Document:

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                                                                  EXHIBIT 10.3.1

                                                                  CONFORMED COPY

                              TAX MATTERS AGREEMENT
                            Dated as of June 18, 2004

                                  BY AND AMONG

                       FORTRESS BROOKDALE ACQUISITION LLC,
                                    "Seller"

                           BLC SENIOR HOLDINGS, INC.,
                                  "Indemnitor"

                                       AND

                          PROVIDENT SENIOR LIVING TRUST
                                   "Acquiror"

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                              TAX MATTERS AGREEMENT

            This TAX MATTERS AGREEMENT (this "Agreement") is dated as of June
18, 2004, by and among Fortress Brookdale Acquisition LLC, a Delaware limited
liability company ("Seller"), BLC Senior Holdings, Inc., a Delaware corporation
("Indemnitor") and Provident Senior Living Trust, a Maryland real estate
investment trust ("Acquiror").

                                   WITNESSETH

            WHEREAS, Seller, Indemnitor and Acquiror have entered into a Stock
Purchase Agreement dated as of the date hereof (the "Purchase Agreement"),
pursuant to which, among other things, Acquiror has agreed to acquire all the
outstanding shares of common stock of Brookdale Living Communities, Inc., a
Delaware corporation (the "Company");

            WHEREAS, upon the acquisition of all the outstanding shares of
common stock of the Company by Acquiror, the Company and each of its
wholly-owned corporate subsidiaries are intended to become qualified REIT
subsidiaries pursuant to Section 856(i) of the Code (defined below), the Company
and each of its wholly-owned direct and indirect corporate subsidiaries will be
deemed to liquidate under Section 332 of the Code for Federal income tax
purposes, and the tax year for the Company and various of its subsidiaries will
end on the Closing Date;

            WHEREAS, after being deemed liquidated under Section 332 of the
Code, the Company and each of its wholly-owned corporate subsidiaries are
intended to be converted to limited liability companies that are not classified
as corporations for Federal income tax purposes;

            WHEREAS, after being converted to limited liability companies, all
the equity interests in the Company and each of its wholly-owned corporate
subsidiaries are intended to be contributed by the Acquiror to an entity that is
classified as a partnership for Federal income tax purposes in which the
Acquiror, directly or through one or more entities disregarded for Federal
income tax purposes, will be a partner; and

            WHEREAS, as a condition to entering into the Purchase Agreement and
the Transaction Agreements (as defined in the Purchase Agreement), and as an
inducement to do so, the parties hereto are entering into this Agreement;

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

            Section 1. Definitions. For purposes of this Agreement, the
following terms shall apply:

            (a) "Acquiror" shall have the meaning set forth in the Introductory
      Paragraph.

            (b) "Code" shall mean the Internal Revenue Code of 1986, as amended.

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            (c) "Final Determination" shall mean (i) a decision, judgment,
      decree, or other order by any court of competent jurisdiction, which
      decision, judgment, decree, or other order has become final after all
      allowable appeals by either party to the action have been exhausted or the
      time for filing such appeal has expired, (ii) a closing agreement entered
      into under Section 7121 of the Code, or any final settlement agreement
      entered in connection with any administrative or judicial proceeding, or
      (iii) the expiration of time for instituting a claim for refund, or if
      such claim was filed, the expiration of time for instituting a suit with
      respect thereto.

            (d) "Indemnitor" shall have the meaning set forth in the
      Introductory Paragraph.

            (e) "Indemnity Amount" shall mean the amount payable by Indemnitor
      to an Acquiror pursuant to Section 3.

            (f) "Pre-Closing Period" shall mean any taxable year or period that
      ends on or before the Closing Date.

            (g) "Post-Closing Period" shall mean any taxable year or period that
      begins after the Closing Date.

            (h) "REIT" shall mean a real estate investment trust, within the
      meaning of Sections 856 et. seq., of the Code.

            (i) "Seller" shall have the meaning set forth in the Introductory
      Paragraph.

            (j) "Straddle Period" shall mean, with respect to any taxable year
      or period of an entity or group of entities that begins on or before the
      Closing Date but ends after the Closing Date, the portion of such taxable
      year or period that (i) begins on the first day of such taxable year or
      period, and (ii) ends on the Closing Date.

