MANAGEMENT AGREEMENT
                              --------------------

         This MANAGEMENT  AGREEMENT (this  "Agreement"),  dated as of August 24,
1999,  is made and entered  into by and between AH Battery  Park Owner,  LLC, an
Ohio limited liability company  ("Owner"),  and Brookdale Living  Communities of
New York-BPC, Inc., a Delaware corporation ("Manager").


                                    RECITALS
                                    --------

         WHEREAS, Owner is the ground lessee of certain real property located at
455 North End Avenue,  Battery Park City, New York (the "Facility")  pursuant to
that certain  Ground  Lease dated as of August 24, 1999 (the "Ground  Lease") by
and between Owner,  as lessee,  and the Battery Park City  Authority,  as Lessor
(the "Lessor");


         WHEREAS,  Manager is  qualified  in the  business of  operating  senior
independent  and assisted  living  facilities  such as the  Facility,  and Owner
desires to engage Manager to manage and operate the Facility; and

         WHEREAS,  Manager is willing to manage and operate the  Facility on the
terms and subject to the conditions set forth in this Agreement.


                                   AGREEMENTS
                                   ----------

         NOW,  THEREFORE,  in  consideration  of the  recitals  and  the  mutual
promises  and  covenants  herein  contained  and for  other  good  and  valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:

1.       Responsibilities of Manager.

         a.     Owner hereby engages Manager to manage and operate the Facility,
                and Manager hereby accepts such engagement  and,  subject to the
                conditions  set forth in this  Agreement,  agrees to manage  and
                operate the Facility, at Owner's expense, in accordance with the
                terms  set  forth  in this  Agreement.  During  the term of this
                Agreement,  Manager  shall have full  authority  to operate  and
                manage the  Facility  as a senior  congregate  and  non-licensed
                assisted  living  facility  in  accordance  with the  terms  and
                conditions  hereof, and shall have full and complete control and
                reign  over,  and use of, the  entire  Facility,  including  its
                common areas.  Without limiting the generality of the foregoing,
                Manager  shall,  at  Owner's  expense,  have full  authority  as
                follows:

                i.       Operational   Policies   and  Forms.   Subject  to  the
                         applicable   Annual   Budget  (as  defined  in  Section
                         1(a)(xii) below), Manager shall establish and implement
                         such operational  policies and procedures,  and develop
                         such new policies and  procedures,  as Manager may deem
                         necessary to cause or to ensure the  establishment  and
                         maintenance  of  operational  standards  determined  by
                         Manager  to  be  appropriate  for  the  nature  of  the
                         Facility.

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                ii.      Charges.  Manager  shall  establish  the  schedules  of
                         charges  for  residents  of  the  Facility,   including
                         appropriate  charges for any and all  special  services
                         rendered to or for residents at the Facility.

                iii.     Information.  Manager shall  develop any  informational
                         material,   mass  media  releases,  and  other  related
                         publicity  materials,  that Manager deems  necessary or
                         appropriate for the operation of the Facility.

                iv.      Regulatory  Compliance.  Manager  shall use  reasonable
                         efforts   to   maintain    all    licenses,    permits,
                         qualifications   and  approvals   from  any  applicable
                         governmental or regulatory  authority  required for the
                         operation of the Facility.  In addition,  Manager shall
                         supervise and coordinate the  preparation and filing of
                         (and,  where required to do so under  applicable law or
                         regulations,  file) all  reports  or other  information
                         required  by all state or other  governmental  agencies
                         having jurisdiction over the Facility and shall deliver
                         copies of all such  reports  and  information  to Owner
                         simultaneously   with  such   filings.   Manager  shall
                         cooperate with governmental  inspection and enforcement
                         activities.

                v.       Equipment and  Improvements.  Subject to the applicable
                         Annual  Budget  and the  Mortgage  Loan  Documents  (as
                         hereinafter  defined),  Manager  shall,  on  behalf  of
                         Owner, acquire, or effect the acquisition of, equipment
                         and improvements which Manager determines are needed to
                         maintain or upgrade the quality of the  Facility or its
                         services, to replace obsolete or run-down equipment, or
                         to  correct  any  other   deficiencies   which  may  be
                         identified   by   Manager   during  the  term  of  this
                         Agreement,  and shall make,  or engage third parties to
                         make, all such repairs,  replacements  and  maintenance
                         and shall cause to be acquired all equipment, including
                         replacement  equipment,  that Manager  determines to be
                         necessary for the operation of the Facility.

                vi.      Accounting.  Manager  shall  supervise  and  coordinate
                         accounting support to, and prepare and maintain records
                         for,  the  Facility.   All  accounting  procedures  and
                         systems  utilized in providing such support shall be in
                         accordance with the operating capital and cash programs
                         developed by Manager,  which  programs shall conform to
                         generally  accepted  accounting   principles.   Nothing
                         herein shall  preclude  Manager  from  engaging a third
                         party  (including  related or  affiliated  parties)  to
                         assist  Manager in the  performance  of the  accounting
                         duties provided for herein.

