Document:

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                                                                  EXHIBIT 10.103

                              AMENDED AND RESTATED
                         MASTER OWNER/MANAGER AGREEMENT

        This Amended and Restated Master Owner/Manager Agreement (this
"AGREEMENT") is made as of the 20th day of December, 2002 by and between (i)
Sunrise Second Assisted Living Holdings, LLC, a Delaware limited liability
company (together with its subsidiaries, "SSALH"), and (ii) Sunrise Assisted
Living Management, Inc., a Virginia corporation ("MANAGER").

                                    RECITALS

        A. SSALH leases certain assisted living facilities (each a "FACILITY"
and collectively, the "FACILITIES") described on Exhibit A hereto.

        B. SSALH has entered into a separate Management Agreement with Manager
with respect to each leased Facility (each a "MANAGEMENT AGREEMENT" and
collectively, the "MANAGEMENT AGREEMENTS"). The term of each Management
Agreement, whether entered into as of the date hereof or on a previous date,
shall expire on January 31, 2028, unless sooner terminated pursuant to the terms
of the applicable Management Agreement or this Agreement (the term of the
Management Agreements being referred to herein individually and collectively as
the "TERM").

        C. The parties hereto desire to set forth their agreement with respect
to the rights and obligations of SSALH and Manager with respect to the early
termination of the Management Agreements, and certain restrictions on the
management of competing assisted living facilities.

                                    AGREEMENT

        NOW, THEREFORE, in consideration of the foregoing 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:

                             SECTION I. DEFINITIONS.

        1.1 CERTAIN DEFINITIONS. The following terms shall have the meanings
indicated or referred to below, inclusive of their singular and plural forms,
except where the context requires otherwise.

        "Accountants" shall mean one of the "Big Four" firms of independent
certified public accountants as may be selected by Manager.

        "Distributable Cash Flow" shall mean Gross Revenues less: (i) Facility
Expenses, (ii) payments by SSALH as tenant under its leases of the Facilities,
and (iii) Reserves (as herein defined).

        "Facilities" shall have the meaning set forth in Recital A.

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        "Force Majeure Event" shall mean any event of Force Majeure, as defined
in the Management Agreements, which materially adversely affects Gross Revenues
with respect to any Facility.

        "Invested Equity" shall mean the aggregate amount of all Capital
Contributions made by a member to the capital of SSALH pursuant to the Venture
Agreement.

        "Major Renovation Project" shall mean any renovation, restoration,
remodeling or capital repair or replacement project undertaken at any Facility,
involving at least ten percent (10%) of the units in the Facility, not arising
due to any default of the Manager under any Management Agreement, which
materially adversely affects Gross Revenues with respect to any Facility.

        "Management Agreements" shall have the meaning set forth in Recital B.

        "Managing Member" shall mean Sunrise Assisted Living Investments, Inc.,
in its capacity as Managing Member of SSALH under the Venture Agreement.

        "Non-Compete Area" shall mean, with respect to any Facilities the
applicable areas described as a "Non-Compete Area" on Exhibit B attached hereto
and incorporated herein.

        "Person" means any individual or entity, and the heirs, executors,
administrators, legal representatives, successors and assigns of such Person
where the context so permits.

        "Related Party" shall mean with respect to any Person, (i) any Person
who directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with such Person, or (ii) any Person
in which such Person has a twenty-five percent (25%) or more beneficial interest
or as to which such Person serves as a trustee or general partner or in a
similar fiduciary capacity. A Person shall be deemed to control a Person if it
owns, directly or indirectly, at least twenty-five percent (25%) of the
ownership interest in such Person or otherwise has the power to direct the
management, operations or business of such Person. The term "BENEFICIAL OWNER"
is to be determined in accordance with Rule 13d- promulgated by the SEC under
the Securities Exchange Act of 1934.

        "Reserves" shall mean $550.00 per each assisted living unit within the
Facilities per year.

        "Sunrise" shall mean, for purposes of Section 4(b) hereof, Manager or
any Related Party thereof which manages any applicable assisted living facility.

        "Termination Date" shall mean with respect to any Management Agreement,
the date of termination of such Management Agreement specified in any notice of
termination given by SSALH to Manager pursuant to the exercise by SSALH of the
termination right hereunder.

        "USALF" shall mean US Assisted Living Facilities II, Inc., a Delaware
corporation, which is a member of SSALH owning an eighty (80%) interest therein.

        "Venture Agreement" shall have the meaning set forth in Section 3.

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                1.2 OTHER DEFINITIONS. All initially capitalized terms used and
not otherwise defined herein shall have the meanings given to such terms in the
Management Agreements. Unless the context otherwise requires, all references
herein to "years" or "months" shall mean "calendar years" or "calendar months."

        2. ADDITIONAL TERMINATION RIGHT.

                2.1. Return Hurdle. In addition to, and without limitation of,
any rights or remedies of SSALH under any Management Agreement, SSALH shall have
the right to terminate all (but not less than all) of the Management Agreements
by written notice given to Manager, if USALF's share of Distributable Cash Flow
from all Facilities is less than nine and five-tenths percent (9.5%) of USALF's
Invested Equity (the "RETURN HURDLE") for each of two (2) consecutive calendar
years, except in the event of a Force Majeure Event or Major Renovation Project.
Manager may, on not more than two (2) separate occasions during any period of
ten (10) consecutive calendar years, elect to pay to USALF the amount which
would be necessary to ensure that USALF's share of Distributable Cash Flow meets
the Return Hurdle for the applicable calendar years (the "CURE RIGHT"), in which
case (i) the Facilities will be deemed to have met the Return Hurdle for the
calendar years in question, and (ii) SSALH shall not have the right to terminate
the Management Agreements based on missing the Return Hurdle for those two
calendar years. If Manager elects to exercise the Cure Right, Manager must pay
the necessary amount to USALF within thirty (30) business days following USALF's
notice to Manager that USALF has elected to cause SSALH to terminate the
Management Agreements as a result of Manager's failure to meet the Return Hurdle
for each of two (2) consecutive calendar years. If Manager makes the necessary
payment by the required date, SSALH's exercise of its termination right will be
null and void. Notwithstanding the foregoing, the Cure Right shall not be
applicable in the event that USALF's share of Distributed Cash Flow from all
Facilities is less than eight percent (8%) of USALF's Invested Equity for each
of two (2) consecutive calendar years, except in the event of a Force Majeure
Event or Major Renovation Project. Calendar years separated by a calendar year
in which a Force Majeure Event or Major Renovation Project occurs shall be
deemed to be consecutive calendar years. Manager acknowledges and agrees that
USALF shall have the right, acting alone, to exercise all of the rights of SSALH
under this Agreement including, without limitation, the termination rights set
forth in this Section 2.1.

                2.2 Defaulting or Disabling Events. If there has been a
Defaulting Event or Disabling Event by Managing Member under the Operating
Agreement, and if as a result thereof USALF exercises its rights under the
Buy-Sell provisions of the Operating Agreement, then after the closing of the
acquisition by USALF of Managing Member's interest in SSALH, SSALH shall have
the right to terminate the Management Agreements on not less than sixty (60)
days' prior written notice. In such event, no Termination Fee will be payable
under the Management Agreements.

                2.3 Effective Date of Termination. Any termination of the
Management Agreements under Section 2 hereof shall be effective as of the
Termination Date set forth in the applicable notice of termination, which shall
not be less than sixty (60) days, nor more than one hundred eighty (180) days,
from the date of such notice.

