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                                                                    EXHIBIT 10.6
                          SUNRISE ASSISTED LIVING, INC.

                         SENIOR EXECUTIVE SEVERANCE PLAN

              Sunrise Assisted Living, Inc., a Delaware corporation (the
"Company"), sets forth herein the terms of its SENIOR EXECUTIVE SEVERANCE PLAN
(the "Plan") as follows:

              SECTION 1. PURPOSE. The Board of Directors of the Company (the
"Board") believes that it is in the best interests of the Company to encourage
the continued employment with and dedication to the Company of certain of the
Company's key executive officers in the face of potentially distracting
circumstances arising from the possibility of a change in control of the
Company, and the Board has established the Plan for this purpose.

              SECTION 2. DEFINITIONS.

              (a)    "ACCRUED OBLIGATIONS" means, with respect to an Executive,
the sum of (1) the Executive's Annual Base Salary through the Date of
Termination to the extent not theretofore paid, (2) the product of (x) the
Executive's Annual Bonus and (y) a fraction, the numerator of which is the
number of days in the current fiscal year through the Date of Termination, and
the denominator of which is 365, and (3) any compensation previously deferred by
the Executive (together with any accrued interest or earnings thereon) and any
accrued vacation pay, in each case, to the extent not theretofore paid.

              (b)    "ANNUAL BASE SALARY" means, with respect to an Executive,
the greater of (a) the annual base salary payable to the Executive by the
Company and its affiliates as of the Date of Termination or (b) the amount equal
to twelve times the highest monthly base salary paid or payable, including any
base salary which has been earned but deferred, to the Executive by the Company
and its affiliate in respect of the twelve-month period immediately preceding
the month in which the Date of Termination occurs.

              (c)    "ANNUAL BONUS" means, with respect to an Executive, the
highest amount paid to the Executive as bonus payments in a single year during
the last three full fiscal years prior to the Date of Termination (annualized in
the event that the Executive was not employed by the Company for the whole of
such fiscal year).

              (d)    "BOARD" means the Board of Directors of the Company.

              (e)    "CAUSE" for termination of an Executive's employment by the
Company shall be deemed to exist if: (a) the Executive is found guilty by a
court of having committed fraud or theft against the Company and such conviction
is affirmed on appeal or the time for appeal has expired; (b) the Executive is
found guilty by a court of having committed a crime involving moral turpitude
and such conviction is affirmed on appeal or the time for appeal has expired;
(c) in the reasonable judgment of the Board, the Executive has compromised trade
secrets or other similarly valuable proprietary information of the

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Company; or (d) in the reasonable judgment of the Board, the Executive has
engaged in gross or willful misconduct that causes substantial and material harm
to the business and operations of the Company or any of its affiliates, the
continuation of which will continue to substantially and materially harm the
business and operations of the Company or any of its affiliates in the future.

              (f)    "CHANGE IN CONTROL" means:

              (1)    The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more
than 50% of either (i) the then outstanding shares of common stock of the
Company (the "Outstanding Company Common Stock") or (ii) the combined voting
power of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this subsection (a), the
following acquisitions shall not constitute a Change in Control: (i) any
acquisition by the Company; (ii) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any corporation
controlled by the Company; and (iii) any acquisition by any entity pursuant to a
transaction which complies with clauses (i), (ii) and (iii) of subsection (3) of
this Section 2(f); or

              (2)    Individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or

              (3)    Consummation of a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the assets of the
Company (a "Business Combination"), in each case unless, following such Business
Combination, (i) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the entity
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or
more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be, and
(ii) no Person (excluding any corporation resulting from such

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Business Combination or any employee benefit plan (or related trust) of the
Company or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 35% or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding
voting securities of such corporation except to the extent that such ownership
existed prior to the Business Combination and (iii) at least a majority of the
members of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing
for such Business Combination; or

              (4)    Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.

              (g)    "CHANGE IN CONTROL EVENT" means the earlier to occur of (i)
a Change in Control or (ii) the execution and delivery by the Company of an
agreement providing for a Change in Control.

              (h)    "CHANGE IN CONTROL PERIOD" means the period commencing upon
a Change in Control Event and ending two years after such Change in Control
Event.

              (i)    "COMPANY" means Sunrise Assisted Living, Inc., a Delaware
corporation.

              (j)    "DATE OF TERMINATION" means, with respect to an Executive,
the effective date of termination of the Executive's employment with the
Company.

