Document:

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                                                                  Exhibit 10.102

REGULATORY AGREEMENT FOR                            U.S. DEPARTMENT OF HOUSING
MULTIFAMILY HOUSING PROJECTS                        AND URBAN DEVELOPMENT
                                                    Office of Housing
                                                    Federal Housing Commissioner

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<S><C>
Under Sections 207, 220, 221(d)(4), 231 and 232, Except Nonprofits

Project No. 143-22014 PM/ALF/REF

Mortgagee:  RED MORTGAGE CAPITAL, INC.

Amount of Mortgage Note: $2,386,100.00                            Date: as of January 1, 2002

Mortgage:  Recorded:  State:  California      County: Orange      Date: January ___, 2002
           Concurrently Herewith              Book __________     Page ____________
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     Originally endorsed for insurance under Section 232 pursuant to Section
223(f) of the National Housing Act, as amended.

     This Agreement entered into as of this 1st day of January, 2002, between
ARV ACACIA VILLA, L.P., a California limited partnership whose address is 245
Fischer Avenue, Suite D-1, Costa Mesa, California 92626, their successors,
heirs, and assigns (jointly and severally, hereinafter referred to as Owners)
and the undersigned SECRETARY OF HOUSING AND URBAN DEVELOPMENT and his
successors (hereinafter referred to as Secretary).

     In consideration of the endorsement for insurance by the Secretary of the
above described note or in consideration of the consent of the Secretary to the
transfer of the mortgaged property or the sale and conveyance of the mortgaged
property by the Secretary, and in order to comply with the requirements of the
National Housing Act, as amended, and the Regulations adopted by the Secretary
pursuant thereto, Owners agree for themselves, their successors, heirs and
assigns, that in connection with the mortgaged property and the project operated
thereon and so long as the contract of mortgage insurance continues in effect,
and during such further period of time as the Secretary shall be the owner,
holder or reinsurer of the mortgage, or during any time the Secretary is
obligated to insure a mortgage on the mortgage property:

     1.   Owners, except as limited by paragraph 17 hereof, assume and agree to
          make promptly all payments due under the note and mortgage.

<PAGE>

                                     --2--

     2.   (a)  Owners shall establish or continue to maintain a reserve fund for
          replacements by the allocation to such reserve fund in a separate
          account with the mortgagee or in a safe and responsible depository
          designated by the mortgagee, concurrently with the beginning of
          payments towards amortization of the principal of the mortgage insured
          or held by the Secretary of an amount equal to $1,926.08 per month
          unless a different date or amount is approved in writing by the
          Secretary. Said monthly deposit consists of $1,499.33 for Realty and
          $426.75 for Non-Realty. In addition, the Owner has made an initial
          deposit to the fund of $190,559.00 ($5,662.00 to Realty and
          $184,897.00 to Non-Realty). Such fund, whether in the form of a cash
          deposit or invested in obligations of, or fully guaranteed as to
          principal by, the United States of America shall at all times be under
          the control of the mortgagee. Disbursements from such fund, whether
          for the purpose of effecting replacement of structural elements and
          mechanical equipment of the project or for any other purpose, may be
          made only after receiving the consent in writing of the Secretary. In
          the event that the owner is unable to make a mortgage note payment on
          the due date and that payment cannot be made prior to the due day of
          the next such installment or when the mortgagee has agreed to forgo
          making an election to assign the mortgage to the Secretary based on a
          monetary default, or to withdraw an election already made, the
          Secretary is authorized to instruct the mortgagee to withdraw funds
          from the reserve fund for replacements to be applied to the mortgage
          payment in order to prevent or cure the default. In addition, in the
          event of a default in the terms of the mortgage, pursuant to which the
          loan has been accelerated, the Secretary may apply or authorize the
          application of the balance in such fund to the amount due on the
          mortgage debt as accelerated.

          (b)  Where Owners are acquiring a project already subject to an
          insured mortgage, the reserve fund for replacements to be established
          will be equal to the amount due to be in such fund under existing
          agreements or charter provisions at the time Owners acquire such
          project, and payments hereunder shall begin with the first payment due
          on the mortgage after acquisition, unless some other method of
          establishing and maintaining the fund is approved in writing by the
          Secretary.