            (k) "Tax" and/or "Taxes" shall mean all Federal, state, local and
      foreign taxes, charges, fees, duties (including customs duties), levies or
      other assessments, including without limitation, income, gross receipts,
      net proceeds, ad valorem, turnover, real and personal property (tangible
      and intangible), sales, use, franchise, excise, value added, stamp,
      transfer, leasing, lease, user, transfer, fuel, excess profits,
      occupational, interest equalization, windfall profits, severance, license,
      payroll, environmental, capital stock, disability, employee's income
      withholding, other withholding, and unemployment taxes, which are imposed
      by any governmental authority, and such term shall include any interest,
      penalties or additions to tax attributable thereto.

            (l) "Tax Authority" shall mean any governmental authority having
      jurisdiction over the assessment, determination, collection, or imposition
      of any Tax.

            (m) "Tax Return" shall mean a report, return or other information
      return required to be supplied to a governmental entity with respect to
      Taxes (and any

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      amendments thereto) including, combined or consolidated returns for any
      group of entities.

            (n) Any capitalized terms used herein and not defined herein, shall
      have the meaning assigned to it in the Purchase Agreement.

            Section 2. Tax Liability for Straddle Period. For purposes of this
Agreement, the Tax liability of any entity with respect to a Straddle Period
shall be computed as follows: (i) in the case of Taxes of an entity that are
either based upon or related to income or receipts, the Tax liability for the
Straddle Period shall be deemed equal to the amount that would be payable if the
period for which such Tax is assessed had ended on and included the Closing
Date, not including transactions occurring on the Closing Date after the
Closing, determined, to the extent permissible under applicable laws and
commercially practicable, in a manner which is consistent with such entity's
accounting practices and business operations as in effect prior to the Closing
Date; (ii) in the case of Taxes that are incurred as a result of any sale,
transfer, assignment or distribution of property, or other similar transaction
engaged in, by any such entity, the Tax liability for the Straddle Period shall
be the amount due with respect to any such sale, transfer, assignment,
distribution, or other similar transaction occurring on or prior to the Closing
Date (not including transactions occurring on the Closing Date but after the
Closing); and (iii) in the case of all other Taxes, Tax liability attributable
to the Straddle Period shall be equal to the Taxes imposed with respect to the
Tax period that includes the Straddle Period multiplied by a fraction, the
numerator of which is the number of days in the Straddle Period through and
including the Closing Date and the denominator of which is the number of days in
the Tax period with respect to which such Taxes are imposed; provided, however,
that notwithstanding the foregoing provisions of this section, with respect to
real property Taxes, Section 2.04 of the Purchase Agreement shall govern.

            Section 3. Amount and Scope of Indemnification.

            (a) Indemnitor shall indemnify, defend, and hold harmless Acquiror
      against and reimburse Acquiror for all Taxes, losses, damages, cost,
      expenses, liabilities, obligations and claims of any kind (including
      reasonable attorneys' fees and costs of investigation) in connection with
      Taxes of the Company and the Company Subsidiaries that are attributable to
      a Pre-Closing Period, including without limitation Taxes properly
      allocable to a Straddle Period under Section 2, or that Acquiror may at
      any time suffer or incur, or become subject to, as a result of or in
      connection with the material inaccuracy of any representation or warranty
      made by Indemnitor in Section 3.19 (other than Section 3.19(l)) of the
      Purchase Agreement or in the schedules referred to in Section 3.19 of the
      Purchase Agreement. Acquiror, if and to the extent it qualifies as a REIT
      with respect to any taxable period and jurisdiction, shall not be required
      to make additional distributions to its shareholders to reduce or
      eliminate its liability for Taxes otherwise indemnified against hereunder,
      whether or not such distributions are required to be made to maintain the
      Acquiror's status as a REIT, but to the extent Acquiror is permitted to,
      and chooses to, make any such additional distributions to its
      shareholders, any reduction in Acquiror's liability for Taxes as a result
      of such additional distributions shall be taken into account in computing
      the Indemnity Amount hereunder.

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            (b) In the event Acquiror makes a claim for indemnification
      hereunder, Acquiror shall provide Indemnitor with a written statement
      setting forth in reasonable detail the basis of the claim for
      indemnification and the calculation of the amount owing under Section 3(a)
      (the "Indemnity Amount").

            (c) Any payment determined due to Acquiror pursuant to this Section
      3 shall be paid within the later of (i) twenty (20) business days after
      written notice from Acquiror to Indemnitor that such amounts are due and
      payable, or (ii) ten (10) business days prior to the due date for any
      return (including without limitation any return of estimated income taxes)
      on which Acquiror would reflect such income or gain.

