<PAGE>

                                                                   EXHIBIT 10.14

                            PROPERTY LEASE AGREEMENT

                                 BY AND BETWEEN

                            CMCP - ISLAND LAKE, LLC,

                      A DELAWARE LIMITED LIABILITY COMPANY,

                                   AS LANDLORD

                                       AND

                             BLC - ISLAND LAKE, LLC,

                      A DELAWARE LIMITED LIABILITY COMPANY,

                                    AS TENANT

                                   DATED AS OF

                                   MAY 1, 2002

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                                                 <C>
1.   Definitions.................................................................................................    1
2.   Leased Property.............................................................................................    7
3.   Condition of Leased Property................................................................................    7
4.   Term........................................................................................................    8
5.   Rent........................................................................................................    8
     (a)     Rent................................................................................................    8
     (b)     Base Rent...........................................................................................    8
     (c)     Late Charge; Interest...............................................................................    8
     (d)     Payment without Abatement...........................................................................    8
6.   Holding Over................................................................................................    8
7.   Use of Leased Property; Compliance With Legal Requirements..................................................    9
     (a)     Intended Use........................................................................................    9
     (b)     Laws................................................................................................    9
     (c)     Compliance with Third Party Payor Program Requirements..............................................    9
     (d)     Landlord to Grant Easements, Etc....................................................................    9
     (e)     Landlord's Receipt Of Third Party Payor Program Reimbursements......................................    9
8.   Tenant's Covenant to Repair.................................................................................   10
     (a)     Repair and Maintenance..............................................................................   10
     (b)     Tenant's Personal Property..........................................................................   10
9.   No Landlord Repair Obligations..............................................................................   10
10.   Surrender..................................................................................................   10
     (a)     Surrender of Leased Property........................................................................   10
     (b)     Transfer of Licenses and Permits....................................................................   10
     (c)     Option to Purchase Tenant's Personal Property.......................................................   11
11.   Capital Additions..........................................................................................   11
     (a)     Construction of Capital Additions...................................................................   11
     (b)     Non-Capital Additions...............................................................................   11
12.   Utilities and Other Services...............................................................................   11
13.   Performance by Landlord of Tenant's Obligations............................................................   12
     (a)     Landlord's Self Help................................................................................   12
     (b)     Landlord's Inspections..............................................................................   12
14.   Entry......................................................................................................   12
15.   Assignment, Subletting and Liens...........................................................................   13
     (a)     Transfers Prohibited Without Consent................................................................   13
     (b)     Adequate Assurances.................................................................................   13
     (c)     Permitted Subleases.................................................................................   13
     (d)     Sublease Limitation.................................................................................   13
     (e)     Liens...............................................................................................   13
16.   Impositions................................................................................................   14
17.   Casualty...................................................................................................   14
     (a)     Restoration and Repair..............................................................................   14
     (b)     Escrow of Insurance Proceeds........................................................................   14
     (c)     Uninsured Losses....................................................................................   15
18.   Insurance..................................................................................................   15
     (a)     Insurance By Tenant.................................................................................   15
     (b)     Landlord as Additional Insured......................................................................   16
     (c)     Carriers and Features...............................................................................   16
     (d)     Failure to Procure Insurance........................................................................   16
     (e)     Waiver of Subrogation...............................................................................   16
     (f)     Indemnification of Landlord.........................................................................   16
</TABLE>

                                        i

<PAGE>

<TABLE>
<S>                                                                                                                 <C>
19.   Environmental Matters......................................................................................   17
     (a)     Tenant's Covenant...................................................................................   17
     (b)     Clean-Up............................................................................................   17
     (c)     Indemnification.....................................................................................   17
20.   Costs and Attorneys' Fees..................................................................................   17
21.   Default; Remedies..........................................................................................   18
     (a)     Default.............................................................................................   18
     (b)     Remedies............................................................................................   19
22.   Landlord's Default.........................................................................................   21
23.   Condemnation...............................................................................................   21
     (a)     Complete Taking.....................................................................................   21
     (b)     Partial Taking......................................................................................   21
     (c)     Award...............................................................................................   21
     (d)     Notices.............................................................................................   22
24.   Reports and Statements.....................................................................................   22
25.   Additional Covenants of Tenant.............................................................................   22
     (a)     Indebtedness of Tenant..............................................................................   22
     (b)     Management of Leased Property; Joinder by Manager...................................................   23
     (c)     Landlord Lien.......................................................................................   23
26.   Permitted Contests.........................................................................................   23
27.   Notices of Commencement of Construction....................................................................   24
28.   Limitation on Liability of Landlord and Tenant.............................................................   24
29.   "Net" Lease................................................................................................   24
30.   Representations and Warranties.............................................................................   25
     (a)     Representations of Tenant...........................................................................   25
     (b)     Representations of Landlord.........................................................................   25
31.   Notices....................................................................................................   26
32.   No Waiver..................................................................................................   27
33.   Quiet Enjoyment............................................................................................   27
34.   Landlord Encumbrances......................................................................................   27
35.   Subordination Non-Disturbance and Attornment...............................................................   28
36.   Brokers....................................................................................................   28
37.   Invalidity.................................................................................................   28
38.   Counterparts...............................................................................................   28
39.   Memorandum of Lease........................................................................................   28
40.   Cumulative.................................................................................................   28
41.   Governing Law..............................................................................................   28
42.   Successors and Assigns, Relationship.......................................................................   28
43.   Entire Agreement...........................................................................................   29
44.   Survival...................................................................................................   29
45.   Estoppel Certificates......................................................................................   29
46.   Time.......................................................................................................   29
47.   Captions and Headings......................................................................................   29
48.   Waiver of Jury Trial.......................................................................................   29
49.   Signage....................................................................................................   29
50.   Guaranty...................................................................................................   29
51.   Pre-existing Conditions....................................................................................   29
</TABLE>

                                       ii

<PAGE>

                                    EXHIBITS:

Exhibit A     Legal Description.
Exhibit B     Memorandum of Lease
Exhibit C     Guaranty

                                      iii

<PAGE>

                            PROPERTY LEASE AGREEMENT

      THIS PROPERTY LEASE AGREEMENT (the "Lease") is made as of this 1 day of
May 2002, by and between CMCP-ISLAND LAKE, LLC, a Delaware limited liability
company ("Landlord") and BLC-ISLAND LAKE, LLC, a Delaware limited liability
company ("Tenant"), and is joined into for certain limited purposes by BROOKDALE
MANAGEMENT-II LLC, a Delaware limited liability company ("Manager").

      In consideration of the mutual promises and agreements herein contained,
the parties agree as follows:

1. DEFINITIONS. For all purposes of this Lease, except as otherwise expressly
provided or unless the context otherwise requires, (i) the terms defined in this
Paragraph shall have the meanings assigned to them in the Paragraph and include
the plural as well as the singular, (ii) all accounting terms not otherwise
defined herein shall have the meanings assigned to them in accordance with GAAP,
(iii) all references in this Lease to designated "Paragraphs" or "Subparagraphs"
and other subdivisions are to the designated Paragraphs, Subparagraphs and other
subdivisions of this Lease, and (iv) the words "herein," "hereof," "hereunder"
and other words of similar import refer to this Lease as a whole and not to any
particular Paragraph or Subparagraph or other subdivision.

      "Award" shall mean all compensation, sums or other value awarded, paid or
received by virtue of a compete or partial Condemnation of the Leased Property
(after deduction of all reasonable legal fees and other reasonable costs and
expenses, including, without limitation, expert witness fees, incurred in
connection with obtaining any such award).

      "Balloon Payment" shall mean any payment of principal due under any
Facility Mortgage in excess of that which would be required if the indebtedness
secured thereby were fully amortized over the term of such Facility Mortgage;
provided, however, if a sinking-fund or other such reserve has been established
and is available to repay such principal indebtedness only the amount in excess
thereof shall be deemed a Balloon Payment.

      "Base Rent" shall mean, without duplication, the sum of (i) Debt Service,
plus (ii) Debt Costs and Reserves payable when and as due under the applicable
Facility Mortgage.

      "Business Day" shall mean any day other than Saturday, Sunday, or any
other day on which the Federal Reserve system is authorized by law or executive
action to close.

      "Capital Addition" shall mean one or more new buildings, or one or more
additional structures annexed to any portion of the Leased Improvements with
respect to the Leased Property, or the material expansion of existing
improvements, which are constructed on any parcel or portion of the Land during
the Term, including the construction of a new wing or new story, the renovation
of existing improvements on the Leased Property in order to provide a
functionally new facility needed to provide services not previously offered, or
any expansion, construction, renovation or conversion in order to increase the
number of units of the Facility, to change the purpose for which such units are
utilized or to improve materially the quality of the Facility, or any related
improvement whose cost would be treated as a capital expenditure under GAAP.

      "Casualty" shall have the meaning given to such term in Paragraph 17(a).

      "Change of Control" shall mean the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the SEC) of 50% or more of the outstanding shares of voting stock
of Tenant (other than the Parent of Tenant or any of its Affiliates in a

<PAGE>

transaction which shall not result in any release of liability or obligation
hereunder) or the merger or consolidation of Tenant with or into any other
Person or any one or more sales or conveyances to any Person of all or
substantially all of the assets of Tenant (other than the Parent of Tenant or
any of its Affiliates in a transaction which shall not result in any release of
liability or obligation hereunder).

      "Claims" shall have the meaning given to such term in Paragraph 26.

      "Code" shall mean the Internal Revenue Code of 1986 and, to the extent
applicable, the Treasury Regulations promulgated thereunder, each as from time
to time amended.

      "Commencement Date" shall mean the date of this Lease.

      "Condemnation" shall mean, with respect to the Leased Property, (i) the
exercise of any governmental power with respect to the Leased Property, whether
by legal proceedings or otherwise, by a Condemnor of its power of condemnation;
(ii) a voluntary sale or transfer of the Leased Property by Landlord to any
Condemnor, either under threat of condemnation or while legal proceedings for
condemnation are pending; and (iii) a taking or voluntary conveyance of all or
part of the Leased Property, or any interest therein, or right accruing thereto
or use thereof, as the result or in settlement of any condemnation or other
eminent domain proceeding affecting the Leased Property, whether or not the same
shall have actually been commenced.

      "Condemnor" shall mean any public or quasi-public authority, or private
corporation or individual, having the power of condemnation.

      "Date of Taking" shall mean the date the Condemnor has the right to
possession of the Leased Property, or any portion thereof, in connection with a
Condemnation.

      "Debt Costs and Reserves" shall mean all payments, charges and costs
payable to a Facility Mortgagee under any Facility Mortgage other than Debt
Service including, without limitation, late charges, default interest, any
reserves, impounds or escrows required for Impositions, insurance premiums or
reserves for capital expenditures required under any Facility Mortgage.

      "Debt Service" shall mean, except as provided herein, the aggregate
monthly (or other periodic) interest and principal due and payable under any
Facility Mortgage including any Principal Reserve Payments; provided, in the
event the applicable Facility Mortgage require a Balloon Payment of principal on
the maturity date of such Facility Mortgage such Balloon Payment shall not be
included in Debt Service; and, provided further, that following the repayment or
refinancing at or during the three (3) month period prior to maturity of the
Facility Mortgage, Debt Service for each Lease Year during the balance of the
Term shall be deemed to equal the average of the annual Debt Service payable
during the three year period prior to such refinancing at or in connection with
maturity.

      "Default" shall mean any event or condition that, with the giving of
notice and/or lapse of time, may ripen into an Event of Default.

      "Entity" shall mean any general partnership, limited partnership, limited
liability company, limited liability partnership, corporation, joint venture,
trust, business trust, cooperative or association.

      "Environment" shall mean soil, surface waters, ground waters, land,
stream, sediments, surface or subsurface strata and ambient air.

      "Environmental Laws" shall mean all applicable laws, statutes,
regulations, rules, ordinances, codes, licenses, permits and orders of all
courts of competent jurisdiction and Government Agencies, and

                                       2

<PAGE>

all applicable judicial and administrative and regulatory decrees, judgments and
orders, including common law rulings and determinations, relating to injury to,
or the protection of, the Environment, including, without limitation, all valid
and lawful requirements of courts and other Government Agencies pertaining to
reporting, licensing, permitting, investigation, remediation and removal of
underground improvements (including, without limitation, treatment or storage
tanks, or water, gas or oil wells), or emissions, discharges, releases or
threatened releases of Hazardous Substances, chemical substances, pesticides,
petroleum or petroleum products, pollutants, contaminants or hazardous or toxic
substances, materials or wastes whether solid, liquid or gaseous in nature, into
the Environment, or relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Substances or
Regulated Medical Wastes, underground improvements (including, without
limitation, treatment or storage tanks, or water, gas or oil wells), or
pollutants, contaminants or hazardous or toxic substances, materials or wastes,
whether solid, liquid or gaseous in nature.

      "Event of Default" shall have the meaning given to such term in Paragraph
21(a).

      "Facility" shall mean the independent and/or assisted living facility
being operated or proposed to be operated on the Leased Property.

      "Facility Mortgage" shall mean, with respect to the Leased Property, any
encumbrance securing the repayment of indebtedness now or hereafter placed upon
the Leased Property and approved by the parties hereto, provided the Leased
Property is then subject to the terms of this Lease, together with all other
documents and instruments evidencing or securing the indebtedness secured
thereby.

      "Facility Mortgagee" shall mean the holder of a Facility Mortgage.

      "Facility State" shall mean the state where the Facility is located.

      "GAAP" shall mean generally accepted accounting principles, consistently
applied, and being principally derived from promulgations of The Financial
Accounting Standards Board and The American Institute of Certified Public
Accountants, or their successors.

      "Government Agencies" shall mean any court, agency, authority, board
(including, without limitation, environmental protection, planning and zoning),
bureau, commission, department, office or instrumentality of any nature
whatsoever of any governmental or quasi-governmental unit of the United States
or the Facility State or any county or any political subdivision of any of the
foregoing, whether now or hereafter in existence, having jurisdiction over
Landlord or Tenant or the Leased Property or any portion thereof or the Facility
operated thereon.

      "Guarantor" shall mean BLC Properties I, LLC, a Delaware limited liability
company.

      "Guaranty" shall mean the guaranty agreement of even date herewith made by
the Parent of Tenant, guarantying all of Tenant's obligations and liabilities
under this Lease.

      "Hazardous Substances" shall mean any substance:

            (a) the presence of which requires or may hereafter require
      notification, investigation or remediation under any federal, state or
      local statute, regulation, rule, ordinance, order, action or policy; or

            (b) which is or becomes defined as a "hazardous waste", "hazardous
      material" or "hazardous substance" or "pollutant" or "contaminant" under
      any present or future federal, state

                                       3

<PAGE>

      or local statute, regulation, rule or ordinance of amendments thereto
      including, without limitation, the Comprehensive Environmental Response,
      Compensation and Liability Act (42 U.S.C. et seq.) and the Resource
      Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.) and the
      regulations promulgated thereunder: or

            (c) which is toxic, explosive, corrosive, flammable, infectious,
      radioactive, carcinogenic, mutagenic or otherwise hazardous and is or
      becomes regulated by any governmental authority, agency, department,
      commission, board, agency or instrumentality of the United States, any
      state of the United States, or any political subdivision thereof; or

            (d) the presence of which on the Leased Property causes or
      reasonably threatens to cause a violation of Environmental Laws upon the
      Leased Property or to adjacent properties or poses or reasonably threatens
      to pose a hazard to the health or safety of persons on or about the Leased
      Property; or

            (e) without limitation, which contains gasoline, diesel fuel or
      other petroleum hydrocarbons or volatile organic compounds; or.

