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EX 10.1

    
      
        
          
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        EXHIBIT
          10.1

         

        CREDIT
          AND SECURITY AGREEMENT

         

        dated
          as of February 28, 2006

         

        among

         

        CYPRESS
          DALLS , L.P. and FT. WORTH, L.P.

         

        collectively,
          as Borrowers

         

        and

         

        MERRILL
          LYNCH CAPITAL,

         

        a
          Division of Merrill Lynch Business Financial Services
          Inc.,

         

        as
          Administrative Agent and as a Lender 

         

        and

         

        THE
          ADDITIONAL LENDERS

         

        FROM
          TIME TO TIME PARTY HERETO

         

        

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
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        TABLE
          OF CONTENTS

         

        
          	 	
                  Page

                
	
                  ARTICLE
                    1
                    DEFINITIONS

                	
                  1

                
	
                  Section
                    1.1

                	
                  Certain
                    Defined
                    Terms

                	
                  1

                
	
                  Section
                    1.2

                	
                  Accounting
                    Terms and
                    Determinations

                	
                  18

                
	
                  Section
                    1.3

                	
                  Other
                    Definitional
                    Provisions

                	
                  19

                
	
                  Section
                    1.4

                	
                  Funding
                    and Settlement
                    Currency

                	
                  19

                
	
                  Section
                    1.5

                	
                  Borrowers
                    as Licensed
                    Operators

                	
                  19

                
	
                  Section
                    1.6

                	
                  Certain
                    References to
                    Credit Parties

                	
                  19

                
	 	 
	
                  ARTICLE
                    2
                    LOANS

                	
                  19

                
	
                  Section
                    2.1

                	
                  Term
                    Loan

                	
                  19

                
	
                  Section
                    2.2

                	
                  [Reserved.]

                	
                  21

                
	
                  Section
                    2.3

                	
                  Interest;
                    Interest
                    Calculations and Certain Fees

                	
                  21

                
	
                  Section
                    2.4

                	
                  Notes

                	
                  23

                
	
                  Section
                    2.5

                	
                  Reserves
                    and
                    Escrows

                	
                  23

                
	
                  Section
                    2.6

                	
                  General
                    Provisions
                    Regarding Payment; Loan Account

                	
                  25

                
	
                  Section
                    2.7

                	
                  Maximum
                    Interest

                	
                  26

                
	
                  Section
                    2.8

                	
                  Taxes

                	
                  26

                
	
                  Section
                    2.9

                	
                  Capital
                    Adequacy

                	
                  27

                
	
                  Section
                    2.10

                	
                  Mitigation
                    Obligations

                	
                  28

                
	
                  Section
                    2.11

                	
                  Appointment
                    of Borrower
                    Representative

                	
                  28

                
	 	 
	
                  ARTICLE
                    3 REPRESENTATIONS
                    AND WARRANTIES

                	
                  29

                
	
                  Section
                    3.1

                	
                  Existence
                    and
                    Power

                	
                  29

                
	
                  Section
                    3.2

                	
                  Organization
                    and
                    Governmental Authorization; No Contravention

                	
                  29

                
	
                  Section
                    3.3

                	
                  Binding
                    Effect

                	
                  30

                
	
                  Section
                    3.4

                	
                  Capitalization

                	
                  30

                
	
                  Section
                    3.5

                	
                  Financial
                    Information

                	
                  30

                
	
                  Section
                    3.6

                	
                  Litigation

                	
                  31

                
	
                  Section
                    3.7

                	
                  Ownership
                    of Property
                    Generally

                	
                  31

                
	
                  Section
                    3.8

                	
                  No
                    Default

                	
                  31

                
	
                  Section
                    3.9

                	
                  Labor
                    Matters

                	
                  31

                
	
                  Section
                    3.10

                	
                  Regulated
                    Entities

                	
                  31

                
	
                  Section
                    3.11

                	
                  Margin
                    Regulations

                	
                  32

                
	
                  Section
                    3.12

                	
                  Compliance
                    With Laws;
                    Anti-Terrorism Laws

                	
                  32

                
	
                  Section
                    3.13

                	
                  Taxes

                	
                  32

                
	
                  Section
                    3.14

                	
                  Compliance
                    with
                    ERISA

                	
                  33

                
	
                  Section
                    3.15

                	
                  Consummation
                    of
                    Financing Documents; Brokers

                	
                  33

                
	
                  Section
                    3.16

                	
                  Related
                    Transactions

                	
                  34

                
	
                  Section
                    3.17

                	
                  Material
                    Contracts

                	
                  34

                
	
                  Section
                    3.18

                	
                  Compliance
                    with
                    Environmental Requirements; No Hazardous Materials

                	
                  34

                

        

         

        
          
            
            

          

          
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                  Section
                    3.19

                	
                  Intellectual
                    Property

                	
                  36

                
	
                  Section
                    3.20

                	
                  Solvency

                	
                  36

                
	
                  Section
                    3.21

                	
                  Full
                    Disclosure

                	
                  36

                
	
                  Section
                    3.22

                	
                  Interest
                    Rate

                	
                  36

                
	
                  Section
                    3.23

                	
                  Representations
                    and
                    Warranties Incorporated from Financing Documents

                	
                  37

                
	
                  Section
                    3.24

                	
                  Subsidiaries.
                    There are
                    no Subsidiaries of Borrowers

                	
                  37

                
	 	 
	
                  ARTICLE
                    4 AFFIRMATIVE
                    COVENANTS

                	
                  37

                
	
                  Section
                    4.1

                	
                  Financial
                    Statements and
                    Other Reports

                	
                  37

                
	
                  Section
                    4.2

                	
                  Payment
                    and Performance
                    of Obligations

                	
                  39

                
	
                  Section
                    4.3

                	
                  Maintenance
                    of
                    Existence; Single Purpose Entity Requirements

                	
                  40

                
	
                  Section
                    4.4

                	
                  Maintenance
                    of Property;
                    Payment of Taxes; Insurance

                	
                  40

                
	
                  Section
                    4.5

                	
                  Compliance
                    with
                    Laws

                	
                  42

                
	
                  Section
                    4.6

                	
                  Inspection
                    of Property,
                    Books and Records

                	
                  42

                
	
                  Section
                    4.7

                	
                  Use
                    of
                    Proceeds

                	
                  43

                
	
                  Section
                    4.8

                	
                  [Reserved.]

                	
                  43

                
	
                  Section
                    4.9

                	
                  [Reserved.]

                	
                  43

                
	
                  Section
                    4.10

                	
                  Environmental
                    Covenants

                	
                  43

                
	
                  Section
                    4.11

                	
                  Syndication

                	
                  45

                
	
                  Section
                    4.12

                	
                  Further
                    Assurances

                	
                  45

                
	
                  Section
                    4.13

                	
                  Litigation

                	
                  46

                
	
                  Section
                    4.14

                	
                  Deferred
                    Maintenance

                	
                  46

                
	
                  Section
                    4.15

                	
                  Power
                    of
                    Attorney

                	
                  46

                
	
                  Section
                    4.16

                	
                  Estoppel
                    Certificates

                	
                  46

                
	 	 
	
                  ARTICLE
                    5 NEGATIVE
                    COVENANTS

                	
                  46

                
	
                  Section
                    5.1

                	
                  Debt

                	
                  47

                
	
                  Section
                    5.2

                	
                  Liens

                	
                  47

                
	
                  Section
                    5.3

                	
                  Contingent
                    Obligations

                	
                  47

                
	
                  Section
                    5.4

                	
                  Restricted
                    Distributions

                	
                  47

                
	
                  Section
                    5.5

                	
                  Restrictive
                    Agreements

                	
                  47

                
	
                  Section
                    5.6

                	
                  Payments
                    and
                    Modifications of Subordinated Debt

                	
                  48

                
	
                  Section
                    5.7

                	
                  Consolidations,
                    Mergers
                    and Sales of Assets

                	
                  48

                
	
                  Section
                    5.8

                	
                  Purchase
                    of
                    Assets

                	
                  49

                
	
                  Section
                    5.9

                	
                  Transactions
                    with
                    Affiliates

                	
                  49

                
	
                  Section
                    5.10

                	
                  Modification
                    of
                    Organizational Documents

                	
                  49

                
	
                  Section
                    5.11

                	
                  Modification
                    of Certain
                    Agreements

                	
                  49

                
	
                  Section
                    5.12

                	
                  Fiscal
                    Year

                	
                  50

                
	
                  Section
                    5.13

                	
                  Conduct
                    of
                    Business

                	
                  50

                
	
                  Section
                    5.14

                	
                  Operating
                    Leases

                	
                  50

                
	
                  Section
                    5.15

                	
                  Lease
                    Payments

                	
                  50

                
	
                  Section
                    5.16

                	
                  Limitation
                    on Sale and
                    Leaseback Transactions

                	
                  50

                
	
                  Section
                    5.17

                	
                  Compliance
                    with
                    Anti-Terrorism Laws

                	
                  50

                

        

         

         

        
          
            
            

          

          
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                  ARTICLE
                    6 FINANCIAL
                    COVENANTS

                	
                  51

                
	
                  Section
                    6.1

                	
                  Definitions

                	
                  51

                
	
                  Section
                    6.2

                	
                  [Reserved.]

                	
                  52

                
	
                  Section
                    6.3

                	
                  [Reserved.]

                	
                  52

                
	
                  Section
                    6.4

                	
                  [Reserved.]

                	
                  53

                
	
                  Section
                    6.5

                	
                  Financial
                    Covenant

                	
                  53

                
	
                  Section
                    6.6

                	
                  Evidence
                    of
                    Compliance

                	
                  53

                
	
                  Section
                    6.7

                	
                  Financial
                    Covenant
                    Default

                	
                  53

                
	 	 
	
                  ARTICLE
                    7
                    CONDITIONS

                	
                  54

                
	
                  Section
                    7.1

                	
                  Conditions
                    to
                    Closing

                	
                  54

                
	
                  Section
                    7.2

                	
                  Searches

                	
                  55

                
	
                  Section
                    7.3

                	
                  Certain
                    Post-Closing
                    Obligations

                	
                  56

                
	 	 
	
                  ARTICLE
                    8 REGULATORY
                    MATTERS

                	
                  56

                
	
                  Section
                    8.1

                	
                  Representations
                    and
                    Warranties Pertaining to Licensed Locations

                	
                  56

                
	
                  Section
                    8.2

                	
                  Representations
                    and
                    Warranties Pertaining to Licensed Operators

                	
                  57

                
	
                  Section
                    8.3

                	
                  Covenants
                    Pertaining to
                    Licensed Locations

                	
                  60

                
	
                  Section
                    8.4

                	
                  Covenants
                    Pertaining to
                    Licensed Operators

                	
                  61

                
	
                  Section
                    8.5

                	
                  Special
                    Notices to
                    Administrative Agent

                	
                  65

                
	
                  Section
                    8.6

                	
                  Cure
                    of Healthcare Laws
                    Violations

                	
                  66

                
	
                  Section
                    8.7

                	
                  Licensed
                    Operator;
                    Manager

                	
                  67

                
	
                  Section
                    8.8

                	
                  Transfer
                    of Healthcare
                    Permits and Operations

                	
                  68

                
	 	 
	
                  ARTICLE
                    9 REAL PROPERTY
                    MATTERS

                	
                  69

                
	
                  Section
                    9.1

                	
                  Leases;
                    Resident
                    Agreements

                	
                  69

                
	
                  Section
                    9.2

                	
                  Project
                    Use and
                    Operation

                	
                  70

                
	
                  Section
                    9.3

                	
                  Casualty
                    Proceeds

                	
                  71

                
	
                  Section
                    9.4

                	
                  Borrowers'
                    Obligation to
                    Rebuild and Use of Casualty Proceeds Therefor

                	
                  73

                
	
                  Section
                    9.5

                	
                  Tax
                    Reduction
                    Proceedings

                	
                  74

                
	
                  Section
                    9.6

                	
                  Commingling;
                    FIRPTA

                	
                  74

                
	
                  Section
                    9.7

                	
                  Representations
                    and
                    Warranties

                	
                  74

                
	 	 
	
                  ARTICLE
                    10 SECURITY
                    AGREEMENT

                	
                  76

                
	
                  Section
                    10.1

                	
                  Generally

                	
                  76

                
	
                  Section
                    10.2

                	
                  Covenants
                    Relating to
                    Collateral

                	
                  77

                
	
                  Section
                    10.3

                	
                  UCC
                    Remedies

                	
                  78

                
	 	 
	
                  ARTICLE
                    11 EVENTS OF
                    DEFAULT

                	
                  80

                
	
                  Section
                    11.1

                	
                  Events
                    of
                    Default

                	
                  80

                
	
                  Section
                    11.2

                	
                  Acceleration

                	
                  82

                
	
                  Section
                    11.3

                	
                  [Reserved.]

                	
                  83

                
	
                  Section
                    11.4

                	
                  Default
                    Rate of
                    Interest

                	
                  83

                
	
                  Section
                    11.5

                	
                  Setoff
                    Rights

                	
                  83

                

        

         

         

        
          
            
            

          

          
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                  Section
                    11.6

                	
                  Application
                    of
                    Proceeds

                	
                  83

                
	
                  Section
                    11.7

                	
                  Waivers

                	
                  84

                
	
                  Section
                    11.8

                	
                  Injunctive
                    Relief

                	
                  86

                
	
                  Section
                    11.9

                	
                  Marshalling

                	
                  86

                
	 	 
	
                  ARTICLE
                    12 EXPENSES AND
                    INDEMNITY

                	
                  87

                
	
                  Section
                    12.1

                	
                  Expenses

                	
                  87

                
	
                  Section
                    12.2

                	
                  Indemnity

                	
                  87

                
	 	 
	
                  ARTICLE
                    13
                    ADMINISTRATIVE AGENT

                	
                  88

                
	
                  Section
                    13.1

                	
                  Appointment
                    and
                    Authorization

                	
                  88

                
	
                  Section
                    13.2

                	
                  Administrative
                    Agent
                    and Affiliates

                	
                  89

                
	
                  Section
                    13.3

                	
                  Action
                    by
                    Administrative Agent

                	
                  89

                
	
                  Section
                    13.4

                	
                  Consultation
                    with
                    Experts

                	
                  89

                
	
                  Section
                    13.5

                	
                  Liability
                    of
                    Administrative Agent

                	
                  89

                
	
                  Section
                    13.6

                	
                  Indemnification

                	
                  90

                
	
                  Section
                    13.7

                	
                  Right
                    to Request and
                    Act on Instructions

                	
                  90

                
	
                  Section
                    13.8

                	
                  Credit
                    Decision

                	
                  90

                
	
                  Section
                    13.9

                	
                  Collateral
                    Matters

                	
                  91

                
	
                  Section
                    13.10

                	
                  Agency
                    for
                    Perfection

                	
                  91

                
	
                  Section
                    13.11

                	
                  Notice
                    of
                    Default

                	
                  91

                
	
                  Section
                    13.12

                	
                  Successor
                    Administrative Agent

                	
                  92

                
	
                  Section
                    13.13

                	
                  Payment
                    and Sharing of
                    Payment

                	
                  93

                
	
                  Section
                    13.14

                	
                  Right
                    to Perform,
                    Preserve and Protect

                	
                  94

                
	
                  Section
                    13.15

                	
                  Additional
                    Titled
                    Agents

                	
                  94

                
	
                  Section
                    13.16

                	
                  Amendments
                    and
                    Waivers

                	
                  95

                
	
                  Section
                    13.17

                	
                  Assignments
                    and
                    Participations

                	
                  95

                
	
                  Section
                    13.18

                	
                  Definitions

                	
                  98

                
	 	 
	
                  ARTICLE
                    14
                    MISCELLANEOUS

                	
                  99

                
	
                  Section
                    14.1

                	
                  Survival

                	
                  99

                
	
                  Section
                    14.2

                	
                  No
                    Waivers

                	
                  99

                
	
                  Section
                    14.3

                	
                  Notices

                	
                  99

                
	
                  Section
                    14.4

                	
                  Severability

                	
                  100

                
	
                  Section
                    14.5

                	
                  Amendments
                    and
                    Waivers

                	
                  101

                
	
                  Section
                    14.6

                	
                  Credit
                    Party
                    Assignments

                	
                  101

                
	
                  Section
                    14.7

                	
                  Headings

                	
                  101

                
	
                  Section
                    14.8

                	
                  Confidentiality

                	
                  101

                
	
                  Section
                    14.9

                	
                  Waiver
                    of Consequential
                    and Other Damages

                	
                  102

                
	
                  Section
                    14.10

                	
                  GOVERNING
                    LAW;
                    SUBMISSION TO JURISDICTION

                	
                  102

                
	
                  Section
                    14.11

                	
                  WAIVER
                    OF JURY
                    TRIAL

                	
                  103

                
	
                  Section
                    14.12

                	
                  Publication;
                    Advertisement

                	
                  103

                
	
                  Section
                    14.13

                	
                  Counterparts;
                    Integration

                	
                  104

                
	
                  Section
                    14.14

                	
                  No
                    Strict
                    Construction

                	
                  104

                
	
                  Section
                    14.15

                	
                  Time

                	
                  104

                
	
                  Section
                    14.16

                	
                  Lender
                    Approvals

                	
                  104

                

        

         

         

        
          
            
            

          

          
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                  Section
                    14.17

                	
                  [Reserved.]

                	
                  104

                
	
                  Section
                    14.18

                	
                  WAIVERS

                	
                  104

                
	
                  Section
                    14.19

                	
                  Release
                    of
                    Administrative Agent and Lenders

                	
                  104

                
	 	 
	
                  ARTICLE
                    15 JOINT AND
                    SEVERAL LIABILITY; GUARANTOR PROVISIONS

                	
                  105

                
	
                  Section
                    15.1

                	
                  Joint
                    and Several
                    Obligations

                	
                  105

                
	
                  Section
                    15.2

                	
                  Guarantor
                    Provisions.

                	
                  109

                

        

         

        
          
            
            

          

          
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        CREDIT
          AND SECURITY AGREEMENT

         

        
          THIS
            CREDIT AND SECURITY AGREEMENT
            is dated
            as of February 28, 2006 by and among CYPRESS
            DALLAS, L.P., a
            Delaware limited partnership, CYPRESS
            FT. WORTH, L.P., a
            Delaware limited partnership (each, individually as a Borrower, and
            collectively, as Borrowers), the financial institutions or other entities
            from
            time to time parties hereto, each as a Lender, and MERRILL
            LYNCH CAPITAL, a division of Merrill Lynch Business Financial Services
            Inc.,
            individually as a Lender and as Administrative Agent. 
 

        RECITALS:

         

        R-1. Borrowers
          have requested that Lenders make available to Borrowers term financing
          facilities as described herein.

         

        R-2. Lenders
          are willing to extend such credit to Borrowers under the terms and conditions
          herein set forth.

         

        NOW,
          THEREFORE,
          in
          consideration of the premises and the agreements, provisions and covenants
          herein contained, Borrowers, Lenders and Administrative Agent agree as
          follows:

         

        ARTICLE
          1

        DEFINITIONS

         

        Section
          1.1 Certain
          Defined Terms. 

         

        The
          following terms have the following meanings:

         

        "Account"
          means
          "account", as defined in Article 9 of the UCC.

         

        "Additional
          Titled Agents"
          has the
          meaning given in Section
          13.15.

         

        "Administrative
          Agent" means
          Merrill Lynch, in its capacity as administrative agent for the Lenders
          hereunder, as such capacity is established in, and subject to the provisions
          of,
          Article 10, and the successors of Merrill Lynch in such capacity.

         

        "Affected
          Lender"
          has the
          meaning given in Section
          13.17(f).

         

        "Affiliate" means
          with respect to any Person (a) any Person that directly or indirectly
          controls such Person, (b) any Person which is controlled by or is under
          common control with such controlling Person, and (c) each of such Person's
          (other than, with respect to any Lender, any Lender's) officers or
          directors (or Persons functioning in substantially similar roles) and the
          spouses, parents, descendants and siblings of such officers, directors
          or other
          Persons. As used in this definition, the term "control" of
          a
          Person means the possession, directly or indirectly, of the power to vote
          five
          percent (5%) or more of any class of voting securities of such Person or to
          direct or cause the direction of the management or

         

        
          
            
            

          

          
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        policies
          of a Person, whether through the ownership of voting securities, by contract
          or
          otherwise.

         

        "Affiliated
          Financing Documents"
          means
          any credit, loan, letter of credit or related documents which are, by their
          terms and by the terms of this Agreement, cross-defaulted with the Financing
          Documents, and for which a Credit Party hereunder is liable or contingently
          liable for payment or as security for which a Credit Party hereunder has
          pledged, assigned or subjected any assets.

         

        "Agreement" means
          this Credit and Security Agreement, as the same may be amended, supplemented,
          restated or otherwise modified from time to time.

         

        "Allocable
          Amount"
          has the
          meaning given in Section
          15.1(g).

         

        "Anti-Terrorism
          Laws" means
          any
          Laws relating to terrorism or money laundering, including Executive Order
          No. 13224 (effective September 24, 2001), the USA PATRIOT Act, the
          Laws comprising or implementing the Bank Secrecy Act, and the Laws administered
          by OFAC.

         

        "Asset
          Disposition" means
          any
          sale, lease, license, transfer, assignment or other consensual disposition
          by
          any Borrower of any asset, but excluding dispositions of Inventory in the
          Ordinary Course of Business.

         

        "Assignment
          Agreement"
          means
          an agreement substantially in the form of Exhibit A
          hereto. 

         

        "ARC"
          means
          American Retirement Corporation, a Tennessee corporation.

         

        "Bankruptcy
          Code" means
          Title 11 of the United States Code entitled "Bankruptcy", as the same may
          be
          amended, modified or supplemented from time to time, and any successor
          statute
          thereto.

         

        "Base
          Rate" means
          a
          rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
          1%) equal to (a) the rate of interest which is identified and normally
          published by Bloomberg Professional Service Page BBAM 1 as the offered rate
          for loans in United States dollars for the period of one (1) month under
          the caption British Bankers Association LIBOR Rates as of 11:00 a.m.
          (London time) as adjusted on a daily basis and effective on the second full
          Business Day after each such day (unless such date is not a Business Day,
          in
          which event the next succeeding Business Day will be used); divided
          by
          (b) the sum of one minus
          the
          daily average during the preceding month of the aggregate maximum reserve
          requirement (expressed as a decimal) then imposed under Regulation D of the
          Board of Governors of the Federal Reserve System (or any successor
          thereto) for "Eurocurrency Liabilities" (as defined therein). If Bloomberg
          Professional Service (or another nationally-recognized rate reporting source
          acceptable to Administrative Agent) no longer reports the LIBOR or
          Administrative Agent determines in good faith that the rate so reported
          no
          longer accurately reflects the rate available to Administrative Agent in
          the
          London Interbank Market or if such index no longer exists or if Page BBAM 1
          no longer

         

        
          
            
            

          

          
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        exists
          or
          accurately reflects the rate available to Administrative Agent in the London
          Interbank Market, Administrative Agent may select a replacement index or
          replacement page, as the case may be.

         

        "Base
          Rate Margin" means
          two
          and one tenth percent (2.10%).

         

        "Blocked
          Person"
          means
          any Person: (a) listed in the annex to, or is otherwise subject to the
          provisions of, Executive Order No. 13224, (b) a Person owned or
          controlled by, or acting for or on behalf of, any Person that is listed
          in the
          annex to, or is otherwise subject to the provisions of, Executive Order
          No. 13224, (c) a Person with which any Lender is prohibited from
          dealing or otherwise engaging in any transaction by any Anti-Terrorism
          Law,
          (d) a Person that commits, threatens or conspires to commit or supports
          "terrorism" as defined in Executive Order No. 13224, or (e) a Person
          that is named a "specially designated national" or "blocked person" on
          the most
          current list published by OFAC or other similar list.

         

        "Borrower"
          and
          "Borrowers"
          mean
          the entities described in the first paragraph of this Agreement and each
          of
          their respective successors and permitted assigns. 

         

        "Borrower
          Representative"
          means
          ARC, in its capacity as Borrower Representative pursuant to the provisions
          of
Section 2.11,
          or any
          successor Borrower Representative selected by Borrowers and approved by
          Agent.

         

        "Business
          Day"
          means
          any day except a Saturday, Sunday or other day on which either the New
          York
          Stock Exchange is closed, or on which commercial banks in Chicago and New
          York
          City are authorized by law to close.

         

        "Capital
          Lease"
          of any
          Person means any lease of any property by such Person as lessee which would,
          in
          accordance with GAAP, be required to be accounted for as a capital lease
          on the
          balance sheet of such Person.

         

        "Capital
          Replacement Reserve"
          has the
          meaning given in Section
          2.5(d).

         

        "Casualty
          Proceeds"
          has the
          meaning given in Section
          9.3(b).

         

        "CCP"
          has the
          meaning given in Section
          8.4b(xi).

         

        "CERCLA"
          means
          the Comprehensive Environmental Response, Compensation and Liability Act
          of
          1980, 42 U.S.C.A. § 9601 et
          seq.,
          as the
          same may be amended from time to time.

         

        "Closed
          Period" means
          the
          period from the Closing Date through the twelfth (12th) full
          calendar month following the Closing Date.

         

        "Closing
          Date"
          means
          the date of this Agreement.

         

        
          
            
            

          

          
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        "CMS"
          means
          the federal Centers for Medicare and Medicaid Services (formerly the federal
          Health Care Financing Administration), or any successor Governmental
          Authority.

         

        "CNL"
          means
          CNL Financial Group, Inc., a Florida corporation.

         

        "Code"
          means
          the Internal Revenue Code of 1986.

         

        "Collateral"
          means
          all property, now existing or hereafter acquired, mortgaged or pledged
          to, or
          purported to be subjected to a Lien in favor of, Administrative Agent,
          for the
          benefit of Administrative Agent and Lenders, pursuant to this Agreement
          and the
          Security Documents.

         

        "Commitment
          Annex"
          means
Annex
          A
          to this
          Agreement.

         

        "Commitment
          Expiry Date"
          means
          February 28, 2009.

         

        "Compliance
          Certificate"
          means a
          certificate, duly executed by a Responsible Officer of Borrower Representative,
          appropriately completed and substantially in the form of Exhibit
          C
          hereto.

         

        "CON" means
          any
          certificate of need or similar license which determines that there is a
          need for
          a healthcare facility at a particular location or within a certain geographic
          region and entitles the holder to use a Licensed Location for a purpose
          permitted under Healthcare Laws. 

         

        "Contingent
          Obligation"
          means,
          with respect to any Person, any direct or indirect liability of such Person:
          (a) with respect to any debt, lease, dividend or other obligation of
          another Person (a "Third
          Party Obligation") if
          the purpose or intent of such Person incurring such liability, or the effect
          thereof, is to provide assurance to the obligee of such Third Party Obligation
          that such Third Party Obligation will be paid or discharged, or that any
          agreement relating thereto will be complied with, or that any holder of
          such
          Third Party Obligation will be protected, in whole or in part, against
          loss with
          respect thereto; (b) with respect to any undrawn portion of any letter of
          credit issued for the account of such Person or as to which such Person
          is
          otherwise liable for the reimbursement of any drawing; (c) under any Swap
          Contract or other derivative obligation; (d) to make take-or-pay or similar
          payments if required regardless of nonperformance by any other party or
          parties
          to an agreement; or (e) for any obligations of another Person pursuant to
          any Guarantee or pursuant to any agreement to purchase, repurchase or otherwise
          acquire any obligation or any property constituting security therefor,
          to
          provide funds for the payment or discharge of such obligation or to preserve
          the
          solvency, financial condition or level of income of another Person. The
          amount
          of any Contingent Obligation shall be equal to the amount of the obligation
          so
          Guaranteed or otherwise supported or, if not a fixed and determinable amount,
          the maximum amount so Guaranteed or otherwise supported.

         

        "Controlled
          Group"
          means
          all members of a group of corporations and all members of a group of trades
          or
          businesses (whether or not incorporated) under common

         

        
          
            
            

          

          
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        control
          which, together with any Borrower, are treated as a single employer under
          Section 414(b), (c), (m) or (o) of the Code or Section
          4001(b) of ERISA.

         

        "Covenant
          Prepayment"
          has the
          meaning given in Section
          6.7.

         

        "Credit
          Exposure"
          means
          any period of time during which any Loan or other Obligation remains unpaid
          or
          outstanding; provided,
          however,
          that no
          Credit Exposure shall be deemed to exist solely due to the existence of
          contingent indemnification liability (other than liability in respect of
          the
          Affiliated Financing Documents), absent the assertion of a claim with respect
          thereto.

         

        "Credit
          Party"
          means
          subject to Section
          1.6,
          any
          Guarantor under a Financing Document Guarantee, Cypress JV, General Partner,
          each Borrower and any Subsidiary of any Borrower, whether now existing
          or
          hereafter acquired or formed; and "Credit
          Parties"
          means
          all such Persons, collectively.

         

        "Cypress
          JV"
          means
          Cypress Dallas & Ft. Worth JV, LLC, a Delaware limited liability company,
          the sole member or limited partner, as applicable, of such
          Borrower.

         

        "Debt"
          of a
          Person means at any date, without duplication, (a) all obligations of such
          Person for borrowed money, (b) all obligations of such Person evidenced by
          bonds, debentures, notes or other similar instruments, (c) all obligations
          of such Person to pay the deferred purchase price of property or services,
          except trade accounts payable arising and paid on a timely basis and in
          the
          Ordinary Course of Business, (d) all Capital Leases of such Person,
          (e) all non-contingent obligations of such Person to reimburse any bank or
          other Person in respect of amounts paid under a letter of credit, banker's
          acceptance or similar instrument, (f) all equity securities of such Person
          subject to repurchase or redemption otherwise than at the sole option of
          such
          Person, (g) all obligations secured by a Lien on any asset of such Person,
          whether or not such obligation is otherwise an obligation of such Person,
          (h) "earnouts", purchase price adjustments, profit sharing arrangements,
          deferred purchase money amounts and similar payment obligations or continuing
          obligations of any nature of such Person arising out of purchase and sale
          contracts; (i) all Debt of others Guaranteed by such Person;
          (j) off-balance sheet liabilities and/or pension plan liabilities;
          (k) obligations arising under non-compete agreements; and
          (l) obligations arising under bonus, deferred compensation, incentive
          compensation or similar arrangements, other than those arising in the Ordinary
          Course of Business. 

         

        "Debt
          Service"
          has the
          meaning given in Section
          6.1(a).

         

        "Debt
          Service Coverage Ratio"
          has the
          meaning given in Section
          6.1(a).

         

        "Debt
          Yield Ratio"
          has the
          meaning given in Section
          6.1(a).

         

        "Default"
          means
          any condition or event which with the giving of notice or lapse of time
          or both
          would, unless cured or waived, become an Event of Default.

         

        
          
            
            

          

          
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        "Default
          Rate"
          has the
          meaning given in Section 11.4.

         

        "Eligible
          Swap Counterparty"
          means
          Administrative Agent or any Affiliate of Administrative Agent that from
          time to
          time enters into a Swap Contract with a Borrower or Borrowers.

         

        "Environmental
          Laws"
          means
          any present and future federal, state and local laws, statutes, ordinances,
          rules, regulations, standards, policies and other governmental directives
          or
          requirements, as well as common law, pertaining to the environment, natural
          resources, pollution, health (including any environmental clean up statutes
          and
          all regulations adopted by any local, state, federal or other Governmental
          Authority, and any statute, ordinance, code, order, decree, law rule or
          regulation all of which pertain to or impose liability or standards of
          conduct
          concerning medical waste or medical products, equipment or supplies), safety
          or
          clean-up that apply to any Borrower or the Project and relate to Hazardous
          Materials, including, without limitation, the Comprehensive Environmental
          Response, Compensation and Liability Act of 1980 (42 U.S.C. § 9601
et
          seq.),
          the
          Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6901
et
          seq.),
          the
          Federal Water Pollution Control Act (33 U.S.C. § 1251 et
          seq.),
          the
          Hazardous Materials Transportation Act (49 U.S.C. § 5101 et
          seq.),
          the
          Clean Air Act (42 U.S.C. § 7401 et
          seq.),
          the
          Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. § 136
et
          seq.),
          the
          Emergency Planning and Community Right-to-Know Act (42 U.S.C. § 11001
et
          seq.),
          the
          Occupational Safety and Health Act (29 U.S.C. § 651 et
          seq.),
          the
          Residential Lead-Based Paint Hazard Reduction Act (42 U.S.C. § 4851
et
          seq.),
          any
          analogous state or local laws, any amendments thereto, and the regulations
          promulgated pursuant to said laws, together with all amendments from time
          to
          time to any of the foregoing and judicial interpretations thereof.

         

        "Environmental
          Liens"
          means
          all Liens and other encumbrances imposed pursuant to any Environmental
          Law,
          whether due to any act or omission of Borrower or any other Person.

         

        "ERISA"
          means
          the Employee Retirement Income Security Act of 1974, as the same may be
          amended,
          modified or supplemented from time to time, and any successor statute thereto,
          and any and all rules or regulations promulgated from time to time
          thereunder.

         

        "ERISA
          Plan"
          means
          any "employee benefit plan", as such term is defined in
          Section 3(3) of ERISA (other than a Multiemployer Plan), which any
          Borrower maintains, sponsors or contributes to, or, in the case of an employee
          benefit plan which is subject to Section 412 of the Code or Title IV of
          ERISA,
          to which any Borrower or any member of the Controlled Group may have any
          liability, including any liability by reason of having been a substantial
          employer within the meaning of Section 4063 of ERISA at any time during
          the
          preceding five (5) years, or by reason of being deemed to be a contributing
          sponsor under Section 4069 of ERISA.

         

        "Event
          of Default"
          has the
          meaning given in Section
          11.1.

         

        
          
            
            

          

          
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        "Exit
          Fee"
          has the
          meaning given in Section
          2.3(d).

         

        "FF&E"
          has the
          meaning given in Section
          9.2(d).

         

        "Financial
          Covenants"
          has the
          meaning given in Section
          6.5.

         

        "Financing
          Documents"
          means
          this Agreement, any Notes, the Security Documents, any fee letter among
          Merrill
          Lynch and any of the Borrowers relating to the transactions contemplated
          hereby,
          any subordination or intercreditor agreement pursuant to which any Debt
          (other
          than any Subordinated Debt) and/or any Liens securing such Debt is
          subordinated to all or any portion of the Obligations and all other documents,
          instruments and agreements contemplated herein or thereby and heretofore
          executed, executed concurrently herewith or executed at any time and from
          time
          to time hereafter, as any or all of the same may be amended, supplemented,
          restated or otherwise modified from time to time, provided that the term
          "Financing Documents" does not include the documents evidencing or securing
          the
          Mezzanine Loan.

         

        "Financing
          Document Guarantee"
          means
          that certain Guaranty of Non-Recourse Carveouts Agreement and that certain
          Debt
          Service Guaranty, each executed by ARC of even date herewith, as well as
          any
          agreement that may exist from time to time pursuant to which any third
          party
          other than a Borrower shall Guarantee the Obligations of the Borrowers
          under
          this Agreement and/or the other Financing Documents.

         

        "Fiscal
          Year"
          means
          the fiscal year of Borrowers ending on December 31 of each calendar
          year.

         

        "GAAP"
          means
          generally accepted accounting principles set forth from time to time in
          the
          opinions and pronouncements of the Accounting Principles Board and the
          American
          Institute of Certified Public Accountants and statements and pronouncements
          of
          the Financial Accounting Standards Board (or agencies with similar functions
          of
          comparable stature and authority within the United States accounting
          profession), which are applicable to the circumstances as of the date of
          determination.

         

        "General
          Partner"
          means,
          collectively, Cypress Dallas GP, LLC and Cypress Ft. Worth GP, LLC, each
          a
          Delaware limited liability company.

         

        "Governmental
          Authority"
          means
          any nation or government, any state or other political subdivision thereof,
          and
          any agency, department or Person exercising executive, legislative, judicial,
          regulatory or administrative functions of or pertaining to government and
          any
          corporation or other Person owned or controlled (through stock or capital
          ownership or otherwise) by any of the foregoing, whether domestic or
          foreign. 

         

        "Governmental
          Payor"
          means
          Medicare, Medicaid, TRICARE, and other state or federal health care programs,
          but specifically excluding Third Party Payors.

         

        "Guarantee"
          by any
          Person means any obligation, contingent or otherwise, of such Person directly
          or
          indirectly guaranteeing any Debt or other obligation of any other

         

        
          
            
            

          

          
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        Person
          and, without limiting the generality of the foregoing, any obligation,
          direct or
          indirect, contingent or otherwise, of such Person (a) to purchase or pay
          (or advance or supply funds for the purchase or payment of) such Debt or
          other obligation (whether arising by virtue of partnership arrangements,
          by
          agreement to keep-well, to purchase assets, goods, securities or services,
          to
          take-or-pay, or to maintain financial statement conditions or otherwise),
          or
          (b) entered into for the purpose of assuring in any other manner the
          obligee of such Debt or other obligation of the payment thereof or to protect
          such obligee against loss in respect thereof (in whole or in part), provided,
          however, that
          the
          term Guarantee shall not include endorsements for collection or deposit
          in the
          Ordinary Course of Business. The term "Guarantee"
          used as
          a verb has a corresponding meaning.

         

        "Guarantor"
          means
          ARC and any other Person that has executed or delivered, or shall in the
          future
          execute or deliver, any Financing Document Guarantee of any portion of
          the
          Obligations.

         

        "Hazardous
          Materials"
          means
          petroleum and petroleum products and compounds containing them, including
          gasoline, diesel fuel and oil; explosives, flammable materials; radioactive
          materials; polychlorinated biphenyls and compounds containing them; lead
          and
          lead-based paint; asbestos or asbestos-containing materials; underground
          or
          above-ground storage tanks, whether empty or containing any substance;
          any
          substance the presence of which on the Project is prohibited by any
          Environmental Laws; toxic mold, or any similar substance that requires
          special
          handling due to environmental concerns; and any other material or substance
          now
          defined as a "hazardous substance," "hazardous material," "hazardous waste,"
          "toxic substance," "toxic pollutant," "contaminant," "pollutant" or other
          words
          of similar import within the meaning of any Environmental Law, including:
          (a) any "hazardous substance" defined as such in (or for purposes
          of) CERCLA, or any so-called "superfund" or "superlien" Law; (b) any
          "pollutant or contaminant" as defined in 42 U.S.C.A. § 9601(33); (c) any
          material now defined as "hazardous waste" pursuant to 40 C.F.R. Part 260;
          (d) any petroleum or petroleum by-products, including crude oil or any
          fraction thereof; (e) natural gas, natural gas liquids, liquefied natural
          gas, or synthetic gas usable for fuel; (f) any "hazardous chemical" as
          defined pursuant to 29 C.F.R. Part 1910; (g) any toxic substances, wastes,
          materials, pollutants or contaminants (including, without limitation, asbestos,
          polychlorinated biphenyls ("PCB's"), flammable explosives, radioactive
          materials, infectious substances, materials containing lead-based paint
          or raw
          materials which include hazardous constituents); and (h) any other toxic
          substance or contaminant that is subject to any Environmental Laws or other
          past
          or present requirement of any Governmental Authority. 

         

        "Hazardous
          Materials Contamination"
          means
          contamination (whether now existing or hereafter occurring) of the
          improvements, buildings, facilities, personalty, soil, groundwater, air
          or other
          elements on or of the relevant property by Hazardous Materials, or any
          derivatives thereof, or on or of any other property as a result of Hazardous
          Materials, or any derivatives thereof, generated on, emanating from or
          disposed
          of in connection with the relevant property.

         

        
          
            
            

          

          
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        "Healthcare
          Laws"
          means
          all applicable Laws relating to the possession, control, warehousing, marketing,
          sale and distribution of pharmaceuticals, the operation of medical or senior
          housing facilities (such as, but not limited to, nursing homes, skilled
          nursing
          facilities, rehabilitation hospitals, intermediate care facilities and
          adult
          care facilities), patient healthcare, patient healthcare information, patient
          abuse, the quality and adequacy of medical care, rate setting, equipment,
          personnel, operating policies, fee splitting, including without limitation,
          (a) all federal and state fraud and abuse laws, including, without
          limitation, the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b(6)),
          the Stark Law (42 U.S.C. § 395n), the civil False Claims Act (31 U.S.C.
§ 729 et
          seq.),
          (b) TRICARE; (c) HIPAA, (d) Medicare; (e) Medicaid;
          (f) quality, safety and accreditation standards and requirements of all
          applicable state laws or regulatory bodies; (g) all laws, policies,
          procedures, requirements and regulations pursuant to which Healthcare Permits
          are issued; and (h) any and all other applicable health care laws,
          regulations, manual provisions, policies and administrative guidance, each
          of
          (a) through (h) as may be amended from time to time. 

         

        "Healthcare
          Permit"
          means a
          Permit (a) issued or required under Healthcare Laws applicable to the
          business of any Borrower or any of its Subsidiaries or necessary in the
          possession, ownership, warehousing, marketing, promoting, sale, labeling,
          furnishing, distribution or delivery of goods or services by a Borrower
          or a
          Licensed Operator under Healthcare Laws, and/or (b) issued or required
          under Healthcare Laws applicable to the ownership of a Licensed
          Location.

         

        "HIPAA"
          means
          the Health Insurance Portability and Accountability Act of 1996, as the
          same may
          be amended, modified or supplemented from time to time, and any successor
          statute thereto, and any and all rules or regulations promulgated from
          time to
          time thereunder.

         

        "HIPAA
          Compliant"
          means
          that the applicable Person is in compliance in all material respects with
          each
          of the applicable requirements of the so-called "Administrative Simplification"
          provisions of HIPAA, and is not and could not reasonably be expected to
          become
          the subject of any civil or criminal penalty, process, claim, action or
          proceeding, or any administrative or other regulatory review, survey, process
          or
          proceeding (other than routine surveys or reviews conducted by any government
          health plan or other accreditation entity) that could result in any of the
          foregoing or that could reasonably be expected to adversely affect such
          Person's
          business, operations, assets, properties or condition (financial or otherwise),
          in connection with any actual or potential violation by such Person of
          the
          provisions of HIPAA.

         

        "Indemnitees"
          has the
          meaning given in Section
          12.2.

         

        "Insurance
          Premiums"
          has the
          meaning given in Section
          2.5(c).

         

        "Intercompany
          Loans"
          has the
          meaning given in Section
          2.11.

         

        "Inventory"
          means
          "inventory", as defined in Article 9 of the UCC.

         

        
          
            
            

          

          
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        "JCAHO"
          means
          the Joint Commission on Accreditation of Healthcare Organizations.

         

        "Joint
          Liability Payment"
          has the
          meaning given in Section
          15.1(g).

         

        "Laws"
          means
          any and all federal, state, local and foreign statutes, laws, judicial
          decisions, regulations, ordinances, rules, judgments, orders, decrees,
          codes,
          plans, injunctions, permits and governmental
          restrictions (whether now or hereafter in effect), which are applicable
          to any
          Credit Party in any particular circumstance. "Laws"
          includes, without limitation, Healthcare Laws.

         

        "Leases"
          means
          the singular or collective reference to leases, subleases or other arrangements
          for occupancy of space within any Project or any part thereof now existing
          or
          hereafter executed; provided,
          however,
          that
          the term "Leases"
          as used
          herein shall not
          include
          Resident Agreements; and provided,
          further,
          that
          use of the term "Leases"
          in any
          Security Document shall
          include
          Resident Agreements even if Resident Agreements are, under applicable Laws,
          not
          governed as creating a landlord-tenant relationship (the intent being that
          Administrative Agent shall have, as part of the Security Documents, a lien
          upon
          and collateral assignment of all Leases and Resident Agreements).

         

        "Lender"
          means
          each of (a) Merrill Lynch, (b) each other Person party hereto in its
          capacity as a lender, (c) each other Person that becomes a party hereto as
          Lender pursuant to Section
          14.6,
          and
          (d) the respective successors of all of the foregoing, and "Lenders"
          means
          all of the foregoing. In addition to the foregoing, for the purpose of
          identifying the Persons entitled to share in the Collateral and the proceeds
          thereof under, and in accordance with the provisions of, this Agreement
          and the
          Security Documents, the term "Lender" shall include each Eligible Swap
          Counterparty.

         

        "Licensed
          Location"
          means
          any Project from which a Borrower or a Person with whom a Borrower has
          contracted provides or furnishes goods or services governed by Healthcare
          Laws,
          and includes, without limitation, any business location of a Borrower which
          is
          subject to any Healthcare Permit.

         

        "Licensed
          Operator"
          means
          the singular or collective (as the context requires) reference to the
          following Persons: (a) any Borrower or any Subsidiary that is licensed
          under Healthcare Laws to operate a Licensed Location, or is otherwise providing
          or furnishing goods or services governed by Healthcare Laws, or is otherwise
          providing or furnishing goods or services (other than the mere leasing
          of a
          Licensed Location as a lessor and the collection of rentals in connection
          therewith) from a Licensed Location, (b) any Person with whom a
          Borrower has contracted to provide such goods or services governed by Healthcare
          Laws.

         

        "Lien"
          means,
          with respect to any asset, any mortgage, lien, pledge, charge, security
          interest
          or encumbrance of any kind, or any other type of preferential arrangement
          that
          has the practical effect of creating a security interest, in respect of
          such
          asset. For the purposes of this Agreement and the other Financing Documents,
          any
          Borrower or any

         

        
          
            
            

          

          
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        Subsidiary
          shall be deemed to own subject to a Lien any asset which it has acquired
          or
          holds subject to the interest of a vendor or lessor under any conditional
          sale
          agreement, Capital Lease or other title retention agreement relating to
          such
          asset.

         

        "Litigation"
          means
          any action, suit or proceeding before any court, mediator, arbitrator or
          Governmental Authority.

         

        "Loan
          Account"
          has the
          meaning given in Section
          2.6(b).

         

        "Loan"
          or
          "Loans"
          means
          the Term Loan or Term Loans provided for herein.

         

        "Management
          Agreement"
          has the
          meaning given in Section
          8.7(b).

         

        "Manager"
          has the
          meaning given in Section 8.7(b).

         

        "Material
          Adverse Effect"
          means,
          with respect to any event, act, condition or occurrence of whatever nature
          (including any adverse determination in any litigation, arbitration, or
          governmental investigation or proceeding), whether singly or in conjunction
          with
          any other event or events, act or acts, condition or conditions, occurrence
          or
          occurrences, whether or not related (a) a material adverse change in, or a
          material adverse effect upon, any of (i) the condition (financial or
          otherwise), operations, business or properties of the Credit Parties taken
          as a
          whole, (ii) the rights and remedies of Administrative Agent or Lenders
          under any Financing Document, or the ability of any Credit Party to perform
          any
          of its obligations under any Financing Document to which it is a party,
          (iii) the legality, validity or enforceability of any Financing Document,
          (iv) the existence, perfection or priority of any security interest granted
          in any Financing Document; or (v) any Credit Party's or Licensed Operator's
          ability to accept, admit and/or retain patients or residents or to own
          or
          operate any Licensed Location, (b) an impairment to the likelihood that
          revenues in general will be collected and paid in the normal course of
          a
          Licensed Operator's or Borrowers' business and upon the same schedule and
          with
          the same frequency as such Licensed Operator's or Borrowers' recent collections
          history; (c) the imposition of a fine against or the creation of any
          liability of any Credit Party or Licensed Operator to any Governmental
          Authority
          under any Healthcare Law in excess of $50,000.00; (d) a termination,
          suspension or material limitation of any Healthcare Permits, (e) the
          failure to satisfy any demand by any Governmental Authority to comply with
          Law
          or remediate any condition, or (f) termination by any third party of any
          third party agreement required for the operation of any Project in the
          manner
          contemplated by this Agreement which agreement is not promptly replaced
          by
          Borrower on terms which are at least as favorable to the applicable Borrower
          or
          Borrowers in all material respects.

         

        "Material
          Contracts"
          has the
          meaning given in Section
          3.17.

         

        "Material
          Lease"
          means
          any Lease other than a Permitted Lease.

         

        "Maximum
          Lawful Rate"
          has the
          meaning given in Section 2.7(b).

         

        
          
            
            

          

          
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        "Medicaid"
          means
          the medical assistance programs administered by state agencies and approved
          by
          CMS pursuant to the terms of Title XIX of the Social Security Act, codified
          at
          42 U.S.C. 1396 et
          seq.

         

        "Medicare"
          means
          the program of health benefits for the aged and disabled administered by
          CMS
          pursuant to the terms of Title XVIII of the Social Security Act, codified
          at 42
          U.S.C. 1395 et
          seq.

         

        "Merrill
          Lynch"
          means
          Merrill Lynch Capital, a division of Merrill Lynch Business Financial Services
          Inc., and its successors.

         

        "Mezzanine
          Loan"
          means
          the loan in the amount of $24,174,00 made by Merrill Lynch to Dallas & Fort
          Worth Senior Housing, LLC, the holder of the 80% membership interest in
          Cypress
          JV.

         

        "Multiemployer
          Plan"
          means a
          multiemployer plan, that is intended to meet the definition set forth in
          Section
          4001(a)(3) of ERISA, to which any Borrower or any member of the Controlled
          Group may have any liability.

         

        "Net
          Operating Income"
          has the
          meaning given in Section
          6.1.

         

        "Notes"
          means
          the Term Note or Term Notes provided for herein.

         

        "Obligations"
          means
          all obligations, liabilities and indebtedness (monetary (including post-petition
          interest, whether or not allowed) or otherwise) of each Credit Party
          under this Agreement or any other Financing Document, in each case howsoever
          created, arising or evidenced, whether direct or indirect, absolute or
          contingent, now or hereafter existing, or due or to become due. In addition
          to,
          but without duplication of, the foregoing, the Obligations shall include,
          without limitation, all obligations, liabilities and indebtedness arising
          from
          or in connection with all Swap Contracts entered into with any Eligible
          Swap
          Counterparty.

         

        "OFAC"
          means
          the U.S. Department of Treasury Office of Foreign Assets Control.

         

        "OFAC
          Lists"
          means,
          collectively, the Specially Designated Nationals and Blocked Persons List
          maintained by OFAC pursuant to Executive Order No. 13224, 66 Fed. Reg.
          49079
          (Sept. 25, 2001) and/or any other list of terrorists or other restricted
          Persons maintained pursuant to any of the rules and regulations of OFAC
          or
          pursuant to any other applicable Executive Orders.

         

        "Operating
          Expenses"
          has the
          meaning given in Section
          6.1a(vi).

         

        "Operating
          Lease"
          means
          any lease of any Licensed Location to an Operating Lessee, and all amendments
          thereto and extensions thereof.

         

        
          
            
            

          

          
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        "Operating
          Lessee"
          means
          any Person to whom any Borrower or any Subsidiary has leased a Licensed
          Location.

         

        "Operating
          Revenue"
          has the
          meaning given in Section
          6.1(a).

         

        "Ordinary
          Course of Business"
          means,
          in respect of any transaction involving any Credit Party, the ordinary
          course of
          such Credit Party's business, as conducted by such Credit Party in accordance
          with past practices.

         

        "Organizational
          Documents"
          means,
          with respect to any Person other than a natural person, the documents by
          which
          such Person was organized (such as a certificate of incorporation, certificate
          of limited partnership or articles of organization, and including, without
          limitation, any certificates of designation for preferred stock or other
          forms
          of preferred equity) and which relate to the internal governance of such
          Person (such as by-laws, a partnership agreement or an operating, limited
          liability or members agreement).

         

        "Participation
          Agreements"
          has the
          meaning given in Section
          8.4(b)(x).

         

        "Payment
          Account"
          means
          the account specified on the signature pages hereof into which all payments
          by
          or on behalf of each Borrower to Administrative Agent under the Financing
          Documents shall be made, or such other account as Administrative Agent
          shall
          from time to time specify by notice to Borrower Representative.

         

        "Payment
          Notification"
          means a
          written notification substantially in the form of Exhibit D
          hereto.

         

        "PBGC"
          means
          the Pension Benefit Guaranty Corporation and any Person succeeding to any
          or all
          of its functions under ERISA.

         

        "Pension
          Plan"
          means
          any ERISA Plan that is subject to Section 412 of the Code or Title IV of
          ERISA.

         

        "Permits"
          means
          all governmental licenses, authorizations, provider numbers, supplier numbers,
          registrations, permits, certificates, franchises, qualifications,
          accreditations, consents and approvals required under all applicable Laws
          and
          required in order to carry on its business as now conducted, including,
          without
          limitation, Healthcare Permits.

         

        "Permitted
          Contest"
          means,
          with respect to any tax obligation or other obligation allegedly or potentially
          owing from any Borrower to any governmental tax authority or other third
          party,
          a contest maintained in good faith by appropriate proceedings promptly
          instituted and diligently conducted and with respect to which such reserve
          or
          other appropriate provision, if any, as shall be required in conformity
          with
          GAAP shall have been made on the books and records and financial statements
          of
          the applicable Borrower(s); provided,
          however,
          that
          (a) compliance with the obligation that is the subject of such contest is
          effectively stayed during such challenge; (b) Borrowers' title to, and its
          right to use, the Collateral is not adversely affected thereby and
          Administrative Agent's Lien and priority on

         

        
          
            
            

          

          
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        the
          Collateral are not adversely affected, altered or impaired thereby;
          (c) Borrowers have given prior written notice to Administrative Agent of
          Borrowers' intent to so contest the obligation; (d) in the case of real
          estate taxes or assessments or mechanic's, workmen's, materialmen's or
          other
          like Liens, Borrowers have obtained an endorsement, in form and substance
          satisfactory to Administrative Agent, to the loan policy of title insurance
          issued to Administrative Agent insuring over any Lien created by such
          obligation, or Borrowers have deposited with Administrative Agent a bond
          or
          other security satisfactory to Administrative Agent, in its reasonable
          discretion, against loss or injury by reason of such contest or the non-payment
          of such obligation or charge (and if such security is cash, Administrative
          Agent
          may, but shall not be obligated to, deposit the same in an interest-bearing
          account and interest accrued thereon, if any, shall be deemed to constitute
          a
          part of such security for purposes of this Agreement, but Administrative
          Agent
          (i) makes no representation or warranty as to the rate or amount of
          interest, if any, which may accrue thereon and shall have no liability
          in
          connection therewith and (ii) shall not be deemed to be a trustee or
          fiduciary with respect to its receipt of any such security and any such
          security
          may be commingled with other monies of Administrative Agent); (e) the
          Collateral or any part thereof or any interest therein shall not be in
          any
          danger of being sold, forfeited or lost by reason of such contest by Borrowers;
          (f) Borrowers have given Administrative Agent notice of the commencement of
          such contest and upon request by Administrative Agent, from time to time,
          notice
          of the status of such contest by Borrowers and/or confirmation of the continuing
          satisfaction of this definition; and (g) upon a final determination of such
          contest, Borrowers shall promptly comply with the requirements thereof.
          

         

        "Permitted
          Leases"
          means
          each Lease listed on Schedule 1 and any Lease (other than any Resident
          Agreement) for any portion of any Project that (a) is for demised
          space of no more than 900 square feet, (b) is for a beauty parlor, barber
          shop, rehabilitation center or other lawful use that is necessary or consistent
          with, and ancillary to, the operation of a senior housing facility, and
          (c) is terminable by Borrower upon not more than sixty (60) days'
          notice.

         

        "Permitted
          Liens"
          means:
          (a) deposits or pledges of cash to secure obligations under workmen's
          compensation, social security or similar laws, or under unemployment insurance
          (but excluding Liens arising under ERISA); (b) deposits or pledges of cash
          to secure bids, tenders, contracts (other than contracts for the payment
          of
          money or the deferred purchase price of property or services), leases,
          statutory
          obligations, surety and appeal bonds and other obligations of like nature
          arising in the Ordinary Course of Business; (c) mechanic's, workmen's,
          materialmen's or other like Liens arising in the Ordinary Course of Business
          with respect to obligations which are not due, or which are being contested
          pursuant to a Permitted Contest; (d) Liens on Collateral, for taxes or
          other governmental charges not at the time delinquent or thereafter payable
          without penalty or the subject of a Permitted Contest; (e) attachments,
          appeal bonds, judgments and other similar Liens on Collateral other than
          Accounts, for sums not exceeding $25,000 in the aggregate arising in connection
          with court proceedings; provided,
          however,
          that
          the execution or other enforcement of such Liens is effectively stayed
          and the
          claims secured thereby are the subject of a Permitted Contest; (f) those
          matters which are set forth as exceptions to or

         

        
          
            
            

          

          
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        subordinate
          matters in the loan title insurance policy accepted by Administrative Agent
          insuring the lien of the Security Documents; (g) Liens and encumbrances in
          favor of Administrative Agent under the Financing Documents; and (h) Liens
          and encumbrances in favor of the holders of the Affiliated Financing
          Documents.

         

        "Person"
          means
          any natural person, corporation, limited liability company, professional
          association, limited partnership, general partnership, joint stock company,
          joint venture, association, company, trust, bank, trust company, land trust,
          business trust or other organization, whether or not a legal entity, and
          any
          Governmental Authority.

         

        "Project"
          means
          the singular reference to each respective portion of the Collateral consisting
          of the land, improvements and all other real and personal property encumbered
          by
          the lien of each respective mortgage, deed of trust, deed to secure debt
          or
          similar Security Document constituting a part of the Financing Documents.
          "Projects"
          means
          all such Projects collectively.

         

        "Pro
          Rata Share"
          means
          (a) with respect to a Lender's right to receive payments of principal and
          interest with respect to the Term Loans, the Term Loan Commitment
          Percentage of such Lender, and (b) for all other purposes (including
          without limitation the indemnification obligations arising under Section
          13.6) with
          respect to any Lender, the percentage obtained by dividing
          (i) such Lender's then outstanding principal amount of the Term Loans,
by
          (ii) the then outstanding principal amount of the Term Loans of all
          Lenders.

         

        "Release"
          has the
          meaning given in 42 U.S.C § 9601 (22).

         

        "Released
          Parties"
          has the
          meaning given in Section
          14.19.

         

        "Releasing
          Parties"
          has the
          meaning given in Section
          14.19.

         

        "Replacement
          Lender"
          has the
          meaning given in Section
          13.17(f).

         

        "Required
          Lenders"
          means,
          subject to the provisions of Section
          13.13(d),
          at any
          time Lenders holding sixty-six and two thirds percent (66 2/3%) or more of
          the outstanding principal balance of the Term Loans (taken as a
          whole).

         

        "Resident
          Agreements"
          means
          the singular or collective reference to all patient and resident care
          agreements, admission agreements and service agreements which include an
          occupancy agreement and all amendments, modifications or supplements
          thereto.

         

        "Responsible
          Officer"
          means
          any of the Chief Executive Officer, Chief Financial Officer or Managing
          Member
          of Cypress JV or the General Partner. 

         

        "Restricted
          Distribution"
          means
          as to any Person (a) any dividend or other distribution (whether in cash,
          securities or other property) on any equity interest in such Person (except
          those payable solely in such Person's equity interests of the same class),
          (b) any payment on account of (i) the purchase, redemption,
          retirement, defeasance,

         

        
          
            
            

          

          
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        surrender,
          cancellation, termination or acquisition of any equity interests in such
          Person
          or any claim respecting the purchase or sale of any equity interest in
          such
          Person, or (ii) any option, warrant or other right to acquire any equity
          interests in such Person, (c) any management fees, salaries or other fees
          or compensation to an Affiliate of Borrower, (d) any lease or rental
          payments to an Affiliate or Subsidiary of Borrower, or (e) repayments of or
          debt service on loans or other indebtedness held by an Affiliate of
          Borrower.

         

        "Sale"
          has the
          meaning given in Section
          2.12.

         

        "Securitization"
          has the
          meaning given in Section
          14.8.

         

        "Security
          Documents"
          means
          any agreement, document or instrument executed concurrently herewith or
          at any
          time hereafter pursuant to which one or more Credit Parties or any other
          Person
          either (a) Guarantees payment or performance of all or any portion of the
          Obligations (including, without limitation, any Financing Documents Guarantee),
          and/or (b) provides, as security for all or any portion of the Obligations,
          a Lien on any of its assets in favor of Administrative Agent for its own
          benefit
          and the benefit of the Lenders, as any or all of the same may be amended,
          supplemented, restated or otherwise modified from time to time.

         

        "Sellers"
          means,
          collectively, Town Village Fort Worth, LP, Town Village Dallas, LP, Town
          Village
          Arlington, LP, each a Delaware limited partnership, and Town Village Leawood,
          LLC a Delaware limited liability company.

         

        "Service
          Agreement"
          has the
          meaning given in Section
          9.1(h).

         

        "Settlement
          Service"
          has the
          meaning given in Section
          13.17(d).

         

        "Solvent"
          means,
          with respect to any Person, that such Person (a) owns and will own assets
          the fair saleable value of which are (i) greater than the total amount of
          its liabilities (including Contingent Obligations), and (ii) greater than
          the amount that will be required to pay the probable liabilities of its
          then
          existing debts as they become absolute and matured considering all financing
          alternatives and potential asset sales reasonably available to it; (b) has
          capital that is not unreasonably small in relation to its business as presently
          conducted or after giving effect to any contemplated transaction; and
          (c) does not intend to incur and does not believe that it will incur debts
          beyond its ability to pay such debts as they become due.

         

        "Stated
          Rate"
          has the
          meaning given in Section 2.7(b).

         

        "Subordinated
          Debt"
          means
          any Debt of Borrowers incurred pursuant to the terms of Subordinated Debt
          Documents.

         

        "Subordinated
          Debt Documents"
          means
          any documents evidencing and/or securing Debt governed by a Subordination
          Agreement.

         

        
          
            
            

          

          
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        "Subordination
          Agreement"
          means
          any agreement between Administrative Agent and another creditor of Borrowers,
          as
          the same may be amended, supplemented, restated or otherwise modified from
          time
          to time in accordance with the terms thereof, pursuant to which the Debt
          owing
          from any Borrower(s) and/or the Liens securing such Debt granted by any
          Borrower(s) to such creditor are subordinated in any way to the Obligations
          and the Liens created under the Security Documents, the terms and provisions
          of
          which such Subordination Agreements have been agreed to by and are acceptable
          to
          Administrative Agent in the exercise of its sole discretion.

         

        "Subsidiary"
          means,
          with respect to any Person, (a) any corporation of which an aggregate of
          more than 50% of the outstanding capital stock having ordinary voting power
          to
          elect a majority of the board of directors of such corporation (irrespective
          of
          whether, at the time, capital stock of any other class or classes of such
          corporation shall have or might have voting power by reason of the happening
          of
          any contingency) is at the time, directly or indirectly, owned legally or
          beneficially by such Person or one or more Subsidiaries of such Person,
          or with
          respect to which any such Person has the right to vote or designate the
          vote of
          more than 50% of such capital stock whether by proxy, agreement, operation
          of
          law or otherwise, and (b) any partnership or limited liability company in
          which such Person and/or one or more Subsidiaries of such Person shall
          have an
          interest (whether in the form of voting or participation in profits or
          capital
          contribution) of more than 50% or of which any such Person is a general
          partner or may exercise the powers of a general partner. Unless the context
          otherwise requires, each reference to a Subsidiary shall be a reference
          to a
          Subsidiary of a Borrower.

         

        "Swap
          Contract"
          means
          any "swap agreement", as defined in Section 101 of the Bankruptcy Code,
          that is
          intended to provide protection against fluctuations in interest
          rates.

         

        "Taking"
          shall
          mean a condemnation or taking pursuant to the lawful exercise of the power
          of
          eminent domain.

         

        "Taxes"
          has the
          meaning given in Section
          2.5(b) and
          2.8.

         

        "Term
          Loan"
          has the
          meaning given in Section
          2.1.

         

        "Term
          Loan Commitment"
          means
          $55,765,000.

         

        "Term
          Loan Commitment Percentage"
          means,
          as to any Lender, (a) on the Closing Date, the percentage set forth
          opposite such Lender's name on the Commitment Annex under the column
          "Term
          Loan Commitment Percentage"
          (if
          such Lender's name is not so set forth thereon, then, on the Closing Date,
          such
          percentage for such Lender shall be deemed to be zero), and (b) on any date
          following the Closing Date, the percentage equal to the principal amount
          of the
          Term Loan held by such Lender on such date divided
          by
          the
          aggregate principal amount of the Term Loan on such date.

         

        "Term
          Loan Note"
          has the
          meaning given in Section
          2.4.

         

        
          
            
            

          

          
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        "Termination
          Date"
          means
          the earlier to occur of (a) the Commitment Expiry Date, or (b) any
          date on which Administrative Agent accelerates the maturity of the Loans
          pursuant to Section 11.2.

         

        "Third
          Party Payor"
          means
Blue
          Cross and/or Blue Shield, private
          insurers,
          managed
          care plans
          and any
          other Person or entity which presently or in the future maintains Third
          Party
          Payor Programs, but specifically excluding Governmental Payors.

         

        "Third
          Party Payor Programs"
          means
          all payment and reimbursement programs, sponsored by a Third Party Payor,
          in
          which a Licensed Operator participates.

         

        "Transfer
          Date"
          has the
          meaning given in Section
          3.4(b).

         

        "TRICARE"
          means
          the program administered pursuant to 10 U.S.C. Section 1071 et
          seq.),
          Sections 1320a-7 and 1320a-7a of Title 42 of the United States Code and
          the
          regulations promulgated pursuant to such statutes.

         

        "UCC"
          means
          the Uniform Commercial Code of the State of Illinois or of any other state
          the
          laws of which are required to be applied in connection with the perfection
          of
          security interests in any Collateral.

         

        "United
          States"
          means
          the United States of America.

         

        Section
          1.2 Accounting
          Terms and Determinations. 

         

        Unless
          otherwise specified herein, all accounting terms used herein shall be
          interpreted, all accounting determinations hereunder (including without
          limitation determinations made pursuant to the exhibits hereto) shall be
          made, and all financial statements required to be delivered hereunder shall
          be
          prepared on a consolidated basis in accordance with GAAP applied on a basis
          consistent with the most recent audited consolidated financial statements
          of
          each Borrower delivered to Administrative Agent and each of the Lenders
          on or
          prior to the Closing Date. If
          at any
          time any change in GAAP would affect the computation of any financial ratio
          or
          financial requirement set forth in any Financing Document, and Administrative
          Agent or Borrowers shall so request, the Administrative Agent, in its sole
          discretion on behalf of Lenders, and Borrowers shall negotiate in good
          faith to
          amend such ratio or requirement to preserve the original intent thereof
          in light
          of such change in GAAP; provided,
          however, that,
          until so amended, (a) such ratio or requirement shall continue to be
          computed in accordance with GAAP prior to such change therein, and
          (b) Borrowers shall provide to the Administrative Agent and the Lenders
          financial statements and other documents required under this Agreement
          which
          include a reconciliation between calculations of such ratio or requirement
          made
          before and after giving effect to such change in GAAP.
          All
          amounts used for purposes of financial calculations required to be made
          herein
          shall be without duplication.

         

        
          
            
            

          

          
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        Section
          1.3 Other
          Definitional Provisions.

         

        References
          in this Agreement to "Articles", "Sections", "Annexes", "Exhibits" or
          "Schedules" shall be to Articles, Sections, Annexes, Exhibits or Schedules
          of or
          to this Agreement unless otherwise specifically provided. Any term defined
          herein may be used in the singular or plural. "Include", "includes" and
          "including" shall be deemed to be followed by "without limitation". Except
          as
          otherwise specified or limited herein, references to any Person include
          the
          successors and assigns of such Person. References "from" or "through" any
          date
          mean, unless otherwise specified, "from and including" or "through and
          including", respectively. References to any statute or act shall include
          all
          related current regulations and all amendments and any successor statutes,
          acts
          and regulations. References to any statute or act, without additional reference,
          shall be deemed to refer to federal statutes and acts of the United States.
          References to any agreement, instrument or document shall include all schedules,
          exhibits, annexes and other attachments thereto. As used in this Agreement,
          the
          meaning of the term "material" or the phrase "in all material respects"
          is
          intended to refer to an act, omission, violation or condition which reflects
          or
          could reasonably be expected to result in a Material Adverse
          Effect.

         

        Section
          1.4 Funding
          and Settlement Currency.

         

        Unless
          otherwise specified herein, the settlement of all payments and fundings
          hereunder between or among the parties hereto shall be made in lawful money
          of
          the United States and in immediately available funds.

         

        Section
          1.5 Borrowers
          as Licensed Operators.

         

        As
          of the
          Closing Date it is contemplated and intended that each Borrower shall be
          the
          Licensed Operator of the Project (which shall be a Licensed Location) owned
          by such Borrower. Therefore, all references to "Licensed Operators" shall
          be
          deemed to refer to the applicable Borrower, and all covenants, representations
          and warranties applicable to a Licensed Operator shall nonetheless be deemed
          to
          be direct covenants, representations and warranties of the applicable Borrower,
          even if such covenants, representations and warranties are, under the terms
          of
          this Agreement, contemplated to be undertaken or made indirectly through
          an
          Operating Lease.

         

        Section
          1.6 Certain
          References to Credit Parties.

         

        References
          to each "Credit Party" or "Credit Parties" in Sections
          3.4,
          3.6,
          3.9,
          3.13,
          3.14,
          3.15,
          3.17,
          4.1(e)
          and
8.5(k)
          shall
          not include ARC.

         

        ARTICLE
          2

        LOANS

         

        Section
          2.1 Term
          Loan.

         

        (a)    Term
          Loan Amounts.
          On the
          terms and subject to the conditions set forth herein, the Lenders hereby
          agree
          to make to Borrowers on the Closing Date a term loan

         

        
          
            
            

          

          
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          ("Term
            Loan") in
            an original principal amount equal to Fifty-Five Million Seven Hundred
            Sixty-Five Thousand Dollars ($55,765,000). Each Lender's obligation to
            fund the
            Term Loan shall be limited to such Lender's Term Loan Commitment Percentage,
            and
            no Lender shall have any obligation to fund any portion of any Term Loan
            required to be funded by any other Lender, but not so funded. No Borrower
            shall
            have any right to reborrow any portion of the Term Loan that is repaid
            or
            prepaid from time to time.

           

        

        (b)    [Reserved.]

         

        (c)    Mandatory
          Prepayments.
          There
          shall become due and payable and Borrowers shall prepay the Term Loan in
          an
          amount equal to the following on the following dates:

         

        (i)    An
          amount
          equal to any Casualty Proceeds that Administrative Agent elects to apply
          to the
          Obligations in accordance with Section
          9.3,
          plus
          any Casualty Proceeds that Administrative Agent elects to not apply to
          the
          Obligations in accordance with Section
          9.3,
          but
          only if Borrowers fail to reinvest such Casualty Proceeds in replacement
          assets
          comparable to the assets giving rise to such Casualty Proceeds if such
          reinvestment is permitted pursuant to the terms of Section 9.3;
          and

         

        (ii)    An
          amount
          equal to any Covenant Prepayment required under Section
          6.7,
          on the
          date provided for in Section
          6.7.

         

        (d)    Optional
          Prepayments.
          Other
          than mandatory prepayments under Sections
          2.1(c)(i)
          and
2.1(c)(ii),
          the
          Term Loan may not be prepaid during the Closed Period. The Term Loan may
          be
          prepaid in full, but not in part, at any time following the expiration
          of the
          Closed Period, provided,
          however,
          that
          Borrowers shall have given Administrative Agent at least thirty (30) days
          prior written notice of the date of such prepayment together with an
          appropriately completed Payment Notification.

         

        (e)    All
          Prepayments.
          Except
          as this Agreement may specifically provide otherwise, all prepayments of
          the
          Term Loan shall be applied by Administrative Agent to the Obligations in
          such
          order and manner as Administrative Agent may elect.

         

        (f)    Extension
          Option.
          Borrowers may extend the Commitment Expiry Date two (2) times for a period
          of
          twelve (12) months each (each, an "Extension Option") upon Borrowers'
          satisfaction of the following conditions:

         

        (i)    Borrowers
          shall have delivered to Administrative Agent written notice of each such
          election (an "Extension Notice") no earlier than ninety (90) days and no
          later
          than forty-five (45) days prior to the applicable Commitment Expiry
          Date;

         

        (ii)    no
          Default shall have occurred and be continuing and no Event of Default shall
          have
          occurred;

         

        (iii)    Administrative
          Agent shall have received each Borrower's and Guarantor's current financial
          statements, certified as correct by each Borrower and

         

        
          
            
            

          

          
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        Guarantor,
          and no material adverse change with respect to any Project, any Borrower
          or
          Guarantor shall have occurred; and 

         

        (iv)    the
          principal balance of the Mezzanine Loan shall be $4,200,000 or
          less.

         

        Section
          2.2 [Reserved.]

         

        Section
          2.3 Interest;
          Interest Calculations and Certain Fees.

         

        (a)    Interest.
          From
          and following the Closing Date, the Loans and the other Obligations shall
          bear
          interest at the sum of the Base Rate plus the applicable Base Rate Margin.
          Interest on all Loans is payable in arrears on the first (1st) day of each
          month
          and on the maturity of such Loans, whether by acceleration or
          otherwise.

         

        (b)    Commitment
          Fee.
          Prior
          to or contemporaneous with Borrowers' execution of this Agreement, Borrowers
          have or shall pay Administrative Agent, for its own account and not for
          the
          benefit of any other Lenders, a fee in an amount equal to Five Hundred
          Fifty-Seven Thousand Six Hundred Fifty Dollars ($557,650).

         

        (c)    Exit
          Fee.
          On the
          Termination Date or upon any voluntary prepayment of the Term Loan as permitted
          hereunder or upon any mandatory prepayment of the Term Loan, Borrowers
          shall pay
          to Administrative Agent for the benefit of Lenders a fee (the "Exit
          Fee") equal
          to the Term Loan Commitment multiplied
          by
          the
          Applicable Exit Fee Percentage. If any such prepayments are made, then
          upon such
          prepayment, Borrower shall pay to Administrative Agent the proportionate
          amount
          of the Exit Fee attributable to such prepayment; provided,
          however,
          that in
          the event of a casualty or Taking and the application of any Casualty Proceeds
          therefrom to a prepayment of a portion of the Obligations is required by
          Administrative Agent, payment of the Exit Fee allocable to such prepayment
          shall
          not be required. The term "Applicable
          Exit Fee Percentage"
          means:
          one percent (1.0%) if the payment is made on or before the twenty-fourth
          (24th) full
          calendar month following the Closing Date; and one half of one percent
          (.50%) if the payment is made during or after the twenty-fifth
          (25th) full calendar month following the Closing Date; provided,
          however,
          that if
          the Termination Date occurs during the Closed Period, the Exit Fee shall
          be an
          amount equal to the sum of one percent (1.0%) multiplied
          by
          the Term
          Loan Commitment plus
          the
          amount of interest which would have been due and payable from the Termination
          Date through the end of the Closed Period, assuming a Base Rate equal to
          the
          Base Rate as of the Termination Date. Notwithstanding the foregoing, if
          (i) the
          Term Loan is repaid with the proceeds of an acquisition or refinancing
          mortgage
          loan facility provided by Merrill Lynch with respect to both Projects or
          (ii)
          Merrill Lynch fails to deliver a term sheet with respect to providing such
          mortgage loan facility within thirty (30) days after receipt from Borrowers
          of a
          written request for a term sheet, the Exit Fee will be waived.

         

        (d)    Audit
          Fees.
          Borrowers shall pay to Administrative Agent, for its own account and not
          for the
          benefit of any other Lenders, all reasonable fees and expenses in connection
          with audits of Borrowers' books and records, audits, valuations or appraisals
          of

         

        
          
            
            

          

          
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        the
          Collateral, audits of Borrowers' compliance with applicable Laws and such
          other
          matters as Administrative Agent shall deem appropriate, which shall be
          due and
          payable on the first Business Day of the month following the date of issuance
          by
          Administrative Agent of a written request for payment thereof to Borrowers.
          Notwithstanding the foregoing, provided that no Event of Default has occurred
          and remains outstanding, Administrative Agent shall not charge audit fees
          in
          respect of any inspections or related actions unless such audit shows
          discrepancies exceeding 10%. Unless an Event of Default has occurred and
          is then
          continuing audits by Lender shall not be undertaken more frequently than
          annually.

         

        (e)    Wire
          Fees.
          Borrowers shall pay to Administrative Agent, for its own account and not
          for the
          account of any other Lenders, on written demand, any and all reasonable
          fees,
          costs or expenses which Administrative Agent pays to a bank or other similar
          institution (including, without limitation, any fees paid by Administrative
          Agent to any other Lender) arising out of or in connection with
          (i) the forwarding to Borrowers or any other Person on behalf of Borrowers,
          by Administrative Agent, of proceeds of the Loans made by any Lender to
          Borrowers pursuant to this Agreement, and (ii) the depositing for
          collection, by Administrative Agent, of any check or item of payment received
          or
          delivered to Administrative Agent on account of Obligations. 

         

        (f)    Real
          Property Inspection Fee.
          Borrowers shall pay to Administrative Agent, for its own account and not
          for the
          benefit of any other Lenders, on the Closing Date, and on each anniversary
          of
          the Closing Date thereafter, a real property inspection fee of Two Thousand
          Dollars ($2,000) per Project per year.

         

        (g)    Late
          Charges.
          If
          payments of principal (other than a final installment of principal upon
          the
          Termination Date), interest due on the Obligations, or any other amounts
          due
          hereunder or under the other Financing Documents are not timely made and
          remain
          overdue for a period of five (5) days, Borrowers, without notice or demand
          by Administrative Agent, promptly shall pay to Administrative Agent, for
          its own
          account and not for the benefit of any other Lenders, as additional compensation
          to Administrative Agent in administering the Obligations, an amount equal
          to
          five percent (5%) of each delinquent payment.

         

        (h)    Computation
          of Interest and Related Fees.
          All
          interest and fees under each Financing Document shall be calculated on
          the basis
          of a three hundred sixty (360)-day year for the actual number of days elapsed.
          The date of funding of Loan shall be included in the calculation of interest.
          The date of payment of a Loan shall be excluded from the calculation of
          interest. If a Loan is repaid on the same day that it is made, one
          (1) day's interest shall be charged. Interest on all Loans is payable in
          arrears on the first (1st) day of each month and on the maturity of such
          Loans, whether by acceleration or otherwise. 

         

        (i)    Automated
          Clearing House Payments.
          If an
          Event of Default has occurred and Administrative Agent so elects, monthly
          payments of interest and amortization shall be paid to Administrative Agent
          by
          Automated Clearing House debit of immediately available funds from the
          financial
          institution account designated by Borrower Representative

         

        
          
            
            

          

          
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        in
          the
          Automated Clearing House debit authorization executed by Borrowers or Borrower
          Representative in connection with this Agreement, and shall be effective
          upon
          receipt. Borrowers shall execute any and all forms and documentation necessary
          from time to time to effectuate such automatic debiting. In no event shall
          any
          such payments be refunded to Borrowers.

         

        Section
          2.4 Notes.

         

        The
          portion of the Term Loan made by each Lender shall be evidenced, if so
          requested
          by such Lender, by a promissory note executed by Borrowers on a joint and
          several basis (a "Term
          Loan Note") in
          an original principal amount equal to such Lender's Pro Rata Share of the
          Term
          Loan Commitment.

         

        Section
          2.5 Reserves
          and Escrows.

         

        (a)    Requirements.
          Borrowers agree to establish and maintain all of the reserves and escrows
          required in this Section
          2.5.
          All
          sums so reserved or escrowed may be commingled with the general funds of
          Administrative Agent and no such sums shall be deemed to be held in trust
          for
          the benefit of Borrowers. Interest at the rates available to Lender for
          escrow
          depository accounts shall accrue and be added to the funds held by Lender
          pursuant to Sections
          2.5(b) and
          2.5(c) hereunder.
          No interest shall be payable on any other funds reserved or escrowed hereunder.
          All sums so reserved or escrowed shall be part of the Collateral and shall
          stand
          as additional security for all of the Obligations. If Administrative Agent
          at
          any time reasonably determines that the amount on deposit in any reserve
          or
          escrow is insufficient for its intended purposes, Borrowers shall, within
          ten
          (10) days following notice from Administrative Agent, deposit such
          additional sums as may reasonably be required by Administrative Agent.
          In the
          event of any default by Borrowers under the terms of this Agreement or
          any other
          Financing Document, Administrative Agent may, at its discretion, apply
          amounts
          on hand in the reserves or escrows to cure such default. Upon demand of
          Administrative Agent, Borrowers shall replenish the applicable reserve
          or escrow
          to restore any sums so applied by Administrative Agent. Upon the occurrence
          of
          an Event of Default and/or the maturity of any portion of the Obligations,
          the
          moneys then remaining on deposit with Administrative Agent shall, at
          Administrative Agent's option, be applied against the Obligations in such
          order
          and manner as Administrative Agent may elect or as may otherwise be required
          under this Agreement.

         

        (b)    Real
          Property Taxes.
          At the
          time of and in addition to the monthly installments of principal and/or
          interest
          due under the Notes, Borrowers shall pay to Administrative Agent a sum
          equal to
          one-twelfth (1/12) of the amount estimated by Administrative Agent to be
          sufficient (when aggregated with an initial deposit to be designated by
          Administrative Agent and paid by Borrowers to Administrative Agent on the
          Closing Date or otherwise upon demand of Administrative Agent) to pay at
          least thirty (30) days before they become due and payable, all taxes,
          assessments and other similar charges levied against any portion of the
          Collateral constituting real property (collectively, the "Taxes").
          In
          the event such real property or any portion thereof is part of a larger
          tract
          for purposes of taxation and assessments, Administrative Agent may require
          the
          Borrowers

         

        
          
            
            

          

          
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        to
          have
          the real property taxed and assessed as a separate parcel or separate parcels,
          or, in the alternative, to make the deposits required under this section
          based
          upon the taxation and assessment of the larger tract. So long as no Event
          of
          Default exists hereunder, Administrative Agent shall apply the escrows
          sums to
          pay the Taxes. Except as provided in the preceding sentence, the obligation
          of
          Borrowers to pay the Taxes is not affected or modified by the provisions
          of this
          paragraph.

         

        (c)    Insurance
          Premiums.
          If an
          Event of Default or failure to timely pay insurance premiums occurs, then
          Borrowers shall pay to Administrative Agent an initial deposit amount which
          is
          sufficient when aggregated with the monthly payment described below to
          pay the
          Insurance Premiums next becoming due and on the first (1st) day of each
          calendar month thereafter a sum equal to one-twelfth (1/12) of the amount
          estimated by Administrative Agent to be sufficient to pay at least thirty
          (30) days before they become due and payable all insurance premiums
          and other similar charges in connection with the insurance required to
          be
          carried by Borrowers pursuant to this Agreement or the other Financing
          Documents
          (collectively, the "Insurance
          Premiums").
          So
          long as no Event of Default exists hereunder, Administrative Agent shall
          apply
          the sums to pay the Insurance Premiums. Except as provided in the preceding
          sentence, the obligation of Borrowers to pay the Insurance Premiums is
          not
          affected or modified by the provisions of this section. Notwithstanding
          the
          foregoing, if the insurance premiums are paid via a premium financing
          arrangement to which Administrative Agent has given its written consent,
          which
          consent shall not be unreasonably withheld, then (i) the amount to be
          escrowed with Administrative Agent at any given time in respect of such
          Insurance Premiums shall be three (3) months of payments under the premium
          finance arrangement, (ii) Borrowers shall tender to Administrative Agent
          each month (on such schedule as Administrative Agent shall reasonably
          request) evidence that Borrowers (or the owner of the policy if the
          Borrowers share in a blanket policy) has paid the applicable premium
          finance amount due for the preceding month, and (iii) Administrative Agent
          shall have no obligation to remit such escrowed sums in payment of the
          premium
          finance amounts.

         

        (d)    Capital
          Replacement Reserve.
          At the
          time of and in addition to the monthly installments of principal and/or
          interest
          due under any of the Notes, Borrowers shall pay to Administrative Agent
          monthly
          deposits in the amount of $25 per residential unit at each Project (the
          "Replacement
          Minimum") to
          be held by Administrative Agent in a capital replacement reserve ("Capital
          Replacement Reserve").
          So
          long as no Event of Default has occurred and is then continuing, the funds
          contained in the Capital Replacement Reserve shall be utilized to pay directly
          or to reimburse Borrowers solely for capital improvements approved in advance
          by
          Administrative Agent in writing. Subject to the foregoing, Administrative
          Agent
          shall release funds from the Capital Replacement Reserve for the actual
          cost of
          such approved capital improvements upon Borrowers' providing Administrative
          Agent with paid receipts, lien waivers and other documentation deemed reasonably
          necessary by Administrative Agent with minimum draws of $25,000.00 which
          shall
          occur no more frequently than once per month. Notwithstanding the foregoing,
          Borrowers' obligation to make deposits shall be suspended so long as no
          Event of
          Default has occurred and is then continuing and Borrowers provide Administrative
          Agent with

        
 

        
          
            
            

          

          
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        satisfactory
          evidence, on an annual basis beginning January 1, 2007, that Borrowers
          have expended during the preceding calendar year for approved capital
          improvements at each Licensed Location an amount equal or greater than
          $300 per
          residential unit at each Project; provided
          that if
          Borrowers do not satisfy said $300 per residential unit at each Project
          requirement, then, no later than January 31 of the applicable year,
          Borrowers shall pay to Administrative Agent an amount equal to the amount
          by
          which $300 per residential unit at each Project exceeds the amount actually
          spent during such year at such Project which amount shall be held by
          Administrative Agent in the Capital Replacement Reserve.

         

        Section
          2.6 General
          Provisions Regarding Payment; Loan Account.

         

        (a)    All
          payments to be made by each Borrower under any Financing Document, including
          payments of principal and interest made hereunder and pursuant to any other
          Financing Document, and all fees, expenses, indemnities and reimbursements,
          shall be made without set-off, recoupment or counterclaim, in lawful money
          of
          the United States and in immediately available funds. If any payment hereunder
          becomes due and payable on a day other than a Business Day, such payment
          shall
          be extended to the next succeeding Business Day and, with respect to payments
          of
          principal, interest thereon shall be payable at the then applicable rate
          during
          such extension (it being understood and agreed that, solely for purposes
          of
          calculating financial covenants and computations contained herein and
          determining compliance therewith, if payment is made, in full, on any such
          extended due date, such payment shall be deemed to have been paid on the
          original due date without giving effect to any extension thereto). Any
          payments
          received in the Payment Account before noon (Chicago time) on any date
          shall be deemed received by Administrative Agent on such date, and any
          payments
          received in the Payment Account after noon (Chicago time) on any date shall
          be deemed received by Administrative Agent on the next succeeding Business
          Day.
          Any optional or mandatory prepayment of a Term Loan shall be accompanied
          by
          timely delivery to Administrative Agent of an appropriately completed Payment
          Notification, as provided in Section
          2.1.

         

        (b)    Administrative
          Agent shall maintain a loan account (the "Loan
          Account") on
          its books to record Loans and other extensions of credit made by the Lenders
          hereunder or under any other Financing Document, and all payments thereon
          made
          by each Borrower. All entries in the Loan Account shall be made in accordance
          with Administrative Agent's customary accounting practices as in effect
          from
          time to time. The balance in the Loan Account, as recorded in Administrative
          Agent's books and records at any time shall be conclusive and binding evidence
          of the amounts due and owing to Administrative Agent by each Borrower absent
          clear and convincing evidence to the contrary; provided,
          however,
          that any
          failure to so record or any error in so recording shall not limit or otherwise
          affect any Borrower's duty to pay all amounts owing hereunder or under
          any other
          Financing Document. Administrative Agent shall endeavor to provide Borrowers
          with a monthly statement regarding the Loan Account (but neither Administrative
          Agent nor any Lender shall have any liability if Administrative Agent shall
          fail
          to provide any such statement). Unless any Borrower notifies Administrative
          Agent of any objection to any such statement (specifically describing the
          basis
          for such objection) within thirty (30) days after the date
          of

         

        
          
            
            

          

          
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        receipt
          thereof, it shall be deemed final, binding and conclusive upon Borrowers
          in all
          respects as to all matters reflected therein.

         

        Section
          2.7 Maximum
          Interest.

         

        (a)    In
          no
          event shall the interest charged with respect to the Notes (if any) or any
          other obligations of any Borrower under any Financing Document exceed the
          maximum amount permitted under the laws of the State of Illinois or of
          any other
          applicable jurisdiction.

         

        (b)    Notwithstanding
          anything to the contrary herein or elsewhere, if at any time the rate of
          interest payable hereunder or under any Note or other Financing Document
          (the
          "Stated
          Rate") would
          exceed the highest rate of interest permitted under any applicable law
          to be
          charged (the "Maximum
          Lawful Rate"),
          then
          for so long as the Maximum Lawful Rate would be so exceeded, the rate of
          interest payable shall be equal to the Maximum Lawful Rate; provided,
          however,
          that if
          at any time thereafter the Stated Rate is less than the Maximum Lawful
          Rate,
          each Borrower shall, to the extent permitted by law, continue to pay interest
          at
          the Maximum Lawful Rate until such time as the total interest received
          is equal
          to the total interest which would have been received had the Stated Rate
          been
          (but for the operation of this provision) the interest rate payable.
          Thereafter, the interest rate payable shall be the Stated Rate unless and
          until
          the Stated Rate again would exceed the Maximum Lawful Rate, in which event
          this
          provision shall again apply.

         

        (c)    In
          no
          event shall the total interest received by any Lender exceed the amount
          which it
          could lawfully have received had the interest been calculated for the full
          term
          hereof at the Maximum Lawful Rate. If, notwithstanding the prior sentence,
          any
          Lender has received interest hereunder in excess of the Maximum Lawful
          Rate,
          such excess amount shall be applied to the reduction of the principal balance
          of
          the Loans or to other amounts (other than interest) payable hereunder, and
          if no such principal or other amounts are then outstanding, such excess
          or part
          thereof remaining shall be paid to Borrowers.

         

        (d)    In
          computing interest payable with reference to the Maximum Lawful Rate applicable
          to any Lender, such interest shall be calculated at a daily rate equal
          to the
          Maximum Lawful Rate divided by the number of days in the year in which
          such
          calculation is made. 

         

        Section
          2.8 Taxes.

         

        (a)    All
          payments of principal and interest on the Loans and all other amounts payable
          hereunder shall be made free and clear of and without deduction for any
          present
          or future income, excise, stamp, documentary, payroll, employment, property
          or
          franchise taxes and other taxes, fees, duties, levies, assessments, withholdings
          or other charges of any nature whatsoever (including interest and penalties
          thereon) imposed by any taxing authority, excluding taxes imposed
          on or measured by Administrative Agent's or any Lender's net income by
          the
          jurisdiction under which Administrative Agent or such Lender is organized
          or
          conducts business (other than solely as the result of entering into any
          of
          the

         

        
          
            
            

          

          
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        Financing
          Documents or taking any action thereunder) (all non-excluded items being
          called "Taxes").
          If
          any withholding or deduction from any payment to be made by any Borrower
          hereunder is required in respect of any Taxes pursuant to any applicable
          Law,
          then
          Borrowers will: (i) pay directly to the relevant authority the full amount
          required to be so withheld or deducted; (ii) promptly forward to
          Administrative Agent an official receipt or other documentation satisfactory
          to
          Administrative Agent evidencing such payment to such authority; and
          (iii) pay to Administrative Agent for the account of Administrative Agent
          and Lenders such additional amount or amounts as is necessary to ensure
          that the
          net amount actually received by Administrative Agent and each Lender will
          equal
          the full amount Administrative Agent and such Lender would have received
          had no
          such withholding or deduction been required. If any Taxes are directly
          asserted
          against Administrative Agent or any Lender with respect to any payment
          received
          by Administrative Agent or such Lender hereunder, Administrative Agent
          or such
          Lender may pay such Taxes and Borrowers will promptly pay such additional
          amounts (including any penalty, interest or expense) as is necessary in
          order that the net amount received by such Person after the payment of
          such
          Taxes (including any Taxes on such additional amount) shall equal the
          amount such Person would have received had such Taxes not been asserted
          so long
          as such amounts have accrued on or after the day which is two hundred seventy
          (270) days prior to the date on which Administrative Agent or such Lender
          first made written demand therefor.

         

        (b)    If
          any
          Borrower fails to pay any Taxes when due to the appropriate taxing authority
          or
          fails to remit to Administrative Agent, for the account of Administrative
          Agent
          and the respective Lenders, the required receipts or other required documentary
          evidence, Borrowers shall indemnify Administrative Agent and Lenders for
          any
          incremental Taxes, interest or penalties that may become payable by
          Administrative Agent or any Lender as a result of any such failure.

         

        (c)    Each
          Lender that (i) is organized under the laws of a jurisdiction other than
          the United States, and (ii)(A) is a party hereto on the Closing Date or
          (B) purports to become an assignee of an interest as a Lender under this
          Agreement after the Closing Date (unless such Lender was already a Lender
          hereunder immediately prior to such assignment) (each such Lender a
          "Foreign
          Lender")
          shall
          execute and deliver to each of Borrowers and Administrative Agent one or
          more
          (as Borrowers or Administrative Agent may reasonably request) United States
          Internal Revenue Service Forms W-8ECI, W-8BEN, W-8IMY (as applicable) and
          other
          applicable forms, certificates or documents prescribed by the United States
          Internal Revenue Service or reasonably requested by Administrative Agent
          certifying as to such Lender's entitlement to a complete exemption from
          withholding or deduction of Taxes. Borrowers shall not be required to pay
          additional amounts to any Lender pursuant to this Section 2.8 with respect
          to United States withholding and income Taxes to the extent that the obligation
          to pay such additional amounts would not have arisen but for the failure
          of such
          Lender to comply with this paragraph other than as a result of a change
          in law.

         

        Section
          2.9 Capital
          Adequacy.

         

        If
          any
          Lender shall reasonably determine that the adoption or taking effect of,
          or any
          change in, any applicable Law regarding capital adequacy, in each instance,
          after the

         

        
          
            
            

          

          
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        Closing
          Date, or any change after the Closing Date in the interpretation, administration
          or application thereof by any Governmental Authority, central bank or comparable
          agency charged with the interpretation, administration or application thereof,
          or the compliance by any Lender or any Person controlling such Lender with
          any
          request, guideline or directive regarding capital adequacy (whether or
          not
          having the force of law) of any such Governmental Authority, central bank
          or comparable agency adopted or otherwise taking effect after the Closing
          Date,
          has or would have the effect of reducing the rate of return on such Lender's
          or
          such controlling Person's capital as a consequence of such Lender's obligations
          hereunder to a level below that which such Lender or such controlling Person
          could have achieved but for such adoption, taking effect, change,
          interpretation, administration, application or compliance (taking into
          consideration such Lender's or such controlling Person's policies with
          respect
          to capital adequacy) then from time to time, upon written demand by such
          Lender (which demand shall be accompanied by a statement setting forth
          the basis
          for such demand and a calculation of the amount thereof in reasonable detail,
          a
          copy of which shall be furnished to Administrative Agent), Borrowers shall
          promptly pay to such Lender such additional amount as will compensate such
          Lender or such controlling Person for such reduction, so long as such amounts
          have accrued on or after the day which is two hundred seventy (270) days
          prior to the date on which such Lender first made demand therefor. 

         

        Section
          2.10 Mitigation
          Obligations.