            (d) Upon request of Indemnitor, the basis of the claim and the
      accuracy of Acquiror's calculation of the Indemnity Amount payable to
      Acquiror pursuant to Section 3 shall be verified by an independent,
      nationally recognized accounting firm (other than the preparer of
      Acquiror's or Indemnitor's Tax Returns or financial statements) acceptable
      to Indemnitor and Acquiror. In the event that the parties are unable to
      agree on an acceptable accounting firm, each shall select one accounting
      firm as its representative and the two accounting firms so selected shall
      select a third firm to perform the requisite verification. In order to
      enable such accountants to verify the basis and accuracy of such claim,
      Acquiror and Indemnitor shall provide to such accountants all information
      reasonably necessary for such verification, including without limitation
      any computer analyses used by Acquiror or Indemnitor to calculate or
      question, as the case may be, such amount or amounts. In conducting its
      verification, the accounting firm shall consult with, and consider in good
      faith the opinions and positions of, Acquiror and Indemnitor as to the
      proper resolution of any matters at issue. The review and determination of
      such calculations by such accounting firm pursuant to this Section 3(d)
      shall be final. The parties hereto agree that, if the accounting firm is
      required to resolve any matters relating to the computations, the
      accounting firm (i) shall provide Acquiror and Indemnitor with a written
      notification that describes in reasonable detail the matter or matters at
      issue, and (ii) prior to its resolution of the matter or matters at issue,
      shall provide Acquiror and Indemnitor with an opportunity to set forth
      their positions concerning the proper resolution of the matter or matters
      at issue in accordance with a procedure reasonably acceptable to both
      Acquiror and Indemnitor. The cost of such verification shall be borne by
      Indemnitor unless it is the determination of such verification that the
      actual amount or amounts payable (exclusive of interest and penalties)
      deviates, in a manner favorable to Indemnitor, by more than 10% from the
      amount originally determined by Acquiror, in which case such cost shall be
      borne by Acquiror.

            (e) At the request and expense of Indemnitor, Acquiror shall seek
      any refund of any Tax. In the event Acquiror receives a refund of (i) any
      amount which gave rise to an indemnification payment hereunder, or (ii)
      any Tax paid by Company prior to the Closing Date with respect to a
      Pre-Closing Period or Straddle Period, Acquiror shall refund such
      indemnification payment to Indemnitor; provided, however, that if either
      party has notified the other that there may be an amount due to Acquiror
      from Indemnitor pursuant to this Agreement or the Purchase Agreement,
      Acquiror may withhold payment until resolution of that claim has occurred.

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            (f) Acquiror agrees not to file any amended return of the Company,
      or any of its affiliates with respect to a Pre-Closing Period or Straddle
      Period without the prior written consent of the Indemnitor.

            (g) The Indemnity Amount shall be reduced for the Tax benefits from
      any net operating loss carryover or other Tax attributes of the Company or
      the Company Subsidiaries as of the Closing that Acquiror or its Affiliates
      actually utilize after the Closing. To the extent that Acquiror or an
      Affiliate realizes an actual Tax benefit as a result of the event giving
      rise to the indemnity payment hereunder (such as, by way of example but
      not limitation, a savings in Federal income Taxes resulting from an
      increase in deductible state Taxes that are indemnified, in a case in
      which the indemnity payment itself does not give rise to gross income for
      Federal income tax purposes), Acquiror shall promptly rebate to Indemnitor
      the amount of such Tax benefit.

            Section 4. Exclusions. (a) Notwithstanding any other provision of
this Agreement, Indemnitor shall not have any liability for indemnification
under this Agreement for any Tax liability attributable, in whole or in part,
to:

                  (i) any fraud, willful misconduct or gross negligence of
      Acquiror or officer, director, employee or agent thereof;

                  (ii) any Tax resulting from a determination that Acquiror is
      not treated as the owner of the Leased Property for income tax purposes
      (including, but not limited to, any adverse effect on Acquiror's status as
      a REIT); or

                  (iii) the willful failure of Acquiror to comply on a timely
      basis with certification, information, documentation, reporting or other
      similar requirements imposed on such Acquiror, or the willful failure of
      Acquiror to comply with its obligations set forth in Section 5, to the
      extent Indemnitor demonstrates that its ability to contest such Tax
      liability is actually prejudiced by such willful failure of Acquiror.