            (f) without limitation, which contains polychlorinated biphenyls
      (PCBs) or asbestos or urea formaldehyde foam insulation; or

            (g) without limitation, which contains or emits radioactive
      particles, waves or material; or

            (h) without limitation, constitutes Regulated Medical Wastes.

      "Immediate Family" shall mean, with respect to any individual, such
individual's spouse, parents, brothers, sisters, children (natural or adopted),
stepchildren, grandchildren, grandparents, parents-in-law, brothers-in-law,
sisters-in-law, nephews and nieces.

      "Impositions" shall mean all taxes (including, without limitation, all
taxes imposed under the laws of the Facility State, as such laws may be amended
from time to time, and all ad valorem, sales and use, single business, gross
receipts, transaction privilege, rent or similar taxes as the same relate to or
are imposed upon Landlord, Tenant or the business conducted upon the Leased
Property or additional federal taxes, interest or penalties, arising out of the
Leased Property's non-compliance with Legal Requirements), assessments
(including, without limitation, all assessments for public improvements or
benefit, whether or not commenced or completed prior to the date hereof and
whether or not to be completed within the Term), water, sewer or other rents and
charges, excises, tax levies, fees (including, without limitation, license,
permit, inspection, authorization and similar fees) and all other governmental
charges, in each case whether general or special, ordinary or extraordinary, or
foreseen or unforeseen, of every character in respect of the Leased Property or
the business conducted thereon by Tenant (including all interest and penalties
thereon due to any failure in payment by Tenant), which at any time prior to,
during or in respect of the Term hereof may be assessed or imposed on or in
respect of or be a lien upon (a) Landlord's interest in the Leased Property, (b)
the Leased Property or any part thereof or any rent therefrom or any estate,
right, title or interest therein, or (c) any occupancy, operation, use or
possession of, or sales from, or activity conducted on, or in connection with
the Leased Property or the leasing or use of the Leased Property or any part
thereof by Tenant; provided, however, that nothing contained herein shall be
construed to require Tenant to pay, and the term "Impositions" shall not
include: (i) any tax based on net income imposed on Landlord, except for federal
taxes arising out of non-compliance with Legal Requirements, (ii) any net
revenue tax of Landlord, (iii) any transfer fee or other tax imposed with
respect to the sale, exchange or other disposition by Landlord of the Leased
Property or any portion thereof or the proceeds thereof, or (iv) any single
business, gross receipts (other than a tax on any rent

                                       4

<PAGE>

received by Landlord from Tenant), transaction privilege, rent or similar taxes
as the same relate to or are imposed upon Landlord, except to the extent that
any tax, assessment, tax levy or charge, which Tenant is obligated to pay
pursuant to the first sentence of this definition and which is in effect at any
time during the Term hereof, is totally or partially repealed, and a tax,
assessment, tax levy or charge described in clause (i) or (ii) preceding is
levied, assessed or imposed expressly in lieu thereof.

      "Improvements" shall have the meaning given such term in Paragraph 2.

      "Inspection Report" shall have the meaning given to such term in Paragraph
13(b).

      "Intended Use" shall have the meaning given such term in Paragraph 7(a).

      "Land" shall have the meaning given such term in Paragraph 2.

      "Landlord" shall have the meaning given such term in the preambles to this
Lease.

      "Lease" shall mean this Property Lease Agreement including the Exhibits
attached hereto, as it and they may be amended from time to time as herein
provided.

      "Lease Year" shall mean each twelve month period commencing on May 1
during the Term, provided the first Lease Year shall include the period of time
from the Commencement Date through May 1, 2002.

      "Leased Property" shall have the meaning given to such term in Paragraph
2.

      "Legal Requirements" shall mean all federal, state, county, municipal and
other governmental statutes, laws, rules, orders, regulations, ordinances,
judgments, decrees and injunctions affecting the Leased Property or the
maintenance, construction, alteration or operation thereof, whether now or
hereafter enacted or in existence, including, without limitation, (a) all
permits, licenses, certificates of need, authorizations and regulations
necessary to operate the Leased Property for the Intended Use, (b) all
covenants, agreements, restrictions and encumbrances contained in any
instruments including any Facility Mortgage at any time in force affecting the
Leased Property, including those (i) which may require material repairs,
modifications or alterations in or to the Leased Property or (ii) with respect
to which a violation thereof would in any way materially and adversely affect
the use and enjoyment thereof, and (c) all requirements of any Third Party Payor
Programs.

      "Lien" shall mean any mortgage, security interest, pledge, collateral
assignment, or other encumbrance, lien or charge of any kind, or any transfer of
any property or assets for the purpose of subjecting the same to the payment of
indebtedness or performance of any other obligation in priority to payment of
its general creditors.

      ""Management Agreement" shall mean that certain Management Agreement of
even date herewith by and between Tenant and Manager.

      "Manager" shall mean Brookdale Management-II, LLC, a Delaware limited
liability company.

      "Non-Capital Additions" shall have the meaning given such term in
Paragraph 11(b).

      "Notice" shall mean a notice given or received in accordance with
Paragraph 31.

      "Officer's Certificate" shall mean a certificate signed by an officer of
Tenant (or an officer of the Manager of Tenant) duly authorized by the board of
managers of Tenant.

                                       5

<PAGE>

      "Overdue Rate" shall mean, on any date, a per annum rate of interest equal
to the lesser of (i) fifteen percent (15%) and (ii) the maximum rate then
permitted under applicable law, calculated from the date any payment obligation
is due (except with respect to payments which are indeterminable prior to notice
from Landlord, in which event the Overdue Rate shall be calculated from the 10th
day following the date such notice was received).

      "Parent" shall mean, with respect to any Person, any Person which owns
directly, or indirectly through one or more Subsidiaries or Affiliated Persons,
fifty percent (50%) or more of the voting or beneficial interest in such Person.

      "Permitted Encumbrances" shall mean all rights, restrictions, and
easements of record set forth on Schedule B to the owner's title insurance
policy issued to Landlord on the date hereof, this Lease and any other such
encumbrances as may have been granted or caused by Landlord or otherwise
consented to in writing by Landlord from time to time.

      "Person" shall mean any individual or Entity, and the heirs, executors,
administrators, legal representatives, successors and assigns of such Person
where the context so requires.

      "Personalty" shall have the meaning given such term in Paragraph 2.

      "Pre-existing Condition" shall have the meaning given to such term in
Paragraph 51.

      "Principal Reserve Payments" shall mean any debt service escrow or
principal reserve payments to be held by or on behalf of any Facility Mortgagee,
which funds will be applied to the debt in the future.

      "Regulated Medical Wastes" shall mean all materials generated by Tenant,
subtenants, patients, occupants or operators of the Leased Property which are
now or may hereafter be subject to regulation pursuant to the Material Waste
Tracking Act of 1988, or any similar Environmental Laws promulgated by any
Governmental Agencies.

      "Related Party" shall mean, with respect to any Person, (i) in the case of
any such Person which is a partnership, any general partner in such partnership
or any limited partner holding, directly or indirectly, ten percent (10%) or
more of the partnership interests in such partnership; (ii) in the case of any
such Person which is a limited liability company, any member of such limited
liability company holding, directly or indirectly, ten percent (10%) or more of
the membership interests in such company; (iii) any other Person which is a
Parent, a Subsidiary, or a Subsidiary of a Parent with respect to such Person or
to one or more of the Persons referred to in the preceding clauses (i) and (ii);
(iv) any other Person who is an officer, director or trustee of, or partner
holding, directly or indirectly, ten percent (10%) or more of the partnership,
membership or stock interests in, such Person or any Person referred to in the
preceding clauses (i), (ii) and (iii); and (v) any other Person who is a member
of the Immediate Family of such Person or of any Person referred to in the
preceding clauses (i) through (iv).

      "Rent" shall mean, collectively, the Base Rent and all other charges,
payments and sums due hereunder.

      "Residents' Personal Property" shall mean such items of furniture,
clothing and other personalty that is the property of any of the residents of
any of the units at the Leased Property.

      "Subsidiary" shall mean, with respect to any Person, any Entity in which
such Person owns directly, or indirectly through one or more Subsidiaries, fifty
percent (50%) or more of the voting or beneficial interest.

                                       6

<PAGE>

      "Tenant" shall have the meaning given such term in the preambles to this
Lease.

      "Tenant's Personal Property" shall mean all motor vehicles and consumable
inventory and supplies, furniture, furnishings, movable walls and partitions,
equipment and machinery and all other personal property of Tenant acquired by
Tenant on and after the date hereof and located at the Leased Property or used
in Tenant's business at the Leased Property and all modifications, replacements,
alterations and additions to such personal property installed at the expense of
Tenant.

      "Term" shall have the meaning given such term in Paragraph 4.

      "Third Party Payor Programs" shall mean all third party payor programs in
which Tenant presently or in the future may participate, including, without
limitation, Medicare, Medicaid, CHAMPUS, Blue Cross and/or Blue Shield, Managed
Care Plans, other private insurance programs and employee assistance programs.

      "Third Party Payors" shall mean Medicare, Medicaid, CHAMPUS, Blue Cross
and/or Blue Shield, private insurers and any other Person which presently or in
the future maintains Third Party Payor Programs.

      "Unsuitable for its Intended Use" shall mean a state or condition of the
Facility as a whole, such that (i) following any damage or destruction involving
the Facility, such Facility cannot reasonably be expected to be restored to
substantially the same condition as existed immediately before such damage or
destruction, within eighteen (18) months following such damage or destruction or
such other longer period of time as to which business interruption insurance is
available to fully cover Rent and other costs related to the Facility following
such damage or destruction; or (ii) as the result of a partial taking by
Condemnation, the Facility or Improvements, as the case may be, cannot be
operated, in the good faith judgment of Landlord and Tenant, on a commercially
practicable basis for its Intended Use, taking into account, among other
relevant factors, the number of usable units, the amount of square footage or
the revenues affected by such damage or destruction or partial taking.

2. LEASED PROPERTY. Landlord hereby leases to Tenant, and Tenant hereby leases
from Landlord, subject to the conditions hereinafter expressed: (a) that certain
parcel of land and the easements, rights and appurtenances related thereto,
particularly described on Exhibit A hereto (the "Land"); (b) improvements on the
Land in the nature of senior independent and assisted living facilities together
with related paved parking and appurtenant improvements and any replacements
thereof (together, the "Improvements"); and (c) certain furniture, fixtures,
equipment, furnishings and other personal property and any replacements thereof
used or utilized in connection with the ownership and operation of the
Improvements (collectively, the "Personalty"). As used herein, the Land,
Improvements and Personalty at any time subject to the terms of this Lease are
referred to as the "Leased Property". The Leased Property does not include the
Tenant's Personal Property or the Resident's Personal Property.

3. CONDITION OF LEASED PROPERTY. Tenant acknowledges and agrees that the Leased
Property is and shall be leased by Landlord to Tenant in its "as-is" condition,
as of the Commencement Date and at all times thereafter, subject to all liens,
encumbrances and restrictions affecting the Leased Property. Landlord makes
absolutely no representations or warranties whatsoever with respect to the
Leased Property or the condition thereof, either to its fitness for use,
condition, purpose or otherwise as to the quality or material or workmanship
therein, latent or patent, it being agreed that all such risks are to be borne
by Tenant. Tenant acknowledges that Landlord has not investigated and does not
warrant or represent to Tenant that the Leased Property is fit for the Intended
Use or for any other purposes whatsoever. Tenant acknowledges that Tenant shall
be solely responsible for any and all actions, repairs, permits, approvals and
costs required for the rehabilitation, renovation, use, occupancy and operation
of the Leased Property in accordance with applicable governmental requirements,
including, without

                                       7

<PAGE>

limitation, all governmental charges and fees, if any, which may be due or
payable to applicable authorities. By leasing the Leased Property, Tenant
warrants and represents to Landlord that Tenant has examined and approved all
things concerning the Leased Property which Tenant deems material to Tenant's
leasing and use of the Leased Property. Tenant further acknowledges and agrees
that: (i) neither Landlord nor any agent of Landlord has made any representation
or warranty, express or implied, concerning the Leased Property or which have
induced Tenant to execute this Lease except as contained in this Lease; and (ii)
any other representations and warranties are expressly disclaimed by Landlord.

4. TERM. This Lease shall be for a term commencing on the Commencement Date, and
ending at midnight April 30, 2022, unless modified or earlier terminated
pursuant to the terms hereof (the "Term").

5. RENT.

      (a) Rent. Tenant shall pay to Landlord (or as Landlord may direct), in
lawful money of the United States of America which shall be legal tender for the
payment of public and private debts, without offset, abatement, demand or
deduction, Rent during the Term, except as hereinafter expressly provided. All
payments to Landlord shall be made by wire transfer of immediately available
federal funds or by other means acceptable to Landlord in its sole discretion.
Rent for any partial month shall be prorated on a per diem basis based on a 360
day year and the twelve (12) thirty (30) day months.

      (b) Base Rent. Base Rent shall be paid in arrears on the first (1st) day
of each calendar month for the immediately preceding month. Until further
written Notice from Landlord, Landlord hereby directs Tenant to pay directly to
the Facility Mortgagee or its designee all Debt Service and Debt Costs and
Reserves due under the Facility Mortgage and Landlord shall use commercially
reasonable efforts to cause the Facility Mortgagee to send all invoices therefor
directly to Tenant. Notwithstanding the foregoing, payments of Debt Service and
Debt Costs and Reserves shall be paid by Tenant to the Facility Mortgagee at
least one (1) Business Day prior to the date due under the Facility Mortgage.
From and after the date of any Final Payment of a Facility Mortgage, Landlord
shall make such payments to the Facility Mortgagee directly.

      (c) Late Charge; Interest. If Tenant fails to make any payment of Rent
within five (5) days or such lesser period provided by the Facility Mortgage or
with respect to any other sums or amounts to be paid by Tenant hereunder on or
before the date such payment is due and payable and such amount remains unpaid
for a period of five (5) Days, such past due payment shall include any Late Fee
under the Facility Mortgage and shall bear interest at the Overdue Rate.

      (d) Payment without Abatement. No abatement, diminution or reduction of
Rent shall be allowed to Tenant or any person claiming under Tenant, under any
circumstances or for any reason whatsoever, except to the extent herein
provided.

6. HOLDING OVER. If Tenant or any other person or party shall remain in
possession of the Leased Property or any part thereof following the expiration
of the Term or earlier termination of this Lease without an agreement in writing
between Landlord and Tenant with respect thereto, the person or party remaining
in possession shall be deemed to be a tenant at sufferance, and during any such
holdover, the Rent payable under this Lease by such tenant at sufferance shall
be one hundred fifty percent (150%) of the Rent in effect immediately prior to
the expiration of the Term or earlier termination of this Lease. In no event,
however, shall such holding over be deemed or construed to be or constitute a
renewal or extension of this Lease.

