SEVENTH AMENDMENT TO LOAN AGREEMENT AND DOCUMENTS


         THIS SEVENTH  AMENDMENT TO LOAN  AGREEMENT AND  DOCUMENTS,  dated as of
January 25, 1999 (this  "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 $24,953,750.00, (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  $10,000,000.00,
and (y) the principal  amount of the Loan and Maximum  Revolving Loan Commitment
were  to  be  decreased  from   $25,000,000.00   to  an  amount  not  to  exceed
$10,000,000.00,  (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;




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         WHEREAS,  the Loan was subsequently  modified and amended by Borrower's
execution  and  delivery  to the  Bank of a  certain  Fourth  Amendment  to Loan
Agreement and Documents dated November 3, 1998 to which the Bank is also a party
(the "Fourth Amendment") wherein (a) the Interim Maturity Date was extended to a
date  certain  which was the first to occur of (x) the earlier of  November  30,
1998,  or (y) the date on which  Borrower  closed on the Offering (as defined in
the Fourth Amendment),  and (b) it was agreed that, on the Interim Maturity Date
(x) the  outstanding  principal  balance  of the Loan was to be  reduced to zero
($0.00)  provided that the Offering had closed,  (y) the  outstanding  principal
balance of the Loan was to be reduced to  $10,000,000.00  regardless  of whether
the Offering had closed,  and (z) the  principal  amount of the Loan and Maximum
Revolving Loan Commitment were to be decreased from  $25,000,000.00 to an amount
not to exceed $10,000,000.00  regardless of whether the Offering had closed, all
of the  foregoing  as set  forth  more  fully in and  subject  to the  terms and
conditions of the Fourth Amendment;

         WHEREAS,  the Loan was subsequently  modified and amended by Borrower's
execution  and delivery to the Bank of a certain Third Amended and Restated Note
dated  December 21, 1998 (the "Third  Amended and Restated  Note") and a certain
Fifth  Amendment to Loan  Agreement and Documents of that same date to which the
Bank is also a party (the "Fifth Amendment") wherein the principal amount of the
Loan and the Maximum Revolving Loan Commitment was increased from $10,000,000.00
to  $15,000,000.00,  as set forth  more  fully in and  subject  to the terms and
conditions of the Fifth Amendment;

         WHEREAS,  the Loan was subsequently  modified and amended by Borrower's
execution and delivery to the Bank of a certain Fourth Amended and Restated Note
dated  January 15, 1999 (the "Fourth  Amended and Restated  Note") and a certain
Sixth  Amendment to Loan  Agreement and Documents of that same date to which the
Bank is also a party (the "Sixth Amendment") wherein the principal amount of the
Loan and the Maximum Revolving Loan Commitment was increased from $15,000,000.00
to  $25,000,000.00,  as set forth  more  fully in and  subject  to the terms and
conditions of the Sixth  Amendment (the Original Loan  Agreement,  as amended by
the First  Amendment,  the Second  Amendment,  the Third  Amendment,  the Fourth
Amendment, the Fifth Amendment, the Sixth Amendment and this Amendment is herein
referred to as the "Loan Agreement");

         WHEREAS,  subject  to the  terms  and  conditions  of  this  Amendment,
Borrower has requested the Bank to consent to the Borrower's  proposed execution
of that  certain  Loan  Agreement  between  Borrower  and FBR  Asset  Investment
Corporation  ("FBR") dated January 25, 1999 (the "FBR Loan  Agreement") and that
certain Promissory Note dated January 25, 1999 in favor of FBR pursuant to which
Borrower  will become  indebted to the FBR in the original  principal  amount of
$5,000,000.00  (the "FBR  Promissory  Note") [the FBR Loan Agreement and the FBR
Promissory Note are referred to collectively as the "FBR Loan Documents" and the
loan made pursuant thereto is referred to as the "FBR Loan"];

         WHEREAS,  Borrower would otherwise be prohibited from entering into the
FBR Loan under the existing Loan  Agreement and Documents but for the consent of
the Bank; and

         WHEREAS, the Bank is willing to consent to the FBR Loan, subject to and
conditioned upon the terms and conditions set forth in this Amendment.

         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.


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         2.   Consent to FBR Loan. The Bank consents to the Borrower's execution
of the FBR Loan  Documents  in form and  content  as set forth as  Exhibit A and
Exhibit B to the Subordination  Agreement (as defined herein),  and acknowledges
that the FBR Loan shall not  constitute  a breach of a negative  covenant  or an
Event of Default under the Loan  Agreement  upon the condition  that (a) the FBR
Loan shall be and remain at all times subordinate to the Loan in accordance with
the  terms of the  Subordination  Agreement  and no  violation  or breach of the
Subordination  Agreement  occurs,  (b) FBR shall  execute and Borrower  shall in
writing  acknowledge the Subordination  Agreement between the Bank and FBR dated
January 25, 1999 (the "Subordination  Agreement") in the form attached hereto as
Exhibit A, and (c) the Borrower herein acknowledges the Subordination  Agreement
and herein agrees (i) that it will make no payment to FBR which is prohibited by
the terms of the Subordination Agreement and (ii) that it will on request by the
Bank  execute  and  deliver  all  documents  which  may be deemed  necessary  or
desirable  by the Bank to  evidence  and  protect  the Bank's  rights  under the
Subordination Agreement.

