MASTER LEASE
                                     between
                            EMERITUS REALTY VII, LLC;
                             EMERITUS REALTY V, LLC;
                            ESC-PORT ST. RICHIE, LLC;
                            EMERITUS REALTY II, LLC;
                            EMERITUS REALTY XIV, LLC;
                          EMERITUS REALTY BOZEMAN, LLC;
                          EMERITUS REALTY III, LLC; and
                          EMERITUS REALTY PUYALLUP, LLC

                 collectively, as their interests appear, Lessor
                                       AND
                              EMERITUS CORPORATION;
                          EMERITUS PROPERTIES V, INC.;
                            ESC-NEW PORT RICHEY, LLC;
                          EMERITUS PROPERTIES II, INC.;
                          EMERITUS PROPERTIES XIV, LLC;
                              ESC-BOZEMAN, LLC; and
                          EMERITUS PROPERTIES III, INC.
               collectively, and jointly and severally, as Lessee

                          Dated as of December 6, 2002


<PAGE>

                                       iv


                                        i

                                TABLE OF CONTENTS
ARTICLE  I.     1
1.1     Leased  Property;  Term.     1
ARTICLE  II.     2
2.1     Definitions     2
ARTICLE  III.     12
3.1     Rent.     12
3.2     [Intentionally  Omitted]     13
3.3     [Intentionally  Omitted]     14
3.4     [Intentionally  Omitted]     14
3.5     Additional  Charges     14
3.6     Late  Payment  of  Rent     14
3.7     Net  Lease     14
ARTICLE  IV.     14
4.1     Impositions.     14
4.2     Utilities     16
4.3     Insurance     16
4.4     Impound  Account     16
4.5     Tax  Service     16
4.6     Initial  Facility  Mortgages     16
ARTICLE  V.     17
5.1     No  Termination,  Abatement,  etc     17
5.2     Termination  with  Respect  to  Fewer  than All of the Facilities     18
ARTICLE  VI.     18
6.1     Ownership  of  the  Leased  Property     18
6.2     Personal  Property     18
6.3     Transfer  of  Personal  Property  and Capital Additions to Lessor     18
ARTICLE  VII.     19
7.1     Condition  of  the  Leased  Property     19
7.2     Use  of  the  Leased  Property.     19
7.3     Lessor  to  Grant  Easements,  etc     20
7.4     Preservation  of  Facility  Value     20
ARTICLE  VIII.     21
8.1     Compliance  with  Legal  and  Insurance  Requirements,  Instruments, etc
21
ARTICLE  IX.     21
9.1     Maintenance  and  Repair.     21
9.2     Encroachments,  Restrictions,  Mineral  Leases,  etc     22
ARTICLE  X.     23
10.1     Construction  of  Capital  Additions  to  the  Leased  Property.     23
10.2     Construction  Requirements  for  all  Capital  Additions     24
10.3     Funding  by  Lessor.     25
10.4     Capital  Additions  Financed  by  Lessee     26
ARTICLE  XI.     27
11.1     Liens     27
ARTICLE  XII.     27
12.1     Permitted  Contests     27
ARTICLE  XIII.     28
13.1     General  Insurance  Requirements     28
13.2     Replacement  Cost     29
13.3     Additional  Insurance     29
13.4     Waiver  of  Subrogation     30
13.5     Policy  Requirements     30
13.6     Increase  in  Limits     30
13.7     Blanket  Policies  and  Policies  Covering  Multiple  Locations     30
13.8     No  Separate  Insurance     31
ARTICLE  XIV.     31
14.1     Insurance  Proceeds     31
14.2     Insured  Casualty.     31
14.3     Uninsured  Casualty     32
14.4     No  Abatement  of  Rent     32
14.5     Waiver     32
14.6     Damage  Near  End  of  Term     32
ARTICLE  XV.     33
15.1     Condemnation.     33
15.2     Award-Distribution     33
15.3     Temporary  Taking     33
ARTICLE  XVI.     33
16.1     Events  of  Default     33
16.2     Certain  Remedies     36
16.3     Damages     36
16.4     Receiver     37
16.5     Lessee's  Obligation  to  Purchase     38
16.6     Waiver     38
16.7     Application  of  Funds     38
16.8     [Reserved]     38
16.9     [Reserved]     38
16.10     Landlord's  Security  Interest     38
ARTICLE  XVII.     39
17.1     Lessor's  Right  to  Cure  Lessee's  Default     39
ARTICLE  XVIII.     40
18.1     Purchase  of  the  Leased  Property     40
ARTICLE  XIX.     40
19.1     Renewal  Terms     40
ARTICLE  XX.     40
20.1     Holding  Over     40
ARTICLE  XXI.     41
21.1     Letters  of  Credit     41
21.2     Times  for  Obtaining  Letters  of  Credit     41
21.3     Reduction  in  Letter  of  Credit  Amount     42
21.4     Uses  of  Letters  of  Credit     42
ARTICLE  XXII.     42
22.1     Risk  of  Loss     42
ARTICLE  XXIII.     42
23.1     General  Indemnification     42
ARTICLE  XXIV.     43
24.1     Subletting  and  Assignment.     43
24.2     Consent     44
24.3     Costs     46
24.4     No  Release  of  Lessee's  Obligations     46
24.5     Assignment  of  Lessee's  Rights  Against  Sublease     46
24.6     Reserved     47
24.7     REIT  Protection     47
24.8     Prepaid  Rent     47
ARTICLE  XXV.     47
25.1     Officer's  Certificates  and  Financial  Statements.     47
25.2     Charges     49
ARTICLE  XXVI.     50
26.1     Lessor's  Right  to  Inspect  and  Show the Leased Property and Capital
Additions     50
ARTICLE  XXVII.     50
27.1     No  Waiver     50
ARTICLE  XXVIII.     50
28.1     Remedies  Cumulative     50
ARTICLE  XXIX.     50
29.1     Acceptance  of  Surrender     50
ARTICLE  XXX.     50
30.1     No  Merger     50
ARTICLE  XXXI.     50
31.1     Conveyance  by  Lessor     50
31.2     New  Lease     51
ARTICLE  XXXII.     52
32.1     Quiet  Enjoyment     52
ARTICLE  XXXIII.     52
33.1     Notices     52
ARTICLE  XXXIV.     53
34.1     Appraiser     53
ARTICLE  XXXV.     54
ARTICLE  XXXVI.     54
36.1     Lessor  May  Grant  Liens     54
36.2     Attornment     54
ARTICLE  XXXVII.     55
37.1     Hazardous  Substances     55
37.2     Notices     55
37.3     Remediation     55
37.4     Indemnity     55
37.5     Environmental  Inspection     56
ARTICLE  XXXVIII.     57
38.1     Memorandum  of  Lease     57
ARTICLE  XXXIX.     57
39.1     Sale  of  Assets     57
ARTICLE  XL.     57
40.1     Subdivision     57
ARTICLE  XLI.     58
41.1     Authority     58
ARTICLE  XLII.     58
42.1     Attorneys'  Fees     58
ARTICLE  XLIII.     58
43.1     Brokers     58
ARTICLE  XLIV.     59
44.1     Miscellaneous.     59
ARTICLE  XLV.     61
45.1     Provisions  Relating  to  Master  Lease     61
45.2     Provisions  Relating  to  Tax  Treatment  of  Lease     61
ARTICLE  XLVI.     62
46.1     HCPI  Rights     62
46.2     Change  in  Control  of  Lessor     63
46.3     Covenants  in  Initial  Facility  Mortgage     64


<PAGE>

Exhibits:
--------

Exhibit  A     Legal  Description  of  the  Land
Exhibit  B     List  of  Lessor's  Personal  Property
Exhibit  C     Description  of  Facilities, Allocated Minimum Rent and Allocated
Value
Exhibit  D     [Intentionally  Omitted]
Exhibit  E     Property  Condition  Reports
Exhibit  F     List  of  Lessor  Addresses
Exhibit  G     [[Intentionally  Omitted]
Exhibit  H     List  of  Initial  Facility  Mortgages
Exhibit  I     List  of  Lessors,  Lessees and License Holders for each Facility
Exhibit  J     Form  of  Letter  of  Credit
Exhibit  K     [Intentionally  Omitted]
Exhibit  L     [Intentionally  Omitted]
Exhibit  M     Permitted  Competing  Facilities
<PAGE>

                                        2




                                      LEASE
     THIS MASTER LEASE ("Lease") is dated as of the sixth day of December, 2002,
and  is  between EMERITUS REALTY VII, LLC, a Delaware limited liability company,
EMERITUS  REALTY  V,  LLC,  a  Delaware  limited liability company, ESC-PORT ST.
RICHIE,  LLC, a Washington limited liability company, EMERITUS REALTY II, LLC, a
Delaware limited liability company, EMERITUS REALTY XIV, LLC, a Delaware limited
liability  company,  EMERITUS  REALTY BOZEMAN, LLC, a Delaware limited liability
company,  EMERITUS  REALTY  III,  LLC, a Delaware limited liability company, and
EMERITUS  REALTY  PUYALLUP,  LLC,  a  Delaware  limited  liability  company
(collectively, as "Lessor"), and EMERITUS CORPORATION, a Washington corporation,
EMERITUS PROPERTIES V, INC., a Washington corporation, ESC-NEW PORT RICHEY, LLC,
a  Washington  limited  liability  company,  EMERITUS  PROPERTIES  II,  INC.,  a
Washington  corporation,  EMERITUS  PROPERTIES  XIV,  LLC,  a Washington limited
liability company, ESC-BOZEMAN, LLC, a Washington limited liability company, and
EMERITUS  PROPERTIES  III,  INC.,  a  Washington  corporation (collectively, and
jointly  and  severally,  as  "Lessee").
ARTICLE  I.
1.1     Leased  Property;  Term.
        -----------------------
     Upon  and subject to the terms and conditions hereinafter set forth, Lessor
leases  to  Lessee  and  Lessee  leases  from  Lessor all of Lessor's rights and
interest  in  and  to  the  following  with respect to each Facility (as defined
below)  (collectively  the  "Leased  Property"):
(a)     the  real  property or properties described in Exhibits A-1 through A-11
                                                       -------------------------
attached  hereto  (collectively,  the  "Land");
(b)     all  buildings,  structures, Fixtures (as hereinafter defined) and other
improvements  of  every  kind  now  or  hereafter located on the Land including,
alleyways  and  connecting tunnels, sidewalks, utility pipes, conduits and lines
(on-site  and  off-site  to  the  extent Lessor has obtained any interest in the
same),  parking  areas and roadways appurtenant to such buildings and structures
and  Capital Additions funded by Lessor of each such Facility (collectively, the
"Leased  Improvements");
(c)     all  easements,  rights  and  appurtenances relating to the Land and the
Leased  Improvements  (collectively,  the  "Related  Rights");
(d)     all  equipment,  machinery,  fixtures,  and  other  items of real and/or
personal  property,  including all components thereof, now and hereafter located
in,  on  or  used  in connection with and permanently affixed to or incorporated
into  the  Leased  Improvements,  including  all  furnaces,  boilers,  heaters,
electrical  equipment,  heating, plumbing, lighting, ventilating, refrigerating,
incineration,  air  and water pollution control, waste disposal, air-cooling and
air-conditioning  systems,  apparatus,  sprinkler  systems,  fire  and  theft
protection  equipment,  and built-in oxygen and vacuum systems, all of which, to
the  greatest  extent  permitted  by  law,  are hereby deemed to constitute real
estate, together with all replacements, modifications, alterations and additions
thereto  (collectively,  the  "Fixtures");  and
(e)     the  machinery,  equipment,  furniture  and  other  personal  property
described  on  Exhibit  B  attached  hereto,  together  with  all  replacements,
               ----------
modifications,  alterations  and  substitutes  therefore  (whether  or  not
constituting  an  upgrade)  (collectively,  "Lessor's  Personal  Property").
     SUBJECT, HOWEVER, to the easements, encumbrances, covenants, conditions and
restrictions  and  other  matters  which  affect  the  Leased Property as of the
Commencement  Date  with respect to each portion of the Leased Property or which
are  created  thereafter  as  permitted  hereunder to have and to hold (i) for a
Fixed  Term  (as  defined  below)  and  (ii)  the Extended Terms provided for in
Article  XIX  unless  this  Lease is earlier terminated as hereinafter provided.
ARTICLE  II.
2.1     Definitions
        -----------
     .  For  all  purposes of this Lease, except as otherwise expressly provided
or  unless the context otherwise requires, (i) the terms defined in this Article
have  the  meanings  assigned  to them in this Article and include the plural as
well  as  the  singular;  (ii) all accounting terms not otherwise defined herein
have  the  meanings  assigned  to  them  in  accordance with GAAP as at the time
applicable;  (iii)  all  references  in  this  Lease  to  designated "Articles,"
"Sections"  and  other subdivisions are to the designated Articles, Sections and
other  subdivisions of this Lease; (iv) the word "including" shall have the same
meaning  as  the  phrase  "including,  without  limitation,"  and  other similar
phrases; and (v) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Lease as a whole and not to any particular Article,
Section  or  other  subdivision:
Additional  Charges:  As  defined  in  Article  III.
-------------------
Affiliate:  Any  Person which, directly or indirectly, controls or is controlled
---------
by  or  is  under  common  control  with any other Person.  For purposes of this
definition,  "control"  (including  the  correlative  meanings  of  the  terms
"controlled  by"  and  "under common control with"), as used with respect to any
Person,  shall  mean  the  possession,  directly  or indirectly, of the power to
direct  or  cause  the  direction of the management and policies of such Person,
through  the  ownership  of  voting  securities,  partnership interests or other
equity  interests.  When  used  with  respect  to  any  corporation,  the  term
"Affiliate"  shall  also  include any Person which owns, directly or indirectly,
fifty  percent  (50%)  or more of any class of security of such corporation, but
shall  exclude  any  affiliate  of Daniel R. Baty which but for its relationship
with  Daniel  R.  Baty  would  not  be  considered  an  Affiliate  of  Lessee.
Allocated  Minimum  Rent:  With  respect to each Facility, the amount of Minimum
------------------------
Rent  allocated  to  such  Facility  as  set forth on Exhibit C attached hereto.
--                                                    ---------
Allocated  Value:  With  respect to each Facility, the "Allocated Value" related
----------------
to  such  Facility  as  set  forth  on  Exhibit  C  attached  hereto.
-                                       ----------
Appraiser:  As  defined  in  Article  XXXIV.
---------
Award:  All compensation, sums or anything of value awarded, paid or received on
-----
a  total  or  partial  Condemnation.
Base  Period:  The  period commencing on that date which is eighteen (18) months
------------
prior  to  the  date  any  appraisal  of  any  Facility  is made pursuant to the
provisions of Article XXXIV and ending on the date which is six (6) months prior
to  the  date  any  such  appraisal  of  the  Facility  is  made.
BLS:  Bureau  of  Labor  Statistics,  U.S.  Department  of  Labor.
---
Business Day:  Each Monday, Tuesday, Wednesday, Thursday and Friday which is not
------------
a  day on which national banks in the City of New York, New York are authorized,
or  obligated,  by  law  or  executive  order,  to  close.
Capital  Additions:  With respect to any Facility, one or more new buildings, or
------------------
one  or  more  additional structures annexed to any portion of any of the Leased
Improvements  of  such  Facility,  or  the  material  expansion  of  existing
improvements, which are constructed on any parcel or portion of the Land of such
Facility, during the Term, including construction of a new wing or new story, or
the  repair,  replacement,  restoration,  remodeling  or  rebuilding of existing
Leased  Improvements  on  such Facility or any portion thereof where the purpose
and  effect  of  such work is to provide a functionally new facility in order to
provide  services  not  previously  offered  in  such  Facility.
Capital  Addition  Costs:  The  costs of any Capital Addition made to the Leased
------------------------
Property whether paid for by Lessee or Lessor, including (i) all permit fees and
--
other costs imposed by any governmental authority, the cost of site preparation,
the  cost of construction including materials and labor, the cost of supervision
and  related  design,  engineering  and  architectural services, the cost of any
fixtures,  and if and to the extent approved by Lessor, the cost of construction
financing;  (ii)  fees paid to obtain necessary licenses and certificates; (iii)
the cost of any land contiguous to the Leased Property which is to become a part
of  the Leased Property purchased for the purpose of placing thereon the Capital
Addition  or  any  portion  thereof or for providing means of access thereto, or
parking  facilities therefor, including the cost of surveying the same, but only
to  the extent approved by Lessor in writing and in advance if Lessor is funding
such  Capital Addition; (iv) the cost of insurance, real estate taxes, water and
sewage  charges  and  other  carrying  charges  for such Capital Addition during
construction; (v) the cost of title insurance; (vi) reasonable fees and expenses
of  legal  counsel;  (vii)  filing,  registration  and recording taxes and fees;
(viii)  documentary  stamp  and similar taxes; and (ix) all reasonable costs and
expenses  of  Lessor  and  any Person which has committed to finance the Capital
Addition,  including  (a)  the  reasonable fees and expenses of their respective
legal  counsel;  (b)  printing  expenses; (c) filing, registration and recording
taxes  and  fees;  (d)  documentary stamp and similar taxes; (e) title insurance
charges  and  appraisal  fees;  (f)  rating agency fees; and (g) commitment fees
charged  by  any  Person  advancing  or  offering  to advance any portion of the
financing  for  such  Capital  Addition.
Cash  Flow:  With  respect  to each Facility, the net income from such Facility,
----------
determined  on  the basis of GAAP applied on a consistent basis, plus the sum of
--
(i)  depreciation and amortization expense; (ii) Rent and other expenses payable
hereunder,  excluding,  however,  Impositions  for  such  Facility;  plus  (iii)
management  fees  for  such  Facility;  less  the  sum  of  (y) a management fee
allowance  of  five  percent (5%) of Gross Revenues for such Facility during the
corresponding  period  plus  (z)  an  annual  Two Hundred Dollar ($200) per unit
reserve  for  such  Facility,  pro-rated  for  the  corresponding  period.
Cash  Flow  Coverage:  With respect to each Facility, for any period, calculated
--------------------
as  of  the  last  day  of  the period, the ratio of Cash Flow for such Facility
attributable  to  such  period  to  total Rent payable for such period under the
Lease.
Closing  Date:  As  defined  in  the  HCPI  Loan  Documents.
-------------
Code:  The  Internal  Revenue  Code  of  1986,  as  amended.
----
Collateral:  As  defined  in  Section  16.10.1.
----------
Commencement Date:  The date hereof, which date is the same as the Closing Date.
-----------------
Condemnation:  The  exercise  of  any  governmental  power,  whether  by  legal
------------
proceedings  or  otherwise,  by  a  Condemnor or a voluntary sale or transfer by
--------
Lessor  to  any  Condemnor,  either  under threat of condemnation or while legal
----
proceedings  for  condemnation  are  pending.
----
Condemnor:  Any  public  or  quasi-public  authority,  or private corporation or
---------
individual,  having  the  power  of  Condemnation.
----
Consolidated  Financials:  For  any  fiscal  year or other accounting period for
------------------------
Lessee  and  its  consolidated Subsidiaries, statements of earnings and retained
---
earnings and of changes in financial position for such period and for the period
--
from  the  beginning of the respective fiscal year to the end of such period and
the  related balance sheet as at the end of such period, together with the notes
thereto,  all  in  reasonable  detail  and setting forth in comparative form the
corresponding figures for the corresponding period in the preceding fiscal year,
and  prepared  in  accordance  with  GAAP.
Consolidated  Net  Worth:  At  any time, the sum of the following for Lessee and
------------------------
its  consolidated Subsidiaries, on a consolidated basis determined in accordance
--
with  GAAP
(i)     the amount of capital or stated capital (after deducting the cost of any
     shares  held  in  its  treasury),  plus
(ii)     the amount of capital surplus and retained earnings (or, in the case of
a  capital  surplus  or  retained  earnings  deficit,  minus  the amount of such
deficit),  minus
(iii)     the sum of the following (without duplication of deductions in respect
of  items  already  deducted  in arriving at surplus and retained earnings): (a)
unamortized  debt  discount  and  expense; and (b) any write-up in book value of
assets  resulting  from  a  revaluation  thereof  subsequent  to the most recent
Consolidated  Financials  prior  to the date hereof, excluding, however, any (i)
net write-up in value of foreign currency in accordance with GAAP, (ii) write-up
resulting  from a reversal of a reserve for bad debts or depreciation, and (iii)
write-up  resulting  from  a  change  in  methods  of  accounting for inventory.
     Cost  of  Living  Index:  The Consumer Price Index for All Urban Consumers,
     -----------------------
U.S. City Average (1982-1984 = 100), published by the BLS, or such other renamed
index.  If the BLS changes the publication frequency of the Cost of Living Index
so  that  a  Cost  of  Living  Index  is  not available to make a cost-of-living
adjustment  as specified herein, the cost-of-living adjustment shall be based on
the  percentage  difference  between  the  Cost  of Living Index for the closest
preceding  month  for  which a Cost of Living Index is available and the Cost of
Living  Index  for  the  comparison month as required by this Lease.  If the BLS
changes  the  base  reference period for the Cost of Living Index from 1982-84 =
100,  the  cost-of-living  adjustment  shall  be determined with the use of such
conversion  formula  or  table  as  may  be  published  by  the BLS.  If the BLS
otherwise  substantially  revises,  or  ceases publication of the Cost of Living
Index,  then  a  substitute  index  for  determining cost-of-living adjustments,
issued  by  the  BLS  or  by  a  reliable  governmental  or  other  nonpartisan
publication,  shall  be  reasonably  selected  by  Lessor  and  Lessee.
CPI  Increase:  For  each  applicable  Lease Year, the product of (a) percentage
-------------
increase,  if any, in (i) the Cost of Living Index published for the month which
---
is  three  (3)  months  prior to the commencement of such applicable Lease Year,
over  (ii)  the  Cost of Living Index published for the month which is three (3)
months  prior to the commencement of the immediately prior Lease Year, times (b)
                                                                       -----
two (2); provided, however, that in no event shall the CPI Increase be less than
zero  percent  (0%)  or  more  than  two  and  three-fourths  percent  (2.75%).
