                    7.3.20    A copy of the Management Contract;

                    7.3.21    A certification from the Inspector to the effect
                              that the construction of the Improvements in
                              accordance with the Plans and Specifications and
                              the intended use of the Improvements complies with
                              all Legal Requirements, and a certification of
                              Borrower reasonably satisfactory to Lender that
                              there is no pending proceeding, either
                              administrative, legislative or judicial, which
                              would in any manner adversely affect the status of
                              the zoning with respect to the Project;

                    7.3.22    Borrower's estimated schedule for Advances of the
                              applicable Non- Revolving Loan;

                    7.3.23    Borrower's equity contribution to the Project
                              either deposited with Lender's Affiliate and
                              disbursed by Lender according to the terms of this
                              Agreement or used to acquire the Property or other
                              Project costs approved by Lender and included in
                              the Budget with evidence of payment delivered to
                              Lender;

                    7.3.24    Intentionally Omitted.

                    7.3.25    All other documents set forth on the Closing Memo.

          7.4       Construction Related Items Prior to Advances. On or prior to
                    the date of an Advance of a Non-Revolving Loan hereunder,
                    Lender shall have received the following for each Project:

                    7.4.1     A Collateral Assignment of Agreements and Plans
                              (the "Contract Assignment") to Lender of (A) the
                              Plans and Specifications; (B) Borrower's
                              agreements with the General Contractor, with the
                              Project Architect, in any, and with mechanical and
                              structural engineers, if any, retained by Borrower
                              in connection with the construction of the
                              Improvements duly executed by Borrower, and (C)
                              consents to any of the assignments referred to in
                              items (A) and (B) above by the other parties to
                              the contracts and agreements being assigned,
                              together with the confirmation by such other
                              parties that they will continue to perform under
                              contracts and agreements, as the same may be,
                              after enforcement of and realization of such
                              assignment by Lender, subject to the terms of the
                              Contract Assignment;

                    7.4.2     An Assignment of the Management Contract,
                              including a subordination of the applicable
                              management/operator fee if an Event of Default
                              occurs;



<PAGE>



                    7.4.3     An Assignment of Licenses and Permits duly
                              executed by Borrower to Lender of all licenses,
                              permits, certificates of occupancy and similar
                              documents or instruments relating to the Project;

                    7.4.4     An Assignment of all present and future rents,
                              leases and profits relating to the Project;

                    7.4.5     Guaranties of the Obligations and Completion of
                              the Project by Grand Court, such Guaranties being
                              supported by certified copies of Articles of
                              Incorporation, a Certificate of Good Standing, and
                              certified resolutions of Grand Court authorizing
                              the Guaranties;

                    7.4.6     The Indemnity duly executed by Borrower and
                              Guarantor;

                    7.4.7     A written opinion of Borrower's counsel and a
                              written opinion of Guarantor's counsel, both in
                              form and substance satisfactory to Lender;

                    7.4.8     An interest rate hedge agreement for the
                              applicable Non-Revolving Loan, both in form and
                              substance reasonably satisfactory to Lender;

                    7.4.9     Plans and Specifications for the Improvements to
                              the extent not already delivered to Lender. No
                              Advance shall be made by Lender hereunder for any
                              portion of construction of the Improvements until
                              the Plans and Specifications for such Improvements
                              shall have been delivered to and approved by
                              Lender;

                    7.4.10    With respect to Advances after foundation and site
                              work for the Project have been substantially
                              completed, Borrower will furnish to Lender and to
                              the Title Company, a Survey showing the location
                              of the actual in-place foundations;

                    7.4.11    A certificate from the Inspector certifying (A)
                              that the construction of the Improvements
                              theretofore completed, if any, has been performed
                              substantially in accordance with the Plans and
                              Specifications; (B) that the quality of
                              construction of the Improvements theretofore
                              completed is in accordance with generally accepted
                              standards in the construction industry for the
                              construction of similar improvements, (C) the
                              estimated total cost of the construction of the
                              Improvements; (D) that the nondisbursed portion of
                              the applicable Non-Revolving Loan as shown on the
                              Budget plus any equity contribution made or to be
                              made by Borrower is adequate to complete the
                              construction of the Improvements pursuant to the
                              Plans and Specifications; and (E) that the
                              completion of the Improvements will occur on or
                              before the Completion Date;

                    7.4.12    Receipt by Lender of an endorsement to the Title
                              Policy indicating that since the last preceding
                              Advance of the Loan there has been no change in


<PAGE>



                              the state of title and no survey exceptions not
                              theretofore approved by Lender and increasing the
                              coverage of the Title Policy by an amount equal to
                              the Advance then being made so that the total
                              amount insured equals the total amount disbursed
                              by Lender under the terms hereof and changing the
                              effective date of the Title Policy to the date of
                              the Advance;

                    7.4.13    Receipt by Lender of evidence of the payment of
                              all insurance premiums and real estate taxes for
                              the Project at least five (5) days prior to last
                              date for payment of such amounts without a penalty
                              or charging of interest thereon or the termination
                              of the applicable insurance policy;

                    7.4.14    A copy of each primary subcontract between the
                              General Contractor and any third parties related
                              to the Project if requested by Lender;

                    7.4.15    All expenses and fees due and payable by Borrower
                              as of the Closing Date including but not limited
                              to the Construction Monitoring Fee and Attorneys
                              Fees; and

                    7.4.16    All other items set forth on the Closing Memo.

          7.5       Construction Related Items Prior to Final Advance. Borrower
                    will, on or prior to the date of the final Advance of a
                    Non-Revolving Loan hereunder, deliver or cause to be
                    delivered to Lender the following for the related Project:

                    7.5.1     Evidence satisfactory to Lender of the issuance by
                              all appropriate Governmental Authorities of
                              certificates of use and occupancy for the
                              Improvements;

                    7.5.2     A final as-built ALTA/ACSM survey satisfactory to
                              Lender, bearing a proper certificate by the
                              surveyor, showing the completed Improvements and
                              all easements and right-of-ways;

                    7.5.3     An additional endorsement to the Title Policy
                              insuring the priority of the Mortgage in the full
                              amount of the applicable Non-Revolving Loan
                              against mechanic's and materialmen's liens
                              (including inchoate liens) arising by reason of
                              unpaid labor and materials supplied in connection
                              with the construction and development of the
                              Project;

                    7.5.4     A certificate by the Inspector or other person
                              satisfactory to Lender stating that the
                              Improvements have been completed substantially in
                              accordance with the Plans and Specifications;

                    7.5.5     An affidavit of Borrower stating that each person
                              providing any material or performing any work in
                              connection with the Project has been (or will be,
                              with the proceeds of and immediately following
                              receipt by Borrower of such final Advance) paid in
                              full or bonded or insured to the reasonable



<PAGE>



                              satisfaction of Lender;

                    7.5.6     A rent roll and copies of all leases for the
                              Project; and

                    7.5.7     A Certificate of Substantial Completion AIA Form
                              G704 from the Project Architect and General
                              Contractor certifying that the Project has been
                              completed substantially in accordance with the
                              Plans and Specifications.

