Document:

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                                                                   EXHIBIT 10.61

                             PARTICIPATION AGREEMENT

         THIS PARTICIPATION AGREEMENT ("Agreement") is entered into as of
February 28, 2002, by and between SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP
("Lender"), and WOODWARD HOLDING, LLC ("Participant").

                                    RECITALS

         A. Lender has provided to Origen Financial, Inc. ("Origen Inc.") and
Origen Financial, L.L.C. ("Origen LLC" and together with Origen Inc., the
"Borrowers") a line of credit facility in the amount of $17,500,000 (the "Line
of Credit") pursuant to the terms and conditions of a certain Amended and
Restated Subordinated Loan Agreement dated February 1, 2002, (the "Loan
Agreement"). All capitalized terms not otherwise defined in this Agreement shall
have the meanings ascribed to such terms in the Loan Agreement.

         B. Advances under the Line of Credit are evidenced by a Second Amended
Promissory Note dated as of February 1, 2002 (the, "Line of Credit Note")
executed and delivered by the Borrowers. The payment and performance of the Line
of Credit Note is secured by substantially all assets of the Borrowers (the,
"Collateral") as described in and evidenced by (i) a certain Amended and
Restated Security Agreement between Origen Inc. and Lender dated February 1,
2002, (ii) a certain Security Agreement between Origen LLC and Lender dated
February 1, 2002, (iii) a certain Amended and Restated Limited Liability Company
Interest Security and Pledge Agreement between Origen Inc. and Lender dated
February 1, 2002, (iv) a certain Limited Liability Company Interest Security and
Pledge Agreement between Origen LLC and Lender dated February 1, 2002, and (v) a
certain Amended and Restated Stock Pledge Agreement between Origen LLC and
Lender dated February 1, 2002 (collectively, the "Collateral Documents"). The
payment and performance of the Line of Credit Note is guaranteed by Bingham
Financial Services Corporation as evidenced by an Amended and Restated Guaranty
dated February 1, 2002 ("Guaranty"). The Loan Agreement, Line of Credit Note,
Collateral Documents and Guaranty together with all other documents, agreements
and instruments executed in connection therewith, are collectively referred to
as the "Line of Credit Loan Documents."

         C. Lender has agreed to sell and Participant has agreed to purchase a
participation in the Line of Credit on the terms and conditions herein set
forth.

         NOW, THEREFORE, in consideration of the premises and the mutual
undertakings herein contained, Lender and Participant hereby agree as follows:

         1. Participation. Subject to the terms and conditions of this
Agreement, Lender hereby sells and agrees to sell and Participant hereby
purchases and agrees to purchase (a "Participation") an undivided fifty percent
(50%) interest (subject to adjustment in accordance with Section 3 below, the
"Participation Percentage") in the Line of Credit. For purposes of this
Agreement, the "Participation Loan" shall mean the Line of Credit (including any
amounts outstanding on the date hereof and any Committed Advances (as defined
below) made hereafter),

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together with any Future Advances (as defined in Section 3) in which each of
Lender and Participant from time to time acquire and hold an interest pursuant
to Section 3, and the "Loan Documents" shall mean all documents, agreements and
instruments executed in connection with the Participation Loan, including,
without limitation, the Line of Credit Loan Documents. The parties acknowledge
and agree that the committed lending limit under the Line of Credit is
$17,500,000.00 (the "Committed Amount"). The interest of Participant under this
Agreement shall include but not be limited to (a) participation in (i) the
currently outstanding amounts under the Line of Credit, including the right to
receive payments of principal and interest payable under the Line of Credit
Note, and (ii) participation in any advances made under the Line of Credit up to
the Committed Amount thereunder ("Committed Advances"), and (b) the right to (i)
receive a pro rata portion of the commitment fee paid and payable by Borrowers
with respect to the Line of Credit, (ii) purchase, at its option, interests in
Future Advances pursuant to Section 3, (iii) receive the proceeds received upon
the disposition of the Collateral, and (iv) the benefits and burdens arising
from the Loan Documents as each of the Loan Documents are amended by Lender
(either individually or collectively) subsequent to the date hereof in
accordance with the terms of this Agreement, all for the pro rata account and
risk of Participant to the extent of its Participation Percentage. Participant's
right to receive its Participation Percentage in the interest, however, shall be
limited to interest which accrues and is paid on or after the date Participant
pays Lender for its Participation in the Line of Credit. This Agreement
constitutes a nonrecourse sale of a Participation equal to the Participation
Percentage and shall not be construed as a loan by Participant to Lender or as a
sale of securities by Lender to Participant or as creating any other
relationship.

         2. Payment of Purchase Price. No later than two business days after the
execution of this Agreement, Participant shall pay Lender the sum of
$8,405,785.64 for the purchase of its undivided Participation in the Line of
Credit. The foregoing purchase price represents Participant's Participation
Percentage in the current outstanding principal balance under the Line of Credit
Note less Participant's Participation Percentage in origination fees of $150,000
paid by Borrowers prior to the date hereof with respect to the Committed Amount.
Lender shall give Participant prompt written notice of any Committed Advance to
be made on the Line of Credit. Participant shall deliver immediately available
funds to Lender no later than five (5) business days after Lender funds the
Committed Advance (or such other date, as mutually agreed by Lender and
Participant) in an amount equal to fifty percent (50%) of the total amount of
the Committed Advance paid by Lender. Participant shall remit the purchase price
for its Participation in the Line of Credit (including any Committed Advance) by
wire transfer, in accordance with the following wire instructions:

         Bank:  Bank One - Michigan
         ABA #072000326
         For Credit to Sun Operating Communities Operating Limited Partnership
         Account #1530503

         Participant's Participation under this Agreement with respect to the
Committed Amount under the Line of Credit Note or any Committed Advances shall
be effective as of the day the purchase price for such Participation interest is
received by Lender. The obligation of Participant

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to provide Lender with the purchase price of Participant's Participation in any
Committed Advance is irrevocable and shall be absolute and unconditional under
any and all circumstances and irrespective of any set-off, counterclaim or
defense to payment that Participant may have or have had against Lender.

         3. Future Advances.

                  a. If either Lender or Participant (an "Advancing Party"),
desires to loan money to Borrowers after the date hereof (in addition to, and
exclusive of, any Committed Advances), whether effected by amending the Line of
Credit Loan Documents or entering into new loan documents with the Borrowers, (a
"Future Advance"), the Advancing Party shall send the other party to this
Agreement (the "Other Party") a notice of the amount and other terms of the
Future Advance; provided, however, that an Advancing Party shall not be required
to deliver such notice to the Other Party until such time as all Future Advances
made by such Advancing Party hereunder, in the aggregate, equal or exceed
$1,000,000.00. The Other Party shall then have the right (but not the
obligation) to purchase up to a 50% participation interest in the Future
Advance. If the Other Party does not respond to the Advancing Party's notice
within five (5) business days after the Other Party's receipt of such notice (or
such other date, as mutually agreed by the Advancing Party and the Other Party),
the Other Party shall be deemed to have declined to purchase a participation
interest in the Future Advance. If the Other Party wishes to purchase up to a
50% participation interest in the Future Advance, the Other Party shall deliver
immediately available funds to the Advancing Party no later than five (5)
business days after the Advancing Party funds the Future Advance (or such other
date, as mutually agreed by the Advancing Party and the Other Party) in an
amount equal to the product of (i) the percentage interest purchased by the
Other Party in the Future Advance, multiplied by (ii) the total amount of the
Future Advance. Any participation in a Future Advance by an Other Party shall be
effective as of the day the purchase price for such participation interest is
received by the Advancing Party. To the extent an origination fee shall be
payable by Borrowers in connection with any Future Advance, the Advancing Party
shall remit to or give a credit for a portion of such origination fee to the
extent of the Other Party's percentage interest in the total amount of the
Future Advance. If an Other Party purchases a participation interest in any
Future Advance, the Participant's Participation Percentage in the Participation
Loan shall be adjusted so that it is equal to (i) the total dollar amount of the
Participant's advances under the Participation Loan (without giving effect to
credits for or receipt of any origination fees), divided by (ii) the total
principal amount of the Participation Loan.

                  b. If the Other Party does not purchase a participation
interest in the Future Advance or such Future Advance is not yet offered to the
Other Party in accordance with Section 3.a. above, then the entire amount of the
Future Advance shall be a "Non-Participation Loan."

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                  c. All indebtedness owing from Borrowers to an Advancing Party
under a Non-Participation Loan shall at all times be wholly subordinate and
junior in right to payment in full of the Participation Loan and all Senior Debt
(as defined in the Loan Agreement). The Advancing Party agrees to enter into a
subordination agreement reasonably acceptable to the Other Party effecting such
subordination upon the making of a Non-Participation Loan.

                  d. All indebtedness owing from Borrowers to an Advancing Party
under a Non-Participation Loan shall be evidenced by a note other than the note
or notes evidencing indebtedness owing under the Participation Loan. If a
Non-Participation Loan is made by Participant, the parties agree to enter into a
mutually acceptable intercreditor agreement on terms substantially in accordance
with this Agreement.

                  e. If an affiliate of Lender or Participant is the lender of
record with respect to any advance constituting any part of the Participation
Loan or a Non-Participation Loan, the parties agree to enter into (and to cause
their respective affiliates, as the case may be, to enter into) a mutually
acceptable intercreditor agreement on terms substantially in accordance with
this Agreement.

         4. Certificate of Participation. No participation certificate shall be
issued by Lender to Participant as this Agreement alone shall evidence the
participation interest in the Participation Loan.

         5. Receipt of Documents.

                  a. By entering into this Agreement, Participant acknowledges
that it has received and is satisfied with and hereby approves the form and
substance of the Line of Credit Loan Documents including any exhibits thereto.

                  b. Participant acknowledges that it has received the same
information regarding the Borrowers as has the Lender. Participant waives any
right to require Lender to furnish or make available to the Participant any of
the Lender's internal credit analysis of the Borrowers. Any such analysis was
prepared solely for internal purposes and the Participant acknowledges and
agrees that it is not and would not be entitled to rely thereon in making its
credit decision.

         6. Application of Payments. Promptly upon receipt by Lender of any
payment of principal or interest on the Participation Loan, Lender shall remit
to Participant its share thereof (after deducting any amount due from
Participant to Lender under this Agreement) determined in accordance with
Section 1 of this Agreement.