Date  of Determination:  The date on which any Prepayment Premium is paid to any
----------------------
Facility  Mortgagee.
Date  of  Taking:  The  date  the  Condemnor  has the right to possession of the
----------------
property  being  condemned.
-----
Emeritus:  Emeritus  Corporation,  a  Washington  corporation.
--------
Emeritus  Realty:  Emeritus  Realty  Corporation,  a  Nevada  corporation.
----------------
Environmental  Costs:  As  defined  in  Article  XXXVII.
--------------------
Environmental  Laws:  Environmental  Laws shall mean any and all federal, state,
-------------------
municipal  and  local laws, statutes, ordinances, rules, regulations, guidances,
policies,  orders,  decrees,  judgments,  whether  statutory  or  common law, as
amended  from  time  to  time,  now  or  hereafter  in  effect,  or promulgated,
pertaining  to the environment, public health and safety and industrial hygiene,
including  the  use,  generation,  manufacture,  production,  storage,  release,
discharge,  disposal,  handling,  treatment,  removal, decontamination, cleanup,
transportation  or  regulation  of  any  Hazardous  Substance,  including  the
Industrial  Site Recovery Act, the Clean Air Act, the Clean Water Act, the Toxic
Substances  Control  Act,  the Comprehensive Environmental Response Compensation
and  Liability  Act,  the  Resource  Conservation  and Recovery Act, the Federal
Insecticide,  Fungicide,  Rodenticide  Act,  the Safe Drinking Water Act and the
Occupational  Safety  and  Health  Act.
Event  of  Default:  As  defined  in  Article  XVI.
------------------
Extended  Term(s):  As  defined  in  Article  XIX.
-----------------
Facility:  Each  Facility  being (and to be) operated or proposed to be operated
--------
on  the  Leased  Property,  as more particularly described on Exhibit C attached
-                                                             ---------
hereto.
Facility  Mortgage:  As  defined  in  Article  XIII.
------------------
Facility  Mortgagee:  As  defined  in Article XIII; provided, however, that with
-------------------
respect to any matter relating to a particular Facility (including any matter in
--
which  the consent or approval of a Facility Mortgagee is required in connection
with  any  such  matter  relating  to  a  particular  Facility), as used herein,
"Facility  Mortgagee"  shall mean only the Facility Mortgagee for such Facility.
As of the Commencement Date, the "Facility Mortgagee" for each Facility shall be
General  Electric  Capital  Corporation.
Fair  market  Added Value:  With respect to each Facility, the Fair Market Value
-------------------------
(as  hereinafter  defined)  of  the  Leased  Property  (including  all  Capital
Additions) of such Facility less the Fair Market Value of the Leased Property of
such  Facility determined as if no Capital Additions financed by Lessee had been
constructed.
Fair Market Rental:  With respect to each Facility, the fair market rental value
------------------
of  the  Leased  Property  of  such  Facility,  or  applicable  portion  thereof
(including  any  periodic  increases therein), determined in accordance with the
appraisal  procedures  set  forth  in  Article  XXXIV.
Fair  Market Value:  With respect to each Facility, the fair market value of the
------------------
Leased  Property  and  all  Capital  Additions  of  such Facility, or applicable
portion(s)  thereof,  determined in accordance with the appraisal procedures set
forth  in  Article  XXXIV.  Fair  Market  Value  shall  be the value obtained by
assuming  that  the  Leased  Property  is encumbered by this Lease.  Further, in
determining  Fair  Market  Value the positive or negative effect on the value of
the  Leased  Property  attributable to the interest rate, amortization schedule,
maturity  date,  prepayment  penalty, exit fee and other terms and conditions of
any  encumbrance  which  will not be removed at or prior to the date as of which
Fair Market Value shall taken into account.  The Leased Property shall be valued
at  its  highest and best use which shall be presumed to be as a fully-permitted
Facility  operated in accordance with the provisions of this Lease.  Fair Market
Value  of  the  Leased  Property  shall not include "going concern" or "business
enterprise" value attributable to factors other than the highest and best use of
the  Leased  Property.  In  addition,  the  following  specific matters shall be
factored  in  or  out,  as  appropriate,  in  determining  Fair  Market  Value:
     (i)     The  negative  value of (a) any deferred maintenance or other items
of  repair  or replacement of the Leased Property, (b) any then current or prior
licensure  or certification violations and/or admissions holds and (c) any other
breach  or  failure  of  Lessee  to perform or observe its obligations hereunder
shall  not  be  taken  into account; rather, the Leased Property, and every part
       ---
thereof  shall  be  deemed  to be in the condition required by this Lease (i.e.,
good  order and repair) and Lessee shall at all times be deemed to have operated
the  Facility  in  compliance  with and to have performed all obligations of the
Lessee  under  this  Lease.
(ii)     The  occupancy  level  of the applicable Facility shall be deemed to be
the  average  occupancy  during  the  Base  Period.
(iii)     If  the  applicable  Facility's  Primary Intended Use includes a mixed
use,  then  the  average  of such mix during the Base Period shall be taken into
account.
     Fixed  Term:  The  period  of  time commencing on the Commencement Date and
     -----------
ending  at 11:50 p.m. Los Angeles time on the expiration of the fifteenth (15th)
Lease  Year.
Fixtures:  With respect to each Facility, the Fixtures (as defined in Article I)
--------
of  such  Facility.
GAAP:  Generally  accepted  accounting  principles.
----
Gross  Revenues:  With  respect  to  each  Facility,  all  revenues  received or
---------------
receivable  from  or by reason of the operation of the Facility or any other use
-------
of  the  Leased  Property  of  such Facility, Lessee's Personal Property and all
Capital  Additions  including all revenues received or receivable for the use of
or  otherwise  attributable to units, rooms, beds and other facilities provided,
meals  served,  services  performed  (including  ancillary  services),  space or
facilities  subleased  or  goods  sold  on  or  from the Leased Property and all
Capital  Additions  of  such  Facility, including, except as provided below, any
consideration  received under any commercial (as opposed to resident or patient)
subletting,  licensing  or  other arrangements with third parties (a "Commercial
Sublessee")  relating  to  the  possession  or  use of any portion of the Leased
Property and all Capital Additions; provided, however, that Gross Revenues shall
not  include:
(i)     non-operating  revenues  such as interest income or income from the sale
of  assets  not  sold  in  the  ordinary  course  of  business;
(iv)     federal, state or local excise taxes and any tax based upon or measured
     by  such  revenues which is added to or made a part of the amount billed to
the  patient  or  other recipient of such services or goods, whether included in
the  billing  or  stated  separately;
(v)     contractual  allowances  (relating  to any period during the Term of the
Lease)  for  billings  not paid by or received from the appropriate governmental
agencies  or  third  party  providers;  and
(vi)     all  proper  patient  billing  credits  and  adjustments  according  to
generally  accepted  accounting  principles  relating to health care accounting.
     Gross  Revenues for each Lease Year of such Facility shall reflect all cost
report  settlement  adjustments,  whether  positive  or negative, received in or
payable  during  such Lease Year in accordance with GAAP relating to health care
accounting,  regardless  of the year that such settlement amounts are applicable
to;  provided,  however, that to the extent settlement amounts are applicable to
years,  or  portions  thereof,  prior  to the Commencement Date, such settlement
amounts  shall  not  be  reflected  in Gross Revenues for the Lease Year of such
Facility  in which such settlement amounts are received or paid.  Gross Revenues
shall include the Gross Revenues of any Commercial Sublessee with respect to any
applicable  portion  of  the Leased Property and/or any Capital Additions, i.e.,
the  Gross  Revenues  generated  from  the  operations conducted on or from such
portion  shall  be included directly in the Gross Revenues and the rent received
or  receivable  by  Lessee from such Commercial Sublessee shall be excluded from
Gross  Revenues  for  such  purpose.
Guarantors:  Emeritus,  and  any  future  guarantor  of  all  or  any portion of
----------
Lessee's obligations pursuant to this Lease (each, individually, a "Guarantor").
-------
Guaranty:  The  Guaranty  of  even  date  herewith  executed  by  Emeritus, as a
--------
Guarantor,  and  any  future  written guaranty of Lessee's obligations hereunder
-------
executed  by  a  Guarantor.
---
Handling:  As  defined  in  Article  XXXVII.
--------
Hazardous  Substances:  Collectively,  any  petroleum,  petroleum  product  or
---------------------
byproduct  or  any  substance, material or waste regulated or listed pursuant to
-------
any  Environmental  Law.
--
HCPI:  Health  Care  Property  Investors,  Inc., a Maryland corporation, and its
----
successors  and  assigns.
---
HCPI  Loan Agreement:  That certain Loan Agreement dated as of December __, 2002
--------------------
by  and  between  HCPI, as lender, and Emeritus Realty, as borrower, as the same
may  be  amended,  modified or supplemented from time to time in accordance with
the  terms  thereof.
HCPI  Loan  Documents:  Collectively,  the  HCPI  Loan Agreement, and all of the
---------------------
other  documents  included within the definition of "Loan Documents" in the HCPI
----
Loan  Agreement,  as the same may be amended, modified or supplemented from time
to  time  in  accordance  with  the  terms  thereof.
Impositions:  Collectively,  all  taxes,  including capital stock, franchise and
-----------
other  state taxes of Lessor (or, if Lessor is not an Affiliate of HCPI, of HCPI
--
as  a  result  of its ownership (whether direct or indirect) in such Lessor), ad
valorem,  sales,  use,  single  business, gross receipts, transaction privilege,
rent or similar taxes; assessments including assessments for public improvements
or  benefits, whether or not commenced or completed prior to the date hereof and
whether  or  not to be completed within the Term; ground rents; water, sewer and
other  utility  levies  and  charges; excise tax levies; fees including license,
permit,  inspection,  authorization and similar fees; and all other governmental
charges,  in each case whether general or special, ordinary or extraordinary, or
foreseen  or  unforeseen,  of  every character in respect of the Leased Property
and/or  the  Rent  and  all  interest  and penalties thereon attributable to any
failure in payment by Lessee which at any time prior to, during or in respect of
the Term hereof may be assessed or imposed on or in respect of or be a lien upon
(i) Lessor or Lessor's interest in the Leased Property, (ii) the Leased Property
or  any  part  thereof  or  any  rent  therefrom  or any estate, right, title or
interest  therein,  or  (iii) any occupancy, operation, use or possession of, or
sales from or activity conducted on or in connection with the Leased Property or
the  leasing  or  use  of  the  Leased  Property  or any part thereof; provided,
however,  that  nothing  contained  in  this Lease shall be construed to require
Lessee  to  pay  (a)  any  tax  based  on  net  income (whether denominated as a
franchise  or capital stock or other tax) imposed on Lessor or any other Person,
(b) any transfer, or net revenue tax of Lessor or any other Person except Lessee
and  its  successors,  (c) any tax imposed with respect to the sale, exchange or
other  disposition  by Lessor of any Leased Property or the proceeds thereof, or
(d) any principal or interest on any indebtedness on the Leased Property owed to
a  Facility Mortgagee for which Lessor is the obligor, except to the extent that
any  tax,  assessment,  tax  levy or charge, which is otherwise included in this
definition, and a tax, assessment, tax levy or charge set forth in clause (a) or
(b)  is levied, assessed or imposed in lieu thereof or as a substitute therefor.
Initial  Facility  Mortgages:  The  Facility  Mortgages  set  forth on Exhibit H
----------------------------                                           ---------
attached  hereto,  together with any amendments, renewals or extensions thereto.
-----
Insurance  Requirements:  The  terms  of  any  insurance policy required by this
-----------------------
Lease and all requirements of the issuer of any such policy and of any insurance
----
board, association, organization or company necessary for the maintenance of any
such  policy.
Intangible Property:  All accounts, proceeds of accounts, rents, profits, income
-------------------
or  revenues  derived  from  the  use  of rooms or other space within the Leased
Property or the providing of services in or from the Leased Property; documents,
chattel  paper,  instruments,  contract  rights,  deposit  accounts,  general
intangibles,  causes  of  action,  now  owned  or  hereafter  acquired by Lessee
(including  any  right  to  any  refund  of  any Impositions) arising from or in
connection  with  Lessee's operation or use of the Leased Property; all licenses
and  permits now owned or hereinafter acquired by Lessee, which are necessary or
desirable  for Lessee's use of the Leased Property for its Primary Intended Use,
including,  if  applicable,  any certificate of need or similar certificate; the
right  to use any trade name or other name associated with the Facility; and any
and  all  third-party  provider  agreements  (including  Medicare and Medicaid).
Land:  With  respect  to  each  Facility,  the  Land  (as  defined in Article I)
----
relating  to  such  Facility.
----
Lease:  As  defined  in  the  preamble.
-----
Lease  Year:  Each period of twelve (12) full calendar months from and after the
-----------
Commencement  Date,  unless  the Commencement Date is a day other than the first
(1st)  day  of a calendar month, in which case the first Lease Year shall be the
period  commencing  on  the  Commencement Date and ending on the last day of the
eleventh  (11th) month following the month in which the Commencement Date occurs
and each subsequent Lease Year shall be each period of twelve (12) full calendar
months  after  the last day of the prior Lease Year; provided, however, that the
last  Lease  Year  during the Term may be a period of less than twelve (12) full
calendar  months  and  shall  end  on  the  last  day  of  the  Term.
Leased Improvements:  With respect to each Facility, the Leased Improvements (as
-------------------
defined  in  Article  I)  of  such  Facility.
Leased Property:  With respect to each Facility, the Leased Property (as defined
---------------
in  Article  I)  of  such  Facility.
Legal  Requirements:  All  federal,  state,  county,  municipal  and  other
-------------------
governmental  statutes,  laws  (including  common  law  and Environmental Laws),
-----------
rules,  policies,  guidance,  codes,  orders,  regulations, ordinances, permits,
-----
licenses,  covenants,  conditions,  restrictions,  judgments,  decrees  and
----
injunctions affecting either the Leased Property, Lessee's Personal Property and
----
all  Capital  Additions  or the construction, use or alteration thereof, whether
now  or  hereafter  enacted  and  in  force, including any which may (i) require
repairs,  modifications  or  alterations  in or to the Leased Property, Lessee's
Personal  Property  and  all Capital Additions, (ii) in any way adversely affect
the  use  and enjoyment thereof, or (iii) regulate the transport, handling, use,
storage  or  disposal or require the cleanup or other treatment of any Hazardous
Substance.
Lender:  Initially,  HCPI  in  its  capacity  as  lender  under  the  HCPI  Loan
------
Agreement,  and  also  its  successors and assigns as lender under the HCPI Loan
------
Agreement.
---
Lessee:  As defined in the preamble; provided, however that with respect to each
------
Facility,  only  the  License  Holder  with  respect  to  such Facility shall be
entitled to operate or maintain such Facility or be entitled to legal possession
of  such  Facility,  and  in no event shall any Lessee other than the applicable
License  Holder with respect to such Facility be entitled to operate or maintain
such  Facility or be entitled to legal possession of such Facility or take other
actions  with respect to such Facility to the extent that such operations or the
taking of such actions would violate the licensure requirements or other laws or
regulations  of  any  governmental  authority  with  respect  to  such Facility.
Notwithstanding the foregoing, nothing herein shall affect the joint and several
liability  of  the  Lessees.
Lessee's  Personal  Property:  With  respect  to  each  Facility,  the  Personal
----------------------------
Property  other  than  Lessor's Personal Property, allocable or relating to such
-------
Facility.
--
Lessor:  As defined in the preamble; provided, however, that with respect to any
------
matter  as  it  relates to a particular Facility (including, but not limited to,
any  matter  in  which Lessor's consent or approval is required for a particular
Facility), as used herein, "Lessor" shall mean only that Lessor which is the fee
owner  of  such Facility.  As of the date hereof, the "Lessor" for each Facility
is  as  set  forth  on  Exhibit  I  attached  hereto.
                        ----------
Lessor's  Personal  Property:  With  respect to each Facility, Lessor's Personal
----------------------------
Property  (as  defined  in  Article  I)  allocable or relating to such Facility.
--
Letter  of  Credit  Amount:  For  each Lease Year, an amount equal to one-fourth
--------------------------
(1/4)  of  the annual total Minimum Rent payable under this Lease for such Lease
---
Year.
Letter  of  Credit  Date:  As  defined  in  Section  21.2.
------------------------
License  Holder:  With  respect  to  any  Facility,  the  Lessee  that holds all
---------------
permits,  licenses,  approvals,  entitlements and other authorizations issued by
-------
governmental  authorities  necessary  to  operate  such Facility for its Primary
--
Intended  Use.
--
Minimum  Rent:  The  sum  of  Allocated  Minimum Rent for all of the Facilities.
-------------
Minimum  Repurchase  Price:  With  respect  to each Facility, the sum of (i) the
--------------------------
Allocated  Value  with  respect  to such Facility plus (ii) any Capital Addition
---
Costs  funded  by  Lessor  with  respect  to  such  Facility.
---
New  Lease:  As  defined  in  Section  31.2.1.
----------
New  Lease  Effective  Date:  As  defined  in  Section  31.2.1.
---------------------------
Officer's  Certificate:  A certificate of Lessee signed by an officer authorized
----------------------
to  so  sign  by  its  board  of  directors  or  by-laws.
Overdue  Rate:  On  any date, a rate equal to 2% above the Prime Rate, but in no
-------------
event  greater  than  the  maximum  rate  then  permitted  under applicable law.
Payment  Date:  Any due date for the payment of the installments of Minimum Rent
-------------
or  any  other  sums  payable  under  this  Lease.
Person:  Any  individual,  corporation, partnership, joint venture, association,
------
joint  stock  company,  limited  liability  company,  trust,  unincorporated
organization,  government  or any agency or political subdivision thereof or any
other  form  of  entity.
Personal  Property:  With respect to each Facility, all machinery, furniture and
------------------
equipment,  including  phone  systems  and computers, trade fixtures, inventory,
supplies  and  other  personal  property used or useful in the use of the Leased
Property  for  its  Primary  Intended  Use,  other  than  Fixtures.
Prepayment  Lease  Rate:  For  the  first  (1st)  Lease Year of the Term, twelve
-----------------------
percent  (12%);  provided,  however,  that commencing upon the expiration of the
-----
first  (1st)  Lease  Year of the Term and upon the expiration of each Lease Year
---
thereafter  during  the  applicable Term (including the Extended Terms, if any),
--
the then current "Prepayment Lease Rate" shall be adjusted to an amount equal to
--
the  product of (a) the then-current Prepayment Lease Rate, times the sum of (b)
                                                            -----
(i)  one  (1),  plus  (ii)  the  applicable  CPI  Increase  for such Lease Year.
Prepayment  Premium:  Any  prepayment  premium,  prepayment penalty, exit fee or
-------------------
other  similar  amount  due in connection with (a) the purchase by the Lender of
---
any  Initial  Facility Mortgage following an Event of Default hereunder or under
--
the  Initial Facility Mortgage, or (b) a prepayment (whether partial or full) of
any  Initial  Facility  Mortgage.
Primary  Intended  Use:  With  respect  to  each  Facility,  an  Alzheimer  care
----------------------
congregate  care,  assisted  living  or skilled nursing facility, and such other
--------
uses  necessary  or incidental to such use.  As of the date hereof, the "Primary
---
Intended  Use"  is  as  set  forth on Exhibit C attached hereto and incorporated
-                                     ---------
herein  by  this  reference.
Prime Rate:  On any date, a rate equal to the annual rate on such date announced
----------
by  the  Bank  of  New  York  to be its prime, base or reference rate for 90-day
unsecured loans to its corporate borrowers of the highest credit standing but in
no  event greater than the maximum rate then permitted under applicable law.  If
the  Bank of New York discontinues its use of such prime, base or reference rate
or  ceases to exist, Lessor shall designate the prime, base or reference rate of
another  state  or federally chartered bank based in New York to be used for the
purpose  of  calculating  the  Prime  Rate  hereunder.
Priority  Encumbrances:  As  defined  in  Article  XXXVI.  Without  limiting the
----------------------
definition  therein,  "Priority  Encumbrances"  shall  also  include the Initial
-----
Facility  Mortgages.
-----
Property Condition Reports:  The reports described on Exhibit E attached hereto.
--------------------------                            ---------
Rent:  Collectively,  the Minimum Rent and Additional Charges, all as defined in
----
Article  III.
SEC:  Securities  and  Exchange  Commission.
---
Separated  Property:  As  defined  in  Section  31.2.
-------------------
State:  With  respect  to  each Facility, the State or Commonwealth in which the
-----
Leased  Property  for  such  Facility  is  located.
--
Subsidiaries:  Corporations,  limited  liability  companies  or partnerships, in
------------
which  Lessee owns, directly or indirectly, more than 50% of the voting stock or
---
partnership,  membership  or  other  equity  interest,  respectively.
Term:  Collectively, the Fixed Term and any Extended Term(s), as the context may
----
require,  unless  earlier  terminated.
Transfer  Consideration:  As  defined  in  Article  XXIV.
-----------------------
Unavoidable  Delays:  Delays  due  to  strike,  lockout,  inability  to  procure
-------------------
materials,  power  failure,  act of God, governmental restriction, enemy action,
-------
civil commotion, fire, unavoidable casualty or other cause beyond the control of
--
the party responsible for performing an obligation hereunder; provided, however,
that  a  lack  of funds shall not be deemed a cause beyond the control of either
party  hereto.
Unsuitable for Its Primary Intended Use:  With respect to each Facility, a state
---------------------------------------
or  condition  of  such Facility such that by reason of damage or destruction or
Condemnation,  in  the  good  faith judgment of Lessor and Lessee, such Facility
cannot  be operated on a commercially practicable basis for its Primary Intended
Use  taking  into account, among other relevant factors, the number of units and
usable  beds  affected  by  such  damage  or  destruction  or  Condemnation.
ARTICLE  III.
