Document:

Exhibit 10.6

     

     

    
      	
              Exhibit
                10.6 

            

    

    Construction
      Loan Promissory Note

    (Floating
      Rate)

    

    

    
      	
              July
                7, 2005

            	
              Maturity
                Date: July 1, 2010

            
	New	
              Amount:
                $4,458,458.00

            

    

     

     

    
      	
               

              Bank:

               

              Bank
                of America, N.A.

              Banking
                Center:

              414
                Union Street

              Healthcare
                Lending

              Nashville,
                TN 37219

              Davidson
                County

               

               

               

              (Street
                address including county)

            	
               

              Borrower:

               

              ARC
                HDV, LLC

              111
                Westwood Place, Suite 200

              Brentwood,
                Williamson County, Tennessee 37027

               

               

               

               

               

               

              (Name
                and street address, including
                county)

            

    

    

    

    FOR
      VALUE
      RECEIVED, the undersigned Borrower unconditionally (and jointly and severally,
      if more than one) promises to pay to the order of Bank, its successors and
      assigns, without setoff, at its offices indicated at the beginning of this
      Note,
      or at such other place as may be designated by Bank, the principal amount of
      Four
      Million Four Hundred Fifty Eight Thousand Four Hundred Fifty Eight and No/100
      Dollars
      ($4,458,458.00), or so much thereof as may be advanced hereunder, together
      with
      interest computed daily on the outstanding principal balance hereunder, at
      an
      annual interest rate, and in accordance with the payment schedule, indicated
      below.

    

    1. Rate. The
      Rate
      shall be that Rate or Rates as set forth in Exhibit
      “B”,
      attached hereto and made a part hereof by reference. Notwithstanding any
      provision of this Note, Bank does not intend to charge and Borrower shall not
      be
      required to pay any amount of interest or other charges in excess of the maximum
      permitted by the applicable law of the State of Tennessee; if any higher rate
      ceiling is lawful, then that higher rate ceiling shall apply. Any payment in
      excess of such maximum shall be refunded to Borrower or credited against
      principal, at the option of Bank.

    

    2. Accrual
      Method. Unless
      otherwise indicated, interest at the Rate set forth above will be calculated
      by
      the 365/360 day method (a daily amount of interest is computed for a
      hypothetical year of 360 days; that amount is multiplied by the actual number
      of
      days for which any principal is outstanding hereunder). 

    

    3. Rate
      Change Date. Any
      Rate
      based on a fluctuating index or base rate will change, unless otherwise
      provided, each time and as of the date that the index or base rate changes.
      In
      the event any index is discontinued, Bank shall substitute an index determined
      by Bank to be comparable, in its sole discretion.

    

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

    4. Payment
      Schedule. All
      payments received hereunder shall be applied first to the payment of any expense
      or charges payable hereunder or under any other loan documents executed in
      connection with this Note, then to interest due and payable, with the balance
      applied to principal, or in such other order as Bank shall determine at its
      option. 

    

       
      Principal Payments.
      Principal shall be paid in quarter-annual installments commencing April 1,
      2008,
      and the 1st
      day of
      each July, October, January and April thereafter, in the amounts specified
      in
      the principal amortization schedule attached hereto as Exhibit
      “A”
      and
      incorporated herein by reference. Interest thereon shall be paid monthly as
      set
      forth in Exhibit
      “B”
      hereto,
      with a final payment of all unpaid interest and principal at the stated maturity
      of this Note.

    

    5. Automatic
      Payment.
      If
      filled in, Borrower has elected to authorize Bank to effect payment of sums
      due
      under this Note by means of debiting Borrower’s account number
      ________________________________. This authorization shall not affect the
      obligation of Borrower to pay such sums when due, without notice, if there
      are
      insufficient funds in such account to make such payment in full on the due
      date
      thereof, or if Bank fails to debit the account.

    

    6. Waivers,
      Consents and Covenants.
      Borrower, any indorser or guarantor hereof, or any other party hereto
      (individually an “Obligor” and collectively “Obligors”) and each of them jointly
      and severally: (a) waive presentment, demand, protest, notice of demand, notice
      of intent to accelerate, notice of acceleration of maturity, notice of protest,
      notice of nonpayment, notice of dishonor, and any other notice required to
      be
      given under the law to any Obligor in connection with the delivery, acceptance,
      performance, default or enforcement of this Note, any indorsement or guaranty
      of
      this Note, or any other documents executed in connection with this Note or
      any
      other note or other loan documents now or hereafter executed in connection
      with
      any obligation of Borrower to Bank (the “Loan Documents”); (b) consent to all
      delays, extensions, renewals or other modifications of this Note or the Loan
      Documents, or waivers of any term hereof or of the Loan Documents, or release
      or
      discharge by Bank of any of Obligors, or release, substitution or exchange
      of
      any security for the payment hereof, or the failure to act on the part of Bank,
      or any indulgence shown by Bank (without notice to or further assent from any
      of
      Obligors), and agree that no such action, failure to act or failure to exercise
      any right or remedy by Bank shall in any way affect or impair the obligations
      of
      any Obligors or be construed as a waiver by Bank of, or otherwise affect, any
      of
      Bank’s rights under this Note, under any indorsement or guaranty of this Note or
      under any of the Loan Documents; and (c) agree to pay, on demand, all costs
      and
      expenses of collection or defense of this Note or of any indorsement or guaranty
      hereof and/or the enforcement or defense of Bank’s rights with respect to, or
      the administration, supervision, preservation, or protection of, or realization
      upon, any property securing payment hereof, including, without limitation,
      reasonable attorney’s fees, including fees related to any suit, mediation or
      arbitration proceeding, out of court payment agreement, trial, appeal,
      bankruptcy proceedings or other proceeding, in such amount as may be determined
      reasonable by any arbitrator or court, whichever is applicable.