          7.6       Procedure For Advances. Subject to the terms and conditions
                    hereof, Lender shall make Advances of each Non-Revolving
                    Loan to a Corporate Checking Account maintained by Borrower
                    at Lender's Affiliate, from time to time, for payment of
                    construction costs of the Improvements, as such construction
                    occurs as determined by the Inspector. Advances shall be
                    made upon request of Borrower in the following manner for
                    each Project:

                    7.6.1     Not less than ten (10) Business Days before the
                              date on which Borrower desires an Advance,
                              Borrower shall submit to Lender a request for an
                              Advance using AIA Forms G702 and G703, including
                              any change orders, invoices for soft costs, and
                              other documents required hereunder, accompanied by
                              a cost breakdown, the accuracy of which shall be
                              certified by Borrower and approved in writing by
                              the Project Architect or the county engineer in
                              the county in which the Project is located.
                              Lender's "Hard and Soft Cost Requisition Form"
                              form shall serve as the disbursement control for
                              each line item. Lender shall not be required to
                              make an Advance for any line item in excess of the
                              amount shown in the "Loan Reserve Category" set
                              forth in such "Hard and Soft Cost Requisition
                              Form" form;

                    7.6.2     Requests for Advances after the first Advance
                              shall not be made more often than once a month and
                              the total amount advanced shall not at any time
                              exceed an amount equal to (i) the percentage of
                              completion evidenced by the inspections of the
                              Improvements by the Inspector, times (ii) the
                              estimated total construction costs filed by
                              Borrower and General Contractor and approved by
                              Lender, (minus the Retainage, as set forth in this
                                       -----
                              Section, and any Advances previously made on
                              account of the cost of materials stored on the
                              Property). Prior to each Advance, at Borrower's
                              expense, an appointed inspector shall inspect the
                              Improvements to verify that the request for an
                              Advance accurately reflects the amount of
                              construction completed to date. Notwithstanding
                              the foregoing, Lender shall withhold the
                              Retainage, provided that when the Project is 50%
                              complete as certified by the Inspector for the
                              Project and provided no Event of Default has
                              occurred and is continuing after the giving of any
                              applicable Notice and the lapse of any applicable
                              cure periods, the Retainage will be reduced to the
                              greater of the retainage rate specified in the
                              General Contractor's contract or five percent
                              (5%). The Retainage shall be held until



<PAGE>



                              Completion, provided, however, that if: (i) no
                              Event of Default has occurred and is continuing
                              after the giving of any applicable notice and the
                              lapse of any applicable cure periods, (ii) Lender
                              receives certification from the Inspector that all
                              such work is complete; and (iii) Lender receives
                              appropriate lien waivers, the Retainage for up to
                              three trades (selected by Borrower and approved by
                              Lender, which approval will not be unreasonably
                              withheld) will be released upon full completion of
                              all work on the Project for each particular trade
                              selected;

                    7.6.3     Borrower shall furnish Lender and the Title
                              Company with any evidence, lien waivers, or
                              affidavits required by the Title Company at the
                              time of each request for an Advance to insure that
                              all bills then due and payable for labor and
                              materials used in constructing the Improvements
                              and all bills due and payable to contractors,
                              subcontractors, laborers, and materialmen have
                              been paid in full, except those bills to be paid
                              with such Advance. With each request for an
                              Advance to be used for contract payments of at
                              least $50,000, Borrower shall deliver to Lender
                              and the Title Company waivers of liens from
                              contractors in the respective sum received by each
                              such contractor for all of Borrower's preceding
                              requests for Advances.

                    7.6.4     Borrower will have the right to reallocate line
                              items in the Budget, subject to the following: (i)
                              proper substantiation for adjustments is delivered
                              to Lender, (ii) no adjustments may be made between
                              hard and soft costs until after Completion of the
                              Project, at which time savings in hard cost line
                              items may be reallocated to soft cost line items,
                              (iii) no adjustments shall be permitted to the
                              equity or interest reserve line items; and (iv)
                              any reallocation must involve at least $10,000 in
                              total adjustments;

                    7.6.5     Following an Event of Default and with the consent
                              of the surety issuing the payment and performance
                              bonds for the applicable Project, Lender may, at
                              Lender's election, pay all bills for labor or
                              materials, directly to the Persons furnishing such
                              labor or materials. Lender will only make Advances
                              for the cost of materials stored on the Property
                              limited to three percent (3%) of the hard costs
                              for such materials, provided the same are
                              adequately secured and insured. Advances
                              previously made on account of stored materials
                              shall not be included in this three percent (3%)
                              limit once such materials have been integrated
                              into the Project. Lender will not make Advances
                              based on the cost of materials not stored on the
                              Property except for Advances to be made on account
                              of costs associated with the line item for FF&E on
                              the Budget which shall be made for 100% of the
                              costs thereof up to a maximum of $300,000 upon
                              evidence acceptable to Lender of insurance,
                              bonding and an effective first-priority security
                              interest thereon in favor of Lender. Lender will
                              make Advances approximately 10 days after
                              satisfaction of all conditions applicable to such
                              Advances.



<PAGE>



          7.7       Sufficiency of Loan To Complete Construction. Anything
                    contained in this Agreement to the contrary notwithstanding,
                    it is expressly understood and agreed that the Loan shall at
                    all times be "in balance." The Loan shall be deemed to be
                    "in balance" only at such time and from time to time, as
                    Lender may determine in Lender's reasonable discretion that
                    the then undisbursed portion of the applicable Non-Revolving
                    Loan equals or exceeds the amount necessary for the timely
                    and full payment of (i) all work done and not theretofore
                    paid for or to be done in connection with the completion of
                    the construction of the Project in accordance with the Plans
                    and Specifications, including completion of all Tenant
                    Improvements and the installation of all fixtures and
                    equipment required for operation of the Project, and (ii)
                    all other costs and expenses incurred and not theretofore
                    paid for, or to be incurred in connection with the Project
                    (to the extent revenues will not, in Lender's sole
                    reasonable judgment, be sufficient for the timely and full
                    payment of such costs and expenses). Borrower agrees that if
                    the Loan is deemed not to be "in balance", Borrower shall,
                    within thirty (30) days after written request by Lender,
                    deposit the deficiency into its Corporate Checking Account,
                    which deposit shall first be exhausted before any further
                    Advances are made (or at Borrower's option, provide Lender
                    with reasonable assurances (as determined by Lender in
                    Lender's sole discretion) that such funds are or will be
                    available). Lender shall not be obligated to make any
                    Advance if the applicable Non-Revolving Loan is not in
                    balance.

          7.8       Additional Construction Items to be Submitted to Lender.
                    Borrower will, at least twenty-one (21) days prior to any
                    Closing Date, deliver or cause to be delivered to Lender the
                    following, all in form and substance satisfactory to Lender
                    for each Project:

                    7.8.1     A detailed market study, the Budget, the Plans and
                              Specifications, all approved in writing by Lender
                              and, if required, by the applicable Governmental
                              Authorities having jurisdiction thereof;

                    7.8.2     Soil reports of the Property, showing that the
                              soil will adequately support the Improvements when
                              constructed in accordance with the Plans and
                              Specifications;

                    7.8.3     The Budget, including: (i) a summary page
                              indicating costs of land, site work, construction
                              and soft costs on an AIA G703 form and (ii)
                              detailed schedules supporting the site work and
                              construction costs shown on the AIA G703 form
                              according to the Construction Standards Institute
                              Division. The Budget will include a minimum
                              contingency line item for hard costs of at least
                              5% of total hard costs. Provided no Event of
                              Default exists after the giving of applicable
                              notices and the lapse of applicable cure periods,
                              if any, fifty (50%) percent of a developer's fee
                              included in the Budget will be paid pro rata as
                              construction is completed and fifty (50%) percent
                              will be paid upon the issuance of a certificate of
                              substantial



<PAGE>



                              completion. The unused hard cost contingency may
                              be applied by Borrower to the Lease Reserve;

                    7.8.4     An Environmental Audit, including a Phase I
                              Environmental Site Assessment Report with wetlands
                              certification, certified to and satisfactory to
                              Lender; and

                    7.8.5     The Appraisal in a form reasonably satisfactory to
                              Lender in all respects including, but not limited
                              to, a loan to value ratio for the Project of not
                              more than 75% after stabilization. The appraiser
                              will be selected and directly engaged by Lender.
                              The cost of the Appraisal will be charged to the
                              Borrower at the Closing. Each appraisal report
                              shall be prepared in accordance with the Uniform
                              Standards of Professional Appraisal Practice
                              applicable to Federally Related Transactions as
                              set out in Appendix A to the real estate appraisal
                              regulations adopted by the Office of the
                              Comptroller of the Currency pursuant to the
                              Financial Institutions Reform, Recovery and
                              Enforcement Act of 1989 ("FIRREA") (Sub-part C of
                              12 C.F.R. 34) and shall be prepared in response to
                              an engagement letter to be issued by Lender.
                              Borrower shall, at the option of Lender, be
                              required to deposit into Borrower's Account, funds
                              adequate to pay for an appraisal on or before the
                              date of such appraisal.