         7. Reports, Notice of Default, etc. Lender shall promptly furnish to
Participant copies of all reports and financial statements received from
Borrowers pursuant to the Loan Documents. Lender shall have no responsibility to
Participant for any errors or omissions in any such reports, financial
statements or other information and shall not otherwise be liable to

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Participant for failing to comply with the provisions of this Section, unless
such failure is due to Lender's gross negligence or willful misconduct.

         Lender shall promptly notify Participant of the occurrence of any Event
of Default, as defined in the Loan Documents, of which the officer of Lender
responsible for the Loan has actual knowledge. Similarly, Participant will
promptly notify Lender of the occurrence of any Event of Default under the Loan
Documents of which the officer of Participant responsible for administration of
Participant's interest has actual knowledge. Failure to give any notice required
under this Section shall not result in any liability of the Lender to the
Participant, or of the Participant to the Lender, or relieve the Lender or the
Participant, as the case may be, from any of their obligations hereunder.

         8. Loan Documents. Lender shall hold all Loan Documents delivered in
connection with the Participation Loan for the benefit of itself and Participant
in accordance with their respective proportionate shares. Lender shall at all
times keep proper books of account and records at its principal office
reflecting Participant's proportionate share in the Participation Loan, which
records shall be accessible for inspection by Participant at all reasonable
times during business hours and upon reasonable notice to Lender.

         9. Servicing of Participation Loan; Management and Enforcement of Loan
Documents. Lender shall be responsible for the normal routine servicing of loan
advances and payments under the Participation Loan on behalf of itself and
Participant in accordance with the terms of this Agreement. However, so long as
Participant has any outstanding Participation interest in the Participation
Loan, Lender and Participant shall jointly manage and enforce the terms of the
Loan Documents. Specifically, without the prior written consent of Participant,
Lender shall not (i) agree to any amendment or modification of any of the Loan
Documents of any kind or nature, (ii) waive any condition or provision of the
Loan Documents, (iii) declare any Event of Default or enforce any remedy under
the Loan Agreement or provided by law or in equity (whether such Event of
Default arises in whole or in part from any Non-Participation Loan), or (iv)
release any Collateral securing the Participation Loan.

         10. Collection After Maturity. If Lender liquidates Collateral or
receives a payment after maturity of the Participation Loan, by acceleration or
otherwise, and whether pursuant to a demand for payment or as a result of legal
proceedings against Borrowers or through payment by or action against any other
person in any way liable for the indebtedness evidenced by the Loan Documents,
or from any source whatsoever, such payment shall be applied in the following
order:

                  a. To the unreimbursed costs and expenses, including
attorney's fees, incurred by Lender or Participant, in effecting such recovery
or in enforcing any right or remedy under the Loan Documents or in realizing
upon the Collateral;

                  b. To accrued interest payable under the Participation Loan,
of which the portion due to Participant shall be paid to Participant;

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                  c. To the unpaid principal amount of the Participation Loan,
of which the portion due to Participant shall be paid to Participant; and

                  d. To the unpaid principal, interest and origination fees
payable with respect to any Non-Participation Loan.

         The foregoing notwithstanding, it is expressly understood that if any
loss (including any un-reimbursed expenses in connection with the Loan
Documents) is sustained with respect to the Participation Loan, that portion of
the total loss which is equal to Participant's Participation Percentage shall be
borne by Participant with the balance of the loss being borne by Lender.

         11. Adjustments to Payments.

                  a. If (i) Lender shall pay an amount to Participant pursuant
hereto in the belief or expectation that a related payment has been or will be
received or collected in connection with the Participation Loan, and (ii) such
related payment is not received or collected by Lender, then Participant will,
within three (3) business days of demand by Lender, return such amount to
Lender, together with interest thereon at the overnight Federal Funds Rate. The
Federal Funds Rate shall be the weighted average of the rates on overnight
Federal Funds transactions, with members of the Federal Reserve System only,
arranged by federal funds brokers, as published as of such day by the Federal
Reserve Bank of New York.

                  b. Notwithstanding anything to the contrary contained herein,
if Lender determines at any time that any amount received or collected by Lender
with respect to the Participation Loan must be returned to Borrowers or paid to
any other person or entity pursuant to any insolvency law or sharing clause or
otherwise, then Lender will not be required to distribute any portion thereof to
Participant and, Participant will, within three (3) business days of demand by
Lender, repay any portion thereof that Lender shall have distributed to
Participant, together with interest thereon at such rate(s), if any, as Lender
shall be required to pay to Borrowers or such other person or entity with
respect thereto.

                  c. If Participant shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of setoff, or otherwise) on
account of its Participation in excess of its Participation Percentage of
payments on account of the Participation Loan, Participant shall promptly remit
such excess to Lender.

         12. No Recourse; Limitation of Lender's Liability. Lender's only
obligation to Participant with respect to any payment of principal or of
interest on the Participation Loan or for any fees or other amounts payable by
Borrowers under any of the Loan Documents shall be to remit to Participant its
share of any such payment if, when, and as received by Lender. Neither Lender
nor Participant shall have any recourse against the other as a result of
Borrowers' failure to make any payment due under the Participation Loan or for
any fee or other amounts payable by Borrowers under the Loan Documents. Neither
Lender nor Participant shall have any responsibility with respect to any
representations, warranties or statements made by Borrowers in the Loan
Documents. All losses, including but not limited to those resulting from the
foregoing

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matters, shall be borne by the parties in proportion of their respective
proportionate shares of the Participation Loan.

         Although Lender will exercise the same care in administering the
Participation Loan as if the Participation Loan were made entirely for Lender's
own account, Lender shall have no liability to Participant for any loss except
for any actual loss suffered by Participant due to Lender's own gross negligence
or willful misconduct.

         Without limiting the foregoing, Lender shall be fully protected in
relying upon any certificate, document or other communication which appears to
it to be genuine and to have been signed or presented by the proper person or
persons and upon the advice of legal counsel, independent accountants and other
appropriate experts (including those retained by Borrowers), and shall not be
required to make any inquiry concerning the performance by Borrowers of their
obligations under or compliance by Borrowers with the terms and conditions of
any of the Loan Documents. Except as otherwise expressly set forth herein,
Lender shall not be deemed to be a trustee or fiduciary for Participant in
connection with this participation, the Line of Credit or any Loan Documents,
and has no duties to Participant.

                  13. Reimbursement and Indemnification.

         a. Except as otherwise provided in this Agreement, each of Lender and
Participant (the "Indemnifying Party") shall reimburse the other party (the
"Indemnified Party") immediately on demand for its proportion of all
out-of-pocket expenses, including reasonable attorney's fees, incurred by the
Indemnified Party in connection with the making, managing, or collection of the
Participation Loan or Collateral or any portion thereof, to the extent not
recovered from Borrowers, and shall indemnify and hold the Indemnified Party
harmless from and against the Indemnifying Party's proportion of the amount of
any costs, expenses (including reasonable attorneys' fees and disbursements),
claims, damages, actions, losses or liabilities, that the Indemnified Party may
suffer or incur in connection with this Agreement or any of the Loan Documents,
or the transactions contemplated hereby or thereby, or any action taken or
omitted to be taken by the Indemnifying Party hereunder or thereunder
(collectively, the "Liabilities"). Notwithstanding the foregoing, however, the
Indemnifying Party shall have no obligation to reimburse the Indemnified Party
for any of the Indemnified Party's fees or costs incurred in connection with
this Agreement. In the event that the Indemnified Party recovers any such
amounts from Borrowers after the Indemnifying Party has reimbursed the
Indemnified Party for its proportion of any or all such Liabilities, the
Indemnified Party shall return to the Indemnifying Party its proportion of the
amounts recovered from Borrowers. Notwithstanding anything else set forth in
this Agreement, the obligations and indemnities under this Paragraph shall
survive the payment in full of the Participation Loan and termination of the
Loan Documents and this Agreement.

         b. In the event that the Indemnifying Party does not, on the date on
which the Indemnifying Party is advised by the Indemnified Party of the payment
by the Indemnified Party of any of the foregoing Liabilities, pay the
Indemnified Party in the amount of its proportionate share of Liabilities, the
Indemnifying Party shall pay the Indemnified Party, for each day until

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the date of delivery to the Indemnified Party of such amount in immediately
available funds, interest on its proportionate share of the Liabilities at a
rate equal to the overnight Federal Funds Rate.

         14. Other Relationships with Borrowers.

                  a. Each of Lender and Participant may accept deposits from,
make loans or otherwise extend credit to Borrowers (in compliance with Section
3), and generally engage in any kind of financial services business with
Borrowers, or any affiliate of Borrowers, and receive payment on such loans or
extensions of credit (subject to Section 3) and otherwise act with respect
thereto fully and without accountability to the other party to this Agreement in
the same manner as if the Participation did not exist and the transactions
described herein were not in effect.

                  b. No Other Party shall have any interest in any collateral
(other than the Collateral) to support any Non-Participation Loans made by an
Advancing Party to or for the account of Borrowers. Any payment by Borrowers to
an Advancing Party under any Non-Participation Loans (whether voluntary,
involuntary, through the exercise of an right of setoff or otherwise) shall be
applied first in reduction of amounts outstanding under the Participation Loan.

                  c. No Advancing Party shall have any obligation to make any
claim against, or assert any lien upon or right of setoff against, any property
held by such party as security for a Non-Participation Loan which does not
constitute Collateral security for the Participation Loan.

         15. Lender's Warranties. Lender represents and warrants that:

                  a. It has not heretofore sold, assigned or otherwise disposed
of any interest in the Line of Credit.

                  b. It has full power and authority to enter into and perform
this Agreement and the officer(s) of Lender signing the Agreement on behalf of
Participant have been duly authorized to do so.

                  c. It will remain in possession of the original Loan Documents
or duplicate original copies of the Loan Documents.

                  d. The principal amount outstanding as of the date of this
Agreement under the Line of Credit Note is $16,961,571.28.

                  e. Lender's officer responsible for the Line of Credit is not
aware of the existence of any Event of Default as defined in the Loan Documents
as of the date of this Agreement.