    

    7. Prepayments.
      Prepayments may be made in whole or in part at any time on any loan for which
      the Rate is based on the Prime Rate, without premium. All prepayments of
      principal shall be applied in the inverse order of maturity, or in such other
      order as Bank shall determine in its sole discretion. No prepayment of any
      advance hereunder that bears interest at the Eurodollar Fixed Rate shall be
      permitted except at the expiration of the Eurodollar Fixed Interest Period.
      Notwithstanding such prohibition, if there is a prepayment of any such
      Eurodollar Fixed Rate advance, because of acceleration or otherwise, Borrower
      shall, within 15 days of any request by Bank, pay to Bank any loss or expense
      which Bank may incur or sustain as a result of such prepayment. For the purposes
      of calculating the amounts owed only, it shall be assumed that Bank actually
      funded or committed to fund the advance through the purchase of an underlying
      deposit in an amount and for a term comparable to the advance, and such
      determination by Bank shall be conclusive, absent a manifest error in
      computation. 

    

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    8. Delinquency
      Charge.
      To the
      extent permitted by law, a delinquency charge may be imposed in an amount not
      to
      exceed four percent (4%) of any payment that is more than fifteen days late.
      

    

    9. Events
      of Default.
      The
      following are events of default hereunder: (a) the failure to pay or perform
      any
      obligation, liability or indebtedness of any Obligor to Bank, or to any
      affiliate or subsidiary of Bank of America, whether under this Note or any
      Loan
      Documents, within three (3) days of the date when due (whether upon demand,
      at
      maturity or by acceleration); (b) the failure to pay or perform any other
      obligation, liability or indebtedness of any Obligor to any other party; (c)
      the
      breach of any covenant contained in any of the Loan Documents (subject to any
      cure procedure set forth therein); (d) the resignation or withdrawal of any
      partner or a material owner of Borrower, as determined by Bank in its sole
      discretion; (e) the commencement of a proceeding against any Obligor for
      dissolution or liquidation, the voluntary or involuntary termination or
      dissolution of any Obligor or the merger or consolidation of Borrower with
      or
      into another entity; (f) the insolvency of, the business failure of, the
      appointment of a custodian, trustee, liquidator or receiver for or for any
      of
      the property of, the assignment for the benefit of creditors by, or the filing
      of a petition under bankruptcy, insolvency or debtor’s relief law or the filing
      of a petition for any adjustment of indebtedness, composition or extension
      by or
      against any Obligor; (g) the determination by Bank that any representation
      or
      warranty made to Bank by any Obligor in any Loan Documents or otherwise is
      or
      was, when it was made, untrue or materially misleading; (h) the failure of
      any
      Obligor to timely deliver such financial statements, including tax returns,
      other statements of condition or other information, as Bank shall request from
      time to time; (i) the entry of an uninsured judgment against any Obligor which
      Bank deems to be of a material nature, in Bank’s sole discretion; (j) the
      seizure or forfeiture of, or the issuance of any writ of possession, garnishment
      or attachment, or any turnover order for any material property of any Obligor;
      or (k) the failure of Borrower’s business to comply with any law or
      regulation controlling its operation that would have a material adverse affect
      upon Borrower.

    

    10. Remedies
      upon Default.
      Whenever there is a default under this Note (a) the entire balance outstanding
      hereunder and all other obligations of any Obligor to Bank (however acquired
      or
      evidenced) shall, at the option of Bank, become immediately due and payable
      and
      any obligation of Bank to permit further borrowing under this Note shall
      immediately cease and terminate, and/or (b) to the extent permitted by law,
      the
      Rate of interest on the unpaid principal shall be increased at Bank’s discretion
      up to the maximum rate allowed by law, or if none, three percent (3%) per annum
      over the Prime Rate (the “Default Rate”). The provisions herein for a Default
      Rate shall not be deemed to extend the time for any payment hereunder or to
      constitute a “grace period” giving Obligors a right to cure any default. At
      Bank’s option, any accrued and unpaid interest, fees or charges may, for
      purposes of computing and accruing interest on a daily basis after the due
      date
      of the Note or any installment thereof, be deemed to be a part of the principal
      balance, and interest shall accrue on a daily compounded basis after such date
      at the Default Rate provided in this Note until the entire outstanding balance
      of principal and interest is paid in full. Upon a default under this Note,
      Bank
      is hereby authorized at any time, at its option and without notice or demand,
      to
      set off and charge against any deposit accounts of any Borrower, (as well as
      any
      money, instruments, securities, documents, chattel paper, credits, claims,
      demands, income and any other property, rights and interests of any Borrower),
      which at any time shall come into the possession or custody or under the control
      of Bank or any of its agents, affiliates or correspondents, any and all
      obligations due hereunder. Additionally, Bank shall have all rights and remedies
      available under each of the Loan Documents, as well as all rights and remedies
      available at law or in equity.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    11. Non-Waiver.
      The
      failure at any time of Bank to exercise any of its options or any other rights
      hereunder shall not constitute a waiver thereof, nor shall it be a bar to the
      exercise of any of its options or rights at a later date. All rights and
      remedies of Bank shall be cumulative and may be pursued singly, successively
      or
      together, at the option of Bank. The acceptance by Bank of any partial payment
      shall not constitute a waiver of any default or of any of Bank’s rights under
      this Note. No waiver of any of its rights hereunder, and no modification or
      amendment of this Note, shall be deemed to be made by Bank unless the same
      shall
      be in writing, duly signed on behalf of Bank; each such waiver shall apply
      only
      with respect to the specific instance involved, and shall in no way impair
      the
      rights of Bank or the obligations of Obligors to Bank in any other respect
      at
      any other time. 