         

        If
          any
          Lender requires compensation under Section 2.9,
          or
          requires any Borrower to pay any additional amount to any Lender or any
          Governmental Authority for the account of any Lender pursuant to Section
          2.8,
          then,
          upon the written request of Borrower Representative,
          such
          Lender shall use reasonable efforts to designate a different lending office
          for
          funding or booking its Loans hereunder or to assign its rights and obligations
          hereunder (subject to the terms of this Agreement) to another of its
          offices, branches or affiliates, if, in the judgment of such Lender, such
          designation or assignment (a) would eliminate or materially reduce amounts
          payable pursuant to any such Section, as the case may be, in the future,
          and
          (b) would not subject such Lender to any unreimbursed cost or expense and
          would not otherwise be disadvantageous to such Lender (as determined in
          its sole
          discretion). Without limitation of the provisions of Section
          12.1,
          Borrowers hereby agree to pay all reasonable costs and expenses incurred
          by any
          Lender in connection with any such designation or assignment. 

         

        Section
          2.11 Appointment
          of Borrower Representative.

         

        Each
          Borrower hereby designates Borrower Representative as its representative
          and
          agent on its behalf for the purposes of giving instructions with respect
          to the
          disbursement of the proceeds of the Loans, giving and receiving all other
          notices and consents hereunder or under any of the other Financing Documents
          and
          taking all other actions (including in respect of compliance with
          covenants) on behalf of any Borrower or Borrowers under the Financing
          Documents. Borrower Representative hereby accepts such appointment.
          Notwithstanding anything to the contrary contained in this Agreement, no
          Borrower other than Borrower Representative shall be entitled to take any
          of the
          foregoing

         

        
          
            
            

          

          
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        actions.
          The proceeds of each Loan made hereunder shall be advanced to or at the
          direction of Borrower Representative and if not used by Borrower Representative
          for the purposes provided in this Agreement shall be deemed to be immediately
          advanced by Borrower Representative to the appropriate other Borrower hereunder
          as an intercompany loan (collectively, "Intercompany
          Loans").
          Administrative Agent and each Lender may regard any notice or other
          communication pursuant to any Financing Document from Borrower Representative
          as
          a notice or communication from all Borrowers, and may give any notice or
          communication required or permitted to be given to any Borrower or all
          Borrowers
          hereunder to Borrower Representative on behalf of such Borrower or all
          Borrowers. Each Borrower agrees that each notice, election, representation
          and
          warranty, covenant, agreement and undertaking made on its behalf by Borrower
          Representative shall be deemed for all purposes to have been made by such
          Borrower and shall be binding upon and enforceable against such Borrower
          to the
          same extent as if the same had been made directly by such Borrower.

         

        ARTICLE
          3

        REPRESENTATIONS
          AND WARRANTIES

         

        To
          induce
          Administrative Agent and Lenders to enter into this Agreement and to make
          the
          Loans and other credit accommodations contemplated hereby, each Borrower
          hereby
          represents and warrants to Administrative Agent and each Lender
          that:

         

        Section
          3.1 Existence
          and Power.

         

        Each
          Credit Party is an entity as specified on Schedule 3.1,
          is duly
          organized, validly existing and in good standing under the laws of the
          jurisdiction specified on Schedule 3.1,
          has the
          same legal name as it appears in such Credit Party's Organizational Documents
          and an organizational identification number (if any), in each case as specified
          on Schedule 3.1,
          and has
          all powers and all Permits necessary or desirable in the operation of its
          business as presently conducted or as proposed to be conducted, except
          where the
          failure to have such Permits could not reasonably be expected to have a
          Material
          Adverse Effect. Each Credit Party is qualified to do business as a foreign
          entity in each jurisdiction in which it is required to be so qualified,
          which
          jurisdictions, in the case of the Borrowers, Cypress JV and the General
          Partner,
          as of the Closing Date are specified on Schedule 3.1,
          except
          where the failure to be so qualified could not reasonably be expected to
          have a
          Material Adverse Effect. None of Borrowers, Cypress JV or the General Partner
          (a) has had, over the five (5) year period preceding the Closing Date,
          any name other than its current name, or (b) was incorporated or organized
          under the laws of any jurisdiction other than its current jurisdiction
          of
          incorporation or organization.

         

        Section
          3.2 Organization
          and Governmental Authorization; No Contravention.

         

        The
          execution, delivery and performance by each Credit Party of the Financing
          Documents to which it is a party are within its powers, have been duly
          authorized by all necessary action pursuant to its Organizational Documents,
          require no further action

         

        
          
            
            

          

          
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        by
          or in
          respect of, or filing with, any Governmental Authority and do not violate,
          conflict with or cause a breach or a default under (a) any Law applicable
          to any Credit Party or any of the Organizational Documents of any Credit
          Party,
          or (b) any agreement or instrument binding upon it, except for such
          violations, conflicts, breaches or defaults as could not, with respect
          to this
          clause (b), reasonably be expected to have a Material Adverse
          Effect.

         

        Section
          3.3 Binding
          Effect.

         

        Each
          of
          the Financing Documents to which any Credit Party is a party constitutes
          a valid
          and binding agreement or instrument of such Credit Party, enforceable against
          such Credit Party in accordance with its respective terms, except as the
          enforceability thereof may be limited by bankruptcy, insolvency or other
          similar
          laws relating to the enforcement of creditors' rights generally and by
          general
          equitable principles.

         

        Section
          3.4 Capitalization.

         

        The
          authorized equity securities of each of the Credit Parties as of the Closing
          Date is as set forth on Schedule 3.4.
          All
          issued and outstanding equity securities of each of the Credit Parties
          are duly
          authorized and validly issued, fully paid, nonassessable, free and clear
          of all
          Liens other than those in favor of Administrative Agent for the benefit
          of
          Administrative Agent and Lenders, and such equity securities were issued
          in
          compliance with all applicable Laws. The identity of the holders of the
          equity
          securities of each of the Credit Parties and the percentage of their
          fully-diluted ownership of the equity securities of each of the Credit
          Parties
          as of the Closing Date is set forth on Schedule 3.4.
          No
          shares of the capital stock or other equity securities of any Credit Party,
          other than those described above, are issued and outstanding as of the
          Closing
          Date. Except as set forth on Schedule 3.4
          or
          in the
          Organizational Documents of Cypress JV, as of the Closing Date there are
          no
          preemptive or other outstanding rights, options, warrants, conversion rights
          or
          similar agreements or understandings for the purchase or acquisition from
          any
          Credit Party of any equity securities of any such entity.

         

        Section
          3.5 Financial
          Information. 

         

        (a)    The
          income statement of the Sellers as of November 30, 2005, copies of which
          have
          been delivered to Administrative Agent, fairly presents the results of
          operations for the Projects for the period covered thereby.

         

        (b)    [Reserved].

         

        (c)    [Reserved].

         

        (d)    Since
          December 31, 2005, there has been no material adverse change in the
          business, operations, properties or condition (financial or otherwise) of
          ARC, taken as a whole. Since November 30, 2005, there has been no material
          adverse change in the business, operations, properties or condition (financial
          or otherwise) of any business, assets or entities being purchased by
          Borrowers pursuant to the Financing Documents.

         

        
          
            
            

          

          
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        Section
          3.6 Litigation.

         

        Except
          as
          set forth on Schedule 3.6
          as of
          the Closing Date, and except as hereafter disclosed to Administrative Agent
          in
          writing, (a) there is no Litigation pending against, or to Borrowers'
          knowledge threatened against or affecting, any Credit Party or any Project
          and
          (b) there is no material Litigation pending, or, to such Borrowers'
          knowledge, threatened against Guarantor. There is no Litigation pending
          in which
          an adverse decision could reasonably be expected to have a Material Adverse
          Effect or which in any manner draws into question the validity of any of
          the
          Financing Documents.

         

        Section
          3.7 Ownership
          of Property Generally.

         

        Each
          Borrower is the lawful owner of, has good and marketable title to and is
          in
          lawful possession of, or has valid leasehold interests in, all properties
          and
          other assets (real or personal, tangible, intangible or mixed) purported or
          reported to be owned or leased (as the case may be) by such Person, subject
          to Permitted Liens.

         

        Section
          3.8 No
          Default.

         

        No
          Default or Event of Default has occurred and is continuing. No Credit Party
          is
          in breach or default under or with respect to any contract, agreement,
          lease or
          other instrument to which it is a party or by which its property is bound
          or
          affected, which breach or default could reasonably be expected to have
          a
          Material Adverse Effect.

         

        Section
          3.9 Labor
          Matters.

         

        As
          of the
          Closing Date, there are no strikes or other labor disputes pending or,
          to such
          Borrower's knowledge, threatened against any Credit Party. Hours worked
          and
          payments made to any employees of the Credit Parties have not been in violation
          of the Fair Labor Standards Act or any other applicable Law dealing with
          such
          matters. All payments due from any Credit Party, or for which any claim
          may be
          made against any of them, on account of wages and employee and retiree
          health
          and welfare insurance and other benefits have been paid or accrued as a
          liability on their books, as the case may be. The consummation of the
          transactions contemplated by the Financing Documents will not give rise
          to a
          right of termination or right of renegotiation on the part of any union
          under
          any collective bargaining agreement to which it is a party or by which
          it is
          bound. 

         

        Section
          3.10 Regulated
          Entities.

         

        No
          Credit
          Party is an "investment company"
          or a
          company "controlled"
          by an
          "investment company"
          or a
          "subsidiary"
          of an
          "investment company,"
          all
          within the meaning of the Investment Company Act of 1940. No Credit Party
          is
          a
          "holding company", or a "subsidiary company" of a "holding company", or
          an
          "affiliate" of a "holding company" or of a "subsidiary company" of a "holding
          company", within the meaning of the Public Utility Holding Company Act
          of
          1935.

         

        
          
            
            

          

          
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        Section
          3.11 Margin
          Regulations.

         

        None
          of
          the proceeds from the Loans have been or will be used, directly or indirectly,
          for the purpose of purchasing or carrying any "margin stock" (as defined
          in
          Regulation U of the Federal Reserve Board), for the purpose of reducing
          or
          retiring any indebtedness which was originally incurred to purchase or
          carry any
          "margin stock" or for any other purpose which might cause any of the Loans
          to be
          considered a "purpose credit" within the meaning of Regulation T, U or
          X of the
          Federal Reserve Board.

         

        Section
          3.12 Compliance
          With Laws; Anti-Terrorism Laws.

         

        (a) Each
          Credit Party is in compliance with the requirements of all applicable Laws,
          except for such Laws the noncompliance with which could not reasonably
          be
          expected to have a Material Adverse Effect.

         

        (b) None
          of
          the Credit Parties, or any of the entities shown in Schedule 3.4
          or any
          of their respective agents acting or benefiting in any capacity in connection
          with the transactions contemplated by this Agreement is (i) in violation of
          any Anti-Terrorism Law, (ii) engages in or conspires to engage in any
          transaction that evades or avoids, or has the purpose of evading or avoiding,
          or
          attempts to violate, any of the prohibitions set forth in any Anti-Terrorism
          Law, or (iii) is a Blocked Person. No Credit Party nor, to the knowledge of
          any Credit Party, any of its Affiliates or agents acting or benefiting
          in any
          capacity in connection with the transactions contemplated by this Agreement,
          (x) conducts any business or engages in making or receiving any
          contribution of funds, goods or services to or for the benefit of any Blocked
          Person, or (y) deals in, or otherwise engages in any transaction relating
          to, any property or interest in property blocked pursuant to Executive
          Order
          No. 13224, any similar executive order or other Anti-Terrorism
          Law.

         

        Section
          3.13 Taxes.

         

        All
          Federal, state and local tax returns, reports and statements required to
          be
          filed by or on behalf of each Credit Party have been filed with the appropriate
          Governmental Authorities in all jurisdictions in which such returns, reports
          and
          statements are required to be filed and, except to the extent subject to
          a
          Permitted Contest, all Taxes (including real property Taxes) and other
          charges shown to be due and payable in respect thereof have been timely
          paid
          prior to the date on which any fine, penalty, interest, late charge or
          loss may
          be added thereto for nonpayment thereof. Except to the extent subject to
          a
          Permitted Contest, all state and local sales and use Taxes required to
          be paid
          by each Credit Party have been paid. All Federal and state returns have
          been
          filed by each Credit Party for all periods for which returns were due with
          respect to employee income tax withholding, social security and unemployment
          taxes, and, except to the extent subject to a Permitted Contest, the amounts
          shown thereon to be due and payable have been paid in full or adequate
          provisions therefor have been made.

         

        
          
            
            

          

          
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        Section
          3.14 Compliance
          with ERISA.

         

        (a)    Each
          ERISA Plan (and the related trusts and funding agreements) complies in form
          and in operation with, has been administered in compliance with, and the
          terms
          of each ERISA Plan satisfy, the applicable requirements of ERISA and the
          Code in
          all material respects. Each ERISA Plan which is intended to be qualified
          under
          Section 401(a) of the Code is so qualified, and the United States Internal
          Revenue Service has issued a favorable determination letter with respect
          to each
          such ERISA Plan which may be relied on currently. No Credit Party has incurred
          liability for any material excise tax under any of Sections 4971 through
          5000 of
          the Code.

         

        (b)    During
          the thirty-six (36) month period prior to the Closing Date or the making of
          any Loan, (i) no steps have been taken to terminate any Pension Plan, and
          (ii) no contribution failure has occurred with respect to any Pension Plan
          sufficient to give rise to a Lien under Section 302(f) of ERISA. No
          condition exists or event or transaction has occurred with respect to any
          Pension Plan which could result in the incurrence by any Credit Party of
          any
          material liability, fine or penalty. No Credit Party has incurred liability
          to
          the PBGC (other than for current premiums) with respect to any employee
          Pension Plan. All contributions (if any) have been made on a timely basis
          to any Multiemployer Plan that are required to be made by any Credit Party
          or
          any other member of the Controlled Group under the terms of the plan or
          of any
          collective bargaining agreement or by applicable Law; no Credit Party nor
          any
          member of the Controlled Group has withdrawn or partially withdrawn from
          any
          Multiemployer Plan, incurred any withdrawal liability with respect to any
          such
          plan or received notice of any claim or demand for withdrawal liability
          or
          partial withdrawal liability from any such plan, and no condition has occurred
          which, if continued, could result in a withdrawal or partial withdrawal
          from any
          such plan, and no Credit Party nor any member of the Controlled Group has
          received any notice that any Multiemployer Plan is in reorganization, that
          increased contributions may be required to avoid a reduction in plan benefits
          or
          the imposition of any excise tax, that any such plan is or has been funded
          at a
          rate less than that required under Section 412 of the Code, that any such
          plan is or may be terminated, or that any such plan is or may become
          insolvent

         

        Section
          3.15 Consummation
          of Financing Documents; Brokers.

         

        Except
          for fees payable to Administrative Agent and/or Lenders, no broker, finder
          or
          other intermediary has brought about the obtaining, making or closing of
          the
          transactions contemplated by the Financing Documents, and no Credit Party
          has or
          will have any obligation to any Person in respect of any finder's or brokerage
          fees, commissions or other expenses in connection herewith or therewith.
          All
          brokerage and finder's fees, commissions and other expenses payable in
          connection with the transactions contemplated by the Financing Documents
          have
          been paid in full by Borrowers contemporaneously with the execution of
          the
          Financing Documents and the initial funding of the Loans. No broker, finder
          or
          other intermediary has brought about the obtaining, making or closing of
          the
          transactions contemplated by the Financing Documents, and no Credit Party
          has or
          will have any obligation to any Person in respect of any finder's or brokerage
          fee in connection herewith or therewith.

         

        
          
            
            

          

          
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        Section
          3.16 Related
          Transactions.

         

        All
          transactions contemplated by the Financing Documents to be consummated
          on or
          prior to the date hereof have been so consummated (including without limitation
          the disbursement and transfer of all funds in connection therewith) in all
          material respects pursuant to the provisions of the applicable Financing
          Documents, true and complete copies of which have been delivered to
          Administrative Agent, and in compliance with all applicable Law, except
          for such
          Laws the noncompliance with which would not reasonably be expected to have
          a
          Material Adverse Effect.

         

        Section
          3.17 Material
          Contracts.

         

        Except
          for the Financing Documents and the other agreements set forth on Schedule
          3.17
          (collectively with the Financing Documents, the "Material
          Contracts"),
          as of
          the Closing Date there are no (a) employment agreements covering the
          management of any Credit Party, (b) collective bargaining agreements or
          other labor agreements covering any employees of any Credit Party,
          (c) agreements for managerial, consulting or similar services to which any
          Credit Party is a party or by which it is bound, (d) agreements regarding
          any Credit Party, its assets or operations or any investment therein to
          which
          any of its equityholders is a party or by which it is bound, (e) real
          estate leases, intellectual property licenses or other lease or license
          agreements to which any Credit Party is a party, either as lessor or lessee,
          or
          as licensor or licensee, or (f) customer, distribution, marketing or supply
          agreements to which any Credit Party is a party, in each case with respect
          to
          the preceding clauses (a), (c), (d), (e), and (f) requiring payment of more
          than $100,000 in any year, (g) partnership agreements to which any Credit
          Party is a general partner or joint venture agreements to which any Credit
          Party
          is a party, (h) third party billing arrangements to which any Credit Party
          is a party, or (i) any other agreements or instruments to which any Credit
          Party is a party, and the breach, nonperformance or cancellation of which,
          or
          the failure of which to renew, could reasonably be expected to have a Material
          Adverse Effect. Schedule
          3.17
          sets
          forth, with respect to each real estate lease agreement to which any Credit
          Party is a party (as a lessee) and which is a Material Contract as of the
          Closing Date, the address of the subject property and the annual rental
          (or,
          where applicable, a general description of the method of computing the
          annual
          rental). The consummation of the transactions contemplated by the Financing
          Documents and the other Financing Documents will not give rise to a right
          of
          termination in favor of any party to any Material Contract (other than
          any
          Credit Party), except for such Material Contracts the noncompliance with
          which
          would not reasonably be expected to have a Material Adverse Effect.

         

        Section
          3.18 Compliance
          with Environmental Requirements; No Hazardous Materials. 

         

        Except
          in
          each case as set forth on Schedule
          3.18:

         

        (a)    no
          Hazardous Materials are located on any of the Projects except those that
          are
          both (i) in compliance with Environmental Laws and with permits issued
          pursuant thereto (if such permits are required), if any, and (ii) either
          (A) in amounts not in excess of

         

        
          
            
            

          

          
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        that
          necessary to operate the applicable Project for the purposes set forth
          herein or
          in amounts used in the ordinary course of business, or (B) fully disclosed
          to and approved by Administrative Agent; to each Borrower's knowledge,
          Hazardous
          Materials have not been Released or threatened to be Released into the
          environment, at, on, under or near any of the Projects in a manner that
          would
          require the taking of any action under any Environmental Law and that have
          given
          rise to, or could reasonably be expected to give rise to, remediation costs
          and
          expenses on the part of any Borrower in excess of $250,000; and no portion
          of
          any Project is being used, or has been used at any previous time, for the
          disposal, storage, treatment, processing or other handling of Hazardous
          Materials in violation of any Environmental Law in any material respect
          nor, to
          each Borrower's knowledge, is any such property affected by any Hazardous
          Materials Contamination;

         

        (b)    no
          Borrower knows of, nor has received, any written notice from any Person
          relating
          to Hazardous Materials in, on, under or from any Project and no notice,
          notification, demand, request for information, citation, summons, complaint
          or
          order has been issued, no complaint has been filed, no penalty has been
          assessed
          and no investigation or review is pending, or to each Borrower's knowledge,
          threatened by any Governmental Authority or other Person with respect to
          any
          (i) alleged violation by any Borrower of any Environmental Law,
          (ii) alleged failure by any Borrower to have any Permits required in
          connection with the conduct of its business or to comply with the terms
          and
          conditions thereof, (iii) any generation, treatment, storage, recycling,
          transportation or disposal of any Hazardous Materials, or (iv) Release of
          Hazardous Materials;

         

        (c)    to
          the
          best knowledge of each Borrower, all oral or written notifications of a
          Release
          of Hazardous Materials required to be filed by or on behalf of any Borrower
          under any applicable Environmental Law have been filed or are in the process
          of
          being timely filed by or on behalf of the applicable Borrower;

         

        (d)    to
          each
          Credit Party's best knowledge, no property now owned by any Borrower and
          no such
          property previously owned by any Borrower, to which any Borrower has, directly
          or indirectly, transported or arranged for the transportation of any Hazardous
          Materials, is listed or proposed for listing, on the National Priorities
          List
          promulgated pursuant to CERCLA, or CERCLIS (as defined in CERCLA) or any
          similar state list or is the subject of Federal, state or local enforcement
          actions or, to the knowledge of such Borrower, other investigations which
          may
          lead to claims against any Credit Party for clean-up costs, remedial work,
          damage to natural resources or personal injury claims, including, without
          limitation, claims under CERCLA;

         

        (e)    to
          each
          Credit Party's best knowledge, after reasonable investigation, there are
          no
          underground storage tanks located on any property owned or to be owned
          or leased
          by any Borrower that are not properly registered or permitted under applicable
          Environmental Laws or that are leaking or disposing of Hazardous
          Materials;

         

        (f)    to
          each
          Credit Party's best knowledge, after reasonable investigation, there are
          no
          Liens under or pursuant to any applicable Environmental Laws on any real
          property or other assets owned or leased by any Borrower, and no actions
          by
          any

         

        
          
            
            

          

          
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        Governmental
          Authority have been taken or, to the knowledge of such Borrower, are in
          process
          which could subject any of such properties or assets to such Liens;
          and

         

        (g)    to
          each
          Credit Party's best knowledge, after reasonable investigation, each Borrower
          has
          truthfully and fully provided to Administrative Agent, in writing, any
          and all
          information relating to environmental conditions in, on, under or from
          the
          Projects, known to each Borrower or contained in each Borrower's files
          and
          records, including but not limited to any reports relating to Hazardous
          Materials in, on, under or migrating to or from the Projects and/or to
          the
          environmental condition of the Projects.

         

        Section
          3.19 Intellectual
          Property.

         

        Each
          Borrower owns, is licensed to use or otherwise has the right to use, all
          intellectual property that is material to the condition (financial or other),
          business or operations of such Borrower. To such Borrower's knowledge,
          each
          Borrower conducts its business without infringement or claim of infringement
          of
          any intellectual property rights of others and there is no infringement
          or claim
          of infringement by others of any intellectual property rights of any Borrower,
          which infringement or claim of infringement could reasonably be expected
          to have
          a Material Adverse Effect.

         

        Section
          3.20 Solvency.

         

        Each
          Borrower and Guarantor is Solvent.

         

        Section
          3.21 Full
          Disclosure.

         

        None
          of
          the information (financial or otherwise) furnished by or on behalf of any
          Credit Party to Administrative Agent or any Lender in connection with the
          consummation of the transactions contemplated by the Financing Documents,
          contains (with respect to information provided by third parties on behalf
          of any
          Credit Party, to the best knowledge of the Credit Parties) any untrue
          statement of a material fact or omits to state a material fact necessary
          to make
          the statements contained herein or therein not misleading in light of the
          circumstances under which such statements were made. All financial projections
          delivered to Administrative Agent and the Lenders have been prepared on
          the
          basis of the assumptions stated therein. Such projections represent each
          Borrower's best estimate of such Borrower's future financial performance
          and
          such assumptions are believed by such Borrower to be fair and reasonable
          in
          light of current business conditions; provided,
          however, that
          Borrowers can give no assurance that such projections will be
          attained.

         

        Section
          3.22 Interest
          Rate.

         

        The
          rate
          of interest paid under the Notes and the method and manner of the calculation
          thereof do not violate any usury or other law or applicable Laws, any of
          the
          Organizational Documents or any of the Financing Documents.

         

        
          
            
            

          

          
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        Section
          3.23 Representations
          and Warranties Incorporated from Financing Documents.

         

        As
          of the
          Closing Date, each of the representations and warranties made in the Financing
          Documents by each of the parties thereto is true and correct in all material
          respects, and such representations and warranties are hereby incorporated
          herein
          by reference with the same effect as though set forth in their entirety
          herein,
          as qualified therein, except to the extent that such representation or
          warranty
          relates to a specific date, in which case such representation and warranty
          shall
          be true as of such earlier date.

         

        Section
          3.24 Subsidiaries.
          There
          are no Subsidiaries of Borrowers.

         

        ARTICLE
          4

        AFFIRMATIVE
          COVENANTS

         

        Each
          Borrower agrees that, so long as any Credit Exposure exists:

         

        Section
          4.1 Financial
          Statements and Other Reports.

         

        (a)    Each
          Borrower will maintain a system of accounting established and administered
          in
          accordance with sound business practices to permit preparation of financial
          statements in accordance with GAAP and to provide the information required
          to be
          delivered to Administrative Agent and the Lenders hereunder. 

         

        (b)    Each
          Borrower will furnish to Administrative Agent (or cause to be furnished
          to
          Administrative Agent) the following financial information and reports with
          respect to each Borrower and each Licensed Operator, in each case in form
          and
          format and providing information satisfactory to Administrative Agent in
          its
          discretion:

         

        (i)    if
          applicable, for the Licensed Operator only, a sales and collections report
          and
          accounts receivable and payable aging schedule on a form reasonably acceptable
          to Lender within twenty-five (25) days after the end of each calendar
          month, which shall include, without limitation, a report of sales, credits
          issued, and collections received; 

         

        (ii)    within
          twenty-five (25) days of the end of each calendar month, internally
          prepared monthly financial statements prepared for Borrowers on a consolidated
          and consolidating basis in accordance with GAAP (including income statements
          and
          balance sheets for each Project and a consolidated operating cash flow
          statement, accompanied by management analysis and actual vs. budget variance
          reports for
          each
          Project;

         

        (iii)    Reserved;

         

        (iv)    within
          twenty-five (25) days of the end of each calendar month, (A) a current
          rent roll (including, a monthly schedule of delinquency receipts and payments),
          and (B) a summary of all leasing activity then taking place with respect to
          each Project;

         

        
          
            
            

          

          
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        (v)    within
          twenty-five (25) days after the end of each measurement period applicable
          to any financial covenant hereunder, such financial reports and information
          as
          Administrative Agent shall require evidencing compliance with the applicable
          financial covenants, which reports and information shall include, at a
          minimum,
          delivery to Administrative Agent of a Compliance Certificate, and, if requested
          by Administrative Agent, back-up documentation (including, without limitation,
          invoices, receipts and other evidence of costs incurred during such quarter
          as
          Administrative Agent shall reasonably require) evidencing the propriety of
          the deductions from revenues in determining such compliance;

         

        (vi)    annual
          projected profit and loss statements (prepared on a monthly basis) for the
          succeeding fiscal year within forty-five (45) days before the end of each
          fiscal year;

         

        (vii)    internally
          prepared annual financial statements prepared for Borrowers on a consolidated
          and consolidating basis in accordance with GAAP within sixty (60) days
          after the end of each fiscal year; 

         

        (viii)    annual
          consolidated and consolidating audited financial statements prepared for
          Borrowers in accordance with GAAP and prepared by a firm of independent
          public
          accountants reasonably satisfactory to Administrative Agent, within one
          hundred
          twenty (120) days after the end of each fiscal year; 

         

        (ix)    promptly
          upon receipt thereof, copies of any reports by the independent accountants
          in
          connection with any interim audit and copies of each management control
          letter
          provided by independent accountants; 

         

        (x)    for
          each
          Borrower, as requested by Administrative Agent, evidence satisfactory to
          Administrative Agent that all federal and state taxes, including, without
          limitation payroll taxes, that are due have been paid in full; 

         

        (xi)    for
          Licensed Operator only, as requested, copies of all cost reports filed
          with
          Medicare or Medicaid or any other Third Party Payor; 

         

        (xii)    within
          ten (10) days after Administrative Agent request, a written statement, duly
          acknowledged by Borrowers, setting forth any right of set-off, claims,
          counterclaims, withholdings or other defenses to which any of the Collateral
          or
          Administrative Agent's rights with respect to the Collateral are subject
          or that
          exist against such sums and Borrowers' obligations under the Financing
          Documents; 

         

        (xiii)    within
          ten (10) days after Administrative Agent request, a written statement, duly
          acknowledged by Licensed Operator, setting forth any right of set-off,
          counterclaim or other defense that exists against such sums and Licensed
          Operator's obligations under any Leases; and

         

        
          
            
            

          

          
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        (xiv)    such
          additional information, reports or statements regarding the Borrowers,
          the
          Projects or Licensed Operator as Administrative Agent may from time to
          time
          reasonably request. 

         

        All
          financial statements shall include a balance sheet and statement of earnings
          and
          shall be prepared in accordance with GAAP. 

         

        (c)    From
          time
          to time, if Administrative Agent determines that obtaining appraisals is
          necessary in order for a Lender to comply with applicable Laws, each Borrower
          shall furnish to Administrative Agent appraisal reports in form and substance
          and from appraisers reasonably satisfactory to Administrative Agent stating
          the
          then current fair market values of all or any portion of the real estate
          owned
          by each Borrower. In addition to the foregoing, from time to time, but
          in the
          absence of a Default or Event of Default not more than once during each
          calendar
          year, Administrative Agent may require Borrowers to obtain and deliver
          to
          Administrative Agent appraisal reports in form and substance and from appraisers
          reasonably satisfactory to Administrative Agent stating the then current
          fair
          market values of all or any portion of the real estate and personal property
          owned by each Borrower.

         

        (d)    Promptly
          upon receipt or filing thereof, each Borrower shall deliver to Administrative
          Agent copies of any reports or notices related to any material taxes and
          any
          other material reports or notices received by any Credit Party from, or
          filed by
          any Credit Party with, any Governmental Authority.

         

        (e)    Promptly
          upon their becoming available, Borrower shall deliver to Administrative
          Agent
          copies of all Swap Contracts.

         

        Section
          4.2 Payment
          and Performance of Obligations.

         

        Each
          Borrower (a) will pay and discharge, at or before maturity, all of their
          respective obligations and liabilities, including tax liabilities, except
          for
          such obligations and/or liabilities (i) that may be the subject of a
          Permitted Contest, or (ii) the nonpayment or nondischarge of which could
          not reasonably be expected to have a Material Adverse Effect or result
          in a Lien
          against any Collateral, except for Permitted Liens, (b) will maintain, in
          accordance with GAAP, appropriate reserves for the accrual of all of their
          respective obligations and liabilities, (c) will not breach, or permit to
          exist any default under, the terms of any commitment, contract, instrument
          or
          obligation (other than Leases) to which it is a party, or by which its
          properties or assets are bound, except for such breaches or defaults which
          could
          not reasonably be expected to have a Material Adverse Effect, and (d) will
          not breach, or permit to exist any default under, the terms of any Material
          Lease to which it is a party as a lessor.

         

        
          
            
            

          

          
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        Section
          4.3 Maintenance
          of Existence; Single Purpose Entity Requirements.

         

        (a)    Each
          Borrower will preserve, renew and keep in full force and effect their respective
          existence and their respective rights, privileges and franchises necessary
          or
          desirable in the normal conduct of business.

         

        (b)    Each
          Borrower will preserve, renew and keep in full force and effect their respective
          existence and their respective rights, privileges and franchises necessary
          or
          desirable to, at all times, comply with all single purpose entity requirements
          set forth on Exhibit
          B.
          If any
          of the Term Loans are placed in a securitization, then Borrowers shall
          promptly
          upon notice from Administrative Agent, amend their respective Organizational
          Documents to incorporate the single purpose entity requirements set forth
          on
Exhibit
          B,
          at
          Borrowers' sole cost and expense. Neither Borrower's election to provide
          home
          healthcare services nor Borrower's compliance with Section 8.3(e) shall
          be a
          violation of this Section
          4.3(b)
          or
Exhibit
          B.

         

        (c)    At
          all
          times, ARC or a wholly-owned Affiliate of ARC shall own twenty percent
          (20%) or
          more of the membership interests in Cypress JV.

         

        Section
          4.4 Maintenance
          of Property; Payment of Taxes; Insurance.

         

        (a)    Each
          Borrower will keep all property useful and necessary in its business in
          good
          working order and condition, ordinary wear and tear excepted. If all or
          any part
          of the Collateral becomes damaged or destroyed, each Borrower will promptly
          and
          completely repair and/or restore the affected Collateral in a good and
          workmanlike manner, provided that such Borrower shall only be obligated
          to
          repair or restore the affected Collateral if Administrative Agent agrees
          to
          disburse insurance proceeds or other sums to pay costs of the work of repair
          or
          reconstruction. Borrowers will not commit or allow waste or permit impairment
          or
          deterioration of the Collateral or abandon all or any part of the Collateral.
          Borrowers will perform such acts to preserve the value of Collateral. Each
          Borrower will (i) preserve its or their interest in and title to the
          Collateral and will forever warrant and defend the same to Administrative
          Agent
          and Lenders against any and all claims made by, through or under Borrowers,
          and
          (ii) except in respect of Permitted Liens, forever warrant and defend the
          validity and priority of the lien and security interest created in the
          Security
          Documents against the claims of all Persons whomsoever claiming by, through
          or
          under Borrowers. The foregoing warranty of title shall survive the foreclosure
          of the Security Documents and shall inure to the benefit of and be enforceable
          by Administrative Agent in the event Administrative Agent acquires title
          to any
          Collateral pursuant to any foreclosure. 

         

        (b)    Borrowers
          will pay or cause to be paid all Taxes prior to the date upon which any
          fine,
          penalty, interest or cost for nonpayment is imposed, and furnish to
          Administrative Agent, upon request, receipted bills of the appropriate
          taxing
          authority or other documentation reasonably satisfactory to Administrative
          Agent
          evidencing the payment thereof. If Borrowers shall fail to pay any Taxes
          in
          accordance with this Section and is not contesting or causing a contesting
          of
          such Taxes pursuant to a Permitted Contest,

         

        
          
            
            

          

          
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        or
          if
          there are insufficient funds in the applicable reserves or escrows under
          Article
          2 to pay any such Taxes, Administrative Agent shall have the right, but
          shall
          not be obligated, to (for the account of all Lenders) pay such Taxes, and
          Borrowers shall repay to Administrative Agent, on written demand, any amount
          paid by Administrative Agent, with interest thereon from the date of the
          advance
          thereof to the date of repayment, at the rate applicable during periods
          of
          Default hereunder, and such amount shall constitute a portion of the
          Obligations. Borrowers shall not pay any Taxes or other obligations in
          installments unless permitted by applicable Laws, and shall, upon the request
          of
          Administrative Agent, deliver copies of all notices and bills relating
          to any
          Taxes or other charge covered by this Section to Administrative
          Agent.

         

        (c)    Upon
          completion of any Permitted Contest, Borrowers shall promptly pay the amount
          due, if any, and deliver to Administrative Agent proof of the completion
          of the
          contest and payment of the amount due, if any, following which Administrative
          Agent Lender shall return the security, if any, deposited with Lender pursuant
          to the definition of Permitted Contest. 

         

        (d)    Each
          Borrower will maintain (i) casualty insurance on all real and personal
          property on an all risks basis (including the perils of flood and quake),
          covering the repair and replacement cost of all such property and coverage
          for
          business interruption and rent loss and professional liability and public
          liability insurance (including products/completed operations liability
          coverage) in the amounts and on such terms as attached hereto as
Schedule
          4.4,
          and
          (ii) such other insurance coverage in such amounts and with respect to such
          risks as Administrative Agent may reasonably request. All such insurance
          shall
          be provided by insurers having an A.M. Best policyholders rating reasonably
          acceptable to Administrative Agent. Borrowers will not bring or keep any
          article
          on any business location of any Credit Party, or cause or allow any condition
          to
          exist, if the presence of such article or the occurrence of such condition
          could
          reasonably cause the invalidation of any insurance required by this Section
          4.4(d),
          or
          would otherwise be prohibited by the terms thereof.

         

        (e)    On
          or
          prior to the Closing Date, and at all times thereafter, each Borrower will
          cause
          Administrative Agent to be named as an additional insured, assignee and
          loss
          payee (which shall include, as applicable, identification as mortgagee),
          as
          applicable, on each insurance policy required to be maintained pursuant
          to this
Section
          4.4
          pursuant
          to endorsements in form and content acceptable to Administrative
          Agent.
          Borrowers will deliver to Administrative Agent and the Lenders (i) on the
          Closing Date, a certificate from Borrowers' insurance broker dated such
          date
          showing the amount of coverage as of such date, and that such policies
          will
          include effective waivers (whether under the terms of any such policy or
          otherwise) by the insurer of all claims for insurance premiums against all
          loss payees and additional insureds and all rights of subrogation against
          all
          loss payees and additional insureds, and that if all or any part of such
          policy
          is canceled, terminated or expires, the insurer will forthwith give notice
          thereof to each additional insured, assignee and loss payee and that no
          cancellation, reduction in amount or material change in coverage thereof
          shall
          be effective until at least thirty (30) days after receipt by each
          additional insured, assignee and loss payee of written notice thereof,
          (ii) upon the

         

        
          
            
            

          

          
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        request
          of any Lender through Administrative Agent from time to time full information
          as
          to the insurance carried, (iii) within five (5) days of receipt of
          notice from any insurer, a copy of any notice of cancellation, nonrenewal
          or
          material change in coverage from that existing on the date of this Agreement,
          and (iv) forthwith, notice of any cancellation or nonrenewal of coverage by
          any Borrower.

         

        (f)    In
          the
          event any Borrower fails to provide Administrative Agent with evidence
          of the
          insurance coverage required by this Agreement, Administrative Agent may
          purchase
          insurance at Borrowers' expense to protect Administrative Agent's interests
          in
          the Collateral. This insurance may, but need not, protect any Borrower's
          interests. The coverage purchased by Administrative Agent may not pay any
          claim
          made by any Borrower or any claim that is made against any Borrower in
          connection with the Collateral. The applicable Borrower may later cancel
          any
          insurance purchased by Administrative Agent, but only after providing
          Administrative Agent with evidence that such Borrower has obtained insurance
          as
          required by this Agreement. If Administrative Agent purchases insurance
          for the
          Collateral, to the fullest extent provided by law Borrowers will be responsible
          for the costs of that insurance, including interest and other charges imposed
          by
          Administrative Agent in connection with the placement of the insurance,
          until
          the effective date of the cancellation or expiration of the insurance.
          The costs
          of the insurance may be added to the Obligations. The costs of the insurance
          may
          be more than the cost of insurance each Borrower is able to obtain on its
          own.

         

        (g)    Borrowers
          shall not carry separate insurance concurrent in form or contributing in
          the
          event of loss with that required to be maintained under this
          Section.

         

        Section
          4.5 Compliance
          with Laws.

         

        Each
          Borrower will comply with the requirements of all applicable Laws, except
          to the
          extent that failure to so comply could not reasonably be expected to
          (a) have a Material Adverse Effect, or (b) result in any Lien upon
          either (i) a material portion of the assets of any such Person in favor of
          any Governmental Authority, or (ii) any portion of the
          Collateral.

         

        Section
          4.6 Inspection
          of Property, Books and Records.

         

        Each
          Borrower will keep proper books of record and account in accordance with
          GAAP in
          which full, true and correct entries shall be made of all dealings and
          transactions in relation to its business and activities; and will permit
          at the
          sole cost of the applicable Borrower, representatives of Administrative
          Agent
          and of any Lender (but at such Lender's expense unless such visit or inspection
          is made concurrently with Administrative Agent) to visit and inspect any of
          their respective properties, to examine and make abstracts or copies from
          any of
          their respective books and records, to conduct a collateral audit and analysis
          of their respective operations and the Collateral and to discuss their
          respective affairs, finances and accounts with their respective officers,
          employees and independent public accountants as often as may reasonably
          be
          desired. In the absence of an Event of Default, Administrative Agent or
          any
          Lender exercising any rights pursuant to this Section

         

        
          
            
            

          

          
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        4.6
          shall
          give the applicable Borrower commercially reasonable prior notice of such
          exercise, and shall not (except for and in addition to the annual inspection
          fee) require Borrower to reimburse the costs and expenses incurred in connection
          with such visit or inspection for more than one (1) visit per year. No
          notice shall be required during the existence and continuance of any Event
          of
          Default.

         

        Section
          4.7 Use
          of
          Proceeds.

         

        Borrowers
          will use the proceeds of the Term Loans solely for payment of amounts due
          in
          respect of an acquisition of equity interests or assets contemplated by
          the
          Financing Documents, transaction fees incurred in connection with the Financing
          Documents and the refinancing on the Closing Date of Debt. No portion of
          the
          proceeds of the Loans will be used for family, personal, agricultural or
          household use.

         

        Section
          4.8 [Reserved.]

         

        Section
          4.9 [Reserved.]

         

        Section
          4.10 Environmental
          Covenants.

         

        (a)    Each
          Borrower covenants and agrees that so long as such Borrower owns, manages,
          is in
          possession of, or otherwise controls the operation of the Projects: (i) all
          uses and operations on or of the Projects, whether by such Borrower or
          any other
          Person, shall be in compliance with all Environmental Laws and permits
          issued
          pursuant thereto in all material respects; (ii) there shall be no material
          Releases of Hazardous Materials in, on, under or from the Projects;
          (iii) there shall be no Hazardous Materials in, on, or under the Projects,
          except those that are both (A) in compliance with all Environmental Laws in
          all material respects and with permits issued pursuant thereto, if and
          to the
          extent required, and (B) (I) in amounts not in excess of that
          necessary to operate the Projects for the purposes set forth herein or
          (II) fully disclosed to and approved by Administrative Agent in writing;
          (iv) each Borrower shall keep the Projects free and clear of all
          Environmental Liens; (v) each Borrower shall, at its sole cost and expense,
          fully and expeditiously cooperate in all activities pursuant to Subsection
          4.10(c) below,
          including but not limited to providing all relevant information and making
          knowledgeable persons available for interviews; (vi) each Borrower shall,
          at its sole cost and expense, perform any environmental site assessment
          or other
          investigation of environmental conditions in connection with the Projects,
          pursuant to any reasonable written request of Administrative Agent, upon
          Administrative Agent's reasonable belief that any Project is not in compliance
          with all Environmental Laws in all material respects, and share with
          Administrative Agent the reports and other results thereof, and Administrative
          Agent and Lenders shall be entitled to rely on such reports and other results
          thereof; (vii) each Borrower shall, at its sole cost and expense, comply
          with all reasonable written requests of Administrative Agent to
          (A) reasonably effectuate remediation of any Hazardous Materials in, on,
          under or from the Projects as required by Environmental Laws; and
          (B) comply in all material respects with any Environmental Law;
          (viii) Borrower shall not allow any Operating Lessee or other user of the
          Projects to violate any Environmental Law; and (ix) each Borrower shall
          immediately notify Administrative Agent in writing after

         

        
          
            
            

          

          
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        it
          has
          become aware of (A) any material Release or threatened Release of Hazardous
          Materials in, on, under, from or migrating towards the Projects; (B) any
          non-compliance with any Environmental Laws related in any way to the Projects
          in
          any material respects; (C) any actual or potential Environmental Lien
          against the Projects; (D) any required or proposed remediation of
          environmental conditions relating to the Projects; and (E) any written or
          other communication of which any Borrower becomes aware from any source
          whatsoever (including but not limited to a Governmental
          Authority) effecting or relating in any way to Hazardous Materials and the
          Borrowers or any Project.

         

        (b)    Administrative
          Agent and any other Person designated by Administrative Agent, including
          but not
          limited to any representative of a Governmental Authority, and any environmental
          consultant, and any receiver appointed by any court of competent jurisdiction,
          shall have the right, but not the obligation, to enter upon the Projects
          at all
          reasonable times to assess any and all aspects of the environmental condition
          of
          the Projects and its use, including but not limited to conducting any
          environmental assessment or audit (the scope of which shall be determined
          in
          Administrative Agent's sole discretion) and taking samples of soil,
          groundwater or other water, air, or building materials, and conducting
          other
          invasive testing, provided, however, that so long as no Default has occurred
          and
          is continuing, Borrower shall have the right to approve any sampling or
          other
          invasive testing, such approval not to be unreasonably withheld. Each Borrower
          shall cooperate with and provide access to Administrative Agent and any
          such
          person or entity designated by Administrative Agent.

         

        (c)    Each
          Borrower shall establish and comply with that any operations and maintenance
          program if recommended by Administrative Agent's environmental consultant
          with
          respect to the Projects, in form and substance reasonably acceptable to
          Administrative Agent, and prepared by an environmental consultant reasonably
          acceptable to Administrative Agent, which program may address any
          asbestos-containing material or lead based paint that may now or in the
          future
          be detected at or on the Projects. Without limiting the generality of the
          preceding sentence, Administrative Agent may require to the extent reasonable
          under the circumstances (i) periodic notices or reports to Administrative
          Agent in form, substance and at such intervals as Administrative Agent
          may
          specify, (ii) an amendment to such operations and maintenance program to
          address changing circumstances, laws or other matters, (iii) at each
          Borrower's sole expense, supplemental examination of the Projects by consultants
          specified by Administrative Agent, (iv) access to the Projects by
          Administrative Agent, its agents or servicer, to review and assess the
          environmental condition of the Projects and each Borrower's compliance
          with any
          operations and maintenance program, and (v) variation of the operations and
          maintenance program in response to the reports provided by any such
          consultants.

         

        (d)    If
          any
          Release or disposal of Hazardous Materials shall occur or shall have occurred
          on
          any real property or any other assets of any Borrower, such Borrower will
          cause
          the prompt containment and removal of such Hazardous Materials and the
          remediation of such real property or other assets as is necessary to comply
          in
          all material respects with all Environmental Laws and to preserve the value
          of
          such real property or other assets. Without limiting the generality of
          the
          foregoing, each Borrower shall comply with each

         

        
          
            
            

          

          
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        Environmental
          Law requiring the performance at any Project by any Borrower or any other
          Credit
          Party of activities in response to the Release or threatened Release of
          a
          Hazardous Material.

         

        (e)    If
          requested by Administrative Agent, Borrowers
          will provide Administrative Agent within thirty (30) days after written
          demand therefor with a bond, letter of credit or similar financial assurance
          evidencing to the reasonable satisfaction of Administrative Agent that
          sufficient funds are available to pay the cost of removing, treating and
          disposing of any Hazardous Materials or Hazardous Materials Contamination
          and
          discharging any assessment which may be established on any property as
          a result
          thereof, such demand to be made, if at all, upon Administrative Agent's
          reasonable business determination that the failure to remove, treat or
          dispose
          of any Hazardous Materials or Hazardous Materials Contamination, or the
          failure
          to discharge any such assessment, could reasonably be expected to have
          a
          Material Adverse Effect.

         

        Section
          4.11 Syndication. 

         

        Borrower
          will enter into such non-material modifications (which shall in no event
          adversely change or effect the rights or obligations of Borrowers) to the
          Financing Documents as Administrative Agent may reasonably request in order
          to
          complete a successful syndication of the Loans and the Loan commitments
          as
          determined by Administrative Agent in the exercise of its reasonable discretion.
          Such modifications shall include, without limitation, reallocation of the
          Term
          Loan Commitment.

         

        Section
          4.12 Further
          Assurances.

         

        (a)    Each
          Borrower will at its own cost and expense, cause to be promptly and duly
          taken,
          executed, acknowledged and delivered all such further acts, documents and
          assurances as may from time to time be necessary or as Administrative Agent
          or
          the Required Lenders may from time to time reasonably request in order
          to carry
          out the intent and purposes of the Financing Documents and the transactions
          contemplated thereby, including all such actions to establish, create,
          preserve,
          protect and perfect a first priority Lien (subject only to Permitted
          Liens) in favor of Administrative Agent for the benefit of the Lenders on
          the Collateral (including Collateral acquired after the date hereof), including
          on any and all assets of each Credit Party, whether now owned or hereafter
          acquired.

         

        (b)    Upon
          receipt of an affidavit of an officer of Administrative Agent or a Lender
          as to
          the loss, theft, destruction or mutilation of any Note or any other Financing
          Document which is not of public record, and, in the case of any such mutilation,
          upon surrender and cancellation of such Note or other applicable Financing
          Document, Borrowers will issue, in lieu thereof, a replacement Note or
          other
          applicable Financing Document, dated the date of such lost, stolen, destroyed
          or
          mutilated Note or other Financing Document in the same principal amount
          thereof
          and otherwise of like tenor.

         

        
          
            
            

          

          
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        Section
          4.13 Litigation. 

         

        Borrowers
          will give prompt written notice to Administrative Agent of any litigation
          or
          governmental proceedings pending or threatened (in writing) against any
          Credit
          Party which might have a Material Adverse Effect with respect to Borrowers,
          any
          other Credit Party or any Project.

         

        Section
          4.14 Deferred
          Maintenance. 

         

        During
          the 12 month period following the Closing Date, Borrowers shall spend at
          least
          $375,000 (over and above the expenditures required by Section
          2.5(d))
          for one
          or more of the deferred maintenance items reflected on and as required
          by
Schedule
          4.14.

         

        Section
          4.15 Power
          of Attorney.

         

        Each
          of
          the officers of Administrative Agent is hereby irrevocably made, constituted
          and
          appointed the true and lawful attorney for Borrowers (without requiring
          any of
          them to act as such) with full power of substitution to do the following,
          all during the existence of an Event of Default: (a) endorse the name of
          Borrowers upon any and all checks, drafts, money orders, and other instruments
          for the payment of money that are payable to Borrowers and constitute
          collections on Borrowers' Accounts; (b) execute in the name of Borrowers
          any schedules, assignments, instruments, documents, and statements that
          Borrowers are obligated to give Administrative Agent under this Agreement;
          (c) take any action Borrowers are required to take under this Agreement;
          and (d) do such other and further acts and deeds in the name of Borrowers
          that Administrative Agent reasonably may deem necessary or desirable to
          enforce
          any Account or other Collateral or perfect Administrative Agent's security
          interest or Lien in any Collateral. This
          power of attorney shall be irrevocable and coupled with an
          interest.

         

        Section
          4.16 Estoppel
          Certificates. 

         

        After
          written request by Administrative Agent, Borrowers, within fifteen
          (15) days and at their expense, will furnish Administrative Agent with a
          statement, duly acknowledged and certified, setting forth (a) the amount of
          the original principal amount of the Notes, and the unpaid principal amount
          of
          the Notes, (b) the rate of interest of the Notes, (c) the date
          payments of interest and/or principal were last paid, (d) any offsets or
          defenses to the payment of the Obligations, and if any are alleged, the
          nature
          thereof, (e) that the Notes and this Agreement have not been modified or if
          modified, giving particulars of such modification, and (f) that there has
          occurred and is then continuing no Default or if such Default exists, the
          nature
          thereof, the period of time it has existed, and the action being taken
          to remedy
          such Default.

         

        ARTICLE
          5

        NEGATIVE
          COVENANTS

         

        Each
          Borrower agrees that, so long as any Credit Exposure exists:

         

        
          
            
            

          

          
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        Section
          5.1 Debt. 

         

        No
          Borrower will, directly or indirectly, create, incur, assume, guarantee
          or
          otherwise become or remain directly or indirectly liable with respect to,
          any
          Debt, except for: (a) Debt under the Financing Documents;
          (b) unsecured Debt in the form of trade payables aged in a manner
          consistent with ARC's past business practices; but in no event more than
          ninety
          (90) days; (c) Debt incurred or assumed for the purpose of financing
          all or any part of the cost of acquiring any equipment used by a Borrower
          in the
          operation of a Project in the Ordinary Course of Business (including through
          Capital Leases), in an aggregate principal amount at any time outstanding
          not
          greater than $100,000 per Project; (d) Debt, if any, arising under Swap
          Contracts; and (e) other Debt approved by Administrative Agent from time to
          time in its sole discretion.

         

        Section
          5.2 Liens.

         

        No
          Borrower will, directly or indirectly, create, assume or suffer to exist
          any
          Lien on any asset now owned or hereafter acquired by it, except for Permitted
          Liens.

         

        Section
          5.3 Contingent
          Obligations.

         

        No
          Borrower will, directly or indirectly, create, assume, incur or suffer
          to exist
          any Contingent Obligations, except for:

         

        (a)    Contingent
          Obligations arising in respect of the Debt under the Financing
          Documents;

         

        (b)    Contingent
          Obligations resulting from endorsements for collection or deposit in the
          Ordinary Course of Business;
          and

         

        (c)    Contingent
          Obligations arising under indemnity agreements with title insurers to cause
          such
          title insurers to issue to Administrative Agent mortgagee title insurance
          policies.

         

        Section
          5.4 Restricted
          Distributions. 

         

        No
          Borrower will, directly or indirectly, declare, order, pay, make or set
          apart
          any sum for any Restricted Distribution at any time during which any Default
          or
          Event of Default has occurred and is then continuing, or if such Restricted
          Distribution is reasonably likely to result in a monetary Default or Event
          of
          Default (including, without limitation, any violation of any financial
          covenant
          on a pro forma basis).

         

        Section
          5.5 Restrictive
          Agreements.

         

        No
          Borrower will, directly or indirectly enter into or assume any agreement
          (other
          than the Financing Documents) prohibiting the creation or assumption of any
          Lien upon its properties or assets, whether now owned or hereafter
          acquired.

         

        
          
            
            

          

          
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        Section
          5.6 Payments
          and Modifications of Subordinated Debt.

         

        No
          Borrower will, directly or indirectly declare, pay, make or set aside any
          amount
          for payment in respect of any Subordinated Debt except as may be permitted
          by
          the applicable Subordination Agreement.

         

        Section
          5.7 Consolidations,
          Mergers and Sales of Assets.

         

        No
          Borrower will, directly or indirectly (a) consolidate or merge with or into
          any other Person, or (b) consummate any Asset Dispositions other than
          dispositions of personal property assets for cash and fair value that the
          applicable Borrower determines in good faith is no longer used or useful
          in the
          business of such Borrower if
          all of
          the following conditions are met: (i) after giving effect to any such
          disposition, Borrowers are in compliance on a pro forma basis with the
          covenants
          set forth in Article 6 recomputed for the most recently ended month and
          quarter for which information is available as though such disposition and
          repayment had occurred during such month and quarter and is in compliance
          with
          all other terms and conditions of this Agreement; and (ii) no Default or
          Event of Default then exists or would result from any such
          disposition.
          

         

        (b)    Borrower
          shall not assign or attempt to assign its rights under this Agreement and
          any
          purported assignment shall be void. Borrower shall not suffer or permit
          any
          sale, transfer, lease (other than a Lease permitted by this Agreement),
          conveyance, alienation, pledge, assignment, mortgage, encumbrance hypothecation
          (other than Permitted Liens) or other disposition of (i) all or any portion
          of the Project or any portion of any other security for the Loan, (ii) all
          or any portion of the Borrower's right, title and interest (legal or equitable)
          in and to the Project or any portion of any other security for the Loan,
          or
          (iii) any interest in Borrower or any interest in Cypress JV (except that
          ARC or its wholly owned Affiliate may acquire the interest from CNL or
          an
          Affiliate of CNL so long as the Mezzanine Loan indebtedness is repaid in
          full)
          or General Partner (any of the foregoing, a "Transfer").
          In
          addition, if ARC fails to continue to exercise (A) control over the day
          to day
          management and operation of Borrower's business or the Projects pursuant
          to the
          Management Agreements, and (B) the power to appoint two members of the
          committee which manages Cypress JV during the term of the Loan, then Lender
          may,
          at Administrative Agent's option, declare the Loan to be immediately due
          and
          payable, and Administrative Agent may invoke any remedies permitted by
          the
          Financing Documents.

         

        (c)    In
          addition to the prohibitions set forth in Section 5.7(b) above, Borrower
          shall
          not engage in or permit a Transfer that would constitute or result in the
          occurrence of one or more non-exempt prohibited transactions under ERISA
          or the
          Internal Revenue Code. Borrower agrees to unwind any such Transfer upon
          notice
          from Lender or, at Lender's option, to assist Lender in obtaining such
          prohibited transaction exemption(s) from the United States Pension and
          Welfare
          Benefits Administration with respect to such Transfer as are necessary
          to remedy
          such prohibited transactions.

         

        
          
            
            

          

          
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        Section
          5.8 Purchase
          of Assets.

         

        (a)    No
          Borrower will, directly or indirectly (a) acquire or enter into any
          agreement to acquire any assets other than in the Ordinary Course of Business;
          (b) create, acquire or enter into any agreement to create or acquire any
          Subsidiary; (c) engage or enter into any agreement to engage in any joint
          venture or partnership with any other Person; or (d) acquire or own or
          enter into any agreement to acquire or own any investment in any
          Person.

         

        Section
          5.9 Transactions
          with Affiliates.

         

        Except
          as
          otherwise disclosed on Schedule
          5.9,
          and
          except for transactions that are disclosed to Administrative Agent in advance
          of
          being entered into and which contain terms that are no less favorable to
          the
          applicable Borrower than those which might be obtained from a third party
          not an
          Affiliate of any Credit Party, no Borrower will, directly or indirectly,
          enter
          into or permit to exist any transaction (including the purchase, sale,
          lease or
          exchange of any property or the rendering of any service) with any
          Affiliate of any Borrower. 

         

        Section
          5.10 Modification
          of Organizational Documents.

         

        No
          Borrower or Cypress JV will, directly
          or indirectly, amend
          or
          otherwise modify any Organizational Documents of such Person, except for
          such
          amendments or other modifications required under this Agreement, or by
          applicable Law and fully disclosed to Administrative Agent, or amendments
          which
          are not material, provided that such amendments are submitted to Lender
          no later
          than five (5) Business Days before becoming effective.

         

        Section
          5.11 Modification
          of Certain Agreements.

         

        Without
          Administrative Agent's prior written consent, not to be unreasonably withheld,
          no Borrower will, directly or indirectly, amend or otherwise modify any
          Material
          Contract, which amendment or modification in any case:

         

        (a)    is
          contrary to the terms of this Agreement or any other Financing
          Document;

         

        (b)    could
          reasonably be expected to be adverse to the rights, interests or privileges
          of
          the Administrative Agent or the Lenders or their ability to enforce the
          same;

         

        (c)    results
          in the imposition or expansion in any material respect of any restriction
          or
          burden on any Borrower; or

         

        (d)    reduces
          in any material respect any rights or benefits of any Borrower (it being
          understood and agreed that any such determination shall be in the reasonable
          discretion of the Administrative Agent).

         

        
          
            
            

          

          
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        Without
          Administrative Agent's prior written consent which may be granted or withheld
          in
          Administrative Agent's sole and absolute discretion, no Borrower will amend
          any
          Management Agreement. Each Borrower shall, prior to entering into any amendment
          or other modification of any of the foregoing documents, deliver to
          Administrative Agent reasonably in advance of the execution thereof, any
          final
          or execution form copy of amendments or other modifications to such
          documents.

         

        Section
          5.12 Fiscal
          Year.

         

        No
          Borrower will change its Fiscal Year without the prior written consent
          of
          Administrative Agent.

         

        Section
          5.13 Conduct
          of Business.

         

        No
          Borrower will, directly or indirectly, engage in any line of business other
          than
          those businesses engaged in on the Closing Date and businesses reasonably
          related thereto.

         

        Section
          5.14 Operating
          Leases.

         

        No
          Borrower will lease any Licensed Location under any Operating Lease without
          Administrative Agent's consent, which may be withheld in Administrative
          Agent's
          sole discretion.

         

        Section
          5.15 Lease
          Payments.

         

        No
          Borrower will, directly
          or indirectly, incur
          or
          assume (whether pursuant to a Guarantee or otherwise) any liability for
          rental payments under a lease if, after giving effect thereto, the aggregate
          amount of minimum lease payments that Borrowers have so incurred or assumed
          will
          exceed, $50,000 per Project for any calendar year under all such leases
          (excluding Capital Leases).

         

        Section
          5.16 Limitation
          on Sale and Leaseback Transactions.

         

        No
          Borrower will, directly or indirectly, enter into any arrangement with
          any
          Person whereby in a substantially contemporaneous transaction any Borrower
          sells
          or transfers all or substantially all of its right, title and interest
          in an
          asset and, in connection therewith, acquires or leases back the right to
          use
          such asset.

         

        Section
          5.17 Compliance
          with Anti-Terrorism Laws.

         

        Administrative
          Agent hereby notifies Borrowers that pursuant to the requirements of
          Anti-Terrorism Laws, and Administrative Agent's policies and practices,
          Administrative Agent is required to obtain, verify and record certain
          information and documentation that identifies Borrowers and its principals,
          which information includes the name and address of each Borrower and its
          principals and such other information that will allow Administrative Agent
          to
          identify such party in accordance with Anti-Terrorism Laws. 

         

        
          
            
            

          

          
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        No
          Borrower will, directly or indirectly, knowingly enter into any Financing
          Documents or Material Contracts with any Person listed on the OFAC Lists.
          Each
          Borrower shall immediately notify Administrative Agent if such Borrower
          has
          knowledge that any Borrower or any additional Credit Party is listed on
          the OFAC
          Lists or (a) is convicted on, (b) pleads nolo contendere to,
          (c) is indicted on, or (d) is arraigned and held over on charges
          involving money laundering or predicate crimes to money laundering. No
          Borrower
          will, directly or indirectly, (i) conduct any business or engage in any
          transaction or dealing with any Blocked Person, including, without limitation,
          the making or receiving of any contribution of funds, goods or services
          to or
          for the benefit of any Blocked Person, (ii) deal in, or otherwise engage in
          any transaction relating to, any property or interests in property blocked
          pursuant to Executive Order No. 13224, any similar executive order or other
          Anti-Terrorism Law, or (iii) engage in or conspire to engage in any
          transaction that evades or avoids, or has the purpose of evading or avoiding,
          or
          attempts to violate, any of the prohibitions set forth in Executive Order
          No. 13224 or other Anti-Terrorism Law. 

         

        ARTICLE
          6

        FINANCIAL
          COVENANTS

         

        Borrowers
          agree that, so long as any Credit Exposure exists:

         

        Section
          6.1 Definitions.

         

        (a)    As
          used
          in this Article 6, the following terms have the following meanings:

         

        (i)    "Debt
          Yield Ratio"
          means
          the ratio (expressed as a percentage) of Net Operating Income (measured for
          the trailing six (6) months and on an annualized basis) to the average
          outstanding balance of the Loans at the time of determination.

         

        (ii)    "Debt
          Service"
          means
          all debt service (principal, if any, interest and recurring charges and
          fees
          payable under this Agreement).

         

        (iii)    "Debt
          Service Coverage Ratio"
          means
          the ratio of Net Operating Income (measured for the trailing six (6) months
          and
          on an annualized basis) to Debt Service (measured for the trailing six
          (6)
          months on an annualized basis).

         

        (iv)    "Net
          Operating Income"
          means
          "Operating
          Revenue"
          for the
          applicable period annualized minus
          "Operating
          Expenses"
          for the
          applicable period.

         

        (v)    "Operating
          Revenue"
          means
          the sum of the following, based on customary industry accounting practices
          and
          reasonable adjustments made by Administrative Agent, and adjusted, however,
          to
          reflect a vacancy factor equal to the greater of actual vacancy or five
          percent
          (5%):

         

        (A)    all
          amounts collected by or on behalf of Borrowers (including payments from
          Licensed
          Operators) from residents of the Project

         

        
          
            
            

          

          
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        (including,
          without limitation, rent, patient day charges, assisted living services,
          rehabilitation service charges, non-refundable deposits, entrance fees
          and
          property fees), as recognized revenue under GAAP, excluding:
          (1) nonrecurring income, extraordinary items, revenues items of the type
          described in subpart (C) below and other non-property related income (each
          as reasonably determined by Administrative Agent); and (2) income from
          residents (i) that are thirty (30) or more days delinquent,
          (ii) that have been thirty (30) or more days delinquent two
          (2) or more times during the immediately prior twelve (12) month
          period, plus

         

        (B)    without
          duplication, all revenues of Licensed Operator in the form of reimbursements
          under Third Party Payor Programs for services rendered during the preceding
          three (3) months (and specifically excluding any cost report settlements or
          other payments received in respect of services rendered prior to the preceding
          three (3) months), plus

         

        (C)    without
          duplication, other operating revenues of Borrowers not to exceed $1,000.00
          per
          month for vending, catering and special events, food and beverage, parking,
          subleases and other occupancy payments (other than late fees and interest
          income) based upon collections and that are a normal, recurring operating
          revenue, minus

         

        (D)    rebates,
          free rent and other concessions made by Borrowers (or Manager) to induce
          residents to enter into Resident Agreements.

         

        (vi)    "Operating
          Expenses"
          means
          the sum of the following for any period: the expenses incurred by Borrowers
          and
          Manager in connection with operating the Projects (including any amounts
          of
          corporate overhead expense of ARC actually allocated by ARC and/or CNL
          to
          Borrowers and/or the Projects, if any), determined on a stabilized accrual
          basis
          for such period (as determined in accordance with GAAP, and as reasonably
          adjusted by Administrative Agent), including, without limitation:
          (1) recurring expenses (e.g., real estate tax and insurance expenses or
          deposits, tenant improvements, leasing commissions, carpeting replacement,
          appliance and drapery replacement and such others as determined by
          Lender) which are not paid out of the replacement reserve,
          (2) management fees (whether paid or not) in an amount equal to the
          greater of actual fees accrued or five percent (5%) of effective gross
          income for the Projects, (3) a replacement reserve (whether reserved or
          not) of not less than $300 per residential unit per annum, and (4) all
          interest and fee obligations accruing under any Debt (other than scheduled
          payments due and owing under the Loan). Insurance expenses shall be calculated
          at the greater of (1) actual annual insurance premiums plus claims paid or
          accrued (without duplication) for which no insurance coverage is available,
          or (2) $400 per residential unit, per year.
          "Operating
          Expenses"
          shall
          specifically exclude income taxes, depreciation, and amortization.

         

        Section
          6.2 [Reserved.]

         

        Section
          6.3 [Reserved.]

         

        
          
            
            

          

          
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        Section
          6.4 [Reserved.]

         

        Section
          6.5 Financial
          Covenant.

         

        Borrowers
          covenant and agree to maintain the following minimum Debt Yield Ratio and
          minimum Debt Service Coverage Ratio for the applicable period shown below
          throughout the term of the Loan: 

         

        
          	
                  Testing
                    Period

                	 	
                  Minimum
                    Debt

                  Yield
                    Ratio

                	 	
                  Minimum
                    Debt

                  Service
                    Coverage

                  Ratio

                
	
                  Each
                    six (6) month period ending December 31, 2006 and March 31,
                    2007

                	 	
                  6.00%

                	 	
                  none

                
	
                  Each
                    six (6) month period ending June 30, 2007, September 30, 2007,
                    December 31, 2007 and March 31, 2008

                	 	
                  8.00%

                	 	
                  1.10
                    to 1.00

                
	
                  Each
                    six (6) month period ending June 30, 2008, September 30, 2008
                    and December 31, 2008

                	 	
                  9.00%

                	 	
                  1.20
                    to 1.00

                
	
                  Each
                    six (6) month period thereafter

                	 	
                  10.00%

                	 	
                  1.20
                    to 1.00

                
	 	 	 	 	 

        

        Determinations
          of compliance with the covenants in this Section
          6.5
          (collectively, the "Financial
          Covenants") shall
          be calculated as of the first (1st)
          day of
          each calendar quarter (commencing with a calculation as of January 1,
          2007).

         

        Section
          6.6 Evidence
          of Compliance.

         

        Borrowers
          shall furnish to Lender, concurrently with the financial reports and
          documentation required by Section
          4.1(b)(v),
          evidence (in form and content satisfactory to Lender) of Borrowers'
          compliance with the covenants in this Article and evidence that no Event
          of
          Default specified in this Article has occurred. Such evidence shall include,
          without limitation, (a) a statement and report, on a form approved by
          Administrative Agent, detailing Borrowers' calculations, and (b) if
          requested by Administrative Agent, back-up documentation (including, without
          limitation, invoices, receipts and other evidence of costs incurred during
          such
          quarter as Administrative Agent shall reasonably require) evidencing the
          propriety of the calculations. 

         

        Section
          6.7 Financial
          Covenant Default.

         

        (a)    In
          the
          event that Borrowers fail to satisfy either of the Financial Covenants
          as of any
          calculation date (i.e., the date as of which covenant compliance is

         

        
          
            
            

          

          
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        calculated;
          not the date on which the determination of compliance or non-compliance
          is
          made), Borrowers shall, within ten (10) calendar days after the date the
          financial reports and compliance certificates required by Sections
          4.1(b)(v) and
          6.6
          are due,
          pay to Administrative Agent, as a mandatory prepayment, an amount (a
          "Covenant
          Prepayment") which,
          if such amount were applied against the outstanding principal balance of
          the
          Loans, would be sufficient to satisfy each of the Financial Covenants as
          of such
          calculation date, calculating the outstanding principal balance of the
          Loans
          after giving proforma effect to such Covenant Prepayment. Failure to satisfy
          one
          or both of the Financial Covenants shall be deemed an Event of Default
          under
Section
          11.1
          only if
          Borrowers fail to make the Covenant Prepayment, together with the proportionate
          amount of the Exit Fee owing with respect thereto, within said ten (10) day
          period.

         

        (b) Notwithstanding
          the provisions of Section 6.7(a), if Borrowers fail to satisfy one or both
          of
          the Financial Covenants for the first or second time during the term of
          the
          Loans and no monetary Default or Event of Default has occurred and is
          continuing, then, instead of applying the required Covenant Prepayment
          to the
          Loans, Administrative Agent shall hold such Covenant Prepayment as a cash
          collateral deposit ("Covenant Deposit") without interest, and the
          proportionate amount of the Exit Fee otherwise payable with respect thereto
          will
          not be payable except as and until provided below. If at any time after
          Administrative Agent receives a Covenant Deposit, Borrowers satisfy the
          Financial Covenants (without having to make a Covenant Prepayment and without
          taking into account the Covenant Deposit) for two (2) consecutive
          calendar quarters and provided that the Covenant Deposit has not theretofore
          been applied to the Indebtedness as a result of the occurrence of an Event
          of
          Default or the occurrence of a third failure to satisfy either or both
          of the
          Financial Covenants, the Covenant Deposit shall be returned to Borrowers.
          The
          Covenant Deposit, if any, shall be given proforma application to principal
          balance of the Loans solely for purposes of determining whether an additional
          amount should be paid to Administrative Agent and added to the Covenant
          Deposit
          if the Financial Covenants is not satisfied for a second time. If the Financial
          Covenants is not satisfied (whether or not a Covenant Prepayment is
          made) for a third time, then (i) Administrative Agent shall no longer
          be required to hold any Covenant Prepayments as a Covenant Deposit and
          all
          subsequent Covenant Prepayments shall be applied to the principal balance
          of the
          Loans and (ii) the Covenant Deposit, if any, shall be applied to the
          principal balance of the Loans and the proportionate amount of the Exit
          Fee with
          respect thereto shall be due and payable within ten (10) calendar days
          after the date of determination of non-compliance. The Covenant Deposit
          shall be
          Collateral. If an Event of Default occurs at any time, the Covenant Deposit
          may
          be immediately applied to the Indebtedness in such order as Administrative
          Agent
          determines and the Exit Fee shall be due with respect thereto.

         

        ARTICLE
          7

        CONDITIONS

         

        Section
          7.1 Conditions
          to Closing. 

         

        The
          obligation of each Lender to make the initial Loans shall be subject to
          the
          receipt or waiver by Administrative Agent of each agreement, document and
          instrument set

         

        
          
            
            

          

          
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        forth
          on
          the closing checklist prepared by Administrative Agent or its counsel and
          provided to Borrower in anticipation of Closing, each in form and substance
          satisfactory to Administrative Agent, and to the satisfaction of the following
          conditions precedent, each to the satisfaction of Administrative Agent
          in its
          sole discretion:

         

        (a)    evidence
          of the consummation of the transactions (other than the funding of the
          Loans and
          the closing of any acquisition for which the proceeds of the Loans are
          purchase
          money) contemplated by the Financing Documents; 

         

        (b)    the
          payment of all fees, expenses and other amounts due and payable under each
          Financing Document;

         

        (c)    the
          absence, since December 31, 2005, of any material adverse change in any
          aspect of the business, operations, properties, prospects or condition
          (financial or otherwise) of any Credit Party, or any event or condition
          which could reasonably be expected to result in such a material adverse
          change;

         

        (d)    evidence
          that ARC and CNL have invested a minimum of $7,649,850 of cash equity in
          Borrowers, of which CNL has invested a minimum of $1,459,750 of cash equity,
          in
          addition to CNL's equity contributions from the proceeds of the Mezzanine
          Loan,
          and such equity infusion has been used by Borrowers to fund the transactions
          under the Financing Documents and otherwise for working capital purposes,
          and
          all portions of such cash equity infusion which are not used on the Closing
          Date
          to fund the transactions under the Financing Documents shall remain available
          to
          Borrowers for working capital purposes and shall be unencumbered (other
          than by
          any Lien of Administrative Agent); and

         

        (e)    all
          conditions to funding of the Mezzanine Loan are satisfied.

         

        Section
          7.2 Searches.

         

        Before
          Closing, and thereafter (as and when determined by Administrative Agent
          in its
          discretion), Administrative Agent shall have the right to perform, all
          at
          Borrowers' expense, the searches described in clauses (a), (b) and
          (c) below against Borrowers and any other Credit Party, the results of
          which are to be consistent with Borrowers' representations and warranties
          and
          covenants under this Agreement:

         

        (a)    UCC
          searches with the Secretary of State and local filing offices of each
          jurisdiction where the applicable Person maintains its executive offices,
          a
          place of business, or assets and the jurisdiction in which the applicable
          Person
          is organized;

         

        (b)    Judgment,
          pending litigation, federal tax lien, personal property tax lien, and corporate
          and partnership tax lien searches, in each jurisdiction searched under
          clause
          (a) above; 

         

        (c)    Real
          property title and lien searches in each jurisdiction in which any real
          property
          Collateral is located; and

         

        
          
            
            

          

          
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        (d)    Searches
          of applicable corporate, limited liability company, partnership and related
          records to confirm the continued existence, organization and good standing
          of
          the applicable Person and the exact legal name under which such Person
          is
          organized.

         

        Section
          7.3 Certain
          Post-Closing Obligations.

         

        Borrowers
          shall complete and/or satisfy the obligations described on Schedule
          7.3
          within
          the time periods set forth therein. 

         

        ARTICLE
          8

        REGULATORY
          MATTERS

         

        Each
          Borrower agrees that, so long as any Credit Exposure exists (for the avoidance
          of doubt, any provisions relating to any CON with respect to any Licensed
          Location shall be applicable only to the extent CON is required or may
          hereafter
          be required under applicable Law with respect to such Licensed
          Location):

         

        Section
          8.1 Representations
          and Warranties Pertaining to Licensed Locations.

         

        To
          induce
          Administrative Agent and Lenders to enter into this Agreement and to make
          the
          Loans and other credit accommodations contemplated hereby, each Borrower
          hereby
          represents and warrants to Administrative Agent and each Lender that:

         

        (a)    Each
          of
          the Projects is an independent living facility with respect to which no
          Healthcare Permit is required for the operation thereof. None of the Licensed
          Locations are in violation of any Health Care Laws, except where any such
          violation would not have a Material Adverse Effect. 

         

        (b)    To
          the
          extent healthcare goods or services are provided at a Project, the Borrower
          that
          is the owner of such Project has (i) or is in the process of obtaining or
          causing the Licensed Operator to obtain each Healthcare Permit and other
          rights
          from, and has made all declarations and filings with, all applicable
          Governmental Authorities, all self regulatory authorities and all courts
          and
          other tribunals necessary, if any, to engage in the provision of such goods
          and/or services and (ii) no knowledge that any Governmental Authority is
          considering limiting, suspending or revoking any such Healthcare Permit.
          All
          Healthcare Permits which have been issued, if any, are valid and in full
          force
          and effect. Each Borrower who is the owner of a Licensed Location is or,
          when
          the applicable Healthcare Permit is issued, will be in material compliance
          with
          the terms and conditions of all such Healthcare Permits except where failure
          to
          be in such compliance or for a Healthcare Permit to be valid and in full
          force
          and effect would not have a Material Adverse Effect.

         

        (c)    If
          applicable, each Licensed Location has received and maintains accreditation
          in
          good standing and without impairment by all applicable accrediting
          organizations, to the extent required by law (including any equivalent
          regulation) or the terms of any Lease pertaining to the Licensed
          Location.

         

        
          
            
            

          

          
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        (d)    No
          Borrower is a participant in any federal program whereby any federal, state
          or
          local government or quasi-governmental body, agency, board or other authority
          may have the right to recover funds by reason of the advance of federal
          funds,
          including, without limitation, those authorized under the Hill-Burton Act
          (42
          U.S.C. 291, et
          seq.).
          No
          Borrower has received notice, and no Borrower is aware of any violation
          of
          applicable anti-trust laws of any federal, state or local government or
          quasi-governmental body, agency, board or other authority pertaining to
          the
          Licensed Locations.

         

        (e)    Each
          Borrower that is the owner of a Licensed Location is the owner of record
          of any
          CON pertaining to such Licensed Location. If under applicable Healthcare
          Laws,
          the CON for a Licensed Location operated by a Borrower merges into a
          state-issued license to operate the Licensed Location, then each such Borrower
          is the owner of record of any CON pertaining to such Licensed
          Location.

         

        (f)    Each
          Project located in a state where licensing as an independent living facility
          is
          not required under the applicable laws of the state where the Project is
          located.

         

        (g)    The
          Licensed Locations and Licensed Operators do not have any uncorrected licensure
          deficiencies.

         

        (h)    Each
          of
          the representations and warranties of the Licensed Operators set forth
          in
Section
          8.2
          below
          are true, complete and correct.

         

        (i)    If
          (i) any Borrower or is or becomes a "covered entity"
          within
          the meaning of HIPAA, or (ii) any Borrower is or becomes subject to the
          "Administrative Simplification"
          provisions of HIPAA, such Borrower is HIPAA Compliant. 

         

        Section
          8.2 Representations
          and Warranties Pertaining to Licensed Operators.

         

        To
          induce
          Administrative Agent and Lenders to enter into this Agreement and to make
          the
          Loans and other credit accommodations contemplated hereby, Borrowers hereby
          represent and warrant the following to Administrative Agent: 

         

        (a)    Each
          of
          the representations and warranties of Borrowers set forth in Sections
          8.1(a) through
          8.1(f) above
          are
          true, complete and correct.

         

        (b)    No
          Licensed Operator is in violation of any of the Health Care Laws, except
          where
          any such violation would not have a Material Adverse Effect. 

         

        (c)    To
          the
          extent goods or services are being provided at a Project which require
          a
          Healthcare Permit, each Licensed Operator has (i) or is in the process of
          obtaining each Healthcare Permit and other rights from, and has made all
          declarations and filings with, all applicable Governmental Authorities,
          all self
          regulatory authorities and all courts and other tribunals necessary to
          engage in
          the business conducted by it except for such Healthcare Permits with respect
          to
          which the failure to obtain would not have a Material Adverse Effect and
          (ii) no knowledge that any Governmental Authority is
          considering

         

        
          
            
            

          

          
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        limiting,
          suspending or revoking any such Healthcare Permit. All Healthcare Permits
          which
          have been issued, if any, are valid and in full force and effect. Each
          Licensed
          Operator is or upon issuance of the applicable Healthcare Permits, will
          be in
          material compliance with the terms and conditions of all such Healthcare
          Permits
          except where failure to be in such compliance or for a Healthcare Permit
          to be
          valid and in full force and effect would not have a Material Adverse
          Effect.

         

        (d)    To
          the
          extent a Licensed Operator submits claims to Governmental Payors, the Licensed
          Operator has the requisite provider number and, if required, Healthcare
          Permits,
          to bill Governmental Payors, except where the failure to have such provider
          number or Healthcare Permits would not have a Material Adverse Effect.
          To the
          extent a Licensed Operator submits claims to Third Party Payors, the Licensed
          Operator has any Healthcare Permit necessary to bill Third Party Payors
          except
          where the failure to have such Healthcare Permit would not have a Material
          Adverse Effect. There is no investigation, audit, claim review, or other
          action
          pending or, to the knowledge of any Licensed Operator, threatened which
          could
          result in a revocation, suspension, termination, probation, restriction,
          limitation, or non-renewal of any provider number or other Healthcare Permit
          or
          result in a Licensed Operator's or Licensed Location's exclusion from any
          Governmental Payor program or Third Party Payor Program, nor has any Third
          Party
          Payor Program made any decision not to renew any provider agreement related
          to
          the Licensed Locations, nor have the Licensed Locations or Licensed Operators
          made any decision not to renew any provider agreement, nor is there any
          action
          pending or threatened to impose material intermediate or alternative sanctions
          with respect to the Licensed Locations.

         

        (e)    All
          Medicare, Medicaid, and private insurance cost reports and financial reports
          submitted by the Licensed Operator will be when submitted materially accurate
          and complete and will not be misleading in any material respects. No cost
          reports for the Licensed Locations remain "open" or unsettled, except as
          otherwise disclosed to Administrative Agent.

         

        (f)    If
          applicable, each Licensed Operator has received and maintains accreditation
          in
          good standing and without impairment by all applicable accrediting
          organizations, to the extent required by law (including any equivalent
          regulation) or the terms of any Lease pertaining to the Licensed
          Location.

         

        (g)    No
          Licensed Operator has been, or to its knowledge has been threatened to
          be,
          (i) excluded from U.S. health care programs pursuant to 42 U.S.C. §1320a7
          and related regulations, (ii) "suspended" or "debarred" from selling
          products to the U.S. government or its agencies pursuant to the Federal
          Acquisition Regulation, relating to debarment and suspension applicable
          to
          federal government agencies generally (48 C.F.R. Subpart 9.4), or other
          applicable laws or regulations, or (iii) made a party to any other action
          by any governmental authority that may prohibit it from selling products
          to any
          governmental or other purchaser pursuant to any Law.

         

        (h)    No
          statement of charges or deficiencies has been made or penalty enforcement
          action
          has been undertaken against the Licensed Locations or any Licensed

         

        
          
            
            

          

          
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        Operator
          (or any officer, director or stockholder of any of the foregoing) during
          the last three (3) calendar years, and there have been no violations over
          the past three (3) calendar years which have threatened any certification
          of the Licensed Locations or any Licensed Operator for participation in
          Medicare, Medicaid or other Third Party Payor Programs. There are no current,
          pending or outstanding Medicare, Medicaid or Third Party Payor Program
          reimbursement audits or appeals pending at the Licensed Locations.

         

        (i)    Neither
          Licensed Operators nor the Licensed Locations are subject to any proceeding,
          suit or investigation by any federal, state or local government or
          quasi-governmental body, agency, board or authority or any other administrative
          or investigative body which may result in the imposition of a fine, alternative,
          interim or final sanction, a lower reimbursement rate for services rendered
          to
          eligible patients which has not been provided for on their respective financial
          statements, or which would have a material adverse effect on any Licensed
          Operator or the operation of the Licensed Locations, or which would result
          in
          the revocation, transfer, surrender, suspension or other impairment of
          the
          operating certificate or provider agreement of the Licensed Locations,
          nor any
          Healthcare Permit.

         

        (j)    There
          are
          no Resident Agreements with patients or residents of the Licensed Locations
          or
          with any other persons or organizations which deviate in any material adverse
          respect from the standard form customarily used at an independent living
          facility or which conflict with any statutory or regulatory requirements.
          All
          resident records at the Licensed Locations and in the possession of or
          created
          by the Licensed Operators, including resident trust fund accounts, are
          true and
          correct in all material respects.

         

        (k)    Neither
          the execution nor performance by Licensed Operator of any Financing Documents
          nor the exercise of any remedies by any party thereunder, will adversely
          affect
          Licensed Operator's right to receive payments and reimbursements from
          Governmental Payors with respect to the Licensed Locations, nor materially
          reduce the payments and reimbursements from Governmental Payors which Licensed
          Operator is receiving as of the date hereof. 

         

        (l)    Licensed
          Operator is not a participant in any federal program whereby any federal,
          state
          or local government or quasi-governmental body, agency, board or other
          authority
          may have the right to recover funds by reason of the advance of federal
          funds,
          including, without limitation, those authorized under the Hill-Burton Act
          (42
          U.S.C. 291, et
          seq.).

         

        (m)    Licensed
          Operator has received no notice, and is not aware of any violation in any
          material respect of applicable antitrust laws, employment or landlord-tenant
          Laws of any federal, state or local government or quasi-governmental body,
          agency, board or other authority with respect to the Licensed Locations
          or
          Licensed Operator.

         

        (n)    No
          Licensed Operator, or any of its respective officers, directors, shareholders
          or
          members has ever been charged with or investigated for committing any violation
          of any state or federal statute or regulation involving fraudulent and
          abusive

         

        
          
            
            

          

          
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        practices
          relating to its or his participation in state or federally sponsored
          reimbursement programs, including, without limitation, fraudulent billing
          practices. The Licensed Locations and, to the knowledge of the Licensed
          Operator, their contractors, have properly and legally billed all intermediaries
          and Third Party Payors for services rendered with respect to the Licensed
          Locations and have maintained their records to reflect such billing practices.
          No funds relating to the Licensed Operators are now, or, to the knowledge
          of the
          Licensed Operators will be, withheld by any Medicare intermediary or other
          Third
          Party Payor. Neither the Licensed Locations nor any other healthcare facilities
          managed by the Licensed Operator, nor any officer, director, shareholder
          or
          member of the Licensed Operator has engaged in any of the following:
          (i) knowingly and willfully making or causing to be made a false statement
          or representation of a material fact in any application for any benefit
          or
          payment under any Healthcare Laws; (ii) knowingly and willfully making or
          causing to be made any false statement or representation of a material
          fact for
          use in determining rights to any benefit or payment under any Healthcare
          Laws;
          (iii) failing to disclose knowledge by a claimant of the occurrence of any
          event affecting the initial or continued right to any benefit or payment
          under
          any Healthcare Laws on its own behalf or on behalf of another, with intent
          to
          secure such benefit or payment fraudulently; (iv) knowingly and willfully
          soliciting or receiving any remuneration (including any kickback, bribe
          or
          rebate), directly or indirectly, overtly or covertly, in cash or in kind
          or
          offering to pay such remuneration (A) in return for referring an individual
          to a Person for the furnishing or arranging for the furnishing of any item
          or
          service for which payment may be made in whole or in part by any Healthcare
          Laws, or (B) in return for purchasing, leasing or ordering or arranging for
          or recommending the purchasing, leasing or ordering of any good, facility,
          service, or item for which payment may be made in whole or in part by any
          Healthcare Laws; (v) presenting or causing to be presented a claim for
          reimbursement for services that is for an item or services that was known
          or
          should have been known to be (A) not provided as claimed, or (B) false
          or fraudulent; or (vi) knowingly and willfully making or causing to be made
          or inducing or seeking to induce the making of any false statement or
          representation (or omitting to state a fact required to be stated therein
          or
          necessary to make the statements contained therein not misleading) of a
          material fact with respect to (A) a facility in order that the facility may
          qualify for Governmental Authority certification, or (B) information
          required to be provided under 42 U.S.C. § 1320a-3.

         

        (o)    If
          applicable, Licensed Operator is HIPAA Compliant.

         

        Section
          8.3 Covenants
          Pertaining to Licensed Locations.

         

        To
          induce
          Administrative Agent and Lenders to enter into this Agreement and to make
          the
          Loans and other credit accommodations contemplated hereby, each Borrower
          hereby
          covenants and agrees with Administrative Agent and each Lender that:

         

        (a)    If
          required under applicable Healthcare Laws, each Borrower has and shall
          maintain
          in full force and effect a valid CON for no less than the number of units
          in the
          Licensed Locations as of the date of this Agreement. 

         

        
          
            
            

          

          
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        (b)    Each
          Borrower shall maintain any applicable CON free from restrictions or known
          conflicts which would materially impair the use or operation of each Licensed
          Location for its current use, and shall not permit any CON to become
          provisional, probationary or restricted in any way.

         

        (c)    No
          Borrower shall do (or suffer to be done by a Borrower or any Affiliate
          of a
          Borrower) any of the following without Administrative Agent's prior written
          consent, which consent shall not be unreasonably withheld, conditioned
          or
          delayed:

         

        (i)    Replace
          or transfer all or any part of any Licensed Location's units to another
          site or
          location;

         

        (ii)    Transfer
          or demise (other than a demised under an Operating Lease approved by
          Administrative Agent in writing) any CON or other Healthcare Permit or
          rights thereunder to any Person (other than Administrative Agent) or to any
          location other than the Licensed Location to which such CON or Governmental
          Approval pertains; or

         

        (iii)    Pledge
          or
          hypothecate any CON or other Healthcare Permit as collateral security for
          any
          indebtedness other than indebtedness to Lender.

         

        (d)    If
          any
          Licensed Location is currently accredited by JCAHO, Borrowers shall use
          diligent
          efforts to do the following except to the extent that a Licensed Operator
          is
          otherwise obligated to do the following pursuant to any Lease: (i) maintain
          such accreditation in good standing and without limitation or impairment,
          (ii) promptly submit to JCAHO a plan of correction for any deficiencies
          listed on any JCAHO accreditation survey report, and (iii) cure all such
          deficiencies within such time frame as is necessary to preserve and maintain
          in
          good standing and without limitation or impairment such JCAHO
          accreditation.

         

        (e)    Within
          twelve (12) months after the Closing Date, Borrowers will cause clinical
          therapy
          and rehabilitation services and companion programs to be offered and provided
          at
          the Projects and obtain all Healthcare Permits required to offer and provide
          such services and programs. All revenue from such services shall be payable
          to a
          Borrower and not a third party provider.

         

        Section
          8.4 Covenants
          Pertaining to Licensed Operators.

         

        To
          induce
          Administrative Agent and Lenders to enter into this Agreement and to make
          the
          Loans and other credit accommodations contemplated hereby, Borrowers hereby
          covenant and agree to the following:

         

        (a)    Licensed
          Operators shall do nothing to cause Borrower to breach any of the provisions
          of
Section
          8.3.

         

        
          
            
            

          

          
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        (b)    Licensed
          Operators will:

         

        (i)    timely
          file or caused to be timely filed (after giving effect to any extension
          duly
          obtained), all notifications, reports, submissions, Permit renewals, cost
          reports and other reports of every kind whatsoever required by Healthcare
          Laws
          (which reports will be materially accurate and complete in all respects
          and not
          misleading in any material respect and shall not remain open or
          unsettled);

         

        (ii)    if
          not
          issued as of the Closing Date, use diligent efforts to obtain all Healthcare
          Permits necessary under Healthcare Laws to carry on the business at the
          Licensed
          Locations as it is conducted on the Closing Date or as necessary to provide
          the
          services and programs described in Section
          8.3(e);
          and
          once any Healthcare Permit is issued, maintain in full force and effect,
          and
          free from restrictions, probations, conditions or known conflicts which
          would
          materially impair the use or operation of any Licensed Location for its
          current
          use, all such Healthcare Permits necessary under Healthcare Laws (A) to
          carry on the business of Licensed Operator as it is conducted on the Closing
          Date, and (B) if Licensed Operator receives or has applied for Medicaid or
          Medicare reimbursements as part of its business, to continue to receive
          reimbursement under Medicare and Medicaid in full compliance with all
          requirements for participation in, and for the licensure required to provide
          the
          services that are reimbursable under, Medicare and Medicaid, including,
          without
          limitation, the Medicare and Medicaid Patient Protection Act of 1987, as
          the
          same may be amended, and such other Third Party Payor Programs as to which
          any
          Licensed Operator receives or has applied for reimbursement as part of
          its
          business; 

         

        (iii)    not
          suffer or permit to occur any of the following:

         

        (A)    any
          transfer of a Healthcare Permit or rights thereunder to any Person (other
          than a
          Borrower or Administrative Agent) or to any location other than a Licensed
          Location approved by Administrative Agent in advance in writing;

         

        (B)    any
          pledge or hypothecation of any Healthcare Permit as collateral security
          for any
          indebtedness other than indebtedness to Administrative Agent;

         

        (C)    any
          rescission, withdrawal, revocation, amendment or modification of or other
          alteration to the nature, tenor or scope of any Healthcare Permit without
          Administrative Agent's prior written consent, including, without limitation,
          (I) any change to the authorized units/beds capacity of any Licensed
          Location and/or the number of units/beds approved by the applicable Governmental
          Authority, and (II) any transfer all or any part of any Licensed Location's
          authorized units or beds to another site or location; 

         

        (D)    any
          voluntary transfer of any resident of any Licensed Location to any other
          facility, unless such transfer is at the request of the resident (without
          economic incentives being given to the resident by an Affiliate of
          Licensed

         

        
          
            
            

          

          
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        Operator) or
          its payor or is for reasons relating to non-payment or the health, required
          level of medical care or safety of the resident to be transferred; 

         

        (E)    without
          Administrative Agent's prior written consent, the provision by Licensed
          Operator
          of additional regulated services at any Licensed Location, including, without
          limitation, medical services; or

         

        (F)    any
          fact,
          event or circumstance for which notice to Administrative Agent is required
          under
Section
          8.5;

         

        (iv)    operate
          or cause the Licensed Locations to be operated in a manner such that the
          Healthcare Permits remain in full force and effect;

         

        (v)    maintain
          or cause to be maintained the standard of care for the patients of the
          Licensed
          Locations at all times at a level necessary to insure a level of quality
          care
          for the patients of the Licensed Locations comparable to that existing
          on the
          date of this Agreement;

         

        (vi)    maintain
          or cause to be maintained a standard of care in the storage, use, transportation
          and disposal of all medical equipment, medical supplies, medical products
          and
          medical waste, of any kind and in any form, that is in accordance at least,
          that
          of the highest prudent industry standard and in conformity with all applicable
          regulations and laws;

         

        (vii)    operate
          or cause to be operated the Licensed Location in a prudent manner in compliance
          in all material respects with applicable Healthcare Laws and cause all
          Healthcare Permits and any other agreements necessary for the use and operation
          of the Licensed Location or as may be necessary for participation in Third
          Party
          Payor Programs to remain in effect without reduction in the number of licensed
          beds or beds authorized for use in applicable Third Party Payor
          Programs;

         

        (viii)    maintain
          or cause to be maintained sufficient inventory and equipment of types and
          quantities at the Licensed Location to enable Licensed Operator to adequately
          to
          perform operation of the Licensed Location; 

         

        (ix)    to
          the
          extent required by applicable law, maintain or cause to be maintained all
          deposits, including, without limitation, deposits relating to patients
          or
          Resident Agreements if such deposits are in cash such deposits are to be
          deposited and held by Licensed Operator (or the Manager under the Management
          Agreement), as the case may be, at such commercial or savings bank or banks
          as
          may be reasonably satisfactory to Administrative Agent, if such deposits
          are in
          any other form, such deposits are to be maintained as Administrative Agent
          may
          expressly permit. Any bond or other instrument which Licensed Operator
          (or the
          Manager under the Management Agreement), as the case may be, is permitted
          to
          hold in lieu of cash deposits under any applicable legal requirements shall
          be
          maintained in full force and effect unless replaced by cash deposits as
          hereinabove described, shall be issued by an institution reasonably satisfactory
          to Administrative Agent,

         

        
          
            
            

          

          
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        shall,
          if
          permitted pursuant to any legal requirements, name Administrative Agent
          as payee
          or mortgagee thereunder (or at Administrative Agent's option, be fully
          assignable to Administrative Agent) and shall, in all respects, comply with
          any applicable in legal requirements and otherwise be reasonably satisfactory
          to
          Administrative Agent. Licensed Operator shall, upon request, provide
          Administrative Agent with evidence reasonably satisfactory to Administrative
          Agent of Licensed Operator's compliance with the foregoing. Following the
          occurrence and during the continuance of any Event of Default, Licensed
          Operator
          shall, upon Administrative Agent's request, if permitted by any applicable
          legal
          requirements, turn over to Administrative Agent the deposits (and any interest
          theretofore earned thereon) with respect to the Licensed Locations, to be
          held by Administrative Agent subject to the terms of their related
          agreements;

         

        (x)    provide
          to Administrative Agent no later than two (2) Business Days after request,
          to the extent applicable, an accurate, complete and current list of all
          participation agreements with Third Party Payors with respect to the business
          of
          Licensed Operators (collectively, "Participation
          Agreements").
          Licensed Operators shall at all times comply in all material respects with
          all
          requirements, contracts, conditions and stipulations applicable to Licensed
          Operators in order to maintain in good standing and without default or
          limitation all such Participation Agreements; and

         

        (xi)    maintain
          a corporate health care regulatory compliance program ("CCP") which
          includes at a minimum, the elements of an effective compliance program,
          as
          published in the Federal Register from time to time, by the Department
          of Health
          and Human Services, Office of Inspector General (or any successor Governmental
          Authority), without regard to whether such program is specifically applicable
          to
          the operations at the Licensed Locations.