                vii.     Reports.  Manager shall  supervise and  coordinate  the
                         preparation  of any  operational  information if and to
                         the  extent   needed  to  comply  with  any   reporting
                         obligations  imposed  on the  Owner by any  Lender  (as
                         hereinafter  defined) or lessors of the Facility except
                         for those reporting obligations which relate to matters
                         which are within the exclusive  control of the Owner or
                         its affiliates.  Manager shall prepare,  or cause to be
                         prepared,  at Owner's expense, the tax returns of Owner
                         (but not Owner's  partners or  affiliates)  for Owner's
                         signature.   Notwithstanding  any  provisions  in  this
                         Agreement to the contrary, Manager shall timely provide
                         to Owner (or to  Owner's  member(s)  or  partner(s)  if
                         Owner is not  subject to entity  level  taxes) the cash
                         necessary to pay any federal,  state or local income or
                         other  taxes  that may be due and  owing as a result of

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                         income generated from operations of the Facility during
                         the Term (as  hereinafter  defined) of this  Agreement.
                         All  originals  of  the  books,   forms,   and  records
                         generated by Manager in  connection  with the operation
                         of the Facility shall be Manager's property.

                viii.    Bank  Accounts.  Manager shall  establish an account or
                         accounts and shall deposit  therein all money  received
                         by Manager on Owner's  behalf from the operation of the
                         Facility.  Withdrawals  and payments  from this account
                         shall  be made  only on  checks  signed  by one or more
                         person or persons designated by Manager.

                ix.      Personnel.  Manager shall have full power and authority
                         to recruit,  hire, train, promote,  direct,  discipline
                         and  fire  all  Facility   personnel,   including   the
                         Executive  Director of the Facility;  establish  salary
                         levels,  personnel policies and employee benefits;  and
                         establish  employee  performance   standards,   all  as
                         Manager  determines to be necessary or desirable during
                         the term of this  Agreement to ensure the efficient and
                         satisfactory  operation of all departments  within, and
                         all  services  offered  by,  the  Facility.  All of the
                         foregoing obligations shall be undertaken in accordance
                         with  the  Annual   Budgets  and   applicable  law  and
                         regulations. All of the Facility personnel shall be the
                         employees   of  Manager  or  its   affiliates,   unless
                         otherwise agreed by Owner and Manager,  and all salary,
                         bonuses,  fringe  benefits,  payroll  taxes and related
                         expenses  payable to or in  respect  of the  Facility's
                         on-site  personnel  holding the  position of  Executive
                         Director of the Facility and all positions  subordinate
                         thereto shall be expenses of the Facility.

                x.       Supplies and  Equipment.  Manager  shall  purchase,  on
                         behalf of Owner,  supplies  and  non-capital  equipment
                         needed to operate  the  Facility  within the  budgetary
                         limits set forth in the Annual Budgets.

                xi.      Legal  Proceedings.  Manager  shall  have the right and
                         authority,  on its own behalf or through  legal counsel
                         designated by Manager,  to direct all legal matters and
                         proceedings  that are  within  the  scope of  Manager's
                         authority   pursuant  to  this  Agreement,   including,
                         without  limitation,  instituting  any legal actions or
                         proceedings  determined  by Manager to be  necessary to
                         collect obligations owing to the Facility, to cancel or
                         to terminate any contract or agreement  relating to the
                         Facility for breach thereof or default thereunder,  and
                         to otherwise  enforce the obligations of the residents,
                         sponsors,  licensees,  customers and any other users of
                         the Facility.  Without  limiting the  generality of the
                         foregoing,  Manager is  authorized  (without  the prior
                         written  consent of Owner) to (a)  settle,  in the name
                         and on behalf of Owner and on such terms and conditions
                         as Manager may deem to be in the best  interests of the
                         Facility, any and all claims or demands arising out of,
                         or in connection  with,  the operation of the Facility,
                         whether or not legal action has been instituted and (b)
                         enter  into  such  agreements  with  any   governmental
                         agencies having  jurisdiction  over the Facility deemed
                         necessary  or  desirable  by  Manager  in its  sole and
                         absolute judgment.  All such amounts paid in respect of
                         any such settlements  shall be expenses of the Facility
                         and be paid by Owner. Manager will give notice promptly
                         to Owner of all demands and claims and all  settlements
                         and legal actions,  but the failure to give such notice
                         shall  not  affect  the  preceding  provisions  of this
                         paragraph.

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                xii.     Annual Budgets.