    

    12. Applicable
      Law, Venue and Jurisdiction.
      This
      Note and the rights and obligations of Borrower and Bank shall be governed
      by
      and interpreted in accordance with the law of the State of Tennessee. In any
      litigation in connection with or to enforce this Note or any indorsement or
      guaranty of this Note or any Loan Documents, Obligors, and each of them,
      irrevocably consent to and confer personal jurisdiction on the courts of the
      State of Tennessee or the United States located within the State of Tennessee
      and expressly waive any objections as to venue in any such courts. Nothing
      contained herein shall, however, prevent Bank from bringing any action or
      exercising any rights within any other state or jurisdiction or from obtaining
      personal jurisdiction by any other means available under applicable law.

    

    13. Partial
      Invalidity.
      The
      unenforceability or invalidity of any provision of this Note shall not affect
      the enforceability or validity of any other provision herein and the invalidity
      or unenforceability of any provision of this Note or of the Loan Documents
      to
      any person or circumstance shall not affect the enforceability or validity
      of
      such provision as it may apply to other persons or circumstances.

    

    14. Binding
      Effect.
      This
      Note shall be binding upon and inure to the benefit of Borrower, Obligors and
      Bank and their respective successors, assigns, heirs and personal
      representatives, provided, however, that no obligations of Borrower or Obligors
      hereunder can be assigned without prior written consent of Bank.

    

    15. Controlling
      Document.
      To the
      extent that this Note conflicts with or is in any way incompatible with any
      other document related specifically to the loan evidenced by this Note, this
      Note shall control over any other such document, and if this Note does not
      address an issue, then each other such document shall control to the extent
      that
      it deals most specifically with an issue.

    

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

    

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

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

    

    B. RESERVATION
      OF RIGHTS.
      NOTHING IN THIS ARBITRATION PROVISION SHALL BE DEEMED TO (I) LIMIT THE
      APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF LIMITATION OR REPOSE
      AND
      ANY WAIVERS CONTAINED IN THIS INSTRUMENT, AGREEMENT OR DOCUMENT; OR (II) BE
      A
      WAIVER BY BANK OF THE PROTECTION AFFORDED TO IT BY 12 U.S.C. SEC. 91 OR ANY
      SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF BANK HERETO
      (A)
      TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED TO) SETOFF, OR (B)
      TO
      FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL, OR (C) TO OBTAIN
      FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO)
      INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT OF A RECEIVER. BANK
      MAY
      EXERCISE SUCH SELF HELP RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH
      PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY
      ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS INSTRUMENT, AGREEMENT OR
      DOCUMENT. NEITHER THIS EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR
      MAINTENANCE OF AN ACTION FOR FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES
      SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT
      IN
      ANY SUCH ACTION, TO ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING
      RESORT TO SUCH REMEDIES.

    

    Borrower
      represents to Bank that the proceeds of this loan are to be used primarily
      for
      business, commercial or agricultural purposes. Borrower acknowledges having
      read
      and understood, and agrees to be bound by, all terms and conditions of this
      Note.

    

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

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

    

    
      	 	ARC HDV, LLC, a Tennessee limited liability
              company
	 	 
	 	By:
	 	 
	 	Name: 
	 	 
	 	Title: 
	 	 

    

     

    

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

         

      

    

    EXHIBIT
      A

    

    QUARTERLY
      PRINCIPAL AMORTIZATION SCHEDULE

    

    

    
      	
              Payment
                Date

            	
              Principal
                Amount

            
	
               

            	
               

            
	
              April
                1, 2008

            	
              $34,810.71

            
	
              July
                1, 2008

            	
              $35,332.87

            
	
              October
                1, 2008

            	
              $35,862.86

            
	
              January
                1, 2009

            	
              $36,400.81

            
	
              April
                1, 2009

            	
              $36,946.82

            
	
              July
                1, 2009

            	
              $37,501.02

            
	
              October
                1, 2009

            	
              $38,063.53

            
	
              January
                1, 2010

            	
              $38,634.49

            
	
              April
                1, 2010

            	
              $39,214.01

            
	
              Due
                at Maturity

            	
              $4,125,690.88
                

            

    

    

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

         

      

    

    EXHIBIT
      B

    

    INTEREST
      RATE OPTION PROVISIONS

    

    

    THIS
      EXHIBIT B is attached to and forms a part of that certain CONSTRUCTION LOAN
      PROMISSORY NOTE (the “Note”), dated July 7, 2005, executed by ARC HDV, LLC, a
      Tennessee limited liability company (“Borrower”), and made payable to the order
      of Bank of America, N.A., a national banking association (“Bank”).

    

    1. Borrower’s
      Rates.
      On the
      terms and subject to the conditions set forth below, Borrower will be able
      to
      select, from one of the following Rate Options, an interest rate which will
      be
      applicable to a particular dollar increment of amounts outstanding, or to be
      disbursed, under the Note: 

    

    The
      Prime
      Rate, plus one percent (1%) per annum (the “Prime Rate Option”);
      and

    

    The
      Eurodollar Fixed Rate, plus 237.50 basis points (the “Eurodollar Fixed Rate
      Option”).

    

    Interest
      based on the Prime Rate Option is a floating rate and will change on and as
      of
      the date of a change in the Prime Rate. The period of time during which the
      Prime Rate shall be applicable shall be a Prime Rate Interest Period. Interest
      based on the Eurodollar Fixed Rate Option will be fixed for a period of one
      (1),
      two (2), or three (3) months (each, a “Eurodollar Fixed Interest Period”) (the
      Eurodollar Fixed Rate being hereafter from time to time referred to as a “Fixed
      Rate Option”).