3.1     Rent.
        ----
       From  and after the Commencement Date Lessee will pay to Lessor in lawful
money  of  the  United  States  of  America  which shall be legal tender for the
payment  of  public  and private debts, without offset or deduction, the amounts
set  forth  hereinafter as Minimum Rent during the Term.  Payments of Rent shall
be  made by wire transfer of funds initiated by Lessee to Lessor's account or to
such  other  Person  as  Lessor  from  time  to  time  may designate in writing.
3.1.1     Allocated  Minimum  Rent.  For  the  period from the Commencement Date
          ------------------------
through  and including the expiration of the first (1st) Lease Year in the Fixed
Term,  Lessee  shall  pay to Lessor as monthly "Allocated Minimum Rent" for each
Facility  the  amounts  allocated  to  and  set  forth opposite such Facility on
Exhibit  Cattached  hereto and incorporated herein by this reference, in advance
      ----
on  or  before  the  first  day  of  each  calendar  month.
3.1.2     Allocated  Minimum  Rent  Increases.  Subject  to  any  increases  in
          -----------------------------------
Sections  3.1.3  and  3.1.4  below,  commencing upon the expiration of the first
(1st)  Lease  Year  of  the  Term  and  upon  the  expiration of each Lease Year
thereafter  during  the  applicable Term (including the Extended Terms, if any),
the  then  current  monthly  "Allocated Minimum Rent" for each Facility shall be
adjusted  to  an  amount  equal to one-twelfth (1/12) of the amount equal to the
product  of  (a) annual Allocated Minimum Rent paid or payable for such Facility
for the immediately prior Lease Year, times (b) the sum of (x) one (1), plus (y)
                                      -----
     the  applicable  CPI  Increase  for  such  Lease  Year.
3.1.3     Increase  in  Minimum  Rent By Reason of a Prepayment Premium.  If (x)
          -------------------------------------------------------------
any  Payment  Party (as defined below) pays (whether directly or indirectly) any
Prepayment  Premium with respect to any Initial Facility Mortgage of a Facility,
and (y) such Payment Party is not reimbursed in full for such Prepayment Premium
by  Lessee within fifteen (15) days after demand by such Payment Party, then the
then  monthly  Allocated  Minimum  Rent  for  such  Facility  shall be increased
effective  as  of  the  Date of Determination, by an amount equal to one-twelfth
(1/12)  of the product of (a) the Prepayment Lease Rate, times (b) the amount of
such Prepayment Premium so paid by a Payment Party.  In such event, Lessor shall
determine the new monthly "Allocated Minimum Rent" for such Facility pursuant to
this  Section  3.1.3  and  Lessor  shall  give  Lessee  notice thereof and shall
indicate  in  such  notice  how  the new monthly Allocated Minimum Rent for such
Facility  was  computed.  Within ten (10) days after receipt of Lessor's notice,
Lessee  shall pay to Lessor an amount equal to the new monthly Allocated Minimum
Rent for such Facility times the number of months from the Date of Determination
to the date of receipt of Lessor's notice (prorated for any partial month), less
the aggregate amount paid by Lessee on account of monthly Allocated Minimum Rent
for  such  Facility  the  same  period.  Thereafter,  Lessee  shall  pay monthly
Allocated  Minimum  Rent for such Facility at the new rate set forth in Lessor's
notice.  As used herein, a "Payment Party" shall mean either (i) Lender, (ii) an
Affiliate of Lender, (iii) Lessor, if the interest in such Lessor which has been
pledged  as  security  to  Lender  is owned (whether directly or indirectly, and
irrespective  of  how  such  ownership is acquired) by Lender or an Affiliate of
Lender, or (iv) Lessor, if the interest in such Lessor which has been pledged as
security  to  Lender  such Lessor will be owned (whether directly or indirectly,
and irrespective of how such ownership is acquired) by Lender or an Affiliate of
Lender  immediately  following  any  Prepayment  Premium.
3.1.4     Increase  in  Minimum Rent For Failure to Obtain Letter of Credit.  If
          -----------------------------------------------------------------
Lessee  fails  to obtain a letter of credit in accordance with Article XXI, then
for  such  time  as  Lessee has failed to obtain such letter of credit, the then
monthly Allocated Minimum Rent for each Facility shall be increased to an amount
equal  to  one  hundred  and  one  percent  (101%) of the then monthly Allocated
Minimum  Rent.
3.2     [Intentionally  Omitted]
        ------------------------
3.3     [Intentionally  Omitted]
3.4     [Intentionally  Omitted]
3.5     Additional  Charges
     .  In addition to the Minimum Rent, (i) Lessee shall also pay and discharge
as  and  when  due  and  payable all other amounts, liabilities, obligations and
Impositions  which Lessee assumes or agrees to pay under this Lease; and (ii) in
the  event  of  any  failure  on  the  part  of Lessee to pay any of those items
referred  to  in  clause (i) above, Lessee shall also promptly pay and discharge
every  fine,  penalty,  interest  and cost which may be added for non-payment or
late  payment of such items (the items referred to in clauses (i) and (ii) above
being  referred  to herein collectively as the "Additional Charges"), and Lessor
shall  have  all  legal,  equitable, and contractual rights, powers and remedies
provided  either  in  this  Lease  or  by  statute  or  otherwise in the case of
non-payment  of  the  Additional  Charges  as  in the case of non-payment of the
Minimum  Rent.
3.6     Late  Payment  of  Rent
        -----------------------
     .  Lessee hereby acknowledges that late payment by Lessee to Lessor of Rent
will cause Lessor to incur costs not contemplated hereunder, the exact amount of
which  is  presently  anticipated  to be extremely difficult to ascertain.  Such
costs  may  include processing and accounting charges and late charges which may
be  imposed on Lessor by the terms of any loan agreement and other expenses of a
similar  or  dissimilar  nature.  Accordingly,  if any installment of Rent other
than  Additional Charges payable to a Person other than Lessor shall not be paid
within  three  (3)  Business  Days after its due date, Lessee will pay Lessor on
demand  a late charge equal to the lesser of (i) five percent (5%) of the amount
of  such  installment  or (ii) the maximum amount permitted by law.  The parties
agree  that  this  late  charge represents a fair and reasonable estimate of the
costs  that  Lessor will incur by reason of late payment by Lessee.  The parties
further agree that such late charge is Rent and not interest and such assessment
does  not  constitute  a lender or borrower/creditor relationship between Lessor
and  Lessee.  In  addition, the amount unpaid, including any late charges, shall
bear  interest  at the Overdue Rate compounded monthly from the due date of such
installment  to  the date of payment thereof, and Lessee shall pay such interest
to Lessor on demand.  The payment of such late charge or such interest shall not
constitute  waiver  of,  nor  excuse  or cure, any default under this Lease, nor
prevent  Lessor  from  exercising  any  other  rights  and remedies available to
Lessor.
3.7     Net  Lease
        ----------
     .  This  Lease  is  and is intended to be what is commonly referred to as a
"net, net, net" or "triple net" lease.  The Rent shall be paid absolutely net to
Lessor,  so  that this Lease shall yield to Lessor the full amount or benefit of
the installments of Minimum Rent and Additional Charges throughout the Term with
respect  to each Facility, all as more fully set forth in Article IV and subject
to  any other provisions of this Lease which expressly provide for adjustment or
abatement  of  Rent  or  other  charges.
ARTICLE  IV.
4.1     Impositions.
        -----------
4.1.1     Subject  to  Article  XII relating to permitted contests, Lessee shall
pay,  or cause to be paid, all Impositions before any fine, penalty, interest or
cost  may be added for non-payment.  Lessee shall make such payments directly to
the  taxing authorities where feasible, and promptly furnish to Lessor copies of
official  receipts  or  other  satisfactory  proof  evidencing  such  payments.
Lessee's  obligation  to pay Impositions shall be absolutely fixed upon the date
such Impositions become a lien upon the Leased Property or any part thereof.  If
     any  Imposition  may,  at  the  option of the taxpayer, lawfully be paid in
installments, whether or not interest shall accrue on the unpaid balance of such
Imposition,  Lessee  may  pay  the  same, and any accrued interest on the unpaid
balance  of such Imposition, in installments as the same respectively become due
and  before  any  fine,  penalty, premium, further interest or cost may be added
thereto.
4.1.2     Lessor  shall  prepare  and file all tax returns and reports as may be
required  by  Legal  Requirements  with  respect  to  Lessor's net income, gross
receipts,  franchise  taxes  and  taxes  on  its capital stock, and Lessee shall
prepare  and  file all other tax returns and reports as may be required by Legal
Requirements  with  respect  to  or relating to the Leased Property, all Capital
Additions  and  Lessee's  Personal  Property.
4.1.3     Any  refund due from any taxing authority in respect of any Imposition
paid  by  Lessee  shall  be  paid  over  to or retained by Lessee if no Event of
Default shall have occurred hereunder and be continuing.  Any other refund shall
be  paid  over  to  or retained by Lessor and applied to the payment of Lessee's
obligations  under  this  Lease  in  such  order  of  priority  as  Lessor shall
determine.
4.1.4     Lessor  and Lessee shall, upon request of the other, provide such data
as  is  maintained  by the party to whom the request is made with respect to the
Leased Property as may be necessary to prepare any required returns and reports.
If any property covered by this Lease is classified as personal property for tax
purposes,  Lessee  shall  file  all  personal  property  tax  returns  in  such
jurisdictions where it must legally so file.  Lessor, to the extent it possesses
the  same,  and  Lessee,  to the extent it possesses the same, shall provide the
other  party,  upon  request,  with  cost and depreciation records necessary for
filing  returns  for  any  property  so  classified as personal property.  Where
Lessor  is  legally  required  to  file personal property tax returns and to the
extent  practicable,  Lessee shall be provided with copies of assessment notices
indicating a value in excess of the reported value in sufficient time for Lessee
to  file  a  protest.
4.1.5     Lessee  may, upon notice to Lessor, at Lessee's option and at Lessee's
sole  cost  and expense, protest, appeal, or institute such other proceedings as
Lessee  may  deem  appropriate  to effect a reduction of real estate or personal
property  assessments  and  Lessor,  at  Lessee's  expense  as  aforesaid, shall
reasonably cooperate with Lessee in such protest, appeal, or other action but at
no cost or expense to Lessor.  Billings for reimbursement by Lessee to Lessor of
personal  property  or  real  property taxes shall be accompanied by copies of a
bill  therefor and payments thereof which identify the personal property or real
property  with  respect  to  which  such  payments  are  made.
4.1.6     Lessor  shall  give prompt notice to Lessee of all Impositions payable
by  Lessee hereunder of which Lessor has knowledge, but Lessor's failure to give
any  such  notice shall in no way diminish Lessee's obligations hereunder to pay
such  Impositions.
4.1.7     Impositions  imposed  or  assessed in respect of the tax-fiscal period
during which the Term terminates with respect to such Facility shall be adjusted
and prorated between Lessor and Lessee with respect to such Facility, whether or
not such Imposition is imposed or assessed before or after such termination, and
Lessee's  obligation  to  pay  its  prorated  share  thereof  shall survive such
termination  with  respect  to  such  Facility.
4.2     Utilities
        ---------
     .  Lessee shall pay or cause to be paid all charges for electricity, power,
gas,  oil, water and other utilities used in the Leased Property and all Capital
Additions  thereto.  Lessee shall also pay or reimburse Lessor for all costs and
expenses  of  any  kind  whatsoever  which  at any time with respect to the Term
hereof  with  respect to any Facility may be imposed against Lessor by reason of
any  of  the  covenants,  conditions  and/or  restrictions  affecting the Leased
Property or any portion thereof, or with respect to easements, licenses or other
rights  over,  across  or  with  respect to any adjacent or other property which
benefits  the  Leased  Property,  including  any  and  all  costs  and  expenses
associated  with  any  utility,  drainage  and  parking  easements.
4.3     Insurance
        ---------
     .  Lessee  shall  pay  or  cause  to be paid all premiums for the insurance
coverage  required  to  be  maintained  by  Lessee  hereunder.
4.4     Impound  Account
        ----------------
     .  Lessor  may,  at its option to be exercised by thirty (30) days' written
notice  to  Lessee,  require  Lessee  to  deposit, at the time of any payment of
Minimum Rent, an amount equal to one-twelfth of Lessee's estimated annual taxes,
of every kind and nature, required pursuant to Section 4.1 plus, if Lessee fails
to  pay  any  insurance  premium  in  a timely manner as required by this Lease,
one-twelfth of Lessee's estimated annual insurance premiums required pursuant to
Section  4.3,  into  an  impound  account  as directed by Lessor, with credit to
Lessee  for any amounts impounded pursuant to the Initial Facility Mortgages for
such  purposes.  Such amounts shall be applied to the payment of the obligations
in  respect  of  which  said amounts were deposited in such order of priority as
Lessor  shall  determine, on or before the respective dates on which the same or
any  of  them  would  become delinquent.  The cost of administering such impound
account shall be paid by Lessee.  Nothing in this Section 4.4 shall be deemed to
affect  any  right  or  remedy  of  Lessor  hereunder.
4.5     Tax  Service
        ------------
     .  If  requested  by  Lessor,  Lessee  shall, at its sole cost and expense,
cause  to  be  furnished  to Lessor a tax reporting service, to be designated by
Lessor,  covering  the  Leased  Property.
4.6     Initial  Facility  Mortgages
        ----------------------------
     .  Notwithstanding anything to the contrary contained in this Lease, during
the  Term of this Lease, Lessee shall be solely responsible and hereby covenants
to  fund  and  maintain  any and all impound, escrow or other reserve or similar
accounts  required  under  any  Initial  Facility  Mortgage  as  security for or
otherwise  relating  to  any  operating  expenses of the Facility, including any
capital  repair  or  replacement reserves and/or impounds or escrow accounts for
Impositions  or  insurance  premiums  (each an "Operating Reserve Account"), but
excluding  any  so-called  debt  service  or loan payment sinking funds required
under  any  such  Initial  Facility Mortgage and excluding any such accounts (or
modified  requirements  with  respect to any existing Operating Reserve Account)
required  by virtue of any amendment to the Initial Facility Mortgages after the
date  hereof  unless  (i)  Lessee  consents in writing to such amendments, which
consent  shall not be unreasonably withheld, or (ii) such account(s) required by
virtue  of  any  such  amendment(s) do not materially increase Lessee's monetary
obligations  under this Section 4.6.  During the Term of this Lease and provided
that no Event of Default shall have occurred and be continuing hereunder, Lessee
shall, subject to the terms and conditions of such Operating Reserve Account and
the  requirements  of  the  Facility  Mortgagee(s)  under  such Initial Facility
Mortgages,  have  access  to  and  the  right  to  apply  or  use (including for
reimbursement)  to  the  same  extent  of  Lessor  all  monies held in each such
Operating  Reserve  Account  for the purposes and subject to the limitations for
which  such Operating Reserve Account is maintained; Lessor agrees to reasonably
cooperate  with  Lessee in connection therewith.  The right of Lessee to use and
apply  such  Operating  Reserve  Account monies in accordance with the foregoing
shall  also  apply  to  any  monies currently held or maintained in an Operating
Reserve  Account  as of the date hereof, regardless whether originally funded by
Lessor  or  Lessee.
ARTICLE  V.
5.1     No  Termination,  Abatement,  etc
        ---------------------------------
     .  Except  as  otherwise  specifically provided in this Lease, Lessee shall
remain bound by this Lease in accordance with its terms and shall not seek or be
entitled to any abatement, deduction, deferment or reduction of Rent, or set-off
against  the Rent.  The respective obligations of Lessor and Lessee shall not be
affected by reason of (i) any damage to or destruction of the Leased Property or
any  portion  thereof  from  whatever  cause  or  any Condemnation of the Leased
Property  or  any  portion thereof; (ii) other than a result of Lessor's willful
misconduct  or  gross  negligence,  the  lawful  or  unlawful prohibition of, or
restriction  upon,  Lessee's use of the Leased Property, or any portion thereof,
the  interference  with  such  use  by  any  Person  or by reason of eviction by
paramount title; (iii) any claim that Lessee has or might have against Lessor by
reason of any default or breach of any warranty by Lessor hereunder or under any
other  agreement  between  Lessor  and  Lessee or to which Lessor and Lessee are
parties;  (iv)  any  bankruptcy,  insolvency,  reorganization,  composition,
readjustment,  liquidation,  dissolution,  winding  up  or  other  proceedings
affecting  Lessor  or any assignee or transferee of Lessor; or (v) for any other
cause,  whether  similar  or  dissimilar  to  any of the foregoing, other than a
discharge of Lessee from any such obligations as a matter of law.  Lessee hereby
specifically  waives all rights arising from any occurrence whatsoever which may
now  or  hereafter  be  conferred  upon  it  by  law (a) to modify, surrender or
terminate  this  Lease  or  quit or surrender the Leased Property or any portion
thereof; or (b) which may entitle Lessee to any abatement, reduction, suspension
or  deferment  of  the Rent or other sums payable by Lessee hereunder, except as
otherwise  specifically provided in this Lease.  However, nothing shall preclude
Lessee  from  bringing  a separate action and Lessee is not waiving other rights
and  remedies not expressly waived herein.  The obligations of Lessor and Lessee
hereunder  shall  be  separate  and independent covenants and agreements and the
Rent and all other sums payable by Lessee hereunder shall continue to be payable
in  all  events  unless  the  obligations  to  pay  the same shall be terminated
pursuant to the express provisions of this Lease or by termination of this Lease
other  than  by  reason  of  an  Event  of Default.  Lessee's agreement that any
eviction  by  paramount  title  as described in item (ii) above shall not affect
Lessee's obligations under this Lease shall not in any way discharge or diminish
any  obligation of any insurer under any policy of title or other insurance and,
to the extent the recovery thereof is not necessary to compensate Lessor for any
damages  incurred by any such eviction, Lessee shall be entitled to a credit for
any  sums recovered by Lessor under any such policy of title or other insurance,
and  Lessor,  upon  request  by  Lessee, shall assign Lessor's rights under such
policies  to  Lessee provided such assignment does not adversely affect Lessor's
rights  under  any such policy and provided further that Lessee shall indemnify,
defend, protect and save Lessor harmless from and against any liability, cost or
expense  of any kind that may be imposed upon Lessor in connection with any such
assignment.
5.2     Termination  with  Respect  to  Fewer  than  All  of  the  Facilities
        ---------------------------------------------------------------------
     .  Wherever  in this Lease the action of terminating the Lease with respect
to a Facility (or action of similar import) is discussed, such action shall mean
the  termination  of  Lessee's  rights in and to the Leased Property relating to
such  Facility.  Notwithstanding anything in this Lease to the contrary, if this
Lease  shall  be  terminated  by  Lessor  or  Lessee  pursuant to rights granted
hereunder  with  respect  to any Facility, such termination shall not affect the
applicable  Term of this Lease with respect to the balance of the Facilities not
so  terminated by Lessor, and this Lease shall continue in full force and effect
with  respect  to  each  other such Facility, except that the total Minimum Rent
payable  hereunder shall be reduced by the amount of Allocated Minimum Rent with
respect  to  such  Facility  as to which  this Lease has so terminated, subject,
however, to Lessor's right, in the event of a termination because of an Event of
Default,  to  recover damages with respect to any such Facility as to which this
Lease  has  been  terminated  as  provided  in  Article  XVI.
ARTICLE  VI.
6.1     Ownership  of  the  Leased  Property
        ------------------------------------
     .  Lessee  acknowledges  that the Leased Property is the property of Lessor
and  that  Lessee  has only the right to the exclusive possession and use of the
Leased  Property  upon  the  terms  and  conditions  of  this  Lease.  Upon  the
expiration  or  earlier  termination  of this Lease with respect to any Facility
Lessee  shall,  at  its  expense,  restore  the Leased Property relating to such
Facility  to  the  condition  required  by  Section  9.1.4.
6.2     Personal  Property
        ------------------
     .  During  the  Term, Lessee may, as necessary and at its expense, install,
affix  or  assemble  or place on any parcels of the Land or in any of the Leased
Improvements,  any  items of Lessee's Personal Property and replacements thereof
which  shall  be  the  property  of  and owned by Lessee.  Except as provided in
Sections  6.3,  6.10  and 35.4, Lessor shall have no rights to Lessee's Personal
Property.  With  respect  to  each  Facility,  Lessee shall provide and maintain
during  the  entire  Term  applicable  to  such  Facility  all Personal Property
necessary  in order to operate the Facility in compliance with all licensure and
certification  requirements,  all  Legal  Requirements  and  all  Insurance
Requirements  and  for  the  Primary  Intended  Use and as required, in Lessee's
prudent  business  judgment,  to  meet  the  needs of residents of the Facility.
6.3     Transfer  of  Personal  Property  and  Capital  Additions  to  Lessor
        ---------------------------------------------------------------------
     .  Upon the expiration or earlier termination of this Lease with respect to
a  Facility,  all  Capital  Additions  not owned by Lessor and Lessee's Personal
Property  relating  to  such Facility which does not provide a new function with
respect to Lessor's Personal Property relating to such Facility shall become the
property  of  Lessor,  free  of  any  encumbrance  and  Lessee shall execute all
documents  and  take any actions reasonably necessary to evidence such ownership
and  discharge  any  encumbrance.  Except as set forth in Sections 10.3 and 10.4
below  (if applicable), upon the expiration or earlier termination of this Lease
with  respect to any Facility, Lessor shall not be obligated to reimburse Lessee
for any replacements, rebuildings, alterations, additions, substitutions, and/or
improvements  that  are  surrendered  as  part of or with the Leased Property or
Capital  Additions  of  such  Facility.
ARTICLE  VII.