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         Participant and Lender agree that Lender has not made and shall not at
any time be deemed to have made any further representation or warranty, express
or implied, with respect to (i) the due execution, authenticity, legality,
accuracy, completeness, validity or enforceability of any of the Loan Documents,
(ii) the financial condition or creditworthiness or insolvency of Borrowers or
any other entity which may have liability for the Participation Loan, or the
collectibility of the Participation Loan, or (iii) any other matter having any
relation to the Participation, the Participation Loan or the Loan Documents.

         16. Participant's Warranties. Participant represents, warrants and
acknowledges that:

                  a. It has full power and authority to enter into and perform
this Agreement and the officers of Participant signing the Agreement on behalf
of Participant have been duly authorized to do so.

                  b. It has reviewed and approved the form and substance of each
of the Line of Credit Loan Documents.

                  c. Its decision to purchase this Participation and any future
decisions it makes with respect to its Participation in the Participation Loan
was based and will be based solely on its own independent evaluation of the
Participation Loan, the creditworthiness of Borrowers and any other entity which
may have liability for the Participation Loan, and its own investigation of the
legality, sufficiency, and enforceability of the Loan Documents, and of the
risks involved in the transactions contemplated in the Loan Documents and it is
not and will not rely on Lender with respect thereto.

         17. Assignment Upon Certain Events. Lender hereby assigns and transfers
to Participant all right, title and interest of Lender, if any, in and to
Participant's Participation interest in the Participation Loan; provided,
however, that, notwithstanding anything to the contrary herein, such assignment
shall become effective only upon the occurrence of an Assignment Event (as
defined below). An "Assignment Event" shall have occurred if (a) Lender ceases
doing business or Lender's existence is terminated by sale, dissolution, merger
or otherwise, (b) any assignment is made for the benefit of Lender's creditors,
(c) any receiver of Lender is appointed, (d) any insolvency, liquidation or
reorganization proceeding under the U.S. Bankruptcy Code or otherwise shall be
filed by or against Lender, or (e) an event of default shall have occurred
under, and the payment of any indebtedness of Lender shall have been accelerated
under, the terms of any loan agreement pursuant to which Lender has incurred
debt. Upon an Assignment Event, Lender shall execute and deliver or cause to be
executed and delivered such further instruments of conveyance, assignment and
transfer and shall take such other action as Participant may reasonably request
to give effect to the foregoing assignment.

         18. Termination. This Agreement shall terminate upon the complete
payment of all amounts due and satisfaction of all obligations of the Borrowers
under the Participation Loan.

         19. Notices. All notices, demands, consents, approvals and other
communications hereunder (collectively, "notices") shall be in writing or by
facsimile transmission and delivered

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to the parties at their respective addresses set forth below, and the same shall
be deemed to have been given or made when delivered by courier or if made by
facsimile transaction, upon receipt of the answer back code of the designed
party after transmission to the designated party or if made by mail, then three
days after having been deposited in the United States mail, postage prepaid by
registered or certified mail.

             Participant:          Woodward Holding, LLC
                                   2300 Harmon Road
                                   Auburn Hills, MI 48326
                                   Attn: Paul Halpern
                                   Telephone:  (248) 340-2264
                                   Facsimile:  (248) 340-2258

             With a copy to:       Woodward Holding, LLC
                                   2300 Harmon Road
                                   Auburn Hills, MI 48326
                                   Attn: Alan L. Schlang
                                   Telephone:  (248) 340-2170
                                   Facsimile:  (248) 340-2175

             Lender:               Sun Communities Operating Limited Partnership
                                   31700 Middlebelt Road, Suite 145
                                   Farmington Hills, Michigan 48334
                                   Attn: Gary A. Shiffman
                                   Telephone:  (248) 932-3100
                                   Facsimile:  (248) 932-3072

             With a copy to:       Jaffe, Raitt, Heuer & Weiss, P.C.
                                   One Woodward Avenue, Suite 2400
                                   Detroit, MI 48226
                                   Attn: Matthew Murphy
                                   Telephone:  (313) 961-8380
                                   Facsimile:  (313) 961-8358

         20. Assignments; Successors and Assigns. Participant warrants and
represents to Lender that its Participation in the Participation Loan is being
purchased for its own account and not for the purpose or intent of resale.
Participant hereby acknowledges that in reliance upon the foregoing warranty and
representation of Participant, Lender has not registered this loan participation
under the Federal Securities Act of 1933 (as amended) or under any state or
local laws. Except as otherwise permitted in this Agreement, neither Lender nor
Participant shall sell, pledge, assign or otherwise transfer all or a portion of
its interest in the Participation Loan or any of its rights or obligations under
this Agreement without the prior written consent of the other party. Subject to
the foregoing, all provisions contained in this Agreement or related hereto
shall inure to the benefit of and shall be binding upon the respective permitted
successors and assigns of Lender and Participant.

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         21. No Partnership; No Trust. Neither the execution of this Agreement,
nor any agreement to share in the profits or losses arising as a result of the
Participation created hereby, is intended to be or to create, nor will be
construed to be or create, a partnership, joint venture or other joint
enterprise between Lender and Participant.

         Neither the execution of this Agreement, nor Lender's holding the Loan
Documents in its own name, nor the servicing of the Participation Loan by
Lender, nor any other right, duty, or obligation of Lender under or pursuant to
any Loan Document or this Agreement, is intended to be or to create, nor will be
a constructive trust or other fiduciary relationship between Lender and
Participant. Notwithstanding the foregoing, (a) Lender and Participant agree
that any payment relating to a purchase of a participation interest by either
party to this Agreement received by the other party pursuant to Section 2 or 3
shall not be deemed to be the property of the receiving party and shall be held
in trust by the receiving party for the benefit of the purchasing party until
either (i) advanced by the receiving party under an advance request or (ii)
applied by the receiving party as reimbursement for an advance made by the
receiving party prior to receipt by the receiving party of an amount equal to
the purchasing party's participation percentage in such advance, and (b) Lender
agrees that a pro rata portion (based on the Participant's Participation
Percentage) of (i) any proceeds of Collateral received by Lender, and (ii) any
payments of principal, interest, penalties, fees or costs received by Lender
with respect to the Participation Loan, shall not be deemed to be the property
of Lender and shall be held in trust by Lender for the benefit of Participant
until remitted to Participant in accordance with this Agreement.

         22. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan.

         23. Captions. The Paragraph captions in this Agreement have been
inserted solely for ease of reference, and are not a part of this Agreement.

         24. Entire Agreement. This Agreement embodies the entire agreement and
understanding between Lender and Participant and supersedes any and all prior
agreements and understandings with respect to the subject matter hereof. This
Agreement may not be amended or in any manner modified unless such amendment or
modification is in writing and signed by both parties. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument. If any provision hereof
would be invalid under applicable law, then such provision shall be deemed to be
modified to the extent necessary to render it valid, while most nearly
preserving its original intent; no provision hereof shall be affected by another
provision being held invalid.

         25. Dispute Resolution. Any and all disputes, controversies or claims
arising out of or related in any way to this Agreement shall be resolved as
provided in this Section 24; provided, however, that either party may seek a
preliminary injunction or other provisional judicial relief if, in its judgment,
such action is necessary to avoid irreparable damage or to preserve the status
quo. Despite any such action, the parties will continue to participate in good
faith in the

                                       11
<PAGE>

procedures set forth in this Section 24. The parties shall meet promptly to make
a good faith effort to resolve any dispute arising under this Agreement. If the
good faith attempts to resolve the dispute are unsuccessful, the parties shall
submit such dispute to arbitration. All such arbitration proceedings shall be
held in the Detroit, Michigan metropolitan area and shall be conducted under the
rules of the American Arbitration Association (the "Rules"). A single arbitrator
(the "Arbitrator") mutually agreeable to the parties shall preside over such
proceedings and shall make all decisions with respect to the resolution of the
dispute, controversy or claim between the parties. In the event the parties are
unable to agree on the Arbitrator within fifteen (15) days after either party
has filed for arbitration in accordance with the Rules, they shall select a
truly neutral arbitrator in accordance with the Rules for the selection of
neutral arbitrators, who shall be the "Arbitrator" for the purposes of this
Section 24. The decision of the Arbitrator shall be final and binding on the
parties, and a judgment may be entered in a court of competent jurisdiction in
order to enforce the Arbitrator's award. The parties shall be entitled to
reasonable levels of discovery (as determined by the Arbitrator in his or her
sole and absolute discretion) in accordance with the Federal Rules of Civil
Procedure. The parties also hereby acknowledge that it is their intent to
expedite the resolution of the dispute, controversy or claim in question, and
that the Arbitrator shall schedule the timing of the hearing consistent with
that intent. During the course of the proceedings, all fees to be paid to the
Arbitrator, and all expenses incurred by the Arbitrator in connection with the
arbitration, shall be borne equally by the parties. However, the Arbitrator
shall award all costs, expenses and fees, including without limitation the
Arbitrator's costs, expenses and fees and the prevailing party's reasonable
attorneys' fees, to the party prevailing in the Arbitration as part of any
award.

                            [signature page attached]

                                       12
<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

                                  "LENDER"

                                  SUN COMMUNITIES OPERATING LIMITED
                                  PARTNERSHIP, a Michigan limited partnership

                                  By:   Sun Communities, Inc., a Maryland
                                        corporation
                                  Its:  General Partner

                                        By:      /s/ Gary A. Shiffman
                                                 -------------------------------

                                        Its:     Chief Executive Officer
                                                 -------------------------------

                                  "PARTICIPANT"

                                  Woodward Holding, LLC

                                  By: /s/ Paul A. Halpern
                                     -------------------------------------------

                                  Its: Manager
                                       -----------------------------------------

                                       13<PAGE>

                                 EXHIBIT 10-10

                          PREFERRED PROVIDER AGREEMENT

     This Preferred Provider Agreement ("Agreement") dated as of December 24,
1998, is by and between Omnicare, Inc., a Delaware corporation ("Omnicare") and
Extendicare Health Services, Inc., a Delaware corporation ("Extendicare").