         

        (c)    No
          Licensed Operator, shall, other than in the normal course of business,
          change
          the terms of any of the Medicaid, Medicare or other Third Party Payor Programs
          or its normal billing payment and reimbursement policies and procedures
          with
          respect thereto (including without limitation the amount and timing of
          finance
          charges, fees and write-offs).

         

        (d)    No
          Licensed Operator or any manager of the Licensed Locations shall rescind,
          withdraw, revoke, amend, modify, supplement, or otherwise alter the nature,
          tenor or scope of the Healthcare Permits for the Licensed Locations.

         

        (e)    If
          any
          Licensed Location is currently accredited by JCAHO, Licensed Operators
          shall
          (i) maintain such accreditation in good standing and without limitation or
          impairment, (ii) promptly submit to JCAHO a plan of correction for any
          deficiencies listed on any JCAHO accreditation survey report, and
          (iii) cure all such deficiencies within such time frame as is necessary to
          preserve and maintain in good standing and without limitation or impairment
          such
          JCAHO accreditation.

         

        
          
            
            

          

          
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        Section
          8.5 Special
          Notices to Administrative Agent.

         

        Borrowers
          shall notify Administrative Agent within three (3) Business Days of
          Borrower's becoming aware of (but in any event prior to Borrowers submitting
          any
          requests for advances of reserves or escrows), and shall contractually
          obligate
          (via written agreement acceptable to Administrative Agent) the Licensed
          Operators to notify Administrative Agent of the occurrence of, any of the
          following facts, events or circumstances, whether existing or pending,
          together
          with such supporting data and information as shall be necessary to fully
          explain
          to Administrative Agent the scope and nature of the fact, event or circumstance,
          and shall provide to Administrative Agent within two (2) Business Days of
          Administrative Agent's request, such additional information as Administrative
          Agent shall request regarding such disclosure: 

         

        (a)    a
          Licensed Operator or any Credit Party, has become subject to any federal,
          state,
          local governmental or private payor civil or criminal investigations, inquiries,
          validation review, program integrity review or reimbursement audits or
          statement
          of deficiencies involving and/or related to its compliance with Healthcare
          Laws
          (including, without limitation, an inquiry or investigation of any Person
          having
          "ownership, financial or control interest" in any Borrowers (as that phrase
          is
          defined in 42 C.F.R. § 420.201 et
          seq.))
          which,
          if adversely determined, could reasonably be expected to have a Material
          Adverse
          Effect, but excluding, where such certification is not existent as of the
          Closing Date, issues related to initial Medicare or Medicaid certification
          ;

         

        (b)    that
          an
          owner, officer, manager, employee or Person with a "direct or indirect
          ownership
          interest" (as that phrase is defined in 42 C.F.R. § 420.201) in a Licensed
          Operator or a Credit Party: (A) has had a civil monetary penalty assessed
          against him or her pursuant to 42 U.S.C. § 1320a-7a or is the subject of a
          proceeding seeking to assess such penalty; (B) has been excluded from
          participation in a Federal Health Care Program (as that term is defined
          in 42
          U.S.C. § 1320a-7b) or is the subject of a proceeding seeking to assess
          such penalty; (C) has been convicted (as that term is defined in 42 C.F.R.
§ 1001.2) of any of those offenses described in 42 U.S.C.
§ 1320a-7b or 18 U.S.C. §§ 669, 1035, 1347, 1518 or is the subject of
          a proceeding seeking to assess such penalty; or (D) has been involved or
          named in a U.S. Attorney complaint made or any other action taken pursuant
          to
          the False Claims Act under 31 U.S.C. §§ 3729-3731 or qui tam action brought
          pursuant to 31 U.S.C. § 3729 et
          seq.;

         

        (c)    any
          claims, actions or appeals before any commission, board or agency charged
          with
          administering Healthcare Laws or programs operated under Healthcare Laws
          (including without limitation any intermediary or carrier, the Provider
          Reimbursement Review Board or the Administrator of the Center for Medicare
          Services) with respect to any state or federal Medicare or Medicaid cost
          reports or claims filed by any Licensed Operator, or any disallowance by
          any
          commission, board or agency in connection with any audit of such cost reports,
          to the extent such audits are not routine;

         

        (d)    [Reserved];

         

        
          
            
            

          

          
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        (e)    [Reserved];

         

        (f)    any
          liability in respect of amounts received by Borrowers or any Licensed Operator
          for the purchase or improvement of any real property under restricted or
          conditioned grants or donations, including, without limitation, monies
          received
          under the Public Health Service Act, 42 U.S.C. Section 291 et
          seq.;

         

        (g)    the
          voluntary disclosure by any Credit Party or Licensed Operator to the Office
          of
          the Inspector General of the United States Department of Health and Human
          Services, a Medicare fiscal intermediary or any state's Medicaid program
          of a
          potential material overpayment matter involving the submission of claims
          to such
          payor by any Licensed Operator;

         

        (h)    receipt
          by any Credit Party or Licensed Operator of any notice or communication
          from the
          Joint Commission on Accreditation of Healthcare Organizations that a Licensed
          Location is (A) subject to or is required to file a plan of correction with
          respect to any accreditation survey, or (B) in danger of losing its
          accreditation due to a failure to comply with a plan of correction;

         

        (i)    any
          charges of resident abuse which are made in any legal or regulatory proceedings
          or material licensing violations involving the Licensed Operator at the
          Licensed
          Locations;

         

        (j)    if
          applicable, any health care survey report related to licensure or certification
          (including, without limitation, an annual or biannual Medicare or Medicaid
          certification survey report) which includes any statement of material
          deficiencies pertaining to any Licensed Operator or any of the Licensed
          Locations (whether via CMS 2567 form or otherwise);

         

        (k)    without
          duplication, any failure of any Credit Party or Licensed Operator to comply
          with
          any covenants or conditions in this Article 8;

         

        (l)    any
          revocation, suspension, termination, probation, restriction, limitation,
          denial,
          or nonrenewal affecting any Licensed Operator with respect to any Medicare
          and/or Medicaid participation or provider agreement, certification, billing
          number, assignment (via CMS 855 forms or otherwise), billing agent or electronic
          funds transfer instruction, including, without limitation, any denial of
          payment
          for new admissions; and/or

         

        (m)    any
          revocation, suspension, termination, probation, restriction, limitation,
          denial
          or nonrenewal affecting any Licensed Operator with respect to any participation
          or provider agreement with any Third Party Payor.

         

        Section
          8.6 Cure
          of Healthcare Laws Violations.

         

        If
          there
          shall occur any fact, event or circumstance for which Borrowers or Licensed
          Operators are required to give Administrative Agent notice under Section
          8.5
          above,
          or if there shall occur any breach of this Article 8 (or the corresponding
          provisions of

         

        
          
            
            

          

          
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        any
          Financing Document), Borrowers shall take, and shall cause the Licensed
          Operators to take (subject to the terms of any Financing Documents and
          the terms
          of any Lease to the Licensed Operator), such action as is necessary to
          validly
          challenge or otherwise appropriately respond to such fact, event or circumstance
          within any timeframe required by applicable Healthcare Laws, and shall
          thereafter diligently pursue the same to a favorable conclusion, all to
          the
          effect that the fact, event or circumstance giving rise to Borrowers' or
          Licensed Operators' notice obligation under Section
          8.5
          or the
          breach of this Article 8 (or the corresponding provisions of any Financing
          Documents), shall be dismissed, rescinded, eliminated and otherwise cease
          to
          exist on that date which is the earlier to occur of (a) sixty
          (60) days after the date any Borrower became aware of such fact, event or
          circumstance, or (b) the expiration of any cure period given under
          applicable Healthcare Laws to cure any such breach. Provided that Borrowers
          are
          at all times in compliance with the foregoing covenants and diligently
          pursue
          and obtain the cure described above within the timeframe described above,
          the
          existence of any fact, event or circumstance for which Borrowers or Licensed
          Operators are required to give Administrative Agent notice under Section
          8.5,
          or the
          existence of a breach of this Article 8 (or the corresponding provisions
          of any
          Financing Documents), shall not, in and of itself, constitute a breach
          of
          Borrowers' or Licensed Operators obligations hereunder or thereunder unless
          the
          same shall (y) have a Material Adverse Effect, or (z) have occurred as
          a result of any Credit Parties' or any Licensed Operators' negligence,
          willful
          misconduct, willful breach of this Agreement or Healthcare Laws or failure
          to
          adhere to commercial reasonable standards of operations.

         

        Section
          8.7 Licensed
          Operator; Manager.

         

        (a)    Without
          in any way limiting the other provisions of this Agreement, Borrowers shall
          not
          change the Licensed Operator of any Licensed Location. Borrowers shall
          cause the
          Licensed Locations at all times to be operated by the Licensed Operators
          identified on Schedule
          8.7.
          If the
          Licensed Operator for a Licensed Location is a Person separate and distinct
          from
          Borrowers as of the date of this Agreement, then, without Administrative
          Agent's
          prior written consent, no Borrower shall become the Licensed Operator for
          such
          Licensed Location, nor shall Borrowers or any Affiliate of any Borrower
          render
          any regulated healthcare service at any Licensed Location in connection
          with or
          in the furtherance of the operation of the Licensed Location.

         

        (b)    Borrowers
          shall not change or permit any Licensed Operator to change the manager
          of any
          Licensed Location or make any modification, amendment, termination or
          cancellation of any management contract for any Licensed Location or agreements
          with brokers, without the prior written consent of Administrative Agent
          in its
          sole and absolute discretion. Any substitute property manager shall be
          required
          to enter into an assignment and subordination of management or operating
          agreement in form and substance reasonably satisfactory to Administrative
          Agent.
          Borrowers shall, and shall cause the Projects initially and at all times
          until a
          substitute property manager is approved by Administrative Agent to be managed
          by
          ARC or an Affiliate or Affiliates of ARC approved by Administrative Agent
          (collectively in the singular, the "Manager") pursuant
          to management/operating agreements approved by Administrative Agent in
          writing
          (the "Management
          Agreements").
          Such
          restrictions and approval rights are solely for the purposes of assuring
          that
          the Projects are

         

        
          
            
            

          

          
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        managed
          and operated in a first-class manner consistent with Healthcare Laws and
          the
          preservation and protection of the Licensed Locations as security for the
          Obligations and shall not place responsibility for the control, care, management
          or repair of the Licensed Locations upon Administrative Agent, or make
          Administrative Agent responsible or liable for any negligence in the management,
          operation, upkeep, repair or control
          of
          the Licensed Locations.

         

        Section
          8.8 Transfer
          of Healthcare Permits and Operations.

         

        Upon
          written notice from Administrative Agent to Borrowers following the occurrence
          of an Event of Default that is continuing hereunder, or immediately if,
          at any
          time during the term hereof, a Licensed Operator vacates any Licensed Location,
          the following provisions shall be effective:

         

        (a)    Borrowers
          shall, or shall cause Licensed Operator to, cooperate with the Administrative
          Agent to effectuate a change of ownership of the Healthcare Permits for
          any
          Licensed Location to a replacement operator designated by Administrative
          Agent
          ("Replacement
          Operator"),
          subject to required approval of any Governmental Authority, and in connection
          therewith, cooperate to effectuate, if requested, the assignment of any
          Third
          Party Payor or Governmental Payor contracts (to the extent assignable).
          Borrowers further shall provide to Administrative Agent all information
          and
          records requested by Administrative Agent in connection with the change
          of
          ownership of the Healthcare Permits; and

         

        (b)    In
          order
          to facilitate an efficient transfer of the operations of any Licensed Location,
          Borrowers shall, if and to the extent requested by Administrative Agent,
          (i) deliver to Administrative Agent copies of all Healthcare Permits and
          the most recent reports and notices pertaining to such Licensed Location
          required to be delivered under Section
          8.5;
          (ii) continue and maintain, and cause Licensed Operator to continue and
          maintain, the operation of such Licensed Location in the ordinary course
          of
          business, including, without limitation, the retention of all residents
          at the
          Licensed Location to the fullest extent possible until the transfer of
          the
          operations of such Licensed Location to the Replacement Operator is completed;
          (iii) enter into such operation transfer agreements, management agreements,
          and other agreements as may be requested by Administrative Agent until
          the
          transfer of the operations of such Licensed Location to the Replacement
          Operator
          is completed; and (iv) provide continued access to Administrative Agent and
          its agents to show such Licensed Location to potential replacement operators.
          Subject to all laws governing the privacy and confidentiality of individually
          identifiable health information, Borrowers hereby consents to the disclosure
          by
          Administrative Agent to potential replacement operators of Borrowers' financial
          statements, licensure reports and surveys, financial and property due diligence
          materials and other documents, materials and information relating to the
          Licensed Locations.

         

        
          
            
            

          

          
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        ARTICLE
          9

        REAL
          PROPERTY MATTERS

         

        Each
          Borrower agrees that, so long as any Credit Exposure exists:

         

        Section
          9.1 Leases;
          Resident Agreements.

         

        (a)    Without
          the prior written consent of Administrative Agent, Borrowers shall not:
          (i) enter into any Leases, other than Permitted Leases; (ii) modify,
          amend, renew, surrender, terminate, consent to a sublease of, consent to
          a
          transfer of, abate rent or other payments due under or otherwise grant
          any
          financial or other concession under any Material Lease or any Permitted
          Lease if
          the effect thereof would cause the Permitted Lease to become a Material
          Lease;
          (iii) accept any rental payment under any Leases more than one
          (1) month in advance of its due date or in violation of the cash management
          or lockbox provisions of this Agreement; or (iv) enter into any ground
          lease or master operating lease of any Project.

         

        (b)    Without
          the prior written consent of Administrative Agent, Borrowers shall not,
          and
          shall not permit the Manager to: (i) modify in any material respect the
          form of Resident Agreement previously approved by Administrative Agent;
          provided
          that
          Borrowers will submit all proposed form modifications to Administrative
          Agent
          prior to the use thereof, (ii) accept any payment under any Resident
          Agreement more than one (1) month in advance of its due date or in
          violation of the cash management or lockbox provisions of this Agreement;
          (iii) enter into any subleases with respect to any Project except for
          Permitted Leases; (iv) modify, amend, renew, surrender, terminate, consent
          to a sublease of, consent to a transfer of, abate rent or other payments
          due
          under or otherwise grant any financial or other concession under any sublease
          (except for Permitted Leases) with respect to any Project; or
          (v) enter into any Resident Agreement for a term of more than one
          (1) year, or upon rates other than market rates or upon a form that fails
          to comply in all material respects with applicable Laws.

         

        (c)    Borrowers
          shall, and shall cause Licensed Operator to, provide Administrative Agent
          with a
          copy of all Material Leases no less than ten (10) days prior to execution
          of such Leases and such Leases shall be on the form of lease previously
          approved
          by Administrative Agent (which form shall include an automatic attornment
          provision whereby, in the event of a foreclosure, the tenant automatically
          shall
          recognize the successor owner as landlord and such tenant shall have no
          right to
          terminate its lease in the event of such foreclosure). If Administrative
          Agent
          consents to any new Material Lease or the modification or renewal of any
          existing Material Lease, at Administrative Agent's request, Borrowers or
          Licensed Operator, as applicable, shall cause the tenant thereunder to
          execute a
          subordination and attornment agreement in form and substance satisfactory
          to
          Administrative Agent. 

         

        (d)    Any
          Operating Lease (or, at Administrative Agent's option, any subordination
          agreement between Administrative Agent and the Operating Lessee
          pertaining

         

        
          
            
            

          

          
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        to
          such
          Operating Lease) shall at all times be in form and substance satisfactory
          to Administrative Agent.

         

        (e)    Borrowers
          shall not suffer or permit any breach or default to occur in any of Borrowers'
          obligations under any of the Material Leases nor suffer or permit the same
          to
          terminate by reason of any failure of Borrowers to meet any requirement
          of any
          Material Lease. 

         

        (f)    Borrowers
          shall not suffer or permit any breach or default by a Licensed Operator
          to occur
          in any of the Licensed Operator's obligations under any Resident Agreement
          nor
          suffer or permit the same to terminate by reason of any failure of the
          Licensed
          Operator to meet any requirement of any Resident Agreement.

         

        (g)    If
          any
          Borrower has authorized or permitted an Operating Lessee to apply for or
          maintain the CON, or if the CON for a Licensed Location operated by an
          Operating
          Lessee merges into a state-issued license to operate the Licensed Location,
          Borrower shall not, at any time, pledge, transfer, hypothecate or otherwise
          alienate the CON.

         

        (h)    If
          the
          Licensed Operator (other than ARC) for a Licensed Location is a Person
          separate
          and distinct from the Borrowers, then the Licensed Operator's use or occupancy
          of the Licensed Location shall at all times be pursuant to a management
          or
          service agreement (each, a "Service
          Agreement")
          approved by Administrative Agent. The term Service Agreement shall not
          include
          the Management Agreement. Any Service Agreements existing as of the Closing
          Date
          are identified on Schedule
          9.1(h).
          Each
          Service Agreement shall provide Administrative Agent the right to terminate
          the
          rights of the Licensed Operator upon Administrative Agent (or its designee)
          or
          any receiver taking possession of the applicable Project or acquisition
          of the
          applicable Project through foreclosure, a deed in lieu of foreclosure UCC
          sale
          or otherwise. In the event a Licensed Operator loses its license to provide
          the
          goods or services covered by a Service Agreement, Borrowers shall act in
          good
          faith to promptly replace such Service Agreement or assist such Licensed
          Operator to reinstate such license in accordance with the terms of the
          applicable Service Agreement.

         

        Section
          9.2 Project
          Use and Operation.

         

        (a)    Without
          the prior written consent of Administrative Agent in each instance, which
          consent shall not be unreasonably withheld or delayed, Borrowers shall
          not
          demolish, remove, construct, or, except as otherwise expressly provided
          herein,
          restore, or alter the Projects or any portion thereof in any material respect;
          nor consent to or permit any such demolition, removal, construction,
          restoration, addition or alteration which would diminish in any material
          respect
          the value of the Projects. No excavation, construction, earth work, site
          work or
          any other mechanic's lienable work shall be done to or for the benefit
          of a
          Project, without Administrative Agent's approval, except for normal repair
          and
          maintenance in the ordinary course of business. Borrowers shall, at their
          expense, (i) take good care of the Projects including grounds generally,
          and utility systems and sidewalks, roads, alleys, and curbs therein, and
          shall
          keep the same in good, safe and insurable condition and in compliance with
          all
          applicable Laws in all material respects, (ii) promptly make all repairs
          to

         

        
          
            
            

          

          
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        the
          Projects, above grade and below grade, interior and exterior, structural
          and
          nonstructural, ordinary and extraordinary, unforeseen and foreseen, which
          are
          necessary in order to maintain the Projects in a manner consistent with
          their
          quality and use as required hereby, and (iii) not commit or suffer to be
          committed any waste of the Projects or do or suffer to be done anything
          which
          will increase the risk of fire or other hazard to the Projects or impair
          the
          value thereof. Borrowers shall keep the sidewalks, vaults, gutters and
          curbs
          comprising, or adjacent to, the Projects, clean and free from dirt, snow,
          ice,
          rubbish and obstructions.

         

        (b)    Unless
          required by applicable Law, Borrowers shall not permit or engage in changes
          in
          the use of any Project (including any change from residential to non-residential
          use, or from non-residential use to residential use) from the use at the
          time this Agreement was executed without Administrative Agent's prior written
          consent. Borrowers shall not request and shall not initiate or acquiesce
          in a
          change in the plat of subdivision, or zoning classification or use of any
          Project, or grant any encumbrances or easements burdening any Project,
          without
          in each case obtaining Administrative Agent's prior written consent, not
          to be
          unreasonably withheld. Borrowers shall not desert or abandon the Projects
          or
          cause or permit the use or occupancy of any part of the Projects to be
          discontinued if such discontinuance or use change would violate in any
          material
          respect any zoning or other law, ordinance or regulation.

         

        (c)    Borrowers
          shall not, and neither shall permit, the Projects or any portion thereof
          to be
          converted or take any preliminary actions which could lead to a conversion
          to
          condominium or cooperative form or ownership.

         

        (d)    All
          of
          Borrowers' personal property delivered upon, attached to, used or required
          to be
          used in connection with the operation of any Project (collectively, the
          "FF&E") shall
          always be located at such Project and except as otherwise permitted herein
          shall
          be kept free and clear of all Liens other than the Permitted Liens. Borrowers
          shall not, without the prior written consent of Administrative Agent, remove
          or
          permit to be removed from any Project any of the FF&E except to repair or
          replace the same except as otherwise permitted herein.

         

        (e)    Borrowers
          shall not consent to or initiate the joint assessment of any Project
          (i) with any other real property constituting a separate tax lot and
          Borrowers represent and covenant that each Project is are and shall remain
          a
          separate tax lot, or (ii) with any portion of the Projects which may be
          deemed to constitute personal property, or any other procedure whereby
          the lien
          of any taxes which may be levied against such personal property shall be
          assessed or levied or charged to the Project as a single lien.

         

        Section
          9.3 Casualty
          Proceeds.

         

        (a)    Borrowers
          shall notify Administrative Agent promptly of the commencement or threat
          of any
          Taking of the Projects or any portion thereof or of the occurrence of any
          casualty with respect to any Project.

         

        
          
            
            

          

          
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        (b)    Subject
          to the provisions of Section
          9.4
          below,
          Administrative Agent may elect to collect, retain and apply against the
          Obligations of Borrowers under this Agreement or any of the other Financing
          Documents all proceeds of insurance resulting from any loss at any Project
          or of
          any Taking of all or any portion of a Project (individually and collectively
          referred to as "Casualty
          Proceeds") after
          deduction of all expenses of collection and settlement, including attorneys'
          and
          adjusters' fees and charges. If any insurance proceeds are paid by check,
          draft
          or other instrument payable to any Borrower and Administrative Agent jointly,
          such Borrower authorizes Administrative Agent to endorse such Borrower's
          name
          thereon and do such other things as Administrative Agent may deem advisable
          to
          reduce the same to cash. Administrative Agent is authorized and empowered,
          and
          each Borrower hereby irrevocably appoints Administrative Agent as its (or
          their) attorney-in-fact (such appointment is coupled with an interest), at
          Administrative Agent's option, to make or file proofs of loss or damage
          and to
          settle and adjust any claim under insurance policies which insure against
          such
          risks, or to direct Borrowers, in writing, to agree with the insurance
          carrier(s) on the amount to be paid in regard to such loss. Any Casualty
          Proceeds remaining after repayment of the Obligations shall be paid by
          Administrative Agent to Borrowers.

         

        (c)    Notwithstanding
          anything in Section
          9.3(b) to
          the
          contrary, in the event of any casualty to any Project or any Taking of
          part of
          any Project, Administrative Agent agrees to make available the Casualty
          Proceeds
          to restoration of the Project if (i) no Event of Default exists,
          (ii) all Casualty Proceeds are deposited with Administrative Agent,
          (iii) in Administrative Agent's reasonable judgment, the amount of Casualty
          Proceeds, together with additional amounts, if any, deposited by Borrower
          with
          Administrative Agent, available for restoration of the Project is sufficient
          to
          pay the full and complete costs of such restoration, (iv) the casualty or
          Taking will not require residential units at the affected Project comprising
          in
          the aggregate more than fifteen percent (15%) of the occupancy space at the
          Project to become vacant during the restoration, (v) the income to
          Borrowers from such affected Project (excluding the effect of business
          interruption or rent loss insurance) will not decrease more than fifteen
          percent (15%) as a result of such casualty or Taking, (vi) in
          Administrative Agent's sole determination, the Obligations will not exceed
          seventy-five percent (75%) of the fair market value of the Project (based
          upon Administrative Agent's allocation of the Loan to such Project) after
          completion of restoration but prior to any re-tenanting, (vii) in
          Administrative Agent's reasonable determination, the affected Project can
          be
          restored to an architecturally and economically viable project in compliance
          with applicable Laws, and (viii) in Administrative Agent's reasonable
          determination, such restoration is likely to be completed not later than
          six
          (6) months prior to the Termination Date.

         

        (d)    Notwithstanding
          the foregoing, if the damage to the Project does not exceed $1,250,000,
          and so
          long as no Default has occurred and is continuing, Borrowers shall be entitled
          to receive the Casualty Proceeds attributable thereto, provided, however,
          that
          Borrowers shall use the Casualty Proceeds to restore or rebuild the Project
          in
          all material respects to its condition prior to such casualty or
          Taking.

         

        
          
            
            

          

          
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        Section
          9.4 Borrowers'
          Obligation to Rebuild and Use of Casualty Proceeds
          Therefor.

         

        (a)    In
          case
          Administrative Agent does not elect to apply or does not have the right
          to apply
          the Casualty Proceeds to the Obligations, as provided in Section
          9.3
          above,
          Borrowers shall:

         

        (i)    Proceed
          with diligence to make settlement with insurers or the appropriate governmental
          authorities and except as provided in Section
          9.3(d) above,
          cause the Casualty Proceeds to be deposited with Administrative
          Agent;

         

        (ii)    In
          the
          event of any delay in making settlement with insurers or the appropriate
          governmental authorities or effecting collection of the Casualty Proceeds,
          deposit with Administrative Agent the full amount required to complete
          construction as aforesaid;

         

        (iii)    If
          the
          damage exceeds $1,250,000, in the event the Casualty Proceeds are insufficient
          to assure Administrative Agent that the all contemplated repairs or construction
          will be completed, promptly deposit with Administrative Agent any amount
          necessary to assure that such contemplated repairs or construction will
          be
          completed; and

         

        (iv)    Promptly
          proceed with the assumption of construction of the applicable Project,
          including
          the repair of all damage resulting from such fire, Taking or other cause
          and
          restoration to its former or reasonably equivalent condition in all material
          respects.

         

        (b)    Any
          request by Borrowers for a disbursement by Administrative Agent of Casualty
          Proceeds and funds deposited by Borrowers shall be subject to reasonable
          construction loan type draw requirements as determined by Administrative
          Agent.

         

        (c)    Notwithstanding
          anything to the contrary, if the damage to the applicable Project does
          not
          exceed $1,250,000 and so long as no Default has occurred and is continuing,
          Borrowers may settle and adjust any claim without the consent of Administrative
          Agent and agree with the insurance company or companies (or Governmental
          Authority, in the case of a Taking) on the amount to be paid upon the loss,
          provided, however, that such adjustment is carried out in a competent and
          timely
          manner. Any monies collected under this subsection (c) shall be applied in
          accordance with Section
          9.3(d) below.

         

        (d)    If
          the
          damage to the applicable Project exceeds $1,250,000, then Administrative
          Agent
          may elect to file the respective proof of loss, settle and adjust any claim
          without the consent of Borrowers and agree with the insurance company on
          the
          amount of the Casualty Proceeds in the place and stead of Borrowers and
          without
          the consent of Borrowers; provided, however,
          that so long as no Event of Default exists, Administrative Agent agrees
          to work
          with Borrowers and to keep Borrowers fully apprised of any and all action
          Administrative Agent takes to settle or adjust any claim. Borrowers
          hereby release

         

        
          
            
            

          

          
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        Administrative
          Agent from any and all liability with respect to the settlement and adjustment
          by Administrative Agent of any claims in respect of any casualty. 

         

        Section
          9.5 Tax
          Reduction Proceedings. 

         

        After
          and
          during the continuance of an Event of Default, Borrowers shall be deemed
          to have
          appointed Administrative Agent as their attorney-in-fact to seek a reduction
          or
          reductions in the assessed valuation of the Projects for real property
          tax
          purposes or for any other purpose and to prosecute any action or proceeding
          in
          connection therewith. This power, being coupled with an interest, shall
          be
          irrevocable for so long as any part of the Obligations remains unpaid and
          any
          Event of Default shall be continuing. 

         

        Section
          9.6 Commingling;
          FIRPTA. 

         

        No
          Borrower has commingled the funds related to the Projects with funds from
          any
          other property. Neither Borrowers nor any partner, stockholder, member
          or other
          principal in Borrowers is or will be, and no legal or beneficial interest
          of a
          partner, stockholder, member or other principal in Borrowers is or will
          be held,
          directly or indirectly, by a "foreign corporation", "foreign partnership",
          "foreign trust", "foreign estate", "foreign person", "affiliate" of a "foreign
          person" or a "United States intermediary" of a "foreign person" within
          the
          meaning of the Internal Revenue Code Sections 897, 1445 or 7701, the
          Foreign Investments in Real Property Tax Act of 1980, the International
          Foreign
          Investment Survey Act of 1976, the Agricultural Foreign Investment Disclosure
          Act of 1978, or the regulations promulgated pursuant to such Acts or any
          amendments to such Acts.

         

        Section
          9.7 Representations
          and Warranties.

         

        To
          induce
          Administrative Agent and Lenders to enter into this Agreement and to make
          the
          Loans and other credit accommodations contemplated hereby, each Borrower
          hereby
          represents and warrants to Administrative Agent and each Lender the following
          with respect to each individual Project, standing alone and without reliance
          upon any other Project:

         

        (a)    Except
          as
          disclosed to Administrative Agent in writing, (i) no condemnation of any
          portion of any Project, has commenced or, to any Borrower's knowledge,
          is
          contemplated by any Governmental Authority, (ii) except as disclosed to
          Administrative Agent in writing, no condemnation or relocation of any roadways
          abutting any Project has commenced or, to any Borrower's knowledge, is
          contemplated by any Governmental Authority, and (iii) no proceeding to deny
          access to any Project from any point or planned point of access to any
          Project,
          has commenced or, to any Borrower's knowledge, is contemplated by any
          Governmental Authority.

         

        (b)    Except
          as
          disclosed to Administrative Agent in writing the contemplated use of any
          Project
          as an independent living facility and the contemplated accessory uses do
          not
          violate, in any material respects, (i) any Laws (including subdivision,
          zoning and building Laws and Environmental Laws), or (ii) any building
          permits, covenants,

         

        
          
            
            

          

          
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        conditions
          and restrictions of record, or agreements affecting any Project or any part
          thereof. Neither the zoning authorizations, subdivision approvals or variances
          nor any other right to construct or to use any Project is to any extent
          dependent upon or related to any real estate other than the real property
          constituting the Collateral. Except as disclosed to Administrative Agent
          on the
          land title surveys delivered to Administrative Agent prior to the Closing
          Date,
          no building or other improvement encroaches upon any property line, building
          line, set back line, side yard line or any recorded or visible easement
          (or
          other easement of which Borrowers are aware or has reason to believe may
          exist) with respect to any Project. Except as disclosed on such surveys, no
          Project is situated in an area designated as having special flood hazards
          as
          defined by the Flood Disaster Protection Act of 1973, as amended, or designated
          as a wetland by any governmental entity having jurisdiction over the Project.
          All Permits required for the use and occupancy of the Project have been
          obtained. All Laws relating to the construction of and operation of the
          Improvements have been complied with in all material respects and all permits
          and licenses required for the construction of and operation of the Project
          have
          been obtained. The Project is accessible through fully improved and dedicated
          roads, accepted for maintenance and public use by public authority having
          jurisdiction. The Project has adequate water, gas and electrical supply,
          storm
          and sanitary sewerage facilities, telephone facilities, other required
          public
          utilities, fire and police protection, and means of access between the
          Project
          and public highways; none of the foregoing will be foreseeably delayed
          or
          impeded by virtue of any requirements under any applicable Laws. The Project
          includes all property and rights that may be reasonably necessary or desirable
          to promote the present uses and enjoyment thereof. To the best of each
          Borrower's knowledge, there are no, nor are there any alleged or asserted,
          violations of law, regulations, ordinances, codes, permits, licenses,
          declarations, covenants, conditions or restrictions of record, or other
          agreements relating to any Project, or the improvements thereto, or any
          part
          thereof. Final certificates of occupancy or non-residential use permits
          have
          been obtained for all improvements on the Project. The parcels of land
          comprising the Project are contiguous, subdivided parcels and are in full
          compliance with applicable subdivision ordinances. No subdivision or
          resubdivision of such parcels is required to: (y) convey, transfer, assign
          or lease such parcels, either individually or as a whole; or (z) rebuild
          after a casualty all or any portion of the improvements on the Project
          to
          current size and configuration.

         

        (c)    The
          Project is taxed separately without regard to any other property and for
          all
          purposes the Project may be mortgaged, conveyed and otherwise dealt with
          as an
          independent parcel. There are no unpaid or outstanding real estate or other
          taxes or assessments on or against any Project or any part thereof, except
          general real estate taxes for fiscal year 2006 not yet due or payable.
          To each
          Credit Party's knowledge, there is no pending or contemplated action pursuant
          to
          which any special assessment may be levied against any portion of any
          Project.

         

        (d)    There
          has
          been no damage or destruction of any part of any Project by fire or other
          casualty that has not been repaired. Except for the deferred maintenance
          items,
          if any, reflected on Schedule
          4.14
          or as
          part of routine maintenance or capital improvements required to be made
          by
          Borrowers under this Agreement, there are presently no material

         

        
          
            
            

          

          
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        existing
          defects in any Project and no material repairs or alterations thereof are
          reasonably necessary or appropriate.

         

        (e)    No
          Borrower has entered into any Material Leases that are currently in effect
          other
          than as set forth on the rent roll delivered by Borrower to Administrative
          Agent
          prior to the closing of the Loans, which Borrower certifies is true and
          correct
          in all material respects. True, correct and complete copies of the form
          of
          Lease, Resident Agreement and other lease or care documents and all
          non-residential Leases, as amended, as in effect with respect to Borrower's
          or
          Operator's operation of the Project, have been delivered to Administrative
          Agent. All Material Leases are in full force and effect. Neither Borrower
          nor
          any tenant is in material default under any Material Lease. Borrower has
          disclosed to Administrative Agent in writing any material default by any
          tenant
          under any Material Lease and no notice of termination has been issued under
          any
          Lease. All rents or other payments required of the tenant under the Material
          Lease due to date have been collected and have been collected no more than
          one
          (1) month in advance, and no tenant has been granted any rent concession or
          inducement whatsoever except as reflected on the rent roll previously delivered
          to Administrative Agent.

         

        (f)    The
          Resident Agreements comply with all applicable Laws in all material respects,
          including Healthcare Laws.

         

        ARTICLE
          10

        SECURITY
          AGREEMENT

         

        Section
          10.1 Generally.

         

        (a)    As
          security for the payment and performance of the Obligations, and the payment
          and
          performance of all obligations, and without limiting any other grant of
          a Lien
          and security interest in any Security Document, Borrowers hereby assign
          and
          grant to Administrative Agent a continuing first priority Lien on and security
          interest in, upon, and to all right, title and interest in and to any and
          all
          property and interests in property of Borrowers whether now owned or hereafter
          created, acquired or arising including all of the following properties
          and
          interests in properties (the "Personal
          Property";
          unless
          otherwise defined in this Agreement, all terms used in this Article 10
          shall have the meanings given them in Article 9 of the Uniform Commercial
          Code):

         

        (i)    All
          of
          Borrowers' Accounts, and all of Borrowers' money, contract rights, chattel
          paper, documents, deposit accounts, securities, investment property and
          instruments with respect thereto, and all of Borrowers' rights, remedies,
          security, Liens and supporting obligations, in, to and in respect of the
          foregoing;

         

        (ii)    To
          the
          extent not listed above, all of Borrowers' money, securities, investment
          property, deposit accounts, instruments, general intangibles, healthcare
          insurance receivables, inventory and other property and the proceeds
          thereof;

         

        
          
            
            

          

          
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        (iii)    All
          of
          Borrowers' letter-of-credit rights and commercial tort claims;

         

        (iv)    All
          of
          Borrowers' now owned or hereafter acquired machinery, equipment, computer
          equipment, tools, tooling, furniture, fixtures, goods, supplies, materials,
          work
          in process, whether now owned or hereafter acquired, together with all
          additions, parts, fittings, accessories, special tools, attachments, and
          accessions now and hereafter affixed thereto and/or used in connection
          therewith, all replacements thereof and substitutions therefor, and all
          cash and
          non-cash proceeds and products thereof and all present and future warranties,
          manuals and other written materials relating thereto;

         

        (v)    All
          of
          Borrowers' now owned or hereafter acquired goods of any kind and any and
          all
          tangible and intangible books and records of Borrowers relating to Borrowers,
          their businesses, their financial condition, records and statements, the
          Licensed Locations and/or the Collateral; and

         

        (vi)    To
          the
          extent not listed above as original collateral, the proceeds (including,
          without
          limitation, insurance proceeds) and products of any or all of the
          foregoing, and all accessions to, substitutions for or replacements of
          and rents
          and profits from any or all of the foregoing.

         

        (b)    Pursuant
          to the Liens created pursuant to Section 10.1
          and
          pursuant to all of the other Security Documents (if any) (including,
          without limitation, any and all UCC financing statements being filed by
          Administrative Agent against any Credit Party), and assuming that any such
          Security Document that is intended to be filed with any governmental public
          recording office has been so filed, Administrative Agent has been granted
          and
          has a valid and perfected first priority security interest and Lien in
          the
          Collateral, including the Personal Property (subject only to any Permitted
          Liens
          permitted under the terms of this Agreement and the other Financing
          Documents) securing the payment of the Obligations, and such security
          interests and Liens are entitled to all of the rights, priorities and benefits
          afforded by the UCC or other applicable Laws as enacted in any relevant
          jurisdiction which relate to perfected security interests. No authorization,
          approval or other action by, and no notice to or filing with, any Governmental
          Authority or consent of any other Person is required for (i) the grant by
          each Borrower to Administrative Agent of the security interests and Liens
          in the
          Collateral, including the Personal Property, provided for under this Agreement
          and the other Security Documents (if any), or (ii) the exercise by
          Administrative Agent of its rights and remedies with respect to the Collateral,
          including the Personal Property, provided for under this Agreement and
          the other
          Security Documents or under any applicable Law, including the UCC.

         

        Section
          10.2  Covenants
          Relating to Collateral.

         

        (a)    Borrowers
          shall not take any of the following actions or make any of the following
          changes
          unless Borrowers have given at least thirty (30) days prior written notice
          to Administrative Agent of Borrowers' intention to take any such action
          and have
          executed any and all documents, instruments and agreements and taken any
          other
          actions

         

        
          
            
            

          

          
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        with
          Administrative Agent may request after receiving such written notice in
          order to
          protect and preserve the Liens, rights and remedies of Administrative Agent
          with
          respect to the Collateral: (i) change the legal name or organizational
          identification number of any Borrower, or (ii) change the jurisdiction of
          incorporation or formation of any Borrower or allow any Borrower to designate
          any jurisdiction as an additional jurisdiction of incorporation for such
          Borrower.

         

        (b)    Borrowers
          shall cause all equipment and other tangible personal property other than
          inventory to be maintained and preserved in the same condition, repair
          and in
          working order as when new, ordinary wear and tear excepted, and shall promptly
          make or cause to be made all repairs, replacements and other improvements
          in
          connection therewith that are necessary or desirable to such end.

         

        (c)    Each
          Borrower hereby authorizes Administrative Agent to file without the signature
          of
          such Borrower one or more UCC financing statements relating to all or any
          part
          of the Collateral, which financing statements may list Administrative Agent
          as
          the "secured party" and such Borrower as the "debtor" and which describe
          and
          indicate the collateral covered thereby as all or any part of the Collateral
          under the Financing Documents (including an indication of the collateral
          covered
          by any such financing statement as "all assets" of such Borrower now owned
          or
          hereafter acquired), in such jurisdictions as Administrative Agent from
          time to
          time determine are appropriate, and to file without the signature of such
          Borrower any continuations of or amendments to any such financing statements,
          in
          any such case in order for Administrative Agent to perfect, preserve or
          protect
          the Liens, rights and remedies of Administrative Agent with respect to
          the
          Collateral.

         

        (d)    Without
          limiting or contradicting any of the provisions of Sections 4.1,
          10.3(b) 10.3(c) or any other provisions of the Financing Documents
          requiring the delivery by Borrowers to Administrative Agent and/or the
          Lenders
          of any reports, certificates, information or schedules, Borrowers shall
          furnish
          to Administrative Agent from time to time any statements and schedules
          further
          identifying or describing the Collateral and any other information, reports
          or
          evidence concerning the Collateral as Lender may reasonably request from
          time to
          time.

         

        Section
          10.3 UCC
          Remedies.

         

        (a)    Upon
          the
          occurrence of and during the continuance of an Event of Default under this
          Agreement or the other Financing Documents, Administrative Agent, in addition
          to
          all other rights, options, and remedies granted to Administrative Agent
          under
          this Agreement or at law or in equity, may exercise, either directly or
          through
          one or more assignees or designees, all rights and remedies granted to
          it under
          all Financing Documents and under the UCC in effect in the applicable
          jurisdiction(s) and under any other applicable law; including, without
          limitation:

         

        (i)    The
          right
          to take possession of, send notices regarding, and collect directly the
          Collateral, with or without judicial process;

         

        
          
            
            

          

          
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        (ii)    The
          right
          to (by its own means or with judicial assistance) enter any of Borrowers'
          premises and take possession of the Collateral, or render it unusable,
          or to
          render it usable or saleable, or dispose of the Collateral on such premises
          in
          compliance with subsection (iii) below and to take possession of Borrowers'
          original books and records, to obtain access to Borrowers' data processing
          equipment, computer hardware and software relating to the Collateral and
          to use
          all of the foregoing and the information contained therein in any manner
          Administrative Agent deems appropriate, without any liability for rent,
          storage,
          utilities, or other sums, and Borrowers shall not resist or interfere with
          such
          action (if Borrowers' books and records are prepared or maintained by an
          accounting service, contractor or other third party agent, Borrowers hereby
          irrevocably authorize such service, contractor or other agent, upon notice
          by
          Administrative Agent to such Person that an Event of Default has occurred
          and is
          continuing, to deliver to Administrative Agent or its designees such books
          and
          records, and to follow Administrative Agent's instructions with respect
          to
          further services to be rendered);

         

        (iii)    The
          right
          to require Borrowers at Borrowers' expense to assemble all or any part
          of the
          Collateral and make it available to Administrative Agent at any place designated
          by Lender;

         

        (iv)    The
          right
          to notify postal authorities to change the address for delivery of Borrowers'
          mail to an address designated by Administrative Agent and to receive, open
          and
          dispose of all mail addressed to any Borrower; and

         

        (v)    The
          right
          to enforce Borrowers' rights against Account Debtors and other obligors,
          including, without limitation, the right to collect Accounts directly in
          Administrative Agent's own name (as agent for Lenders) and to charge the
          collection costs and expenses, including attorneys' fees, to
          Borrowers.

         

        (b)    Without
          restricting the generality of the foregoing and for the purposes aforesaid,
          each
          Borrower hereby appoints and constitutes Administrative Agent its lawful
          attorney-in-fact with full power of substitution in the Collateral to use
          unadvanced funds remaining under this Agreement or which may be reserved,
          escrowed or set aside for any purposes hereunder at any time, or to advance
          funds in excess of the face amount of the Notes, to pay, settle or compromise
          all existing bills and claims, which may be liens or security interests,
          or to
          avoid such bills and claims becoming liens against the Collateral; to execute
          all applications and certificates in the name of such Borrower and to prosecute
          and defend all actions or proceedings in connection with the Collateral;
          and to
          do any and every act which such Borrower might do in its own behalf; it
          being
          understood and agreed that this power of attorney shall be a power coupled
          with
          an interest and cannot be revoked.

         

        
          
            
            

          

          
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        ARTICLE
          11

        EVENTS
          OF DEFAULT

         

        Section
          11.1 Events
          of Default.

         

        For
          purposes of the Financing Documents, the occurrence of any of the following
          conditions and/or events, whether voluntary or involuntary, by operation
          of law
          or otherwise, shall constitute an "Event
          of Default":

         

        (a)    Borrowers
          shall fail to pay all amounts due under the Financing Documents on the
          Termination Date or any Borrower shall fail to pay within five (5) days of
          when due any principal, interest, premium or fee under any Financing Document
          or
          any other amount payable under any Financing Document;

         

        (b)    any
          Borrower shall fail to observe or perform any covenant contained in Section
          2.12,
          Section 4.4(b),
          Section
          4.4(d),
          Section 4.7,
          Section 4.10,
          Article 5,
          Article 6
          (subject
          to the provisions of Section
          6.7),
          Section
          8.3(c),
          clauses
          (iii), (iv) or (x) of Section
          8.4(b),
          Section
          8.4(c),
          Section
          8.4(e) or
          Section
          8.5
          or
          Borrowers shall fail to deliver any financial reports or statements when
          due
          under Section
          4.1
          and such
          default is not remedied or waived within five (5) Business Days after
          receipt by Borrower Representative of notice from Administrative Agent
          of such
          default, or Borrowers shall fail to permit any visit or inspection required
          by
Section
          4.6
          within
          two (2) Business Days after notice;

         

        (c)    any
          Event
          of Default under and as defined in any other Financing Document occurs
          or any
          Credit Party defaults in the performance of or compliance with any term
          contained in this Agreement or in any other Financing Document (other than
          occurrences described in other provisions of this Section
          11.1
          for
          which a different grace or cure period is specified or for which no grace
          or
          cure period is specified and thereby constitute immediate Events of
          Default) and such default is not remedied or waived within thirty
          (30) days after the earlier of (i) receipt by Borrower Representative
          of notice from Administrative Agent or Required Lenders of such default
          or
          (ii) actual knowledge of any Borrower or any other Credit Party of such
          default, provided, however, if such default cannot by its nature be cured
          within
          thirty (30) days, but such Credit Party commences cure within said thirty
          (30) day period and diligently pursues such cure thereafter, such Credit
          Party shall have an additional reasonable time to complete such cure up
          to a
          maximum of ninety (90) days or any Event of Default under and as defined in
          any other Financing Document occurs; 

         

        (d)    any
          representation, warranty, certification or statement made by any Credit
          Party or
          to Borrowers' knowledge any other Person in any Financing Document or in
          any
          certificate, financial statement or other document delivered pursuant to
          any
          Financing Document is incorrect in any respect (or in any material respect
          if
          such representation, warranty, certification or statement is not by its
          terms
          already qualified as to materiality) when made;

         

        
          
            
            

          

          
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        (e)    (i) failure
          of any Borrower to pay when due or within any applicable grace period any
          principal, interest or other amount on Debt (other than the Loans) or in
          respect
          of any Swap Contract, or the occurrence of any breach, default, condition
          or
          event with respect to any Debt (other than the Loans) or in respect of
          any Swap
          Contract, if the effect of such failure or occurrence is to cause, or to
          permit
          the holder or holders of any such Debt, or the counterparty under any such
          Swap
          Contract, to cause, Debt or other liabilities having an individual principal
          amount in excess of $100,000 or having an aggregate principal amount in
          excess
          of $100,000 to become or be declared due prior to its stated maturity;
          or
          (ii) the occurrence of any breach or default under any terms or provisions
          of any Subordinated Debt Document or under any agreement subordinating
          the
          Subordinated Debt to all or any portion of the Obligations or the occurrence
          of
          any event requiring the prepayment of any Subordinated Debt;

         

        (f)    any
          Credit Party shall commence a voluntary case or other proceeding seeking
          liquidation, reorganization or other relief with respect to itself or its
          debts
          under any bankruptcy, insolvency or other similar law now or hereafter
          in effect
          or seeking the appointment of a trustee, receiver, liquidator, custodian
          or
          other similar official of it or any substantial part of its property, or
          shall
          consent to any such relief or to the appointment of or taking possession
          by any
          such official in an involuntary case or other proceeding commenced against
          it,
          or shall make a general assignment for the benefit of creditors, or shall
          fail
          generally to pay its debts as they become due, or shall take any corporate
          action to authorize any of the foregoing;

         

        (g)    an
          involuntary case or other proceeding shall be commenced against any Credit
          Party
          seeking liquidation, reorganization or other relief with respect to it
          or its
          debts under any bankruptcy, insolvency or other similar law now or hereafter
          in
          effect or seeking the appointment of a trustee, receiver, liquidator, custodian
          or other similar official of it or any substantial part of its property,
          and
          such involuntary case or other proceeding shall remain undismissed and
          unstayed
          for a period of sixty (60) days; or an order for relief shall be entered
          against any Credit Party under the federal bankruptcy laws as now or hereafter
          in effect;

         

        (h)    (i) institution
          of any steps by any Person to terminate a Pension Plan if as a result of
          such
          termination any Borrower or any member of the Controlled Group could be
          required
          to make a contribution to such Pension Plan, or could incur a liability
          or
          obligation to such Pension Plan, in excess of $100,000, (ii) a contribution
          failure occurs with respect to any Pension Plan sufficient to give rise
          to a
          Lien under Section 302(f) of ERISA, or (iii) there shall occur any
          withdrawal or partial withdrawal from a Multiemployer
          Plan and the withdrawal liability (without unaccrued interest) to
          Multiemployer Plans as a result of such withdrawal (including any outstanding
          withdrawal liability that any Borrower or any member of the Controlled
          Group
          have incurred on the date of such withdrawal) exceeds $100,000;
          

         

        (i)    one
          or
          more judgments or orders for the payment of money (not paid or fully covered
          by
          insurance maintained in accordance with the requirements of this Agreement
          and
          as to which the relevant insurance company has acknowledged

         

        
          
            
            

          

          
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        coverage) aggregating
          in excess of $1,000,000 shall be rendered against any or all Borrowers
          and
          either (i) enforcement proceedings shall have been commenced by any
          creditor upon any such judgments or orders or (ii) there shall be any
          period of twenty (20) consecutive days during which a stay of enforcement
          of any such judgments or orders, by reason of a pending appeal, bond or
          otherwise, shall not be in effect;

         

        (j)    ARC
          shall
          cease to, directly or indirectly, own and control at least (i) 20% of the
          outstanding equity interests of Cypress JV, or (ii) Cypress JV ceases to
          own all of the membership interests in General Partner;

         

        (k)    any
          Lien
          created by any of the Security Documents shall at any time fail to constitute
          a
          valid and perfected Lien on all of the Collateral purported to be secured
          thereby, subject to no prior or equal Lien except Permitted Liens, or any
          Borrower shall so assert;

         

        (l)    any
          Borrower shall be prohibited or otherwise materially restrained from conducting
          the business theretofore conducted by it by virtue of any casualty, any
          labor
          strike, any determination, ruling, decision, decree or order of any court
          or
          regulatory authority of competent jurisdiction or any other event and such
          casualty, labor strike, determination, ruling, decision, decree, order
          or other
          event remains unstayed and in effect for any period of ten
          (10) days;

         

        (m)    the
          institution by any Governmental Authority of criminal proceedings against
          any
          Credit Party; or

         

        (n)    Borrowers
          shall fail to perform any of the post-closing obligations as required by
          Section
          7.3
          and
Schedule
          7.3;
          or

         

        (o)    ARC
          breaches any financial covenant contained in a Financing Document
          Guaranty.

         

        All
          cure
          periods provided for in this Section shall run concurrently with any cure
          period
          provided for in any applicable Financing Documents under which the default
          occurred.

         

        Section
          11.2 Acceleration.

         

        Upon
          the
          occurrence and during the continuance of an Event of Default, Administrative
          Agent may, and shall if requested by Required Lenders, by notice to Borrower
          Representative declare the Obligations to be, and the Obligations shall
          thereupon become, immediately due and payable without presentment, demand,
          protest or other notice of any kind, all of which are hereby waived by
          each
          Borrower and Borrowers will pay the same; provided, however, that in the
          case of
          any of the Events of Default specified in Section
          11.1(f) or
          11.1(g) above,
          without any notice to any Borrower or any other act by Administrative Agent
          or
          the Lenders, all of the Obligations shall become immediately due and payable
          without presentment, demand, protest or other notice of any kind, all of
          which
          are hereby waived by each Borrower and Borrowers will pay the same.

         

        
          
            
            

          

          
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        Section
          11.3 [Reserved.]

         

        Section
          11.4 Default
          Rate of Interest.

         

        At
          the
          election of Administrative Agent or Required Lenders, after the occurrence
          of an
          Event of Default and for so long as it continues, the Loans and other
          Obligations shall bear interest at rates that are five percent (5.0%) per
          annum in excess of the rates otherwise payable under this Agreement (each,
          the
          "Default
          Rate").
          

         

        Section
          11.5 Setoff
          Rights.

         

        During
          the continuance of any Event of Default, each Lender is hereby authorized
          by
          each Borrower at any time or from time to time, with reasonably prompt
          subsequent notice to such Borrower (any prior or contemporaneous notice
          being
          hereby expressly waived) to set off and to appropriate and to apply any and
          all (a) balances held by such Lender or any of such Lender's Affiliates at
          any of its offices for the account of such Borrower (regardless of whether
          such
          balances are then due to such Borrower), and (b) other property at any time
          held or owing by such Lender to or for the credit or for the account of
          such
          Borrower, against and on account of any of the Obligations; except that
          no
          Lender shall exercise any such right without the prior written consent
          of
          Administrative Agent. Any Lender exercising a right to set off shall purchase
          for cash (and the other Lenders shall sell) interests in each of such other
          Lender's Pro Rata Share of the Obligations as would be necessary to cause
          all
          Lenders to share the amount so set off with each other Lender in accordance
          with
          their respective Pro Rata Share of the Obligations. Each Borrower agrees,
          to the
          fullest extent permitted by law, that any Lender and any of such Lender's
          Affiliates may exercise its right to set off with respect to the Obligations
          as
          provided in this Section
          11.5.

         

        Section
          11.6 Application
          of Proceeds.

         

        Notwithstanding
          anything to the contrary contained in this Agreement, upon the occurrence
          and
          during the continuance of an Event of Default, (a) each Borrower
          irrevocably waives the right to direct the application of any and all payments
          at any time or times thereafter received by Administrative Agent from or
          on
          behalf of such Borrower or any Guarantor of all or any part of the Obligations,
          and, as between Borrowers on the one hand and Administrative Agent and
          Lenders
          on the other, Administrative Agent shall have the continuing and exclusive
          right
          to apply and to reapply any and all payments received against the Obligations
          in
          such manner as Administrative Agent may deem advisable notwithstanding
          any
          previous application by Administrative Agent and (b) the proceeds of any
          sale of, or other realization upon, all or any part of the Collateral shall
          be
          applied: first,
          to all
          reasonable fees, costs, indemnities, liabilities, obligations and expenses
          incurred by or owing to Administrative Agent with respect to this Agreement,
          the
          other Financing Documents or the Collateral; second,
          to all
          reasonable fees, costs, indemnities, liabilities, obligations and expenses
          incurred by or owing to any Lender with respect to this Agreement, the
          other
          Financing Documents or the Collateral; third,
          to
          accrued and unpaid interest on the Obligations (including any interest
          which,
          but for the provisions of the Bankruptcy Code,

         

        
          
            
            

          

          
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        would
          have accrued on such amounts); fourth,
          to the
          principal amount of the Obligations outstanding (excluding any Obligations
          in
          respect of any Swap Contract); fifth,
          to the
          Obligations owing to any Eligible Swap Counterparty in respect of any Swap
          Contracts permitted by the terms of this Agreement; and fifth,
          to any
          other indebtedness or obligations of Borrowers owing to Administrative
          Agent or
          any Lender under the Financing Documents. Any balance remaining shall be
          delivered to Borrowers or to whoever may be lawfully entitled to receive
          such
          balance (including any holder of the indebtedness evidenced by the Affiliated
          Financing Documents) or as a court of competent jurisdiction may direct. In
          carrying out the foregoing, (y) amounts received shall be applied in the
          numerical order provided until exhausted prior to the application to the
          next
          succeeding category, and (z) each of the Persons entitled to receive a
          payment in any particular category shall receive an amount equal to its
          pro rata
          share of amounts available to be applied pursuant thereto for such category.
          

         

        Section
          11.7 Waivers. 

         

        (a)    Except
          as
          otherwise provided for in this Agreement and to the fullest extent permitted
          by
          applicable law, each Borrower waives: (i) presentment, demand and protest,
          and notice of presentment, dishonor, intent to accelerate, acceleration,
          protest, default, nonpayment, maturity, release, compromise, settlement,
          extension or renewal of any or all Financing Documents, the Notes or any
          other
          notes, commercial paper, accounts, contracts, documents, instruments, chattel
          paper and Guarantees at any time held by Lenders on which any Borrower
          may in
          any way be liable, and hereby ratifies and confirms whatever Lenders may
          do in
          this regard; (ii) all rights to notice and a hearing prior to
          Administrative Agent's or any Lender's taking possession or control of,
          or to
          Administrative Agent's or any Lender's replevy, attachment or levy upon,
          any
          Collateral or any bond or security which might be required by any court
          prior to
          allowing Administrative Agent or any Lender to exercise any of its remedies;
          and
          (iii) the benefit of all valuation, appraisal and exemption Laws. Each
          Borrower acknowledges that it has been advised by counsel of its choices
          and
          decisions with respect to this Agreement, the other Financing Documents
          and the
          transactions evidenced hereby and thereby.

         

        (b)    Each
          Borrower for itself and all endorsers, guarantors and sureties and their
          heirs,
          legal representatives, successors and assigns, (i) agrees that its
          liability shall not be in any manner affected by any indulgence, extension
          of
          time, renewal, waiver, or modification granted or consented to by Lender;
          (ii) consents to any indulgences and all extensions of time, renewals,
          waivers, or modifications that may be granted by Administrative Agent or
          any
          Lender with respect to the payment or other provisions of the Financing
          Documents, and to any substitution, exchange or release of the Collateral,
          or
          any part thereof, with or without substitution, and agrees to the addition
          or
          release of any Borrower, endorsers, guarantors, or sureties, or whether
          primarily or secondarily liable, without notice to any other Borrower and
          without affecting its liability hereunder; (iii) agrees that its liability
          shall be unconditional and without regard to the liability of any other
          Borrower, Administrative Agent or any Lender for any tax on the indebtedness;
          and (iv) to
          the
          fullest extent permitted by law,
          expressly waives the benefit of any statute or rule of law

         

        
          
            
            

          

          
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        or
          equity
          now provided, or which may hereafter be provided, which would produce a
          result
          contrary to or in conflict with the foregoing.

         

        (c)    To
          the
          extent that Administrative Agent or any Lender may have acquiesced in any
          noncompliance with any requirements or conditions precedent to the closing
          of
          the Loans or to any subsequent disbursement of Loan proceeds, such acquiescence
          shall not be deemed to constitute a waiver by Administrative Agent or any
          Lender
          of such requirements with respect to any future disbursements of Loan proceeds
          and Administrative Agent may at any time after such acquiescence require
          Borrowers to comply with all such requirements. Any forbearance by
          Administrative Agent or Lender in exercising any right or remedy under
          any of
          the Financing Documents, or otherwise afforded by applicable law, including
          any
          failure to accelerate the maturity date of the Loans, shall not be a waiver
          of
          or preclude the exercise of any right or remedy nor shall it serve as a
          novation
          of the Notes or as a reinstatement of the Loans or a waiver of such right
          of
          acceleration or the right to insist upon strict compliance of the terms
          of the
          Financing Documents. Administrative Agent's or any Lender's acceptance
          of
          payment of any sum secured by any of the Financing Documents after the
          due date
          of such payment shall not be a waiver of Administrative Agent's and such
          Lender's right to either require prompt payment when due of all other sums
          so
          secured or to declare a default for failure to make prompt payment. The
          procurement of insurance or the payment of taxes or other liens or charges
          by
          Administrative Agent as the result of an Event of Default shall not be
          a waiver
          of Administrative Agent's right to accelerate the maturity of the Loans,
          nor
          shall Administrative Agent's receipt of any condemnation awards, insurance
          proceeds, or damages under this Agreement operate to cure or waive any
          Credit
          Party's default in payment of sums secured by any of the Financing
          Documents.

         

        (d)    Without
          limiting the generality of anything contained in this Agreement or the
          other
          Financing Documents, each Borrower agrees that if an Event of Default is
          continuing (i) Administrative Agent and Lenders are not subject to any "one
          action" or "election of remedies" law or rule, and (ii) all Liens and other
          rights, remedies or privileges provided to Administrative Agent or Lenders
          shall
          remain in full force and effect until Administrative Agent or Lenders have
          exhausted all remedies against the Collateral and any other properties
          owned by
          Borrowers and the Financing Documents and other security instruments or
          agreements securing the Loans have been foreclosed, sold and/or otherwise
          realized upon in satisfaction of Borrowers' obligations under the Financing
          Documents.

         

        (e)    Nothing
          contained herein or in any other Financing Document shall be construed
          as
          requiring Administrative Agent or any Lender to resort to any part of the
          Collateral for the satisfaction of any of Borrowers' obligations under
          the
          Financing Documents in preference or priority to any other Collateral,
          and
          Administrative Agent may seek satisfaction out of all of the Collateral
          or any
          part thereof, in its absolute discretion in respect of Borrowers' obligations
          under the Financing Documents. In addition, Administrative Agent shall
          have the
          right from time to time to partially foreclose upon any Collateral in any
          manner
          and for any amounts secured by the Financing Documents then due and payable
          as
          determined by Administrative Agent in its sole discretion, including, without
          limitation, the following circumstances: (i) in the event any Borrower
          defaults beyond any applicable grace period in the payment of one or more
          scheduled payments of principal

         

        
          
            
            

          

          
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        and/or
          interest, Administrative Agent may foreclose upon all or any part of the
          Collateral to recover such delinquent payments, or (ii) in the event
          Administrative Agent elects to accelerate less than the entire outstanding
          principal balance of the Loans, Administrative Agent may foreclose all
          or any
          part of the Collateral to recover so much of the principal balance of the
          Loans
          as Lender may accelerate and such other sums secured by one or more of
          the
          Financing Documents as Administrative Agent may elect. Notwithstanding
          one or
          more partial foreclosures, any unforeclosed Collateral shall remain subject
          to
          the Financing Documents to secure payment of sums secured by the Financing
          Documents and not previously recovered.

         

        (f)    To
          the
          fullest extent permitted by law, each Borrower, for itself and its successors
          and assigns, waives in the event of foreclosure of any or all of the Collateral
          any equitable right otherwise available to any Credit Party which would
          require
          the separate sale of the any of the Collateral or require Administrative
          Agent
          or Lenders to exhaust their remedies against any part of the Collateral
          before
          proceeding against any other part of the Collateral; and further in the
          event of
          such foreclosure each Borrower does hereby expressly consent to and authorize,
          at the option of Lender, the foreclosure and sale either separately or
          together
          of each part of the Collateral.

         

        Section
          11.8 Injunctive
          Relief.

         

        The
          parties acknowledge and agree that, for certain Events of Default,
          Administrative Agent and Lenders may have no adequate remedy in money damages
          and, accordingly, shall be entitled to an injunction (including without
          limitation, a temporary restraining order, preliminary injunction, writ
          of
          attachment, or order compelling an audit) against such Events of Default.
          However, no specification in this Agreement of a specific legal or equitable
          remedy shall be construed as a waiver or prohibition against any other
          legal or
          equitable remedies in the event of a breach or threatened breach of any
          provision of this Agreement.
          Each
          Credit Party waives, to
          the
          fullest extent permitted by law,
          the
          requirement of the posting of any bond in connection with such injunctive
          relief. By joining in the Financing Documents as a Credit Party, each Credit
          Party specifically joins in this Section as if this Section were a part
          of each
          Financing Documents executed by the Credit Party. 

         

        Section
          11.9 Marshalling.

         

        Administrative
          Agent and Lenders shall have no obligation to marshal any assets in favor
          of any
          Credit Party, or against or in payment of any of the other Obligations
          or any
          other obligation owed to Administrative Agent or Lenders by any Credit
          Party.

         

        
          
            
            

          

          
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        ARTICLE
          12

        EXPENSES
          AND INDEMNITY

         

        Section
          12.1 Expenses.

         

        Each
          Borrower hereby agrees to promptly pay (a) all reasonable costs and
          expenses of Administrative Agent (including without limitation the reasonable
          fees, costs and expenses of counsel to, and independent appraisers and
          consultants retained by Administrative Agent) in connection with the
          examination, review, due diligence investigation, documentation, negotiation
          and
          closing of the transactions contemplated by the Financing Documents, in
          connection with the performance by Administrative Agent of its rights and
          remedies under the Financing Documents and in connection with the continued
          administration of the Financing Documents, including (i) any amendments,
          modifications, consents and waivers to and/or under any and all Financing
          Documents and (ii) any periodic public record searches conducted by or at
          the request of Administrative Agent (including, without limitation, title
          investigations, UCC searches, fixture filing searches, judgment, pending
          litigation and tax lien searches and searches of applicable corporate,
          limited
          liability, partnership and related records concerning the continued existence,
          organization and good standing of certain Persons), (b) without limitation
          of the preceding clause (a), all costs and expenses of Administrative Agent
          (including recordation and transfer taxes) in connection with the creation,
          perfection and maintenance of Liens pursuant to the Financing Documents,
          (c) without limitation of the preceding clause (a), all costs and expenses
          of Administrative Agent in connection with (i) protecting, storing,
          insuring, handling, maintaining or selling any Collateral; (ii) any
          litigation, dispute, suit or proceeding relating to any Financing Document;
          and
          (iii) any workout, collection, bankruptcy, insolvency and other enforcement
          proceedings under any and all of the Financing Documents, and (d) all costs
          and expenses incurred by Lenders in connection with any litigation, dispute,
          suit or proceeding relating to any Financing Document and in connection
          with any
          workout, collection, bankruptcy, insolvency and other enforcement proceedings
          under any and all Financing Documents, provided, however, that to the extent
          that the costs and expenses referred to in this clause (d) consist of fees,
          costs and expenses of counsel, Borrowers shall be obligated to pay such
          fees,
          costs and expenses for counsel to Administrative Agent and for only one
          counsel
          acting for all Lenders (other than Administrative Agent). 

         

        Section
          12.2 Indemnity.

         

        Each
          Borrower hereby agrees to indemnify, pay and hold harmless Administrative
          Agent
          and Lenders and the officers, directors, employees, trustees, agents, investment
          advisors, collateral managers, servicers, and counsel of Administrative
          Agent
          and Lenders (collectively called the "Indemnitees") from
          and against any and all liabilities, obligations, losses, damages, penalties,
          actions, judgments, suits, claims, costs, expenses and disbursements of
          any kind
          or nature whatsoever (including the fees and disbursements of counsel for
          such
          Indemnitee) in connection with any investigative, response, remedial,
          administrative or judicial matter or proceeding, whether or not such Indemnitee
          shall be designated a party thereto and including any such proceeding initiated
          by or on behalf of a Credit Party, and the reasonable expenses of investigation
          by engineers, environmental

         

        
          
            
            

          

          
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        consultants
          and similar technical personnel and any commission, fee or compensation
          claimed
          by any broker (other than any broker retained by Administrative Agent or
          Lenders) asserting any right to payment for the transactions contemplated
          hereby, which may be imposed on, incurred by or asserted against such Indemnitee
          as a result of or in connection with the transactions contemplated hereby
          or by
          the other Financing Documents (including (a)(i) as a direct or indirect
          result of the presence on or under, or escape, seepage, leakage, spillage,
          discharge, emission or release from, any property now or previously owned,
          leased or operated by any Borrower, or any other Person of any Hazardous
          Materials or any Hazardous Materials Contamination, (ii) arising out of or
          relating to the offsite disposal of any materials generated or present
          on any
          such property or (iii) arising out of or resulting from the environmental
          condition of any such property or the applicability of any governmental
          requirements relating to Hazardous Materials, whether or not occasioned
          wholly
          or in part by any condition, accident or event caused by any act or omission
          of
          any Borrower, (b) proposed and actual extensions of credit under this
          Agreement) and the use or intended use of the proceeds of the Loans and
          (c) any brokerage claims in connection with the sale or any leasing of any
          Project, except that no Borrower shall have any obligation hereunder to
          an
          Indemnitee with respect to any liability resulting from the gross negligence
          or
          willful misconduct of such Indemnitee, as determined by a final non-appealable
          judgment of a court of competent jurisdiction or for any liability with
          respect
          to clauses (a) or (c) first occurring after transfer of title of a
          Project following a foreclosure or pursuant to a conveyance in lieu of
          foreclosure provided that the applicable Borrower is no longer in possession
          of
          the applicable Project. To the extent that the undertaking set forth in
          the
          immediately preceding sentence may be unenforceable, each Borrower shall
          contribute the maximum portion which it is permitted to pay and satisfy
          under
          applicable law to the payment and satisfaction of all such indemnified
          liabilities incurred by the Indemnitees or any of them.

         

        ARTICLE
          13

        ADMINISTRATIVE
          AGENT

         

        Section
          13.1 Appointment
          and Authorization.

         

        Each
          Lender hereby irrevocably appoints and authorizes Administrative Agent
          to enter
          into each of the Financing Documents to which it is a party (other than
          this
          Agreement) on its behalf and to take such actions as Administrative Agent
          on its behalf and to exercise such powers under the Financing Documents
          as are
          delegated to Administrative Agent by the terms thereof, together with all
          such
          powers as are reasonably incidental thereto. Subject to the terms of
Section
          13.16
          and to
          the terms of the other Financing Documents, Administrative Agent is authorized
          and empowered to amend, modify, or waive any provisions of this Agreement
          or the
          other Financing Documents on behalf of Lenders. The provisions of this
          Article
          13 are solely for the benefit of Administrative Agent and Lenders and neither
          any Borrower nor any other Credit Party shall have any rights as a third
          party
          beneficiary of any of the provisions hereof. In performing its functions
          and
          duties under this Agreement, Administrative Agent shall act solely as agent
          of
          Lenders and does not assume and shall not be deemed to have assumed any
          obligation toward or relationship of agency or trust with or for any Borrower
          or
          any other Credit Party. Administrative Agent

         

        
          
            
            

          

          
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        may
          perform any of its duties hereunder, or under the Financing Documents,
          by or
          through its agents or employees.

         

        Section
          13.2 Administrative
          Agent and Affiliates.

         

        Administrative
          Agent
          shall
          have the same rights and powers under the Financing Documents as any other
          Lender and may exercise or refrain from exercising the same as though it
          were
          not Administrative Agent, and Administrative Agent and its Affiliates may
          lend
          money to, invest in and generally engage in any kind of business with each
          Credit Party or Affiliate of any Credit Party as if it were not Administrative
          Agent hereunder.

         

        Section
          13.3 Action
          by Administrative Agent.

         

        The
          duties of Administrative Agent shall be mechanical and administrative in
          nature.
          Administrative Agent shall not have by reason of this Agreement a fiduciary
          relationship in respect of any Lender. Nothing in this Agreement or any
          of the
          Financing Documents is intended to or shall be construed to impose upon
          Administrative Agent any obligations in respect of this Agreement or any
          of the
          Financing Documents except as expressly set forth herein or
          therein.

         

        Section
          13.4 Consultation
          with Experts.

         

        Administrative
          Agent may consult with legal counsel, independent public accountants and
          other
          experts selected by it and shall not be liable for any action taken or
          omitted
          to be taken by it in good faith in accordance with the advice of such counsel,
          accountants or experts.

         

        Section
          13.5 Liability
          of Administrative Agent.

         

        Neither
          Administrative Agent nor any of its directors, officers, agents or employees
          shall be liable to any Lender for any action taken or not taken by it in
          connection with the Financing Documents, except that Administrative Agent
          shall
          be liable with respect to its specific duties set forth hereunder but only
          to
          the extent of its own gross negligence or willful misconduct in the discharge
          thereof as determined by a final non-appealable judgment of a court of
          competent
          jurisdiction. Neither Administrative Agent nor any of its directors, officers,
          agents or employees shall be responsible for or have any duty to ascertain,
          inquire into or verify (a) any statement, warranty or representation made
          in connection with any Financing Document or any borrowing hereunder;
          (b) the performance or observance of any of the covenants or agreements
          specified in any Financing Document; (c) the satisfaction of any condition
          specified in any Financing Document; (d) the validity, effectiveness,
          sufficiency or genuineness of any Financing Document, any Lien purported
          to be
          created or perfected thereby or any other instrument or writing furnished
          in
          connection therewith; (e) the existence or non-existence of any Default or
          Event of Default; or (f) the financial condition of any Credit Party.
          Administrative Agent shall not incur any liability by acting in reliance
          upon
          any notice, consent, certificate, statement, or other writing (which may
          be a
          bank wire, telex, facsimile or electronic transmission or similar
          writing) believed by it to be

         

        
          
            
            

          

          
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        genuine
          or to be signed by the proper party or parties. Administrative Agent shall
          not
          be liable for any apportionment or distribution of payments made by it
          in good
          faith and if any such apportionment or distribution is subsequently determined
          to have been made in error the sole recourse of any Lender to whom payment
          was
          due but not made, shall be to recover from other Lenders any payment in
          excess
          of the amount to which they are determined to be entitled (and such other
          Lenders hereby agree to return to such Lender any such erroneous payments
          received by them).

         

        Section
          13.6 Indemnification.

         

        Each
          Lender shall, in accordance with its Pro Rata Share, indemnify Administrative
          Agent (to the extent not reimbursed by Borrowers) upon demand against any
          cost, expense (including counsel fees and disbursements), claim, demand,
          action,
          loss or liability (except such as result from Administrative Agent's gross
          negligence or willful misconduct as determined by a final non-appealable
          judgment of a court of competent jurisdiction) that Administrative Agent
          may suffer or incur in connection with the Financing Documents or any action
          taken or omitted by Administrative Agent hereunder or thereunder. If any
          indemnity furnished to Administrative Agent for any purpose shall, in the
          opinion of Administrative Agent, be insufficient or become impaired,
          Administrative Agent may call for additional indemnity and cease, or not
          commence, to do the acts indemnified against even if so directed by Required
          Lenders until such additional indemnity is furnished.

         

        Section
          13.7 Right
          to Request and Act on Instructions.

         

        Administrative
          Agent may at any time request instructions from Lenders with respect to
          any
          actions or approvals which by the terms of this Agreement or of any of
          the
          Financing Documents Administrative Agent is permitted or desires to take
          or to
          grant, and if such instructions are promptly requested, Administrative
          Agent
          shall be absolutely entitled to refrain from taking any action or to withhold
          any approval and shall not be under any liability whatsoever to any Person
          for
          refraining from any action or withholding any approval under any of the
          Financing Documents until it shall have received such instructions from
          Required
          Lenders or all or such other portion of the Lenders as shall be prescribed
          by
          this Agreement. Without limiting the foregoing, no Lender shall have any
          right
          of action whatsoever against Administrative Agent as a result of Administrative
          Agent acting or refraining from acting under this Agreement or any of the
          other
          Financing Documents in accordance with the instructions of Required Lenders
          (or
          all or such other portion of the Lenders as shall be prescribed by this
          Agreement) and, notwithstanding the instructions of Required Lenders (or
          such other applicable portion of the Lenders), Administrative Agent shall
          have
          no obligation to take any action if it believes, in good faith, that such
          action
          would violate applicable Law or exposes Administrative Agent to any liability
          for which it has not received satisfactory indemnification in accordance
          with
          the provisions of Section
          13.6.

         

        Section
          13.8 Credit
          Decision.

         

        Each
          Lender acknowledges that it has, independently and without reliance upon
          Administrative Agent or any other Lender, and based on such documents
          and

         

        
          
            
            

          

          
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        information
          as it has deemed appropriate, made its own credit analysis and decision
          to enter
          into this Agreement. Each Lender also acknowledges that it will, independently
          and without reliance upon Administrative Agent or any other Lender, and
          based on
          such documents and information as it shall deem appropriate at the time,
          continue to make its own credit decisions in taking or not taking any action
          under the Financing Documents.

         

        Section
          13.9 Collateral
          Matters. 

         

        Lenders
          irrevocably authorize Administrative Agent, at its option and in its discretion,
          to (a) release any Lien granted to or held by Administrative Agent under
          any Security Document (i) upon payment
          in full of all Obligations or (ii) constituting property sold or disposed
          of as part of or in connection with any disposition permitted under any
          Financing Document (it being understood and agreed that Administrative
          Agent may
          conclusively rely without further inquiry on a certificate of a Responsible
          Officer as to the sale or other disposition of property being made in full
          compliance with the provisions of the Financing Documents); and (b) release
          or subordinate any Lien granted to or held by Administrative Agent under
          any
          Security Document constituting property described in Section
          5.7(b) (it
          being
          understood and agreed that Administrative Agent may conclusively rely without
          further inquiry on a certificate of a Responsible Officer as to the
          identification of any property described in Section 5.7(b)).
          Upon
          request by Administrative Agent at any time, Lenders will confirm Administrative
          Agent's authority
          to release and/or subordinate particular types or items of Collateral pursuant
          to this Section
          13.9.

         

        Section
          13.10 Agency
          for Perfection.

         

        Administrative
          Agent and each Lender hereby appoint each other Lender as agent for the
          purpose
          of perfecting Administrative Agent's security interest in assets which,
          in
          accordance with the Uniform Commercial Code in any applicable jurisdiction,
          can
          be perfected by possession or control. Should any Lender (other than
          Administrative Agent) obtain possession or control of any such assets, such
          Lender shall notify Administrative Agent thereof, and, promptly upon
          Administrative Agent's request therefor, shall deliver such assets to
          Administrative Agent or in accordance with Administrative Agent's instructions
          or transfer control to Administrative Agent in accordance with Administrative
          Agent's instructions. Each Lender agrees that it will not have any right
          individually to enforce or seek to enforce any Security Document or to
          realize
          upon any Collateral for the Loans unless instructed to do so by Administrative
          Agent (or consented to by Administrative Agent, as provided in Section
          11.5),
          it
          being understood and agreed that such rights and remedies may be exercised
          only
          by Administrative Agent.

         

        Section
          13.11 Notice
          of Default.

         

        Administrative
          Agent shall not be deemed to have knowledge or notice of the occurrence
          of any
          Default or Event of Default except with respect to defaults in the payment
          of
          principal, interest and fees required to be paid to Administrative Agent
          for the
          account of Lenders, unless Administrative Agent shall have received written
          notice from a Lender or a

         

        
          
            
            

          

          
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        Borrower
          referring to this Agreement, describing such Default or Event of Default
          and
          stating that such notice is a "notice of default". Administrative Agent
          will
          notify each Lender of its receipt of any such notice. Administrative Agent
          shall
          take such action with respect to such Default or Event of Default as may
          be
          requested by Required Lenders (or all or such other portion of the Lenders
          as
          shall be prescribed by this Agreement) in accordance with the terms hereof.
          Unless and until Administrative Agent has received any such request,
          Administrative Agent may (but shall not be obligated to) take such action,
          or refrain from taking such action, with respect to such Default or Event
          of
          Default as it shall deem advisable or in the best interests of
          Lenders.

         

        Section
          13.12 Successor
          Administrative Agent.

         

        Administrative
          Agent may at any time give notice of its resignation to the Lenders and
          Borrowers. Upon receipt of any such notice of resignation, Required Lenders
          shall have the right, in consultation with Borrowers, to appoint a successor
          Administrative Agent, and provided that, if no Default or Event of Default
          has
          occurred and is outstanding, Borrowers shall have the right to consent
          to any
          such successor Administrative Agent, which consent shall not be unreasonably
          withheld, conditioned or delayed. Upon the acceptance of a successor's
          appointment as Administrative Agent hereunder and notice of such acceptance
          to
          the retiring Administrative Agent, such successor shall succeed to and
          become
          vested with all of the rights, powers, privileges and duties of the retiring
          (or
          retired) Administrative Agent, the retiring Administrative Agent's
          resignation shall become immediately effective and the retiring Administrative
          Agent shall be discharged from all of its duties and obligations hereunder
          and
          under the other Financing Documents (if such resignation was not already
          effective and such duties and obligations not already discharged, as provided
          below in this paragraph). The fees payable by Borrowers to a successor
          Administrative Agent under this Agreement shall be the same as those payable
          to
          its predecessor unless otherwise agreed among Borrowers and such successor.
          If
          no such successor shall have been so appointed by Required Lenders and
          shall
          have accepted such appointment within thirty (30) days after the retiring
          Administrative Agent gives notice of its resignation, then the retiring
          Administrative Agent may on behalf of the Lenders (but without any
          obligation) appoint a successor Administrative Agent, and provided that, if
          no Default or Event of Default has occurred and is outstanding, Borrowers
          shall
          have the right to consent to any such successor Administrative Agent, which
          consent shall not be unreasonably, withheld, conditioned or delayed. From
          and
          following the expiration of such thirty (30) day period, Administrative
          Agent shall have the exclusive right, upon one (1) Business Days' notice to
          Borrower Representative and the Lenders, to make its resignation effective
          immediately. From and following the effectiveness of such notice, (a) the
          retiring Administrative Agent shall be discharged from its duties and
          obligations hereunder and under the other Financing Documents, and (b) all
          payments, communications and determinations provided to be made by, to
          or
          through Administrative Agent shall instead be made by or to each Lender
          directly, until such time as Required Lenders appoint a successor Administrative
          Agent as provided for above in this paragraph. The provisions of this Agreement
          shall continue in effect for the benefit of any retiring Administrative
          Agent
          and its sub-agents after the effectiveness of its resignation hereunder
          and
          under the other

         

        
          
            
            

          

          
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        Financing
          Documents in respect of any actions taken or omitted to be taken by any
          of them
          while the retiring Administrative Agent was acting or was continuing to
          act as
          Administrative Agent.

         

        Section
          13.13 Payment
          and Sharing of Payment.

         

        (a)    Term
          Loan Payments.
          Payments of principal, interest and fees in respect of the Term Loans will
          be
          settled on the date of receipt if received by Administrative Agent on the
          last
          Business Day of a month or on the Business Day immediately following the
          date of
          receipt if received on any day other than the last Business Day of a
          month.

         

        (b)    Return
          of Payments.

         

        (i)    If
          Administrative Agent pays an amount to a Lender under this Agreement in
          the
          belief or expectation that a related payment has been or will be received
          by
          Administrative Agent from a Borrower and such related payment is not received
          by
          Administrative Agent, then Administrative Agent will be entitled to recover
          such
          amount from such Lender on demand without setoff, counterclaim or deduction
          of
          any kind, together with interest accruing on a daily basis at the Federal
          Funds
          Rate.

         

        (ii)    If
          Administrative Agent determines at any time that any amount received by
          Administrative Agent under this Agreement must be returned to any Borrower
          or
          paid to any other Person pursuant to any insolvency law or otherwise, then,
          notwithstanding any other term or condition of this Agreement or any other
          Financing Document, Administrative Agent will not be required to distribute
          any
          portion thereof to any Lender. In addition, each Lender will repay to
          Administrative Agent on demand any portion of such amount that Administrative
          Agent has distributed to such Lender, together with interest at such rate,
          if
          any, as Administrative Agent is required to pay to any Borrower or such
          other
          Person, without setoff, counterclaim or deduction of any kind.

         

        (c)    Defaulted
          Lenders.
          The
          failure of any Defaulted Lender to make any payment required by it hereunder
          shall not relieve any other Lender of its obligations to make payment,
          but
          neither any other Lender nor Administrative Agent shall be responsible
          for the
          failure of any Defaulted Lender to make any payment required hereunder.
          Notwithstanding anything set forth herein to the contrary, a Defaulted
          Lender
          shall not have any voting or consent rights under or with respect to any
          Financing Document or constitute a "Lender" (or be included in the calculation
          of "Required Lenders" hereunder) for any voting or consent rights under or
          with respect to any Financing Document. 

         

        (d)    Sharing
          of Payments.
          If any
          Lender shall obtain any payment or other recovery (whether voluntary,
          involuntary, by application of setoff or otherwise) on account of any Loan
          (other than pursuant to the terms of Section
          2.9) in
          excess of its pro rata share of payments entitled pursuant to the other
          provisions of this Section
          13.13,
          such
          Lender shall purchase from the other Lenders such participations in extensions
          of credit made by such other Lenders (without recourse, representation
          or
          warranty) as shall be necessary to cause such purchasing Lender to share
          the excess payment or other recovery ratably with each of

         

        
          
            
            

          

          
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        them;
          provided, however, that if all or any portion of the excess payment or
          other
          recovery is thereafter recovered from such purchasing Lender, the purchase
          shall
          be rescinded and each Lender which has sold a participation to the purchasing
          Lender shall repay to the purchasing Lender the purchase price to the ratable
          extent of such recovery, without interest. Each Borrower agrees that any
          Lender
          so purchasing a participation from another Lender pursuant to this clause
          (d) may, to the fullest extent permitted by law, exercise all its rights of
          payment (including pursuant to Section
          11.5) with
          respect to such participation as fully as if such Lender were the direct
          creditor of Borrowers in the amount of such participation. If under any
          applicable bankruptcy, insolvency or other similar law, any Lender receives
          a
          secured claim in lieu of a setoff to which this clause (d) applies, such
          Lender shall, to the extent practicable, exercise its rights in respect
          of such
          secured claim in a manner consistent with the rights of the Lenders entitled
          under this clause (d) to share in the benefits of any recovery on such
          secured claim.

         

        Section
          13.14 Right
          to Perform, Preserve and Protect.

         

        Upon
          and
          during the continuance of any Default or Event of Default, Administrative
          Agent
          itself may, but shall not be obligated to, cause any obligation of any
          Credit
          Party hereunder or under any other Financing Document to be performed at
          Borrowers' expense. Upon and during the continuance of any Default or Event
          of
          Default, Administrative Agent is further authorized by Borrowers and the
          Lenders
          to make expenditures from time to time which Administrative Agent, in its
          reasonable business judgment, deems necessary or desirable to (a) preserve
          or protect the business conducted by Borrowers, the Collateral, or any
          portion
          thereof, and/or (b) enhance the likelihood of, or maximize the amount of,
          repayment of the Loans and other Obligations. Each Borrower hereby agrees
          to
          reimburse Administrative Agent on demand for any and all costs (which costs
          shall be reasonable), liabilities and obligations incurred by Administrative
          Agent pursuant to this Section
          13.14.
          Each
          Lender hereby agrees to indemnify Administrative Agent upon demand for
          any and
          all costs, liabilities and obligations incurred by Administrative Agent
          pursuant
          to this Section
          13.14,
          in
          accordance with the provisions of Section
          13.6.
          

         

        Section
          13.15 Additional
          Titled Agents.

         

        Except
          for rights and powers, if any, expressly reserved under this Agreement
          to any
          bookrunner, arranger or to any titled agent named on the cover page of
          this
          Agreement, other than Administrative Agent (collectively, the "Additional
          Titled Agents"),
          and
          except for obligations, liabilities, duties and responsibilities, if any,
          expressly assumed under this Agreement by any Additional Titled Agent,
          no
          Additional Titled Agent, in such capacity, has any rights, powers, liabilities,
          duties or responsibilities hereunder or under any of the other Financing
          Documents. Without limiting the foregoing, no Additional Titled Agent shall
          have
          nor be deemed to have a fiduciary relationship with any Lender. At any
          time that
          any Lender serving as an Additional Titled Agent shall have transferred
          to any
          other Person (other than any Affiliates) all of its interests in the Loans,
          such Lender shall be deemed to have concurrently resigned as such Additional
          Titled Agent.

         

        
          
            
            

          

          
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        Section
          13.16 Amendments
          and Waivers.

         

        In
          addition to the required signatures under Section
          14.5,
          no
          provision of this Agreement or any other Financing Document may be amended,
          waived or otherwise modified unless such amendment, waiver or other modification
          is in writing and is signed or otherwise approved by the following
          Persons:

         

        (a)    if
          any
          amendment, waiver or other modification would increase a Lender's funding
          obligations in respect of any Term Loan, by such Lender; and/or

         

        (b)    if
          the
          rights or duties of Administrative Agent are affected thereby, by Administrative
          Agent;

         

        Provided
          that,
          in
          each of (a) and (b) above, no such amendment, waiver or other
          modification shall, unless signed by all the Lenders directly affected
          thereby,
          (i) reduce the principal of, rate of interest on or any fees with respect
          to any Loan or forgive any principal, interest (other than default
          interest) or fees (other than late charges) with respect to any Loan;
          (ii) postpone the date fixed for, or waive, any payment (other than a
          payment pursuant to Section 2.1(c) or
          Section
          6.7) of
          principal of any Loan, or of interest on any Loan (other than default
          interest) or any fees provided for hereunder (other than late
          charges) or for any termination of any commitment; (iii) change the
          definition of the term Required Lenders or the percentage of Lenders which
          shall
          be required for Lenders to take any action hereunder; (iv) release all or
          substantially all of the Collateral, authorize any Borrower to sell or
          otherwise
          dispose of all or substantially all of the Collateral or release any Guarantor
          of all or any portion of the Obligations of its Guarantee obligations with
          respect thereto, except, in each case with respect to this clause (iv), as
          otherwise may be provided in this Agreement or the other Financing Documents
          (including in connection with any disposition permitted hereunder);
          (v) amend, waive or otherwise modify this Section
          13.16
          or the
          definitions of the terms used in this Section
          13.16
          insofar
          as the definitions affect the substance of this Section
          13.16;
          or
(vi) consent
          to the assignment, delegation or other transfer by any Credit Party of
          any of
          its rights and obligations under any Financing Document or release any
          Borrower
          of its payment obligations under any Financing Document, except, in each
          case
          with respect to this clause (vi), pursuant to a merger or consolidation
          permitted pursuant to this Agreement. It is hereby understood and agreed
          that
          all Lenders shall be deemed directly affected by an amendment, waiver or
          other
          modification of the type described in the preceding clauses (iii), (iv),
          (v) and (vi) of the preceding sentence.

         

        Section
          13.17 Assignments
          and Participations.

         

        (a)    Any
          Lender may at any time assign to one or more Eligible Assignees all or
          any
          portion of such Lender's Loans together with all related obligations of
          such
          Lender hereunder. Except as Administrative Agent may otherwise agree, the
          amount
          of any such assignment (determined as of the date of the applicable Assignment
          Agreement or, if a "Trade
          Date"
          is
          specified in such Assignment Agreement, as of such Trade Date) shall be in
          a minimum
          aggregate amount equal to $1,000,000 or, if less, the assignor's entire
          interests in the outstanding Loans; provided, however, that, in connection
          with
          simultaneous

         

        
          
            
            

          

          
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        assignments
          to two or more related Approved Funds, such Approved Funds shall be treated
          as
          one assignee for purposes of determining compliance with the minimum assignment
          size referred to above. Borrowers and Administrative Agent shall be entitled
          to
          continue to deal solely and directly with such Lender in connection with
          the
          interests so assigned to an Eligible Assignee until Administrative Agent
          shall
          have received and accepted an effective Assignment Agreement
          executed,
          delivered and fully completed by the applicable
          parties thereto
          and
          a
          processing fee of $3,500;
          provided,
          however,
          that
          only one processing fee shall be payable in connection with simultaneous
          assignments to two or more related Approved Funds. 

         

        (b)    From
          and
          after the date on which the conditions described above have been met,
          (i) such Eligible Assignee shall be deemed automatically to have become a
          party hereto and, to the extent of the interests assigned to such Eligible
          Assignee pursuant to such Assignment Agreement, shall have the rights and
          obligations of a Lender hereunder and (ii) the assigning Lender, to the
          extent that rights and obligations hereunder have been assigned by it pursuant
          to such Assignment Agreement, shall be released from its rights and obligations
          hereunder (other than those that survive termination pursuant to Section
          14.1).
          Upon
          the request of the Eligible Assignee (and, as applicable, the assigning
          Lender) pursuant to an effective Assignment Agreement, each Borrower shall
          execute and deliver to Administrative Agent for delivery to the Eligible
          Assignee (and, as applicable, the assigning Lender) Notes in the aggregate
          principal amount of the Eligible Assignee's Term Loans (and, as applicable,
          Notes in the principal amount of that portion of the principal amount of
          the
          Term Loans retained by the assigning Lender). Upon receipt by the assigning
          Lender of such Note, the assigning Lender shall return to Borrower
          Representative any prior Note held by it.

         

        (c)    Notwithstanding
          the foregoing provisions of this Section
          13.17
          or any
          other provision of this Agreement, any Lender may at any time pledge or
          assign a
          security interest in all or any portion of its rights under this Agreement
          to
          secure obligations of such Lender, including any pledge or assignment to
          secure
          obligations to a Federal Reserve Bank; provided, however, that no such
          pledge or
          assignment shall release such Lender from any of its obligations hereunder
          or
          substitute any such pledgee or assignee for such Lender as a party
          hereto.

         

        (d)    Notwithstanding
          the foregoing provisions of this Section
          13.17
          or any
          other provision of this Agreement, Administrative Agent has the right,
          but not
          the obligation, to effectuate assignments of Loans via an electronic settlement
          system acceptable to Administrative Agent as designated in writing from
          time to
          time to the Lenders by Administrative Agent (the "Settlement
          Service").
          At
          any time when the Administrative Agent elects, in its sole discretion,
          to
          implement such Settlement Service, each such assignment shall be effected
          by the
          assigning Lender and proposed assignee pursuant to the procedures then
          in effect
          under the Settlement Service, which procedures shall be consistent with
          the
          other provisions of this Section
          13.17.
          Each
          assigning Lender and proposed Eligible Assignee shall comply with the
          requirements of the Settlement Service in connection with effecting any
          assignment of Loans pursuant to the Settlement Service. If so elected by
          each of
          Administrative Agent and the Borrowers, Administrative Agent's and the
          Borrowers' approval of such Eligible Assignee shall be deemed to have been
          automatically granted with

         

        
          
            
            

          

          
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        respect
          to any transfer effected through the Settlement Service. Assignments and
          assumptions of the Loans shall be effected by the provisions otherwise
          set forth
          herein until Administrative Agent notifies Lenders of the Settlement Service
          as
          set forth herein.