                                       8

<PAGE>

7. USE OF LEASED PROPERTY; COMPLIANCE WITH LEGAL REQUIREMENTS.

      (a) Intended Use. Tenant shall use the Leased Property as a senior
independent and/or assisted living facility and for such other uses as may be
related, incidental or necessary thereto (the "Intended Use") and for no other
purpose. Tenant's use of the Leased Property shall, subject to the right of
diligent contest as provided in Paragraph 26, comply with all zoning
classifications of any lawful Governmental Agencies or other public or private
regulatory authority (including insurance underwriters or rating bureaus) having
jurisdiction over the Leased Property and shall otherwise comply with applicable
Legal Requirements. Tenant shall not perform any act or follow any practice
relating to the Leased Property which shall constitute a nuisance. Subject to
the terms and provisions of this Lease, Tenant shall have the right to control
the business being conducted at the Leased Property.

      (b) Laws. Tenant, at its sole expense, shall (i) comply in all material
respects with all Legal Requirements in respect to the use, operation,
maintenance, repair, alteration and restoration of the Leased Property, and (ii)
procure, maintain and comply with all material respects with all appropriate
licenses, certificates of need, permits, provider agreements and other
authorizations and agreements required for the use of the Leased Property for
the Intended Use, and for the proper operation and maintenance of the Leased
Property or any part thereof, including, without limitation, any Capital
Additions, except where failure to comply will not have a material adverse
effect on the use or operation of the Leased Property for the Intended Use or
the value or security of the Leased Property.

      (c) Compliance with Third Party Payor Program Requirements. Tenant shall,
at its sole cost and expense, make whatever improvements (capital or ordinary)
as are required to conform the Leased Property in all material respects to such
standards, if any, as may, from time to time, be required by any applicable
Third Party Payor Programs to the extent Tenant is a participant in such Third
Party Payor Programs (it being acknowledged that participation in such Third
Party Payor Programs is at the sole and absolute discretion of Tenant), or any
other applicable programs or legislation, or capital improvements required by
any other governmental agency having jurisdiction over the Leased Property as a
condition of the continued operation of the Leased Property for its Intended
Use, except where the failure to comply will not have a material adverse effect
on the use or operation of the Leased Property for its Intended Use.

      (d) Landlord to Grant Easements, Etc. Landlord shall from time to time at
the request of Tenant and at Tenant's sole cost and expense, (i) grant easements
and other rights in the nature of easements with respect to the Leased Property
to third parties; (ii) release existing easements or other rights in the nature
of easements which are for the benefit of the Leased Property; (iii) dedicate or
transfer unimproved portions of the Leased Property for road, highway or other
public purposes; (iv) execute petitions to have the Leased Property annexed to
any municipal corporation or utility district; (v) execute amendments to any
covenants and restrictions affecting the Leased Property; and (vi) execute and
deliver to any Person any instrument appropriate to confirm or effect such
grants, release, dedications, transfer, petitions and amendments (to the extent
of its interests in the Leased Property); provided, however, that Landlord shall
have first reasonably determined in good faith that such grant, release,
dedication, transfer, petition or amendment is not detrimental in any material
respect to the operation of the Leased Property for its Intended Use does not
materially reduce the value of the Leased Property and, to the extent required
by the Facility Mortgage, is acceptable to the Facility Mortgagee.

      (e) Landlord's Receipt Of Third Party Payor Program Reimbursements. In the
event that Landlord is required by applicable law to receive any payments from
Third Party Payors as the owner of the Facility which would be deemed payment
for services provided by or on behalf of Tenant to residents of the Facility,
the parties hereto agree that, so long as there is no existing and continuing
Event of Default hereunder, Landlord shall pay such monies to Tenant as promptly
as practicable.

                                       9

<PAGE>

8. TENANT'S COVENANT TO REPAIR.

      (a) Repair and Maintenance. Tenant shall, at all times during the Term and
at its sole cost and expense, put, keep, replace and maintain the Leased
Property (including, without limitation, the Improvements and the Personalty) in
good repair and in good, safe and substantial order and condition, shall make
all repairs and replacements thereto, both inside and outside, structural and
non-structural, ordinary and extraordinary, howsoever the necessity or
desirability for repairs and replacements may occur, and whether or not
necessitated by wear, tear, obsolescence or defects, latent or otherwise, and
shall use all reasonable precautions to prevent waste, damage or injury. Tenant
shall also at its own cost and expense install, maintain and replace all
landscaping, signs, sidewalks, roadways, driveways and parking areas within the
Leased Property in good repair and in good, safe and substantial order and
condition. Tenant's obligation under this Paragraph 8 shall constitute an
expense of Tenant, shall not constitute Rent and shall not offset or reduce any
rent otherwise required to be paid hereunder.

      (b) Tenant's Personal Property. Tenant may (and shall as provided herein
below), at its expense, affix or assemble or place on any parcels of the Land or
in any of the Improvements, any items of Tenant's Personal Property, and Tenant
may, subject to the conditions set forth below, remove the same at any time.
Tenant shall provide and maintain throughout the Term all such Tenant's Personal
Property as shall be necessary in order to operate the Facility for its Intended
Use and in material compliance with all applicable Legal Requirements and
Insurance Requirements. All of Tenant's Personal Property not removed by Tenant
on or prior to the expiration or earlier termination of this Lease shall be
considered abandoned by Tenant and may be appropriated, sold, destroyed or
otherwise disposed of by Landlord at Tenant's sole expense without the necessity
of first giving notice thereof to Tenant, without any payment to Tenant and
without any obligation to account therefor. Tenant shall, at its expense,
restore all of the Leased Property to the condition required by Paragraph 10
including repair of all damage to the Leased Property caused by the removal of
Tenant's Personal Property, whether effected by Tenant or Landlord, and,
further, bear Landlord's cost of such removal.

9. NO LANDLORD REPAIR OBLIGATIONS. Landlord shall not be required to make any
alterations, reconstructions, replacements, changes, additions, improvements or
repairs of any kind or nature whatsoever to the Leased Property or any portion
thereof (including, without limitation, any portion of the Improvements or any
Personalty) at any time during the Term.

10. SURRENDER.

      (a) Surrender of Leased Property. Tenant shall on the last day of the
Term, or upon the sooner termination of this Lease, peaceably and quietly
surrender the Leased Property to Landlord, in good repair and in good, safe and
substantial order and condition, and, further, in at least as good condition as
when the Leased Property was received, ordinary wear and tear and damage by
fire, Casualty or Condemnation excepted.

      (b) Transfer of Licenses and Permits. In addition, upon the expiration or
earlier termination of this Lease, Tenant shall, at Landlord's sole cost and
expense, use its best efforts to transfer to and cooperate with Landlord or
Landlord's nominee in connection with the processing of all applications for
licenses, operating permits and other governmental authorizations and all
contracts, including contracts with governmental or quasi-governmental entities
which may be necessary for the operation of the Facility. If requested by
Landlord, Tenant will continue to manage the Facility after the expiration of
the Term and for so long thereafter as is necessary for Landlord or Landlord's
nominee to obtain all necessary licenses, operating permits and other
governmental authorizations, on such reasonable terms (which shall include an
agreement to pay Tenant a market rate management fee and reimburse Tenant for
its reasonable out-of-pocket costs and expense, and reasonable administrative
costs) upon which Landlord and Tenant shall agree.

                                       10

<PAGE>

      (c) Option to Purchase Tenant's Personal Property. Upon ninety (90) days'
prior Notice (or such shorter period as shall be appropriate if this Lease is
terminated prior to its expiration date), Landlord shall have the option to
purchase all (but not less than all) of Tenant's Personal Property for an amount
equal to the then Fair Market Value thereof subject to and with appropriate
price adjustments for all equipment leases, conditional sale contracts, security
interests and other encumbrances to which such Tenant's Personal Property is
subject. If Landlord exercises such option upon expiration or earlier
termination of the Term, Tenant shall convey Tenant's Personal Property to
Landlord on an "as-is" basis, in its then current condition and state of repair.
Tenant shall provide Landlord with warranties of title, reflecting no
encumbrances as to which adjustments to the purchase price thereof, as required
by the first sentence of this paragraph 10(c), have not been made. Failure of
Landlord to notify Tenant of its election to purchase Tenant's Personal Property
by the 90th day prior to the expiration of the Term (or such shorter period as
may be appropriate if this Lease is terminated prior to its expiration date)
shall be deemed to constitute a waiver of Landlord's right to purchase Tenant's
Personal Property.

11. CAPITAL ADDITIONS.

      (a) Construction of Capital Additions. Tenant shall not construct or
install any Capital Addition on the Leased Property without obtaining Landlord's
prior written consent, which consent shall not be unreasonably withheld, delayed
or conditioned, provided that no consent shall be required for any Capital
Addition as long as (i) the Capital Additions Costs for such Capital Addition
are less than Two Hundred Fifty Thousand Dollars ($250,000), in the aggregate
and (ii) such construction or installation will not materially and adversely
affect or violate any Legal Requirement or Insurance Requirement applicable to
the Leased Property. If Landlord's consent is required, prior to commencing
construction of any Capital Addition, Tenant shall submit to Landlord, in
writing, a proposal setting forth, in reasonable detail, any proposed Capital
Addition and shall provide to Landlord such plans and specifications, permits,
licenses, contracts and other information concerning the proposed Capital
Addition as Landlord may reasonably request. Landlord shall have ten (10)
Business Days to review all materials submitted to Landlord in connection with
any such proposal. Failure of Landlord to respond to Tenant's proposal within
ten (10) Business Days after receipt of all information and materials requested
by Landlord in connection with the proposed Capital Addition shall be deemed to
constitute approval of such proposed Capital Addition, subject in all events,
however, to Tenant's compliance with the other requirements of this Paragraph
11. Without limiting the generality of the foregoing, such proposal shall
indicate the approximate projected cost of constructing such Capital Addition
and the use or uses to which it will be put. No Capital Addition shall be made
which would tie in or connect any Improvement on the Leased Property with any
other improvements on property adjacent to the Leased Property (and not part of
the Land), including, without limitation, tie-ins of buildings or other
structures or utilities, without Landlord's consent, which shall be given or
withheld in Landlord's discretion. Any Capital Additions shall, upon the
expiration or sooner termination of the Term, pass to and become the property of
Landlord, free and clear of all encumbrances other than Permitted Encumbrances.

      (b) Non-Capital Additions. Tenant shall have the right, at Tenant's sole
cost and expense, without Landlord consent, to make additions, modifications or
improvements to the Leased Property which are not Capital Additions
("Non-Capital Additions") from time to time as Tenant, in its sole discretion,
may deem desirable for the applicable Intended Use provided that any such
Non-Capital Addition will not materially alter the character or purpose or
materially detract from the value or operating efficiency of the Leased
Property.

12. UTILITIES AND OTHER SERVICES. Tenant shall be liable for and shall pay
directly all charges, fees and amounts (together with any applicable penalties,
late charges, taxes or assessments thereon) when due for water, gas,
electricity, air conditioning, heat, septic, sewer, refuse collection, telephone
and any other utility charges or similar items in connection with the use or
occupancy of the Leased Property. Landlord shall not be responsible or liable in
any way whatsoever for the quality, quantity, impairment,

                                       11

<PAGE>

interruption, stoppage, or other interference with any utility service,
including, without limitation, water, air conditioning, heat, gas, electric
current for light and power, telephone, or any other utility service provided to
or serving the Leased Property or any damage or injury caused thereby. No such
interruption, termination or cessation of utility services shall relieve Tenant
of its duties and obligations pursuant to this Lease, including, without
limitation, its obligation to pay all Rent as and when the same shall be due
hereunder.

13. PERFORMANCE BY LANDLORD OF TENANT'S OBLIGATIONS.

      (a) Landlord's Self Help. If Tenant shall default in the performance of
any term, provision, covenant or condition on its part to be performed hereunder
and such default shall be continuing, Landlord may, after Notice to Tenant and a
reasonable time to perform after such Notice (or without Notice and additional
time to perform if, in Landlord's reasonable opinion, an emergency exists or
action is necessary to cure any default under the Facility Mortgage prior to the
expiration of the applicable cure period therefor) perform the same for the
account and at the expense of Tenant. If, at any time and by reason of such
Event of Default, Landlord is compelled to pay, or reasonably elects to pay, any
sum of money or do any reasonable act which will require the payment of any sum
of money, or is compelled to incur any expense in the enforcement of its rights
hereunder or otherwise, such sum or sums, together with interest thereon at the
Overdue Rate, shall be deemed additional rent hereunder and shall be paid to
Landlord by Tenant promptly when billed therefor, and Landlord shall have all
the same rights and remedies in respect thereof as Landlord has in respect of
the Rent herein reserved.

      (b) Landlord's Inspections. Landlord, its agents or representatives,
including any applicable Facility Mortgagee, shall have the right, but not the
obligation, to enter upon the Leased Property to perform annual inspections of
the Leased Property or more frequently as required under such Facility Mortgage
to confirm that Tenant is performing all of Tenant's obligations under this
Lease, and that Tenant has not violated any of its covenants under this Lease.
Upon completion of such inspection, Landlord may deliver to Tenant a written
report ("Inspection Report") outlining certain defaults, if any, in Tenant's
obligations under clause (i) of Paragraph 7(b), Paragraph 7(c) or Paragraph
8(a). Within ten (10) Business Days of Tenant's receipt of such Inspection
Report, Tenant shall either (i) unless prohibited by the terms of the Facility
Mortgage, object to Landlord in writing as to any portion of the Inspection
Report, specifically describing such objection; or (ii) begin to perform any and
all required work outlined in the Inspection Report which Tenant has not
objected to, and diligently complete such work. If Tenant objects to any item in
the Inspection Report, then within ten (10) Business Days of Landlord's receipt
of Tenant's objection notice, both Landlord and Tenant shall select a third
party licensed engineer mutually satisfactory to Landlord and Tenant or if a
single engineer cannot be agreed upon, then Landlord and Tenant shall each, at
their own cost, select a licensed engineer and the two chosen engineers shall
select a third licensed engineer, the cost of the third engineer being paid
equally by Landlord and Tenant. The engineer(s) shall determine, by majority
vote, if the work outlined in the Inspection Report should be performed by
Tenant. Such determination shall be final and binding on Landlord and Tenant.

14. ENTRY. Landlord, any Facility Mortgagee and their agents or representatives
may enter the Leased Property at reasonable times during normal business hours
upon twenty-four (24) hours prior written Notice (except during emergencies, in
which case Landlord shall endeavor to give such Notice as Landlord deems
reasonable under the circumstances) for the purpose of inspecting the Leased
Property, or performing any work which Landlord elects to undertake by reason of
Tenant's Default under the terms of this Lease. Landlord shall use reasonable
efforts not to disturb Tenant or any resident or occupant of the Leased Property
as a result of any such entry by Landlord, its agents or representatives.

                                       12

<PAGE>

15. ASSIGNMENT, SUBLETTING AND LIENS.

      (a) Transfers Prohibited Without Consent. Except as provided below, Tenant
shall not, without the prior written consent of Landlord, which consent shall
not be unreasonably withheld or delayed, in each instance, sell, assign or
otherwise transfer this Lease, or Tenant's interest in the Leased Property, in
whole or in part, or any rights or interest which Tenant may have under this
Lease, or sublet the Leased Property, or any part thereof. When given, the
consent of Landlord to an assignment, transfer, subletting shall in no event be
construed to relieve Tenant or such assignee or subtenant from the obligation of
obtaining the express consent in writing of Landlord to any further assignment,
transfer or subletting. Any assignment, transfer or sublease in violation of
this Paragraph 15 shall be voidable at Landlord's option. For purposes of this
Paragraph, Landlord's consent shall conclusively be deemed reasonably withheld
if the effect of any such transfer would adversely affect the Real Estate
Investment Trust ("REIT") status or the treatment of Landlord or its Parent
under applicable REIT regulations.