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        3. POSSIBLE ADJUSTMENT TO MANAGEMENT FEES FOR CERTAIN FACILITIES.
Manager agrees that the Percentage Fee portion of the Management Fee is subject
to recomputation as set forth in this Section 3 for the Arlington Facility, the
Edina Facility, the Fair Oaks Facility and the Palos Park Facility. Promptly
after December 31, 2003, Manager shall determine the annualized "Net Operating
Income" (defined below) for each such Facility based on the Net Operating Income
for such Facility for the three (3) month period ending on such date. Commencing
as of January 1, 2004, the Percentage Fee portion of the Management Fee for each
such Facility shall be increased or decreased by the adjustment amount as set
forth on Exhibit C-1, C-2, C-3 or C-4, as applicable (the "Adjustment Amount"),
correlating to the annualized Net Operating Income of such Facility shown on
Exhibit C-1, C-2, C-3 or C-4, as applicable. Such adjusted Percentage Fee
portion of the Management Fee shall remain in effect for such Facility until the
earliest of (i) the sale of such Facility to a third party, (ii) the acquisition
by one member of SSALH of the other member's interests pursuant to the Buy-Sell
provisions of the Amended and Restated Operating Agreement of SSALH (the
"Venture Agreement"), or (iii) December 31, 2009. For purposes of this Section
3, "Net Operating Income" of a Facility shall mean Gross Revenues attributable
to such Facility, less all Facility Expenses of such Facility, including the
Management Fee.

        4. NON-COMPETE.

        (a) Generally. Notwithstanding any provision of this Agreement or the
Management Agreements to the contrary, Sunrise shall not (i) develop a senior
housing or assisted living facility within any Non-Compete Area, (ii) own any
interest in a senior housing or assisted living facility within any Non-Compete
Area, except that this non-compete provision will not restrict Sunrise from
acquiring a multi-property portfolio that includes a senior housing or assisted
living facility within any Non-Compete Area, provided that at least seventy-five
percent (75%) of the overall value of the portfolio is comprised of properties
outside such Non-Compete Area and (iii) manage any senior housing or any
assisted living facility within any Non-Compete Area unless the direct and
indirect ownership interest of Sunrise Assisted Living, Inc., and its wholly
owned subsidiaries ("SALI") in such assisted living facility is in the aggregate
no greater than twenty percent (20%) of the total ownership interests in such
senior housing or assisted living facility. By way of example and not in
limitation, if a Person in which SALI owned a fifty percent (50%) interest owned
thirty percent (30%) of an assisted living facility, SALI would for purposes
hereof be deemed to own fifteen (15%) of such facility, and Sunrise would not be
prohibited from managing the same. If Sunrise is permitted, by virtue of this
provision, to manage a facility within the Non-Compete Area, the facility so
managed will not be advertised as being a "Sunrise" facility in the same manner
as the Facilities leased and operated by SSALH. Such other facilities will be
held out under a different primary name, as managed by Sunrise. The limitations
contained in this Section 3 shall survive the termination or expiration of any
individual Management Agreement and shall only cease to be in force and effect
after the last Management Agreement has expired or been terminated.

        (b) New Orleans. SSALH leases a Facility known as Sunrise of Bayou St.
John in New Orleans, Louisiana. Sunrise has disclosed to SSALH that it owns a
potential development site located at 1200 Mirabeau Avenue, Nun, Louisiana 70122
(the "Nun Site"). SSALH hereby agrees that, notwithstanding anything in this
Agreement or in the Venture Agreement to the contrary, Sunrise may develop the
Nun Site provided that the following conditions have been

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met: (i) the Facility known as Sunrise of Bayou St. John has had an occupancy
rate of at least ninety-five percent (95%) for the twelve (12) month period
immediately prior to the commencement of construction of the Facility on the Nun
Site; and (ii) Sunrise shall provide to SSALH a right of first offer to acquire
the Nun Site prior to Sunrise offering any third party the right to acquire an
interest in the Nun Site; and (iii) if SSALH has not exercised its right of
first offer pursuant to the foregoing clause prior to development of the site,
then Sunrise shall again provide SSALH a second right of first offer to acquire
the facility constructed on the Nun Site at such time as the occupancy at the
facility has become stabilized; and (iv) Sunrise shall not operate the facility
developed on the Nun Site (unless SSALH has acquired an interest in the facility
pursuant to the foregoing right of first offer) in a manner which requires
Sunrise to obtain either an Assisted Living License or an Alzheimer's Care
License for the operation of the facility. If the Sunrise of Bayou St. John
Facility has less than a ninety-five percent (95%) occupancy, then Sunrise may
proceed with such development provided that Sunrise substitutes a different
asset acceptable to USALF (the "Substitute Asset") for the Sunrise of Bayou St.
John Facility into SSALH, and purchases the Sunrise of Bayou St. John Facility
from SSALH at a price acceptable to USALF. For purposes hereof, the right of
first offer shall be provided in the same manner as set forth in Section 22 of
the Venture Agreement, except that SSALH shall be substituted in the place of
Managing Member and Sunrise shall be substituted in the place of Investor
Member. FMV shall be established as set forth in Section 22.4 of the Venture
Agreement.

        5. REPRESENTATIONS AND WARRANTIES OF THE MANAGER.

                5.1. The Manager is a corporation, duly organized and validly
existing under the laws of the Commonwealth of Virginia, and, to the extent
necessary, duly qualified to do business in each of the states in which a
Facility is located, with the full power and authority and legal right to carry
on its business in the manner and in the locations in which such business has
been and is now being conducted by it, to execute and deliver this Agreement and
to perform its obligations hereunder.

                5.2. No consent of any third party is required as a condition to
the entering into this Agreement by Manager other than such consent as has been
previously obtained.

                5.3 The execution and delivery of this Agreement has been duly
authorized by Manager and this Agreement constitutes the valid and binding
obligation and agreement of Manager, enforceable in accordance with its terms
(subject to the effect of bankruptcy, insolvency or creditor's rights generally,
and to limitations imposed by general principles of equity).

                5.4 Neither the execution and delivery of this Agreement, nor
compliance with the terms and provisions thereof, will result in any breach of
the terms, conditions or provisions of, or conflict with or constitute a default
under, or result in the creation of any lien, charge or encumbrance upon any
Facility or the assets of Manager pursuant to the terms of, any indenture,
mortgage, deed of trust, note, evidence of indebtedness, agreement or other
instrument to which Manager or any Related Party may be party or by which it or
they or any of its or their properties or assets may be bound, or violate any
provision of law, or any applicable order, writ,

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injunction, judgment or decree of any court, or any order or other public
regulation of any governmental commission, bureau or administrative agency.

                5.5 Except as in each instance previously disclosed to SSALH in
writing, there are no judgments presently outstanding and unsatisfied against
Manager or any of its assets and neither Manager nor any of its assets is
involved in any litigation at law or in equity, or in any proceeding before any
court, or by or before any governmental or administrative agency, which
judgment, litigation or proceeding could reasonably be anticipated to have a
material adverse effect on Manager, any of its Related Parties or any Facility,
and no such material judgment, litigation or proceeding is, to the best of
Manager's knowledge, threatened against Manager or any of its assets, and to the
best of Manager's knowledge, no investigation looking toward such a proceeding
has begun or is contemplated.

                5.6 No order, permission, consent, approval, license,
authorization, registration or validation of, or filing with, or exemption by,
any governmental agency, commission, board or public authority is required to
authorize, or is required in connection with the execution, delivery and
performance by Manager of this Agreement or the taking of any action thereby
contemplated, which has not been obtained, other than any such order,
permission, consent, approval, license, authorization, registration or
validation of, or filing with, or exemption by, any governmental agency,
commission, board or public authority required in connection with the ownership
or operation of the Facilities.

        6. REPRESENTATIONS AND WARRANTIES OF SSALH.

                6.1 SSALH is a limited liability company duly organized and
validly existing under the laws of the State of Delaware, with full power and
authority and legal right to carry on its business in the manner and in the
locations in which such business has been and is now being conducted by it, to
execute and deliver this Agreement and to perform its obligations hereunder.

                6.2 No consent of any third party is required as a condition to
the entering into of this Agreement by SSALH other than such consent as has been
previously obtained.