     3.   Real property covered by the mortgage and this agreement is described
          in Exhibit A attached hereto.

          (This paragraph 4 is not applicable to cases insured under Section
          232).

     4.   (a)  If the mortgage is originally a Secretary-held purchase money
          mortgage, or is originally endorsed for insurance under any Section
          other than Sections 231 or 232 and is not designed primarily for
          occupancy by elderly persons, Owners shall not in selecting tenants
          discriminate against any person or persons by reason of the fact that
          there are children in the family.

          (b)  If the mortgage is originally endorsed for insurance under
          Section 221, Owners shall in selecting tenants give to displaced
          persons or families an absolute preference or priority of occupancy
          which shall be accomplished as follows:

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                                     --3--

               (1)  For a period of sixty (60) days from the date of original
                    offering, unless a shorter period of time is approved in
                    writing by the Secretary, all units shall be held for such
                    preferred applicants, after which time any remaining
                    unrented units may be rented to non-preferred applicants;

               (2)  Thereafter, and on a continuing basis, such preferred
                    applicants shall be given preference over non-preferred
                    applicants in their placement on a waiting list to be
                    maintained by the Owners; and

               (3)  Through such further provisions agreed to in writing by the
                    parties.

          (c)  Without the prior written approval of the Secretary not more than
          25% of the number of units in a project insured under Section 231
          shall be occupied by persons other than elderly persons.

          (d)  All advertising or efforts to rent a project insured under
          Section 231 shall reflect a bona fide effort of the Owners to obtain
          occupancy by elderly persons.

     5.   Owners shall not without the prior written approval of the Secretary:

          (a) Convey, transfer, or encumber any of the mortgaged property, or
          permit the conveyance, transfer or encumbrance of such property.

          (b) Assign, transfer, dispose of, or encumber any personal property of
          the project, including rents, or pay out any funds except from surplus
          cash, except for reasonable operating expenses and necessary repairs.

          (c) Convey, assign, or transfer any beneficial interest in any trust
          holding title to the property, or the interest of any general partner
          in a partnership owning the property, or any right to manage or
          receive the rents and profits from the mortgaged property.

          (d) Remodel, add to, reconstruct, or demolish any part of the
          mortgaged property or subtract from any real or personal property of
          the project.

          (e) Make, or receive and retain, any distribution of assets or any
          income of any kind of the project except surplus cash and except on
          the following conditions:

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                                      --4--

               (1)  All distributions shall be made only as of and after the end
                    of a semiannual or annual fiscal period, and only as
                    permitted by the law of the applicable jurisdiction;

               (2)  No distribution shall be made from borrowed funds, prior to
                    the completion of the project or when there is any default
                    under this Agreement or under the note or mortgage;

               (3)  Any distribution of any funds of the project, which the
                    party receiving such funds is not entitled to retain
                    hereunder, shall be held in trust separate and apart from
                    any other funds; and

               (4)  There shall have been compliance with all outstanding
                    notices of requirements for proper maintenance of the
                    project.

          (f) Engage, except for natural persons, in any other business or
          activity, including the operation of any other rental project, or
          incur any liability or obligation not in connection with the project.

          (g) Require, as a condition of the occupancy or leasing of any unit in
          the project, any consideration or deposit other than the prepayment of
          the first month's rent plus a security deposit in an amount not in
          excess of one month's rent to guarantee the performance of the
          covenants of the lease. Any funds collected as security deposits shall
          be kept separate and apart from all other funds of the project in a
          trust account the amount of which shall at all times equal or exceed
          the aggregate of all outstanding obligations under said account.

          (h) Permit the use of the dwelling accommodations or nursing
          facilities of the project for any purpose except the use which was
          originally intended, or permit commercial use greater than that
          originally approved by the Secretary.

     6.   Owners shall maintain the mortgaged premises, accommodations and the
          grounds and equipment appurtenant thereto, in good repair and
          condition. In the event all or any of the buildings covered by the
          mortgage shall be destroyed or damaged by fire or other casualty, the
          money derived from any insurance on the property shall be applied in
          accordance with the terms of the mortgage.