            (b) Acquiror, Indemnitor and Seller agree, for themselves and on
      behalf of their respective existing and future affiliates and
      representatives, that notwithstanding any provision to the contrary in
      this Agreement, the Purchase Agreement or any other Transaction Agreement,
      with respect to each indemnification obligation in this Agreement, in no
      event shall the Indemnitor have liability to the Acquiror for any
      punitive, incidental, indirect or consequential damages, damages for the
      loss of profits or other special damages (including, but not limited to,
      any adverse effect on Acquiror's status as a REIT, unless such failure is
      due to Indemnitor's or Seller's willful misconduct, recklessness or gross
      negligence), and in no event shall Taxes (subject to the immediately
      preceding parenthetical clause) include any of the foregoing.

            (c) Notwithstanding anything to the contrary in this Agreement, no
      liability shall be imposed upon Indemnitor for any liability for Taxes for
      amounts that are required to be paid by Indemnitor, or any affiliate, as
      Tenant, to Acquiror, or any of its

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      affiliates, as Landlord, under the Transaction Documents, including but
      not limited to transfer and similar Taxes relating to the transactions
      contemplated thereunder.

            (d) Notwithstanding anything to the contrary in this Agreement or
      any other Transaction Agreement, Seller shall have no liability for Taxes
      to the Acquiror or any of its affiliates.

            (e) Notwithstanding anything to the contrary in this Agreement,
      Indemnitor shall not be liable for any Taxes arising from transactions
      that occur following the Closing, including transactions occurring on the
      Closing Date after the Closing, and Acquiror shall not be liable for any
      Taxes of the Company and the Company Subsidiaries arising from
      transactions that occur at or preceding the Closing.

            Section 5. Preparation of Tax Returns. Indemnitor will be
responsible for the preparation and filing of all Tax Returns for Company and
the Company Subsidiaries for all Pre-Closing Periods, and will pay all
third-party costs and expenses incurred in preparing and filing such Tax
Returns. Acquiror will be responsible for the preparation and filing of all Tax
Returns for Company and the Company Subsidiaries for all Post-Closing Periods
and any Tax period that includes a Straddle Period. All Tax Returns of the
Company and the Company Subsidiaries for any Pre-Closing Period and any Straddle
Period shall be prepared in a manner consistent with the applicable entity's
past practices as in effect prior to the Closing Date; provided, however, that
such past practices are in accordance with the Code and the regulations
thereunder. Acquiror shall submit any Tax Return that includes a Straddle Period
to Indemnitor for review and consent, which consent shall not be unreasonably
withheld. Each of Acquiror, Seller and Indemnitor agrees to reasonably cooperate
in making available information necessary to the preparation and filing of such
Tax Returns and each agrees to make available, at its expense, records and
employees of Company, Indemnitor, Seller and Acquiror necessary for the
preparation or such Tax Returns. Acquiror and its accountants will be provided
for their review, a draft of each material Tax Return with respect to any period
(or portion thereof) ending on or before the Closing Date at least 20 days prior
to the date Indemnitor intends to file such Tax Return. To the extent that
positions previously taken on Tax Returns of the Company and the Company
Subsidiaries require further explication or substantiation in order for the
Acquiror to prepare Tax Returns with respect to Post-Closing Periods, the
Indemnitor and the Seller shall provide or cause to be provided such information
and background with respect to such matters as the Acquiror may from time to
time reasonably request.

            Section 6. Contests Pertaining to Tax.

            (a) Acquiror shall promptly notify Indemnitor (but in no event later
      than 5 Business Days following the receipt by Acquiror) of (i) the
      assertion of any claim or any dispute of any Tax reporting position, the
      commencement of any audit or examination of Company or any Company
      Subsidiary by any Tax Authority with respect to any Pre-Closing Period or
      Straddle Period and (ii) the receipt by it from the Internal Revenue
      Service of a written, proposed or final revenue agent's report, a 30-day
      letter or a notice of deficiency (as described in 6212 of the Code) or
      similar written notice from a Tax authority of a state, local, or foreign
      government, in which an adjustment is proposed or determined to the Taxes
      for which Indemnitor may be required to provide

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      indemnification pursuant to this Agreement (a "Tax Claim"); provided,
      however, that any failure to provide such notice shall not relieve
      Indemnitor of any obligation to indemnify Acquiror hereunder except,
      notwithstanding anything to the contrary contained in Section 4(iii), to
      the extent that the Indemnitor's ability to contest such adjustment is
      prejudiced in Indemnitor's discretion by such failure of the Acquiror.