7.1     Condition  of  the  Leased  Property
        ------------------------------------
     .  Lessee  acknowledges  receipt  and  delivery of possession of the Leased
Property  and  confirms  that Lessee has examined and otherwise has knowledge of
the condition of the Leased Property prior to the execution and delivery of this
Lease  and,  as  of  the  Commencement  Date with respect to each portion of the
Leased  Property,  has  found the same to be in good order and repair, free from
Hazardous  Substances  not  in  compliance  with  Legal  Requirements (except as
disclosed  on  the Property Condition Reports) and satisfactory for its purposes
hereunder.  Regardless, however, of any examination or inspection made by Lessee
and  whether  or  not  any  patent or latent defect or condition was revealed or
discovered thereby, Lessee is leasing the Leased Property "as is" in its present
condition.  Lessee  waives  any claim or action against Lessor in respect of the
condition of the Leased Property including any defects or adverse conditions not
discovered  or  otherwise  known  by Lessee as of the Commencement Date.  LESSOR
MAKES  NO  WARRANTY  OR  REPRESENTATION,  EXPRESS  OR IMPLIED, IN RESPECT OF THE
LEASED PROPERTY OR ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR USE, DESIGN OR
CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, OR AS TO THE NATURE OR
QUALITY  OF  THE  MATERIAL  OR  WORKMANSHIP  THEREIN,  OR  THE  EXISTENCE OF ANY
HAZARDOUS  SUBSTANCE, IT BEING AGREED THAT ALL SUCH RISKS, LATENT OR PATENT, ARE
TO  BE BORNE SOLELY BY LESSEE INCLUDING ALL RESPONSIBILITY AND LIABILITY FOR ANY
ENVIRONMENTAL  REMEDIATION  AND  COMPLIANCE  WITH  ALL  ENVIRONMENTAL  LAWS.
7.2     Use  of  the  Leased  Property.
        ------------------------------
7.2.1     Lessee  covenants  that it will obtain and maintain all authorizations
and  approvals  needed  to use and operate the Leased Property and each Facility
for  such Facility's respective Primary Intended Use and any other use conducted
on  the  Leased  Property  as  may  be  permitted from time to time hereunder in
accordance  with  Legal  Requirements  including  applicable  licenses, provider
agreements,  permits,  and,  if  appropriate,  Medicare  and/or  Medicaid
certification.
7.2.2     Lessee  shall  use  or  cause  to  be used the Leased Property and the
improvements  thereon  of  each  Facility  for its Primary Intended Use.  Lessee
shall not use the Leased Property or any portion thereof or any Capital Addition
thereto  for  any  other  use without the prior written consent of Lessor, which
consent  Lessor  may  withhold  in  its  sole  discretion.
7.2.3     Lessee  shall operate continuously the Leased Property and all Capital
Additions  of each Facility in accordance with its Primary Intended Use.  Lessee
shall  devote the entirety of each Facility and all Capital Additions thereto to
the  Primary  Intended  Use,  except for areas reasonably required for office or
storage  space  uses  incidental  to the Primary Intended Use.  Lessee shall not
modify the services offered or take any other action (e.g., removing patients or
residents  from  any Facility or directing patients or residents, or prospective
patients  or residents, to another Facility) which would materially reduce Gross
Revenues.  Lessee  shall at all times maintain an adequate staff for the service
of  its  residents  and/or  patients.  Lessee  shall  employ  its best judgment,
efforts  and abilities to operate the entirety of each Facility in such a manner
so  as  to  maximize  Gross  Revenues  and  to  enhance  the  reputation  and
attractiveness  of  each  Facility.
7.2.4     Lessee  shall conduct its business at each Facility in conformity with
prudent  standards  of  patient  or  resident  care  practice.
7.2.5     Lessee  shall  not  commit  or suffer to be committed any waste on the
Leased  Property or any Capital Addition thereto or cause or permit any nuisance
thereon.
7.2.6     Lessee  shall  neither  suffer  nor  permit the Leased Property or any
portion thereof or any Capital Addition thereto financed by Lessor to be used in
such  a  manner as (i) might reasonably tend to impair Lessor's title thereto or
to  any  portion  thereof  or  (ii)  may make possible a claim of adverse use or
possession,  or  an  implied  dedication  of  the Leased Property or any portion
thereof  or  any  Capital  Addition  thereto  financed  by  Lessor.
7.2.7     There  shall  be  no  change  of  any  License Holder for any Facility
without  Lessor's  prior written consent, which consent may be given or withheld
in  Lessor's  sole  and  absolute  discretion.
7.3     Lessor  to  Grant  Easements,  etc
        ----------------------------------
     .  Lessor  shall,  from  time  to  time  so long as no Event of Default has
occurred  and  is  continuing, at the request of Lessee and at Lessee's cost and
expense,  but  subject  to  the  approval of Lessor, which approval shall not be
unreasonably  withheld  or  delayed  (i) grant easements and other rights in the
nature  of  easements;  (ii)  release  existing easements or other rights in the
nature  of  easements  which  are  for the benefit of the Leased Property; (iii)
dedicate  or  transfer  unimproved  portions  of  the  Leased Property for road,
highway  or  other  public  purposes;  (iv) execute petitions to have the Leased
Property  annexed  to any municipal corporation or utility district; (v) execute
amendments  to  any  covenants, conditions and restrictions affecting the Leased
Property;  and (vi) execute and deliver to any Person any instrument appropriate
to  confirm  or  effect  such grants, releases, dedications and transfers to the
extent  of its interest in the Leased Property, but only upon delivery to Lessor
of  an  Officer's  Certificate  stating  that  such  grant  release, dedication,
transfer,  petition or amendment is not detrimental to the proper conduct of the
business  of  Lessee  on  the Leased Property and does not materially reduce the
value  of  the  Leased  Property.
7.4     Preservation  of  Facility  Value
        ---------------------------------
     .  Lessee  acknowledges  that  the  value  of the Facility is dependent, in
part,  on  the  concentration  on  the  Leased  Property  during the Term of the
assisted  living  business of Lessee and its Affiliates in the geographical area
of the Leased Property.  Lessee further acknowledges that diversion of residents
and/or  patients,  as  applicable,  from  any  Facility  to  other facilities or
institutions  owned,  operated  or  managed,  whether directly or indirectly, by
Lessee  or  its  Affiliates will have a material adverse impact on the value and
utility  of  the  Leased  Property.  Accordingly,  Lessor  and  Lessee  agree as
follows:
7.4.1     During  the  Term,  neither  Lessee  nor  any of its Affiliates, shall
directly  or  indirectly,  operate,  own,  manage  or  have  any  interest in or
otherwise  participate  in  or  receive  revenues  from  any  other  facility or
institution  providing services or similar goods to those provided in connection
with  any  Facility  and the Primary Intended Use (which Lessee did not operate,
own, manage or have any interest in on the Commencement Date), within a ten (10)
     mile  radius  outward  from  the outside boundary of the Leased Property of
such  Facility.   All distances shall be measured on a straight line rather than
on  a  driving  distance  basis.  In  the  event  that any portion of such other
facility  or  institution  is  located  within  such  restricted area the entire
facility  or  institution  shall  be deemed located within such restricted area.
Notwithstanding  the  foregoing,  the provisions of this Section 7.4.1 shall not
apply  to  Lessee's  operation  of  the facilities and institutions set forth on
Exhibit M attached hereto and incorporated herein.  Lessor shall have all rights
    -----
at  law  and  in  equity  available  to Lessor as a result of any breach of this
Section  7.4  hereunder.
ARTICLE  VIII.
8.1     Compliance  with  Legal  and  Insurance  Requirements,  Instruments, etc
        ------------------------------------------------------------------------
     .  Subject  to  Article  XII  regarding  permitted contests, Lessee, at its
expense,  shall  promptly  (i)  comply with all Legal Requirements and Insurance
Requirements  regarding  the use, operation, maintenance, repair and restoration
of  the  Leased  Property,  Lessee's Personal Property and all Capital Additions
whether or not compliance therewith may require structural changes in any of the
Leased  Improvements  or Capital Additions thereto or interfere with the use and
enjoyment  of the Leased Property and (ii) procure, maintain and comply with all
licenses,  certificates  of  need,  provider  agreements (but only to the extent
Lessee, in its prudent business judgment, elects to participate in the Medicare,
Medicaid  or other third party payor programs) and other authorizations required
for  the  use of the Leased Property, Lessee's Personal Property and all Capital
Additions  for  the  applicable  Primary  Intended  Use and any other use of the
Leased Property, Lessee's Personal Property and all Capital Additions then being
made,  and  for  the proper erection, installation, operation and maintenance of
the  Leased  Property, Lessee's Personal Property and all Capital Additions.  In
an  emergency or in the event of a breach by Lessee of its obligations hereunder
which  is not cured within any applicable cure period, Lessor may, but shall not
be  obligated  to,  enter  upon  the  Leased  Property and all Capital Additions
thereto  and  take such actions and incur such costs and expenses to effect such
compliance  as it deems advisable to protect its interest in the Leased Property
and  Capital  Additions thereto, and Lessee shall reimburse Lessor for all costs
and  expenses  incurred  by  Lessor  in  connection  with  such actions.  Lessee
covenants  and  agrees  that the Leased Property, Lessee's Personal Property and
all  Capital  Additions  shall  not  be  used  for  any  unlawful  purpose.
ARTICLE  IX.
9.1     Maintenance  and  Repair.
        ------------------------
9.1.1     Lessee,  at its expense, shall maintain the Leased Property, and every
portion  thereof,  Lessee's Personal Property and all Capital Additions, and all
private  roadways,  sidewalks  and curbs appurtenant to the Leased Property, and
which  are  under  Lessee's  control in good order and repair whether or not the
need  for  such  repairs  occurs as a result of Lessee's use, any prior use, the
elements  or  the age of the Leased Property, Lessee's Personal Property and all
Capital  Additions,  and,  with  reasonable  promptness,  make all necessary and
appropriate  repairs  thereto  of  every  kind  and  nature,  including, without
limitations  all  repairs  described  in  Section  9.1.6 within the time periods
specified  in  Section  9.1.6, and those necessary to comply with changes in any
Legal  Requirements, whether interior or exterior, structural or non-structural,
ordinary  or  extraordinary,  foreseen  or  unforeseen or arising by reason of a
condition  existing  prior  to  the  Commencement Date.  All repairs shall be at
least  equivalent in quality to the original work.  Lessee will not take or omit
to  take  any action the taking or omission of which might materially impair the
value  or  the  usefulness  of  the  Leased  Property or any part thereof or any
Capital  Addition  thereto  for  its  Primary  Intended  Use.
9.1.2     Lessor  shall  not under any circumstances be required to (i) build or
rebuild  any  improvements  on  the  Leased  Property;  (ii)  make  any repairs,
replacements,  alterations, restorations or renewals of any nature to the Leased
Property,  whether  ordinary  or  extraordinary,  structural  or non-structural,
foreseen  or  unforeseen,  or  to  make  any expenditure whatsoever with respect
thereto;  or  (iii)  maintain  the  Leased  Property  in any way.  Lessee hereby
waives, to the extent permitted by law, the right to make repairs at the expense
of  Lessor  pursuant  to  any law in effect at the time of the execution of this
Lease  or  hereafter  enacted.
9.1.3     Nothing  contained  in  this Lease and no action or inaction by Lessor
shall  be  construed  as  (i)  constituting  the  consent  or request of Lessor,
expressed  or implied, to any contractor, subcontractor, laborer, materialman or
vendor  to  or for the performance of any labor or services or the furnishing of
any  materials  or  other  property  for the construction, alteration, addition,
repair  or  demolition  of  or to the Leased Property or any part thereof or any
Capital  Addition  thereto; or (ii) giving Lessee any right, power or permission
to  contract  for  or  permit  the  performance  of any labor or services or the
furnishing  of  any  materials or other property in such fashion as would permit
the  making  of  any  claim  against  Lessor  in  respect thereof or to make any
agreement  that  may  create,  or in any way be the basis for, any right, title,
interest,  lien,  claim  or  other  encumbrance upon the estate of Lessor in the
Leased  Property,  or  any  portion  thereof  or  any  Capital Addition thereto.
9.1.4     Unless  Lessor  shall  convey  any  of  the  Leased Property to Lessee
pursuant  to  the provisions of this Lease, Lessee shall, upon the expiration or
earlier termination of the Term with respect to a Facility, vacate and surrender
the  Leased Property, Lessor's Personal Property, Lessee's Personal Property and
all  Capital  Additions in each case with respect to such Facility, to Lessor in
the  condition in which such Leased Property and Lessor's Personal Property were
originally  received from Lessor and such Lessee's Personal Property and Capital
Additions  were  originally  introduced  to  such  Facility, except as repaired,
rebuilt,  restored,  altered  or  added  to  as  permitted  or  required  by the
provisions  of  this  Lease  and  except  for  ordinary  wear  and  tear.
9.2     Encroachments,  Restrictions,  Mineral  Leases,  etc
        ----------------------------------------------------
     .  If  any  of  the  Leased Improvements or Capital Additions shall, at any
time,  encroach  upon any property, street or right-of-way, or shall violate any
restrictive  covenant  or  other agreement affecting the Leased Property, or any
part  thereof  or  any  Capital  Addition thereto, or shall impair the rights of
others  under  any  easement  or  right-of-way  to  which the Leased Property is
subject,  or  the  use of the Leased Property or any Capital Addition thereto is
impaired,  limited  or interfered with by reason of the exercise of the right of
surface  entry or any other provision of a lease or reservation of any oil, gas,
water  or other minerals, then promptly upon the request of Lessor or any Person
affected  by any such encroachment, violation or impairment, Lessee, at its sole
cost  and expense, but subject to its right to contest the existence of any such
encroachment,  violation  or impairment, shall protect, indemnify, save harmless
and defend Lessor from and against all losses, liabilities, obligations, claims,
damages,  penalties,  causes of action, costs and expenses (including reasonable
attorneys',  consultants' and experts' fees and expenses) based on or arising by
reason  of  any  such encroachment, violation or impairment.  In the event of an
adverse  final determination with respect to any such encroachment, violation or
impairment,  Lessee  shall  either  (i)  obtain  valid  and effective waivers or
settlements  of  all  claims,  liabilities  and damages resulting from each such
encroachment,  violation  or impairment, whether the same shall affect Lessor or
Lessee;  or  (ii)  make  such changes in the Leased Improvements and any Capital
Addition  thereto,  and  take  such  other  actions, as Lessee in the good faith
exercise  of  its  judgment  deems  reasonably  practicable,  to  remove  such
encroachment  or  to  end such violation or impairment, including, if necessary,
the  alteration  of  any  of  the  Leased  Improvements  or any Capital Addition
thereto,  and in any event take all such actions as may be necessary in order to
be  able  to  continue  the operation of the Leased Improvements and any Capital
Addition thereto for the Primary Intended Use substantially in the manner and to
the  extent the Leased Improvements and Capital Additions were operated prior to
the  assertion  of  such  encroachment,  violation  or  impairment.  Lessee's
obligations  under  this Section 9.2 shall be in addition to and shall in no way
discharge or diminish any obligation of any insurer under any policy of title or
other  insurance  and,  to  the  extent the recovery thereof is not necessary to
compensate  Lessor  for any damages incurred by any such encroachment, violation
or  impairment,  Lessee  shall be entitled to a credit for any sums recovered by
Lessor  under  any  such  policy  of  title  or other insurance and Lessor, upon
request  by  Lessee,  shall assign Lessor's rights under such policies to Lessee
provided  such  assignment  does  not adversely affect Lessor's rights under any
such  policy  and  provided further that Lessee shall indemnify, defend, protect
and  save Lessor harmless from and against any liability, cost or expense of any
kind  that  may  be  imposed upon Lessor in connection with any such assignment.
Lessor  agrees  to  use  reasonable efforts to seek recovery under any policy of
title  or other insurance under which Lessor is an insured party for all losses,
liabilities,  obligations,  claims,  damages, penalties, causes of action, costs
and  expenses  (including  reasonable attorneys', consultants' and experts' fees
and  expenses) based on or arising by reason of any such encroachment, violation
or  impairment  as  set forth in this Section 9.2; provided, however, that in no
event  shall  Lessor  be  obligated  to institute any litigation, arbitration or
other  legal  proceedings  in  connection  therewith.
ARTICLE  X.
10.1     Construction  of  Capital  Additions  to  the  Leased  Property.
         ---------------------------------------------------------------
10.1.1     Requests.
           --------
     With  respect  to  each  Facility,  no Capital Addition shall be made which
would  tie  in  or  connect  any  Leased  Improvements  with any improvements on
property  adjacent  to the Land of such Facility without Lessor's approval which
may  be  withheld  in  Lessor's sole and absolute discretion.  All other Capital
Additions  shall be subject to Lessor's review and approval which approval shall
not  be  unreasonably withheld.  For any Capital Addition which does not require
the  approval  of Lessor, Lessee shall, prior to commencing construction of such
Capital  Addition,  provide  to  Lessor  a  written  description of such Capital
Addition  and  on  an ongoing basis supply Lessor with related documentation and
information  as  Lessor  may  reasonably  request.  If  Lessee desires to make a
Capital Addition for which Lessor's approval is required, Lessee shall submit to
Lessor in reasonable detail a general description of the proposal, the projected
cost  of  construction  and  such  plans  and specifications, permits, licenses,
contracts and other information concerning the proposal as Lessor may reasonably
request.  Such  description shall indicate the use or uses to which such Capital
Addition  will  be  put  and the impact, if any, on current and forecasted gross
revenues  and operating income attributable thereto.  It shall be reasonable for
Lessor  to condition its approval of any Capital Addition upon any or all of the
following  terms  and  conditions:
(a)     Such  construction  shall  be  effected  pursuant  to detailed plans and
specifications  approved  by  Lessor;
(b)     Such construction shall be conducted under the supervision of a licensed
architect  or  engineer  selected  by  Lessee  and  approved  by  Lessor;
(c)     Lessee  shall  have  procured or caused to be procured a performance and
payment bond for the full value of such construction, which such bond shall name
Lessor  as  an  additional  obligee  and  otherwise be in form and substance and
issued  by  a  Person  reasonably  satisfactory  to  Lessor;  and
(d)     Such  construction shall not be undertaken unless Lessee demonstrates to
the  reasonable  satisfaction  of  Lessor  the financial ability to complete the
construction  without  adversely  affecting  its cash flow position or financial
viability.
10.2     Construction  Requirements  for  all  Capital  Additions
         --------------------------------------------------------
     .  Whether or not Lessor's review and approval is required, for all Capital
Additions:
(a)     Such  construction  shall  not  be  commenced  until  Lessee  shall have
procured  and  paid  for  all  municipal  and  other  governmental  permits  and
authorizations  required  therefor, and Lessor shall join in the application for
such  permits  or  authorizations  whenever  such action is necessary; provided,
however, that (i) any such joinder shall be at no cost or expense to Lessor; and
     (ii) any plans required to be filed in connection with any such application
which  require the approval of Lessor as hereinabove provided shall have been so
approved  by  Lessor;
(b)     Such construction shall not, and Lessee's licensed architect or engineer
shall  certify to Lessor that such construction shall not, impair the structural
strength  of  any  component  of  the  applicable  Facility  or  overburden  the
electrical,  water,  plumbing,  HVAC  or  other  building  systems  of  any such
component;
(c)     Lessee's licensed architect or engineer shall certify to Lessor that the
detailed  plans  and  specifications  conform  to and comply with all applicable
building, subdivision and zoning codes, laws, ordinances and regulations imposed
by  all governmental authorities having jurisdiction over the Leased Property of
the  applicable  Facility;
(d)     Such  construction  shall, when completed, be of such a character as not
to  decrease  the value of the Leased Property as it was immediately before such
Capital  Addition;
(e)     During  and following completion of such construction, the parking which
is  located  in  the  applicable  Facility or on the Land of such Facility shall
remain  adequate for the operation of such Facility for its Primary Intended Use
and in no event shall such parking be less than that which was or is required by
law  or  which  was  located  in  such  Facility  or  on  the Land prior to such
construction;  provided,  however,  with  Lessor's  prior  consent  and  at  no
additional  expense  to  Lessor,  (i)  to  the  extent additional parking is not
already a part of a Capital Addition, Lessee may construct additional parking on
the  Land; or (ii) Lessee may acquire off-site parking to serve such Facility as
long  as  such  parking  shall  be  dedicated to, or otherwise made available to
serve,  such  Facility;
(f)     All  work  done  in  connection  with  such  construction  shall be done
promptly and in a good and workmanlike manner using first-class materials and in
conformity  with  all  Legal  Requirements;  and
(g)     Promptly  following  the  completion  of such construction, Lessee shall
deliver to Lessor "as built" drawings of such addition, certified as accurate by
the  licensed  architect  or engineer selected by Lessee to supervise such work,
and  copies  of  any  new  or  revised  Certificates  of  Occupancy.
10.3     Funding  by  Lessor.
         -------------------
10.3.1     Lessee may request that Lessor fund a Capital Addition, in which case
     Lessee  shall provide to Lessor any information about such Capital Addition
which  Lessor  may  reasonably  request.  Lessor  may,  but  shall  be  under no
obligation  to,  provide the funds necessary to meet the request.  Within thirty
(30)  days  of  receipt of a request to fund a proposed Capital Addition, Lessor
shall  notify  Lessee  as  to whether it will fund the proposed Capital Addition
and,  if  so,  the terms and conditions upon which it would do so, including the
terms of any amendment to this Lease.  Lessee shall have ten (10) days to accept
or  reject  Lessor's  funding  proposal.  In  no  event shall the portion of the
projected  Capital  Addition  Cost  comprised  of land, if any, materials, labor
charges  and  fixtures  be less than ninety percent (90%) of the total amount of
the  projected  cost  of  such  Capital  Addition.