                         A.      Preparation and Submission. At least forty-five
                                 (45)  days  prior to each  calendar  year  that
                                 commences  during  the Term of this  Agreement,
                                 Manager shall submit to Owner a proposed annual
                                 budget for the Facility projecting the revenues
                                 available and funds required during such fiscal
                                 year  in  order  to  manage  and   operate  the
                                 Facility and to make capital  improvements that
                                 Manager determines to be necessary or desirable
                                 in order to keep the Facility's  physical plant
                                 in good  condition  and  repair.  The  proposed
                                 annual  budget  shall  be based  upon  data and
                                 information then available to Manager and shall
                                 include, without limitation, estimated salaries
                                 and   fringe   benefits   for  all   personnel,
                                 projected  staffing  patterns for the Facility,
                                 estimates of required capital  expenditures and
                                 purchases of  equipment,  supplies,  inventory,
                                 food and similar items,  and an estimate of the
                                 level of rates and charges to  residents of the
                                 Facility   sufficient   to   generate   revenue
                                 necessary  to manage and operate  the  Facility
                                 and make the capital improvements  projected in
                                 such budget.  The proposed  annual budget shall
                                 be an estimate of revenues and costs, and Owner
                                 and  Manager  acknowledge  that  (1)  projected
                                 revenue  may not be actually  received  and (2)
                                 projected  costs  may  be  exceeded  by  actual
                                 expenses and capital  expenditures  incurred in
                                 connection  with the operation and  maintenance
                                 of the Facility. By submitting such a projected
                                 budget,  Manager  will  not  be  deemed  to  be
                                 providing  a  guaranty  or  warranty  as to the
                                 projected   revenue,    expenses   or   capital
                                 expenditures of the Facility.

                         B.      Adoption.   Each  annual  budget   proposed  by
                                 Manager pursuant to subparagraph (A) above and,
                                 to the extent any  Lender has  approval  rights
                                 with respect  thereto,  as finally  approved by
                                 such Lender or  Lenders,  shall  constitute  an
                                 "Annual  Budget"  for all  purposes  under this
                                 Agreement.

                         C.      Efforts  to  Operate   within  Annual   Budget.
                                 Manager  agrees to use  reasonable  efforts  to
                                 operate  the  Facility in  accordance  with the
                                 Annual   Budgets.   Subject  to  the  foregoing
                                 limitation,  Owner  shall be  responsible  on a
                                 periodic  basis,  as and when  needed,  for all
                                 expenses and capital  expenditures  incurred in
                                 connection  with the operation and  maintenance
                                 of the Facility, including, without limitation,
                                 Fees (defined  below) and cost  overruns  which
                                 exceed  the  amounts  set  forth  in  the  then
                                 current Annual Budget. Notwithstanding anything
                                 in this  Agreement,  if Manager  determines  in
                                 good   faith   that  the   incurrence   of  any
                                 expenditure is required in order to comply with
                                 applicable  law or  regulations  or to  provide
                                 services   in   accordance   with  the   senior
                                 independent  and  assisted  living   industry's
                                 then-prevailing  standards in

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                                 the area in which the Facility is located or is
                                 otherwise  desirable  or  appropriate  for  the
                                 operation of the  Facility,  then Manager shall
                                 be entitled to make such expenditures,  and all
                                 such  expenditures  shall  be  deemed,  for all
                                 purposes of this Agreement, to be in accordance
                                 with the then current Annual Budget.

                xiii.    Collection  of Accounts.  Manager shall issue bills and
                         collect accounts and monies owed for goods and services
                         furnished by the Facility,  including,  but not limited
                         to,  enforcing  the rights of Owner and the Facility as
                         creditor  under any contract or residency  agreement or
                         in connection  with the rendering of any services.  All
                         of which, including, but not limited to rents and other
                         monies payable under residency agreements, shall be the
                         property  of owner  to be held  and used in  accordance
                         with the applicable provisions of this Agreement.

                xiv.     Contracts. Consistent with or as otherwise contemplated
                         by the Annual Budget,  Manager shall  negotiate,  enter
                         into,  secure,  cancel and/or terminate such agreements
                         and  contracts  which  Manager  may deem  necessary  or
                         advisable for the operation of the Facility, including,
                         without  limitation,  the  furnishing  of  concessions,
                         supplies, utilities,  extermination, refuse removal and
                         other  services.  Where  lawful,  such  agreements  and
                         contracts  may be  entered  into in the  name of and on
                         behalf of Owner.

                xv.      Residency Agreements.  Manager shall have the right and
                         authority  to  negotiate,  enter  into,  amend,  cancel
                         and/or terminate residency agreements with residents of
                         the  Facility,   as  agent  for  Owner.  All  residency
                         agreements,   leases  and  other  occupancy  agreements
                         entered  into by Manager  shall  state that  Manager is
                         acting as agent on behalf of Owner. Where lawful,  such
                         residency agreements may be entered into in the name of
                         and on behalf of Owner.

                xvi.     Other Matters.  Manager shall, on its own behalf and/or
                         on  Owner's  behalf,  be  permitted  to enter into such
                         other  agreements,   contracts,   easements  and  other
                         documents or commitments and to perform such other acts
                         as are  necessary or desirable,  in Manager's  sole and
                         absolute discretion, for the operation of the Facility.