            (b) Indemnitor shall have the sole right to represent the interests
      of the Company and the Company Subsidiaries, and to settle any dispute
      with respect to Taxes arising, in any Tax audit or administrative or court
      proceeding relating to Pre-Closing Periods or to any Straddle Period of
      the Company or any Company Subsidiary, as the case may be, and to employ
      counsel of Indemnitor's choice at Indemnitor's expense to carry out such
      representation; provided, however, that Indemnitor shall notify Acquiror
      of its intention to represent such interests within ten (10) Business Days
      of Indemnitor's receipt of the notice from Acquiror in accordance with
      Section 6(a). Acquiror agrees that it will cooperate fully with Indemnitor
      and Indemnitor's counsel in the defense against or compromise of any claim
      in any said proceeding. Acquiror shall execute and deliver to Indemnitor
      any power of attorney or other document requested by Indemnitor in
      connection with any audit or administrative or court proceeding with
      respect to which Indemnitor is representing the interests of the Company
      or any Company Subsidiary (or successor-in-interest) in any proceeding
      described in this Section 6. In connection with any audit or
      administrative or court proceeding with respect to which Indemnitor is
      representing the interests of the Company or any Company Subsidiary (or
      any successor-in-interest), Indemnitor shall consult in good faith with,
      and keep reasonably informed, Acquiror and its counsel and shall provide
      Acquiror with copies of any documents, reports or claims issued by or sent
      to the relevant auditing agent or Tax Authority, as well as a reasonable
      opportunity to review and comment thereon, but the decisions regarding
      what actions are to be taken shall be made by Indemnitor in its reasonable
      judgment, taking into account the reasonable requests and interests of the
      Acquiror.

            (c) Acquiror shall not make payment of any claim for at least ten
      (10) days after giving written notice of such claim to Indemnitor if such
      forbearance is permitted by law. If the conduct of the contest requires
      Acquiror to pay the tax claimed and file or sue for a refund, Indemnitor
      shall advance to such Acquiror, on an interest-free basis, sufficient
      funds to pay the tax and any interest, penalties and additions to tax
      payable with respect thereto (to the extent such amount is subject to
      Indemnitor's indemnity obligations hereunder). Acquiror shall as promptly
      as practicable use such funds to pay such tax, interest, penalties or
      additions to tax, as the case may be.

            (d) If Acquiror receives any settlement offer from the Internal
      Revenue Service or similar notice from a Tax authority of a state, local,
      or foreign government with respect to a claim for which Acquiror seeks
      indemnity from Indemnitor, such Acquiror shall promptly inform Indemnitor
      of the receipt of such settlement offer. If Indemnitor recommends
      acceptance of such settlement offer, but Acquiror declines to accept such
      offer in writing within thirty (30) days: (i) the obligation of Indemnitor
      to make indemnity payments under this Agreement as the result of any such
      contest or proceedings shall not exceed the obligation that it would have
      had if such contest had been settled or proceeding terminated on such date
      on the basis of the settlement offer the

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      acceptance of which was recommended by Indemnitor; and (ii) Indemnitor
      shall have no further liability for costs or other expenses in respect of
      such contest. Acquiror shall not settle any claim without Indemnitor's
      consent; provided, however, that Acquiror shall not be required to contest
      any proposed adjustment and may settle any such proposed adjustment if (i)
      Acquiror shall waive its right to indemnity with respect to such
      adjustment and shall refund to Indemnitor any amount previously paid or
      advanced by Indemnitor with respect to such adjustment or the contest of
      such adjustment.