                6.3 The execution and delivery of this Agreement has been duly
authorized by SSALH and this Agreement constitutes the valid and binding
obligation and agreement of SSALH, enforceable in accordance with its terms
(subject to the effect of bankruptcy, insolvency or creditor's rights generally,
and to limitations imposed by general principals of equity).

                6.4 Neither the execution and delivery of this Agreement, nor
compliance with the terms and provisions hereof, will result in any breach of
the terms, conditions or provisions of, or conflict with or constitute a default
under, or result in the creation of any lien, charge or encumbrance upon the
property or assets of SSALH pursuant to the terms of any indenture, mortgage,
deed of trust, note, evidence of indebtedness, agreement or other instrument to
which SSALH or any Related Party may be party or by which it or they or any of
its or their properties or assets may be bound, or violate any provision of law,
or any applicable order, writ, injunction, judgment or decree of any court, or
any order or other public regulation of any governmental commission, bureau or
administrative agency.

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                6.5 There are no judgments presently outstanding and unsatisfied
against SSALH or any of its assets and neither SSALH nor any of its assets is
involved in any litigation at law or in equity, or in any proceeding before any
court, or by or before any governmental agency, which judgment, litigation or
proceeding could reasonably be anticipated to have a material adverse effect on
SSALH or any of its Related Parties or any Facility and no such material
judgment, litigation or proceeding is, to the best of SSALH's knowledge,
threatened against SSALH or any of its assets, and to the best of SSALH's
knowledge, no investigation in anticipation of such a proceeding has begun or is
contemplated.

                6.6 No order, permission, consent, approval, license,
authorization, registration or validation of, or filing with, or exemption by,
any governmental agency, commission, board or public authority is required to
authorize, or is required in connection with the execution, delivery and
performance by SSALH of this Agreement or the taking of any action thereby
contemplated, which has not been obtained, other than any such order,
permission, consent, approval, license, authorization, registration or
validation of, or filing with, or exemption by, any governmental agency,
commission, board or public authority required in connection with the ownership
or operation of the Facilities.

        7. MISCELLANEOUS.

                7.1 NOTICES.

                (a) Any and all notices, demands, consents, approvals, offers,
elections and other communications required or permitted under this Agreement
(collectively, "NOTICES") shall be deemed adequately given if in writing and the
same shall be delivered either in hand or by mail or Federal Express or similar
expedited commercial carrier, addressed to the recipient of the notice, postpaid
and registered or certified with return receipt required (if by mail), or with
all freight charges prepaid (if by Federal Express or similar carrier).

                (b) All notices required or permitted to be sent hereunder shall
be deemed to have been given for all purposes of this Agreement upon the date of
acknowledged receipt and in all other cases, upon the date of receipt or
refusal, except that whenever under this Agreement a notice is either received
on a day which is not a business day or is required to be delivered on or before
a specific day which is not a business day, the day of receipt or required
delivery shall automatically be extended to the next business day.

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                (c)     All such notices shall be addressed:

If to the Manager, to:  Sunrise Assisted Living Management, Inc.
                        7902 Westpark Drive
                        McLean, Virginia 22102
                        Attention:  Tiffany Tomasso, President
                        Telephone:  (703) 744-1607
                        Telecopier: (703) 744-1628

                        with a copy to:

                        Watt, Tieder, Hoffar & Fitzgerald, L.L.P.
                        7929 Westpark Drive, Suite 400
                        McLean, Virginia 22102
                        Attention:  Wayne G. Tatusko, Esq.
                        Telephone:  (703) 749-1088
                        Telecopier: (703) 356-5388

If to SSALH, to:        c/o Sunrise Assisted Living Investments, Inc.
                        7902 Westpark Drive
                        McLean, Virginia  22102
                        Attention:  Daniel B. Gorham, Executive Vice President
                        Telephone: (703) 744-1632
                        Facsimile: (703) 744-1645

                        with a copy to:

                        Wayne G. Tatusko, Esq.
                        Watt, Tieder, Hoffar & Fitzgerald, L.L.P.
                        7929 Westpark Drive, Suite 400
                        McLean, Virginia  22102
                        Telephone:  (703) 749-1085
                        Facsimile:  (703) 356-5388

                        US Assisted Living Facilities II, Inc.
                        75 Fourteenth Street, Suite 2400
                        Atlanta, Georgia  30309
                        Attention:  Mr. Laine Kenan
                        Telephone:  404-920-9046
                        Facsimile:  404-920-9001

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                        King & Spalding
                        1185 Avenue of the Americas
                        New York, New York  10036
                        Attention:  Isam Salah, Esq.
                        Telephone:  (212) 556-2140
                        Facsimile:  (212) 556-2222

                (d) By notice given as herein provided, the parties hereto and
their respective successors and assigns shall have the right from time to time
and at any time during the term of this Agreement to change their respective
addresses effective upon receipt by the other parties of such notice and each
shall have the right to specify as its address any other address within the
United States of America or to add one or two more parties to whom a copy of a
notice must be given.

                7.2 AMENDMENTS. This Agreement may be amended only with the
written approval of the Parties hereto.

                7.3 INTERPRETATION. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Virginia without
regard to the principles of conflicts of law. Any dispute arising in connection
with this Agreement shall be resolved in a court of competent jurisdiction, and
each party hereby submits to the jurisdiction of that court. EACH PARTY HEREBY
WAIVES ITS RIGHT TO TRIAL BY JURY IN CONNECTION WITH ANY DISPUTE BETWEEN ANY OF
THE PARTIES TO THIS AGREEMENT ARISING OUT OF THIS AGREEMENT OR THE RIGHTS OR
OBLIGATIONS OF THE PARTIES HEREUNDER. The titles of the Articles and Sections in
this Agreement are for convenience only and shall not be considered in
construing this Agreement. Pronouns used herein shall be construed to refer to
the masculine, feminine, neuter, singular and plural as the identity of the
individual or entity referred to may require. No provision of this Agreement
shall be interpreted as bestowing any rights whatsoever upon any third party. A
cross reference to another section shall be deemed to be to such section of this
Agreement, unless explicitly stated otherwise.

                7.4 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original.

                7.5 SEVERABILITY. If any provision of this Agreement is
determined to be unenforceable for any reason, it shall be adjusted rather than
voided, if possible, to achieve the intent of the parties. In any event, all
other provisions shall be deemed valid and enforceable to the greatest possible
extent.

                7.6 BINDING ON SUCCESSORS.

                (a) The rights and obligations of the parties under this
Agreement shall inure to the benefit of and bind their respective heirs,
successors and assigns.

                (b) Notwithstanding the foregoing, because the termination right
set forth in Section 2 is based upon the Invested Equity of USALF in SSALH, such
right can be exercised by SSALH only while SSALH (or its wholly-owned
subsidiaries) is the lessee of the Facilities and

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cannot be exercised by any successor or assign of SSALH. In the event that SSALH
sells or assigns its interests as the lessee of any Facility, Manager agrees to
enter into an amendment to its Management Agreement for such Facility that will
grant the successor owner/lessee and operator (a "Successor") the right to
terminate the Management Agreement. Such termination right shall be based upon
the same general concept set forth in Section 2 of this Agreement, and the
Manager agrees that it will negotiate in good faith hurdles that will facilitate
the sale of such Facility at a price favorable to SSALH, provided, that the
Manager will not be obligated to agree to a Return Hurdle that is more favorable
to the buyer than 200 basis points lower than the deemed capitalization rate for
the particular Facility or a lower Return Hurdle for which no cure is allowed
that is more favorable to the buyer than 350 basis points lower than such deemed
capitalization rate. The deemed capitalization rate shall be determined by
dividing (i) 200% of the net operating income for the six (6) months immediately
preceding the sale of the Facility by (ii) the purchase price for the Facility
paid by the Successor. This right to terminate by a Successor shall be on a
pooled basis for all Facilities purchased by such Successor. Manager shall not
be required to provide such termination right to a Successor which acquires only
a single Facility.

