SECURITY AGREEMENT

THIS SECURITY AGREEMENT (this “ Agreement ”) is entered into as of February 27, 2009, among each of the Domestic Subsidiaries of Brookdale Senior Living Inc., a Delaware corporation (the “ Borrower ”)   from time to time party hereto (individually an “ Obligor ” and collectively the “ Obligors ”) and BANK OF AMERICA, N.A., in its capacity as administrative agent (in such capacity, the “ Administrative Agent ”) for the holders of the Secured Obligations (defined below).

WHEREAS, pursuant to that certain Second Amended and Restated Credit Agreement dated as of the date hereof (as amended, modified, extended, renewed or replaced from time to time, the “ Credit Agreement ”) among the Borrower, the Guarantors identified therein, the Lenders identified therein and the Administrative Agent, the Lenders have agreed to make Loans   and issue Letters of Credit   upon the terms and subject to the conditions set forth therein; and

WHEREAS, this Agreement is required by the terms of the Credit Agreement.

NOW, THEREFORE, in consideration of these premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1.            Definitions .

(a)           Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to such terms in the Credit Agreement, and the following terms shall have the meanings set forth in the UCC (defined below):  Accession, As-Extracted Collateral, Consumer Goods, Equipment, Farm Products, Fixtures, Goods, Inventory, Manufactured Home, Money, Proceeds, Standing Timber.

(b)           In addition, the following terms shall have the meanings set forth below:

“ Collateral ” has the meaning provided in Section 2 hereof.

“ Secured Obligations ” means, without duplication, (a) all Obligations now existing or hereafter arising pursuant to the Loan Documents and (b) all costs and expenses incurred in connection with enforcement and collection of the Obligations, including the reasonable fees, charges and disbursements of counsel.

“ UCC ” means the Uniform Commercial Code as in effect from time to time in the state of New York except as such term may be used in connection with the perfection of the Collateral and then the applicable jurisdiction with respect to such affected Collateral shall apply.

2.            Grant of Security Interest in the Collateral .  To secure the prompt payment and performance in full when due, whether by lapse of time, acceleration, mandatory prepayment or otherwise, of the Secured Obligations, each Obligor hereby grants to the Administrative Agent, for the benefit of the holders of the Secured Obligations, a continuing security interest in, and a right to set off against, any and all right, title and interest of such Obligor in and to all of the following, whether now owned or existing or owned, acquired, or arising hereafter (collectively, the “ Collateral ”):

(a)           all Equipment located at the Mortgaged Properties;

(b)           all Fixtures located at the Mortgaged Properties;

(c)           all Goods located at the Mortgaged Properties;

(d)           all Inventory located at the Mortgaged Properties;

(e)           all books, records, ledger cards, files, correspondence, computer programs, tapes, disks, and related data processing software (owned by such Obligor or in which it has an interest) that at any time evidence or contain information relating to (a) – (d) and (f) of this Section 2 or are otherwise necessary or helpful in the collection thereof or realization thereupon; and

(f)           all Accessions and all Proceeds of any and all of the foregoing.

Notwithstanding the foregoing, the term “Collateral” shall not include any property to the extent that the grant of a security interest therein constitutes a breach or default under or results in the termination of or requires any consent not obtained under, any contract, license, agreement, instrument or other document, except to the extent that the term in such contract, license, agreement, instrument or other document providing for such prohibition, breach, default or termination or requiring such consent is ineffective under applicable Law (including, without limitation, Sections 9-406, 9- 407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable Law or principles of equity).

The Obligors and the Administrative Agent, on behalf of the Lenders, hereby acknowledge and agree that the security interests created hereby in the Collateral constitute continuing collateral security for all of the Secured Obligations, whether now existing or hereafter arising.

3.            Representations and Warranties .  Each Obligor hereby represents and warrants to the Administrative Agent, for the benefit of the holders of the Secured Obligations, that:

(a)            Ownership .  Each Obligor owns or has rights in its Collateral and has the right to pledge, sell, assign or transfer the same.