     7.   Owners shall not file any petition in bankruptcy or for a receiver or
          in insolvency or for reorganization or composition, or make any
          assignment for the benefit of creditors or to a trustee for creditors,
          or permit an adjudication in bankruptcy or

<PAGE>

                                     --5--

          the taking possession of the mortgaged property or any part thereof by
          a receiver or the seizure and sale of the mortgaged property or any
          part hereof under judicial process or pursuant to any power of sale,
          and fail to have such adverse actions set aside within forty-five (45)
          days.

     8.   (a)  Any management contract entered into by Owners or any of them
          involving the project shall contain a provision that, in the event of
          default hereunder, it shall be subject to termination without penalty
          upon written request by the Secretary. Upon such request Owners shall
          immediately arrange to terminate the contract within a period of not
          more than thirty (30) days and shall make arrangements satisfactory to
          the Secretary for continuing proper management of the project.

          (b)  Payment for services, supplies, or materials shall not exceed the
          amount ordinarily paid for such services, supplies, or materials in
          the area where the services are rendered or the supplies or materials
          furnished.

          (c)  The mortgaged property, equipment, buildings, plans, offices,
          apparatus, devices, books, contracts, records, documents, and other
          papers relating thereto shall at all times be maintained in reasonable
          condition for proper audit and subject to examination and inspection
          at any reasonable time by the Secretary or his duly authorized agents.
          Owners shall keep copies of all written contracts or other instruments
          which affect the mortgaged property, all or any of which may be
          subject to inspection and examination by the Secretary or his duly
          authorized agents.

          (d)  The books and accounts of the operations of the mortgaged
          property and of the project shall be kept in accordance with the
          requirements of the Secretary.

          (e)  Within sixty (60) days following the end of each fiscal year the
          Secretary shall be furnished with a complete annual financial report
          based upon an examination of the books and records of mortgagor
          prepared in accordance with the requirements of the Secretary,
          prepared and certified to by an officer or responsible Owner and, when
          required by the Secretary, prepared and certified by a Certified
          Public Accountant, or other person acceptable to the Secretary.

          (f)  At the request of the Secretary, his agents, employees, or
          attorneys, the Owners shall furnish monthly occupancy reports and
          shall give specific answers to questions upon which information is
          desired from time to time relative to

<PAGE>

                                     --6--

          income, assets, liabilities, contracts, operation, and condition of
          the property and the status of the insured mortgage.

          (g)  All rents and other receipts of the project shall be deposited in
          the name of the project in a financial institution, whose deposits are
          insured by an agency of the Federal Government. Such funds shall be
          withdrawn only in accordance with the provisions of this Agreement for
          expenses of the project or for distributions of surplus cash as
          permitted by paragraph 6(e) above. Any Owner receiving funds of the
          project other than by such distribution of surplus cash shall
          immediately deposit such funds in the project bank account and failing
          so to do in violation of this Agreement shall hold such funds in
          trust. Any Owner receiving property of the project in violation of
          this Agreement shall hold such funds in trust. At such time as the
          Owners shall have lost control and/or possession of the project, all
          funds held in trust shall be delivered to the mortgagee to the extent
          that the mortgage indebtedness has not been satisfied.

          (h)  If the mortgage is insured under Section 232:

               1.   The Owners or lessees shall at all times maintain in full
               force and effect from the state or other licensing authority such
               license as may be required to operate the project as a nursing
               home and shall not lease all or part of the project except on
               terms approved by the Secretary.

               2.   The Owners shall suitably equip the project for nursing home
               operations.

               3.   The Owners shall execute a Security Agreement and Financing
               Statement (or other form of chattel lien) upon all items of
               equipment, except as the Secretary may exempt, which are not
               incorporated as security for the insured mortgage. The Security
               Agreement and Financing Statement shall constitute a first lien
               upon such equipment and shall run in favor of the mortgagee as
               additional security for the insured mortgage.

          (i)  If the mortgage is insured under Section 231, Owners or lessees
          shall at all times maintain in full force and effect from the state or
          other licensing authority such license as may be required to operate
          the project as housing for the elderly.