                xvii.    Loan Documents. Manager shall, on its own behalf and/or
                         on  Owner's  behalf,  be  permitted  to deal  with  the
                         providers  of  financing  for the  Facility,  including
                         without limitation,  (A) the senior mortgage loans (the
                         "Mortgage  Loan") made by Key  Corporate  Capital Inc.,
                         Fleet   National   Bank  and  European   American  Bank
                         (collectively,  "Senior  Lender")  secured  by  Owner's
                         interest in the  Facility  and (B) any other  equity or
                         mezzanine  loans made to Owner or its member  either as
                         of  the  date   hereof   or  after  the  date  of  this
                         Agreement(the   "Equity   Loan")   made  by  a   lender
                         acceptable  to Owner  and  Manager  ("Equity  Lender").
                         Senior  Lender and Equity  Lender  shall be referred to
                         individually  as a  "Lender,"  and the  loan  documents
                         evidencing  and/or  securing the Mortgage  Loan and the
                         Equity Loan are referred to collectively  herein as the
                         "Loan  Documents."  The Loan  Documents  which evidence
                         and/or   secure  the  Mortgage  Loan  are  referred  to
                         collectively  herein as the "Mortgage Loan  Documents."
                         Manager shall be  responsible  for  complying  with the
                         terms of the

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                         Loan Documents,  at Owner's sole cost and expense, with
                         the exception of those  provisions (i) which are within
                         the exclusive control of Owner and its affiliates, e.g.
                         filing of  income  tax  returns  and  certificates  and
                         notices  relating  to  Owner's  (and  its  affiliates')
                         organizational  documents,  etc., and (ii) which relate
                         to the  repayment of the debt  evidenced and secured by
                         the Loan Documents except to the extent that Manager is
                         administering  the  Mortgage  Loan and the Equity  Loan
                         pursuant hereto or pursuant to that certain Amended and
                         Restated Development Agreement of even date herewith by
                         and  between  Owner  and  Manager,  as  developer  (the
                         "Development  Agreement").  Owner (and its  affiliates)
                         shall not amend or waive  any  provision  of any of the
                         Loan  Documents  without the prior  written  consent of
                         Manager.

                xviii.   Ground   Lease.   Manager  shall  have  the  right  and
                         authority,  at the  Owner's  expense,  to  enter  into,
                         perform,  and modify its  obligations  and duties under
                         the Ground  Lease.  Owner  shall not amend or waive any
                         provision  of any of the  Loan  Documents  without  the
                         prior written consent of Manager, which may be withheld
                         in Manager's sole discretion.

2.       Responsibilities  of Owner.  Owner shall not interfere  with Manager in
         connection  with  the  management  or  operation  of  the  Facility  in
         accordance with the terms of this Agreement.  Owner  acknowledges  that
         the  management  or operation  of the Facility is within the  exclusive
         control of Manager and Owner hereby  grants  Manager sole and exclusive
         possession and control over the Facility.

3.       Exclusive Representative/Attorney-in-Fact.  It is understood and agreed
         that, during the term of this Agreement, Manager shall be the exclusive
         representative  of Owner for the purposes  described in this Agreement.
         Any   communications   with   any   Lender,   regulatory   authorities,
         governmental agencies,  contractors,  suppliers,  residents,  sponsors,
         licensees,  customers,  and guests of the  Facility  shall be  directed
         through Manager.  Any and all notices received by Owner relating to the
         Facility,  the Ground  Lease,  the Loan  Documents,  the Owner,  or the
         direct or indirect  owners of interests in Owner shall  immediately  be
         forwarded by Owner to Manager. During the term of this Agreement, Owner
         hereby appoints Manager as its attorney-in-fact  throughout the term of
         this  Agreement  to take any action and  execute any  instruments  that
         Owner is  obligated  under,  or that  Owner has  covenanted  and agreed
         hereunder  or under the Loan  Documents  or the Ground Lease to take or
         execute  or which  Manager  otherwise  determines  to be  necessary  or
         appropriate   for   Manager  to  perform  its  duties  or  satisfy  its
         obligations  hereunder or otherwise  necessary or  appropriate  for the
         management  and  operation  of  the  Facility,   which  appointment  as
         attorney-in-fact is irrevocable and coupled with an interest.

4.       Insurance.  Subject  to  and  in  accordance  with  the  Mortgage  Loan
         Documents and the Ground Lease,  Manager shall arrange for and maintain
         all  necessary  and proper  hazard  insurance  covering  the  Facility,
         including the furniture,  fixtures and equipment situated thereon,  all
         necessary and proper public  liability  insurance for the protection of
         Manager, Owner and, to the extent required under the Loan Documents and
         the Ground Lease, any Lender and Ground Lessor,  respectively.  Manager
         shall also arrange for and  maintain  all employee  health and worker's
         compensation insurance for the Facility's personnel.  Manager shall, at
         Owner's  expense,  also  maintain  such  other  insurance  as  required
         pursuant to the  Mortgage  Loan  Documents  and the Ground  Lease.  Any
         insurance  provided  pursuant to this paragraph  shall be an expense of
         the Facility payable by Owner.

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5.       Proprietary  Interest.  The systems,  methods,  procedures and controls
         employed by Manager and any written materials or brochures developed by
         Manager to document  the same are to remain the property of Manager and
         are not, at any time during or after the term of this Agreement,  to be
         utilized,  distributed,  copied or  otherwise  employed  or acquired by
         Owner, except as authorized by Manager.