8.   Events of Default. Upon the occurrence of any of the following events
     and after expiration of applicable cure periods, if any, with respect
     to Borrower or any Guarantor:

     8.1  Payment. The non-payment of: (i) any principal amount of any
          of the Advances, whether by acceleration or otherwise within
          5 Business Days of when the same is due, or (ii) the
          non-payment of any interest upon any Note or any other
          amounts owing under any of the other Loan Documents due
          Lender pursuant to this Agreement within 5 Business Days of
          when the same is due;

     8.2  Covenants. The default in the due observance of any affirmative
          covenant or agreement to be kept or performed by it under the terms of
          this Agreement or any of the Loan Documents and the failure or
          inability of it to cure such default within thirty (30) days of the
          occurrence thereof; provided that such thirty (30) day grace period
          will not apply to: (i) any default which in Lender's good faith
          determination is incapable of cure, (ii) any default that has
          previously occurred, (iii) any default in any negative covenants, or
          (iv) any failure to maintain insurance or to permit inspection of the
          Collateral or of its books and records;

     8.3  Representations and Warranties. Any representation or warranty made by
          it in this Agreement, in any of the Loan Documents or in any report,
          certificate, opinion, financial statement or other document furnished
          in connection with the Obligations is false or erroneous in any
          material respect or any material breach thereof has been committed
          such that Borrower's ability to fulfill its obligations under any of
          the Loan Documents shall be materially and aversely affected;




<PAGE>



     8.4  Obligations. Except as provided in Sections 8.1, 8.2 and 8.3 above,
                                             -------------------------
          the default by it in the due observance of any covenant, negative
          covenant or agreement to be kept or performed by it under the terms of
          this Agreement, the Loan Documents or any document now or in the
          future executed in connection with any of the Obligations and the
          lapse of any applicable cure period provided herein or therein with
          respect to such default, or, if so defined therein, the occurrence of
          any Event of Default or Default (as such terms are defined therein);

     8.5  Bankruptcy, Etc. It: (i) dissolves or is the subject of any
          dissolution, a winding up or liquidation; (ii) makes a general
          assignment for the benefit of creditors; or (iii) files or has filed
          against it a petition in bankruptcy, for a reorganization or an
          arrangement, or for a receiver, trustee or similar creditors'
          representative for its property or assets or any part thereof, or any
          other proceeding under any federal or state insolvency law, and if
          filed against it, the same has not been dismissed or discharged within
          sixty (60) days thereof;

     8.6  Execution, Attachment, Etc. The commencement of any foreclosure
          proceedings, proceedings in aid of execution, attachment actions,
          levies against, or the filing by any taxing authority of a lien
          against it or against any of the Collateral, except those liens being
          diligently contested in good faith which in the aggregate do not
          exceed $250,000 for any Guarantor or $50,000 for any Borrower;

     8.7  Loss, Theft or Substantial Damage to the Collateral. In addition to
          the rights of Lender to deal with proceeds of insurance as provided in
          the Loan Documents, the uninsured loss, theft or substantial damage to
          the Collateral if the result of such occurrence (singly or in the
          aggregate) is the failure or inability to resume substantially normal
          operation of its business within thirty (30) days of the date of such
          occurrence; however, Borrower shall be granted 180 days to resume
          substantially normal operation of its business if Borrower fulfills
          all of its other obligations under the Loan Documents, including
          without limitation, the payment of any amounts due under the Loan
          Documents and compliance with the insurance requirements under the
          Loan Documents;

     8.8  Judgments. Unless in the opinion of Lender adequately insured or
          bonded, the entry of a final judgment for the payment of money which
          is in excess of $250,000 for any Guarantor or $50,000 for any Borrower
          against Guarantor or Borrower and the failure: (i) to discharge the
          same, or cause it to be discharged, within sixty (60) days from the
          date of the order, decree or process under which or pursuant to which
          such judgment was entered, or (ii) to secure a stay of execution
          pending appeal of such judgment; or (iii) the entry of one or more
          final monetary or non-monetary judgments or order which, singly or in
          the aggregate is in excess of $250,000 for any Guarantor or $50,000
          for any Borrower, does or could reasonably be expected to cause or
          have a Material Adverse Effect: (a) in the value of the Collateral or
          its condition (financial or otherwise), operations, properties or
          prospects, (b) on its ability to perform its obligations under this



<PAGE>



          Agreement or the Loan Documents, or (c) on the rights and remedies of
          Lender under this Agreement, any Note, or any Loan Document;

     8.9  Revocation of Guarantee. The revocation by Guarantor or attempted
          revocation by Guarantor or limitation by Guarantor in whole or in part
          of any Guarantee;

     8.10 Impairment of Security. (a) The validity or effectiveness of any Loan
          Document or its transfer, grant, pledge, mortgage or assignment by the
          party executing it in favor of Lender is determined by a court of
          competent jurisdiction to be invalid; (b) any party, other than
          Lender, to a Loan Document asserts in any legal proceeding that any
          Loan Document is not a legal, valid and binding obligation of it
          enforceable in accordance with its terms; (c) the security interest or
          lien purporting to be created by any of the Loan Documents ceases to
          be or is asserted in any legal proceeding by any party to any Loan
          Document (other than Lender) not to be a valid, perfected lien subject
          to no liens other than liens not prohibited by this Agreement or any
          Loan Document; or (d) any Loan Document is amended, subordinated,
          terminated or discharged, or any person is released from any of its
          covenants or obligations except to the extent that Lender expressly
          consents in writing thereto; and

     8.11 Other Indebtedness. A default after any applicable notice and cure
          period with respect to any evidence of Indebtedness in excess of
          $250,000 by any Guarantor or $50,000 by any Borrower (other than to
          Lender under the Loan Documents), if the effect of such default is to
          accelerate the maturity of such Indebtedness or to permit the holder
          thereof to cause such Indebtedness to become due prior to the stated
          maturity thereof, or if any Indebtedness of any of them in excess of
          $250,000 by any Guarantor or $50,000 by any Borrower (other than to
          Lender under the Loan Documents) is not paid when due and payable,
          whether at the due date thereof or a date fixed for prepayment or
          otherwise (after the expiration of any applicable grace period);

     8.12 Title Insurance. Failure or refusal by the Title Company, by reason of
          any matter affecting title to the Property or Improvements, to insure
          any Advance as giving rise to a valid first lien, subject only to
          Permitted Liens or those exceptions previously approved by Lender
          pursuant to this Agreement, provided that Borrower shall have 30 days
          from the date of such failure or refusal to cure any such matter
          affecting title and to obtain such insurance;

          then in any such event ("Event of Default"), Lender may take any or
          all of the following actions (provided that if any Event of Default
          specified in Section 8.5, above, as to Borrower occurs, the results
                       -----------
          described in clauses (i) and (ii), below, will occur automatically,
          except in the case of a filing of a proceeding identified in Section
                                                                       -------
          8.5 against Borrower, unless such proceeding is not dismissed or
          ----
          discharged within 60 days of the filing thereof): (i) declare the
          Total Commitment terminated, (ii) declare all principal, interest and
          other amounts due




