Document:

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                                                                  Exhibit 10.117

                       THIRD AMENDMENT TO MULTIFAMILY NOTE

          THIS THIRD AMENDMENT TO MULTIFAMILY NOTE (this "Amendment") is made as
of this _____ day of _____________, 2002 between RETIREMENT INNS III, LLC, a
Delaware limited liability company (the "Borrower"), and RED MORTGAGE CAPITAL,
INC., an Ohio corporation, formerly known as Provident Mortgage Capital, Inc.,
successor-in-interest to Banc One Capital Funding Corporation (the "Lender").

                                    RECITALS

          WHEREAS, the Lender has previously made a loan to the Borrower in the
original principal sum of Eight Million Two Hundred Nine Thousand Nine Hundred
Dollars ($8,209,900) (the "Loan") pursuant to the terms of that certain
Multifamily Note dated as of June 27, 1999, by the Borrower to the order of the
Lender (the "Original Note"), as amended pursuant to the terms of that certain
First Amendment to Multifamily Note dated as of December 28, 2000 between
Borrower and Lender (the "First Amendment to Note"), as further amended pursuant
to the terms of that certain Second Amendment to Multifamily Note dated as of
February 19, 2002, but effective as of January 1, 2002, between Borrower and
Lender (the "Second Amendment to Note", and together with the Original Note and
the First Amendment to Note, the "Existing Note") and is secured, in part, by a
first mortgage lien on the real property (the "Mortgaged Property") described on
Exhibit A to that certain Multifamily Deed of Trust, Assignment of Rents,
Security Agreement and Fixture Filing dated as of June 27, 1999 by the Borrower
to and for the benefit of the Lender, recorded among the Official Records of
Ventura County, California (the "Land Records") on June 28, 1999 as Instrument
No. 99-122405 (the "Original Deed of Trust"), as amended by that certain
Amendment to Multifamily Deed of Trust, Assignment of Rents, Security Agreement
and Fixture Filing dated as of August 31, 1999 between the Borrower and the
Lender, recorded among the Land Records on September 10, 1999 as Instrument No.
99-173435 (the "First Amendment to Deed of Trust"), as affected by that certain
Confirmatory Assignment of Multifamily Deed of Trust, Assignment of Rents,
Security Agreement and Fixture Filing dated as of December 12, 2000, effective
as of October 2, 2000, by Banc One Capital Funding Corporation, an Ohio
corporation to Provident Mortgage Capital, Inc., now known as Red Mortgage
Capital, Inc., recorded among the Land Records on January 31, 2001 as Instrument
No. 2001-0018605-00 (the "Confirmatory Assignment"), as further amended by that
certain Second Amendment to Multifamily Deed of Trust, Assignment of Rents,
Security Agreement and Fixture Filing dated as of February 13, 2002, but
effective as of January 1, 2002, between the Borrower and the Lender, recorded
among the Land Records on February 21, 2002 as Instrument No. 02-040888 (the
"Second Amendment to Deed of Trust", and together with the Original Deed of
Trust, the First Amendment to Deed of Trust and the Confirmatory Assignment, the
"Existing Deed of Trust"); and

          WHEREAS, pursuant to the terms of that certain Master Modification
Agreement dated as of February 19, 2002 by and among the Borrower, ARV Assisted
Living, Inc., a Delaware corporation (the "Guarantor"), and the Lender (the
"Modification Agreement"), and the Second Amendment to Note, the Maturity Date
(as such term was defined in the Original Note, as amended by the First
Amendment to Note) of the Loan was extended to July 1, 2003, the principal sum
of the Loan was increased to $11,980,000 and the interest rate of the Loan was
changed to 8.50%; and

          WHEREAS, the Borrower has requested and the Lender has agreed pursuant
to the terms and conditions of that certain Second Master Modification Agreement
dated as of the date hereof by and among Borrower, Guarantor, and Lender (the
"Second Modification Agreement") to extend the Maturity Date (as such term is
defined in the Existing Note) of the Loan to January 1, 2004 (the "Extension");
and

          WHEREAS, Borrower and Lender have agreed to enter into this Amendment
in accordance with the terms and conditions of the Second Modification
Agreement.

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          NOW, THEREFORE, for and in consideration of the premises, the mutual
entry of the Second Modification Agreement by the parties thereto, the Extension
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged by each party hereto, the parties hereby agree as
follows:

          Section 1.  Recitals. The Recitals are hereby incorporated into this
Amendment as a substantive part hereof.

          Section 2.  Modification to the Existing Note.

                 (a)  The third sentence of Section 3(b) of the Existing Note is
hereby deleted in its entirety and the following is inserted in lieu thereof:

          "Subject to Section 20 herein, any remaining principal and interest
          shall be due and payable on January 1, 2004 or on any earlier date on
          which the unpaid principal balance of this Note becomes due and
          payable, by acceleration or otherwise (the "Maturity Date")."