6.       Term of  Agreement.  Unless  this  Agreement  is sooner  terminated  as
         hereinafter  expressly  provided in Section 7 or as otherwise agreed in
         writing  by  both  parties,  the  initial  term  (the  "Term")  of this
         Agreement  shall  commence  on the date  hereof  and  shall  end on the
         "Maturity Date", as such term is defined in the Mortgage Loan Documents
         and as the same may be extended pursuant to the Mortgage Loan Documents
         (the  "Termination  Date").  Upon  any  termination  of this  Agreement
         pursuant to the  immediately  preceding  sentence,  the parties  hereto
         shall have no further  obligations or liabilities  other than the right
         of Manager to receive Fees through the Termination Date, and during any
         such  period  for which  Manager  provides  services  or assists in the
         management  and  operation of the Facility in  connection  therewith it
         shall be entitled to receive an appropriate fee therefor.  In addition,
         upon any termination of this Agreement,  all right,  title and interest
         of  the  Manager  in  and to  any  licenses,  permits,  qualifications,
         approvals,  leases, residency agreements,  trade contracts and/or other
         agreements  that are necessary for the operation of the Facility shall,
         at the  option of Owner (to the  extent  assignable),  be  assigned  to
         Owner,  except in connection  with a synthetic  lease  transaction,  in
         which case such items shall be assigned to the lessee thereunder.

7.       Events of Default and Remedies.

         a.     Event of  Default.  At the option of the  non-defaulting  party,
                each of the  following  shall  constitute  an "Event of Default"
                hereunder:

                i.       if  Owner  shall  fail to pay or allow  payment  of any
                         installment  of the Fees due to Manager  in  accordance
                         with  Section  10 hereof or any  other  amounts  due to
                         Manager  under this  Agreement for a period of five (5)
                         days after written  notice of such failure from Manager
                         to Owner;

                ii.      if Owner fails to perform in any  material  respect any
                         term,  provision,  or covenant of this Agreement (other
                         than as set  forth  in  Section  7(a)(i))  and (A) such
                         failure  continues  for ten  (10)  days  after  written
                         notice from  Manager to Owner  specifying  such failure
                         (unless such failure  cannot be cured by the payment of
                         money and cannot reasonably be cured within such 10-day
                         period, in which event,  Owner shall have an additional
                         period,  not to exceed an additional  thirty (30) days,
                         in which to cure the  default)  or (B)  Owner  fails to
                         endeavor  diligently  and  continuously  to  cure  such
                         default as promptly as is practicable;

                iii.     if Manager fails to perform in any material respect any
                         term, provision,  or covenant of this Agreement and (A)
                         subject to Section 8 below,  such failure continues for
                         thirty  (30)  days  after  written  notice  from  Owner
                         specifying such failure to perform (unless such failure
                         cannot  reasonably be cured within such 30-day  period,
                         in which event, Manager shall have an additional period
                         as is  necessary  to cure the  default)  or (B)

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                         Manager fails to endeavor  diligently and  continuously
                         to cure such default as promptly as is practicable; or

                iv.      if either Owner,  on the one hand,  or Manager,  on the
                         other,  is  dissolved  or  liquidated,  applies  for or
                         consents to the  appointment of a receiver,  trustee or
                         liquidator of all or a substantial  part of its assets,
                         files a  voluntary  petition  in  bankruptcy  or is the
                         subject of an involuntary  bankruptcy  filing,  makes a
                         general  assignment  for the benefit of  creditors,  or
                         files a petition or an answer seeking reorganization or
                         arrangement  with creditors or to take advantage of any
                         insolvency  law,  or if an  order,  judgment  or decree
                         shall   be   entered   by  any   court   of   competent
                         jurisdiction,   on  the   application  of  a  creditor,
                         adjudicating  Owner or Manager bankrupt or insolvent or
                         approving a petition seeking reorganization of Owner or
                         Manager or appointing a receiver, trustee or liquidator
                         for  such  party  of all or a  substantial  part of its
                         assets,  and  such  order,  judgment  or  decree  shall
                         continue unstayed and in effect for any period of sixty
                         (60) consecutive days; or

                v.       if Owner or any  affiliate  of  Owner is in  breach  or
                         default of any of its  obligations  under that  certain
                         Equity  Option  Agreement  of even date  herewith  with
                         Manager or under that certain Property Option Agreement
                         of even date herewith with Manager.

         b.     Remedies.  At any time  after  the  occurrence  and  during  the
                continuance  of any Event of  Default  caused by Owner,  Manager
                may,  at its  option,  do  one or  more  of the  following:  (i)
                terminate  this  Agreement  by  giving  written  notice to Owner
                and/or (ii) exercise all rights and remedies available at law or
                in  equity.  At any time  after the  occurrence  and  during the
                continuance of an Event of Default caused by Manager, Owner may,
                as its sole option,  terminate this Agreement in accordance with
                the terms  hereof and Manager  shall have no other  liability to
                Owner hereunder.