<PAGE>



          and payable hereunder and under the Loan Documents, to be immediately
          due and payable whereupon all such amounts will immediately be due
          payable, without presentment, demand, protest or notice of any kind,
          all of which hereby are waived by Borrower, and (iii) exercise any
          other rights and remedies provided hereunder, under any of the Loan
          Documents and/or by applicable law. After the occurrence of any Event
          of Default, Lender is authorized at any time and from time to time
          without notice to Borrower to offset, appropriate and apply to all or
          any part of the Obligations all moneys, credits, deposits (general or
          special, demand or time, provisional or final) and other property of
          any nature whatsoever of Borrower now or at any time hereafter in the
          possession of, in transit to or from, under the control or custody of,
          or on deposit with (whether held by Borrower individually or jointly
          with another party) Lender any or all indebtedness at any time owing
          by Lender to or for the credit or account of Borrower. The rights and
          remedies of Lender upon the occurrence of any Event of Default will
          include but not be limited to all rights and remedies provided in the
          Loan Documents and all rights and remedies provided under applicable
          law. Borrower irrevocably waives (a) any requirement of marshalling of
          the Collateral upon the occurrence of any Event of Default and (b) any
          right to direct the application of any payments received by Lender
          from or on behalf of Borrower after the occurrence of any Event of
          Default. Lender, at its option, may apply any or all funds not
          previously disbursed to payment of outstanding invoices and to
          completion of the Improvements, with the right and power in such event
          to enter upon and take possession of the Project and the Improvements,
          to make such changes in the Plans and Specifications as may seem
          desirable, and to do all things reasonably necessary in Lender's
          opinion to complete or partially complete the Improvements. Lender
          shall not be responsible for the workmanship and materials in such
          completion or partial completion of construction, with the single
          exception that Lender shall be required to use reasonable care in the
          selection of the contractor or contractors used by it in such
          completion or partial completion.

9.   Representations and Warranties to Survive. All representations,
     warranties, covenants and agreements made by Borrower herein and in
     the other Loan Documents will survive the execution and delivery of
     this Agreement, the Loan Documents and the issuance of the Notes.

10.  Environmental Indemnification. Lender will not be deemed to assume any
     liability or obligation for loss, damage, fines, penalties, claims or
     duties to clean-up or dispose of wastes or materials on or relating to
     the Property merely by conducting any inspections of the Property or
     by obtaining title to the Property by foreclosure, deed in lieu of
     foreclosure or otherwise. Borrower, including its successors and
     assigns, agrees to remain fully liable and will indemnify, defend and
     hold harmless Lender, its respective directors, officers, employees,
     agents, contractors, subcontractors, licensees, invitees, successors
     and assigns, from and against any claims, demands, judgments, damages,
     actions, causes of action, injuries, administrative orders,
     liabilities, costs, expenses, clean-up costs, waste



<PAGE>



     disposal costs, litigation costs, fines, penalties, damages and other
     related liabilities arising from (i) the failure of Borrower to
     perform any obligation herein required to be performed by Borrower,
     (ii) the removal or other remediation of hazardous or toxic
     substances, hazardous wastes, pollutants or contaminants, solid waste
     or petroleum at or from the Property, (iii) any act or omission, event
     or circumstance existing or occurring resulting from or in connection
     with the ownership, construction, occupancy, operation, use and/or
     maintenance of the Property, (iv) any and all claims or proceedings
     (whether brought by private party or governmental agency) for bodily
     injury, property damage, abatement or remediation, environmental
     damage or impairment and any other injury or damage resulting from or
     relating to any hazardous or toxic substances, hazardous waste,
     pollutants, contaminants, solid waste, or petroleum located upon or
     migrating into, from or through the Property (whether or not any or
     all of the foregoing was caused by the Borrower or its tenant or
     subtenant, or a prior owner of the Property or its tenant or
     subtenant, or any third party and whether or not the alleged liability
     is attributable to the handling, storage, generation, transportation
     or disposal of such material or the mere presence of such material on
     the Property), except to the extent caused by or the result of any act
     of (a) Lender or its agents, or (b) any owner of the Property after
     foreclosure or a deed in lieu of foreclosure, and (v) Borrower's
     breach of any representation or warranty contained in this Section.
     Without limitation, the foregoing indemnities will apply to Lender
     with respect to claims, demands, losses, damages (including
     consequential damages), liabilities, causes of action, judgements,
     penalties, costs and expenses (including reasonable attorneys' fees
     and court costs) which in whole or in part are caused by or arise out
     of the negligence of Lender. Such indemnity, however, will not apply
     to Lender to the extent the subject of the indemnification is caused
     by or arises out of the gross negligence or willful misconduct of
     Lender. All environmental representations, warranties, covenants, and
     indemnities will continue indefinitely and may not be cancelled or
     terminated except by a writing signed by Lender specifically referring
     to this Section. Notwithstanding anything contained to the contrary in
     the Notes, this Agreement, or other Loan Documents evidencing or
     securing the Obligations, the provisions of this Section will survive
     the termination or expiration of the Obligations, the full repayment
     of the Obligations, or the acquiring of title by Lender or its
     respective successors and assigns by foreclosure, deed in lieu of
     foreclosure or otherwise, and will be fully enforceable against
     Borrower and its successors and assigns. The provisions of this
     Section will constitute a separate undertaking by Borrower and will be
     an inducement to Lender in extending the Loans evidencing the
     Obligations to Borrower. The provisions of this Section will not be
     subject to any anti-deficiency or similar laws.

11.  Intentionally Omitted.

12.  General.

     12.1 Waiver. No delay or omission on the part of Lender to
          exercise any right or power arising from any Event of
          Default will impair any such right or power or be considered
          a waiver of any such right or power or a waiver of any such
          Event of Default or any acquiescence therein nor will the
          action or nonaction of Lender



<PAGE>



          in case of such Event of Default impair any right or power arising as
          a result thereof or affect any subsequent default or any other default
          of the same or a different nature. No disbursement of Advances
          hereunder will constitute a waiver of any of the conditions to
          Lender's obligation to make further Advances; nor, in the event that
          Borrower is unable to satisfy any such condition, will any such
          Advance have the effect of precluding Lender from thereafter declaring
          such inability to be a Default or an Event of Default. No modification
          or waiver of any provision of this Agreement or any of the Loan
          Documents, nor consent to any departure by Borrower therefrom, will be
          established by conduct, custom or course of dealing; and no
          modification, waiver or consent will in any event be effective unless
          the same is in writing and specifically refers to this Agreement, and
          then such waiver or consent will be effective only in the specific
          instance and for the purpose for which given. No notice to or demand
          on Borrower in any case will entitle Borrower to any other or further
          notice or demand in the same, similar or other circumstance. The
          liability of any Borrower will not be affected by any surrender,
          exchange, acceptance, or release by Lender of any party or other
          person or any other guarantee or any security held by it for any of
          the Obligations or by Lender's failure to take any steps to perfect or
          maintain its lien or security interest in or to preserve any of its
          rights to, any guarantee, security or other collateral for any of the
          Obligations, by any delay or omission in exercising any right, remedy
          or power with respect to any of the Obligations or any guarantee or
          collateral therefor, or by any irregularity, unenforceability or
          invalidity of any of the Obligations or any security or guarantee
          therefor. Lender at any time and from time to time, and without
          impairing, releasing, discharging or modifying the liabilities of any
          Borrower under a particular Non-Revolving Loan ("Subject Borrower"),
          may, in accordance the terms and conditions of the Loan Documents: (a)
          without the consent of or notice to any Borrower or Borrowers under
          any other Non-Revolving Loan or Loans (collectively, "Other
          Borrowers"), change the manner, amount, place or terms of payment or
          performance of or interest rates on, or change or extend the time of
          payment of, or other terms relating to the Obligations of the Subject
          Borrower, (b) renew, substitute, modify, amend or alter, or grant
          consents or waivers relating to, any of the Obligations of the Subject
          Borrower without the consent of or notice to the Other Borrowers, (c)
          renew, substitute, modify, amend or alter, or grant consents or
          waivers relating to, any guarantee or any security for any guarantee,
          (d) apply any and all payments received by a Lender by whomever paid
          or however realized, including any proceeds of any Collateral, to any
          of the Obligations in such order, manner and amount as permitted by
          this Agreement, (e) deal with any Person in respect of the Obligations
          in such manner as Lender deems appropriate in its sole discretion
          and/or (f) substitute any security or guarantee. Irrespective of the
          taking or refraining from the taking of any such action, the
          obligations of Borrower will remain in full force and effect. Lender
          in its sole discretion may determine the reasonableness of the period
          which may elapse prior to the making of demand for any payment upon
          Borrower and need not pursue any remedy or remedies against Borrower,
          any other Person or any Collateral before having recourse against



