FOURTH AMENDMENT TO LOAN AGREEMENT AND DOCUMENTS


     THIS FOURTH AMENDMENT TO LOAN AGREEMENT AND DOCUMENTS, dated as of November
3, 1998 (the  "Amendment"),  is entered  into by and  between  BROOKDALE  LIVING
COMMUNITIES, INC., a Delaware corporation (the "Borrower"), and LaSALLE NATIONAL
BANK, a national banking association (the "Bank").

                                   WITNESSETH

         WHEREAS,  Borrower has previously  executed and delivered to the Bank a
certain  Note dated April 27,  1998 in the  original  principal  amount of up to
Fifteen  Million Dollars  ($15,000,000.00)  (the "Original  Note")  evidencing a
certain loan (the "Loan") set forth more fully in and governed by a certain Loan
Agreement  of that same date to which  the Bank is also a party  (the  "Original
Loan Agreement");

         WHEREAS,  the Loan was subsequently  modified and amended by Borrower's
execution and delivery to the Bank of a certain  Amended and Restated Note dated
July 16, 1998 increasing the principal amount of the Loan by $10,000,000.00,  on
an interim basis only, from  $15,000,000.00 to $25,000,000.00  (the "Amended and
Restated Note") and a certain First Amendment to Loan Agreement and Documents of
that same date to which the Bank is also a party (the  "First  Amendment")  that
(a) increased the principal  amount of the Loan on an interim basis as aforesaid
and (b)  permitted  a portion of the Loan to be  reserved  for the  issuance  of
standby  Letters of Credit by the Bank to and for the benefit of  municipalities
and other  governmental  units in connection with projects developed by Borrower
from time to time as set forth more fully therein;

         WHEREAS,  the Loan was subsequently  modified and amended by Borrower's
execution  and  delivery  to the  Bank of a  certain  Second  Amendment  to Loan
Agreement and Documents dated October 14, 1998 to which the Bank is also a party
(the  "Second  Amendment")  wherein  (a) the Bank  consented  to the  Borrower's
proposed issuance of a convertible  subordinated and unsecured note to OZ Master
Fund, Ltd. in the principal amount of Ten Million Dollars ($10,000,000.00),  (b)
the Bank  permitted  the Borrower to guarantee  financing  from other  financial
institutions  to certain  Subsidiaries  of Borrower in  connection  with certain
development  projects  located in New York,  New York (Battery Park City),  Glen
Ellyn,  Illinois  and  Raleigh,  North  Carolina,  which  projects  were  to  be
originally  financed  by  Nomura  Asset  Capital  Corporation,  (c) the Event of
Default set forth in Section  7.01(O) of the Loan  Agreement  was  modified  and
restructured,  and (d) the  Interim  Maturity  Date was  extended to November 3,
1998;

         WHEREAS,  the Loan was subsequently  modified and amended by Borrower's
execution  and  delivery  to the  Bank  of a  certain  Third  Amendment  to Loan
Agreement and Documents dated October 20, 1998 to which the Bank is also a party
(the "Third  Amendment")  wherein (a) the Maximum  Revolving Loan Commitment was
frozen at $24,953,750 (the  "Outstanding  Principal  Amount"),  (b) the "Interim
Maturity  Date" was extended to November 3, 1998, (c) it was agreed that, on the
Interim Maturity Date (x) the outstanding  principal  balance of the Loan was to
be reduced to $10,000,000,  and (y) the principal amount of the Loan and Maximum
Revolving Loan Commitment were to be decreased from $25,000,000 to an amount not
to exceed  $10,000,000,  (d) the Interim  Interest Rate and the Revised  Default
Rate were adjusted,  and (e) certain additional changes to the Maximum Revolving
Loan  Commitment  were  mandated  based upon the Stock Price of the Company from
time to time, all of the foregoing as set forth more fully in and subject to the
terms and  conditions of the Third  Amendment (the Original Loan  Agreement,  as
amended by the First Amendment,  the Second Amendment,  and the Third Amendment,
is herein referred to as the "Loan Agreement");


