Document:

<PAGE>

                                                                    EXHIBIT 10.2

                                                                 Loan No. 20-365

                                   GUARANTY

          THIS GUARANTY dated as of the 20th day of February, 2001 (the
"Guaranty") is made by ASSISTED LIVING CONCEPTS, INC., a Nevada corporation
("Guarantor"), for the benefit of HELLER HEALTHCARE FINANCE, INC., a Delaware
corporation, in its capacity as Agent for the Lenders (as Agent and Lenders are
defined in the Loan Agreement described below).

                                    RECITALS

          A.  Financial Accommodations.  ALC Ohio, Inc., ALC Pennsylvania, Inc.,
              ------------------------
ALC Iowa, Inc., ALC Nebraska, Inc. and ALC New Jersey, Inc., each a Nevada
corporation, together with certain affiliates of such parties which are now or
hereafter become parties to the Loan Agreement defined below (collectively,
"Borrower"), Agent and Lenders are concurrently herewith entering into that
certain Loan Agreement (the "Loan Agreement") of even date herewith pursuant to
which Lenders shall extend financial accommodations to Borrower.

          B.  Inducement.  To induce Lenders to extend to Borrower the financial
              ----------
accommodations set forth in the Loan Agreement, Guarantor is willing to execute
and deliver this Guaranty.

          In consideration of the foregoing, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Guarantor hereby agrees as follows:

1.  DEFINED TERMS
    -------------

          All capitalized terms used herein and not otherwise defined shall have
the meanings assigned to such terms in the Loan Agreement.

2.  THE GUARANTY
    ------------

          2.1 Guaranty of Obligations. Guarantor unconditionally and absolutely
              -----------------------
guarantees to Agent and Lenders the full and prompt payment and performance when
due, whether at maturity or earlier, by reason of acceleration or otherwise, and
at all times thereafter, of the indebtedness, liabilities and obligations of
every kind and nature of Borrower to Agent and/or Lenders arising under or in
any way relating to the Loan Agreement or any of the other Loan Documents,
howsoever created, incurred or evidenced, whether direct or indirect, absolute
or contingent, now or hereafter existing, due or to become due, and howsoever
owned, held or acquired by Agent and/or Lenders (collectively, the
"Obligations"). Without limitation to the foregoing, the Obligations shall
include (a) all reasonable attorneys' and paralegals' fees, including the cost
of inside attorneys and paralegals, costs and expenses and all court costs and
costs of appeal incurred by Agent
<PAGE>

and/or Lenders in collecting any amount due Agent and/or Lenders under this
Guaranty or in prosecuting any action against Borrower, Guarantor or any other
guarantor with respect to all or any part of the Obligations (collectively, the
"Enforcement Costs"), and (b) all interest, fees, costs and expenses due Agent
and/or Lenders after the filing of a bankruptcy petition by or against Borrower
regardless of whether such amounts can be collected during the pendency of the
bankruptcy proceedings.

          2.2 Continuing Guaranty; Guaranty of Payment. This Guaranty is a
              ----------------------------------------
continuing guaranty of the Obligations, and Guarantor agrees that the
obligations of Guarantor to Agent and/or Lenders hereunder shall be primary
obligations, shall not be subject to any counterclaim, set-off, abatement,
deferment or defense based upon any claim that Guarantor may have against Agent
and/or Lenders, Borrower or any other person or entity.

          2.3 Liability of Guarantor Not Affected. This Guaranty shall remain in
              -----------------------------------
full force and effect without regard to, and shall not be released, discharged
or affected in any way by, any circumstances or condition, including, without
limitation:

          (a) the attempt or the absence of any attempt by Agent and/or Lenders
     to obtain payment or performance by Borrower or any other guarantor (this
     being a guaranty of payment and performance and not of collection);

          (b) Agent's and/or Lenders' delay in enforcing Guarantor's obligations
     hereunder or of any other party under the Loan Documents, or any prior
     partial exercise by Agent and/or Lenders of any right or remedy hereunder
     or under any of the other Loan Documents;

          (c) any renewal, extension, substitution, modification, replacement of
     or indulgence with respect to, the Obligations, all of which Agent and/or
     Lenders is hereby authorized to make;

          (d) the fact that Borrower is not liable for the payment or
     performance of the Obligations, or any portion thereof, for any reason
     whatsoever, Guarantor being liable for the Obligations notwithstanding that
     Borrower may not be;

          (e) any sale, exchange, release, surrender or other disposition of, or
     realization upon, any collateral securing the Obligations, or any
     settlement or compromise of any guaranties of the Obligations, or any other
     obligation of any person or entity with respect to the Loan Documents;

          (f) the acceptance by Agent and/or Lenders of any additional security
     for the Obligations;

          (g) the lack of validity or enforceability of, or Agent's and/or
     Lenders' waiver or consent with respect to, any provision of any instrument

                                      -2-
<PAGE>

     evidencing, securing or otherwise relating to the Obligations, or any part
     thereof, including without limitation the Loan Documents;

          (h) the failure by Agent and/or Lenders to take any steps to perfect,
     maintain, or enforce its security interests or remedies under the Loan
     Documents, or to preserve its rights to or protect any security or
     collateral, for the Obligations;

          (i) any voluntary or involuntary bankruptcy, insolvency,
     reorganization, arrangement, readjustment, assignment for the benefit of
     creditors, composition, receivership, liquidation, marshalling of assets
     and liabilities or similar event or proceedings with respect to Borrower or
     Guarantor, as applicable, or any of their respective properties (each, an
     "Insolvency Proceeding"), or any action taken by Agent and/or Lenders, any
     trustee or receiver or by any court in any such proceeding;

          (j) the failure by Agent and/or Lenders to file or enforce a claim
     against the estate (either in an Insolvency Proceeding or other proceeding)
     of Borrower or Guarantor;

          (k) in any proceeding under Title 11 of the United States Code (11
     U.S.C. Section 101 et seq.), as amended (the "Bankruptcy Code"): (i) any
     election by Agent and/or Lenders under Section 1111(b)(2) of the Bankruptcy
     Code, (ii) any borrowing or grant of a security interest by Borrower as
     debtor-in-possession under Section 364 of the Bankruptcy Code, (iii) the
     inability of Agent and/or Lenders to enforce the Obligations against
     Borrower by application of the automatic stay provisions of Section 362 of
     the Bankruptcy Code, or (iv) the disallowance, under Section 502 of the
     Bankruptcy Code, of all or any portion of Agent's and/or Lenders' claim(s)
     against Borrower for repayment of the Obligations;

          (l) the failure of Guarantor to receive notice of any intended
     disposition of the collateral for the Obligations;

          (m) any merger or consolidation of Borrower into or with any other
     entity, or any sale, lease or transfer of any of the assets of Borrower or
     Guarantor to any other person or entity;

          (n) any change in the ownership of Borrower, or any change in the
     relationship between Borrower and Guarantor or any termination of any such
     relationship;

          (o) the death, incapacity, insanity, disability, dissolution or other
     change in states of Borrower or Guarantor;

          (p) the making of additional loans to Borrower, the increase or
     reduction of the maximum principal amount of the Obligations, the increase
     or

                                      -3-
<PAGE>

     reduction in the interest rate provided in the Notes, or any other
     modification, amendment, release or waiver of the terms of the Loan
     Documents;

          (q) the absence, impairment or loss of any right of reimbursement or
     subrogation or other right or remedy of Guarantor; and

          (r) any other circumstance which might otherwise constitute a legal or
     equitable discharge or defense of Borrower, Guarantor or any other
     guarantor.

