AMENDED AND RESTATED NOTE

$25,000,000.00                                                 Chicago, Illinois
                                                                   July 16, 1998

         FOR VALUE  RECEIVED,  BROOKDALE  LIVING  COMMUNITIES,  INC., a Delaware
corporation  (the  "Maker"),  with its  principal  place of  business at 77 West
Wacker Drive, Suite 4800, Chicago, Illinois 60601, hereby promises to pay to the
order of LaSALLE NATIONAL BANK, a national banking  association (the "Bank"), at
its office at 135 South LaSalle Street,  Chicago,  Illinois 60603, or such other
place as Bank may direct from time to time, in lawful money of the United States
and in available  funds,  the  principal  amount of TWENTY FIVE MILLION  DOLLARS
($25,000,000.00),  or such lesser  amount as Bank  advanced  to Maker  hereunder
which is  outstanding  as of the Maturity Date, as defined in that certain First
Amendment to Loan  Agreement and Documents  dated the date hereof by and between
Maker and the Bank.

         Maker  previously  executed  and  delivered  to the Bank a certain Note
dated April 27, 1998 in the original  principal  amount of  $15,000,000.00  (the
"Original  Note")  pursuant  to a Loan  Agreement  dated  April  27,  1998  (the
"Original  Loan  Agreement")  evidencing  a Loan  made by the Bank to the  Maker
pursuant to such Original Loan Agreement. Maker has entered into a certain First
Amendment to Loan Agreement and Documents (the "First  Amendment") with the Bank
dated the date hereof amending  certain terms of the Original Loan Agreement and
Documents (as defined in the Original Loan Agreement). This Amended and Restated
Note is issued pursuant to the Original Loan Agreement and Documents, as amended
by the First  Amendment  (the Original Loan  Agreement,  as amended by the First
Amendment, is herein referred to as the "Loan Agreement").  The Original Note is
amended,  restated and  superseded  in its entirety by this Amended and Restated
Note,  and any amounts  outstanding  under the Original Note are  transferred to
this Amended and Restated Note.

         The Loan  evidenced by this Note  constitutes a revolving  credit under
applicable Laws and Maker may repay and reborrow  hereunder subject to the terms
and  conditions of the Loan  Agreement and  Documents.  All advances  under this
Amended and Restated Note shall bear interest in accordance with and be governed
by the terms and provisions of the Loan  Agreement.  All payments  received from
the Maker hereunder shall be applied by the Bank in accordance with the terms of
the Loan Agreement.

         The Borrower may prepay the  outstanding  amounts of the Loan from time
to time in whole or in part on any business day without penalty or premium.

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         This Amended and Restated Note is issued under the Loan Agreement,  and
this Amended and Restated Note and the Bank are entitled to all of the benefits,
rights and remedies  provided for by the Loan  Agreement or referred to therein,
to  which  Loan  Agreement  reference  is  made  for a  statement  thereof.  All
capitalized  terms  used  herein  which are not  defined  herein,  but which are
defined in the Loan  Agreement,  shall have the meaning  prescribed  in the Loan
Agreement.

         All unpaid  amounts  owing on this Amended and Restated  Note or on any
other  Obligations  under the Loan Agreement or the other Documents  immediately
shall  become  due and  payable  at the  option of the Bank,  without  notice or
demand, upon the occurrence of any Event of Default.

         In the event of  default  in the  payment  of any sums due  under  this
Amended and Restated  Note, the Maker hereby agrees that the Bank may offset all
of Maker's money, bank or other deposits or credits now or hereafter held by the
Bank or owed by the Bank to the Maker against all amounts due under this Amended
and Restated  Note or against any other  amounts  which may be due the Bank from
the Maker.

         No clause or provision  contained in this Amended and Restated  Note or
any documents related hereto shall be construed or shall so operate (a) to raise
the interest  rate set forth in this Amended and Restated  Note above the lawful
maximum, if any, in effect from time to time in the applicable  jurisdiction for
loans to borrowers of the type, in the amount,  for the purposes,  and otherwise
of the kind contemplated,  or (b) to require the payment or the doing of any act
contrary to law, but if any clause or  provision  contained  shall  otherwise so
operate to invalidate  this Amended and Restated Note, in whole or in part, then
(i) such clauses or provisions  shall be deemed modified to the extent necessary
to be in compliance  with the law, or (ii) to the extent not possible,  shall be
deemed  void as though not  contained  and the  remainder  of this  Amended  and
Restated  Note and such  document  shall remain  operative and in full force and
effect.

         All  makers  and any  endorsers,  guarantors,  sureties,  accommodation
parties and all other persons  liable or to become liable for all or any part of
the  indebtedness  evidenced  by this  Amended and  Restated  Note,  jointly and
severally waive, to the extent permitted by law, except as otherwise provided in
the Loan Agreement or the other Documents, diligence,  presentment,  protest and
demand, and also notice of protest, of demand, of nonpayment, of dishonor and of
maturity  and also  recourse or  suretyship  defenses  generally;  and they also
jointly and  severally  hereby  consent to any and all  renewals,  extensions or
modifications of the terms of this Amended and Restated Note, including time for
payment, and further agree that any such renewals,  extension or modification of
the terms of this Amended and Restated  Note or the release or  substitution  of
any security for the  indebtedness  under this Amended and Restated  Note or any
other  indulgences  shall not affect the liability of any of the parties for the
indebtedness  evidenced by this Amended and Restated  Note.  Any such  renewals,
extensions or modifications may be made without notice to any of said parties.


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         The  Maker  shall be  liable  to the Bank for all  costs  and  expenses
incurred in connection  with  collection,  whether by suit or otherwise,  of any
amount due under this Amended and Restated Note, including,  without limitation,
reasonable attorneys' fees, as more fully set forth in the Loan Agreement.

         This  Amended and Restated  Note shall be governed by and  construed in
accordance with the laws of the State of Illinois.


                                           BROOKDALE LIVING COMMUNITIES, INC., 
                                           a Delaware corporation


                                           By:
                                           Print Name:
                                           Title:

   

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