              (k)    "EXECUTIVE" means an executive officer of the Company
designated by the Board to participate in the Plan.

              (l)    "GOOD REASON" means, with respect to an Executive: (1) any
reduction in the Executive's base salary, fringe benefits or bonus eligibility,
except, in the case of fringe benefits or bonus eligibility, in connection with
a reduction in such compensation generally applicable to peer employees of the
Company; (2) that the Executive has his responsibilities or areas of supervision
with the Company substantially reduced (in the Executive's reasonable judgment)
or the Executive is requested to report to a lower level supervisor; (3) that
the Executive has his responsibilities or areas of supervision with the Company
substantially increased without an appropriate increase in Executive's
compensation (in the Executive's reasonable judgment); (4) that the Executive is
required to move his office outside the metropolitan area in which the office of
the Executive was previously located; or (5) that the Executive is required to
report to a new supervisor and the Executive and the new supervisor have
irreconcilable working relationship problems or difficulties.

              (m)    "OTHER BENEFITS" means, with respect to an Executive, any
other amounts or benefits required to be paid or provided or which the Executive
is eligible to receive under any plan, program, policy or practice or contract
or agreement of the Company and its affiliates.

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              SECTION 3. TERM. This Plan shall be for a period commencing on
February 25, 2000 and ending on February 25, 2005; provided, however, that, in
the event of a Change in Control Event during the term of this Plan, the term of
this Plan shall be automatically extended, if necessary, so that this Plan
remains in full force and effect for the Change in Control Period relating to
such Change in Control Event and until all payments required to be made
hereunder have been made. References herein to the term of this Plan shall
include the initial term and any additional period for which this Plan is
extended or renewed.

              SECTION 4. SEVERANCE BENEFITS FOLLOWING A CHANGE IN CONTROL.

              (a)    GOOD REASON; OTHER THAN FOR CAUSE. If a Change in Control
Event occurs during the term of this Plan and the Company terminates an
Executive's employment other than for Cause or the Executive terminates
employment for Good Reason during the Change in Control Period:

                     (i)    The Company shall pay to the Executive the following
                            amounts:

                            A.     the Accrued Obligations in a lump sum in cash
              within 30 days of the Date of Termination;

                            B.     the amount equal to the product of (1) three
              (3) and (2) the sum of (x) the Executive's Annual Base Salary and
              (y) the Annual Bonus; and

                            C.     the amount equal to the value (based on a
              Black-Scholes valuation methodology) as of the Date of Termination
              of all unexercised stock options held by the Executive as of the
              Date of Termination that have exercise prices of $$24.375, 25.00,
              25.625 and 37.625 per share whether or not such options have
              vested as of the Date of Termination; provided, however, that the
              amount paid under this subparagraph (C) shall not exceed an amount
              equal to $4 million less the sum of (i) the amounts paid to the
              Executive under subparagraph (B) and (ii) the aggregate of the
              excess, if any, of the fair market value of a share of the
              Company's common stock as of the Date of Termination over the
              exercise price of each unexercised option held by the Executive on
              the Date of Termination (whether or not such options have vested
              as of the Date of Termination and but not including the options
              for which payment is being made pursuant to this subparagraph
              (C)), multiplied, with respect to each option, by the total number
              of shares subject to the unexercised portion of such option. The
              following assumptions shall be used in preparing the Black-Scholes
              valuation: volatility of 20% and average remaining term on the
              options of four years. Upon payment of such amount, the options
              shall be no longer exercisable and shall be terminated.

              The Company shall pay the amounts provided in subparagraphs (B)
              and (C) in a lump sum in cash within 30 days of the Date of
              Termination; provided, however, that if requested by the acquiror
              in the Change in Control transaction to provided

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              transition services, payment of up to one half of amounts due
              under this Agreement may be deferred until the completion of a
              transition period ending up to 120 days following the consummation
              of such transaction.

                     (ii)   For two (2) years after the Date of Termination, or
       such longer period as may be provided by the terms of the appropriate
       plan, program, practice or policy, the Company shall continue benefits to
       the Executive and/or the Executive's family at least equal to those which
       would have been provided to them in accordance with the welfare benefit
       plans, practices, policies and programs provided by the Company and its
       affiliates (including, without limitation, medical, prescription, dental,
       disability, employee life, group life, accidental death and travel
       accident insurance plans and programs) to the extent applicable generally
       to other peer employees of the Company and its affiliates, as if the
       Executive's employment had not been terminated; provided, however, that
       if the Executive becomes reemployed with another employer and is eligible
       to receive medical or other welfare benefits under another employer
       provided plan, the medical and other welfare benefits described herein
       shall be secondary to those provided under such other plan during such
       applicable period of eligibility.