          Guarantor hereby expressly waives and surrenders any defense to its
liability under this Guaranty based upon any of the foregoing acts, omissions,
agreements, waivers or matters, whether or not Guarantor had notice or knowledge
of same.  It is the purpose and intent of this Guaranty that the obligations of
Guarantor hereunder shall be absolute and unconditional under any and all
circumstances.

         2.4  Rights of Agent and/or Lenders.  Agent and/or Lenders are hereby
              ------------------------------
authorized, without notice to or demand of Guarantor and without affecting the
liability of Guarantor hereunder, to take any of the following actions from time
to time:  (a) increase or decrease the amount of, or renew, extend, accelerate
or otherwise change the time for payment of, or other terms relating to, the
Obligations, or otherwise modify, amend or change the terms of any promissory
note or other agreement evidencing, securing or otherwise relating to any of the
Obligations, including, without limitation, the making of additional advances
thereunder; (b) accept and apply any payments on or recoveries against the
Obligations from any source, and any proceeds of any security therefor, to the
Obligations in such manner, order and priority as Agent and/or Lenders may elect
in their sole discretion; (c) take, hold, sell, release or otherwise dispose of
all or any security for the Obligations or the payment of this Guaranty; (d)
settle, release, compromise, collect or otherwise liquidate the Obligations or
any portion thereof; (e) accept, hold, substitute, add or release any other
guaranty or endorsements of the Obligations; and (f) at any time after maturity
of the Obligations, appropriate and apply toward payment of the Obligations (i)
any indebtedness due or to become due from Agent and/or Lenders to Guarantor,
and (ii) any moneys, credits, or other property belonging to Guarantor at any
time held by or coming into the possession of Agent and/or Lenders or any
affiliates thereof, whether for deposit or otherwise.

         2.5  Subordination. All indebtedness now or hereafter owing by Borrower
              -------------
to Guarantor, or any one of them, for borrowed money or otherwise is hereby
subordinated to the payment of the Obligations, and, subsequent to a default
hereunder or under any of the other Loan Documents, Guarantor shall not accept
payment of all or any portion of such subordinated indebtedness until
satisfaction in full of the Obligations. All security interests, liens and
encumbrances which Guarantor, or any one of them, now or hereafter may have upon
any of the assets of Borrower, or any one of them, are hereby subordinated to
all security interests, liens and encumbrances heretofore, now or hereafter
granted to Agent and/or Lenders pursuant to the Loan Documents.

                                      -4-
<PAGE>

3.   GUARANTOR'S WAIVERS
     -------------------

          3.1  Statutes of Limitation. Guarantor irrevocably waives all statutes
               ----------------------
of limitation as a defense to any action or proceeding brought against Guarantor
by Agent and/or Lenders, to the fullest extent permitted by law.

          3.2  Election of Remedies. Guarantor irrevocably waives any defense
               --------------------
based upon an election of remedies made by Agent and/or Lenders or any other
election afforded to Agent and/or Lenders pursuant to applicable law, including,
without limitation, (a) any election to proceed by judicial or nonjudicial
foreclosure or by Uniform Commercial Code sale or by deed or assignment in lieu
thereof, or any election of remedies which destroys or otherwise impairs the
subrogation rights of the Guarantor or the rights of the Guarantor to proceed
against Borrower for reimbursement, or both, (b) the waiver by Agent and/or
Lenders, either by action or inaction of Agent and/or Lenders or by operation of
law, of a deficiency judgment against Borrower or Lessee, and (c) any election
pursuant to an Insolvency Proceeding.

          3.3  Rights of Subrogation and Other Rights. Guarantor irrevocably
waives (a) all rights at law or in equity to seek subrogation, contribution,
indemnification or any other form of reimbursement or repayment from Borrower or
any other person or entity now or hereafter primarily or secondarily liable for
any of the Obligations for any disbursements made by any Guarantor under or in
connection with this Guaranty, (b) all claims of any kind or type against
Borrower as a result of any payment made by Guarantor to Agent and/or Lenders,
and (c) any right to participate in any security now or hereafter held by Agent
and/or Lenders. In furtherance, and not in limitation, of the foregoing,
Guarantor agrees that any payment to Agent and/or Lenders pursuant to this
Guaranty shall be deemed a contribution to the capital of Borrower or other
obligated party and shall not constitute Guarantor a creditor of Borrower or
such other party. Guarantor further agrees that to the extent the waiver of its
rights of subrogation as set forth herein is found by a court of competent
jurisdiction to be void or voidable for any reason, any rights of subrogation
Guarantor may have against Borrower or against any collateral or security for
any of the Obligations shall be junior and subordinate to any rights Agent
and/or Lenders may have against Borrower and to all right, title and interest
Agent and/or Lenders may have in such collateral or security.

          3.4  Demands and Notices. Guarantor irrevocably waives all
               -------------------
presentments, demands for performance, protests, notices of protest, notices of
dishonor, notices of acceptance of this Guaranty and of the existence, creation
or incurring of new or additional Obligations, notices of defaults by Borrower
or any other person liable for the Obligations and demands and notices of every
kind that may be required to be given by any statute or rule or law.

          3.5  Borrower Information. Guarantor irrevocably waives (a) any duty
               --------------------
of Agent and/or Lenders to advise Guarantor of any information known to Agent
and/or Lenders regarding the financial condition of Borrower (it being the
obligation of Guarantor

                                      -5-
<PAGE>

to keep informed regarding such condition), and (b) any defense based on any
claim that Guarantor's obligations exceed or are more burdensome than those of
Borrower.

          3.6  Limitation of Liability. Guarantor irrevocably waives any
               -----------------------
impairment, modification, change, release or limitation of the liability of, or
stay of actions or lien enforcement proceedings against, Borrower or Guarantor,
their property, or their estate in bankruptcy, resulting from the operation of
any provision of the state or federal bankruptcy laws, or from the decision of
any court.

          3.7  Lack of Diligence. Guarantor irrevocably waives any and all
               -----------------
claims or defenses based upon lack of diligence in: (a) collection of any
Obligations; (b) protection of any collateral or other security for the
Indebtedness or Obligations; or (c) realization upon the other Loan Documents.

          3.8  Other Defenses. Guarantor irrevocably waives any other defenses,
               --------------
set-offs or counterclaims which may be available to Borrower, or any other
Guarantor if there are more than one, and any and all other defenses now or at
any time hereafter available to Guarantor (including without limitation those
given to sureties) at law or in equity.

4.  REPRESENTATIONS AND WARRANTS
    ----------------------------

          Guarantor represents and warrants to Agent and Lenders as follows:

          4.1  Existence: Authority; Execution. (a) Guarantor is a duly
               -------------------------------
organized corporation, validly existing, and in good standing under the laws of
the state of its incorporation or formation and qualified to do business in the
states in which any of its material assets exist; and (b) this Guaranty has been
duly and validly authorized, executed and delivered and constitutes the binding
obligation of Guarantor, enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditor's rights generally
or by equitable principles relating to enforceability.

          4.2  Financial Statements. All financial statements and other
               --------------------
financial information furnished or to be furnished to Agent and/or Lenders (a)
are or will be true and correct in all material respects and do or will fairly
represent the financial condition of Guarantor (including all contingent
liabilities), and (b) were or will be prepared in accordance with generally
accepted accounting principles, or such other accounting principles as may be
reasonably acceptable to Agent at the time of their preparation, consistently
applied. There has been no material adverse change in Guarantor's financial
condition since the dates of the statements most recently furnished Agent.