    

    2. Selection
      of Applicable Interest Rate.

    

    (a) Request.
      Borrower may request (a “Rate Request”) that loans in the minimum amount of
      $100,000 and in $50,000 increments in excess thereof (an “Increment”) of the
      outstanding principal of, or amounts to be disbursed under, the Note bear
      interest at the Prime Rate Option, or the Eurodollar Fixed Rate Option, as
      applicable, by telephonic notice no later than 10:00 a.m. (Nashville,
      Tennessee time) a sufficient (in Bank’s sole discretion) number of Business Days
      prior to the effective date of the Rate Request to permit Bank to quote the
      rate
      requested.

    

    (b) Applicable
      Interest Rates.
      Borrower’s Rate Request will become effective, and interest on the Increment
      designated will be calculated at the rate (the “Effective Rate”) requested by
      Borrower, subject to the following:

    

    (i) Notwithstanding
      any Rate Request, interest shall be calculated on the basis of the Prime Rate
      Option if (a) Bank, in good faith, is unable to ascertain the requested Fixed
      Rate Option by reason of circumstances then affecting the applicable money
      market or otherwise, (b) it becomes unlawful or impracticable for the
      Bank
      to maintain loans based upon the requested Fixed Rate Option, or (c) Bank,
      in good faith, determines that it is impracticable to maintain loans based
      on
      the requested Fixed Rate Option because of increased taxes, regulatory costs,
      reserve requirements, expenses or any other costs or charges that affect such
      Interest Rate Options. Upon the occurrence of any of the above events, any
      increment to which a requested Fixed Rate Option applies, shall be immediately
      (or at the option of Bank, at the end of the current Fixed Rate Interest
      Period), without further action of Borrower or Bank, converted to an increment
      to which the Prime Rate Option applies.

    

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    (ii) Borrower
      may have no more than three (3) Effective Rates applicable to amounts
      outstanding under the Note at any given time.

    

    (iii) A
      Rate
      Request shall be effective as to amounts to be disbursed under the Note only
      if,
      on the effective date of the Rate Requests, such amounts are in fact disbursed
      to or for the account of the Borrower in accordance with the provisions of
      the
      Note and any related loan documents.

    

    (iv) Any
      amounts of outstanding principal for which a Rate Request has not been made,
      or
      is otherwise not effective, shall bear interest until paid in full at the Fixed
      Rate Option.

    

    (v) Any
      amounts of outstanding principal bearing interest based upon a Fixed Rate Option
      shall bear interest at such rate until the end of the Eurodollar Fixed Interest
      Period therefor, and thereafter shall bear interest based upon the Prime Rate
      unless a new Rate Request for a Prime Rate Option and/or Fixed Rate Option
      complying with the terms hereof has been made and has become
      effective.

    

    (vi) If
      Borrower shall be in default under the Note (“Default”), then Bank shall no
      longer be obligated to honor any Rate Requests for the Eurodollar Fixed Rate
      Option and the Note shall thereafter bear interest at the Default
      Rate.    

    

    (vii) No
      Fixed
      Rate Interest Period shall extend beyond the maturity date of the
      Note.

    

    (c) Repayment.
      Principal shall be payable as set forth in the Note and interest shall be
      payable as follows: 

    

    (i) For
      any
      Interest Period during which the Prime Rate is applicable to any of the
      outstanding principal, interest thereon shall be payable monthly, and continuing
      on the same day of each successive month thereafter, with a final payment of
      all
      accrued and unpaid interest on the last day of such Interest Period and, in
      the
      case of an Interest Period greater than three months, at three month intervals
      after the first day of such Interest Period.

    

    (ii) For
      any
      Interest Period during which the Eurodollar Fixed Rate is applicable to any
      of
      the outstanding principal, interest thereon shall be payable on the last day
      of
      each applicable Eurodollar Fixed Interest Period.

    

    

    3. Defined
      Terms.
      The
      following terms as used in this Exhibit
      B
      shall
      have the following meanings:

    

    “Business
      Day”
      shall
      mean a day on which Bank is open for business and dealing in deposits in
      Nashville, Tennessee.

    

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    “Eurodollar
      Fixed Rate”
      shall
      mean the rate of interest per annum (rounded upwards, if necessary to the
      nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page)
      as
      the London Interbank offered rate for deposits in Dollars at approximately
      11:00
      a.m. (London time) two Business Days prior to the first day of such Interest
      Period for a term comparable to such Interest Period, as adjusted from time
      to
      time in Bank’s sole discretion for then applicable reserve requirements, deposit
      insurance assessment rates and other regulatory costs. If for any reason such
      rate is not available, the term “Eurodollar Rate” shall mean the rate of
      interest per annum (rounded upwards, if necessary to the nearest 1/100 of 1%)
      appearing on Reuters Screen LIBO Page as the London interbank offered rate
      for
      deposits in Dollars at approximately 11:00 a.m. (London time) two Business
      Days
      prior to the first day of such Interest Period for a term comparable to such
      Interest Period, as adjusted from time to time in Bank’s sole discretion for
      then applicable reserve requirements, deposit insurance assessment rates and
      other regulatory costs; provided,
      however,
      if more
      than one rate is specified on Reuters Screen LIBO Page, the applicable rate
      shall be the arithmetic mean of all such rates.

    

    “Prime
      Rate”
      is the
      fluctuating rate of interest established by Bank from time to time, at its
      discretion, whether or not such rate shall be otherwise published. The Prime
      Rate is established by Bank as an index and may or may not at any time be the
      best or lowest rate charged by Bank on any loan.