     9.   Owners will comply with the provisions of any Federal, State, or local
          law prohibiting discrimination in housing on the grounds of race,
          color, religion or

<PAGE>

                                     --7--

          creed, sex, or national origin, including Title VIII of the Civil
          Rights Act of 1968 (Public Law 90-284; 82 Stat. 73), as amended,
          Executive Order 11063, and all requirements imposed by or pursuant to
          the regulations of the Department of Housing and Urban Development
          implementing these authorities (including 24 CFR Parts 100, 107 and
          110, and Subparts I and M of Part 200).

     10.  Upon a violation of any of the above provisions of this Agreement by
          Owners, the Secretary may give written notice thereof, to Owners, by
          registered or certified mail, addressed to the addresses stated in
          this Agreement, or such other addresses as may subsequently, upon
          appropriate written notice thereof to the Secretary, be designated by
          the Owners as their legal business address. If such violation is not
          corrected to the satisfaction of the Secretary within thirty (30) days
          after the date such notice is mailed or within such further time as
          the Secretary determines is necessary to correct the violation,
          without further notice the Secretary may declare a default under this
          Agreement effective on the date of such declaration of default and
          upon such default the Secretary may:

          (a)  (i)  If the Secretary holds the note - declare the whole of said
                    indebtedness immediately due and payable and then proceed
                    with the foreclosure of the mortgage;

               (ii) If said note is not held by the Secretary - notify the
                    holder of the note of such default and request holder to
                    declare a default under the note and mortgage, and holder
                    after receiving such notice and request, but not otherwise,
                    at its option, may declare the whole indebtedness due, and
                    thereupon proceed with foreclosure of the mortgage, or
                    assign the note and mortgage to the Secretary as provided in
                    the Regulations;

          (b)  Collect all rents and charges in connection with the operation of
          the project and use such collections to pay the Owners' obligations
          under this Agreement and under the note and mortgage and the necessary
          expenses of preserving the property and operating the project.

          (c)  Take possession of the project, bring any action necessary to
          enforce any rights of the Owners growing out of the project operation,
          and operate the project in accordance with the terms of this Agreement
          until such time as the Secretary in his discretion determines that the
          Owners are again in a position to operate the project in accordance
          with the terms of this Agreement and in compliance with the
          requirements of the note and mortgage. (d) Apply to any court, state
          or Federal, for specific performance of this Agreement, for an
          injunction against any violation of the Agreement, for the appointment
          of a receiver to take over and operate the project in accordance with
          the terms of the Agreement, or for such other relief as may be
          appropriate, since the injury to the Secretary arising from a default
          under any of the terms of this Agreement would be irreparable and the
          amount of damage would be difficult to ascertain.

<PAGE>

                                     --8--

          (d)  Apply to any court, state or Federal, for specific performance of
          this Agreement, for an injunction against any violation of the
          Agreement, for the appointment of a receiver to take over and operate
          the project in accordance with the terms of the Agreement, or for such
          other relief as may be appropriate, since the injury to the Secretary
          arising from a default under any of the terms of this Agreement would
          be irreparable and the amount of damage would be difficult to
          ascertain.

     11.  As security for the payment due under this Agreement to the reserve
          fund for replacements, and to secure the Secretary because of his
          liability under the endorsement of the note for insurance, and as
          security for the other obligations under this Agreement, the Owners
          respectively assign, pledge and mortgage to the Secretary their rights
          to the rents, profits, income and charges of whatsoever sort which
          they may receive or be entitled to receive from the operation of the
          mortgaged property, subject, however, to any assignment of rents in
          the insured mortgage referred to herein. Until a default is declared
          under this Agreement, however, permission is granted to Owners to
          collect and retain under the provisions of this Agreement such rents,
          profits, income, and charges, but upon default this permission is
          terminated as to all rents due or collected thereafter.