                     (iv)   To the extent not theretofore paid or provided, the
       Company shall timely pay or provide to the Executive all Other Benefits.

              (b)    CAUSE; OTHER THAN FOR GOOD REASON. If the Executive's
employment is terminated for Cause during the Change in Control Period, this
Plan shall terminate without further obligations to the Executive, other than
the obligation to pay to the Executive (x) his Annual Base Salary through the
Date of Termination, (y) the amount of any compensation previously deferred by
the Executive and (z) Other Benefits through the Date of Termination, in each
case to the extent theretofore unpaid. If the Executive voluntarily terminates
employment during the Change in Control Period, excluding a termination for Good
Reason, this Plan shall terminate without further obligations to the Executive,
other than for Accrued Obligations and the timely payment or provision of Other
Benefits through the Date of Termination. In such case, all Accrued Obligations
shall be paid to the Executive in a lump sum in cash within 30 days of the Date
of Termination.

              SECTION 5. EFFECT ON OPTION PLANS. Immediately prior to a Change
in Control, all stock option grants made to an Executive by the Company that are
outstanding at the time of such Change in Control shall be accelerated and vest.
Accordingly, all stock options shall be exercisable at such time in accordance
with their terms. This Plan is intended to amend all stock option grants
previously awarded to Executives to accelerate vesting as described above to the
extent vesting would not otherwise be accelerated under the terms of such stock
option grants.

              SECTION 6. PARACHUTE LIMITATIONS. Notwithstanding any other
provision of this Plan or of any other agreement, contract or understanding
heretofore or hereafter entered into by an Executive with the Company or any
affiliate, except an agreement, contract or understanding hereafter entered into
that expressly modifies or excludes application of this paragraph (an "Other
Agreement"), and notwithstanding any formal or informal plan or other

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arrangement for the direct or indirect provision of compensation to the
Executive (including groups or classes of participants or beneficiaries of which
the Executive is a member), whether or not such compensation is deferred, is in
cash, or is in the form of a benefit to or for the Executive (a "Benefit
Arrangement"), if the Executive is a "disqualified individual" (as defined in
Section 280G(c) of the Internal Revenue Code of 1986, as amended (the "Code")),
any right to receive any payment or other benefit under this Plan shall not
become vested (i) to the extent that such right to payment or other benefit,
taking into account all other rights, payments, or benefits to or for the
Executive under this Plan, all Other Agreements and all Benefit Arrangements,
would cause any payment or benefit to the Executive under this Plan to be
considered a "parachute payment" within the meaning of Section 280G(b)(2) of the
Code as then in effect (a "Parachute Payment") and (ii) if, as a result of
receiving a Parachute Payment, the aggregate after-tax amounts received by the
Executive from the Company under this Plan, all Other Agreements and all Benefit
Arrangements would be less than the maximum after-tax amount that could be
received by the Executive without causing any such payment or benefit to be
considered a Parachute Payment. In the event that the receipt of any such right
to payment or other benefit under this Plan, in conjunction with all other
rights, payments or benefits to or for the Executive under any Other Agreement
or any Benefit Arrangement would cause the Executive to be considered to have
received a Parachute Payment under this Plan that would have the effect of
decreasing the after-tax amount received by the Executive as described in clause
(ii) of the preceding sentence, then the Executive shall have the right, in the
Executive's sole discretion, to designate those rights, payments or benefits
under this Plan, any Other Agreements and any Benefit Arrangements that should
be reduced or eliminated so as to avoid having the payment or benefit to the
Executive under this Plan be deemed to be a Parachute Payment.

              SECTION 7 EXPENSES. The Company shall pay any and all reasonable
legal fees and expenses incurred by an Executive in seeking to obtain or
enforce, by bringing an action against the Company, any right or benefit
provided in this Plan if the Executive is successful in whole or in part in such
action.

