FIRST AMENDMENT, CONSENT AND WAIVER TO CREDIT AGREEMENT

Exhibit 10.3

EXECUTION VERSION

FIRST AMENDMENT, CONSENT AND WAIVER TO
CREDIT AGREEMENT

          FIRST AMENDMENT, CONSENT AND WAIVER, dated as of May 10, 2006 (this “ Amendment ”), to the CREDIT AGREEMENT, dated as of February 10, 2006 (as the same may be further amended, supplemented, extended or restated, or otherwise modified from time to time, the “ Credit Agreement ”), among BROOKDALE SENIOR LIVING INC., a Delaware corporation (the “ Borrower ”), the several banks and other financial institutions or entities from time to time parties to this Agreement (the “ Lenders ”), LEHMAN BROTHERS INC., as advisor, sole lead arranger and sole bookrunner (in such capacity, the “ Lead Arranger ”), GOLDMAN SACHS CREDIT PARTNERS L.P., CITIGROUP GLOBAL MARKETS INC. and LASALLE BANK NATIONAL ASSOCIATION, as co-arrangers (in such capacity, the “ Co-Arrangers ”), LASALLE BANK NATIONAL ASSOCIATION, as syndication agent (in such capacity, the “ Syndication Agent ”), GOLDMAN SACHS CREDIT PARTNERS L.P. and CITICORP NORTH AMERICA, INC., as co-documentation agents (in such capacity, the “ Co-Documentation Agents ”) and LEHMAN COMMERCIAL PAPER INC., as administrative agent (in such capacity, the “ Administrative Agent ”).

WITNESSETH:

          WHEREAS, pursuant to that certain Purchase and Sale Agreement, dated as of February 7, 2006 (the “ AEW Acquisition Agreement ”), the Borrower indirectly acquired (the “ AEW Acquisition ”) five properties set forth on Schedule 1A for an aggregate purchase price of approximately $179,500,000 comprised of approximately $124,500,000 financing provided by Merrill Lynch Capital, a Division of Merrill Lynch Business Financial Services Inc. (the “ AEW Merrill Financing ”) and $55,000,000 of equity;

          WHEREAS, in connection with the AEW Acquisition, the Borrower created 14 Subsidiaries (the “ AEW Subsidiaries ”), six of which are Management Subsidiaries, as more particularly described on Schedule 2A ;

          WHEREAS, the Merrill Financing is structured as (i) a $95,000,000 first-mortgage loan which is secured by the properties acquired in the AEW Acquisition and (ii) a $29,500,000 mezzanine loan (the “ AEW Mezzanine Financing ”) which is secured by a pledge of the Capital Stock of certain of the AEW Subsidiaries (the “ Pledged AEW Subsidiaries ”) as more particularly set forth on Schedule 2A ;

          WHEREAS, pursuant to that certain Asset Purchase Agreement, dated as of January 6, 2006 (the “ Liberty Acquisition Agreement ”), the Borrower indirectly acquired (the “ Liberty Acquisition ”) seven properties set forth on Schedule 1B for an aggregate purchase price of approximately $92,100,000 comprised of approximately $65,200,000 financing provided by

General Electric Capital Corporation (the “ Liberty GE Financing ”) and $26,900,000 of equity with an additional $6,425,000 available for reimbursement of fifty percent of capital improvement expenditures;

          WHEREAS, in connection with the Liberty Acquisition, the Borrower created eight Subsidiaries (the “ Liberty Subsidiaries ”) as more particularly described on Schedule 2B ;

          WHEREAS, the Liberty GE Financing is structured as a $65,200,000 first-mortgage loan which is secured by the properties acquired in the Liberty Acquisition and a pledge of the Capital Stock of certain of the Liberty Subsidiaries (the “ Pledged Liberty Subsidiaries ”) as more particularly set forth on Schedule 2B ;

          WHEREAS, pursuant to that certain Purchase and Sale Agreement, dated as of November 18, 2005 (the “ Pin Oaks Acquisition Agreement ”), the Borrower indirectly acquired (the “ Pin Oaks Acquisition ”) one property (comprised of two facilities) set forth on Schedule 1C for an aggregate purchase price of approximately $13,000,000 comprised of approximately $8,800,000 financing provided by Merrill Lynch Capital, a Division of Merrill Lynch Business Financial Services Inc. (the “ Pin Oaks Merrill Financing ”), and $4,200,000 of equity;