                                    RECITALS:

     WHEREAS, Extendicare, through its Affiliates (as hereinafter defined), owns
and operates Extendicare Facilities (as hereinafter defined) throughout the
United States, and may build, acquire or operate additional Extendicare
Facilities in the United States, and is authorized to act on behalf of all such
Extendicare Facilities;

     WHEREAS, Extendicare desires to make available quality and cost-effective
Pharmacy Services (as hereinafter defined) to residents of the Extendicare
Facilities located in the United States;

     WHEREAS, Omnicare is engaged in the business of providing Pharmacy Services
through duly licensed pharmacies located throughout the United States, and has
developed specialized expertise in providing such Pharmacy Services to
Facilities (as hereinafter defined) and their residents;

     WHEREAS, certain of the Extendicare Facilities have in effect on the date
of this Agreement one or more Existing Pharmacy Agreements (as hereinafter
defined) with various pharmacies, relating to the provision of some or all
Pharmacy Services to such Extendicare Facilities and their residents;

     WHEREAS, Extendicare has determined that it may be possible to enhance the
efficiency and quality of Pharmacy Services by utilizing one pharmacy provider;

<PAGE>

     WHEREAS, recent reports make clear that misprescription or improper
administration of drugs can undermine patient care and adversely affect survey
and certification results;

     WHEREAS, Omnicare provides to many of its Facility customers a variety of
service enhancements to assist Facilities in assessing and managing patients'
care needs and improving outcomes of care, including a clinically-based
formulary management program, disease management programs, and state-of-the-art
information and drug management systems which reduce errors in drug prescription
and administration to long-term care patients;

     WHEREAS, the Medicare prospective payment system, with all-inclusive rates,
has created revenue uncertainties and a need for the Extendicare Facilities to
contract with a cost-effective pharmacy provider;

     WHEREAS, managed care organizations are continually seeking pricing
concessions and capitated or other non-traditional service arrangements as
conditions to contracting with Extendicare Facilities for patient care services;

     WHEREAS, due to Omnicare's volume purchasing arrangements, Omnicare is
capable of offering Pharmacy Services at competitive prices which are typically
at or below those charged by other providers for comparable products and
services;

     WHEREAS, because of Omnicare's experience, quality of operations and
cost-effective pricing, Extendicare desires to designate Omnicare as the
preferred provider of Pharmacy Services to the Extendicare Facilities located in
the united States, and to retain Omnicare's pharmacy Affiliates to provide
Pharmacy Services to such Facilities;

     WHEREAS, in consideration of its designation as the preferred provider of
Pharmacy Services to the Extendicare Facilities located throughout the United
States, Omnicare is willing to make certain long-term commitments to the
Extendicare Facilities and their

<PAGE>

residents, to offer certain favorable pricing arrangements, and to make certain
expenditures for installation and operation of equipment, systems and programs,
and training of personnel;

     NOW, THEREFORE, in consideration of the mutual agreements and promises
hereinafter set forth, the sufficiency and adequacy of which are hereby
acknowledged, the parties hereto agree and covenant as follows:

     1.  CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the following meanings:

     "Affiliate" shall mean, as to any Person, any other Person controlling,
controlled by or under common control with such Person. For purposes of the
foregoing definition, a Person shall be deemed to "control" another Person if
that Person has the direct or indirect ability to direct or cause the direction
of the management and polices of the "controlled" Person, through ownership of
equity securities, by contract, or otherwise.

     "Ancillary Supplies" shall mean (i) oxygen, (ii) nonprescription
medications which a Facility purchases in bulk, not for nay particular resident,
and (iii) enteral and parenteral nutritional products which Extendicare or one
of its Affiliates provides at its expense.

     "Bankruptcy Event" shall be deemed to have occurred with respect to a
Person if it shall apply for or consent to the appointment of a receiver,
trustee, or liquidator of all or a substantial part of its assets, file a
voluntary petition in bankruptcy, make a general assignment for the benefit of
creditors, file a petition or an answer seeking reorganization or arrangement
with creditors to take advantage of any insolvency law, or if an order, judgment
or decree shall be entered by any court of competent jurisdiction, on the
application of a creditor, adjudicating it as bankrupt or insolvent or approving
a petition seeking reorganization or appointing a receiver, trustee, or
liquidator of all or a substantial part of its assets, or if an involuntary
petition in bankruptcy shall have been filed against it and shall continue
undismissed for any period of ninety (90) days.

<PAGE>

     "Extendicare Facility" shall mean any Facility located in the United States
now or hereafter owned or operated by Extendicare or any Affiliate of
Extendicare, or which Extendicare or any of its Affiliates manages under a
management contract (if, under such management agreement, Extendicare or its
Affiliate is entitled to contract for and designate the provider of Pharmacy
Services), in each case during the term of this Agreement; provided that
"Extendicare Facility" shall not include and Facility which Extendicare or one
of its Affiliates leases from a hospital and which is located in such hospital
or on its campus if Extendicare or such Affiliate is not entitled to contract
for and designate the provider of Pharmacy Services for such Facility.

     "Existing Pharmacy Agreement" shall mean (i) any agreement to provide
Pharmacy Services to an Extendicare Facility that is in effect as of the date of
this Agreement, (ii) any then-existing agreement to provide Pharmacy Services to
a Facility which becomes an Extendicare Facility after the date of this
Agreement, and (iii) any Out of Area Agreement (as defined in Section 2 below)
entered into by an Extendicare Facility after the date of this Agreement.

     "Facility" shall mean any nursing care facility, assisted living facility,
residential care facility, long-term care hospital, and/or other provider of
inpatient institutional health care services.

     "Omnicare Geographic Service Area" shall mean the combined geographic
service areas of all Omnicare pharmacy Affiliates, as modified from time to time
based upon Omnicare's acquisition or disposition of pharmacy Affiliates, the
establishment of new Omnicare pharmacy Affiliates, and/or expansion or
contraction of the geographic areas which Omnicare's pharmacy Affiliates are
capable or reasonably should be capable of servicing at any given time.

     "Omnicare Pharmacy" shall have the meaning assigned to such term in Section
3.a.below.

<PAGE>

     "Person" shall mean any individual, corporation, partnership, limited
liability company, governmental authority, or other legal entity of any nature
whatsoever.

     "Pharmacy Services" means pharmaceutical dispensing and distribution
services and pharmaceutical products (prescription and nonprescription),
including, without limitation, intravenous products, supplies and services, and
related equipment (including, without limitation, medical carts, fax machines,
treatment carts, emergency boxes, convenient boxes, automated dispensing
cabinets, and automated medical supply cabinets), enteral and parenteral
nutritional products, and scheduled training and education programs, pharmacy
consulting services, medical records, a clinically-based drug formulary, and
disease management programs; provided, however, that "Pharmacy Services" shall
not include (i) oxygen; (ii) nonprescription medications which a Facility
purchases in bulk, not for any particular resident, or (iii) enteral and
parenteral nutritional products which Extendicare or one of its Affiliates
provides at it expense.

     "Standard Facility Pharmacy Services Contract" shall mean, collectively,
(i) the pharmacy services agreement and (ii) the pharmacy consultant agreement,
in the forms attached hereto as Exhibits A-1 and A-2, respectively, to be
entered into between Omnicare Pharmacies and Extendicare Facilities as set forth
below. Each reference in this Agreement to a Standard Facility Pharmacy Services
Contract shall mean both a pharmacy services and pharmacy consultant agreement,
in the forms attached hereto, and consequently all references to entering into a
Standard Facility Pharmacy Services Contract shall mean entering into both such
pharmacy services and pharmacy consultant agreements.

     2.  OMNICARE DESIGNATED PREFERRED PROVIDER

     During the term of this Agreement, Extendicare, on behalf of itself and
each of the Extendicare Facilities, designates Omnicare as its pharmacy of
choice and as the preferred provider of Pharmacy Services and Ancillary Supplies
("Preferred Provider") for all current and future Extendicare Facilities located
in the United States. Omnicare accepts such designation and agrees to provide
Pharmacy Services and Ancillary Supplies to such Extendicare Facilities and
their residents in accordance with the terms, conditions and procedures set
forth in this Agreement and the Standard Facility Pharmacy Services Contracts to
be entered into hereunder.

<PAGE>

     In connection with Extendicare's designation of Omnicare as its Preferred
Provider of Pharmacy Services, Extendicare agrees to cause the Extendicare
Facilities which are from time to time party to Standard Facility Pharmacy
Services Contracts with an Omnicare Pharmacy (as hereinafter defined) (i) to
designate such Omnicare Pharmacy as its provider of Pharmacy Services for
regulatory purposes, and to use such Omnicare pharmacy as the provider of those
Pharmacy Services which the Extendicare Facility uses itself, (ii) to use such
Omnicare Pharmacy as the provider of those Pharmacy Services which the
Extendicare Facility provides to its residents at its expense (e.g., under the
current Medicare prospective payment system or a capitated managed care
arrangement, in accordance with the fee schedules attached hereto as Schedule 1
and Schedule 2, respectively), and (iii) to inform its other residents that the
Omnicare Pharmacy is the designated provider of Pharmacy Services for such
Facility for regulatory purposes and such Facility's pharmacy of choice, and to
recommend to such other residents (other than those residents whose applicable
managed care payor will not reimburse the applicable Omnicare Pharmacy for
Pharmacy Services provided to such resident) that they use the Omnicare Pharmacy
as their provider of Pharmacy Services, in preference to any other pharmacy.

         Notwithstanding the previous sentence or anything to the contrary set
forth herein, (i) in no event shall this Agreement or any Standard Facility
Pharmacy Service Contract be construed to restrict the right of individual
residents of the Extendicare Facilities to receive pharmaceuticals from the
pharmacy provider of their choice and to be advised of such right, and (ii) any
Extendicare Facility which is located outside of the Omnicare Geographic Service
Area (an "Out of Area Facility") may contract with one or more other pharmacies
for Pharmacy Services, and Omnicare and its Affiliates shall have no
responsibility with respect to such Out of Area Facilities; provided, however,
that such contracts ("Out of Area Agreements") shall be in accordance with
subsection 3.d. below; and provided, further, that if the Omnicare Geographic
Service Area expands such that an Extendicare Facility which was an Out of Area
Facility immediately prior to such expansion thereafter is located in the
Omnicare Geographic Service Area, such Extendicare Facility shall no longer be
an Out of Area Facility and the provisions of Section 3.c.(iv) of this Agreement
shall apply to such Extendicare Facility accordingly.