         

        (e)    Any
          Lender may at any time, without the consent of, or notice to, any Borrower
          or
          Administrative Agent, sell to one or more Persons participating interests
          in its
          Loans, commitments or other interests hereunder (any such Person, a
          "Participant").
          In
          the event of a sale by a Lender of a participating interest to a Participant,
          (i) such Lender's obligations hereunder
          shall remain unchanged for all purposes, (ii) Borrowers and Administrative
          Agent shall continue to deal solely
          and directly with such Lender in connection with such Lender's rights and
          obligations hereunder, and (iii) all amounts payable by each Borrower shall
          be determined as if such Lender had not sold such participation and
          shall
          be paid directly to such Lender. No Participant shall have any direct or
          indirect voting rights hereunder except with respect to (x) any event
          described in Section
          13.16
          expressly requiring the unanimous vote of all Lenders or, as applicable,
          all
          affected Lenders, and (y) the institution or commencement of enforcement
          remedies. Each Lender agrees to incorporate the requirements of the preceding
          sentence into each participation agreement which such Lender enters into
          with
          any Participant. Each Borrower agrees that if amounts outstanding under
          this
          Agreement are due and payable (as a result of acceleration or otherwise),
          each
          Participant shall be deemed to have the right of set-off in respect of
          its
          participating interest in amounts owing under this Agreement to the same
          extent
          as if the amount of its participating interest were owing directly to it
          as a
          Lender under this Agreement; provided, however, that such right of set-off
          shall
          be subject to the obligation of
          each
          Participant to share with Lenders, and Lenders agree to share with each
          Participant, as provided in Section
          11.5.

         

        (f)    Within
          thirty (30) days after: (i) receipt by Administrative Agent of notice
          and demand from any Lender for payment of additional costs as provided
          in
Section
          2.9,
          which
          demand shall not have been revoked, (ii) any Borrower is required to pay
          any additional amount to any Lender or any Governmental Authority for the
          account of any Lender pursuant to Section
          2.8,
          (iii) any Lender is a Defaulted Lender, and the circumstances causing such
          status shall not have been cured or waived; or (iv) any failure by any
          Lender to consent to a requested amendment, waiver or modification to any
          Financing Document in which Required Lenders have already consented to
          such
          amendment, waiver or modification but the consent of each Lender, or each
          Lender
          affected thereby, is required with respect thereto, (each relevant Lender
          in the
          foregoing clauses (i) through (iv) being an "Affected Lender") each
          of Borrower Representative and Administrative Agent may, at its option,
          notify
          such Affected Lender and, in the case of Borrowers' election, the Administrative
          Agent, of such Person's intention to obtain, at Borrowers' expense, a
          replacement Lender ("Replacement
          Lender") for
          such Lender, which Replacement Lender shall be an Eligible Assignee and,
          in the
          event the Replacement Lender is to replace an Affected Lender described
          in the
          preceding clause (iv), such Replacement Lender consents to the requested
          amendment, waiver or modification making the replaced Lender an Affected
          Lender.
          In the event Borrowers or Administrative Agent, as applicable, obtains
          a
          Replacement Lender within ninety (90) days following notice of its
          intention to do so, the Affected Lender shall

         

        
          
            
            

          

          
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        sell,
          at
          par, and assign all of its Loans and funding commitments hereunder to such
          Replacement Lender in accordance with the procedures set forth in Section
          14.6(a);
          provided, however, that (i) Borrowers shall have reimbursed such Lender for
          its increased costs and additional payments for which it is entitled to
          reimbursement under Section
          2.8
          or
Section
          2.9,
          as
          applicable, of this Agreement through the date of such sale and assignment
          and
          (ii) Borrowers shall pay to Administrative Agent the $3,500 processing fee
          in respect of such assignment. In the event that a replaced Lender does
          not
          execute an Assignment Agreement pursuant to Section
          13.17(a) within
          five (5) Business Days after receipt by such replaced Lender of notice of
          replacement pursuant to this Section
          13.17(f) and
          presentation to such replaced Lender of an Assignment Agreement evidencing
          an
          assignment pursuant to this Section
          13.17(f),
          such
          replaced Lender shall be deemed to have consented to the terms of such
          Assignment Agreement, and any such Assignment Agreement executed by
          Administrative Agent, the Replacement Lender and, to the extent required
          pursuant to Section
          13.17(a),
          Borrowers, shall be effective for purposes of this Section
          13.17(f) and
          Section
          13.17(a).
          Upon
          any such assignment and payment, such replaced Lender shall no longer constitute
          a "Lender" for purposes hereof, other than with respect to such rights
          and
          obligations that survive termination as set forth in Section
          14.1.

         

        Section
          13.18 Definitions.

         

        As
          used
          in this Article 13, the following terms have the following
          meanings:

         

        "Approved
          Fund"
          means
          any (a) investment company, fund, trust, securitization vehicle or conduit
          that is (or will be) engaged in making, purchasing, holding or otherwise
          investing in commercial loans and similar extensions of credit in the ordinary
          course of its business or (b) any Person (other than a natural
          person) which temporarily warehouses loans for any Lender or any entity
          described in the preceding clause (a) and that, with respect to each of the
          preceding clauses (a) and (b), is administered or managed by (i) a
          Lender, (ii) an Affiliate of a Lender or (iii) a Person (other than a
          natural person) or an Affiliate of a Person (other than a natural
          person) that administers or manages a Lender.

         

        "Assignment
          Agreement"
          means
          an agreement substantially in the form of Exhibit
          A
          hereto.

         

        "Defaulted
          Lender"
          means,
          so long as such failure shall remain in existence and uncured, any Lender
          which
          shall have failed to make any Loan or other credit accommodation, disbursement
          or reimbursement required pursuant to the terms of any Financing
          Document.

         

        "Eligible
          Assignee"
          means
          (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund,
          and (d) any other Person (other than a natural person) approved by
          (i) Administrative Agent, and (ii) unless an Event of Default has
          occurred and is continuing, Borrower Representative (such approval of Borrower
          Representative not to be unreasonably withheld or delayed, and shall be
          deemed
          provided unless expressly withheld by Borrower Representative within three
          (3) Business Days of request therefor); provided, however,
          that

         

        
          
            
            

          

          
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        notwithstanding
          the foregoing, "Eligible
          Assignee"
          shall
          not include any Borrower or any of a Borrower's Affiliates.

         

        "Federal
          Funds Rate"
          means,
          for any day, the rate of interest per annum (rounded upwards, if necessary,
          to
          the nearest whole multiple of 1/100 of 1%) equal to the weighted average of
          the rates on overnight Federal funds transactions with members of the Federal
          Reserve System arranged by Federal funds brokers on such day, as published
          by
          the Federal Reserve Bank of New York on the Business Day next succeeding
          such
          day, provided, however, that (a) if such day is not a Business Day, the
          Federal Funds Rate for such day shall be such rate on such transactions
          on the
          next preceding Business Day, and (b) if no such rate is so published on
          such next preceding Business Day, the Federal Funds Rate for such day shall
          be
          the average rate quoted to Administrative Agent on such day on such transactions
          as determined by Administrative Agent.

         

        ARTICLE
          14

        MISCELLANEOUS

         

        Section
          14.1 Survival.

         

        All
          agreements, representations and warranties made herein and in every other
          Financing Document shall survive the execution and delivery of this Agreement
          and the other Financing Documents. The provisions of Sections 2.8
          and
2.9
          and
          Article 12 and 13 shall survive the payment of the Obligations (both with
          respect to any Lender and all Lenders collectively), any termination of
          this
          Agreement, and any judgment with respect to any Obligations, including
          any final
          foreclosure judgment with respect to any Security Document, and no unpaid
          or
          unperformed, current or future, Obligations will merge into any such
          judgment.

         

        Section
          14.2 No
          Waivers.

         

        No
          failure or delay by Administrative Agent or any Lender in exercising any
          right,
          power or privilege under any Financing Document shall operate as a waiver
          thereof nor shall any single or partial exercise thereof preclude any other
          or
          further exercise thereof or the exercise of any other right, power or privilege.
          The rights and remedies herein and therein provided shall be cumulative
          and not
          exclusive of any rights or remedies provided by law. Any reference in any
          Financing Document to the "continuing" nature of any Event of Default shall
          not
          be construed as establishing or otherwise indicating that any Borrower
          or any
          other Credit Party has the independent right to cure any such Event of
          Default,
          but is rather presented merely for convenience should such Event of Default
          be
          waived in accordance with the terms of the applicable Financing
          Documents.

         

        Section
          14.3 Notices.

         

        (a)    All
          notices, requests and other communications to any party hereunder shall
          be in
          writing (including prepaid overnight courier, facsimile transmission or
          similar
          writing) and shall be given to such party at its address, facsimile number
          or e-mail address

         

        
          
            
            

          

          
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        set
          forth
          on the signature pages hereof (or, in the case of any such Lender who becomes
          a
          Lender after the date hereof, in an Assignment Agreement or in a notice
          delivered to Borrower Representative and Administrative Agent by the assignee
          Lender forthwith upon such assignment) or at such other address, facsimile
          number or e-mail address as such party may hereafter specify for the purpose
          by
          notice to Administrative Agent and Borrower Representative; provided, however,
          that notices, requests or other communications shall be permitted by electronic
          means only in accordance with the provisions of Section
          14.3(b).
          Each
          such notice, request or other communication shall be effective (i) if given
          by facsimile, when such notice is transmitted to the facsimile number specified
          by this Section and the sender receives a confirmation of transmission
          from the
          sending facsimile machine, or (ii) if given by mail, prepaid overnight
          courier or any other means, when received or
          when
          receipt is refused at
          the
          applicable address specified by this Section.

         

        (b)    Notices
          and other communications to the parties hereto may be delivered or furnished
          by
          electronic communication (including facsimile transmission, e-mail and
          Internet
          or intranet websites) pursuant to procedures approved from time to time by
          Administrative Agent, provided, however, that the foregoing shall not apply
          to
          default notices or any notice of the exercise of remedies to any Credit
          Party
          unless such electronic communication is confirmed within one (1) Business
          Day by overnight courier or notices sent directly to any Lender if such
          Lender
          has notified the Administrative Agent that it is incapable of receiving
          notices
          by electronic communication. The Administrative Agent or Borrower Representative
          may, in its discretion, agree to accept notices and other communications
          to it
          hereunder by electronic communications pursuant to procedures approved
          by it,
          provided, however, that approval of such procedures may be limited to particular
          notices or communications.

         

        (c)    Unless
          the parties otherwise agree, (i) notices and other communications sent to
          an e-mail address shall be deemed received upon the sender's receipt of
          an
          acknowledgment from the intended recipient (such as by the "return receipt
          requested" function, as available, return e-mail or other written
          acknowledgment), and (ii) notices or communications posted to an Internet
          or intranet website shall be deemed received upon the deemed receipt by
          the
          intended recipient at its e-mail address as described in the foregoing
          clause
          (i) of notification that such notice or communication is available and
          identifying the website address therefor, provided, however, that if any
          such
          notice or other communication is not sent or posted during normal business
          hours, such notice or communication shall be deemed to have been sent at
          the
          opening of business on the next Business Day.

         

        Section
          14.4 Severability.

         

        In
          case
          any provision of or obligation under this Agreement or any other Financing
          Document shall be invalid, illegal or unenforceable in any jurisdiction,
          the
          validity, legality and enforceability of the remaining provisions or
          obligations, or of such provision or obligation in any other jurisdiction,
          shall
          not in any way be affected or impaired thereby. 

         

        
          
            
            

          

          
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        Section
          14.5 Amendments
          and Waivers.

         

        No
          provision of this Agreement or any other Financing Document may be materially
          amended, waived or otherwise modified unless such amendment, waiver or
          other
          modification is in writing and is signed or otherwise approved by Borrowers,
          the
          Required Lenders and any other Lender to the extent required under Section
          13.16;
          provided,
          however,
          that
          Administrative Agent shall be entitled, in its sole but commercially reasonable
          discretion and without the consent of any other Lender, to waive any financial
          covenant of any Credit Party. 

         

        Section
          14.6 Credit
          Party Assignments.

         

        No
          Credit
          Party may assign, delegate or otherwise transfer any of its rights or other
          obligations hereunder or under any other Financing Document without the
          prior
          written consent of Administrative Agent and each Lender.

         

        Section
          14.7 Headings.

         

        Headings
          and captions used in the Financing Documents (including the Exhibits, Schedules
          and Annexes hereto and thereto) are included for convenience of reference
          only and shall not be given any substantive effect.

         

        Section
          14.8 Confidentiality.

         

        Administrative
          Agent and each Lender shall hold all non-public information regarding the
          Credit
          Parties, their Affiliates and their respective businesses identified as
          such by
          Borrowers and obtained by Administrative Agent or any Lender pursuant to
          the
          requirements hereof in accordance with such Person's customary procedures
          for
          handling information of such nature, except that disclosure of such information
          may be made (a) to their respective agents, employees, Subsidiaries,
          Affiliates, attorneys, auditors, professional consultants, rating agencies,
          insurance industry associations and portfolio management services, (b) to
          prospective transferees or purchasers of any interest in the Loans and
          to
          prospective contractual counterparties (or the professional advisors thereto)
          in
          Swap Contracts, provided, however, that any such Persons shall have agreed
          to be
          bound by the provisions of this Section
          14.8,
          (c) as required by Law, subpoena, judicial order or similar order and in
          connection with any litigation, (d) as may be required in connection with
          the examination, audit or similar investigation of such Person and (e) to
          a Person that is a trustee, investment advisor, collateral manager, servicer,
          noteholder or secured party in a Securitization (as hereinafter defined) in
          connection with the administration, servicing and reporting on the assets
          serving as collateral for such Securitization. For the purposes of this
          Section,
          "Securitization"
          shall
          mean a public or private offering by a Lender or any of its Affiliates
          or their
          respective successors and assigns, of securities which represent an interest
          in,
          or which are collateralized, in whole or in party, by the Loans.
          Confidential information shall include only such information identified
          as such
          at the time provided to Administrative Agent and shall not include information
          that either: (i) is in the public domain, or becomes part of the public
          domain after disclosure to such Person through no fault of such Person,
          or

         

        
          
            
            

          

          
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        (ii)    is
          disclosed
          to such Person by a Person other than a Credit Party, provided, however,
          Administrative Agent does not have actual knowledge that such Person is
          prohibited from disclosing such information. The obligations of Administrative
          Agent and Lenders under this Section
          14.8
          shall
          supersede and replace the obligations of Administrative Agent and Lenders
          under
          any confidentiality agreement in respect of this financing executed and
          delivered by Administrative Agent or any Lender prior to the date
          hereof.

         

        Section
          14.9 Waiver
          of Consequential and Other Damages.

         

        To
          the
          fullest extent permitted by applicable law, no Borrower shall assert, and
          each
          Borrower hereby waives, any claim against any Indemnitee, on any theory
          of
          liability, for special, indirect, consequential or punitive damages (as
          opposed
          to direct or actual damages) arising out of, in connection with, or as a
          result of this Agreement, any other Financing Document or any agreement
          or
          instrument contemplated hereby or thereby, the transactions contemplated
          hereby
          or thereby, any Loan or the use of the proceeds thereof. No Indemnitee
          shall be
          liable for any damages arising from the use by unintended recipients of
          any
          information or other materials distributed by it through telecommunications,
          electronic or other information transmission systems in connection with
          this
          Agreement or the other Financing Documents or the transactions contemplated
          hereby or thereby.

         

        Section
          14.10 GOVERNING
          LAW; SUBMISSION TO JURISDICTION.

         

        THIS
          AGREEMENT, EACH NOTE AND EACH OTHER FINANCING DOCUMENT, AND ALL MATTERS
          RELATING
          HERETO OR THERETO OR ARISING THEREFROM (WHETHER SOUNDING IN CONTRACT LAW,
          TORT
          LAW OR OTHERWISE), SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
          IN
          ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICTS
          OF LAWS PRINCIPLES. EACH BORROWER HEREBY CONSENTS TO THE JURISDICTION OF
          ANY
          STATE OR FEDERAL COURT LOCATED WITHIN CHICAGO, STATE OF ILLINOIS AND IRREVOCABLY
          AGREES THAT, SUBJECT TO ADMINISTRATIVE AGENT'S ELECTION, ALL ACTIONS OR
          PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER FINANCING
          DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS. EACH BORROWER EXPRESSLY SUBMITS
          AND
          CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE
          OF
          FORUM NON CONVENIENS. EACH BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY
          AND
          ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON
          SUCH
          BORROWER BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED
          TO
          SUCH BORROWER AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND SERVICE SO
          MADE
          SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.

         

        
          
            
            

          

          
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        Section
          14.11 WAIVER
          OF JURY TRIAL.

         

        EACH
          OF EACH BORROWER, ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY
          WAIVES
          ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING
          OUT
          OF OR RELATING TO THE FINANCING DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
          THEREBY AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE
          A
          COURT AND NOT BEFORE A JURY. EACH OF EACH BORROWER, ADMINISTRATIVE AGENT
          AND
          EACH LENDER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER
          INTO
          A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING
          INTO
          THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND THAT EACH WILL CONTINUE
          TO
          RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH OF EACH BORROWER,
          ADMINISTRATIVE AGENT AND EACH LENDER WARRANTS AND REPRESENTS THAT EACH
          HAS HAD
          THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT
          EACH
          KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.

         

        Section
          14.12 Publication;
          Advertisement.

         

        (a)    Publication.
          No
          Credit Party will directly or indirectly publish, disclose or otherwise
          use in
          any public disclosure, advertising material, promotional material, press
          release
          or interview, any reference to the name, logo or any trademark of Merrill
          Lynch
          or any of its Affiliates or any reference to this Agreement or the financing
          evidenced hereby, in any case except (i) as required by Law, subpoena or
          judicial or similar order, in which case the applicable Credit Party shall
          give
          Administrative Agent prior written notice of such publication or other
          disclosure, or (ii) with Merrill Lynch's prior written
          consent.

         

        (b)    Advertisement.
          Each
          Lender and each Credit Party hereby authorizes Merrill Lynch to publish
          the name
          of such Lender and Credit Party, the existence of the financing arrangements
          referenced under this Agreement, the primary purpose and/or structure of
          those
          arrangements, the amount of credit extended under each facility, the title
          and
          role of each party to this Agreement, and the total amount of the financing
          evidenced hereby in any "tombstone", comparable advertisement or press
          release
          which Merrill Lynch elects to submit for publication. In addition, each
          Lender
          and each Credit Party agrees that Merrill Lynch may provide lending industry
          trade organizations with information necessary and customary for inclusion
          in
          league table measurements after the Closing Date. With respect to any of
          the
          foregoing, Merrill Lynch shall provide Borrowers with an opportunity to
          review
          and confer with Merrill Lynch regarding the contents of any such tombstone,
          advertisement or information, as applicable, prior to its submission for
          publication and, following such review period, Merrill Lynch may, from
          time to
          time, publish such information in any media form desired by Merrill Lynch,
          until
          such time that Borrowers shall have requested Merrill Lynch cease any such
          further publication.

         

        
          
            
            

          

          
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        Section
          14.13 Counterparts;
          Integration.

         

        This
          Agreement and the other Financing Documents may be signed in any number
          of
          counterparts, each of which shall be an original, with the same effect
          as if the
          signatures thereto and hereto were upon the same instrument. Signatures
          by
          facsimile shall bind the parties hereto. This Agreement and the other Financing
          Documents constitute the entire agreement and understanding among the parties
          hereto and supersede any and all prior agreements and understandings, oral
          or
          written, relating to the subject matter hereof.

         

        Section
          14.14 No
          Strict Construction.

         

        The
          parties hereto have participated jointly in the negotiation and drafting
          of this
          Agreement. In the event an ambiguity or question of intent or interpretation
          arises, this Agreement shall be construed as if drafted jointly by the
          parties
          hereto and no presumption or burden of proof shall arise favoring or disfavoring
          any party by virtue of the authorship of any provisions of this
          Agreement.

         

        Section
          14.15 Time.

         

        Time
          is
          of the essence in each Borrower's and each other Credit Party's performance
          under this Agreement and all other Financing Documents.

         

        Section
          14.16 Lender
          Approvals.

         

        Unless
          expressly provided herein to the contrary, any approval, consent, waiver
          or
          satisfaction of Administrative Agent or Lenders with respect to any matter
          that
          is the subject of this Agreement, the other Financing Documents may be
          granted
          or withheld by Administrative Agent and Lenders in their sole and absolute
          discretion and credit judgment. 

         

        Section
          14.17 [Reserved.]

         

        Section
          14.18 WAIVERS.

         

        EACH
          BORROWER WAIVES THE BENEFIT OF ANY AND EVERY STATUTE, ORDINANCE, OR RULE
          OF
          COURT WHICH MAY BE LAWFULLY WAIVED CONFERRING UPON SUCH BORROWER ANY RIGHT
          OR PRIVILEGE OF EXEMPTION, HOMESTEAD RIGHTS, STAY OF EXECUTION, OR SUPPLEMENTARY
          PROCEEDINGS, OR OTHER RELIEF FROM THE ENFORCEMENT OR IMMEDIATE ENFORCEMENT
          OF A
          JUDGMENT OR RELATED PROCEEDINGS ON A JUDGMENT. 

         

        Section
          14.19 Release
          of Administrative Agent and Lenders. 

         

        Each
          Borrower, voluntarily, knowingly, unconditionally, and irrevocably, with
          specific and express intent, for and on behalf of itself and its agents,
          attorneys, heirs, successors, and assigns (collectively the "Releasing
          Parties") does
          hereby fully and completely release, acquit and forever discharge each
          Indemnitee, and any other person,

         

        
          
            
            

          

          
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        firm,
          business, corporation, insurer, or association which may be responsible
          or
          liable for the acts or omissions of any Indemnitee, or who may be liable
          for the
          injury or damage resulting therefrom (collectively the "Released
          Parties"),
          of
          and from any and all actions, causes of action, suits, debts, disputes,
          damages,
          claims, obligations, liabilities, costs, expenses and demands of any kind
          whatsoever, at law or in equity, whether matured or unmatured, liquidated
          or
          unliquidated, vested or contingent, choate or inchoate, known or unknown
          that
          the Releasing Parties (or any of them) has against the Released Parties or
          any of them (whether directly or indirectly). The foregoing release shall
          be
          deemed renewed and reaffirmed as of the date of each advance of proceeds
          under
          any Loans and each other accommodation made or granted to any Borrower
          by any
          Released Party under any Financing Document. Each Borrower acknowledges
          that the
          foregoing release is a material inducement to Administrative Agent's and
          each
          Lender's decision to extend to Borrower the financial accommodations hereunder
          and has been relied upon by Administrative Agent and each Lender in agreeing
          to
          extend the credit herein contemplated and in making each advance or other
          accommodation hereunder. 

         

        ARTICLE
          15

        JOINT
          AND SEVERAL LIABILITY; GUARANTOR PROVISIONS

         

        Section
          15.1 Joint
          and Several Obligations.

         

        (a)    Borrowers
          is defined collectively to include all Persons constituting the Borrowers;
          provided, however, that any references herein to "any Borrower", "each
          Borrower"
          or similar references, shall be construed as a reference to each individual
          Person comprising the Borrowers. Each Person comprising Borrowers shall
          be
          jointly and severally liable for all of the obligations of Borrowers under
          this
          Agreement and the Borrowers under the Affiliated Financing Documents (the
          "Affiliated
          Borrowers"),
          regardless of which of the Borrowers or the Affiliated Borrowers actually
          receives the proceeds of the indebtedness governed hereby or the benefit
          of any
          other extensions of credit hereunder or the benefit of any other extension
          of
          credit under the Affiliated Financing Documents, or the manner in which
          the
          Borrowers, the Affiliated Borrowers, the Administrative Agent or the Lenders
          account therefor in their respective books and records. In addition, each
          entity
          comprising Borrowers hereby acknowledges and agrees that all of the
          representations, warranties, covenants, obligations, conditions, agreements
          and
          other terms contained in this Agreement shall be applicable to and shall
          be
          binding upon and measured and enforceable individually against each Person
          comprising Borrowers as well as all such Persons when taken together. By
          way of
          illustration, but without limiting the generality of the foregoing, the
          terms of
Section 11.1
          of this
          Agreement are to be applied to each individual Person comprising the Borrowers
          (as well as to all such Persons taken as a whole), such that the occurrence
          of
          any of the events described in Section 11.1
          of this
          Agreement as to any Person comprising the Borrowers shall constitute an
          Event of
          Default even if such event has not occurred as to any other Persons comprising
          the Borrowers or as to all such Persons taken as a whole (except as otherwise
          expressly provided therein).

         

        (b)    Each
          Borrower acknowledges that it will enjoy significant benefits from the
          business
          conducted by the other Borrowers and the Affiliated Borrowers because
          of,

         

        
          
            
            

          

          
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        inter
          alia, their combined ability to bargain with other Persons including without
          limitation their ability to receive the credit extensions under this Agreement
          and the other Financing Documents and the Affiliated Financing Documents
          on
          favorable terms granted by this Agreement and other Financing Documents
          and the
          Affiliated Financing Documents which would not have been available to an
          individual Borrower acting alone. Each Borrower has determined that it
          is in its
          best interest to procure the credit facilities contemplated hereunder,
          with the
          credit support of the other Borrowers as contemplated by this Agreement
          and the
          other Financing Documents and the credit support of the Affiliated Borrowers
          as
          contemplated by the Affiliated Financing Documents.

         

        (c)    Administrative
          Agent and Lenders have advised the Borrowers that each of them is unwilling
          to
          enter into this Agreement, the other Financing Documents and the Affiliated
          Financing Documents and make available the credit facilities extended hereby
          or
          thereby to any Borrower or Affiliated Borrower unless each Borrower agrees,
          among other things, to be jointly and severally liable for the due and
          proper
          payment of the Obligations of each other Borrower under this Agreement
          and other
          Financing Documents and of each Affiliated Borrower under the Affiliated
          Financing Documents. Each Borrower has determined that it is in its best
          interest and in pursuit of its purposes that it so induce the Administrative
          Agent and Lender to extend credit pursuant to this Agreement and the other
          documents executed in connection herewith (i) because of the desirability
          to each Borrower of the credit facilities hereunder and to each Affiliated
          Borrower of the credit facilities under the Affiliated Financing Documents
          and
          the interest rates and the modes of borrowing available hereunder and
          thereunder, (ii) because each Borrower may engage in transactions jointly
          with other Borrowers or Affiliated Borrowers, and (iii) because each
          Borrower may require, from time to time, access to funds under this Agreement
          for the purposes herein set forth. Each Borrower, individually, expressly
          understands, agrees and acknowledges, that the credit facilities contemplated
          hereunder would not be made available on the terms herein in the absence
          of the
          collective credit of all of the Persons constituting the Borrowers and
          the
          Affiliated Borrowers, the joint and several liability of all such Persons,
          and
          the cross-collateralization of the collateral of all such Persons hereunder
          and
          under the Affiliated Financing Documents. Accordingly, each Borrower,
          individually acknowledges that the benefit to each of the Persons comprising
          the
          Borrowers as a whole constitutes reasonably equivalent value, regardless
          of the
          amount of the indebtedness actually borrowed by, advanced to, or the amount
          of
          credit provided to, or the amount of collateral provided by, any individual
          Borrower.

         

        (d)    Each
          Borrower has determined that it is and, after giving effect to the transactions
          contemplated by this Agreement, the other Financing Documents and the Affiliated
          Financing Documents (including, without limitation, the inter-Borrower
          arrangement set forth in this Section) will be Solvent and has and will
          have the ability to pay its debts from time to time incurred in connection
          with
          the conduct of its business as such debts mature and that the value of
          the
          benefits to be derived by such Borrower from the access to funds under
          this
          Agreement (including, without limitation, the inter-Borrower arrangement
          set
          forth in this Section) is reasonably equivalent to the obligations
          undertaken pursuant hereto.

         

        
          
            
            

          

          
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        (e)    The
          Borrower Representative (on behalf of each Borrower) shall maintain records
          specifying (i) all Obligations incurred by each Borrower, (ii) the
          date of such incurrence, (iii) the date and amount of any payments made in
          respect of such Obligations, and (iv) all inter-Borrower obligations
          pursuant to this Section. The Borrower Representative shall make copies
          of such
          records available to the Administrative Agent, upon request.

         

        (f)    To
          the
          extent that applicable law otherwise would render the full amount of the
          joint
          and several obligations of any Borrower hereunder, under the other Financing
          Documents and under the Affiliated Financing Documents invalid or unenforceable,
          such Borrower's obligations hereunder and under the other Financing Documents
          and Affiliated Financing Documents shall be limited to the maximum amount
          which
          does not result in such invalidity or unenforceability; provided, however,
          that
          each Borrower's obligations hereunder and under the other Financing Documents
          and Affiliated Financing Documents shall be presumptively valid and enforceable
          to their fullest extent in accordance with the terms hereof or thereof,
          as if
          this Section were not a part of this Agreement.

         

        (g)    To
          the
          extent that any Borrower shall make a payment under this Section of all or
          any of the Obligations (other than credit facilities made to that Borrower
          for
          which it is primarily liable) (a "Joint
          Liability Payment") which,
          taking into account all other Joint Liability Payments then previously
          or
          concurrently made by any other Borrower, exceeds the amount which such
          Borrower
          would otherwise have paid if each Borrower had paid the aggregate Obligations
          satisfied by such Joint Liability Payments in the same proportion that
          such
          Borrower's Allocable Amount (as defined below) (as determined immediately
          prior to such Joint Liability Payments) bore to the aggregate Allocable
          Amounts of each of the Borrowers as determined immediately prior to the
          making
          of such Joint Liability Payments, then, following indefeasible payment
          in full
          in cash of the Obligations and termination of the Commitments, such Borrower
          shall be entitled to receive contribution and indemnification payments
          from, and
          be reimbursed by, each other Borrower for the amount of such excess, pro
          rata
          based upon their respective Allocable Amounts in effect immediately prior
          to
          such Joint Liability Payments. As of any date of determination, the
          "Allocable
          Amount"
          of any
          Borrower shall be equal to the maximum amount of the claim which could
          then be
          recovered from such Borrower under this Section without rendering such
          claim voidable or avoidable under Section 548 of Chapter 11 of the
          Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer
          Act,
          Uniform Fraudulent Conveyance Act or similar statute or common law.

         

        (h)    Except
          as
          specifically provided in this Agreement or any of the other Financing Documents,
          Administrative Agent shall have the exclusive right to determine the time
          and
          manner of application of any payments or credits, whether received from
          any
          Borrower or any other source, and such determination shall be binding on
          all
          Borrowers. All such payments and credits may be applied, reversed and reapplied,
          in whole or in part, to any of the Obligations as Administrative Agent
          shall
          determine in its sole discretion without affecting the validity or
          enforceability of the Obligations of any other Borrower or Affiliated
          Borrower.

         

        
          
            
            

          

          
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        (i)    Each
          Borrower hereby agrees that, except as hereinafter provided, its obligations
          hereunder shall be unconditional, irrespective of (i) the absence of any
          attempt to collect the Obligations from any obligor or other action to
          enforce
          the same; (ii) the waiver or consent by Administrative Agent and/or any
          applicable Lender(s) with respect to any provision of any instrument
          evidencing the Obligations, or any part thereof, or any other agreement
          heretofore, now or hereafter executed by a Borrower or Affiliated Borrower
          and
          delivered to Administrative Agent and/or any Lender; (iii) failure by
          Administrative Agent to take any steps to perfect and maintain its security
          interest in, or to preserve its rights to, any security or collateral for
          the
          Obligations; (iv) the institution of any proceeding under the United States
          Bankruptcy Code, or any similar proceeding, by or against a Borrower or
          Affiliated Borrower or Administrative Agent's or any Lender's election
          in any
          such proceeding of the application of Section 1111(b)(2) of the United
          States Bankruptcy Code; (v) any borrowing or grant of a security interest
          by a Borrower or Affiliated Borrower as debtor-in-possession, under
          Section 364 of the United States Bankruptcy Code; (vi) the
          disallowance, under Section 502 of the United States Bankruptcy Code, of
          all or any portion of Administrative Agent's or any Lender's claim(s) for
          repayment of any of the Obligations; or (vii) any other circumstance other
          than payment in full of the Obligations which might otherwise constitute
          a legal
          or equitable discharge or defense of a guarantor or surety.

         

        (j)    Until
          all
          Obligations have been paid and satisfied in full, no payment made by or
          for the
          account of a Borrower or Affiliated Borrower including, without limitation,
          (i) a payment made by such Borrower or Affiliated Borrower on behalf of the
          liabilities of any other Borrower or Affiliated Borrower, or (ii) a payment
          made by any other person under any Guarantee, shall entitle such Borrower
          or
          Affiliated Borrower, by subrogation or otherwise, to any payment from any
          other
          Borrower or Affiliated Borrower or from or out of any other Borrower's
          or
          Affiliated Borrower's property and such Borrower or Affiliated Borrower
          shall
          not exercise any right or remedy against any other Borrower or Affiliated
          Borrower or any property of any other Borrower or Affiliated Borrower by
          reason
          of any performance of such Borrower or Affiliated Borrower of its joint
          and
          several obligations hereunder.

         

        (k)    Any
          notice given by one Borrower hereunder shall constitute and be deemed to
          be
          notice given by all Borrowers and Affiliated Borrowers, jointly and severally.
          Notice given by Administrative Agent or any Lender to any one Borrower
          or
          Affiliated Borrower hereunder or pursuant to any Financing Documents or
          Affiliated Financing Documents in accordance with the terms hereof or thereof
          shall constitute notice to each and every Borrower and Affiliated Borrower.
          The
          knowledge of one Borrower or Affiliated Borrower shall be imputed to all
          Borrowers and Affiliated Borrowers and any consent by one Borrower or Affiliated
          Borrower shall constitute the consent of and shall bind all Borrowers and
          Affiliated Borrower.

         

        (l)    This
          Section is intended only to define the relative rights of Borrowers and
          Affiliated Borrowers and nothing set forth in this Section is intended to
          or shall impair the obligations of Borrowers, jointly and severally, to
          pay any
          amounts as and when the same shall become due and payable in accordance
          with the
          terms of this Agreement or any other Financing Documents. Nothing contained
          in
          this Section shall limit the liability of any

         

        
          
            
            

          

          
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        Borrower
          to pay the credit facilities made directly or indirectly to that Borrower
          and
          accrued interest, Fees and expenses with respect thereto for which such
          Borrower
          shall be primarily liable.

         

        (m)    The
          parties hereto acknowledge that the rights of contribution and indemnification
          hereunder shall constitute assets of each Borrower to which such contribution
          and indemnification is owing. The rights of any indemnifying Borrower against
          the other Borrowers or Affiliated Borrowers under this Section shall be
          exercisable upon the full and indefeasible payment of the Obligations and
          the
          termination of the credit facilities hereunder and under the Affiliated
          Financing Documents.

         

        Section
          15.2 Guarantor
          Provisions.

         

        (a)    Each
          Borrower, as joint and several primary obligor of the Obligations directly
          incurred by any other Borrower or by any Affiliated Borrower, authorizes
          Administrative Agent and Lenders, without giving notice to such Borrower
          or to
          any other Borrower or any Affiliated Borrower (to the extent permitted
          hereunder
          or under any Affiliated Financing Document) or obtaining such Borrower's
          consent or any other Borrower's or Affiliated Borrower's consent (to the
          extent
          permitted hereunder or under any Affiliated Financing Document) and without
          affecting the liability of such Borrower for the Obligations directly incurred
          by the other Borrower or Affiliated Borrower, from time to time to:

         

        (i)    compromise,
          settle, renew, extend the time for payment, change the manner or terms
          of
          payment, liquidate, discharge the performance of, decline to enforce, or
          release
          all or any of the Obligations; grant other indulgences to any Borrower
          in
          respect thereof; or modify in any manner any documents relating to the
          Obligations;

         

        (ii)    declare
          all Obligations due and payable upon the occurrence and during the continuance
          of an Event of Default;

         

        (iii)    take
          and
          hold security for the performance of the Obligations of any Borrower and
          exchange, enforce, waive and release any such security;

         

        (iv)    release,
          surrender or exchange any deposits or other property securing the Obligations
          or
          on which Administrative Agent and/or any applicable Lender(s) at any time
          may have a Lien; release, substitute or add any one or more endorsers or
          guarantors of the Obligations of any other Borrower or Affiliated Borrower
          or
          such Borrower; or compromise, settle, renew, extend the time for payment,
          discharge the performance of, decline to enforce, or release all or any
          obligations of any such endorser or guarantor or other Person who is now
          or may
          hereafter be liable on any Obligations or release, surrender or exchange
          any
          deposits or other property of any such Person;

         

        (v)    accept
          partial payments, apply payments received by Administrative Agent and/or
          any
          applicable Lender(s) from any Borrower or any Affiliated

         

        
          
            
            

          

          
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        Borrower
          to any Obligations, in such order as Administrative Agent shall determine,
          in
          its sole discretion; and

         

        (vi)    subject
          to the provisions hereof, assign this Agreement in whole or in
          part.

         

        (b)    Each
          Borrower, as a primary, joint and several obligor with respect to the
          Obligations directly incurred by any other Borrower or any Affiliated Borrower,
          waives:

         

        (i)    any
          defense based upon any legal disability or other defense of any other Borrower
          or any Affiliated Borrower, or by reason of the cessation or limitation
          of the
          liability of any other Borrower or any Affiliated Borrower from any cause
          (other
          than full payment of all Obligations), including, without limitation, failure
          of
          consideration, breach of warranty, statute of frauds, statute of limitations,
          accord and satisfaction, and usury;

         

        (ii)    any
          defense based upon any legal disability or other defense of any other guarantor
          or other Person;

         

        (iii)    any
          defense based upon any lack of authority of the officers, directors, partners
          or
          agents acting or purporting to act on behalf of any other Borrower or Affiliated
          Borrower or any principal of any other Borrower or Affiliated Borrower
          or any
          defect in the formation of any other Borrower or Affiliated Borrower or
          any
          principal of any other Borrower or Affiliated Borrower;

         

        (iv)    any
          defense based upon the application by any other Borrower or Affiliated
          Borrower
          of the proceeds of the credit facilities or the loans under the Affiliated
          Financing Documents for purposes other than the purposes represented by
          such
          other Borrower or Affiliated Borrower to Administrative Agent and Lenders
          or
          intended or understood by Administrative Agent and Lenders or such
          Borrower;

         

        (v)    any
          defense based on such Borrower's rights, under statute or otherwise, to
          require
          Administrative Agent and/or any applicable Lender(s) to sue any other
          Borrower or Affiliated Borrower or otherwise to exhaust its rights and
          remedies
          against any other Borrower or Affiliated Borrower or any other Person or
          against
          any collateral before seeking to enforce its right to require such Borrower
          to
          satisfy the Obligations of any other Borrower or Affiliated
          Borrower;

         

        (vi)    any
          defense based on Administrative Agent's or any Lender's failure at any
          time to
          require strict performance by any Borrower of any provision of the Financing
          Documents or by any Affiliated Borrower of any provisions of the Affiliated
          Financing Documents. Such Borrower agrees that no such failure shall waive,
          alter or diminish any right of Administrative Agent and/or any applicable
          Lender(s) thereafter to demand strict compliance and performance therewith.
          Nothing contained herein shall prevent Administrative Agent and/or any
          applicable Lender(s) from foreclosing on any Lien, or exercising any rights
          available to Administrative Agent and/or any applicable

         

        
          
            
            

          

          
            -110-

            
              

            

          

          
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        Lender(s) thereunder,
          and the exercise of any such rights shall not constitute a legal or equitable
          discharge of such Borrower;

         

        (vii)    any
          defense arising from any act or omission of Administrative Agent and/or
          any
          applicable Lender(s) which changes the scope of such Borrower's risks
          hereunder, but the foregoing shall not limit any Credit Party from asserting
          claims based on breaches of this Agreement or willful misconduct by
          Administrative Agent and/or any applicable Lender;

         

        (viii)    any
          defense based upon Administrative Agent's or any Lender's election of any
          remedy
          against such Borrower or any other Borrower or Affiliated Borrower or any
          of
          them; any defense based on the order in which Administrative Agent and/or
          any
          Lender(s) enforces its remedies;

         

        (ix)    any
          defense based on (A) Administrative Agent's or any applicable Lender's
          surrender, release, exchange, substitution, dealing with or taking any
          additional collateral, (B) Administrative Agent's or any applicable
          Lender's abstaining from taking advantage of or realizing upon any Lien
          or other
          Guarantee, and (C) any impairment of collateral securing the Obligations,
          including, without limitation, Administrative Agent's or any applicable
          Lender's
          failure to perfect or maintain a Lien in such collateral;

         

        (x)    any
          defense based upon Administrative Agent's or any Lender's failure to disclose
          to
          such Borrower any information concerning any other Borrower's or Affiliated
          Borrower's financial condition or any other circumstances bearing on any
          other
          Borrower's or Affiliated Borrower's ability to pay the Obligations;

         

        (xi)    any
          defense based upon any statute or rule of law which provides that the obligation
          of a surety must be neither larger in amount nor in any other respects
          more
          burdensome than that of a principal;

         

        (xii)    any
          defense based upon Administrative Agent's and/or any Lender's election,
          in any
          proceeding instituted under the Bankruptcy Code, of the application of
          Bankruptcy Code §1111(b)(2) or any successor statute;

         

        (xiii)    any
          defense based upon any borrowing or any grant of a security interest under
          Bankruptcy Code §364;

         

        (xiv)    any
          defense based on Administrative Agent's and/or any Lender's failure to
          be
          diligent or to satisfy any other standard imposed on a secured party, in
          exercising rights with respect to collateral securing the
          Obligations;

         

        (xv)    except
          as
          otherwise expressly set forth herein: notice of acceptance hereof; notice
          of the
          existence, creation or acquisition of any Obligation; notice of any Event
          of
          Default; notice of the amount of the Obligations outstanding from time
          to time;
          notice of any other fact which might increase such Borrower's risk; diligence;
          presentment; demand of payment; protest; filing of claims with a court
          in the
          event of any other Borrower's receivership or bankruptcy and all other
          notices
          and demands to which such

         

        
          
            
            

          

          
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        Borrower
          might otherwise be entitled (and agrees the same shall not have to be made
          on
          the other Borrower as a condition precedent to such Borrower's obligations
          hereunder);

         

        (xvi)    any
          defense based on errors and omissions by Administrative Agent and/or any
          Lender
          in connection with its administration of the credit facilities or the loans
          made
          under the Affiliated Financing Documents, but the foregoing shall not limit
          any
          Credit Party from asserting claims based on breaches of this Agreement
          or
          willful misconduct by Administrative Agent and/or any applicable
          Lender;

         

        (xvii)    any
          defense based on application of fraudulent conveyance or transfer law or
          shareholder distribution law to any of the Obligations or the security
          therefor;

         

        (xviii)    any
          defense based on Administrative Agent's and/or any Lender's failure to
          seek
          relief from stay or adequate protection in any other Borrower's or Affiliated
          Borrower's bankruptcy proceeding or any other act or omission by Administrative
          Agent and/or any Lender which impairs such Borrower's prospective subrogation
          rights;

         

        (xix)    any
          defense based on legal prohibition of Administrative Agent's and/or any
          Lender's
          acceleration of the maturity of the Obligations during the occurrence of
          an
          Event of Default or any other legal prohibition on enforcement of any other
          right or remedy of Administrative Agent and/or any Lender with respect
          to the
          Obligations and the security therefor;

         

        (xx)    any
          defense available to a surety under applicable law; and

         

        (xxi)    the
          benefit of any statute of limitations affecting the liability of such Borrower
          hereunder or the enforcement hereof.

         

        (c)    Each
          Borrower further agrees that its obligations hereunder shall not be impaired
          in
          any manner whatsoever by any bankruptcy, extensions, moratoria or other
          relief
          granted to any other Borrower or Affiliated Borrower pursuant to any statute
          presently in force or hereafter enacted.

         

        (d)    Each
          Borrower authorizes Administrative Agent and each Lender to exercise, in
          its
          sole discretion, any right, remedy or combination thereof which may then
          be
          available to Administrative Agent or such Lender, since it is such Borrower's
          intent that the Obligations be absolute, independent and unconditional
          obligations of such Borrower under all circumstances. Notwithstanding any
          foreclosure of any Lien with respect to any or all of any property securing
          the
          Obligations, whether by the exercise of the power of sale contained therein,
          by
          an action for judicial foreclosure or by an acceptance of a deed in lieu
          of
          foreclosure, each Borrower shall remain bound under such Borrower's Guarantee
          of
          the Obligations directly incurred by any other Borrower or Affiliated
          Borrower.

         

        (e)    This
          Agreement is a primary and original obligation of each of the Borrowers
          and each
          of the Borrowers shall be liable for all existing and future Obligations
          of

         

        
          
            
            

          

          
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        any
          other
          Borrower or Affiliated Borrower as fully as if such Obligations were directly
          incurred by such Borrower.

         

         

        
          
            
            

          

          
            -113-

            
              

            

          

          
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        IN
          WITNESS WHEREOF,
          the
          parties hereto have caused this Agreement to be duly executed by their
          respective authorized officers as of the day and year first above
          written.

         

        
          	
                  BORROWERS:

                   

                  CYPRESS
                    DALLAS, L.P.,

                  a
                    Delaware limited partnership

                
	 	 
	
                  By:

                	
                  Cypress
                    Dallas GP, LLC, its general partners

                
	 	 
	 	
                  By:_________________________________

                  Name:_______________________________

                  Its:_________________________________

                   

                  Address:____________________________

                  ___________________________________

                   

                  Facsimile
                    number:______________________

                  E-mail
                    Address:_______________________

                  Taxpayer
                    Identification Number:

                  ___________________________________

                

        

         

        

          
            	
                    CYPRESS
                      FT. WORTH, L.P.,

                    a
                      Delaware limited partnership

                  
	 	 
	
                    By:

                  	
                    Cypress
                      Ft. Worth GP, LLC, its general partner

                  
	 	 
	 	
                    By:_________________________________

                    Name:_______________________________

                    Its:_________________________________

                     

                    Address:____________________________

                    ___________________________________

                     

                    Facsimile
                      number:______________________

                    E-mail
                      Address:_______________________

                    Taxpayer
                      Identification Number:

                    ___________________________________

                  

          

           

          
            (Signature
              Page to Credit and Security Agreement (Dallas/Ft. Worth))

          

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

          
            	
                    ADMINISTRATIVE
                      AGENT AND LENDERS:

                     

                    MERRILL
                      LYNCH CAPITAL, a division of Merrill Lynch Business Financial
                      Services
                      Inc.,
                      as Administrative Agent and a Lender

                     

                    By:_________________________________________

                    Name:_______________________________________

                    Title:________________________________________

                     

                    Address:  
                      222
                      N. LaSalle Street, 16th Floor

                    Chicago,
                      Illinois 60601

                    Attn:    Account
                      Manager for MLC-HCF

                    ARC
                      transaction

                    Facsimile
                      number: (866) 264-3051

                    E-Mail
                      Address: MLC_HCF_RE1@ml.com

                  

          

          

          
            	
                    With
                      copies to:

                     

                    Merrill
                      Lynch Capital

                    222
                      N. LaSalle Street, 16th
                      Floor

                    Chicago,
                      Illinois 60601

                    Attn:  
                      Group
                      Senior Transaction Attorney,

                                
                      Healthcare
                      Finance

                    Facsimile
                      Number: (312) 499-3245

                  

          

          

          
            	
                    Merrill
                      Lynch Capital

                    7700
                      Wisconsin Ave., Suite 400

                    Bethesda,
                      Maryland 20814

                    Attn:  
                      Group
                      Senior Transaction Attorney,

                                Healthcare
                      Finance

                    Facsimile
                      Number: (866) 341-9053

                  

          

          

          
            	
                    And
                      with an additional copy to:

                     

                    Goldberg,
                      Kohn, Bell, Black,

                    Rosenbloom
                      & Moritz, Ltd.

                    55
                      East Monroe Street, Suite 3700

                    Chicago,
                      Illinois 60603

                    Attn: 
                      James
                      B. Rosenbloom

                    Facsimile
                      number: (312) 863-7425

                    E-mail
                      Address:
                      james.rosenbloom@goldbergkohn.com

                  

          

          

          
            	
                    Payment
                      Account Designation:

                     

                    ABA
                      No.:____________________________________

                    Account
                      No.:_________________________________

                    Account
                      Name:________________________________

                    Reference:____________________________________

                  

          

        

         

         

        (Signature
          Page to Credit and Security Agreement (Dallas/Ft. Worth))

        
          
            
            

          

          
            
            

            
              

            

          

          
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              Contents

          

        

         

        ANNEXES,
          EXHIBITS AND SCHEDULES

         

        

        ANNEXES

        

        Annex
          A - Commitment
          Annex

        

        

        EXHIBITS

        

        Exhibit
          A - Assignment
          Agreement

        Exhibit
          B - Single
          Purpose Entity Requirements

        Exhibit
          C - Compliance
          Certificate

        Exhibit
          D - Payment
          Notification

        Exhibit
          E - Borrowers'
          Taxpayer Identification Numbers

        

        

        SCHEDULES

        

        Schedule
          1 - Permitted
          Leases

        Schedule
          3.1 - Existence,
          Organizational Identification Numbers, Foreign Qualification,
          Prior Names

        Schedule
          3.4 - Capitalization

        Schedule
          3.6 - Litigation

        Schedule
          3.17 - Material
          Contracts

        Schedule
          3.18 - Environmental
          Compliance

        Schedule
          4.4 - Insurance
          Requirements

        Schedule
          4.14 - Deferred
          Maintenance Items

        Schedule
          5.9 - Affiliate
          Transactions

        Schedule
          7.3 - Post-Closing
          Deliveries and Covenants

        Schedule
          8.7 - Licensed
          Operators

        Schedule
          9.1(h) - Service
          Agreements

         

        
          
            
            

          

          
            
            

            
              

            

          

          
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                    Annex
                      A to Credit Agreement (Commitment
                      Annex)

                  

          

        

         

         

        
          	
                  Lender

                	
                  Term
                    Loan

                  Commitment
                    Amount

                	
                  Term
                    Loan

                  Commitment
                    Percentage

                
	
                  Merrill
                    Lynch Capital

                	
                  $55,765,000

                	
                  100%

                
	
                  TOTALS

                	
                  $55,765,000

                	
                  100%

                

        

         

        
 

        
          
            
            

          

          
            
            

            
              

            

          

          
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                  Exhibit
                    A to Credit Agreement (Assignment
                    Agreement)

                

        

        

        This
          Assignment Agreement (this "Assignment
          Agreement") is
          entered into as of __________ by and between the Assignor named on the
          signature
          page hereto ("Assignor") and
          the Assignee named on the signature page hereto ("Assignee").
          Reference is made to the Credit Agreement dated as of February __, 2006
          (as
          amended or otherwise modified from time to time, the "Credit
          Agreement") among
          MERRILL LYNCH CAPITAL, as Administrative Agent and Lender and the other
          Lenders
          party thereto from time to time and CYPRESS DALLAS, L.P. and CYPRESS FT.
          WORTH,
          L.P., each a Delaware limited partnership ("Borrowers"),
          the
          financial institutions party thereto from time to time, as Lenders, and
          Merrill
          Lynch Capital, a division of Merrill Lynch Business Financial Services
          Inc., as
          Administrative Agent. Capitalized terms used herein and not otherwise defined
          shall have the meanings assigned to them in the Credit
          Agreement.

         

        Assignor
          and Assignee hereby agree as follows:

         

        1.    Assignor
          hereby sells and assigns to Assignee, and Assignee hereby purchases and
          assumes
          from Assignor the interests set forth on the schedule attached hereto (the
          "Schedule"),
          in
          and to Assignor's rights and obligations under the Credit Agreement as
          of the
          effective date set forth on the Schedule (the "Effective Date").
          Such
          purchase and sale is made without recourse, representation or warranty
          except as
          expressly set forth herein. On the Effective Date, Assignee shall pay to
          Assignor an amount equal to the aggregate amounts assigned pursuant to
          the
          Schedule and Assignor shall pay to Assignee a closing fee in respect of
          the
          transactions contemplated hereby in the amount specified on the
          Schedule.

         

        2.    Assignor
          (a) represents that as of the Effective Date, that it is the legal and
          beneficial owner of the interests assigned hereunder free and clear of
          any
          adverse claim, (b) makes no other representation or warranty and assumes no
          responsibility with respect to any statement, warranties or representations
          made
          in or in connection with the Credit Agreement or the execution, legality,
          validity, enforceability, genuineness, sufficiency or value of the Credit
          Agreement, any other Financing Documents or any other instrument or document
          furnished pursuant thereto; and (c) makes no representation or warranty and
          assumes no responsibility with respect to the financial condition of any
          other
          Credit Party or any other Person or the performance or observance by any
          Credit
          Party of its Obligations under the Credit Agreement or any other Financing
          Documents or any other instrument or document furnished pursuant
          thereto.

         

        3.    Assignee
          (a) confirms that it has received a copy of the Credit Agreement and the
          other Financing Documents, together with copies of the most recent financial
          statements delivered pursuant thereto and such other documents and information
          as it has deemed appropriate to make its own credit analysis and decision
          to
          enter into this Assignment Agreement; (b) agrees that it will,
          independently and without reliance upon Administrative Agent, Assignor
          or any
          other Lender and based on such documents and information as it shall deem
          appropriate at the time, continue to make its own credit

         

        
          
            
            

          

          
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        decisions
          in taking or not taking action under the Credit Agreement; (c) appoints and
          authorizes Administrative Agent to take such action as Administrative Agent
          on
          its behalf and to exercise such powers under the Credit Agreement and the
          other
          Financing Documents as are delegated to Administrative Agent by the terms
          thereof, together with such powers as are reasonably incidental thereto;
          (d) agrees that it will perform in accordance with their terms all
          obligations which by the terms of the Credit Agreement are required to
          be
          performed by it as a Lender; (e) represents that on the date of this
          Assignment Agreement it is not presently aware of any facts that would
          cause it
          to make a claim under the Credit Agreement; (f) represents and warrants
          that Assignee is not a Foreign Lender or, if it is a Foreign Lender,
          (i) that it has delivered to Administrative Agent the documentation
          required to be delivered to Administrative Agent by
          Section
          13
          below
          and
          (i) that if it is claiming exemption from U.S. federal withholding tax
          under Section 871(h) or 881(c) of the Code with respect to payments of
          "portfolio interest", (w) it is not a "bank" within the meaning of Section
          881(c)(3)(A) of the Code, (x) it is not a 10-percent shareholder of
          any Credit Party within the meaning of Section 881(c)(3)(B) or Section
          871(h)(3)(B) of the Code, (y) it is not a controlled foreign
          corporation related to any Credit Party within the meaning of
          Section 881(c)(3)(C) of the Code, and (z) it is not a conduit
          entity participating in a conduit financing arrangement (as defined in
          Section
          1.881-3 of the Code Treasury Regulations); (g) represents and warrants that
          Assignee is (or, upon receipt of the required consents hereto by Administrative
          Agent and Borrowers will become) an Eligible Assignee, and
          (h) represents and warrants that it has experience and expertise in the
          making or the purchasing of loans such as the Loans, and that it has acquired
          the interests described herein for its own account and without any present
          intention of selling all or any portion of such interests.

         

        4.    Each
          of
          Assignor and Assignee represents and warrants to the other party hereto
          that it
          has full power and authority to enter into this Assignment Agreement and
          to
          perform its obligations hereunder in accordance with the provisions hereof,
          that
          this Assignment Agreement has been duly authorized, executed and delivered
          by
          such party and that this Assignment Agreement constitutes a legal, valid
          and
          binding obligation of such party, enforceable against such party in accordance
          with its terms, except as enforceability may be limited by applicable
          bankruptcy, insolvency, reorganization, moratorium or other similar laws
          affecting creditors' rights generally and by general principles of
          equity.

         

        5.    Upon
          the
          effectiveness of this Assignment Agreement pursuant to Section
          13
          below,
          (a) Administrative Agent shall register Assignee as a Lender, pursuant to
          the terms of the Credit Agreement, (b) Assignee shall be a party to the
          Credit Agreement and, to the extent provided in this Assignment Agreement,
          have
          the rights and obligations of a Lender thereunder, (c) Assignor shall, to
          the extent provided in this Assignment Agreement, relinquish its rights
          and be
          released from its obligations under the Credit Agreement and
          (d) Administrative Agent shall thereafter make all payments in respect of
          the interest assigned hereby (including payments of principal, interest,
          fees
          and other amounts) to Assignee. Assignor and Assignee shall make all
          appropriate adjustments in payments for periods prior to the Effective
          Date by
          Administrative Agent or with respect to the making of this assignment directly
          between themselves.

         

        
          
            
            

          

          
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        6.    Each
          of
          Assignor and Assignee hereby agrees from time to time, upon request of
          the other
          such party hereto, to take such additional actions and to execute and deliver
          such additional documents and instruments as such other party may reasonably
          request to effect the transactions contemplated by, and to carry out the
          intent
          of, this Assignment Agreement. 

         

        7.    Neither
          this Assignment Agreement nor any term hereof may be changed, waived, discharged
          or terminated, except by an instrument in writing signed by the party
          (including, if applicable, any party required to evidence its consent to
          or
          acceptance of this Assignment Agreement) against whom enforcement of such
          change, waiver, discharge or termination is sought. 

         

        8.    For
          the
          purposes hereof and for purposes of the Credit Agreement, the notice address
          of
          Assignee shall be as set forth on the Schedule. Any notice or other
          communication herein required or permitted to be given shall be in writing
          and
          delivered in accordance with the notice provisions of the Credit Agreement.
          

         

        9.    In
          case
          any provision in or obligation under this Assignment Agreement shall be
          invalid,
          illegal or unenforceable in any jurisdiction, the validity, legality and
          enforceability of the remaining provisions or obligations, or of such provision
          or obligation in any other jurisdiction, shall not in any way be affected
          or
          impaired thereby. 

         

        10.    THIS
          ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
          IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO
          CONFLICTS OF LAWS PRINCIPLES. 

         

        11.    This
          Assignment Agreement shall be binding upon, and shall inure to the benefit
          of,
          the parties hereto and their respective successors and assigns. 

         

        12.    This
          Assignment Agreement may be signed in any number of counterparts, each
          of which
          shall be an original, with the same effect as if the signatures hereto
          were upon
          the same agreement.

         

        13.    This
          Assignment Agreement shall become effective as of the Effective Date upon
          the
          satisfaction of each of the following conditions: (a) the execution of a
          counterpart hereof by each of Assignor and Assignee, (b) the execution of a
          counterpart hereof by Administrative Agent and each Borrower as evidence
          of its
          consent hereto to the extent required pursuant to Section
          13.17 of
          the Credit Agreement, (c) the receipt by Administrative Agent of the
          administrative fee referred to in Section
          13.17(a) of
          the
          Credit Agreement, (d) in the event Assignee is a Foreign Lender, the
          receipt by Administrative Agent of United States Internal Revenue Service
          Forms
          W-8ECI, W-8BEN or W-8IMY (as applicable), and such other forms, certificates
          or
          documents, including those prescribed by the United States Internal Revenue
          Service, properly completed and executed by Assignee, certifying as to
          Assignee's entitlement to exemption from withholding or deduction of Taxes,
          and
          (e) the receipt by Administrative Agent of originals or facsimiles of the
          counterparts described above.

         

        
          
            
            

          

          
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        The
          parties hereto have caused this Assignment Agreement to be executed and
          delivered as of the date first written above.

         

        

        
          	
                  ASSIGNOR:

                  ___________________________

                   

                  By:_________________________________

                  Title:________________________________

                

        

        

        
          	
                  ASSIGNEE:

                  ___________________________

                   

                  By:_________________________________

                  Title:________________________________

                   

                

        

        

        
          	
                  Consented
                    to:

                   

                  Merrill
                    Lynch Capital, a division of Merrill Lynch

                  Business
                    Financial Services Inc., as Administrative Agent
                    

                   

                  By:_________________________________

                  Title:________________________________

                   

                

        

        

        
          
            	
                    CYPRESS
                      DALLAS, L.P.,

                    a
                      Delaware limited partnership

                  
	 	 
	
                    By:

                  	
                    Cypress
                      Dallas GP, LLC, its general partners

                  
	 	 
	 	
                    By:__________________________________

                    Name:________________________________

                    Its:__________________________________

                  

          

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
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              Contents

          

        

         

        
          
            	
                    CYPRESS
                      FT. WORTH, L.P.,

                    a
                      Delaware limited partnership

                  
	 	 
	
                    By:

                  	
                    Cypress
                      Ft. Worth GP, LLC, its general partner

                  
	 	 
	 	
                    By:__________________________________

                    Name:________________________________

                    Its:__________________________________

                  

          

        

        

         

        

        
          
            
            

          

          
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              Contents

          

        

        

        Schedule
          to Assignment Agreement

         

        Assignor: ____________________

         

        Assignee: ____________________

         

        Effective
          Date: ____________________

         

        
          Credit
            Agreement dated as of February __, 2006 among Cypress Dallas, L.P. and
            Cypress
            Ft. Worth, L.P., as Borrowers, the financial institutions party thereto
            from
            time to time, as Lenders, and Merrill Lynch Capital, a division of Merrill
            Lynch
            Business Financial Services Inc., as Administrative Agent

        

         

        Interests
          Assigned:

         

        
          	
                  Commitment/Loan

                	
                  Term
                    Loan

                
	
                  Assignor
                    Amounts

                	
                  $__________

                
	
                  Amounts
                    Assigned

                	
                  $__________

                
	
                  Assignor
                    Amounts

                  (post-assignment)

                	
                   

                  $__________

                

        

        

        
          	
                  Closing
                    Fee:

                	
                  $__________

                

        

        

        

        Assignee
          Information:

        
          	 	 
	
                  Address
                    for Notices:

                  ___________________________

                  ___________________________

                  Attention:___________________

                  Telephone:___________________

                  Facsimile:____________________

                	
                  Address
                    for Payments:

                   

                  Bank:__________________________

                  ABA
                    #:_________________________

                  Account
                    #:______________________

                  Reference:______________________

                

        

         

         

        
          
            
            

          

          
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              Contents

          

        

         

        
          		
                  Exhibit
                    B to Credit Agreement (SPE
                    Requirements)

                

        

        

        1.    The
          Borrowers' business and purposes are and will continue to be limited to
          the
          following:

         

        (a)    to
          enter
          into and perform its obligations under this Agreement and the other Financing
          Documents;

         

        (b)    to
          acquire, own, hold, lease, maintain, develop and improve the
          Projects;

         

        (c)    to
          sell,
          transfer, service, convey, dispose of, pledge, assign, borrow money against,
          finance or otherwise deal with the Projects to the extent permitted under
          the
          Financing Documents;

         

        (d)    to
          refinance the Projects in connection with a permitted repayment of the
          Loans;
          and

         

        (e)    to
          engage
          in any lawful act or activity and to exercise any powers permitted to entities
          of the type (e.g., limited partnerships, limited liability companies,
          corporations, as applicable to each Borrower) formed under the laws of the
          state of organization of such Person as of the date of this Agreement that
          are
          related or incidental to and necessary, convenient or advisable for the
          accomplishment of the above mentioned purposes.

         

        2.    Borrowers
          shall do (or cause to be done) all things necessary in order to preserve
          their existence to the fullest extent permitted by law. Except as expressly
          permitted by the Financing Documents (if at all), Borrowers shall do (or
          cause
          to be done) all of the following:

         

        (a)    not
          own
          any asset or property other than (i) a fee interest in the Projects, and
          (ii) incidental personal property necessary for the ownership or operation
          of the Projects;

         

        (b)    not
          enter
          into any contract or agreement with any Affiliate of the Borrowers, any
          constituent party of the Borrowers, any guarantor or indemnitor under any
          of the
          Financing Documents or any Affiliate of any such constituent party or guarantor
          or indemnitor, except upon terms and conditions that are intrinsically
          fair and
          substantially similar to those that would be available on an arm's-length
          basis
          with third parties other than any such party;

         

        (c)    maintain
          their intention to remain solvent and pay their debts and liabilities
          (including, as applicable, shared personnel and overhead expenses) from
          their assets, to the extent of their assets, as the same shall become
          due;

         

        
          
            
            

          

          
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        (d)    do
          or
          cause to be done all things necessary to observe organizational formalities
          of
          the Borrowers and preserve their existence, and not terminate or fail to
          comply
          with any of the provisions in this Section.

         

        (e)    maintain
          all of their books, records, financial statements and bank accounts separate
          from those of their Affiliates and any other person or entity; provided,
          however, that the Borrowers' financial position, assets, results of operations
          and cash flows may be included in a consolidated financial statement of
          an
          Affiliate of the Borrowers in accordance with GAAP so long as any such
          consolidated financial statement contains a note indicating that the Borrowers
          and their Affiliates comprising the consolidated group are separate legal
          entities;

         

        (f)    hold
          themselves out to the public as a legal entities separate and distinct
          from each
          other and from any other entity (including any Affiliate of the Borrowers,
          any
          guarantor or any constituent party of the Borrowers), correct any known
          misunderstanding regarding their status as a separate entities, conduct
          business
          in their own name, and not identify themselves or any of their Affiliates
          as a
          division or part of the other; provided, however, that all Borrowers shall
          be
          permitted to, and shall at all times, hold themselves out to the public
          as
          entities that operate as a common enterprise;

         

        (g)    to
          the
          extent of cash flow available from ownership of the Projects and other
          business
          of the Borrowers, intend to maintain adequate capital for the normal obligations
          reasonably foreseeable in a business of their size and character and in
          light of
          their contemplated business operations;

         

        (h)    not
          commingle the funds and other assets of the Borrowers with those of any
          Affiliate or constituent party, any guarantor or any other person, except
          for
          funds deposited into any lockbox accounts or other cash management arrangements
          required under this Agreement;

         

        (i)    maintain
          their assets in such a manner that it will not be costly or difficult to
          segregate, ascertain or identify its individual assets from those of any
          Affiliate or constituent party, any guarantor or any other person or
          entity;

         

        (j)    not
          permit any Affiliate or constituent party independent access to the Borrowers'
          bank accounts, except Borrower Representative in connection with any lockbox
          account or other cash management arrangements required hereunder, any property
          management agreements entered into by Borrowers and approved by Administrative
          Agent, and otherwise in connection with property or cash management activities
          consistent with the terms of the Financing Documents;

         

        (k)    pay
          the
          salaries of their own employees, if any;

         

        (l)    compensate
          each of their consultants and agents, if any;

         

        (m)    maintain
          an arm's-length relationship with their Affiliates;

         

        
          
            
            

          

          
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        (n)    allocate
          fairly and reasonably shared expenses, if any, including shared office
          space;

         

        (o)    not
          pledge any of their assets for the benefit of any person or entity other
          than
          Administrative Agent, except as expressly permitted by the Financing Documents
          (if at all);

         

        (p)    have
          no
          obligation to indemnify their equity owners or members (but not including
          their
          respective individual officers, as the case may be, except to the extent
          that
          payment of such obligation is fully subordinated to the payment of the
          Obligations; provided, however, the foregoing shall not apply where the
          indemnity is paid from third party funds, such as insurance
          proceeds;

         

        (q)    maintain
          records, books of account and bank accounts separate and apart from any
          other
          person or entity (other than any lockbox account or other cash management
          arrangement required hereunder); and file their own tax returns, if any,
          as may
          be required under applicable law, provided, however, that the Borrowers
          may file
          their federal tax return on a consolidated basis); and maintain their books,
          records, resolutions and agreements as official records; and

         

        (r)    not
          make
          any loans or advances to any third party, and not acquire obligations or
          securities of their Affiliates, except, in each case, as permitted under
          the
          Financing Documents.

         

        3.    So
          long
          as the Loans remain outstanding, the Borrowers shall not do (or cause to
          be
          done) any of the following except to the extent otherwise permitted under
          the Financing Documents (if at all):

         

        (a)    assume,
          guarantee, become obligated for, or hold themselves out to be responsible
          for
          the debts or obligations of any other person or entity or the decisions
          or
          actions respecting the daily business or affairs of any other
          person;

         

        (b)    engage,
          directly or indirectly, in any business other than the actions required
          or
          permitted to be performed under the Borrower's Organizational Documents
          (as the
          same may be amended or supplemented from time to time with Administrative
          Agent's consent);

         

        (c)    incur,
          create or assume any indebtedness other than the Loans except as otherwise
          permitted by the Financing Documents;

         

        (d)    make
          or
          permit to remain outstanding any loan or advance to, or own or acquire
          any stock
          or securities of, any person or entity;

         

        (e)    form,
          acquire or hold any subsidiary (whether corporate, partnership, limited
          liability company or other); or

         

        
          
            
            

          

          
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        (f)    to
          the
          fullest extent permitted by law, engage in any dissolution, liquidation,
          consolidation, merger or sale of all or substantially all of their
          assets.

         

        
          
            
            

          

          
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                  Exhibit
                    C to Credit Agreement (Compliance
                    Certificate)

                

        

        

        COMPLIANCE
          CERTIFICATE

         

        [BORROWER
          REPRESENTATIVE]

         

        Date:
          __________, _____

         

        
          This
            certificate is given by _____________________, a Responsible Officer
            of
            _____________ ("Borrower
            Representative"),
            pursuant to that certain Credit Agreement dated as of February __, 2006
            among
            CYPRESS DALLAS, L.P. and CYPRESS FT. WORTH, L.P., each a Delaware limited
            partnership (collectively, "Borrower"),
            the
            Lenders from time to time party thereto and Merrill Lynch Capital, a
            division of
            Merrill Lynch Business Financial Services Inc., as Administrative Agent
            for
            Lenders (as such agreement may have been amended, restated, supplemented
            or
            otherwise modified from time to time, the "Credit
            Agreement").
            Capitalized terms used herein without definition shall have the meanings
            set
            forth in the Credit Agreement.

           

        

        The
          undersigned Responsible Officer hereby certifies to Administrative Agent
          and
          Lenders that:

         

        (a)    the
          financial statements delivered with this certificate in accordance with
          Section 4.1
          of the
          Credit Agreement fairly present in all material respects the results of
          operations and financial condition of Borrower and its Subsidiaries as
          of the
          dates and the accounting period covered by such financial
          statements;

         

        (b)    I
          have
          reviewed the terms of the Credit Agreement and have made, or caused to
          be made
          under my supervision, a review in reasonable detail of the transactions
          and
          conditions of Borrower and its Subsidiaries during the accounting period
          covered
          by such financial statements;

         

        (c)    such
          review has not disclosed the existence during or at the end of such accounting
          period, and I have no knowledge of the existence as of the date hereof,
          of any
          condition or event that constitutes a material Default or an Event of Default,
          except as set forth in Schedule
          1
          hereto,
          which includes a description of the nature and period of existence of such
          Default or an Event of Default and what action Borrower has taken, is
          undertaking and proposes to take with respect thereto; and

         

        (d)    Borrower
          is in compliance with the covenants contained in Article 6 of the Credit
          Agreement, and Guarantor is in compliance with the covenants contained
          in the
          Guarantee constituting a part of the Financing Documents, except as set
          forth
          below.

         

        (e)    Except
          as
          noted on Schedule
          2
          attached
          hereto, the Credit Agreement contains a complete and accurate list of all
          business locations of Borrowers and all names under which each Borrower
          currently conducts business; Schedule
          2
          specifically notes any changes in the names under which Borrower conducts
          business.

         

        
          
            
            

          

          
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        (f)    Except
          as
          noted on Schedule
          3
          attached
          hereto, the undersigned has no knowledge of any federal or state tax liens
          having been filed against the Borrower or any Collateral or the Guarantor,
          to
          the extent that tax liens against Guarantor would result in a Material
          Adverse
          Effect or would adversely affect the Collateral.

         

        (g)    Except
          as
          noted on Schedule
          3
          attached
          hereto, the undersigned has no knowledge of any failure of the Borrower
          or the
          Guarantor, to the extent that tax liens against Guarantor would result
          in a
          Material Adverse Effect or would adversely affect the Collateral to make
          required payments of withholding or other tax obligations of the Borrower
          or the
          Guarantor, to the extent that tax liens against Guarantor would result
          in a
          Material Adverse Effect or would adversely affect the Collateral during
          the
          accounting period to which the attached statements pertain or any subsequent
          period.

         

        (h)    [Reserved.]

         

        (i)    [Reserved.]

         

        (j)    Schedule
          4
          attached
          hereto contains a complete and accurate statement of all deposit or investment
          accounts maintained by Borrower.

         

        (k)    Except
          as
          described on Schedule
          5
          attached
          hereto:

         

        (i)    there
          are
          no current, pending or threatened proceedings relating to a condemnation
          or
          other public taking of any Project;

         

        (ii)    no
          Project has suffered no casualty or other damage or loss of the type typically
          covered by hazard insurance;

         

        (iii)    all
          insurance required to be maintained by Borrowers or ARC for the benefit
          of
          Borrower is in force and premiums therefor have been paid as and when due
          and no
          Borrower has made any claims thereunder;

         

        (iv)    the
          undersigned has no knowledge of any current, pending or threatened changes
          to
          the zoning classification or permitted uses of any Project; and

         

        (l)    Except
          as
          described in the Credit Agreement or in Schedule
          6
          attached
          hereto, the undersigned has no knowledge of any current, pending or
          threatened:

         

        (i)    material
          litigation against any Borrower;

         

        (ii)    inquiries,
          investigations or proceedings concerning the business affairs, practices,
          licensing or reimbursement entitlements of any Borrower;

         

        (iii)    default
          by Borrower under any material contract to which either of them is a party,
          including, without limitation, any Material Leases.

         

        
          
            
            

          

          
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        Such
          calculations and the certifications contained therein are true, correct
          and
          complete;

         

        The
          foregoing certifications and computations are made as of ___________________,
          _____ (end of month) and delivered this ____ day of _____________,
          20___.

         

        

        
          	
                  Sincerely,

                   

                  By_______________________________________

                  Name_____________________________________

                  Title
                    ________________ of
                    Borrower Representative

                

        

        

        

        

        List
          of Schedules:

        

        Schedule
          1 - Non-Compliance with Covenants

        Schedule
          2 - Business Locations and Names of Borrower

        Schedule
          3 - Unpaid Tax or Withholding Obligations

        Schedule
          4 - List of all Deposit and Investment Accounts of Borrower

        Schedule
          5 - Events Affecting Real Property (condemnation, insurance, zoning,
          taxes)

        Schedule
          6 - Pending Litigation, Inquiries or Investigations; Defaults under Material
          Contracts

         

        
          
            
            

          

          
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              Contents

          

        

        

        Schedules
          to Compliance Certificate

        

        Schedule
          1 - Non-Compliance with Covenants

        

        

        Schedule
          2 - Business Locations and Names of Borrower

        

        

        Schedule
          3 - Unpaid Tax or Withholding Obligations

        

        

        Schedule
          4 - List of all Deposit and Investment Accounts of Borrower

        

        

        Schedule
          5 - Events Affecting Real Property (condemnation, insurance, zoning,
          taxes)

        

        

        Schedule
          6 - Pending Litigation, Inquiries or Investigations; Defaults under Material
          Contracts

        

        

        Worksheets
          for covenant calculations

         

        
          
            
            

          

          
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              Contents

          

        

         

        
          		
                  Exhibit
                    D to Credit Agreement (Payment
                    Notification)

                

        

        

        

        [BORROWER
          REPRESENTATIVE]

         

        Date:
          ___________, ______

         

        

        Reference
          is hereby made to the Credit Agreement dated February __, 2006 among the
          undersigned, Merrill Lynch Capital, a division of Merrill Lynch Business
          Financial Services Inc., as Administrative Agent and the financial institutions
          party thereto. Capitalized terms used here have the meanings ascribed thereto
          in
          the Credit Agreement.

         

        Please
          be
          advised that funds in the amount of $_____________ will be wire transferred
          to
          Administrative Agent on _________, 200_. Such funds shall constitute
          [an
          optional]
          [a
          mandatory]
          prepayment of the Term Loans, with such prepayments to be applied in the
          manner
          specified in Section
          2.1(e).
          Such
          mandatory prepayment is being made pursuant to Section __________ of the
          Credit
          Agreement.

         

        Fax
          to MLC Operations 312-499-3336 no later than noon Chicago
          time

         

        
          	
                  Note:

                	
                  Funds
                    must be received no later than noon Chicago time for same day
                    application

                

        

         

        Wire
          Instructions:

        Bank
          Name:

        LaSalle
          Bank National Association

        135
          S.
          LaSalle Street

        Chicago,
          IL 60603

        ABA#                                        0710-0050-5

         

        Account
          Name:                        _______________________

         

        Account
          #:                                ______________________

        Reference:                                 (Client
          Name)

        

        Address:

        Merrill
          Lynch Capital

        222
          N.
          LaSalle Street, 16th
          Floor

        Chicago,
          IL 60601

        

        IN
          WITNESS WHEREOF, the undersigned officer has executed and delivered this
          certificate this ____ day of ___________, ____.

         

        
          	
                  By_______________________________________

                  Name_____________________________________

                  Title
                    ________________ of
                    Borrower Representative

                

        

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            Back
              to Table of
              Contents

          

        

         

        
          		
                  Exhibit
                    E to Credit Agreement (Borrowers'

                  Taxpayer
                    Identification Numbers)

                

        

         

        

        See
          Schedule 3.1

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            Back
              to Table of
              Contents

          

        

         

        
          		
                  Schedule
                    1
                    -
                    Permitted
                    Leases

                

        

         

         

        
          
            	
                    Lessee

                  	
                    Location

                  	
                    Annual
                      Rent

                  
	
                    Universal
                      Health Services

                  	
                    Fort
                      Worth, Texas

                  	
                    $800/month

                  
	
                    Reachout
                      Home Care

                  	
                    Dallas,
                      Texas

                  	
                    $857.15

                  

          

        

         

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            Back
              to Table of
              Contents

          

        

        
 

        
          		
                  Schedule
                    3.1
                    -
                    Existence,
                    Organizational Identification

                  Numbers,
                    Foreign Qualification, Prior
                    Names

                

        

         

        

          
            	
                    Cypress
                      Ft. Worth, L.P.

                  	 
	
                    d/b/a:
                      Town Village Ridgmar (application to be made at closing)

                  	 
	
                    Organizational
                      ID No.:

                  	
                    4103300

                  
	
                    EIN:

                  	
                    74-3162190

                  
	
                    State
                      of Formation:

                  	
                    Delaware

                  
	
                    Foreign
                      Qualifications:

                  	
                    Texas

                  

          

          

          

          
            	
                    Cypress
                      Dallas, L.P.

                  	 
	
                    d/b/a:
                      Town Village North Dallas (application to be made at
                      closing)

                  	 
	
                    Organizational
                      ID No.:

                  	
                    4103298

                  
	
                    EIN:

                  	
                    74-3162182

                  
	
                    State
                      of Formation:

                  	
                    Delaware

                  
	
                    Foreign
                      Qualifications:

                  	
                    Texas

                  

          

          

          

          
            	
                    Cypress
                      Dallas & Ft. Worth JV, LLC

                  	 
	
                    Organizational
                      ID No.:

                  	
                    4100374

                  
	
                    EIN:

                  	
                    01-0855700

                  
	
                    State
                      of Formation:

                  	
                    Delaware

                  

          

          

          

          
            	
                    Cypress
                      Ft. Worth GP, LLC

                  	 
	
                    Organizational
                      ID No.:

                  	
                    4100366

                  
	
                    EIN:

                  	
                    33-1130740

                  
	
                    State
                      of Formation:

                  	
                    Delaware

                  
	
                    Foreign
                      Qualifications:

                  	
                    Texas

                  

          

          

          

          
            	
                    Cypress
                      Dallas GP, LLC

                  	 
	
                    Organizational
                      ID No.:

                  	
                    4100371

                  
	
                    EIN:

                  	
                    33-1130741

                  
	
                    State
                      of Formation:

                  	
                    Delaware

                  
	
                    Foreign
                      Qualifications:

                  	
                    Texas

                  

          

          

          

          
            	
                    American
                      Retirement Corporation

                  	 
	
                    Organizational
                      ID No.:

                  	
                    0325434

                  
	
                    EIN:

                  	
                    62-1674303

                  
	
                    State
                      of Formation:

                  	
                    Tennessee

                  

          

        

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            Back
              to Table of
              Contents

          

        

         

        
          		
                  Schedule
                    3.4
                    -
                    Capitalization

                

        

         

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            Back
              to Table of
              Contents

          

        

         

        
          		
                  Schedule
                    3.6
                    -
                    Litigation

                

        

        

        

        None

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            Back
              to Table of
              Contents

          

        

         

        
          		
                  Schedule
                    3.17 -
                    Material
                    Contracts

                

        

        

        

        Management
          Agreements listed on Schedule
          5.9.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            Back
              to Table of
              Contents

          

        

         

        
          		
                  Schedule
                    3.18
                    -
                    Environmental
                    Compliance

                

        

        

        

        Those
          matters referenced in the following reports prepared by Property Solutions
          Incorporated:

        

        
          Phase
            I
            Environmental Site Assessment dated February 22, 2006 for Town Village
            Ridgmar,
            Fort Worth, Texas

          

          Phase
            I
            Environmental Site Assessment dated February 22, 2006 for Town Village
            North
            Dallas, Dallas, Texas 

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            Back
              to Table of
              Contents

          

        

         

        
          		
                  Schedule
                    4.4
                    -
                    Insurance
                    Requirements

                

        

        

        The
          following requirements for insurance are effective as of the Closing Date.
          Lender reserves the absolute right to modify, amend or supplement these
          requirements at any time and from time to time during the term of the Loan
          and
          Borrower will be required to satisfy any such modified, amended or supplemented
          requirements after commercially reasonable notice to Borrower from Lender
          of
          such modification, amendment or supplement.

         

        Property
          Insurance for Borrower:  

         

        1.    Issued
          on
ACORD
          27
          form
          (Evidence of Insurance), signed by authorized agent.

         

        2.    Insurance
          carrier(s) must be rated A- VII or better (by A.M. Best).

         

        3.    ACORD
          27
          should
          disclose: (a) annual premium for the coverages should be shown on the
ACORD
          27;
          (b) premiums that remain unpaid for the term of the policy, if any.
Lender
          has accepted the schedule of estimated 2006 insurance expense provided
          by Bette
          McNamara from the Borrower.

         

        4.    Policy
          should be an all risk/special perils coverage form.

         

        5.    Policy
          must provide replacement cost coverage with waiver of coinsurance or agreed
          amount endorsement.

         

        6.    Policy
          must provide waiver of terrorism exclusion (or indicate "no terrorism
          exclusion").

         

        7.    Deductible
          shall be no greater than $10,000. Lender
          has approved the
          property deductible of $50,000 ($100,000 with respects to flood and earthquake).
          

         

        Ø If
          the
          deductible is subject to an
          overall aggregate deductible, this must be disclosed with a copy of the
          specific
          aggregate deductible agreement provided.

         

        8.    Building
          coverage must be greater than or equal to replacement cost valued by Merrill
          Lynch Capital or its representatives (if the policy is a blanket policy
          insuring
          other properties, and there is any sub-limit on the amount of coverage
          for any
          particular property, such limit should be shown on the evidence of insurance).
          Renewal amount and annual agreed amount endorsement shall be adjusted by
          Borrower, subject to Lender's approval, to maintain proper insurable values.
          Lender
          has approved the following actual coverage: Building, Business Personal
          Property, and Business Income coverages are written on a blanket basis
          with
          total limits of $500,000,000.

         

        9.    Loss
          of
          Rents coverage must be greater than or equal to twelve (12) months rental
          income (if the policy is a blanket policy insuring other properties, and
          there
          is any sublimit on the amount of coverage for any particular property,
          such
          limit should be shown on the evidence of insurance). Lender
          has approved the following actual coverage: Building,

         

        
          
            
            

          

          
            -1-

            
              

            

          

          
            Back
              to Table of
              Contents

          

        

         

        Business
          Personal Property, and Business Income coverages are written on a blanket
          basis
          with total limits of $500,000,000.

         

        10.    Policy
          must provide for Boiler & Machinery coverage.

         

        11.    Policy
          must provide for Building Law and Ordinance coverage.

         

        12.    Policy
          must provide for windstorm coverage, if applicable (For Florida/Coastal
          properties).

         

        13.    Policy
          must provide for flood coverage, if applicable (For properties in FEMA
          flood
          zones A, B, V, and X-Shaded). Lender
          has approved the following actual coverage: Flood coverage is written at
          a
          blanket limit of $50,000,000
          with a deductible of $100,000 each occurrence. Lender has confirmed that
          no
          flood coverage is required for any Property in this
          transaction.

         

        14.    Policy
          must provide for earthquake coverage, if applicable (For properties located
          in
          Seismic Zones 3 and 4). Lender
          has approved the following actual coverage: Earthquake coverage is written
          at a
          blanket limit of $50,000,000 with a deductible of $100,000 each occurrence.
          Lender has confirmed that no earthquake coverage is required for any Property
          in
          this transaction.

         

        15.    Merrill
          Lynch Capital shall be named on the ACORD 27 as Mortgagee and Loss Payee
          (as
          applicable) and Certificate Holder.

         

        16.    ACORD
          27
          must provide for thirty (30) days' notice of cancellation or any material
          change in the policy to Merrill Lynch Capital, and if possible, deleting
          "endeavor to" and "but failure to mail such notice shall impose no obligation
          or
          liability of any kind upon the company, its agents or representatives"
          language.
          Cancellation notice only-no notice for "material change". Acord 27 does
          not
          contain "endeavor to" wording.

         

        17.    Policy
          must contain waiver of subrogation by insurer with respect to contractual
          releases made by insured prior to loss.

         

        18.    Higher
          limits and special coverages in addition to those indicated above may be
          required depending upon the property size and nature of operations (if
          a joint
          venture).

         

        
          
            
            

          

          
            -2-

            
              

            

          

          
            Back
              to Table of
              Contents

          

        

         

        Property
          Insurance for Operator:  

         

        1.    Operator
          must carry business interruption insurance with a coverage of twelve
          (12) months. Lender
          has approved the following actual coverage: Building, Business Personal
          Property, and Business Income coverages are written on a blanket basis
          with
          total limits of $500,000,000.

         

        2.    Issued
          on
ACORD
          27
          form
          (Evidence of Insurance), signed by authorized agent.

         

        3.    Insurance
          carrier(s) must be rated A- VII or better (by A.M. Best).

         

        4.    ACORD
          27
          should
          disclose: (a) annual premium for the coverages should be shown on the Acord
          27; (b) premiums that remain unpaid for the term of the policy, if any.
Lender
          has accepted the schedule of estimated 2006 insurance expense provided
          by Bette
          McNamara from the Borrower.

         

        5.    Policy
          should be an all risk/special perils coverage form.

         

        6.    Policy
          must provide replacement cost coverage with waiver of coinsurance or agreed
          amount endorsement. Lender
          has approved the following actual coverage: Building, Business Personal
          Property, and Business Income coverages are written on a blanket basis
          with
          total limits of $500,000,000.

         

        7.    Policy
          must provide waiver of terrorism exclusion (or indicate "no terrorism
          exclusion").

         

        8.    Deductible
          shall be no greater than $10,000. Lender
          has approved the
          property deductible of $50,000 ($100,000 with respects to flood and
          earthquake).

         

        9.    ACORD
          27
          must provide for thirty (30) days' notice of cancellation or any material
          change in the policy to Merrill Lynch Capital. Cancellation notice only-no
          notice for "material change". Acord 27 does not contain "endeavor to"
          wording.

         

        10.    Policy
          must contain waiver of subrogation by insurer with respect to contractual
          releases made by insured prior to loss. 

         

        
          
            11.    Merrill
              Lynch Capital shall be named on the ACORD
              27
              as
              Mortgagee and Loss Payee (as applicable) and Certificate
              Holder.

             

            
              
                
                

              

              
                -3-

                
                  

                

              

              
                Back
                  to Table of
                  Contents

              

            

          

        

         

        General
          and Professional Liability Insurance:

         

        1.    Certificate
          must be issued on ACORD
          25
          form
          (Certificate of Ins.), signed by authorized agent.

         

        2.    Insurance
          carrier(s) must be rated A- VII or better (by A.M. Best).

         

        3.    ACORD
          25
          should
          disclose: (a) annual premium for the coverages should be shown on the
ACORD
          25;
          (b) premiums that remain unpaid for the term of the policy, if any.
Lender
          has accepted the schedule of estimated 2006 insurance expense provided
          by Bette
          McNamara from the Borrower.

         

        4.    Policy
          should include coverage for Contractual Liability.

         

        5.    Policy
          should include waiver of terrorism exclusion (or indicate "no terrorism
          exclusion"). All Professional and General Liability policies provide coverage
          for claims arising from acts of terrorism. All certificates reflect this
          coverage with the exception of the Lexington policy which provides $4,000,000
          General Liability coverage. This policy has been reviewed and coverage
          is
          provided for claims arising from acts of terrorism.

         

        6.    Policy
          must have a deductible not greater than $25,000. Lender
          has approved deductibles discussed below in item 7 of this
          section.

         

        Ø If
          the
          deductible is subject to an overall aggregate deductible, this must be
          disclosed
          with a copy of the specific aggregate deductible agreement
          provided.

         

        7.    Coverage
          is required in a minimum $1,000,000 per claim and $3,000,000 in the aggregate
          (aggregate may apply to other insureds beyond the other named insureds
          listed
          below only with Lender's prior written consent): [enter names of named
          insurance
          - i.e., the policy owner - and the other named insureds; this should consist
          only of borrowers unless MLC otherwise approves]. 

         

        Lender
          has approved the following coverage: The combined general liability and
          professional liability insurance program is written as
          follows:

         

        
          	 	
                  à

                	
                  The
                    primary general liability coverage is written with a limit of
                    $4,000,000
                    each occurrence, with a $4,000,000 policy aggregate including
                    a
                    self-insured retention of $1,000,000. Claims made by "patients"
                    are
                    covered for claims arising out of specified perils, as identified
                    in the
                    policy, only.

                

        

        

        
          	 	
                  à

                	
                  There
                    is also a $4,000,000 excess of $1,000,000 coverage for general
                    liability
                    and professional liability claims provided by a captive program
                    that is
                    currently. 

                

        

         

         

        
          
            
            

          

          
            -4-

            
              

            

          

          
            Back
              to Table of
              Contents

          

        

         

        
          	
                	à	
                  The
                    two policies described above are designed to transfer some of
                    the
                    liability of the $5,000,000 self-insured retention which the
                    combined
                    General Liability/Professional Liability program provided by
                    XL Insurance
                    Ltd. Bermuda is subject to. The limit provided is $15,000,000
                    under one
                    policy and a second covering only General Liability has been
                    written for
                    an additional
                    $10,000,000.

                

        

        

        
          	 	
                  à

                	
                  Total
                    combined primary and excess general liability coverage is $25,000,000
                    with
                    a $1,000,000 self-insured retention. Total combined coverage
                    for
                    professional liability is $15,000,000 with a $1,000,000 self-insured
                    retention.

                

        

        

        8.    ACORD
          25
          should provide for thirty (30) days' notice of cancellation or any material
          change in the policy to Merrill Lynch Capital, and if possible, deleting
          "endeavor to" and "but failure to mail such notice shall impose no obligation
          or
          liability of any kind upon the company, its agents or representatives"
          language.
Lender
          has approved the certificates without the requested changes to the notice
          of
          cancellation.

         

        9.    Policy
          must name Merrill
          Lynch Capital as additional insured and must name the
          following as other named insureds: The entities identified on Schedule
          5.9.

         

        10.    Policy
          must include Separation of Insureds/Cross Liability. 

         

        11.    Policy
          will be written on a claims-made basis. Lender
          has approved the following: The primary general liability insurance program
          is
          written on an Occurrence basis. The two combined Excess General Liability
          and
          Professional Liability insurance programs are written on a Claims-Made
          basis
          with the retroactive date of coverage being the inception date of coverage
          on
          October 31, 2005.

         

        12.    Insurance
          shall be noted as being primary without right of contribution of any other
          insurance carried by or on behalf of Lessor per each policies terms and
          conditions.

         

        13.    Higher
          limits and special coverages in addition to those indicated above may be
          required depending upon the property size and nature of operations (if
          a joint
          venture).

         

        
          
            
            

          

          
            -5-

            
              

            

          

          
            Back
              to Table of
              Contents

          

        

         

        Automobile
          Liability Insurance (must show the following):

         

        
          	
                	1.	
                  Issued
                    on Acord 25 form (Certificate of Insurance), signed by authorized
                    agent.

                

        

        

        
          	
                	2.	
                  Insurance
                    carrier (s) rated A- VII or better (by A.M.
                    Best).

                

        

        

        
          	
                	3.	
                  Current
                    policy term.

                

        

        

        
          	
                	4.	
                  Coverage
                    for Owned, Non-Owned, and Hired
                    autos.

                

        

        

        
          	
                	5.	
                  Annual
                    premium for the coverages shown. Lender
                    has accepted the schedule of estimated 2006 insurance expense
                    provided by
                    Bette McNamara from the
                    Borrower.

                

        

        

        
          	
                	6.	
                  Premiums
                    that remain unpaid for the policy term, if any.

                

        

        

        
          	
                	7.	
                  Waiver
                    of terrorism exclusion (or indicate "no terrorism
                    exclusion").

                

        

        

        
          	
                	1.	
                  Liability
                    deductible not greater than $5,000. Lender
                    has approved the
                    automobile liability deductible of
                    $100,000.

                

        

        

        
          	
                	2.	
                  If
                    the deductible is subject to an overall aggregate deductible,
                    this must be
                    disclosed with a copy of the specific aggregate deductible agreement
                    provided.

                

        

        

        
          	
                	3.	
                  Minimum
                    $1,000,000 per occurrence limit (primary and umbrella/excess
                    can be
                    combined to achieve minimum limit.

                

        

        

        
          	
                	4.	
                  Thirty
                    (30) days (ten (10) days for non-payment) notice of
                    cancellation or any material change in the policy to Merrill
                    Lynch Capital
                    deleting "endeavor to" and "but failure to mail such notice shall
                    impose
                    no obligation or liability of any kind upon the company, its
                    agents or
                    representatives" language. Lender
                    has approved the certificates without the requested changes to
                    the notice
                    of cancellation.

                

        

        

        
          	
                	5.	
                  Merrill
                    Lynch Capital included as Additional Insured (see
                    below).

                

        

        

        
          	 	
                  6.

                	
                  Waiver
                    of Subrogation endorsement in favor of Merrill Lynch Capital
                    (see below).
                    Lender
                    has accepted the following: The current insurance carrier would
                    not
                    provide Waiver of Subrogation in favor of Lender. However, the
                    policy does
                    name Lender as Additional Insured which insures Lender to the
                    extent of
                    Lender's insurable interest in the automobiles for this
                    transaction.

                

        

        

        
          	
                	7.	
                  Separation
                    of Insureds/Cross Liability included. Lender
                    has accepted this as per the policy terms and
                    conditions.

                

        

         

        
          
            
            

          

          
            -6-

            
              

            

          

          
            Back
              to Table of
              Contents

          

        

        

        
          	
                	8.	
                  Insurance
                    shall be noted as being primary without right of contribution
                    of any other
                    insurance carried by or on behalf of Lessor. This
                    has been accepted by the
                    Lender.

                

        

        

        
          	
                	9.	
                  Higher
                    limits and special coverages in addition to those indicated above
                    may be
                    required depending upon the property size and nature of operations
                    (if a
                    joint venture).

                

        

         

        
          
            
            

          

          
            -7-

            
              

            

          

          
            Back
              to Table of
              Contents

          

        

        

        Certificate
          Holder and Entity to be Shown on Required
          Endorsements:

         

        Merrill
          Lynch Capital, a Division of 

        Merrill
          Lynch Business Financial Services Inc.,

        and
          its
          successors and assigns

        222
          N. La
          Salle Street - 16th
          Floor

        Chicago,
          IL 60601

        Attn:
          Portfolio Management

        

        

        Insurance
          Consultant for Merrill Lynch Capital:

         

        Lockton
          Companies, Inc.