            (e) If Indemnitor shall have duly complied with all the terms of
      this Section 6, Indemnitor's liability for indemnification, if any, under
      Section 3(a), shall be deferred (subject to the provisions of Section 6(c)
      hereof) until a Final Determination of the liability of such Acquiror. At
      such time, Indemnitor shall become obligated for the payment of any
      indemnification hereunder resulting from the outcome of such contest, and
      Acquiror shall become obligated to refund to Indemnitor any amount
      received as a refund by Acquiror or credited to Acquiror attributable to
      advances by Indemnitor hereunder. Within thirty (30) days following such
      Final Determination, any amounts due hereunder shall be paid first by set
      off against each other and either (i) Indemnitor shall pay to Acquiror any
      excess of the full amount due hereunder over the amount of any advances
      previously made by Indemnitor and applied against Indemnitor's indemnity
      obligation as aforesaid or (ii) Acquiror shall repay to Indemnitor any
      excess of such advances over such full amount due hereunder, together with
      the portion of any interest received by such Acquiror that is properly
      attributable to such excess amount of such advances during the period such
      advances were outstanding, and, if Indemnitor shall have indemnified such
      Acquiror with respect to the adverse tax consequences of any advances or
      payments hereunder, the amount of tax savings, if any, resulting from any
      payment pursuant to this sentence.

            Section 7. Cooperation. Acquiror agrees to consider in good faith
any action (including filing claims for refund and amended Tax Returns) which it
is reasonably requested to take by Indemnitor that would minimize the net amount
of any indemnity payment due from Indemnitor hereunder.

            Section 8. Treatment of Payments. The parties hereto shall, for all
tax and financial accounting purposes, to the extent permitted by law, treat the
assumption and payment of liabilities hereunder by Indemnitor as a distribution
by Indemnitor to the Company occurring prior to the Closing, and, accordingly,
as not includible in the taxable income of Acquiror. Correspondingly, the
parties hereto shall, for all tax and financial accounting purposes, to the
extent permitted by law, treat any payment hereunder from Acquiror to Indemnitor
as a capital contribution by the Company to Indemnitor occurring prior to the
Closing, and, accordingly, as not includible in the taxable income of
Indemnitor.

            Section 9. Elections. So long as the Company and the Company
Subsidiaries remain incorporated as corporations under applicable law, the
Acquiror will not elect to treat Company or its wholly-owned direct or indirect
corporate subsidiaries as anything other than a qualified REIT subsidiary
pursuant to Section 856(i) of the Code. Notwithstanding the preceding sentence,
the Acquiror may, after Closing, cause the Company and one or more of the
Company Subsidiaries to convert from corporations into limited liability
companies pursuant to

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state law. To such extent, the Company and any such Company Subsidiaries that
are wholly-owned, directly or indirectly, by Company, shall thereafter be
treated as disregarded entities for Federal income Tax purposes and, to the
extent permitted thereby, for purposes of applicable state, local and foreign
Taxes. Acquiror may also transfer ownership of such disregarded entities to an
entity controlled by the Acquiror that is classified as a partnership or as a
disregarded subsidiary of Acquiror for Federal income Tax purposes. The parties
hereto shall treat the Tax year of the Company, and, to the extent permitted by
law, of any Company Subsidiaries, as ending on the Closing Date for Federal
income Tax purposes and, to the extent permitted by law, for all state, local
and foreign Tax purposes, and shall take no position inconsistent therewith.

            Section 10. Notices. All notices, demands, declarations, consents,
directions, approvals, instructions, requests and other communications required
or permitted by the terms of this Agreement shall be given in the same manner as
in the Purchase Agreement.

            Section 11. Miscellaneous.

            (a) Except as otherwise provided herein, the terms and conditions of
      this Agreement shall be binding upon and inure solely to the benefit of
      the parties hereto and their respective successors and assigns, and
      nothing in this Agreement, express or implied, is intended to confer upon
      any party other than the parties hereto or their respective successors and
      assigns any rights or remedies of any nature whatsoever under or by reason
      of this Agreement.

            (b) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
      INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
      GIVING EFFECT TO ANY CONFLICTS OF LAW PRINCIPLES OF SUCH STATE THAT MIGHT
      REFER THE GOVERNANCE, CONSTRUCTION OR INTERPRETATION OF THIS AGREEMENTS TO
      THE LAWS OF ANOTHER JURISDICTION. EACH OF SELLER, INDEMNITOR AND ACQUIROR
      AGREES IRREVOCABLY AND UNCONDITIONALLY TO:

                  (i) submit for itself and its property in any Action relating
      to this Agreement, or for recognition and enforcement of any judgment in
      respect thereof, to the exclusive jurisdiction of the Courts of the State
      of New York sitting in the County of New York, the court of the United
      States of America for the Southern District of New York, and appellate
      courts having jurisdiction of appeals from any of the foregoing, and
      agrees that all claims in respect of any such Action shall be heard and
      determined in such New York State court or, to the extent permitted by
      law, in such federal court;