              SECTION 8. WITHHOLDING. Notwithstanding anything in this Plan to
the contrary , all payments required to be made by the Company hereunder to an
Executive or his estate or beneficiaries shall be subject to the withholding of
such amounts relating to taxes as the Company reasonably may determine it should
withhold pursuant to any applicable law or regulation. In lieu of withholding
such amounts, in whole or in part, the Company may, in its sole discretion,
accept other provisions for the payment of taxes and any withholdings as
required by law, provided that the Company is satisfied that all requirements of
law affecting its responsibilities to withhold compensation have been satisfied.

              SECTION 9. NO DUTY TO MITIGATE. An Executive's payments received
hereunder shall be considered severance pay in consideration of past service,
and pay in consideration of continued service from the date hereof and
entitlement thereto shall not be governed by any duty to mitigate damages by
seeking further employment.

              SECTION 10. AMENDMENT, SUSPENSION OR TERMINATION. This Plan may be
amended, suspended or terminated at any time by the Board; provided, however,
that, following a Change in Control Event and during the Change in Control
Period relating to

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such Change in Control Event, the Board may not amend, suspend or terminate this
Plan without the consent of all Executives then subject to the Plan.

              SECTION 11. GOVERNING LAW. This Plan shall be governed by the laws
of United States to the extent applicable and otherwise by the laws of the State
of Delaware, excluding the choice of law rules thereof.

              SECTION 12. SEVERABILITY. If any part of any provision of this
Plan shall be invalid or unenforceable under applicable law, such part shall be
ineffective to the extent of such invalidity or unenforceability only, without
in any way affecting the remaining parts of such provision or the remaining
provisions of this Plan.

              SECTION 13. DISCLAIMER OF RIGHTS. No provision in this Plan shall
be construed to confer upon any individual the right to remain in the employ or
service of the Company or any affiliate, or to interfere in any way with any
contractual or other right or authority of the Company either to increase or
decrease the compensation or other payments to any individual at any time, or to
terminate any employment or other relationship between any individual and the
Company. The obligation of the Company to pay any benefits pursuant to this Plan
shall be interpreted as a contractual obligation to pay only those amounts
described herein, in the manner and under the conditions prescribed herein. The
Plan shall in no way be interpreted to require the Company to transfer any
amounts to a third party trustee or otherwise hold any amounts in trust or
escrow for payment to any participant or beneficiary under the terms of the
Plan.

              SECTION 14. CAPTIONS. The use of captions in this Plan is for the
convenience of reference only and shall not affect the meaning of any provision
of this Plan.

              SECTION 15. NUMBER AND GENDER. With respect to words used in this
Plan, the singular form shall include the plural form, the masculine gender
shall include the feminine gender, etc., as the context requires.

                                    * * * * *

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              This Plan was duly adopted and approved by the Board as of the
25th day of February, 2000.

                                         s/ Thomas B. Newell
                                         -----------------------------------
                                         Secretary of the Meeting

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                                                                    EXHIBIT 10.7

                              CONSULTING AGREEMENT

       This CONSULTING AGREEMENT (this "Agreement"), dated March 28, 2000, with
an effective date of April 1, 2000, is entered into between SUNRISE ASSISTED
LIVING, INC. (the "Company") and DAVID W. FAEDER (the "Consultant").

       WHEREAS, the Company desires to obtain the consulting services of the
Consultant as an independent contractor to assist with real estate related
matters, to provide advice and counsel to its Chairman of the Board and Chief
Executive Officer and to its President and to provide such other advice, counsel
and assistance as its Chairman of the Board and Chief Executive Officer or its
President may require; and

       WHEREAS, the parties desire to enter into this Agreement to set forth the
terms and conditions for the consulting relationship of the Consultant with the
Company.

       NOW, THEREFORE, it is AGREED as follows:

       1.     ENGAGEMENT.

              (a)    During the term of this Agreement (as set out in Section 6
hereof), the Consultant shall serve as a consultant to the Company. The
Consultant shall perform consulting services as and when reasonably requested by
the Chairman of the Board and Chief Executive Officer of the Company or by the
President of the Company. The Consultant shall render advisory and consulting
services to the Company of the type customarily performed by persons serving in
similar limited consulting capacities, consistent with the knowledge and
experience possessed by the Consultant. The Consultant's services shall include
assisting the Company with real estate sales, acquisitions and development
matters, providing related advice and counsel to the Chairman of the Board and
Chief Executive Officer of the Company and to the President of the Company and
providing such other advice, counsel and assistance as the Chairman of the Board
and Chief Executive Officer of the Company or the President of the Company may
reasonably request. Unless the parties otherwise agree in writing, the
Consultant's services to the Company shall terminate at the end of the term of
this Agreement.