                7.7 CONFIDENTIALITY. Both parties hereto agree to maintain the
confidentiality of the financial terms and conditions of this Agreement and to
maintain the confidentiality of (a) any financial information provided by one
party to the other, and (b) all information contained in any plans,
specifications, manuals, forms, contracts, books, records, computer discs and
similar materials containing information, invoices and other documents received
or maintained by SSALH pursuant to this Agreement, other than information that
is available from public sources. Either party may, however, disclose any of
such information to its agents, directors, officers, employees, advisors,
attorneys, affiliates or representatives who require such information for the
purpose of performing or assisting in the performance of its obligations or
services hereunder, and to investors or lenders or proposed investors or
lenders, provided that in all such cases such parties shall be informed of the
confidential nature of such information. Either party hereto may also disclose
any such information (x) to the extent required by law, regulation (including
SEC regulations) or court order provided that such party shall have first, to
the extent reasonably practicable, advised the other of the requirement to
disclose such information and shall have afforded the other an opportunity to
dispute such requirement and seek relief therefrom by legal process; (y) in
connection with any suit, action, arbitration or other proceedings between the
parties hereto or their respective Related Parties, or (z) to the extent
required in connection with the preparation or filing of any tax returns or
other filings required by any applicable law. Any press releases or other public
announcements concerning SSALH or the arrangement between the parties shall be
mutually approved by both parties in their reasonable discretion.

                7.8 TIME IS OF THE ESSENCE. Time is of the essence with respect
to all time or notice deadlines set forth herein; provided, however, this
provision shall not affect the rights of any defaulting party hereunder to cure
such default within the time periods (if any) explicitly set forth herein, if
and as so permitted pursuant to the terms of this Agreement.

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        EXECUTED as of the date first above written.

                                 SSALH:

                                 SUNRISE SECOND ASSISTED LIVING HOLDINGS,
                                 LLC, a Delaware limited liability company

                                 By:  Sunrise Assisted Living Investment, Inc.,
                                      Managing Member

                                      By: /s/ Daniel B. Gorham
                                          --------------------
                                          Daniel B. Gorham, Vice President

                                 MANAGER:

                                 SUNRISE ASSISTED LIVING MANAGEMENT, INC., a
                                 Virginia corporation

                                 By /s/ Daniel B. Gorham
                                    --------------------
                                     Daniel B. Gorham, Vice President

                                    EXHIBITS

                Exhibit                       Description

                    A                         List of Facilities
                    B                         Non-Compete Areas
                    C                         Adjustment Amount Schedule

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                                    EXHIBIT A

                               LIST OF FACILITIES

                HOME FACILITY                          ADDRESS

             Fair Oaks Facility             4816 Hazel Avenue
                                            Fair Oaks, California  95628
             Orchard Facility               5975 South Holly Street
                                            Centennial, Colorado  80121
             Baton Rouge Facility           8502 Jefferson Highway
                                            Baton Rouge, Louisiana  70809
             East Cobb Facility             1551 Johnson Ferry Road
                                            Marietta, Georgia  30062
             Arlington Facility             1395 Massachusetts Avenue
                                            Arlington, Massachusetts  02474
             New Orleans Facility           5958 St. Bernard Avenue
                                            New Orleans, Louisiana  70122
             Edina Facility                 7128 France Avenue South
                                            Edina, Minnesota  55435
             Ivey Ridge Facility            2950 Old Alabama Road
                                            Alpharetta, Georgia  30022
             Palos Park Facility            12828 S. LaGrange Road
                                            Palos Park, Illinois  60464
             Westminster Facility           10280 N. Sheridan Boulevard
                                            Westminster, Colorado  80031
             Wall Facility                  2600 Allaire Road
                                            Wall, New Jersey
             Huntcliff IL Facility          8592 Roswell Road
                                            Atlanta, Georgia  30350
             Huntcliff AL Facility          8480 Roswell Road
                                            Atlanta, Georgia  30350

                                       A-1
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                                    EXHIBIT B

                                NON-COMPETE AREAS

1.      Radius of 2.5 miles from any of the following Facilities:

               Arlington Facility
               East Cobb Facility
               Edina Facility
               Fair Oaks Facility
               Orchard Facility
               Palos Park Facility

2.      Radius of 3 miles from the following Facility:

               New Orleans Facility

3.      Radius of 3.5 miles from any of the following Facilities:

               Baton Rouge Facility
               Huntcliff IL Facility
               Huntcliff AL Facility
               Ivey Ridge Facility
               Westminster Facility
               Wall Facility

                                       B-1
<PAGE>

                                    EXHIBIT C

                           ADJUSTMENT AMOUNT SCHEDULE

                               ARLINGTON FACILITY

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
                              NOI RANGE                                   MNGT FEE ADJUSTMENT
--------------------------------------------------------------------------------------------------
<S>                           <C>               <C>                       <C>
 $           -                        -         $     1,979,909                           -2.00%
 $     1,979,910                      -         $     1,981,959                           -1.92%
 $     1,981,960                      -         $     1,984,009                           -1.84%
 $     1,984,010                      -         $     1,986,059                           -1.76%
 $     1,986,060                      -         $     1,988,109                           -1.68%
 $     1,988,110                      -         $     1,990,159                           -1.60%
 $     1,990,160                      -         $     1,992,209                           -1.52%
 $     1,992,210                      -         $     1,994,259                           -1.44%
 $     1,994,260                      -         $     1,996,309                           -1.36%
 $     1,996,310                      -         $     1,998,359                           -1.28%
 $     1,998,360                      -         $     2,000,409                           -1.20%
 $     2,000,410                      -         $     2,002,459                           -1.12%
 $     2,002,460                      -         $     2,004,509                           -1.04%
 $     2,004,510                      -         $     2,006,559                           -0.96%
 $     2,006,560                      -         $     2,008,609                           -0.88%
 $     2,008,610                      -         $     2,010,659                           -0.80%
 $     2,010,660                      -         $     2,012,709                           -0.72%
 $     2,012,710                      -         $     2,014,759                           -0.64%
 $     2,014,760                      -         $     2,016,809                           -0.56%
 $     2,016,810                      -         $     2,018,859                           -0.48%
 $     2,018,860                      -         $     2,020,909                           -0.40%
 $     2,020,910                      -         $     2,022,959                           -0.32%
 $     2,022,960                      -         $     2,025,009                           -0.24%
 $     2,025,010                      -         $     2,027,059                           -0.16%
 $     2,027,060                      -         $     2,029,109                           -0.08%
 $     2,029,110                      -         $     2,031,159                            0.00%
 $     2,031,160                      -         $     2,033,209                            0.08%
 $     2,033,210                      -         $     2,035,259                            0.16%
 $     2,035,260                      -         $     2,037,309                            0.24%
 $     2,037,310                      -         $     2,039,359                            0.32%
 $     2,039,360                      -         $     2,041,409                            0.40%
 $     2,041,410                      -         $     2,043,459                            0.48%
 $     2,043,460                      -         $     2,045,509                            0.56%
 $     2,045,510                      -         $     2,047,559                            0.64%
 $     2,047,560                      -         $     2,049,609                            0.72%
 $     2,049,610                      -         $     2,051,660                            0.80%
 $     2,051,661                      -         $     2,053,710                            0.88%
 $     2,053,711                      -         $     2,055,760                            0.96%
 $     2,055,761                      -         $     2,057,810                            1.04%
 $     2,057,811                      -         $     2,059,860                            1.12%
 $     2,059,861                      -         $     2,061,910                            1.20%
 $     2,061,911                      -         $     2,063,960                            1.28%
 $     2,063,961                      -         $     2,066,010                            1.36%
 $     2,066,011                      -         $     2,068,060                            1.44%
 $     2,068,061                      -         $     2,070,110                            1.52%
 $     2,070,111                      -         $     2,072,160                            1.60%
 $     2,072,161                      -         $     2,074,210                            1.68%
 $     2,074,211                      -         $     2,076,260                            1.76%
 $     2,076,261                      -         $     2,078,310                            1.84%
 $     2,078,311                      -         $     2,080,360                            1.92%
              >                       -         $     2,080,360                            2.00%
--------------------------------------------------------------------------------------------------
</TABLE>