10.3.2     If  Lessor  agrees  to  fund  a  proposed Capital Addition and Lessee
accepts  the terms thereof, Lessee shall provide Lessor with the following prior
to  any  advance  of  funds:
(a)     any  information, certificates, licenses, permits or documents requested
by Lessor which are necessary and obtainable to confirm that Lessee will be able
     to  use the Capital Addition upon completion thereof in accordance with the
Primary  Intended Use, including all required federal, state or local government
licenses  and  approvals;
(b)     an  Officer's Certificate and, if requested, a certificate from Lessee's
architect,  setting  forth  in reasonable detail the projected or actual Capital
Addition  Costs;
(c)     an  amendment to this Lease, in a form prepared by Lessor and reasonably
agreed  to by Lessee, providing for an increase in the Rent in amounts as agreed
upon  by  the  parties  hereto  and  other  provisions  as  may  be necessary or
appropriate;
(d)     a deed conveying title to Lessor to any land acquired for the purpose of
constructing  the  Capital  Addition free and clear of any liens or encumbrances
except  those  approved  by  Lessor,  and  accompanied by an ALTA survey thereof
satisfactory  to  Lessor;
(e)     for  each  advance,  endorsements  to  any  outstanding  policy of title
insurance  covering  the Leased Property or commitments therefor satisfactory in
form  and  substance  to  Lessor  (i)  updating  the same without any additional
exception  except  as may be approved by Lessor and (ii) increasing the coverage
thereof  by  an  amount  equal to the Fair Market Value of the Capital Addition,
except  to  the extent covered by the owner's policy of title insurance referred
to  in  subparagraph  (f),  below;
(f)     if appropriate, an owner's policy of title insurance insuring fee simple
title  to  any  land  conveyed  to  Lessor  free  and  clear  of  all  liens and
encumbrances  except  those that do not materially affect the value of such land
and  do  not  interfere  with  the use of the Leased Property or are approved by
Lessor;
(g)     if  requested  by  Lessor,  a  M.A.I.  appraisal  of the Leased Property
indicating  that the Fair Market Value of the Leased Property upon completion of
the  Capital  Addition  will exceed the Fair Market Value of the Leased Property
immediately  prior  thereto by an amount not less than ninety-five percent (95%)
of  the  cost  of  the  Capital  Addition;  and
(h)     such  other  billing  statements,  invoices, certificates, endorsements,
opinions,  site  assessments, surveys, resolutions, ratifications, lien releases
and waivers and other instruments and information reasonably required by Lessor.
10.4     Capital  Additions  Financed  by  Lessee
         ----------------------------------------
     .  If  Lessee  provides or arranges such financing, this Lease shall be and
hereby  is  amended  to  provide  as  follows:
(a)     The  Gross  Revenues attributable to such Capital Addition and all other
Capital  Additions,  if any, financed by Lessee, shall be deemed to be an amount
which  bears  the  same  proportion  to the total Gross Revenues from the entire
Leased  Property  (including all Capital Additions) of such Facility as the Fair
Market  Added  Value  of all said Capital Additions to such Facility financed by
Lessee  bears  to the Fair Market Value of the entire Leased Property (including
all  Capital  Additions)  immediately after completion of said Capital Addition.
The  above  referenced  proportion  of  the  Fair  Market Added Value of Capital
Additions  to  a  Facility  paid  for  by Lessee to the Fair Market Value of the
entire Leased Property of such Facility expressed as a percentage is referred to
     herein  as the "Added Value Percentage" for such Facility.  The Added Value
Percentage determined as provided above for Capital Additions financed by Lessee
with  respect  to  a Facility shall remain in effect for such Facility until any
subsequent Capital Addition to such Facility with respect to a Facility financed
by  Lessee  is  completed.
(b)     There  shall  be no adjustment in the Minimum Rent by reason of any such
Capital  Addition.
(c)     Upon the expiration or earlier termination of this Lease with respect to
a  Facility,  except  by reason of the default by Lessee hereunder, Lessor shall
compensate  Lessee  for all Capital Additions financed by Lessee with respect to
such  Facility:
(i)     By  purchasing such Capital Additions from Lessee for cash in the amount
of  the  then  Fair  Market  Added  Value  of  such  Capital  Additions;  or
(ii)     By  such  other  arrangement  regarding  such  compensation as shall be
mutually  and  reasonably  acceptable  to  Lessor  and  Lessee.
ARTICLE  XI.
11.1     Liens
         -----
     .  Subject to the provisions of Article XII relating to permitted contests,
Lessee  will  not  directly  or  indirectly  create  or allow to remain and will
promptly  discharge  at  its  expense  any  lien, encumbrance, attachment, title
retention  agreement  or  claim upon the Leased Property or any Capital Addition
thereto  or  any  attachment, levy, claim or encumbrance in respect of the Rent,
excluding,  however,  (i)  this  Lease;  (ii)  matters  that  exist  as  of  the
Commencement  Date;  (iii)  restrictions, liens and other encumbrances which are
consented  to  in  writing  by  Lessor, or any easements granted pursuant to the
provisions  of  Section  7.3;  (iv)  liens  for  Impositions which Lessee is not
required  to  pay hereunder; (v) subleases permitted by Article XXIV; (vi) liens
for  Impositions  not  yet  delinquent;  (vii)  liens  of  mechanics,  laborers,
materialmen,  suppliers  or  vendors  for  sums  either disputed or not yet due,
provided  that  (1)  the  payment  of such sums shall not be postponed under any
related  contract  for  more  than  sixty  (60) days after the completion of the
action giving rise to such lien and such reserve or other appropriate provisions
as  shall  be  required  by law or GAAP shall have been made therefor or (2) any
such  liens  are  in the process of being contested as permitted by Article XII;
(viii)  any  liens  which  are  the  responsibility  of  Lessor  pursuant to the
provisions  of  Article  XXXVI;  and  (ix) liens related to equipment leases for
equipment  which  is used or useful in Lessee's business on the Leased Property,
provided  that  the  payment  of  any sums due under such equipment leases shall
either  (1) be paid as and when due in accordance with the terms thereof, or (2)
be  in  the  process  of  being  contested  as  permitted  by  Article  XII.
ARTICLE  XII.
12.1     Permitted  Contests
         -------------------
     .  Lessee,  upon  prior written notice to Lessor, on its own or in Lessor's
name,  at  Lessee's  expense,  may  contest,  by  appropriate  legal proceedings
conducted  in  good  faith  and  with  due  diligence,  the  amount, validity or
application,  in  whole  or in part, of any licensure or certification decision,
Imposition,  Legal  Requirement,  Insurance Requirement, lien, attachment, levy,
encumbrance,  charge  or  claim;  provided,  however, that (i) in the case of an
unpaid  Imposition,  lien,  attachment,  levy, encumbrance, charge or claim, the
commencement  and  continuation of such proceedings shall suspend the collection
thereof  from  Lessor  and  from  the  Leased  Property  or any Capital Addition
thereto;  (ii)  neither the Leased Property or any Capital Addition thereto, the
Rent therefrom nor any part or interest in either thereof would be in any danger
of  being  sold,  forfeited,  attached  or  lost  pending  the  outcome  of such
proceedings; (iii) in the case of a Legal Requirement, neither Lessor nor Lessee
would  be  in  any  danger  of civil or criminal liability for failure to comply
therewith  pending  the  outcome  of  such proceedings; (iv) if any such contest
shall  involve  a  sum  of  money  or potential loss in excess of Fifty Thousand
Dollars  ($50,000), Lessee shall deliver to Lessor and its counsel an opinion of
legal counsel reasonably acceptable to Lessor to the effect set forth in clauses
(i),  (ii) and (iii) above, to the extent applicable; (v) in the case of a Legal
Requirement,  Imposition,  lien,  encumbrance  or charge, Lessee shall give such
reasonable  security  as may be required by Lessor to insure ultimate payment of
the  same  and  to  prevent any sale or forfeiture of the Leased Property or any
Capital  Addition  thereto  or  the  Rent  by  reason  of  such  non-payment  or
noncompliance;  (vi)  in  the  case  of  an  Insurance Requirement, the coverage
required  by  Article  XIII  shall  be  maintained; and (vii) if such contest be
finally  resolved against Lessor or Lessee, Lessee shall promptly pay the amount
required  to  be paid, together with all interest and penalties accrued thereon,
or  comply  with  the  applicable  Legal  Requirement  or Insurance Requirement.
Lessor,  at  Lessee's  expense,  shall  execute  and  deliver  to  Lessee  such
authorizations  and  other  documents  as may reasonably be required in any such
contest,  and, if reasonably requested by Lessee or if Lessor so desires, Lessor
shall  join as a party therein.  The provisions of this Article XII shall not be
construed  to  permit  Lessee to contest the payment of Rent or any other amount
(other than Impositions or Additional Charges which Lessee may from time to time
be  required  to  impound  with  Lessor)  payable by Lessee to Lessor hereunder.
Lessee  shall  indemnify,  defend,  protect  and  save  Lessor harmless from and
against  any  liability,  cost  or  expense of any kind that may be imposed upon
Lessor  in  connection  with  any such contest and any loss resulting therefrom.
ARTICLE  XIII.
13.1     General  Insurance  Requirements
         --------------------------------
     .  During the Term, Lessee shall at all times keep the Leased Property, and
all  property located in or on the Leased Property, including Capital Additions,
the  Fixtures  and  the Personal Property, insured with the kinds and amounts of
insurance  described below.  Each element of insurance described in this Article
shall be maintained with respect to the Leased Property of each Facility and the
Personal  Property  and  operations thereon.  This insurance shall be written by
companies  authorized  to do insurance business in the State in which the Leased
Property  is  located.  All  liability  type  policies  must  name  Lessor as an
"additional  insured."  All property policies shall name Lessor as "loss payee."
All  business  interruption  policies  shall  name  Lessor  as "loss payee" with
respect  to  Rent  only.  Losses  shall  be  payable  to Lessor and/or Lessee as
provided  in Article XIV.  In addition, the policies, as appropriate, shall name
as  an  "additional insured" or "loss payee" the holder of any mortgage, deed of
trust  or  other  security  agreement  ("Facility  Mortgagee")  securing  any
indebtedness  or  any  other  Encumbrance  placed  on  the  Leased  Property  in
accordance  with the provisions of Article XXXVI ("Facility Mortgage") by way of
a  standard  form  of mortgagee's loss payable endorsement.  Any loss adjustment
shall require the written consent of Lessor, Lessee, and each Facility Mortgagee
unless  the  amount  of  the loss is less than $10,000 in which event no consent
shall be required.  Evidence of insurance shall be deposited with Lessor and, if
requested,  with  any  Facility  Mortgagee(s).  If any provision of any Facility
Mortgage requires deposits of insurance to be made with such Facility Mortgagee,
Lessee  shall either pay to Lessor monthly the amounts required and Lessor shall
transfer  such  amounts  to  each  Facility  Mortgagee,  or, pursuant to written
direction by Lessor, Lessee shall make such deposits directly with such Facility
Mortgagee.  The  policies  shall insure against the following risks with respect
to  each  Facility:
13.1.1     Loss  or  damage  by fire, vandalism and malicious mischief, extended
coverage  perils  commonly  known  as special form perils, earthquake (including
earth  movement) and windstorm in an amount not less than the insurable value on
a  replacement  cost  basis  (as  defined below in Section 13.2) and including a
building  ordinance  coverage  endorsement;
13.1.2     Loss  or  damage  by  explosion of steam boilers, pressure vessels or
similar  apparatus,  now or hereafter installed in each Facility, in such limits
with  respect  to any one accident as may be reasonably requested by Lessor from
time  to  time;
13.1.3     Flood  (when the Leased Property of a Facility is located in whole or
in  part  within  a designated 100-year flood plain area) and such other hazards
and  in  such amounts as may be customary for comparable properties in the area;
13.1.4     Loss  of  rental value in an amount not less than twelve (12) months'
Rent  payable  hereunder  or  business  interruption  in an amount not less than
twelve (12) months of income and normal operating expenses including payroll and
Rent  payable hereunder with an endorsement extending the period of indemnity by
at  least ninety (90) days (Building Ordinance - Increased Period of Restoration
Endorsement)  necessitated  by the occurrence of any of the hazards described in
Sections  13.1.1,  13.1.2  or  13.1.3;
13.1.5     Claims  for  personal  injury  or  property  damage under a policy of
comprehensive  general public liability insurance with amounts not less than One
Million  and  No/100  Dollars  ($1,000,000.00)  combined  single limit and Three
Million  No/100 Dollars ($3,000,000.00) in the annual aggregate, with respect to
each  Facility;  and
13.1.6     Medical professional liability with amounts not less than One Million
Dollars  ($1,000,000)  combined  single  limit  and  Three  Million  Dollars
($3,000,000)  in  the  annual  aggregate,  with  respect  to  each  Facility.
13.2     Replacement  Cost
         -----------------
     .  The  term  "replacement  cost" shall mean the actual replacement cost of
the  insured  property  from  time to time with new materials and workmanship of
like  kind  and quality.  If either party believes that the replacement cost has
increased  or  decreased at any time during the Term, it shall have the right to
have  such  replacement  cost  redetermined  by  an impartial national insurance
company  reasonably acceptable to both parties (the "impartial appraiser").  The
party  desiring to have the replacement cost so redetermined shall forthwith, on
receipt  of  such  determination by the impartial appraiser, give written notice
thereof to the other party hereto.  The determination of the impartial appraiser
shall  be  final  and  binding on the parties hereto, and Lessee shall forthwith
increase  or  decrease  the  amount  of  the  insurance carried pursuant to this
Article  to  the  amount  so  determined by the impartial appraiser.  Each party
shall  pay  one-half  (1/2)  of the fee, if any, of the impartial appraiser.  If
Lessee  has  made  improvements  to  the Leased Property, Lessor may at Lessee's
expense  have  the  replacement  cost  redetermined  at  any  time  after  such
improvements  are  made,  regardless  of  when  the  replacement  cost  was last
determined.
13.3     Additional  Insurance
         ---------------------
     .  In addition to the insurance described above, Lessee shall maintain such
additional  insurance upon notice from Lessor as may be reasonably required from
time  to  time by any Facility Mortgagee and shall further at all times maintain
adequate workers' compensation coverage and any other coverage required by Legal
Requirements  for  all Persons employed by Lessee on the Leased Property and any
Capital  Addition  thereto  in  accordance  with  Legal  Requirements.
13.4     Waiver  of  Subrogation
         -----------------------
     .  All  insurance  policies  carried  by  either  party covering the Leased
Property  and  any  Capital  Addition  thereto  and  Lessee's  Personal Property
including contents, fire and casualty insurance, shall expressly waive any right
of  subrogation on the part of the insurer against the other party.  The parties
hereto  agree that their policies will include such waiver clause or endorsement
so  long as the same are obtainable without extra cost, and in the event of such
an  extra  charge  the other party, at its election, may pay the same, but shall
not  be  obligated  to  do  so.  Each party waives any claims it has against the
other  party  to  the  extent  such  claim  is  covered  by  insurance.
13.5     Policy  Requirements
         --------------------
     .  All  of  the  policies of insurance referred to in this Article shall be
written  in  form  satisfactory  to  Lessor  and  by  insurance companies with a
policyholder  rating  of  "A"  and  a financial rating of "X" in the most recent
version  of  Best's  Key  Rating  Guide.  Lessee  shall  pay all of the premiums
therefor,  and  deliver such policies or certificates thereof to Lessor prior to
their  effective date (and with respect to any renewal policy, at least ten (10)
days  prior  to  the expiration of the existing policy), and in the event of the
failure of Lessee either to effect such insurance in the names herein called for
or  to  pay  the  premiums therefor, or to deliver such policies or certificates
thereof  to  Lessor,  at the times required, Lessor shall be entitled, but shall
have  no  obligation, to effect such insurance and pay the premiums therefor, in
which  event  the  cost  thereof,  together with interest thereon at the Overdue
Rate,  shall  be  repayable  to Lessor upon demand therefor.  Each insurer shall
agree,  by endorsement on the policy or policies issued by it, or by independent
instrument  furnished  to  Lessor,  that  it  will give to Lessor ten (10) days'
written  notice  before  the  policy  or  policies in question shall be altered,
allowed to expire or cancelled.  Each property policy shall have a deductible or
deductibles,  if  any, which are no greater than $5,000, unless such requirement
is  specifically  waived  by  Lessor.  Each  earthquake  policy  shall  have  a
deductible  of  ten percent of real property, personal property and rental value
limit at the subject location, unless such requirement is specifically waived by
Lessor.
13.6     Increase  in  Limits
         --------------------
     .  If  either  party  shall at any time believe the limits of the insurance
required  hereunder  to  be  either excessive or insufficient, the parties shall
endeavor  to  agree  in  writing  on  the  proper and reasonable limits for such
insurance  to be carried and such insurance shall thereafter be carried with the
limits  thus  agreed  on until further change pursuant to the provisions of this
Section.  If  the  parties  shall  be  unable  to  agree thereon, the proper and
reasonable  limits  for  such  insurance to be carried shall be determined by an
impartial  third party reasonably selected by the parties.  Nothing herein shall
permit  the  amount  of  insurance  to  be  reduced  below the amount or amounts
required  by  any  Facility  Mortgagee.
13.7     Blanket  Policies  and  Policies  Covering  Multiple  Locations
         ---------------------------------------------------------------
     .  Notwithstanding  anything  to  the  contrary  contained in this Article,
Lessee's  obligations  to carry the insurance provided for herein may be brought
within  the  coverage  of  a blanket policy or policies of insurance carried and
maintained  by Lessee; provided, however, that the coverage afforded Lessor will
not  be  reduced  or  diminished or otherwise be different from that which would
exist  under  a separate policy for each Facility meeting all other requirements
of  this  Lease  by  reason  of the use of such blanket policy of insurance, and
provided  further  that  the  requirements  of  this  Article XIII are otherwise
satisfied.  For any liability policies covering one or more of the Facilities or
any  other  facilities  in addition to the Facilities, Lessor may require excess
limits  as  Lessor  reasonably  determines.
13.8     No  Separate  Insurance
         -----------------------
     .  Lessee  shall not, on Lessee's own initiative or pursuant to the request
or requirement of any third party, (i) take out separate insurance concurrent in
form  or contributing in the event of loss with that required in this Article to
be  furnished by, or which may reasonably be required to be furnished by, Lessee
or  (ii)  increase  the  amounts  of  any then existing insurance by securing an
additional policy or additional policies, unless all parties having an insurable
interest  in  the subject matter of the insurance, including in all cases Lessor
and all Facility Mortgagees, are included therein as additional insureds and the
loss  is  payable  under such insurance in the same manner as losses are payable
under  this  Lease.  Lessee shall immediately notify Lessor of the taking out of
any  such  separate  insurance or of the increasing of any of the amounts of the
then existing insurance by securing an additional policy or additional policies.
ARTICLE  XIV.
14.1     Insurance  Proceeds
         -------------------
     .  All  proceeds  payable  by  reason  of  any loss or damage to the Leased
Property,  or  any portion thereof, under any policy of insurance required to be
carried hereunder shall be paid to Lessor and made available by Lessor to Lessee
from  time  to time for the reasonable costs of reconstruction or repair, as the
case  may  be,  of  any  damage to or destruction of the Leased Property, or any
portion thereof; provided, however, that if the total amount of proceeds payable
is $10,000 or less, the proceeds shall be paid to Lessee and used for the repair
of  any  damage  to  the  Leased  Property.  Any  excess  proceeds  of insurance
remaining  after  the  completion  of  the  restoration or reconstruction of the
Leased  Property  to  substantially  the  same  condition as existed immediately
before the damage or destruction and with materials and workmanship of like kind
and  quality and to Lessor's reasonable satisfaction shall be remitted by Lessor
to  Lessee  free  and  clear  upon completion of any such repair and restoration
except  as  otherwise  specifically  provided below in this Article XIV.  In the
event  neither Lessor nor Lessee is required or elects to repair and restore the
Leased  Property,  all  such insurance proceeds shall be retained by Lessor free
and  clear  except as otherwise specifically provided below in this Article XIV.
All salvage resulting from any risk covered by insurance shall belong to Lessor.
14.2     Insured  Casualty.
         -----------------
14.2.1     If the Leased Property and/or any Capital Additions of a Facility are
     damaged  or  destroyed  from  a risk covered by insurance carried by Lessee
such  that such Facility thereby is rendered Unsuitable for its Primary Intended
Use,  Lessee  shall either (i) restore such Leased Property to substantially the
same condition as existed immediately before such damage or destruction, or (ii)
offer to acquire the Leased Property of such Facility from Lessor for a purchase
price  equal  to the greater of (y) the Minimum Repurchase Price or (z) the Fair
Market  Value  immediately  prior to such damage or destruction.  If Lessor does
not  accept  Lessee's offer to so purchase the Leased Property of such Facility,
Lessee may either withdraw such offer and proceed to restore the Leased Property
of  such  Facility  to  substantially  the same condition as existed immediately
before  such  damage or destruction or terminate the Lease in which event Lessor
shall  be  entitled  to  retain  the  insurance  proceeds.
14.2.2     If the Leased Property and/or any Capital Additions of a Facility are
damaged from a risk covered by insurance carried by Lessee, but such Facility is
not  thereby  rendered  Unsuitable  for  its  Primary Intended Use, Lessee shall
restore  such  Leased  Property  to  substantially the same condition as existed
immediately  before  such  damage.  Such  damage shall not terminate this Lease;
provided, however, that if Lessee cannot within a reasonable time after diligent
efforts  obtain the necessary government approvals needed to restore and operate
such  Facility  for  its  Primary Intended Use, Lessee may offer to purchase the
Leased  Property  of  such Facility for a purchase price equal to the greater of
the  Minimum  Repurchase Price of such Facility or the Fair Market Value of such
Facility  immediately prior to such damage.  If Lessee shall make such offer and
Lessor  does  not  accept  the  same,  Lessee may either withdraw such offer and
proceed  to  restore  the  Leased Property of such Facility to substantially the
same  condition  as  existed  immediately  before such damage or destruction, or
terminate  the  Lease with respect to such Facility, in which event Lessor shall
be  entitled  to  retain  the  insurance  proceeds.
14.2.3     If  the  cost  of  the  repair  or  restoration exceeds the amount of
proceeds received by Lessor from the insurance required to be carried hereunder,
Lessee  shall  contribute  any  excess  amounts needed to restore such Facility.
Such  difference  shall  be  paid  by  Lessee  to Lessor together with any other
insurance  proceeds,  for  application  to  the  cost of repair and restoration.