          Section 3.  Ratification. Except as may be amended or modified hereby,
the terms of the Existing Note are hereby ratified, affirmed and confirmed and
shall otherwise remain in full force and effect.

          Section 4.  Amendments. This Amendment may be amended or supplemented
by and only by an instrument executed and delivered by each party hereto.

          Section 5.  Waiver. The Lender shall not be deemed to have waived the
exercise of any right which it holds under the Original Loan Documents (as such
term is defined in the Second Modification Agreement) unless such waiver is made
expressly and in writing (and no delay or omission by the Lender in exercising
any such right shall be deemed a waiver of its future exercise). No such waiver
made as to any instance involving the exercise of any such right shall be deemed
a waiver as to any other such instance, or any other such right. Without
limiting the operation and effect of the foregoing provisions hereof, no act
done or omitted by the Lender pursuant to the powers and rights granted to it
hereunder shall be deemed a waiver by the Lender of any of its rights and
remedies under any of the provisions of the Original Loan Documents executed in
connection with the Loan, and this Assignment is made and accepted without
prejudice to any of such rights and remedies.

          Section 6.  Governing Law. This Agreement shall be given effect and
construed by application of the law of the State of California.

          Section 7.  Headings. The headings of the sections, subsections,
paragraphs and subparagraphs hereof are provided herein for and only for
convenience of reference, and shall not be considered in construing their
contents.

          Section 8.  References. As used herein, all references made (i) in the
neuter, masculine or feminine gender shall be deemed to have been made in all
such genders and (ii) in the singular or plural number shall be deemed to have
been made, respectively, in the plural or singular number as well.

          Section 9.  Severability. No determination by any court, governmental
body or otherwise that any provision of this Amendment or any amendment hereof
is invalid or unenforceable in any instance shall affect the validity or
enforceability of (i) any other such provision or (ii) such provision in any
circumstance not controlled by such determination. Each such provision shall be
valid and enforceable to the fullest extent allowed by, and shall be construed
wherever possible as being consistent with, applicable law.

          Section 10. Binding Effect. This Amendment shall be binding upon and
inure to the benefit of the Borrower and the Lender and their respective
successors and assigns, except that the Borrower shall not have the right to
assign its rights hereunder or any interest in the Original Loan Documents
without the prior written consent of the Lender.

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          Section 11. Counterparts. This Amendment may be executed in any number
of counterparts, each of which shall be deemed to be an original and all of
which shall constitute one and the same instrument.

          Section 12. WAIVER OF JURY TRIAL. THE BORROWER AND THE LENDER EACH (i)
AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF
THIS AMENDMENT, THE NOTE, ANY OTHER ORIGINAL LOAN DOCUMENT, OR THE RELATIONSHIP
BETWEEN THE PARTIES, AS LENDER AND BORROWER, THAT IS TRIABLE OF RIGHT BY A JURY
AND (ii) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE
EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO
TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH
THE BENEFIT OF COMPETENT LEGAL COUNSEL.

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          IN WITNESS WHEREOF, each of the parties hereto have executed and
delivered this Amendment under their respective seals as of the day and year
first written above.

WITNESS:                                 BORROWER:

                                         RETIREMENT INNS III, LLC,
                                         a Delaware limited liability company

                                   By:
--------------------                  ------------------------------------
                                         Name:    Abdo H. Khoury
                                         Title:   Manager

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WITNESS:                                 LENDER:

                                         RED MORTGAGE CAPITAL, INC.,
                                         an Ohio corporation, formerly known
                                         as Provident Mortgage Capital, Inc.,
                                         successor-in-interest to Banc One
                                         Capital Funding Corporation

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

                                       44<PAGE>

                                                                  Exhibit 10.118
                       THIRD AMENDMENT TO RIGHTS AGREEMENT

          THIS THIRD AMENDMENT TO RIGHTS AGREEMENT (this "Amendment"), dated as
of October 1, 2002, is made by and between ARV ASSISTED LIVING, INC., a Delaware
corporation (the "Company"), and CONTINENTAL STOCK TRANSFER & TRUST COMPANY (the
"Rights Agent").