                                      C-1-1
<PAGE>

                                 EDINA FACILITY

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
                         NOI RANGE                                MNGT FEE ADJUSTMENT
-------------------------------------------------------------------------------------------
<S>                      <C>                 <C>                  <C>
 $          -                      -         $    1,808,380                         -2.00%
 $    1,808,381                    -         $    1,810,307                         -1.92%
 $    1,810,308                    -         $    1,812,234                         -1.84%
 $    1,812,235                    -         $    1,814,161                         -1.76%
 $    1,814,162                    -         $    1,816,088                         -1.68%
 $    1,816,089                    -         $    1,818,015                         -1.60%
 $    1,818,016                    -         $    1,819,942                         -1.52%
 $    1,819,943                    -         $    1,821,869                         -1.44%
 $    1,821,870                    -         $    1,823,796                         -1.36%
 $    1,823,797                    -         $    1,825,723                         -1.28%
 $    1,825,724                    -         $    1,827,650                         -1.20%
 $    1,827,651                    -         $    1,829,577                         -1.12%
 $    1,829,578                    -         $    1,831,504                         -1.04%
 $    1,831,505                    -         $    1,833,431                         -0.96%
 $    1,833,432                    -         $    1,835,358                         -0.88%
 $    1,835,359                    -         $    1,837,285                         -0.80%
 $    1,837,286                    -         $    1,839,212                         -0.72%
 $    1,839,213                    -         $    1,841,139                         -0.64%
 $    1,841,140                    -         $    1,843,066                         -0.56%
 $    1,843,067                    -         $    1,844,993                         -0.48%
 $    1,844,994                    -         $    1,846,920                         -0.40%
 $    1,846,921                    -         $    1,848,847                         -0.32%
 $    1,848,848                    -         $    1,850,774                         -0.24%
 $    1,850,775                    -         $    1,852,701                         -0.16%
 $    1,852,702                    -         $    1,854,628                         -0.08%
 $    1,854,629                    -         $    1,856,555                          0.00%
 $    1,856,556                    -         $    1,858,482                          0.08%
 $    1,858,483                    -         $    1,860,409                          0.16%
 $    1,860,410                    -         $    1,862,336                          0.24%
 $    1,862,337                    -         $    1,864,264                          0.32%
 $    1,864,265                    -         $    1,866,191                          0.40%
 $    1,866,192                    -         $    1,868,118                          0.48%
 $    1,868,119                    -         $    1,870,045                          0.56%
 $    1,870,046                    -         $    1,871,972                          0.64%
 $    1,871,973                    -         $    1,873,899                          0.72%
 $    1,873,900                    -         $    1,875,826                          0.80%
 $    1,875,827                    -         $    1,877,753                          0.88%
 $    1,877,754                    -         $    1,879,680                          0.96%
 $    1,879,681                    -         $    1,881,607                          1.04%
 $    1,881,608                    -         $    1,883,534                          1.12%
 $    1,883,535                    -         $    1,885,461                          1.20%
 $    1,885,462                    -         $    1,887,388                          1.28%
 $    1,887,389                    -         $    1,889,315                          1.36%
 $    1,889,316                    -         $    1,891,242                          1.44%
 $    1,891,243                    -         $    1,893,169                          1.52%
 $    1,893,170                    -         $    1,895,096                          1.60%
 $    1,895,097                    -         $    1,897,023                          1.68%
 $    1,897,024                    -         $    1,898,950                          1.76%
 $    1,898,951                    -         $    1,900,877                          1.84%
 $    1,900,878                    -         $    1,902,804                          1.92%
              >                    -         $    1,902,804                          2.00%
-------------------------------------------------------------------------------------------
</TABLE>

                                      C-2-1
<PAGE>

                               FAIR OAKS FACILITY

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
                         NOI RANGE                                MNGT FEE ADJUSTMENT
--------------------------------------------------------------------------------------------
<S>                      <C>                 <C>                  <C>
 $          -                      -         $    1,289,627                         -2.00%
 $    1,289,628                    -         $    1,290,922                         -1.92%
 $    1,290,923                    -         $    1,292,217                         -1.84%
 $    1,292,218                    -         $    1,293,512                         -1.76%
 $    1,293,513                    -         $    1,294,807                         -1.68%
 $    1,294,808                    -         $    1,296,102                         -1.60%
 $    1,296,103                    -         $    1,297,397                         -1.52%
 $    1,297,398                    -         $    1,298,692                         -1.44%
 $    1,298,693                    -         $    1,299,987                         -1.36%
 $    1,299,988                    -         $    1,301,282                         -1.28%
 $    1,301,283                    -         $    1,302,577                         -1.20%
 $    1,302,578                    -         $    1,303,872                         -1.12%
 $    1,303,873                    -         $    1,305,167                         -1.04%
 $    1,305,168                    -         $    1,306,462                         -0.96%
 $    1,306,463                    -         $    1,307,757                         -0.88%
 $    1,307,758                    -         $    1,309,052                         -0.80%
 $    1,309,053                    -         $    1,310,347                         -0.72%
 $    1,310,348                    -         $    1,311,642                         -0.64%
 $    1,311,643                    -         $    1,312,937                         -0.56%
 $    1,312,938                    -         $    1,314,232                         -0.48%
 $    1,314,233                    -         $    1,315,527                         -0.40%
 $    1,315,528                    -         $    1,316,822                         -0.32%
 $    1,316,823                    -         $    1,318,117                         -0.24%
 $    1,318,118                    -         $    1,319,412                         -0.16%
 $    1,319,413                    -         $    1,320,707                         -0.08%
 $    1,320,708                    -         $    1,322,002                          0.00%
 $    1,322,003                    -         $    1,323,297                          0.08%
 $    1,323,298                    -         $    1,324,592                          0.16%
 $    1,324,593                    -         $    1,325,887                          0.24%
 $    1,325,888                    -         $    1,327,182                          0.32%
 $    1,327,183                    -         $    1,328,477                          0.40%
 $    1,328,478                    -         $    1,329,772                          0.48%
 $    1,329,773                    -         $    1,331,067                          0.56%
 $    1,331,068                    -         $    1,332,362                          0.64%
 $    1,332,363                    -         $    1,333,657                          0.72%
 $    1,333,658                    -         $    1,334,952                          0.80%
 $    1,334,953                    -         $    1,336,247                          0.88%
 $    1,336,248                    -         $    1,337,542                          0.96%
 $    1,337,543                    -         $    1,338,837                          1.04%
 $    1,338,838                    -         $    1,340,132                          1.12%
 $    1,340,133                    -         $    1,341,427                          1.20%
 $    1,341,428                    -         $    1,342,722                          1.28%
 $    1,342,723                    -         $    1,344,017                          1.36%
 $    1,344,018                    -         $    1,345,312                          1.44%
 $    1,345,313                    -         $    1,346,607                          1.52%
 $    1,346,608                    -         $    1,347,902                          1.60%
 $    1,347,903                    -         $    1,349,197                          1.68%
 $    1,349,198                    -         $    1,350,492                          1.76%
 $    1,350,493                    -         $    1,351,787                          1.84%
 $    1,351,788                    -         $    1,353,082                          1.92%
              >                    -         $    1,353,082                          2.00%
--------------------------------------------------------------------------------------------
</TABLE>