          4.3  No Defaults. There is no existing event of default, and no event
               -----------
has occurred which with the passage of time and/or the giving of notice or both
will constitute an event of default, under any agreement to which Guarantor is a
party, which event of default could reasonably be expected to have a material
adverse effect on Guarantor's ability to perform the Obligations under this
Guaranty, and neither the execution and delivery of this

                                      -6-
<PAGE>

Guaranty nor compliance with the terms and provisions hereof will violate any
presently existing provision of law or any presently existing regulation, order,
writ, injunction or decree of any court or governmental department, commission,
board, bureau, agency or instrumentality, which violation could reasonably be
expected to have a material adverse effect on Guarantor's ability to perform the
Obligations under this Guaranty, or constitute a default under, any agreement to
which Guarantor is a party or by which Guarantor is bound, which default could
reasonably be expected to have a material adverse effect on Guarantor's ability
to perform the Obligations under this Guaranty.

          4.4  No Litigation. There are no actions, suits or proceedings pending
               -------------
or, to the best of Guarantor's knowledge, threatened against the Guarantor
before any court or any governmental, administrative, regulatory, adjudicatory
or arbitrational body or agency of any kind which, if decided adversely, would
materially and adversely affect performance by the Guarantor of Guarantor's
obligations pursuant to and as contemplated by the terms and provisions of this
Guaranty.

          4.5  Accuracy. Neither this Guaranty nor any document, financial
               --------
statement, credit information, certificate or written statement heretofore
furnished or required herein to be furnished to Agent and/or Lenders by
Guarantor contains any untrue statement of fact or omits to state a fact
material to this Guaranty.

5.  EVENTS OF DEFAULT

          Upon the occurrence of any of the following events, Agent and/or
Lenders may, without notice to Borrower or Guarantor, declare any or all of the
Obligations, whether or not then due, immediately due and payable by Guarantor
under this Guaranty, and Agent and/or Lenders shall be entitled to enforce the
obligations of Guarantor hereunder.

          5.1  Default by Borrower. Borrower shall default in the payment or
               -------------------
performance of any of the Obligations guarantied hereby, after giving effect to
any applicable notice and cure provisions set forth in the Loan Documents.

          5.2  Failure to Perform. Guarantor fails to perform any of its
               ------------------
obligations under this Guaranty or any agreement under which security is given
herefor, or this Guaranty is revoked or terminated by Guarantor, or any
representation or warranty made or given by Guarantor to Agent and/or Lenders
proves to be false or misleading in any material respect.

          5.3  Insolvency Proceeding. The making by Guarantor of any assignment
               ---------------------
for the benefit of creditors, or a trustee or receiver being appointed for
Guarantor or for any property of Guarantor, or Guarantor becoming insolvent or
the subject of any Insolvency Proceeding and, in the case of such a proceeding
being commenced against Guarantor, such proceeding is not dismissed within
thirty (30) days following the commencement date thereof.

          5.4  Dissolution. Guarantor dies, dissolves or liquidates, or the
               -----------
business of Guarantor is suspended or terminated for any reason.

                                      -7-
<PAGE>

6.  MISCELLANEOUS

          6.1  Revival and Reinstatement. If at any time all or any part of any
               -------------------------
payment theretofore applied by Agent and/or Lenders to any of the Obligations is
or must be rescinded or returned by Agent and/or Lenders for any reason
whatsoever (including, without limitation, the insolvency, bankruptcy or
reorganization of Borrower), such Obligations shall, for the purposes of this
Guaranty, to the extent such payment is or must be rescinded or returned, be
deemed to have continued in existence, notwithstanding such application by Agent
and/or Lenders, and this Guaranty shall continue to be effective or be
reinstated, as the case may be, as to such Obligations, and Guarantor shall be
fully liable therefore, all as though such application by Agent and/or Lenders
had not been made.

          6.2  No Marshaling. Agent and Lenders have no obligation to marshal
               -------------
any assets in favor of Guarantor, or against or in payment of (a) any of the
Obligations, or (b) any other obligation owed to Agent and/or Lenders by
Guarantor, Borrower or any other person.

          6.3  No Modification, Waiver or Release Without Writing. Except as may
               --------------------------------------------------
otherwise be expressly set forth herein, this Guaranty may not be modified,
amended, revised, revoked, terminated, changed or varied in any way whatsoever,
nor shall any waiver of any of the provisions of this Guaranty be binding upon
Agent or Lenders, except as expressly set forth in a writing duly executed by
Agent and Lenders. No waiver by Agent or Lenders of any default shall operate as
a waiver of any other default or the same default on a future occasion, and no
action by Agent or Lenders permitted hereunder shall in any way affect or impair
Agent's or Lenders' rights or the obligations of Guarantor under this Guaranty.

          6.4  Assignment; Successors and Assigns. Guarantor may not assign
               ----------------------------------
Guarantor's obligations or liability under this Guaranty. Subject to the
preceding sentence, this Guaranty shall be binding upon the parties hereto and
their respective heirs, executors, successors, representatives and assigns and
shall inure to the benefit of the parties hereto and their respective successors
and assigns. Subject to the Loan Agreement, Agent and/or Lenders may, without
notice to anyone, sell or assign the Obligations, the Notes or other Loan
Documents or any part thereof, or grant participations therein, and in any such
event each and every assignee or holder of, or participant in, all or any of the
Obligations shall have the right to enforce this Guaranty, by suit or otherwise
for the benefit of such assignee, holder, or participant, as fully as if herein
by name specifically given such right, but Agent and/or Lenders shall have an
unimpaired right, prior and superior to that of any such assignee, holder or
participant, to enforce this Guaranty for the benefit of Agent and/or Lenders.

          6.5  Integration. This Guaranty is the entire agreement of Guarantor
               -----------
with-respect to the subject matter of this Guaranty, provided that this Guaranty
shall not in any way limit or abrogate the obligations of Guarantor under the
other Loan Documents, including, without limitation, the Hazardous Materials
Indemnity Agreement of even date herewith.

                                      -8-
<PAGE>

          6.6  Rights Cumulative. All of Agent's and/or Lenders' rights under
               -----------------
this Guaranty and the other Loan Documents are cumulative. The exercise of any
one right does not exclude the exercise of any other right given in this
Guaranty or the other Loan Documents or any other right of Agent and/or Lenders
not set forth in this Guaranty or the other Loan Documents. If there is more
than one Guarantor hereunder, Agent and/or Lenders may exercise their rights and
remedies against any one or more of such Guarantors and the failure of Agent
and/or Lenders to proceed against one or more of such Guarantors shall not
affect the liability of the Guarantor under this Guaranty.

          6.7  Severability. Whenever possible each provision of this Guaranty
               ------------
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.

          6.8  Material Inducement; Consideration. Guarantor acknowledges and
               ----------------------------------
agrees that Agent and Lenders are specifically relying upon the representations,
warranties, agreements and waivers contained herein and that such
representations, warranties, agreements and waivers constitute a material
inducement to Agent and Lenders to accept this Guaranty and to enter into the
Loan Agreement and the transaction contemplated therein. Guarantor further
acknowledges that it expects to benefit from Lenders' extension of financing
accommodations to Borrower because of its relationship to Borrower, and that it
is executing this Guaranty in consideration of that anticipated benefit.