(b)            Chief Executive Office; Books & Records; Legal Name; State of Organization .  As of the Closing Date, each Obligor’s chief executive office and principal place of business are (and for the prior four months have been) located at the locations set forth on Schedule 3(b) attached hereto, and, as of the Closing Date, each Obligor keeps its books and records at such applicable locations.  As of the Closing Date, each Obligor’s exact legal name is as shown in this Agreement and its location (within the meaning of Section 9-307 of the UCC) is (and for the prior four months has been) its state of organization as shown in this Agreement.  As of the Closing Date, no Obligor has in the past four months changed its name, been party to a merger, consolidation or other change in structure not disclosed on Schedule 3(b) attached hereto.

(c)            Security Interest/Priority .  This Agreement creates a valid security interest in favor of the Administrative Agent, for the benefit of the holders of the Secured Obligations, in the Collateral of such Obligor and, when properly perfected by filing, shall constitute a valid and perfected, first priority security interest in such Collateral, to the extent such security interest can be perfected by filing under the UCC, free and clear of all Liens except for Permitted Liens.  

(d)            Types of Collateral .  None of the Collateral consists of, or is the Proceeds of, As-Extracted Collateral, Consumer Goods, Farm Products, Manufactured Homes or Standing Timber.

(e)            Equipment and Inventory .  With respect to any Equipment and/or Inventory of an Obligor, each such Obligor has exclusive possession and Control of such Equipment and Inventory of such Obligor except for (i) Equipment leased by such Obligor as a lessee or (ii) Equipment or Inventory in transit with common carriers.  No Inventory of an Obligor is held by a Person other than an Obligor pursuant to consignment, sale or return, sale on approval or similar arrangement.

(f)            Mergers, Etc.   Other than as set forth on Schedule 3(b) hereto, no Obligor has been party to a merger, consolidation or other change in structure in the prior five years.

(g)            Consents; Etc.   Except for (i) the filing or recording of UCC financing statements, and (ii) consents, authorizations, filings or other actions which have been obtained or made, no consent or authorization of, filing with, or other act by or in respect of, any arbitrator or Governmental Authority and no consent of any other Person (including, without limitation, any stockholder, member or creditor of such Obligor), is required for (A) the grant by such Obligor of the security interest in the Collateral granted hereby or for the execution, delivery or performance of this Agreement by such Obligor, (B) the perfection of such security interest (to the extent such security interest can be perfected by filing under the UCC or the granting of Control) or (C) the exercise by the Administrative Agent or the holders of the Secured Obligations of the rights and remedies provided for in this Agreement.

4.            Covenants . Each Obligor covenants that until such time as the Secured Obligations (excluding Secured Obligations solely with respect to Cash Collateralized Letters of Credit) arising under the Loan Documents have been paid in full and the Commitments and any Letters of Credit (excluding any Cash Collateralized Letters of Credit) have expired or been terminated, such Obligor shall:

(a)            Filing of Financing Statements, Notices, etc .  Authorize, and hereby does authorize, the Administrative Agent to prepare and file such financing statements (including continuation statements) or amendments thereof or supplements thereto or other instruments as the Administrative Agent may from time to time deem necessary or appropriate in order to perfect and maintain the security interest granted hereunder in accordance with the UCC.  Such financing statements may describe the collateral in the same manner as described in this Agreement or may contain an indication or description of collateral that describes such property in any other manner as the Administrative Agent may determine is necessary, advisable or prudent to ensure the perfection of the security interests in the collateral granted to the Administrative Agent in connection herewith.  Each Obligor shall also execute and deliver to the Administrative Agent such agreements, assignments or instruments (including affidavits, notices, reaffirmations and amendments and restatements of existing documents, as the Administrative Agent may reasonably request) and do all such other things as the Administrative Agent may reasonably deem necessary or appropriate (i) to assure to the Administrative Agent its security interests hereunder are perfected and maintained, including such instruments as the Administrative Agent may from time to time reasonably request in order to perfect and maintain the security interests granted hereunder in accordance with the UCC, (ii) to consummate the transactions contemplated hereby and (iii) to otherwise protect and assure the Administrative Agent of its rights and interests hereunder.  Furthermore, each Obligor also hereby irrevocably makes, constitutes and appoints the Administrative Agent, its nominee or any other person whom the Administrative Agent may designate, as such Obligor’s attorney in fact with full power and for the limited purpose to sign in the name of such Obligor any financing statements, or amendments and supplements to financing statements, renewal financing statements, notices or any similar documents which in the Administrative Agent’s reasonable discretion would be necessary or appropriate in order to perfect and maintain perfection of the security interests granted hereunder, such power, being coupled with an interest, being and remaining irrevocable until such time as the Secured Obligations arising under the Loan Documents have been paid in full and the Commitments have expired or been terminated.  In the event for any reason the Law of any jurisdiction other than New York becomes or is applicable to the Collateral of any Obligor or any part thereof, or to any of the Secured Obligations, such Obligor agrees to execute and deliver all such instruments and to do all such other things as the Administrative Agent in its sole discretion reasonably deems necessary or appropriate to preserve, protect and enforce the security interest of the Administrative Agent under the Law of such other jurisdiction (and, if an Obligor shall fail to do so promptly upon the request of the Administrative Agent, then the Administrative Agent may execute any and all such requested documents on behalf of such Obligor pursuant to the power of attorney granted hereinabove).