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         WHEREAS,  the Borrower has  represented  to the Bank that it intends to
close on a convertible  subordinated debt offering of approximately  $35,000,000
(the  "Offering")  on or about November 18, 1998, the proceeds of which would be
used by the Borrower to reduce the outstanding  principal balance of the Loan to
zero, and has therefore  requested the Bank to extend the Interim  Maturity Date
as set forth  herein,  which the Bank is  willing to do subject to the terms and
conditions set forth herein:

         NOW,  THEREFORE,  in consideration  of the premises,  the covenants and
agreements  herein  contained,  and other good and valuable  consideration,  the
receipt and  sufficiency  of which are hereby  acknowledged,  the parties hereby
agree as follows:

         1.  Incorporation  of Recitals.  The above and  foregoing  recitals are
incorporated into and made a part of this Amendment.  All capitalized terms used
herein,  if not  otherwise  specifically  defined,  shall have the  meanings and
definitions  prescribed  in the Loan  Agreement  and the  Documents  referred to
therein.

         2. Outstanding  Principal Balance of Loan. Except for the provisions of
Paragraph 4 (a) of this  Amendment,  for purposes of this Amendment and the Loan
Agreement,  the outstanding  principal  balance of the Loan at any time shall be
the sum of (a) all amounts of the Loan  Advances  made under the Loan  Agreement
remaining  unpaid plus (b) all  outstanding  LC  Reserves.  For the  purposes of
Paragraph 4 (a) of this Amendment, the outstanding principal balance of the Loan
shall  mean all  amounts  of the Loan  Advances  made  under the Loan  Agreement
remaining unpaid excluding the outstanding LC Reserves.

         3. Interim  Maturity Date.  The term "Interim  Maturity Date" is hereby
amended and restated to mean a date  certain  which is the first to occur of (a)
November 30, 1998, or (b) the date on which Borrower closes on the Offering.

         4. Decreased Loan Balance and Commitment. On the Interim Maturity Date,
without  further  notice,  (a) the  Borrower  shall  pay  down  the  outstanding
principal  balance of the Loan to zero ($0.00) provided the Offering has closed,
and (b) the Borrower  shall pay down the  outstanding  principal  balance of the
Loan to  $10,000,000.00  regardless of whether the Offering has closed,  and (c)
the principal amount of the Loan and Maximum  Revolving Loan Commitment shall be
decreased  from  $25,000,000.00  to  an  amount  not  to  exceed  $10,000,000.00
regardless of whether the Offering has closed.

         5.  Maturity  Date.  The term  "Maturity  Date" is hereby  amended  and
restated to mean (a) the Interim  Maturity Date as to any and all amounts of the
outstanding  principal balance of the Loan in excess of $10,000,000.00,  and (b)
April 26, 1999 as to the outstanding  principal  balance of the Loan at or below
$10,000,000.00  together  with any accrued but unpaid  interest  thereon and any
other  costs or amount  owed to the Bank  under the Loan  Agreement  as  amended
hereby.

         6. Interim  Interest  Rate. The Borrower  acknowledges  and agrees that
effective as of October 20, 1998, (a) the outstanding  principal  balance of the
Loan in excess of  $10,000,000.00  has been  bearing and shall  continue to bear
interest at the Prime Rate plus four  percent  (4.0%),  and (b) the  outstanding
principal balance of the Loan not in excess of  $10,000,000.00  has been bearing
and shall  continue to bear interest  payable at the Prime Rate plus one-half of
one  percent  (0.50%)  per annum (the  "Interim  Interest  Rate").  The  Interim
Interest Rate is, during its pendency, in lieu of the interest rate set forth in
Section 2.02 of the Loan Agreement and in lieu of the Interim  Interest Rate set
forth in the Second Amendment.