    

    4. Notices;
      Authority to Act.
      Borrower acknowledges and agrees that the agreement of Bank herein to receive
      certain notices by telephone is solely for the convenience of Borrower. Bank
      shall be entitled to rely on the authority of the person purporting to be a
      person authorized by Borrower to give such notice, and Bank shall have no
      liability to Borrower on account of any action taken by Bank in reliance upon
      such telephonic notice. The obligation of Borrower to repay all sums owing
      under
      the Note shall not be affected in any way or to any extent by any failure by
      Bank to receive written confirmation of any telephonic notice or the receipt
      by
      Bank of a confirmation which is at variance with the terms understood by Bank
      to
      be contained in the telephonic notice.

    

    IN
      WITNESS WHEREOF, the parties hereto have executed this Exhibit
      B
      to Note
      as of the 7th day of July, 2005.

    

    

    
      	 	Borrower: 	 	ARC
              HDV, LLC
	 	 	 	 
	 	 	 	By:
	 	 	 	 
	 	 	 	Its:
	 	 	 	 
	 	Bank:	 	Bank
              of America, N.A.
	 	 	 	 
	 	 	 	By:
	 	 	 	 
	 	 	 	Its:

    

     

    
      
        
        

      

      
        -10-Exhibit 10.7

    Exhibit
      10.7

    Date:
      July 7, 2005

    

    Limited
      Guaranty

    

    
      	
               

              Bank:

               

              Bank
                of America, N.A.

              Banking
                Center:

              414
                Union Street

              Healthcare
                Lending

              Nashville,
                Davidson County, Tennessee 

              37219-1697

               

               

               

               

               

               

              (Street
                address including county)

            	
               

              Guarantor:

               

              American
                Retirement Corporation

              111
                Westwood Place, Suite 200

              Brentwood,
                Williamson County, Tennessee 

              37027

               

               

               

               

               

               

               

               

              (Name
                and street address, including
                county)

            

    

    

    “Borrower”:
      ARC HDV,
      LLC, a Tennessee limited liability company

    

    (Borrower’s
      Name)

    

    1. Guaranty.
      FOR
      VALUE
      RECEIVED, and to induce Bank of America, N.A. (Attn: Hope Walker,
      Healthcare Lending)(“Bank”) to make loans or advances or to extend credit or
      other financial accommodations or benefits, with or without security, to or
      for
      the account of Borrower, the undersigned “Guarantor”, if more than one, then
      each of them jointly and severally, hereby becomes surety for and irrevocably
      and unconditionally guarantees to Bank prompt payment in an amount as provided
      herein, when due, whether by acceleration or otherwise, of any Liabilities
      of
      Borrower to Bank. This Guaranty is cumulative to and does not supersede any
      other guaranties.

    

    This
      Guaranty is limited to the amount of $23,180,008.00 dollars principal plus
      interest incurred by Borrower pursuant to: (i) those three (3) certain
      promissory notes from Borrower to Bank, each dated as of July 7, 2005, in the
      principal amounts of $9,360,775.00 and $9,360,775.00, and $4,458,458.00,
      respectively, including, without limitation, all principal plus interest owing
      at any time thereunder whether arising by modification, renewal or advance
      of
      additional principal which may accrue or be incurred with respect to said
      promissory notes or other Loan Documents, (ii) attorney’s fees, cost of expenses
      of collection incurred and/or the cost of the enforcement of rights in enforcing
      this Guaranty (including, without limitation, any liability arising from failure
      to comply with any state or federal laws, rules and regulations concerning
      the
      control of hazardous waste or substances at or with respect to any real estate
      securing any loan guaranteed hereby), plus interest on such attorney’s fees and
      cost of collection.

     

    Except
      to
      the extent limited above, Guarantor unconditionally guarantees the faithful,
      prompt and complete compliance by Borrower with all Obligations (as hereinafter
      defined). The undertakings of Guarantor hereunder are independent of the
      Liabilities and Obligations of Borrower and a separate action or actions for
      payment, damages or performance may be brought or prosecuted against Guarantor,
      whether or not an action is brought against Borrower or to realize upon the
      security for the Liabilities and/or Obligations, whether or not Borrower is
      joined in any such action or actions, and whether or not notice is given or
      demand is made upon Borrower.

    

    Bank
      shall not be required to proceed first against Borrower, or any other person
      or
      entity, whether primarily or secondarily liable, or against any collateral
      held
      by it, before resorting to Guarantor for payment, and Guarantor shall not be
      entitled to assert as a defense to the enforceability of the Guaranty any
      defense of Borrower with respect to any Liabilities or Obligations.  

    

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

    2. Paragraph
      Headings, Governing Law and Binding Effect. Guarantor
      agrees that the paragraph headings in this Guaranty are for convenience only
      and
      that they will not limit any of the provisions of this Guaranty. Guarantor
      further agrees that this Guaranty shall be governed by and construed in
      accordance with the laws of the State of Tennessee and applicable United States
      federal law. Guarantor further agrees that this Guaranty shall be deemed to
      have
      been made in the State of Tennessee at Bank’s address indicated above, and shall
      be governed by, and construed in accordance with, the laws of the State of
      Tennessee, or the United States courts located within the State of Tennessee,
      and is performable in the State of Tennessee. This Guaranty is binding upon
      Guarantor, his, their or its executors, administrators, successors or assigns,
      and shall inure to the benefit of Bank, its successors, indorsees or assigns.
      Anyone executing this Guaranty shall be bound by the terms hereof without regard
      to execution by anyone else.