8.      Facility Operations.

         a.     No Guarantee of  Profitability.  Manager does not guarantee that
                operation of the Facility will be profitable.

         b.     Force Majeure. The parties will not be deemed to be in violation
                or breach of their  respective  non-monetary  obligations  under
                this  Agreement if they are  prevented  from  performing  any of
                their  respective  obligations  hereunder  for any reason beyond
                their   control,   including,   without   limitation,   strikes,
                shortages,   war,  acts  of  God,  or  any  applicable  statute,
                regulation  or rule of  federal,  state or local  government  or
                agency  thereof  having  jurisdiction  over the  Facility or the
                operations thereof.

9.       Withdrawal of Funds by Manager. Owner and Manager acknowledge and agree
         that the efficient operation of the Facilityrequires  that Manager have
         ready  access  to  the  funds  required  therefor,   including  without
         limitation,   the  proceeds  of  the  Mortgage  Loan  and  Equity  Loan
         (collectively, the "Loan Proceeds") plus any capital contributions from
         Owner's  members  and  their  members  (the  "Capital   Contribution").
         Accordingly, Owner agrees not to withdraw any funds from the Facility's
         bank  account(s)  (except  as may be  required  to  make  the  payments
         required under the Loan Documents) without the prior written consent of
         Manager, which may be withheld in Manager's sole

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         and absolute discretion.  Moreover,  during the term of this Agreement,
         Owner (a) irrevocably grants Manager the authority on Owner's behalf to
         make  draw  requests  for the  Loan  Proceeds  in  accordance  with the
         Mortgage Loan  Documents,  (b)  irrevocably  authorizes  each Lender to
         disburse its Loan Proceeds  directly to Manager in accordance with such
         draw  requests  and the Loan  Documents,  (including  those  provisions
         relating to compliance  with the Lien Law of the State of New York) (c)
         shall not be  entitled to any  portion of the Loan  Proceeds  under the
         Loan  Documents,  and (d)  irrevocably  grants Manager the authority to
         establish and maintain bank account(s) on Owner's behalf to deposit and
         withdraw  (without  Owner's  consent  or  approval)  the Loan  Proceeds
         subject to compliance  with the Loan  Documents and the Lien Law of the
         State  of New  York  and  all  funds  necessary  for  the  development,
         construction,  operation,  maintenance and use of the Facility. Subject
         to  Manager's  obligations  in  Section  1(a)(vii)  of this  Agreement,
         Manager shall have the right (without Owner's prior consent) to use any
         excess proceeds or revenues generated from the Facility's operations to
         reduce the principal  balance of either the Mortgage Loan or the Equity
         Loan.

10.      Fees.  Upon  substantial  completion of the Facility,  Manager shall be
         entitled to receive  management  fees (the "Fees") equal to the greater
         of (a) five percent (5%) of the gross  revenues of the Facility  during
         each month or portion thereof occurring during such term or (b) $10,000
         per month.  Fees shall be paid on a monthly basis  simultaneously  with
         the delivery by Manager to Owner of the monthly statements provided for
         in  Section  1(a)(vii).  In  addition  to the  Fees,  Owner  agrees  to
         reimburse Manager and Brookdale Living Communities,  Inc. ("Brookdale")
         for any and all costs and/or expenses paid, or incurred,  by Manager or
         Brookdale  in  connection  with  the  Ground  Lease  any  of  the  Loan
         Documents,  including, without limitation,  rent, interest,  principal,
         commitment  fees, due diligence  deposits,  draw fees,  servicing fees,
         structuring fees and extension fees or any other fees or expenses under
         any of the Loan  Documents or the Ground  Lease.  Manager  acknowledges
         that  its  right to  receive  any  Fees or  other  sums  due and  owing
         hereunder shall be subject and  unconditionally  subordinate to (i) the
         payment  by Owner to Ground  Lessor of all  Rental  (as  defined in the
         Ground  Lease) and (ii) the  payment by Owner or its sole member to any
         Lender of any sums due under any Loan Documents.

11.      Assignment.   This  Agreement  shall  not  be  assigned  (including  by
         operation  of law,  whether  by merger or  consolidation  (excluding  a
         merger effected solely for the purpose of changing Owner's jurisdiction
         of incorporation that does not affect the ownership  interests of Owner
         in any material respect) or otherwise) by Owner, on the one hand, or by
         Manager,  on the other,  without the prior written consent of the other
         party;  provided,  however, that Owner may assign this Agreement to the
         Senior  Lender  pursuant to the  Collateral  Assignment  of  Collateral
         Assignment of Contracts, Permits, Licenses and Approval and that to the
         extent permitted by applicable law and regulations,  and subject to the
         receipt of all required licenses, permits, approvals and authorizations
         of applicable  governmental agencies, this Agreement may be assigned by
         Manager  to one or more  corporations  or other  legal  entities  which
         control,  or  are  controlled  by or are  under  common  control  with,
         directly or indirectly, Manager or Brookdale.