     12.  As used in this Agreement the term:

          (a)  "Mortgage" includes "Deed of Trust", "Chattel Mortgage",
          "Security Instrument", and any other security for the note identified
          herein, and endorsed for insurance or held by the Secretary;

          (b)  "Mortgagee" refers to the holder of the mortgage identified
          herein, its successors and assigns;

          (c)  "Owners" refers to the persons named in the first paragraph
          hereof and designated as Owners, their successors, heirs and assigns;

          (d)  "Mortgaged Property" includes all property, real, personal or
          mixed, covered by the mortgage or mortgages securing the note endorsed
          for insurance or held by the Secretary;

          (e)  "Project" includes the mortgaged property and all its other
          assets of whatsoever nature or wheresoever situate, used in or owned
          by the business conducted on said mortgaged property, which business
          is providing housing and other activities as are incidental thereto;

<PAGE>

                                     --9--

          (f)  "Surplus Cash" means any cash remaining after:

               (1)  the payment of:

                   (i)   All sums due or currently required to be paid under the
                         terms of any mortgage or note insured or held by the
                         Secretary;

                   (ii)  All amounts required to be deposited in the reserve
                         fund for replacements;

                   (iii) All obligations of the project other than the insured
                         mortgage unless funds for payment are set aside or
                         deferment of payment has been approved by the
                         Secretary; and

               (2)  the segregation of:

                    (i)  An amount equal to the aggregate of all special funds
                         required to be maintained by the project; and

                    (ii) All tenant security deposits held.

          (g)  "Distribution" means any withdrawal or taking of cash or any
          assets of the project, including the segregation of cash or assets for
          subsequent withdrawal within the limitations of Paragraph 6(e) hereof,
          and excluding payment for reasonable expenses incident to the
          operation and maintenance of the project.

          (h)  "Default" means a default declared by the Secretary when a
          violation of this Agreement is not corrected to his satisfaction
          within the time allowed by this Agreement or such further time as may
          be allowed by the Secretary after written notice;

          (i)  "Section" refers to a Section of the National Housing Act, as
          amended.

          (j)  "Displaced persons or families" shall mean a family or families,
          or a person, displaced from an urban renewal area, or as the result of
          government action, or as a result of a major disaster as determined by
          the President pursuant to the Disaster Relief Act of 1970.

<PAGE>

                                     --10--

          (k)  "Elderly person" means any person, married or single, who is
          sixty-two years of age or over.

     13.  This instrument shall bind, and the benefits shall inure to, the
          respective Owners, their heirs, legal representatives, executors,
          administrators, successors in office or interest, and assigns, and to
          the Secretary and his successors so long as the contract of mortgage
          insurance continues in effect, and during such further time as the
          Secretary shall be the owner, holder, or reinsurer of the mortgage, or
          obligated to reinsure the mortgage.

     14.  Owners warrant that they have not, and will not, execute any other
          agreement with provisions contradictory of, or in opposition to, the
          provisions hereof, and that, in any event, the requirements of this
          Agreement are paramount and controlling as to the rights and
          obligations set forth and supersede any other requirements in conflict
          therewith.

     15.  The invalidity of any clause, part or provision of this Agreement
          shall not affect the validity or the remaining portions thereof.

     16.  The following Owners: ARV Acacia Villa, L.P., a California limited
          partnership, and all present and future limited and general partners
          thereof, do not assume personal liability for payments due under the
          note and mortgage, or for the payments to the reserve for
          replacements, or for matters not under their control, provided that
          said Owners shall remain liable under this Agreement only with respect
          to the matters hereinafter stated; namely:

          (a)  for funds or property of the project coming into their hands
          which, by the provisions hereof, they are not entitled to retain; and

          (b)  for their own acts and deeds or acts and deeds of others which
          they have authorized in violation of the provisions hereof.

(To be executed with formalities for recording a deed to real estate)

<PAGE>

                                     --11--

     All references herein to the terms "nursing home" or nursing homes" shall
mean and include the terms "assisted living facility" and "assisted living
facilities."

     See Rider I attached hereto and made a part hereof.

     IN WITNESS WHEREOF, the parties hereto have set their hands and seals on
the date first hereinabove written.