              (b)    The parties acknowledge and agree that the Consultant's
fulfillment of his obligations to the Company hereunder will require
substantially all of the Consultant's full business time.

              (c)    The parties acknowledge that the Consultant will be elected
to serve as Vice Chairman of the Board of Directors of the Company as long as he
continues as a director of the Company; provided, however, that nothing herein
shall require the Company or any of its directors, officers or employees to
re-nominate the Consultant for election to the Board of Directors at the end of
his next term thereon expiring in May 2003 or at any time thereafter.

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              2.     COMPENSATION AND EXPENSES. The Company agrees to pay the
Consultant during the term of this Agreement at the rate of $205,000 per year,
payable in equal monthly installments on the first day of each month during the
term of this Agreement (and equitably pro rated for any partial month during the
term of this Agreement). The first such monthly installment shall be due and
payable on or before the first day of the term hereof. The Company shall
reimburse the Consultant for all reasonable travel, lodging, entertainment and
other incidental expenses incurred by the Consultant in connection with the
Consultant's performance of services hereunder, provided that all such expenses
are in accordance with the Company's policies applicable to similar expenses
incurred by its executive management employees. The Company shall (without
limitation) reimburse the Consultant for all legal and other reasonable expenses
incurred by the Consultant in connection with the negotiation and consummation
of this Agreement. The Consultant will invoice the Company monthly for any
reimbursement of expenses payable hereunder in respect of services performed and
expenses incurred during the previous month, and each such invoice shall be
accompanied by receipts and other supporting documentation of expenses incurred
as reasonably requested by the Company. The Company shall pay the expense
reimbursements that are due under this Agreement within a time frame consistent
with its normal practice for senior executives. The parties acknowledge and
agree that any amounts paid by the Company to the Consultant under this
Agreement are in lieu of any compensation or expense reimbursement to which the
Consultant might otherwise be entitled to by virtue of his position on the Board
of Directors and as Vice Chairman of the Board of Directors of the Company.

              3.     EFFECT ON OPTIONS AGREEMENTS. The Company and the
Consultant agree that notwithstanding anything herein or in any other agreement
entered into by the Company and/or the Consultant to the contrary, all of the
Consultant's existing options, severance benefits and other entitlements will
continue to vest and be exercisable or available pursuant to the terms of the
stock option agreements and severance or other agreements pursuant to which such
options, benefits or entitlements were granted to the Consultant as if his
employment with the Company had continued through March 31, 2003, even if this
Agreement is terminated earlier for any reason. In furtherance thereof, the
Company and the Consultant hereby restate and/or amend all of the option
agreements (the "Option Agreements") granted to the Consultant pursuant to the
applicable stock option plans (including but not limited to the Sunrise Assisted
Living, Inc. 1995 Stock Incentive Plan, the Sunrise Assisted Living, Inc. 1996
Non-Incentive Stock Option Plan, the Sunrise Assisted Living, Inc. 1997
Non-Incentive Stock Option Plan and the Sunrise Assisted Living 1999 Stock
Option Plan) to provide that the Consultant's relationship with the Company as a
consultant, as established pursuant to this Agreement, shall be deemed to be an
employment relationship with the Company for purposes of the Option Agreements
through March 31, 2003, even if this Agreement is terminated earlier for any
reason.

              4.     OFFICE AND SUPPORT SERVICES. During the term of this
Agreement, the Company shall continue to provide the Consultant with office
space, supplies, secretarial and staff support and other appropriate support
services and facilities that are reasonably required by the Consultant in
connection with his performance of services hereunder. In addition, during the
term of this Agreement, the Consultant shall continue to be entitled to his
current car allowance from the Company under the same terms as his car allowance
from the Company as of the date immediately prior to the date of this Agreement.

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              5.     TERM. The term of this Agreement shall be for three (3)
years, through March 31, 2003, unless earlier terminated pursuant to Section 8
hereof. The parties by mutual written agreement may extend the term of this
Agreement.

              6.     STANDARDS. The Consultant shall perform his duties and
responsibilities under this Agreement using his good faith efforts, in a
diligent, timely, professional and workmanlike manner.