<PAGE>



          Borrower hereunder. Borrower subordinates until the prior payment in
          full to Lender of the Obligations and the termination of this
          Agreement any and all rights of subrogation, reimbursement or
          indemnity whatsoever, and any and all right of recourse to security,
          under or out of the property of Borrower or otherwise, for the
          Obligations. No set-off, counterclaim, reduction, or diminution of any
          obligation, or any defense of any kind or nature that Borrower has or
          may have against any other Borrower will be available hereunder to any
          Borrower against Lender until the Obligations have been paid in full.

12.2 Notices. All notices, demands, requests, consents, approvals, and
     other communications required or permitted hereunder will be in
     writing and will be conclusively deemed to have been received by a
     party hereto and to be effective if delivered personally to such
     party, or sent by telex, telecopy (followed by written confirmation)
     or other telegraphic means, or by overnight courier service, or by
     certified or registered mail, return receipt requested, postage
     prepaid, addressed to such party at the address set forth below (or to
     such other address as any party may give to the other in writing for
     such purpose.

     To Lender:             KEY CORPORATE CAPITAL INC.
                            525 Vine Street
                            Cincinnati, Ohio 45202
                            Attention: Key Health Care Finance -Troy E. Miller
                            Telecopier No.:513-762-8450
                            Telephone No.:513-762-8272


     To Borrower:           GRAND COURT - GREATWOOD, L.P.
                            c/o Grand Court Lifestyles, Inc.
                            One Executive Drive
                            Ft. Lee, New Jersey  07024
                            Attention:  Chief Financial Officer
                            Telecopier No.:  201-947-6663
                            Telephone No.:  201-947-7322


All such communications, if personally delivered, will be conclusively deemed to
have been received by a party hereto and to be effective when so delivered, or
if sent by telex, telecopy or telegraphic means, on the day on which
transmitted, or if sent by overnight courier service, on the day after deposit
thereof with such service, or if sent by certified or registered mail, on the
third business day after the day on which deposited in the mail, except that
notices and communications to Lender pursuant to Section 2 above, will not be
                                                 ---------
effective until received by Lender.

     12.3 Successors and Assigns. This Agreement will be binding upon and inure
          to the benefit of Borrower and Lender and its respective successors
          and assigns,



<PAGE>



          provided, however, that Borrower may not assign this Agreement in
          whole or in part without the prior written consent of Lender.

     12.4 Illegality. If fulfillment of any provision hereof or any transaction
          related hereto or of any provision of any of the Loan Documents, at
          the time performance of such provision is due, involves transcending
          the limit of validity prescribed by law, then ipso facto, the
          obligation to be fulfilled will be reduced to the limit of such
          validity; and if any clause or provisions herein contained other than
          the provisions hereof pertaining to repayment of the Obligations
          operates or would prospectively operate to invalidate this Agreement
          in whole or in part, then such clause or provision only will be void,
          as though not herein contained, and the remainder of this Agreement
          will remain operative and in full force and effect; and if such
          provision pertains to repayment of the Obligations, then, at the
          option of Lender, all of the Obligations will become immediately due
          and payable.

     12.5 Gender, Etc. Whenever used herein, the singular number will include
          the plural, the plural the singular and the use of the masculine,
          feminine or neuter gender will include all genders.

     12.6 Headings. The headings in this Agreement are for convenience only and
          will not limit or otherwise affect any of the terms hereof.

     12.7 Liability of Lender. Borrower hereby agrees that Lender will not be
          chargeable for any negligence, mistake, act or omission of any
          accountant, examiner, agent, Inspector, or attorney selected with
          reasonable care and in the exercise of good faith by Lender in making
          examinations, investigations or collections, or otherwise in
          protecting or realizing upon any lien or security interest or any
          other interest in the Collateral or other security for the
          Obligations, unless Lender actually knows or, should, using reasonable
          care, have known that such mistake, negligence, act or omission is
          incorrect at the time committed. Lender makes no representations and
          assumes no obligations as to Borrower or third parties concerning the
          quality of the construction of the Project or the absence therefrom of
          defects. In this connection Borrower agrees to and shall indemnify
          Lender from any liability, claims or losses resulting from the
          Advances or from the condition of the Project whether related to the
          quality of construction or otherwise and whether arising during or
          after the term of the Loans except and to the extent that such
          construction was performed by, on behalf of, or at the direction of
          Lender, its agents, or contractors. This provision shall survive the
          repayment of the Obligations and shall continue in full force and
          effect so long as the possibility of any such liability, claim or loss
          exists. The relationship between Lender and Borrower is solely that of
          a lender and borrower, and nothing contained herein or in any of the
          Loan Documents shall in any manner be construed as making the parties
          hereto principal, Lender, partners, joint venturers or any other
          relationship other than lender and borrower.




<PAGE>



     12.8 Execution in Counterparts. This Agreement may be executed in any
          number of counterparts and by different parties hereto in separate
          counterparts, each of which when so executed will be deemed to be an
          original and all of which taken together will constitute one and the
          same agreement.

    12.9  Remedies Cumulative. No single or partial exercise of any right or
          remedy by Lender will preclude any other or further exercise thereof
          or the exercise of any other right or remedy. All remedies hereunder
          and in any instrument or document evidencing, securing, guaranteeing
          or relating to any Loan or now or hereafter existing at law or in
          equity or by statute are cumulative and none of them will be exclusive
          of the others or any other remedy. All such rights and remedies may be
          exercised separately, successively, concurrently, independently or
          cumulatively from time to time and as often and in such order as
          Lender may deem appropriate.

    12.10 Costs, Expenses and Legal Fees. Borrower will be solely responsible
          for all reasonable fees and expenses for appraisals, surveys, title
          insurance, lien searches environmental reports, recording fees,
          documentary taxes and similar items. Borrower agrees jointly and
          severally to reimburse on demand Lender for all reasonable
          out-of-pocket costs and expenses, including, without limitation, due
          diligence and reasonable fees and expenses of attorneys (which
          attorneys may be Lender's employees and including, without limitation,
          the reasonable fees and disbursements of Frost & Jacobs, special
          counsel for Lender), and other advisors, expended or incurred in
          amending, supplementing, waiving or enforcing provisions of this
          Agreement and the other Loan Documents; in administering, monitoring
          and enforcing of this Agreement and the other Loan Documents (with
          respect to the enforcement of this Agreement and other Loan Documents,
          Borrower agrees to reimburse on demand the Lender for all reasonable
          out-of-pocket costs and expenses incurred in connection with such
          enforcement); in monitoring the Collateral; in obtaining advice from
          auditors, attorneys and other advisors regarding its rights and
          responsibilities under this Agreement and the other Loan Documents, or
          the perfection, protection or preservation of rights and interests
          hereunder or thereunder; in collecting any sum which is not paid when
          due under this Agreement and the other Loan Documents; in negotiations
          with respect to any Default or Event of Default or any restructuring
          or "working out" the Loans; and/or in the protection, perfection,
          preservation and enforcement of any and all rights of Lender in
          connection with this Agreement and any of the other Loan Documents,
          including, without limitation, the fees and costs incurred in any
          out-of-court work-out, any litigation or in any bankruptcy or
          reorganization proceeding or similar proceeding.