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         7.  Fee.  As an  inducement  and  condition  to the  execution  of this
Amendment by the Bank,  the Borrower  shall pay the Bank an extension fee in the
amount of $50,000.00 (the "Extension  Fee"). If on the Interim Maturity Date the
outstanding  principal  balance  of the  Loan  is  reduced  to zero  ($0.00)  by
application of the proceeds of the Offering and if the Borrower is not otherwise
in default under the Loan Agreement or the Documents, the Extension Fee shall be
refunded to Borrower.  If on the Interim Maturity Date the outstanding principal
balance of the Loan has not been reduced to zero ($0.00) by  application  of the
proceeds of the Offering or if the  Borrower is  otherwise in default  under the
Loan Agreement or the Documents, the Extension Fee shall be deemed fully paid to
and earned by the Bank.

         8.  Reaffirmation.  To the extent any term(s) or condition(s) in any of
the Documents  (including,  without  limitation,  the Amended and Restated Note)
shall  contradict  or be in conflict  with the amended  terms of the Loan as set
forth herein,  such terms and conditions are hereby deemed  modified and amended
accordingly, upon the effective date hereof, to reflect the terms of the Loan as
so amended herein. All terms of the Documents  (including,  without  limitation,
the Amended and Restated Note),  as amended hereby,  shall be and remain in full
force and effect and shall constitute the legal, valid,  binding and enforceable
obligations of Borrower to the Bank. As of the date of this Amendment,  Borrower
herein  restates,  ratifies and reaffirms  each and every term and condition set
forth in the  Documents  as amended  herein.  There are no other  changes to the
Documents,  including  without  limitation  the Loan  Agreement,  except for the
changes specifically set forth herein.

         9. No Waiver. No failure or delay on the part of the Bank in exercising
any right,  power or remedy hereunder or under any other Documents shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further  exercise  thereof or the exercise
of any other right,  power or remedy hereunder or under any other Document.  The
remedies  herein  provided and under any other  Document are  cumulative and not
exclusive of any remedies provided by law.

         10.  Certification.  To  further  induce  the Bank to enter  into  this
Amendment, Borrower represents and warrants to the Bank as follows: (a) Borrower
is empowered to perform all acts and things undertaken and done pursuant to this
Amendment and has taken all corporate or other action necessary to authorize the
execution,  delivery and performance of the of this Amendment;  (b) the officers
of Borrower  executing  this  Amendment  have been duly elected or appointed and
have been fully  authorized to execute the same at the time  executed;  (c) this
Amendment,  when executed and  delivered,  will be the legal,  valid and binding
obligation of Borrower, enforceable against it in accordance with its respective
terms; and (d) Borrower is delivering to the Bank contemporaneously  herewith, a
certificate  of Borrower's  Secretary  certifying as to the  resolutions  of the
Executive  Committee of Borrower's  Board of Directors  approving this Amendment
and the  incumbency  and  signatures  of the  officers of Borrower  signing this
Amendment.

         11.  Absence Of Claim.  To  further  induce the Bank to enter into this
Amendment,  Borrower hereby acknowledges and agrees that, as of the date hereof,
there exists no right of offset, defense,  counterclaim or objection in favor of
Borrower as against the Bank with respect to the Obligations to the Bank.

         12.  Illinois  Law To  Govern.  This  Amendment  and  each  transaction
contemplated  hereunder  shall be deemed to be made under and shall be construed
and interpreted in accordance with the laws of the State of Illinois.

         13.  Binding  Effect.  The terms,  provisions  and  conditions  of this
Amendment  shall be binding  upon and inure to the  benefit  of each  respective
party and their respective legal representatives, successors and assigns.


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         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized,  as of the date
first above written.

                                       BORROWER:

                                       BROOKDALE LIVING COMMUNITIES, INC.

                                    By:  /s/ Darryl W. Copeland, Jr. 
                                    Print Name:  Darryl W. Copeland, Jr.
                                    Title:  Executive Vice President

ATTEST:

By:  /s/ Robert J. Rudnik
Print Name:  Robert J. Rudnik                          
Title:  Secretary                                                     


                                       BANK:

                                       LaSALLE NATIONAL BANK

                                    By:  /s/ Ann B. O'Shaughnessy        
                                    Print Name: Ann B. O'Shaughnessy     
                                    Title:  Assistant Vice President     


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