              7.     CONFIDENTIALITY; COOPERATION WITH LEGA1 PROCESS;
NON-COMPETITION; NON SOLICITATION.

                     (a)    The Consultant acknowledges that he has held a
sensitive management position with the Company and will continue to perform
services for the Company as provided herein and that, by virtue of having held
such position and performing such services, he has had access to and has learned
(and will continue to have access to and to learn) certain material proprietary
information and trade secrets reasonably deemed confidential by the Company in
good faith and directly pertaining to its specific business and operations
(collectively, the "Proprietary Information"). The Proprietary Information may
include information marked confidential, restricted or proprietary by the
Company and related to the Company's unique products, systems, software,
finances (including prices, costs and revenues), marketing plans, methods of
operation, prospective and existing contracts, business plans, procedures,
strategies (including acquisition strategies), customer lists, referral sources,
lists of doctors, and other unique information concerning the Company's specific
practices and procedures. The Consultant represents that he will not disclose
any such information to any other person, except as may be required by law or as
may be necessary in furtherance of the performance of services hereunder.
Notwithstanding the foregoing, Proprietary Information shall not include (i)
information in the public domain through no fault of the Consultant; (ii)
information received by the Consultant from a third party not under an
obligation to keep such information confidential; or (iii) the Consultant's
general know-how and professional expertise.

                     (b)    The parties agree that no provision of this Section
7 or any other provision of this Agreement shall be construed or interpreted in
any way to limit, restrict or preclude either party hereto from cooperating with
any governmental agency in the performance of its investigatory or other lawful
duties or producing materials or giving testimony pursuant to a court
proceeding, or restrict the Consultant in the performance of his services to the
Company. The Consultant agrees that if he receives a subpoena or is otherwise
required by law to provide information to a governmental entity or other person
concerning the activities of the Company or his activities in connection with
the Company's business, he will promptly notify the Company of such subpoena or
requirement and deliver to the Company a copy of such subpoena or other notice,
unless such disclosure would, in the opinion of a recognized legal expert on
such matters, be prohibited by law.

                     (c)    Until March 31, 2003, the Consultant shall not
provide similar consulting services to any business or other enterprise in the
assisted-living industry directly competing with the Company in any geographic
market where the Company maintains an assisted-living facility (unless the Board
of Directors of the Company shall have authorized such activity or the Company
shall have consented thereto in writing).

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                     (d)    The Consultant agrees that during the term of this
Agreement and for twelve (12) months thereafter he will not solicit any employee
of the Company to leave the Company's employment (unless the Company shall have
consented thereto).

              8.     TERMINATION OF SERVICE; BOARD RESIGNATION; SEVERANCE.

                     (a)    Either party shall have the right to terminate this
Agreement and the Consultant's services hereunder in accordance herewith at any
time upon thirty (30) days prior written notice to the other party.

                     (b)    The Consultant and the Company shall use their best
efforts to provide for a proper transition and wind-down of the Consultant's
activities hereunder in connection with any such termination of this Agreement
and of such services.

                     (c)    Upon termination of this Agreement, the Consultant
agrees to resign from the Company's Board of Directors and all committees
thereof, and to resign as Vice Chairman of the Board, effective in each case,
upon such termination, unless the Company, acting through its Board of
Directors, requests in writing that the Consultant withdraws such resignation
and the Consultant agrees in writing to so withdraw such resignation prior to
the termination of this Agreement. In furtherance thereof, the Consultant shall
provide a letter to the Company embodying the agreement set forth in the
immediately preceding sentence.

                     (d)    The Consultant shall be entitled to the benefits
established for an "Executive" under the Company's Senior Executive Severance
Plan as adopted by the Board of Directors of the Company on February 25, 2000 or
as amended hereafter for the President of the Company (the "Severance Plan")
notwithstanding anything herein or in any other agreement entered into by the
Company and/or the Consultant to the contrary, and the Consultant shall be
subject to all the terms of the Severance Plan as if he were designated as an
"executive" under the Severance Plan (including, without limitation, the
provisions regarding parachute payments contained in Section 6 of the Severance
Plan) until the termination of this Agreement (unless at the time of any such
termination by the Company, the Consultant is performing his duties hereunder
and the Company has knowledge of a pending change in control transaction that
upon consummation would entitle the Consultant to benefits under the Severance
Plan, in which event the Consultant's entitlement to the benefits established
under the Severance Plan will survive with respect to such change in control
transaction as if he continued as an "executive" thereunder).