      (b) Adequate Assurances. Without limiting any of the foregoing provisions
of this Paragraph 15, if, pursuant to the U.S. Bankruptcy Code, as the same may
be amended from time to time, Tenant is permitted to assign or otherwise
transfer its rights and obligations under this Lease in disregard of the
restrictions contained in this Paragraph 15, the assignee agrees to provide
adequate assurance to Landlord (i) of the continued use of the Leased Property
solely in accordance with the Intended Use thereof and in compliance with all
other terms of this Lease; and (ii) of such other matters as Landlord may
reasonably require at the time of such assumption or assignment. Such assignee
shall expressly assume this Lease by an agreement in recordable form.

      (c) Permitted Subleases. Notwithstanding the foregoing, but subject to the
provisions of Paragraph 15(d), Tenant may enter into third party residency
agreements with respect to the units located at the Facility and may sublease
space at the Leased Property for a bank, beauty salon, barber shop, laundry,
commissary or healthcare purposes or other concessions and services in the
ordinary course of business consistent with the Intended Use, so long as such
sublease will not reduce the number of units at the Facility and will not
violate or affect any Legal Requirement or Insurance Requirement, and Tenant
shall provide (or cause to be provided) such additional insurance coverage
applicable to the activities to be conducted in such subleased space as Landlord
may reasonably require.

      (d) Sublease Limitation. Anything contained in this Lease to the contrary
notwithstanding, Tenant shall not sublet the Leased Property on any basis such
that the rental to be paid by any sublessee thereunder would be based, in whole
or in part, on either (i) the income or profits derived by the business
activities of such sublessee, or (ii) any other formula, such that any portion
of such sublease rental would fail to qualify as "rents from real property"
within the meaning of Section 856(d) of the Code, or any similar or successor
provision thereto such that the sublease(s) might, in Landlord's reasonable
determination, adversely affect the REIT status or treatment of Landlord or its
Parent under any applicable REIT regulations.

      (e) Liens. Subject to the provisions of Paragraph 26, Tenant shall not,
directly or indirectly, create or allow to remain and shall promptly discharge
or bond over in a manner reasonably satisfactory to Landlord, at its expense,
any Lien the Leased Property or Tenant's leasehold interest therein or any
attachment, levy, claim or encumbrance in respect of the Rent, other than (i)
Permitted Encumbrances; (ii) restrictions, liens and other encumbrances which
are consented to in writing by Landlord or otherwise permitted under this Lease;
(iii) liens for those taxes of Landlord which Tenant is not required to pay
hereunder; (iv) Liens for Impositions or for sums resulting from noncompliance
with Legal Requirements so long as (A) the same are not yet payable, or (B) are
being contested in accordance with Paragraph 26; (v) liens of mechanics,
laborers, materialmen, suppliers or vendors incurred in the ordinary course of
business that are not yet due and payable or are for sums that are being
contested in accordance with

                                       13

<PAGE>

Paragraph 26; and (vi) any Facility Mortgage or other liens which are the
responsibility of Landlord pursuant to the provisions of Paragraph 36.

16. IMPOSITIONS. Throughout the Term, Tenant shall bear, pay and discharge all
Impositions of every kind and nature whatsoever, extraordinary as well as
ordinary, and each and every installment thereof which shall or may during the
Term hereof be assessed or imposed upon, or arise in connection with, the use,
occupancy or possession of the Leased Property or any part thereof, including,
without limitation, ad valorem real and personal property taxes, Landlord's
franchise taxes and all taxes assessed or imposed in lieu of or in addition to
any of the foregoing but specifically excluding any federal income taxes of
Landlord other than additional taxes, interest or penalties and related expenses
arising out of the Leased Property's non-compliance with Legal Requirements.
Upon request of Landlord, Tenant shall promptly furnish to Landlord satisfactory
evidence of the payment of any Imposition required to be paid by Tenant pursuant
to the foregoing. If any refund shall be due from any taxing authority in
respect of any Imposition paid by Tenant, the same shall be paid to or retained
by Tenant.

17. CASUALTY.

      (a) Restoration and Repair. In the event that the Improvements and/or
Personalty shall be destroyed or damaged in whole or in part by fire or any
cause whatsoever ("Casualty"), Tenant shall give Landlord immediate notice
thereof and shall repair, reconstruct or replace the Improvements and/or
Personalty, or the portion thereof so destroyed or damaged (whichever is
reasonably required), at least to the extent of the value and character thereof
existing immediately prior to such occurrence, and in accordance with Legal
Requirements. All work shall be started as soon as practicable and completed at
Tenant's sole cost and expense. Tenant shall, however, immediately take such
action as is necessary to assure that the Leased Property (or any portion
thereof) does not constitute a nuisance or otherwise presents a health or safety
hazard. Tenant shall continue to pay all Rent without abatement. Notwithstanding
the foregoing, in the event that a period of two (2) years or less remains on
the Term, Tenant may elect to terminate this Lease upon the occurrence of a
Casualty in which the Property as a whole is rendered Unsuitable for its
Intended Use by Notice to Landlord within thirty (30) days following the date of
such Casualty which termination shall be effective on the last day of the
calendar month in which such Notice is given. Upon such termination Tenant shall
assign all insurance proceeds for such damage or destruction to Landlord and any
applicable Facility Mortgagee.

      (b) Escrow of Insurance Proceeds. Subject to the requirements of any
Facility Mortgagee, in the event of a Casualty resulting in an insurance loss
payment for any Improvements and/or Personalty in an amount greater than Two
Hundred Fifty Thousand Dollars ($250,000), unless this Lease is terminated as
provided in Paragraph 17(a), the proceeds of all insurance policies maintained
by Tenant plus the amount of any deductible shall, subject to all Legal
Requirements, be deposited in the name of Landlord, Tenant and any Facility
Mortgagee in an escrow account at an approved financial institution designated
by Landlord, and shall be used by Tenant for the repair, reconstruction or
restoration of the Improvements and/or Personalty. Such proceeds shall be
disbursed periodically by escrow agent upon certification of the architect or
engineer having supervision of the work that such amounts are the amounts paid
or payable for the repair, reconstruction or restoration. Tenant shall, at the
time of establishment of such escrow account and from time to time thereafter
until said work shall have been completed and paid for, furnish Landlord with
adequate evidence that at all times the undisbursed portion of the escrowed
funds, together with any funds made available by Tenant, is sufficient to pay
for the repair, reconstruction or restoration in its entirety. If a Casualty
results in a loss payment for the Improvements and/or Personalty in an amount
equal to or less than Two Hundred Fifty Thousand Dollars ($250,000), unless this
Lease is terminated as provided in Paragraph 17(a), then the proceeds shall be
paid to Tenant, and shall be applied by Tenant toward the repair, reconstruction
and restoration of the Leased Property. Tenant shall obtain, and make available
to Landlord, receipted bills and, upon completion of the work, full and final
waivers of lien.

                                       14

<PAGE>

      (c) Uninsured Losses. Nothing contained herein shall relieve Tenant of its
obligations under this Paragraph 17 even if the Casualty is not covered, either
in whole or in part, by insurance.

18. INSURANCE.

      (a) Insurance By Tenant. Tenant shall, throughout the Term, and at its
sole cost and expense, maintain in full force and effect the types and amounts
of insurance required under the Facility Mortgage or, if there is no Facility
Mortgage or the Facility Mortgagee does not require the maintenance of
insurance, the following types and amounts of insurance coverage; provided such
insurance coverage is commercially available at commercially reasonable rates:

            (i) Hazard Insurance. Tenant shall keep the Improvements and
      Personalty, including all permitted alterations, changes, additions and
      replacements thereof and thereto, insured against loss or damage caused
      by: (A) fire, and other hazards and perils generally included under
      extended coverage; (B) sprinkler leakage; (C) vandalism and malicious
      mischief; (D) boiler and machinery; and (E) other perils commonly covered
      by "All Risk" insurance, all in an amount which reasonably assures there
      will be sufficient proceeds to replace the Improvements and Personalty in
      the event of a loss against which such insurance is issued but in no event
      less than 100% of the full replacement value thereof (exclusive of
      foundations). All insurance required hereunder, and all other insurance
      maintained by Tenant on the Improvements and Personalty in excess of or in
      addition to that required hereunder, shall be carried in favor of Landlord
      and Tenant, as their respective interests may appear.

            (ii) Liability Insurance. Tenant shall provide and keep in full
      force and effect a policy of broad form comprehensive general public
      liability and property damage insurance providing coverage against
      liability for personal injury, death and property damage having limits of
      not less than Five Million Dollars ($5,000,000) per occurrence, and Five
      Million Dollars ($5,000,000) in the aggregate, for the Leased Property,
      with umbrella liability coverage of at least Ten Million Dollars
      ($10,000,000).

            (iii) Business Interruption. Tenant shall provide and keep in effect
      a policy of business interruption insurance in an amount to cover costs,
      damages, lost income, expenses, Base Rent, and all other sums payable
      under this Lease for a period of not less than eighteen (18) months.

            (iv) Worker's Compensation and Employer's Liability Insurance.
      Tenant shall provide and keep in full force and effect workers'
      compensation insurance, in a form prescribed by the laws of the Facility
      State, and employers' liability insurance with limits of not less than
      Five Million Dollars ($5,000,000), with umbrella liability coverage of at
      least Ten Million Dollars ($10,000,000).

            (v) Builder's Risk Insurance. Tenant shall, prior to the
      commencement of and during the construction of any restoration, renovation
      or alteration to the Leased Property, provide and keep in full force and
      effect builders' risk insurance.

            (vi) Flood Insurance. If any Improvements are or become located in
      an area which is considered a flood risk by the U.S. Department of Housing
      and Urban Development, Tenant shall provide and keep in effect a policy of
      flood insurance with the maximum limit of coverage available for the
      Improvements under the National Flood Insurance Act of 1968, the Flood
      Disaster Protection Act of 1973 or the National Flood Insurance Reform Act
      of 1994.

                                       15

<PAGE>

            (vii) Other Insurance. In addition, Tenant shall, at Landlord's
      request, provide and keep in full force and effect such other insurance
      for such risks and in such amounts as may from time to time be required
      pursuant to any Facility Mortgage or commonly insured against in the case
      of business operations similar to those contemplated by this Lease to be
      conducted by Tenant on the Leased Property or required by any Legal
      Requirements.

      (b) Landlord as Additional Insured. Any and all insurance maintained by
Tenant as required by this Lease, or in excess of or in addition to that
required hereunder, shall name Landlord and any Facility Mortgagee as additional
insureds.

      (c) Carriers and Features. All insurance policies required to be carried
by Tenant as provided in this Paragraph 18 shall be issued by insurance
companies authorized and licensed to do business in the Facility State with a
Best's Insurance Rating of not less than "A-" or a Best's Financial Category of
not less than "VIII", with reasonable deductibles per occurrence. All such
policies shall be for periods of not less than one year and Tenant shall renew
the same at least thirty (30) days prior to the expiration thereof. All such
policies shall require not less than thirty (30) days written notice to Landlord
prior to any cancellation thereof or any change reducing coverage thereunder.
Notwithstanding the foregoing, Tenant may elect to obtain blanket insurance for
each of the foregoing required types of insurance.

      Tenant shall pay the premiums for all insurance policies which Tenant is
obligated to carry under this Paragraph 18 and, prior to the expiration of any
such policy, deliver to Landlord a copy of the renewal policy or policies, or a
certificate or certificates thereof, along with evidence that the premiums
therefor have been paid for at least the next ensuing quarter-annual period.

      (d) Failure to Procure Insurance. If Tenant fails to procure insurance
required under this Paragraph or fails to maintain the same in full force and
effect continuously during the Term, Landlord shall be entitled to procure the
same and Tenant shall immediately reimburse Landlord for such premium expense as
additional Rent.

      (e) Waiver of Subrogation. If any of Tenant's Personal Property shall be
stolen, damaged or destroyed by an insured peril, Landlord shall not have any
liability to Tenant, nor to any insurer of Tenant, for or in respect of such
theft, damage or destruction, and Tenant shall use its best efforts to require
all policies of insurance carried by it on Tenant's Personal Property to contain
or be endorsed with a provision by which the insurer designated therein shall
waive its right of subrogation against Landlord.

      (f) Indemnification of Landlord. Notwithstanding the existence of any
insurance provided for herein and without regard to the policy limits of any
such insurance, Tenant shall protect, indemnify and hold harmless Landlord for,
from and against all liabilities, obligations, claims, damages, penalties,
causes of action, costs and reasonable expenses (including, without limitation,
reasonable attorneys' fees), to the maximum extent permitted by law, imposed
upon or incurred by or asserted against Landlord (except to the extent that any
of the following result from Landlord's gross negligence or willful misconduct)
by reason of: (i) any accident, injury to or death of persons or loss of or
damage to property occurring on or about the Leased Property or adjoining
sidewalks or right of way, including, without limitation, any claims of
malpractice; (ii) any past, present or future use, misuse, non-use,
non-compliance, condition, management, maintenance or repair by Tenant or anyone
claiming under Tenant of the Leased Property or Tenant's Personal Property or
any litigation, proceeding or claim by Governmental Agencies or other third
parties (other than Condemnation proceedings) to which Landlord is made a party
or participant relating to the Leased Property or Tenant's Personal Property or
such use, misuse, non-use, non-compliance, condition, management, maintenance,
or repair thereof; (iii) any Impositions (which are the obligation of Tenant to
pay pursuant to the applicable provisions of this

                                       16

<PAGE>

Lease) and (iv) any failure or inability to obtain the insurance coverage
required hereunder. Tenant shall pay all amounts payable under this Paragraph
18(f) within ten (10) Business Days after demand therefor, and if not timely
paid, such amounts shall bear interest at the Overdue Rate from the date of
determination to the date of payment. Tenant, at its expense, shall contest,
resist and defend any such claim, action or proceeding asserted or instituted
against Landlord or may compromise or otherwise dispose of the same, with
Landlord's prior written consent (which consent may not be unreasonably
withheld, delayed or conditioned). The obligations of Tenant under this
Paragraph 18(f) are in addition to the obligations set forth in Paragraph 19(c)
and shall survive the termination of this Lease.

19. ENVIRONMENTAL MATTERS.

      (a) Tenant's Covenant. Throughout the Term, Tenant covenants that it shall
not cause, permit or allow any Hazardous Materials to be placed, stored, dumped,
dispensed, released, discharged, deposited, used, transported, located or
generated on the Leased Property in violation of any Environmental Law.

      (b) Clean-Up. Subject to the provisions of Paragraph 51, during the Term,
Tenant shall immediately clean-up any Hazardous Materials found on or within any
portion of the Leased Property, and shall remediate the Leased Property to
comply with any and all Environmental Laws regarding Hazardous Materials and
clean-up thereof, and to pay for all clean-up and remediation costs at no cost
to Landlord; provided such Hazardous Materials were placed, released,
discharged, used, transported or generated prior to the end of the Term and do
not result from any act or omission of Landlord.