                                        ARV ACACIA VILLA, L.P.
                                        a California limited partnership

                                        By: CASA BONITA FULLERTON, LTD.
                                            ------------------------------------
                                            a California limited partnership
                                            General Partner

                                        By: ARV ASSISTED LIVING, INC.
                                            a Delaware corporation
                                            General Partner

                                        By:
                                            ------------------------------------
                                            Douglas Armstrong
                                            Vice President

                                        As of January 1, 2002

                                        SECRETARY OF HOUSING AND URBAN
                                        DEVELOPMENT ACTING BY AND
                                        THROUGH THE FEDERAL HOUSING
                                        COMMISSIONER

                                        By:
                                            ------------------------------------
                                            Authorized Agent

                                        As of January 1, 2002<PAGE>

                                                                  EXHIBIT 10.103

REGULATORY AGREEMENT
NURSING HOMES                                       U.S. DEPARTMENT OF HOUSING
                                                    AND URBAN DEVELOPMENT
                                                    Office of Housing
                                                    Federal Housing Commissioner

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<S><C>
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| Project Number                                   | Mortgagee                                       |
| 143-22014 PM/ALF/REF                             | Red Mortgage Capital, Inc., an Ohio corporation |
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| Amount of Mortgage Note                          | Date                                            |
| $2,386,100.00                                    | As of January 1, 2002                           |
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| Mortgage Recorded (State)              | County                  | Date                            |
| California                             | Orange                  | January __, 2002                |
------------------------------------------------------------------------------------------------------
| Book                                             | Page                                            |
|                                                  |                                                 |
------------------------------------------------------------------------------------------------------
</TABLE>

     This Agreement entered into as of this 1st day of January, 2002, between
ACACIA VILLA, LLC, a Delaware limited liability company whose address is 245
Fischer Avenue, Suite D-1, Costa Mesa, California 92626 (jointly and severally,
hereinafter referred to as Lessee) and the undersigned FEDERAL HOUSING
COMMISSIONER, (hereinafter called Commissioner).

     In consideration of the consent of the Commissioner to the leasing of the
aforesaid project by ARV ACACIA VILLA, L.P., a California limited partnership,
Mortgagor, and in order to comply with the requirements of the National Housing
Act and the Regulations adopted by the Commissioner pursuant thereto, Lessees
agree for themselves, their successors, heirs and assigns, that in connection
with the mortgaged property and the project operated thereon and so long as the
Contract of Mortgage Insurance continues in effect, and during such further
period of time as the Commissioner shall be the owner, holder or reinsurer of
the mortgage, or during any time the Commissioner is obligated to insure a
mortgage on the mortgaged property:

     (1)  The lease shall be subject and subordinate to the mortgage securing
          the note or other obligation endorsed for insurance by the
          commissioner;

     (2)  Lessee shall make payments under lease when due;

     (3)  Payments by the lessee to the lessor shall be sufficient to pay all
          mortgage payments including payments to reserves for taxes, insurance,
          etc., payments to the Reserve for Replacements, and to take care of
          necessary maintenance. If at the end of any calendar year, or any
          fiscal year if the project operates on the basis of a fiscal year,
          payments under the lease have not been sufficient to take care of the
          above

________________________________________________________________________________
                                  Page 1 of 6          form HUD-92466-NHL (1/92)
                                                             Ref Handbook 4600.1

<PAGE>

          items, the lessor and lessee upon request in writing from the
          Commissioner shall renegotiate the amounts due under the lease so that
          such amounts shall be sufficient to take care of such items; the
          Commissioner shall be furnished by the lessee, within thirty days
          after being called upon to do so, with a financial report in form
          satisfactory to the Commissioner covering the operations of the
          mortgaged property and of the project;

     (4)  The lessee shall not sublease the project or any part thereof without
          the consent of the Commissioner;

     (5)  The lessee shall at all times maintain in full force and effect a
          license from the State or other licensing authority to operate the
          project as a nursing home, but the owner shall not be required to
          maintain such a license;

     (6)  Lessee shall maintain in good repair and condition any parts of the
          project for the maintenance of which lessee is responsible under the
          terms of the lease;

     (7)  Lessee shall not remodel, reconstruct, add to, or demolish any part of
          the mortgaged property or subtract from any real or personal property
          of the project;

     (8)  Lessee shall not use the project for any purpose except the operation
          of a nursing home;

     (9)  If a default is declared by the Commissioner under the provisions of
          Paragraph 10 of the Regulatory Agreement entered into by the
          lessor-mortgagor and the Commissioner as of the 1st day of January,
          2002, a copy of notice of default having been given to the lessee, the
          lessee will thereafter make all future payments under the lease to the
          Commissioner;

     (10) The lease may be cancelled upon thirty days written notice by the
          Commissioner given to the lessor and the lessee for a violation of any
          of the above provisions unless the violation is corrected to the
          satisfaction of the Commissioner within said thirty day period.