<PAGE>

     In connection with Extendicare's designation of Omnicare as its Preferred
Provider of Ancillary Supplies during the term of this Agreement, Extendicare
agrees to cause the Extendicare Facilities to use the Omnicare Pharmacies as the
providers of Ancillary Supplies to such Extendicare Facilities which an Omnicare
Pharmacy is reasonably capable of servicing, except with respect to those
Ancillary Supplies which another provider offers in writing to provide at a
price lower than that charged by the applicable Omnicare Pharmacy (a "Lower
Price Offer") and which the Omnicare Pharmacy declines to sell at such lower
price within fifteen (15) days after delivery of the Lower Price Offer to the
Omnicare Pharmacy. Notwithstanding the foregoing, the Extendicare Facilities
currently serviced by Omnicare Pharmacies shall continue to use such Omnicare
Pharmacies as their providers of Ancillary Supplies, and such Omnicare
Pharmacies shall continue to provide such Ancillary Supplies to such Extendicare
Facilities, at the pricing levels currently in effect, for a period of six (6)
months after the date hereof.

     3.  CONDITION AND PROCEDURES FOR EXECUTION OF STANDARD FACILITY PHARMACY
SERVICES CONTRACTS

         a.  DEVELOPMENT OF SERVICE CAPABILITY. Notwithstanding anything to the
contrary et forth herein, the obligation of Omnicare and Extendicare to cause
their respective Affiliates to enter into a Standard Facility Pharmacy Services
Contract with respect to an Extendicare Facility is expressly conditioned upon
Omnicare now having or hereafter acquiring or otherwise establishing a pharmacy
Affiliate which is or reasonably should be capable of providing Pharmacy
Services to that Extendicare Facility (each such pharmacy Affiliate shall be
referred to herein as an "Omnicare Pharmacy").

         b.  EXISTING PHARMACY AGREEMENTS.

             i.   List of Extendicare Facilities. Extendicare hereby agrees to
deliver to Omnicare, within ten (10) business days after the date of this
Agreement, a list which will be, to the best knowledge of Extendicare's
executive and elected officers, in all material respects, taken as a whole,
accurate, setting forth, with respect to each Extendicare Facility existing as
of the date hereof, (1) the name, address and number of licensed beds of such

<PAGE>

Extendicare Facility, and (2) a description of each an every Existing Pharmacy
Agreement for that Facility, including the parties to such agreement, the date
thereof, the name and address of the company currently providing services
thereunder, the date such agreement expires (including a description of any
terms providing for automatic renewal), and the terms and conditions under which
such agreement may be terminated by the Extendicare Facility prior to its
expiration. Such list shall be attached hereto as Exhibit B.

             ii.  Notice of New Extendicare Facilities. Extendicare agrees that,
within ten (10) business days after any Facility becomes an Extendicare Facility
(e.g., as a consequence of Extendicare's acquisition thereof), Extendicare shall
notify Omnicare in writing of the foregoing information with respect to such
Extendicare Facility, which notice shall be deemed to supplement Exhibit B
hereto.

             iii. Notice of Execution of Out of Area Agreements. Within ten
(10) business days after any Out of Area Facility enters into any Out of Area
Agreement, Extendicare shall notify Omnicare in writing of the foregoing
information with respect to such Out of Area Agreement, which notice shall be
deemed to update Exhibit B hereto.

     c.  PROCEDURE FOR EXECUTION OF STANDARD FACILITY PHARMACY SERVICES
CONTRACTS.

             i.   Contracts to be Executed Promptly After the Date of this
Agreement. Omnicare and Extendicare acknowledge that each of the Extendicare
Facilities marked with single asterisks (*) on Exhibit B hereto (the
"Immediately Serviceable Facilities") (A) is located within the Omnicare
Geographic Service Area and (B) is not a party to any existing Pharmacy
Agreement with a Person other than an Omnicare Affiliate which would preclude
such Extendicare Facility from entering into a Standard Facility Pharmacy
Services Contract within Omnicare Pharmacy, effective as of the effective date
for such Standard Facility Pharmacy Services Contract set forth on such
Exhibit B. The parties further acknowledge that Omnicare has, on or prior to the
date hereof, delivered Standard Facility Pharmacy Services Contracts for such
Extendicare Facilities to Extendicare, completed with the appropriate

<PAGE>

information for the applicable Extendicare Facility (e.g., name, address and
effective dates), each of which has been executed by the applicable Omnicare
Pharmacy. Each such Standard Facility Pharmacy Services Contract shall have a
term of five (5) years from its effective date, with two (2) automatic renewals
of five (5) years each, and shall be subject to termination as provided in
Exhibit A; provided, however, that in no event shall any term of such contract
extend beyond December 31, 2013, or with respect to Facilities which Extendicare
or one of its Affiliates leases or manages pursuant to a management agreement,
beyond the date specified in Section 3(c)(v) below. Promptly after the date of
this Agreement, but in no event later than twenty (20) business days after the
date of this Agreement, Extendicare shall cause such Immediately Serviceable
Facilities to execute and deliver to Omnicare such Standard Facility Pharmacy
Services Contracts. From and after the effective date of each Standard Facility
Pharmacy Services Contract, the applicable Omnicare Pharmacy shall provide
Pharmacy Services to the applicable Extendicare Facility in accordance with the
terms of each such agreement.

             ii.   Termination of Existing Pharmacy Agreements. Omnicare and
Extendicare acknowledge that each of the Extendicare Facilities marked with
double asterisks (**) on Exhibit B hereto (the "Later Serviceable Facilities")
(A) is located within the Omnicare Geographic Service Area and (B) is currently
party to an existing Pharmacy Agreement, with a Person other than an Omnicare
Affiliate, which would preclude such Extendicare Facility from entering into a
Standard Facility Pharmacy Services Contract with an Omnicare Pharmacy prior to
the expiration or termination of such contract. Extendicare shall cause such
Later Serviceable Facilities to take such actions as may be necessary to
terminate, at the earliest possible time without cost or penalty to such
Extendicare Facility, any such Existing Pharmacy Agreement, and to terminate
immediately any Existing Pharmacy Agreement which is terminable with a cost or
penalty if Omnicare in its discretion agrees to reimburse such Extendicare
Facility for such cost or penalty, in which case Omnicare shall make such
reimbursement not later than ten (10) business days after Omnicare agrees to
make such reimbursement; provided, however, that such termination shall not
result, in Extendicare's reasonable opinion, in any injury or harm to any
resident of such Facility. Extendicare shall promptly notify Omnicare of all
such actions. No sooner than ninety (90) days and no later than forty-five (45)
days before the earliest date that a Later Serviceable Facility's Existing
Pharmacy Agreement(s) will expire or any termination will

<PAGE>

be effective, Omnicare shall deliver a Standard Facility Pharmacy Services
Contract for such Extendicare Facility, completed with the appropriate
information for the applicable Extendicare Facility (e.g., name, address and
effective date (which effective date shall be the first day following the date
such Existing Pharmacy Agreement expires or is effectively terminated)), and
executed on behalf of the applicable Omnicare Pharmacy. Each such Standard
Facility Pharmacy Services Contract shall have a term of five (5) years from its
effective date, with two (2) automatic renewals of five (5) years each, and
shall be subject to termination as provided in Exhibit A; provided, however,
that in no event shall any term of such contract extend beyond December 31,
2013, or with respect to Facilities which Extendicare or one of its Affiliates
leases or manages pursuant to a management agreement, beyond the date specified
in Section 3(c)(v) below. Extendicare shall cause the applicable Extendicare
Facility to execute and deliver to Omnicare such Standard Facility Pharmacy
Services Contract within twenty (20) business days after Extendicare's receipt
thereof. From and after the effective date of each Standard Facility Pharmacy
Services Contract, the Omnicare Pharmacy shall provide Pharmacy Services to each
such Extendicare Facility in accordance with the terms of such agreement.

             iii.  New Extendicare Facilities. If, during the term of this
Agreement, any Facility becomes an Extendicare Facility (e.g., as a consequence
of Extendicare's acquisition thereof) and there is an Omnicare Pharmacy that is
reasonably capable of servicing such Extendicare Facility, (A) if such
Extendicare Facility is not party to an Existing Pharmacy Agreement, Omnicare
and Extendicare shall cause such Extendicare Facility to enter into a Standard
Facility Pharmacy Services Contract as soon as practicable (which would normally
be the date of such acquisition), and (B) if such Extendicare Facility is party
to an Existing Pharmacy Agreement, Extendicare shall cause the Extendicare
Facility to take such actions as may be necessary to terminate, at the earliest
possible time, any such Existing Pharmacy Agreement which is terminable by such
Facility, and the provisions of the subsection 3.c.(ii) of this Agreement shall
apply; provided, however, that in no event shall any term of such contract
extend beyond December 31, 2013, or with respect to Facilities which Extendicare
or one of its Affiliates leases or manages pursuant to a management agreement,
beyond the date specified in Section 3(c(v) below. In any asset acquisition of a
Facility, Extendicare shall use its best efforts to cause its acquiring
Affiliate not to assume (without cost or incurring penalties) any

<PAGE>

agreement to provide Pharmacy Services to which the seller may be party with
respect to such Facility, if such Facility is in the Omnicare Geographic Service
Area.

             iv.  New Omnicare Pharmacies. After the date on which Omnicare
acquires or otherwise establishes any Omnicare Pharmacy or expands the service
area of any Omnicare pharmacy Affiliate such that such pharmacy becomes
reasonably capable of servicing a previously Out of Area Facility, Omnicare
shall notify Extendicare of such fact, which notice shall include the name and
address of such Omnicare Pharmacy and a list of all previously Out of Area
Facilities which such Omnicare Pharmacy is reasonably capable of servicing. With
respect to each such Extendicare Facility which is not then party to an Existing
Pharmacy Agreement or for which the Existing Pharmacy Agreement expires or is
terminable by the Extendicare Facility without cost or penalty within sixty (60)
days (or, if terminable with cost or penalty, if Omnicare agrees to reimburse
the Extendicare Facility for such cost or penalty, in which case Omnicare shall
make such reimbursement not later than ten (10) business days after Omnicare
agrees to make such reimbursement) (collectively, "Newly Serviceable
Facilities"), Omnicare shall include with such notice a Standard Facility
Pharmacy Services Contract, completed with the appropriate information for the
applicable Newly Serviceable Facility (e.g., name, address and effective date
(which effective date shall not be sooner than ninety (90) days after the date
such notice is given)), and executed on behalf of the applicable Omnicare
Pharmacy. Each such Standard Facility Pharmacy Services Contract shall have a
term of five (5) years from its effective date with two (2) automatic renewals
of five (5) years each, an shall be subject to termination as provided in
Exhibit A; provided that in no event shall any term of such contract extend
beyond December 31, 2013, or with respect to Facilities which Extendicare or one
of its Affiliates leases or manages pursuant to a management agreement, beyond
the date specified in Section 3(c)(v) below. Upon receipt of such materials, (A)
Extendicare shall cause each such Newly Serviceable Facility to execute and
deliver to Omnicare such Standard Facility Pharmacy Services Contract within
twenty (20) days after Extendicare's receipt thereof, and (B) Extendicare shall
cause any Newly Serviceable Facilities which are party to an Existing Provider
Agreement to terminate such existing contracts prior to the effective date of
the Standard Facility Pharmacy Services Contract for the applicable Facility, so
long as such termination does not result, in Extendicare's reasonable opinion,
in any injury or harm to any resident of such Facility.