    

    3. Definitions.

    

    A. “Guarantor”
      shall mean Guarantor or any one or more of them.

    

    B. “Liability”
      or “Liabilities” shall mean without limitation, all liabilities, overdrafts,
      indebtedness, and obligations of Borrower and/or Guarantor to Bank, whether
      direct or indirect, absolute or contingent, joint or several, secured or
      unsecured, due or not due, contractual or tortious, liquidated or unliquidated,
      arising by operation of law or otherwise, now or hereafter existing, or held
      or
      to be held by Bank for its own account or as agent for another or others,
      whether created directly, indirectly, or acquired by assignment or otherwise,
      including but not limited to all extensions or renewals thereof, and all sums
      payable under or by virtue thereof, including without limitation, all amounts
      of
      principal and interest, all expenses (including reasonable attorney’s fees and
      cost of collection) incurred in the collection thereof or the enforcement of
      rights thereunder (including without limitation, any liability arising from
      failure to comply with state or federal laws, rules and regulations concerning
      the control of hazardous waste or substances at or with respect to any real
      estate securing any loan guaranteed hereby), whether arising in the ordinary
      course of business or otherwise. If Borrower is a partnership, corporation
      or
      other entity the term “Liability” or “Liabilities” as used herein shall include
      all Liabilities to Bank of any successor entity or entities.

    

    C. “Loan
      Documents” shall mean all deeds to secure debt, deeds of trust, mortgages,
      security agreements and other documents securing payment of the Liabilities
      and
      all notes and other agreements, documents, and instruments evidencing or
      relating to the Liabilities and Obligations.

    

    D. “Obligation”
      or “Obligations” shall mean all terms, conditions, covenants, agreements and
      undertakings of Borrower and/or Guarantor under all notes and other documents
      evidencing the Liabilities, and under all deeds to secure debt, deeds of trust,
      mortgages, security agreements and other agreements, documents and instruments
      executed in connection with the Liabilities or related thereto.

    

    4. Waivers
      by Guarantor. Guarantor
      waives notice of acceptance of this Guaranty, notice of any Liabilities or
      Obligations to which it may apply, presentment, demand for payment, protest,
      notice of dishonor or nonpayment of any Liabilities, notice of intent to
      accelerate, notice of acceleration, and notice of any suit or the taking of
      other action by Bank against Borrower, Guarantor or any other person, any
      applicable statute of limitations and any other notice to any party liable
      on
      any Loan Document (including Guarantor).

    

    Each
      Guarantor also hereby waives any claim, right or remedy which such Guarantor
      may
      now have or hereafter acquire against Borrower that arises hereunder and/or
      from
      the performance by any other Guarantor hereunder including, without limitation,
      any claim, remedy or right of subrogation, reimbursement, exoneration,
      contribution, indemnification, or participation in any claim, right or remedy
      of
      Bank against Borrower or against any security which Bank now has or hereafter
      acquires, whether or not such claim, right or remedy arises in equity, under
      contract, by statute, under common law or otherwise. 

    

    Guarantor
      also waives the benefits of any provision of law requiring that Bank exhaust
      any
      right or remedy, or take any action, against Borrower, any Guarantor, any other
      person and/or property including but not limited to the provisions of the Tenn.
      Code Ann. §47-12-101, as amended, or otherwise.

    

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    Bank
      may
      at any time and from time to time (whether before or after revocation or
      termination of this Guaranty) without notice to Guarantor (except as required
      by
      law), without incurring responsibility to Guarantor, without impairing,
      releasing or otherwise affecting the Obligations of Guarantor, in whole or
      in
      part, and without the indorsement or execution by Guarantor of any additional
      consent, waiver or guaranty: (a) change the manner, place or terms of payment,
      or change or extend the time of or renew, or change any interest rate or alter
      any Liability or Obligation or installment thereof, or any security therefor;
      (b) loan additional monies or extend additional credit to Borrower, with or
      without security, thereby creating new Liabilities or Obligations the payment
      or
      performance of which shall be guaranteed hereunder, and the Guaranty herein
      made
      shall apply to the Liabilities and Obligations as so changed, extended,
      surrendered, realized upon or otherwise altered; (c) sell, exchange, release,
      surrender, realize upon or otherwise deal with in any manner and in any order
      any property at any time pledged or mortgaged to secure the Liabilities or
      Obligations and any offset there against; (d) exercise or refrain from
      exercising any rights against Borrower or others (including Guarantor) or act
      or
      refrain from acting in any other manner; (e) settle or compromise any Liability
      or Obligation or any security therefor and subordinate the payment of all or
      any
      part thereof to the payment of any Liability or Obligation of any other parties
      primarily or secondarily liable on any of the Liabilities or Obligations; (f)
      release or compromise any Liability of Guarantor hereunder or any Liability
      or
      Obligation of any other parties primarily or secondarily liable on any of the
      Liabilities or Obligations; or (g) apply any sums from any sources to any
      Liability without regard to any Liabilities remaining unpaid.

    

    5. Subordination.
      Upon
      demand of Bank, Guarantor agrees that it will not demand, take or receive from
      Borrower, by set-off or in any other manner, payment of any debt, now and at
      any
      time or times hereafter owing by Borrower to Guarantor unless and until all
      the
      Liabilities and Obligations shall have been fully paid and performed, and any
      security interest, liens or encumbrances which Guarantor now has and from time
      to time hereafter may have upon any of the assets of Borrower shall be made
      subordinate, junior and inferior and postponed in priority, operation and effect
      to any security interest of Bank in such assets.

    

    6. Waivers
      by Bank. No
      delay
      on the part of Bank in exercising any of its options, powers or rights, and
      no
      partial or single exercise thereof, shall constitute a waiver thereof. No waiver
      of any of its rights hereunder, and no modification or amendment of this
      Guaranty, shall be deemed to be made by Bank unless the same shall be in
      writing, duly signed on behalf of Bank; and each such waiver, if any, shall
      apply only with respect to the specific instance involved, and shall in no
      way
      impair the rights of Bank or the obligations of Guarantor to Bank in any other
      respect at any other time.