                                      C-3-1
<PAGE>

                               PALOS PARK FACILITY

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
                         NOI RANGE                                MNGT FEE ADJUSTMENT
--------------------------------------------------------------------------------------------
<S>                      <C>                 <C>                  <C>
 $          -                      -         $    1,915,640                         -2.00%
 $    1,915,641                    -         $    1,917,690                         -1.92%
 $    1,917,691                    -         $    1,919,740                         -1.84%
 $    1,919,741                    -         $    1,921,790                         -1.76%
 $    1,921,791                    -         $    1,923,840                         -1.68%
 $    1,923,841                    -         $    1,925,890                         -1.60%
 $    1,925,891                    -         $    1,927,940                         -1.52%
 $    1,927,941                    -         $    1,929,990                         -1.44%
 $    1,929,991                    -         $    1,932,040                         -1.36%
 $    1,932,041                    -         $    1,934,090                         -1.28%
 $    1,934,091                    -         $    1,936,140                         -1.20%
 $    1,936,141                    -         $    1,938,190                         -1.12%
 $    1,938,191                    -         $    1,940,240                         -1.04%
 $    1,940,241                    -         $    1,942,290                         -0.96%
 $    1,942,291                    -         $    1,944,340                         -0.88%
 $    1,944,341                    -         $    1,946,390                         -0.80%
 $    1,946,391                    -         $    1,948,440                         -0.72%
 $    1,948,441                    -         $    1,950,490                         -0.64%
 $    1,950,491                    -         $    1,952,540                         -0.56%
 $    1,952,541                    -         $    1,954,590                         -0.48%
 $    1,954,591                    -         $    1,956,640                         -0.40%
 $    1,956,641                    -         $    1,958,690                         -0.32%
 $    1,958,691                    -         $    1,960,740                         -0.24%
 $    1,960,741                    -         $    1,962,790                         -0.16%
 $    1,962,791                    -         $    1,964,840                         -0.08%
 $    1,964,841                    -         $    1,966,890                          0.00%
 $    1,966,891                    -         $    1,968,940                          0.08%
 $    1,968,941                    -         $    1,970,990                          0.16%
 $    1,970,991                    -         $    1,973,040                          0.24%
 $    1,973,041                    -         $    1,975,090                          0.32%
 $    1,975,091                    -         $    1,977,140                          0.40%
 $    1,977,141                    -         $    1,979,190                          0.48%
 $    1,979,191                    -         $    1,981,240                          0.56%
 $    1,981,241                    -         $    1,983,290                          0.64%
 $    1,983,291                    -         $    1,985,340                          0.72%
 $    1,985,341                    -         $    1,987,390                          0.80%
 $    1,987,391                    -         $    1,989,440                          0.88%
 $    1,989,441                    -         $    1,991,490                          0.96%
 $    1,991,491                    -         $    1,993,540                          1.04%
 $    1,993,541                    -         $    1,995,590                          1.12%
 $    1,995,591                    -         $    1,997,640                          1.20%
 $    1,997,641                    -         $    1,999,690                          1.28%
 $    1,999,691                    -         $    2,001,740                          1.36%
 $    2,001,741                    -         $    2,003,790                          1.44%
 $    2,003,791                    -         $    2,005,840                          1.52%
 $    2,005,841                    -         $    2,007,890                          1.60%
 $    2,007,891                    -         $    2,009,940                          1.68%
 $    2,009,941                    -         $    2,011,990                          1.76%
 $    2,011,991                    -         $    2,014,040                          1.84%
 $    2,014,041                    -         $    2,016,090                          1.92%
              >                    -         $    2,016,090                          2.00%
--------------------------------------------------------------------------------------------
</TABLE>

                                        C-4-1<PAGE>
                                                                  EXHIBIT 10.104

                        OPERATING DEFICIT LOAN AGREEMENT

                      (SUNRISE OF STUDIO CITY, CALIFORNIA)

        THIS OPERATING DEFICIT LOAN AGREEMENT (the "Agreement") is made as of
the 23rd day of December, 2002, by SUNRISE ASSISTED LIVING MANAGEMENT, INC., a
Virginia corporation ("SALMI") to and for the benefit of AL U.S./STUDIO CITY
SENIOR HOUSING, L.P., a California limited partnership ("Beneficiary").

                                    RECITALS

        A. Beneficiary desires to construct a certain assisted living facility
(the "Facility") in Studio City, California, to be known as "Sunrise of Studio
City."

        B. The costs of construction of the Facility will be paid in part from
the proceeds of a loan in the maximum principal amount of $14,250,000.00 (the
"Construction Loan") made to Beneficiary by GMAC Commercial Mortgage
("Construction Lender"). The Construction Loan is being made pursuant to a Loan
Agreement of even date herewith by and between Beneficiary and Construction
Lender (the "Loan Agreement"), is evidenced by a certain Promissory Note of even
date herewith (the "Note") and secured by a certain Construction Deed of Trust
and Security Agreement of even date herewith (the "Deed of Trust") encumbering
the property on which the Facility is to be constructed, as each may be amended
from time to time.

        C. Pursuant to the terms of a certain Pre-Opening Services and
Management Agreement by and between SALMI and Beneficiary (the "Management
Agreement"), SALMI will provide Beneficiary with certain pre-opening services
and will be the manager of the Facility once the Facility is completed.

        D. SALMI will derive substantial direct and indirect benefits from the
Management Agreement.

        NOW, THEREFORE, in consideration of the premises, and intending to be
legally bound, SALMI and Beneficiary hereby agree as follows:

        1.     DEFINITIONS.

        1.1    Certain Definitions.

               (a) "Operating Deficit" shall mean the excess, if any, of (i)
"Adjusted Facility Expenses" (defined below), over (ii) Gross Revenues generated
by the operation of the Facility, determined monthly on a cash basis, commencing
as of the Commencement Date.

<PAGE>

               (b) "Operating Surplus" shall mean the excess, if any, of (i)
Gross Revenues generated by the operation of the Facility, over (ii) Adjusted
Facility Expenses, determined monthly on a cash basis commencing as of the
Commencement Date.

               (c) "Adjusted Facility Expenses" shall mean (i) all Facility
Expenses (excluding amortization, depreciation and similar non-cash items) with
respect to the Facility; except that such term shall not include real estate
taxes, utilities and insurance premiums to the extent such items are greater
than 103% of the amounts projected for such items on the pro forma budget for
the Facility attached as Exhibit A; PLUS (ii) the Monthly Payment, excluding
therefrom any portion thereof resulting from the calculation of interest at a
rate in excess of seven percent (7%) per annum (except to the extent that such
excess is due to any default by SALII or any of its Related Parties under any
Facility Development Agreement or Facility Management Agreement).

               (d) "Commencement Date" shall be the date by which all funds
budgeted in the interest reserve working capital reserve established for the
Facility pursuant to the pro forma budget attached hereto as Exhibit A
("Budget") have been expended. The working capital reserve may be increased (or
decreased) after the date hereof due to savings (or cost overruns) in other
Budget categories, and Beneficiary and SALMI agree to be bound by any and all
subsequent changes in such working capital reserve.

               (e) "Collection Costs" shall mean the reasonable costs and
expenses (including reasonable attorney's fees) incurred by Beneficiary if
Beneficiary is required to pursue its remedies in order to enforce SALMI's
obligations hereunder.

               (f) "Monthly Payment" shall mean the regular monthly payment of
interest to be paid by Beneficiary to Construction Lender pursuant to the terms
of the Note under its terms as they exist as of the date hereof. In no event
shall the Monthly Payment include any principal sum due on maturity of the
Construction Loan nor by reason of the acceleration of the Construction Loan.

               (g) "Operating Default Loan" shall mean any loan advance made by
SALMI to Beneficiary pursuant to the terms hereof.

               (h) "Termination Date" shall mean the earlier of (i) two (2)
years from the Commencement of Management Services, or (ii) the effective date
of the termination of the Management Agreement for any reason other than a
default by SALMI thereunder, except that this date shall be extended so that in
no case may this Agreement terminate prior to the repayment of the Construction
Loan.

        1.2 Other Definitions. Initially capitalized terms used and not
otherwise defined herein shall have the meaning given thereto in the Management
Agreement if defined in the Management Agreement, or if not defined in the

                                       2
<PAGE>

Management Agreement, then the meaning given thereto in the LLC Agreement if
defined in the LLC Agreement.