                  (ii) consent that any such Action may and shall be brought in
      such courts and waives any objection that it may now or hereafter have to
      the venue or jurisdiction of any such Action in any such court or that
      such Action was brought in an inconvenient court and agrees not to plead
      or claim the same;

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                  (iii) waive all right to trial by jury in any Action (whether
      based on contract, tort or otherwise) arising out of or relating to any of
      this Agreement, or its performance under or the enforcement of this
      Agreement;

                  (iv) agree that service of process in any such Action may be
      effected by mailing a copy of such process by registered or certified mail
      (or any substantially similar form of mail), postage prepaid, to such
      party at its address as provided in Section 10; and

                  (v) agree that nothing in this Agreement shall affect the
      right to effect service of process in any other manner permitted by the
      Laws of the State of New York.

            (c) This Agreement may be executed in two or more counterparts, each
      of which shall be deemed to be an original, but all of which shall
      constitute one and the same agreement.

            (d) When a reference is made in this Agreement to Sections, such
      reference shall be to a Section of this Agreement, unless otherwise
      indicated. The headings contained in this Agreement are for reference
      purposes only and shall not affect in any way the meaning or
      interpretation of this Agreement. Whenever the words "include," "includes"
      or "including" are used in this Agreement, they shall be deemed to be
      followed by the words "without limitation."

            (e) Except as described in Sections 3, 5 and 6 above, each party
      shall pay all costs and expenses that it incurs with respect to the
      negotiation, execution, delivery and performance of this Agreement. If any
      action at law or in equity is necessary to enforce or interpret the terms
      of this Agreement, the prevailing party shall be entitled to reasonable
      attorneys' fees, costs and necessary disbursements in addition to any
      other relief to which such party may be entitled.

            (f) Any term of this Agreement may be amended, and the observance of
      any term of this Agreement may be waived (either generally or in a
      particular instance and either retroactively or prospectively), only with
      the written consent of Acquiror and Indemnitor.

            Section 12. Term. Except as otherwise provided herein, with respect
to indemnification under Section 3(a) for Taxes, the term of this Agreement
shall extend from the date hereof until such time as the applicable statute of
limitations (including any extensions thereof) bars a claim by the Internal
Revenue Service or relevant foreign, state or local Tax authority for a Tax
otherwise indemnifiable under this Agreement.

            Section 13. Termination. This Agreement shall automatically
terminate upon the termination of the Purchase Agreement in accordance with its
terms. In the event of the termination of this Agreement pursuant to this
Section 13, except as expressly provided in the Purchase Agreement, no party
hereto shall have any liability to any other party with respect to this
Agreement or the transactions contemplated hereby and this Agreement shall be of
no further force or effect.

                                       10
<PAGE>

            Section 14. Release. Acquiror, Indemnitor and their respective
existing and future Affiliates (collectively, the "Releasing Parties") do hereby
absolutely release and discharge Seller and its existing and future Affiliates
and Representatives (collectively, the "Releasees") from any and all claims,
actions, causes of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, covenants, contracts, controversies, agreements,
demands, costs and judgments of whatsoever kind or nature, whether known or
unknown, absolute or contingent, direct or indirect at law or in equity, which
any of the Releasing Parties ever had or now has or have or hereafter can, shall
or may have, for, upon or by reason of any matter, cause or thing whatsoever to
the extent arising from, in connection with, related to or as a result of (a)
the Purchase Agreement and the transactions contemplated thereby and the
consummation thereof, relating to any period from the beginning of the world to
the end of time, regardless of when brought, (b) the Transaction Agreements and
the transactions contemplated thereby and the consummation thereof, relating to
any period from the beginning of the world to the end of time, regardless of
when brought, (c) the Private Placement and the transactions contemplated
thereby and the consummation thereof, relating to any period from the beginning
of the world to the end of time, regardless of when brought and (d) any action
or inaction of any of the Releasees relating to or associated with the
transactions contemplated by the Purchase Agreement, the Transaction Agreements
and the Private Placement, the transactions contemplated thereby and the
consummation thereof, relating to any period from the beginning of the world to
the end of time, regardless of when brought, except, in each case, for the
obligations of Seller under Section 2.06(b) of the Purchase Agreement (subject
to Sections 7.05 and 7.06 thereof) and Sections 5.04(a) and 7.06 of the Purchase
Agreement.