          6.9  Indemnification. Guarantor agrees to indemnify, pay and hold
               ---------------
Agent and Lenders and their respective officers, directors, employees, agents,
and attorneys (collectively called the "Indemnitees") harmless 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 reasonable fees and disbursements of counsel
for such Indemnitees in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not such Indemnitee
shall be designated a party thereto) that may be imposed on, incurred by, or
asserted against that Indemnitee, in any manner relating to or arising out of
this Guaranty or the exercise of any right or remedy hereunder or under the
other documents pertaining to the Obligations (the "Indemnified Liabilities");
provided that Guarantor shall have no obligation to an Indemnitee under this
--------
subsection with respect to Indemnified Liabilities arising from the gross
negligence or willful misconduct of that Indemnitee as determined by a court of
competent jurisdiction.  To the extent that the undertaking to indemnify, pay
and hold harmless set forth in the preceding sentence may be unenforceable
because it is violative of any law or public policy, Guarantor shall contribute
the maximum portion that it is permitted to pay and satisfy under applicable law
to the payment and satisfaction of all Indemnified Liabilities incurred by the
Indemnitees or any of them.

          6.10 Counterparts. This Guaranty may be executed in counterparts, each
               ------------
of which shall be deemed an original, but all of which, when taken together,
shall be deemed one and the same agreement.

                                      -9-
<PAGE>

          6.11 Governing Law. This Guaranty shall be governed by and construed
               -------------
in accordance with the internal laws of the State of Illinois, without regard to
conflicts of law provisions.

          6.12 Joint and Several Obligations. If this Guaranty is executed by
               -----------------------------
more than one Guarantor then all of the covenants, obligations, agreements,
indemnities, representations and warranties of the Guarantors contained herein
shall be joint and several.

          6.13 VENUE.  GUARANTOR HEREBY CONSENTS TO THE JURISDICTION OF ANY
               -----
STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF COOK, STATE OF ILLINOIS AND
IRREVOCABLY AGREES THAT, SUBJECT TO AGENT'S ELECTION, ALL ACTIONS OR PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS GUARANTY SHALL BE LITIGATED IN SUCH COURTS.
GUARANTOR EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. GUARANTOR HEREBY WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF
PROCESS MAY BE MADE UPON GUARANTOR BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, ADDRESSED TO GUARANTOR, AT THE ADDRESS SET FORTH IN THIS
AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS
BEEN POSTED.

          6.14 WAIVER OF JURY TRIAL.  GUARANTOR, AND BY THEIR ACCEPTANCE OF THIS
               --------------------
GUARANTY, AGENT AND LENDERS, HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT MATTER
OF THIS GUARANTY AND THE BUSINESS RELATIONSHIP THAT IS BEING ESTABLISHED.  THIS
WAIVER IS KNOWINGLY, INTENTIONALLY AND VOLUNTARILY MADE BY GUARANTOR, AND BY
GUARANTOR'S ACCEPTANCE OF THIS GUARANTY, AGENT, LENDERS AND GUARANTOR
ACKNOWLEDGE THAT NEITHER AGENT, LENDERS NOR ANY PERSON ACTING ON BEHALF OF AGENT
OR LENDERS HAS MADE ANY REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL
BY JURY OR HAS TAKEN ANY ACTIONS WHICH IN ANY WAY MODIFY OR NULLIFY ITS EFFECT.

          6.15 WAIVERS. THE WAIVERS SET FORTH IN THIS GUARANTY (INCLUDING,
               -------
WITHOUT LIMITATION, SECTIONS 6.13 AND 6.14 ABOVE) ARE KNOWINGLY, INTENTIONALLY,
AND VOLUNTARILY MADE BY GUARANTOR, AND GUARANTOR ACKNOWLEDGES THAT NEITHER
AGENT, LENDERS NOR ANY PERSON ACTING ON BEHALF OF THEM, HAS MADE ANY
REPRESENTATIONS OF FACT TO INDUCE THESE WAIVERS OR IN ANY WAY TO MODIFY OR
NULLIFY THEIR EFFECT. GUARANTOR FURTHER ACKNOWLEDGES THAT IT HAS BEEN
REPRESENTED (OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF
THIS GUARANTY

                                      -10-
<PAGE>

AND IN THE MAKING OF THESE WAIVERS BY INDEPENDENT LEGAL COUNSEL, SELECTED OF ITS
OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THESE WAIVERS WITH
COUNSEL.

                                      -11-
<PAGE>

          The undersigned has duly executed this Guaranty as of the date and
year first above written.

                        ASSISTED LIVING CONCEPTS, INC.,
                        a Nevada corporation

                        By: /s/ Drew Q. Miller
                           __________________________________________
                        Name:  Drew Q. Miller
                        Its:   Senior Vice President, Chief Financial
                               Officer and Treasurer

                                      -12-Prepared by MERRILL CORPORATION www.edgaradvantage.com

QuickLinks
 -- Click here to rapidly navigate through this document
  

 
 

EXHIBIT 4.1    
  

 
  RIGHTS AND PREFERENCES OF
  SERIES C CONVERTIBLE
  PREFERRED STOCK OF
  SOLIGEN TECHNOLOGIES, INC.    
  

    9(d) The Series C Convertible Preferred Stock ("Series C Preferred Stock") shall consist of one million (1,000,000) shares having the following
particular rights and preferences: 

(i)
Dividends. Holders of shares of Series C Preferred Stock shall not be entitled to any fixed or guaranteed dividends, nor to any cumulative
dividend rights, but shall be entitled to receive out of the earnings and assets of the Corporation only such dividends as may be lawfully declared on such dates or may be determined in the discretion
of the Board of Directors. No dividend or other distribution whatsoever shall be declared or paid on Common Shares or Preferred Shares ranking junior to the rights of the Series C Preferred
Stock unless a dividend or other distribution shall be simultaneously paid on each outstanding share of Series C Preferred Stock which is equal to or greater than the product of (i) the
dividend or distribution proposed to be declared or paid on each share of Common Shares or such junior Preferred Shares (on an as-converted to Common Shares basis) times (ii) the
number of Common Shares into which each such share of Series C Preferred Stock is then convertible under Subsection 9(d)(iii) below. In any event, no dividend or other distribution shall
be paid at any time on Series C Preferred Stock, on any other class or series of Preferred Shares (other than "Series B Preferred Stock"), or on Common Shares which would have the effect
of reducing the net assets of the Corporation below the aggregate preferential amount (determined in accordance with Subsection 9(d)(ii) below) payable to holders of Series C Preferred
Stock upon liquidation or dissolution of the Corporation. 

(ii)
Liquidation.

    (a) Liquidation Preferences. Upon liquidation or dissolution of the Corporation, whether voluntary or involuntary, each
share of Series C Preferred Stock shall entitle its holder to receive, out of the assets of the Corporation available for distribution to shareholders, whether from capital, surplus or
earnings,
and before any distribution of such assets to the holders of Common Shares or Preferred Shares ranking junior to the rights of the Series C Preferred Stock, a liquidation preference of one
dollar ($1.00) per share (as adjusted for stock splits, dividends, consolidations, recapitalizations and similar events), plus any unpaid dividends declared pursuant to Subsection
9(d)(i) above. If the assets of the Corporation available for distribution to shareholders are insufficient to satisfy in full the liquidation preferences for Series C Preferred Stock
and all the other classes or series of Preferred Shares entitled to a stated liquidation preference, then the holders of Series A and Series B Preferred Stock shall share ratably in such
distribution in proportion to their respective stated liquidation preferences, and within each such series, each holder shall be entitled to receive the same distribution for each share of such
series. After setting apart or paying in full the liquidation preferences on Series A and Series B Preferred Stock, further distribution of the remaining available assets shall be made
pro rata to the holders of Series C Preferred Stock. After setting apart or paying in full the liquidation preference on Series C Preferred Stock, further distribution of the remaining
available assets shall be made pro rata to the holders of any other classes or series of Preferred Shares entitled to a stated preference on liquidation, and then pro rata to the holders of Common
Shares. 