    

    7. Termination.
      This
      Guaranty shall be binding on each Guarantor until written notice of revocation
      signed by such Guarantor or written notice of the death of such Guarantor shall
      have been received by Bank, notwithstanding change in name, location,
      composition or structure of, or the dissolution, termination or increase,
      decrease or change in personnel, owners or partners of Borrower, or any one
      or
      more of Guarantors. No notice of revocation or termination hereof shall affect
      in any manner rights arising under this Guaranty with respect to Liabilities
      or
      Obligations that shall have been committed, created, contracted, assumed or
      incurred prior to receipt of such written notice pursuant to any agreement
      entered into by Bank prior to receipt of such notice. The sole effect of such
      notice of revocation or termination hereof shall be to exclude from this
      Guaranty, Liabilities or Obligations thereafter arising that are unconnected
      with Liabilities or Obligations theretofore arising or transactions entered
      into
      theretofore.

    

    8. Partial
      Invalidity and/or Enforceability of Guaranty. The
      unenforceability or invalidity of any provision of this Guaranty shall not
      affect the enforceability or validity of any other provision herein and the
      invalidity or unenforceability of any provision of any Loan Document as it
      may
      apply to any person or circumstance shall not affect the enforceability or
      validity of such provision as it may apply to other persons or
      circumstances.

    

    In
      the
      event Bank is required to relinquish or return the payments, the collateral
      or
      the proceeds thereof, in whole or in part, which had been previously applied
      to
      or retained for application against any Liability, by reason of a proceeding
      arising under the Bankruptcy Code, or for any other reason, this Guaranty shall
      automatically continue to be effective notwithstanding any previous cancellation
      or release effected by Bank.

    

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    9. Change
      of Status. Guarantor
      will not become a party to a merger or consolidation with any other company,
      except where Guarantor is the surviving corporation or entity, and all covenants
      under this Guaranty are assumed by the surviving entity. Further, Guarantor
      may
      not change its legal structure, without the written consent of Bank and all
      covenants under this Guaranty are assumed by the new or surviving entity.
      Guarantor further agrees that this Guaranty shall be binding, legal and
      enforceable against Guarantor in the event Borrower changes its name, status
      or
      type of entity.

    

    10. Financial
      and Other Information. Guarantor
      agrees to furnish to Bank any and all financial information and any other
      information regarding Guarantor and/or collateral requested in writing by Bank
      within ten (10) days of the date of the request. Guarantor has made an
      independent investigation of the financial condition and affairs of Borrower
      prior to entering into this Guaranty, and Guarantor will continue to make such
      investigation; and in entering into this Guaranty Guarantor has not relied
      upon
      any representation of Bank as to the financial condition, operation or
      creditworthiness of Borrower. Guarantor further agrees that Bank shall have
      no
      duty or responsibility now or hereafter to make any investigation or appraisal
      of Borrower on behalf of Guarantor or to provide Guarantor with any credit
      or
      other information which may come to its attention now or hereafter.

    

    11. Notices.
      Notice
      shall be deemed reasonable if mailed postage prepaid at least five (5) days
      before the related action to the address of Guarantor or Bank, at their
      respective addresses indicated at the beginning of this Guaranty, or to such
      other address as any party may designate by written notice to the other party.
      Each notice, request and demand shall be deemed given or made, if sent by mail,
      upon the earlier of the date of receipt or five (5) days after deposit in the
      U.S. Mail, first class postage prepaid, or if sent by any other means, upon
      delivery.

    

    12. Guarantor
      Duties.
      Guarantor shall upon notice or demand by Bank promptly and with due diligence
      pay all amounts guaranteed hereby for the benefit of Bank in the event of (a)
      the occurrence of any default under any Loan Documents; (b) the failure of
      any
      Borrower or Guarantor to perform any obligation or pay any liability or
      indebtedness of any Borrower or Guarantor to Bank, or to any affiliate of Bank,
      whether under any Note, Guaranty, or any other agreement, now or hereafter
      existing, as and when due (whether upon demand, at maturity or by acceleration);
      (c) the failure of any Borrower or Guarantor to pay or perform any other
      liability, obligation or indebtedness of any Borrower or Guarantor to any other
      party; (d) the resignation or withdrawal of any partner or a material owner
      of
      Borrower, as determined by Bank in its sole discretion; (e) the commencement
      of
      a proceeding against any Borrower or Guarantor for dissolution or liquidation,
      the voluntary or involuntary termination or dissolution of any Borrower or
      Guarantor or the merger or consolidation of the Borrower with or into another
      entity; (f) the insolvency, or the business failure of, or the appointment
      of a
      custodian, trustee, liquidator or receiver for or of any of the property of,
      or
      the assignment for the benefit of creditors by, or the filing of a petition
      under bankruptcy, insolvency or debtor’s relief law or the filing of a petition
      for any adjustment of indebtedness, composition or extension by or against
      any
      Borrower or Guarantor; (g) the sole determination by Bank that any
      representation or warranty to Bank in any Loan Document or otherwise to Bank
      was
      untrue or materially misleading when made; (h) the failure of Guarantor or
      Borrower to timely deliver such financial statements including tax returns
      and
      all schedules, or other statements of condition or other information, as Bank
      shall request from time to time; (i) the entry of an uninsured judgment against
      Borrower or Guarantor which Bank deems to be of a material nature in the sole
      discretion of Bank; (j) the seizure or forfeiture of any of Borrower or
      Guarantor’s property, or the issuance of any writ of possession, garnishment or
      attachment, or any turnover order; (k) any lien or additional security interest
      not otherwise permitted being placed upon any collateral which is security
      for
      any Loan Document; or (l) the failure of Borrower’s business to comply with any
      law or regulation controlling the operation of Borrower’s business.