14.2.4     If Lessor accepts Lessee's offer to purchase the Leased Property of a
Facility,  this  Lease  shall  terminate as to such Facility upon payment of the
purchase  price  and  Lessor  shall  remit  to  Lessee  all  insurance  proceeds
pertaining to the Leased Property of such Facility, including insurance proceeds
pertaining  to  Capital  Additions  and Lessee's Personal Property, then held by
Lessor.
14.3     Uninsured  Casualty
         -------------------
     .  If the Leased Property of a Facility is damaged or destroyed from a risk
not  covered  by  insurance  carried  by  Lessee,  whether or not such damage or
destruction  renders  such  Facility  Unsuitable  for  its Primary Intended Use,
Lessee  at  its  expense  shall  restore the Leased Property of such Facility to
substantially  the  same  condition  it was in immediately before such damage or
destruction  and  such  damage  or  destruction  shall not terminate this Lease;
provided, however, that if Lessee cannot within a reasonable time after diligent
efforts  obtain the necessary government approvals needed to restore and operate
the  Facility  for  its  Primary  Intended Use, Lessee shall purchase the Leased
Property  of  such  Facility  for  a  purchase price equal to the greater of the
Minimum  Repurchase  Price  or  the  Fair Market Value immediately prior to such
damage.
14.4     No  Abatement  of  Rent
         -----------------------
     .  This Lease shall remain in full force and effect and Lessee's obligation
to  pay  the  Rent  and  all  other  charges required by this Lease shall remain
unabated  during  the  period required for adjusting insurance, satisfying Legal
Requirements,  repair  and  restoration.
14.5     Waiver
         ------
     .  Lessee  waives  any  statutory  rights of termination which may arise by
reason  of  any  damage  or  destruction  of  the  Leased  Property.
14.6     Damage  Near  End  of  Term
         ---------------------------
     .  If  the  damage  or destruction contemplated hereunder occurs during the
last  year  of  the  Fixed  Term  or  any  Extended  Term, as applicable, of the
applicable  Facility  and  Lessee  terminates  any options it might then have to
purchase  the  Leased  Property or extend the Term of this Lease with respect to
such  Facility,  Lessee  may,  in  lieu  of  repairing  and restoring the Leased
Property  as  contemplated  hereunder, terminate this Lease with respect to such
Facility,  effective  as  of the date of payment to Lessor of the greater of (a)
the  insurance  proceeds  attributable to such damage or destruction and (b) the
cost  to  repair  such  damage or destruction as reasonably estimated by Lessor.
ARTICLE  XV.
15.1     Condemnation.
         ------------
15.1.1     Total  Taking
           -------------
     .  If the Leased Property of a Facility is totally and permanently taken by
Condemnation, this Lease shall terminate with respect to such Facility as of the
day  before  the  Date  of  Taking  for  such  Facility.
15.1.2     Partial  Taking
           ---------------
     .  If  a  portion  of  the  Leased  Property  of  a  Facility  is  taken by
Condemnation,  this Lease shall remain in effect if the affected Facility is not
thereby  rendered  Unsuitable for Its Primary Intended Use, but if such Facility
is  thereby  rendered  Unsuitable for its Primary Intended Use, this Lease shall
terminate  with respect to such Facility as of the day before the Date of Taking
for  such  Facility.
15.1.3     Restoration
           -----------
     .  If  there  is  a  partial  taking  of the Leased Property and this Lease
remains  in  full  force  and effect pursuant to Section 15.2, Lessor shall make
available  to  Lessee  the  portion  of  the  Award  necessary  and specifically
identified  for  restoration  of the Leased Property and Lessee shall accomplish
all  necessary  restoration  whether or not the amount provided by the condemnor
for  restoration  is  sufficient.
15.2     Award-Distribution
         ------------------
     .  The  entire  Award  shall  belong to and be paid to Lessor, except that,
subject  to  the  rights of the Facility Mortgagees, Lessee shall be entitled to
receive  from  the  Award, if and to the extent such Award specifically includes
such  item,  lost profits value and moving expenses, provided, that in any event
Lessor  shall  receive  from  the  Award,  subject to the rights of the Facility
Mortgagees,  no less than the greater of the Fair Market Value of the applicable
Facility  prior to the institution of the Condemnation or the Minimum Repurchase
Price  of  the  applicable  Facility.
15.3     Temporary  Taking
         -----------------
     .  The taking of the Leased Property, or any part thereof, shall constitute
a taking by Condemnation only when the use and occupancy by the taking authority
has  continued for longer than 180 consecutive days.  During any shorter period,
which shall be a temporary taking, all the provisions of this Lease shall remain
in  full  force  and effect and the Award allocable to the Term shall be paid to
Lessee.
ARTICLE  XVI.
16.1     Events  of  Default
         -------------------
     .  Any one or more of the following shall constitute an "Event of Default":
(a)     a  default shall occur under any other lease or agreement between Lessor
or an Affiliate of Lessor and Lessee or an Affiliate of Lessee, or any letter of
     credit,  guaranty, mortgage, deed of trust, or other instrument executed by
Lessee  or  an Affiliate of Lessee in favor of Lessor or an Affiliate of Lessor,
in every case, whether now or hereafter existing, where the default is not cured
within  any  applicable  grace  period  set  forth  therein;
(b)     Lessee  shall  fail to pay any installment of Rent when the same becomes
due  and payable and such failure is not cured by Lessee within a period of five
(5)  days  after notice thereof from Lessor; provided, however, that such notice
shall  be in lieu of and not in addition to any notice required under applicable
law;
(c)     Lessee  shall  fail  to obtain a letter of credit as required by Article
XXI;
(d)     if  Lessee  shall fail to observe or perform any other term, covenant or
condition  of  this  Lease and such failure is not cured by Lessee within thirty
(30)  days after notice thereof from Lessor, unless such failure cannot with due
diligence  be  cured  within  a  period  of thirty (30) days, in which case such
failure  shall  not  be  deemed  to  be  an  Event of Default if Lessee proceeds
promptly and with due diligence to cure the failure and diligently completes the
curing  thereof; provided, however, that such notice shall be in lieu of and not
in  addition  to  any  notice  required  under  applicable  law;
(e)     Lessee  or  any  Guarantor  shall:
(i)     admit in writing its inability to pay its debts generally as they become
     due,
(ii)     file  a  petition  in bankruptcy or a petition to take advantage of any
insolvency  act,
(iii)     make  an  assignment  for  the  benefit  of  its  creditors,
(iv)     consent  to  the appointment of a receiver of itself or of the whole or
any  substantial  part  of  its  property,  or
(v)     file  a  petition  or answer seeking reorganization or arrangement under
the Federal bankruptcy laws or any other applicable law or statute of the United
States  of  America  or  any  state  thereof;
(f)     Lessee  or  any Guarantor shall be adjudicated as bankrupt or a court of
competent  jurisdiction  shall  enter an order or decree appointing, without the
consent  of Lessee, a receiver of Lessee or of the whole or substantially all of
its property, or approving a petition filed against it seeking reorganization or
     arrangement  of  Lessee  under  the  Federal  bankruptcy  laws or any other
applicable  law or statute of the United States of America or any state thereof,
and  such  judgment, order or decree shall not be vacated or set aside or stayed
within  sixty  (60)  days  from  the  date  of  the  entry  thereof;
(g)     Lessee or any Guarantor shall be liquidated or dissolved, or shall begin
proceedings  toward  such  liquidation  or dissolution, or shall, in any manner,
permit  the  sale  or  divestiture  of  substantially  all  its  assets;
(h)     the  estate  or  interest  of  Lessee in the Leased Property or any part
thereof  shall  be  levied upon or attached in any proceeding and the same shall
not  be  vacated  or  discharged  within  the  later  of  ninety (90) days after
commencement  thereof  or  thirty  (30)  days  after receipt by Lessee of notice
thereof from Lessor; provided, however, that such notice shall be in lieu of and
not  in  addition  to  any  notice  required  under  applicable  law;
(i)     except  as  a  result  of  damage,  destruction  or Condemnation, Lessee
voluntarily  ceases  operations on the Leased Property for a period in excess of
thirty  (30)  days;
(j)     any  of the representations or warranties made by Lessee in the Guaranty
or  otherwise  proves  to  be  untrue  when  made  in any material respect which
materially  and  adversely  affects  Lessor;
(k)     any  applicable license or third-party provider reimbursement agreements
material  to a Facility's operation for its Primary Intended Use are at any time
terminated  or  revoked  or  suspended  for  more  than  twenty  (20)  days;
(l)     any  local,  state  or  federal  agency  having  jurisdiction  over  the
operation  of  any Facility removes ten percent (10%) or more of the patients or
residents  located  in  such  Facility;
(m)     Lessee  voluntarily  transfers  ten (10) or more patients located in the
Facility  to  any  other facility in which Lessee or any Affiliate of Lessee has
any  ownership  or other financial interest, including, without limitation, fees
earned  under  any  management agreement, provided that Lessee's transfer of any
patient  to  a  different  type  of  care facility as a result of such patient's
special  needs  that  cannot  be  met  at  such  Facility  shall not be deemed a
voluntary  transfer;
(n)     Lessee fails to give notice to Lessor not later than ten (10) days after
any  notice,  claim  or  demand  from  any governmental authority or any officer
acting on behalf thereof, of any violation of any law, order, ordinance, rule or
regulation  with  respect  to  the  operation  of  any  Facility;
(o)     Lessee  fails  to  notify  Lessor  within  twenty-four  (24) hours after
receipt  of any notice from any governmental agency terminating or suspending or
threatening  termination or suspension, of any material license or certification
relating  to  any  Facility;
(p)     Lessee fails to cure or abate any violation occurring during the Term of
a  Facility that is claimed by any governmental authority, or any officer acting
on  behalf  thereof, of any law, order, ordinance, rule or regulation pertaining
to  the  operation  of  such  Facility,  and  within  the time permitted by such
authority  for  such  cure  or  abatement;
(q)     any  proceedings  are  instituted  against  Lessee  by  any governmental
authority  which  are  reasonably  likely to result in (i) the revocation of any
license granted to Lessee for the operation of any Facility, (ii) if applicable,
the  decertification  of  any  Facility  from  participation  in the Medicare or
Medicaid  reimbursement program, or (iii) the issuance of a stop placement order
with  respect  to  any  Facility;
(r)     any  default  and  acceleration  of  any recourse funded indebtedness of
Lessee  or  any  recourse  funded  indebtedness  of  any Affiliate of Lessee has
occurred,  and  such  funded  indebtedness  has  an  unpaid principal balance of
$1,000,000 or more or such default and acceleration could reasonably be expected
to  have  a  material adverse impact on the financial condition or operations of
Lessee  or  any  Guarantor;
(s)     any  default  which is not cured within any applicable cure period shall
occur  under any guaranty of Lessee's or an Affiliate of Lessee's obligations to
Lessor or an Affiliate of Lessor, in every case, whether such guaranty is now or
hereafter  existing;  and
(t)     any event of default under the HCPI Loan Documents.  In addition, Lessor
and  Lessee  acknowledge  that  an  "Event  of  Default"  under this Lease shall
constitute  an  event  of  default  under  the  HCPI  Loan  Documents,  as  more
particularly  set  forth  in  the  HCPI  Loan  Documents.
16.2     Certain  Remedies
         -----------------
     .  If  an  Event  of Default shall have occurred, Lessor may terminate this
Lease with respect to the Facility from which such Event of Default emanated, if
any,  and  any  one  or  more  (including  all,  if so elected by Lessor) of the
Facilities,  regardless of whether such Event of Default emanated primarily from
a  single  Facility,  by  giving  Lessee notice of such termination and the Term
shall  terminate  and  all  rights  of  Lessee under this Lease shall cease with
respect  to  all  such Facilities as to which Lessor has elected to so terminate
this  Lease.  Notwithstanding  the  foregoing,  an Event of Default shall not be
deemed  to  emanate  from  a  particular Facility or group of Facilities if such
Event  of  Default is of a monetary nature or is described in subparagraphs (b),
(c),  (e),  (f), (g), (h), (j), (r) and (s) of Section 16.1 above.  Lessor shall
have  all  rights  at  law  and in equity available to Lessor as a result of any
Event of Default.  Lessee shall pay as Additional Charges all costs and expenses
incurred  by  or  on  behalf of Lessor, including reasonable attorneys' fees and
expenses, as a result of any Event of Default hereunder.  If an Event of Default
shall  have  occurred  and  be  continuing,  whether  or not this Lease has been
terminated  with  respect  to  any  one or more (including all, if so elected by
Lessor)  of the Facilities pursuant to Section 16.1, Lessee shall, to the extent
permitted  by  law,  if  required  by  Lessor so to do, immediately surrender to
Lessor  possession  of  the  Leased  Property  and  any Capital Additions of the
Facilities  as  to  which Lessor has so elected to terminate this Lease and quit
the  same  and Lessor may enter upon and repossess such Leased Property and such
Capital  Addition thereto by reasonable force, summary proceedings, ejectment or
otherwise,  and, to the extent permitted by law, may remove Lessee and all other
Persons (other than the residents of each Facility) and any of Lessee's Personal
Property  from  such  Leased  Property  and  such  Capital  Addition  thereto.
16.3     Damages
         -------
     .  (i) The termination of this Lease with respect to any one or more of the
Facilities;  (ii)  the  repossession  of  the  Leased  Property  and any Capital
Additions  of  any  Facility;  (iii)  the  failure  of  Lessor,  notwithstanding
reasonable  good  faith  efforts,  to  relet  the Leased Property or any portion
thereof; (iv) the reletting of all or any portion of the Leased Property; or (v)
the  inability  of  Lessor  to  collect or receive any rentals due upon any such
reletting,  shall  not  relieve  Lessee  of  its  liabilities  and  obligations
hereunder,  all  of  which  shall  survive any such termination, repossession or
reletting.  If any such termination occurs, Lessee shall forthwith pay to Lessor
all  Rent  due  and  payable  with  respect  to  the  Facility terminated to and
including  the  date  of  such  termination.  Thereafter:
Lessee  shall forthwith pay to Lessor, at Lessor's option, as and for liquidated
and  agreed  current  damages  for  Lessee's  Default,  either:
     (A)     the  sum  of:
(i)     the  worth at the time of award of the unpaid Rent which had been earned
at the time of termination with respect to the terminated Facility to the extent
     not  previously  paid  by  Lessee  under  this  Section  16.3,
(ii)     the  worth  at the time of award of the amount by which the unpaid Rent
which  would  have  been earned after termination with respect to the terminated
Facility  until  the  time  of award exceeds the amount of such rental loss that
Lessee  proves  could  have  been  reasonably  avoided,
(iii)     the  worth at the time of award of the amount by which the unpaid Rent
for  the  balance of the Term after the time of award exceeds the amount of such
rental  loss  that  Lessee  proves  could  be  reasonably  avoided,  plus
(iv)     any  other  amount necessary to compensate Lessor for all the detriment
proximately  caused  by  Lessee's  failure to perform its obligations under this
Lease  or  which  in  the  ordinary  course  of things would be likely to result
therefrom.
          or  (B)
without termination of Lessee's right to possession of the Leased Property, each
installment  of  said  Rent and other sums payable by Lessee to Lessor under the
Lease as the same becomes due and payable, together with interest at the Overdue
Rate  from  the  date  when due until paid, and Lessor may enforce, by action or
otherwise,  any  other  term  or  covenant  of  this  Lease.
     Notwithstanding  anything  in this Lease to the contrary, in the event that
this  Lease shall be terminated by Lessor with respect to any Facility by reason
of an Event of Default, such termination shall not affect the applicable Term of
this  Lease  with  respect to the balance of the Facilities not so terminated by
Lessor,  and  this Lease shall continue in full force and effect with respect to
each  such  other Facility, except that the total monthly Allocated Minimum Rent
payable  hereunder  shall  be reduced by the amount of monthly Allocated Minimum
Rent  as  to  which  this Lease has so terminated, subject, however, to Lessor's
right  to  recover  damages  with  respect to any such Facility as to which this
Lease  has  been  so  terminated  as  provided  in  this  Article  XVI.
16.4     Receiver
         --------
     .  Upon  the  occurrence  of  an Event of Default, and upon commencement of
proceedings to enforce the rights of Lessor hereunder, Lessor shall be entitled,
as  a  matter of right, to the appointment of a receiver or receivers acceptable
to  Lessor  of  the  Leased Property and any Capital Addition thereto and of the
revenues, earnings, income, products and profits thereof, pending the outcome of
such  proceedings,  with  such powers as the court making such appointment shall
confer.
16.5     Lessee's  Obligation  to  Purchase
         ----------------------------------
     .  If an Event of Default shall have occurred with respect to any Facility,
Lessor  may  require  Lessee to purchase the Leased Property of such Facility on
the  first  Minimum  Rent  Payment Date occurring not less than thirty (30) days
after  the date specified in a notice from Lessor requiring such purchase for an
amount  equal  to  the greater of (i) the Fair Market Value of such Facility, or
(ii)  the  Minimum Repurchase Price of such Facility, plus, in either event, all
Rent  then due and payable (excluding the installment of Minimum Rent due on the
purchase  date)  with respect to such Facility.  If Lessor exercises such right,
Lessor  shall  convey the Leased Property of such Facility to Lessee on the date
fixed  therefor  in accordance with the provisions of Article XVIII upon receipt
of  the  purchase  price  therefor and this Lease shall thereupon terminate with
respect  to  such  Facility.  Any purchase by Lessee of the Leased Property of a
Facility  pursuant  to this Section shall be in lieu of the damages specified in
Section  16.3  with  respect  to  such  Facility.
16.6     Waiver
         ------
     .  If  Lessor initiates judicial proceedings or if this Lease is terminated
by Lessor pursuant to this Article with respect to a Facility, Lessee waives, to
the extent permitted by applicable law, (i) any right of redemption, re-entry or
repossession;  and  (ii)  the  benefit  of  any  laws  now or hereafter in force
exempting  property  from  liability  for  rent  or  for  debt.
16.7     Application  of  Funds
         ----------------------
     .  Any  payments  received  by  Lessor  under any of the provisions of this
Lease during the existence or continuance of any Event of Default which are made
to  Lessor  rather than Lessee due to the existence of an Event of Default shall
be  applied  to  Lessee's  obligations  in the order which Lessor may reasonably
determine  or  as  may  be  prescribed  by  the  laws  of  the  State.
16.8     [Reserved]
16.9     [Reserved]
16.10     Landlord's  Security  Interest
     .  The  parties intend that if an Event of Default occurs under this Lease,
Lessor  will  control  Lessee's Personal Property and the Intangible Property so
that  Lessor  or  its  designee  or  nominee can operate or re-let each Facility
intact  for its Primary Intended Use.  Accordingly, to implement such intention,
and  for  the  purpose  of  securing  the payment and performance obligations of
Lessee  hereunder,  Lessor  and  Lessee  agree  as  follows:
16.10.1     Lessee,  as  debtor,  hereby  grants  to Lessor, as secured party, a
security  interest  and  an express contractual lien upon all of Lessee's right,
title  and  interest  in  and  to  Lessee's  Personal Property and in and to the
Intangible  Property  and  any  and  all  products,  proceeds, rents and profits
thereof  in  which  Lessee  now owns or hereafter acquires an interest or right,
including  any  leased  Lessee's  Personal  Property  (collectively,  the
"Collateral").  This  Lease  constitutes  a security agreement covering all such
Lessee's  Personal  Property and the Intangible Property.  The security interest
granted  to  Lessor  with  respect to Lessee's Personal Property in this Section
16.10  is  intended  by  Lessor  and  Lessee  to  be subordinate to any security
interest  granted  in  connection  with  the  financing or leasing of all or any
portion  of  the  Lessee's  Personal  Property  so  long as Lessee uses its best
efforts to secure an agreement in Lessor's favor that the lessor or financier of
     such Lessee's Personal Property agrees to give Lessor written notice of any
default  by  Lessee  under  the terms of such lease or financing arrangement, to
give Lessor a reasonable time following such notice to cure any such default and
consents  to  Lessor's written assumption of such lease or financing arrangement
upon  Lessor's  curing  of  any  such defaults.  This security agreement and the
security  interest  created  herein  shall  survive the termination, but not the
expiration,  of  this  Lease  with respect to any or all of the Facilities until
such  time  as  Lessor has been fully compensated for all damages resulting from
such  termination.
16.10.2     Lessee  hereby  authorizes Lessor to file such financing statements,
continuation  statements and other documents as may be necessary or desirable to
perfect  or  continue  the  perfection  of  Lessor's  security  interest  in the
Collateral.  In  addition,  if  required  by Lessor at any time during the Term,
Lessee  shall  execute and deliver to Lessor, in form reasonably satisfactory to
Lessor,  additional  security  agreements, financing statements, fixture filings
and such other documents as Lessor may reasonably require to perfect or continue
     the  perfection  of  Lessor's  security interest in the Collateral.  In the
event Lessee fails to execute any financing statement or other documents for the
perfection or continuation of Lessor's security interest, Lessee hereby appoints
Lessor  as its true and lawful attorney-in-fact to execute any such documents on
its  behalf,  which  power  of attorney shall be irrevocable and is deemed to be
coupled  with  an  interest.
16.10.3     Lessee  will  give  Lessor  at least thirty (30) days' prior written
notice of any change in Lessee's name, identity, jurisdiction of organization or
     corporate structure.  With respect to any such change, Lessee will promptly
execute  and  deliver  such  instruments,  documents  and  notices and take such
actions,  as  Lessor deems necessary or desirable to create, perfect and protect
the  security  interests  of  Lessor  in  the  Collateral.
16.10.4     Upon the occurrence of an Event of Default, Lessor shall be entitled
to  exercise  any  and all rights or remedies available to a secured party under
the  Uniform  Commercial  Code,  or  available to a lessor under the laws of the
State,  with  respect to Lessee's Personal Property and the Intangible Property,
including  the  right  to  sell  the  same  at  public  or  private  sale.
ARTICLE  XVII.