     (11) The Commissioner must approve any change in or transfer of ownership
          of the lessee entity, and any change in or transfer of the management
          operation, or control of the project.

     (12) The lessee shall not reduce or expand, allow to be reduced or
          expanded, or cause the expansion or reduction of the bed capacity of
          the project without the consent of

________________________________________________________________________________
                                  Page 2 of 6          form HUD-92466-NHL (1/92)
                                                             Ref Handbook 4600.1

<PAGE>

          the Commissioner. Any change in the bed capacity shall violate this
          Regulatory Agreement.

     (13) The lessee shall not enter into any management contract involving the
          project, unless such shall contain a provision that, in the event of
          default under the Regulatory Agreement as recited in paragraph 9
          (above) of this Agreement, the management agreement shall be subject
          to termination without penalty upon written request of the
          Commissioner. Upon such request the lessee shall immediately arrange
          to terminate the contract within a period of not more than thirty (30)
          days and shall make arrangements satisfactory to the Commissioner for
          continuing proper management of the project.

     (14) The mortgaged property, equipment, buildings, plans, offices,
          apparatus, devices, books, contracts, records, documents, and other
          papers relating thereto shall at all times be maintained in reasonable
          condition for proper audit and subject to examination and inspection
          at any reasonable time by the Commissioner or his duly authorized
          agents. Lessee shall keep copies of all written contracts or other
          instruments which affect the mortgaged property, all or any of which
          may be subject to inspection and examination by the Commissioner or
          his/her duly authorized agents.

     (15) There shall be full compliance with the provisions of (1) any State or
          local laws prohibiting discrimination in housing on the basis of race,
          color, creed, or national origin; and (2) with the Regulations of the
          Federal Housing Administration providing for non-discrimination and
          equal opportunity in housing. It is understood and agreed that failure
          or refusal to comply with any such provisions shall be a proper basis
          for the Commissioner to take any corrective action he may deem
          necessary including, but not limited to, the refusal to consent to a
          further renewal of the lease between the mortgagor-lessor and the
          lessee, the rejection of applications for FHA mortgage insurance and
          the refusal to enter into future contracts of any kind with which the
          lessee is identified; and further, if the lessee is a corporation or
          any other type of business association or organization which may fail
          or refuse to comply with the aforementioned provisions, the
          Commissioner shall have a similar right of corrective action (1) with
          respect to any individuals who are officers, directors, trustees,
          managers, partners, associates or principal stockholders of the
          lessee; and (2) with respect to any other type of business
          association, or organization with which the officers, directors,
          trustees, managers, partners, associates or principal stockholders of
          the lessee may be identified.

________________________________________________________________________________
                                  Page 3 of 6          form HUD-92466-NHL (1/92)
                                                             Ref Handbook 4600.1

<PAGE>

     (16) The lease is evidenced by a Memorandum of Lease attached hereto and
          made a part hereof.

     IN WITNESS WHEREOF, the parties hereto have set their hands and seals on
the date first hereinabove written.

                                        ACACIA VILLA, LLC
                                        a Delaware limited liability company

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

                                        As of January 1, 2002

                                        SECRETARY OF HOUSING AND URBAN
                                        DEVELOPMENT ACTING BY AND
                                        THROUGH THE FEDERAL HOUSING
                                        COMMISSIONER

                                        By:
                                            ------------------------------------
                                            Authorized Agent

                                        As of January 1, 2002

________________________________________________________________________________
                                  Page 4 of 6          form HUD-92466-NHL (1/92)
                                                             Ref Handbook 4600.1

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