      (c) Indemnification. Subject to the provisions of Paragraph 51, Tenant
shall indemnify, release and hold harmless Landlord, its successors, assigns,
members, managers, officers, directors, shareholders and employees, from and
against all Liabilities (as defined below), suffered by, incurred by or assessed
against such parties, their agents or other representatives, whether incurred as
a result of legal action taken by any Governmental Agency, taken by any private
claimant, or taken by Landlord, before or after the expiration of the Term as a
result of the presence, disturbance, discharge, release, removal or clean-up of
any Hazardous Materials upon or under, on or off site, associated with,
generated on or flowing or originating from the Leased Property prior to the end
of the Term; provided such Liabilities do not arise as a result of any act or
omission of Landlord. The term "Liabilities" as used in this Paragraph 19 is
hereby defined as any and all liabilities, expenses, demands, damages, punitive
or exemplary damages, consequential damages, costs, cleanup costs, response
costs, losses, causes of action, claims for relief, reasonable attorneys' fees,
other professional fees, penalties, fines, assessments and charges. The
provisions of this Paragraph 19 shall survive the expiration or sooner
termination of this Lease.

20. COSTS AND ATTORNEYS' FEES. If either party shall bring an action to recover
any sum due hereunder, or for any breach hereunder, and shall obtain a judgment
or decree in its favor, the court may award to the prevailing party in such
action its reasonable costs and reasonable attorneys' fees, specifically
including reasonable attorneys' fees incurred in connection with any appeals
(whether or not taxable or assessable as such by law). Landlord shall also be
entitled to recover Landlord's reasonable attorneys' fees and costs incurred in
any bankruptcy action filed by or against Tenant, including, without limitation,
those incurred in seeking relief from the automatic stay, in dealing with the
assumption or rejection of this Lease, in any adversary proceeding, and in the
preparation and filing of any proof of claim.

                                       17

<PAGE>

21. DEFAULT; REMEDIES.

      (a) Default. Upon the occurrence of any one or more of the following
events ("Event of Default"), Landlord shall have the right to exercise any
rights or remedies available in this Lease, at law or in equity. Events of
Default shall be:

            (i) Tenant's failure to pay when due any regularly scheduled payment
      of Rent, or any other sum of money payable hereunder (whether as
      additional Rent or otherwise) and such failure is not cured within five
      (5) days (or such earlier period as set forth in this Paragraph 21(a));

            (ii) Tenant's failure to pay when due any other payment of Rent, or
      any other sum of money payable hereunder (whether as additional Rent or
      otherwise) and such failure is not cured within five (5) days after
      receipt of Notice thereof from Landlord;

            (iii) Tenant's failure to perform any other of the terms, covenants
      or conditions contained in this Lease if not remedied within thirty (30)
      days after receipt of Notice thereof, or, if such default cannot
      reasonably be remedied within such period, Tenant does not within thirty
      (30) days after Notice thereof commence such act or acts as shall be
      necessary to remedy the default and shall not thereafter diligently
      complete such act or acts within a reasonable time, provided, however, in
      no event shall such cure period extend beyond one hundred eighty (180)
      days after Notice thereof;

            (iv) if Tenant or its Parent becomes bankrupt or insolvent, or files
      any debtor proceedings, or files pursuant to any statute a petition in
      bankruptcy or insolvency or for reorganization, or files a petition for
      the appointment of a receiver or trustee for all or substantially all of
      its assets, and such petition or appointment or if any of the foregoing
      are filed against Tenant or its Parent, shall not have been set aside
      within ninety (90) days from the date of such petition or appointment, or
      if Tenant or its Parent makes an assignment for the benefit of creditors
      or shall admit in writing its inability to pay its debts generally as they
      become due, or if Tenant's interest in this Lease is attached, seized or
      made subject to any other judicial seizure and such seizure or attachment
      is not discharged within ninety (90) days;

            (v) if Tenant's fails to provide insurance coverage (or allows such
      coverage to be canceled or lapse) pursuant to its obligation hereunder;

            (vi) if Tenant or its Parent is liquidated or dissolved, or begins
      proceedings toward such liquidation or dissolution, or, in any manner,
      permits the sale or divestiture of substantially all of its assets;

            (vii) if a Change of Control occurs or the estate or interest of
      Tenant in the Leased Property or any material part thereof is voluntarily
      or involuntarily transferred, assigned, conveyed, levied upon or attached
      in any proceeding in violation of the terms of this Lease, unless Tenant
      is contesting such lien or attachment in good faith in accordance with
      Paragraph 26 hereof;

            (viii) if there has been a final unappealable determination by any
      Government Agency of the revocation or limitation of any license, permit,
      certification or approval required for the lawful operation of the
      Facility in accordance with its Intended Use or the loss or limitation of
      any license, permit, certification or approval under any other
      circumstances under which Tenant or is required to cease its operation of
      the Facility in accordance with its Intended Use at the time

                                       18

<PAGE>

      of such loss or limitation and such event or failure has a material
      adverse affect on the use or operation of the Leased Property;

            (ix) if Tenant voluntarily ceases operation of the Leased Property
      for its Intended Use, except as a result of Casualty or partial or
      complete Condemnation;

            (x) if Tenant fails to pay for money borrowed or for the deferred
      purchase price of any material property or services (excluding trade
      accounts payable in the ordinary course of business on customary trade
      terms) or any guaranty relating thereto which, in the aggregate, exceeds
      Two Hundred Fifty Thousand Dollars ($250,000), and the same be declared to
      be or become due and payable prior to the stated maturity thereof and all
      applicable notices with respect thereto have been given and all applicable
      grace or cure periods with respect thereto shall have lapsed; or

            (xi) if any Person acquires more than 9.8% of the outstanding
      ownership interests in Tenant, which would, in Landlord's sole but
      reasonable determination, adversely affect the status or treatment of
      Landlord or its Parent as a real estate investment trust under the
      applicable provisions of the Code.

      Notwithstanding the foregoing, if any applicable Facility Mortgage
provides for a shorter cure or grace period, or does not require notice to be
given to trigger an event of default thereunder for the same obligation as
described above and provided such obligation is a concurrent obligation of
Tenant hereunder, then the provisions for notice (or lack thereof) and cure
under such Facility Mortgage shall supercede the notice and cure provisions set
forth above, it being acknowledged and agreed that all such payments and
obligations of Tenant hereunder shall be made and performed within such time
periods so as to comply with the terms of the Facility Mortgage.

      (b) Remedies. If any of the Events of Default hereinabove specified shall
occur and be continuing, Landlord shall have and may exercise any one or more of
the following rights and remedies:

            (i) Landlord may, by written Notice thereof to Tenant, terminate
      this Lease and, peaceably or pursuant to appropriate legal proceedings,
      re-enter, retake and resume possession of the Leased Property for
      Landlord's own account and, for Tenant's breach of and default under this
      Lease, recover immediately from Tenant any and all Rent and other sums and
      damages due or in existence at the time of such termination, including,
      without limitation: (A) all Rent and other sums, charges, payments, costs
      and expenses agreed and/or required to be paid by Tenant to Landlord
      hereunder; (B) all reasonable costs and expenses of Landlord in connection
      with the recovery of possession of the Leased Property, including
      reasonable attorneys' fees and court costs; and (C) all costs and expenses
      of Landlord in connection with any reletting or attempted reletting of the
      Leased Property or any part or parts thereof, including, without
      limitation, brokerage fees, reasonable attorneys' fees and the cost of any
      alterations or repairs which may be reasonably required to so relet the
      Leased Property, or any part or parts thereof;

            (ii) Landlord may, by written Notice thereof to Tenant, terminate
      Tenant's option to renew the term this Lease for any or all of the Renewal
      Terms;

            (iii) Landlord may, pursuant to any prior notice required by law,
      and without terminating this Lease, peaceably or pursuant to appropriate
      legal proceedings, re-enter, retake and resume possession of the Leased
      Property for the account of Tenant, make such alterations of and repairs
      to the Leased Property as may be reasonably necessary in order to relet
      the same or any part or parts thereof and relet or attempt to relet the
      Leased Property or any part or parts thereof for such term or terms (which
      may be for a term or terms extending beyond the Term), at

                                       19

<PAGE>

      such Rent and upon such other terms and provisions as Landlord, in its
      reasonable discretion, may deem advisable. In the event that Landlord
      retakes and resumes possession of the Leased Property, it shall use
      reasonable efforts to mitigate any damages it suffered by virtue of such
      Event of Default. Subject to the requirements of any Facility Mortgage,
      upon any such reletting, all rents received by Landlord from such
      reletting shall be applied: (A) first, to the payment of all costs and
      expenses of recovering possession of the Leased Property; (B) second, to
      the payment of any costs and expenses of such reletting, including
      brokerage fees, reasonable attorneys' fees and the cost of any alterations
      and repairs reasonably required for such reletting; (C) third, to the
      payment of any indebtedness, other than Rent, due hereunder from Tenant to
      Landlord, and to satisfy any Liens encumbering Tenant's leasehold
      interest; (D) fourth, to the payment of all Rent and other sums due and
      unpaid hereunder; and (E) fifth, the residue, if any, shall be held by
      Landlord and applied in payment of future Rent as the same may become due
      and payable hereunder. If the rents received from such reletting during
      any period shall be less than that required to be paid during that period
      by Tenant hereunder, then Tenant shall promptly pay any such deficiency to
      Landlord and failing the prompt payment thereof by Tenant to Landlord,
      Landlord shall immediately be entitled to institute legal proceedings for
      the recovery and collection of the same. Landlord shall, in addition, be
      immediately entitled to sue for and otherwise recover from Tenant any
      other damages occasioned by or resulting from any abandonment of the
      Leased Property or other Event of Default under this Lease other than a
      monetary Event of Default. No such re-entry, retaking or resumption of
      possession of the Leased Property by Landlord for the account of Tenant
      shall be construed as an election on the part of Landlord to terminate
      this Lease unless a Notice of such intention shall be given to Tenant or
      unless the termination of this Lease be decreed by a court of competent
      jurisdiction. Notwithstanding any such re-entry and reletting or attempted
      reletting of the Leased Property or any part or parts thereof for the
      account of Tenant without termination of this Lease, Landlord may at any
      time thereafter, upon Notice to Tenant, elect to terminate this Lease or
      pursue any other remedy available to Landlord for Tenant's previous and
      continuing Event of Default under this Lease.

            (iv) Landlord may, without re-entering, retaking or resuming
      possession of the Leased Property, sue for all Rent and all other sums,
      charges, payments, costs and expenses due from Tenant to Landlord
      hereunder either: (A) as they become due under this Lease, taking into
      account that Tenant's right and option to pay the Rent hereunder on a
      monthly basis in any particular Lease Year is conditioned upon the absence
      of an Event of Default under this Lease; or (B) at Landlord's option,
      accelerate the maturity and due date of the whole or any part of the Rent
      for the entire then-remaining unexpired balance of the Initial Term or the
      applicable Renewal Term, as the case may be (reduced to its present value,
      applying an interest rate of seven percent (7%)) less the present value of
      the fair market rent for the same period, as well as all other sums,
      charges, payments, costs and expenses required to be paid by Tenant to
      Landlord hereunder, including, without limitation, damages for breach or
      default of Tenant's obligations hereunder in existence at the time of such
      acceleration, such that all sums due and payable under this Lease shall,
      following such acceleration, be treated as being, and in fact shall be,
      due and payable in advance as of the date of such acceleration. Landlord
      may then proceed to recover and collect all such unpaid Rent and other
      sums so sued for from Tenant by distress, levy, execution or otherwise.

      In addition to the remedies hereinabove specified and enumerated, Landlord
shall have and may exercise the right to invoke any other remedies allowed at
law or in equity as if the remedies of re-entry, unlawful detainer proceedings
and other remedies were not herein provided. Accordingly, the mention in this
Lease of any particular remedy shall not preclude Landlord from having or
exercising any other remedy at law or in equity. Nothing herein contained shall
be construed as precluding Landlord from having or exercising such lawful
remedies as may be and become necessary in order to preserve

                                       20

<PAGE>

Landlord's right or the interest of Landlord in the Leased Property and in this
Lease, even before the expiration of any notice periods provided for in this
Lease, if under the particular circumstances then existing the allowance of such
notice periods will prejudice or will endanger the rights and estate of Landlord
in this Lease and in the Leased Property.

22. LANDLORD'S DEFAULT.

      If Landlord shall default in the performance or observance of any of its
covenants or obligations set forth in this Lease and such default shall continue
for a period of thirty (30) days after Notice thereof from Tenant to Landlord,
or such additional period as may be reasonably required to correct the same
provided Landlord has promptly commenced and is diligently prosecuting a cure
thereof, Tenant may declare the occurrence of a "Landlord Default" by a second
Notice to Landlord. Thereafter, Tenant may forthwith cure the same and, subject
to the provisions of the following Paragraph, invoice Landlord for costs and
expenses (including reasonable attorneys' fees and court costs) incurred by
Tenant in curing the same, together with interest thereon from five (5) days
following the date Landlord receives Tenant's invoice, at the Overdue Rate.
Tenant shall have no right to terminate this Lease for any default by Landlord
hereunder and no right, for any such default, to offset or counterclaim against
any Rent or other charges due hereunder.

      If Landlord shall in good faith dispute the occurrence of any Landlord
Default and Landlord, before the expiration of the thirty (30) day cure period,
shall give Notice thereof to Tenant, setting forth, in reasonable detail, the
basis therefor, no Landlord Default shall be deemed to have occurred and
Landlord shall have no obligation with respect thereof until final adverse
determination thereof. Tenant and Landlord shall in good faith attempt to
resolve such dispute and if they fail to do so within ten (10) days after
Landlord's Notice, either may submit the matter for resolution to a court of
competent jurisdiction.

23. CONDEMNATION.

      (a) Complete Taking. If (i) the whole of the Leased Property shall be
taken by Condemnation or (ii) a Condemnation of less than the whole of the
Leased Property renders the entire Leased Property Unsuitable for its Intended
Use then this Lease shall automatically terminate as of the Date of Taking.
Tenant and Landlord shall seek the Award for their interests in the Leased
Property as provided in Paragraph 23(c).

      (b) Partial Taking. If any part of the Leased Property shall be taken by
Condemnation, such that the Leased Property may still be used for its Intended
Use, this Lease shall not terminate or be terminated and Tenant shall restore
the remaining portion of the Leased Property to the extent necessary to render
it reasonably suitable for its Intended Use and make all repairs to any
Improvements or Personalty damaged by such taking to the extent necessary to
constitute such Improvements a complete architectural unit and otherwise in
accordance with Legal Requirements. Any proceeds shall be paid to and held and
disbursed by an escrow agent in the manner and under the conditions provided in
Paragraph 17 in respect of a Casualty. The Award shall be made available by
Landlord to pay or reimburse Tenant for the cost of restoration or rebuilding
and, any surplus which may remain out of any Award after payment of such cost of
restoration or rebuilding shall be the sole property of Landlord.

      (c) Award. Subject to the provisions of Paragraph 23(b), all Awards in any
Condemnation, either permanent or temporary, of all or any part of the Leased
Property or any easement or any appurtenance thereto, including severance and
consequential damages and change in grade of any street, shall be the property
of and paid to Landlord; provided any Award made for the Tenant's leasehold
interest in the Leased Property, Tenant's Personalty located thereon, the loss
of Tenant's business for the remainder of the Term and relocation expenses of
Tenant shall be paid to and be the property of Tenant.

                                       21

<PAGE>

      (d) Notices. Each of Landlord and Tenant further covenants and agrees to
give the other immediate Notice of the actual or threatened commencement of any
Condemnation proceedings and to deliver to the other copies of any and all
papers served in connection with any such proceedings.