            Section 15. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced under any Law or as
a matter of public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated by this Agreement is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties to this Agreement shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions
contemplated by this Agreement be consummated as originally contemplated to the
greatest extent possible.

            Section 16. Entire Agreement. Except as otherwise provided in this
Agreement, or as otherwise expressly agreed in writing by the parties, this
Agreement and the other Transaction Documents constitute the entire agreement
and supersede all other prior or contemporaneous oral or written agreements and
understandings among the parties, or any of them, with respect to the subject
matter hereof, and there are no warranties, representations or other agreements,
express or implied, made to any party by any other party in connection with the
subject matter hereof or thereof except as specifically set forth herein or
therein or in the documents delivered pursuant hereto or in connection herewith.

                                       11
<PAGE>

            IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.

                                FORTRESS BROOKDALE ACQUISITION LLC

                                By:  /s/ Randal A. Nardone
                                  ----------------------------------------------
                                  Name:  Randal A. Nardone
                                  Title: Secretary

                                BLC SENIOR HOLDINGS, INC.

                                By:  /s/ Mark J. Shulte
                                  ----------------------------------------------
                                  Name:  Mark J. Shulte
                                  Title: Chairman, Chief Executive Officer

                                PROVIDENT SENIOR LIVING TRUST

                                By:  /s/ Darryl W. Copeland, Jr.
                                  ----------------------------------------------
                                  Name:  Darryl W. Copeland, Jr.
                                  Title: Chief Executive Officer

                                       12<PAGE>

                                                                  EXHIBIT 10.3.2

                          PROVIDENT SENIOR LIVING TRUST
                        600 College Road East, Suite 3400
                               Princeton, NJ 08540

March 28, 2005

Fortress Brookdale Acquisition LLC
c/o Fortress Investment Group LLC
1251 Avenue of the Americas, 16th Floor
New York, New York 10020
Attention: Mr. Randal A. Nardone

Brookdale Living Communities, Inc.
330 North Wabash Avenue, Suite 1400
Chicago, Illinois 60611
Attention: General Counsel

Ladies and Gentlemen:

      Reference is made to that certain Tax Matters Agreement dated as of June
18, 2004 (the "Tax Agreement"), by and among Fortress Brookdale Acquisition LLC
("Seller"), Provident Senior Living Trust, a Maryland real estate investment
trust ("Acquiror"), and Brookdale Living Communities, Inc., formerly known as
BLC Senior Holdings, Inc. ("Indemnitor").

      The parties hereto hereby agree that Section 3(g) of the Tax Agreement is
hereby deleted.

      Except as expressly provided herein, (i) the Tax Agreement shall remain in
full force and effect, and (ii) no party hereto makes any amendment, alteration
or modification of the Tax Agreement nor does any party hereto waive any
provision of the Tax Agreement or any right that it may have thereunder.

                                        PROVIDENT SENIOR LIVING TRUST

                                        By:/s/ Darryl W. Copeland, Jr.
                                          --------------------------------------
                                          Darryl W. Copeland, Jr.
                                          Chief Executive Officer

<PAGE>

Fortress Brookdale Acquisition LLC
Brookdale Living Communities, Inc.
March 28, 2005
Page 2

Acknowledged and agreed as of
the date first written above:

FORTRESS BROOKDALE ACQUISITION LLC

By:       /s/ William B. Daniger
   -----------------------------------------
   Name:  William B. Daniger
   Title: Vice President

BROOKDALE LIVING COMMUNITIES, INC.

By:       /s/ R. Stanley Young
   -----------------------------------------
   Name:  R. Stanley Young
   Title: Executive Vice President,
          Chief Financial Officer and
          Treasurer

Copies to:

Skadden Arps Slate Meagher & Flom LLP
Four Times Square
New York, New York  10036
Attention:        Joseph A. Coco, Esq.
Facsimile:        (212) 735-2000

Sidley Austin Brown & Wood LLP
787 Seventh Avenue
New York, New York  10019
Attention:        Robert L. Golub, Esq.
Facsimile:        (212) 839-5599

Winston & Strawn LLP
35 West Wacker Drive
Chicago, Illinois  60601
Attention:        Brendan P. Head, Esq.
Facsimile:        (312) 558-5700

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