        5847
          San
          Felipe, Suite 320

        Houston,
          TX 77057

         

        
          	
                  Primary
                    Contact:

                	 	
                  Secondary
                    Contact:

                
	
                  Vicki
                    Wibel, CIC, CRM

                	 	
                  Nelson
                    Reese, AIS

                
	
                  Account
                    Manager, Commercial Insurance

                	 	
                  Account
                    Manager, Commercial Insurance

                
	
                  713.458.5200
                    (Main)

                	 	
                  713.458.5200
                    (Main)

                
	
                  713.458.5246
                    (Direct)

                	 	
                  713.458.5425
                    (Direct)

                
	
                  281.793.4449
                    (Mobile)

                	 	
                  713.628.5012
                    (Mobile)

                
	
                  713.458.5299
                    (Fax(

                	 	
                  713.458.5299
                    (Fax)

                
	
                  vwibel@lockton.com
                    (E-mail)

                	 	
                  nreese@lockton.com
                    (E-mail)

                

        

         

        
 

        
          
            
            

          

          
            -8-

            
              

            

          

          
            Back
              to Table of
              Contents

          

        

         

        
          		
                  Schedule
                    4.14
                    -
                    Deferred
                    Maintenance
                    Schedule

                

        

         

        
          
            	
                    Dallas
                      

                  
	
                    Seal
                      building*

                  
	
                    E-call
                      system

                  
	
                    Roof
                      repair

                  
	
                    Sprinkler
                      head repair 

                  
	
                    Auto-entry
                      doors 

                  
	
                    Facilitate
                      site drainage via grading & drains*

                  
	 
	 
	
                    Fort
                      Worth 

                  
	
                    Seal
                      building*

                  
	
                    E-call
                      system

                  
	
                    Expand
                      parking 

                  
	
                    Auto-entry
                      doors 

                  
	
                    Facilitate
                      additional site drainage near the
                      building.*

                  

          

        

        
        

         

         *
          Required

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            Back
              to Table of
              Contents

          

        

         

        
          		
                  Schedule
                    5.9 - Affiliate
                    Transactions

                

        

         

        
          Management
            Agreement for Town Village North Dallas and Town Village Ridgmar Continuing
            Care
            Retirement Community dated February 28, 2006 by and between Cypress Dallas,
            L.P., Cypress Ft. Worth, L.P. and ARC Management LLC.

        

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            Back
              to Table of
              Contents

          

        

         

        
          		
                  Schedule
                    7.3 - Post Closing Deliveries
                    and Covenants

                

        

         

         

         

        
 

        
          
            
            

          

          
            
            

            
              

            

          

          
            Back
              to Table of
              Contents

          

        

         

        
          		
                  Schedule
                    8.7 - Licensed
                    Operators

                

        

         

        

        None.

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            Back
              to Table of
              Contents

          

        

         

        
          		
                  Schedule
                    9.1(h) - Service
                    Agreement

                

        

         

        NoneEX 10.2

    
      
        
          Back
            to Table of
            Contents

           

        

      

      EXHIBIT
        10.2

       

      CREDIT
        AND SECURITY AGREEMENT

       

      dated
        as of February 28, 2006

       

      among

       

      CYPRESS
        ARLINGTON, LP and CYPRESS LEAWOOD, LLC

       

      collectively,
        as Borrowers

       

      and

       

      MERRILL
        LYNCH CAPITAL,

       

      a
        Division of Merrill Lynch Business Financial Services
        Inc.,

       

      as
        Administrative Agent and as a Lender 

       

      and

       

      THE
        ADDITIONAL LENDERS

       

      FROM
        TIME TO TIME PARTY HERETO

       

      

      

       

      
        
           

        

        
          
          

          
            

          

        

        
          Back
            to Table of
            Contents

        

      

      

      TABLE
        OF CONTENTS

       

      
        	 	
                Page

              
	
                ARTICLE
                  1
                  DEFINITIONS

              	
                1

              
	
                Section
                  1.1

              	
                Certain
                  Defined
                  Terms

              	
                1

              
	
                Section
                  1.2

              	
                Accounting
                  Terms and
                  Determinations

              	
                18

              
	
                Section
                  1.3

              	
                Other
                  Definitional
                  Provisions

              	
                19

              
	
                Section
                  1.4

              	
                Funding
                  and Settlement
                  Currency

              	
                19

              
	
                Section
                  1.5

              	
                Borrowers
                  as Licensed
                  Operators

              	
                19

              
	
                Section
                  1.6

              	
                Certain
                  References to
                  Credit Parties

              	
                19

              
	 	 
	
                ARTICLE
                  2
                  LOANS

              	
                19

              
	
                Section
                  2.1

              	
                Term
                  Loan

              	
                19

              
	
                Section
                  2.2

              	
                [Reserved.]

              	
                21

              
	
                Section
                  2.3

              	
                Interest;
                  Interest
                  Calculations and Certain Fees

              	
                21

              
	
                Section
                  2.4

              	
                Notes

              	
                23

              
	
                Section
                  2.5

              	
                Reserves
                  and
                  Escrows

              	
                23

              
	
                Section
                  2.6

              	
                General
                  Provisions
                  Regarding Payment; Loan Account

              	
                25

              
	
                Section
                  2.7

              	
                Maximum
                  Interest

              	
                26

              
	
                Section
                  2.8

              	
                Taxes

              	
                26

              
	
                Section
                  2.9

              	
                Capital
                  Adequacy

              	
                27

              
	
                Section
                  2.10

              	
                Mitigation
                  Obligations

              	
                28

              
	
                Section
                  2.11

              	
                Appointment
                  of Borrower
                  Representative

              	
                28

              
	 	 
	
                ARTICLE
                  3 REPRESENTATIONS
                  AND WARRANTIES

              	
                29

              
	
                Section
                  3.1

              	
                Existence
                  and
                  Power

              	
                29

              
	
                Section
                  3.2

              	
                Organization
                  and
                  Governmental Authorization; No Contravention

              	
                29

              
	
                Section
                  3.3

              	
                Binding
                  Effect

              	
                30

              
	
                Section
                  3.4

              	
                Capitalization

              	
                30

              
	
                Section
                  3.5

              	
                Financial
                  Information

              	
                30

              
	
                Section
                  3.6

              	
                Litigation

              	
                31

              
	
                Section
                  3.7

              	
                Ownership
                  of Property
                  Generally

              	
                31

              
	
                Section
                  3.8

              	
                No
                  Default

              	
                31

              
	
                Section
                  3.9

              	
                Labor
                  Matters

              	
                31

              
	
                Section
                  3.10

              	
                Regulated
                  Entities

              	
                31

              
	
                Section
                  3.11

              	
                Margin
                  Regulations

              	
                32

              
	
                Section
                  3.12

              	
                Compliance
                  With Laws;
                  Anti-Terrorism Laws

              	
                32

              
	
                Section
                  3.13

              	
                Taxes

              	
                32

              
	
                Section
                  3.14

              	
                Compliance
                  with
                  ERISA

              	
                33

              
	
                Section
                  3.15

              	
                Consummation
                  of
                  Financing Documents; Brokers

              	
                33

              
	
                Section
                  3.16

              	
                Related
                  Transactions

              	
                34

              
	
                Section
                  3.17

              	
                Material
                  Contracts

              	
                34

              
	
                Section
                  3.18

              	
                Compliance
                  with
                  Environmental Requirements; No Hazardous Materials

              	
                34

              

      

       

      
        
           

        

        
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                Section
                  3.19

              	
                Intellectual
                  Property

              	
                36

              
	
                Section
                  3.20

              	
                Solvency

              	
                36

              
	
                Section
                  3.21

              	
                Full
                  Disclosure

              	
                36

              
	
                Section
                  3.22

              	
                Interest
                  Rate

              	
                36

              
	
                Section
                  3.23

              	
                Representations
                  and
                  Warranties Incorporated from Financing Documents

              	
                37

              
	
                Section
                  3.24

              	
                Subsidiaries.
                  There are
                  no Subsidiaries of Borrowers

              	
                37

              
	 	 
	
                ARTICLE
                  4 AFFIRMATIVE
                  COVENANTS

              	
                37

              
	
                Section
                  4.1

              	
                Financial
                  Statements and
                  Other Reports

              	
                37

              
	
                Section
                  4.2

              	
                Payment
                  and Performance
                  of Obligations

              	
                39

              
	
                Section
                  4.3

              	
                Maintenance
                  of
                  Existence; Single Purpose Entity Requirements

              	
                40

              
	
                Section
                  4.4

              	
                Maintenance
                  of Property;
                  Payment of Taxes; Insurance

              	
                40

              
	
                Section
                  4.5

              	
                Compliance
                  with
                  Laws

              	
                42

              
	
                Section
                  4.6

              	
                Inspection
                  of Property,
                  Books and Records

              	
                42

              
	
                Section
                  4.7

              	
                Use
                  of
                  Proceeds

              	
                43

              
	
                Section
                  4.8

              	
                [Reserved.]

              	
                43

              
	
                Section
                  4.9

              	
                [Reserved.]

              	
                43

              
	
                Section
                  4.10

              	
                Environmental
                  Covenants

              	
                43

              
	
                Section
                  4.11

              	
                Syndication

              	
                45

              
	
                Section
                  4.12

              	
                Further
                  Assurances

              	
                45

              
	
                Section
                  4.13

              	
                Litigation

              	
                46

              
	
                Section
                  4.14

              	
                Deferred
                  Maintenance

              	
                46

              
	
                Section
                  4.15

              	
                Power
                  of
                  Attorney

              	
                46

              
	
                Section
                  4.16

              	
                Estoppel
                  Certificates

              	
                46

              
	 	 
	
                ARTICLE
                  5 NEGATIVE
                  COVENANTS

              	
                46

              
	
                Section
                  5.1

              	
                Debt

              	
                47

              
	
                Section
                  5.2

              	
                Liens

              	
                47

              
	
                Section
                  5.3

              	
                Contingent
                  Obligations

              	
                47

              
	
                Section
                  5.4

              	
                Restricted
                  Distributions

              	
                47

              
	
                Section
                  5.5

              	
                Restrictive
                  Agreements

              	
                47

              
	
                Section
                  5.6

              	
                Payments
                  and
                  Modifications of Subordinated Debt

              	
                48

              
	
                Section
                  5.7

              	
                Consolidations,
                  Mergers
                  and Sales of Assets

              	
                48

              
	
                Section
                  5.8

              	
                Purchase
                  of
                  Assets

              	
                49

              
	
                Section
                  5.9

              	
                Transactions
                  with
                  Affiliates

              	
                49

              
	
                Section
                  5.10

              	
                Modification
                  of
                  Organizational Documents

              	
                49

              
	
                Section
                  5.11

              	
                Modification
                  of Certain
                  Agreements

              	
                49

              
	
                Section
                  5.12

              	
                Fiscal
                  Year

              	
                50

              
	
                Section
                  5.13

              	
                Conduct
                  of
                  Business

              	
                50

              
	
                Section
                  5.14

              	
                Operating
                  Leases

              	
                50

              
	
                Section
                  5.15

              	
                Lease
                  Payments

              	
                50

              
	
                Section
                  5.16

              	
                Limitation
                  on Sale and
                  Leaseback Transactions

              	
                50

              
	
                Section
                  5.17

              	
                Compliance
                  with
                  Anti-Terrorism Laws

              	
                50

              

      

       

       

      
        
           

        

        
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            Contents

        

      

       

      
        	
                ARTICLE
                  6 FINANCIAL
                  COVENANTS

              	
                51

              
	
                Section
                  6.1

              	
                Definitions

              	
                51

              
	
                Section
                  6.2

              	
                [Reserved.]

              	
                52

              
	
                Section
                  6.3

              	
                [Reserved.]

              	
                52

              
	
                Section
                  6.4

              	
                [Reserved.]

              	
                53

              
	
                Section
                  6.5

              	
                Financial
                  Covenant

              	
                53

              
	
                Section
                  6.6

              	
                Evidence
                  of
                  Compliance

              	
                53

              
	
                Section
                  6.7

              	
                Financial
                  Covenant
                  Default

              	
                53

              
	 	 
	
                ARTICLE
                  7
                  CONDITIONS

              	
                54

              
	
                Section
                  7.1

              	
                Conditions
                  to
                  Closing

              	
                54

              
	
                Section
                  7.2

              	
                Searches

              	
                55

              
	
                Section
                  7.3

              	
                Certain
                  Post-Closing
                  Obligations

              	
                56

              
	 	 
	
                ARTICLE
                  8 REGULATORY
                  MATTERS

              	
                56

              
	
                Section
                  8.1

              	
                Representations
                  and
                  Warranties Pertaining to Licensed Locations

              	
                56

              
	
                Section
                  8.2

              	
                Representations
                  and
                  Warranties Pertaining to Licensed Operators

              	
                57

              
	
                Section
                  8.3

              	
                Covenants
                  Pertaining to
                  Licensed Locations

              	
                60

              
	
                Section
                  8.4

              	
                Covenants
                  Pertaining to
                  Licensed Operators

              	
                61

              
	
                Section
                  8.5

              	
                Special
                  Notices to
                  Administrative Agent

              	
                64

              
	
                Section
                  8.6

              	
                Cure
                  of Healthcare Laws
                  Violations

              	
                66

              
	
                Section
                  8.7

              	
                Licensed
                  Operator;
                  Manager

              	
                67

              
	
                Section
                  8.8

              	
                Transfer
                  of Healthcare
                  Permits and Operations

              	
                68

              
	 	 
	
                ARTICLE
                  9 REAL PROPERTY
                  MATTERS

              	
                68

              
	
                Section
                  9.1

              	
                Leases;
                  Resident
                  Agreements

              	
                69

              
	
                Section
                  9.2

              	
                Project
                  Use and
                  Operation

              	
                70

              
	
                Section
                  9.3

              	
                Casualty
                  Proceeds

              	
                71

              
	
                Section
                  9.4

              	
                Borrowers'
                  Obligation to
                  Rebuild and Use of Casualty Proceeds Therefor

              	
                72

              
	
                Section
                  9.5

              	
                Tax
                  Reduction
                  Proceedings

              	
                73

              
	
                Section
                  9.6

              	
                Commingling;
                  FIRPTA

              	
                74

              
	
                Section
                  9.7

              	
                Representations
                  and
                  Warranties

              	
                74

              
	 	 
	
                ARTICLE
                  10 SECURITY
                  AGREEMENT

              	
                76

              
	
                Section
                  10.1

              	
                Generally

              	
                76

              
	
                Section
                  10.2

              	
                Covenants
                  Relating to
                  Collateral

              	
                77

              
	
                Section
                  10.3

              	
                UCC
                  Remedies

              	
                78

              
	 	 
	
                ARTICLE
                  11 EVENTS OF
                  DEFAULT

              	
                79

              
	
                Section
                  11.1

              	
                Events
                  of
                  Default

              	
                79

              
	
                Section
                  11.2

              	
                Acceleration

              	
                82

              
	
                Section
                  11.3

              	
                [Reserved.]

              	
                82

              
	
                Section
                  11.4

              	
                Default
                  Rate of
                  Interest

              	
                82

              
	
                Section
                  11.5

              	
                Setoff
                  Rights

              	
                82

              

      

       

       

      
        
           

        

        
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                Section
                  11.6

              	
                Application
                  of
                  Proceeds

              	
                83

              
	
                Section
                  11.7

              	
                Waivers

              	
                84

              
	
                Section
                  11.8

              	
                Injunctive
                  Relief

              	
                86

              
	
                Section
                  11.9

              	
                Marshalling

              	
                86

              
	 	 
	
                ARTICLE
                  12 EXPENSES AND
                  INDEMNITY

              	
                86

              
	
                Section
                  12.1

              	
                Expenses

              	
                86

              
	
                Section
                  12.2

              	
                Indemnity

              	
                87

              
	 	 
	
                ARTICLE
                  13
                  ADMINISTRATIVE AGENT

              	
                88

              
	
                Section
                  13.1

              	
                Appointment
                  and
                  Authorization

              	
                88

              
	
                Section
                  13.2

              	
                Administrative
                  Agent
                  and Affiliates

              	
                88

              
	
                Section
                  13.3

              	
                Action
                  by
                  Administrative Agent

              	
                88

              
	
                Section
                  13.4

              	
                Consultation
                  with
                  Experts

              	
                89

              
	
                Section
                  13.5

              	
                Liability
                  of
                  Administrative Agent

              	
                89

              
	
                Section
                  13.6

              	
                Indemnification

              	
                89

              
	
                Section
                  13.7

              	
                Right
                  to Request and
                  Act on Instructions

              	
                90

              
	
                Section
                  13.8

              	
                Credit
                  Decision

              	
                90

              
	
                Section
                  13.9

              	
                Collateral
                  Matters

              	
                90

              
	
                Section
                  13.10

              	
                Agency
                  for
                  Perfection

              	
                91

              
	
                Section
                  13.11

              	
                Notice
                  of
                  Default

              	
                91

              
	
                Section
                  13.12

              	
                Successor
                  Administrative Agent

              	
                91

              
	
                Section
                  13.13

              	
                Payment
                  and Sharing of
                  Payment

              	
                92

              
	
                Section
                  13.14

              	
                Right
                  to Perform,
                  Preserve and Protect

              	
                93

              
	
                Section
                  13.15

              	
                Additional
                  Titled
                  Agents

              	
                94

              
	
                Section
                  13.16

              	
                Amendments
                  and
                  Waivers

              	
                94

              
	
                Section
                  13.17

              	
                Assignments
                  and
                  Participations

              	
                95

              
	
                Section
                  13.18

              	
                Definitions

              	
                97

              
	 	 
	
                ARTICLE
                  14
                  MISCELLANEOUS

              	
                98

              
	
                Section
                  14.1

              	
                Survival

              	
                98

              
	
                Section
                  14.2

              	
                No
                  Waivers

              	
                99

              
	
                Section
                  14.3

              	
                Notices

              	
                99

              
	
                Section
                  14.4

              	
                Severability

              	
                100

              
	
                Section
                  14.5

              	
                Amendments
                  and
                  Waivers

              	
                100

              
	
                Section
                  14.6

              	
                Credit
                  Party
                  Assignments

              	
                100

              
	
                Section
                  14.7

              	
                Headings

              	
                100

              
	
                Section
                  14.8

              	
                Confidentiality

              	
                101

              
	
                Section
                  14.9

              	
                Waiver
                  of Consequential
                  and Other Damages

              	
                101

              
	
                Section
                  14.10

              	
                GOVERNING
                  LAW;
                  SUBMISSION TO JURISDICTION

              	
                102

              
	
                Section
                  14.11

              	
                WAIVER
                  OF JURY
                  TRIAL

              	
                102

              
	
                Section
                  14.12

              	
                Publication;
                  Advertisement

              	
                103

              
	
                Section
                  14.13

              	
                Counterparts;
                  Integration

              	
                103

              
	
                Section
                  14.14

              	
                No
                  Strict
                  Construction

              	
                103

              
	
                Section
                  14.15

              	
                Time

              	
                104

              
	
                Section
                  14.16

              	
                Lender
                  Approvals

              	
                104

              

      

       

       

      
        
           

        

        
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                Section
                  14.17

              	
                [Reserved.]

              	
                104

              
	
                Section
                  14.18

              	
                WAIVERS

              	
                104

              
	
                Section
                  14.19

              	
                Release
                  of
                  Administrative Agent and Lenders

              	
                104

              
	 	 
	
                ARTICLE
                  15 JOINT AND
                  SEVERAL LIABILITY; GUARANTOR PROVISIONS

              	
                105

              
	
                Section
                  15.1

              	
                Joint
                  and Several
                  Obligations

              	
                105

              
	
                Section
                  15.2

              	
                Guarantor
                  Provisions.

              	
                109

              

      

       

      
        
           

        

        
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      CREDIT
        AND SECURITY AGREEMENT

       

      THIS
        CREDIT
        AND SECURITY AGREEMENT
        is dated
        as of February 28, 2006 by and among CYPRESS
        LEAWOOD, LLC, a
        Delaware limited liability company, CYPRESS
        ARLINGTON, LP, a
        Delaware limited partnership (each, individually as a Borrower, and
        collectively, as Borrowers), the financial institutions or other entities
        from
        time to time parties hereto, each as a Lender, and MERRILL
        LYNCH CAPITAL, a division of Merrill Lynch Business Financial Services
        Inc.,
        individually as a Lender and as Administrative Agent. 

       

      RECITALS:

       

      R-1. Borrowers
        have requested that Lenders make available to Borrowers term financing
        facilities as described herein.

       

      R-2. Lenders
        are willing to extend such credit to Borrowers under the terms and conditions
        herein set forth.

       

      NOW,
        THEREFORE,
        in
        consideration of the premises and the agreements, provisions and covenants
        herein contained, Borrowers, Lenders and Administrative Agent agree as
        follows:

       

      ARTICLE
        1

      DEFINITIONS

       

      Section
        1.1 Certain
        Defined Terms. 

       

      The
        following terms have the following meanings:

       

      "Account"
        means
        "account", as defined in Article 9 of the UCC.

       

      "Additional
        Titled Agents"
        has the
        meaning given in Section
        13.15.

       

      "Administrative
        Agent" means
        Merrill Lynch, in its capacity as administrative agent for the Lenders
        hereunder, as such capacity is established in, and subject to the provisions
        of,
        Article 10, and the successors of Merrill Lynch in such capacity.

       

      "Affected
        Lender"
        has the
        meaning given in Section
        13.17(f).

       

      "Affiliate" means
        with respect to any Person (a) any Person that directly or indirectly
        controls such Person, (b) any Person which is controlled by or is under
        common control with such controlling Person, and (c) each of such Person's
        (other than, with respect to any Lender, any Lender's) officers or
        directors (or Persons functioning in substantially similar roles) and the
        spouses, parents, descendants and siblings of such officers, directors or
        other
        Persons. As used in this definition, the term "control" of
        a
        Person means the possession, directly or indirectly, of the power to vote
        five
        percent (5%) or more of any class of voting securities of such Person or to
        direct or cause the direction of the management or

       

      
        
           

        

        
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      policies
        of a Person, whether through the ownership of voting securities, by contract
        or
        otherwise.

       

      "Affiliated
        Financing Documents"
        means
        any credit, loan, letter of credit or related documents which are, by their
        terms and by the terms of this Agreement, cross-defaulted with the Financing
        Documents, and for which a Credit Party hereunder is liable or contingently
        liable for payment or as security for which a Credit Party hereunder has
        pledged, assigned or subjected any assets.

       

      "Agreement" means
        this Credit and Security Agreement, as the same may be amended, supplemented,
        restated or otherwise modified from time to time.

       

      "Allocable
        Amount"
        has the
        meaning given in Section
        15.1(g).

       

      "Anti-Terrorism
        Laws" means
        any
        Laws relating to terrorism or money laundering, including Executive Order
        No. 13224 (effective September 24, 2001), the USA PATRIOT Act, the
        Laws comprising or implementing the Bank Secrecy Act, and the Laws administered
        by OFAC.

       

      "Asset
        Disposition" means
        any
        sale, lease, license, transfer, assignment or other consensual disposition
        by
        any Borrower of any asset, but excluding dispositions of Inventory in the
        Ordinary Course of Business.

       

      "Assignment
        Agreement"
        means
        an agreement substantially in the form of Exhibit A
        hereto. 

       

      "ARC"
        means
        American Retirement Corporation, a Tennessee corporation.

       

      "Bankruptcy
        Code" means
        Title 11 of the United States Code entitled "Bankruptcy", as the same may
        be
        amended, modified or supplemented from time to time, and any successor statute
        thereto.

       

      "Base
        Rate" means
        a
        rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
        1%) equal to (a) the rate of interest which is identified and normally
        published by Bloomberg Professional Service Page BBAM 1 as the offered rate
        for loans in United States dollars for the period of one (1) month under
        the caption British Bankers Association LIBOR Rates as of 11:00 a.m.
        (London time) as adjusted on a daily basis and effective on the second full
        Business Day after each such day (unless such date is not a Business Day,
        in
        which event the next succeeding Business Day will be used); divided
        by
        (b) the sum of one minus
        the
        daily average during the preceding month of the aggregate maximum reserve
        requirement (expressed as a decimal) then imposed under Regulation D of the
        Board of Governors of the Federal Reserve System (or any successor
        thereto) for "Eurocurrency Liabilities" (as defined therein). If Bloomberg
        Professional Service (or another nationally-recognized rate reporting source
        acceptable to Administrative Agent) no longer reports the LIBOR or
        Administrative Agent determines in good faith that the rate so reported no
        longer accurately reflects the rate available to Administrative Agent in
        the
        London Interbank Market or if such index no longer exists or if Page BBAM 1
        no longer

       

      
        
           

        

        
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            Contents

        

         

      

      exists
        or
        accurately reflects the rate available to Administrative Agent in the London
        Interbank Market, Administrative Agent may select a replacement index or
        replacement page, as the case may be.

       

      "Base
        Rate Margin" means
        two
        and one tenth percent (2.10%).

       

      "Blocked
        Person"
        means
        any Person: (a) listed in the annex to, or is otherwise subject to the
        provisions of, Executive Order No. 13224, (b) a Person owned or
        controlled by, or acting for or on behalf of, any Person that is listed in
        the
        annex to, or is otherwise subject to the provisions of, Executive Order
        No. 13224, (c) a Person with which any Lender is prohibited from
        dealing or otherwise engaging in any transaction by any Anti-Terrorism Law,
        (d) a Person that commits, threatens or conspires to commit or supports
        "terrorism" as defined in Executive Order No. 13224, or (e) a Person
        that is named a "specially designated national" or "blocked person" on the
        most
        current list published by OFAC or other similar list.

       

      "Borrower"
        and
        "Borrowers"
        mean
        the entities described in the first paragraph of this Agreement and each
        of
        their respective successors and permitted assigns. 

       

      "Borrower
        Representative"
        means
        ARC, in its capacity as Borrower Representative pursuant to the provisions
        of
Section 2.11,
        or any
        successor Borrower Representative selected by Borrowers and approved by
        Agent.

       

      "Business
        Day"
        means
        any day except a Saturday, Sunday or other day on which either the New York
        Stock Exchange is closed, or on which commercial banks in Chicago and New
        York
        City are authorized by law to close.

       

      "Capital
        Lease"
        of any
        Person means any lease of any property by such Person as lessee which would,
        in
        accordance with GAAP, be required to be accounted for as a capital lease
        on the
        balance sheet of such Person.

       

      "Capital
        Replacement Reserve"
        has the
        meaning given in Section
        2.5(d).

       

      "Casualty
        Proceeds"
        has the
        meaning given in Section
        9.3(b).

       

      "CCP"
        has the
        meaning given in Section
        8.4b(xi).

       

      "CERCLA"
        means
        the Comprehensive Environmental Response, Compensation and Liability Act
        of
        1980, 42 U.S.C.A. § 9601 et
        seq.,
        as the
        same may be amended from time to time.

       

      "Closed
        Period" means
        the
        period from the Closing Date through the twelfth (12th) full
        calendar month following the Closing Date.

       

      "Closing
        Date"
        means
        the date of this Agreement.

       

      
        
           

        

        
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      "CMS"
        means
        the federal Centers for Medicare and Medicaid Services (formerly the federal
        Health Care Financing Administration), or any successor Governmental
        Authority.

       

      "CNL"
        means
        CNL Financial Group, Inc., a Florida corporation.

       

      "Code"
        means
        the Internal Revenue Code of 1986.

       

      "Collateral"
        means
        all property, now existing or hereafter acquired, mortgaged or pledged to,
        or
        purported to be subjected to a Lien in favor of, Administrative Agent, for
        the
        benefit of Administrative Agent and Lenders, pursuant to this Agreement and
        the
        Security Documents.

       

      "Commitment
        Annex"
        means
Annex
        A
        to this
        Agreement.

       

      "Commitment
        Expiry Date"
        means
        February 28, 2009.

       

      "Compliance
        Certificate"
        means a
        certificate, duly executed by a Responsible Officer of Borrower Representative,
        appropriately completed and substantially in the form of Exhibit
        C
        hereto.

       

      "CON" means
        any
        certificate of need or similar license which determines that there is a need
        for
        a healthcare facility at a particular location or within a certain geographic
        region and entitles the holder to use a Licensed Location for a purpose
        permitted under Healthcare Laws. 

       

      "Contingent
        Obligation"
        means,
        with respect to any Person, any direct or indirect liability of such Person:
        (a) with respect to any debt, lease, dividend or other obligation of
        another Person (a "Third
        Party Obligation") if
        the purpose or intent of such Person incurring such liability, or the effect
        thereof, is to provide assurance to the obligee of such Third Party Obligation
        that such Third Party Obligation will be paid or discharged, or that any
        agreement relating thereto will be complied with, or that any holder of such
        Third Party Obligation will be protected, in whole or in part, against loss
        with
        respect thereto; (b) with respect to any undrawn portion of any letter of
        credit issued for the account of such Person or as to which such Person is
        otherwise liable for the reimbursement of any drawing; (c) under any Swap
        Contract or other derivative obligation; (d) to make take-or-pay or similar
        payments if required regardless of nonperformance by any other party or parties
        to an agreement; or (e) for any obligations of another Person pursuant to
        any Guarantee or pursuant to any agreement to purchase, repurchase or otherwise
        acquire any obligation or any property constituting security therefor, to
        provide funds for the payment or discharge of such obligation or to preserve
        the
        solvency, financial condition or level of income of another Person. The amount
        of any Contingent Obligation shall be equal to the amount of the obligation
        so
        Guaranteed or otherwise supported or, if not a fixed and determinable amount,
        the maximum amount so Guaranteed or otherwise supported.

       

      "Controlled
        Group"
        means
        all members of a group of corporations and all members of a group of trades
        or
        businesses (whether or not incorporated) under common

       

      
        
           

        

        
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      control
        which, together with any Borrower, are treated as a single employer under
        Section 414(b), (c), (m) or (o) of the Code or Section
        4001(b) of ERISA.

       

      "Covenant
        Prepayment"
        has the
        meaning given in Section
        6.7.

       

      "Credit
        Exposure"
        means
        any period of time during which any Loan or other Obligation remains unpaid
        or
        outstanding; provided,
        however,
        that no
        Credit Exposure shall be deemed to exist solely due to the existence of
        contingent indemnification liability (other than liability in respect of
        the
        Affiliated Financing Documents), absent the assertion of a claim with respect
        thereto.

       

      "Credit
        Party"
        means
        subject to Section
        1.6,
        any
        Guarantor under a Financing Document Guarantee, Cypress JV, General Partner,
        each Borrower and any Subsidiary of any Borrower, whether now existing or
        hereafter acquired or formed; and "Credit
        Parties"
        means
        all such Persons, collectively.

       

      "Cypress
        JV"
        means
        Cypress Arlington and Leawood JV, LLC, a Delaware limited liability company,
        the
        sole member or limited partner, as applicable, of such Borrower.

       

      "Debt"
        of a
        Person means at any date, without duplication, (a) all obligations of such
        Person for borrowed money, (b) all obligations of such Person evidenced by
        bonds, debentures, notes or other similar instruments, (c) all obligations
        of such Person to pay the deferred purchase price of property or services,
        except trade accounts payable arising and paid on a timely basis and in the
        Ordinary Course of Business, (d) all Capital Leases of such Person,
        (e) all non-contingent obligations of such Person to reimburse any bank or
        other Person in respect of amounts paid under a letter of credit, banker's
        acceptance or similar instrument, (f) all equity securities of such Person
        subject to repurchase or redemption otherwise than at the sole option of
        such
        Person, (g) all obligations secured by a Lien on any asset of such Person,
        whether or not such obligation is otherwise an obligation of such Person,
        (h) "earnouts", purchase price adjustments, profit sharing arrangements,
        deferred purchase money amounts and similar payment obligations or continuing
        obligations of any nature of such Person arising out of purchase and sale
        contracts; (i) all Debt of others Guaranteed by such Person;
        (j) off-balance sheet liabilities and/or pension plan liabilities;
        (k) obligations arising under non-compete agreements; and
        (l) obligations arising under bonus, deferred compensation, incentive
        compensation or similar arrangements, other than those arising in the Ordinary
        Course of Business. 

       

      "Debt
        Service"
        has the
        meaning given in Section
        6.1(a).

       

      "Debt
        Service Coverage Ratio"
        has the
        meaning given in Section
        6.1(a).

       

      "Debt
        Yield Ratio"
        has the
        meaning given in Section
        6.1(a).

       

      "Default"
        means
        any condition or event which with the giving of notice or lapse of time or
        both
        would, unless cured or waived, become an Event of Default.

       

      
        
           

        

        
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      "Default
        Rate"
        has the
        meaning given in Section 11.4.

       

      "Eligible
        Swap Counterparty"
        means
        Administrative Agent or any Affiliate of Administrative Agent that from time
        to
        time enters into a Swap Contract with a Borrower or Borrowers.

       

      "Environmental
        Laws"
        means
        any present and future federal, state and local laws, statutes, ordinances,
        rules, regulations, standards, policies and other governmental directives
        or
        requirements, as well as common law, pertaining to the environment, natural
        resources, pollution, health (including any environmental clean up statutes
        and
        all regulations adopted by any local, state, federal or other Governmental
        Authority, and any statute, ordinance, code, order, decree, law rule or
        regulation all of which pertain to or impose liability or standards of conduct
        concerning medical waste or medical products, equipment or supplies), safety
        or
        clean-up that apply to any Borrower or the Project and relate to Hazardous
        Materials, including, without limitation, the Comprehensive Environmental
        Response, Compensation and Liability Act of 1980 (42 U.S.C. § 9601
et
        seq.),
        the
        Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6901
et
        seq.),
        the
        Federal Water Pollution Control Act (33 U.S.C. § 1251 et
        seq.),
        the
        Hazardous Materials Transportation Act (49 U.S.C. § 5101 et
        seq.),
        the
        Clean Air Act (42 U.S.C. § 7401 et
        seq.),
        the
        Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. § 136
et
        seq.),
        the
        Emergency Planning and Community Right-to-Know Act (42 U.S.C. § 11001
et
        seq.),
        the
        Occupational Safety and Health Act (29 U.S.C. § 651 et
        seq.),
        the
        Residential Lead-Based Paint Hazard Reduction Act (42 U.S.C. § 4851
et
        seq.),
        any
        analogous state or local laws, any amendments thereto, and the regulations
        promulgated pursuant to said laws, together with all amendments from time
        to
        time to any of the foregoing and judicial interpretations thereof.

       

      "Environmental
        Liens"
        means
        all Liens and other encumbrances imposed pursuant to any Environmental Law,
        whether due to any act or omission of Borrower or any other Person.

       

      "ERISA"
        means
        the Employee Retirement Income Security Act of 1974, as the same may be amended,
        modified or supplemented from time to time, and any successor statute thereto,
        and any and all rules or regulations promulgated from time to time
        thereunder.

       

      "ERISA
        Plan"
        means
        any "employee benefit plan", as such term is defined in
        Section 3(3) of ERISA (other than a Multiemployer Plan), which any
        Borrower maintains, sponsors or contributes to, or, in the case of an employee
        benefit plan which is subject to Section 412 of the Code or Title IV of ERISA,
        to which any Borrower or any member of the Controlled Group may have any
        liability, including any liability by reason of having been a substantial
        employer within the meaning of Section 4063 of ERISA at any time during the
        preceding five (5) years, or by reason of being deemed to be a contributing
        sponsor under Section 4069 of ERISA.

       

      "Event
        of Default"
        has the
        meaning given in Section
        11.1.

       

      
        
           

        

        
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      "Exit
        Fee"
        has the
        meaning given in Section
        2.3(d).

       

      "FF&E"
        has the
        meaning given in Section
        9.2(d).

       

      "Financial
        Covenants"
        has the
        meaning given in Section
        6.5.

       

      "Financing
        Documents"
        means
        this Agreement, any Notes, the Security Documents, any fee letter among Merrill
        Lynch and any of the Borrowers relating to the transactions contemplated
        hereby,
        any subordination or intercreditor agreement pursuant to which any Debt (other
        than any Subordinated Debt) and/or any Liens securing such Debt is
        subordinated to all or any portion of the Obligations and all other documents,
        instruments and agreements contemplated herein or thereby and heretofore
        executed, executed concurrently herewith or executed at any time and from
        time
        to time hereafter, as any or all of the same may be amended, supplemented,
        restated or otherwise modified from time to time, provided that the term
        "Financing Documents" does not include the documents evidencing or securing
        the
        Mezzanine Loan.

       

      "Financing
        Document Guarantee"
        means
        that certain Guaranty of Non-Recourse Carveouts Agreement and that certain
        Debt
        Service Guaranty, each executed by ARC of even date herewith, as well as
        any
        agreement that may exist from time to time pursuant to which any third party
        other than a Borrower shall Guarantee the Obligations of the Borrowers under
        this Agreement and/or the other Financing Documents.

       

      "Fiscal
        Year"
        means
        the fiscal year of Borrowers ending on December 31 of each calendar
        year.

       

      "GAAP"
        means
        generally accepted accounting principles set forth from time to time in the
        opinions and pronouncements of the Accounting Principles Board and the American
        Institute of Certified Public Accountants and statements and pronouncements
        of
        the Financial Accounting Standards Board (or agencies with similar functions
        of
        comparable stature and authority within the United States accounting
        profession), which are applicable to the circumstances as of the date of
        determination.

       

      "General
        Partner"
        means
        Cypress Arlington GP, LLC, a Delaware limited liability company.

       

      "Governmental
        Authority"
        means
        any nation or government, any state or other political subdivision thereof,
        and
        any agency, department or Person exercising executive, legislative, judicial,
        regulatory or administrative functions of or pertaining to government and
        any
        corporation or other Person owned or controlled (through stock or capital
        ownership or otherwise) by any of the foregoing, whether domestic or
        foreign. 

       

      "Governmental
        Payor"
        means
        Medicare, Medicaid, TRICARE, and other state or federal health care programs,
        but specifically excluding Third Party Payors.

       

      "Guarantee"
        by any
        Person means any obligation, contingent or otherwise, of such Person directly
        or
        indirectly guaranteeing any Debt or other obligation of any other

       

      
        
           

        

        
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      Person
        and, without limiting the generality of the foregoing, any obligation, direct
        or
        indirect, contingent or otherwise, of such Person (a) to purchase or pay
        (or advance or supply funds for the purchase or payment of) such Debt or
        other obligation (whether arising by virtue of partnership arrangements,
        by
        agreement to keep-well, to purchase assets, goods, securities or services,
        to
        take-or-pay, or to maintain financial statement conditions or otherwise),
        or
        (b) entered into for the purpose of assuring in any other manner the
        obligee of such Debt or other obligation of the payment thereof or to protect
        such obligee against loss in respect thereof (in whole or in part), provided,
        however, that
        the
        term Guarantee shall not include endorsements for collection or deposit in
        the
        Ordinary Course of Business. The term "Guarantee"
        used as
        a verb has a corresponding meaning.

       

      "Guarantor"
        means
        ARC and any other Person that has executed or delivered, or shall in the
        future
        execute or deliver, any Financing Document Guarantee of any portion of the
        Obligations.

       

      "Hazardous
        Materials"
        means
        petroleum and petroleum products and compounds containing them, including
        gasoline, diesel fuel and oil; explosives, flammable materials; radioactive
        materials; polychlorinated biphenyls and compounds containing them; lead
        and
        lead-based paint; asbestos or asbestos-containing materials; underground
        or
        above-ground storage tanks, whether empty or containing any substance; any
        substance the presence of which on the Project is prohibited by any
        Environmental Laws; toxic mold, or any similar substance that requires special
        handling due to environmental concerns; and any other material or substance
        now
        defined as a "hazardous substance," "hazardous material," "hazardous waste,"
        "toxic substance," "toxic pollutant," "contaminant," "pollutant" or other
        words
        of similar import within the meaning of any Environmental Law, including:
        (a) any "hazardous substance" defined as such in (or for purposes
        of) CERCLA, or any so-called "superfund" or "superlien" Law; (b) any
        "pollutant or contaminant" as defined in 42 U.S.C.A. § 9601(33); (c) any
        material now defined as "hazardous waste" pursuant to 40 C.F.R. Part 260;
        (d) any petroleum or petroleum by-products, including crude oil or any
        fraction thereof; (e) natural gas, natural gas liquids, liquefied natural
        gas, or synthetic gas usable for fuel; (f) any "hazardous chemical" as
        defined pursuant to 29 C.F.R. Part 1910; (g) any toxic substances, wastes,
        materials, pollutants or contaminants (including, without limitation, asbestos,
        polychlorinated biphenyls ("PCB's"), flammable explosives, radioactive
        materials, infectious substances, materials containing lead-based paint or
        raw
        materials which include hazardous constituents); and (h) any other toxic
        substance or contaminant that is subject to any Environmental Laws or other
        past
        or present requirement of any Governmental Authority. 

       

      "Hazardous
        Materials Contamination"
        means
        contamination (whether now existing or hereafter occurring) of the
        improvements, buildings, facilities, personalty, soil, groundwater, air or
        other
        elements on or of the relevant property by Hazardous Materials, or any
        derivatives thereof, or on or of any other property as a result of Hazardous
        Materials, or any derivatives thereof, generated on, emanating from or disposed
        of in connection with the relevant property.

       

      
        
           

        

        
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      "Healthcare
        Laws"
        means
        all applicable Laws relating to the possession, control, warehousing, marketing,
        sale and distribution of pharmaceuticals, the operation of medical or senior
        housing facilities (such as, but not limited to, nursing homes, skilled nursing
        facilities, rehabilitation hospitals, intermediate care facilities and adult
        care facilities), patient healthcare, patient healthcare information, patient
        abuse, the quality and adequacy of medical care, rate setting, equipment,
        personnel, operating policies, fee splitting, including without limitation,
        (a) all federal and state fraud and abuse laws, including, without
        limitation, the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b(6)),
        the Stark Law (42 U.S.C. § 395n), the civil False Claims Act (31 U.S.C.
§ 729 et
        seq.),
        (b) TRICARE; (c) HIPAA, (d) Medicare; (e) Medicaid;
        (f) quality, safety and accreditation standards and requirements of all
        applicable state laws or regulatory bodies; (g) all laws, policies,
        procedures, requirements and regulations pursuant to which Healthcare Permits
        are issued; and (h) any and all other applicable health care laws,
        regulations, manual provisions, policies and administrative guidance, each
        of
        (a) through (h) as may be amended from time to time. 

       

      "Healthcare
        Permit"
        means a
        Permit (a) issued or required under Healthcare Laws applicable to the
        business of any Borrower or any of its Subsidiaries or necessary in the
        possession, ownership, warehousing, marketing, promoting, sale, labeling,
        furnishing, distribution or delivery of goods or services by a Borrower or
        a
        Licensed Operator under Healthcare Laws, and/or (b) issued or required
        under Healthcare Laws applicable to the ownership of a Licensed
        Location.

       

      "HIPAA"
        means
        the Health Insurance Portability and Accountability Act of 1996, as the same
        may
        be amended, modified or supplemented from time to time, and any successor
        statute thereto, and any and all rules or regulations promulgated from time
        to
        time thereunder.

       

      "HIPAA
        Compliant"
        means
        that the applicable Person is in compliance in all material respects with
        each
        of the applicable requirements of the so-called "Administrative Simplification"
        provisions of HIPAA, and is not and could not reasonably be expected to become
        the subject of any civil or criminal penalty, process, claim, action or
        proceeding, or any administrative or other regulatory review, survey, process
        or
        proceeding (other than routine surveys or reviews conducted by any government
        health plan or other accreditation entity) that could result in any of the
        foregoing or that could reasonably be expected to adversely affect such Person's
        business, operations, assets, properties or condition (financial or otherwise),
        in connection with any actual or potential violation by such Person of the
        provisions of HIPAA.

       

      "Indemnitees"
        has the
        meaning given in Section
        12.2.

       

      "Insurance
        Premiums"
        has the
        meaning given in Section
        2.5(c).

       

      "Intercompany
        Loans"
        has the
        meaning given in Section
        2.11.

       

      "Inventory"
        means
        "inventory", as defined in Article 9 of the UCC.

       

      
        
           

        

        
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      "JCAHO"
        means
        the Joint Commission on Accreditation of Healthcare Organizations.

       

      "Joint
        Liability Payment"
        has the
        meaning given in Section
        15.1(g).

       

      "Laws"
        means
        any and all federal, state, local and foreign statutes, laws, judicial
        decisions, regulations, ordinances, rules, judgments, orders, decrees, codes,
        plans, injunctions, permits and governmental
        restrictions (whether now or hereafter in effect), which are applicable to
        any
        Credit Party in any particular circumstance. "Laws"
        includes, without limitation, Healthcare Laws.

       

      "Leases"
        means
        the singular or collective reference to leases, subleases or other arrangements
        for occupancy of space within any Project or any part thereof now existing
        or
        hereafter executed; provided,
        however,
        that
        the term "Leases"
        as used
        herein shall not
        include
        Resident Agreements; and provided,
        further,
        that
        use of the term "Leases"
        in any
        Security Document shall
        include
        Resident Agreements even if Resident Agreements are, under applicable Laws,
        not
        governed as creating a landlord-tenant relationship (the intent being that
        Administrative Agent shall have, as part of the Security Documents, a lien
        upon
        and collateral assignment of all Leases and Resident Agreements).

       

      "Lender"
        means
        each of (a) Merrill Lynch, (b) each other Person party hereto in its
        capacity as a lender, (c) each other Person that becomes a party hereto as
        Lender pursuant to Section
        14.6,
        and
        (d) the respective successors of all of the foregoing, and "Lenders"
        means
        all of the foregoing. In addition to the foregoing, for the purpose of
        identifying the Persons entitled to share in the Collateral and the proceeds
        thereof under, and in accordance with the provisions of, this Agreement and
        the
        Security Documents, the term "Lender" shall include each Eligible Swap
        Counterparty.

       

      "Licensed
        Location"
        means
        any Project from which a Borrower or a Person with whom a Borrower has
        contracted provides or furnishes goods or services governed by Healthcare
        Laws,
        and includes, without limitation, any business location of a Borrower which
        is
        subject to any Healthcare Permit.

       

      "Licensed
        Operator"
        means
        the singular or collective (as the context requires) reference to the
        following Persons: (a) any Borrower or any Subsidiary that is licensed
        under Healthcare Laws to operate a Licensed Location, or is otherwise providing
        or furnishing goods or services governed by Healthcare Laws, or is otherwise
        providing or furnishing goods or services (other than the mere leasing of
        a
        Licensed Location as a lessor and the collection of rentals in connection
        therewith) from a Licensed Location, (b) any Person with whom a
        Borrower has contracted to provide such goods or services governed by Healthcare
        Laws.

       

      "Lien"
        means,
        with respect to any asset, any mortgage, lien, pledge, charge, security interest
        or encumbrance of any kind, or any other type of preferential arrangement
        that
        has the practical effect of creating a security interest, in respect of such
        asset. For the purposes of this Agreement and the other Financing Documents,
        any
        Borrower or any

       

      
        
           

        

        
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      Subsidiary
        shall be deemed to own subject to a Lien any asset which it has acquired
        or
        holds subject to the interest of a vendor or lessor under any conditional
        sale
        agreement, Capital Lease or other title retention agreement relating to such
        asset.

       

      "Litigation"
        means
        any action, suit or proceeding before any court, mediator, arbitrator or
        Governmental Authority.

       

      "Loan
        Account"
        has the
        meaning given in Section
        2.6(b).

       

      "Loan"
        or
        "Loans"
        means
        the Term Loan or Term Loans provided for herein.

       

      "Management
        Agreement"
        has the
        meaning given in Section
        8.7(b).

       

      "Manager"
        has the
        meaning given in Section 8.7(b).

       

      "Material
        Adverse Effect"
        means,
        with respect to any event, act, condition or occurrence of whatever nature
        (including any adverse determination in any litigation, arbitration, or
        governmental investigation or proceeding), whether singly or in conjunction
        with
        any other event or events, act or acts, condition or conditions, occurrence
        or
        occurrences, whether or not related (a) a material adverse change in, or a
        material adverse effect upon, any of (i) the condition (financial or
        otherwise), operations, business or properties of the Credit Parties taken
        as a
        whole, (ii) the rights and remedies of Administrative Agent or Lenders
        under any Financing Document, or the ability of any Credit Party to perform
        any
        of its obligations under any Financing Document to which it is a party,
        (iii) the legality, validity or enforceability of any Financing Document,
        (iv) the existence, perfection or priority of any security interest granted
        in any Financing Document; or (v) any Credit Party's or Licensed Operator's
        ability to accept, admit and/or retain patients or residents or to own or
        operate any Licensed Location, (b) an impairment to the likelihood that
        revenues in general will be collected and paid in the normal course of a
        Licensed Operator's or Borrowers' business and upon the same schedule and
        with
        the same frequency as such Licensed Operator's or Borrowers' recent collections
        history; (c) the imposition of a fine against or the creation of any
        liability of any Credit Party or Licensed Operator to any Governmental Authority
        under any Healthcare Law in excess of $50,000.00; (d) a termination,
        suspension or material limitation of any Healthcare Permits, (e) the
        failure to satisfy any demand by any Governmental Authority to comply with
        Law
        or remediate any condition, or (f) termination by any third party of any
        third party agreement required for the operation of any Project in the manner
        contemplated by this Agreement which agreement is not promptly replaced by
        Borrower on terms which are at least as favorable to the applicable Borrower
        or
        Borrowers in all material respects.

       

      "Material
        Contracts"
        has the
        meaning given in Section
        3.17.

       

      "Material
        Lease"
        means
        any Lease other than a Permitted Lease.

       

      "Maximum
        Lawful Rate"
        has the
        meaning given in Section 2.7(b).

       

      
        
           

        

        
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      "Medicaid"
        means
        the medical assistance programs administered by state agencies and approved
        by
        CMS pursuant to the terms of Title XIX of the Social Security Act, codified
        at
        42 U.S.C. 1396 et
        seq.

       

      "Medicare"
        means
        the program of health benefits for the aged and disabled administered by
        CMS
        pursuant to the terms of Title XVIII of the Social Security Act, codified
        at 42
        U.S.C. 1395 et
        seq.

       

      "Merrill
        Lynch"
        means
        Merrill Lynch Capital, a division of Merrill Lynch Business Financial Services
        Inc., and its successors.

       

      "Mezzanine
        Loan"
        means
        the loan in the amount of $17,226,000 made by Merrill Lynch to Arlington
&
Leawood Senior Housing LLC, the holder of the 80% membership interest in
        Cypress
        JV.

       

      "Multiemployer
        Plan"
        means a
        multiemployer plan, that is intended to meet the definition set forth in
        Section
        4001(a)(3) of ERISA, to which any Borrower or any member of the Controlled
        Group may have any liability.

       

      "Net
        Operating Income"
        has the
        meaning given in Section
        6.1.

       

      "Notes"
        means
        the Term Note or Term Notes provided for herein.

       

      "Obligations"
        means
        all obligations, liabilities and indebtedness (monetary (including post-petition
        interest, whether or not allowed) or otherwise) of each Credit Party
        under this Agreement or any other Financing Document, in each case howsoever
        created, arising or evidenced, whether direct or indirect, absolute or
        contingent, now or hereafter existing, or due or to become due. In addition
        to,
        but without duplication of, the foregoing, the Obligations shall include,
        without limitation, all obligations, liabilities and indebtedness arising
        from
        or in connection with all Swap Contracts entered into with any Eligible Swap
        Counterparty.

       

      "OFAC"
        means
        the U.S. Department of Treasury Office of Foreign Assets Control.

       

      "OFAC
        Lists"
        means,
        collectively, the Specially Designated Nationals and Blocked Persons List
        maintained by OFAC pursuant to Executive Order No. 13224, 66 Fed. Reg. 49079
        (Sept. 25, 2001) and/or any other list of terrorists or other restricted
        Persons maintained pursuant to any of the rules and regulations of OFAC or
        pursuant to any other applicable Executive Orders.

       

      "Operating
        Expenses"
        has the
        meaning given in Section
        6.1a(vi).

       

      "Operating
        Lease"
        means
        any lease of any Licensed Location to an Operating Lessee, and all amendments
        thereto and extensions thereof.

       

      
        
           

        

        
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      "Operating
        Lessee"
        means
        any Person to whom any Borrower or any Subsidiary has leased a Licensed
        Location.

       

      "Operating
        Revenue"
        has the
        meaning given in Section
        6.1(a).

       

      "Ordinary
        Course of Business"
        means,
        in respect of any transaction involving any Credit Party, the ordinary course
        of
        such Credit Party's business, as conducted by such Credit Party in accordance
        with past practices.

       

      "Organizational
        Documents"
        means,
        with respect to any Person other than a natural person, the documents by
        which
        such Person was organized (such as a certificate of incorporation, certificate
        of limited partnership or articles of organization, and including, without
        limitation, any certificates of designation for preferred stock or other
        forms
        of preferred equity) and which relate to the internal governance of such
        Person (such as by-laws, a partnership agreement or an operating, limited
        liability or members agreement).

       

      "Participation
        Agreements"
        has the
        meaning given in Section
        8.4(b)(x).

       

      "Payment
        Account"
        means
        the account specified on the signature pages hereof into which all payments
        by
        or on behalf of each Borrower to Administrative Agent under the Financing
        Documents shall be made, or such other account as Administrative Agent shall
        from time to time specify by notice to Borrower Representative.

       

      "Payment
        Notification"
        means a
        written notification substantially in the form of Exhibit D
        hereto.

       

      "PBGC"
        means
        the Pension Benefit Guaranty Corporation and any Person succeeding to any
        or all
        of its functions under ERISA.

       

      "Pension
        Plan"
        means
        any ERISA Plan that is subject to Section 412 of the Code or Title IV of
        ERISA.

       

      "Permits"
        means
        all governmental licenses, authorizations, provider numbers, supplier numbers,
        registrations, permits, certificates, franchises, qualifications,
        accreditations, consents and approvals required under all applicable Laws
        and
        required in order to carry on its business as now conducted, including, without
        limitation, Healthcare Permits.

       

      "Permitted
        Contest"
        means,
        with respect to any tax obligation or other obligation allegedly or potentially
        owing from any Borrower to any governmental tax authority or other third
        party,
        a contest maintained in good faith by appropriate proceedings promptly
        instituted and diligently conducted and with respect to which such reserve
        or
        other appropriate provision, if any, as shall be required in conformity with
        GAAP shall have been made on the books and records and financial statements
        of
        the applicable Borrower(s); provided,
        however,
        that
        (a) compliance with the obligation that is the subject of such contest is
        effectively stayed during such challenge; (b) Borrowers' title to, and its
        right to use, the Collateral is not adversely affected thereby and
        Administrative Agent's Lien and priority on

       

      
        
           

        

        
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      the
        Collateral are not adversely affected, altered or impaired thereby;
        (c) Borrowers have given prior written notice to Administrative Agent of
        Borrowers' intent to so contest the obligation; (d) in the case of real
        estate taxes or assessments or mechanic's, workmen's, materialmen's or other
        like Liens, Borrowers have obtained an endorsement, in form and substance
        satisfactory to Administrative Agent, to the loan policy of title insurance
        issued to Administrative Agent insuring over any Lien created by such
        obligation, or Borrowers have deposited with Administrative Agent a bond
        or
        other security satisfactory to Administrative Agent, in its reasonable
        discretion, against loss or injury by reason of such contest or the non-payment
        of such obligation or charge (and if such security is cash, Administrative
        Agent
        may, but shall not be obligated to, deposit the same in an interest-bearing
        account and interest accrued thereon, if any, shall be deemed to constitute
        a
        part of such security for purposes of this Agreement, but Administrative
        Agent
        (i) makes no representation or warranty as to the rate or amount of
        interest, if any, which may accrue thereon and shall have no liability in
        connection therewith and (ii) shall not be deemed to be a trustee or
        fiduciary with respect to its receipt of any such security and any such security
        may be commingled with other monies of Administrative Agent); (e) the
        Collateral or any part thereof or any interest therein shall not be in any
        danger of being sold, forfeited or lost by reason of such contest by Borrowers;
        (f) Borrowers have given Administrative Agent notice of the commencement of
        such contest and upon request by Administrative Agent, from time to time,
        notice
        of the status of such contest by Borrowers and/or confirmation of the continuing
        satisfaction of this definition; and (g) upon a final determination of such
        contest, Borrowers shall promptly comply with the requirements thereof.

       

      "Permitted
        Leases"
        means
        each Lease listed on Schedule 1 and any Lease (other than any Resident
        Agreement) for any portion of any Project that (a) is for demised
        space of no more than 900 square feet, (b) is for a beauty parlor, barber
        shop, rehabilitation center or other lawful use that is necessary or consistent
        with, and ancillary to, the operation of a senior housing facility, and
        (c) is terminable by Borrower upon not more than sixty (60) days'
        notice.

       

      "Permitted
        Liens"
        means:
        (a) deposits or pledges of cash to secure obligations under workmen's
        compensation, social security or similar laws, or under unemployment insurance
        (but excluding Liens arising under ERISA); (b) deposits or pledges of cash
        to secure bids, tenders, contracts (other than contracts for the payment
        of
        money or the deferred purchase price of property or services), leases, statutory
        obligations, surety and appeal bonds and other obligations of like nature
        arising in the Ordinary Course of Business; (c) mechanic's, workmen's,
        materialmen's or other like Liens arising in the Ordinary Course of Business
        with respect to obligations which are not due, or which are being contested
        pursuant to a Permitted Contest; (d) Liens on Collateral, for taxes or
        other governmental charges not at the time delinquent or thereafter payable
        without penalty or the subject of a Permitted Contest; (e) attachments,
        appeal bonds, judgments and other similar Liens on Collateral other than
        Accounts, for sums not exceeding $25,000 in the aggregate arising in connection
        with court proceedings; provided,
        however,
        that
        the execution or other enforcement of such Liens is effectively stayed and
        the
        claims secured thereby are the subject of a Permitted Contest; (f) those
        matters which are set forth as exceptions to or

       

      
        
           

        

        
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      subordinate
        matters in the loan title insurance policy accepted by Administrative Agent
        insuring the lien of the Security Documents; (g) Liens and encumbrances in
        favor of Administrative Agent under the Financing Documents; and (h) Liens
        and encumbrances in favor of the holders of the Affiliated Financing
        Documents.

       

      "Person"
        means
        any natural person, corporation, limited liability company, professional
        association, limited partnership, general partnership, joint stock company,
        joint venture, association, company, trust, bank, trust company, land trust,
        business trust or other organization, whether or not a legal entity, and
        any
        Governmental Authority.

       

      "Project"
        means
        the singular reference to each respective portion of the Collateral consisting
        of the land, improvements and all other real and personal property encumbered
        by
        the lien of each respective mortgage, deed of trust, deed to secure debt
        or
        similar Security Document constituting a part of the Financing Documents.
        "Projects"
        means
        all such Projects collectively.

       

      "Pro
        Rata Share"
        means
        (a) with respect to a Lender's right to receive payments of principal and
        interest with respect to the Term Loans, the Term Loan Commitment
        Percentage of such Lender, and (b) for all other purposes (including
        without limitation the indemnification obligations arising under Section
        13.6) with
        respect to any Lender, the percentage obtained by dividing
        (i) such Lender's then outstanding principal amount of the Term Loans,
by
        (ii) the then outstanding principal amount of the Term Loans of all
        Lenders.

       

      "Release"
        has the
        meaning given in 42 U.S.C § 9601 (22).

       

      "Released
        Parties"
        has the
        meaning given in Section
        14.19.

       

      "Releasing
        Parties"
        has the
        meaning given in Section
        14.19.

       

      "Replacement
        Lender"
        has the
        meaning given in Section
        13.17(f).

       

      "Required
        Lenders"
        means,
        subject to the provisions of Section
        13.13(d),
        at any
        time Lenders holding sixty-six and two thirds percent (66 2/3%) or more of
        the outstanding principal balance of the Term Loans (taken as a
        whole).

       

      "Resident
        Agreements"
        means
        the singular or collective reference to all patient and resident care
        agreements, admission agreements and service agreements which include an
        occupancy agreement and all amendments, modifications or supplements
        thereto.

       

      "Responsible
        Officer"
        means
        any of the Chief Executive Officer, Chief Financial Officer or Managing Member
        of Cypress JV or the General Partner. 

       

      "Restricted
        Distribution"
        means
        as to any Person (a) any dividend or other distribution (whether in cash,
        securities or other property) on any equity interest in such Person (except
        those payable solely in such Person's equity interests of the same class),
        (b) any payment on account of (i) the purchase, redemption,
        retirement, defeasance,

       

      
        
           

        

        
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      surrender,
        cancellation, termination or acquisition of any equity interests in such
        Person
        or any claim respecting the purchase or sale of any equity interest in such
        Person, or (ii) any option, warrant or other right to acquire any equity
        interests in such Person, (c) any management fees, salaries or other fees
        or compensation to an Affiliate of Borrower, (d) any lease or rental
        payments to an Affiliate or Subsidiary of Borrower, or (e) repayments of or
        debt service on loans or other indebtedness held by an Affiliate of
        Borrower.

       

      "Sale"
        has the
        meaning given in Section
        2.12.

       

      "Securitization"
        has the
        meaning given in Section
        14.8.

       

      "Security
        Documents"
        means
        any agreement, document or instrument executed concurrently herewith or at
        any
        time hereafter pursuant to which one or more Credit Parties or any other
        Person
        either (a) Guarantees payment or performance of all or any portion of the
        Obligations (including, without limitation, any Financing Documents Guarantee),
        and/or (b) provides, as security for all or any portion of the Obligations,
        a Lien on any of its assets in favor of Administrative Agent for its own
        benefit
        and the benefit of the Lenders, as any or all of the same may be amended,
        supplemented, restated or otherwise modified from time to time.

       

      "Sellers"
        means,
        collectively, Town Village Fort Worth, LP, Town Village Dallas, LP, Town
        Village
        Arlington, LP, each a Delaware limited partnership, and Town Village Leawood,
        LLC a Delaware limited liability company.

       

      "Service
        Agreement"
        has the
        meaning given in Section
        9.1(h).

       

      "Settlement
        Service"
        has the
        meaning given in Section
        13.17(d).

       

      "Solvent"
        means,
        with respect to any Person, that such Person (a) owns and will own assets
        the fair saleable value of which are (i) greater than the total amount of
        its liabilities (including Contingent Obligations), and (ii) greater than
        the amount that will be required to pay the probable liabilities of its then
        existing debts as they become absolute and matured considering all financing
        alternatives and potential asset sales reasonably available to it; (b) has
        capital that is not unreasonably small in relation to its business as presently
        conducted or after giving effect to any contemplated transaction; and
        (c) does not intend to incur and does not believe that it will incur debts
        beyond its ability to pay such debts as they become due.

       

      "Stated
        Rate"
        has the
        meaning given in Section 2.7(b).

       

      "Subordinated
        Debt"
        means
        any Debt of Borrowers incurred pursuant to the terms of Subordinated Debt
        Documents.

       

      "Subordinated
        Debt Documents"
        means
        any documents evidencing and/or securing Debt governed by a Subordination
        Agreement.

       

      
        
           

        

        
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      "Subordination
        Agreement"
        means
        any agreement between Administrative Agent and another creditor of Borrowers,
        as
        the same may be amended, supplemented, restated or otherwise modified from
        time
        to time in accordance with the terms thereof, pursuant to which the Debt
        owing
        from any Borrower(s) and/or the Liens securing such Debt granted by any
        Borrower(s) to such creditor are subordinated in any way to the Obligations
        and the Liens created under the Security Documents, the terms and provisions
        of
        which such Subordination Agreements have been agreed to by and are acceptable
        to
        Administrative Agent in the exercise of its sole discretion.

       

      "Subsidiary"
        means,
        with respect to any Person, (a) any corporation of which an aggregate of
        more than 50% of the outstanding capital stock having ordinary voting power
        to
        elect a majority of the board of directors of such corporation (irrespective
        of
        whether, at the time, capital stock of any other class or classes of such
        corporation shall have or might have voting power by reason of the happening
        of
        any contingency) is at the time, directly or indirectly, owned legally or
        beneficially by such Person or one or more Subsidiaries of such Person, or
        with
        respect to which any such Person has the right to vote or designate the vote
        of
        more than 50% of such capital stock whether by proxy, agreement, operation
        of
        law or otherwise, and (b) any partnership or limited liability company in
        which such Person and/or one or more Subsidiaries of such Person shall have
        an
        interest (whether in the form of voting or participation in profits or capital
        contribution) of more than 50% or of which any such Person is a general
        partner or may exercise the powers of a general partner. Unless the context
        otherwise requires, each reference to a Subsidiary shall be a reference to
        a
        Subsidiary of a Borrower.

       

      "Swap
        Contract"
        means
        any "swap agreement", as defined in Section 101 of the Bankruptcy Code, that
        is
        intended to provide protection against fluctuations in interest
        rates.

       

      "Taking"
        shall
        mean a condemnation or taking pursuant to the lawful exercise of the power
        of
        eminent domain.

       

      "Taxes"
        has the
        meaning given in Section
        2.5(b) and
        2.8.

       

      "Term
        Loan"
        has the
        meaning given in Section
        2.1.

       

      "Term
        Loan Commitment"
        means
        $39,735,000.

       

      "Term
        Loan Commitment Percentage"
        means,
        as to any Lender, (a) on the Closing Date, the percentage set forth
        opposite such Lender's name on the Commitment Annex under the column
        "Term
        Loan Commitment Percentage"
        (if
        such Lender's name is not so set forth thereon, then, on the Closing Date,
        such
        percentage for such Lender shall be deemed to be zero), and (b) on any date
        following the Closing Date, the percentage equal to the principal amount
        of the
        Term Loan held by such Lender on such date divided
        by
        the
        aggregate principal amount of the Term Loan on such date.

       

      "Term
        Loan Note"
        has the
        meaning given in Section
        2.4.

       

      
        
           

        

        
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      "Termination
        Date"
        means
        the earlier to occur of (a) the Commitment Expiry Date, or (b) any
        date on which Administrative Agent accelerates the maturity of the Loans
        pursuant to Section 11.2.

       

      "Third
        Party Payor"
        means
Blue
        Cross and/or Blue Shield, private
        insurers,
        managed
        care plans
        and any
        other Person or entity which presently or in the future maintains Third Party
        Payor Programs, but specifically excluding Governmental Payors.

       

      "Third
        Party Payor Programs"
        means
        all payment and reimbursement programs, sponsored by a Third Party Payor,
        in
        which a Licensed Operator participates.

       

      "Transfer
        Date"
        has the
        meaning given in Section
        3.4(b).

       

      "TRICARE"
        means
        the program administered pursuant to 10 U.S.C. Section 1071 et
        seq.),
        Sections 1320a-7 and 1320a-7a of Title 42 of the United States Code and the
        regulations promulgated pursuant to such statutes.

       

      "UCC"
        means
        the Uniform Commercial Code of the State of Illinois or of any other state
        the
        laws of which are required to be applied in connection with the perfection
        of
        security interests in any Collateral.

       

      "United
        States"
        means
        the United States of America.

       

      Section
        1.2 Accounting
        Terms and Determinations. 

       

      Unless
        otherwise specified herein, all accounting terms used herein shall be
        interpreted, all accounting determinations hereunder (including without
        limitation determinations made pursuant to the exhibits hereto) shall be
        made, and all financial statements required to be delivered hereunder shall be
        prepared on a consolidated basis in accordance with GAAP applied on a basis
        consistent with the most recent audited consolidated financial statements
        of
        each Borrower delivered to Administrative Agent and each of the Lenders on
        or
        prior to the Closing Date. If
        at any
        time any change in GAAP would affect the computation of any financial ratio
        or
        financial requirement set forth in any Financing Document, and Administrative
        Agent or Borrowers shall so request, the Administrative Agent, in its sole
        discretion on behalf of Lenders, and Borrowers shall negotiate in good faith
        to
        amend such ratio or requirement to preserve the original intent thereof in
        light
        of such change in GAAP; provided,
        however, that,
        until so amended, (a) such ratio or requirement shall continue to be
        computed in accordance with GAAP prior to such change therein, and
        (b) Borrowers shall provide to the Administrative Agent and the Lenders
        financial statements and other documents required under this Agreement which
        include a reconciliation between calculations of such ratio or requirement
        made
        before and after giving effect to such change in GAAP.
        All
        amounts used for purposes of financial calculations required to be made herein
        shall be without duplication.

       

      
        
           

        

        
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      Section
        1.3 Other
        Definitional Provisions.

       

      References
        in this Agreement to "Articles", "Sections", "Annexes", "Exhibits" or
        "Schedules" shall be to Articles, Sections, Annexes, Exhibits or Schedules
        of or
        to this Agreement unless otherwise specifically provided. Any term defined
        herein may be used in the singular or plural. "Include", "includes" and
        "including" shall be deemed to be followed by "without limitation". Except
        as
        otherwise specified or limited herein, references to any Person include the
        successors and assigns of such Person. References "from" or "through" any
        date
        mean, unless otherwise specified, "from and including" or "through and
        including", respectively. References to any statute or act shall include
        all
        related current regulations and all amendments and any successor statutes,
        acts
        and regulations. References to any statute or act, without additional reference,
        shall be deemed to refer to federal statutes and acts of the United States.
        References to any agreement, instrument or document shall include all schedules,
        exhibits, annexes and other attachments thereto. As used in this Agreement,
        the
        meaning of the term "material" or the phrase "in all material respects" is
        intended to refer to an act, omission, violation or condition which reflects
        or
        could reasonably be expected to result in a Material Adverse
        Effect.

       

      Section
        1.4 Funding
        and Settlement Currency.

       

      Unless
        otherwise specified herein, the settlement of all payments and fundings
        hereunder between or among the parties hereto shall be made in lawful money
        of
        the United States and in immediately available funds.

       

      Section
        1.5 Borrowers
        as Licensed Operators.

       

      As
        of the
        Closing Date it is contemplated and intended that each Borrower shall be
        the
        Licensed Operator of the Project (which shall be a Licensed Location) owned
        by such Borrower. Therefore, all references to "Licensed Operators" shall
        be
        deemed to refer to the applicable Borrower, and all covenants, representations
        and warranties applicable to a Licensed Operator shall nonetheless be deemed
        to
        be direct covenants, representations and warranties of the applicable Borrower,
        even if such covenants, representations and warranties are, under the terms
        of
        this Agreement, contemplated to be undertaken or made indirectly through
        an
        Operating Lease.

       

      Section
        1.6 Certain
        References to Credit Parties.

       

      References
        to each "Credit Party" or "Credit Parties" in Sections
        3.4,
        3.6,
        3.9,
        3.13,
        3.14,
        3.15,
        3.17,
        4.1(e)
        and
8.5(k)
        shall
        not include ARC.

       

      ARTICLE
        2

      LOANS

       

      Section
        2.1 Term
        Loan.

       

      (a)    Term
        Loan Amounts.
        On the
        terms and subject to the conditions set forth herein, the Lenders hereby
        agree
        to make to Borrowers on the Closing Date a term loan

       

      
        
           

        

        
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      ("Term
        Loan") in
        an original principal amount equal to Thirty-Nine Million Seven Hundred
        Thirty-Five Thousand Dollars ($39,735,000). Each Lender's obligation to fund
        the
        Term Loan shall be limited to such Lender's Term Loan Commitment Percentage,
        and
        no Lender shall have any obligation to fund any portion of any Term Loan
        required to be funded by any other Lender, but not so funded. No Borrower
        shall
        have any right to reborrow any portion of the Term Loan that is repaid or
        prepaid from time to time.

       

      (b)    [Reserved.]

       

      (c)    Mandatory
        Prepayments.
        There
        shall become due and payable and Borrowers shall prepay the Term Loan in
        an
        amount equal to the following on the following dates:

       

      (i)    An
        amount
        equal to any Casualty Proceeds that Administrative Agent elects to apply
        to the
        Obligations in accordance with Section
        9.3,
        plus
        any Casualty Proceeds that Administrative Agent elects to not apply to the
        Obligations in accordance with Section
        9.3,
        but
        only if Borrowers fail to reinvest such Casualty Proceeds in replacement
        assets
        comparable to the assets giving rise to such Casualty Proceeds if such
        reinvestment is permitted pursuant to the terms of Section 9.3;
        and

       

      (ii)    An
        amount
        equal to any Covenant Prepayment required under Section
        6.7,
        on the
        date provided for in Section
        6.7.

       

      (d)    Optional
        Prepayments.
        Other
        than mandatory prepayments under Sections
        2.1(c)(i)
        and
2.1(c)(ii),
        the
        Term Loan may not be prepaid during the Closed Period. The Term Loan may
        be
        prepaid in full, but not in part, at any time following the expiration of
        the
        Closed Period, provided,
        however,
        that
        Borrowers shall have given Administrative Agent at least thirty (30) days
        prior written notice of the date of such prepayment together with an
        appropriately completed Payment Notification.

       

      (e)    All
        Prepayments.
        Except
        as this Agreement may specifically provide otherwise, all prepayments of
        the
        Term Loan shall be applied by Administrative Agent to the Obligations in
        such
        order and manner as Administrative Agent may elect.

       

      (f)    Extension
        Option.
        Borrowers may extend the Commitment Expiry Date two (2) times for a period
        of
        twelve (12) months each (each, an "Extension Option") upon Borrowers'
        satisfaction of the following conditions:

       

      (i)    Borrowers
        shall have delivered to Administrative Agent written notice of each such
        election (an "Extension Notice") no earlier than ninety (90) days and no
        later
        than forty-five (45) days prior to the applicable Commitment Expiry
        Date;

       

      (ii)    no
        Default shall have occurred and be continuing and no Event of Default shall
        have
        occurred;

       

      (iii)    Administrative
        Agent shall have received each Borrower's and Guarantor's current financial
        statements, certified as correct by each Borrower and

       

      
        
           

        

        
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      Guarantor,
        and no material adverse change with respect to any Project, any Borrower
        or
        Guarantor shall have occurred; and 

       

      (iv)    the
        principal balance of the Mezzanine Loan shall be $4,200,000 or
        less.

       

      Section
        2.2 [Reserved.]

       

      Section
        2.3 Interest;
        Interest Calculations and Certain Fees.

       

      (a)    Interest.
        From
        and following the Closing Date, the Loans and the other Obligations shall
        bear
        interest at the sum of the Base Rate plus the applicable Base Rate Margin.
        Interest on all Loans is payable in arrears on the first (1st) day of each
        month
        and on the maturity of such Loans, whether by acceleration or
        otherwise.

       

      (b)    Commitment
        Fee.
        Prior
        to or contemporaneous with Borrowers' execution of this Agreement, Borrowers
        have or shall pay Administrative Agent, for its own account and not for the
        benefit of any other Lenders, a fee in an amount equal to Three Hundred Ninety
        Seven Thousand Three Hundred Fifty Dollars ($397,350).

       

      (c)    Exit
        Fee.
        On the
        Termination Date or upon any voluntary prepayment of the Term Loan as permitted
        hereunder or upon any mandatory prepayment of the Term Loan, Borrowers shall
        pay
        to Administrative Agent for the benefit of Lenders a fee (the "Exit
        Fee") equal
        to the Term Loan Commitment multiplied
        by
        the
        Applicable Exit Fee Percentage. If any such prepayments are made, then upon
        such
        prepayment, Borrower shall pay to Administrative Agent the proportionate
        amount
        of the Exit Fee attributable to such prepayment; provided,
        however,
        that in
        the event of a casualty or Taking and the application of any Casualty Proceeds
        therefrom to a prepayment of a portion of the Obligations is required by
        Administrative Agent, payment of the Exit Fee allocable to such prepayment
        shall
        not be required. The term "Applicable
        Exit Fee Percentage"
        means:
        one percent (1.0%) if the payment is made on or before the twenty-fourth
        (24th) full
        calendar month following the Closing Date; and one half of one percent
        (.50%) if the payment is made during or after the twenty-fifth
        (25th) full calendar month following the Closing Date; provided,
        however,
        that if
        the Termination Date occurs during the Closed Period, the Exit Fee shall
        be an
        amount equal to the sum of one percent (1.0%) multiplied
        by
        the Term
        Loan Commitment plus
        the
        amount of interest which would have been due and payable from the Termination
        Date through the end of the Closed Period, assuming a Base Rate equal to
        the
        Base Rate as of the Termination Date. Notwithstanding the foregoing, if (i)
        the
        Term Loan is repaid with the proceeds of an acquisition or refinancing mortgage
        loan facility provided by Merrill Lynch with respect to both Projects or
        (ii)
        Merrill Lynch fails to deliver a term sheet with respect to providing such
        mortgage loan facility within thirty (30) days after receipt from Borrowers
        of a
        written request for a term sheet, the Exit Fee will be waived.

       

      (d)    Audit
        Fees.
        Borrowers shall pay to Administrative Agent, for its own account and not
        for the
        benefit of any other Lenders, all reasonable fees and expenses in connection
        with audits of Borrowers' books and records, audits, valuations or appraisals
        of

       

      
        
           

        

        
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      the
        Collateral, audits of Borrowers' compliance with applicable Laws and such
        other
        matters as Administrative Agent shall deem appropriate, which shall be due
        and
        payable on the first Business Day of the month following the date of issuance
        by
        Administrative Agent of a written request for payment thereof to Borrowers.
        Notwithstanding the foregoing, provided that no Event of Default has occurred
        and remains outstanding, Administrative Agent shall not charge audit fees
        in
        respect of any inspections or related actions unless such audit shows
        discrepancies exceeding 10%. Unless an Event of Default has occurred and
        is then
        continuing audits by Lender shall not be undertaken more frequently than
        annually.

       

      (e)    Wire
        Fees.
        Borrowers shall pay to Administrative Agent, for its own account and not
        for the
        account of any other Lenders, on written demand, any and all reasonable fees,
        costs or expenses which Administrative Agent pays to a bank or other similar
        institution (including, without limitation, any fees paid by Administrative
        Agent to any other Lender) arising out of or in connection with
        (i) the forwarding to Borrowers or any other Person on behalf of Borrowers,
        by Administrative Agent, of proceeds of the Loans made by any Lender to
        Borrowers pursuant to this Agreement, and (ii) the depositing for
        collection, by Administrative Agent, of any check or item of payment received
        or
        delivered to Administrative Agent on account of Obligations. 

       

      (f)    Real
        Property Inspection Fee.
        Borrowers shall pay to Administrative Agent, for its own account and not
        for the
        benefit of any other Lenders, on the Closing Date, and on each anniversary
        of
        the Closing Date thereafter, a real property inspection fee of Two Thousand
        Dollars ($2,000) per Project per year.

       

      (g)    Late
        Charges.
        If
        payments of principal (other than a final installment of principal upon the
        Termination Date), interest due on the Obligations, or any other amounts
        due
        hereunder or under the other Financing Documents are not timely made and
        remain
        overdue for a period of five (5) days, Borrowers, without notice or demand
        by Administrative Agent, promptly shall pay to Administrative Agent, for
        its own
        account and not for the benefit of any other Lenders, as additional compensation
        to Administrative Agent in administering the Obligations, an amount equal
        to
        five percent (5%) of each delinquent payment.

       

      (h)    Computation
        of Interest and Related Fees.
        All
        interest and fees under each Financing Document shall be calculated on the
        basis
        of a three hundred sixty (360)-day year for the actual number of days elapsed.
        The date of funding of Loan shall be included in the calculation of interest.
        The date of payment of a Loan shall be excluded from the calculation of
        interest. If a Loan is repaid on the same day that it is made, one
        (1) day's interest shall be charged. Interest on all Loans is payable in
        arrears on the first (1st) day of each month and on the maturity of such
        Loans, whether by acceleration or otherwise. 

       

      (i)    Automated
        Clearing House Payments.
        If an
        Event of Default has occurred and Administrative Agent so elects, monthly
        payments of interest and amortization shall be paid to Administrative Agent
        by
        Automated Clearing House debit of immediately available funds from the financial
        institution account designated by Borrower Representative

       

      
        
           

        

        
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      in
        the
        Automated Clearing House debit authorization executed by Borrowers or Borrower
        Representative in connection with this Agreement, and shall be effective
        upon
        receipt. Borrowers shall execute any and all forms and documentation necessary
        from time to time to effectuate such automatic debiting. In no event shall
        any
        such payments be refunded to Borrowers.

       

      Section
        2.4 Notes.

       

      The
        portion of the Term Loan made by each Lender shall be evidenced, if so requested
        by such Lender, by a promissory note executed by Borrowers on a joint and
        several basis (a "Term
        Loan Note") in
        an original principal amount equal to such Lender's Pro Rata Share of the
        Term
        Loan Commitment.

       

      Section
        2.5 Reserves
        and Escrows.

       

      (a)    Requirements.
        Borrowers agree to establish and maintain all of the reserves and escrows
        required in this Section
        2.5.
        All
        sums so reserved or escrowed may be commingled with the general funds of
        Administrative Agent and no such sums shall be deemed to be held in trust
        for
        the benefit of Borrowers. Interest at the rates available to Lender for escrow
        depository accounts shall accrue and be added to the funds held by Lender
        pursuant to Sections
        2.5(b) and
        2.5(c) hereunder.
        No interest shall be payable on any other funds reserved or escrowed hereunder.
        All sums so reserved or escrowed shall be part of the Collateral and shall
        stand
        as additional security for all of the Obligations. If Administrative Agent
        at
        any time reasonably determines that the amount on deposit in any reserve
        or
        escrow is insufficient for its intended purposes, Borrowers shall, within
        ten
        (10) days following notice from Administrative Agent, deposit such
        additional sums as may reasonably be required by Administrative Agent. In
        the
        event of any default by Borrowers under the terms of this Agreement or any
        other
        Financing Document, Administrative Agent may, at its discretion, apply amounts
        on hand in the reserves or escrows to cure such default. Upon demand of
        Administrative Agent, Borrowers shall replenish the applicable reserve or
        escrow
        to restore any sums so applied by Administrative Agent. Upon the occurrence
        of
        an Event of Default and/or the maturity of any portion of the Obligations,
        the
        moneys then remaining on deposit with Administrative Agent shall, at
        Administrative Agent's option, be applied against the Obligations in such
        order
        and manner as Administrative Agent may elect or as may otherwise be required
        under this Agreement.

       

      (b)    Real
        Property Taxes.
        At the
        time of and in addition to the monthly installments of principal and/or interest
        due under the Notes, Borrowers shall pay to Administrative Agent a sum equal
        to
        one-twelfth (1/12) of the amount estimated by Administrative Agent to be
        sufficient (when aggregated with an initial deposit to be designated by
        Administrative Agent and paid by Borrowers to Administrative Agent on the
        Closing Date or otherwise upon demand of Administrative Agent) to pay at
        least thirty (30) days before they become due and payable, all taxes,
        assessments and other similar charges levied against any portion of the
        Collateral constituting real property (collectively, the "Taxes").
        In
        the event such real property or any portion thereof is part of a larger tract
        for purposes of taxation and assessments, Administrative Agent may require
        the
        Borrowers

       

      
        
           

        

        
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      to
        have
        the real property taxed and assessed as a separate parcel or separate parcels,
        or, in the alternative, to make the deposits required under this section
        based
        upon the taxation and assessment of the larger tract. So long as no Event
        of
        Default exists hereunder, Administrative Agent shall apply the escrows sums
        to
        pay the Taxes. Except as provided in the preceding sentence, the obligation
        of
        Borrowers to pay the Taxes is not affected or modified by the provisions
        of this
        paragraph.

       

      (c)    Insurance
        Premiums.
        If an
        Event of Default or failure to timely pay insurance premiums occurs, then
        Borrowers shall pay to Administrative Agent an initial deposit amount which
        is
        sufficient when aggregated with the monthly payment described below to pay
        the
        Insurance Premiums next becoming due and on the first (1st) day of each
        calendar month thereafter a sum equal to one-twelfth (1/12) of the amount
        estimated by Administrative Agent to be sufficient to pay at least thirty
        (30) days before they become due and payable all insurance premiums
        and other similar charges in connection with the insurance required to be
        carried by Borrowers pursuant to this Agreement or the other Financing Documents
        (collectively, the "Insurance
        Premiums").
        So
        long as no Event of Default exists hereunder, Administrative Agent shall
        apply
        the sums to pay the Insurance Premiums. Except as provided in the preceding
        sentence, the obligation of Borrowers to pay the Insurance Premiums is not
        affected or modified by the provisions of this section. Notwithstanding the
        foregoing, if the insurance premiums are paid via a premium financing
        arrangement to which Administrative Agent has given its written consent,
        which
        consent shall not be unreasonably withheld, then (i) the amount to be
        escrowed with Administrative Agent at any given time in respect of such
        Insurance Premiums shall be three (3) months of payments under the premium
        finance arrangement, (ii) Borrowers shall tender to Administrative Agent
        each month (on such schedule as Administrative Agent shall reasonably
        request) evidence that Borrowers (or the owner of the policy if the
        Borrowers share in a blanket policy) has paid the applicable premium
        finance amount due for the preceding month, and (iii) Administrative Agent
        shall have no obligation to remit such escrowed sums in payment of the premium
        finance amounts.

       

      (d)    Capital
        Replacement Reserve.
        At the
        time of and in addition to the monthly installments of principal and/or interest
        due under any of the Notes, Borrowers shall pay to Administrative Agent monthly
        deposits in the amount of $25 per residential unit at each Project (the
        "Replacement
        Minimum") to
        be held by Administrative Agent in a capital replacement reserve ("Capital
        Replacement Reserve").
        So
        long as no Event of Default has occurred and is then continuing, the funds
        contained in the Capital Replacement Reserve shall be utilized to pay directly
        or to reimburse Borrowers solely for capital improvements approved in advance
        by
        Administrative Agent in writing. Subject to the foregoing, Administrative
        Agent
        shall release funds from the Capital Replacement Reserve for the actual cost
        of
        such approved capital improvements upon Borrowers' providing Administrative
        Agent with paid receipts, lien waivers and other documentation deemed reasonably
        necessary by Administrative Agent with minimum draws of $25,000.00 which
        shall
        occur no more frequently than once per month. Notwithstanding the foregoing,
        Borrowers' obligation to make deposits shall be suspended so long as no Event
        of
        Default has occurred and is then continuing and Borrowers provide Administrative
        Agent with

      
 

      
        
           

        

        
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      satisfactory
        evidence, on an annual basis beginning January 1, 2007, that Borrowers
        have expended during the preceding calendar year for approved capital
        improvements at each Licensed Location an amount equal or greater than $300
        per
        residential unit at each Project; provided
        that if
        Borrowers do not satisfy said $300 per residential unit at each Project
        requirement, then, no later than January 31 of the applicable year,
        Borrowers shall pay to Administrative Agent an amount equal to the amount
        by
        which $300 per residential unit at each Project exceeds the amount actually
        spent during such year at such Project which amount shall be held by
        Administrative Agent in the Capital Replacement Reserve.

       

      Section
        2.6 General
        Provisions Regarding Payment; Loan Account.

       

      (a)    All
        payments to be made by each Borrower under any Financing Document, including
        payments of principal and interest made hereunder and pursuant to any other
        Financing Document, and all fees, expenses, indemnities and reimbursements,
        shall be made without set-off, recoupment or counterclaim, in lawful money
        of
        the United States and in immediately available funds. If any payment hereunder
        becomes due and payable on a day other than a Business Day, such payment
        shall
        be extended to the next succeeding Business Day and, with respect to payments
        of
        principal, interest thereon shall be payable at the then applicable rate
        during
        such extension (it being understood and agreed that, solely for purposes
        of
        calculating financial covenants and computations contained herein and
        determining compliance therewith, if payment is made, in full, on any such
        extended due date, such payment shall be deemed to have been paid on the
        original due date without giving effect to any extension thereto). Any payments
        received in the Payment Account before noon (Chicago time) on any date
        shall be deemed received by Administrative Agent on such date, and any payments
        received in the Payment Account after noon (Chicago time) on any date shall
        be deemed received by Administrative Agent on the next succeeding Business
        Day.
        Any optional or mandatory prepayment of a Term Loan shall be accompanied
        by
        timely delivery to Administrative Agent of an appropriately completed Payment
        Notification, as provided in Section
        2.1.

       

      (b)    Administrative
        Agent shall maintain a loan account (the "Loan
        Account") on
        its books to record Loans and other extensions of credit made by the Lenders
        hereunder or under any other Financing Document, and all payments thereon
        made
        by each Borrower. All entries in the Loan Account shall be made in accordance
        with Administrative Agent's customary accounting practices as in effect from
        time to time. The balance in the Loan Account, as recorded in Administrative
        Agent's books and records at any time shall be conclusive and binding evidence
        of the amounts due and owing to Administrative Agent by each Borrower absent
        clear and convincing evidence to the contrary; provided,
        however,
        that any
        failure to so record or any error in so recording shall not limit or otherwise
        affect any Borrower's duty to pay all amounts owing hereunder or under any
        other
        Financing Document. Administrative Agent shall endeavor to provide Borrowers
        with a monthly statement regarding the Loan Account (but neither Administrative
        Agent nor any Lender shall have any liability if Administrative Agent shall
        fail
        to provide any such statement). Unless any Borrower notifies Administrative
        Agent of any objection to any such statement (specifically describing the
        basis
        for such objection) within thirty (30) days after the date
        of

       

      
        
           

        

        
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      receipt
        thereof, it shall be deemed final, binding and conclusive upon Borrowers
        in all
        respects as to all matters reflected therein.

       

      Section
        2.7 Maximum
        Interest.

       

      (a)    In
        no
        event shall the interest charged with respect to the Notes (if any) or any
        other obligations of any Borrower under any Financing Document exceed the
        maximum amount permitted under the laws of the State of Illinois or of any
        other
        applicable jurisdiction.

       

      (b)    Notwithstanding
        anything to the contrary herein or elsewhere, if at any time the rate of
        interest payable hereunder or under any Note or other Financing Document
        (the
        "Stated
        Rate") would
        exceed the highest rate of interest permitted under any applicable law to
        be
        charged (the "Maximum
        Lawful Rate"),
        then
        for so long as the Maximum Lawful Rate would be so exceeded, the rate of
        interest payable shall be equal to the Maximum Lawful Rate; provided,
        however,
        that if
        at any time thereafter the Stated Rate is less than the Maximum Lawful Rate,
        each Borrower shall, to the extent permitted by law, continue to pay interest
        at
        the Maximum Lawful Rate until such time as the total interest received is
        equal
        to the total interest which would have been received had the Stated Rate
        been
        (but for the operation of this provision) the interest rate payable.
        Thereafter, the interest rate payable shall be the Stated Rate unless and
        until
        the Stated Rate again would exceed the Maximum Lawful Rate, in which event
        this
        provision shall again apply.

       

      (c)    In
        no
        event shall the total interest received by any Lender exceed the amount which
        it
        could lawfully have received had the interest been calculated for the full
        term
        hereof at the Maximum Lawful Rate. If, notwithstanding the prior sentence,
        any
        Lender has received interest hereunder in excess of the Maximum Lawful Rate,
        such excess amount shall be applied to the reduction of the principal balance
        of
        the Loans or to other amounts (other than interest) payable hereunder, and
        if no such principal or other amounts are then outstanding, such excess or
        part
        thereof remaining shall be paid to Borrowers.

       

      (d)    In
        computing interest payable with reference to the Maximum Lawful Rate applicable
        to any Lender, such interest shall be calculated at a daily rate equal to
        the
        Maximum Lawful Rate divided by the number of days in the year in which such
        calculation is made. 

       

      Section
        2.8 Taxes.

       

      (a)    All
        payments of principal and interest on the Loans and all other amounts payable
        hereunder shall be made free and clear of and without deduction for any present
        or future income, excise, stamp, documentary, payroll, employment, property
        or
        franchise taxes and other taxes, fees, duties, levies, assessments, withholdings
        or other charges of any nature whatsoever (including interest and penalties
        thereon) imposed by any taxing authority, excluding taxes imposed
        on or measured by Administrative Agent's or any Lender's net income by the
        jurisdiction under which Administrative Agent or such Lender is organized
        or
        conducts business (other than solely as the result of entering into any of
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      Financing
        Documents or taking any action thereunder) (all non-excluded items being
        called "Taxes").
        If
        any withholding or deduction from any payment to be made by any Borrower
        hereunder is required in respect of any Taxes pursuant to any applicable
        Law,
        then
        Borrowers will: (i) pay directly to the relevant authority the full amount
        required to be so withheld or deducted; (ii) promptly forward to
        Administrative Agent an official receipt or other documentation satisfactory
        to
        Administrative Agent evidencing such payment to such authority; and
        (iii) pay to Administrative Agent for the account of Administrative Agent
        and Lenders such additional amount or amounts as is necessary to ensure that
        the
        net amount actually received by Administrative Agent and each Lender will
        equal
        the full amount Administrative Agent and such Lender would have received
        had no
        such withholding or deduction been required. If any Taxes are directly asserted
        against Administrative Agent or any Lender with respect to any payment received
        by Administrative Agent or such Lender hereunder, Administrative Agent or
        such
        Lender may pay such Taxes and Borrowers will promptly pay such additional
        amounts (including any penalty, interest or expense) as is necessary in
        order that the net amount received by such Person after the payment of such
        Taxes (including any Taxes on such additional amount) shall equal the
        amount such Person would have received had such Taxes not been asserted so
        long
        as such amounts have accrued on or after the day which is two hundred seventy
        (270) days prior to the date on which Administrative Agent or such Lender
        first made written demand therefor.

       

      (b)    If
        any
        Borrower fails to pay any Taxes when due to the appropriate taxing authority
        or
        fails to remit to Administrative Agent, for the account of Administrative
        Agent
        and the respective Lenders, the required receipts or other required documentary
        evidence, Borrowers shall indemnify Administrative Agent and Lenders for
        any
        incremental Taxes, interest or penalties that may become payable by
        Administrative Agent or any Lender as a result of any such failure.

       

      (c)    Each
        Lender that (i) is organized under the laws of a jurisdiction other than
        the United States, and (ii)(A) is a party hereto on the Closing Date or
        (B) purports to become an assignee of an interest as a Lender under this
        Agreement after the Closing Date (unless such Lender was already a Lender
        hereunder immediately prior to such assignment) (each such Lender a
        "Foreign
        Lender")
        shall
        execute and deliver to each of Borrowers and Administrative Agent one or
        more
        (as Borrowers or Administrative Agent may reasonably request) United States
        Internal Revenue Service Forms W-8ECI, W-8BEN, W-8IMY (as applicable) and
        other
        applicable forms, certificates or documents prescribed by the United States
        Internal Revenue Service or reasonably requested by Administrative Agent
        certifying as to such Lender's entitlement to a complete exemption from
        withholding or deduction of Taxes. Borrowers shall not be required to pay
        additional amounts to any Lender pursuant to this Section 2.8 with respect
        to United States withholding and income Taxes to the extent that the obligation
        to pay such additional amounts would not have arisen but for the failure
        of such
        Lender to comply with this paragraph other than as a result of a change in
        law.

       

      Section
        2.9 Capital
        Adequacy.