24. REPORTS AND STATEMENTS. Tenant shall furnish the following reports and
statements to Landlord during the Term:

            (i) copies of all licenses authorizing Tenant to operate the
      Facility for its Intended Use;

            (ii) all Medicare and Medicaid certifications, together with
      provider agreements and all material correspondence relating thereto with
      respect to the Facility, if any (excluding, however, correspondence which
      may be subject to any attorney-client privilege);

            (iii) all reports or surveys, statements of deficiencies, plans of
      correction, and all material correspondence relating thereto, including,
      without limitation, all reports and material correspondence concerning
      compliance with or enforcement of licensure, Medicare/Medicaid (if
      applicable), all accreditation requirements including physical environment
      and Life Safety Code survey reports (excluding, however, correspondence
      which may be subject to any attorney-client privilege);

            (iv) with reasonable promptness, such other confirmation as to the
      licensure and, if applicable, Medicare and Medicaid participation of
      Tenant as Landlord may reasonably request from time to time;

            (v) unaudited financial statements for the Leased Property and the
      operations thereon;

            (vi) occupancy reports for the Facility; and

            (vii) any statements, reports and other information with respect to
      Tenant or the operation of the Leased Property required pursuant to any
      Facility Mortgage or otherwise reasonably requested by Landlord.

25. ADDITIONAL COVENANTS OF TENANT.

      (a) Indebtedness of Tenant. Tenant shall not create, incur, assume or
guarantee, or permit to exist, or become or remain liable directly or indirectly
upon, any indebtedness except the following:

            (i) indebtedness of Tenant to Landlord or to Manager under the
      Management Agreement;

            (ii) indebtedness of Tenant for current taxes, assessments,
      governmental charges of levies, to the extent that payment thereof shall
      not at the time be required to be made in accordance with the provisions
      of Paragraph 26;

            (iii) indebtedness of Tenant in respect of judgments or awards (A)
      either (x) which have been in force for less than the applicable appeal
      period and in respect of which execution thereof shall have been stayed
      pending such appeal or review, or (y) which are fully covered by insurance
      payable to Tenant or (z) which are for an amount not in excess of
      $250,000, in the aggregate, at any one time outstanding, and (B) either
      (x) which have been in force for not longer than the applicable appeal
      period, so long as execution is not levied thereunder or (y) in respect

                                       22

<PAGE>

      of which an appeal or proceedings for review shall at the time be
      prosecuted in good faith in accordance with the provisions of Paragraph
      26, and in respect of which execution thereof shall have been stayed
      pending such appeal or review;

            (iv) unsecured borrowings from any Related Party (other than
      Landlord or its Affiliates) which are by their terms expressly subordinate
      to the payment and performance of Tenant's obligations under this Lease;

            (v) indebtedness for purchase money financing of goods and services
      in excess of Two Hundred Fifty Thousand Dollars ($250,000) incurred in the
      ordinary course of business, subject to Landlord's consent, which shall
      not be unreasonably withheld or delayed; or

            (vi) other indebtedness incurred in the ordinary course of business.

      (b) Management of Leased Property; Joinder by Manager. Tenant shall not
enter into or permit to exist any management agreement of any of the Leased
Property, or make any material modification of an approved management agreement,
unless the terms thereof have been previously approved in writing by Landlord,
which approval may be withheld in Landlord's reasonable discretion; provided,
however, that Landlord hereby approves the terms of the Management Agreement.
Subject to the rights of the Facility Mortgagee, all management fees, payments
in connection with any extension of credit and fees for services provided in
connection with the operation of the Leased Property, payable by Tenant to
Manager under the Management Agreement are hereby subordinated to all of the
obligations of Tenant due under this Lease, and Manager's consent to such
subordination is evidenced by its joining into this Lease for the limited
purposes of this Paragraph 25(b).

      (c) Landlord Lien. In additional to any statutory landlord's lien and in
order to secure payment of the Rent and all other sums payable hereunder by
Tenant, and to secure payment of any loss, cost or damage which Landlord may
suffer by reason of an Event of Default, Tenant hereby grants unto Landlord, to
the maximum extent permitted by Applicable Law, a security interest in and
express contractual lien upon Tenant's Personal Property (except motor
vehicles), and Tenant's interest in all ledger sheets, files, records, documents
and instruments (including, without limitation, computer programs, tapes and
related electronic data processing) relating to the operation of the Facility
and all proceeds therefrom, subject to any Permitted Encumbrances; and such
Tenant's Personal Property shall not be removed from the Leased Property at any
time when an Event of Default has occurred and is continuing.

      Upon Landlord's request, Tenant shall execute and deliver to Landlord
financing statements in form sufficient to perfect the security interest of
Landlord in Tenant's Personal Property and the proceeds thereof in accordance
with the provisions of the applicable laws of the State. During the continuance
of an Event of Default, Tenant hereby grants Landlord an irrevocable limited
power of attorney, coupled with an interest, to execute all such financing
statements in Tenant's name, place and stead. The security interest herein
granted is in additional to any statutory lien for the Rent.

26. PERMITTED CONTESTS. Tenant shall have the right to contest the amount or
validity of any Legal Requirement, Insurance Requirement, Lien, Imposition,
charge or other claim (collectively, "Claims") as to the Leased Property, by
appropriate legal proceedings, conducted in good faith and with due diligence,
provided that (i) the foregoing shall in no way be construed as relieving,
modifying or extending Tenant's obligation to pay any Claims as finally
determined; (ii) such contest shall not cause Landlord to be in default under
any Facility Mortgage encumbering the Leased Property or any interest therein;
(iii) no part of the Leased Property nor any Rent therefrom shall be in any
immediate danger of sale, forfeiture, attachment or loss; and (iv) Tenant shall
indemnify and hold harmless Landlord from and against any cost, claim, damage,
penalty or reasonable expense, including reasonable attorneys' fees,

                                       23

<PAGE>

incurred by Landlord in connection therewith or as a result thereof. Upon
Landlord's request, Tenant shall either (i) provide a bond, title indemnity,
endorsement or other assurance reasonably satisfactory to Landlord that all
Claims which may be assessed against the Leased Property, together with all
interest and penalties thereon, will be paid, or (ii) deposit within the time
otherwise required for payment with a bank or trust company, as trustee, or
escrow agent as security for the payment of such Claims, an amount sufficient to
pay the same, together with interest and penalties in connection therewith and
all Claims which may be assessed against or become a Claim on the Leased
Property, or any part thereof, in connection with any such contest. Tenant shall
furnish Landlord with reasonable evidence of such deposit, title indemnity,
endorsement or other assurance within five (5) Business Days after request
therefor. Landlord agrees to join in such proceedings if required legally to
prosecute such contest, provided that Landlord shall not thereby be subjected to
any liability therefor (including, without limitation, for the payment of any
costs or expenses in connection therewith). Tenant shall be entitled to any
refund of any Claims and such charges and penalties or interest thereon which
have been paid by Tenant or paid by Landlord and for which Landlord has been
fully reimbursed by Tenant. If Tenant shall fail (A) to pay any Claims promptly
after such Claim is finally determined, (B) to provide security therefor as
provided in this Paragraph 26, or (C) to prosecute any such contest diligently
and in good faith, Landlord may, upon reasonable Notice to Tenant, pay such
charges, together with interest and penalties due with respect thereto, and
Tenant shall reimburse Landlord therefor, upon demand.

27. NOTICES OF COMMENCEMENT OF CONSTRUCTION. If required by the laws of the
Facility State or in the event permitted by the laws of the Facility State and
Landlord so requests upon Tenant giving Notice to Landlord of its intended
construction, and in the event that Tenant reasonably contemplates construction
of any work on the Leased Property will cost, in the aggregate, Two Hundred
Fifty Thousand Dollars ($250,000) or more, prior to commencement by Tenant of
any work on the Leased Property which shall have been previously permitted by
Landlord as provided in this Lease, Tenant shall record or file a notice of the
commencement of such work (the "Notice of Commencement") in the land records of
the County in which the Leased Property is located, identifying Tenant as the
party for whom such work is being performed, stating such other matters as may
be required by applicable law and requiring the service of copies of all
notices, liens or claims of lien upon Landlord. Any such Notice of Commencement
shall clearly reflect that the interest of Tenant in the Leased Property is that
of a leasehold estate and shall also clearly reflect that the interest of
Landlord, as the fee simple owner of the Leased Property, shall not be subject
to mechanics or materialmen's liens on account of the work which is the subject
of such Notice of Commencement. A copy of any such Notice of Commencement shall
be furnished to and approved by Landlord and its attorneys prior to the
recording or filing thereof, as aforesaid

28. LIMITATION ON LIABILITY OF LANDLORD AND TENANT. If Tenant is awarded a money
judgment against Landlord, then Tenant's sole recourse for satisfaction of such
judgment shall be limited to execution against the Leased Property. In no event
shall any trustee, stockholder, shareholder, member, manager, partner, employee,
officer or beneficiary of Landlord be personally liable for the obligations of
Landlord hereunder. Except to the extent provided in any Parent guaranty or
indemnity, in no event shall any trustee, shareholder, member, guarantor,
partner, employee, officer or beneficiary of Tenant or any Affiliate of Tenant
be personally liable for any of the obligations of Tenant hereunder.

29. "NET" LEASE. Landlord and Tenant acknowledge and agree that this Lease shall
be and constitute what is generally referred to as a "triple net" or "absolute
net" lease, such that Tenant shall be obligated hereunder to pay all costs and
expenses incurred with respect to, and associated with, the Leased Property and
the Facility, including, without limitation, all Impositions, utility charges,
insurance costs, maintenance costs and repair and restoration expenses (all as
more particularly herein provided).

                                       24

<PAGE>

30. REPRESENTATIONS AND WARRANTIES

      (a) Representations of Tenant. To induce Landlord to enter into this
Lease, Tenant represents and warrants to Landlord as follows:

            (i) Status and Authority of Tenant. Tenant is a limited liability
      company duly organized, validly existing and in corporate good standing
      under the laws of the State of Delaware. Tenant has all requisite power
      and authority to enter into and perform its obligations under this Lease
      and to consummate the transactions contemplated hereby, including such
      licensing as may be required for Tenant to Lease and operate the Leased
      Property as a senior independent and assisted living facility. Tenant has
      duly qualified to transact business in each jurisdiction in which the
      nature of the business conducted by it requires such qualification.

            (ii) Action of Tenant. Tenant has taken all necessary action to
      authorize the execution, delivery and performance of this Lease, and this
      Lease constitutes the valid and binding obligation and agreement of
      Tenant, enforceable against Tenant in accordance with its terms, except as
      enforceability may be limited by bankruptcy, insolvency, reorganization,
      moratorium or similar laws of general application affecting the rights and
      remedies of creditors.

            (iii) No Violations of Agreements. To the best of Tenant's
      knowledge, except as permitted or contemplated by this Lease or the
      Facility Mortgage, neither the execution, delivery or performance of this
      Lease by Tenant, nor compliance with the terms and provisions hereof, will
      result in any breach of the terms, conditions or provisions of, or
      conflict with or constitute a default under, or result in any breach of
      the terms, conditions or provisions of, or conflict with or constitute a
      default under, or result in the creation of any lien, charge or
      encumbrance upon the Leased Property pursuant to the terms of any
      indenture, mortgage, deed of trust, note, evidence of indebtedness or any
      other material agreement or instrument by which Tenant is bound.

            (iv) Litigation. Tenant has received no written notice and, to
      Tenant's knowledge, no action or proceeding is pending or threatened which
      questions the validity of this Lease.

      (b) Representations of Landlord. To induce Tenant to enter into this
Lease, Landlord represents and warrants to Tenant as follows:

            (i) Status and Authority of Landlord. Landlord is a duly organized,
      validly existing limited liability company and in good standing under the
      laws of the State of Delaware, and has all requisite power and authority
      under the laws of such state to enter into and perform its obligations
      under this Lease and to consummate the transactions contemplated hereby.
      Landlord has duly qualified and is in good standing in each jurisdiction
      in which the nature of the business conducted by it required such
      qualification.

            (ii) Action of Landlord. Landlord has taken all necessary action to
      authorize the execution, delivery and performance of this Lease, and, upon
      the execution and delivery of this Lease by Landlord, this Lease shall
      constitute the valid and binding obligation and agreement of Landlord,
      enforceable against Landlord in accordance with its terms, except as
      enforceability may be limited by bankruptcy, insolvency, reorganization,
      moratorium or similar laws of general application affecting the rights and
      remedies of creditors.

            (iii) No Violations of Agreements. Neither the execution, delivery
      or performance of this Lease by Landlord, nor compliance with the terms
      and provisions hereof, will result in any breach of the terms, conditions
      or provisions of, or conflict with or constitute a default under, or
      result in any creation of any lien, charge or encumbrance upon any of the
      property or asset of

                                       25

<PAGE>

      Landlord's pursuant to the terms of any indenture, mortgage, deed of
      trust, note, evidence of indebtedness or any other material agreement or
      instrument by which Tenant is bound

            (iv) Litigation. No investigation, action or proceeding is pending
      and, to Landlord's knowledge no action or proceeding is pending or
      threatened which questions the validity of this Lease or any action taken
      or to be taken pursuant hereto.

31. NOTICES. All notices, approvals, requests, consents and other communications
("Notices") given pursuant to this Lease shall be in writing and shall be deemed
to have been duly given (i) when actually received if either (A) hand delivered
or (B) sent by facsimile transmission; (ii) two (2) days after the same was
deposited in a regularly maintained receptacle for the deposit of United States
mail, sent by registered or certified mail, postage and charges prepaid; or
(iii) the next Business Day if sent via a national overnight delivery service,
addressed as follows or at such other address as either party may specify from
time to time by Notice to the other party at least five (5) days prior Notice of
the changed address:

      If to Tenant:              BLC-Island Lake, LLC
                                 c/o Brookdale Living Communities, Inc.
                                 330 North Wabash Avenue
                                 Suite 1400
                                 Chicago, Illinois 60611
                                 Attention: R. Stanley Young
                                 Telephone: (312) 977-3720
                                 Facsimile: (312) 977-3699

      with a copy to:            Brookdale Living Communities, Inc.
                                 330 N. Wabash Avenue
                                 Suite 1400
                                 Chicago, Illinois 60611
                                 Attention: General Counsel
                                 Telephone: (312) 977-3760
                                 Facsimile: (312) 977-3769

      and to:                    Douglas E. Wambach
                                 Burke, Warren, MacKay & Serritella, P.C.
                                 330 North Wabash Avenue, 22nd Floor
                                 Chicago, Illinois 60611
                                 Telephone: (312) 840-7019
                                 Facsimile: (312) 840-7900

      If to Guarantor:           BLC Properties I, LLC
                                 c/o Brookdale Living Communities, Inc.
                                 330 North Wabash Avenue
                                 Suite 1400
                                 Chicago, Illinois 60611
                                 Attention: R. Stanley Young
                                 Telephone: (312) 977-3720
                                 Facsimile: (312) 977-3699

                                       26

<PAGE>

      with a copy to:            Brookdale Living Communities, Inc.
                                 330 N. Wabash Avenue
                                 Suite 1400
                                 Chicago, Illinois 60611
                                 Attention: General Counsel
                                 Telephone: (312) 977-3760
                                 Facsimile: (312) 977-3769

      and to:                    Douglas E. Wambach
                                 Burke, Warren, MacKay & Serritella, P.C.
                                 330 North Wabash Avenue, 22nd Floor
                                 Chicago, Illinois 60611
                                 Telephone: (312) 840-7019
                                 Facsimile: (312) 840-7900

      If to Landlord:            CMCP-Island Lake, LLC
                                 c/o Capstead Mortgage Corporation
                                 8401 North Central Expressway, Suite 800
                                 Dallas, Texas 75225
                                 Attention: Andrew F. Jacobs
                                 Telephone: (214) 874-2350
                                 Facsimile: (214) 874-2398

      with a copy to:            Andrews & Kurth, L.L.P.
                                 1717 Main Street, Suite 3700
                                 Dallas, Texas 75201
                                 Attention: David Barbour
                                 Telephone: (214) 659-4400
                                 Facsimile: (214) 659-4401

32. NO WAIVER. No course of dealing between Landlord and Tenant, or any delay or
omission of Landlord or Tenant to insist upon a strict performance of any term
or condition of this Lease shall be deemed a waiver of any right or remedy that
such party may have, and shall not be deemed a waiver of any subsequent breach
of such term or condition.