17.1     Lessor's  Right  to  Cure  Lessee's  Default
         --------------------------------------------
     .  If  Lessee shall fail to make any payment or to perform any act required
to  be  made  or  performed  hereunder, Lessor, without waiving or releasing any
obligation  or  default,  may,  but  shall  be under no obligation to, make such
payment  or  perform  such act for the account and at the expense of Lessee, and
may,  to  the  extent  permitted  by law, enter upon the Leased Property and any
Capital  Addition  thereto for such purpose and take all such action thereon as,
in  Lessor's  opinion,  may be necessary or appropriate therefor.  No such entry
shall be deemed an eviction of Lessee.  All sums so paid by Lessor and all costs
and  expenses,  including  reasonable attorneys' fees and expenses, so incurred,
together  with  interest thereon at the Overdue Rate from the date on which such
sums  or  expenses  are  paid  or incurred by Lessor, shall be paid by Lessee to
Lessor  on  demand.
ARTICLE  XVIII.
18.1     Purchase  of  the  Leased  Property
         -----------------------------------
     .  If  Lessee  purchases  the  Leased  Property of any Facility from Lessor
pursuant  to any provision of this Lease, Lessor shall, upon receipt from Lessee
of  the applicable purchase price, together with full payment of any unpaid Rent
due  and  payable with respect to any period ending on or before the date of the
purchase,  deliver  to  Lessee an appropriate deed or other conveyance conveying
the  entire  interest of Lessor in and to the Leased Property to Lessee free and
clear  of all encumbrances other than (i) those that Lessee has agreed hereunder
to  pay or discharge; (ii) those mortgage liens, if any, which Lessee has agreed
in  writing  to  accept  and  to  take  title  subject to; (iii) those liens and
encumbrances  which  were  in  effect  on  the date of conveyance of such Leased
Property  to  Lessor;  and (iv) any other encumbrances permitted hereunder to be
imposed  on  such Leased Property which are assumable at no cost to Lessee or to
which Lessee may take subject without cost to Lessee; provided, however, that in
no  event shall Lessee be obligated to assume or take subject to any encumbrance
with  a  principal balance in excess of the applicable purchase or option price,
and  provided  further  that  where  the  purchase price is equal to the Minimum
Repurchase Price and if any such encumbrance may not be removed without penalty,
the applicable purchase price shall be increased or decreased by an amount equal
to  the  positive  or  negative  effect on Fair Market Value attributable to the
interest  rate,  amortization  schedule,  maturity  date, prepayment penalty and
other  terms  and  conditions  of  such encumbrance.  The difference between the
applicable  purchase  price  and  the total of the encumbrances assumed or taken
subject  to  shall  be  paid  to  Lessor  or as Lessor may direct in immediately
available  funds.  All  expenses of such conveyance, including the cost of title
insurance, attorneys' fees incurred by Lessor in connection with such conveyance
and  release,  transfer  taxes  and  recording and escrow fees, shall be paid by
Lessee.
ARTICLE  XIX.
19.1     Renewal  Terms
         --------------
     .  With  respect  to  each  Facility, provided that no Event of Default, or
event  which, with notice or lapse of time or both, would constitute an Event of
Default,  has occurred and is continuing, either at the date of exercise or upon
the  commencement  of an Extended Term (as hereunder defined), then Lessee shall
have  the  right to renew this Lease with respect to all (but not less than all)
of  the Facilities for two (2) ten year renewal terms (each an "Extended Term"),
by  giving  written  notice  to Lessor of such renewal not less than twelve (12)
months and not more than fifteen (15) months prior to the expiration of the then
current  Fixed  Term  or  Extended  Term,  as  applicable.  With respect to each
Facility,  during  each  Extended  Term, all of the terms and conditions of this
Lease  shall continue in full force and effect.  Notwithstanding anything to the
contrary  in  this  Article  XIX,  Lessor, in its sole discretion, may waive the
condition  to  Lessee's  right  to renew this Lease that no Event of Default, or
event  which, with notice or lapse of time or both, would constitute an Event of
Default,  have occurred or be continuing, and the same may not be used by Lessee
as a means to negate the effectiveness of Lessee's exercise of its renewal right
for  such  Extended  Term.
ARTICLE  XX.
20.1     Holding  Over
         -------------
     .  Except  as provided in Section 19, if Lessee shall for any reason remain
in  possession  of  the  Leased  Property and/or Capital Additions of a Facility
after  the  expiration  or  earlier  termination  of the then-current Term, such
possession  shall  be  as a month-to-month tenant during which time Lessee shall
pay  as Minimum Rent each month twice the monthly Minimum Rent applicable to the
prior Lease Year for such Facility, together with all Additional Charges and all
other  sums  payable  by  Lessee  pursuant to this Lease.  During such period of
month-to-month  tenancy, Lessee shall be obligated to perform and observe all of
the  terms,  covenants  and  conditions  of this Lease, but shall have no rights
hereunder  other  than  the  right, to the extent given by law to month-to-month
tenancies,  to  continue its occupancy and use of the Leased Property and/or any
Capital  Additions  of such Facility.  Nothing contained herein shall constitute
the  consent,  express or implied, of Lessor to the holding over of Lessee after
the  expiration  or  earlier  termination  of  this  Lease.
ARTICLE  XXI.
21.1     Letters  of  Credit
         -------------------
     .  Commencing  upon  the  first  day  of  the  sixth  (6th)  Lease Year and
continuing  for  sixty  (60) days after the expiration or earlier termination of
this  Lease,  Lessee  shall  have  obtained  letters  of credit from a financial
institution  satisfactory  to Lessor, in an amount equal to the Letter of Credit
Amount,  naming  Lessor  as beneficiary to secure Lessee's obligations hereunder
and  Lessee's and any Affiliate of Lessee's obligations under any other lease or
other  agreement  or  instrument  with or in favor of Lessor or any Affiliate of
Lessor,  at  the  times  and  for  the purposes set forth below.  Each letter of
credit  shall  be in substantially the form of Exhibit J hereto.  Each letter of
                                               ---------
credit  shall be for a term of not less than one (1) year and irrevocable during
that  term.  Each  letter of credit shall provide that it will be honored upon a
signed  statement  by  Lessor that Lessor is entitled to draw upon the letter of
credit  under  this  Lease, and shall require no signature or statement from any
party other than Lessor.  No notice to Lessee shall be required to enable Lessor
to  draw  upon  the  letter of credit.  Each letter of credit shall also provide
that  following  the  honor  of  any drafts in an amount less than the aggregate
amount  of  the  letter  of  credit,  the financial institution shall return the
original  letter  of  credit  to  Lessor and Lessor's rights as to the remaining
amount  of  the  letter  of  credit will not be extinguished.  In the event of a
transfer  of  Lessor's  interest  in  the Leased Property, Lessor shall have the
right  to  transfer  the letter of credit to the transferee and thereupon shall,
without  any  further  agreement between the parties, be released by Lessee from
all  liability therefor, and it is agreed that the provisions hereof shall apply
to  every  transfer  or assignment of the letter of credit to a new Lessor.  The
letter  of  credit  may  be  assigned  as security in connection with a Facility
Mortgage.  If  the financial institution from which Lessee has obtained a letter
of  credit  shall  admit  in writing its inability to pay its debts generally as
they  become  due, file a petition in bankruptcy or a petition to take advantage
of  any  insolvency  act,  make  an  assignment for the benefit of its creditors
consent  to  the  appointment  of  a  receiver  of itself or of the whole or any
substantial  part  of  its  property,  or  file  a  petition  or  answer seeking
reorganization  or  arrangement  under  the Federal bankruptcy laws or any other
applicable  law or statute of the United States of America or any state thereof,
then  Lessee shall obtain a replacement letter of credit within thirty (30) days
of  such  act  from  another  financial  institution  satisfactory  to  Lessor.
21.2     Times  for  Obtaining  Letters  of  Credit
         ------------------------------------------
     .  The  initial  letter of credit shall be obtained and delivered to Lessor
prior  to the commencement of the sixth (6th) Lease Year.  The letters of credit
covering subsequent periods (or renewals of the then existing letters of credit)
shall  be  obtained and delivered to Lessor not less than thirty (30) days prior
to  the  expiration  of  the  then  existing letter of credit ("Letter of Credit
Date").  The  term  for each such letter of credit shall begin no later than the
expiration  date  of  the  previous  letter  of  credit.
21.3     Reduction  in  Letter  of  Credit  Amount
         -----------------------------------------
     .  If  Lessee  purchases  any  Facility,  or if this Lease is terminated or
expires  with  respect  to  any  Facility  (other  than by reason of an Event of
Default), the Letter of Credit Amount shall be reduced by an amount equal to the
product  of (a) the then existing Letter of Credit Amount, times (b) a fraction,
the  numerator  of  which  is  the  then existing Allocated Minimum Rent for the
Facility  being  purchased by Lessee or for which this Lease has been terminated
or  expired,  as  applicable,  and the denominator of which is the then existing
total  Minimum  Rent  payable  for  all Facilities (including the Facility being
purchased  by  Lessee, or the Facility with respect to which this Lease has been
terminated  or  expired).
21.4     Uses  of  Letters  of  Credit
         -----------------------------
     .  Lessor  shall  have  the right to draw upon a letter of credit up to its
full  amount  whenever  an  Event of Default has occurred or an event of default
under  any other lease or agreement between Lessor or an Affiliate of Lessor and
Lessee  or  an  Affiliate of Lessee or any letter of credit, guaranty, mortgage,
deed  of trust, or other instrument executed by Lessee or an Affiliate of Lessee
in  favor  of  Lessor  or an Affiliate of Lessor has occurred and any applicable
cure  periods  have  expired;  provided  further,  if  Lessee  fails to obtain a
satisfactory  letter  of  credit  prior to the applicable Letter of Credit Date,
Lessor  may  draw  upon  the  full  amount of the then existing letter of credit
without  giving  any  notice  or time to cure to Lessee.  No such draw shall (i)
cure  or  constitute  a  waiver of an Event of Default, (ii) be deemed to fix or
determine the amounts to which Lessor is entitled to recover under this Lease or
otherwise,  or  (iii)  be  deemed to limit or waive Lessor's right to pursue any
remedies  provided  for  in  this  Lease.  If  all or any portion of a letter of
credit  is  drawn  against by Lessor, Lessee shall, within two (2) business days
after  demand  by  Lessor,  order  the  issuer of such letter of credit to issue
Lessor,  at Lessee's expense, a replacement or supplementary letter of credit in
substantially  the  form  attached  hereto  as  Exhibit J such that at all times
                                                ---------
during the Term, Lessor shall have the ability to draw on one or more letters of
credit  totaling, in the aggregate, the amount required pursuant to Section 21.3
and  Lessor,  upon  the receipt thereof, shall return any amounts drawn down and
held  pending  receipt  of  such  replacement or supplementary letter of credit.
ARTICLE  XXII.
22.1     Risk  of  Loss
         --------------
     .  The  risk  of loss or of decrease in the enjoyment and beneficial use of
the  Leased  Property  as  a consequence of the damage or destruction thereof by
fire,  the  elements,  casualties,  thefts,  riots,  wars  or  otherwise,  or in
consequence  of  foreclosures,  attachments, levies or executions (other than by
Lessor and Persons claiming from, through or under Lessor) is assumed by Lessee,
and  except  as  otherwise provided herein no such event shall entitle Lessee to
any  abatement  of  Rent.
ARTICLE  XXIII.
23.1     General  Indemnification
         ------------------------
     .  In  addition  to  the  other  indemnities  contained  herein,  and
notwithstanding  the existence of any insurance carried by or for the benefit of
Lessor or Lessee, and without regard to the policy limits of any such insurance,
Lessee  shall  protect,  indemnify,  save  harmless  and  defend Lessor from and
against  all  liabilities,  obligations,  claims,  damages  penalties, causes of
action,  costs  and  expenses, including reasonable attorneys', consultants' and
experts'  fees  and  expenses,  imposed  upon or incurred by or asserted against
Lessor  by reason of: (i) any accident, injury to or death of Persons or loss of
or  damage  to  property  occurring on or about the Leased Property or adjoining
sidewalks;  (ii)  any  use, misuse, non-use, condition, maintenance or repair by
Lessee  of  the  Leased  Property;  (iii)  any  failure on the part of Lessee to
perform  or comply with any of the terms of this Lease; (iv) the non-performance
of  any of the terms and provisions of any and all existing and future subleases
of  the  Leased  Property to be performed by any party thereunder; (v) any claim
for  malpractice, negligence or misconduct committed by any Person on or working
from  the  Leased  Property;  and  (vi)  the  violation  by  Lessee of any Legal
Requirement.  Any  amounts  which  become  payable  by Lessee under this Article
shall  be  paid  within  ten (10) days after liability therefor is determined by
litigation  or  otherwise,  and  if  not  timely paid shall bear interest at the
Overdue  Rate  from  the  date  of  such  determination  to the date of payment.
Lessee,  at its sole cost and expense, shall contest, resist and defend any such
claim,  action  or  proceeding  asserted  or  instituted  against  Lessor or may
compromise or otherwise dispose of the same as Lessee sees fit.  For purposes of
this  Article  XXIII,  any acts or omissions of Lessee, or by employees, agents,
assignees,  contractors,  subcontractors  or  others  acting for or on behalf of
Lessee  (whether  or  not they are negligent, intentional, willful or unlawful),
shall  be  strictly  attributable  to  Lessee.
Lessor  shall  indemnify,  save  harmless and defend Lessee from and against all
liabilities,  obligations,  claims,  damages, penalties, causes of action, costs
and expenses, including, but not limited to, reasonable attorneys' fees, imposed
upon  or  incurred  by  or  asserted  against  Lessee  as  a result of the gross
negligence  or  willful  misconduct  of  Lessor.  Lessor,  at its expense, shall
contest,  resist,  and  defend  any  claim,  action  or  proceeding  asserted or
instituted  against  Lessee  with  respect to the foregoing or may compromise or
otherwise  dispose  of  the  same  as Lessor sees fit.  Any amounts which become
payable  by  Lessor  under this Section shall be paid within ten (10) days after
liability  therefor  on  the  part  of  Lessor  is  determined  by litigation or
otherwise,  and  if  not  timely  paid  shall  bear a late charge (to the extent
permitted by law) at the Overdue Rate from the date of such determination to the
date  of  payment.
ARTICLE  XXIV.
24.1     Subletting  and  Assignment.
         ---------------------------
24.1.1     Prohibition
           -----------
     .  Lessee  shall  not, without Lessor's prior written consent, which may be
withheld  in  Lessor's sole and absolute discretion, voluntarily or by operation
of  law  assign  (which  term  includes  any  sale, encumbering, pledge or other
transfer  or  hypothecation)  this  Lease,  master sublet all or any part of the
Leased  Property  of  any  Facility or engage the services of any Person for the
management  or  operation  of  any Facility.  Lessee acknowledges that Lessor is
relying upon the expertise of Lessee in the operation of the Facilities and that
Lessor  entered into this Lease with the expectation that Lessee would remain in
and  operate  such  Facilities during the entire Term and for that reason Lessor
retains sole and absolute discretion in approving or disapproving any assignment
or  master  sublease.  If  Lessee  is  a  corporation  or partnership or limited
liability  company,  any  transfer of its stock (other than a transfer of any of
Lessee's  stock  owned  by  Daniel  R.  Baty  for  estate  planning purposes) or
partnership  interests  (or  the stock or partnership or membership interests of
the  entity(ies)  that  controls  Lessee)  or  any  dissolution  or  merger  or
consolidation  of Lessee (or its controlling entity(ies)) with any other entity,
which  results  in  any  Person  (other  than  Daniel R. Baty) and such Person's
Affiliates  collectively  owning  greater  than twenty-five percent (25%) of the
total  outstanding  shares  of  any  class  of  Lessee's stock or partnership or
membership  interests, or the sale or other transfer of all or substantially all
of  the  assets  of Lessee (or its controlling entity(ies)), shall constitute an
assignment of Lessee's interest in this Lease within the meaning of this Article
XXIV  and  the  provisions  requiring  consent  contained  herein  shall  apply
(provided,  however, that the foregoing provision regarding transfer of Lessee's
stock  constituting  an  assignment  shall  not  apply  if (i) Lessee's stock is
publicly traded, and (ii) Lessee's Consolidated Net Worth after such transfer is
not less than Lessee's Consolidated Net Worth as of the Commencement Date).  Any
sublease  of  more  than  ten percent (10%) of any Facility to any Person or its
Affiliates,  in  one transaction or in a series of transactions, shall be deemed
to  be  a master sublease hereunder.  For any sublease transaction not requiring
the  consent of Lessor hereunder, Lessee shall, within ten (10) days of entering
into  any such sublease, notify Lessor of the existence of such sublease and the
identity  of  the  sublessee  and supply Lessor with a copy of the sublease, any
related  documentation  and  any  other  materials  or  information  reasonably
requested  by  Lessor.
24.1.2     Certain  Business  Reorganizations.  Lessor  will  not  unreasonably
           ----------------------------------
withhold  its  written  consent to an assignment of this Lease to (A) any Person
which  acquires all or substantially all of the assets and business of Lessee by
virtue of a merger or consolidation of, with or into Lessee or (B) any purchaser
     of 51% or more of the outstanding voting stock or partnership or membership
interest  of  Lessee, if in Lessor's reasonable judgment such assignee, together
with  any  guarantor  of such assignee's obligations under this Lease, has (1) a
consolidated  net worth equal to or greater than Lessee's consolidated net worth
at the time of the proposed assignment or as of the Commencement Date, whichever
is  greater,  and (2) the operational expertise and reputation at least equal to
that  of Lessee at the time of the proposed assignment or as of the Commencement
Date,  whichever  is  greater.
24.1.3     Public  Offering;  Public  Trading.  Notwithstanding  anything to the
           ----------------------------------
contrary in Section 24.1.2, Lessor's consent shall not be required in connection
with and the provisions of Section 24.1.2 shall not apply to any transfer of any
stock  of  Lessee  as  a result of a public offering of Lessee's stock which (a)
constitutes  a  bona  fide  public distribution of such stock pursuant to a firm
commitment  underwriting  or  a  plan  of  distribution  registered  under  the
Securities Act of 1933 and (b) results in such stock being listed for trading on
the  American  Stock  Exchange  or the New York Stock Exchange or authorized for
quotation  on the NASDAQ National Market immediately upon the completion of such
public  offering.  In  addition,  so long as such stock is listed for trading on
any  such  exchange  or authorized for quotation on such market, the transfer or
exchange  of  such  stock  over  such  exchange  or market shall not be deemed a
Transfer hereunder unless the same (whether in one transaction or in any step or
series  of  transactions) results in a change in control of Lessee or (including
pursuant  to  a  tender  or  similar offer to acquire the outstanding and issued
securities  of  such  entity).
24.2     Consent
         -------
     .  If Lessee desires at any time to assign this Lease, to master sublet any
Facility  or  any  portion  thereof or engage the services of any Person for the
management  or  operation  of such Facility, it shall first notify Lessor of its
desire  to  do  so  and  shall  submit in writing to Lessor: (i) the name of the
proposed master sublessee, assignee or manager; (ii) the terms and provisions of
the proposed master sublease, assignment or management agreement; and (iii) such
financial  information  as Lessor reasonably may request concerning the proposed
master  sublessee,  assignee  or  manager.
24.2.1     Lessor may, as a condition to granting such consent, require that the
     obligations of any sublessee, assignee, or manager which is an Affiliate of
another  Person  be  guaranteed  by  its parent or controlling Person if (i) the
Consolidated  Net  Worth  of  Lessee would be diminished as a result of any such
assignment  of Lessee's interest described in this Article XXIV, or (ii) the new
controlling Person(s) would have a consolidated net worth less than the Lessee's
consolidated net worth as of the Commencement Date and that any guaranty of this
Lease be reaffirmed by any Guarantor notwithstanding such subletting, assignment
or  management  arrangement.  Any  sublease  shall  be  expressly  subject  and
subordinate  to  all  applicable  terms and conditions of this Lease and provide
that  Lessor, at its option and without any obligation to do so, may require any
sublessee  to  attorn  to  Lessor,  in  which  event  Lessor shall undertake the
obligations  of  Lessee,  as  sublessor under such sublease from the time of the
exercise  of  such  option  to the termination of such sublease and in such case
Lessor  shall  not  be  liable for any prepaid rents or security deposit paid by
such sublessee to Lessee unless Lessor actually receives the same from Lessee or
for  any  other prior defaults of Lessee under such sublease.  In the event that
Lessor shall not require such attornment with respect to any sublease, then such
sublease  shall  automatically  terminate  upon  the  expiration  or  earlier
termination  of  this Lease, including any early termination by mutual agreement
of  Lessor  and  Lessee.  Furthermore,  any  sublease,  assignment or management
agreement  shall expressly provide that the sublessee, assignee or manager shall
furnish  Lessor  with such financial and operational information and information
about  the  physical  condition  of  such  Facility,  including  the information
required  by  Section  25.2  herein,  as  Lessor  may request from time to time.
24.2.2     Lessor  may,  as  a  condition  to  its  consent  to  any such master
subletting,  require  Lessee  to pay to Lessor one hundred percent (100%) of all
Transfer Consideration (defined below).  "Transfer Consideration" shall mean the
positive difference, if any, between the Fair Market Rental for the Facility and
the Rent payable by Lessee determined on a monthly basis, prorating the Rent, as
appropriate,  if less than all of such Facility is sublet; provided, however, in
no  event shall Lessor be entitled to receive any amount in excess of the amount
Lessee  is entitled to receive as a result of the master sublease.  The Transfer
Consideration  for each month shall be paid by Lessee to Lessor monthly when the
Minimum  Rent  is  due  for  the  duration  of  the  master  subletting.
24.2.3     Lessor  may,  as  a  condition  to  its  consent to any assignment or
management  arrangement, require Lessee to pay to Lessor upon the effective date
of  such  assignment  or  management  arrangement an amount equal to one hundred
percent (100%) of the Transfer Consideration for the remaining Term of the Lease
assuming  all renewal options are exercised and there is no early termination of
the Lease and Lessor shall refund any amounts attributable to renewal options if
they  subsequently  are  not  exercised with interest thereon at the Prime Rate;
provided, however, in no event shall Lessor be entitled to receive any amount in
excess of the amount Lessee is entitled to receive as a result of the assignment
or  management  agreement.
