LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (the "Agreement") is made this 8th day of May, 2001, by and
among SUNRISE FAIRFAX ASSISTED LIVING, L.L.C., a limited liability company organized and existing
under the laws of the Commonwealth of Virginia (the "Borrower") and CHEVY CHASE BANK, F.S.B., a
federally chartered savings bank (the "Lender").
A. The Borrower has applied to the Lender for an interim loan in the maximum principal amount of Eight Million
One Hundred Thousand Dollars
($8,100,000) (the "Loan"), the proceeds of which shall be used as follows: (i)
the proceeds of Note A (as hereinafter defined) shall be used to refinance existing indebtedness secured by the
Property and (b) the proceeds of Note B (as hereinafter defined) shall be used to make a loan to the Foundation
(the "Foundation Loan"), which will in turn repay an existing loan owed by the Foundation to the Lender for the
benefit of Merritt Academy
B. The Lender is willing to make the Loan to the Borrower upon the terms and subject to the conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises, the mutual agreements herein contained, and other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower and the
Lender hereby agree as follows:
Section 1.1 Certain Defined Terms.
As used herein, the terms defined in the Preamble and Recitals hereto shall have the respective meanings
specified therein, and the following terms shall have the following meanings:
"Account," individually, and, "Accounts," collectively, mean with respect to the Borrower, all presently existing or
hereafter acquired or created accounts, accounts receivable, contract rights, notes, drafts, instruments,
acceptances, chattel paper, leases and writings evidencing a monetary obligation or a security interest in or a
lease of goods, all rights to receive the payment of money or other considerat