33. QUIET ENJOYMENT. Landlord covenants that Tenant, upon paying the Rent and
observing and keeping the covenants, agreements and stipulations of this Lease
on its part to be kept, shall lawfully, peaceably and quietly hold, occupy and
enjoy the Leased Property during the Term without hindrance, ejection or
molestation. Landlord covenants and warrants that it is lawfully seized of the
Leased Property and has good, right and lawful authority to enter into this
Lease for the full term aforesaid, that the Leased Property is free and clear of
all encumbrances that would prevent Landlord from having such right and
authority and that Landlord will put Tenant in actual possession of the Leased
Property on the Commencement Date.

34. LANDLORD ENCUMBRANCES. Except as agreed by Landlord and Tenant, Landlord
shall not directly or indirectly, create or otherwise cause to exist any lien,
encumbrance or title retention agreement upon the Leased Property or any portion
thereof or interest therein, whether to secure any borrowing or other means of
financing or refinancing, provided, however, that Landlord may further encumber
the Leased Property without Tenant's consent provided the costs and debt service
resulting from such lien, encumbrance or title retention agreement shall not be
included in Base Rent hereunder.

                                       27

<PAGE>

35. SUBORDINATION NON-DISTURBANCE AND ATTORNMENT. In the event that Landlord
places any Facility Mortgage on the Leased Property, Tenant agrees to promptly
enter into, execute and deliver to the requesting party a commercially
reasonable subordination, non-disturbance and attornment agreement with any such
Facility Mortgagee, which shall acknowledge that this Lease, Tenant's interest
hereunder and Tenant's leasehold interest in and to the Leased Property are
junior, inferior, subordinate and subject in right, title, interest, lien,
encumbrance, priority and all other respects to the lien of any Facility
Mortgage or Mortgages now or hereafter in force and effect upon or encumbering
Landlord's interest in the Leased Property, or any portion thereof, and to all
collateral assignments by Landlord to any third party or parties of any of
Landlord's rights under this Lease or the rents, issues and profits thereof or
therefrom as security for any liability or indebtedness, direct, indirect or
contingent, of Landlord to such third party or parties, and to all future
modifications, extensions, renewals, consolidations and replacements of, and all
amendments and supplements to any such mortgage, mortgages or assignments;
provided such lender agrees not to disturb Tenant's occupancy of the Leased
Property or its rights under this Lease as long as there is no existing and
continuing Event of Default. If, within fifteen (15) days following Tenant's
receipt of a written request by Landlord or the holder or proposed holder of any
such Facility Mortgage, Tenant shall fail or refuse or shall have not executed
any such subordination, non-disturbance and attornment agreement, Tenant shall
be in breach and default of its obligation to do so and of this Lease and
Landlord shall be entitled thereupon to exercise any and all remedies available
to Landlord pursuant to this Lease or otherwise provided by law.

36. BROKERS. Landlord and Tenant represent and warrant to the other that neither
of them have engaged or contracted with any person, firm or entity to serve or
act as a broker, agent or finder for the purpose of leasing the Leased Property,
and that no broker's or real estate or other similar commissions or fees are or
shall be due in respect of the transaction contemplated by this Lease. Landlord
and Tenant each shall indemnify, defend and save harmless the other from and
against any cost and expense, including reasonable attorney's fees, incurred by
the other as a result of the untruth of any of the foregoing representations
made by it.

37. INVALIDITY. If any provision of this Lease shall be declared invalid or
unenforceable, the remainder of this Lease shall continue in full force and
effect.

38. COUNTERPARTS. This Lease may be executed in two (2) or more counterparts,
which taken together shall be deemed one (1) original.

39. MEMORANDUM OF LEASE. The parties hereto agree not to record this Lease. The
parties agree to execute and to record in the appropriate local registry a
Memorandum of Lease in the form attached as Exhibit B.

40. CUMULATIVE. All rights and remedies of Landlord and Tenant herein shall be
cumulative and none shall be exclusive of any other or of any rights and
remedies allowed by law.

41. GOVERNING LAW. Except as to matters regarding the internal affairs of
Landlord and issues of or limitations on any personal liability of the members
or managers of Landlord for obligations of Landlord, as to which the laws of the
State of Delaware shall govern, this Lease shall be interpreted, construed,
applied and enforced in accordance with the laws of the Facility State.

42. SUCCESSORS AND ASSIGNS, RELATIONSHIP. The covenants, terms, conditions,
provisions, and undertakings in this Lease shall extend to and be binding upon
the permitted successors, and assigns of the respective parties hereto, and
shall be construed as covenants running with the land. This Lease creates and
evidences a lease between Landlord and Tenant, and not a partnership, joint
venture, or other type of ownership inconsistent with a lease, and neither
Landlord nor Tenant shall make any representation to the contrary.

                                       28

<PAGE>

43. ENTIRE AGREEMENT. This Lease and any exhibits attached hereto, contains the
entire agreement and understanding between the parties with respect to the
subject matter hereof. There are no oral understandings, terms, or conditions,
and neither party has relied upon any representation, express or implied, with
respect to the subject matter hereof not contained in this Lease. All prior
understandings, terms, or conditions with respect to the subject matter hereof
are deemed merged in this Lease. This Lease cannot be changed or supplemented
orally, but may be modified or amended only by a written instrument executed by
the parties. Any disputes regarding the interpretation of any portion of this
Lease shall not be presumptively construed against the drafting party.

44. SURVIVAL. Tenant's indemnity obligations herein, including, without
limitation, those set forth in Paragraphs 18(f) and 19(c) shall survive
termination of this Lease.

45. ESTOPPEL CERTIFICATES. Each of Landlord and Tenant shall from time to time,
within fifteen (15) Business Days after request by the other and without charge,
give an Estoppel Certificate containing such other matters as may be reasonably
requested to any person, firm or corporation specified by the requesting party.
If the Estoppel Certificate is not returned within such fifteen (15) Business
Day period, such party shall be deemed to have consented to the information
contained therein as if it had executed such Estoppel Certificate and returned
it to the requesting party.

46. TIME. Time is of the essence in every particular of this Lease, including,
without limitation, obligations for the payment of money.

47. CAPTIONS AND HEADINGS. The captions and headings in this Lease have been
inserted herein only as a matter of convenience and for reference and in no way
define, limit or describe the scope or intent of, or otherwise affect, the
provisions of this Lease.

48. WAIVER OF JURY TRIAL. TO THE EXTENT ALLOWED BY APPLICABLE LAW, TENANT AND
LANDLORD HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER
OF THEM OR THEIR HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS OR ASSIGNS MAY HAVE
TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS LEASE OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN
CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A
MATERIAL INDUCEMENT TO LANDLORD'S ACCEPTING THIS LEASE.

49. SIGNAGE. Tenant shall have the right to install signs containing Tenant's
trade name and such other identification signs on the Leased Property as are
permitted by applicable Legal Requirements. Tenant shall obtain all governmental
permits, licenses and approvals necessary to erect such signs, and shall
maintain such signs in good condition and repair. Tenant shall not remove any
identification signs without first obtaining Landlord's written consent, which
shall not be unreasonably withheld or delayed.

50. GUARANTY. At the time of Tenant's execution of this Lease, Tenant shall
obtain the execution of the guaranty agreement in the form of Exhibit C attached
hereto ("Guaranty") by Guarantor.

51. PRE-EXISTING CONDITIONS. Notwithstanding anything to the contrary contained
herein, with respect to any physical condition on the Leased Property, or any
portion thereof, which was created prior to the Term which is or has been
rendered unlawful or no longer in compliance with any Legal Requirement
including, but not limited to, the discovery of Hazardous Materials on the
Leased Property which were not caused by the Tenant's use or occupancy of the
Leased Property or the requirement of any Governmental Agency to make
alterations or repairs to the Leased Property which are not necessitated by
Tenant's use or occupancy of the Leased Property ("Pre-existing Conditions"),
Landlord agrees to use commercially reasonable efforts to have the condition
remedied or payment for such

                                       29

<PAGE>

condition paid by the party who created such condition or any other third party
who might reasonably be deemed liable for such condition within six (6) months
after Landlord first receives Notice thereof. In the event that Landlord is
unable to seek recovery from any such third party after reasonable efforts to do
so (during the aforesaid six (6) month period), Landlord shall notify Tenant of
the condition and the costs associated with remediation or correction thereof or
any liability it has incurred thereby. Within ten (10) Business Days following
receipt of Notice thereof, Tenant shall notify Landlord of its intent to (i)
correct or remediate the condition within a reasonable time thereafter or (ii)
request that Landlord remediate or correct the condition, in which case the cost
of such remediation shall be payable by Tenant as Rent hereunder. In the event
that Tenant agrees to correct or remediate the Pre-existing Condition and fails
to do so within a reasonable time thereafter, Landlord may give the Tenant
written notice of its failure to comply. If the condition is not fully corrected
or remediated within thirty (30) days thereafter (provided, if Tenant has
commenced and is diligently prosecuting such correction or remediation, such
thirty (30) day period shall be extended for a reasonable period to allow for
completion thereof, not to exceed one hundred eighty days), Landlord may
commence to correct or remediate the Pre-existing Condition and the cost of such
remediation shall be payable by Tenant as shall be mutually agreed by Landlord
and Tenant.

                           [Signature Pages to Follow]

                                       30

<PAGE>

      IN WITNESS WHEREOF, the parties have hereunto executed this Lease the day
and year first above written.

LANDLORD:

CMCP-ISLAND LAKE, LLC,
a Delaware limited liability company

By: /s/ Andrew F. Jacobs
    ------------------------------
      Andrew F. Jacobs, President

/s/ Illegible
_________________________________
Witness


/s/ Illegible
_________________________________
Witness

                        [Tenant's Signature Page Follows]

<PAGE>

TENANT:

BLC-ISLAND LAKE, LLC,
a Delaware limited liability company

By: /s/ R. Stanley Young
    ----------------------------------
      R. Stanley Young
      Vice President

/s/ Michael Ascher
-------------------------------------
Witness

/s/ Cheryl Miller
-------------------------------------
Witness

<PAGE>

Manager hereby joins into this Property Lease Agreement for the limited purposes
set forth in Paragraph 25(b) hereof.

MANAGER:

BROOKDALE MANAGEMENT-II, LLC,
a Delaware limited liability company

By: /s/ R. Stanley Young
    --------------------------------
      R. Stanley Young
      Vice President

/s/ Michael Ascher
------------------------------------
Witness

/s/ Cheryl Miller
------------------------------------
Witness

<PAGE>

                                    EXHIBIT A

                                LEGAL DESCRIPTION

<PAGE>

                                    EXHIBIT B

                               MEMORANDUM OF LEASE

This instrument prepared by and
upon recordation return to:

Peter K. McKee, Esq.
Andrews & Kurth L.L.P.
1717 Main Street, Suite 3700
Dallas, Texas 75201

                               MEMORANDUM OF LEASE

      THIS MEMORANDUM OF LEASE (this "Memorandum") is made and entered into this
____ day of May, 2002 by and between CMCP-ISLAND LAKE, LLC, a Delaware limited
liability company, with an address at c/o Capstead Mortgage Corporation, 8401
North Central Expressway, Suite 800, Dallas, Texas 75225 ("Landlord"), and
BLC-Island Lake, LLC, a Delaware limited liability company, with an address at
c/o Brookdale Living Communities, Inc., 330 N. Wabash Avenue, Suite 1400,
Chicago, Illinois 60611 ("Tenant").

                          W I T N E S S E T H  T H A T:

      1. Landlord and Tenant entered into a Lease (the "Lease") on the ______
day of May, 2002, for premises located at 160 Islander Court, Longwood, Seminole
County, Florida, and more particularly described in Exhibit A attached hereto
(the "Premises").

      2. The term of the Lease commences on [May 1, 2002], the date referred to
therein as the Commencement Date, and shall terminate on April 30, 2022. The
Lease may be terminated earlier pursuant to the terms of the Lease.

      3. This Memorandum shall apply with respect to Landlord, Tenant and each
of their respective successors and permitted assigns. This Memorandum is not
intended to modify the terms of the Lease and in the event of any ambiguity, the
Lease shall control.

      4. Any notices required hereunder shall be directed to the parties shown
on Exhibit B attached hereto and made a part hereof for all purposes.

<PAGE>

      EXECUTED by the undersigned under seal with the intent that this
instrument be an instrument under seal as of the day, month and year first above
written.

                                 LANDLORD:

_______________________          CMCP-ISLAND LAKE, LLC
Witness                          a Delaware limited liability company

_______________________          By:
                                     -----------------------
Witness                                 Andrew F. Jacobs
                                        President

                                 [SEAL]

                                 TENANT:

_______________________          BLC-ISLAND LAKE, LLC,
Witness                          a Delaware limited liability company

_______________________          By:
                                     -----------------------
Witness                                 R. Stanley Young
                                        Vice President

                                     [SEAL]

                     [Insert State Specific Acknowledgement]

<PAGE>

                                    EXHIBIT A

                        LEGAL DESCRIPTION OF THE PREMISES

<PAGE>

                                    EXHIBIT B

                                     NOTICES

      If to Tenant:              BLC-Island Lake, LLC
                                 c/o Brookdale Living Communities, Inc.
                                 330 North Wabash Avenue
                                 Suite 1400
                                 Chicago, Illinois 60611
                                 Attention: R. Stanley Young
                                 Telephone: (312) 977-3720
                                 Facsimile: (312) 977-3699

      with a copy to:            Brookdale Living Communities, Inc.
                                 330 N. Wabash Avenue
                                 Suite 1400
                                 Chicago, Illinois 60611
                                 Attention: General Counsel
                                 Telephone: (312) 977-3760
                                 Facsimile: (312) 977-3769

      and to:                    Douglas E. Wambach
                                 Burke, Warren, MacKay & Serritella, P.C.
                                 330 North Wabash Avenue, 22nd Floor
                                 Chicago, Illinois 60611
                                 Telephone: (312) 840-7019
                                 Facsimile: (312) 840-7900

      If to Landlord:            CMCP-Island Lake, LLC
                                 c/o Capstead Mortgage Corporation
                                 8401 North Central Expressway, Suite 800
                                 Dallas, Texas 75225
                                 Attention: Andrew F. Jacobs
                                 Telephone: (214) 874-2350
                                 Facsimile: (214) 874-2398

      with a copy to:            Andrews & Kurth, L.L.P.
                                 1717 Main Street, Suite 3700
                                 Dallas, Texas 75201
                                 Attention: David Barbour
                                 Telephone: (214) 659-4400
                                 Facsimile: (214) 659-4401

<PAGE>

                                    EXHIBIT C

                                 LEASE GUARANTY

      This LEASE GUARANTY (this "Guaranty") is made and entered into to be
effective as of May 1, 2002 (the "Effective Date"), by BLC PROPERTIES I, LLC, a
Delaware limited liability company ("Guarantor"), in favor of CMCP-ISLAND LAKE,
LLC, a Delaware limited liability company ("Landlord").