    12.11 Indemnity. Borrower will indemnify, defend and hold harmless Lender,
          its respective directors, officers, counsel and employees, from and
          against all claims, demands, liabilities, judgments, losses, damages,
          costs and expenses, joint or several (including all accounting fees
          and Attorneys' Fees reasonably incurred), that any such indemnified
          party may incur arising under or by reason of this


<PAGE>



          Agreement, any of the Loans, Loan Documents or Collateral, or any act
          hereunder or thereunder or with respect hereto or thereto except the
          willful misconduct or negligence of such indemnified party. Without
          limiting the generality of the foregoing, Borrower agrees that if,
          after receipt by Lender of any payment of all or any part of the
          Obligations, demand is made at any time upon Lender for the repayment
          or recovery of any amount or amounts received by it in payment or on
          account of the Obligations and Lender repays all or any part of such
          amount or amounts by reason of any judgment, decree or order of any
          court or administrative body, or by reason of any settlement or
          compromise of any such demand, this Agreement will continue in full
          force and effect and Borrower will be liable, and will indemnify,
          defend and hold harmless Lender for the amount or amounts so repaid.
          The provisions of this Section will be and remain effective
          notwithstanding any contrary action which may have been taken by
          Borrower in reliance upon such payment, and any such contrary action
          so taken will be without prejudice to Lender's rights under this
          Agreement and will be deemed to have been conditioned upon such
          payment having become final and irrevocable. The provisions of this
          Section will survive the termination of this Agreement.

    12.12 Continuing Agreement. This Agreement is and is intended to be a
          continuing Agreement and will remain in full force and effect until
          the Obligations are finally and irrevocably paid in full and the Notes
          and Total Commitment are terminated.

    12.13 Complete Agreement. This Agreement, together with the exhibits and
          schedules hereto, the other Loan Documents and related documents to be
          delivered on the Line of Credit Closing Date and each Closing Date
          thereafter, constitutes the entire agreement of the parties hereto
          regarding the subject matter hereof and thereof and supersedes any
          prior or written agreements or understandings regarding such subject
          matter.

    12.14 No Third Party Beneficiaries. Nothing express or implied herein is
          intended or will be construed to confer upon or give any person, firm
          or corporation, other than the parties hereto, any right to remedy
          hereunder or by reasons hereof.

    12.15 No Partnership or Joint Venture. Nothing contained herein or in any of
          the agreements or transactions contemplated hereby is intended or will
          be constructed to create any relationship other than as expressly
          stated herein or therein and will not create any joint venture,
          partnership or other relationship.

    12.16 Confidentiality. Lender will take all steps reasonably appropriate to
          keep all information delivered to them by Borrower hereunder
          confidential - except for disclosures: (i) required by any court
          order, law, rule or regulation or (ii) to their accountants and
          attorneys.

    12.17 Governing Law and Jurisdiction; Waiver of Jury Trial. THIS AGREEMENT
          WILL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES
          HERETO DETERMINED IN ACCORDANCE WITH THE LAWS




<PAGE>



          OF THE STATE OF OHIO WITHOUT REGARD TO ITS CONFLICT OF LAWS
          PRINCIPLES, AND BORROWER HEREBY AGREES TO THE JURISDICTION OF
          ANY STATE OR FEDERAL COURT LOCATED WITHIN HAMILTON COUNTY, OHIO, AND
          CONSENT THAT ANY SERVICE OF PROCESS MAY BE MADE BY CERTIFIED MAIL
          DIRECTED TO BORROWER AT THE ADDRESS SET FORTH HEREIN FOR NOTICES AND
          SERVICE SO MADE WILL BE DEEMED TO BE COMPLETED FIVE (5) BUSINESS DAYS
          AFTER THE SAME HAS BEEN DEPOSITED IN U.S. MAILS, POSTAGE PREPAID;
          PROVIDED THAT NOTHING CONTAINED HEREIN WILL PREVENT LENDER FROM
          BRINGING ANY ACTION OR EXERCISING ANY RIGHTS AGAINST ANY SECURITY OR
          AGAINST BORROWER INDIVIDUALLY OR AGAINST ANY PROPERTY OF BORROWER,
          WITHIN ANY OTHER STATE OR NATION TO ENFORCE ANY AWARD OR JUDGMENT
          OBTAINED IN THE FEDERAL OR STATE COURT LOCATED IN HAMILTON COUNTY,
          OHIO. BORROWER WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS AND
                                                       ----- --- ----------
          ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER. BORROWER
          AND LENDER EACH UNCONDITIONALLY AND IRREVOCABLY WAIVE ANY RIGHT TO
          TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT,
          THE OTHER LOAN DOCUMENTS OR ANY TRANSACTION CONTEMPLATED IN ANY OF
          SUCH AGREEMENTS.



     Effective as of October 30, 1998.

                                 BORROWER:

                                 GRAND COURT-GREATWOOD, L.P.

                                 By:
                                    -------------------------------
                                 Print Name:
                                            -----------------------
                                 Title:
                                       ----------------------------


                                 LENDER:

                                 KEY CORPORATE CAPITAL INC.

                                 By:
                                    --------------------------------
                                      Troy E. Miller
                                      Vice President




<PAGE>



                                    EXHIBIT A


                           BORROWER ADDITION AMENDMENT


      --------------------------------------------------------------------------
("New Borrower(s)"), and GRAND COURT-GREATWOOD, L.P. (collectively,
"Borrowers"), and KEY CORPORATE CAPITAL INC. ("Lender"), hereby agree as follows
effective as of               , 19      ("Effective Date"):
               ---------------    ------

1.       Recitals.

         1.1      On October 30, 1998 Borrowers and Lender entered into a Line
                  of Credit Agreement ("Line of Credit Agreement") and a
                  Promissory Note (collectively, with any other Note entered
                  into by any Borrower with Lender, the "Notes"). Capitalized
                  terms used herein and not otherwise defined will have the
                  meanings given such terms in the Line of Credit Agreement. As
                  used herein, "Line of Credit Agreement" and "Notes" will mean
                  such documents as they may have been amended prior to the
                  Effective Date.

         1.2      New Borrower, Borrowers, and Lender, desire to amend the Line
                  of Credit Agreement, the Notes, and all other documents
                  executed in connection therewith (collectively, "Loan
                  Documents") pursuant to this Borrower Addition Amendment
                  ("Amendment") as set forth herein.

2.       Amendment.

         2.1      All references in the Loan Documents to "Borrower" or
                  "Borrowers" will include New Borrower.

         2.2      All reference in the Loan Documents to "Debtor" or "Debtors"
                  will include New Borrower.

         2.3      The Transaction Guarantee given by Grand Court to secure the
                  obligations of the Borrowers is hereby amended to add New
                  Borrower as a Debtor whose obligations are secured by the
                  Guarantee.

         2.4      The Completion Guarantee given by Guarantor to secure the
                  Completion of each Project is hereby amended to add New
                  Borrower as a Debtor whose Project shall be included in the
                  Guarantee.

3.       Representations and Warranties. To induce Lender to enter into this
         Amendment, New Borrower represents and warrants as follows:

         3.1      The representations and warranties of Borrowers contained in
                  the Loan Documents are deemed to have been made again by
                  Borrowers and New Borrower on and as of the date of execution
                  of this Amendment.