<PAGE>

From and after the effective date of each Standard Facility Pharmacy Services
Contract, the Omnicare Pharmacy shall provide Pharmacy Services to each such
Extendicare Facility in accordance with the terms of such agreement and this
Agreement. With respect to each Extendicare Facility other than a Newly
Serviceable Facility which such new Omnicare Pharmacy is reasonably capable of
servicing which is party to an Existing Pharmacy Agreement, the provisions of
subsection 3.c.(ii) shall apply.

             v.   Term of Standard Facility Pharmacy Services Contracts for
Leased and Managed Extendicare Facilities. With respect to Extendicare
Facilities which are leased by Extendicare or one of its Affiliates or which are
managed by Extendicare or one of its Affiliates pursuant to a management
agreement, (i) the term of any Standard Facility Pharmacy Service Contract shall
not extend beyond the date that the relevant lease or management contract
expires by its terms (provided that in the event that Extendicare or its
Affiliate thereafter continues to lease or mange such facility on a holdover or
other basis, such Standard Facility Pharmacy Services Contract shall continue in
effect during such period, but in no event later than December 31, 2013) and
(ii) the Standard Facility Pharmacy Services Contract shall be terminable by
Extendicare or its Affiliate without cause or penalty upon termination of the
lease or management agreement effective at such time that Extendicare or its
Affiliate ceases to operate such Facility. To the extent that any lease or
management contract terminates or expires and is thereafter replaced or renewed,
Extendicare or its Affiliate shall enter into a new Standard Facility Pharmacy
Services Contract under the same terms and conditions as set forth herein.

         d.  TERMS OF EXTENDICARE PROVIDER AGREEMENTS PENDING OMNICARE
DEVELOPING PHARMACY CAPABILITY. The parties hereby acknowledge their mutual
intention that, by virtue of its Preferred Provider designation and the terms of
this Agreement, Omnicare pharmacy Affiliates shall provide Pharmacy Services to
each Extendicare Facility as soon as possible after Omnicare acquires or
otherwise establishes a pharmacy Affiliate which is or reasonably should be
capable of providing Pharmacy Services to that Extendicare Facility.
Accordingly, during the term of this Agreement, Extendicare will cause the
Extendicare Facilities not to enter into or renew any agreement with any Person
other than Omnicare and Omnicare's affiliates pursuant to which any Person other
than Omnicare or Omnicare's Affiliates

<PAGE>

is to furnish Pharmacy Services to the residents of any Extendicare Facility,
unless (i) at the time such agreement is entered into or renewed, Omnicare does
not have a pharmacy Affiliate reasonably capable of servicing such Extendicare
Facility, and (ii) such agreement is terminable by the applicable Extendicare
Facility, without cause, cost or penalty, within sixty (60) days or less of such
Facility giving notice of termination.

         e.  OMNICARE GUARANTY. Omnicare hereby unconditionally guarantees the
Omnicare Pharmacies' timely payment and performance of their respective
obligations under each Standard Facility Pharmacy Services Contract entered into
under this Agreement.

     4.  PRICING OF PHARMACY SERVICES TO BE PROVIDED UNDER STANDARD FACILITY
PHARMACY SERVICES CONTRACTS.

         a.  COMPETITIVE PRICING. Each Omnicare Pharmacy shall charge for
Pharmacy Services provided to Extendicare Facilities and their residents under
Standard Facility Pharmacy Services contracts using rates which are competitive
within the applicable local marketplace, provided that with respect to those
Pharmacy Services which a governmental program pays an Omnicare Pharmacy to
provide, the foregoing shall not be deemed to preclude any Omnicare Pharmacy
from receiving the maximum reimbursement permitted under such program.

         b.  MOST FAVORABLE PRICING. With respect to those Pharmacy Services
which are paid for by Extendicare or one of its Affiliates (e.g., under the
current Medicare prospective payment system or a capitated managed care
arrangement), such rate shall not be higher than the most favorable rates
concurrently charged for Pharmacy Services provided to residents of the same
payor type in like Facilities by that Omnicare Pharmacy or other Omnicare
Pharmacies reasonably capable of servicing such Extendicare Facility in the same
state and for reasonably comparable volumes of product and upon reasonably
comparable terms and conditions (including distance of the Facility from the
Omnicare Pharmacy, dispensing system used, services included and service
levels), as such rates may be changed by the Omnicare Pharmacies from time to
time; and provided, that with respect to those Pharmacy Services which

<PAGE>

are paid for by Extendicare or one of its Affiliates under the current Medicare
prospective payment system as currently being implemented, pricing shall be as
set forth on Schedule 1 hereto for the period from the date of this Agreement
through the third (3rd) anniversary of the effective date hereof. Schedule 2
hereto sets forth the initial pricing established by the parties for residents
covered under a capitated managed care arrangement, which pricing shall be
adjusted from time to time in accordance with the foregoing sentence. Within
sixty (60) days after the beginning of each calendar year after the date hereof
(commencing in the year 2000), Omnicare shall certify to Extendicare that the
prices charged during the preceding calendar year by the Omnicare Pharmacies to
the Extendicare Facilities and their residents complied with subsection 4.0 and
this subsection 4.b. of the Agreement (or shall specify any respects in which
such prices failed to so comply); provided, that Omnicare shall not be obligated
to conduct any audit of such prices in order to make such certification, and if
any audit conducted by Extendicare pursuant to subsection 4.c. indicates any
item(s) of actual or potential noncompliance, or Extendicare other wise believes
that one or more items of actual or potential noncompliance occurred which are
not indicated in such certification, then the parties shall proceed as set forth
in the second paragraph of subsection 4.c., and Omnicare's liability as a
consequence of any such certification proving to be false in any respect shall
be limited to the obligations expressly set forth in such paragraph.

         c.  AUDITS. Omnicare shall cause the Omnicare Pharmacies to permit
Extendicare to audit, at Extendicare's sole cost, at mutually agreed reasonable
times and not more frequently than once per year, the records of such Omnicare
Pharmacies which indicate the prices charged by them for Pharmacy Services
furnished to like Facilities and their residents in the same state as the
relevant Extendicare Facilities during the most recently completed calendar
year, for reasonably comparable volumes of products and upon reasonably
comparable terms and conditions (each a "Pharmacy Audit"). For a period of
thirty (30) days after any termination or expiration of this Agreement,
Extendicare may commence one or more Pharmacy Audits with respect to the prices
charged by such Omnicare Pharmacies for Pharmacy Services rendered during the
final year of this Agreement, which pharmacy Audits shall be completed within
six (6) months of the termination or expiration of this Agreement, and,
notwithstanding such termination or expiration, Extendicare and its Affiliates
shall be entitled to receive any refunds resulting from incorrect pricing, in
accordance with the next paragraph.

<PAGE>

     In the event that Extendicare believes, as the result of any such audit or
otherwise, that the relevant Omnicare Pharmacy has charged an Extendicare
Facility prices higher than those specified in this Section 4, then Extendicare
shall notify Omnicare and the Omnicare Pharmacy of such fact and the parties
shall meet and review the information which Extendicare believes indicates the
same. If the parties agree that the prices charged exceeded those which are
called for by this Section 4, then the Omnicare Pharmacy (i) shall, within
thirty (30) days thereafter, correct its pricing for the Extendicare Facilities
and their residents, and (ii) shall refund to Extendicare or any of its
Affiliates which paid for such Pharmacy Services the amount of any overcharges
plus interest at the prevailing LIBOR rate within thirty (30) days after the
respective amounts of the overcharges are calculated and agreed upon in writing
by the parties (and the parties agree to cooperate in good faith to determine
such amounts promptly). In the event that the parties are unable to agree upon
whether there were any overcharges or the amount(s) of same, either party may
submit such dispute to binding arbitration in accordance with Section 8.n.
below, and, within thirty (30) days after any arbitration decision determining
that overcharges did occur, the Omnicare Pharmacy (i) shall correct its pricing
for the Extendicare Facilities and their residents, and (ii) shall refund to
Extendicare or any of its Affiliates which paid for such Pharmacy Services the
amount of any overcharges plus interest at the prevailing LIBOR rate. In no
event shall Omnicare be deemed to be in breach of this Section 4 unless the
parties shall have agreed upon the amount of the relevant overcharges or an
arbitrator shall have determined the same and, in either such case, the Omnicare
Pharmacy shall have failed to take any action specified in clauses (i) or (ii)
in this Section 4 (c) within the applicable time period set forth herein.

     In the event that it is determined, pursuant to the preceding paragraph,
that Omnicare pharmacy Affiliates have failed to comply with subsection 4.b. in
more than two out of any five consecutive calendar years and that such
noncompliance has caused Extendicare Facilities to be charged, in the aggregate,
five percent (5%) or more in excess of what they otherwise would have been
charged in the aggregate in more than two out of any five consecutive calendar
years had all Omnicare pharmacy Affiliates complied with subsection 4.b., then,
in addition to the refunds and corrective actions specified in the previous
paragraph, Omnicare shall pay to Extendicare or any of its overcharged
Affiliates an additional three

<PAGE>

hundred fifty (350) basis points over the prevailing LIBOR rate described in the
preceding paragraph.

         d.  CONFIDENTIALITY. Extendicare agrees that the information provided
to it and its agents and representatives by any Omnicare Pharmacy in connection
with any audit conducted pursuant to Section 4(c) ("Confidential Information")
shall be held in confidence and shall not be disclosed or used by Extendicare or
any such agent or representative, other than in any arbitration proceeding to
enforce this Agreement (and the parties shall cooperate in obtaining
confidential treatment therefore in any such proceeding). If Extendicare or its
agents or representatives are requested or become legally compelled (by oral
questions, interrogatories, requests for information or documents, subpoena,
civil or criminal investigative demand, or similar process) or are required by a
regulatory body to disclose Confidential Information, Extendicare will promptly
notify Omnicare to permit Omnicare to seek a protective order or take other
appropriate action. Extendicare will also cooperate in Omnicare's efforts to
obtain a protective order or other reasonable assurance that confidential
treatment will be accorded the Confidential Information. If, in the absence of a
protective order, Extendicare or any of its agents or representatives are, in
the written opinion of Extendicare's counsel addressed to Omnicare, compelled as
a matter of law to disclose the Confidential Information, such party will advise
and consult with Omnicare and its counsel as to such disclosure and the nature
and wording of such disclosure, and the parties will use their best efforts to
obtain confidential treatment therefore.