    

    13. Remedies.
      Upon
      the
      failure of Guarantor to fulfill its duty to pay all Liabilities and perform
      and
      satisfy all Obligations as required hereunder, Bank shall have all of the
      remedies of a creditor and, to the extent applicable, of a secured party, under
      all applicable law, and without limiting the generality of the foregoing, Bank
      may, at its option and without notice or demand: (a) declare any Liability
      due
      and payable at once; and (b) take possession of any collateral pledged by
      Borrower or Guarantor wherever located, and sell, resell, assign, transfer
      and
      deliver all or any part of said collateral of Borrower or Guarantor at any
      public or private sale or otherwise dispose of any or all of the collateral
      in
      its then condition, for cash or on credit or for future delivery, and in
      connection therewith Bank may impose reasonable conditions upon any such sale,
      and Bank, unless prohibited by law the provisions of which cannot be waived,
      may
      purchase all or any part of said collateral to be sold, free from and discharged
      of all trusts, claims, rights or redemption and equities of Borrower or
      Guarantor whatsoever; Guarantor acknowledges and agrees that the sale of any
      collateral through any nationally recognized broker-dealer, investment banker
      or
      any other method common in the securities industry shall be deemed a
      commercially reasonable sale under the Uniform Commercial Code or any other
      equivalent statute or federal law, and expressly waives notice thereof except
      as
      provided herein. 

    

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    14. Attorney
      Fees, Cost and Expenses. Guarantor
      shall pay all costs of collection and reasonable attorney’s fees, including
      reasonable attorney’s fees in connection with any suit, mediation or arbitration
      proceeding, out of Court payment agreement, trial, appeal, bankruptcy
      proceedings or otherwise, incurred or paid by Bank in enforcing the payment
      of
      any Liability or defending this agreement.

    

    15. Preservation
      of Property. Bank
      shall not be bound to take any steps necessary to preserve any rights in any
      property pledged as collateral to Bank to secure Borrower and/or Guarantor’s
      Liabilities and Obligations as against prior parties who may be liable in
      connection therewith, and Borrower and Guarantor hereby agree to take any such
      steps. Bank, nevertheless, at any time, may (a) take any action it deems
      appropriate for the care or preservation of such property or of any rights
      of
      Borrower and/or Guarantor or Bank therein; (b) demand, sue for, collect or
      receive any money or property at any time due, payable or receivable on account
      of or in exchange for any property pledged as collateral to Bank to secure
      Borrower and/or Guarantor’s Liabilities to Bank; (c) compromise and settle with
      any person liable on such property; or (d) extend the time of payment or
      otherwise change the terms of the Loan Documents as to any party liable on
      the
      Loan Documents, all without notice to, without incurring responsibility to,
      and
      without affecting any of the Obligations or Liabilities of
      Guarantor.

    

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

    

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

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

    

    B. RESERVATION
      OF RIGHTS.
      NOTHING IN THIS ARBITRATION PROVISION SHALL BE DEEMED TO (I) LIMIT THE
      APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF LIMITATION OR REPOSE
      AND
      ANY WAIVERS CONTAINED IN THIS INSTRUMENT, AGREEMENT OR DOCUMENT; OR (II) BE
      A
      WAIVER BY BANK OF THE PROTECTION AFFORDED TO IT BY 12 U.S.C. SEC. 91 OR ANY
      SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF BANK HERETO
      (A)
      TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED TO) SETOFF, OR (B)
      TO
      FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL, OR (C) TO OBTAIN
      FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO)
      INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT OF A RECEIVER. BANK
      MAY
      EXERCISE SUCH SELF HELP RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH
      PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY
      ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS INSTRUMENT, AGREEMENT OR
      DOCUMENT. NEITHER THIS EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR
      MAINTENANCE OF AN ACTION FOR FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES
      SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT
      IN
      ANY SUCH ACTION, TO ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING
      RESORT TO SUCH REMEDIES.

    

    17. Controlling
      Document. To
      the
      extent that this Limited Guaranty conflicts with or is in any way incompatible
      with any other Loan Document concerning this Obligation, any promissory note
      shall control over any other document, and if such promissory note does not
      address an issue, then each other document shall control to the extent that
      it
      deals most specifically with an issue.

     

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    18. NOTICE
      OF FINAL AGREEMENT. THIS WRITTEN LIMITED GUARANTY REPRESENTS THE FINAL AGREEMENT
      BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
      CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
      UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

    IN
      WITNESS WHEREOF, the undersigned has caused this Guaranty to be executed as
      of
      this 7th day of July, 2005.

    

    

    
      	 	Corporate
              Guarantor:
	 	 
	 	
              American
                Retirement Corporation, a Tennessee

              corporation

            
	 	 
	 	By:
	 	 
	 	Name:
	 	 
	 	Title:
	 	 

    

    

     

    

    Corporate
      Acknowledgment

    

    State
      of
      Tennessee

    )

    County
      of
      Williamson

    

    This
      instrument was acknowledged before me on ___________, 2005, by
      ________________________, of American Retirement Corporation, a Tennessee
      corporation, on behalf of said corporation.

    

     

    

    
      
        	
                 

              	 
	 	Notary
                Public
	 	in
                and for the State of _______________
	 	 
	My
                Commission Expires	Print
                Name of Notary
	_________________	 

      

    

        

     

    
      
        
        

      

      
        -7-

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