<PAGE>



         3.2      No Event of Default (as such term is defined in the Loan
                  Documents) or event or condition which with the lapse of time
                  or giving of notice or both would constitute an Event of
                  Default exists on the date hereof.

         3.3      New Borrower has received a complete copy of each of the Loan
                  Documents, and has reviewed the Loan Documents to the extent
                  deemed appropriate or necessary by New Borrower.

4.       Covenants.

         4.1      New Borrower, with the consent of Lender, hereby assumes the
                  duties and obligations of a Borrower under the Line of Credit
                  Agreement, and all of the documents executed in connection
                  therewith (collectively, the "Loan Documents"), including but
                  not limited to the Notes, and New Borrower agrees to pay the
                  Notes in accordance with their terms and to keep and perform
                  all of the covenants, obligations and conditions of the Loan
                  Documents.

         4.2      New Borrower agrees to execute one or more financing
                  statements pursuant to the Uniform Commercial Code in form
                  satisfactory to Lender and will pay the cost of filing
                  financing, continuation and termination statements in all
                  public offices where filing is deemed necessary or desirable
                  by Lender. New Borrower will execute and deliver to Lender
                  from time to time such supplemental assignments or other
                  instruments as Lender may require for the purpose of
                  confirming Lender's interest in the Collateral. New Borrower
                  hereby authorizes Lender to execute and file on behalf of New
                  Borrower all financing statements, deeds of trust or
                  mortgages, and documents deemed necessary or appropriate to
                  perfect Lender's interest in the Collateral.

5.       General.

         5.1      Except as expressly modified herein, the Loan Documents, as
                  amended, are and remain in full force and effect.

         5.2      Nothing contained herein will be construed as waiving any
                  default or Event of Default under the Loan Documents or will
                  affect or impair any right, power or remedy of Lender under or
                  with respect to the Loan Documents, as amended, or any
                  agreement or instrument guaranteeing, securing or otherwise
                  relating to any of the Loans.

         5.3      All representations and warranties made by Borrowers and New
                  Borrower herein will survive the execution and delivery of
                  this Amendment.

         5.4      This Amendment will be binding upon and inure to the benefit
                  of Borrowers, New Borrower, and Lender and their respective
                  successors and assigns.

         5.5      New Borrower will pay Lender's attorneys fees of $8000 plus
                  out of pocket expenses incurred in connection with the
                  preparation of this Amendment and the Loan Documents related
                  hereto. Such fees may be deducted by Lender from the proceeds
                  of an Advance.

         5.6      This Amendment will in all respects be governed and construed
                  in accordance with the laws of the State of Ohio.



<PAGE>



          5.7       A copy of this Amendment may be attached to the Notes as an
                    allonge.




<PAGE>



         Executed as of the Effective Date.

                                     LENDER:

                                     KEY CORPORATE CAPITAL INC.

                                     By:
                                        ------------------------
                                              Troy E. Miller
                                              Vice President

                                     NEW BORROWER:

                                     ---------------------------
                                     By:
                                        ------------------------
                                     Print Name:
                                                ----------------
                                     Title:
                                           ---------------------


                                     BORROWERS:

                                     GRAND COURT - GREATWOOD, L.P.



                                     By:
                                        --------------------------
                                     Print Name:
                                                ------------------
                                     Borrowers' Designated Officer



<PAGE>



                                    EXHIBIT B


                    REQUIREMENTS OF TITLE COMMITMENT / POLICY



Title Insurance Company Requirements. The maximum single risk (i.e., the
          amount insured under any one policy) by a title insurer may not exceed
          25% of that insurer's surplus and statutory reserves. The Policy must
          be written by an insurer authorized to do business in the jurisdiction
          in which the Property is located.

Loan Policy Forms. Standard 1992 American Land Title Association ("ALTA")
         form of loan title insurance policy, or the 1987 or 1970 (amended
         October 17, 1970 and October 17, 1984) ALTA loan form policies must be
         used (the ALTA 1990 loan policy will not be accepted).

Insurance Amount. The amount insured must equal at least the original principal
          amount of the loan.

Named Insured. The named insured under the Policy must be substantially the
          same as the following: "Key Corporate Capital Inc., and its respective
          successors and assigns."

Creditors' Rights. Any "creditors' rights" exception or other exclusion from
          coverage for voidable transactions under bankruptcy, fraudulent
          conveyance or other debtor protection laws or equitable principles
          must be removed by either an endorsement or a written waiver.

Arbitration. In the event that the form Policy which is utilized includes a
          compulsory arbitration provision, the insurer must agree that such
          compulsory arbitration provisions do not apply to any claims by or on
          behalf of the insured. Please note that the 1987 and 1990 ALTA form
          loan policies include such provisions.

Date of Policy. The effective date of the Policy must be as of the date and
          time of the closing and shall be authorized by Agent. The Mortgage
          shall not be recorded until after the closing. Upon the recording of
          the Mortgage the Policy shall be redated as of the date of the
          recording of the Mortgage.

Legal Description. The legal description of the Property contained in the
         Policy must conform to (i) the legal description shown on the survey of
         the Property, and (ii) the legal description contained in the Mortgage.
         In any event, the Policy must be endorsed to provide that the insured
         legal description is the same as that shown on the survey.

Easements. Each Policy shall insure, as separate parcels: (a) all appurtenant
          easements and other estates benefiting the property, and (b) all other
          rights, title and interests of the borrower



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          in real property under reciprocal easement agreements, access
          agreements, operating agreements and agreements containing covenants,
          conditions and restrictions relating to the Property.

UCC, Tax, Judgment and Lien Searches. UCC, tax, judgment and lien searches
         must be made no earlier than thirty (30) days before the closing of the
         loan against the borrower and its principals (identified as such in the
         mortgage loan application) in (i) the county where the property is
         located, (ii) the Secretary of State's office of the State where the
         property is located, (iii) the county where any such party has its
         principal place of business or, if an individual, its residence, (iv)
         the Secretary of State's office of the state where any such party and
         its principal place of business or, if an individual, its residence,
         and (v) if not already covered, the Secretary of State's offices of the
         state of formation of each of the foregoing entities.

Exceptions to Coverage.  With respect to the exceptions, the following applies:

         Each Policy shall afford the broadest coverage available in the
                  state in which the subject property is located.

         With respect to the "standard" exceptions (such as for parties in
                  possession or other matters not shown on public records), such
                  exceptions must be deleted.

         With respect to the "standard" exception regarding tenants in
                  possession under residential leases, such exception should
                  also be deleted. In the alternative, the exception should read
                  as follows: "Rights or claims of parties in possession under
                  residential leases or occupants of apartment units, as tenants
                  only, without any right of first refusal to purchase any
                  portion of the property."

         The standard survey exception to the Policy must be deleted.
                  Instead, a survey reading reflecting the current survey should
                  be incorporated.

         Any exception for taxes, assessments or other lienable items must
                  expressly insure that such taxes, assessments or other items
                  are not yet due and payable.

         Any lien, encumbrance, condition, restriction or easement of
                  record must be listed in the Policy, and the Policy must
                  affirmatively insure that the improvements do not encroach
                  upon the listed easements or insure against all loss or damage
                  due to such encroachment.

         The Policy may not contain any exception for any filed or unfiled
                  mechanics' or materialmen's liens.

         In the event that a comprehensive endorsement has been issued and
                  any Schedule B exceptions continue to be excluded from the
                  coverage provided through that endorsement, then a
                  determination must be made whether such exceptions would be
                  acceptable to Agent. In the event that it is determined that
                  such exception is



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                  acceptable, a written explanation regarding the acceptability
                  must be submitted as part of the delivery of the loan
                  documents.