     5.  REPRESENTATIONS AND WARRANTIES.

         a.  BINDING OBLIGATION. Each party represents and warrants to the other
party that this Agreement has been duly authorized, executed and delivered by
such party and constitutes its valid and binding obligation.

         b.  GOVERNMENTAL AUTHORIZATIONS. Omnicare represents and warrants to
Extendicare that it and each Omnicare Pharmacy, employee, agent, or
subcontractor that will provide services to the Extendicare Facilities under a
Standard Facility Pharmacy

<PAGE>

Services Contract holds, or prior to entering into such Standard Facility
Pharmacy Services contract will obtain, and shall continue to maintain in good
standing throughout the term of this Agreement, all licenses, permits,
registrations, certifications and authorizations in all applicable jurisdictions
where such licenses, permits, registrations, certifications and authorizations
are necessary to provide Pharmacy Services.

     6.  TERM.

         a.  DURATION. The term of this Agreement shall commence as of the date
hereof and shall continue in effect until the fifth (5th) anniversary hereof
unless sooner terminated as herein provided. Upon the expiration of such five
(5) year term, the term of this Agreement shall automatically be renewed for an
additional term of five (5) years unless the parties mutually agree in writing
not to so renew such term, and likewise upon the expiration of such five (5)
year renewal term the term of this Agreement shall automatically be renewed for
a further term of five (5) years unless the parties mutually agree in writing
not to so renew such term.

         b.  TERMINATION. This Agreement may be terminated, and neither party
shall thereafter have any obligation hereunder (except as to liabilities or
claims of either party hereto which shall have theretofore accrued or arisen),
as follows:

             (i)  By Extendicare. By Extendicare, upon delivery of written
notice to Omnicare specifying such termination, if:

                  (A)  A Bankruptcy Event shall occur with respect to Omnicare;
or

                  (B)  Omnicare shall breach in any material respect its
obligations hereunder and such breach shall not have been cured within thirty
(30) days (or fifteen (15) days in the case of an obligation to pay money)
following delivery by Extendicare to Omnicare of written notice specifying such
breach in reasonable detail (which notice shall

<PAGE>

expressly state that it is a notice of breach pursuant to this subsection of
this Agreement); provided that Extendicare shall not be entitled to terminate
this Agreement unless all Extendicare Facilities are current within established
payment terms in all payments owed by the Extendicare Facilities to the Omnicare
Pharmacies (which payments shall not be deemed to include those subject to a
good faith dispute or payments owed by third party payors to Omnicare
Pharmacies); and provided, further, that if Omnicare's breach of this Agreement
materially harms the health or safety of the residents of any Extendicare
Facility which is party to a Standard Facility Pharmacy Services Contract,
Extendicare may terminate such Standard Facility Pharmacy Services Contract by
delivery of written notice to Omnicare if Extendicare shall have notified
Omnicare and the Omnicare Pharmacy of such breach both in writing and by
telephone or in person ("Emergency Notice"), and such breach has not been cured
by the Omnicare Pharmacy within such reasonable time after the Omnicare
Pharmacy's receipt of the Emergency Notice as Extendicare deems appropriate in
its reasonable discretion and specifies in the Emergency Notice.

             (ii) By Omnicare. By Omnicare, upon delivery of written notice to
Extendicare specifying such termination, if:

                  (A)  A Bankruptcy Event shall occur with respect to
Extendicare; or

                  (B)  Extendicare shall breach in any material respect its
obligations hereunder and such breach shall not have been cured within thirty
(30) days (or fifteen (15) days in the case of an obligation to pay money)
following delivery by Omnicare to Extendicare of written notice specifying such
breach in reasonable detail (which notice shall expressly state that it is a
notice of breach pursuant to this subsection of this Agreement).

     No termination of this Agreement under this Section shall (i) release or
otherwise affect any liability of either party for failure to perform this
Agreement prior to the effectiveness of such termination, or (ii) terminate or
otherwise affect the obligations of any Omnicare

<PAGE>

Pharmacy or Extendicare Facility under any Standard Facility Pharmacy Services
Contract then in effect.

     7.  MATERIAL CHANGE IN LAW. In the event that, after the date of this
Agreement, there is a material change in law which results in this Agreement or
the parties' performance of their obligations hereunder being in violation of
applicable law, the parties shall negotiate in good faith with one another to
amend this Agreement so as to promptly eliminate such violation, provided that
such amendment shall give the fullest possible effect to the intent of the
parties as expressed herein. If the parties are unable to agree upon such
amendment, either party may submit the matter to binding arbitration before a
single arbitrator in Chicago, Illinois in accordance with the American Health
Lawyers Association Alternative Dispute Resolution Service Rules of Procedure
for Arbitration, and judgment upon the award of the arbitrator may be entered in
any court having jurisdiction. The arbitrator shall make a determination as to
whether it is more likely than not that a material change in law after the date
of this Agreement has resulted in this Agreement or the parties' performance of
their obligations hereunder being in violation of applicable law, and, if the
arbitrator determines that it has, such arbitrator shall either (i) draft and
require the parties to enter into an amendment to this Agreement which
eliminates the violation of law and conforms as closely as possible to the
original terms of this Agreement, or (ii) if the arbitrator determines that no
such amendment is feasible, order the termination of this Agreement. Until the
earlier of (i) the date any such dispute is resolved through mutual agreement or
binding arbitration or (ii) six (6) months after any such arbitration is
commenced, each party shall continue to observe all other terms of this
Agreement and shall cause each of its Affiliates to continue to perform such
Affiliate's obligations under all Standard Facility Pharmacy Services Contracts.

     8.  MISCELLANEOUS PROVISIONS

         a.  PUBLICITY. No party hereto shall use the name of the other party or
any of its Affiliates in any advertising, publication, or promotional materials
without prior written approval of such party, which approval shall not be
unreasonably withheld, conditioned

<PAGE>

or delayed; provided that the forgoing shall not be deemed to restrict any party
from making any disclosure required by applicable law or the rules of any
applicable securities exchange.

         b.  INDEMNIFICATION. Each Party (the "Indemnitor") hereby agrees to
indemnify and hold harmless the other party, its employees, officers, directors,
shareholders, and agents (the "Indemnitees") from all charges, claims, causes of
action, damages, expenses and liability, including reasonable attorneys' fees,
asserted against, imposed upon or incurred by any such Indemnitee which are
based upon or arise out of illness or injury, including, without limitation,
death of any person, or property damage arising from or relating to any wrongful
act or omission of such Indemnitor or such Indemnitor's employees or agents.

         c.  NOTICES. Any notice, demand, or communication required, permitted,
or desired to be given hereunder, shall be given in writing and shall be deemed
sufficiently given when personally delivered, or five (5) business days after
mailed by prepaid certified mail, return receipt requested, or one (1) business
day after sent by nationally-recognized overnight courier, or when sent by
facsimile transmission (receipt confirmed), addressed as follows:

                  To Extendicare:           Extendicare Health Services, Inc.
                                            3000 Steeles Avenue East
                                            Suite 700
                                            Markham, Ontario L3R 9W2
                                            Attn: Chief Financial Officer
                                            Fax: (905) 470-5588
                                            Phone: (905) 470-4000

                  With a required copy to : Extendicare Health Services, Inc.
                                            111 West Michigan Avenue
                                            Milwaukee, WI  53203
                                            Attn: General Counsel
                                            Fax: (414) 207-3663
                                            Phone: (414) 207-3650

<PAGE>

                  To Omnicare:              Omnicare, Inc.
                                            100 East River Center Blvd.
                                            Suite 1700
                                            Covington, KY  41011
                                            Attn: General Counsel
                                            Fax: (606) 392-3333
                                            Phone: (606) 392-3300

                  With a required copy to:  Reed Smith Shaw & McClay, LLP
                                            1301 K Street, N. W.
                                            Suite 1100 - East Tower
                                            Washington, DC  20005
                                            Attn: Thomas C. Fox, Esq.
                                            Fax: (202) 414-9299
                                            Phone: (202) 414-9200

Or at such other addresses and to such other persons as either party may from
time to time designate by notice given as herein provided; provided, however,
that any Emergency Notice shall be deemed given only upon actual receipt by
Omnicare.

         d.  RELATIONSHIP BETWEEN PARTIES. Neither Omnicare nor any of its
Affiliates on the one part, and Extendicare nor any of its Affiliates on the
other part, is for any purposes, an agent, partner or employee of the other.
This Agreement does not constitute a joint venture between the parties, their
Affiliates or any of their respective successors or assigns. It is agreed that
in performing Pharmacy Services pursuant to Standard Facility Pharmacy Services
Contracts, Omnicare and its Affiliates and each of their employees will, at all
times, be an independent contractor to Extendicare, the Extendicare Facilities
and their residents.

         e.  GOVERNING LAW. THE VALIDITY OF THIS AGREEMENT, THE INTERPRETATION
OF THE IGHTS AND DUTIES OF THE PARTIES HEREUNDER AND THE CONSTRUCTION OF THE
TERMS HEREOF, SHALL BE GOVERNED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE, WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS THEREOF.

         f.  EQUITABLE REMEDIES; SPECIFIC PERFORMANCE. The rights and remedies
of the parties hereunder shall be cumulative and shall be enforceable in equity
as well

<PAGE>

as at law; provided, however, that nothing contained herein is intended
to, nor shall it, limit or affect any rights at law, by statute or otherwise, of
any party aggrieved.