       

      If
        any
        Lender shall reasonably determine that the adoption or taking effect of,
        or any
        change in, any applicable Law regarding capital adequacy, in each instance,
        after the

       

      
        
           

        

        
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      Closing
        Date, or any change after the Closing Date in the interpretation, administration
        or application thereof by any Governmental Authority, central bank or comparable
        agency charged with the interpretation, administration or application thereof,
        or the compliance by any Lender or any Person controlling such Lender with
        any
        request, guideline or directive regarding capital adequacy (whether or not
        having the force of law) of any such Governmental Authority, central bank
        or comparable agency adopted or otherwise taking effect after the Closing
        Date,
        has or would have the effect of reducing the rate of return on such Lender's
        or
        such controlling Person's capital as a consequence of such Lender's obligations
        hereunder to a level below that which such Lender or such controlling Person
        could have achieved but for such adoption, taking effect, change,
        interpretation, administration, application or compliance (taking into
        consideration such Lender's or such controlling Person's policies with respect
        to capital adequacy) then from time to time, upon written demand by such
        Lender (which demand shall be accompanied by a statement setting forth the
        basis
        for such demand and a calculation of the amount thereof in reasonable detail,
        a
        copy of which shall be furnished to Administrative Agent), Borrowers shall
        promptly pay to such Lender such additional amount as will compensate such
        Lender or such controlling Person for such reduction, so long as such amounts
        have accrued on or after the day which is two hundred seventy (270) days
        prior to the date on which such Lender first made demand therefor. 

       

      Section
        2.10 Mitigation
        Obligations.

       

      If
        any
        Lender requires compensation under Section 2.9,
        or
        requires any Borrower to pay any additional amount to any Lender or any
        Governmental Authority for the account of any Lender pursuant to Section
        2.8,
        then,
        upon the written request of Borrower Representative,
        such
        Lender shall use reasonable efforts to designate a different lending office
        for
        funding or booking its Loans hereunder or to assign its rights and obligations
        hereunder (subject to the terms of this Agreement) to another of its
        offices, branches or affiliates, if, in the judgment of such Lender, such
        designation or assignment (a) would eliminate or materially reduce amounts
        payable pursuant to any such Section, as the case may be, in the future,
        and
        (b) would not subject such Lender to any unreimbursed cost or expense and
        would not otherwise be disadvantageous to such Lender (as determined in its
        sole
        discretion). Without limitation of the provisions of Section
        12.1,
        Borrowers hereby agree to pay all reasonable costs and expenses incurred
        by any
        Lender in connection with any such designation or assignment. 

       

      Section
        2.11 Appointment
        of Borrower Representative.

       

      Each
        Borrower hereby designates Borrower Representative as its representative
        and
        agent on its behalf for the purposes of giving instructions with respect
        to the
        disbursement of the proceeds of the Loans, giving and receiving all other
        notices and consents hereunder or under any of the other Financing Documents
        and
        taking all other actions (including in respect of compliance with
        covenants) on behalf of any Borrower or Borrowers under the Financing
        Documents. Borrower Representative hereby accepts such appointment.
        Notwithstanding anything to the contrary contained in this Agreement, no
        Borrower other than Borrower Representative shall be entitled to take any
        of the
        foregoing

       

      
        
           

        

        
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      actions.
        The proceeds of each Loan made hereunder shall be advanced to or at the
        direction of Borrower Representative and if not used by Borrower Representative
        for the purposes provided in this Agreement shall be deemed to be immediately
        advanced by Borrower Representative to the appropriate other Borrower hereunder
        as an intercompany loan (collectively, "Intercompany
        Loans").
        Administrative Agent and each Lender may regard any notice or other
        communication pursuant to any Financing Document from Borrower Representative
        as
        a notice or communication from all Borrowers, and may give any notice or
        communication required or permitted to be given to any Borrower or all Borrowers
        hereunder to Borrower Representative on behalf of such Borrower or all
        Borrowers. Each Borrower agrees that each notice, election, representation
        and
        warranty, covenant, agreement and undertaking made on its behalf by Borrower
        Representative shall be deemed for all purposes to have been made by such
        Borrower and shall be binding upon and enforceable against such Borrower
        to the
        same extent as if the same had been made directly by such Borrower.

       

      ARTICLE
        3

      REPRESENTATIONS
        AND WARRANTIES

       

      To
        induce
        Administrative Agent and Lenders to enter into this Agreement and to make
        the
        Loans and other credit accommodations contemplated hereby, each Borrower
        hereby
        represents and warrants to Administrative Agent and each Lender
        that:

       

      Section
        3.1 Existence
        and Power.

       

      Each
        Credit Party is an entity as specified on Schedule 3.1,
        is duly
        organized, validly existing and in good standing under the laws of the
        jurisdiction specified on Schedule 3.1,
        has the
        same legal name as it appears in such Credit Party's Organizational Documents
        and an organizational identification number (if any), in each case as specified
        on Schedule 3.1,
        and has
        all powers and all Permits necessary or desirable in the operation of its
        business as presently conducted or as proposed to be conducted, except where
        the
        failure to have such Permits could not reasonably be expected to have a Material
        Adverse Effect. Each Credit Party is qualified to do business as a foreign
        entity in each jurisdiction in which it is required to be so qualified, which
        jurisdictions, in the case of the Borrowers, Cypress JV and the General Partner,
        as of the Closing Date are specified on Schedule 3.1,
        except
        where the failure to be so qualified could not reasonably be expected to
        have a
        Material Adverse Effect. None of Borrowers, Cypress JV or the General Partner
        (a) has had, over the five (5) year period preceding the Closing Date,
        any name other than its current name, or (b) was incorporated or organized
        under the laws of any jurisdiction other than its current jurisdiction of
        incorporation or organization.

       

      Section
        3.2 Organization
        and Governmental Authorization; No Contravention.

       

      The
        execution, delivery and performance by each Credit Party of the Financing
        Documents to which it is a party are within its powers, have been duly
        authorized by all necessary action pursuant to its Organizational Documents,
        require no further action

       

      
        
           

        

        
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      by
        or in
        respect of, or filing with, any Governmental Authority and do not violate,
        conflict with or cause a breach or a default under (a) any Law applicable
        to any Credit Party or any of the Organizational Documents of any Credit
        Party,
        or (b) any agreement or instrument binding upon it, except for such
        violations, conflicts, breaches or defaults as could not, with respect to
        this
        clause (b), reasonably be expected to have a Material Adverse
        Effect.

       

      Section
        3.3 Binding
        Effect.

       

      Each
        of
        the Financing Documents to which any Credit Party is a party constitutes
        a valid
        and binding agreement or instrument of such Credit Party, enforceable against
        such Credit Party in accordance with its respective terms, except as the
        enforceability thereof may be limited by bankruptcy, insolvency or other
        similar
        laws relating to the enforcement of creditors' rights generally and by general
        equitable principles.

       

      Section
        3.4 Capitalization.

       

      The
        authorized equity securities of each of the Credit Parties as of the Closing
        Date is as set forth on Schedule 3.4.
        All
        issued and outstanding equity securities of each of the Credit Parties are
        duly
        authorized and validly issued, fully paid, nonassessable, free and clear
        of all
        Liens other than those in favor of Administrative Agent for the benefit of
        Administrative Agent and Lenders, and such equity securities were issued
        in
        compliance with all applicable Laws. The identity of the holders of the equity
        securities of each of the Credit Parties and the percentage of their
        fully-diluted ownership of the equity securities of each of the Credit Parties
        as of the Closing Date is set forth on Schedule 3.4.
        No
        shares of the capital stock or other equity securities of any Credit Party,
        other than those described above, are issued and outstanding as of the Closing
        Date. Except as set forth on Schedule 3.4
        or
        in the
        Organizational Documents of Cypress JV, as of the Closing Date there are
        no
        preemptive or other outstanding rights, options, warrants, conversion rights
        or
        similar agreements or understandings for the purchase or acquisition from
        any
        Credit Party of any equity securities of any such entity.

       

      Section
        3.5 Financial
        Information. 

       

      (a)    The
        income statement of the Sellers as of November 30, 2005, copies of which
        have
        been delivered to Administrative Agent, fairly presents the results of
        operations for the Projects for the period covered thereby.

       

      (b)    [Reserved].

       

      (c)    [Reserved].

       

      (d)    Since
        December 31, 2005, there has been no material adverse change in the
        business, operations, properties or condition (financial or otherwise) of
        ARC, taken as a whole. Since November 30, 2005, there has been no material
        adverse change in the business, operations, properties or condition (financial
        or otherwise) of any business, assets or entities being purchased by
        Borrowers pursuant to the Financing Documents.

       

      
        
           

        

        
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      Section
        3.6 Litigation.

       

      Except
        as
        set forth on Schedule 3.6
        as of
        the Closing Date, and except as hereafter disclosed to Administrative Agent
        in
        writing, (a) there is no Litigation pending against, or to Borrowers'
        knowledge threatened against or affecting, any Credit Party or any Project
        and
        (b) there is no material Litigation pending, or, to such Borrowers'
        knowledge, threatened against Guarantor. There is no Litigation pending in
        which
        an adverse decision could reasonably be expected to have a Material Adverse
        Effect or which in any manner draws into question the validity of any of
        the
        Financing Documents.

       

      Section
        3.7 Ownership
        of Property Generally.

       

      Each
        Borrower is the lawful owner of, has good and marketable title to and is
        in
        lawful possession of, or has valid leasehold interests in, all properties
        and
        other assets (real or personal, tangible, intangible or mixed) purported or
        reported to be owned or leased (as the case may be) by such Person, subject
        to Permitted Liens.

       

      Section
        3.8 No
        Default.

       

      No
        Default or Event of Default has occurred and is continuing. No Credit Party
        is
        in breach or default under or with respect to any contract, agreement, lease
        or
        other instrument to which it is a party or by which its property is bound
        or
        affected, which breach or default could reasonably be expected to have a
        Material Adverse Effect.

       

      Section
        3.9 Labor
        Matters.

       

      As
        of the
        Closing Date, there are no strikes or other labor disputes pending or, to
        such
        Borrower's knowledge, threatened against any Credit Party. Hours worked and
        payments made to any employees of the Credit Parties have not been in violation
        of the Fair Labor Standards Act or any other applicable Law dealing with
        such
        matters. All payments due from any Credit Party, or for which any claim may
        be
        made against any of them, on account of wages and employee and retiree health
        and welfare insurance and other benefits have been paid or accrued as a
        liability on their books, as the case may be. The consummation of the
        transactions contemplated by the Financing Documents will not give rise to
        a
        right of termination or right of renegotiation on the part of any union under
        any collective bargaining agreement to which it is a party or by which it
        is
        bound. 

       

      Section
        3.10 Regulated
        Entities.

       

      No
        Credit
        Party is an "investment company"
        or a
        company "controlled"
        by an
        "investment company"
        or a
        "subsidiary"
        of an
        "investment company,"
        all
        within the meaning of the Investment Company Act of 1940. No Credit Party
        is
        a
        "holding company", or a "subsidiary company" of a "holding company", or an
        "affiliate" of a "holding company" or of a "subsidiary company" of a "holding
        company", within the meaning of the Public Utility Holding Company Act of
        1935.

       

      
        
           

        

        
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      Section
        3.11 Margin
        Regulations.

       

      None
        of
        the proceeds from the Loans have been or will be used, directly or indirectly,
        for the purpose of purchasing or carrying any "margin stock" (as defined
        in
        Regulation U of the Federal Reserve Board), for the purpose of reducing or
        retiring any indebtedness which was originally incurred to purchase or carry
        any
        "margin stock" or for any other purpose which might cause any of the Loans
        to be
        considered a "purpose credit" within the meaning of Regulation T, U or X
        of the
        Federal Reserve Board.

       

      Section
        3.12 Compliance
        With Laws; Anti-Terrorism Laws.

       

      (a) Each
        Credit Party is in compliance with the requirements of all applicable Laws,
        except for such Laws the noncompliance with which could not reasonably be
        expected to have a Material Adverse Effect.

       

      (b) None
        of
        the Credit Parties, or any of the entities shown in Schedule 3.4
        or any
        of their respective agents acting or benefiting in any capacity in connection
        with the transactions contemplated by this Agreement is (i) in violation of
        any Anti-Terrorism Law, (ii) engages in or conspires to engage in any
        transaction that evades or avoids, or has the purpose of evading or avoiding,
        or
        attempts to violate, any of the prohibitions set forth in any Anti-Terrorism
        Law, or (iii) is a Blocked Person. No Credit Party nor, to the knowledge of
        any Credit Party, any of its Affiliates or agents acting or benefiting in
        any
        capacity in connection with the transactions contemplated by this Agreement,
        (x) conducts any business or engages in making or receiving any
        contribution of funds, goods or services to or for the benefit of any Blocked
        Person, or (y) deals in, or otherwise engages in any transaction relating
        to, any property or interest in property blocked pursuant to Executive Order
        No. 13224, any similar executive order or other Anti-Terrorism
        Law.

       

      Section
        3.13 Taxes.

       

      All
        Federal, state and local tax returns, reports and statements required to
        be
        filed by or on behalf of each Credit Party have been filed with the appropriate
        Governmental Authorities in all jurisdictions in which such returns, reports
        and
        statements are required to be filed and, except to the extent subject to
        a
        Permitted Contest, all Taxes (including real property Taxes) and other
        charges shown to be due and payable in respect thereof have been timely paid
        prior to the date on which any fine, penalty, interest, late charge or loss
        may
        be added thereto for nonpayment thereof. Except to the extent subject to
        a
        Permitted Contest, all state and local sales and use Taxes required to be
        paid
        by each Credit Party have been paid. All Federal and state returns have been
        filed by each Credit Party for all periods for which returns were due with
        respect to employee income tax withholding, social security and unemployment
        taxes, and, except to the extent subject to a Permitted Contest, the amounts
        shown thereon to be due and payable have been paid in full or adequate
        provisions therefor have been made.

       

      
        
           

        

        
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      Section
        3.14 Compliance
        with ERISA.

       

      (a)    Each
        ERISA Plan (and the related trusts and funding agreements) complies in form
        and in operation with, has been administered in compliance with, and the
        terms
        of each ERISA Plan satisfy, the applicable requirements of ERISA and the
        Code in
        all material respects. Each ERISA Plan which is intended to be qualified
        under
        Section 401(a) of the Code is so qualified, and the United States Internal
        Revenue Service has issued a favorable determination letter with respect
        to each
        such ERISA Plan which may be relied on currently. No Credit Party has incurred
        liability for any material excise tax under any of Sections 4971 through
        5000 of
        the Code.

       

      (b)    During
        the thirty-six (36) month period prior to the Closing Date or the making of
        any Loan, (i) no steps have been taken to terminate any Pension Plan, and
        (ii) no contribution failure has occurred with respect to any Pension Plan
        sufficient to give rise to a Lien under Section 302(f) of ERISA. No
        condition exists or event or transaction has occurred with respect to any
        Pension Plan which could result in the incurrence by any Credit Party of
        any
        material liability, fine or penalty. No Credit Party has incurred liability
        to
        the PBGC (other than for current premiums) with respect to any employee
        Pension Plan. All contributions (if any) have been made on a timely basis
        to any Multiemployer Plan that are required to be made by any Credit Party
        or
        any other member of the Controlled Group under the terms of the plan or of
        any
        collective bargaining agreement or by applicable Law; no Credit Party nor
        any
        member of the Controlled Group has withdrawn or partially withdrawn from
        any
        Multiemployer Plan, incurred any withdrawal liability with respect to any
        such
        plan or received notice of any claim or demand for withdrawal liability or
        partial withdrawal liability from any such plan, and no condition has occurred
        which, if continued, could result in a withdrawal or partial withdrawal from
        any
        such plan, and no Credit Party nor any member of the Controlled Group has
        received any notice that any Multiemployer Plan is in reorganization, that
        increased contributions may be required to avoid a reduction in plan benefits
        or
        the imposition of any excise tax, that any such plan is or has been funded
        at a
        rate less than that required under Section 412 of the Code, that any such
        plan is or may be terminated, or that any such plan is or may become
        insolvent

       

      Section
        3.15 Consummation
        of Financing Documents; Brokers.

       

      Except
        for fees payable to Administrative Agent and/or Lenders, no broker, finder
        or
        other intermediary has brought about the obtaining, making or closing of
        the
        transactions contemplated by the Financing Documents, and no Credit Party
        has or
        will have any obligation to any Person in respect of any finder's or brokerage
        fees, commissions or other expenses in connection herewith or therewith.
        All
        brokerage and finder's fees, commissions and other expenses payable in
        connection with the transactions contemplated by the Financing Documents
        have
        been paid in full by Borrowers contemporaneously with the execution of the
        Financing Documents and the initial funding of the Loans. No broker, finder
        or
        other intermediary has brought about the obtaining, making or closing of
        the
        transactions contemplated by the Financing Documents, and no Credit Party
        has or
        will have any obligation to any Person in respect of any finder's or brokerage
        fee in connection herewith or therewith.

       

      
        
           

        

        
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      Section
        3.16 Related
        Transactions.

       

      All
        transactions contemplated by the Financing Documents to be consummated on
        or
        prior to the date hereof have been so consummated (including without limitation
        the disbursement and transfer of all funds in connection therewith) in all
        material respects pursuant to the provisions of the applicable Financing
        Documents, true and complete copies of which have been delivered to
        Administrative Agent, and in compliance with all applicable Law, except for
        such
        Laws the noncompliance with which would not reasonably be expected to have
        a
        Material Adverse Effect.

       

      Section
        3.17 Material
        Contracts.

       

      Except
        for the Financing Documents and the other agreements set forth on Schedule
        3.17
        (collectively with the Financing Documents, the "Material
        Contracts"),
        as of
        the Closing Date there are no (a) employment agreements covering the
        management of any Credit Party, (b) collective bargaining agreements or
        other labor agreements covering any employees of any Credit Party,
        (c) agreements for managerial, consulting or similar services to which any
        Credit Party is a party or by which it is bound, (d) agreements regarding
        any Credit Party, its assets or operations or any investment therein to which
        any of its equityholders is a party or by which it is bound, (e) real
        estate leases, intellectual property licenses or other lease or license
        agreements to which any Credit Party is a party, either as lessor or lessee,
        or
        as licensor or licensee, or (f) customer, distribution, marketing or supply
        agreements to which any Credit Party is a party, in each case with respect
        to
        the preceding clauses (a), (c), (d), (e), and (f) requiring payment of more
        than $100,000 in any year, (g) partnership agreements to which any Credit
        Party is a general partner or joint venture agreements to which any Credit
        Party
        is a party, (h) third party billing arrangements to which any Credit Party
        is a party, or (i) any other agreements or instruments to which any Credit
        Party is a party, and the breach, nonperformance or cancellation of which,
        or
        the failure of which to renew, could reasonably be expected to have a Material
        Adverse Effect. Schedule
        3.17
        sets
        forth, with respect to each real estate lease agreement to which any Credit
        Party is a party (as a lessee) and which is a Material Contract as of the
        Closing Date, the address of the subject property and the annual rental (or,
        where applicable, a general description of the method of computing the annual
        rental). The consummation of the transactions contemplated by the Financing
        Documents and the other Financing Documents will not give rise to a right
        of
        termination in favor of any party to any Material Contract (other than any
        Credit Party), except for such Material Contracts the noncompliance with
        which
        would not reasonably be expected to have a Material Adverse Effect.

       

      Section
        3.18 Compliance
        with Environmental Requirements; No Hazardous Materials. 

       

      Except
        in
        each case as set forth on Schedule
        3.18:

       

      (a)    no
        Hazardous Materials are located on any of the Projects except those that
        are
        both (i) in compliance with Environmental Laws and with permits issued
        pursuant thereto (if such permits are required), if any, and (ii) either
        (A) in amounts not in excess of

       

      
        
           

        

        
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      that
        necessary to operate the applicable Project for the purposes set forth herein
        or
        in amounts used in the ordinary course of business, or (B) fully disclosed
        to and approved by Administrative Agent; to each Borrower's knowledge, Hazardous
        Materials have not been Released or threatened to be Released into the
        environment, at, on, under or near any of the Projects in a manner that would
        require the taking of any action under any Environmental Law and that have
        given
        rise to, or could reasonably be expected to give rise to, remediation costs
        and
        expenses on the part of any Borrower in excess of $250,000; and no portion
        of
        any Project is being used, or has been used at any previous time, for the
        disposal, storage, treatment, processing or other handling of Hazardous
        Materials in violation of any Environmental Law in any material respect nor,
        to
        each Borrower's knowledge, is any such property affected by any Hazardous
        Materials Contamination;

       

      (b)    no
        Borrower knows of, nor has received, any written notice from any Person relating
        to Hazardous Materials in, on, under or from any Project and no notice,
        notification, demand, request for information, citation, summons, complaint
        or
        order has been issued, no complaint has been filed, no penalty has been assessed
        and no investigation or review is pending, or to each Borrower's knowledge,
        threatened by any Governmental Authority or other Person with respect to
        any
        (i) alleged violation by any Borrower of any Environmental Law,
        (ii) alleged failure by any Borrower to have any Permits required in
        connection with the conduct of its business or to comply with the terms and
        conditions thereof, (iii) any generation, treatment, storage, recycling,
        transportation or disposal of any Hazardous Materials, or (iv) Release of
        Hazardous Materials;

       

      (c)    to
        the
        best knowledge of each Borrower, all oral or written notifications of a Release
        of Hazardous Materials required to be filed by or on behalf of any Borrower
        under any applicable Environmental Law have been filed or are in the process
        of
        being timely filed by or on behalf of the applicable Borrower;

       

      (d)    to
        each
        Credit Party's best knowledge, no property now owned by any Borrower and
        no such
        property previously owned by any Borrower, to which any Borrower has, directly
        or indirectly, transported or arranged for the transportation of any Hazardous
        Materials, is listed or proposed for listing, on the National Priorities
        List
        promulgated pursuant to CERCLA, or CERCLIS (as defined in CERCLA) or any
        similar state list or is the subject of Federal, state or local enforcement
        actions or, to the knowledge of such Borrower, other investigations which
        may
        lead to claims against any Credit Party for clean-up costs, remedial work,
        damage to natural resources or personal injury claims, including, without
        limitation, claims under CERCLA;

       

      (e)    to
        each
        Credit Party's best knowledge, after reasonable investigation, there are
        no
        underground storage tanks located on any property owned or to be owned or
        leased
        by any Borrower that are not properly registered or permitted under applicable
        Environmental Laws or that are leaking or disposing of Hazardous
        Materials;

       

      (f)    to
        each
        Credit Party's best knowledge, after reasonable investigation, there are
        no
        Liens under or pursuant to any applicable Environmental Laws on any real
        property or other assets owned or leased by any Borrower, and no actions
        by
        any

       

      
        
           

        

        
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      Governmental
        Authority have been taken or, to the knowledge of such Borrower, are in process
        which could subject any of such properties or assets to such Liens;
        and

       

      (g)    to
        each
        Credit Party's best knowledge, after reasonable investigation, each Borrower
        has
        truthfully and fully provided to Administrative Agent, in writing, any and
        all
        information relating to environmental conditions in, on, under or from the
        Projects, known to each Borrower or contained in each Borrower's files and
        records, including but not limited to any reports relating to Hazardous
        Materials in, on, under or migrating to or from the Projects and/or to the
        environmental condition of the Projects.

       

      Section
        3.19 Intellectual
        Property.

       

      Each
        Borrower owns, is licensed to use or otherwise has the right to use, all
        intellectual property that is material to the condition (financial or other),
        business or operations of such Borrower. To such Borrower's knowledge, each
        Borrower conducts its business without infringement or claim of infringement
        of
        any intellectual property rights of others and there is no infringement or
        claim
        of infringement by others of any intellectual property rights of any Borrower,
        which infringement or claim of infringement could reasonably be expected
        to have
        a Material Adverse Effect.

       

      Section
        3.20 Solvency.

       

      Each
        Borrower and Guarantor is Solvent.

       

      Section
        3.21 Full
        Disclosure.

       

      None
        of
        the information (financial or otherwise) furnished by or on behalf of any
        Credit Party to Administrative Agent or any Lender in connection with the
        consummation of the transactions contemplated by the Financing Documents,
        contains (with respect to information provided by third parties on behalf
        of any
        Credit Party, to the best knowledge of the Credit Parties) any untrue
        statement of a material fact or omits to state a material fact necessary
        to make
        the statements contained herein or therein not misleading in light of the
        circumstances under which such statements were made. All financial projections
        delivered to Administrative Agent and the Lenders have been prepared on the
        basis of the assumptions stated therein. Such projections represent each
        Borrower's best estimate of such Borrower's future financial performance
        and
        such assumptions are believed by such Borrower to be fair and reasonable
        in
        light of current business conditions; provided,
        however, that
        Borrowers can give no assurance that such projections will be
        attained.

       

      Section
        3.22 Interest
        Rate.

       

      The
        rate
        of interest paid under the Notes and the method and manner of the calculation
        thereof do not violate any usury or other law or applicable Laws, any of
        the
        Organizational Documents or any of the Financing Documents.

       

      
        
           

        

        
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      Section
        3.23 Representations
        and Warranties Incorporated from Financing Documents.

       

      As
        of the
        Closing Date, each of the representations and warranties made in the Financing
        Documents by each of the parties thereto is true and correct in all material
        respects, and such representations and warranties are hereby incorporated
        herein
        by reference with the same effect as though set forth in their entirety herein,
        as qualified therein, except to the extent that such representation or warranty
        relates to a specific date, in which case such representation and warranty
        shall
        be true as of such earlier date.

       

      Section
        3.24 Subsidiaries.
        There
        are no Subsidiaries of Borrowers.

       

      ARTICLE
        4

      AFFIRMATIVE
        COVENANTS

       

      Each
        Borrower agrees that, so long as any Credit Exposure exists:

       

      Section
        4.1 Financial
        Statements and Other Reports.

       

      (a)    Each
        Borrower will maintain a system of accounting established and administered
        in
        accordance with sound business practices to permit preparation of financial
        statements in accordance with GAAP and to provide the information required
        to be
        delivered to Administrative Agent and the Lenders hereunder. 

       

      (b)    Each
        Borrower will furnish to Administrative Agent (or cause to be furnished to
        Administrative Agent) the following financial information and reports with
        respect to each Borrower and each Licensed Operator, in each case in form
        and
        format and providing information satisfactory to Administrative Agent in
        its
        discretion:

       

      (i)    if
        applicable, for the Licensed Operator only, a sales and collections report
        and
        accounts receivable and payable aging schedule on a form reasonably acceptable
        to Lender within twenty-five (25) days after the end of each calendar
        month, which shall include, without limitation, a report of sales, credits
        issued, and collections received; 

       

      (ii)    within
        twenty-five (25) days of the end of each calendar month, internally
        prepared monthly financial statements prepared for Borrowers on a consolidated
        and consolidating basis in accordance with GAAP (including income statements
        and
        balance sheets for each Project and a consolidated operating cash flow
        statement, accompanied by management analysis and actual vs. budget variance
        reports for
        each
        Project;

       

      (iii)    Reserved;

       

      (iv)    within
        twenty-five (25) days of the end of each calendar month, (A) a current
        rent roll (including, a monthly schedule of delinquency receipts and payments),
        and (B) a summary of all leasing activity then taking place with respect to
        each Project;

       

      
        
           

        

        
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      (v)    within
        twenty-five (25) days after the end of each measurement period applicable
        to any financial covenant hereunder, such financial reports and information
        as
        Administrative Agent shall require evidencing compliance with the applicable
        financial covenants, which reports and information shall include, at a minimum,
        delivery to Administrative Agent of a Compliance Certificate, and, if requested
        by Administrative Agent, back-up documentation (including, without limitation,
        invoices, receipts and other evidence of costs incurred during such quarter
        as
        Administrative Agent shall reasonably require) evidencing the propriety of
        the deductions from revenues in determining such compliance;

       

      (vi)    annual
        projected profit and loss statements (prepared on a monthly basis) for the
        succeeding fiscal year within forty-five (45) days before the end of each
        fiscal year;

       

      (vii)    internally
        prepared annual financial statements prepared for Borrowers on a consolidated
        and consolidating basis in accordance with GAAP within sixty (60) days
        after the end of each fiscal year; 

       

      (viii)    annual
        consolidated and consolidating audited financial statements prepared for
        Borrowers in accordance with GAAP and prepared by a firm of independent public
        accountants reasonably satisfactory to Administrative Agent, within one hundred
        twenty (120) days after the end of each fiscal year; 

       

      (ix)    promptly
        upon receipt thereof, copies of any reports by the independent accountants
        in
        connection with any interim audit and copies of each management control letter
        provided by independent accountants; 

       

      (x)    for
        each
        Borrower, as requested by Administrative Agent, evidence satisfactory to
        Administrative Agent that all federal and state taxes, including, without
        limitation payroll taxes, that are due have been paid in full; 

       

      (xi)    for
        Licensed Operator only, as requested, copies of all cost reports filed with
        Medicare or Medicaid or any other Third Party Payor; 

       

      (xii)    within
        ten (10) days after Administrative Agent request, a written statement, duly
        acknowledged by Borrowers, setting forth any right of set-off, claims,
        counterclaims, withholdings or other defenses to which any of the Collateral
        or
        Administrative Agent's rights with respect to the Collateral are subject
        or that
        exist against such sums and Borrowers' obligations under the Financing
        Documents; 

       

      (xiii)    within
        ten (10) days after Administrative Agent request, a written statement, duly
        acknowledged by Licensed Operator, setting forth any right of set-off,
        counterclaim or other defense that exists against such sums and Licensed
        Operator's obligations under any Leases; and

       

      
        
           

        

        
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      (xiv)    such
        additional information, reports or statements regarding the Borrowers, the
        Projects or Licensed Operator as Administrative Agent may from time to time
        reasonably request. 

       

      All
        financial statements shall include a balance sheet and statement of earnings
        and
        shall be prepared in accordance with GAAP. 

       

      (c)    From
        time
        to time, if Administrative Agent determines that obtaining appraisals is
        necessary in order for a Lender to comply with applicable Laws, each Borrower
        shall furnish to Administrative Agent appraisal reports in form and substance
        and from appraisers reasonably satisfactory to Administrative Agent stating
        the
        then current fair market values of all or any portion of the real estate
        owned
        by each Borrower. In addition to the foregoing, from time to time, but in
        the
        absence of a Default or Event of Default not more than once during each calendar
        year, Administrative Agent may require Borrowers to obtain and deliver to
        Administrative Agent appraisal reports in form and substance and from appraisers
        reasonably satisfactory to Administrative Agent stating the then current
        fair
        market values of all or any portion of the real estate and personal property
        owned by each Borrower.

       

      (d)    Promptly
        upon receipt or filing thereof, each Borrower shall deliver to Administrative
        Agent copies of any reports or notices related to any material taxes and
        any
        other material reports or notices received by any Credit Party from, or filed
        by
        any Credit Party with, any Governmental Authority.

       

      (e)    Promptly
        upon their becoming available, Borrower shall deliver to Administrative Agent
        copies of all Swap Contracts.

       

      Section
        4.2 Payment
        and Performance of Obligations.

       

      Each
        Borrower (a) will pay and discharge, at or before maturity, all of their
        respective obligations and liabilities, including tax liabilities, except
        for
        such obligations and/or liabilities (i) that may be the subject of a
        Permitted Contest, or (ii) the nonpayment or nondischarge of which could
        not reasonably be expected to have a Material Adverse Effect or result in
        a Lien
        against any Collateral, except for Permitted Liens, (b) will maintain, in
        accordance with GAAP, appropriate reserves for the accrual of all of their
        respective obligations and liabilities, (c) will not breach, or permit to
        exist any default under, the terms of any commitment, contract, instrument
        or
        obligation (other than Leases) to which it is a party, or by which its
        properties or assets are bound, except for such breaches or defaults which
        could
        not reasonably be expected to have a Material Adverse Effect, and (d) will
        not breach, or permit to exist any default under, the terms of any Material
        Lease to which it is a party as a lessor.

       

      
        
           

        

        
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      Section
        4.3 Maintenance
        of Existence; Single Purpose Entity Requirements.

       

      (a)    Each
        Borrower will preserve, renew and keep in full force and effect their respective
        existence and their respective rights, privileges and franchises necessary
        or
        desirable in the normal conduct of business.

       

      (b)    Each
        Borrower will preserve, renew and keep in full force and effect their respective
        existence and their respective rights, privileges and franchises necessary
        or
        desirable to, at all times, comply with all single purpose entity requirements
        set forth on Exhibit
        B.
        If any
        of the Term Loans are placed in a securitization, then Borrowers shall promptly
        upon notice from Administrative Agent, amend their respective Organizational
        Documents to incorporate the single purpose entity requirements set forth
        on
Exhibit
        B,
        at
        Borrowers' sole cost and expense. Neither Borrower's election to provide
        home
        healthcare services nor Borrower's compliance with Section 8.3(e) shall be
        a
        violation of this Section
        4.3(b)
        or
Exhibit
        B.

       

      (c)    At
        all
        times, ARC or a wholly-owned Affiliate of ARC shall own twenty percent (20%)
        or
        more of the membership interests in Cypress JV.

       

      Section
        4.4 Maintenance
        of Property; Payment of Taxes; Insurance.

       

      (a)    Each
        Borrower will keep all property useful and necessary in its business in good
        working order and condition, ordinary wear and tear excepted. If all or any
        part
        of the Collateral becomes damaged or destroyed, each Borrower will promptly
        and
        completely repair and/or restore the affected Collateral in a good and
        workmanlike manner, provided that such Borrower shall only be obligated to
        repair or restore the affected Collateral if Administrative Agent agrees
        to
        disburse insurance proceeds or other sums to pay costs of the work of repair
        or
        reconstruction. Borrowers will not commit or allow waste or permit impairment
        or
        deterioration of the Collateral or abandon all or any part of the Collateral.
        Borrowers will perform such acts to preserve the value of Collateral. Each
        Borrower will (i) preserve its or their interest in and title to the
        Collateral and will forever warrant and defend the same to Administrative
        Agent
        and Lenders against any and all claims made by, through or under Borrowers,
        and
        (ii) except in respect of Permitted Liens, forever warrant and defend the
        validity and priority of the lien and security interest created in the Security
        Documents against the claims of all Persons whomsoever claiming by, through
        or
        under Borrowers. The foregoing warranty of title shall survive the foreclosure
        of the Security Documents and shall inure to the benefit of and be enforceable
        by Administrative Agent in the event Administrative Agent acquires title
        to any
        Collateral pursuant to any foreclosure. 

       

      (b)    Borrowers
        will pay or cause to be paid all Taxes prior to the date upon which any fine,
        penalty, interest or cost for nonpayment is imposed, and furnish to
        Administrative Agent, upon request, receipted bills of the appropriate taxing
        authority or other documentation reasonably satisfactory to Administrative
        Agent
        evidencing the payment thereof. If Borrowers shall fail to pay any Taxes
        in
        accordance with this Section and is not contesting or causing a contesting
        of
        such Taxes pursuant to a Permitted Contest,

       

      
        
           

        

        
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      or
        if
        there are insufficient funds in the applicable reserves or escrows under
        Article
        2 to pay any such Taxes, Administrative Agent shall have the right, but shall
        not be obligated, to (for the account of all Lenders) pay such Taxes, and
        Borrowers shall repay to Administrative Agent, on written demand, any amount
        paid by Administrative Agent, with interest thereon from the date of the
        advance
        thereof to the date of repayment, at the rate applicable during periods of
        Default hereunder, and such amount shall constitute a portion of the
        Obligations. Borrowers shall not pay any Taxes or other obligations in
        installments unless permitted by applicable Laws, and shall, upon the request
        of
        Administrative Agent, deliver copies of all notices and bills relating to
        any
        Taxes or other charge covered by this Section to Administrative
        Agent.

       

      (c)    Upon
        completion of any Permitted Contest, Borrowers shall promptly pay the amount
        due, if any, and deliver to Administrative Agent proof of the completion
        of the
        contest and payment of the amount due, if any, following which Administrative
        Agent Lender shall return the security, if any, deposited with Lender pursuant
        to the definition of Permitted Contest. 

       

      (d)    Each
        Borrower will maintain (i) casualty insurance on all real and personal
        property on an all risks basis (including the perils of flood and quake),
        covering the repair and replacement cost of all such property and coverage
        for
        business interruption and rent loss and professional liability and public
        liability insurance (including products/completed operations liability
        coverage) in the amounts and on such terms as attached hereto as
Schedule
        4.4,
        and
        (ii) such other insurance coverage in such amounts and with respect to such
        risks as Administrative Agent may reasonably request. All such insurance
        shall
        be provided by insurers having an A.M. Best policyholders rating reasonably
        acceptable to Administrative Agent. Borrowers will not bring or keep any
        article
        on any business location of any Credit Party, or cause or allow any condition
        to
        exist, if the presence of such article or the occurrence of such condition
        could
        reasonably cause the invalidation of any insurance required by this Section
        4.4(d),
        or
        would otherwise be prohibited by the terms thereof.

       

      (e)    On
        or
        prior to the Closing Date, and at all times thereafter, each Borrower will
        cause
        Administrative Agent to be named as an additional insured, assignee and loss
        payee (which shall include, as applicable, identification as mortgagee),
        as
        applicable, on each insurance policy required to be maintained pursuant to
        this
Section
        4.4
        pursuant
        to endorsements in form and content acceptable to Administrative
        Agent.
        Borrowers will deliver to Administrative Agent and the Lenders (i) on the
        Closing Date, a certificate from Borrowers' insurance broker dated such date
        showing the amount of coverage as of such date, and that such policies will
        include effective waivers (whether under the terms of any such policy or
        otherwise) by the insurer of all claims for insurance premiums against all
        loss payees and additional insureds and all rights of subrogation against
        all
        loss payees and additional insureds, and that if all or any part of such
        policy
        is canceled, terminated or expires, the insurer will forthwith give notice
        thereof to each additional insured, assignee and loss payee and that no
        cancellation, reduction in amount or material change in coverage thereof
        shall
        be effective until at least thirty (30) days after receipt by each
        additional insured, assignee and loss payee of written notice thereof,
        (ii) upon the

       

      
        
           

        

        
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      request
        of any Lender through Administrative Agent from time to time full information
        as
        to the insurance carried, (iii) within five (5) days of receipt of
        notice from any insurer, a copy of any notice of cancellation, nonrenewal
        or
        material change in coverage from that existing on the date of this Agreement,
        and (iv) forthwith, notice of any cancellation or nonrenewal of coverage by
        any Borrower.

       

      (f)    In
        the
        event any Borrower fails to provide Administrative Agent with evidence of
        the
        insurance coverage required by this Agreement, Administrative Agent may purchase
        insurance at Borrowers' expense to protect Administrative Agent's interests
        in
        the Collateral. This insurance may, but need not, protect any Borrower's
        interests. The coverage purchased by Administrative Agent may not pay any
        claim
        made by any Borrower or any claim that is made against any Borrower in
        connection with the Collateral. The applicable Borrower may later cancel
        any
        insurance purchased by Administrative Agent, but only after providing
        Administrative Agent with evidence that such Borrower has obtained insurance
        as
        required by this Agreement. If Administrative Agent purchases insurance for
        the
        Collateral, to the fullest extent provided by law Borrowers will be responsible
        for the costs of that insurance, including interest and other charges imposed
        by
        Administrative Agent in connection with the placement of the insurance, until
        the effective date of the cancellation or expiration of the insurance. The
        costs
        of the insurance may be added to the Obligations. The costs of the insurance
        may
        be more than the cost of insurance each Borrower is able to obtain on its
        own.

       

      (g)    Borrowers
        shall not carry separate insurance concurrent in form or contributing in
        the
        event of loss with that required to be maintained under this
        Section.

       

      Section
        4.5 Compliance
        with Laws.

       

      Each
        Borrower will comply with the requirements of all applicable Laws, except
        to the
        extent that failure to so comply could not reasonably be expected to
        (a) have a Material Adverse Effect, or (b) result in any Lien upon
        either (i) a material portion of the assets of any such Person in favor of
        any Governmental Authority, or (ii) any portion of the
        Collateral.

       

      Section
        4.6 Inspection
        of Property, Books and Records.

       

      Each
        Borrower will keep proper books of record and account in accordance with
        GAAP in
        which full, true and correct entries shall be made of all dealings and
        transactions in relation to its business and activities; and will permit
        at the
        sole cost of the applicable Borrower, representatives of Administrative Agent
        and of any Lender (but at such Lender's expense unless such visit or inspection
        is made concurrently with Administrative Agent) to visit and inspect any of
        their respective properties, to examine and make abstracts or copies from
        any of
        their respective books and records, to conduct a collateral audit and analysis
        of their respective operations and the Collateral and to discuss their
        respective affairs, finances and accounts with their respective officers,
        employees and independent public accountants as often as may reasonably be
        desired. In the absence of an Event of Default, Administrative Agent or any
        Lender exercising any rights pursuant to this Section

       

      
        
           

        

        
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      4.6
        shall
        give the applicable Borrower commercially reasonable prior notice of such
        exercise, and shall not (except for and in addition to the annual inspection
        fee) require Borrower to reimburse the costs and expenses incurred in connection
        with such visit or inspection for more than one (1) visit per year. No
        notice shall be required during the existence and continuance of any Event
        of
        Default.

       

      Section
        4.7 Use
        of
        Proceeds.

       

      Borrowers
        will use the proceeds of the Term Loans solely for payment of amounts due
        in
        respect of an acquisition of equity interests or assets contemplated by the
        Financing Documents, transaction fees incurred in connection with the Financing
        Documents and the refinancing on the Closing Date of Debt. No portion of
        the
        proceeds of the Loans will be used for family, personal, agricultural or
        household use.

       

      Section
        4.8 [Reserved.]

       

      Section
        4.9 [Reserved.]

       

      Section
        4.10 Environmental
        Covenants.

       

      (a)    Each
        Borrower covenants and agrees that so long as such Borrower owns, manages,
        is in
        possession of, or otherwise controls the operation of the Projects: (i) all
        uses and operations on or of the Projects, whether by such Borrower or any
        other
        Person, shall be in compliance with all Environmental Laws and permits issued
        pursuant thereto in all material respects; (ii) there shall be no material
        Releases of Hazardous Materials in, on, under or from the Projects;
        (iii) there shall be no Hazardous Materials in, on, or under the Projects,
        except those that are both (A) in compliance with all Environmental Laws in
        all material respects and with permits issued pursuant thereto, if and to
        the
        extent required, and (B) (I) in amounts not in excess of that
        necessary to operate the Projects for the purposes set forth herein or
        (II) fully disclosed to and approved by Administrative Agent in writing;
        (iv) each Borrower shall keep the Projects free and clear of all
        Environmental Liens; (v) each Borrower shall, at its sole cost and expense,
        fully and expeditiously cooperate in all activities pursuant to Subsection
        4.10(c) below,
        including but not limited to providing all relevant information and making
        knowledgeable persons available for interviews; (vi) each Borrower shall,
        at its sole cost and expense, perform any environmental site assessment or
        other
        investigation of environmental conditions in connection with the Projects,
        pursuant to any reasonable written request of Administrative Agent, upon
        Administrative Agent's reasonable belief that any Project is not in compliance
        with all Environmental Laws in all material respects, and share with
        Administrative Agent the reports and other results thereof, and Administrative
        Agent and Lenders shall be entitled to rely on such reports and other results
        thereof; (vii) each Borrower shall, at its sole cost and expense, comply
        with all reasonable written requests of Administrative Agent to
        (A) reasonably effectuate remediation of any Hazardous Materials in, on,
        under or from the Projects as required by Environmental Laws; and
        (B) comply in all material respects with any Environmental Law;
        (viii) Borrower shall not allow any Operating Lessee or other user of the
        Projects to violate any Environmental Law; and (ix) each Borrower shall
        immediately notify Administrative Agent in writing after

       

      
        
           

        

        
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      it
        has
        become aware of (A) any material Release or threatened Release of Hazardous
        Materials in, on, under, from or migrating towards the Projects; (B) any
        non-compliance with any Environmental Laws related in any way to the Projects
        in
        any material respects; (C) any actual or potential Environmental Lien
        against the Projects; (D) any required or proposed remediation of
        environmental conditions relating to the Projects; and (E) any written or
        other communication of which any Borrower becomes aware from any source
        whatsoever (including but not limited to a Governmental
        Authority) effecting or relating in any way to Hazardous Materials and the
        Borrowers or any Project.

       

      (b)    Administrative
        Agent and any other Person designated by Administrative Agent, including
        but not
        limited to any representative of a Governmental Authority, and any environmental
        consultant, and any receiver appointed by any court of competent jurisdiction,
        shall have the right, but not the obligation, to enter upon the Projects
        at all
        reasonable times to assess any and all aspects of the environmental condition
        of
        the Projects and its use, including but not limited to conducting any
        environmental assessment or audit (the scope of which shall be determined
        in
        Administrative Agent's sole discretion) and taking samples of soil,
        groundwater or other water, air, or building materials, and conducting other
        invasive testing, provided, however, that so long as no Default has occurred
        and
        is continuing, Borrower shall have the right to approve any sampling or other
        invasive testing, such approval not to be unreasonably withheld. Each Borrower
        shall cooperate with and provide access to Administrative Agent and any such
        person or entity designated by Administrative Agent.

       

      (c)    Each
        Borrower shall establish and comply with that any operations and maintenance
        program if recommended by Administrative Agent's environmental consultant
        with
        respect to the Projects, in form and substance reasonably acceptable to
        Administrative Agent, and prepared by an environmental consultant reasonably
        acceptable to Administrative Agent, which program may address any
        asbestos-containing material or lead based paint that may now or in the future
        be detected at or on the Projects. Without limiting the generality of the
        preceding sentence, Administrative Agent may require to the extent reasonable
        under the circumstances (i) periodic notices or reports to Administrative
        Agent in form, substance and at such intervals as Administrative Agent may
        specify, (ii) an amendment to such operations and maintenance program to
        address changing circumstances, laws or other matters, (iii) at each
        Borrower's sole expense, supplemental examination of the Projects by consultants
        specified by Administrative Agent, (iv) access to the Projects by
        Administrative Agent, its agents or servicer, to review and assess the
        environmental condition of the Projects and each Borrower's compliance with
        any
        operations and maintenance program, and (v) variation of the operations and
        maintenance program in response to the reports provided by any such
        consultants.

       

      (d)    If
        any
        Release or disposal of Hazardous Materials shall occur or shall have occurred
        on
        any real property or any other assets of any Borrower, such Borrower will
        cause
        the prompt containment and removal of such Hazardous Materials and the
        remediation of such real property or other assets as is necessary to comply
        in
        all material respects with all Environmental Laws and to preserve the value
        of
        such real property or other assets. Without limiting the generality of the
        foregoing, each Borrower shall comply with each

       

      
        
           

        

        
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      Environmental
        Law requiring the performance at any Project by any Borrower or any other
        Credit
        Party of activities in response to the Release or threatened Release of a
        Hazardous Material.

       

      (e)    If
        requested by Administrative Agent, Borrowers
        will provide Administrative Agent within thirty (30) days after written
        demand therefor with a bond, letter of credit or similar financial assurance
        evidencing to the reasonable satisfaction of Administrative Agent that
        sufficient funds are available to pay the cost of removing, treating and
        disposing of any Hazardous Materials or Hazardous Materials Contamination
        and
        discharging any assessment which may be established on any property as a
        result
        thereof, such demand to be made, if at all, upon Administrative Agent's
        reasonable business determination that the failure to remove, treat or dispose
        of any Hazardous Materials or Hazardous Materials Contamination, or the failure
        to discharge any such assessment, could reasonably be expected to have a
        Material Adverse Effect.

       

      Section
        4.11 Syndication. 

       

      Borrower
        will enter into such non-material modifications (which shall in no event
        adversely change or effect the rights or obligations of Borrowers) to the
        Financing Documents as Administrative Agent may reasonably request in order
        to
        complete a successful syndication of the Loans and the Loan commitments as
        determined by Administrative Agent in the exercise of its reasonable discretion.
        Such modifications shall include, without limitation, reallocation of the
        Term
        Loan Commitment.

       

      Section
        4.12 Further
        Assurances.

       

      (a)    Each
        Borrower will at its own cost and expense, cause to be promptly and duly
        taken,
        executed, acknowledged and delivered all such further acts, documents and
        assurances as may from time to time be necessary or as Administrative Agent
        or
        the Required Lenders may from time to time reasonably request in order to
        carry
        out the intent and purposes of the Financing Documents and the transactions
        contemplated thereby, including all such actions to establish, create, preserve,
        protect and perfect a first priority Lien (subject only to Permitted
        Liens) in favor of Administrative Agent for the benefit of the Lenders on
        the Collateral (including Collateral acquired after the date hereof), including
        on any and all assets of each Credit Party, whether now owned or hereafter
        acquired.

       

      (b)    Upon
        receipt of an affidavit of an officer of Administrative Agent or a Lender
        as to
        the loss, theft, destruction or mutilation of any Note or any other Financing
        Document which is not of public record, and, in the case of any such mutilation,
        upon surrender and cancellation of such Note or other applicable Financing
        Document, Borrowers will issue, in lieu thereof, a replacement Note or other
        applicable Financing Document, dated the date of such lost, stolen, destroyed
        or
        mutilated Note or other Financing Document in the same principal amount thereof
        and otherwise of like tenor.

       

      
        
           

        

        
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      Section
        4.13 Litigation. 

       

      Borrowers
        will give prompt written notice to Administrative Agent of any litigation
        or
        governmental proceedings pending or threatened (in writing) against any Credit
        Party which might have a Material Adverse Effect with respect to Borrowers,
        any
        other Credit Party or any Project.

       

      Section
        4.14 Deferred
        Maintenance. 

       

      During
        the 12 month period following the Closing Date, Borrowers shall spend at
        least
        $375,000 (over and above the expenditures required by Section
        2.5(d))
        for one
        or more of the deferred maintenance items reflected on and as required by
        Schedule
        4.14.

       

      Section
        4.15 Power
        of Attorney.

       

      Each
        of
        the officers of Administrative Agent is hereby irrevocably made, constituted
        and
        appointed the true and lawful attorney for Borrowers (without requiring any
        of
        them to act as such) with full power of substitution to do the following,
        all during the existence of an Event of Default: (a) endorse the name of
        Borrowers upon any and all checks, drafts, money orders, and other instruments
        for the payment of money that are payable to Borrowers and constitute
        collections on Borrowers' Accounts; (b) execute in the name of Borrowers
        any schedules, assignments, instruments, documents, and statements that
        Borrowers are obligated to give Administrative Agent under this Agreement;
        (c) take any action Borrowers are required to take under this Agreement;
        and (d) do such other and further acts and deeds in the name of Borrowers
        that Administrative Agent reasonably may deem necessary or desirable to enforce
        any Account or other Collateral or perfect Administrative Agent's security
        interest or Lien in any Collateral. This
        power of attorney shall be irrevocable and coupled with an
        interest.

       

      Section
        4.16 Estoppel
        Certificates. 

       

      After
        written request by Administrative Agent, Borrowers, within fifteen
        (15) days and at their expense, will furnish Administrative Agent with a
        statement, duly acknowledged and certified, setting forth (a) the amount of
        the original principal amount of the Notes, and the unpaid principal amount
        of
        the Notes, (b) the rate of interest of the Notes, (c) the date
        payments of interest and/or principal were last paid, (d) any offsets or
        defenses to the payment of the Obligations, and if any are alleged, the nature
        thereof, (e) that the Notes and this Agreement have not been modified or if
        modified, giving particulars of such modification, and (f) that there has
        occurred and is then continuing no Default or if such Default exists, the
        nature
        thereof, the period of time it has existed, and the action being taken to
        remedy
        such Default.

       

      ARTICLE
        5

      NEGATIVE
        COVENANTS

       

      Each
        Borrower agrees that, so long as any Credit Exposure exists:

       

      
        
           

        

        
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      Section
        5.1 Debt. 

       

      No
        Borrower will, directly or indirectly, create, incur, assume, guarantee or
        otherwise become or remain directly or indirectly liable with respect to,
        any
        Debt, except for: (a) Debt under the Financing Documents;
        (b) unsecured Debt in the form of trade payables aged in a manner
        consistent with ARC's past business practices; but in no event more than
        ninety
        (90) days; (c) Debt incurred or assumed for the purpose of financing
        all or any part of the cost of acquiring any equipment used by a Borrower
        in the
        operation of a Project in the Ordinary Course of Business (including through
        Capital Leases), in an aggregate principal amount at any time outstanding
        not
        greater than $100,000 per Project; (d) Debt, if any, arising under Swap
        Contracts; and (e) other Debt approved by Administrative Agent from time to
        time in its sole discretion.

       

      Section
        5.2 Liens.

       

      No
        Borrower will, directly or indirectly, create, assume or suffer to exist
        any
        Lien on any asset now owned or hereafter acquired by it, except for Permitted
        Liens.

       

      Section
        5.3 Contingent
        Obligations.

       

      No
        Borrower will, directly or indirectly, create, assume, incur or suffer to
        exist
        any Contingent Obligations, except for:

       

      (a)    Contingent
        Obligations arising in respect of the Debt under the Financing
        Documents;

       

      (b)    Contingent
        Obligations resulting from endorsements for collection or deposit in the
        Ordinary Course of Business;
        and

       

      (c)    Contingent
        Obligations arising under indemnity agreements with title insurers to cause
        such
        title insurers to issue to Administrative Agent mortgagee title insurance
        policies.

       

      Section
        5.4 Restricted
        Distributions. 

       

      No
        Borrower will, directly or indirectly, declare, order, pay, make or set apart
        any sum for any Restricted Distribution at any time during which any Default
        or
        Event of Default has occurred and is then continuing, or if such Restricted
        Distribution is reasonably likely to result in a monetary Default or Event
        of
        Default (including, without limitation, any violation of any financial covenant
        on a pro forma basis).

       

      Section
        5.5 Restrictive
        Agreements.

       

      No
        Borrower will, directly or indirectly enter into or assume any agreement
        (other
        than the Financing Documents) prohibiting the creation or assumption of any
        Lien upon its properties or assets, whether now owned or hereafter
        acquired.

       

      
        
           

        

        
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      Section
        5.6 Payments
        and Modifications of Subordinated Debt.

       

      No
        Borrower will, directly or indirectly declare, pay, make or set aside any
        amount
        for payment in respect of any Subordinated Debt except as may be permitted
        by
        the applicable Subordination Agreement.

       

      Section
        5.7 Consolidations,
        Mergers and Sales of Assets.

       

      No
        Borrower will, directly or indirectly (a) consolidate or merge with or into
        any other Person, or (b) consummate any Asset Dispositions other than
        dispositions of personal property assets for cash and fair value that the
        applicable Borrower determines in good faith is no longer used or useful
        in the
        business of such Borrower if
        all of
        the following conditions are met: (i) after giving effect to any such
        disposition, Borrowers are in compliance on a pro forma basis with the covenants
        set forth in Article 6 recomputed for the most recently ended month and
        quarter for which information is available as though such disposition and
        repayment had occurred during such month and quarter and is in compliance
        with
        all other terms and conditions of this Agreement; and (ii) no Default or
        Event of Default then exists or would result from any such
        disposition.
        

       

      (b)    Borrower
        shall not assign or attempt to assign its rights under this Agreement and
        any
        purported assignment shall be void. Borrower shall not suffer or permit any
        sale, transfer, lease (other than a Lease permitted by this Agreement),
        conveyance, alienation, pledge, assignment, mortgage, encumbrance hypothecation
        (other than Permitted Liens) or other disposition of (i) all or any portion
        of the Project or any portion of any other security for the Loan, (ii) all
        or any portion of the Borrower's right, title and interest (legal or equitable)
        in and to the Project or any portion of any other security for the Loan,
        or
        (iii) any interest in Borrower or any interest in Cypress JV (except that
        ARC or its wholly owned Affiliate may acquire the interest from CNL or an
        Affiliate of CNL so long as the Mezzanine Loan indebtedness is repaid in
        full)
        or General Partner (any of the foregoing, a "Transfer").
        In
        addition, if ARC fails to continue to exercise (A) control over the day to
        day
        management and operation of Borrower's business or the Projects pursuant
        to the
        Management Agreements, and (B) the power to appoint two members of the
        committee which manages Cypress JV during the term of the Loan, then Lender
        may,
        at Administrative Agent's option, declare the Loan to be immediately due
        and
        payable, and Administrative Agent may invoke any remedies permitted by the
        Financing Documents.

       

      (c)    In
        addition to the prohibitions set forth in Section 5.7(b) above, Borrower
        shall
        not engage in or permit a Transfer that would constitute or result in the
        occurrence of one or more non-exempt prohibited transactions under ERISA
        or the
        Internal Revenue Code. Borrower agrees to unwind any such Transfer upon notice
        from Lender or, at Lender's option, to assist Lender in obtaining such
        prohibited transaction exemption(s) from the United States Pension and Welfare
        Benefits Administration with respect to such Transfer as are necessary to
        remedy
        such prohibited transactions.

       

      
        
           

        

        
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      Section
        5.8 Purchase
        of Assets.

       

      (a)    No
        Borrower will, directly or indirectly (a) acquire or enter into any
        agreement to acquire any assets other than in the Ordinary Course of Business;
        (b) create, acquire or enter into any agreement to create or acquire any
        Subsidiary; (c) engage or enter into any agreement to engage in any joint
        venture or partnership with any other Person; or (d) acquire or own or
        enter into any agreement to acquire or own any investment in any
        Person.

       

      Section
        5.9 Transactions
        with Affiliates.

       

      Except
        as
        otherwise disclosed on Schedule
        5.9,
        and
        except for transactions that are disclosed to Administrative Agent in advance
        of
        being entered into and which contain terms that are no less favorable to
        the
        applicable Borrower than those which might be obtained from a third party
        not an
        Affiliate of any Credit Party, no Borrower will, directly or indirectly,
        enter
        into or permit to exist any transaction (including the purchase, sale, lease
        or
        exchange of any property or the rendering of any service) with any
        Affiliate of any Borrower. 

       

      Section
        5.10 Modification
        of Organizational Documents.

       

      No
        Borrower or Cypress JV will, directly
        or indirectly, amend
        or
        otherwise modify any Organizational Documents of such Person, except for
        such
        amendments or other modifications required under this Agreement, or by
        applicable Law and fully disclosed to Administrative Agent, or amendments
        which
        are not material, provided that such amendments are submitted to Lender no
        later
        than five (5) Business Days before becoming effective.

       

      Section
        5.11 Modification
        of Certain Agreements.

       

      Without
        Administrative Agent's prior written consent, not to be unreasonably withheld,
        no Borrower will, directly or indirectly, amend or otherwise modify any Material
        Contract, which amendment or modification in any case:

       

      (a)    is
        contrary to the terms of this Agreement or any other Financing
        Document;

       

      (b)    could
        reasonably be expected to be adverse to the rights, interests or privileges
        of
        the Administrative Agent or the Lenders or their ability to enforce the
        same;

       

      (c)    results
        in the imposition or expansion in any material respect of any restriction
        or
        burden on any Borrower; or

       

      (d)    reduces
        in any material respect any rights or benefits of any Borrower (it being
        understood and agreed that any such determination shall be in the reasonable
        discretion of the Administrative Agent).

       

      
        
           

        

        
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      Without
        Administrative Agent's prior written consent which may be granted or withheld
        in
        Administrative Agent's sole and absolute discretion, no Borrower will amend
        any
        Management Agreement. Each Borrower shall, prior to entering into any amendment
        or other modification of any of the foregoing documents, deliver to
        Administrative Agent reasonably in advance of the execution thereof, any
        final
        or execution form copy of amendments or other modifications to such
        documents.

       

      Section
        5.12 Fiscal
        Year.

       

      No
        Borrower will change its Fiscal Year without the prior written consent of
        Administrative Agent.

       

      Section
        5.13 Conduct
        of Business.

       

      No
        Borrower will, directly or indirectly, engage in any line of business other
        than
        those businesses engaged in on the Closing Date and businesses reasonably
        related thereto.

       

      Section
        5.14 Operating
        Leases.

       

      No
        Borrower will lease any Licensed Location under any Operating Lease without
        Administrative Agent's consent, which may be withheld in Administrative Agent's
        sole discretion.

       

      Section
        5.15 Lease
        Payments.

       

      No
        Borrower will, directly
        or indirectly, incur
        or
        assume (whether pursuant to a Guarantee or otherwise) any liability for
        rental payments under a lease if, after giving effect thereto, the aggregate
        amount of minimum lease payments that Borrowers have so incurred or assumed
        will
        exceed, $50,000 per Project for any calendar year under all such leases
        (excluding Capital Leases).

       

      Section
        5.16 Limitation
        on Sale and Leaseback Transactions.

       

      No
        Borrower will, directly or indirectly, enter into any arrangement with any
        Person whereby in a substantially contemporaneous transaction any Borrower
        sells
        or transfers all or substantially all of its right, title and interest in
        an
        asset and, in connection therewith, acquires or leases back the right to
        use
        such asset.

       

      Section
        5.17 Compliance
        with Anti-Terrorism Laws.

       

      Administrative
        Agent hereby notifies Borrowers that pursuant to the requirements of
        Anti-Terrorism Laws, and Administrative Agent's policies and practices,
        Administrative Agent is required to obtain, verify and record certain
        information and documentation that identifies Borrowers and its principals,
        which information includes the name and address of each Borrower and its
        principals and such other information that will allow Administrative Agent
        to
        identify such party in accordance with Anti-Terrorism Laws. 

       

      
        
           

        

        
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      No
        Borrower will, directly or indirectly, knowingly enter into any Financing
        Documents or Material Contracts with any Person listed on the OFAC Lists.
        Each
        Borrower shall immediately notify Administrative Agent if such Borrower has
        knowledge that any Borrower or any additional Credit Party is listed on the
        OFAC
        Lists or (a) is convicted on, (b) pleads nolo contendere to,
        (c) is indicted on, or (d) is arraigned and held over on charges
        involving money laundering or predicate crimes to money laundering. No Borrower
        will, directly or indirectly, (i) conduct any business or engage in any
        transaction or dealing with any Blocked Person, including, without limitation,
        the making or receiving of any contribution of funds, goods or services to
        or
        for the benefit of any Blocked Person, (ii) deal in, or otherwise engage in
        any transaction relating to, any property or interests in property blocked
        pursuant to Executive Order No. 13224, any similar executive order or other
        Anti-Terrorism Law, or (iii) engage in or conspire to engage in any
        transaction that evades or avoids, or has the purpose of evading or avoiding,
        or
        attempts to violate, any of the prohibitions set forth in Executive Order
        No. 13224 or other Anti-Terrorism Law. 

       

      ARTICLE
        6

      FINANCIAL
        COVENANTS

       

      Borrowers
        agree that, so long as any Credit Exposure exists:

       

      Section
        6.1 Definitions.

       

      (a)    As
        used
        in this Article 6, the following terms have the following meanings:

       

      (i)    "Debt
        Yield Ratio"
        means
        the ratio (expressed as a percentage) of Net Operating Income (measured for
        the trailing six (6) months and on an annualized basis) to the average
        outstanding balance of the Loans at the time of determination.

       

      (ii)    "Debt
        Service"
        means
        all debt service (principal, if any, interest and recurring charges and fees
        payable under this Agreement).

       

      (iii)    "Debt
        Service Coverage Ratio"
        means
        the ratio of Net Operating Income (measured for the trailing six (6) months
        and
        on an annualized basis) to Debt Service (measured for the trailing six (6)
        months on an annualized basis).

       

      (iv)    "Net
        Operating Income"
        means
        "Operating
        Revenue"
        for the
        applicable period annualized minus
        "Operating
        Expenses"
        for the
        applicable period.

       

      (v)    "Operating
        Revenue"
        means
        the sum of the following, based on customary industry accounting practices
        and
        reasonable adjustments made by Administrative Agent, and adjusted, however,
        to
        reflect a vacancy factor equal to the greater of actual vacancy or five percent
        (5%):

       

      (A)    all
        amounts collected by or on behalf of Borrowers (including payments from Licensed
        Operators) from residents of the Project

       

      
        
           

        

        
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      (including,
        without limitation, rent, patient day charges, assisted living services,
        rehabilitation service charges, non-refundable deposits, entrance fees and
        property fees), as recognized revenue under GAAP, excluding:
        (1) nonrecurring income, extraordinary items, revenues items of the type
        described in subpart (C) below and other non-property related income (each
        as reasonably determined by Administrative Agent); and (2) income from
        residents (i) that are thirty (30) or more days delinquent,
        (ii) that have been thirty (30) or more days delinquent two
        (2) or more times during the immediately prior twelve (12) month
        period, plus

       

      (B)    without
        duplication, all revenues of Licensed Operator in the form of reimbursements
        under Third Party Payor Programs for services rendered during the preceding
        three (3) months (and specifically excluding any cost report settlements or
        other payments received in respect of services rendered prior to the preceding
        three (3) months), plus

       

      (C)    without
        duplication, other operating revenues of Borrowers not to exceed $1,000.00
        per
        month for vending, catering and special events, food and beverage, parking,
        subleases and other occupancy payments (other than late fees and interest
        income) based upon collections and that are a normal, recurring operating
        revenue, minus

       

      (D)    rebates,
        free rent and other concessions made by Borrowers (or Manager) to induce
        residents to enter into Resident Agreements.

       

      (vi)    "Operating
        Expenses"
        means
        the sum of the following for any period: the expenses incurred by Borrowers
        and
        Manager in connection with operating the Projects (including any amounts
        of
        corporate overhead expense of ARC actually allocated by ARC and/or CNL to
        Borrowers and/or the Projects, if any), determined on a stabilized accrual
        basis
        for such period (as determined in accordance with GAAP, and as reasonably
        adjusted by Administrative Agent), including, without limitation:
        (1) recurring expenses (e.g., real estate tax and insurance expenses or
        deposits, tenant improvements, leasing commissions, carpeting replacement,
        appliance and drapery replacement and such others as determined by
        Lender) which are not paid out of the replacement reserve,
        (2) management fees (whether paid or not) in an amount equal to the
        greater of actual fees accrued or five percent (5%) of effective gross
        income for the Projects, (3) a replacement reserve (whether reserved or
        not) of not less than $300 per residential unit per annum, and (4) all
        interest and fee obligations accruing under any Debt (other than scheduled
        payments due and owing under the Loan). Insurance expenses shall be calculated
        at the greater of (1) actual annual insurance premiums plus claims paid or
        accrued (without duplication) for which no insurance coverage is available,
        or (2) $400 per residential unit, per year.
        "Operating
        Expenses"
        shall
        specifically exclude income taxes, depreciation, and amortization.

       

      Section
        6.2 [Reserved.]

       

      Section
        6.3 [Reserved.]

       

      
        
           

        

        
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      Section
        6.4 [Reserved.]

       

      Section
        6.5 Financial
        Covenant.

       

      Borrowers
        covenant and agree to maintain the following minimum Debt Yield Ratio and
        minimum Debt Service Coverage Ratio for the applicable period shown below
        throughout the term of the Loan: 

       

      
        	
                Testing
                  Period

              	 	
                Minimum
                  Debt

                Yield
                  Ratio

              	 	
                Minimum
                  Debt

                Service
                  Coverage

                Ratio

              
	
                Each
                  six (6) month period ending December 31, 2006 and March 31,
                  2007

              	 	
                6.00%

              	 	
                none

              
	
                Each
                  six (6) month period ending June 30, 2007, September 30, 2007,
                  December 31, 2007 and March 31, 2008

              	 	
                8.00%

              	 	
                1.10
                  to 1.00

              
	
                Each
                  six (6) month period ending June 30, 2008, September 30, 2008
                  and December 31, 2008

              	 	
                9.00%

              	 	
                1.20
                  to 1.00

              
	
                Each
                  six (6) month period thereafter

              	 	
                10.00%

              	 	
                1.20
                  to 1.00

              
	 	 	 	 	 

      

      Determinations
        of compliance with the covenants in this Section
        6.5
        (collectively, the "Financial
        Covenants") shall
        be calculated as of the first (1st)
        day of
        each calendar quarter (commencing with a calculation as of January 1,
        2007).

       

      Section
        6.6 Evidence
        of Compliance.

       

      Borrowers
        shall furnish to Lender, concurrently with the financial reports and
        documentation required by Section
        4.1(b)(v),
        evidence (in form and content satisfactory to Lender) of Borrowers'
        compliance with the covenants in this Article and evidence that no Event
        of
        Default specified in this Article has occurred. Such evidence shall include,
        without limitation, (a) a statement and report, on a form approved by
        Administrative Agent, detailing Borrowers' calculations, and (b) if
        requested by Administrative Agent, back-up documentation (including, without
        limitation, invoices, receipts and other evidence of costs incurred during
        such
        quarter as Administrative Agent shall reasonably require) evidencing the
        propriety of the calculations. 

       

      Section
        6.7 Financial
        Covenant Default.

       

      (a)    In
        the
        event that Borrowers fail to satisfy either of the Financial Covenants as
        of any
        calculation date (i.e., the date as of which covenant compliance is

       

      
        
           

        

        
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      calculated;
        not the date on which the determination of compliance or non-compliance is
        made), Borrowers shall, within ten (10) calendar days after the date the
        financial reports and compliance certificates required by Sections
        4.1(b)(v) and
        6.6
        are due,
        pay to Administrative Agent, as a mandatory prepayment, an amount (a
        "Covenant
        Prepayment") which,
        if such amount were applied against the outstanding principal balance of
        the
        Loans, would be sufficient to satisfy each of the Financial Covenants as
        of such
        calculation date, calculating the outstanding principal balance of the Loans
        after giving proforma effect to such Covenant Prepayment. Failure to satisfy
        one
        or both of the Financial Covenants shall be deemed an Event of Default under
        Section
        11.1
        only if
        Borrowers fail to make the Covenant Prepayment, together with the proportionate
        amount of the Exit Fee owing with respect thereto, within said ten (10) day
        period.

       

      (b) Notwithstanding
        the provisions of Section 6.7(a), if Borrowers fail to satisfy one or both
        of
        the Financial Covenants for the first or second time during the term of the
        Loans and no monetary Default or Event of Default has occurred and is
        continuing, then, instead of applying the required Covenant Prepayment to
        the
        Loans, Administrative Agent shall hold such Covenant Prepayment as a cash
        collateral deposit ("Covenant Deposit") without interest, and the
        proportionate amount of the Exit Fee otherwise payable with respect thereto
        will
        not be payable except as and until provided below. If at any time after
        Administrative Agent receives a Covenant Deposit, Borrowers satisfy the
        Financial Covenants (without having to make a Covenant Prepayment and without
        taking into account the Covenant Deposit) for two (2) consecutive
        calendar quarters and provided that the Covenant Deposit has not theretofore
        been applied to the Indebtedness as a result of the occurrence of an Event
        of
        Default or the occurrence of a third failure to satisfy either or both of
        the
        Financial Covenants, the Covenant Deposit shall be returned to Borrowers.
        The
        Covenant Deposit, if any, shall be given proforma application to principal
        balance of the Loans solely for purposes of determining whether an additional
        amount should be paid to Administrative Agent and added to the Covenant Deposit
        if the Financial Covenants is not satisfied for a second time. If the Financial
        Covenants is not satisfied (whether or not a Covenant Prepayment is
        made) for a third time, then (i) Administrative Agent shall no longer
        be required to hold any Covenant Prepayments as a Covenant Deposit and all
        subsequent Covenant Prepayments shall be applied to the principal balance
        of the
        Loans and (ii) the Covenant Deposit, if any, shall be applied to the
        principal balance of the Loans and the proportionate amount of the Exit Fee
        with
        respect thereto shall be due and payable within ten (10) calendar days
        after the date of determination of non-compliance. The Covenant Deposit shall
        be
        Collateral. If an Event of Default occurs at any time, the Covenant Deposit
        may
        be immediately applied to the Indebtedness in such order as Administrative
        Agent
        determines and the Exit Fee shall be due with respect thereto.

       

      ARTICLE
        7

      CONDITIONS

       

      Section
        7.1 Conditions
        to Closing. 

       

      The
        obligation of each Lender to make the initial Loans shall be subject to the
        receipt or waiver by Administrative Agent of each agreement, document and
        instrument set

       

      
        
           

        

        
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      forth
        on
        the closing checklist prepared by Administrative Agent or its counsel and
        provided to Borrower in anticipation of Closing, each in form and substance
        satisfactory to Administrative Agent, and to the satisfaction of the following
        conditions precedent, each to the satisfaction of Administrative Agent in
        its
        sole discretion:

       

      (a)    evidence
        of the consummation of the transactions (other than the funding of the Loans
        and
        the closing of any acquisition for which the proceeds of the Loans are purchase
        money) contemplated by the Financing Documents; 

       

      (b)    the
        payment of all fees, expenses and other amounts due and payable under each
        Financing Document;

       

      (c)    the
        absence, since December 31, 2005, of any material adverse change in any
        aspect of the business, operations, properties, prospects or condition
        (financial or otherwise) of any Credit Party, or any event or condition
        which could reasonably be expected to result in such a material adverse change;
        

       

      (d)    evidence
        that ARC and CNL have invested a minimum of $5,450,150 of cash equity in
        Borrowers, of which CNL has invested a minimum of $1,040,250 of cash equity,
        in
        addition to CNL's equity contributions from the proceeds of the Mezzanine
        Loan,
        and such equity infusion has been used by Borrowers to fund the transactions
        under the Financing Documents and otherwise for working capital purposes,
        and
        all portions of such cash equity infusion which are not used on the Closing
        Date
        to fund the transactions under the Financing Documents shall remain available
        to
        Borrowers for working capital purposes and shall be unencumbered (other than
        by
        any Lien of Administrative Agent); and

       

      (e)    all
        conditions to funding of the Mezzanine Loan are satisfied.

       

      Section
        7.2 Searches.

       

      Before
        Closing, and thereafter (as and when determined by Administrative Agent in
        its
        discretion), Administrative Agent shall have the right to perform, all at
        Borrowers' expense, the searches described in clauses (a), (b) and
        (c) below against Borrowers and any other Credit Party, the results of
        which are to be consistent with Borrowers' representations and warranties
        and
        covenants under this Agreement:

       

      (a)    UCC
        searches with the Secretary of State and local filing offices of each
        jurisdiction where the applicable Person maintains its executive offices,
        a
        place of business, or assets and the jurisdiction in which the applicable
        Person
        is organized;

       

      (b)    Judgment,
        pending litigation, federal tax lien, personal property tax lien, and corporate
        and partnership tax lien searches, in each jurisdiction searched under clause
        (a) above; 

       

      (c)    Real
        property title and lien searches in each jurisdiction in which any real property
        Collateral is located; and

       

      
        
           

        

        
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      (d)    Searches
        of applicable corporate, limited liability company, partnership and related
        records to confirm the continued existence, organization and good standing
        of
        the applicable Person and the exact legal name under which such Person is
        organized.

       

      Section
        7.3 Certain
        Post-Closing Obligations.

       

      Borrowers
        shall complete and/or satisfy the obligations described on Schedule
        7.3
        within
        the time periods set forth therein. 

       

      ARTICLE
        8

      REGULATORY
        MATTERS

       

      Each
        Borrower agrees that, so long as any Credit Exposure exists (for the avoidance
        of doubt, any provisions relating to any CON with respect to any Licensed
        Location shall be applicable only to the extent CON is required or may hereafter
        be required under applicable Law with respect to such Licensed
        Location):

       

      Section
        8.1 Representations
        and Warranties Pertaining to Licensed Locations.

       

      To
        induce
        Administrative Agent and Lenders to enter into this Agreement and to make
        the
        Loans and other credit accommodations contemplated hereby, each Borrower
        hereby
        represents and warrants to Administrative Agent and each Lender that:

       

      (a)    Each
        of
        the Projects is an independent living facility with respect to which no
        Healthcare Permit is required for the operation thereof. None of the Licensed
        Locations are in violation of any Health Care Laws, except where any such
        violation would not have a Material Adverse Effect. 

       

      (b)    To
        the
        extent healthcare goods or services are provided at a Project, the Borrower
        that
        is the owner of such Project has (i) or is in the process of obtaining or
        causing the Licensed Operator to obtain each Healthcare Permit and other
        rights
        from, and has made all declarations and filings with, all applicable
        Governmental Authorities, all self regulatory authorities and all courts
        and
        other tribunals necessary, if any, to engage in the provision of such goods
        and/or services and (ii) no knowledge that any Governmental Authority is
        considering limiting, suspending or revoking any such Healthcare Permit.
        All
        Healthcare Permits which have been issued, if any, are valid and in full
        force
        and effect. Each Borrower who is the owner of a Licensed Location is or,
        when
        the applicable Healthcare Permit is issued, will be in material compliance
        with
        the terms and conditions of all such Healthcare Permits except where failure
        to
        be in such compliance or for a Healthcare Permit to be valid and in full
        force
        and effect would not have a Material Adverse Effect.

       

      (c)    If
        applicable, each Licensed Location has received and maintains accreditation
        in
        good standing and without impairment by all applicable accrediting
        organizations, to the extent required by law (including any equivalent
        regulation) or the terms of any Lease pertaining to the Licensed
        Location.

       

      
        
           

        

        
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      (d)    No
        Borrower is a participant in any federal program whereby any federal, state
        or
        local government or quasi-governmental body, agency, board or other authority
        may have the right to recover funds by reason of the advance of federal funds,
        including, without limitation, those authorized under the Hill-Burton Act
        (42
        U.S.C. 291, et
        seq.).
        No
        Borrower has received notice, and no Borrower is aware of any violation of
        applicable anti-trust laws of any federal, state or local government or
        quasi-governmental body, agency, board or other authority pertaining to the
        Licensed Locations.

       

      (e)    Each
        Borrower that is the owner of a Licensed Location is the owner of record
        of any
        CON pertaining to such Licensed Location. If under applicable Healthcare
        Laws,
        the CON for a Licensed Location operated by a Borrower merges into a
        state-issued license to operate the Licensed Location, then each such Borrower
        is the owner of record of any CON pertaining to such Licensed
        Location.

       

      (f)    Each
        Project located in a state where licensing as an independent living facility
        is
        not required under the applicable laws of the state where the Project is
        located.

       

      (g)    The
        Licensed Locations and Licensed Operators do not have any uncorrected licensure
        deficiencies.

       

      (h)    Each
        of
        the representations and warranties of the Licensed Operators set forth in
        Section
        8.2
        below
        are true, complete and correct.

       

      (i)    If
        (i) any Borrower or is or becomes a "covered entity"
        within
        the meaning of HIPAA, or (ii) any Borrower is or becomes subject to the
        "Administrative Simplification"
        provisions of HIPAA, such Borrower is HIPAA Compliant. 

       

      Section
        8.2 Representations
        and Warranties Pertaining to Licensed Operators.

       

      To
        induce
        Administrative Agent and Lenders to enter into this Agreement and to make
        the
        Loans and other credit accommodations contemplated hereby, Borrowers hereby
        represent and warrant the following to Administrative Agent: 

       

      (a)    Each
        of
        the representations and warranties of Borrowers set forth in Sections
        8.1(a) through
        8.1(f) above
        are
        true, complete and correct.

       

      (b)    No
        Licensed Operator is in violation of any of the Health Care Laws, except
        where
        any such violation would not have a Material Adverse Effect. 

       

      (c)    To
        the
        extent goods or services are being provided at a Project which require a
        Healthcare Permit, each Licensed Operator has (i) or is in the process of
        obtaining each Healthcare Permit and other rights from, and has made all
        declarations and filings with, all applicable Governmental Authorities, all
        self
        regulatory authorities and all courts and other tribunals necessary to engage
        in
        the business conducted by it except for such Healthcare Permits with respect
        to
        which the failure to obtain would not have a Material Adverse Effect and
        (ii) no knowledge that any Governmental Authority is
        considering

       

      
        
           

        

        
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      limiting,
        suspending or revoking any such Healthcare Permit. All Healthcare Permits
        which
        have been issued, if any, are valid and in full force and effect. Each Licensed
        Operator is or upon issuance of the applicable Healthcare Permits, will be
        in
        material compliance with the terms and conditions of all such Healthcare
        Permits
        except where failure to be in such compliance or for a Healthcare Permit
        to be
        valid and in full force and effect would not have a Material Adverse
        Effect.

       

      (d)    To
        the
        extent a Licensed Operator submits claims to Governmental Payors, the Licensed
        Operator has the requisite provider number and, if required, Healthcare Permits,
        to bill Governmental Payors, except where the failure to have such provider
        number or Healthcare Permits would not have a Material Adverse Effect. To
        the
        extent a Licensed Operator submits claims to Third Party Payors, the Licensed
        Operator has any Healthcare Permit necessary to bill Third Party Payors except
        where the failure to have such Healthcare Permit would not have a Material
        Adverse Effect. There is no investigation, audit, claim review, or other
        action
        pending or, to the knowledge of any Licensed Operator, threatened which could
        result in a revocation, suspension, termination, probation, restriction,
        limitation, or non-renewal of any provider number or other Healthcare Permit
        or
        result in a Licensed Operator's or Licensed Location's exclusion from any
        Governmental Payor program or Third Party Payor Program, nor has any Third
        Party
        Payor Program made any decision not to renew any provider agreement related
        to
        the Licensed Locations, nor have the Licensed Locations or Licensed Operators
        made any decision not to renew any provider agreement, nor is there any action
        pending or threatened to impose material intermediate or alternative sanctions
        with respect to the Licensed Locations.

       

      (e)    All
        Medicare, Medicaid, and private insurance cost reports and financial reports
        submitted by the Licensed Operator will be when submitted materially accurate
        and complete and will not be misleading in any material respects. No cost
        reports for the Licensed Locations remain "open" or unsettled, except as
        otherwise disclosed to Administrative Agent.

       

      (f)    If
        applicable, each Licensed Operator has received and maintains accreditation
        in
        good standing and without impairment by all applicable accrediting
        organizations, to the extent required by law (including any equivalent
        regulation) or the terms of any Lease pertaining to the Licensed
        Location.

       

      (g)    No
        Licensed Operator has been, or to its knowledge has been threatened to be,
        (i) excluded from U.S. health care programs pursuant to 42 U.S.C. §1320a7
        and related regulations, (ii) "suspended" or "debarred" from selling
        products to the U.S. government or its agencies pursuant to the Federal
        Acquisition Regulation, relating to debarment and suspension applicable to
        federal government agencies generally (48 C.F.R. Subpart 9.4), or other
        applicable laws or regulations, or (iii) made a party to any other action
        by any governmental authority that may prohibit it from selling products
        to any
        governmental or other purchaser pursuant to any Law.

       

      (h)    No
        statement of charges or deficiencies has been made or penalty enforcement
        action
        has been undertaken against the Licensed Locations or any Licensed

       

      
        
           

        

        
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      Operator
        (or any officer, director or stockholder of any of the foregoing) during
        the last three (3) calendar years, and there have been no violations over
        the past three (3) calendar years which have threatened any certification
        of the Licensed Locations or any Licensed Operator for participation in
        Medicare, Medicaid or other Third Party Payor Programs. There are no current,
        pending or outstanding Medicare, Medicaid or Third Party Payor Program
        reimbursement audits or appeals pending at the Licensed Locations.

       

      (i)    Neither
        Licensed Operators nor the Licensed Locations are subject to any proceeding,
        suit or investigation by any federal, state or local government or
        quasi-governmental body, agency, board or authority or any other administrative
        or investigative body which may result in the imposition of a fine, alternative,
        interim or final sanction, a lower reimbursement rate for services rendered
        to
        eligible patients which has not been provided for on their respective financial
        statements, or which would have a material adverse effect on any Licensed
        Operator or the operation of the Licensed Locations, or which would result
        in
        the revocation, transfer, surrender, suspension or other impairment of the
        operating certificate or provider agreement of the Licensed Locations, nor
        any
        Healthcare Permit.

       

      (j)    There
        are
        no Resident Agreements with patients or residents of the Licensed Locations
        or
        with any other persons or organizations which deviate in any material adverse
        respect from the standard form customarily used at an independent living
        facility or which conflict with any statutory or regulatory requirements.
        All
        resident records at the Licensed Locations and in the possession of or created
        by the Licensed Operators, including resident trust fund accounts, are true
        and
        correct in all material respects.

       

      (k)    Neither
        the execution nor performance by Licensed Operator of any Financing Documents
        nor the exercise of any remedies by any party thereunder, will adversely
        affect
        Licensed Operator's right to receive payments and reimbursements from
        Governmental Payors with respect to the Licensed Locations, nor materially
        reduce the payments and reimbursements from Governmental Payors which Licensed
        Operator is receiving as of the date hereof. 

       

      (l)    Licensed
        Operator is not a participant in any federal program whereby any federal,
        state
        or local government or quasi-governmental body, agency, board or other authority
        may have the right to recover funds by reason of the advance of federal funds,
        including, without limitation, those authorized under the Hill-Burton Act
        (42
        U.S.C. 291, et
        seq.).

       

      (m)    Licensed
        Operator has received no notice, and is not aware of any violation in any
        material respect of applicable antitrust laws, employment or landlord-tenant
        Laws of any federal, state or local government or quasi-governmental body,
        agency, board or other authority with respect to the Licensed Locations or
        Licensed Operator.

       

      (n)    No
        Licensed Operator, or any of its respective officers, directors, shareholders
        or
        members has ever been charged with or investigated for committing any violation
        of any state or federal statute or regulation involving fraudulent and
        abusive

       

      
        
           

        

        
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      practices
        relating to its or his participation in state or federally sponsored
        reimbursement programs, including, without limitation, fraudulent billing
        practices. The Licensed Locations and, to the knowledge of the Licensed
        Operator, their contractors, have properly and legally billed all intermediaries
        and Third Party Payors for services rendered with respect to the Licensed
        Locations and have maintained their records to reflect such billing practices.
        No funds relating to the Licensed Operators are now, or, to the knowledge
        of the
        Licensed Operators will be, withheld by any Medicare intermediary or other
        Third
        Party Payor. Neither the Licensed Locations nor any other healthcare facilities
        managed by the Licensed Operator, nor any officer, director, shareholder
        or
        member of the Licensed Operator has engaged in any of the following:
        (i) knowingly and willfully making or causing to be made a false statement
        or representation of a material fact in any application for any benefit or
        payment under any Healthcare Laws; (ii) knowingly and willfully making or
        causing to be made any false statement or representation of a material fact
        for
        use in determining rights to any benefit or payment under any Healthcare
        Laws;
        (iii) failing to disclose knowledge by a claimant of the occurrence of any
        event affecting the initial or continued right to any benefit or payment
        under
        any Healthcare Laws on its own behalf or on behalf of another, with intent
        to
        secure such benefit or payment fraudulently; (iv) knowingly and willfully
        soliciting or receiving any remuneration (including any kickback, bribe or
        rebate), directly or indirectly, overtly or covertly, in cash or in kind
        or
        offering to pay such remuneration (A) in return for referring an individual
        to a Person for the furnishing or arranging for the furnishing of any item
        or
        service for which payment may be made in whole or in part by any Healthcare
        Laws, or (B) in return for purchasing, leasing or ordering or arranging for
        or recommending the purchasing, leasing or ordering of any good, facility,
        service, or item for which payment may be made in whole or in part by any
        Healthcare Laws; (v) presenting or causing to be presented a claim for
        reimbursement for services that is for an item or services that was known
        or
        should have been known to be (A) not provided as claimed, or (B) false
        or fraudulent; or (vi) knowingly and willfully making or causing to be made
        or inducing or seeking to induce the making of any false statement or
        representation (or omitting to state a fact required to be stated therein
        or
        necessary to make the statements contained therein not misleading) of a
        material fact with respect to (A) a facility in order that the facility may
        qualify for Governmental Authority certification, or (B) information
        required to be provided under 42 U.S.C. § 1320a-3.

       

      (o)    If
        applicable, Licensed Operator is HIPAA Compliant.

       

      Section
        8.3 Covenants
        Pertaining to Licensed Locations.

       

      To
        induce
        Administrative Agent and Lenders to enter into this Agreement and to make
        the
        Loans and other credit accommodations contemplated hereby, each Borrower
        hereby
        covenants and agrees with Administrative Agent and each Lender that:

       

      (a)    If
        required under applicable Healthcare Laws, each Borrower has and shall maintain
        in full force and effect a valid CON for no less than the number of units
        in the
        Licensed Locations as of the date of this Agreement. 

       

      
        
           

        

        
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      (b)    Each
        Borrower shall maintain any applicable CON free from restrictions or known
        conflicts which would materially impair the use or operation of each Licensed
        Location for its current use, and shall not permit any CON to become
        provisional, probationary or restricted in any way.

       

      (c)    No
        Borrower shall do (or suffer to be done by a Borrower or any Affiliate of
        a
        Borrower) any of the following without Administrative Agent's prior written
        consent, which consent shall not be unreasonably withheld, conditioned or
        delayed:

       

      (i)    Replace
        or transfer all or any part of any Licensed Location's units to another site
        or
        location;

       

      (ii)    Transfer
        or demise (other than a demised under an Operating Lease approved by
        Administrative Agent in writing) any CON or other Healthcare Permit or
        rights thereunder to any Person (other than Administrative Agent) or to any
        location other than the Licensed Location to which such CON or Governmental
        Approval pertains; or

       

      (iii)    Pledge
        or
        hypothecate any CON or other Healthcare Permit as collateral security for
        any
        indebtedness other than indebtedness to Lender.

       

      (d)    If
        any
        Licensed Location is currently accredited by JCAHO, Borrowers shall use diligent
        efforts to do the following except to the extent that a Licensed Operator
        is
        otherwise obligated to do the following pursuant to any Lease: (i) maintain
        such accreditation in good standing and without limitation or impairment,
        (ii) promptly submit to JCAHO a plan of correction for any deficiencies
        listed on any JCAHO accreditation survey report, and (iii) cure all such
        deficiencies within such time frame as is necessary to preserve and maintain
        in
        good standing and without limitation or impairment such JCAHO
        accreditation.

       

      (e)    Within
        twelve (12) months after the Closing Date, Borrowers will cause clinical
        therapy
        and rehabilitation services and companion programs to be offered and provided
        at
        the Projects and obtain all Healthcare Permits required to offer and provide
        such services and programs. All revenue from such services shall be payable
        to a
        Borrower and not a third party provider.

       

      Section
        8.4 Covenants
        Pertaining to Licensed Operators.

       

      To
        induce
        Administrative Agent and Lenders to enter into this Agreement and to make
        the
        Loans and other credit accommodations contemplated hereby, Borrowers hereby
        covenant and agree to the following:

       

      (a)    Licensed
        Operators shall do nothing to cause Borrower to breach any of the provisions
        of
Section
        8.3.

       

      
        
           

        

        
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      (b)    Licensed
        Operators will:

       

      (i)    timely
        file or caused to be timely filed (after giving effect to any extension duly
        obtained), all notifications, reports, submissions, Permit renewals, cost
        reports and other reports of every kind whatsoever required by Healthcare
        Laws
        (which reports will be materially accurate and complete in all respects and
        not
        misleading in any material respect and shall not remain open or
        unsettled);

       

      (ii)    if
        not
        issued as of the Closing Date, use diligent efforts to obtain all Healthcare
        Permits necessary under Healthcare Laws to carry on the business at the Licensed
        Locations as it is conducted on the Closing Date or as necessary to provide
        the
        services and programs described in Section
        8.3(e);
        and
        once any Healthcare Permit is issued, maintain in full force and effect,
        and
        free from restrictions, probations, conditions or known conflicts which would
        materially impair the use or operation of any Licensed Location for its current
        use, all such Healthcare Permits necessary under Healthcare Laws (A) to
        carry on the business of Licensed Operator as it is conducted on the Closing
        Date, and (B) if Licensed Operator receives or has applied for Medicaid or
        Medicare reimbursements as part of its business, to continue to receive
        reimbursement under Medicare and Medicaid in full compliance with all
        requirements for participation in, and for the licensure required to provide
        the
        services that are reimbursable under, Medicare and Medicaid, including, without
        limitation, the Medicare and Medicaid Patient Protection Act of 1987, as
        the
        same may be amended, and such other Third Party Payor Programs as to which
        any
        Licensed Operator receives or has applied for reimbursement as part of its
        business; 

       

      (iii)    not
        suffer or permit to occur any of the following:

       

      (A)    any
        transfer of a Healthcare Permit or rights thereunder to any Person (other
        than a
        Borrower or Administrative Agent) or to any location other than a Licensed
        Location approved by Administrative Agent in advance in writing;

       

      (B)    any
        pledge or hypothecation of any Healthcare Permit as collateral security for
        any
        indebtedness other than indebtedness to Administrative Agent;

       

      (C)    any
        rescission, withdrawal, revocation, amendment or modification of or other
        alteration to the nature, tenor or scope of any Healthcare Permit without
        Administrative Agent's prior written consent, including, without limitation,
        (I) any change to the authorized units/beds capacity of any Licensed
        Location and/or the number of units/beds approved by the applicable Governmental
        Authority, and (II) any transfer all or any part of any Licensed Location's
        authorized units or beds to another site or location; 

       

      (D)    any
        voluntary transfer of any resident of any Licensed Location to any other
        facility, unless such transfer is at the request of the resident (without
        economic incentives being given to the resident by an Affiliate of
        Licensed

       

      
        
           

        

        
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      Operator) or
        its payor or is for reasons relating to non-payment or the health, required
        level of medical care or safety of the resident to be transferred; 

       

      (E)    without
        Administrative Agent's prior written consent, the provision by Licensed Operator
        of additional regulated services at any Licensed Location, including, without
        limitation, medical services; or

       

      (F)    any
        fact,
        event or circumstance for which notice to Administrative Agent is required
        under
Section
        8.5;

       

      (iv)    operate
        or cause the Licensed Locations to be operated in a manner such that the
        Healthcare Permits remain in full force and effect;

       

      (v)    maintain
        or cause to be maintained the standard of care for the patients of the Licensed
        Locations at all times at a level necessary to insure a level of quality
        care
        for the patients of the Licensed Locations comparable to that existing on
        the
        date of this Agreement;

       

      (vi)    maintain
        or cause to be maintained a standard of care in the storage, use, transportation
        and disposal of all medical equipment, medical supplies, medical products
        and
        medical waste, of any kind and in any form, that is in accordance at least,
        that
        of the highest prudent industry standard and in conformity with all applicable
        regulations and laws;

       

      (vii)    operate
        or cause to be operated the Licensed Location in a prudent manner in compliance
        in all material respects with applicable Healthcare Laws and cause all
        Healthcare Permits and any other agreements necessary for the use and operation
        of the Licensed Location or as may be necessary for participation in Third
        Party
        Payor Programs to remain in effect without reduction in the number of licensed
        beds or beds authorized for use in applicable Third Party Payor
        Programs;

       

      (viii)    maintain
        or cause to be maintained sufficient inventory and equipment of types and
        quantities at the Licensed Location to enable Licensed Operator to adequately
        to
        perform operation of the Licensed Location; 

       

      (ix)    to
        the
        extent required by applicable law, maintain or cause to be maintained all
        deposits, including, without limitation, deposits relating to patients or
        Resident Agreements if such deposits are in cash such deposits are to be
        deposited and held by Licensed Operator (or the Manager under the Management
        Agreement), as the case may be, at such commercial or savings bank or banks
        as
        may be reasonably satisfactory to Administrative Agent, if such deposits
        are in
        any other form, such deposits are to be maintained as Administrative Agent
        may
        expressly permit. Any bond or other instrument which Licensed Operator (or
        the
        Manager under the Management Agreement), as the case may be, is permitted
        to
        hold in lieu of cash deposits under any applicable legal requirements shall
        be
        maintained in full force and effect unless replaced by cash deposits as
        hereinabove described, shall be issued by an institution reasonably satisfactory
        to Administrative Agent,

       

      
        
           

        

        
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      shall,
        if
        permitted pursuant to any legal requirements, name Administrative Agent as
        payee
        or mortgagee thereunder (or at Administrative Agent's option, be fully
        assignable to Administrative Agent) and shall, in all respects, comply with
        any applicable in legal requirements and otherwise be reasonably satisfactory
        to
        Administrative Agent. Licensed Operator shall, upon request, provide
        Administrative Agent with evidence reasonably satisfactory to Administrative
        Agent of Licensed Operator's compliance with the foregoing. Following the
        occurrence and during the continuance of any Event of Default, Licensed Operator
        shall, upon Administrative Agent's request, if permitted by any applicable
        legal
        requirements, turn over to Administrative Agent the deposits (and any interest
        theretofore earned thereon) with respect to the Licensed Locations, to be
        held by Administrative Agent subject to the terms of their related
        agreements;

       

      (x)    provide
        to Administrative Agent no later than two (2) Business Days after request,
        to the extent applicable, an accurate, complete and current list of all
        participation agreements with Third Party Payors with respect to the business
        of
        Licensed Operators (collectively, "Participation
        Agreements").
        Licensed Operators shall at all times comply in all material respects with
        all
        requirements, contracts, conditions and stipulations applicable to Licensed
        Operators in order to maintain in good standing and without default or
        limitation all such Participation Agreements; and

       

      (xi)    maintain
        a corporate health care regulatory compliance program ("CCP") which
        includes at a minimum, the elements of an effective compliance program, as
        published in the Federal Register from time to time, by the Department of
        Health
        and Human Services, Office of Inspector General (or any successor Governmental
        Authority), without regard to whether such program is specifically applicable
        to
        the operations at the Licensed Locations.