(b)            Defense of Title .  Warrant and defend title to and ownership of or rights in the Collateral (except as otherwise permitted under the Credit Agreement and the other Loan Documents) of such Obligor at its own expense against the claims and demands of all other parties claiming an interest therein, keep the Collateral free from all Liens, except for Liens permitted by the Credit Agreement and not sell, exchange, transfer, assign, lease or otherwise dispose of the Collateral of such Obligor or any interest therein, except as permitted under the Credit Agreement and the other Loan Documents.

(c)            Collateral Held by Warehouseman, Bailee, etc.   If any Collateral is at any time in the possession or control of a warehouseman, bailee or any agent or processor of such Obligor, such Obligor shall notify the Administrative Agent of the same and if the Administrative Agent so requests (i) notify such Person in writing of the Administrative Agent’s security interest therein, (ii) instruct such Person to hold all such Collateral for the Administrative Agent’s account and subject to the Administrative Agent’s instructions and (iii) use reasonable best efforts to obtain a written acknowledgment from such Person that it is holding such Collateral for the benefit of the Administrative Agent.

(d)            Nature of Collateral .  At all times maintain the Collateral as personal property and not affix any of the Collateral to any real property in a manner which would change its nature from personal property to real property or a Fixture to real property, unless the Administrative Agent shall have a perfected Lien on such Fixture or real property.

(e)            Insurance . Insure, repair and replace the Collateral of such Obligor as set forth in the Credit Agreement.  All insurance proceeds paid in connection with any insurance providing coverage with respect to any Collateral shall be subject to the security interests of the Administrative Agent hereunder and shall be paid or applied in accordance with the terms of the Credit Agreement.

5.            Authorization to File Financing Statements .  Each Obligor hereby authorizes the Administrative Agent to prepare and file such financing statements (including continuation statements) or amendments thereof or supplements thereto or other instruments as the Administrative Agent may from time to time deem necessary or appropriate in order to perfect and maintain the security interests granted hereunder in accordance with the UCC.  Such financing statements may describe the collateral in the same manner as described in this Agreement or may contain an indication or description of collateral that describes such property in any other manner as the Administrative Agent may determine is necessary, advisable or prudent to ensure the perfection of the security interests in the collateral granted to the Administrative Agent in connection herewith.

6.            Advances .  On failure of any Obligor to perform any of the covenants and agreements contained herein, the Administrative Agent may, at its sole option and in its sole discretion, perform the same and in so doing may expend such sums as the Administrative Agent may reasonably deem advisable in the performance thereof, including, without limitation, the payment of any taxes, a payment to obtain a release of a Lien or potential Lien, expenditures made in defending against any adverse claim and all other expenditures which the Administrative Agent

may make for the protection of the security hereof or which may be compelled to make by operation of Law.  All such sums and amounts so expended shall be repayable by the Obligors on a joint and several basis promptly upon timely notice thereof and demand therefor, shall constitute additional Secured Obligations and shall bear interest from the date said amounts are expended at the Default Rate.  No such performance of any covenant or agreement by the Administrative Agent on behalf of any Obligor, and no such advance or exp