12.      Notices.  Any notices  required or permitted to be sent hereunder shall
         be delivered personally or by facsimile (with answer back acknowledged)
         or mailed,  certified mail, return receipt  requested,  or delivered by
         overnight  courier  service to the following  addresses,  or such other
         addresses as shall be given by notice delivered hereunder, and shall be
         deemed to have been given upon delivery, if delivered personally,  upon
         receipt with answer back acknowledged,  if delivered by facsimile three
         (3)

                                       9

<PAGE>

         business  days after  mailing,  if mailed,  or one  business  day after
         delivery to the courier, if delivery by overnight courier service:

         If to Owner, to:

                           AH Battery Park Owner, LLC
                           723 Electronic Drive, Suite 300
                           Horsham, Pennsylvania 43215
                           Attn: David Fenkell
                           Facsimile: 215-706-0877

         With a copy to:

                           Squire, Sanders, & Dempsey, LLP
                           1300 Huntington Center, 41 South High Street
                           Columbus, Ohio 43215
                           Attn: David Cooper, Jr.
                           Facsimile: 614-365-2499

         If to Manager, to:

                           Brookdale Living Communities of New York-BPC, Inc.
                           c/o Brookdale Living Communities, Inc.
                           77 West Wacker Drive
                           Suite 4400
                           Chicago, Illinois 60601
                           Attn:  Darryl W. Copeland, Jr.
                           Facsimile: (312) 977-3699

         With a copy to:

                           Brookdale Living Communities, Inc.
                           77 West Wacker Drive
                           Suite 4400
                           Chicago, Illinois 60601
                           Attn: Robert J. Rudnik
                           Facsimile: (312) 977-3769


13.      Relationship  of the Parties.  The  relationship of Manager to Owner in
         connection  with  this  Agreement  shall  be  that  of  an  independent
         contractor,  and all acts  performed by Manager  during the term hereof
         shall be deemed to be performed in Manager's capacity as an independent
         contractor. Nothing contained in this Agreement is intended to or shall
         be construed to give rise to or create a  partnership  or joint venture
         or lease between Owner,  its  successors and assigns,  on the one hand,
         and Manager, its successors and assigns, on the other hand.

                                       10

<PAGE>

14.      Entire  Agreement.   This  Agreement  and  any  documents  executed  in
         connection herewith contain the entire agreement among the parties with
         respect to the subject matter hereof and,  subject to the  restrictions
         contained in Section 11 above,  shall be binding upon their  respective
         successors and assigns,  and shall be construed in accordance  with the
         laws of the state where the Facility is located. This Agreement may not
         be  modified  or  amended  except by written  instrument  signed by the
         parties hereto.

15.      Contract Modifications for Certain Legal Events. In the event any state
         or federal  laws or  regulations,  whether  now  existing or enacted or
         promulgated after the effective date of this Agreement, are interpreted
         by judicial  decision,  a  regulatory  agency or legal  counsel of both
         parties  in such a manner as to  indicate  that the  structure  of this
         Agreement  may be in violation of such laws or  regulations,  Owner and
         Manager agree to cooperate in restructuring their relationship and this
         Agreement to eliminate  such violation or to reduce the risk thereof to
         the extent such  restructuring  can be accomplished  upon  commercially
         reasonable terms;  provided,  that any such restructuring shall, to the
         maximum extent possible, preserve the underlying economic and financial
         arrangements  between  Owner and Manager.  The parties  agree that such
         amendment  may  require  either or both  parties to obtain  appropriate
         regulatory licenses and approvals.

16.      Captions.  The captions  used herein are for  convenience  of reference
         only and shall not be construed in any manner to limit or modify any of
         the terms hereof.

17.      Severability.  In the event one or more of the provisions  contained in
         this Agreement is deemed to be invalid, illegal or unenforceable in any
         respect under applicable law, the validity, legality and enforceability
         of the  remaining  provisions  hereof  shall not in any way be impaired
         thereby.

18.      Counterparts.   This  Agreement  may  be  executed  in  any  number  of
         counterparts,  each of  which  shall  be an  original,  and  each  such
         counterpart shall together constitute but one and the same Agreement.

19.      Limitation of Personal  Liability of Owner.  Notwithstanding  any other
         provision  of this  Agreement  to the  contrary,  in no event shall any
         officer, director, member, partner, manager, shareholder,  incorporator
         or agent of Owner or of  Owner's  affiliates  be  personally  liable to
         Manager for any of Owner's obligations under this Agreement.

20.      Limitation of Personal Liability of Manager.  Notwithstanding any other
         provision  of this  Agreement  to the  contrary,  in no event shall any
         officer, director, member, partner, manager, shareholder,  incorporator
         or agent of Manager or of Manager's  affiliates be personally liable to
         Owner for any of Manager's obligations under this Agreement.