       

      (c)    No
        Licensed Operator, shall, other than in the normal course of business, change
        the terms of any of the Medicaid, Medicare or other Third Party Payor Programs
        or its normal billing payment and reimbursement policies and procedures with
        respect thereto (including without limitation the amount and timing of finance
        charges, fees and write-offs).

       

      (d)    No
        Licensed Operator or any manager of the Licensed Locations shall rescind,
        withdraw, revoke, amend, modify, supplement, or otherwise alter the nature,
        tenor or scope of the Healthcare Permits for the Licensed Locations.

       

      (e)    If
        any
        Licensed Location is currently accredited by JCAHO, Licensed Operators shall
        (i) maintain such accreditation in good standing and without limitation or
        impairment, (ii) promptly submit to JCAHO a plan of correction for any
        deficiencies listed on any JCAHO accreditation survey report, and
        (iii) cure all such deficiencies within such time frame as is necessary to
        preserve and maintain in good standing and without limitation or impairment
        such
        JCAHO accreditation.

       

      
        
           

        

        
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      Section
        8.5 Special
        Notices to Administrative Agent.

       

      Borrowers
        shall notify Administrative Agent within three (3) Business Days of
        Borrower's becoming aware of (but in any event prior to Borrowers submitting
        any
        requests for advances of reserves or escrows), and shall contractually obligate
        (via written agreement acceptable to Administrative Agent) the Licensed
        Operators to notify Administrative Agent of the occurrence of, any of the
        following facts, events or circumstances, whether existing or pending, together
        with such supporting data and information as shall be necessary to fully
        explain
        to Administrative Agent the scope and nature of the fact, event or circumstance,
        and shall provide to Administrative Agent within two (2) Business Days of
        Administrative Agent's request, such additional information as Administrative
        Agent shall request regarding such disclosure: 

       

      (a)    a
        Licensed Operator or any Credit Party, has become subject to any federal,
        state,
        local governmental or private payor civil or criminal investigations, inquiries,
        validation review, program integrity review or reimbursement audits or statement
        of deficiencies involving and/or related to its compliance with Healthcare
        Laws
        (including, without limitation, an inquiry or investigation of any Person
        having
        "ownership, financial or control interest" in any Borrowers (as that phrase
        is
        defined in 42 C.F.R. § 420.201 et
        seq.))
        which,
        if adversely determined, could reasonably be expected to have a Material
        Adverse
        Effect, but excluding, where such certification is not existent as of the
        Closing Date, issues related to initial Medicare or Medicaid certification
        ;

       

      (b)    that
        an
        owner, officer, manager, employee or Person with a "direct or indirect ownership
        interest" (as that phrase is defined in 42 C.F.R. § 420.201) in a Licensed
        Operator or a Credit Party: (A) has had a civil monetary penalty assessed
        against him or her pursuant to 42 U.S.C. § 1320a-7a or is the subject of a
        proceeding seeking to assess such penalty; (B) has been excluded from
        participation in a Federal Health Care Program (as that term is defined in
        42
        U.S.C. § 1320a-7b) or is the subject of a proceeding seeking to assess
        such penalty; (C) has been convicted (as that term is defined in 42 C.F.R.
§ 1001.2) of any of those offenses described in 42 U.S.C.
§ 1320a-7b or 18 U.S.C. §§ 669, 1035, 1347, 1518 or is the subject of
        a proceeding seeking to assess such penalty; or (D) has been involved or
        named in a U.S. Attorney complaint made or any other action taken pursuant
        to
        the False Claims Act under 31 U.S.C. §§ 3729-3731 or qui tam action brought
        pursuant to 31 U.S.C. § 3729 et
        seq.;

       

      (c)    any
        claims, actions or appeals before any commission, board or agency charged
        with
        administering Healthcare Laws or programs operated under Healthcare Laws
        (including without limitation any intermediary or carrier, the Provider
        Reimbursement Review Board or the Administrator of the Center for Medicare
        Services) with respect to any state or federal Medicare or Medicaid cost
        reports or claims filed by any Licensed Operator, or any disallowance by
        any
        commission, board or agency in connection with any audit of such cost reports,
        to the extent such audits are not routine;

       

      (d)    [Reserved];

       

      
        
           

        

        
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      (e)    [Reserved];

       

      (f)    any
        liability in respect of amounts received by Borrowers or any Licensed Operator
        for the purchase or improvement of any real property under restricted or
        conditioned grants or donations, including, without limitation, monies received
        under the Public Health Service Act, 42 U.S.C. Section 291 et
        seq.;

       

      (g)    the
        voluntary disclosure by any Credit Party or Licensed Operator to the Office
        of
        the Inspector General of the United States Department of Health and Human
        Services, a Medicare fiscal intermediary or any state's Medicaid program
        of a
        potential material overpayment matter involving the submission of claims
        to such
        payor by any Licensed Operator;

       

      (h)    receipt
        by any Credit Party or Licensed Operator of any notice or communication from
        the
        Joint Commission on Accreditation of Healthcare Organizations that a Licensed
        Location is (A) subject to or is required to file a plan of correction with
        respect to any accreditation survey, or (B) in danger of losing its
        accreditation due to a failure to comply with a plan of correction;

       

      (i)    any
        charges of resident abuse which are made in any legal or regulatory proceedings
        or material licensing violations involving the Licensed Operator at the Licensed
        Locations;

       

      (j)    if
        applicable, any health care survey report related to licensure or certification
        (including, without limitation, an annual or biannual Medicare or Medicaid
        certification survey report) which includes any statement of material
        deficiencies pertaining to any Licensed Operator or any of the Licensed
        Locations (whether via CMS 2567 form or otherwise);

       

      (k)    without
        duplication, any failure of any Credit Party or Licensed Operator to comply
        with
        any covenants or conditions in this Article 8;

       

      (l)    any
        revocation, suspension, termination, probation, restriction, limitation,
        denial,
        or nonrenewal affecting any Licensed Operator with respect to any Medicare
        and/or Medicaid participation or provider agreement, certification, billing
        number, assignment (via CMS 855 forms or otherwise), billing agent or electronic
        funds transfer instruction, including, without limitation, any denial of
        payment
        for new admissions; and/or

       

      (m)    any
        revocation, suspension, termination, probation, restriction, limitation,
        denial
        or nonrenewal affecting any Licensed Operator with respect to any participation
        or provider agreement with any Third Party Payor.

       

      Section
        8.6 Cure
        of Healthcare Laws Violations.

       

      If
        there
        shall occur any fact, event or circumstance for which Borrowers or Licensed
        Operators are required to give Administrative Agent notice under Section
        8.5
        above,
        or if there shall occur any breach of this Article 8 (or the corresponding
        provisions of

       

      
        
           

        

        
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      any
        Financing Document), Borrowers shall take, and shall cause the Licensed
        Operators to take (subject to the terms of any Financing Documents and the
        terms
        of any Lease to the Licensed Operator), such action as is necessary to validly
        challenge or otherwise appropriately respond to such fact, event or circumstance
        within any timeframe required by applicable Healthcare Laws, and shall
        thereafter diligently pursue the same to a favorable conclusion, all to the
        effect that the fact, event or circumstance giving rise to Borrowers' or
        Licensed Operators' notice obligation under Section
        8.5
        or the
        breach of this Article 8 (or the corresponding provisions of any Financing
        Documents), shall be dismissed, rescinded, eliminated and otherwise cease
        to
        exist on that date which is the earlier to occur of (a) sixty
        (60) days after the date any Borrower became aware of such fact, event or
        circumstance, or (b) the expiration of any cure period given under
        applicable Healthcare Laws to cure any such breach. Provided that Borrowers
        are
        at all times in compliance with the foregoing covenants and diligently pursue
        and obtain the cure described above within the timeframe described above,
        the
        existence of any fact, event or circumstance for which Borrowers or Licensed
        Operators are required to give Administrative Agent notice under Section
        8.5,
        or the
        existence of a breach of this Article 8 (or the corresponding provisions
        of any
        Financing Documents), shall not, in and of itself, constitute a breach of
        Borrowers' or Licensed Operators obligations hereunder or thereunder unless
        the
        same shall (y) have a Material Adverse Effect, or (z) have occurred as
        a result of any Credit Parties' or any Licensed Operators' negligence, willful
        misconduct, willful breach of this Agreement or Healthcare Laws or failure
        to
        adhere to commercial reasonable standards of operations.

       

      Section
        8.7 Licensed
        Operator; Manager.

       

      (a)    Without
        in any way limiting the other provisions of this Agreement, Borrowers shall
        not
        change the Licensed Operator of any Licensed Location. Borrowers shall cause
        the
        Licensed Locations at all times to be operated by the Licensed Operators
        identified on Schedule
        8.7.
        If the
        Licensed Operator for a Licensed Location is a Person separate and distinct
        from
        Borrowers as of the date of this Agreement, then, without Administrative
        Agent's
        prior written consent, no Borrower shall become the Licensed Operator for
        such
        Licensed Location, nor shall Borrowers or any Affiliate of any Borrower render
        any regulated healthcare service at any Licensed Location in connection with
        or
        in the furtherance of the operation of the Licensed Location.

       

      (b)    Borrowers
        shall not change or permit any Licensed Operator to change the manager of
        any
        Licensed Location or make any modification, amendment, termination or
        cancellation of any management contract for any Licensed Location or agreements
        with brokers, without the prior written consent of Administrative Agent in
        its
        sole and absolute discretion. Any substitute property manager shall be required
        to enter into an assignment and subordination of management or operating
        agreement in form and substance reasonably satisfactory to Administrative
        Agent.
        Borrowers shall, and shall cause the Projects initially and at all times
        until a
        substitute property manager is approved by Administrative Agent to be managed
        by
        ARC or an Affiliate or Affiliates of ARC approved by Administrative Agent
        (collectively in the singular, the "Manager") pursuant
        to management/operating agreements approved by Administrative Agent in writing
        (the "Management
        Agreements").
        Such
        restrictions and approval rights are solely for the purposes of assuring
        that
        the Projects are

       

      
        
           

        

        
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      managed
        and operated in a first-class manner consistent with Healthcare Laws and
        the
        preservation and protection of the Licensed Locations as security for the
        Obligations and shall not place responsibility for the control, care, management
        or repair of the Licensed Locations upon Administrative Agent, or make
        Administrative Agent responsible or liable for any negligence in the management,
        operation, upkeep, repair or control
        of
        the Licensed Locations.

       

      Section
        8.8 Transfer
        of Healthcare Permits and Operations.

       

      Upon
        written notice from Administrative Agent to Borrowers following the occurrence
        of an Event of Default that is continuing hereunder, or immediately if, at
        any
        time during the term hereof, a Licensed Operator vacates any Licensed Location,
        the following provisions shall be effective:

       

      (a)    Borrowers
        shall, or shall cause Licensed Operator to, cooperate with the Administrative
        Agent to effectuate a change of ownership of the Healthcare Permits for any
        Licensed Location to a replacement operator designated by Administrative
        Agent
        ("Replacement
        Operator"),
        subject to required approval of any Governmental Authority, and in connection
        therewith, cooperate to effectuate, if requested, the assignment of any Third
        Party Payor or Governmental Payor contracts (to the extent assignable).
        Borrowers further shall provide to Administrative Agent all information and
        records requested by Administrative Agent in connection with the change of
        ownership of the Healthcare Permits; and

       

      (b)    In
        order
        to facilitate an efficient transfer of the operations of any Licensed Location,
        Borrowers shall, if and to the extent requested by Administrative Agent,
        (i) deliver to Administrative Agent copies of all Healthcare Permits and
        the most recent reports and notices pertaining to such Licensed Location
        required to be delivered under Section
        8.5;
        (ii) continue and maintain, and cause Licensed Operator to continue and
        maintain, the operation of such Licensed Location in the ordinary course
        of
        business, including, without limitation, the retention of all residents at
        the
        Licensed Location to the fullest extent possible until the transfer of the
        operations of such Licensed Location to the Replacement Operator is completed;
        (iii) enter into such operation transfer agreements, management agreements,
        and other agreements as may be requested by Administrative Agent until the
        transfer of the operations of such Licensed Location to the Replacement Operator
        is completed; and (iv) provide continued access to Administrative Agent and
        its agents to show such Licensed Location to potential replacement operators.
        Subject to all laws governing the privacy and confidentiality of individually
        identifiable health information, Borrowers hereby consents to the disclosure
        by
        Administrative Agent to potential replacement operators of Borrowers' financial
        statements, licensure reports and surveys, financial and property due diligence
        materials and other documents, materials and information relating to the
        Licensed Locations.

       

      
        
           

        

        
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      ARTICLE
        9

      REAL
        PROPERTY MATTERS

       

      Each
        Borrower agrees that, so long as any Credit Exposure exists:

       

      Section
        9.1 Leases;
        Resident Agreements.

       

      (a)    Without
        the prior written consent of Administrative Agent, Borrowers shall not:
        (i) enter into any Leases, other than Permitted Leases; (ii) modify,
        amend, renew, surrender, terminate, consent to a sublease of, consent to
        a
        transfer of, abate rent or other payments due under or otherwise grant any
        financial or other concession under any Material Lease or any Permitted Lease
        if
        the effect thereof would cause the Permitted Lease to become a Material Lease;
        (iii) accept any rental payment under any Leases more than one
        (1) month in advance of its due date or in violation of the cash management
        or lockbox provisions of this Agreement; or (iv) enter into any ground
        lease or master operating lease of any Project.

       

      (b)    Without
        the prior written consent of Administrative Agent, Borrowers shall not, and
        shall not permit the Manager to: (i) modify in any material respect the
        form of Resident Agreement previously approved by Administrative Agent;
provided
        that
        Borrowers will submit all proposed form modifications to Administrative Agent
        prior to the use thereof, (ii) accept any payment under any Resident
        Agreement more than one (1) month in advance of its due date or in
        violation of the cash management or lockbox provisions of this Agreement;
        (iii) enter into any subleases with respect to any Project except for
        Permitted Leases; (iv) modify, amend, renew, surrender, terminate, consent
        to a sublease of, consent to a transfer of, abate rent or other payments
        due
        under or otherwise grant any financial or other concession under any sublease
        (except for Permitted Leases) with respect to any Project; or
        (v) enter into any Resident Agreement for a term of more than one
        (1) year, or upon rates other than market rates or upon a form that fails
        to comply in all material respects with applicable Laws.

       

      (c)    Borrowers
        shall, and shall cause Licensed Operator to, provide Administrative Agent
        with a
        copy of all Material Leases no less than ten (10) days prior to execution
        of such Leases and such Leases shall be on the form of lease previously approved
        by Administrative Agent (which form shall include an automatic attornment
        provision whereby, in the event of a foreclosure, the tenant automatically
        shall
        recognize the successor owner as landlord and such tenant shall have no right
        to
        terminate its lease in the event of such foreclosure). If Administrative
        Agent
        consents to any new Material Lease or the modification or renewal of any
        existing Material Lease, at Administrative Agent's request, Borrowers or
        Licensed Operator, as applicable, shall cause the tenant thereunder to execute
        a
        subordination and attornment agreement in form and substance satisfactory
        to
        Administrative Agent. 

       

      (d)    Any
        Operating Lease (or, at Administrative Agent's option, any subordination
        agreement between Administrative Agent and the Operating Lessee
        pertaining

       

      
        
           

        

        
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      to
        such
        Operating Lease) shall at all times be in form and substance satisfactory
        to Administrative Agent.

       

      (e)    Borrowers
        shall not suffer or permit any breach or default to occur in any of Borrowers'
        obligations under any of the Material Leases nor suffer or permit the same
        to
        terminate by reason of any failure of Borrowers to meet any requirement of
        any
        Material Lease. 

       

      (f)    Borrowers
        shall not suffer or permit any breach or default by a Licensed Operator to
        occur
        in any of the Licensed Operator's obligations under any Resident Agreement
        nor
        suffer or permit the same to terminate by reason of any failure of the Licensed
        Operator to meet any requirement of any Resident Agreement.

       

      (g)    If
        any
        Borrower has authorized or permitted an Operating Lessee to apply for or
        maintain the CON, or if the CON for a Licensed Location operated by an Operating
        Lessee merges into a state-issued license to operate the Licensed Location,
        Borrower shall not, at any time, pledge, transfer, hypothecate or otherwise
        alienate the CON.

       

      (h)    If
        the
        Licensed Operator (other than ARC) for a Licensed Location is a Person separate
        and distinct from the Borrowers, then the Licensed Operator's use or occupancy
        of the Licensed Location shall at all times be pursuant to a management or
        service agreement (each, a "Service
        Agreement")
        approved by Administrative Agent. The term Service Agreement shall not include
        the Management Agreement. Any Service Agreements existing as of the Closing
        Date
        are identified on Schedule
        9.1(h).
        Each
        Service Agreement shall provide Administrative Agent the right to terminate
        the
        rights of the Licensed Operator upon Administrative Agent (or its designee)
        or
        any receiver taking possession of the applicable Project or acquisition of
        the
        applicable Project through foreclosure, a deed in lieu of foreclosure UCC
        sale
        or otherwise. In the event a Licensed Operator loses its license to provide
        the
        goods or services covered by a Service Agreement, Borrowers shall act in
        good
        faith to promptly replace such Service Agreement or assist such Licensed
        Operator to reinstate such license in accordance with the terms of the
        applicable Service Agreement.

       

      Section
        9.2 Project
        Use and Operation.

       

      (a)    Without
        the prior written consent of Administrative Agent in each instance, which
        consent shall not be unreasonably withheld or delayed, Borrowers shall not
        demolish, remove, construct, or, except as otherwise expressly provided herein,
        restore, or alter the Projects or any portion thereof in any material respect;
        nor consent to or permit any such demolition, removal, construction,
        restoration, addition or alteration which would diminish in any material
        respect
        the value of the Projects. No excavation, construction, earth work, site
        work or
        any other mechanic's lienable work shall be done to or for the benefit of
        a
        Project, without Administrative Agent's approval, except for normal repair
        and
        maintenance in the ordinary course of business. Borrowers shall, at their
        expense, (i) take good care of the Projects including grounds generally,
        and utility systems and sidewalks, roads, alleys, and curbs therein, and
        shall
        keep the same in good, safe and insurable condition and in compliance with
        all
        applicable Laws in all material respects, (ii) promptly make all repairs
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      the
        Projects, above grade and below grade, interior and exterior, structural
        and
        nonstructural, ordinary and extraordinary, unforeseen and foreseen, which
        are
        necessary in order to maintain the Projects in a manner consistent with their
        quality and use as required hereby, and (iii) not commit or suffer to be
        committed any waste of the Projects or do or suffer to be done anything which
        will increase the risk of fire or other hazard to the Projects or impair
        the
        value thereof. Borrowers shall keep the sidewalks, vaults, gutters and curbs
        comprising, or adjacent to, the Projects, clean and free from dirt, snow,
        ice,
        rubbish and obstructions.

       

      (b)    Unless
        required by applicable Law, Borrowers shall not permit or engage in changes
        in
        the use of any Project (including any change from residential to non-residential
        use, or from non-residential use to residential use) from the use at the
        time this Agreement was executed without Administrative Agent's prior written
        consent. Borrowers shall not request and shall not initiate or acquiesce
        in a
        change in the plat of subdivision, or zoning classification or use of any
        Project, or grant any encumbrances or easements burdening any Project, without
        in each case obtaining Administrative Agent's prior written consent, not
        to be
        unreasonably withheld. Borrowers shall not desert or abandon the Projects
        or
        cause or permit the use or occupancy of any part of the Projects to be
        discontinued if such discontinuance or use change would violate in any material
        respect any zoning or other law, ordinance or regulation.

       

      (c)    Borrowers
        shall not, and neither shall permit, the Projects or any portion thereof
        to be
        converted or take any preliminary actions which could lead to a conversion
        to
        condominium or cooperative form or ownership.

       

      (d)    All
        of
        Borrowers' personal property delivered upon, attached to, used or required
        to be
        used in connection with the operation of any Project (collectively, the
        "FF&E") shall
        always be located at such Project and except as otherwise permitted herein
        shall
        be kept free and clear of all Liens other than the Permitted Liens. Borrowers
        shall not, without the prior written consent of Administrative Agent, remove
        or
        permit to be removed from any Project any of the FF&E except to repair or
        replace the same except as otherwise permitted herein.

       

      (e)    Borrowers
        shall not consent to or initiate the joint assessment of any Project
        (i) with any other real property constituting a separate tax lot and
        Borrowers represent and covenant that each Project is are and shall remain
        a
        separate tax lot, or (ii) with any portion of the Projects which may be
        deemed to constitute personal property, or any other procedure whereby the
        lien
        of any taxes which may be levied against such personal property shall be
        assessed or levied or charged to the Project as a single lien.

       

      Section
        9.3 Casualty
        Proceeds.

       

      (a)    Borrowers
        shall notify Administrative Agent promptly of the commencement or threat
        of any
        Taking of the Projects or any portion thereof or of the occurrence of any
        casualty with respect to any Project.

       

      
        
           

        

        
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      (b)    Subject
        to the provisions of Section
        9.4
        below,
        Administrative Agent may elect to collect, retain and apply against the
        Obligations of Borrowers under this Agreement or any of the other Financing
        Documents all proceeds of insurance resulting from any loss at any Project
        or of
        any Taking of all or any portion of a Project (individually and collectively
        referred to as "Casualty
        Proceeds") after
        deduction of all expenses of collection and settlement, including attorneys'
        and
        adjusters' fees and charges. If any insurance proceeds are paid by check,
        draft
        or other instrument payable to any Borrower and Administrative Agent jointly,
        such Borrower authorizes Administrative Agent to endorse such Borrower's
        name
        thereon and do such other things as Administrative Agent may deem advisable
        to
        reduce the same to cash. Administrative Agent is authorized and empowered,
        and
        each Borrower hereby irrevocably appoints Administrative Agent as its (or
        their) attorney-in-fact (such appointment is coupled with an interest), at
        Administrative Agent's option, to make or file proofs of loss or damage and
        to
        settle and adjust any claim under insurance policies which insure against
        such
        risks, or to direct Borrowers, in writing, to agree with the insurance
        carrier(s) on the amount to be paid in regard to such loss. Any Casualty
        Proceeds remaining after repayment of the Obligations shall be paid by
        Administrative Agent to Borrowers.

       

      (c)    Notwithstanding
        anything in Section
        9.3(b) to
        the
        contrary, in the event of any casualty to any Project or any Taking of part
        of
        any Project, Administrative Agent agrees to make available the Casualty Proceeds
        to restoration of the Project if (i) no Event of Default exists,
        (ii) all Casualty Proceeds are deposited with Administrative Agent,
        (iii) in Administrative Agent's reasonable judgment, the amount of Casualty
        Proceeds, together with additional amounts, if any, deposited by Borrower
        with
        Administrative Agent, available for restoration of the Project is sufficient
        to
        pay the full and complete costs of such restoration, (iv) the casualty or
        Taking will not require residential units at the affected Project comprising
        in
        the aggregate more than fifteen percent (15%) of the occupancy space at the
        Project to become vacant during the restoration, (v) the income to
        Borrowers from such affected Project (excluding the effect of business
        interruption or rent loss insurance) will not decrease more than fifteen
        percent (15%) as a result of such casualty or Taking, (vi) in
        Administrative Agent's sole determination, the Obligations will not exceed
        seventy-five percent (75%) of the fair market value of the Project (based
        upon Administrative Agent's allocation of the Loan to such Project) after
        completion of restoration but prior to any re-tenanting, (vii) in
        Administrative Agent's reasonable determination, the affected Project can
        be
        restored to an architecturally and economically viable project in compliance
        with applicable Laws, and (viii) in Administrative Agent's reasonable
        determination, such restoration is likely to be completed not later than
        six
        (6) months prior to the Termination Date.

       

      (d)    Notwithstanding
        the foregoing, if the damage to the Project does not exceed $1,250,000, and
        so
        long as no Default has occurred and is continuing, Borrowers shall be entitled
        to receive the Casualty Proceeds attributable thereto, provided, however,
        that
        Borrowers shall use the Casualty Proceeds to restore or rebuild the Project
        in
        all material respects to its condition prior to such casualty or
        Taking.

       

      
        
           

        

        
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      Section
        9.4 Borrowers'
        Obligation to Rebuild and Use of Casualty Proceeds
        Therefor.

       

      (a)    In
        case
        Administrative Agent does not elect to apply or does not have the right to
        apply
        the Casualty Proceeds to the Obligations, as provided in Section
        9.3
        above,
        Borrowers shall:

       

      (i)    Proceed
        with diligence to make settlement with insurers or the appropriate governmental
        authorities and except as provided in Section
        9.3(d) above,
        cause the Casualty Proceeds to be deposited with Administrative
        Agent;

       

      (ii)    In
        the
        event of any delay in making settlement with insurers or the appropriate
        governmental authorities or effecting collection of the Casualty Proceeds,
        deposit with Administrative Agent the full amount required to complete
        construction as aforesaid;

       

      (iii)    If
        the
        damage exceeds $1,250,000, in the event the Casualty Proceeds are insufficient
        to assure Administrative Agent that the all contemplated repairs or construction
        will be completed, promptly deposit with Administrative Agent any amount
        necessary to assure that such contemplated repairs or construction will be
        completed; and

       

      (iv)    Promptly
        proceed with the assumption of construction of the applicable Project, including
        the repair of all damage resulting from such fire, Taking or other cause
        and
        restoration to its former or reasonably equivalent condition in all material
        respects.

       

      (b)    Any
        request by Borrowers for a disbursement by Administrative Agent of Casualty
        Proceeds and funds deposited by Borrowers shall be subject to reasonable
        construction loan type draw requirements as determined by Administrative
        Agent.

       

      (c)    Notwithstanding
        anything to the contrary, if the damage to the applicable Project does not
        exceed $1,250,000 and so long as no Default has occurred and is continuing,
        Borrowers may settle and adjust any claim without the consent of Administrative
        Agent and agree with the insurance company or companies (or Governmental
        Authority, in the case of a Taking) on the amount to be paid upon the loss,
        provided, however, that such adjustment is carried out in a competent and
        timely
        manner. Any monies collected under this subsection (c) shall be applied in
        accordance with Section
        9.3(d) below.

       

      (d)    If
        the
        damage to the applicable Project exceeds $1,250,000, then Administrative
        Agent
        may elect to file the respective proof of loss, settle and adjust any claim
        without the consent of Borrowers and agree with the insurance company on
        the
        amount of the Casualty Proceeds in the place and stead of Borrowers and without
        the consent of Borrowers; provided, however,
        that so long as no Event of Default exists, Administrative Agent agrees to
        work
        with Borrowers and to keep Borrowers fully apprised of any and all action
        Administrative Agent takes to settle or adjust any claim. Borrowers
        hereby release

       

      
        
           

        

        
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      Administrative
        Agent from any and all liability with respect to the settlement and adjustment
        by Administrative Agent of any claims in respect of any casualty. 

       

      Section
        9.5 Tax
        Reduction Proceedings. 

       

      After
        and
        during the continuance of an Event of Default, Borrowers shall be deemed
        to have
        appointed Administrative Agent as their attorney-in-fact to seek a reduction
        or
        reductions in the assessed valuation of the Projects for real property tax
        purposes or for any other purpose and to prosecute any action or proceeding
        in
        connection therewith. This power, being coupled with an interest, shall be
        irrevocable for so long as any part of the Obligations remains unpaid and
        any
        Event of Default shall be continuing. 

       

      Section
        9.6 Commingling;
        FIRPTA. 

       

      No
        Borrower has commingled the funds related to the Projects with funds from
        any
        other property. Neither Borrowers nor any partner, stockholder, member or
        other
        principal in Borrowers is or will be, and no legal or beneficial interest
        of a
        partner, stockholder, member or other principal in Borrowers is or will be
        held,
        directly or indirectly, by a "foreign corporation", "foreign partnership",
        "foreign trust", "foreign estate", "foreign person", "affiliate" of a "foreign
        person" or a "United States intermediary" of a "foreign person" within the
        meaning of the Internal Revenue Code Sections 897, 1445 or 7701, the
        Foreign Investments in Real Property Tax Act of 1980, the International Foreign
        Investment Survey Act of 1976, the Agricultural Foreign Investment Disclosure
        Act of 1978, or the regulations promulgated pursuant to such Acts or any
        amendments to such Acts.

       

      Section
        9.7 Representations
        and Warranties.

       

      To
        induce
        Administrative Agent and Lenders to enter into this Agreement and to make
        the
        Loans and other credit accommodations contemplated hereby, each Borrower
        hereby
        represents and warrants to Administrative Agent and each Lender the following
        with respect to each individual Project, standing alone and without reliance
        upon any other Project:

       

      (a)    Except
        as
        disclosed to Administrative Agent in writing, (i) no condemnation of any
        portion of any Project, has commenced or, to any Borrower's knowledge, is
        contemplated by any Governmental Authority, (ii) except as disclosed to
        Administrative Agent in writing, no condemnation or relocation of any roadways
        abutting any Project has commenced or, to any Borrower's knowledge, is
        contemplated by any Governmental Authority, and (iii) no proceeding to deny
        access to any Project from any point or planned point of access to any Project,
        has commenced or, to any Borrower's knowledge, is contemplated by any
        Governmental Authority.

       

      (b)    Except
        as
        disclosed to Administrative Agent in writing the contemplated use of any
        Project
        as an independent living facility and the contemplated accessory uses do
        not
        violate, in any material respects, (i) any Laws (including subdivision,
        zoning and building Laws and Environmental Laws), or (ii) any building
        permits, covenants,

       

      
        
           

        

        
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      conditions
        and restrictions of record, or agreements affecting any Project or any part
        thereof. Neither the zoning authorizations, subdivision approvals or variances
        nor any other right to construct or to use any Project is to any extent
        dependent upon or related to any real estate other than the real property
        constituting the Collateral. Except as disclosed to Administrative Agent
        on the
        land title surveys delivered to Administrative Agent prior to the Closing
        Date,
        no building or other improvement encroaches upon any property line, building
        line, set back line, side yard line or any recorded or visible easement (or
        other easement of which Borrowers are aware or has reason to believe may
        exist) with respect to any Project. Except as disclosed on such surveys, no
        Project is situated in an area designated as having special flood hazards
        as
        defined by the Flood Disaster Protection Act of 1973, as amended, or designated
        as a wetland by any governmental entity having jurisdiction over the Project.
        All Permits required for the use and occupancy of the Project have been
        obtained. All Laws relating to the construction of and operation of the
        Improvements have been complied with in all material respects and all permits
        and licenses required for the construction of and operation of the Project
        have
        been obtained. The Project is accessible through fully improved and dedicated
        roads, accepted for maintenance and public use by public authority having
        jurisdiction. The Project has adequate water, gas and electrical supply,
        storm
        and sanitary sewerage facilities, telephone facilities, other required public
        utilities, fire and police protection, and means of access between the Project
        and public highways; none of the foregoing will be foreseeably delayed or
        impeded by virtue of any requirements under any applicable Laws. The Project
        includes all property and rights that may be reasonably necessary or desirable
        to promote the present uses and enjoyment thereof. To the best of each
        Borrower's knowledge, there are no, nor are there any alleged or asserted,
        violations of law, regulations, ordinances, codes, permits, licenses,
        declarations, covenants, conditions or restrictions of record, or other
        agreements relating to any Project, or the improvements thereto, or any part
        thereof. Final certificates of occupancy or non-residential use permits have
        been obtained for all improvements on the Project. The parcels of land
        comprising the Project are contiguous, subdivided parcels and are in full
        compliance with applicable subdivision ordinances. No subdivision or
        resubdivision of such parcels is required to: (y) convey, transfer, assign
        or lease such parcels, either individually or as a whole; or (z) rebuild
        after a casualty all or any portion of the improvements on the Project to
        current size and configuration.

       

      (c)    The
        Project is taxed separately without regard to any other property and for
        all
        purposes the Project may be mortgaged, conveyed and otherwise dealt with
        as an
        independent parcel. There are no unpaid or outstanding real estate or other
        taxes or assessments on or against any Project or any part thereof, except
        general real estate taxes for fiscal year 2006 not yet due or payable. To
        each
        Credit Party's knowledge, there is no pending or contemplated action pursuant
        to
        which any special assessment may be levied against any portion of any
        Project.

       

      (d)    There
        has
        been no damage or destruction of any part of any Project by fire or other
        casualty that has not been repaired. Except for the deferred maintenance
        items,
        if any, reflected on Schedule
        4.14
        or as
        part of routine maintenance or capital improvements required to be made by
        Borrowers under this Agreement, there are presently no material

       

      
        
           

        

        
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      existing
        defects in any Project and no material repairs or alterations thereof are
        reasonably necessary or appropriate.

       

      (e)    No
        Borrower has entered into any Material Leases that are currently in effect
        other
        than as set forth on the rent roll delivered by Borrower to Administrative
        Agent
        prior to the closing of the Loans, which Borrower certifies is true and correct
        in all material respects. True, correct and complete copies of the form of
        Lease, Resident Agreement and other lease or care documents and all
        non-residential Leases, as amended, as in effect with respect to Borrower's
        or
        Operator's operation of the Project, have been delivered to Administrative
        Agent. All Material Leases are in full force and effect. Neither Borrower
        nor
        any tenant is in material default under any Material Lease. Borrower has
        disclosed to Administrative Agent in writing any material default by any
        tenant
        under any Material Lease and no notice of termination has been issued under
        any
        Lease. All rents or other payments required of the tenant under the Material
        Lease due to date have been collected and have been collected no more than
        one
        (1) month in advance, and no tenant has been granted any rent concession or
        inducement whatsoever except as reflected on the rent roll previously delivered
        to Administrative Agent.

       

      (f)    The
        Resident Agreements comply with all applicable Laws in all material respects,
        including Healthcare Laws.

       

      ARTICLE
        10

      SECURITY
        AGREEMENT

       

      Section
        10.1 Generally.

       

      (a)    As
        security for the payment and performance of the Obligations, and the payment
        and
        performance of all obligations, and without limiting any other grant of a
        Lien
        and security interest in any Security Document, Borrowers hereby assign and
        grant to Administrative Agent a continuing first priority Lien on and security
        interest in, upon, and to all right, title and interest in and to any and
        all
        property and interests in property of Borrowers whether now owned or hereafter
        created, acquired or arising including all of the following properties and
        interests in properties (the "Personal
        Property";
        unless
        otherwise defined in this Agreement, all terms used in this Article 10
        shall have the meanings given them in Article 9 of the Uniform Commercial
        Code):

       

      (i)    All
        of
        Borrowers' Accounts, and all of Borrowers' money, contract rights, chattel
        paper, documents, deposit accounts, securities, investment property and
        instruments with respect thereto, and all of Borrowers' rights, remedies,
        security, Liens and supporting obligations, in, to and in respect of the
        foregoing;

       

      (ii)    To
        the
        extent not listed above, all of Borrowers' money, securities, investment
        property, deposit accounts, instruments, general intangibles, healthcare
        insurance receivables, inventory and other property and the proceeds
        thereof;

       

      
        
           

        

        
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      (iii)    All
        of
        Borrowers' letter-of-credit rights and commercial tort claims;

       

      (iv)    All
        of
        Borrowers' now owned or hereafter acquired machinery, equipment, computer
        equipment, tools, tooling, furniture, fixtures, goods, supplies, materials,
        work
        in process, whether now owned or hereafter acquired, together with all
        additions, parts, fittings, accessories, special tools, attachments, and
        accessions now and hereafter affixed thereto and/or used in connection
        therewith, all replacements thereof and substitutions therefor, and all cash
        and
        non-cash proceeds and products thereof and all present and future warranties,
        manuals and other written materials relating thereto;

       

      (v)    All
        of
        Borrowers' now owned or hereafter acquired goods of any kind and any and
        all
        tangible and intangible books and records of Borrowers relating to Borrowers,
        their businesses, their financial condition, records and statements, the
        Licensed Locations and/or the Collateral; and

       

      (vi)    To
        the
        extent not listed above as original collateral, the proceeds (including,
        without
        limitation, insurance proceeds) and products of any or all of the
        foregoing, and all accessions to, substitutions for or replacements of and
        rents
        and profits from any or all of the foregoing.

       

      (b)    Pursuant
        to the Liens created pursuant to Section 10.1
        and
        pursuant to all of the other Security Documents (if any) (including,
        without limitation, any and all UCC financing statements being filed by
        Administrative Agent against any Credit Party), and assuming that any such
        Security Document that is intended to be filed with any governmental public
        recording office has been so filed, Administrative Agent has been granted
        and
        has a valid and perfected first priority security interest and Lien in the
        Collateral, including the Personal Property (subject only to any Permitted
        Liens
        permitted under the terms of this Agreement and the other Financing
        Documents) securing the payment of the Obligations, and such security
        interests and Liens are entitled to all of the rights, priorities and benefits
        afforded by the UCC or other applicable Laws as enacted in any relevant
        jurisdiction which relate to perfected security interests. No authorization,
        approval or other action by, and no notice to or filing with, any Governmental
        Authority or consent of any other Person is required for (i) the grant by
        each Borrower to Administrative Agent of the security interests and Liens
        in the
        Collateral, including the Personal Property, provided for under this Agreement
        and the other Security Documents (if any), or (ii) the exercise by
        Administrative Agent of its rights and remedies with respect to the Collateral,
        including the Personal Property, provided for under this Agreement and the
        other
        Security Documents or under any applicable Law, including the UCC.

       

      Section
        10.2  Covenants
        Relating to Collateral.

       

      (a)    Borrowers
        shall not take any of the following actions or make any of the following
        changes
        unless Borrowers have given at least thirty (30) days prior written notice
        to Administrative Agent of Borrowers' intention to take any such action and
        have
        executed any and all documents, instruments and agreements and taken any
        other
        actions

       

      
        
           

        

        
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      with
        Administrative Agent may request after receiving such written notice in order
        to
        protect and preserve the Liens, rights and remedies of Administrative Agent
        with
        respect to the Collateral: (i) change the legal name or organizational
        identification number of any Borrower, or (ii) change the jurisdiction of
        incorporation or formation of any Borrower or allow any Borrower to designate
        any jurisdiction as an additional jurisdiction of incorporation for such
        Borrower.

       

      (b)    Borrowers
        shall cause all equipment and other tangible personal property other than
        inventory to be maintained and preserved in the same condition, repair and
        in
        working order as when new, ordinary wear and tear excepted, and shall promptly
        make or cause to be made all repairs, replacements and other improvements
        in
        connection therewith that are necessary or desirable to such end.

       

      (c)    Each
        Borrower hereby authorizes Administrative Agent to file without the signature
        of
        such Borrower one or more UCC financing statements relating to all or any
        part
        of the Collateral, which financing statements may list Administrative Agent
        as
        the "secured party" and such Borrower as the "debtor" and which describe
        and
        indicate the collateral covered thereby as all or any part of the Collateral
        under the Financing Documents (including an indication of the collateral
        covered
        by any such financing statement as "all assets" of such Borrower now owned
        or
        hereafter acquired), in such jurisdictions as Administrative Agent from time
        to
        time determine are appropriate, and to file without the signature of such
        Borrower any continuations of or amendments to any such financing statements,
        in
        any such case in order for Administrative Agent to perfect, preserve or protect
        the Liens, rights and remedies of Administrative Agent with respect to the
        Collateral.

       

      (d)    Without
        limiting or contradicting any of the provisions of Sections 4.1,
        10.3(b) 10.3(c) or any other provisions of the Financing Documents
        requiring the delivery by Borrowers to Administrative Agent and/or the Lenders
        of any reports, certificates, information or schedules, Borrowers shall furnish
        to Administrative Agent from time to time any statements and schedules further
        identifying or describing the Collateral and any other information, reports
        or
        evidence concerning the Collateral as Lender may reasonably request from
        time to
        time.

       

      Section
        10.3 UCC
        Remedies.

       

      (a)    Upon
        the
        occurrence of and during the continuance of an Event of Default under this
        Agreement or the other Financing Documents, Administrative Agent, in addition
        to
        all other rights, options, and remedies granted to Administrative Agent under
        this Agreement or at law or in equity, may exercise, either directly or through
        one or more assignees or designees, all rights and remedies granted to it
        under
        all Financing Documents and under the UCC in effect in the applicable
        jurisdiction(s) and under any other applicable law; including, without
        limitation:

       

      (i)    The
        right
        to take possession of, send notices regarding, and collect directly the
        Collateral, with or without judicial process;

       

      
        
           

        

        
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      (ii)    The
        right
        to (by its own means or with judicial assistance) enter any of Borrowers'
        premises and take possession of the Collateral, or render it unusable, or
        to
        render it usable or saleable, or dispose of the Collateral on such premises
        in
        compliance with subsection (iii) below and to take possession of Borrowers'
        original books and records, to obtain access to Borrowers' data processing
        equipment, computer hardware and software relating to the Collateral and
        to use
        all of the foregoing and the information contained therein in any manner
        Administrative Agent deems appropriate, without any liability for rent, storage,
        utilities, or other sums, and Borrowers shall not resist or interfere with
        such
        action (if Borrowers' books and records are prepared or maintained by an
        accounting service, contractor or other third party agent, Borrowers hereby
        irrevocably authorize such service, contractor or other agent, upon notice
        by
        Administrative Agent to such Person that an Event of Default has occurred
        and is
        continuing, to deliver to Administrative Agent or its designees such books
        and
        records, and to follow Administrative Agent's instructions with respect to
        further services to be rendered);

       

      (iii)    The
        right
        to require Borrowers at Borrowers' expense to assemble all or any part of
        the
        Collateral and make it available to Administrative Agent at any place designated
        by Lender;

       

      (iv)    The
        right
        to notify postal authorities to change the address for delivery of Borrowers'
        mail to an address designated by Administrative Agent and to receive, open
        and
        dispose of all mail addressed to any Borrower; and

       

      (v)    The
        right
        to enforce Borrowers' rights against Account Debtors and other obligors,
        including, without limitation, the right to collect Accounts directly in
        Administrative Agent's own name (as agent for Lenders) and to charge the
        collection costs and expenses, including attorneys' fees, to
        Borrowers.

       

      (b)    Without
        restricting the generality of the foregoing and for the purposes aforesaid,
        each
        Borrower hereby appoints and constitutes Administrative Agent its lawful
        attorney-in-fact with full power of substitution in the Collateral to use
        unadvanced funds remaining under this Agreement or which may be reserved,
        escrowed or set aside for any purposes hereunder at any time, or to advance
        funds in excess of the face amount of the Notes, to pay, settle or compromise
        all existing bills and claims, which may be liens or security interests,
        or to
        avoid such bills and claims becoming liens against the Collateral; to execute
        all applications and certificates in the name of such Borrower and to prosecute
        and defend all actions or proceedings in connection with the Collateral;
        and to
        do any and every act which such Borrower might do in its own behalf; it being
        understood and agreed that this power of attorney shall be a power coupled
        with
        an interest and cannot be revoked.

       

      
        
           

        

        
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      ARTICLE
        11

      EVENTS
        OF DEFAULT

       

      Section
        11.1 Events
        of Default.

       

      For
        purposes of the Financing Documents, the occurrence of any of the following
        conditions and/or events, whether voluntary or involuntary, by operation
        of law
        or otherwise, shall constitute an "Event
        of Default":

       

      (a)    Borrowers
        shall fail to pay all amounts due under the Financing Documents on the
        Termination Date or any Borrower shall fail to pay within five (5) days of
        when due any principal, interest, premium or fee under any Financing Document
        or
        any other amount payable under any Financing Document;

       

      (b)    any
        Borrower shall fail to observe or perform any covenant contained in Section
        2.12,
        Section 4.4(b),
        Section
        4.4(d),
        Section 4.7,
        Section 4.10,
        Article 5,
        Article 6
        (subject
        to the provisions of Section
        6.7),
        Section
        8.3(c),
        clauses
        (iii), (iv) or (x) of Section
        8.4(b),
        Section
        8.4(c),
        Section
        8.4(e) or
        Section
        8.5
        or
        Borrowers shall fail to deliver any financial reports or statements when
        due
        under Section
        4.1
        and such
        default is not remedied or waived within five (5) Business Days after
        receipt by Borrower Representative of notice from Administrative Agent of
        such
        default, or Borrowers shall fail to permit any visit or inspection required
        by
Section
        4.6
        within
        two (2) Business Days after notice;

       

      (c)    any
        Event
        of Default under and as defined in any other Financing Document occurs or
        any
        Credit Party defaults in the performance of or compliance with any term
        contained in this Agreement or in any other Financing Document (other than
        occurrences described in other provisions of this Section
        11.1
        for
        which a different grace or cure period is specified or for which no grace
        or
        cure period is specified and thereby constitute immediate Events of
        Default) and such default is not remedied or waived within thirty
        (30) days after the earlier of (i) receipt by Borrower Representative
        of notice from Administrative Agent or Required Lenders of such default or
        (ii) actual knowledge of any Borrower or any other Credit Party of such
        default, provided, however, if such default cannot by its nature be cured
        within
        thirty (30) days, but such Credit Party commences cure within said thirty
        (30) day period and diligently pursues such cure thereafter, such Credit
        Party shall have an additional reasonable time to complete such cure up to
        a
        maximum of ninety (90) days or any Event of Default under and as defined in
        any other Financing Document occurs; 

       

      (d)    any
        representation, warranty, certification or statement made by any Credit Party
        or
        to Borrowers' knowledge any other Person in any Financing Document or in
        any
        certificate, financial statement or other document delivered pursuant to
        any
        Financing Document is incorrect in any respect (or in any material respect
        if
        such representation, warranty, certification or statement is not by its terms
        already qualified as to materiality) when made;

       

      
        
           

        

        
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      (e)    (i) failure
        of any Borrower to pay when due or within any applicable grace period any
        principal, interest or other amount on Debt (other than the Loans) or in
        respect
        of any Swap Contract, or the occurrence of any breach, default, condition
        or
        event with respect to any Debt (other than the Loans) or in respect of any
        Swap
        Contract, if the effect of such failure or occurrence is to cause, or to
        permit
        the holder or holders of any such Debt, or the counterparty under any such
        Swap
        Contract, to cause, Debt or other liabilities having an individual principal
        amount in excess of $100,000 or having an aggregate principal amount in excess
        of $100,000 to become or be declared due prior to its stated maturity; or
        (ii) the occurrence of any breach or default under any terms or provisions
        of any Subordinated Debt Document or under any agreement subordinating the
        Subordinated Debt to all or any portion of the Obligations or the occurrence
        of
        any event requiring the prepayment of any Subordinated Debt;

       

      (f)    any
        Credit Party shall commence a voluntary case or other proceeding seeking
        liquidation, reorganization or other relief with respect to itself or its
        debts
        under any bankruptcy, insolvency or other similar law now or hereafter in
        effect
        or seeking the appointment of a trustee, receiver, liquidator, custodian
        or
        other similar official of it or any substantial part of its property, or
        shall
        consent to any such relief or to the appointment of or taking possession
        by any
        such official in an involuntary case or other proceeding commenced against
        it,
        or shall make a general assignment for the benefit of creditors, or shall
        fail
        generally to pay its debts as they become due, or shall take any corporate
        action to authorize any of the foregoing;

       

      (g)    an
        involuntary case or other proceeding shall be commenced against any Credit
        Party
        seeking liquidation, reorganization or other relief with respect to it or
        its
        debts under any bankruptcy, insolvency or other similar law now or hereafter
        in
        effect or seeking the appointment of a trustee, receiver, liquidator, custodian
        or other similar official of it or any substantial part of its property,
        and
        such involuntary case or other proceeding shall remain undismissed and unstayed
        for a period of sixty (60) days; or an order for relief shall be entered
        against any Credit Party under the federal bankruptcy laws as now or hereafter
        in effect;

       

      (h)    (i) institution
        of any steps by any Person to terminate a Pension Plan if as a result of
        such
        termination any Borrower or any member of the Controlled Group could be required
        to make a contribution to such Pension Plan, or could incur a liability or
        obligation to such Pension Plan, in excess of $100,000, (ii) a contribution
        failure occurs with respect to any Pension Plan sufficient to give rise to
        a
        Lien under Section 302(f) of ERISA, or (iii) there shall occur any
        withdrawal or partial withdrawal from a Multiemployer
        Plan and the withdrawal liability (without unaccrued interest) to
        Multiemployer Plans as a result of such withdrawal (including any outstanding
        withdrawal liability that any Borrower or any member of the Controlled Group
        have incurred on the date of such withdrawal) exceeds $100,000;
        

       

      (i)    one
        or
        more judgments or orders for the payment of money (not paid or fully covered
        by
        insurance maintained in accordance with the requirements of this Agreement
        and
        as to which the relevant insurance company has acknowledged

       

      
        
           

        

        
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      coverage) aggregating
        in excess of $1,000,000 shall be rendered against any or all Borrowers and
        either (i) enforcement proceedings shall have been commenced by any
        creditor upon any such judgments or orders or (ii) there shall be any
        period of twenty (20) consecutive days during which a stay of enforcement
        of any such judgments or orders, by reason of a pending appeal, bond or
        otherwise, shall not be in effect;

       

      (j)    ARC
        shall
        cease to, directly or indirectly, own and control at least (i) 20% of the
        outstanding equity interests of Cypress JV, or (ii) Cypress JV ceases to
        own all of the membership interests in General Partner;

       

      (k)    any
        Lien
        created by any of the Security Documents shall at any time fail to constitute
        a
        valid and perfected Lien on all of the Collateral purported to be secured
        thereby, subject to no prior or equal Lien except Permitted Liens, or any
        Borrower shall so assert;

       

      (l)    any
        Borrower shall be prohibited or otherwise materially restrained from conducting
        the business theretofore conducted by it by virtue of any casualty, any labor
        strike, any determination, ruling, decision, decree or order of any court
        or
        regulatory authority of competent jurisdiction or any other event and such
        casualty, labor strike, determination, ruling, decision, decree, order or
        other
        event remains unstayed and in effect for any period of ten
        (10) days;

       

      (m)    the
        institution by any Governmental Authority of criminal proceedings against
        any
        Credit Party; or

       

      (n)    Borrowers
        shall fail to perform any of the post-closing obligations as required by
        Section
        7.3
        and
Schedule
        7.3;
        or

       

      (o)    ARC
        breaches any financial covenant contained in a Financing Document
        Guaranty.

       

      All
        cure
        periods provided for in this Section shall run concurrently with any cure
        period
        provided for in any applicable Financing Documents under which the default
        occurred.

       

      Section
        11.2 Acceleration.

       

      Upon
        the
        occurrence and during the continuance of an Event of Default, Administrative
        Agent may, and shall if requested by Required Lenders, by notice to Borrower
        Representative declare the Obligations to be, and the Obligations shall
        thereupon become, immediately due and payable without presentment, demand,
        protest or other notice of any kind, all of which are hereby waived by each
        Borrower and Borrowers will pay the same; provided, however, that in the
        case of
        any of the Events of Default specified in Section
        11.1(f) or
        11.1(g) above,
        without any notice to any Borrower or any other act by Administrative Agent
        or
        the Lenders, all of the Obligations shall become immediately due and payable
        without presentment, demand, protest or other notice of any kind, all of
        which
        are hereby waived by each Borrower and Borrowers will pay the same.

       

      
        
           

        

        
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      Section
        11.3 [Reserved.]

       

      Section
        11.4 Default
        Rate of Interest.

       

      At
        the
        election of Administrative Agent or Required Lenders, after the occurrence
        of an
        Event of Default and for so long as it continues, the Loans and other
        Obligations shall bear interest at rates that are five percent (5.0%) per
        annum in excess of the rates otherwise payable under this Agreement (each,
        the
        "Default
        Rate").
        

       

      Section
        11.5 Setoff
        Rights.

       

      During
        the continuance of any Event of Default, each Lender is hereby authorized
        by
        each Borrower at any time or from time to time, with reasonably prompt
        subsequent notice to such Borrower (any prior or contemporaneous notice being
        hereby expressly waived) to set off and to appropriate and to apply any and
        all (a) balances held by such Lender or any of such Lender's Affiliates at
        any of its offices for the account of such Borrower (regardless of whether
        such
        balances are then due to such Borrower), and (b) other property at any time
        held or owing by such Lender to or for the credit or for the account of such
        Borrower, against and on account of any of the Obligations; except that no
        Lender shall exercise any such right without the prior written consent of
        Administrative Agent. Any Lender exercising a right to set off shall purchase
        for cash (and the other Lenders shall sell) interests in each of such other
        Lender's Pro Rata Share of the Obligations as would be necessary to cause
        all
        Lenders to share the amount so set off with each other Lender in accordance
        with
        their respective Pro Rata Share of the Obligations. Each Borrower agrees,
        to the
        fullest extent permitted by law, that any Lender and any of such Lender's
        Affiliates may exercise its right to set off with respect to the Obligations
        as
        provided in this Section
        11.5.

       

      Section
        11.6 Application
        of Proceeds.

       

      Notwithstanding
        anything to the contrary contained in this Agreement, upon the occurrence
        and
        during the continuance of an Event of Default, (a) each Borrower
        irrevocably waives the right to direct the application of any and all payments
        at any time or times thereafter received by Administrative Agent from or
        on
        behalf of such Borrower or any Guarantor of all or any part of the Obligations,
        and, as between Borrowers on the one hand and Administrative Agent and Lenders
        on the other, Administrative Agent shall have the continuing and exclusive
        right
        to apply and to reapply any and all payments received against the Obligations
        in
        such manner as Administrative Agent may deem advisable notwithstanding any
        previous application by Administrative Agent and (b) the proceeds of any
        sale of, or other realization upon, all or any part of the Collateral shall
        be
        applied: first,
        to all
        reasonable fees, costs, indemnities, liabilities, obligations and expenses
        incurred by or owing to Administrative Agent with respect to this Agreement,
        the
        other Financing Documents or the Collateral; second,
        to all
        reasonable fees, costs, indemnities, liabilities, obligations and expenses
        incurred by or owing to any Lender with respect to this Agreement, the other
        Financing Documents or the Collateral; third,
        to
        accrued and unpaid interest on the Obligations (including any interest which,
        but for the provisions of the Bankruptcy Code,

       

      
        
           

        

        
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      would
        have accrued on such amounts); fourth,
        to the
        principal amount of the Obligations outstanding (excluding any Obligations
        in
        respect of any Swap Contract); fifth,
        to the
        Obligations owing to any Eligible Swap Counterparty in respect of any Swap
        Contracts permitted by the terms of this Agreement; and fifth,
        to any
        other indebtedness or obligations of Borrowers owing to Administrative Agent
        or
        any Lender under the Financing Documents. Any balance remaining shall be
        delivered to Borrowers or to whoever may be lawfully entitled to receive
        such
        balance (including any holder of the indebtedness evidenced by the Affiliated
        Financing Documents) or as a court of competent jurisdiction may direct. In
        carrying out the foregoing, (y) amounts received shall be applied in the
        numerical order provided until exhausted prior to the application to the
        next
        succeeding category, and (z) each of the Persons entitled to receive a
        payment in any particular category shall receive an amount equal to its pro
        rata
        share of amounts available to be applied pursuant thereto for such category.
        

       

      Section
        11.7 Waivers. 

       

      (a)    Except
        as
        otherwise provided for in this Agreement and to the fullest extent permitted
        by
        applicable law, each Borrower waives: (i) presentment, demand and protest,
        and notice of presentment, dishonor, intent to accelerate, acceleration,
        protest, default, nonpayment, maturity, release, compromise, settlement,
        extension or renewal of any or all Financing Documents, the Notes or any
        other
        notes, commercial paper, accounts, contracts, documents, instruments, chattel
        paper and Guarantees at any time held by Lenders on which any Borrower may
        in
        any way be liable, and hereby ratifies and confirms whatever Lenders may
        do in
        this regard; (ii) all rights to notice and a hearing prior to
        Administrative Agent's or any Lender's taking possession or control of, or
        to
        Administrative Agent's or any Lender's replevy, attachment or levy upon,
        any
        Collateral or any bond or security which might be required by any court prior
        to
        allowing Administrative Agent or any Lender to exercise any of its remedies;
        and
        (iii) the benefit of all valuation, appraisal and exemption Laws. Each
        Borrower acknowledges that it has been advised by counsel of its choices
        and
        decisions with respect to this Agreement, the other Financing Documents and
        the
        transactions evidenced hereby and thereby.

       

      (b)    Each
        Borrower for itself and all endorsers, guarantors and sureties and their
        heirs,
        legal representatives, successors and assigns, (i) agrees that its
        liability shall not be in any manner affected by any indulgence, extension
        of
        time, renewal, waiver, or modification granted or consented to by Lender;
        (ii) consents to any indulgences and all extensions of time, renewals,
        waivers, or modifications that may be granted by Administrative Agent or
        any
        Lender with respect to the payment or other provisions of the Financing
        Documents, and to any substitution, exchange or release of the Collateral,
        or
        any part thereof, with or without substitution, and agrees to the addition
        or
        release of any Borrower, endorsers, guarantors, or sureties, or whether
        primarily or secondarily liable, without notice to any other Borrower and
        without affecting its liability hereunder; (iii) agrees that its liability
        shall be unconditional and without regard to the liability of any other
        Borrower, Administrative Agent or any Lender for any tax on the indebtedness;
        and (iv) to
        the
        fullest extent permitted by law,
        expressly waives the benefit of any statute or rule of law

       

      
        
           

        

        
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      or
        equity
        now provided, or which may hereafter be provided, which would produce a result
        contrary to or in conflict with the foregoing.

       

      (c)    To
        the
        extent that Administrative Agent or any Lender may have acquiesced in any
        noncompliance with any requirements or conditions precedent to the closing
        of
        the Loans or to any subsequent disbursement of Loan proceeds, such acquiescence
        shall not be deemed to constitute a waiver by Administrative Agent or any
        Lender
        of such requirements with respect to any future disbursements of Loan proceeds
        and Administrative Agent may at any time after such acquiescence require
        Borrowers to comply with all such requirements. Any forbearance by
        Administrative Agent or Lender in exercising any right or remedy under any
        of
        the Financing Documents, or otherwise afforded by applicable law, including
        any
        failure to accelerate the maturity date of the Loans, shall not be a waiver
        of
        or preclude the exercise of any right or remedy nor shall it serve as a novation
        of the Notes or as a reinstatement of the Loans or a waiver of such right
        of
        acceleration or the right to insist upon strict compliance of the terms of
        the
        Financing Documents. Administrative Agent's or any Lender's acceptance of
        payment of any sum secured by any of the Financing Documents after the due
        date
        of such payment shall not be a waiver of Administrative Agent's and such
        Lender's right to either require prompt payment when due of all other sums
        so
        secured or to declare a default for failure to make prompt payment. The
        procurement of insurance or the payment of taxes or other liens or charges
        by
        Administrative Agent as the result of an Event of Default shall not be a
        waiver
        of Administrative Agent's right to accelerate the maturity of the Loans,
        nor
        shall Administrative Agent's receipt of any condemnation awards, insurance
        proceeds, or damages under this Agreement operate to cure or waive any Credit
        Party's default in payment of sums secured by any of the Financing
        Documents.

       

      (d)    Without
        limiting the generality of anything contained in this Agreement or the other
        Financing Documents, each Borrower agrees that if an Event of Default is
        continuing (i) Administrative Agent and Lenders are not subject to any "one
        action" or "election of remedies" law or rule, and (ii) all Liens and other
        rights, remedies or privileges provided to Administrative Agent or Lenders
        shall
        remain in full force and effect until Administrative Agent or Lenders have
        exhausted all remedies against the Collateral and any other properties owned
        by
        Borrowers and the Financing Documents and other security instruments or
        agreements securing the Loans have been foreclosed, sold and/or otherwise
        realized upon in satisfaction of Borrowers' obligations under the Financing
        Documents.

       

      (e)    Nothing
        contained herein or in any other Financing Document shall be construed as
        requiring Administrative Agent or any Lender to resort to any part of the
        Collateral for the satisfaction of any of Borrowers' obligations under the
        Financing Documents in preference or priority to any other Collateral, and
        Administrative Agent may seek satisfaction out of all of the Collateral or
        any
        part thereof, in its absolute discretion in respect of Borrowers' obligations
        under the Financing Documents. In addition, Administrative Agent shall have
        the
        right from time to time to partially foreclose upon any Collateral in any
        manner
        and for any amounts secured by the Financing Documents then due and payable
        as
        determined by Administrative Agent in its sole discretion, including, without
        limitation, the following circumstances: (i) in the event any Borrower
        defaults beyond any applicable grace period in the payment of one or more
        scheduled payments of principal

       

      
        
           

        

        
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      and/or
        interest, Administrative Agent may foreclose upon all or any part of the
        Collateral to recover such delinquent payments, or (ii) in the event
        Administrative Agent elects to accelerate less than the entire outstanding
        principal balance of the Loans, Administrative Agent may foreclose all or
        any
        part of the Collateral to recover so much of the principal balance of the
        Loans
        as Lender may accelerate and such other sums secured by one or more of the
        Financing Documents as Administrative Agent may elect. Notwithstanding one
        or
        more partial foreclosures, any unforeclosed Collateral shall remain subject
        to
        the Financing Documents to secure payment of sums secured by the Financing
        Documents and not previously recovered.

       

      (f)    To
        the
        fullest extent permitted by law, each Borrower, for itself and its successors
        and assigns, waives in the event of foreclosure of any or all of the Collateral
        any equitable right otherwise available to any Credit Party which would require
        the separate sale of the any of the Collateral or require Administrative
        Agent
        or Lenders to exhaust their remedies against any part of the Collateral before
        proceeding against any other part of the Collateral; and further in the event
        of
        such foreclosure each Borrower does hereby expressly consent to and authorize,
        at the option of Lender, the foreclosure and sale either separately or together
        of each part of the Collateral.

       

      Section
        11.8 Injunctive
        Relief.

       

      The
        parties acknowledge and agree that, for certain Events of Default,
        Administrative Agent and Lenders may have no adequate remedy in money damages
        and, accordingly, shall be entitled to an injunction (including without
        limitation, a temporary restraining order, preliminary injunction, writ of
        attachment, or order compelling an audit) against such Events of Default.
        However, no specification in this Agreement of a specific legal or equitable
        remedy shall be construed as a waiver or prohibition against any other legal
        or
        equitable remedies in the event of a breach or threatened breach of any
        provision of this Agreement.
        Each
        Credit Party waives, to
        the
        fullest extent permitted by law,
        the
        requirement of the posting of any bond in connection with such injunctive
        relief. By joining in the Financing Documents as a Credit Party, each Credit
        Party specifically joins in this Section as if this Section were a part of
        each
        Financing Documents executed by the Credit Party. 

       

      Section
        11.9 Marshalling.

       

      Administrative
        Agent and Lenders shall have no obligation to marshal any assets in favor
        of any
        Credit Party, or against or in payment of any of the other Obligations or
        any
        other obligation owed to Administrative Agent or Lenders by any Credit
        Party.

       

      
        
           

        

        
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      ARTICLE
        12

      EXPENSES
        AND INDEMNITY

       

      Section
        12.1 Expenses.

       

      Each
        Borrower hereby agrees to promptly pay (a) all reasonable costs and
        expenses of Administrative Agent (including without limitation the reasonable
        fees, costs and expenses of counsel to, and independent appraisers and
        consultants retained by Administrative Agent) in connection with the
        examination, review, due diligence investigation, documentation, negotiation
        and
        closing of the transactions contemplated by the Financing Documents, in
        connection with the performance by Administrative Agent of its rights and
        remedies under the Financing Documents and in connection with the continued
        administration of the Financing Documents, including (i) any amendments,
        modifications, consents and waivers to and/or under any and all Financing
        Documents and (ii) any periodic public record searches conducted by or at
        the request of Administrative Agent (including, without limitation, title
        investigations, UCC searches, fixture filing searches, judgment, pending
        litigation and tax lien searches and searches of applicable corporate, limited
        liability, partnership and related records concerning the continued existence,
        organization and good standing of certain Persons), (b) without limitation
        of the preceding clause (a), all costs and expenses of Administrative Agent
        (including recordation and transfer taxes) in connection with the creation,
        perfection and maintenance of Liens pursuant to the Financing Documents,
        (c) without limitation of the preceding clause (a), all costs and expenses
        of Administrative Agent in connection with (i) protecting, storing,
        insuring, handling, maintaining or selling any Collateral; (ii) any
        litigation, dispute, suit or proceeding relating to any Financing Document;
        and
        (iii) any workout, collection, bankruptcy, insolvency and other enforcement
        proceedings under any and all of the Financing Documents, and (d) all costs
        and expenses incurred by Lenders in connection with any litigation, dispute,
        suit or proceeding relating to any Financing Document and in connection with
        any
        workout, collection, bankruptcy, insolvency and other enforcement proceedings
        under any and all Financing Documents, provided, however, that to the extent
        that the costs and expenses referred to in this clause (d) consist of fees,
        costs and expenses of counsel, Borrowers shall be obligated to pay such fees,
        costs and expenses for counsel to Administrative Agent and for only one counsel
        acting for all Lenders (other than Administrative Agent). 

       

      Section
        12.2 Indemnity.

       

      Each
        Borrower hereby agrees to indemnify, pay and hold harmless Administrative
        Agent
        and Lenders and the officers, directors, employees, trustees, agents, investment
        advisors, collateral managers, servicers, and counsel of Administrative Agent
        and Lenders (collectively called the "Indemnitees") from
        and against any and all liabilities, obligations, losses, damages, penalties,
        actions, judgments, suits, claims, costs, expenses and disbursements of any
        kind
        or nature whatsoever (including the fees and disbursements of counsel for
        such
        Indemnitee) in connection with any investigative, response, remedial,
        administrative or judicial matter or proceeding, whether or not such Indemnitee
        shall be designated a party thereto and including any such proceeding initiated
        by or on behalf of a Credit Party, and the reasonable expenses of investigation
        by engineers, environmental

       

      
        
           

        

        
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      consultants
        and similar technical personnel and any commission, fee or compensation claimed
        by any broker (other than any broker retained by Administrative Agent or
        Lenders) asserting any right to payment for the transactions contemplated
        hereby, which may be imposed on, incurred by or asserted against such Indemnitee
        as a result of or in connection with the transactions contemplated hereby
        or by
        the other Financing Documents (including (a)(i) as a direct or indirect
        result of the presence on or under, or escape, seepage, leakage, spillage,
        discharge, emission or release from, any property now or previously owned,
        leased or operated by any Borrower, or any other Person of any Hazardous
        Materials or any Hazardous Materials Contamination, (ii) arising out of or
        relating to the offsite disposal of any materials generated or present on
        any
        such property or (iii) arising out of or resulting from the environmental
        condition of any such property or the applicability of any governmental
        requirements relating to Hazardous Materials, whether or not occasioned wholly
        or in part by any condition, accident or event caused by any act or omission
        of
        any Borrower, (b) proposed and actual extensions of credit under this
        Agreement) and the use or intended use of the proceeds of the Loans and
        (c) any brokerage claims in connection with the sale or any leasing of any
        Project, except that no Borrower shall have any obligation hereunder to an
        Indemnitee with respect to any liability resulting from the gross negligence
        or
        willful misconduct of such Indemnitee, as determined by a final non-appealable
        judgment of a court of competent jurisdiction or for any liability with respect
        to clauses (a) or (c) first occurring after transfer of title of a
        Project following a foreclosure or pursuant to a conveyance in lieu of
        foreclosure provided that the applicable Borrower is no longer in possession
        of
        the applicable Project. To the extent that the undertaking set forth in the
        immediately preceding sentence may be unenforceable, each Borrower shall
        contribute the maximum portion which it is permitted to pay and satisfy under
        applicable law to the payment and satisfaction of all such indemnified
        liabilities incurred by the Indemnitees or any of them.

       

      ARTICLE
        13

      ADMINISTRATIVE
        AGENT

       

      Section
        13.1 Appointment
        and Authorization.

       

      Each
        Lender hereby irrevocably appoints and authorizes Administrative Agent to
        enter
        into each of the Financing Documents to which it is a party (other than this
        Agreement) on its behalf and to take such actions as Administrative Agent
        on its behalf and to exercise such powers under the Financing Documents as
        are
        delegated to Administrative Agent by the terms thereof, together with all
        such
        powers as are reasonably incidental thereto. Subject to the terms of
Section
        13.16
        and to
        the terms of the other Financing Documents, Administrative Agent is authorized
        and empowered to amend, modify, or waive any provisions of this Agreement
        or the
        other Financing Documents on behalf of Lenders. The provisions of this Article
        13 are solely for the benefit of Administrative Agent and Lenders and neither
        any Borrower nor any other Credit Party shall have any rights as a third
        party
        beneficiary of any of the provisions hereof. In performing its functions
        and
        duties under this Agreement, Administrative Agent shall act solely as agent
        of
        Lenders and does not assume and shall not be deemed to have assumed any
        obligation toward or relationship of agency or trust with or for any Borrower
        or
        any other Credit Party. Administrative Agent

       

      
        
           

        

        
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      may
        perform any of its duties hereunder, or under the Financing Documents, by
        or
        through its agents or employees.

       

      Section
        13.2 Administrative
        Agent and Affiliates.

       

      Administrative
        Agent
        shall
        have the same rights and powers under the Financing Documents as any other
        Lender and may exercise or refrain from exercising the same as though it
        were
        not Administrative Agent, and Administrative Agent and its Affiliates may
        lend
        money to, invest in and generally engage in any kind of business with each
        Credit Party or Affiliate of any Credit Party as if it were not Administrative
        Agent hereunder.

       

      Section
        13.3 Action
        by Administrative Agent.

       

      The
        duties of Administrative Agent shall be mechanical and administrative in
        nature.
        Administrative Agent shall not have by reason of this Agreement a fiduciary
        relationship in respect of any Lender. Nothing in this Agreement or any of
        the
        Financing Documents is intended to or shall be construed to impose upon
        Administrative Agent any obligations in respect of this Agreement or any
        of the
        Financing Documents except as expressly set forth herein or
        therein.

       

      Section
        13.4 Consultation
        with Experts.

       

      Administrative
        Agent may consult with legal counsel, independent public accountants and
        other
        experts selected by it and shall not be liable for any action taken or omitted
        to be taken by it in good faith in accordance with the advice of such counsel,
        accountants or experts.

       

      Section
        13.5 Liability
        of Administrative Agent.

       

      Neither
        Administrative Agent nor any of its directors, officers, agents or employees
        shall be liable to any Lender for any action taken or not taken by it in
        connection with the Financing Documents, except that Administrative Agent
        shall
        be liable with respect to its specific duties set forth hereunder but only
        to
        the extent of its own gross negligence or willful misconduct in the discharge
        thereof as determined by a final non-appealable judgment of a court of competent
        jurisdiction. Neither Administrative Agent nor any of its directors, officers,
        agents or employees shall be responsible for or have any duty to ascertain,
        inquire into or verify (a) any statement, warranty or representation made
        in connection with any Financing Document or any borrowing hereunder;
        (b) the performance or observance of any of the covenants or agreements
        specified in any Financing Document; (c) the satisfaction of any condition
        specified in any Financing Document; (d) the validity, effectiveness,
        sufficiency or genuineness of any Financing Document, any Lien purported
        to be
        created or perfected thereby or any other instrument or writing furnished
        in
        connection therewith; (e) the existence or non-existence of any Default or
        Event of Default; or (f) the financial condition of any Credit Party.
        Administrative Agent shall not incur any liability by acting in reliance
        upon
        any notice, consent, certificate, statement, or other writing (which may
        be a
        bank wire, telex, facsimile or electronic transmission or similar
        writing) believed by it to be

       

      
        
           

        

        
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      genuine
        or to be signed by the proper party or parties. Administrative Agent shall
        not
        be liable for any apportionment or distribution of payments made by it in
        good
        faith and if any such apportionment or distribution is subsequently determined
        to have been made in error the sole recourse of any Lender to whom payment
        was
        due but not made, shall be to recover from other Lenders any payment in excess
        of the amount to which they are determined to be entitled (and such other
        Lenders hereby agree to return to such Lender any such erroneous payments
        received by them).

       

      Section
        13.6 Indemnification.

       

      Each
        Lender shall, in accordance with its Pro Rata Share, indemnify Administrative
        Agent (to the extent not reimbursed by Borrowers) upon demand against any
        cost, expense (including counsel fees and disbursements), claim, demand,
        action,
        loss or liability (except such as result from Administrative Agent's gross
        negligence or willful misconduct as determined by a final non-appealable
        judgment of a court of competent jurisdiction) that Administrative Agent
        may suffer or incur in connection with the Financing Documents or any action
        taken or omitted by Administrative Agent hereunder or thereunder. If any
        indemnity furnished to Administrative Agent for any purpose shall, in the
        opinion of Administrative Agent, be insufficient or become impaired,
        Administrative Agent may call for additional indemnity and cease, or not
        commence, to do the acts indemnified against even if so directed by Required
        Lenders until such additional indemnity is furnished.

       

      Section
        13.7 Right
        to Request and Act on Instructions.

       

      Administrative
        Agent may at any time request instructions from Lenders with respect to any
        actions or approvals which by the terms of this Agreement or of any of the
        Financing Documents Administrative Agent is permitted or desires to take
        or to
        grant, and if such instructions are promptly requested, Administrative Agent
        shall be absolutely entitled to refrain from taking any action or to withhold
        any approval and shall not be under any liability whatsoever to any Person
        for
        refraining from any action or withholding any approval under any of the
        Financing Documents until it shall have received such instructions from Required
        Lenders or all or such other portion of the Lenders as shall be prescribed
        by
        this Agreement. Without limiting the foregoing, no Lender shall have any
        right
        of action whatsoever against Administrative Agent as a result of Administrative
        Agent acting or refraining from acting under this Agreement or any of the
        other
        Financing Documents in accordance with the instructions of Required Lenders
        (or
        all or such other portion of the Lenders as shall be prescribed by this
        Agreement) and, notwithstanding the instructions of Required Lenders (or
        such other applicable portion of the Lenders), Administrative Agent shall
        have
        no obligation to take any action if it believes, in good faith, that such
        action
        would violate applicable Law or exposes Administrative Agent to any liability
        for which it has not received satisfactory indemnification in accordance
        with
        the provisions of Section
        13.6.

       

      Section
        13.8 Credit
        Decision.

       

      Each
        Lender acknowledges that it has, independently and without reliance upon
        Administrative Agent or any other Lender, and based on such documents
        and

       

      
        
           

        

        
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      information
        as it has deemed appropriate, made its own credit analysis and decision to
        enter
        into this Agreement. Each Lender also acknowledges that it will, independently
        and without reliance upon Administrative Agent or any other Lender, and based
        on
        such documents and information as it shall deem appropriate at the time,
        continue to make its own credit decisions in taking or not taking any action
        under the Financing Documents.

       

      Section
        13.9 Collateral
        Matters. 

       

      Lenders
        irrevocably authorize Administrative Agent, at its option and in its discretion,
        to (a) release any Lien granted to or held by Administrative Agent under
        any Security Document (i) upon payment
        in full of all Obligations or (ii) constituting property sold or disposed
        of as part of or in connection with any disposition permitted under any
        Financing Document (it being understood and agreed that Administrative Agent
        may
        conclusively rely without further inquiry on a certificate of a Responsible
        Officer as to the sale or other disposition of property being made in full
        compliance with the provisions of the Financing Documents); and (b) release
        or subordinate any Lien granted to or held by Administrative Agent under
        any
        Security Document constituting property described in Section
        5.7(b) (it
        being
        understood and agreed that Administrative Agent may conclusively rely without
        further inquiry on a certificate of a Responsible Officer as to the
        identification of any property described in Section 5.7(b)).
        Upon
        request by Administrative Agent at any time, Lenders will confirm Administrative
        Agent's authority
        to release and/or subordinate particular types or items of Collateral pursuant
        to this Section
        13.9.

       

      Section
        13.10 Agency
        for Perfection.

       

      Administrative
        Agent and each Lender hereby appoint each other Lender as agent for the purpose
        of perfecting Administrative Agent's security interest in assets which, in
        accordance with the Uniform Commercial Code in any applicable jurisdiction,
        can
        be perfected by possession or control. Should any Lender (other than
        Administrative Agent) obtain possession or control of any such assets, such
        Lender shall notify Administrative Agent thereof, and, promptly upon
        Administrative Agent's request therefor, shall deliver such assets to
        Administrative Agent or in accordance with Administrative Agent's instructions
        or transfer control to Administrative Agent in accordance with Administrative
        Agent's instructions. Each Lender agrees that it will not have any right
        individually to enforce or seek to enforce any Security Document or to realize
        upon any Collateral for the Loans unless instructed to do so by Administrative
        Agent (or consented to by Administrative Agent, as provided in Section
        11.5),
        it
        being understood and agreed that such rights and remedies may be exercised
        only
        by Administrative Agent.

       

      Section
        13.11 Notice
        of Default.

       

      Administrative
        Agent shall not be deemed to have knowledge or notice of the occurrence of
        any
        Default or Event of Default except with respect to defaults in the payment
        of
        principal, interest and fees required to be paid to Administrative Agent
        for the
        account of Lenders, unless Administrative Agent shall have received written
        notice from a Lender or a

       

      
        
           

        

        
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      Borrower
        referring to this Agreement, describing such Default or Event of Default
        and
        stating that such notice is a "notice of default". Administrative Agent will
        notify each Lender of its receipt of any such notice. Administrative Agent
        shall
        take such action with respect to such Default or Event of Default as may
        be
        requested by Required Lenders (or all or such other portion of the Lenders
        as
        shall be prescribed by this Agreement) in accordance with the terms hereof.
        Unless and until Administrative Agent has received any such request,
        Administrative Agent may (but shall not be obligated to) take such action,
        or refrain from taking such action, with respect to such Default or Event
        of
        Default as it shall deem advisable or in the best interests of
        Lenders.

       

      Section
        13.12 Successor
        Administrative Agent.

       

      Administrative
        Agent may at any time give notice of its resignation to the Lenders and
        Borrowers. Upon receipt of any such notice of resignation, Required Lenders
        shall have the right, in consultation with Borrowers, to appoint a successor
        Administrative Agent, and provided that, if no Default or Event of Default
        has
        occurred and is outstanding, Borrowers shall have the right to consent to
        any
        such successor Administrative Agent, which consent shall not be unreasonably
        withheld, conditioned or delayed. Upon the acceptance of a successor's
        appointment as Administrative Agent hereunder and notice of such acceptance
        to
        the retiring Administrative Agent, such successor shall succeed to and become
        vested with all of the rights, powers, privileges and duties of the retiring
        (or
        retired) Administrative Agent, the retiring Administrative Agent's
        resignation shall become immediately effective and the retiring Administrative
        Agent shall be discharged from all of its duties and obligations hereunder
        and
        under the other Financing Documents (if such resignation was not already
        effective and such duties and obligations not already discharged, as provided
        below in this paragraph). The fees payable by Borrowers to a successor
        Administrative Agent under this Agreement shall be the same as those payable
        to
        its predecessor unless otherwise agreed among Borrowers and such successor.
        If
        no such successor shall have been so appointed by Required Lenders and shall
        have accepted such appointment within thirty (30) days after the retiring
        Administrative Agent gives notice of its resignation, then the retiring
        Administrative Agent may on behalf of the Lenders (but without any
        obligation) appoint a successor Administrative Agent, and provided that, if
        no Default or Event of Default has occurred and is outstanding, Borrowers
        shall
        have the right to consent to any such successor Administrative Agent, which
        consent shall not be unreasonably, withheld, conditioned or delayed. From
        and
        following the expiration of such thirty (30) day period, Administrative
        Agent shall have the exclusive right, upon one (1) Business Days' notice to
        Borrower Representative and the Lenders, to make its resignation effective
        immediately. From and following the effectiveness of such notice, (a) the
        retiring Administrative Agent shall be discharged from its duties and
        obligations hereunder and under the other Financing Documents, and (b) all
        payments, communications and determinations provided to be made by, to or
        through Administrative Agent shall instead be made by or to each Lender
        directly, until such time as Required Lenders appoint a successor Administrative
        Agent as provided for above in this paragraph. The provisions of this Agreement
        shall continue in effect for the benefit of any retiring Administrative Agent
        and its sub-agents after the effectiveness of its resignation hereunder and
        under the other

       

      
        
           

        

        
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      Financing
        Documents in respect of any actions taken or omitted to be taken by any of
        them
        while the retiring Administrative Agent was acting or was continuing to act
        as
        Administrative Agent.

       

      Section
        13.13 Payment
        and Sharing of Payment.

       

      (a)    Term
        Loan Payments.
        Payments of principal, interest and fees in respect of the Term Loans will
        be
        settled on the date of receipt if received by Administrative Agent on the
        last
        Business Day of a month or on the Business Day immediately following the
        date of
        receipt if received on any day other than the last Business Day of a
        month.

       

      (b)    Return
        of Payments.

       

      (i)    If
        Administrative Agent pays an amount to a Lender under this Agreement in the
        belief or expectation that a related payment has been or will be received
        by
        Administrative Agent from a Borrower and such related payment is not received
        by
        Administrative Agent, then Administrative Agent will be entitled to recover
        such
        amount from such Lender on demand without setoff, counterclaim or deduction
        of
        any kind, together with interest accruing on a daily basis at the Federal
        Funds
        Rate.

       

      (ii)    If
        Administrative Agent determines at any time that any amount received by
        Administrative Agent under this Agreement must be returned to any Borrower
        or
        paid to any other Person pursuant to any insolvency law or otherwise, then,
        notwithstanding any other term or condition of this Agreement or any other
        Financing Document, Administrative Agent will not be required to distribute
        any
        portion thereof to any Lender. In addition, each Lender will repay to
        Administrative Agent on demand any portion of such amount that Administrative
        Agent has distributed to such Lender, together with interest at such rate,
        if
        any, as Administrative Agent is required to pay to any Borrower or such other
        Person, without setoff, counterclaim or deduction of any kind.

       

      (c)    Defaulted
        Lenders.
        The
        failure of any Defaulted Lender to make any payment required by it hereunder
        shall not relieve any other Lender of its obligations to make payment, but
        neither any other Lender nor Administrative Agent shall be responsible for
        the
        failure of any Defaulted Lender to make any payment required hereunder.
        Notwithstanding anything set forth herein to the contrary, a Defaulted Lender
        shall not have any voting or consent rights under or with respect to any
        Financing Document or constitute a "Lender" (or be included in the calculation
        of "Required Lenders" hereunder) for any voting or consent rights under or
        with respect to any Financing Document. 

       

      (d)    Sharing
        of Payments.
        If any
        Lender shall obtain any payment or other recovery (whether voluntary,
        involuntary, by application of setoff or otherwise) on account of any Loan
        (other than pursuant to the terms of Section
        2.9) in
        excess of its pro rata share of payments entitled pursuant to the other
        provisions of this Section
        13.13,
        such
        Lender shall purchase from the other Lenders such participations in extensions
        of credit made by such other Lenders (without recourse, representation or
        warranty) as shall be necessary to cause such purchasing Lender to share
        the excess payment or other recovery ratably with each of

       

      
        
           

        

        
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      them;
        provided, however, that if all or any portion of the excess payment or other
        recovery is thereafter recovered from such purchasing Lender, the purchase
        shall
        be rescinded and each Lender which has sold a participation to the purchasing
        Lender shall repay to the purchasing Lender the purchase price to the ratable
        extent of such recovery, without interest. Each Borrower agrees that any
        Lender
        so purchasing a participation from another Lender pursuant to this clause
        (d) may, to the fullest extent permitted by law, exercise all its rights of
        payment (including pursuant to Section
        11.5) with
        respect to such participation as fully as if such Lender were the direct
        creditor of Borrowers in the amount of such participation. If under any
        applicable bankruptcy, insolvency or other similar law, any Lender receives
        a
        secured claim in lieu of a setoff to which this clause (d) applies, such
        Lender shall, to the extent practicable, exercise its rights in respect of
        such
        secured claim in a manner consistent with the rights of the Lenders entitled
        under this clause (d) to share in the benefits of any recovery on such
        secured claim.

       

      Section
        13.14 Right
        to Perform, Preserve and Protect.

       

      Upon
        and
        during the continuance of any Default or Event of Default, Administrative
        Agent
        itself may, but shall not be obligated to, cause any obligation of any Credit
        Party hereunder or under any other Financing Document to be performed at
        Borrowers' expense. Upon and during the continuance of any Default or Event
        of
        Default, Administrative Agent is further authorized by Borrowers and the
        Lenders
        to make expenditures from time to time which Administrative Agent, in its
        reasonable business judgment, deems necessary or desirable to (a) preserve
        or protect the business conducted by Borrowers, the Collateral, or any portion
        thereof, and/or (b) enhance the likelihood of, or maximize the amount of,
        repayment of the Loans and other Obligations. Each Borrower hereby agrees
        to
        reimburse Administrative Agent on demand for any and all costs (which costs
        shall be reasonable), liabilities and obligations incurred by Administrative
        Agent pursuant to this Section
        13.14.
        Each
        Lender hereby agrees to indemnify Administrative Agent upon demand for any
        and
        all costs, liabilities and obligations incurred by Administrative Agent pursuant
        to this Section
        13.14,
        in
        accordance with the provisions of Section
        13.6.
        

       

      Section
        13.15 Additional
        Titled Agents.

       

      Except
        for rights and powers, if any, expressly reserved under this Agreement to
        any
        bookrunner, arranger or to any titled agent named on the cover page of this
        Agreement, other than Administrative Agent (collectively, the "Additional
        Titled Agents"),
        and
        except for obligations, liabilities, duties and responsibilities, if any,
        expressly assumed under this Agreement by any Additional Titled Agent, no
        Additional Titled Agent, in such capacity, has any rights, powers, liabilities,
        duties or responsibilities hereunder or under any of the other Financing
        Documents. Without limiting the foregoing, no Additional Titled Agent shall
        have
        nor be deemed to have a fiduciary relationship with any Lender. At any time
        that
        any Lender serving as an Additional Titled Agent shall have transferred to
        any
        other Person (other than any Affiliates) all of its interests in the Loans,
        such Lender shall be deemed to have concurrently resigned as such Additional
        Titled Agent.

       

      
        
           

        

        
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      Section
        13.16 Amendments
        and Waivers.

       

      In
        addition to the required signatures under Section
        14.5,
        no
        provision of this Agreement or any other Financing Document may be amended,
        waived or otherwise modified unless such amendment, waiver or other modification
        is in writing and is signed or otherwise approved by the following
        Persons:

       

      (a)    if
        any
        amendment, waiver or other modification would increase a Lender's funding
        obligations in respect of any Term Loan, by such Lender; and/or

       

      (b)    if
        the
        rights or duties of Administrative Agent are affected thereby, by Administrative
        Agent;

       

      Provided
        that,
        in
        each of (a) and (b) above, no such amendment, waiver or other
        modification shall, unless signed by all the Lenders directly affected thereby,
        (i) reduce the principal of, rate of interest on or any fees with respect
        to any Loan or forgive any principal, interest (other than default
        interest) or fees (other than late charges) with respect to any Loan;
        (ii) postpone the date fixed for, or waive, any payment (other than a
        payment pursuant to Section 2.1(c) or
        Section
        6.7) of
        principal of any Loan, or of interest on any Loan (other than default
        interest) or any fees provided for hereunder (other than late
        charges) or for any termination of any commitment; (iii) change the
        definition of the term Required Lenders or the percentage of Lenders which
        shall
        be required for Lenders to take any action hereunder; (iv) release all or
        substantially all of the Collateral, authorize any Borrower to sell or otherwise
        dispose of all or substantially all of the Collateral or release any Guarantor
        of all or any portion of the Obligations of its Guarantee obligations with
        respect thereto, except, in each case with respect to this clause (iv), as
        otherwise may be provided in this Agreement or the other Financing Documents
        (including in connection with any disposition permitted hereunder);
        (v) amend, waive or otherwise modify this Section
        13.16
        or the
        definitions of the terms used in this Section
        13.16
        insofar
        as the definitions affect the substance of this Section
        13.16;
        or
(vi) consent
        to the assignment, delegation or other transfer by any Credit Party of any
        of
        its rights and obligations under any Financing Document or release any Borrower
        of its payment obligations under any Financing Document, except, in each
        case
        with respect to this clause (vi), pursuant to a merger or consolidation
        permitted pursuant to this Agreement. It is hereby understood and agreed
        that
        all Lenders shall be deemed directly affected by an amendment, waiver or
        other
        modification of the type described in the preceding clauses (iii), (iv),
        (v) and (vi) of the preceding sentence.

       

      Section
        13.17 Assignments
        and Participations.

       

      (a)    Any
        Lender may at any time assign to one or more Eligible Assignees all or any
        portion of such Lender's Loans together with all related obligations of such
        Lender hereunder. Except as Administrative Agent may otherwise agree, the
        amount
        of any such assignment (determined as of the date of the applicable Assignment
        Agreement or, if a "Trade
        Date"
        is
        specified in such Assignment Agreement, as of such Trade Date) shall be in
        a minimum
        aggregate amount equal to $1,000,000 or, if less, the assignor's entire
        interests in the outstanding Loans; provided, however, that, in connection
        with
        simultaneous

       

      
        
           

        

        
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      assignments
        to two or more related Approved Funds, such Approved Funds shall be treated as
        one assignee for purposes of determining compliance with the minimum assignment
        size referred to above. Borrowers and Administrative Agent shall be entitled
        to
        continue to deal solely and directly with such Lender in connection with
        the
        interests so assigned to an Eligible Assignee until Administrative Agent
        shall
        have received and accepted an effective Assignment Agreement
        executed,
        delivered and fully completed by the applicable
        parties thereto
        and
        a
        processing fee of $3,500;
        provided,
        however,
        that
        only one processing fee shall be payable in connection with simultaneous
        assignments to two or more related Approved Funds. 

       

      (b)    From
        and
        after the date on which the conditions described above have been met,
        (i) such Eligible Assignee shall be deemed automatically to have become a
        party hereto and, to the extent of the interests assigned to such Eligible
        Assignee pursuant to such Assignment Agreement, shall have the rights and
        obligations of a Lender hereunder and (ii) the assigning Lender, to the
        extent that rights and obligations hereunder have been assigned by it pursuant
        to such Assignment Agreement, shall be released from its rights and obligations
        hereunder (other than those that survive termination pursuant to Section
        14.1).
        Upon
        the request of the Eligible Assignee (and, as applicable, the assigning
        Lender) pursuant to an effective Assignment Agreement, each Borrower shall
        execute and deliver to Administrative Agent for delivery to the Eligible
        Assignee (and, as applicable, the assigning Lender) Notes in the aggregate
        principal amount of the Eligible Assignee's Term Loans (and, as applicable,
        Notes in the principal amount of that portion of the principal amount of
        the
        Term Loans retained by the assigning Lender). Upon receipt by the assigning
        Lender of such Note, the assigning Lender shall return to Borrower
        Representative any prior Note held by it.

       

      (c)    Notwithstanding
        the foregoing provisions of this Section
        13.17
        or any
        other provision of this Agreement, any Lender may at any time pledge or assign
        a
        security interest in all or any portion of its rights under this Agreement
        to
        secure obligations of such Lender, including any pledge or assignment to
        secure
        obligations to a Federal Reserve Bank; provided, however, that no such pledge
        or
        assignment shall release such Lender from any of its obligations hereunder
        or
        substitute any such pledgee or assignee for such Lender as a party
        hereto.

       

      (d)    Notwithstanding
        the foregoing provisions of this Section
        13.17
        or any
        other provision of this Agreement, Administrative Agent has the right, but
        not
        the obligation, to effectuate assignments of Loans via an electronic settlement
        system acceptable to Administrative Agent as designated in writing from time
        to
        time to the Lenders by Administrative Agent (the "Settlement
        Service").
        At
        any time when the Administrative Agent elects, in its sole discretion, to
        implement such Settlement Service, each such assignment shall be effected
        by the
        assigning Lender and proposed assignee pursuant to the procedures then in
        effect
        under the Settlement Service, which procedures shall be consistent with the
        other provisions of this Section
        13.17.
        Each
        assigning Lender and proposed Eligible Assignee shall comply with the
        requirements of the Settlement Service in connection with effecting any
        assignment of Loans pursuant to the Settlement Service. If so elected by
        each of
        Administrative Agent and the Borrowers, Administrative Agent's and the
        Borrowers' approval of such Eligible Assignee shall be deemed to have been
        automatically granted with

       

      
        
           

        

        
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      respect
        to any transfer effected through the Settlement Service. Assignments and
        assumptions of the Loans shall be effected by the provisions otherwise set
        forth
        herein until Administrative Agent notifies Lenders of the Settlement Service
        as
        set forth herein.

       

      (e)    Any
        Lender may at any time, without the consent of, or notice to, any Borrower
        or
        Administrative Agent, sell to one or more Persons participating interests
        in its
        Loans, commitments or other interests hereunder (any such Person, a
        "Participant").
        In
        the event of a sale by a Lender of a participating interest to a Participant,
        (i) such Lender's obligations hereunder
        shall remain unchanged for all purposes, (ii) Borrowers and Administrative
        Agent shall continue to deal solely
        and directly with such Lender in connection with such Lender's rights and
        obligations hereunder, and (iii) all amounts payable by each Borrower shall
        be determined as if such Lender had not sold such participation and
        shall
        be paid directly to such Lender. No Participant shall have any direct or
        indirect voting rights hereunder except with respect to (x) any event
        described in Section
        13.16
        expressly requiring the unanimous vote of all Lenders or, as applicable,
        all
        affected Lenders, and (y) the institution or commencement of enforcement
        remedies. Each Lender agrees to incorporate the requirements of the preceding
        sentence into each participation agreement which such Lender enters into
        with
        any Participant. Each Borrower agrees that if amounts outstanding under this
        Agreement are due and payable (as a result of acceleration or otherwise),
        each
        Participant shall be deemed to have the right of set-off in respect of its
        participating interest in amounts owing under this Agreement to the same
        extent
        as if the amount of its participating interest were owing directly to it
        as a
        Lender under this Agreement; provided, however, that such right of set-off
        shall
        be subject to the obligation of
        each
        Participant to share with Lenders, and Lenders agree to share with each
        Participant, as provided in Section
        11.5.