        2. AGREEMENT TO LEND.

               (a) SALMI hereby unconditionally guarantees and agrees that SALMI
will lend to Beneficiary the amount of any Operating Deficit, pursuant to the
terms set forth herein, from the Commencement Date through the Termination Date.

               (b) Commencing as of the first (1st) day of the first (1st)
calendar month following the Commencement Date, and continuing as of the first
(1st) day of each calendar month thereafter until the Termination Date, the
Operating Deficit, if any, for the calendar month just ended will be determined
by Beneficiary. SALMI shall provide to Beneficiary funds in an amount equal to
the Operating Deficit within five (5) business days after receipt of notice of
such determination if such determination is accompanied by a directive from
Beneficiary that it desires that the funds be advanced by SALMI at such time.

               (c) SALMI hereby further agrees to pay any and all Collection
Costs which may be incurred by Beneficiary. The repayment of Collection Costs
shall not affect the "Borrowing Account" or the "Loan Account" (defined below).
The obligation to pay Collection Costs is separate and apart from the obligation
to lend.

        3.     OBLIGATION TO LEND AND REPAYMENT TERMS.

               (a) Beneficiary shall establish two (2) separate accounts
hereunder with respect to SALMI's obligation to lend and SALMI's right to
repayment. The first account (the "Borrowing Account") shall be the amount which
Beneficiary is entitled to borrow from SALMI and which SALMI is obligated to
loan to Beneficiary, but which has not yet been advanced by SALMI to
Beneficiary. The second account (the "Loan Account") shall be the actual amount
owed to SALMI by Beneficiary in connection with advances actually made by SALMI
to Beneficiary.

               (b) The Borrowing Account shall be established as of the end of
the first calendar month following the Commencement Date with respect to which
there is an Operating Deficit. There shall be added to the Borrowing Account the
amount of any Operating Deficit for any month from and after the first month in
which there is an Operating Deficit. There shall be subtracted from the
Borrowing Account any sums actually loaned by SALMI to Beneficiary after the
establishment of the Borrowing Account, provided, however, that the Borrowing
Account shall never be less than zero. Beneficiary shall have the right, at any
time or from time to time, to direct that SALMI lend to Beneficiary all or any
portion of the balance in the Borrowing Account. Such election by Beneficiary
may be made by written notice from Beneficiary to

                                       3
<PAGE>

SALMI. SALMI shall be obligated to advance funds to satisfy its obligation
hereunder within five (5) business days of receipt of such notice from
Beneficiary.

               (c) The Loan Account shall be established upon the first advance
of any Operating Deficit Loan by SALMI to Beneficiary. Interest on any Operating
Deficit Loan shall be computed at the rate of ten percent (10%) per annum.
Interest shall be computed at such rate based upon the outstanding Operating
Deficit Loan balance from time to time. The Loan Account shall be increased, as
of the date of advance, by advances of funds by SALMI to Beneficiary, and shall
be decreased by payments to SALMI by Beneficiary on account thereof. The Loan
Account may be prepaid at any time or from time to time without penalty.
Principal and interest on the Loan Account shall be paid by AL US on behalf of
Beneficiary as set forth in Article 5.3 of the Limited Liability Company
Operating Agreement of AL US Development, LLC effective as of December 23, 2002
(the "LLC Agreement") and Section 8 below.

               (d) Notwithstanding anything to the contrary contained in this
Agreement, SALMI shall have no obligation to make any advance hereunder with
respect to any Operating Deficit accruing from and after the Termination Date.
At any time on or after the Commencement Date and on or prior to the Termination
Date, SALMI shall remain obligated to lend to Beneficiary the outstanding amount
in the Borrowing Account.

               (e) Any obligation or debt of Beneficiary or ALUS now or
hereafter held by SALMI is hereby subordinated to the obligations of Beneficiary
to Construction Lender under the Loan Agreement (the "Obligations") and SALMI
shall not enforce or collect any such indebtedness from Beneficiary of ALUS.
Nevertheless, upon request by Construction Lender, SALMI shall collect, enforce
and receive such indebtedness of Beneficiary or ALUS to SALMI. Any sums
collected at Construction Lender's request or collected in contravention of the
prohibition set forth herein shall be held by SALMI as trustee for Construction
Lender and shall be paid over to Construction Lender on account of the
Obligations; provided, however, that such payments shall not impair, reduce or
affect in any manner the liability of SALMI under the other provisions of this
Agreement. SALMI hereby agrees to indemnify and hold Construction Lender
harmless from and against any and all loss, cost, damage, liability or expense
(including without limitation attorneys' fees and costs) incurred by
Construction Lender incident to or in connection with any allegation or finding
that the delivery of this Agreement is a "preference" under 11 U.S.C. Section
547.

               (f) In no event shall SALMI's obligations hereunder be construed
as a guarantee of repayment of the Construction Loan.

               (g) Notwithstanding the foregoing or any other provision of this
Agreement not the contrary, payments of interest and principal shall be required
to be made only if and to the extent that Borrower has sufficient Proceeds from
Capital Transactions available to pay such interest and/or principal in
accordance with terms of the Venture Agreement. To the extent that such Proceeds
from Capital Transactions are insufficient to pay interest under the loan on a

                                       4
<PAGE>

current basis, any such interest shall accrue. Payments of principal under the
Loan shall be made only from available Proceeds of Capital Transactions in
accordance with the Venture Agreement.

        4. [INTENTIONALLY OMITTED].

        5. REPRESENTATIONS AND WARRANTIES.  SALMI hereby makes the following
representations and warranties to Beneficiary:

               (a) Power and Authority. SALMI has the requisite power,
authority, capacity and legal right to execute, deliver and perform this
Agreement.

               (b) Binding Obligations of SALMI. This Agreement and all other
documents required to be executed and delivered hereunder, when executed and
delivered, will constitute legal, valid and binding obligations of SALMI
enforceable against SALMI in accordance with their terms.

               (c) No Legal Bar.  Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will,
with or without notice and/or lapse of time:

                      (i) constitute a breach of any of the terms and provisions
of, or constitute a default under, any notice, contract, document, instrument,
agreement or undertaking, whether written or oral, to which SALMI is a party or
to which SALMI is subject;

                      (ii) accelerate or constitute an event entitling the
holder of any indebtedness of SALMI to accelerate the maturity of any such
indebtedness;

                      (iii) conflict with or result in a breach of any writ,
order, injunction or decree against SALMI of any court or governmental agency or
instrumentality, whether national, state, local or other; or

                      (iv) conflict with or be prohibited by any federal, state,
local or other governmental law, statute, rule or regulation.

               (d) No Consent. No consent of any other person not heretofore
obtained and no consent, approval or authorization of, or registration,
declaration or filing with any court, governmental body, governmental authority
or other person or entity whatsoever is required in connection with the valid
execution, delivery or performance by SALMI of this Agreement or any other
documents required to be executed and delivered hereunder, or in connection with
any other transaction contemplated by this Agreement.

               (e) Truth and Completeness. Neither this Agreement nor any other
statement furnished by SALMI to Beneficiary in connection with the transactions
contemplated hereby

                                       5
<PAGE>

contains any untrue statement of material fact or omits any statement material
fact necessary in order to make the statements contained herein or therein true
and not misleading.

        6. NO IMPLIED WAIVER. No delay or failure of Beneficiary in exercising
any right or remedy under this Agreement shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right or remedy preclude any
other or further exercise thereof or the exercise of any other right or remedy.