         If Schedule B indicates the presence of any easements that are
                  not located on the survey, the Policy must provide affirmative
                  insurance against any loss resulting from the exercise by the
                  holder of such easement of its right to use or maintain that
                  easement. CLTA Form 103.1 or an equivalent endorsement is
                  required for this purpose.

Endorsements.  With respect to endorsements, the following applies:

                  EachPolicy must include an acceptable environmental protection
                  lien endorsement on ALTA Form 8.1. Please note that Form 8.1
                  may take exception for an entire statute which contains one or
                  more specific sections under which environmental protection
                  liens could take priority over the Mortgage; provided,
                  however, that such specific sections under which the lien
                  could arise must also be referenced.

              EachPolicy must contain an endorsement which provides that the
                  insured legal description is the same as shown on the survey.

              EachPolicy must contain a comprehensive endorsement (ALTA Form 9)
                  if a lien, encumbrance, condition, restriction or easement is
                  listed in Schedule B to the title insurance policy.

              The following endorsements shall be included in each Policy
                  (unless inapplicable given the circumstances of the
                  transaction):

                  -access
                  -zoning (ALTA 3.1)
                  -assignment of loan documents -contiguity -single tax lot
                  -doing business -due execution -mortgage tax -usury -address
                  -assignment of leases and rents -assessments -mineral rights
                  -reverter -subdivision -leasehold -tie-in -first loss
                  -lastdollar




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13       Other Coverages. Each Policy shall insure the following by endorsement
         or affirmative insurance to the extent such coverage is not afforded by
         the ALTA Form 9 or its equivalent in a particular jurisdiction:

          a.        that no conditions, covenants or restrictions of record
                    affecting the Property:

                    (i)       have been violated,

                    (ii)      create lien rights which prime the insured
                              mortgage, contain a right of reverter or
                              forfeiture, a right of reentry or power of
                              termination, or

                  if violated in the future would result in the lien
                  created by the insured mortgage, or title to the
                  Property being lost, forfeited or subordinated; and

                  that except for temporary interference resulting solely from
                  maintenance, repair, replacement or alteration of lines,
                  facilities or equipment located in easements and rights of way
                  taken as certain exceptions to each Policy, such exceptions do
                  not and shall not prevent the use and operation of the
                  Property or the improvements as used and operated on the
                  effective date of the Policy.

Informational Matters. The Policy must include, as an informational note, the
following:

         The recorded plat number together with recording information; and

         The property parcel number or the tax identification number, as
applicable.

                    Financing Statements. Any financing statements filed or
                    recorded showing the Agent as secured party must be shown as
                    an informational note only. Such financing statements (and
                    assignments thereof) may not be listed as exceptions on
                    Schedule B.

Delivery  of Copies. All copies of all easements, encumbrances or other
          restrictions shown as exceptions on the Policy must be delivered.







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                                    EXHIBIT C

                               SURVEY REQUIREMENTS

1.       Property Survey:

         1.1      A survey shall be certified to Key Corporate Capital Inc. and
                  Borrower and Title Insurance Company by a registered land
                  surveyor using the attached long-form certification. The
                  survey is to have the surveyor's seal affixed and shall
                  reflect a current date. Older surveys are acceptable if
                  updated and re-certified.

         1.2      The full legal description and street address must be shown.
                  The legal description must be identical to that contained in
                  the title insurance commitment. If the premises are described
                  as being on a filed plat or map, the survey should contain a
                  legend relating the parcel to the map on which it is shown.

         1.3      All perimeter property lines must be specifically identified.
                  Show the location by courses and distances of: (a) the parcel
                  to be covered by the mortgage; (b) clearly designate the point
                  of beginning and the relation of the point of beginning of
                  said parcel to the monument from which it is fixed; (c) all
                  servient easements; (d) the established building line; (e) all
                  easements appurtenant to said parcel (f) the line of the
                  street or streets abutting the parcel and the width of said
                  streets; (g) the location by courses and distances of the
                  nearest intersection of two streets to the subject property.

         1.4      The number of square feet or acres contained in the parcel
                  must be specifically identified.

         1.5      All streets adjacent to the property and R.O.W. lines must be
                  specifically identified. The survey must disclose that access
                  to the adjacent streets exists.

         1.6      All exceptions on the title insurance commitment must be
                  plotted (or, identified on the face of the survey as not
                  plottable). Indicate the reason that any exceptions (except
                  liens) are not plottable.

         1.7      All easements affecting the property shall be identified by
                  recording information (book and page or document number of
                  instrument creating the easement).

         1.8      Identify all utility lines as they service the property and
                  improvements (sewer, water, gas, electric and telephone).
                  Indicate whether the utility line is above or below grade and
                  show the sizes of the respective service.

         1.9      Show and describe encroachments or make a positive statement
                  there are not encroachments.

         1.10     State whether or not the property appears on any U.S.
                  Department of H.U.D.



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                  Flood Insurance Boundary Map and, if so, further state the map
                  number and whether or not the property appears in the "Flood
                  Hazard" shown on the map.

         1.11     Show the location of railroad tracks and sidings.

         1.12     The location of rubbish fills, sloughs, springs, filled-in
                  wells or cisterns and seep holes should be charted wherever
                  possible.

         1.13     For property on which existing improvements are to remain,
                  include:

                  1.13.1   All structures and improvements including sidewalks,
                           stoops, over-hangs, and parking areas must be shown.
                           The square footage of all structures must be listed.
                           Show all structures and improvements on said parcel
                           with horizontal lengths of all sides and the relation
                           thereof by distances to (i) all boundary lines of the
                           parcel; (ii) servient easements; (iii) established
                           building lines; and (iv) street lines.

                  1.13.2   Identify parking and paved areas. Identify the number
                           of vehicles that may be parked in each parking area.

2.   Foundation Survey:

         2.1      The property survey shall be updated to show the location of
                  added building foundations. It shall show horizontal lengths
                  of all sides and the relation thereof by distances to: (a) all
                  boundary lines of the parcel; (b) servient easements; (c)
                  established building lines; and (d) street lines.

          2.2     Certification shall be updated to the date the foundation
                  survey was made.

3.   Final Survey:

         3.1      The property survey shall be updated to show all completed
                  structures and improvements in the same manner as required in
                  item 13 (a) above.

         3.2      Certification will be updated to the date the final survey
                  was made.







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                                    EXHIBIT D

                       LONG-FORM CERTIFICATION FOR SURVEYS

I hereby certify to Key Corporate Capital Inc. and Borrower and Title Insurance
Company that the survey prepared by me entitled "
_________________________________" was actually made upon the ground and that it
and the information, courses and distances shown thereon are correct; that the
title lines and lines of actual possession are the same; that the size, location
and type of buildings and improvements are as shown and all are within the
boundary lines of the property; that there are no violations of zoning
ordinances, restrictions or other rules and regulations with reference to the
location of said building and improvements; that there are no easements,
encroachments or use affecting this property appearing from a careful physical
inspection of the same, other than those shown and depicted thereon; that all
utility services required for the operations of the premises either enter the
premises through adjoining public streets, or the survey shows the point of
entry and location of any utilities which pass through or are located on
adjoining private land; that the survey shows the location and direction of all
storm drainage systems for the collection and disposal of all roof and surface
drainage; that any discharge into streams, rivers or other conveyance system is
shown on the survey; and that the parcels described heron do not lie within
flood hazard areas in accordance with the document entitled "Department of
Housing and Urban Development, Federal Insurance Administration - Special Flood
Hazard Area Maps". This survey is made in accordance with the "Minimum Standard
Detail Requirements for Land Title Surveys" jointly established and adopted by
ALTA and ACSM."





                                        BY: ___________________________



                                        DATE: _________________________



(Seal)


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