21.      Confidentiality. Owner acknowledges that Manager may suffer irreparable
         harm if the information provided to Owner pursuant to this Agreement or
         this Agreement was disclosed to any third parties.  Accordingly,  Owner
         shall keep this  Agreement and all such  information  confidential  and
         shall not disclose  any of such  information  not already  known to the
         public to any party except Owner's lenders, attorneys,  accountants and
         other  professional   advisors  in  connection  with  the  transactions
         contemplated by this Agreement or as otherwise required by law or court
         order.  Owner shall endeavor to minimize the number of persons who have
         copies of this  Agreement  and shall inform each of such persons of the
         confidential  nature  thereof.  The provisions of this Section 21 shall
         not prohibit any

                                       11

<PAGE>

         affiliate of Owner from  participating  in other  similar  transactions
         with parties other than Brookdale, Manager or their affiliates.

22.      Requirements of Ground Lease.  Initially  capitalized terms not defined
         below  shall  have the same  meanings  ascribed  to them in the  Ground
         Lease.

         a.     Manager shall not discriminate  against  employees or applicants
                for employment because of race, creed, color, religion, national
                origin,  ancestry, sex, age, disability or marital status, shall
                comply  with all  applicable  Federal,  State  and  local  laws,
                ordinances,  rules and  regulations  from time to time in effect
                and  the  provisions  of  the  Master  Lease   prohibiting  such
                discrimination  or pertaining to equal employment  opportunities
                and shall  undertake  programs of  affirmative  action to ensure
                that  employees and applicants for employment are afforded equal
                employment  opportunities  without  discrimination.  Such action
                shall  be  taken  with   reference   to,  but  not  limited  to,
                recruitment,  employment, job assignment,  promotion, upgrading,
                demotion, transfer, layoff or termination, rates of pay or other
                forms of compensation, and selection for training or retraining,
                including apprenticeship and on-the-job training.

         b.     Manager shall request each  employment  agency,  labor union and
                authorized  representative  of  workers  with  which  it  has  a
                collective  bargaining or other agreement or  understanding,  to
                furnish it with a written statement that such employment agency,
                labor union or representative  will not discriminate  because of
                race, creed, color, religion,  national origin,  ancestry,  sex,
                age, disability or marital status and that such agency, union or
                representative will cooperate in the implementation of Manager's
                obligations hereunder.

         c.     Manager shall state in all solicitations or  advertisements  for
                employees  placed  by  or  on  behalf  of  contractor  that  all
                qualified   applicants   shall  be  afforded  equal   employment
                opportunities  without  discrimination  because of race,  creed,
                color, religion, national origin, ancestry, sex, age, disability
                or marital status.

         d.     Manager  shall  comply with all of the  provisions  of the Civil
                Rights Law of the State of New York and Sections  291-299 of the
                Executive  Law of the State of New York,  shall upon  reasonable
                notice furnish all  information  and reports  deemed  reasonably
                necessary by Landlord  and shall  permit  access to its relevant
                books,  records  and  accounts  for the  purpose  of  monitoring
                compliance  with the Civil  Rights Law and such  sections of the
                Executive Law.

23.      Senior  Lender's  Right to Terminate.  Notwithstanding  anything to the
         contrary  contained  herein,  upon a default  under any  Mortgage  Loan
         Document and Senior Lender's  acquisition  and/or obtaining  control of
         the Project through  foreclosure,  sale or other means,  this Agreement
         shall  terminate  upon Senior  Lender's  written  request at no cost to
         Senior Lender.

24.      Recording.  Manager  may not  record  this  Agreement  or a  memorandum
         thereof without Ground Lessor's consent at any time.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       12

<PAGE>


     IN  WITNESS  WHEREOF,  the  parties  hereto  have  caused  this  Management
Agreement to be executed and  delivered in their names and on their behalf as of
the date first set forth above.


                              OWNER:

                              AH Battery Park Owner, LLC

                              By:  AH Battery Park Member, LLC, its sole member

                                   By:  Alliance Holdings, Inc., its sole
                                        manager and member


                                   By:  /s/ David B. Fenkell
                                        ------------------------------
                                        Name:  David B. Fenkell
                                        Title: President


                              MANAGER:

                              Brookdale Living Communities of New York-BPC, Inc.



                              By:  /s/ Mark J. Schulte
                                   -----------------------------------
                                   Name:  Mark J. Schulte
                                   Title: President

<PAGE>




STATE OF PENNSYLVANIA     )
                          )    SS.
COUNTY OF MONTGOMERY      )


         The foregoing  instrument was  acknowledged  before me this 18th day of
August, 1999, by David B. Fenkell, the President of Alliance Holdings,  Inc., as
member and manager of AH Battery Park Member,  LLC,  which is the sole member of
AH Battery Park Owner, LLC.


NOTARY SEAL

                                        /s/ Joseph Hiltwine
                                        ------------------------------
                                                NOTARY PUBLIC
                                        Montgomery County, Pennsylvania

STATE OF ILLINOIS         )
                          )    SS.
COUNTY OF COOK            )


         The foregoing  instrument was  acknowledged  before me this 16th day of
August,  1999, by Mark J. Schulte, the President of Brookdale Living Communities
of New York-BPC, Inc., on behalf of said corporation.


NOTARY SEAL

                                        /s/ Donna Jean Elrod
                                        ------------------------------
                                                NOTARY PUBLIC
                                            Cook County, Illinois