    (b) Deemed Liquidations. The sale of all or substantially all of the Corporation's assets, or the acquisition of the
Corporation by another entity by means of merger, consolidation, share exchange, reorganization or otherwise, pursuant to which shares of the Corporation's capital stock are converted into cash,
securities or other property of the acquiring entity or any of its affiliates, shall be regarded as a liquidation within the meaning of this Subsection 9(d)(ii); provided, however, that each holder of
Series C Preferred Stock shall have the right to elect the benefits of the provisions of Subsection 

1

 

9(d)(iii) or other applicable conversion provisions in lieu of receiving payment of the liquidation preference in the event of the liquidation, dissolution or winding up of the Corporation
pursuant to this Subsection 9(d)(ii); provided, further, that this provision shall not apply if the holders of the Corporation's voting capital stock immediately prior to such merger, consolidation,
share exchange or reorganization beneficially own, directly or indirectly, more than fifty percent (50%) of the combined voting power of the capital stock of the corporation resulting from such
merger, consolidation, share exchange or reorganization. 

    (c) Noncash Distribution. Whenever the distribution provided for in this Subsection 9(d)(ii) shall be payable in
property other than cash, the value of such distribution shall be the fair market value of such property as determined in good faith by the Corporation's Board of Directors. 

(iii)  Conversion.

    (a) Automatic Conversions. At any time or times, part or all of any holder's shares of Series C Preferred Stock
may be converted into Common Shares at the conversion price then in effect, in the manner specified below, and upon delivery by the holder thereof of written notice of conversion to the Corporation at
its principal business offices (or at the office of any transfer agent for shares of Series C Preferred Stock or Common Shares) specifying the number of such shares to be converted, accompanied
by the certificate or certificates for the shares to be converted, duly endorsed in blank or accompanied by signed instruments appropriate for the transfer thereof. In addition, all of the outstanding
shares of Series C Preferred Stock shall, at the election of the Corporation's Board of Directors, be automatically converted into Common Shares in the manner specified below upon the
occurrence of either of the following events (an "Automatic Conversion Event"): 

    (1) Immediately
prior to such time as the Corporation shall close a firm commitment underwritten public offering of Common Shares pursuant to a registration statement
filed pursuant to the Securities Act of 1933, as amended, ("Securities Act") in which the Corporation receives gross proceeds of at least ten million dollars ($10,000,000) and at a price equal to or
greater than one dollar ($1.00) per share (adjusted for stock splits, dividends, consolidations, recapitalizations, and similar events); or 

    (2) After
one (1) year from the date that a share of Series C Preferred Stock is issued, when (a) the Common Shares shall have traded above one
dollar ($1.00) per share (as adjusted for stock splits, dividends, consolidations, recapitalizations and similar events) for sixty (60) consecutive trading days on a national securities
exchange or NASDAQ, or (b) the closing bid price for the Common Shares quoted by an established quotation service for over-the-counter securities shall be above one
dollar ($1.00) per share (as adjusted for stock splits, dividends, consolidations, recapitalizations and similar events) for sixty (60) consecutive trading days; and the cumulative trading
volume of the Common Shares during such sixty (60) consecutive trading days is equal to or greater than three million five hundred thousand (3,500,000) Common Shares, if traded on a national
securities exchange, or five million (5,000,000) Common Shares, if traded on NASDAQ or traded over-the-counter. 

    (b) Conversion Procedures. The Common Shares (or other shares, securities or property) into which the outstanding shares
of Series C Preferred Stock are convertible as computed in this Subsection 9(d)(iii) shall, promptly after delivery to the Corporation of written notice of any conversion election, or
promptly after the occurrence of any Automatic Conversion Event, and upon surrender to the Corporation of the certificates representing the Series C Preferred Stock to be converted, duly
endorsed in blank or accompanied by signed instruments appropriate for transfer, be issued and delivered as soon as practicable to the holders of Series C Preferred Stock in due and proper
form, and shall be fully paid and nonassessable; as to any portion of the shares so surrendered which are not subject to such conversion election, the Corporation shall promptly issue to the holder
thereof a certificate in due and proper form representing the shares of Series C Preferred Stock which have not 

2

 

been so converted. Conversion shall be deemed to have been made at the close of business on the date the holder gave notice to the Corporation, or on the date that the Corporation's Board of Directors
elected to declare an Automatic Conversion Event, irrespective of the date on which such surrender or issuance may occur, and as of such election date each such holder shall be deemed to have become
the record holder of such respective number of Common Shares (or other shares, securities or property), and the Series C Preferred Stock so converted shall be deemed forthwith cancelled and
shall not thereafter be deemed authorized or subject to reissuance. No adjustment shall be made in the number of Common Shares issuable upon conversion to reflect declared, but unpaid, dividends on
Series C Preferred Stock, but such dividends for which the payment date has passed shall be paid in cash as of the date of conversion of the shares of Series C Preferred Stock as to
which they are owing. The Corporation shall not be required to issue any fraction of Common Shares upon conversion of Series C Preferred Stock; if any fraction of Common Shares would, except
for the foregoing clause, be issuable to any holder on the conversion of Series C Preferred Stock, the Corporation shall pay to each holder of such converted Series C Preferred Stock an
amount in cash equal to the then current fair market value of such fractional interest. 

    (c) Conversion Rates. The number of Common Shares issuable with respect to any share of Series C Preferred Stock
shall be determined by dividing one dollar ($1.00) by the conversion price then in effect at the time of conversion for such series which shall initially be ten cents ($0.10) per share (the
"Series C Conversion Price"), and which shall thereafter be subject to adjustment from time to time as set forth herein. 

    (d) Adjustment of Series C Conversion Price Upon Issuance of Common Shares or Convertible Securities. Except as
provided in Subsection 9(d)(iii)(e), if, after the first date that a share of Series C Preferred Stock is issued, the Corporation shall issue or sell, or, in accordance with Subsections
9(d)(iii)(d)(1) through 9(d)(iii)(d)(5), is deemed to have issued or sold any Common Shares, or any stock or security convertible into or exchangeable for Common Shares, without consideration or for a
consideration per share less than the Series C Conversion Price in effect immediately prior to the time of such issue or sale or deemed issuance or sale, then, forthwith upon each such issue or
sale or deemed issuance or sale, the Series C Conversion Price shall be reduced to the price determined by dividing (i) an amount equal to the sum of (x) the number of Common
Shares of the Corporation outstanding immediately prior to such issue or sale (including the number of Common Shares issuable pursuant to exercise of all outstanding options and warrants and the
conversion of all of the outstanding Preferred Shares at the then existing conversion prices) multiplied by the then existing Series C Conversion Price plus (y) the consideration, if
any, received by the Corporation upon such issue or sale, by (ii) the sum of the number of Common Shares outstanding immediately after such issue or sale (including the Common Shares issuable
pursuant to conversion or exchange of the securities or stock issued or sold in such issue or sale) plus the number of Common Shares issuable pursuant to exercise of all outstanding options and
warrants and the conversion of all of the outstanding Preferred Shares at the conversion prices existing before such issue or sale. 