                                    RECITALS

          A. WHEREAS, the Company and the Chasemellon Shareholders Services,
L.L.C. ("Chasemellon") entered into that certain Rights Agreement dated as of
May 14, 1998, as amended as of October 21, 1998 and April 24, 2000 (the "Rights
Agreement");

          B. WHEREAS, Chasemellon, as assignor, and Rights Agent, as assignee,
entered into that Certain Assignment and Assumption of Rights Agreement dated
September 25, 2002 pursuant to which Chasemellon assigned and transferred all of
its right, title and interest under the Rights Agreement to Rights Agent, and
Rights Agent assumed and agreed to perform and to be bound by all of the terms
and conditions imposed upon Chasemellon under the Rights Agreement

          C. WHEREAS, pursuant to Section 26 of the Rights Agreement, the
Company and the Rights Agent desire to amend the Rights Agreement as set forth
below;

          NOW, THEREFORE, the Rights Agreement is hereby amended as follows:

          1. Amendment of Section 9. The following paragraph shall be added to
Section 9 beneath the last sentence of the first paragraph of Section 9.

          "The Company agrees to take all such action, from and after the
Distribution Date, as may be necessary or appropriate to permit the issuance of
shares in connection with the exercise of the Rights, including any required
registration under (i) the Securities Act of 1933, as amended from time to time
(the "Securities Act"), and (ii) the securities or "blue sky" laws of the
various states, in connection with the exercisability of the Rights. The Company
may temporarily suspend, for a period of time not to exceed 90 days, the
exercisability of the Rights in order to prepare and file a registration
statement or statements for the purpose of effecting any such registration and
permit such statement(s) to become effective. At the commencement and
termination of any such suspension, the Company shall issue a public
announcement and shall provide written notice to the Rights Agent, stating that
the exercisability of the Rights has been temporarily suspended, or that such
suspension has terminated, as the case may be. Notwithstanding any provision of
this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall have
been obtained and until a registration statement has been declared effective."

          2. Amendment of Section 23.1. The first sentence of Section 23.1 of
the Rights Agreement is hereby amended and restated to read in its entirety as
follows:

               "23.1 Right to Redeem. The Board of Directors of the Company may,
at its option, at any time prior to the Distribution Date, redeem all but not
less than all of the then outstanding Rights at a redemption price of $.01 per
Right, appropriately adjusted to reflect any stock split, stock dividend,
recapitalization or similar transaction occurring after the date hereof (such
redemption price

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being hereinafter referred to as the "Redemption Price"), and the Company may,
at its option, pay the Redemption Price in Common Shares (based on the "current
per share market price," determined pursuant to Section 11.4, of the Common
Shares at the time of redemption), cash or any other form of consideration
deemed appropriate by the Board of Directors."

          3. Amendment of Section 27.1. Section 27.1 of the Rights Agreement is
hereby amended and restated to read in its entirety as follows:

               "27.1 Exchange of Common Shares for Rights. The Board of
Directors of the Company may, at its option, at any time after the occurrence of
a Trigger Event, exchange Common Shares for all or part of the then outstanding
and exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 11.1.2) by exchanging that number of
Common Shares having an aggregate value equal to the Spread (with such value
being based on the current per share market price (as determined pursuant to
Section 11.4) on the date of the occurrence of a Trigger Event) per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such amount per Right being
hereinafter referred to as the "Exchange Consideration"). Notwithstanding the
foregoing, the Board shall not be empowered to effect an exchange for more than
that number of Rights for which there are sufficient Common Shares authorized
but unissued, or held by the Company as treasury shares, to permit the exchange
for Rights. From and after the occurrence of an event specified in Section 13.1,
any Rights that theretofore have not been exchanged pursuant to this Section
27.1 shall thereafter be exercisable only in accordance with Section 13 and may
not be exchanged pursuant to this Section 27.1. The exchange of the Rights by
the Board of Directors may be made effective at such time, on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish."

          4. Effectiveness. This Amendment shall be deemed effective as of
August 20, 2002 as if executed by both parties on such date. Except as amended
hereby, the Rights Agreement shall remain in full force and effect and shall be
otherwise unaffected hereby.

          5. Miscellaneous. This Amendment shall be deemed to be a contract made
under the laws of the State of Delaware and for all purposes shall be governed
by and construed in accordance with the laws of such state applicable to
contracts to be made and performed entirely within such state, without giving
effect to the choice of law provisions thereof. This Amendment may be executed
in any number of counterparts, each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument. If any term, provision, covenant or restriction
of this Amendment is held by a court of competent jurisdiction or other
authority to be invalid, illegal, or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Amendment shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.

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          IN WITNESS WHEREOF, the parties hereto have caused this Third
Amendment to Rights Agreement to be duly executed as of the date first above
written.

ARV ASSISTED LIVING, INC.

          By:
               ---------------------------------
          Name:   Douglas M. Pasquale

          Its:    Chairman, Chief Executive Officer

CONTINENTAL STOCK TRANSFER & TRUST COMPANY

          By:
               ---------------------------------
          Name:
               ---------------------------------
          Its:
               ---------------------------------

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