         g.  WAIVER. A waiver by either party of a breach or a failure to
perform shall not constitute a waiver of any subsequent breach or failure.

         h.  SEVERABILITY. In the event that any provision of this Agreement or
the application of any provision to the parties with respect to their
obligations hereunder shall be held by a tribunal of competent jurisdiction to
be unlawful or unenforceable, the remaining provisions of this Agreement shall
continue in full force and effect and the parties shall endeavor in good faith
to replace the unlawful or unenforceable provision with one which is lawful and
enforceable and which gives the fullest effect to the intent of the parties as
expressed herein.

         i.  SUCCESSORS AND ASSIGNS: ACQUIROR OF ALL OR SUBSTANTIALLY ALL
EXTENDICARE FACILITIES IN UNITED STATES. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto, and each of their
respective successors and permitted assigns. Except as provided in this
paragraph, this Agreement shall not be assigned in whole or in part by any party
without the prior written consent of the other party. Notwithstanding the
previous sentence, in the event that any Person (an "Acquiror") purchases or
otherwise acquires the assets and operations of Extendicare with respect to a
majority of the beds of the Extendicare Facilities located in the United States
(a "Large Facility Acquisition"), as calculated immediately prior to such sale
or other acquisition, Extendicare shall cause such Acquiror to enter into a
Preferred Provider Agreement with Omnicare in form and substance identical to
this Agreement, effective for the remaining term of this Agreement and renewable
as set forth in Section 6 hereof, but with the application thereof limited to
the Extendicare Facilities so purchased or otherwise acquired. In such event,
this Agreement shall remain in effect with respect to the assets and operations
of all Extendicare Facilities not sold or otherwise transferred in such
transaction, but Extendicare shall be released hereunder with respect to the
assets and operations of the Extendicare Facilities so purchased or acquired. In
the event that any Acquiror purchases or otherwise acquires all of the assets
and operations of Extendicare with respect to the Extendicare Facilities (such
transaction shall also constitute a "Large Facility Acquisition"), Extendicare
shall assign this

<PAGE>
Agreement to such Acquiror and shall cause the Acquiror to assume all
obligations of Extendicare hereunder, in which event Extendicare shall be
released hereunder. Any failure by Extendicare to comply with the provisions of
this subsection 8.i. with respect to any sale or other disposition shall
constitute a material breach of this Agreement. The parties acknowledge that
Omnicare's damages in the event of any such material breach would be difficult
to calculate, and consequently they agree that, upon any such material breach by
Extendicare, Omnicare shall be entitled to liquidate damages in an amount equal
to its Lost Profits (as hereinafter defined), which amount represents the
parties' reasonable estimate of the actual damages which will be incurred in the
event of any such material breach.

     For purposes of this Agreement, "Lost Profits" shall mean (i) the number of
years (and portions thereof) remaining in the term of this Agreement (including
any remaining renewal terms) as of the date of such material breach, multiplied
by (ii) the aggregate annual revenue which would be realized from providing
Pharmacy Services to the Extendicare Facilities as to which the applicable
Acquiror has purchased or otherwise acquired Extendicare's assets and operations
(other than Extendicare Facilities which are party to Standard Facility Pharmacy
Services Contracts), as reasonably estimated by Omnicare based upon (A) its
revenues from providing Pharmacy Services to Extendicare Facilities or other
reasonably comparable Facilities in the same respective states and (B) all other
available information, multiplied by (iii) (A) with respect to the portion of
the remaining term of this Agreement (including renewal terms) falling within
the first five (5) years after the date of this Agreement, fifteen percent
(15%), (B) with respect to the portion of the remaining term of this Agreement
(including renewal terms) falling within the second five (5) years after the
date of this Agreement, fourteen percent (14%), and (C) with respect to the
portion of the remaining term of this Agreement (including renewal terms)
falling within the third five (5) years after the date of this Agreement,
thirteen percent (13%) (provided, that such percentage shall be subject to
revision, up or down, in the event that the average earnings before interest,
taxes, depreciation and amortization of Omnicare Pharmacies appropriately
comparable to the Omnicare Pharmacies which would be servicing such Extendicare
Facilities represents a greater or smaller percentage of those Omnicare
Pharmacies' average revenues from Pharmacy Services).

<PAGE>

         j.  LIMITATION ON LIQUIDATED DAMAGES PROVISIONS IN STANDARD FACILITY
PHARMACY SERVICES CONTRACTS. Notwithstanding anything to the contrary set forth
in any Standard Facility Pharmacy Services Contract:

             (i)  If Extendicare or its Affiliates engage in a transaction or
series of transactions in which they sell, to a single purchaser and/or its
Affiliates, three (3) or fewer Extendicare Facilities which are party to
Standard Facility Pharmacy Services Contract (a "Small Facility Acquisition"),
then they shall not be deemed to be in violation of Section 5.5 thereof if they
cause such purchaser(s) to enter into new pharmacy services and pharmacy
consultant agreements with the applicable Omnicare Pharmacy, in substantially
the form of the Standard Facility Pharmacy Services Contract attached hereto
(but with respect to the Pharmacy Services Agreement attached as Exhibit A-1,
subsection 1.1(j) thereof shall be deleted, and with respect to both the
Pharmacy Services Agreement and Pharmacy Consulting Agreement attached hereto,
all references to this Agreement shall be deleted therefrom, and Sections 3.1
and 3 of each agreement, respectively, shall be modified to provide for pricing
reflecting prevailing market conditions for the number of Facilities included in
such sale, as negotiated by the Omnicare Pharmacy, such purchaser, and
Extendicare) for a term of at least three (3) years or a lesser period if fewer
than three (3) years remain under this Agreement (including any renewal terms).
Each such Extendicare Facility which causes such purchaser(s) to enter into such
contracts for at least such three (3) year term is sometimes hereinafter
referred to as a "Small Sale Facility."

             (ii) If Extendicare or its Affiliates engage in a transaction or
series of transactions in which they sell, to a single purchaser and/or its
Affiliates, more than three (3) Extendicare Facilities which are party to
Standard Facility Pharmacy Services Contracts, then they shall not be deemed to
be in violation of Section 5.5 thereof if , after giving effect to such sale,
the total number of beds in Extendicare Facilities in the Unites Sates which are
then serviced by Omnicare Pharmacies exceeds the Base Number (as hereinafter
defined), and Extendicare and its Affiliates cause such purchaser(s) to enter
into new pharmacy services and pharmacy consultant agreements with the
applicable Omnicare Pharmacy, in substantially the form of the Standard Facility
Pharmacy Services Contract attached hereto (but with respect to the Pharmacy
Services Agreement attached as Exhibit A-1, subsection 1.1(j) thereof shall be
deleted,

<PAGE>

and with respect to both the Pharmacy Services Agreement and Pharmacy Consulting
Agreement, all references to this Agreement shall be deleted therefrom, and
Section 3.1 and 3 of each agreement, respectively, shall be modified to provide
for pricing reflecting prevailing market conditions for the number of Facilities
included in such sale, as negotiated by the Omnicare Pharmacy, such purchaser
and Extendicare) for a term of at least three (3) years or a lesser period if
fewer than three (3) years remain under the Agreement (including any renewal
terms). For such purposes, the "Base Number" shall mean (A) 20,651 beds as of
the date of this Agreement, increased by three percent (3%) beginning January 1,
2000 and compounded annually thereafter for each year which shall have passed
after the date of such sale, less (B) the number of beds contained in any Small
Sale Facilities for which the sale occurred prior to such date; provided, that
in the event Extendicare or one of its Affiliates sells a Facility and
thereafter leases it back or agrees to manage it pursuant to a management
agreement, such Facility shall be considered an "Extendicare Facility" for
purposes of this Section 8.j(ii) only if the Standard Facility Pharmacy Services
Contract in effect for such Facility after such sale has a term expiring no
sooner than the term of the Standard Facility Pharmacy Services Contract which
was in effect when Extendicare or its Affiliate owned such Facility.

             k.   AMENDMENTS, WAIVERS IN WRITING. This Agreement cannot be
changed or modified, nor may any party's rights hereunder be waived, except by a
written amendment or waiver duly executed by the party sought to be charged
therewith.

             l.   COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which, when taken
together, shall constitute one and the same agreement.

             m.   EXTENDICARE A PREFERRED PROVIDER OF CONTRACT RESEARCH.
Omnicare hereby designates Extendicare as a preferred provider for clinical
research, to the extent Extendicare has the necessary qualifications and
capabilities, and will afford to Extendicare the opportunity to participate
(such participation to be in Extendicare's sole discretion) in Omnicare's
contract research organization relationships, provided that the Extendicare
Facilities are approved as appropriate under such project.

<PAGE>

             n.   DISPUTES. The parties agree to meet and confer in good faith
to resolve, through discussions between the parties, any disputes with respect
to any provisions of this Agreement. If the parties are unable to resolve the
dispute through such discussion, such dispute shall be submitted to binding
arbitration before a single arbitrator in Chicago, Illinois in accordance with
the American Health Lawyers Association Alternative Dispute Resolution Service
Rules or Procedure for Arbitration (or a reasonable successor thereof) then in
effect. In any such arbitration, neither party shall assert that this Agreement
or any provision hereof is illegal, unenforceable or unconscionable, except as a
result of a change in law, in which event Section 7 hereof shall apply. Judgment
upon the award of the arbitrator may be entered in any court having
jurisdiction. The prevailing party in any such arbitration (as determined by the
arbitrator) shall be entitled to its costs and reasonable attorney fees incurred
in connection with the arbitration.

             o.   CONSUMER SATISFACTION SURVEYS. Omnicare or its Affiliates
shall conduct consumer satisfaction surveys as requested by Extendicare with
respect to the services rendered by the Omnicare Pharmacies to the Extendicare
Facilities and their residents, provided that in no event shall such surveys be
conducted more frequently than once per year at any Extendicare Facility. The
parties shall cooperate in good faith to develop the survey questions.
Extendicare and the applicable Extendicare Facilities shall be notified promptly
of the results of such surveys, and the parties shall use reasonable efforts to
respond to the survey results.

                            [Signature page follows]

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Preferred Provider Agreement effective as of the day and year first above
written.

EXTENDICARE HEALTH SERVICES, INC.

By: ________________________________________
Name: ______________________________________
Title:______________________________________

OMNICARE, INC.
By: ________________________________________
Name: ______________________________________
Title: _____________________________________

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