              9.     NO ASSIGNMENTS. This Agreement is personal to each of the
parties hereto. Neither party may assign or delegate any rights or obligations
hereunder without first obtaining the written consent of the other party hereto.
However, in the event of the death of the Consultant all rights to receive
payments hereunder shall become rights of the Consultant's estate.

              10.    AMENDMENT; MODIFICATION: WAIVER. No amendments or additions
to this Agreement shall be binding unless in writing and signed by both of the
parties hereto. No delay or failure at any time on the part of the Company or
the Consultant in exercising any right, power or privilege under this Agreement,
or in enforcing any provision of this Agreement, shall impair any such right,
power, or privilege, or be construed as a waiver of any default or as any

                                       4
<PAGE>   5

acquiescence therein, or shall affect the right of the Company or the Consultant
thereafter to enforce each and every provision of this Agreement in accordance
with its terms.

              11.    SECTION HEADINGS. The section headings used in this
Agreement are included solely for convenience and shall not affect, or be used
in connection with, the interpretation of this Agreement.

              12.    SEVERABILITY. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

              13.    NOTICES. For purposes of this Agreement, notices and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when hand delivered, sent by overnight
courier, or mailed by first-class, registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:

If to the Company:

                         Sunrise Assisted Living, Inc.
                         9401 Lee Highway
                         Suite 300
                         Fairfax, Virginia 22031
                         Fax No. (703) 374-4765
                         Attention: Chairman of the Board and Chief Executive
                         Officer

                         with a copy (which shall not constitute notice) to:

                         Hogan & Hartson, L.L.P.
                         555 13th Street, N.W.
                         Washington, D.C.  20004-1109
                         Attention:  William L. Neff, Esq.
                         Fax No.:  (202) 637-5910

If to the Consultant:
                         David W. Faeder
                         1501 Brookmeade Place
                         Vienna, VA  22182
                         Fax No.:  (703) 759-2156

                         with a copy (which shall not constitute notice) to:

                         Shaw Pittman
                         2300 N Street, N.W.
                         Washington, DC  20037
                         Attention:  Craig A. de Ridder, Esq.
                         Fax No.:  (202) 663-8007

                                       5
<PAGE>   6

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

              14.    ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto, and supersedes all prior oral or written
agreements, commitments or understandings, with respect to the matters provided
for herein, except that the various stock option agreements and/or severance or
entitlement agreements between the Consultant and the Company (including the
Severance Plan) shall not be superseded by this Agreement.

              15.    INDEPENDENT CONTRACTOR STATUS. The Consultant shall have
sole control of the manner and means of performing his services under this
Agreement and shall complete such services in accordance with his own means and
methods of work. The parties intend that the Consultant shall be an independent
contractor and that the Consultant shall be responsible for the payment of
applicable income and self-employment taxes with respect to his compensation
under this Agreement.

              16.    GOVERNING LAW. This Agreement shall be governed by the laws
of the State of Delaware, excluding the choice of law rules thereof.

              17.    ARBITRATION. Any disputes between the Company and the
Consultant in any way concerning this Agreement or the services to be provided
hereunder shall be submitted at the initiative of either party to mandatory
arbitration before a single arbitrator in Wilmington, Delaware pursuant to the
Commercial Arbitration Rules of the American Arbitration Association, or its
successor, then in effect. The decision of the arbitrator shall be rendered in
writing, shall be final and may be entered as a judgment in any court in the
State of Delaware. The parties irrevocably consent to the jurisdiction of the
federal and state courts located in Delaware for this purpose. Each party shall
be responsible for its or his own costs incurred in such arbitration and in
enforcing any arbitration award, including attorney's fees.

              18.    AUTHORITY TO ENTER INTO THIS AGREEMENT. Each party
executing this Agreement has the requisite corporate power and authority to
enter into this Agreement and all of the provisions of this Agreement have been
duly authorized by all necessary corporate action.

                                       6
<PAGE>   7

       IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered in their name and on their behalf as of the date first
above written.

                                 SUNRISE ASSISTED LIVING, INC.
Attest:

                                 By:   s/ Paul J. Klaassen
-------------------------             -------------------------------
(Secretary)                           Chairman of the Board and
                                       Chief Executive Officer

                                 CONSULTANT

                                   s/ David W. Faeder
                                 ---------------------------------------
                                 David W. Faeder

                                       7

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