    For
purposes of this Subsection 9(d)(iii)(d), the following Subsections 9(d)(iii)(d)(1) to 9(d)(iii)(d)(5) shall also be applicable: 

    (1) Issuance of Rights or Options. In case at any time the Corporation shall in any manner grant (whether directly or by
assumption in a merger or otherwise) any options, warrants or other rights to subscribe for or to purchase Common Shares or any stock or security convertible into or exchangeable for Common Shares
(such options, warrants and rights being called "Options" and such convertible or exchangeable stock or securities being called "Convertible Securities") whether or not such Options or the right to
convert or exchange any such Convertible Securities are immediately exercisable, and the price per share for which Common Shares are issuable upon the exercise of such Options or upon the conversion
or exchange of such Convertible Securities (determined by dividing (i) the total amount, if any, received or receivable by the Corporation as 

3

 

consideration for the granting of such Options, plus the minimum aggregate amount of additional consideration payable to the Corporation upon the exercise of all such Options, plus, in the case of
such Options which relate to Convertible Securities, the minimum aggregate amount of additional consideration, if any, payable upon the issue or sale of such Convertible Securities and upon the
conversion or exchange thereof, by (ii) the Common Shares issuable upon the exercise of such Options or upon the conversion or exchange of all such Convertible Securities issuable upon the
exercise of such Options) shall be less than the Series C Conversion Price in effect immediately prior to the time of the granting of such Options, then the total maximum number of Common
Shares issuable upon the exercise of such Options or upon conversion or exchange of the total maximum amount of such Convertible Securities shall be deemed to have been issued for such price per share
as of the date of granting of such Options. Except as otherwise provided in Subsection 9(d)(iii)(d)(3), no adjustment of the Series C Conversion Price shall be made upon the actual issuance of
the Common Shares or Convertible Securities upon exercise of such Options or upon the actual issuance of such Common Shares upon conversion or exchange of such Convertible Securities. 

    (2) Issuance of Convertible Securities. In case the Corporation shall in any manner issue (whether directly or by
assumption in a merger or otherwise) or sell any Convertible Securities, whether or not the rights to exchange or convert any such Convertible Securities are immediately exercisable, and the price per
share for which the Common Shares are issuable upon such conversion or exchange (determined by dividing (i) the total amount received or receivable by the Corporation as consideration for the
issuance or sale of such Convertible Securities, plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion or exchange thereof, by
(ii) the total maximum number of Common Shares issuable upon the conversion or exchange of all such Convertible Securities) shall be less than the Series C Conversion Price in effect
immediately prior to the time of such issue or sale, then the Common Shares issuable upon conversion or exchange of all such Convertible Securities shall be deemed to have been issued for such price
per share as of the date of the issuance or sale of such Convertible Securities and thereafter shall be deemed to be outstanding, provided that (a) except as otherwise provided in Subsection
9(d)(iii)(d)(3), no adjustment of the Series C Conversion Price shall be made upon the actual issuance of such Common Shares upon
conversion or exchange of such Convertible Securities and (b) if any such issuance or sale of such Convertible Securities is made upon exercise of any Options to purchase any such Convertible
Securities for which adjustments of the Series C Conversion Price have been or are to be made pursuant to other provisions of this Subsection 9(d)(iii)(d), no further adjustment of the
Series C Conversion Price shall be made by reason of such issuance or sale. 

    (3) Change in Option Price or Conversion Rate. Upon the happening of any of the following events, namely, if the
purchase price provided for in any Option referred to in Subsection 9(d)(iii)(d)(1), or the rate at which Convertible Securities referred to in Subsection 9(d)(iii)(d)(2) are convertible into or
exchangeable for Common Shares shall change at any time (including, but not limited to, changes under or by reason of provisions designed to protect against dilution), the Series C Conversion
Price in effect at the time of such event shall forthwith be readjusted to the Series C Conversion Price which would have been in effect at such time had such Options or Convertible Securities
still outstanding provided for such changed purchase price, additional consideration or conversion rate, as the case may be, at the time initially granted, issued or sold; and on the expiration of any
such Option or termination of any such right to convert or exchange such Convertible Securities, the Series C Conversion Price then in effect hereunder shall forthwith be increased to the
Series C Conversion Price which should have been in effect at the time of such expiration or termination had such Option or Convertible Securities, to the extent outstanding immediately prior
to such expiration or termination, never been issued. 

4

 

    (4) Consideration for Shares. In case any Common Shares, Options or Convertible Securities shall be issued or sold for
cash, the consideration received therefor shall be deemed to be the amount received by the Corporation therefor, without deduction therefrom of any expenses incurred or any underwriting commissions or
concessions paid or allowed by the Corporation in connection therewith. In case Common Shares, Options or Convertible Securities shall be issued or sold for a consideration in whole or in part other
than cash, the amount of the consideration other than cash received by the Corporation shall be deemed to be the fair market value of such consideration as determined in good faith by the Board of
Directors of the Corporation, without deduction of any expenses incurred or any underwriting commissions or concessions paid or allowed by the Corporation in connection therewith. In case any Options
shall be issued in connection with the issuance or sale of other securities of the Corporation, together comprising one integral transaction in which no specific consideration is allocated to such
Options by the parties thereto, such Options shall be deemed to have been issued for such consideration as determined in good faith by the Board of Directors of the Corporation. 

    (5) Record Date. In case the Corporation shall take a record of the holders of its Common Shares for the purpose of
entitling them (i) to receive a dividend or other distribution payable in Common Shares, Options or Convertible Securities, or (ii) to subscribe for or purchase Common Shares, Options or
Convertible Securities, then such record date shall be deemed to be the date of the issuance or sale of the Common Shares deemed to have been issued or sold upon the declaration of such dividend or
the
making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be, and, in each such case, the number of Common Shares into which shares of
Series C Preferred Stock may be converted shall be increased in proportion to the increase (through such dividend or distribution) in the number of outstanding Common Shares, by reducing the
Series C Conversion Price in the same proportion. 

    (e) Certain Issues of Common Shares Excepted. Anything herein to the contrary notwithstanding, the Corporation shall not
be required to make any adjustment of the Series C Conversion Price pursuant to Subsection 9(d)(iii)(d) in the case of the issuance of: (i) up to an aggregate of ten million five hundred
thousand (10,500,000) Common Shares (appropriately adjusted for stock splits, dividends, consolidations, recapitalizations and similar events), pursuant to the Corporation's 1993 Stock Option Plan, as
amended, unless the director representing the Series B Preferred Stock or the Series C Preferred Stock votes in favor of the issuance of Common Shares pursuant to such employment
compensation plan beyond the aforementioned limit; and (ii) such other securities as the holders of sixty-six and two-thirds percent (662/3%) of the then
outstanding shares of Series C Preferred Stock shall agree in writing may be issued without causing an adjustment in the Series C Conversion Price. 

    (f)  Subdivision or Combination of Common Shares. In case the Corporation shall at any time subdivide (by any stock
split, stock dividend or otherwise) its outstanding Common Shares into a greater number of shares, without making a corresponding subdivision of the outstanding shares of Series C Preferred
Stock, then the Series C Conversion Price in effect immediately prior to such subdivision shall be proportionately reduced. Conversely, in case the outstanding Common Shares shall be combined
into a smaller number of shares without a corresponding adjustment to the number of outstanding shares of Series C Preferred Stock, then the Series C Conversion Price in effect
immediately prior to such combination shall be proportionately increased. 