          WHEREAS, in connection with the Pin Oaks Acquisition, the Borrower created two Subsidiaries (the “ Pin Oaks Subsidiaries ”), one of which is a Management Subsidiary, as more particularly described on Schedule 2C ;

          WHEREAS, the Pin Oaks Merrill Financing is structured as a joinder by the Pin Oaks Subsidiaries to an existing $20,955,233 credit facility with Merrill Lynch Capital, a Division of Merrill Lynch Business Financial Services Inc., dated as of December 21, 2005, which is a first-mortgage loan financing secured by certain real property including the property acquired in connection with the Pin Oaks Acquisition, and a pledge of the Capital Stock of the Pin Oaks Subsidiaries, as more particularly set forth on Schedule 2C ;

          WHEREAS, the Borrower has requested that the Lenders amend the Credit Agreement to permit the pledge of the Capital Stock of the Pledged AEW Subsidiaries, the Pledged Liberty Subsidiaries and the Pin Oaks Subsidiaries and to make certain other amendments; and

          WHEREAS, the Lenders have agreed to amend the Credit Agreement solely upon the terms and conditions set forth herein;

          NOW, THEREFORE, in consideration of the premises and the agreements hereinafter set forth, the parties hereto hereby agree as follows:

          1. Defined Terms . Unless otherwise noted herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

          2. Amendment to Section 1.1 of the Credit Agreement (Defined Terms) . (a)Section 1.1 of the Credit Agreement is hereby amended by adding the following new defined terms in the appropriate alphabetical order:

     ‘“ AEW Mezzanine Financing ’: as defined in the First Amendment.

     “ AEW Mezzanine Loan Agreement ”: the Mezzanine Loan Agreement, dated as of April 28, 2006, among Brookdale Gardens Holdings I, LLC, Brookdale Gardens Holdings II, LLC, and Brookdale Gardens Holdings III, LLC, collectively as borrower, and Merrill Lynch Capital, a Division of Merrill Lynch Business Financial Services Inc., as lender.

     “ First Amendment ”: the First Amendment to this Agreement, dated as of May 10, 2006.

     “ First Amendment Effective Date ”: the “Amendment Effective Date” as defined in the First Amendment.

     “ Liberty GE Financing ”: as defined in the First Amendment.

     “ Pin Oaks Loan Agreement ”: the $20,955,233 Loan Agreement, dated as of December 21, 2005, among AHC Properties, Inc. and KGC Operator, Inc., collectively as borrowers, and Merrill Lynch Capital, a Division of Merrill Lynch Business Financial Services, as lender.

     “ Pin Oaks Merrill Financing ”: as defined in the First Amendment.

     “ Pin Oaks Subsidiaries ”: as defined in the First Amendment.

     “ Pledged AEW Subsidiaries ”: as defined in the First Amendment.

     “ Pledged Liberty Subsidiaries ”: as defined in the First Amendment.”

          (b) Section 1.1 of the Credit Agreement is hereby further amended by deleting the definition of “Excluded Guarantee Subsidiary” and substituting in lieu thereof the following:

     “‘ Excluded Guarantee Subsidiary ’: any Subsidiary of the Borrower which is prohibited from providing a guarantee of the Obligations pursuant to (i) with respect to any Subsidiary existing as of the date hereof, documentation evidencing Indebtedness permitted by Section 7.2(d) or any other agreement, document or instrument to which such Subsidiary (or its Properties) is a party or otherwise bound as of the date hereof or (ii) with respect to any Subsidiary acquired or created to consummate any Acquisition permitted by Section 7.7(f) after the date hereof, either (x) documentation evidencing Indebtedness assumed by such Subsidiary in connection with such Acquisition or any other agreement, document or instrument to which such Subsidiary (or its Properties) is a party or otherwise bound assumed in connection with such Acquisition or (y) documentation evidencing Indebtedness otherwise permitted by Section 7.2 to which such Subsidiary is a party or by which it or any of its Property is bound.”

          (c) Section 1.1 of the Credit Agreement is hereby amended by inserting the following at the end of the definition of “Excluded Pledge Subsidiary”:

     “Solely for the purposes of Section 6.11, “ Excluded Pledge Subsidiary ” shall include (i) until the termination of the AEW Mezzanine Financing, the Pledged AEW Subsidiaries, (ii) until the termination of the L