        7. ASSIGNMENT. Beneficiary's rights under this Agreement may be assigned
by Beneficiary to a third party, including, without limitation, Construction
Lender as additional security for the Construction Loan, in the sole and
absolute discretion of Beneficiary, in which event such assignee shall have the
right to enforce all of Beneficiary's rights against SALMI in the same manner as
if such assignee were originally named as the Beneficiary hereunder. No assignee
shall be personally liable to repay any outstanding amount in the Loan Account,
SALMI's recourse being limited to any Operating Surplus arising after such
assignee assumes control of the Facility from Beneficiary, subject to the
provisions of Section 3(h) above. No such assignment shall, however, relieve
Beneficiary of Beneficiary's obligation to repay the Loan Account, which shall
remain a recourse obligation of Beneficiary to SALMI, subject to the provisions
of Section 3(h) above.

        8. JOINDER BY PARENT COMPANY.

               (a) Subject to the provisions of Section 8(b) below, AL U.S.
Development Venture, LLC, a Delaware limited liability company ("ALUS"), the
sole member of AL U.S. Pool One, LLC, a Delaware limited liability company, the
sole member of AL California GP, LLC, a Delaware limited liability company, the
general partner of Beneficiary, hereby guarantees to SALMI, its successors and
assigns, as if ALUS were the primary obligor under this Agreement, (a) the
prompt satisfaction and discharge of all sums due by Beneficiary under the terms
of this Agreement and (b) the prompt and faithful performance by Beneficiary of
all of the terms, covenants and conditions of this Agreement. It is expressly
understood and agreed that this is a continuing guaranty and that the
obligations of ALUS hereunder shall be identical to those of Beneficiary.
Subject to the provisions of Section 8(b) below, in addition, ALUS guarantees
the full payment of and agrees to reimburse SALMI for all costs of collection
incurred by SALMI in enforcing this Agreement and pursuing any remedies set
forth in this Agreement, including court costs and reasonable attorneys' fees
(including, but not limited to, fees in any bankruptcy or appellate proceeding).

               (b) Notwithstanding the provisions of the foregoing Section 8(a)
or any other provision of this Agreement to the contrary, payments of interest
and principal shall be required to be made only if and to the extent that ALUS
has sufficient Proceeds from Capital Transactions available to pay such interest
and/or principal in accordance with terms of Section 5.3 of the Venture
Agreement. To the extent that such Proceeds from Capital Transactions are
insufficient to pay interest under any Operating Deficit Loan on a current
basis, any such interest shall

                                       6
<PAGE>

accrue. Payments of principal under the Loan shall be made only from available
Proceeds of Capital Transactions in accordance with the provisions of Section
5.3 of the Venture Agreement.

               (c) Subject to the foregoing provisions of the foregoing Section
8(b), obligation to repay any Operating Deficit Loan hereunder to SALMI shall
survive the Termination Date.

        9. MISCELLANEOUS.

               (a) Modifications. This Agreement may not be modified or amended
except by a written agreement duly executed by the parties hereto and approved
in writing by Construction Lender, and shall be binding upon, and inure to the
benefit of, the parties hereto and their respective heirs, personal
representatives, successors and assigns.

               (b) Severability. Should any one or more provisions of this
Agreement be determined to be illegal or unenforceable, all other provisions
nevertheless shall be effective.

               (c) Integration. Except as provided in any written agreement now
or at any time hereafter in force between Beneficiary and SALMI, this Agreement
shall constitute the entire agreement of SALMI with Beneficiary with respect to
the Operating Deficit, and no representation, understanding, promise or
condition concerning the subject matter hereof shall be binding upon SALMI or
Beneficiary unless expressed herein or therein.

               (d) Construction. Wherever in this Agreement the context so
requires, reference to the neuter, masculine or feminine shall be deemed to
include each of the other, and reference to either the singular or the plural
shall be deemed to include the other.

               (e) Notices. All notices of other communications required or
permitted to be given pursuant to the provisions of this Agreement shall be in
writing and shall be delivered in person or sent by registered or certified
United States mail, postage prepaid, return receipt requested, or by express
courier to the addresses of the parties as set forth below:

SALMI:                Sunrise Assisted Living Management, Inc.
                      7902 Westpark Drive
                      McLean, Virginia  22102
                      Attention: Legal Department

with a copy to:       Watt, Tieder, Hoffar & Fitzgerald, L.L.P.
                      7929 Westpark Drive, Suite 400
                      McLean, Virginia  22102
                      Attention:  Wayne G. Tatusko, Esquire

Beneficiary:          AL U.S./Studio City Senior Housing, L.P.
                      c/o Sunrise Assisted Living Investments, Inc.
                      7902 Westpark Drive

                                       7
<PAGE>

                      McLean, Virginia  22102
                      Attention:  James S. Pope, Vice President

with a copy to:       AEW Capital Management LP
                      World Trade Center
                      Two Seaport Lane
                      Boston, MA  02110
                      Attention:  Christopher Kazantis

and to:               Hale and Dorr, LLP
                      60 State Street
                      Boston, Massachusetts  02109
                      Attention:  Joseph J. Christian, Esquire

or to such other addresses as are specified by no less than fifteen (15) days
prior written notice delivered in accordance herewith. All such notices, demands
and requests shall be deemed effectively given and delivered three (3) business
days after the postmark date of mailing, or if delivered personally, when
received. Rejection or other refusal to accept or the inability to deliver
because of a changed address of which no notice was given shall be deemed to be
receipt of the notice, demand or request sent.

               (f) Captions. The captions appearing herein are used for
reference only and shall not be construed as limiting anything set forth herein.

               (g) Governing Law. This Agreement shall be construed and
interpreted in accordance with and shall be governed by, the laws of the
Commonwealth of Virginia without regard to the principles of conflicts of laws,
except to the extent preempted by United States federal law.

                      [THIS SPACE INTENTIONALLY LEFT BLANK]

                                       8
<PAGE>

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first hereinabove written.

               SALMI:

               SUNRISE ASSISTED LIVING MANAGEMENT, INC., a
               Virginia corporation

               By: /s/Daniel B. Gorham
                   --------------------
                   Daniel B. Gorham, Vice President

               BENEFICIARY
               -----------

               AL U.S./STUDIO CITY SENIOR HOUSING, L.P., a California limited
               partnership

               By:   AL California GP, LLC, a Delaware limited liability
                     company, its General Partner

                     By:  AL U.S. POOL ONE, LLC, a Delaware limited liability
                          company, its Sole Member

                          By:  AL U.S. DEVELOPMENT VENTURE, LLC, a Delaware
                               limited liability company, its Sole Member

                               By:  SUNRISE ASSISTED LIVING INVESTMENTS, INC.,
                                    a Virginia corporation, its Managing Member

                                    By: /s/ Daniel B. Gorham
                                       ---------------------
                                       Daniel B. Gorham, Vice President

                               By:  AEW SENIOR HOUSING COMPANY, LLC, a
                                    Delaware limited liability company, Member

                                    By:  SEAPORT SENIOR HOUSING MANAGEMENT,
                                         LLC, a Delaware limited liability
                                         company, its Managing Member

                                         By: /s/ Christopher A. Kazantis
                                             ----------------------------
                                             Christopher A. Kazantis
                                             Vice President

                                       9
<PAGE>

                                    JOINDER:

        The undersigned AL US Development, LLC hereby joins this Agreement
solely for the purposes set forth in Section 8 hereof.

                             AL U.S. DEVELOPMENT VENTURE, LLC, a
                             Delaware limited liability company

                             By:    SUNRISE ASSISTED LIVING
                                    INVESTMENTS, INC., a
                                    Virginia corporation, its Managing Member

                                    By:/s/ Daniel B. Gorham
                                       --------------------
                                       Daniel B. Gorham
                                       Vice President

                             By:    AEW SENIOR HOUSING
                                    COMPANY, LLC, a Delaware limited
                                    liability company, Member

                                    By:  SEAPORT SENIOR HOUSING MANAGEMENT,
                                         LLC, a Delaware limited liability
                                         company, its Managing Member

                                         By: /s/ Christopher A. Kazantis
                                            ----------------------------
                                            Christopher A. Kazantis
                                            Vice President

                                       10
<PAGE>

                                  EXHIBIT LIST

                               Exhibit A -- Budget

                                       11

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