    (g) Other Distributions. If the Corporation shall declare a distribution payable in securities of other persons
(including, but not limited to, spin-offs of a business whereby, for example, an asset of the Corporation is contributed to a subsidiary which is spun-off to the Corporation's
shareholders), evidences of indebtedness issued by this Corporation or other persons, assets (excluding cash dividends) or options or rights not referred to in Subsection 9(d)(iii)(h), then, in each
such case for the purpose of this Subsection 9(d)(iii)(g), the holders of the Series C Preferred Stock shall be entitled to a proportionate share of any such distribution as though they were
the holders of the number of Common Shares into which their shares of Series C Preferred Stock are convertible as of the record date fixed for the determination of the holders of Common Shares
entitled to receive such distribution. 

5

 
    (h) Reorganization or Reclassification. If any capital reorganization or reclassification of the capital stock of the
Corporation shall be effected in such a way that holders of Common Shares shall be entitled to receive stock, securities or assets with respect to or in exchange for Common Shares, then, as a
condition of such reorganization or reclassification, lawful and adequate provisions shall be made whereby each holder of a share or shares of Series C Preferred Stock shall thereupon have the
right to receive, upon the basis and upon the terms and conditions specified herein and in lieu of the Common Shares immediately theretofore receivable upon the conversion of such shares of
Series C Preferred Stock, such shares of stock, securities or assets as may be issued or payable with respect to or in exchange for a number of outstanding shares of such Series C
Preferred Stock equal to the number of Common Shares immediately theretofore receivable upon such conversion had such reorganization or reclassification not taken place, and in any such case
appropriate provisions shall be made with respect to the rights and interests of such holder to the end that the provisions hereof shall thereafter be applicable, as nearly as may be, in relation to
any shares of stock, securities or assets thereafter deliverable upon the exercise of such conversion rights. 

    (i)  Notice of Adjustment. Upon any adjustment of the Series C Conversion Price, then, and in each such case, the
Corporation shall give written notice thereof as soon as practicable thereafter, by first class, registered or certified mail, postage prepaid, return receipt requested, or by telecopier (to be
promptly followed by notice sent by registered or certified mail, return receipt requested, as set forth above), addressed to each holder of shares of Series C Preferred Stock, as the case may
be, at the address of such holder as shown on the books of the Corporation, which notice shall state the conversion rate resulting from such adjustment and the manner in which such calculation was
made. 

    (j)  Shares to be Reserved. The Corporation will at all times reserve and keep available out of its authorized, but
unissued, Common Shares, solely for the purpose of issuance upon the conversion of Series C Preferred Stock as herein provided, such number of Common Shares as shall then be issuable upon the
conversion of all outstanding shares of Series C Preferred Stock. The Corporation covenants that all Common Shares which shall be so issued shall be duly and validly issued, fully paid,
nonassessable and free from all taxes, liens and charges with respect to the issue thereof. The Corporation will take such action as may be necessary to assure that all Common Shares may be so issued
without violation of any applicable law or regulation, or of any requirement of any securities exchange upon which the Common Shares may be listed. 

    (k) Issue Tax. The issuance of certificates for Common Shares upon conversion of Series C Preferred Stock shall
be made without charge to the holders thereof for any issuance tax in respect thereof, provided that the Corporation shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any certificate in a name other than that of the holder (or its affiliate) of the Series C Preferred Stock. 

(iv)
Voting.

    (a) Shareholder Voting. Holders of the outstanding Series C Preferred Stock shall be entitled to cast, on all
matters submitted to a vote of all of the shareholders of the Corporation (including in the election of directors, except as set forth in Subsections 9(b)(iv), 9(b)(v), 9(c)(iv) and 9(c)(v))
and on which shareholders are entitled to vote under the provisions of the Wyoming Business Corporation Act, that number of votes equal to the number of Common Shares into which such outstanding
Series C Preferred Stock is then convertible under Subsection 9(d)(iii) at the record date for the determination of shareholders entitled to vote on such matter, and with respect to such
vote, shall be entitled, notwithstanding any provision hereof, to notice of any stockholders' meeting in accordance with the Bylaws of this Corporation. Fractional votes shall not, however, be
permitted and any fractional voting rights resulting from the aforementioned formula (after aggregating all shares into which shares of Series C Preferred Stock held by each holder could be
converted) shall be rounded to the nearest whole number (with one-half rounded upward to one). In addition to their right to elect the Series C 

6

 

Director, as provided below, and except as set forth in Subsections 9(b)(iv), 9(b)(v), 9(c)(iv) and 9(c)(v), holders of Series C Preferred Stock shall vote together with the holders of
Series A Preferred Stock, Series B Preferred Stock and Common Shares on all such matters except as otherwise provided herein. 

    (b) Series B Director/Series C Director.

    (1) As
long as the holders of Series B Preferred Stock have the right to elect the Series B Director under Subsection 9(c)(iv)(b), and such holders
exercise such right, the holders of Series C Preferred Stock shall not have any right to elect a specific member to the Corporation's Board of Directors to represent the holders of
Series C Preferred Stock (the "Series C Director"). 

    (2) For
so long as more than fifty percent (50%) of all shares of Series C Preferred Stock issued by the Corporation shall be outstanding, and if the holders of
Series B Preferred Stock no longer have the right to elect the Series B Director, or if such holders do not exercise such right, then the holders of the Series C Preferred Stock,
voting as a separate voting group, shall be entitled to elect one (1) Series C Director at the annual meeting of the Corporation's shareholders and otherwise if there is a vacancy of the
directorship held by the Series C Director. If the aforementioned minimum outstanding shares requirement has been met, then at any meeting held for the purpose of electing directors, the
presence in person or by proxy of the holders of a majority of the outstanding shares of Series C Preferred Stock shall constitute a quorum of such shares for the election of the
Series C Director to be elected. Once
elected, the Series C Director shall have a fiduciary obligation to all shareholders pursuant to the Wyoming Business Corporation Act. 

    (3) Except
as otherwise provided by law, the Series C Director shall be elected by a majority of the votes cast by the Series C Preferred Stock at a
meeting of shareholders at which a quorum is present. Provided that the minimum outstanding shares requirement in Subsection 9(d)(iv)(b)(2) is met, any vacancy of the Series C Director shall be
filled only by the vote or written consent of the holders of a majority of the then outstanding shares of Series C Preferred Stock. Any Series C Director may be removed from office,
whether with or without cause, only by the vote or written consent of the holders of a majority of the then outstanding shares of Series C Preferred Stock. 

    (c) Noncompliance. If the Corporation fails to comply with Subsections 9(d)(iv)(b), then, in addition to any other legal
remedies available to the holders of the Series C Preferred Stock, the number of directors that the holders of the then outstanding shares of Series C Preferred Stock shall be entitled
to elect under Subsection 9(d)(iv)(b) shall be increased to a total of three (3) directors, effective immediately upon such noncompliance and for as long as such noncompliance exists. 

(v)
Restrictions.