                                    RECITALS

      WHEREAS, as of the Effective Date, Landlord and BLC-ISLAND LAKE, LLC, a
Delaware limited liability company, as "Tenant," have executed and entered into
that certain Lease Agreement (as the same may be renewed, extended, amended or
modified from time to time, the "Lease"), pertaining to that certain Leased
Property (as defined in the Lease Agreement);

      WHEREAS, Guarantor is an affiliate of Tenant, and Guarantor will derive
substantial direct and indirect benefit from the transactions contemplated by
the Lease; and

      WHEREAS, it is a condition to the entering into of the Lease by Landlord
that Guarantor shall have executed and delivered this Guaranty.

      NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged by Guarantor, and in order to induce Landlord to enter into the
Lease, Guarantor hereby agrees as follows:

      Section 1. GUARANTY. Guarantor hereby unconditionally and irrevocably
guarantees (i) the full and prompt payment of all rent and other sums required
to be paid by Tenant under the Lease, (ii) the full and timely performance of
all other terms, conditions, covenants and obligations of Tenant under the Lease
(as same may be amended, renewed, extended or modified), and (iii) any and all
expenses (including reasonable attorneys' fees and expenses) incurred by
Landlord in enforcing any rights under the Lease or this Guaranty (such
obligations, collectively, are referred to as the "Guaranteed Obligations").
Guarantor agrees that this Guaranty is a guarantee of payment and performance,
not collection, and that Guarantor is primarily liable and responsible for the
payment and performance of the Guaranteed Obligations. It is not necessary for
Landlord, in order to enforce payment and performance by Guarantor under this
Guaranty, first or contemporaneously to institute suit or exhaust remedies
against Tenant or others liable for any of the Guaranteed Obligations or to
enforce rights against any collateral securing any of it. With the exception of
the defense of prior payment, performance, or compliance by Tenant or Guarantor
of the Guaranteed Obligations which Guarantor is called upon to pay, or the
defense that Landlord's claim against Guarantor hereunder is barred by the
applicable statue of limitations, all defenses of the law of guaranty or
suretyship, including, without limitation, substantive defenses and procedural
defenses, are waived and released by Guarantor to the extent permitted by law.
Except as provided in the preceding sentence, under no circumstances will the
liability of Guarantor under this Guaranty be terminated either with respect to
any period of time when the liability of Tenant under the Lease continues, or
with respect to any circumstances as to which the Guaranteed Obligations have
not been fully discharged by payment or performance.

      Section 2. GUARANTY ABSOLUTE. Guarantor guarantees that the Guaranteed
Obligations will be paid and performed strictly in accordance with the terms of
the Lease. The liability and responsibilities of Guarantor under this Guaranty
shall be absolute and unconditional, shall not be subject to any counterclaim,
setoff, or deduction and shall not be released, discharged, affected or impaired
by (i) any change in the time, manner, or place of payment or performance of any
of the

<PAGE>

Guaranteed Obligations, or any other amendment or waiver of or any consent to
departure from or termination of the Lease, (ii) any release or discharge of
Tenant in any bankruptcy, receivership or other similar proceedings, (iii) the
impairment, limitation or modification of the liability of Tenant or the estate
of Tenant in bankruptcy or of any remedy for the enforcement of Tenant's
liability under the Lease, resulting from the operation of any present or future
provisions of any bankruptcy code or other statute or from the decision in any
court, the rejection or disaffirmance of the Lease in any such proceedings, or
the assignment or transfer of the Lease by Tenant, (iv) any failure, omission or
delay on the part of Landlord, to enforce, assert or exercise any right, power
or remedy conferred on or available to Landlord in or by the Lease or this
Guaranty, or any action on the part of Landlord granting indulgence or extension
in any form whatsoever or any invalidity, irregularity or unenforceability as to
Tenant of all or any part of the Guaranteed Obligations or any security
therefore, (v) the waiver by Landlord of the performance or observance by Tenant
or Guarantor of any of the agreements, covenants, terms or conditions contained
in the Lease or this Guaranty, (vi) any merger, consolidation, reorganization or
similar transaction involving Tenant even if Tenant is a disappearing party in
such transaction, (vii) the inability of Landlord or any Tenant to enforce any
provision of the Lease for any reason, (viii) any change in the corporate
relationship between Tenant and Guarantor or any termination of such
relationship, (ix) any change in the ownership of all or any part of the member
interests of Tenant, (x) the inability of Tenant to perform, or the release of
Tenant or Guarantor from the performance of, any obligation, agreement,
covenant, term or condition under the Lease or this Guaranty by reason of any
law, regulation or decree, now or hereafter in effect, (xi) any merger of the
leasehold estate of Tenant with the fee estate or any other estate in the Leased
Property, or (xii) any disability or other defense of Tenant. Landlord and
Tenant, without notice to or consent by Guarantor, may at any time or times
enter into such modifications, extensions, amendments, or other covenants with
respect to the Lease as they may deem appropriate and Guarantor shall not be
released thereby, but shall continue to be fully liable for the payment and
performance of all liabilities, obligations and duties of Tenant under the Lease
as so modified, extended or amended.

      Section 3. REINSTATEMENT. Guarantor further agrees that, if at any time
all or any part of any payment theretofore applied to any of the Guaranteed
Obligations is or must be rescinded or returned for any reason whatsoever
(including, without limitation, the insolvency, bankruptcy or reorganization of
Guarantor), such Guaranteed Obligations shall, for the purposes of this
Guaranty, to the extent that such payment is or must be rescinded or returned,
be deemed to have continued in existence, notwithstanding such application, and
this Guaranty shall continue to be effective or be reinstated, as the case may
be, as to such Guaranteed Obligations, all as though such application had not
been made.

      Section 4. CERTAIN ACTIONS. Landlord may, from time to time at its
discretion and without notice to Guarantor, take any or all of the following
actions: (a) retain or obtain the primary or secondary obligation of any obligor
or obligors, in addition to Guarantor, with respect to any of the Guaranteed
Obligations; (b) extend or renew for one or more periods (regardless of whether
longer than the original period), or release or compromise any obligation of
Guarantor hereunder or any obligation of any nature of any other obligor
(including, without limitation, Tenant) with respect to any of the Guaranteed
Obligations; or (c) release or fail to perfect any lien upon or security
interest in, or impair, surrender, release or permit any substitution or
exchange for, all or any part of any property securing any of the Guaranteed
Obligations or any obligation hereunder, or extend or renew for one or more
periods (regardless of whether longer than the original period) or release or
compromise any obligations of any nature of any obligor with respect to any such
property.

      Section 5. WAIVER. To the extent permitted by applicable law, Guarantor
hereby expressly waives: (i) notice of the acceptance of this Guaranty, (ii)
except as otherwise provided in the Lease or the Guaranty notice of the
existence or creation or non-payment of all or any of the Guaranteed
Obligations, (iii) presentment, demand, notice of dishonor, protest and all
other notices whatsoever

                                      C-2

<PAGE>

except as otherwise provided in the Lease or the Guaranty, and (iv) all
diligence in collection or protection of or realization upon the Guaranteed
Obligations or any thereof, any obligation hereunder, or any security for or
guaranty of any of the foregoing.

      Section 6. WAIVER OF SUBROGATION. Guarantor hereby waives all rights of
subrogation which it may at any time otherwise have as a result of this Guaranty
to the claims of Landlord against Tenant and all contractual, statutory or
common law rights of reimbursement, contribution or indemnity from Tenant which
it may at any time otherwise have as a result of this Guaranty prior to final
payment and satisfaction of the Guaranteed Obligations.

      Section 7. MISCELLANEOUS.

      7.l Amendments, Etc. No amendment or waiver of any provision of this
Guaranty nor consent to any departure by Guarantor therefrom shall be effective
unless the same shall be in writing and signed by Landlord.

      7.2 Addresses for Notices. All notices hereunder shall be in writing,
personally delivered, delivered by overnight courier service, sent by facsimile
transmission (with confirmation of receipt), or sent by certified mail, return
receipt requested, addressed as follows, or to such other address as shall be
designated by Guarantor or Landlord in written notice to the other party:

      If to Tenant:              BLC-Island Lake, LLC
                                 c/o Brookdale Living Communities, Inc.
                                 330 North Wabash Avenue
                                 Suite 1400
                                 Chicago, Illinois 60611
                                 Attention: R. Stanley Young
                                 Telephone: (312) 977-3720
                                 Facsimile: (312) 977-3699

      with a copy to:            Brookdale Living Communities, Inc.
                                 330 N. Wabash Avenue
                                 Suite 1400
                                 Chicago, Illinois 60611
                                 Attention: General Counsel
                                 Telephone: (312) 977-3760
                                 Facsimile: (312) 977-3769

      and to:                    Douglas E. Wambach
                                 Burke, Warren, MacKay & Serritella, P.C.
                                 330 North Wabash Avenue, 22nd Floor
                                 Chicago, Illinois 60611
                                 Telephone: (312) 840-7019
                                 Facsimile: (312) 840-7900

                                      C-3

<PAGE>

      If to Guarantor:           BLC Properties I, LLC
                                 c/o Brookdale Living Communities, Inc.
                                 330 North Wabash Avenue
                                 Suite 1400
                                 Chicago, Illinois 60611
                                 Attention: R. Stanley Young
                                 Telephone: (312) 977-3720
                                 Facsimile: (312) 977-3699

      with a copy to:            Brookdale Living Communities, Inc.
                                 330 N. Wabash Avenue
                                 Suite 1400
                                 Chicago, Illinois 60611
                                 Attention: General Counsel
                                 Telephone: (312) 977-3760
                                 Facsimile: (312) 977-3769

      and to:                    Douglas E. Wambach
                                 Burke, Warren, MacKay & Serritella, P.C.
                                 330 North Wabash Avenue, 22nd Floor
                                 Chicago, Illinois 60611
                                 Telephone: (312) 840-7019
                                 Facsimile: (312) 840-7900

      If to Landlord:            CMCP-Island Lake, LLC
                                 c/o Capstead Mortgage Corporation
                                 8401 North Central Expressway, Suite 800
                                 Dallas, Texas 75225
                                 Attention: Andrew F. Jacobs
                                 Telephone: (214) 874-2350
                                 Facsimile: (214) 874-2398

      with a copy to:            Andrews & Kurth, L.L.P.
                                 1717 Main Street, Suite 3700
                                 Dallas, Texas 75201
                                 Attention: David Barbour
                                 Telephone: (214) 659-4400
                                 Facsimile: (214) 659-4401

      7.3 No Waiver; Remedies. No failure on the part of Landlord to exercise,
and no delay in exercising, any right hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
other remedies available at law or equity.

      7.4 Continuing Guaranty; Transfer of Interest. This Guaranty shall create
a continuing guaranty and will (i) remain in full force and effect until payment
and performance in full and termination of the Guaranteed Obligations, (ii) be
binding upon Guarantor and its successors and assigns, and (iii) inure, together
with the rights and remedies of Landlord hereunder, to the benefit of Landlord
and its successors, as permitted under the Lease. Without limiting the
generality of the foregoing clause, if and when Landlord assigns or otherwise
transfers any interest held by it under the Lease to any other

                                      C-4

<PAGE>

person, that other person shall thereupon become vested with all the benefits
held by Landlord under this Guaranty.

      7.5 GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.

      Section 8. INDUCEMENT TO LANDLORD. Guarantor acknowledges and agrees that
the execution and delivery of this Guaranty by Guarantor to Landlord has served
as a material inducement to Landlord to execute and deliver the Lease, and
Guarantor further acknowledges and agrees that but for the execution and
delivery of this Guaranty by Guarantor, Landlord would not have executed and
delivered the Lease.

      Section 9. ATTORNEYS' FEES. Should it become necessary for Landlord to
execute any action or proceeding to enforce Guarantor's obligations under this
Guaranty due to the occurrence of default by Guarantor hereunder and Landlord
prevails in such action or proceeding, Landlord and in addition to the other
rights of Landlord hereunder, shall be permitted to recover from Guarantor the
reasonable attorney's fees, court costs related to the enforcement of the rights
of Landlord hereunder and any other related reasonable expenses incurred by
Landlord.

      Section 10. CUMULATIVE REMEDIES. The stated rights of Landlord under this
Guaranty shall be understood as not excluding any other legal or equitable
rights of Landlord against Guarantor not expressly set forth herein, but shall
be understood as being cumulative to all such all other legal and equitable
rights of Landlord arising out of Guarantor's obligations hereunder and not
expressly stated herein.

      Section 11. SUBMISSION TO JURISDICTION. Guarantor hereby irrevocably
submits to the non-exclusive jurisdiction of any State or Federal court located
in Dallas, Texas over any action, suit or proceeding to enforce or defend any
right under this Guaranty or otherwise arising from or relating to this
Guaranty, and Guarantor irrevocably agrees that all claims in respect of any
such action, suit or proceeding may be heard and determined in such court.
Guarantor hereby irrevocably waives, to the fullest extent that it may
effectively do so, the defense of an inconvenient forum or venue to the
maintenance of any such action, suit or proceeding. Guarantor hereby agrees that
a final, non-appealable judgment in any such action, suit or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.

      Section 12. WAIVER OF JURY TRIAL. Guarantor hereby waives, to the fullest
extent permitted by applicable law, any right to a trial by jury in any action,
suit or proceeding to enforce or defend any rights under this Guaranty or any
other transaction document or any amendment, instrument, document or agreement
delivered or which may in the future be delivered in connection herewith or
arising from or relating to any relationship existing in connection with this
guaranty, and agrees, to the fullest extent permitted by applicable law, that
any such action, suit or proceeding shall be tried before a court and not before
a jury.

Section 13. COOPERATION, FURTHER ASSURANCES. Guarantor covenants, and agrees to
sign, execute and deliver or cause to be signed, executed and delivered and to
do or make, or to cause to be done or make, upon the written request of
Landlord, any and all agreements, instruments, papers, deeds, acts or things,
supplemental, confirming or otherwise, as may be reasonably required by Landlord
for the purpose of, or in connection with, the transaction contemplated hereby.
Upon full and final payment and performance of the Guaranteed Obligations,
Landlord agrees to execute a release for the benefit of Guarantor, in form and
content reasonably satisfactory to Landlord. Except to the extent expressly
provided otherwise in any guaranty or indemnity from Guarantor or its

                                      C-5

<PAGE>

Parent to Landlord or its Affiliates, in no event shall any trustee,
shareholder, member, guarantor, partner, employee, officer or beneficiary of
Guarantor be personally liable for any of the obligations of Guarantor
hereunder.

               [THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]

                                      C-6

<PAGE>
      Guarantor has caused this Guaranty to be effective as of the Effective
Date.

                                            GUARANTOR:

                                            BLC PROPERTIES I, LLC,
                                            a Delaware limited liability company

                                            By:
                                                --------------------------------
                                                R. Stanley Young
                                                Vice President