         3.   Permanent Reduction. Effective as of January 15, 1999 and pursuant
to the Sixth Amendment,  the principal amount of the Loan and Maximum  Revolving
Loan  Commitment  has been  increased  from  $15,000,000.00  to an amount not to
exceed  $25,000,000.00  until the Interim  Maturity Date on which date,  without
further notice or demand (a) Borrower shall pay amounts  necessary to reduce the
outstanding principal balance of the Loan to $15,000,000.00 or less, and (b) the
Maximum Revolving Loan Commitment shall be permanently  reduced to an amount not
to exceed $15,000,000.00 (the "Mandatory Permanent  Reduction").  In addition to
(but not to the exclusion of) the circumstances  comprising the Interim Maturity
Date which results in the Mandatory Permanent  Reduction,  the Maximum Revolving
Loan Commitment shall also be automatically and permanently reduced to an amount
not to exceed  $15,000,000.00  on a date and time  certain  which  date and time
certain shall occur contemporaneous with Borrower's repayment of the outstanding
principal balance of the Loan to an amount that is $15,000,000.00 or less at any
time  and for any  reason  whatsoever  (the  "Voluntary  Permanent  Reduction").
Notwithstanding  the  foregoing,  in the event the Interim  Maturity Date is the
same date as the Maturity Date, the  outstanding  principal  balance of the Loan
together  with any  accrued but unpaid  interest  thereon and any other costs or
amounts owed to the Bank  hereunder  shall be due and paid in full on such date.
As of the date of this Amendment,  the provisions of this paragraph are intended
to supersede and replace the provision of Paragraph 5 of the Sixth Amendment.

         4.   Bank  Fees.  Contemporaneous  with  and  as  a  condition  to  the
execution of the Sixth Amendment,  Borrower paid the Bank a fee in the amount of
$100,000.00 (the "Fee"), which Fee was and is deemed fully earned by the Bank at
the time  Borrower and the Bank  executed  the Sixth  Amendment,  as  additional
consideration  for increasing the amount of the Loan and Maximum  Revolving Loan
Commitment to $25,000,000.00.  If the outstanding  principal balance of the Loan
and the Maximum  Revolving Loan Commitment are reduced to $15,000,000.00 or less
on or  prior to April  1,  1999,  regardless  of  whether  such  reduction  is a
Mandatory  Permanent Reduction or a Voluntary  Permanent  Reduction,  and if the
Borrower is not otherwise in default under the Loan  Agreement or the Documents,
fifty  percent  (50%) of the Fee shall be refunded to Borrower.  Borrower  shall
also pay the  reasonable  legal  fees of Bank  counsel  in  connection  with the
preparation  of this  Amendment  and all prior  amendments  and matters  related
thereto.  In addition to the Fee, Borrower shall continue to be obligated to pay
the Bank the Unused  Commitment  Fee in the amount of one-quarter of one percent
(1/4%)  per annum of the  average  unused  Maximum  Revolving  Loan  Commitment,
excluding the LC Reserve,  and as otherwise set forth in the Loan Agreement,  as
amended by this Amendment.  As of the date of this Amendment,  the provisions of
this  paragraph are intended to supersede and replace the provision of Paragraph
12 of the Sixth Amendment.

         5.   Information.  Borrower  shall  provide Bank,  upon  request,  with
copies of all documentation and information concerning the FBR Loan.



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         6.   Reaffirmation.  To the extent any term(s) or  condition(s)  in the
Loan Agreement or any of the Documents  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 Loan
Agreement  and the  Documents,  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 Loan  Agreement and 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.  Notwithstanding  the
foregoing, Borrower acknowledges and agrees that in addition to amending certain
terms and  conditions of the Loan,  this  Amendment  restates  certain terms and
conditions  previously set forth in the Loan Agreement.  Any terms or conditions
set forth in the Loan Agreement that are not specifically amended or modified by
this Amendment,  even if not specifically  restated herein, shall remain binding
on the parties hereto.

         7.   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.

         8.   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.

         9.   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.

         10.  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.

         11.  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/ David E. Heise
                                          --------------------------------------
                                      Print Name:  David E. Heise 
                                      Title: Commercial Banking Officer


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                                    EXHIBIT A

                             SUBORDINATION AGREEMENT



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