    For
so long as more than fifty percent (50%) of all shares of Series C Preferred Stock issued by the Corporation shall be outstanding, except where the vote or written consent
of the holders of a greater number of shares of the Corporation is required by law or by the Articles of Incorporation, and in addition to any other vote required by law or the Articles of
Incorporation, the Corporation will not take any of the following actions without the approval of the holders of at least sixty-six and two-thirds percent
(662/3%) of the then outstanding shares of Series C Preferred Stock, given in writing or by vote at a meeting, consenting or voting (as the case may be) as a separate voting
group: 

    (a) Engage
in any transaction or a series of transactions resulting in a "Change of Control ("Change in Control" shall mean and occur when (i) any "person" as
such term is defined in Section 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Corporation, is or becomes a beneficial owner (within the meaning of rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of
securities of the Corporation, representing fifty-one percent 

7

 

(51%) or more of the combined voting power of the Corporation's then outstanding securities; or (ii) the shareholders of the Corporation approve a reorganization, merger or consolidation of the
Corporation with any other corporation or entity, other than a reorganization, merger or consolidation which would result in the voting securities of the Corporation outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty-one percent (51%) of the combined
voting power of the voting securities of the Corporation or such surviving entity outstanding immediately after such reorganization, merger or consolidation; or (iii) the shareholders of the
Corporation approve a plan of complete liquidation, dissolution or winding up of the Corporation or an agreement for the sale or disposition by the Corporation of all or substantially all of its
assets); 

    (b) Pay
or declare any dividends or make any distribution with respect to any holder of Common or Preferred Shares junior to the Series C Preferred Stock; 

    (c) Redeem
or otherwise repurchase any shares of Common or Preferred Shares junior to the Series C Preferred Stock; 

    (d) Enter
into any transactions with any of its affiliates, unless each such transaction is on terms at least as favorable as those available to the Corporation from
disinterested third parties and such transaction is approved by the Board of Directors, including the Series B Director or Series C Director (provided that the approval of the
Series B Director or the Series C Director is not required if such director is an interested party in such transaction); or 

    (e) Change
the rights, preferences, privileges or restrictions of any shares of Series C Preferred Stock. 

(vi)  Sinking Fund.

    There
shall be no sinking fund provision for the payment of dividends, liquidation preferences, or redemption of the shares of Series C Preferred Stock. 

(vii)
Redemption of Series C Preferred Stock.

    (a) Mandatory Redemption. If a Change of Control (as defined in Subsection 9(d)(v)(a)) has occurred, the Corporation
shall offer to redeem all of the outstanding shares of Series C Preferred Stock for cash, at a price per share equal to one hundred and fifty percent (150%) of the liquidation preference for
Series C Preferred Stock under Subsection 9(d)(ii)(a), plus any declared, but unpaid, dividends under Subsection 9(d)(i), by providing each holder of Series C Preferred Stock with
written notice of such redemption ("Redemption Offer Notice") within thirty (30) days of such Change of Control. If any holder of Series C Preferred Stock does not elect in writing
within twenty (20) days of the date of the Redemption Offer Notice ("Election Period") to have all of such holder's shares of Series C Preferred Stock redeemed, then, with respect to the
holder's unredeemed shares of Series C Preferred Stock, such holder's mandatory redemption rights hereunder shall terminate as to such Change of Control event. If any of the holders of the
outstanding shares of Series C Preferred Stock elects redemption before the expiration of the Election Period, then the Corporation shall notify such holder of the redemption within ten
(10) days following the end of the Election Period ("Mandatory Redemption Notice"). Within ten (10) days of the receipt of the Mandatory Redemption Notice, such holder shall surrender to
the Corporation the certificate(s) representing such shares of Series C Preferred Stock to be redeemed duly endorsed for transfer to this Corporation, and upon receipt of such certificates, the
Corporation shall pay the redemption price for such shares to the order of the person whose name appears on such certificate(s) as the owner thereof, and each surrendered certificate shall be
cancelled. As to any portion of the shares of Series C Preferred Stock so surrendered which are not subject to such holder's redemption election, the Corporation shall promptly issue to the
person whose name appears on such certificate(s) a certificate in due and proper form representing the shares of Series C Preferred Stock which have not been redeemed. When the 

8

 

redemption price is paid, all rights in respect of the redeemed shares of Series C Preferred Stock shall cease and terminate, and such shares shall no longer be deemed to be authorized,
outstanding, or available for reissuance, whether or not the certificates representing such shares have been received by the Corporation. 

    (b) Optional Redemption. If from and after two years of the date the first share of Series C Preferred Stock is
sold and issued by the Corporation, the Common Shares shall have traded above fifty cents ($0.50) per share (as adjusted for stock splits, dividends, consolidations, recapitalizations and similar
events) for sixty (60) consecutive days on a national securities exchange or NASDAQ, or the closing bid price quoted by an established quotation service for
over-the-counter securities shall be above fifty cents ($0.50) for sixty (60) consecutive days, then the Corporation shall have the right, but not the obligation, to
redeem all of the outstanding shares of Series C Preferred Stock for cash, at a price per share equal to one hundred and fifty percent (150%) of the liquidation preference for Series C
Preferred Stock under Subsection 9(d)(ii)(a), plus any declared, but unpaid, dividends under Subsection 9(d)(i), by providing each holder of Series C Preferred Stock with written notice of such
redemption not less than thirty (30) days prior to the scheduled date of redemption ("Optional Redemption Notice"). In the event of such redemption, and prior to the scheduled date of
redemption, holders of Series C Preferred Stock shall surrender to the Corporation the certificate(s) representing such shares of Series C Preferred Stock to be redeemed duly endorsed
for transfer to this Corporation, and upon receipt of such certificates, the Corporation shall pay the redemption price for such shares to the order of the person whose name appears on such
certificate(s) as the owner thereof, and each surrendered certificate shall be cancelled. When the redemption price is paid, all rights in respect of the redeemed shares of Series C Preferred
Stock shall cease and terminate, and such shares shall no longer be deemed to be authorized, outstanding or available for reissuance, whether or not the certificates representing such
shares have been received by the Corporation. Nothing herein contained in this Subsection 9(d)(vii)(b) shall prohibit any holder of Series C Preferred Stock from electing the benefits of the
provisions of Subsection 9(d)(iii) or other applicable conversion provisions prior to the scheduled date of redemption. 

    (c) Noncompliance/Conversion Price Adjustment. If (i) any of the holders of Series C Preferred Stock
elects redemption under Subsection 9(d)(vii)(a) and complies with the provisions therein; (ii) the Corporation fails to redeem any of such holder's shares of Series C Preferred Stock as
required therein; and (iii) such failure is not due to the failure of the holders of Series B Preferred Stock to approve such redemption under Subsection 9(c)(v)(c), then the
Series C Conversion Price for those unredeemed shares of Series C Preferred Stock shall be reduced by one percent (1%) on the seventh (7th) day following such noncompliance
and by an additional one percent (1%) every seven (7) days thereafter until the redemption has been made. 

(viii)
Noncompliance with Registration Rights/Conversion Price Adjustment.

    If
all of the conditions set forth in Section 5.1 of that certain Investor Rights Agreement between the Corporation and the holders of Series C Preferred Stock have been
met (including, but not limited to, the absence of an underwriter's exclusion under Section 5.1(c) of such Investor Rights Agreement) and the Corporation fails to comply with the registration
rights provisions set forth in such Section 5.1, then the Series C Conversion Price shall be reduced by one percent (1%) on the seventh (7th) day following such
noncompliance and by an additional one percent (1%) every seven (7) days thereafter until the registration of such shares has been made. 

9

QuickLinks

EXHIBIT 4.1

RIGHTS AND PREFERENCES OF SERIES C CONVERTIBLE PREFERRED STOCK OF SOLIGEN TECHNOLOGIES, INC.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00021-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00021-of-00352.parquet"}]]