       

      (f)    Within
        thirty (30) days after: (i) receipt by Administrative Agent of notice
        and demand from any Lender for payment of additional costs as provided in
        Section
        2.9,
        which
        demand shall not have been revoked, (ii) any Borrower is required to pay
        any additional amount to any Lender or any Governmental Authority for the
        account of any Lender pursuant to Section
        2.8,
        (iii) any Lender is a Defaulted Lender, and the circumstances causing such
        status shall not have been cured or waived; or (iv) any failure by any
        Lender to consent to a requested amendment, waiver or modification to any
        Financing Document in which Required Lenders have already consented to such
        amendment, waiver or modification but the consent of each Lender, or each
        Lender
        affected thereby, is required with respect thereto, (each relevant Lender
        in the
        foregoing clauses (i) through (iv) being an "Affected Lender") each
        of Borrower Representative and Administrative Agent may, at its option, notify
        such Affected Lender and, in the case of Borrowers' election, the Administrative
        Agent, of such Person's intention to obtain, at Borrowers' expense, a
        replacement Lender ("Replacement
        Lender") for
        such Lender, which Replacement Lender shall be an Eligible Assignee and,
        in the
        event the Replacement Lender is to replace an Affected Lender described in
        the
        preceding clause (iv), such Replacement Lender consents to the requested
        amendment, waiver or modification making the replaced Lender an Affected
        Lender.
        In the event Borrowers or Administrative Agent, as applicable, obtains a
        Replacement Lender within ninety (90) days following notice of its
        intention to do so, the Affected Lender shall

       

      
        
           

        

        
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      sell,
        at
        par, and assign all of its Loans and funding commitments hereunder to such
        Replacement Lender in accordance with the procedures set forth in Section
        14.6(a);
        provided, however, that (i) Borrowers shall have reimbursed such Lender for
        its increased costs and additional payments for which it is entitled to
        reimbursement under Section
        2.8
        or
Section
        2.9,
        as
        applicable, of this Agreement through the date of such sale and assignment
        and
        (ii) Borrowers shall pay to Administrative Agent the $3,500 processing fee
        in respect of such assignment. In the event that a replaced Lender does not
        execute an Assignment Agreement pursuant to Section
        13.17(a) within
        five (5) Business Days after receipt by such replaced Lender of notice of
        replacement pursuant to this Section
        13.17(f) and
        presentation to such replaced Lender of an Assignment Agreement evidencing
        an
        assignment pursuant to this Section
        13.17(f),
        such
        replaced Lender shall be deemed to have consented to the terms of such
        Assignment Agreement, and any such Assignment Agreement executed by
        Administrative Agent, the Replacement Lender and, to the extent required
        pursuant to Section
        13.17(a),
        Borrowers, shall be effective for purposes of this Section
        13.17(f) and
        Section
        13.17(a).
        Upon
        any such assignment and payment, such replaced Lender shall no longer constitute
        a "Lender" for purposes hereof, other than with respect to such rights and
        obligations that survive termination as set forth in Section
        14.1.

       

      Section
        13.18 Definitions.

       

      As
        used
        in this Article 13, the following terms have the following
        meanings:

       

      "Approved
        Fund"
        means
        any (a) investment company, fund, trust, securitization vehicle or conduit
        that is (or will be) engaged in making, purchasing, holding or otherwise
        investing in commercial loans and similar extensions of credit in the ordinary
        course of its business or (b) any Person (other than a natural
        person) which temporarily warehouses loans for any Lender or any entity
        described in the preceding clause (a) and that, with respect to each of the
        preceding clauses (a) and (b), is administered or managed by (i) a
        Lender, (ii) an Affiliate of a Lender or (iii) a Person (other than a
        natural person) or an Affiliate of a Person (other than a natural
        person) that administers or manages a Lender.

       

      "Assignment
        Agreement"
        means
        an agreement substantially in the form of Exhibit
        A
        hereto.

       

      "Defaulted
        Lender"
        means,
        so long as such failure shall remain in existence and uncured, any Lender
        which
        shall have failed to make any Loan or other credit accommodation, disbursement
        or reimbursement required pursuant to the terms of any Financing
        Document.

       

      "Eligible
        Assignee"
        means
        (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund,
        and (d) any other Person (other than a natural person) approved by
        (i) Administrative Agent, and (ii) unless an Event of Default has
        occurred and is continuing, Borrower Representative (such approval of Borrower
        Representative not to be unreasonably withheld or delayed, and shall be deemed
        provided unless expressly withheld by Borrower Representative within three
        (3) Business Days of request therefor); provided, however,
        that

       

      
        
           

        

        
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      notwithstanding
        the foregoing, "Eligible
        Assignee"
        shall
        not include any Borrower or any of a Borrower's Affiliates.

       

      "Federal
        Funds Rate"
        means,
        for any day, the rate of interest per annum (rounded upwards, if necessary,
        to
        the nearest whole multiple of 1/100 of 1%) equal to the weighted average of
        the rates on overnight Federal funds transactions with members of the Federal
        Reserve System arranged by Federal funds brokers on such day, as published
        by
        the Federal Reserve Bank of New York on the Business Day next succeeding
        such
        day, provided, however, that (a) if such day is not a Business Day, the
        Federal Funds Rate for such day shall be such rate on such transactions on
        the
        next preceding Business Day, and (b) if no such rate is so published on
        such next preceding Business Day, the Federal Funds Rate for such day shall
        be
        the average rate quoted to Administrative Agent on such day on such transactions
        as determined by Administrative Agent.

       

      ARTICLE
        14

      MISCELLANEOUS

       

      Section
        14.1 Survival.

       

      All
        agreements, representations and warranties made herein and in every other
        Financing Document shall survive the execution and delivery of this Agreement
        and the other Financing Documents. The provisions of Sections 2.8
        and
2.9
        and
        Article 12 and 13 shall survive the payment of the Obligations (both with
        respect to any Lender and all Lenders collectively), any termination of this
        Agreement, and any judgment with respect to any Obligations, including any
        final
        foreclosure judgment with respect to any Security Document, and no unpaid
        or
        unperformed, current or future, Obligations will merge into any such
        judgment.

       

      Section
        14.2 No
        Waivers.

       

      No
        failure or delay by Administrative Agent or any Lender in exercising any
        right,
        power or privilege under any Financing Document shall operate as a waiver
        thereof nor shall any single or partial exercise thereof preclude any other
        or
        further exercise thereof or the exercise of any other right, power or privilege.
        The rights and remedies herein and therein provided shall be cumulative and
        not
        exclusive of any rights or remedies provided by law. Any reference in any
        Financing Document to the "continuing" nature of any Event of Default shall
        not
        be construed as establishing or otherwise indicating that any Borrower or
        any
        other Credit Party has the independent right to cure any such Event of Default,
        but is rather presented merely for convenience should such Event of Default
        be
        waived in accordance with the terms of the applicable Financing
        Documents.

       

      Section
        14.3 Notices.

       

      (a)    All
        notices, requests and other communications to any party hereunder shall be
        in
        writing (including prepaid overnight courier, facsimile transmission or similar
        writing) and shall be given to such party at its address, facsimile number
        or e-mail address

       

      
        
           

        

        
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      set
        forth
        on the signature pages hereof (or, in the case of any such Lender who becomes
        a
        Lender after the date hereof, in an Assignment Agreement or in a notice
        delivered to Borrower Representative and Administrative Agent by the assignee
        Lender forthwith upon such assignment) or at such other address, facsimile
        number or e-mail address as such party may hereafter specify for the purpose
        by
        notice to Administrative Agent and Borrower Representative; provided, however,
        that notices, requests or other communications shall be permitted by electronic
        means only in accordance with the provisions of Section
        14.3(b).
        Each
        such notice, request or other communication shall be effective (i) if given
        by facsimile, when such notice is transmitted to the facsimile number specified
        by this Section and the sender receives a confirmation of transmission from
        the
        sending facsimile machine, or (ii) if given by mail, prepaid overnight
        courier or any other means, when received or
        when
        receipt is refused at
        the
        applicable address specified by this Section.

       

      (b)    Notices
        and other communications to the parties hereto may be delivered or furnished
        by
        electronic communication (including facsimile transmission, e-mail and Internet
        or intranet websites) pursuant to procedures approved from time to time by
        Administrative Agent, provided, however, that the foregoing shall not apply
        to
        default notices or any notice of the exercise of remedies to any Credit Party
        unless such electronic communication is confirmed within one (1) Business
        Day by overnight courier or notices sent directly to any Lender if such Lender
        has notified the Administrative Agent that it is incapable of receiving notices
        by electronic communication. The Administrative Agent or Borrower Representative
        may, in its discretion, agree to accept notices and other communications
        to it
        hereunder by electronic communications pursuant to procedures approved by
        it,
        provided, however, that approval of such procedures may be limited to particular
        notices or communications.

       

      (c)    Unless
        the parties otherwise agree, (i) notices and other communications sent to
        an e-mail address shall be deemed received upon the sender's receipt of an
        acknowledgment from the intended recipient (such as by the "return receipt
        requested" function, as available, return e-mail or other written
        acknowledgment), and (ii) notices or communications posted to an Internet
        or intranet website shall be deemed received upon the deemed receipt by the
        intended recipient at its e-mail address as described in the foregoing clause
        (i) of notification that such notice or communication is available and
        identifying the website address therefor, provided, however, that if any
        such
        notice or other communication is not sent or posted during normal business
        hours, such notice or communication shall be deemed to have been sent at
        the
        opening of business on the next Business Day.

       

      Section
        14.4 Severability.

       

      In
        case
        any provision of or obligation under this Agreement or any other Financing
        Document shall be invalid, illegal or unenforceable in any jurisdiction,
        the
        validity, legality and enforceability of the remaining provisions or
        obligations, or of such provision or obligation in any other jurisdiction,
        shall
        not in any way be affected or impaired thereby. 

       

      
        
           

        

        
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      Section
        14.5 Amendments
        and Waivers.

       

      No
        provision of this Agreement or any other Financing Document may be materially
        amended, waived or otherwise modified unless such amendment, waiver or other
        modification is in writing and is signed or otherwise approved by Borrowers,
        the
        Required Lenders and any other Lender to the extent required under Section
        13.16;
        provided,
        however,
        that
        Administrative Agent shall be entitled, in its sole but commercially reasonable
        discretion and without the consent of any other Lender, to waive any financial
        covenant of any Credit Party. 

       

      Section
        14.6 Credit
        Party Assignments.

       

      No
        Credit
        Party may assign, delegate or otherwise transfer any of its rights or other
        obligations hereunder or under any other Financing Document without the prior
        written consent of Administrative Agent and each Lender.

       

      Section
        14.7 Headings.

       

      Headings
        and captions used in the Financing Documents (including the Exhibits, Schedules
        and Annexes hereto and thereto) are included for convenience of reference
        only and shall not be given any substantive effect.

       

      Section
        14.8 Confidentiality.

       

      Administrative
        Agent and each Lender shall hold all non-public information regarding the
        Credit
        Parties, their Affiliates and their respective businesses identified as such
        by
        Borrowers and obtained by Administrative Agent or any Lender pursuant to
        the
        requirements hereof in accordance with such Person's customary procedures
        for
        handling information of such nature, except that disclosure of such information
        may be made (a) to their respective agents, employees, Subsidiaries,
        Affiliates, attorneys, auditors, professional consultants, rating agencies,
        insurance industry associations and portfolio management services, (b) to
        prospective transferees or purchasers of any interest in the Loans and to
        prospective contractual counterparties (or the professional advisors thereto)
        in
        Swap Contracts, provided, however, that any such Persons shall have agreed
        to be
        bound by the provisions of this Section
        14.8,
        (c) as required by Law, subpoena, judicial order or similar order and in
        connection with any litigation, (d) as may be required in connection with
        the examination, audit or similar investigation of such Person and (e) to
        a Person that is a trustee, investment advisor, collateral manager, servicer,
        noteholder or secured party in a Securitization (as hereinafter defined) in
        connection with the administration, servicing and reporting on the assets
        serving as collateral for such Securitization. For the purposes of this Section,
        "Securitization"
        shall
        mean a public or private offering by a Lender or any of its Affiliates or
        their
        respective successors and assigns, of securities which represent an interest
        in,
        or which are collateralized, in whole or in party, by the Loans.
        Confidential information shall include only such information identified as
        such
        at the time provided to Administrative Agent and shall not include information
        that either: (i) is in the public domain, or becomes part of the public
        domain after disclosure to such Person through no fault of such Person,
        or

       

      
        
           

        

        
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      (ii)    is
        disclosed
        to such Person by a Person other than a Credit Party, provided, however,
        Administrative Agent does not have actual knowledge that such Person is
        prohibited from disclosing such information. The obligations of Administrative
        Agent and Lenders under this Section
        14.8
        shall
        supersede and replace the obligations of Administrative Agent and Lenders
        under
        any confidentiality agreement in respect of this financing executed and
        delivered by Administrative Agent or any Lender prior to the date
        hereof.

       

      Section
        14.9 Waiver
        of Consequential and Other Damages.

       

      To
        the
        fullest extent permitted by applicable law, no Borrower shall assert, and
        each
        Borrower hereby waives, any claim against any Indemnitee, on any theory of
        liability, for special, indirect, consequential or punitive damages (as opposed
        to direct or actual damages) arising out of, in connection with, or as a
        result of this Agreement, any other Financing Document or any agreement or
        instrument contemplated hereby or thereby, the transactions contemplated
        hereby
        or thereby, any Loan or the use of the proceeds thereof. No Indemnitee shall
        be
        liable for any damages arising from the use by unintended recipients of any
        information or other materials distributed by it through telecommunications,
        electronic or other information transmission systems in connection with this
        Agreement or the other Financing Documents or the transactions contemplated
        hereby or thereby.

       

      Section
        14.10 GOVERNING
        LAW; SUBMISSION TO JURISDICTION.

       

      THIS
        AGREEMENT, EACH NOTE AND EACH OTHER FINANCING DOCUMENT, AND ALL MATTERS RELATING
        HERETO OR THERETO OR ARISING THEREFROM (WHETHER SOUNDING IN CONTRACT LAW,
        TORT
        LAW OR OTHERWISE), SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
        IN
        ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICTS
        OF LAWS PRINCIPLES. EACH BORROWER HEREBY CONSENTS TO THE JURISDICTION OF
        ANY
        STATE OR FEDERAL COURT LOCATED WITHIN CHICAGO, STATE OF ILLINOIS AND IRREVOCABLY
        AGREES THAT, SUBJECT TO ADMINISTRATIVE AGENT'S ELECTION, ALL ACTIONS OR
        PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER FINANCING
        DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS. EACH BORROWER EXPRESSLY SUBMITS
        AND
        CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE
        OF
        FORUM NON CONVENIENS. EACH BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY
        AND
        ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON
        SUCH
        BORROWER BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED
        TO
        SUCH BORROWER AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE
        SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.

       

      
        
           

        

        
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      Section
        14.11 WAIVER
        OF JURY TRIAL.

       

      EACH
        OF EACH BORROWER, ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY
        WAIVES
        ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING
        OUT
        OF OR RELATING TO THE FINANCING DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
        THEREBY AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE
        A
        COURT AND NOT BEFORE A JURY. EACH OF EACH BORROWER, ADMINISTRATIVE AGENT
        AND
        EACH LENDER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER
        INTO
        A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING INTO
        THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND THAT EACH WILL CONTINUE
        TO
        RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH OF EACH BORROWER,
        ADMINISTRATIVE AGENT AND EACH LENDER WARRANTS AND REPRESENTS THAT EACH HAS
        HAD
        THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT
        EACH
        KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.

       

      Section
        14.12 Publication;
        Advertisement.

       

      (a)    Publication.
        No
        Credit Party will directly or indirectly publish, disclose or otherwise use
        in
        any public disclosure, advertising material, promotional material, press
        release
        or interview, any reference to the name, logo or any trademark of Merrill
        Lynch
        or any of its Affiliates or any reference to this Agreement or the financing
        evidenced hereby, in any case except (i) as required by Law, subpoena or
        judicial or similar order, in which case the applicable Credit Party shall
        give
        Administrative Agent prior written notice of such publication or other
        disclosure, or (ii) with Merrill Lynch's prior written
        consent.

       

      (b)    Advertisement.
        Each
        Lender and each Credit Party hereby authorizes Merrill Lynch to publish the
        name
        of such Lender and Credit Party, the existence of the financing arrangements
        referenced under this Agreement, the primary purpose and/or structure of
        those
        arrangements, the amount of credit extended under each facility, the title
        and
        role of each party to this Agreement, and the total amount of the financing
        evidenced hereby in any "tombstone", comparable advertisement or press release
        which Merrill Lynch elects to submit for publication. In addition, each Lender
        and each Credit Party agrees that Merrill Lynch may provide lending industry
        trade organizations with information necessary and customary for inclusion
        in
        league table measurements after the Closing Date. With respect to any of
        the
        foregoing, Merrill Lynch shall provide Borrowers with an opportunity to review
        and confer with Merrill Lynch regarding the contents of any such tombstone,
        advertisement or information, as applicable, prior to its submission for
        publication and, following such review period, Merrill Lynch may, from time
        to
        time, publish such information in any media form desired by Merrill Lynch,
        until
        such time that Borrowers shall have requested Merrill Lynch cease any such
        further publication.

       

      
        
           

        

        
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      Section
        14.13 Counterparts;
        Integration.

       

      This
        Agreement and the other Financing Documents may be signed in any number of
        counterparts, each of which shall be an original, with the same effect as
        if the
        signatures thereto and hereto were upon the same instrument. Signatures by
        facsimile shall bind the parties hereto. This Agreement and the other Financing
        Documents constitute the entire agreement and understanding among the parties
        hereto and supersede any and all prior agreements and understandings, oral
        or
        written, relating to the subject matter hereof.

       

      Section
        14.14 No
        Strict Construction.

       

      The
        parties hereto have participated jointly in the negotiation and drafting
        of this
        Agreement. In the event an ambiguity or question of intent or interpretation
        arises, this Agreement shall be construed as if drafted jointly by the parties
        hereto and no presumption or burden of proof shall arise favoring or disfavoring
        any party by virtue of the authorship of any provisions of this
        Agreement.

       

      Section
        14.15 Time.

       

      Time
        is
        of the essence in each Borrower's and each other Credit Party's performance
        under this Agreement and all other Financing Documents.

       

      Section
        14.16 Lender
        Approvals.

       

      Unless
        expressly provided herein to the contrary, any approval, consent, waiver
        or
        satisfaction of Administrative Agent or Lenders with respect to any matter
        that
        is the subject of this Agreement, the other Financing Documents may be granted
        or withheld by Administrative Agent and Lenders in their sole and absolute
        discretion and credit judgment. 

       

      Section
        14.17 [Reserved.]

       

      Section
        14.18 WAIVERS.

       

      EACH
        BORROWER WAIVES THE BENEFIT OF ANY AND EVERY STATUTE, ORDINANCE, OR RULE
        OF
        COURT WHICH MAY BE LAWFULLY WAIVED CONFERRING UPON SUCH BORROWER ANY RIGHT
        OR PRIVILEGE OF EXEMPTION, HOMESTEAD RIGHTS, STAY OF EXECUTION, OR SUPPLEMENTARY
        PROCEEDINGS, OR OTHER RELIEF FROM THE ENFORCEMENT OR IMMEDIATE ENFORCEMENT
        OF A
        JUDGMENT OR RELATED PROCEEDINGS ON A JUDGMENT. 

       

      Section
        14.19 Release
        of Administrative Agent and Lenders. 

       

      Each
        Borrower, voluntarily, knowingly, unconditionally, and irrevocably, with
        specific and express intent, for and on behalf of itself and its agents,
        attorneys, heirs, successors, and assigns (collectively the "Releasing
        Parties") does
        hereby fully and completely release, acquit and forever discharge each
        Indemnitee, and any other person,

       

      
        
           

        

        
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      firm,
        business, corporation, insurer, or association which may be responsible or
        liable for the acts or omissions of any Indemnitee, or who may be liable
        for the
        injury or damage resulting therefrom (collectively the "Released
        Parties"),
        of
        and from any and all actions, causes of action, suits, debts, disputes, damages,
        claims, obligations, liabilities, costs, expenses and demands of any kind
        whatsoever, at law or in equity, whether matured or unmatured, liquidated
        or
        unliquidated, vested or contingent, choate or inchoate, known or unknown
        that
        the Releasing Parties (or any of them) has against the Released Parties or
        any of them (whether directly or indirectly). The foregoing release shall
        be
        deemed renewed and reaffirmed as of the date of each advance of proceeds
        under
        any Loans and each other accommodation made or granted to any Borrower by
        any
        Released Party under any Financing Document. Each Borrower acknowledges that
        the
        foregoing release is a material inducement to Administrative Agent's and
        each
        Lender's decision to extend to Borrower the financial accommodations hereunder
        and has been relied upon by Administrative Agent and each Lender in agreeing
        to
        extend the credit herein contemplated and in making each advance or other
        accommodation hereunder. 

       

      ARTICLE
        15

      JOINT
        AND SEVERAL LIABILITY; GUARANTOR PROVISIONS

       

      Section
        15.1 Joint
        and Several Obligations.

       

      (a)    Borrowers
        is defined collectively to include all Persons constituting the Borrowers;
        provided, however, that any references herein to "any Borrower", "each Borrower"
        or similar references, shall be construed as a reference to each individual
        Person comprising the Borrowers. Each Person comprising Borrowers shall be
        jointly and severally liable for all of the obligations of Borrowers under
        this
        Agreement and the Borrowers under the Affiliated Financing Documents (the
        "Affiliated
        Borrowers"),
        regardless of which of the Borrowers or the Affiliated Borrowers actually
        receives the proceeds of the indebtedness governed hereby or the benefit
        of any
        other extensions of credit hereunder or the benefit of any other extension
        of
        credit under the Affiliated Financing Documents, or the manner in which the
        Borrowers, the Affiliated Borrowers, the Administrative Agent or the Lenders
        account therefor in their respective books and records. In addition, each
        entity
        comprising Borrowers hereby acknowledges and agrees that all of the
        representations, warranties, covenants, obligations, conditions, agreements
        and
        other terms contained in this Agreement shall be applicable to and shall
        be
        binding upon and measured and enforceable individually against each Person
        comprising Borrowers as well as all such Persons when taken together. By
        way of
        illustration, but without limiting the generality of the foregoing, the terms
        of
Section 11.1
        of this
        Agreement are to be applied to each individual Person comprising the Borrowers
        (as well as to all such Persons taken as a whole), such that the occurrence
        of
        any of the events described in Section 11.1
        of this
        Agreement as to any Person comprising the Borrowers shall constitute an Event
        of
        Default even if such event has not occurred as to any other Persons comprising
        the Borrowers or as to all such Persons taken as a whole (except as otherwise
        expressly provided therein).

       

      (b)    Each
        Borrower acknowledges that it will enjoy significant benefits from the business
        conducted by the other Borrowers and the Affiliated Borrowers because
        of,

       

      
        
           

        

        
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      inter
        alia, their combined ability to bargain with other Persons including without
        limitation their ability to receive the credit extensions under this Agreement
        and the other Financing Documents and the Affiliated Financing Documents
        on
        favorable terms granted by this Agreement and other Financing Documents and
        the
        Affiliated Financing Documents which would not have been available to an
        individual Borrower acting alone. Each Borrower has determined that it is
        in its
        best interest to procure the credit facilities contemplated hereunder, with
        the
        credit support of the other Borrowers as contemplated by this Agreement and
        the
        other Financing Documents and the credit support of the Affiliated Borrowers
        as
        contemplated by the Affiliated Financing Documents.

       

      (c)    Administrative
        Agent and Lenders have advised the Borrowers that each of them is unwilling
        to
        enter into this Agreement, the other Financing Documents and the Affiliated
        Financing Documents and make available the credit facilities extended hereby
        or
        thereby to any Borrower or Affiliated Borrower unless each Borrower agrees,
        among other things, to be jointly and severally liable for the due and proper
        payment of the Obligations of each other Borrower under this Agreement and
        other
        Financing Documents and of each Affiliated Borrower under the Affiliated
        Financing Documents. Each Borrower has determined that it is in its best
        interest and in pursuit of its purposes that it so induce the Administrative
        Agent and Lender to extend credit pursuant to this Agreement and the other
        documents executed in connection herewith (i) because of the desirability
        to each Borrower of the credit facilities hereunder and to each Affiliated
        Borrower of the credit facilities under the Affiliated Financing Documents
        and
        the interest rates and the modes of borrowing available hereunder and
        thereunder, (ii) because each Borrower may engage in transactions jointly
        with other Borrowers or Affiliated Borrowers, and (iii) because each
        Borrower may require, from time to time, access to funds under this Agreement
        for the purposes herein set forth. Each Borrower, individually, expressly
        understands, agrees and acknowledges, that the credit facilities contemplated
        hereunder would not be made available on the terms herein in the absence
        of the
        collective credit of all of the Persons constituting the Borrowers and the
        Affiliated Borrowers, the joint and several liability of all such Persons,
        and
        the cross-collateralization of the collateral of all such Persons hereunder
        and
        under the Affiliated Financing Documents. Accordingly, each Borrower,
        individually acknowledges that the benefit to each of the Persons comprising
        the
        Borrowers as a whole constitutes reasonably equivalent value, regardless
        of the
        amount of the indebtedness actually borrowed by, advanced to, or the amount
        of
        credit provided to, or the amount of collateral provided by, any individual
        Borrower.

       

      (d)    Each
        Borrower has determined that it is and, after giving effect to the transactions
        contemplated by this Agreement, the other Financing Documents and the Affiliated
        Financing Documents (including, without limitation, the inter-Borrower
        arrangement set forth in this Section) will be Solvent and has and will
        have the ability to pay its debts from time to time incurred in connection
        with
        the conduct of its business as such debts mature and that the value of the
        benefits to be derived by such Borrower from the access to funds under this
        Agreement (including, without limitation, the inter-Borrower arrangement
        set
        forth in this Section) is reasonably equivalent to the obligations
        undertaken pursuant hereto.

       

      
        
           

        

        
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      (e)    The
        Borrower Representative (on behalf of each Borrower) shall maintain records
        specifying (i) all Obligations incurred by each Borrower, (ii) the
        date of such incurrence, (iii) the date and amount of any payments made in
        respect of such Obligations, and (iv) all inter-Borrower obligations
        pursuant to this Section. The Borrower Representative shall make copies of
        such
        records available to the Administrative Agent, upon request.

       

      (f)    To
        the
        extent that applicable law otherwise would render the full amount of the
        joint
        and several obligations of any Borrower hereunder, under the other Financing
        Documents and under the Affiliated Financing Documents invalid or unenforceable,
        such Borrower's obligations hereunder and under the other Financing Documents
        and Affiliated Financing Documents shall be limited to the maximum amount
        which
        does not result in such invalidity or unenforceability; provided, however,
        that
        each Borrower's obligations hereunder and under the other Financing Documents
        and Affiliated Financing Documents shall be presumptively valid and enforceable
        to their fullest extent in accordance with the terms hereof or thereof, as
        if
        this Section were not a part of this Agreement.

       

      (g)    To
        the
        extent that any Borrower shall make a payment under this Section of all or
        any of the Obligations (other than credit facilities made to that Borrower
        for
        which it is primarily liable) (a "Joint
        Liability Payment") which,
        taking into account all other Joint Liability Payments then previously or
        concurrently made by any other Borrower, exceeds the amount which such Borrower
        would otherwise have paid if each Borrower had paid the aggregate Obligations
        satisfied by such Joint Liability Payments in the same proportion that such
        Borrower's Allocable Amount (as defined below) (as determined immediately
        prior to such Joint Liability Payments) bore to the aggregate Allocable
        Amounts of each of the Borrowers as determined immediately prior to the making
        of such Joint Liability Payments, then, following indefeasible payment in
        full
        in cash of the Obligations and termination of the Commitments, such Borrower
        shall be entitled to receive contribution and indemnification payments from,
        and
        be reimbursed by, each other Borrower for the amount of such excess, pro
        rata
        based upon their respective Allocable Amounts in effect immediately prior
        to
        such Joint Liability Payments. As of any date of determination, the
        "Allocable
        Amount"
        of any
        Borrower shall be equal to the maximum amount of the claim which could then
        be
        recovered from such Borrower under this Section without rendering such
        claim voidable or avoidable under Section 548 of Chapter 11 of the
        Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer
        Act,
        Uniform Fraudulent Conveyance Act or similar statute or common law.

       

      (h)    Except
        as
        specifically provided in this Agreement or any of the other Financing Documents,
        Administrative Agent shall have the exclusive right to determine the time
        and
        manner of application of any payments or credits, whether received from any
        Borrower or any other source, and such determination shall be binding on
        all
        Borrowers. All such payments and credits may be applied, reversed and reapplied,
        in whole or in part, to any of the Obligations as Administrative Agent shall
        determine in its sole discretion without affecting the validity or
        enforceability of the Obligations of any other Borrower or Affiliated
        Borrower.

       

      
        
           

        

        
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      (i)    Each
        Borrower hereby agrees that, except as hereinafter provided, its obligations
        hereunder shall be unconditional, irrespective of (i) the absence of any
        attempt to collect the Obligations from any obligor or other action to enforce
        the same; (ii) the waiver or consent by Administrative Agent and/or any
        applicable Lender(s) with respect to any provision of any instrument
        evidencing the Obligations, or any part thereof, or any other agreement
        heretofore, now or hereafter executed by a Borrower or Affiliated Borrower
        and
        delivered to Administrative Agent and/or any Lender; (iii) failure by
        Administrative Agent to take any steps to perfect and maintain its security
        interest in, or to preserve its rights to, any security or collateral for
        the
        Obligations; (iv) the institution of any proceeding under the United States
        Bankruptcy Code, or any similar proceeding, by or against a Borrower or
        Affiliated Borrower or Administrative Agent's or any Lender's election in
        any
        such proceeding of the application of Section 1111(b)(2) of the United
        States Bankruptcy Code; (v) any borrowing or grant of a security interest
        by a Borrower or Affiliated Borrower as debtor-in-possession, under
        Section 364 of the United States Bankruptcy Code; (vi) the
        disallowance, under Section 502 of the United States Bankruptcy Code, of
        all or any portion of Administrative Agent's or any Lender's claim(s) for
        repayment of any of the Obligations; or (vii) any other circumstance other
        than payment in full of the Obligations which might otherwise constitute
        a legal
        or equitable discharge or defense of a guarantor or surety.

       

      (j)    Until
        all
        Obligations have been paid and satisfied in full, no payment made by or for
        the
        account of a Borrower or Affiliated Borrower including, without limitation,
        (i) a payment made by such Borrower or Affiliated Borrower on behalf of the
        liabilities of any other Borrower or Affiliated Borrower, or (ii) a payment
        made by any other person under any Guarantee, shall entitle such Borrower
        or
        Affiliated Borrower, by subrogation or otherwise, to any payment from any
        other
        Borrower or Affiliated Borrower or from or out of any other Borrower's or
        Affiliated Borrower's property and such Borrower or Affiliated Borrower shall
        not exercise any right or remedy against any other Borrower or Affiliated
        Borrower or any property of any other Borrower or Affiliated Borrower by
        reason
        of any performance of such Borrower or Affiliated Borrower of its joint and
        several obligations hereunder.

       

      (k)    Any
        notice given by one Borrower hereunder shall constitute and be deemed to
        be
        notice given by all Borrowers and Affiliated Borrowers, jointly and severally.
        Notice given by Administrative Agent or any Lender to any one Borrower or
        Affiliated Borrower hereunder or pursuant to any Financing Documents or
        Affiliated Financing Documents in accordance with the terms hereof or thereof
        shall constitute notice to each and every Borrower and Affiliated Borrower.
        The
        knowledge of one Borrower or Affiliated Borrower shall be imputed to all
        Borrowers and Affiliated Borrowers and any consent by one Borrower or Affiliated
        Borrower shall constitute the consent of and shall bind all Borrowers and
        Affiliated Borrower.

       

      (l)    This
        Section is intended only to define the relative rights of Borrowers and
        Affiliated Borrowers and nothing set forth in this Section is intended to
        or shall impair the obligations of Borrowers, jointly and severally, to pay
        any
        amounts as and when the same shall become due and payable in accordance with
        the
        terms of this Agreement or any other Financing Documents. Nothing contained
        in
        this Section shall limit the liability of any

       

      
        
           

        

        
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      Borrower
        to pay the credit facilities made directly or indirectly to that Borrower
        and
        accrued interest, Fees and expenses with respect thereto for which such Borrower
        shall be primarily liable.

       

      (m)    The
        parties hereto acknowledge that the rights of contribution and indemnification
        hereunder shall constitute assets of each Borrower to which such contribution
        and indemnification is owing. The rights of any indemnifying Borrower against
        the other Borrowers or Affiliated Borrowers under this Section shall be
        exercisable upon the full and indefeasible payment of the Obligations and
        the
        termination of the credit facilities hereunder and under the Affiliated
        Financing Documents.

       

      Section
        15.2 Guarantor
        Provisions.

       

      (a)    Each
        Borrower, as joint and several primary obligor of the Obligations directly
        incurred by any other Borrower or by any Affiliated Borrower, authorizes
        Administrative Agent and Lenders, without giving notice to such Borrower
        or to
        any other Borrower or any Affiliated Borrower (to the extent permitted hereunder
        or under any Affiliated Financing Document) or obtaining such Borrower's
        consent or any other Borrower's or Affiliated Borrower's consent (to the
        extent
        permitted hereunder or under any Affiliated Financing Document) and without
        affecting the liability of such Borrower for the Obligations directly incurred
        by the other Borrower or Affiliated Borrower, from time to time to:

       

      (i)    compromise,
        settle, renew, extend the time for payment, change the manner or terms of
        payment, liquidate, discharge the performance of, decline to enforce, or
        release
        all or any of the Obligations; grant other indulgences to any Borrower in
        respect thereof; or modify in any manner any documents relating to the
        Obligations;

       

      (ii)    declare
        all Obligations due and payable upon the occurrence and during the continuance
        of an Event of Default;

       

      (iii)    take
        and
        hold security for the performance of the Obligations of any Borrower and
        exchange, enforce, waive and release any such security;

       

      (iv)    release,
        surrender or exchange any deposits or other property securing the Obligations
        or
        on which Administrative Agent and/or any applicable Lender(s) at any time
        may have a Lien; release, substitute or add any one or more endorsers or
        guarantors of the Obligations of any other Borrower or Affiliated Borrower
        or
        such Borrower; or compromise, settle, renew, extend the time for payment,
        discharge the performance of, decline to enforce, or release all or any
        obligations of any such endorser or guarantor or other Person who is now
        or may
        hereafter be liable on any Obligations or release, surrender or exchange
        any
        deposits or other property of any such Person;

       

      (v)    accept
        partial payments, apply payments received by Administrative Agent and/or
        any
        applicable Lender(s) from any Borrower or any Affiliated

       

      
        
           

        

        
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      Borrower
        to any Obligations, in such order as Administrative Agent shall determine,
        in
        its sole discretion; and

       

      (vi)    subject
        to the provisions hereof, assign this Agreement in whole or in
        part.

       

      (b)    Each
        Borrower, as a primary, joint and several obligor with respect to the
        Obligations directly incurred by any other Borrower or any Affiliated Borrower,
        waives:

       

      (i)    any
        defense based upon any legal disability or other defense of any other Borrower
        or any Affiliated Borrower, or by reason of the cessation or limitation of
        the
        liability of any other Borrower or any Affiliated Borrower from any cause
        (other
        than full payment of all Obligations), including, without limitation, failure
        of
        consideration, breach of warranty, statute of frauds, statute of limitations,
        accord and satisfaction, and usury;

       

      (ii)    any
        defense based upon any legal disability or other defense of any other guarantor
        or other Person;

       

      (iii)    any
        defense based upon any lack of authority of the officers, directors, partners
        or
        agents acting or purporting to act on behalf of any other Borrower or Affiliated
        Borrower or any principal of any other Borrower or Affiliated Borrower or
        any
        defect in the formation of any other Borrower or Affiliated Borrower or any
        principal of any other Borrower or Affiliated Borrower;

       

      (iv)    any
        defense based upon the application by any other Borrower or Affiliated Borrower
        of the proceeds of the credit facilities or the loans under the Affiliated
        Financing Documents for purposes other than the purposes represented by such
        other Borrower or Affiliated Borrower to Administrative Agent and Lenders
        or
        intended or understood by Administrative Agent and Lenders or such
        Borrower;

       

      (v)    any
        defense based on such Borrower's rights, under statute or otherwise, to require
        Administrative Agent and/or any applicable Lender(s) to sue any other
        Borrower or Affiliated Borrower or otherwise to exhaust its rights and remedies
        against any other Borrower or Affiliated Borrower or any other Person or
        against
        any collateral before seeking to enforce its right to require such Borrower to
        satisfy the Obligations of any other Borrower or Affiliated
        Borrower;

       

      (vi)    any
        defense based on Administrative Agent's or any Lender's failure at any time
        to
        require strict performance by any Borrower of any provision of the Financing
        Documents or by any Affiliated Borrower of any provisions of the Affiliated
        Financing Documents. Such Borrower agrees that no such failure shall waive,
        alter or diminish any right of Administrative Agent and/or any applicable
        Lender(s) thereafter to demand strict compliance and performance therewith.
        Nothing contained herein shall prevent Administrative Agent and/or any
        applicable Lender(s) from foreclosing on any Lien, or exercising any rights
        available to Administrative Agent and/or any applicable

       

      
        
           

        

        
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      Lender(s) thereunder,
        and the exercise of any such rights shall not constitute a legal or equitable
        discharge of such Borrower;

       

      (vii)    any
        defense arising from any act or omission of Administrative Agent and/or any
        applicable Lender(s) which changes the scope of such Borrower's risks
        hereunder, but the foregoing shall not limit any Credit Party from asserting
        claims based on breaches of this Agreement or willful misconduct by
        Administrative Agent and/or any applicable Lender;

       

      (viii)    any
        defense based upon Administrative Agent's or any Lender's election of any
        remedy
        against such Borrower or any other Borrower or Affiliated Borrower or any
        of
        them; any defense based on the order in which Administrative Agent and/or
        any
        Lender(s) enforces its remedies;

       

      (ix)    any
        defense based on (A) Administrative Agent's or any applicable Lender's
        surrender, release, exchange, substitution, dealing with or taking any
        additional collateral, (B) Administrative Agent's or any applicable
        Lender's abstaining from taking advantage of or realizing upon any Lien or
        other
        Guarantee, and (C) any impairment of collateral securing the Obligations,
        including, without limitation, Administrative Agent's or any applicable Lender's
        failure to perfect or maintain a Lien in such collateral;

       

      (x)    any
        defense based upon Administrative Agent's or any Lender's failure to disclose
        to
        such Borrower any information concerning any other Borrower's or Affiliated
        Borrower's financial condition or any other circumstances bearing on any
        other
        Borrower's or Affiliated Borrower's ability to pay the Obligations;

       

      (xi)    any
        defense based upon any statute or rule of law which provides that the obligation
        of a surety must be neither larger in amount nor in any other respects more
        burdensome than that of a principal;

       

      (xii)    any
        defense based upon Administrative Agent's and/or any Lender's election, in
        any
        proceeding instituted under the Bankruptcy Code, of the application of
        Bankruptcy Code §1111(b)(2) or any successor statute;

       

      (xiii)    any
        defense based upon any borrowing or any grant of a security interest under
        Bankruptcy Code §364;

       

      (xiv)    any
        defense based on Administrative Agent's and/or any Lender's failure to be
        diligent or to satisfy any other standard imposed on a secured party, in
        exercising rights with respect to collateral securing the
        Obligations;

       

      (xv)    except
        as
        otherwise expressly set forth herein: notice of acceptance hereof; notice
        of the
        existence, creation or acquisition of any Obligation; notice of any Event
        of
        Default; notice of the amount of the Obligations outstanding from time to
        time;
        notice of any other fact which might increase such Borrower's risk; diligence;
        presentment; demand of payment; protest; filing of claims with a court in
        the
        event of any other Borrower's receivership or bankruptcy and all other notices
        and demands to which such

       

      
        
           

        

        
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      Borrower
        might otherwise be entitled (and agrees the same shall not have to be made
        on
        the other Borrower as a condition precedent to such Borrower's obligations
        hereunder);

       

      (xvi)    any
        defense based on errors and omissions by Administrative Agent and/or any
        Lender
        in connection with its administration of the credit facilities or the loans
        made
        under the Affiliated Financing Documents, but the foregoing shall not limit
        any
        Credit Party from asserting claims based on breaches of this Agreement or
        willful misconduct by Administrative Agent and/or any applicable
        Lender;

       

      (xvii)    any
        defense based on application of fraudulent conveyance or transfer law or
        shareholder distribution law to any of the Obligations or the security
        therefor;

       

      (xviii)    any
        defense based on Administrative Agent's and/or any Lender's failure to seek
        relief from stay or adequate protection in any other Borrower's or Affiliated
        Borrower's bankruptcy proceeding or any other act or omission by Administrative
        Agent and/or any Lender which impairs such Borrower's prospective subrogation
        rights;

       

      (xix)    any
        defense based on legal prohibition of Administrative Agent's and/or any Lender's
        acceleration of the maturity of the Obligations during the occurrence of
        an
        Event of Default or any other legal prohibition on enforcement of any other
        right or remedy of Administrative Agent and/or any Lender with respect to
        the
        Obligations and the security therefor;

       

      (xx)    any
        defense available to a surety under applicable law; and

       

      (xxi)    the
        benefit of any statute of limitations affecting the liability of such Borrower
        hereunder or the enforcement hereof.

       

      (c)    Each
        Borrower further agrees that its obligations hereunder shall not be impaired
        in
        any manner whatsoever by any bankruptcy, extensions, moratoria or other relief
        granted to any other Borrower or Affiliated Borrower pursuant to any statute
        presently in force or hereafter enacted.

       

      (d)    Each
        Borrower authorizes Administrative Agent and each Lender to exercise, in
        its
        sole discretion, any right, remedy or combination thereof which may then
        be
        available to Administrative Agent or such Lender, since it is such Borrower's
        intent that the Obligations be absolute, independent and unconditional
        obligations of such Borrower under all circumstances. Notwithstanding any
        foreclosure of any Lien with respect to any or all of any property securing
        the
        Obligations, whether by the exercise of the power of sale contained therein,
        by
        an action for judicial foreclosure or by an acceptance of a deed in lieu
        of
        foreclosure, each Borrower shall remain bound under such Borrower's Guarantee
        of
        the Obligations directly incurred by any other Borrower or Affiliated
        Borrower.

       

      (e)    This
        Agreement is a primary and original obligation of each of the Borrowers and
        each
        of the Borrowers shall be liable for all existing and future Obligations
        of

       

      
        
           

        

        
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      any
        other
        Borrower or Affiliated Borrower as fully as if such Obligations were directly
        incurred by such Borrower.

       

      [SIGNATURES
        APPEAR ON FOLLOWING PAGES]

       

      
        
           

        

        
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      IN
        WITNESS WHEREOF,
        the
        parties hereto have caused this Agreement to be duly executed by their
        respective authorized officers as of the day and year first above
        written.

       

      
        	
                BORROWERS:

                 

                CYPRESS
                  LEAWOOD, LLC,

                a
                  Delaware limited liability company

                 

                 

                By:__________________________________

                Name:________________________________

                Its:__________________________________

                 

                Address:______________________________

                _____________________________________

                 

                Facsimile
                  number:_______________________

                E-mail
                  Address:_________________________

                Taxpayer
                  Identification Number:

                _____________________________________

              
	 
	 
	
                CYPRESS
                  ARLINGTON, LP,

                a
                  Delaware limited partnership

              
	 	 
	
                By:

              	
                Cypress
                  Arlington GP, LLC, a Delaware limited liability company, its general
                  partner

              
	 	 
	 	
                By:_________________________________

                Name:_______________________________

                Its:_________________________________

                 

                Address:_____________________________

                ____________________________________

                 

                Facsimile
                  number:______________________

                E-mail
                  Address:________________________

                Taxpayer
                  Identification Number:

                
                  ____________________________________

                

              

      

       

       

      
        
           

        

        
          
          

          
            

          

        

        
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                ADMINISTRATIVE
                  AGENT AND LENDERS:

                 

                MERRILL
                  LYNCH CAPITAL, a division of Merrill Lynch Business Financial Services
                  Inc., as Administrative Agent and a Lender

                 

                By:_________________________________________

                Name:_______________________________________

                Title:________________________________________

                 

                Address: 222
                  N. LaSalle Street, 16th Floor

                Chicago,
                  Illinois 60601

                Attn:
                  Account Manager for MLC-HCF

                ARC
                  transaction

                Facsimile
                  number: (866) 264-3051

                E-Mail
                  Address: MLC_HCF_RE1@ml.com

              

      

      

      
        	
                With
                  copies to:

                 

                Merrill
                  Lynch Capital

                222
                  N. LaSalle Street, 16th
                  Floor

                Chicago,
                  Illinois 60601

                Attn:
                  Group Senior Transaction Attorney, Healthcare

                Finance

                Facsimile
                  Number: (312) 499-3245

              

      

      

      
        	
                Merrill
                  Lynch Capital

                7700
                  Wisconsin Ave., Suite 400

                Bethesda,
                  Maryland 20814

                Attn:
                  Group Senior Transaction Attorney, Healthcare

                Finance

                Facsimile
                  Number: (866) 341-9053

              

      

      

      
        	
                And
                  with an additional copy to:

                 

                Goldberg,
                  Kohn, Bell, Black,

                Rosenbloom
                  & Moritz, Ltd.

                55
                  East Monroe Street, Suite 3700

                Chicago,
                  Illinois 60603

                Attn:
                  James B. Rosenbloom

                Facsimile
                  number: (312) 863-7425

                E-mail
                  Address:
                  james.rosenbloom@goldbergkohn.com

              

      

      

      
        	
                Payment
                  Account Designation:

                 

                ABA
                  No.:

                Account
                  No.:

                Account
                  Name:

                Reference:

              

      

      

      
        (Signature
          Page to Credit and Security Agreement)

      

      
        
           

        

        
          
          

          
            

          

        

        
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      ANNEXES,
        EXHIBITS AND SCHEDULES

       

      

      ANNEXES

      

      Annex
        A - Commitment
        Annex

      

      

      EXHIBITS

      

      Exhibit
        A - Assignment
        Agreement

      Exhibit
        B - Single
        Purpose Entity Requirements

      Exhibit
        C - Compliance
        Certificate

      Exhibit
        D - Payment
        Notification

      Exhibit
        E - Borrowers'
        Taxpayer Identification Numbers

      

      

      SCHEDULES

      

      Schedule
        1 - Permitted
        Leases

      Schedule
        3.1 - Existence,
        Organizational Identification Numbers, Foreign Qualification,
        Prior Names

      Schedule
        3.4 - Capitalization

      Schedule
        3.6 - Litigation

      Schedule
        3.17 - Material
        Contracts

      Schedule
        3.18 - Environmental
        Compliance

      Schedule
        4.4 - Insurance
        Requirements

      Schedule
        4.14 - Deferred
        Maintenance Items

      Schedule
        5.9 - Affiliate
        Transactions

      Schedule
        7.3 - Post-Closing
        Deliveries and Covenants

      Schedule
        8.7 - Licensed
        Operators

      Schedule
        9.1(h) - Service
        Agreements

       

      
        
           

        

        
          
          

          
            

          

        

        
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                  Annex
                    A to Credit Agreement (Commitment
                    Annex)

                

        

      

       

       

      
        	
                Lender

              	
                Term
                  Loan

                Commitment
                  Amount

              	
                Term
                  Loan

                Commitment
                  Percentage

              
	
                Merrill
                  Lynch Capital

              	
                $39,735,000

              	
                100%

              
	
                TOTALS

              	
                $39,735,000

              	
                100%

              

      

       

      
 

      
        
           

        

        
          
          

          
            

          

        

        
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                Exhibit
                  A to Credit Agreement (Assignment
                  Agreement)

              

      

      

      

      This
        Assignment Agreement (this "Assignment
        Agreement") is
        entered into as of __________ by and between the Assignor named on the signature
        page hereto ("Assignor") and
        the Assignee named on the signature page hereto ("Assignee").
        Reference is made to the Credit Agreement dated as of February __, 2006 (as
        amended or otherwise modified from time to time, the "Credit
        Agreement") among
        MERRILL LYNCH CAPITAL, as Administrative Agent and Lender and the other Lenders
        party thereto from time to time and CYPRESS LEAWOOD, LLC a Delaware limited
        liability company, and CYPRESS ARLINGTON, L.P., a Delaware limited partnership
        ("Borrowers"),
        the
        financial institutions party thereto from time to time, as Lenders, and Merrill
        Lynch Capital, a division of Merrill Lynch Business Financial Services Inc.,
        as
        Administrative Agent. Capitalized terms used herein and not otherwise defined
        shall have the meanings assigned to them in the Credit Agreement.

       

      Assignor
        and Assignee hereby agree as follows:

       

      1.    Assignor
        hereby sells and assigns to Assignee, and Assignee hereby purchases and assumes
        from Assignor the interests set forth on the schedule attached hereto (the
        "Schedule"),
        in
        and to Assignor's rights and obligations under the Credit Agreement as of
        the
        effective date set forth on the Schedule (the "Effective Date").
        Such
        purchase and sale is made without recourse, representation or warranty except
        as
        expressly set forth herein. On the Effective Date, Assignee shall pay to
        Assignor an amount equal to the aggregate amounts assigned pursuant to the
        Schedule and Assignor shall pay to Assignee a closing fee in respect of the
        transactions contemplated hereby in the amount specified on the
        Schedule.

       

      2.    Assignor
        (a) represents that as of the Effective Date, that it is the legal and
        beneficial owner of the interests assigned hereunder free and clear of any
        adverse claim, (b) makes no other representation or warranty and assumes no
        responsibility with respect to any statement, warranties or representations
        made
        in or in connection with the Credit Agreement or the execution, legality,
        validity, enforceability, genuineness, sufficiency or value of the Credit
        Agreement, any other Financing Documents or any other instrument or document
        furnished pursuant thereto; and (c) makes no representation or warranty and
        assumes no responsibility with respect to the financial condition of any
        other
        Credit Party or any other Person or the performance or observance by any
        Credit
        Party of its Obligations under the Credit Agreement or any other Financing
        Documents or any other instrument or document furnished pursuant
        thereto.

       

      3.    Assignee
        (a) confirms that it has received a copy of the Credit Agreement and the
        other Financing Documents, together with copies of the most recent financial
        statements delivered pursuant thereto and such other documents and information
        as it has deemed appropriate to make its own credit analysis and decision
        to
        enter into this Assignment Agreement; (b) agrees that it will,
        independently and without reliance upon Administrative Agent, Assignor or
        any
        other Lender and based on such documents and information as it shall deem
        appropriate at the time, continue to make its own credit

       

      
        
           

        

        
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      decisions
        in taking or not taking action under the Credit Agreement; (c) appoints and
        authorizes Administrative Agent to take such action as Administrative Agent
        on
        its behalf and to exercise such powers under the Credit Agreement and the
        other
        Financing Documents as are delegated to Administrative Agent by the terms
        thereof, together with such powers as are reasonably incidental thereto;
        (d) agrees that it will perform in accordance with their terms all
        obligations which by the terms of the Credit Agreement are required to be
        performed by it as a Lender; (e) represents that on the date of this
        Assignment Agreement it is not presently aware of any facts that would cause
        it
        to make a claim under the Credit Agreement; (f) represents and warrants
        that Assignee is not a Foreign Lender or, if it is a Foreign Lender,
        (i) that it has delivered to Administrative Agent the documentation
        required to be delivered to Administrative Agent by
        Section
        13
        below
        and
        (i) that if it is claiming exemption from U.S. federal withholding tax
        under Section 871(h) or 881(c) of the Code with respect to payments of
        "portfolio interest", (w) it is not a "bank" within the meaning of Section
        881(c)(3)(A) of the Code, (x) it is not a 10-percent shareholder of
        any Credit Party within the meaning of Section 881(c)(3)(B) or Section
        871(h)(3)(B) of the Code, (y) it is not a controlled foreign
        corporation related to any Credit Party within the meaning of
        Section 881(c)(3)(C) of the Code, and (z) it is not a conduit
        entity participating in a conduit financing arrangement (as defined in Section
        1.881-3 of the Code Treasury Regulations); (g) represents and warrants that
        Assignee is (or, upon receipt of the required consents hereto by Administrative
        Agent and Borrowers will become) an Eligible Assignee, and
        (h) represents and warrants that it has experience and expertise in the
        making or the purchasing of loans such as the Loans, and that it has acquired
        the interests described herein for its own account and without any present
        intention of selling all or any portion of such interests.

       

      4.    Each
        of
        Assignor and Assignee represents and warrants to the other party hereto that
        it
        has full power and authority to enter into this Assignment Agreement and
        to
        perform its obligations hereunder in accordance with the provisions hereof,
        that
        this Assignment Agreement has been duly authorized, executed and delivered
        by
        such party and that this Assignment Agreement constitutes a legal, valid
        and
        binding obligation of such party, enforceable against such party in accordance
        with its terms, except as enforceability may be limited by applicable
        bankruptcy, insolvency, reorganization, moratorium or other similar laws
        affecting creditors' rights generally and by general principles of
        equity.

       

      5.    Upon
        the
        effectiveness of this Assignment Agreement pursuant to Section
        13
        below,
        (a) Administrative Agent shall register Assignee as a Lender, pursuant to
        the terms of the Credit Agreement, (b) Assignee shall be a party to the
        Credit Agreement and, to the extent provided in this Assignment Agreement,
        have
        the rights and obligations of a Lender thereunder, (c) Assignor shall, to
        the extent provided in this Assignment Agreement, relinquish its rights and
        be
        released from its obligations under the Credit Agreement and
        (d) Administrative Agent shall thereafter make all payments in respect of
        the interest assigned hereby (including payments of principal, interest,
        fees
        and other amounts) to Assignee. Assignor and Assignee shall make all
        appropriate adjustments in payments for periods prior to the Effective Date
        by
        Administrative Agent or with respect to the making of this assignment directly
        between themselves.

       

      
        
           

        

        
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      6.    Each
        of
        Assignor and Assignee hereby agrees from time to time, upon request of the
        other
        such party hereto, to take such additional actions and to execute and deliver
        such additional documents and instruments as such other party may reasonably
        request to effect the transactions contemplated by, and to carry out the
        intent
        of, this Assignment Agreement. 

       

      7.    Neither
        this Assignment Agreement nor any term hereof may be changed, waived, discharged
        or terminated, except by an instrument in writing signed by the party
        (including, if applicable, any party required to evidence its consent to
        or
        acceptance of this Assignment Agreement) against whom enforcement of such
        change, waiver, discharge or termination is sought. 

       

      8.    For
        the
        purposes hereof and for purposes of the Credit Agreement, the notice address
        of
        Assignee shall be as set forth on the Schedule. Any notice or other
        communication herein required or permitted to be given shall be in writing
        and
        delivered in accordance with the notice provisions of the Credit Agreement.
        

       

      9.    In
        case
        any provision in or obligation under this Assignment Agreement shall be invalid,
        illegal or unenforceable in any jurisdiction, the validity, legality and
        enforceability of the remaining provisions or obligations, or of such provision
        or obligation in any other jurisdiction, shall not in any way be affected
        or
        impaired thereby. 

       

      10.    THIS
        ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
        IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO
        CONFLICTS OF LAWS PRINCIPLES. 

       

      11.    This
        Assignment Agreement shall be binding upon, and shall inure to the benefit
        of,
        the parties hereto and their respective successors and assigns. 

       

      12.    This
        Assignment Agreement may be signed in any number of counterparts, each of
        which
        shall be an original, with the same effect as if the signatures hereto were
        upon
        the same agreement.

       

      13.    This
        Assignment Agreement shall become effective as of the Effective Date upon
        the
        satisfaction of each of the following conditions: (a) the execution of a
        counterpart hereof by each of Assignor and Assignee, (b) the execution of a
        counterpart hereof by Administrative Agent and each Borrower as evidence
        of its
        consent hereto to the extent required pursuant to Section
        13.17 of
        the Credit Agreement, (c) the receipt by Administrative Agent of the
        administrative fee referred to in Section
        13.17(a) of
        the
        Credit Agreement, (d) in the event Assignee is a Foreign Lender, the
        receipt by Administrative Agent of United States Internal Revenue Service
        Forms
        W-8ECI, W-8BEN or W-8IMY (as applicable), and such other forms, certificates
        or
        documents, including those prescribed by the United States Internal Revenue
        Service, properly completed and executed by Assignee, certifying as to
        Assignee's entitlement to exemption from withholding or deduction of Taxes,
        and
        (e) the receipt by Administrative Agent of originals or facsimiles of the
        counterparts described above.

       

      
        
           

        

        
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      The
        parties hereto have caused this Assignment Agreement to be executed and
        delivered as of the date first written above.

       

      

      
        	
                ASSIGNOR:

                ___________________________

                 

                By:_________________________________

                Title:________________________________

              

      

      

      
        	
                ASSIGNEE:

                ___________________________

                 

                By:_________________________________

                Title:________________________________

                 

              

      

      

      
        	
                Consented
                  to:

                 

                Merrill
                  Lynch Capital, a division of Merrill Lynch

                Business
                  Financial Services Inc., as Administrative Agent
                  

                 

                By:_________________________________

                Title:________________________________

                 

              

      

      

      
        	
                CYPRESS
                  LEAWOOD, LLC

              
	 	 
	 	
                By:______________________________

                Name:____________________________

                Its:______________________________

                 

                Address:__________________________

                _________________________________

                 

                Facsimile
                  number:___________________

                E-mail
                  Address:_____________________

                Taxpayer
                  Identification Number:

                _________________________________

              

      

      

      
        	
                CYPRESS
                  ARLINGTON, L.P.,

                 

                a
                  Delaware limited partnership

                 

              
	
                By:

              	
                Cypress
                  Arlington GP, LLC, a Delaware limited liability company, its general
                  partner

              
	 	 
	 	
                By:_________________________

                Name:_______________________

                Its:_________________________

                 

                Address:____________________

                ___________________________

                 

                Facsimile
                  number:______________

                E-mail
                  Address:_______________

                Taxpayer
                  Identification Number:

                ___________________________

              

      

      

      
        
           

        

        
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      Schedule
        to Assignment Agreement

       

      Assignor: ____________________

       

      Assignee: ____________________

       

      Effective
        Date: ____________________

       

      Credit
        Agreement dated as of February __, 2006 among Cypress Leawood, LLC and Cypress
        Arlington, L.P., as Borrowers, the financial institutions party thereto from
        time to time, as Lenders, and Merrill Lynch Capital, a division of Merrill
        Lynch
        Business Financial Services Inc., as Administrative Agent

       

      Interests
        Assigned:

       

      
        	
                Commitment/Loan

              	
                Term
                  Loan

              
	
                Assignor
                  Amounts

              	
                $__________

              
	
                Amounts
                  Assigned

              	
                $__________

              
	
                Assignor
                  Amounts

                (post-assignment)

              	
                 

                $__________

              

      

      

      
        	
                Closing
                  Fee:

              	
                $__________

              

      

      

      

      Assignee
        Information:

      
        	 	 
	
                Address
                  for Notices:

                ___________________________

                ___________________________

                Attention:___________________

                Telephone:___________________

                Facsimile:____________________

              	
                Address
                  for Payments:

                 

                Bank:__________________________

                ABA
                  #:_________________________

                Account
                  #:______________________

                Reference:______________________

              

      

       

       

      
        
           

        

        
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                Exhibit
                  B to Credit Agreement (SPE
                  Requirements)

              

      

      

      1.    The
        Borrowers' business and purposes are and will continue to be limited to the
        following:

       

      (a)    to
        enter
        into and perform its obligations under this Agreement and the other Financing
        Documents;

       

      (b)    to
        acquire, own, hold, lease, maintain, develop and improve the
        Projects;

       

      (c)    to
        sell,
        transfer, service, convey, dispose of, pledge, assign, borrow money against,
        finance or otherwise deal with the Projects to the extent permitted under
        the
        Financing Documents;

       

      (d)    to
        refinance the Projects in connection with a permitted repayment of the Loans;
        and

       

      (e)    to
        engage
        in any lawful act or activity and to exercise any powers permitted to entities
        of the type (e.g., limited partnerships, limited liability companies,
        corporations, as applicable to each Borrower) formed under the laws of the
        state of organization of such Person as of the date of this Agreement that
        are
        related or incidental to and necessary, convenient or advisable for the
        accomplishment of the above mentioned purposes.

       

      2.    Borrowers
        shall do (or cause to be done) all things necessary in order to preserve
        their existence to the fullest extent permitted by law. Except as expressly
        permitted by the Financing Documents (if at all), Borrowers shall do (or
        cause
        to be done) all of the following:

       

      (a)    not
        own
        any asset or property other than (i) a fee interest in the Projects, and
        (ii) incidental personal property necessary for the ownership or operation
        of the Projects;

       

      (b)    not
        enter
        into any contract or agreement with any Affiliate of the Borrowers, any
        constituent party of the Borrowers, any guarantor or indemnitor under any
        of the
        Financing Documents or any Affiliate of any such constituent party or guarantor
        or indemnitor, except upon terms and conditions that are intrinsically fair
        and
        substantially similar to those that would be available on an arm's-length
        basis
        with third parties other than any such party;

       

      (c)    maintain
        their intention to remain solvent and pay their debts and liabilities
        (including, as applicable, shared personnel and overhead expenses) from
        their assets, to the extent of their assets, as the same shall become
        due;

       

      
        
           

        

        
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      (d)    do
        or
        cause to be done all things necessary to observe organizational formalities
        of
        the Borrowers and preserve their existence, and not terminate or fail to
        comply
        with any of the provisions in this Section.

       

      (e)    maintain
        all of their books, records, financial statements and bank accounts separate
        from those of their Affiliates and any other person or entity; provided,
        however, that the Borrowers' financial position, assets, results of operations
        and cash flows may be included in a consolidated financial statement of an
        Affiliate of the Borrowers in accordance with GAAP so long as any such
        consolidated financial statement contains a note indicating that the Borrowers
        and their Affiliates comprising the consolidated group are separate legal
        entities;

       

      (f)    hold
        themselves out to the public as a legal entities separate and distinct from
        each
        other and from any other entity (including any Affiliate of the Borrowers,
        any
        guarantor or any constituent party of the Borrowers), correct any known
        misunderstanding regarding their status as a separate entities, conduct business
        in their own name, and not identify themselves or any of their Affiliates
        as a
        division or part of the other; provided, however, that all Borrowers shall
        be
        permitted to, and shall at all times, hold themselves out to the public as
        entities that operate as a common enterprise;

       

      (g)    to
        the
        extent of cash flow available from ownership of the Projects and other business
        of the Borrowers, intend to maintain adequate capital for the normal obligations
        reasonably foreseeable in a business of their size and character and in light
        of
        their contemplated business operations;

       

      (h)    not
        commingle the funds and other assets of the Borrowers with those of any
        Affiliate or constituent party, any guarantor or any other person, except
        for
        funds deposited into any lockbox accounts or other cash management arrangements
        required under this Agreement;

       

      (i)    maintain
        their assets in such a manner that it will not be costly or difficult to
        segregate, ascertain or identify its individual assets from those of any
        Affiliate or constituent party, any guarantor or any other person or
        entity;

       

      (j)    not
        permit any Affiliate or constituent party independent access to the Borrowers'
        bank accounts, except Borrower Representative in connection with any lockbox
        account or other cash management arrangements required hereunder, any property
        management agreements entered into by Borrowers and approved by Administrative
        Agent, and otherwise in connection with property or cash management activities
        consistent with the terms of the Financing Documents;

       

      (k)    pay
        the
        salaries of their own employees, if any;

       

      (l)    compensate
        each of their consultants and agents, if any;

       

      (m)    maintain
        an arm's-length relationship with their Affiliates;

       

      
        
           

        

        
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      (n)    allocate
        fairly and reasonably shared expenses, if any, including shared office
        space;

       

      (o)    not
        pledge any of their assets for the benefit of any person or entity other
        than
        Administrative Agent, except as expressly permitted by the Financing Documents
        (if at all);

       

      (p)    have
        no
        obligation to indemnify their equity owners or members (but not including
        their
        respective individual officers, as the case may be, except to the extent
        that
        payment of such obligation is fully subordinated to the payment of the
        Obligations; provided, however, the foregoing shall not apply where the
        indemnity is paid from third party funds, such as insurance
        proceeds;

       

      (q)    maintain
        records, books of account and bank accounts separate and apart from any other
        person or entity (other than any lockbox account or other cash management
        arrangement required hereunder); and file their own tax returns, if any,
        as may
        be required under applicable law, provided, however, that the Borrowers may
        file
        their federal tax return on a consolidated basis); and maintain their books,
        records, resolutions and agreements as official records; and

       

      (r)    not
        make
        any loans or advances to any third party, and not acquire obligations or
        securities of their Affiliates, except, in each case, as permitted under
        the
        Financing Documents.

       

      3.    So
        long
        as the Loans remain outstanding, the Borrowers shall not do (or cause to
        be
        done) any of the following except to the extent otherwise permitted under
        the Financing Documents (if at all):

       

      (a)    assume,
        guarantee, become obligated for, or hold themselves out to be responsible
        for
        the debts or obligations of any other person or entity or the decisions or
        actions respecting the daily business or affairs of any other
        person;

       

      (b)    engage,
        directly or indirectly, in any business other than the actions required or
        permitted to be performed under the Borrower's Organizational Documents (as
        the
        same may be amended or supplemented from time to time with Administrative
        Agent's consent);

       

      (c)    incur,
        create or assume any indebtedness other than the Loans except as otherwise
        permitted by the Financing Documents;

       

      (d)    make
        or
        permit to remain outstanding any loan or advance to, or own or acquire any
        stock
        or securities of, any person or entity;

       

      (e)    form,
        acquire or hold any subsidiary (whether corporate, partnership, limited
        liability company or other); or

       

      
        
           

        

        
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      (f)    to
        the
        fullest extent permitted by law, engage in any dissolution, liquidation,
        consolidation, merger or sale of all or substantially all of their
        assets.

       

      
        
           

        

        
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                Exhibit
                  C to Credit Agreement (Compliance
                  Certificate)

              

      

      

      COMPLIANCE
        CERTIFICATE

       

      [BORROWER
        REPRESENTATIVE]

       

      Date:
        __________, _____

       

      This
        certificate is given by _____________________, a Responsible Officer of
        _____________ ("Borrower
        Representative"),
        pursuant to that certain Credit Agreement dated as of February __, 2006 among
        CYPRESS LEAWOOD, LLC and CYPRESS ARLINGTON, L.P., each a Delaware limited
        partnership (collectively, "Borrower"),
        the
        Lenders from time to time party thereto and Merrill Lynch Capital, a division
        of
        Merrill Lynch Business Financial Services Inc., as Administrative Agent for
        Lenders (as such agreement may have been amended, restated, supplemented
        or
        otherwise modified from time to time, the "Credit
        Agreement").
        Capitalized terms used herein without definition shall have the meanings
        set
        forth in the Credit Agreement.

       

      The
        undersigned Responsible Officer hereby certifies to Administrative Agent
        and
        Lenders that:

       

      (a)    the
        financial statements delivered with this certificate in accordance with
Section 4.1
        of the
        Credit Agreement fairly present in all material respects the results of
        operations and financial condition of Borrower and its Subsidiaries as of
        the
        dates and the accounting period covered by such financial
        statements;

       

      (b)    I
        have
        reviewed the terms of the Credit Agreement and have made, or caused to be
        made
        under my supervision, a review in reasonable detail of the transactions and
        conditions of Borrower and its Subsidiaries during the accounting period
        covered
        by such financial statements;

       

      (c)    such
        review has not disclosed the existence during or at the end of such accounting
        period, and I have no knowledge of the existence as of the date hereof, of
        any
        condition or event that constitutes a material Default or an Event of Default,
        except as set forth in Schedule
        1
        hereto,
        which includes a description of the nature and period of existence of such
        Default or an Event of Default and what action Borrower has taken, is
        undertaking and proposes to take with respect thereto; and

       

      (d)    Borrower
        is in compliance with the covenants contained in Article 6 of the Credit
        Agreement, and Guarantor is in compliance with the covenants contained in
        the
        Guarantee constituting a part of the Financing Documents, except as set forth
        below.

       

      (e)    Except
        as
        noted on Schedule
        2
        attached
        hereto, the Credit Agreement contains a complete and accurate list of all
        business locations of Borrowers and all names under which each Borrower
        currently conducts business; Schedule
        2
        specifically notes any changes in the names under which Borrower conducts
        business.

       

      
        
           

        

        
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      (f)    Except
        as
        noted on Schedule
        3
        attached
        hereto, the undersigned has no knowledge of any federal or state tax liens
        having been filed against the Borrower or any Collateral or the Guarantor,
        to
        the extent that tax liens against Guarantor would result in a Material Adverse
        Effect or would adversely affect the Collateral.

       

      (g)    Except
        as
        noted on Schedule
        3
        attached
        hereto, the undersigned has no knowledge of any failure of the Borrower or
        the
        Guarantor, to the extent that tax liens against Guarantor would result in
        a
        Material Adverse Effect or would adversely affect the Collateral to make
        required payments of withholding or other tax obligations of the Borrower
        or the
        Guarantor, to the extent that tax liens against Guarantor would result in
        a
        Material Adverse Effect or would adversely affect the Collateral during the
        accounting period to which the attached statements pertain or any subsequent
        period.

       

      (h)    [Reserved.]

       

      (i)    [Reserved.]

       

      (j)    Schedule
        4
        attached
        hereto contains a complete and accurate statement of all deposit or investment
        accounts maintained by Borrower.

       

      (k)    Except
        as
        described on Schedule
        5
        attached
        hereto:

       

      (i)    there
        are
        no current, pending or threatened proceedings relating to a condemnation
        or
        other public taking of any Project;

       

      (ii)    no
        Project has suffered no casualty or other damage or loss of the type typically
        covered by hazard insurance;

       

      (iii)    all
        insurance required to be maintained by Borrowers or ARC for the benefit of
        Borrower is in force and premiums therefor have been paid as and when due
        and no
        Borrower has made any claims thereunder;

       

      (iv)    the
        undersigned has no knowledge of any current, pending or threatened changes
        to
        the zoning classification or permitted uses of any Project; and

       

      (l)    Except
        as
        described in the Credit Agreement or in Schedule
        6
        attached
        hereto, the undersigned has no knowledge of any current, pending or
        threatened:

       

      (i)    material
        litigation against any Borrower;

       

      (ii)    inquiries,
        investigations or proceedings concerning the business affairs, practices,
        licensing or reimbursement entitlements of any Borrower;

       

      (iii)    default
        by Borrower under any material contract to which either of them is a party,
        including, without limitation, any Material Leases.

       

      
        
           

        

        
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      Such
        calculations and the certifications contained therein are true, correct and
        complete;

       

      The
        foregoing certifications and computations are made as of ___________________,
        _____ (end of month) and delivered this ____ day of _____________,
        20___.

       

      

      
        	
                Sincerely,

                 

                By_______________________________________

                Name_____________________________________

                Title
                  ________________ of
                  Borrower Representative

              

      

      

      

      

      List
        of Schedules:

      

      Schedule
        1 - Non-Compliance with Covenants

      Schedule
        2 - Business Locations and Names of Borrower

      Schedule
        3 - Unpaid Tax or Withholding Obligations

      Schedule
        4 - List of all Deposit and Investment Accounts of Borrower

      Schedule
        5 - Events Affecting Real Property (condemnation, insurance, zoning,
        taxes)

      Schedule
        6 - Pending Litigation, Inquiries or Investigations; Defaults under Material
        Contracts

       

      
        
           

        

        
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      Schedules
        to Compliance Certificate

      

      Schedule
        1 - Non-Compliance with Covenants

      

      

      Schedule
        2 - Business Locations and Names of Borrower

      

      

      Schedule
        3 - Unpaid Tax or Withholding Obligations

      

      

      Schedule
        4 - List of all Deposit and Investment Accounts of Borrower

      

      

      Schedule
        5 - Events Affecting Real Property (condemnation, insurance, zoning,
        taxes)

      

      

      Schedule
        6 - Pending Litigation, Inquiries or Investigations; Defaults under Material
        Contracts

      

      

      Worksheets
        for covenant calculations

       

      
        
           

        

        
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                Exhibit
                  D to Credit Agreement (Payment
                  Notification)

              

      

      

      

      [BORROWER
        REPRESENTATIVE]

       

      Date:
        ___________, ______

       

      

      Reference
        is hereby made to the Credit Agreement dated February __, 2006 among the
        undersigned, Merrill Lynch Capital, a division of Merrill Lynch Business
        Financial Services Inc., as Administrative Agent and the financial institutions
        party thereto. Capitalized terms used here have the meanings ascribed thereto
        in
        the Credit Agreement.

       

      Please
        be
        advised that funds in the amount of $_____________ will be wire transferred
        to
        Administrative Agent on _________, 200_. Such funds shall constitute
        [an
        optional]
        [a
        mandatory]
        prepayment of the Term Loans, with such prepayments to be applied in the
        manner
        specified in Section
        2.1(e).
        Such
        mandatory prepayment is being made pursuant to Section __________ of the
        Credit
        Agreement.

       

      Fax
        to MLC Operations 312-499-3336 no later than noon Chicago
        time

       

      
        	
                Note:

              	
                Funds
                  must be received no later than noon Chicago time for same day
                  application

              

      

       

      Wire
        Instructions:

      Bank
        Name:

      LaSalle
        Bank National Association

      135
        S.
        LaSalle Street

      Chicago,
        IL 60603

      ABA#                                        0710-0050-5

       

      Account
        Name:                        _______________________

       

      Account
        #:                                ______________________

      Reference:                                 (Client
        Name)

      

      Address:

      Merrill
        Lynch Capital

      222
        N.
        LaSalle Street, 16th
        Floor

      Chicago,
        IL 60601

      

      IN
        WITNESS WHEREOF, the undersigned officer has executed and delivered this
        certificate this ____ day of ___________, ____.

       

      
        	
                By_______________________________________

                Name_____________________________________

                Title
                  ________________ of
                  Borrower Representative

              

      

      

      
        
           

        

        
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                Exhibit
                  E to Credit Agreement (Borrowers'

                Taxpayer
                  Identification Numbers)

              

      

       

      

      See
        Schedule 3.1

       

       

      
        
           

        

        
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                Schedule
                  1
                  -
                  Permitted
                  Leases

              

      

      

       

      
        	
                Lessee

              	
                Location

              	
                Annual
                  Rent

              
	
                Reachout
                  Home Care

              	
                Arlington,
                  Texas

              	
                January
                  2006 - March 2006

                Higher
                  of $750 per month or 10% of average monthly sales for September
                  2005
                  through November 2005

              
	
                April
                  2006 - June 2006

                Higher
                  of $1,000 per month or 10% of average monthly sales for December
                  2005
                  through February 2006

              
	
                July
                  2006 and thereafter

                Higher
                  of $1,000 per month or 10% of average monthly sales for previous
                  quarter

              

      

       

      
 

      
        
           

        

        
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                Schedule
                  3.1
                  -
                  Existence,
                  Organizational Identification

                Numbers,
                  Foreign Qualification, Prior
                  Names

              

      

      

      
        	
                Cypress
                  Leawood, LLC

              	 
	
                d/b/a:
                  Town Village Leawood (application to be made at closing)

              	 
	
                Organization
                  ID No.:

              	
                4100355

              
	
                EIN:

              	
                33-1130743

              
	
                State
                  of Formation:

              	
                Delaware

              
	
                Foreign
                  Qualifications:

              	
                Kansas

              

      

      

      

      
        	
                Cypress
                  Arlington, L.P.

              	 
	
                d/b/a:
                  Town Village Arlington (application to be made at closing)

              	 
	
                Organization
                  ID No.:

              	
                4103302

              
	
                EIN:

              	
                74-3162176

              
	
                State
                  of Formation:

              	
                Delaware

              
	
                Foreign
                  Qualifications:

              	
                Texas

              

      

      

      

      
        	
                Cypress
                  Arlington & Leawood JV, LLC

              	 
	
                Organizational
                  ID No.:

              	
                4100362

              
	
                EIN:

              	
                01-0855703

              
	
                State
                  of Formation:

              	
                Delaware

              

      

      

      

      
        	
                Cypress
                  Arlington GP, LLC

              	 
	
                Organization
                  ID No.:

              	
                4100358

              
	
                EIN:

              	
                33-1130742

              
	
                State
                  of Formation:

              	
                Delaware

              
	
                Foreign
                  Organizations:

              	
                Texas

              

      

      

      

      
        	
                American
                  Retirement Corporation

              	 
	
                Organization
                  ID No.:

              	
                0325434

              
	
                EIN:

              	
                62-1674303

              
	
                State
                  of Formation:

              	
                Tennessee

              

      

       

       

      
        
           

        

        
          
          

          
            

          

        

        
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                Schedule
                  3.4
                  -
                  Capitalization

              

      

       

      
 

      

      
        
           

        

        
          
          

          
            

          

        

        
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                Schedule
                  3.6
                  -
                  Litigation

              

      

      

      

      None

       

      
        
           

        

        
          
          

          
            

          

        

        
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                Schedule
                  3.17 -
                  Material
                  Contracts

              

      

      

      

      Management
        Agreements listed on Schedule
        5.9.

       

      
        
           

        

        
          
          

          
            

          

        

        
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                Schedule
                  3.18
                  -
                  Environmental
                  Compliance

              

      

      

      

      Those
        matters referenced in the following reports prepared by Property Solutions
        Incorporated:

      

      Phase
        I
        Environmental Site Assessment dated February 22, 2006 for Town Village Leawood,
        Leawood, Kansas

      

      Phase
        I
        Environmental Site Assessment dated February 22, 2006 for Town Village
        Arlington, Arlington, Texas

       

      
        
           

        

        
          
          

          
            

          

        

        
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                Schedule
                  4.4
                  -
                  Insurance
                  Requirements

              

      

      

      The
        following requirements for insurance are effective as of the Closing Date.
        Lender reserves the absolute right to modify, amend or supplement these
        requirements at any time and from time to time during the term of the Loan
        and
        Borrower will be required to satisfy any such modified, amended or supplemented
        requirements after commercially reasonable notice to Borrower from Lender
        of
        such modification, amendment or supplement.

       

      Property
        Insurance for Borrower:  

       

      1.    Issued
        on
ACORD
        27
        form
        (Evidence of Insurance), signed by authorized agent.

       

      2.    Insurance
        carrier(s) must be rated A- VII or better (by A.M. Best).

       

      3.    ACORD
        27
        should
        disclose: (a) annual premium for the coverages should be shown on the
ACORD
        27;
        (b) premiums that remain unpaid for the term of the policy, if any.
Lender
        has accepted the schedule of estimated 2006 insurance expense provided by
        Bette
        McNamara from the Borrower.

       

      4.    Policy
        should be an all risk/special perils coverage form.

       

      5.    Policy
        must provide replacement cost coverage with waiver of coinsurance or agreed
        amount endorsement.

       

      6.    Policy
        must provide waiver of terrorism exclusion (or indicate "no terrorism
        exclusion").

       

      7.    Deductible
        shall be no greater than $10,000. Lender
        has approved the
        property deductible of $50,000 ($100,000 with respects to flood and earthquake).
        

       

      Ø If
        the
        deductible is subject to an
        overall aggregate deductible, this must be disclosed with a copy of the specific
        aggregate deductible agreement provided.

       

      8.    Building
        coverage must be greater than or equal to replacement cost valued by Merrill
        Lynch Capital or its representatives (if the policy is a blanket policy insuring
        other properties, and there is any sub-limit on the amount of coverage for
        any
        particular property, such limit should be shown on the evidence of insurance).
        Renewal amount and annual agreed amount endorsement shall be adjusted by
        Borrower, subject to Lender's approval, to maintain proper insurable values.
        Lender
        has approved the following actual coverage: Building, Business Personal
        Property, and Business Income coverages are written on a blanket basis with
        total limits of $500,000,000.

       

      9.    Loss
        of
        Rents coverage must be greater than or equal to twelve (12) months rental
        income (if the policy is a blanket policy insuring other properties, and
        there
        is any sublimit on the amount of coverage for any particular property, such
        limit should be shown on the evidence of insurance). Lender
        has approved the following actual coverage: Building,

       

      
        
           

        

        
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      Business
        Personal Property, and Business Income coverages are written on a blanket
        basis
        with total limits of $500,000,000.

       

      10.    Policy
        must provide for Boiler & Machinery coverage.

       

      11.    Policy
        must provide for Building Law and Ordinance coverage.

       

      12.    Policy
        must provide for windstorm coverage, if applicable (For Florida/Coastal
        properties).

       

      13.    Policy
        must provide for flood coverage, if applicable (For properties in FEMA flood
        zones A, B, V, and X-Shaded). Lender
        has approved the following actual coverage: Flood coverage is written at
        a
        blanket limit of $50,000,000
        with a deductible of $100,000 each occurrence. Lender has confirmed that
        no
        flood coverage is required for any Property in this
        transaction.

       

      14.    Policy
        must provide for earthquake coverage, if applicable (For properties located
        in
        Seismic Zones 3 and 4). Lender
        has approved the following actual coverage: Earthquake coverage is written
        at a
        blanket limit of $50,000,000 with a deductible of $100,000 each occurrence.
        Lender has confirmed that no earthquake coverage is required for any Property
        in
        this transaction.

       

      15.    Merrill
        Lynch Capital shall be named on the ACORD 27 as Mortgagee and Loss Payee
        (as
        applicable) and Certificate Holder.

       

      16.    ACORD
        27
        must provide for thirty (30) days' notice of cancellation or any material
        change in the policy to Merrill Lynch Capital, and if possible, deleting
        "endeavor to" and "but failure to mail such notice shall impose no obligation
        or
        liability of any kind upon the company, its agents or representatives" language.
        Cancellation notice only-no notice for "material change". Acord 27 does not
        contain "endeavor to" wording.

       

      17.    Policy
        must contain waiver of subrogation by insurer with respect to contractual
        releases made by insured prior to loss.

       

      18.    Higher
        limits and special coverages in addition to those indicated above may be
        required depending upon the property size and nature of operations (if a
        joint
        venture).

       

      
        
           

        

        
          -2-

          
            

          

        

        
          Back
            to Table of
            Contents

        

      

       

      Property
        Insurance for Operator:  

       

      1.    Operator
        must carry business interruption insurance with a coverage of twelve
        (12) months. Lender
        has approved the following actual coverage: Building, Business Personal
        Property, and Business Income coverages are written on a blanket basis with
        total limits of $500,000,000.

       

      2.    Issued
        on
ACORD
        27
        form
        (Evidence of Insurance), signed by authorized agent.

       

      3.    Insurance
        carrier(s) must be rated A- VII or better (by A.M. Best).

       

      4.    ACORD
        27
        should
        disclose: (a) annual premium for the coverages should be shown on the Acord
        27; (b) premiums that remain unpaid for the term of the policy, if any.
Lender
        has accepted the schedule of estimated 2006 insurance expense provided by
        Bette
        McNamara from the Borrower.

       

      5.    Policy
        should be an all risk/special perils coverage form.

       

      6.    Policy
        must provide replacement cost coverage with waiver of coinsurance or agreed
        amount endorsement. Lender
        has approved the following actual coverage: Building, Business Personal
        Property, and Business Income coverages are written on a blanket basis with
        total limits of $500,000,000.

       

      7.    Policy
        must provide waiver of terrorism exclusion (or indicate "no terrorism
        exclusion").

       

      8.    Deductible
        shall be no greater than $10,000. Lender
        has approved the
        property deductible of $50,000 ($100,000 with respects to flood and
        earthquake).

       

      9.    ACORD
        27
        must provide for thirty (30) days' notice of cancellation or any material
        change in the policy to Merrill Lynch Capital. Cancellation notice only-no
        notice for "material change". Acord 27 does not contain "endeavor to"
        wording.

       

      10.    Policy
        must contain waiver of subrogation by insurer with respect to contractual
        releases made by insured prior to loss. 

       

      
        
          11.    Merrill
            Lynch Capital shall be named on the ACORD
            27
            as
            Mortgagee and Loss Payee (as applicable) and Certificate
            Holder.

           

          
            
               

            

            
              -3-

              
                

              

            

            
              Back
                to Table of
                Contents

            

          

        

      

       

      General
        and Professional Liability Insurance:

       

      1.    Certificate
        must be issued on ACORD
        25
        form
        (Certificate of Ins.), signed by authorized agent.

       

      2.    Insurance
        carrier(s) must be rated A- VII or better (by A.M. Best).

       

      3.    ACORD
        25
        should
        disclose: (a) annual premium for the coverages should be shown on the
ACORD
        25;
        (b) premiums that remain unpaid for the term of the policy, if any.
Lender
        has accepted the schedule of estimated 2006 insurance expense provided by
        Bette
        McNamara from the Borrower.

       

      4.    Policy
        should include coverage for Contractual Liability.

       

      5.    Policy
        should include waiver of terrorism exclusion (or indicate "no terrorism
        exclusion"). All Professional and General Liability policies provide coverage
        for claims arising from acts of terrorism. All certificates reflect this
        coverage with the exception of the Lexington policy which provides $4,000,000
        General Liability coverage. This policy has been reviewed and coverage is
        provided for claims arising from acts of terrorism.

       

      6.    Policy
        must have a deductible not greater than $25,000. Lender
        has approved deductibles discussed below in item 7 of this
        section.

       

      Ø If
        the
        deductible is subject to an overall aggregate deductible, this must be disclosed
        with a copy of the specific aggregate deductible agreement
        provided.

       

      7.    Coverage
        is required in a minimum $1,000,000 per claim and $3,000,000 in the aggregate
        (aggregate may apply to other insureds beyond the other named insureds listed
        below only with Lender's prior written consent): [enter names of named insurance
        - i.e., the policy owner - and the other named insureds; this should consist
        only of borrowers unless MLC otherwise approves]. 

       

      Lender
        has approved the following coverage: The combined general liability and
        professional liability insurance program is written as
        follows:

       

      
        	 	
                à

              	
                The
                  primary general liability coverage is written with a limit of $4,000,000
                  each occurrence, with a $4,000,000 policy aggregate including a
                  self-insured retention of $1,000,000. Claims made by "patients"
                  are
                  covered for claims arising out of specified perils, as identified
                  in the
                  policy, only.

              

      

      

      
        	 	
                à

              	
                There
                  is also a $4,000,000 excess of $1,000,000 coverage for general
                  liability
                  and professional liability claims provided by a captive program
                  that is
                  currently. 

              

      

       

       

      
        
           

        

        
          -4-

          
            

          

        

        
          Back
            to Table of
            Contents

        

      

       

      
        	
              	à	
                The
                  two policies described above are designed to transfer some of the
                  liability of the $5,000,000 self-insured retention which the combined
                  General Liability/Professional Liability program provided by XL
                  Insurance
                  Ltd. Bermuda is subject to. The limit provided is $15,000,000 under
                  one
                  policy and a second covering only General Liability has been written
                  for
                  an additional
                  $10,000,000.

              

      

      

      
        	 	
                à

              	
                Total
                  combined primary and excess general liability coverage is $25,000,000
                  with
                  a $1,000,000 self-insured retention. Total combined coverage for
                  professional liability is $15,000,000 with a $1,000,000 self-insured
                  retention.

              

      

      

      8.    ACORD
        25
        should provide for thirty (30) days' notice of cancellation or any material
        change in the policy to Merrill Lynch Capital, and if possible, deleting
        "endeavor to" and "but failure to mail such notice shall impose no obligation
        or
        liability of any kind upon the company, its agents or representatives" language.
        Lender
        has approved the certificates without the requested changes to the notice
        of
        cancellation.

       

      9.    Policy
        must name Merrill
        Lynch Capital as additional insured and must name the
        following as other named insureds: The entities identified on Schedule
        5.9.

       

      10.    Policy
        must include Separation of Insureds/Cross Liability. 

       

      11.    Policy
        will be written on a claims-made basis. Lender
        has approved the following: The primary general liability insurance program
        is
        written on an Occurrence basis. The two combined Excess General Liability
        and
        Professional Liability insurance programs are written on a Claims-Made basis
        with the retroactive date of coverage being the inception date of coverage
        on
        October 31, 2005.

       

      12.    Insurance
        shall be noted as being primary without right of contribution of any other
        insurance carried by or on behalf of Lessor per each policies terms and
        conditions.

       

      13.    Higher
        limits and special coverages in addition to those indicated above may be
        required depending upon the property size and nature of operations (if a
        joint
        venture).

       

      
        
           

        

        
          -5-

          
            

          

        

        
          Back
            to Table of
            Contents

        

      

       

      Automobile
        Liability Insurance (must show the following):

       

      
        	
              	1.	
                Issued
                  on Acord 25 form (Certificate of Insurance), signed by authorized
                  agent.

              

      

      

      
        	
              	2.	
                Insurance
                  carrier (s) rated A- VII or better (by A.M.
                  Best).

              

      

      

      
        	
              	3.	
                Current
                  policy term.

              

      

      

      
        	
              	4.	
                Coverage
                  for Owned, Non-Owned, and Hired
                  autos.

              

      

      

      
        	
              	5.	
                Annual
                  premium for the coverages shown. Lender
                  has accepted the schedule of estimated 2006 insurance expense provided
                  by
                  Bette McNamara from the
                  Borrower.

              

      

      

      
        	
              	6.	
                Premiums
                  that remain unpaid for the policy term, if any.

              

      

      

      
        	
              	7.	
                Waiver
                  of terrorism exclusion (or indicate "no terrorism
                  exclusion").

              

      

      

      
        	
              	1.	
                Liability
                  deductible not greater than $5,000. Lender
                  has approved the
                  automobile liability deductible of
                  $100,000.

              

      

      

      
        	
              	2.	
                If
                  the deductible is subject to an overall aggregate deductible, this
                  must be
                  disclosed with a copy of the specific aggregate deductible agreement
                  provided.

              

      

      

      
        	
              	3.	
                Minimum
                  $1,000,000 per occurrence limit (primary and umbrella/excess can
                  be
                  combined to achieve minimum limit.

              

      

      

      
        	
              	4.	
                Thirty
                  (30) days (ten (10) days for non-payment) notice of
                  cancellation or any material change in the policy to Merrill Lynch
                  Capital
                  deleting "endeavor to" and "but failure to mail such notice shall
                  impose
                  no obligation or liability of any kind upon the company, its agents
                  or
                  representatives" language. Lender
                  has approved the certificates without the requested changes to
                  the notice
                  of cancellation.

              

      

      

      
        	
              	5.	
                Merrill
                  Lynch Capital included as Additional Insured (see
                  below).

              

      

      

      
        	 	
                6.

              	
                Waiver
                  of Subrogation endorsement in favor of Merrill Lynch Capital (see
                  below).
                  Lender
                  has accepted the following: The current insurance carrier would
                  not
                  provide Waiver of Subrogation in favor of Lender. However, the
                  policy does
                  name Lender as Additional Insured which insures Lender to the extent
                  of
                  Lender's insurable interest in the automobiles for this
                  transaction.

              

      

      

      
        	
              	7.	
                Separation
                  of Insureds/Cross Liability included. Lender
                  has accepted this as per the policy terms and
                  conditions.

              

      

       

      
        
           

        

        
          -6-

          
            

          

        

        
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            to Table of
            Contents

        

      

      

      
        	
              	8.	
                Insurance
                  shall be noted as being primary without right of contribution of
                  any other
                  insurance carried by or on behalf of Lessor. This
                  has been accepted by the
                  Lender.

              

      

      

      
        	
              	9.	
                Higher
                  limits and special coverages in addition to those indicated above
                  may be
                  required depending upon the property size and nature of operations
                  (if a
                  joint venture).

              

      

       

      
        
           

        

        
          -7-

          
            

          

        

        
          Back
            to Table of
            Contents

        

      

      

      Certificate
        Holder and Entity to be Shown on Required
        Endorsements:

       

      Merrill
        Lynch Capital, a Division of 

      Merrill
        Lynch Business Financial Services Inc.,

      and
        its
        successors and assigns

      222
        N. La
        Salle Street - 16th
        Floor

      Chicago,
        IL 60601

      Attn:
        Portfolio Management

      

      

      Insurance
        Consultant for Merrill Lynch Capital:

       

      Lockton
        Companies, Inc.

      5847
        San
        Felipe, Suite 320

      Houston,
        TX 77057

       

      
        	
                Primary
                  Contact:

              	 	
                Secondary
                  Contact:

              
	
                Vicki
                  Wibel, CIC, CRM

              	 	
                Nelson
                  Reese, AIS

              
	
                Account
                  Manager, Commercial Insurance

              	 	
                Account
                  Manager, Commercial Insurance

              
	
                713.458.5200
                  (Main)

              	 	
                713.458.5200
                  (Main)

              
	
                713.458.5246
                  (Direct)

              	 	
                713.458.5425
                  (Direct)

              
	
                281.793.4449
                  (Mobile)

              	 	
                713.628.5012
                  (Mobile)

              
	
                713.458.5299
                  (Fax(

              	 	
                713.458.5299
                  (Fax)

              
	
                vwibel@lockton.com
                  (E-mail)

              	 	
                nreese@lockton.com
                  (E-mail)

              

      

       

      
 

      
        
           

        

        
          -8-

          
            

          

        

        
          Back
            to Table of
            Contents

        

      

       

      
        		
                Schedule
                  4.14
                  -
                  Deferred
                  Maintenance
                  Schedule

              

      

       

       

      
        	
                Leawood
                  

              
	
                E-Call
                  system

              
	
                Visitor
                  parking 

              
	
                Kitchen
                  A/C 

              
	
                Apartment
                  combinations 

              
	 
	 
	
                Arlington
                  TX 

              
	
                Auto
                  entry doors 

              
	
                E-Call
                  system

              
	
                Exterior
                  painting*

              
	
                Roof
                  repair*

              
	
                Enhancements
                  to curb appeal 

              

      

      

      *
        Required

       

      
        
           

        

        
          
          

          
            

          

        

        
          Back
            to Table of
            Contents

        

      

       

      
        		
                Schedule
                  5.9 - Affiliate
                  Transactions

              

      

       

      

      Management
        Agreement for Town Village Arlington and Town Village Leawood Continuing
        Care
        Retirement Community dated February 28, 2006 by and between Cypress Arlington,
        L.P., Cypress Leawood, LLC and ARC Management LLC.

       

      
        
           

        

        
          
          

          
            

          

        

        
          Back
            to Table of
            Contents

        

      

       

      
        		
                Schedule
                  7.3 - Post Closing Deliveries
                  and Covenants

              

      

       

       

       

      
 

      
        
           

        

        
          
          

          
            

          

        

        
          Back
            to Table of
            Contents

        

      

       

      
        		
                Schedule
                  8.7 - Licensed
                  Operators

              

      

       

      

      None.

       

       

      
        
           

        

        
          
          

          
            

          

        

        
          Back
            to Table of
            Contents

        

      

       

      
        		
                Schedule
                  9.1(h) - Service
                  Agreement

              

      

       

      None

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