24.2.4     The  consent  by  Lessor  to  any  assignment,  master  subletting or
management  arrangement  shall  not  constitute  a  consent  to  any  subsequent
assignment,  master  subletting  or  management  arrangement by Lessee or to any
subsequent or successive assignment, master subletting or management arrangement
by  the  master  sublessee,  assignee  or  manager.  Any  purported or attempted
assignment,  sublease,  management  agreement  or  other  permission to use such
Facility  contrary  to  the provisions of this Article shall be void and, at the
option  of  Lessor,  shall  terminate  this  Lease.
24.2.5     Notwithstanding  the  preceding,  Lessee  may  sublease or assign the
Lease to an Affiliate of Lessee without the written consent of Lessor and Lessee
shall not be required to pay any Transfer Consideration to Lessor as a result of
such  sublease or assignment to an Affiliate, but such sublease or assignment of
the Lease from Lessee to an Affiliate of Lessee will not relieve Lessee from its
obligations  under  the  Lease  or  any Guarantor from its obligations under any
guaranty  of  this  Lease.
24.3     Costs
         -----
     .  Lessee shall reimburse Lessor for Lessor's reasonable costs and expenses
incurred in conjunction with the processing and documentation of any assignment,
master  subletting  or  management arrangement, including reasonable attorneys',
architects',  engineers'  or  other consultants' fees whether or not such master
sublease,  assignment  or  management  agreement  is  actually  consummated.
24.4     No  Release  of  Lessee's  Obligations
         --------------------------------------
     .  No  assignment,  subletting or management agreement shall relieve Lessee
of its obligation to pay the Rent and to perform all of the other obligations to
be  performed by Lessee hereunder.  The liability of Lessee named herein and any
immediate  and  remote  successor  in  interest  of  Lessee  (by  assignment  or
otherwise), and the due performance of the obligations of this Lease on Lessee's
part  to  be performed or observed, shall not in any way be discharged, released
or impaired by any (i) agreement which modifies any of the rights or obligations
of  the parties under this Lease, (ii) stipulation which extends the time within
which  an  obligation  under  this Lease is to be performed, (iii) waiver of the
performance  of  an  obligation  required  under  this Lease, or (iv) failure to
enforce  any  of  the  obligations  set  forth  in  this  Lease.
24.5     Assignment  of  Lessee's  Rights  Against  Sublease
         ---------------------------------------------------
     .  If  Lessor  shall  consent  to  a  master  subletting,  then the written
instrument  of  consent,  executed  and  acknowledged  by  Lessor,  Lessee  and
sublessee,  shall  contain  a  provision substantially similar to the following:
(i)     Lessee and sublessee hereby agree that, if sublessee shall be in default
     of  any  obligation  of  Lessee  under  the  sublease,  which  default also
constitutes  a default by Lessee under the Lease, then Lessor shall be permitted
to  avail  itself  of  all  of  the  rights  and remedies available to Lessee in
connection  therewith.
(ii)     Without  limiting  the  generality  of  the  foregoing, Lessor shall be
permitted  (by  assignment  of  a  cause of action or otherwise) to institute an
action or proceeding against sublessee in the name of Lessee in order to enforce
Lessee's  rights  under  the  sublease,  and also shall be permitted to take all
ancillary  actions  (e.g.,  serve  default  notices  and demands) in the name of
Lessee  as  Lessor  reasonably  shall  determine  to  be  necessary.
(iii)     Lessee  agrees to cooperate with Lessor, and to execute such documents
as  shall  be reasonably necessary, in connection with the implementation of the
foregoing  rights  of  Lessor.
(iv)     Lessee expressly acknowledges and agrees that the exercise by Lessor of
any  of  the  foregoing  rights and remedies shall not constitute an election of
remedies,  and  shall not in any way impair Lessor's entitlement to pursue other
rights  and  remedies  directly  against  Lessee.
24.6     Reserved
         --------
24.7     REIT  Protection
     .  Anything contained in this Lease to the contrary notwithstanding, Lessee
shall  not  (i)  sublet,  assign  or enter into a management arrangement for the
Leased Property on any basis such that the rental or other amounts to be paid by
the  sublessee,  assignee  or  manager thereunder would be based, in whole or in
part,  on  the  income  or  profits  derived  by  the business activities of the
sublessee,  assignee  or  manager;  (ii)  furnish  or render any services to the
sublessee,  assignee  or  manager  or  manage  or operate the Leased Property so
subleased,  assigned or managed; (iii) sublet, assign or enter into a management
arrangement  for  the Leased Property to any Person in which Lessor or HCPI owns
an  interest,  directly  or indirectly (by applying constructive ownership rules
set  forth  in  Section  856(d)(5) of the Code); or (iv) sublet, assign or enter
into  a management arrangement for the Leased Property in any other manner which
could cause any portion of the amounts received by Lessor pursuant to this Lease
or  any  sublease  to  fail  to qualify as "rents from real property" within the
meaning  of  Section  856(d)  of the Code, or any similar or successor provision
thereto  or  which  could  cause  any  other income of Lessor or HCPI to fail to
qualify  as  income  described  in  Section  856(c)(2)  of  the  Code.
24.8     Prepaid  Rent
         -------------
     .  Lessee  shall  not  require or accept prepayment for more than three (3)
months'  use  of  individual units or rooms of any Facility.  Amounts charged to
residents  for  individual units or rooms shall not be materially less than fair
market  value.
ARTICLE  XXV.
25.1     Officer's  Certificates  and  Financial  Statements.
         ---------------------------------------------------
25.1.1     Officer's  Certificate
           ----------------------
     .  At any time and from time to time upon Lessee's receipt of not less than
ten  (10)  days' prior written request by Lessor, Lessee shall furnish to Lessor
an  Officer's  Certificate  certifying  (i) that this Lease is unmodified and in
full  force  and  effect,  or  that  this  Lease  is in full force and effect as
modified  and  setting forth the modifications; (ii) the dates to which the Rent
has  been paid; (iii) whether or not, to the best knowledge of Lessee, Lessor is
in  default in the performance of any covenant, agreement or condition contained
in  this Lease and, if so, specifying each such default of which Lessee may have
knowledge;  and  (iv) responses to such other questions or statements of fact as
Lessor,  any  ground  or  underlying  lessor,  any  purchaser  or any current or
prospective  Facility  Mortgagee  shall reasonably request.  Lessee's failure to
deliver  such  statement within such time shall constitute an acknowledgement by
Lessee  that (x) this Lease is unmodified and in full force and effect except as
may  be  represented  to the contrary by Lessor; (y) Lessor is not in default in
the performance of any covenant, agreement or condition contained in this Lease;
and  (z)  the  other  matters  set  forth  in such request, if any, are true and
correct.  Any  such certificate furnished pursuant to this Article may be relied
upon  by  Lessor  and  any  current or prospective Facility Mortgagee, ground or
underlying  lessor  or  purchaser  of  the  Leased  Property.
25.1.2     Statements
           ----------
     .  Lessee  shall  furnish  the  following  statements  to  Lessor:
(a)     within 120 days after the end of each of Lessee's and Guarantor's fiscal
     years,  a copy of the audited consolidated balance sheets of Lessee and its
consolidated Subsidiaries as of the end of such fiscal year, and related audited
consolidated  statements  of  income,  changes  in  common  stock  and  other
stockholders'  equity  and  changes  in the financial position of Lessee and its
consolidated  Subsidiaries  and  Guarantor  for  such  fiscal  year, prepared in
accordance  with  GAAP applied on a basis consistently maintained throughout the
period  involved,  such  consolidated  financial  statements  to be certified by
nationally  recognized  certified  public  accountants;
(b)     within  120 days after the end of Lessee's and Guarantor's fiscal years,
and  together  with  the annual audit report furnished in accordance with clause
(a)  above,  an  Officer's  Certificate stating that to the best of the signer's
knowledge  and  belief after making due inquiry, Lessee is not in default in the
performance  or observance of any of the terms of this Lease, or if Lessee shall
be  in  default, specifying all such defaults, the nature thereof, and the steps
being  taken  to  remedy  the  same;
(c)     within  thirty  (30)  days  after the end of each month for those months
occurring  from  the  Commencement Date to three months after the first month in
which  the average Cash Flow Coverage for any Facility equals or exceeds 1.3 for
such  month,  all  consolidated  financial reports Lessee produces for reporting
purposes  and  detailed statements of income and detailed operational statistics
regarding  occupancy  rates,  patient  and resident mix and patient and resident
rates by type for such Facility; and thereafter within sixty (60) days after the
end  of  each of Lessee's quarters, all quarterly consolidated financial reports
Lessee  produces  for  reporting  purposes and detailed statements of income and
detailed  operational statistics regarding occupancy rates, patient and resident
mix  and  patient  and  resident  rates  by  type  for  such  Facility;
(d)     within  120  days after the end of each of Lessee's fiscal years, a copy
of  each cost report, if any, filed with the appropriate governmental agency for
each  Facility;
(e)     within  thirty  (30)  days  after they are required to be filed with the
SEC,  copies  of  any  annual  reports  and  of information, documents and other
reports,  or  copies  of  such  portions  of any of the foregoing as the SEC may
prescribe,  which  Emeritus is required to file with the SEC pursuant to Section
13  or  15(d)  of  the  Securities  Exchange  Act  of  1934;
(f)     within three (3) Business Days after Lessee's receipt thereof, copies of
all  written  communications  received  by  Lessee  from  any  regulatory agency
relating  to (i) surveys of any Facility for purposes of licensure, Medicare and
Medicaid  certification  and  accreditation  and  (ii) any proceeding, formal or
informal,  with  respect  to  cited  deficiencies  with  respect to services and
activities  provided  and  performed  at  any  Facility,  including  patient and
resident  care,  patient  and resident activities, patient and resident therapy,
dietary,  medical  records,  drugs  and  medicines,  supplies,  housekeeping and
maintenance,  or  the  condition  of  such  Facility, and involving an actual or
threatened  warning,  imposition  of  a  fine  or  a  penalty,  or  suspension,
termination  or  revocation  of  such  Facility's  license  to  be  operated  in
accordance  with  its  Primary  Intended  Use;
(g)     to the extent reasonably obtainable by Lessee, within 120 days after the
end  of  each  fiscal  year  of  the financial institution issuing the letter of
credit  required  under  Article XXI, a copy of the audited consolidated balance
sheets  of  such  financial  institution  as of the end of such fiscal year, and
related unaudited consolidated statements of income, changes in common stock and
other  stockholders  equity  and  changes  in  the  financial  position  of such
financial  institution  and  its  consolidated subsidiaries for each such fiscal
year,  prepared  in  accordance  with  generally  accepted accounting principles
applied  on a basis consistently maintained throughout the period involved, such
consolidated  financial  statements  to  be  certified  by nationally recognized
certified  public  accountants;
(h)     immediately  upon  Lessee's  receipt  thereof,  copies  of  all material
claims, complaints, notices, warnings or asserted violations relating in any way
to  the  Leased  Property  or  Lessee's  use  thereof;  and
(i)     with  reasonable  promptness,  such  other  information  respecting  the
financial  and  operational  condition  and affairs of Lessee, any Guarantor and
each  Facility and the physical condition of the Leased Property and any Capital
Addition  thereto  as  Lessor  may  reasonably  request,  in  the  form  of  a
questionnaire  or  otherwise,  from  time  to  time.
     Notwithstanding the foregoing, if HCPI or an Affiliate of HCPI does not own
any  interest  (whether  direct  or  indirect)  in  Lessor,  Lessee shall not be
required  to provide Lessor with the statements set forth in subsections (a) and
(e)  above  (except  to the extent that such statements are required by Facility
Mortgages);  provided,  however,  that  the  foregoing  shall  not  be deemed or
construed to limit or otherwise modify any requirements of Emeritus Realty under
the HCPI Loan Documents, including any obligations of Emeritus Realty thereunder
to  deliver the financial and other instruments required by such subsections (a)
and  (c)  above  to  HCPI  as  and  when required under the HCPI Loan Documents.
25.2     Charges
         -------
     .  Lessee  acknowledges  that the failure to furnish Lessor with any of the
certificates  or  statements  required  by this Article XXV will cause Lessor to
incur  costs  and expenses not contemplated hereunder, the exact amount of which
is  presently  anticipated to be extremely difficult to ascertain.  Accordingly,
if  Lessee  fails  to  furnish Lessor with any of the certificates or statements
required  by this Article XXV, Lessee shall pay to Lessor upon demand $1,000 for
each  such  failure  as  Additional Charges.  The parties agree that this charge
represents a fair and reasonable estimate of the costs that Lessor will incur by
reason  of  Lessee's  failure  to  furnish  Lessor  with  such  certificates and
statements.
ARTICLE  XXVI.
26.1     Lessor's  Right  to  Inspect  and  Show the Leased Property and Capital
         -----------------------------------------------------------------------
Additions
    -----
     .  Lessee shall permit Lessor and its authorized representatives to inspect
the Leased Property and any Capital Addition thereto during usual business hours
and  on  reasonable  notice  subject  to  any  security,  health,  safety  or
confidentiality  requirements  of  Lessee  or any Legal Requirement or Insurance
Requirement.
ARTICLE  XXVII.
27.1     No  Waiver
         ----------
     .  No  failure  by Lessor to insist upon the strict performance of any term
hereof  or to exercise any right, power or remedy hereunder and no acceptance of
full  or  partial payment of Rent during the continuance of any default or Event
of Default shall constitute a waiver of any such breach or of any such term.  No
waiver  of  any breach shall affect or alter this Lease, which shall continue in
full  force  and  effect  with  respect to any other then existing or subsequent
breach.
ARTICLE  XXVIII.
28.1     Remedies  Cumulative
         --------------------
     .  Each  legal,  equitable or contractual right, power and remedy of Lessor
now  or hereafter provided either in this Lease or by statute or otherwise shall
be  cumulative  and  concurrent  and  shall be in addition to every other right,
power  and remedy and the exercise or beginning of the exercise by Lessor of any
one  or  more  of  such  rights,  powers  and  remedies  shall  not preclude the
simultaneous  or  subsequent  exercise  by  Lessor  of  any or all of such other
rights,  powers  and  remedies.
ARTICLE  XXIX.
29.1     Acceptance  of  Surrender
         -------------------------
     .  No  surrender  to Lessor of this Lease or of the Leased Property, or any
part  thereof  or  of  any  interest therein, shall be valid or effective unless
agreed  to  and  accepted  in  writing  by  Lessor  and  no act by Lessor or any
representative  or  agent  of  Lessor,  other  than such a written acceptance by
Lessor,  shall  constitute  an  acceptance  of  any  such  surrender.
ARTICLE  XXX.
30.1     No  Merger
         ----------
     .  There  shall  be  no  merger  of  this  Lease or of the leasehold estate
created  hereby  by  reason of the fact that the same Person may acquire, own or
hold,  directly  or  indirectly,  (i) this Lease or the leasehold estate created
hereby  or  any interest in this Lease or such leasehold estate and (ii) the fee
estate  in  the  Leased  Property.
ARTICLE  XXXI.
31.1     Conveyance  by  Lessor
         ----------------------
     .  If Lessor or any successor owner of the Leased Property shall convey the
Leased  Property  other  than  as  security for a debt, Lessor or such successor
owner,  as  the  case  may  be,  shall  thereupon  be  released  from all future
liabilities  and  obligations of the Lessor under this Lease arising or accruing
from and after the date of such conveyance or other transfer and all such future
liabilities  and  obligations  shall  thereupon  be  binding upon the new owner.
31.2     New  Lease
         ----------
     .  Any  Lessor  shall  have  the  right,  at any time and from time to time
during  the Term for any purpose, by written notice to Lessee, to require Lessee
to execute an amendment to this Lease whereby the Leased Property of one or more
Facilities  owned  by  such  Lessor  (individually,  a  "Separated  Property" or
collectively,  the  "Separated  Properties")  is separated and removed from this
Lease,  and  to  simultaneously  execute a substitute lease with respect to such
Separated  Property(ies),  in  which  case:
31.2.1     the  Lessor  that  is  the  owner  of such Separated Property and the
Lessee  that is the License Holder with respect to such Separated Property shall
execute  a  new  lease  (the  "New  Lease")  for  such  Separated Property(ies),
effective  as  of  the  date  specified in Section 31.2.3. below (the "New Lease
Effective  Date"),  in  the same form and substance as this Lease, but with such
changes  thereto  as  necessary  to  reflect  the  separation  of  the Separated
Property(ies)  from  the  balance of the Leased Property, including specifically
the  following:
(a)     The total monthly Minimum Rent payable under such New Lease shall be the
     total  applicable  monthly  Allocated  Minimum  Rent  with  respect to such
Separated  Property(ies);
(b)     All  Minimum Rent rental escalations under the New Lease shall be at the
times and in the amounts set forth in this Lease for Minimum Rent increases; and
(c)     The  New  Lease  shall  provide  that  the  lessee  thereunder  shall be
responsible  for  the  payment,  performance  and  satisfaction  of  all duties,
obligations  and liabilities arising under this Lease, insofar as they relate to
the Separated Property(ies), that were not paid, performed and satisfied in full
prior  to the effective date of the New Lease (and Lessee under this Lease shall
also  be  responsible  for  the  payment,  performance  and  satisfaction of the
aforesaid  duties, obligations and liabilities not paid, performed and satisfied
in  full  prior  to  the  effective  date  of  such  New  Lease).
31.2.2     Lessor  and  Lessee  shall  also  execute  an amendment to this Lease
effective  as  of  the New Lease Effective Date reflecting the separation of the
Separated  Property(ies) from the balance of the Leased Property and making such
modifications  to  this  Lease  as  are  necessitated  thereby.
31.2.3     In  the case of any New Lease that is entered into in accordance with
this  Section  31.2  such  New Lease shall be effective on the date which is the
earlier  of  (i)  the  date the New Lease is fully executed and delivered by the
parties thereto and (ii) the date specified in the written notice from Lessor to
Lessee  requiring  a New Lease as described above, which date shall be no sooner
than  ten  (10)  days  after  the  date  such  notice  is  issued.
31.2.4     Lessee's  obligation  to provide letters of credit in accordance with
Article  21  of this Lease shall be segregated so that (a) the applicable Lessee
shall  be  required  to provide a letter of credit pursuant to the New Lease, on
the same terms and conditions as set forth in this Lease, except that "Letter of
Credit  Amount"  under  the  New  Lease  shall  mean an amount equal to the then
existing  Letter  of  Credit  Amount  under  this  Lease (prior to the amendment
contemplated  in Section 31.2.2 above), times a fraction, the numerator of which
is  the  sum  of  the  then  existing  annual  Allocated  Minimum  Rent  for the
Substituted  Property(ies),  and the denominator of which is the sum of the then
existing  total  annual  Minimum  Rent payable for all Facilities (including the
Separated Property(ies)), and (b) the "Letter of Credit Amount" under this Lease
(as amended) shall be reduced by the "Letter of Credit Amount" for the New Lease
determined  in  accordance  with  subsection  (a)  above.
31.2.5     Lessee  and  Lessor  shall  take such actions and execute and deliver
such  documents,  including without limitation the New Lease and an amendment to
this  Lease,  as  are  reasonably  necessary  and  appropriate to effectuate the
provisions  and  intent  of  this  Section  31.2.
31.2.6     Lessor  shall  reimburse  Lessee  for  all  of  Lessee's  reasonable
out-of-pocket  costs  and expenses in connection with the preparation and review
of  any  New  Lease entered into in accordance with this Section 31.2, including
but  not  limited  to  reasonable  attorney's  and  accountant's costs, fees and
expenses  incurred  by  Lessee.
ARTICLE  XXXII.
32.1     Quiet  Enjoyment
         ----------------
     .  So  long  as Lessee shall pay the Rent as the same becomes due and shall
fully  comply  with  all  of  the  terms  of  this  Lease  and fully perform its
obligations  hereunder,  Lessee shall peaceably and quietly have, hold and enjoy
the Leased Property for the Term, free of any claim or other action by Lessor or
anyone  claiming  by,  through  or  under  Lessor,  but subject to all liens and
encumbrances  of  record  as  of  the  Commencement  Date  with  respect  to the
applicable  portion  of  the  Leased Property or created thereafter as permitted
under  hereunder  or thereafter consented to by Lessee.  No failure by Lessor to
comply  with  the  foregoing  covenant  shall give Lessee any right to cancel or
terminate this Lease or abate, reduce or make a deduction from or offset against
the  Rent  or  any other sum payable under this Lease, or to fail to perform any
other  obligation  of  Lessee  hereunder.  Notwithstanding the foregoing, Lessee
shall  have the right, by separate and independent action to pursue any claim it
may  have  against  Lessor  as a result of a breach by Lessor of the covenant of
quiet  enjoyment  contained  in  this  Article.
ARTICLE  XXXIII.
33.1     Notices
         -------
     .  Any notice, consent, approval, demand or other communication required or
permitted  to  be  given  hereunder  (a  "notice") must be in writing and may be
served  personally  or  by  U.S.  Mail.  If  served  by  U.S.  Mail, it shall be
addressed  as  follows:
If  to  Lessor:     As  set  forth  on  Exhibit  F
                                        ----------

with  a  copy  to:     The  Nathanson  Group
1520  Fourth  Ave.,  Sixth  Floor
Seattle,  Washington  98101
Attn:  Randi  S.  Nathanson,  Esq.
Fax:  (206)  623-1738
If  to  Lessee:     c/o  Emeritus  Corporation
3131  Elliott  Ave.,  Suite  500
Seattle,  Washington  98121
Attn:  Raymond  Brandstrom
Fax:  (206)  443-5432
with  a  copy  to:     The  Nathanson  Group
1520  Fourth  Ave.,  Sixth  Floor
Seattle,  Washington  98101
Attn:  Randi  S.  Nathanson,  Esq.
Fax:  (206)  623-1738


     Any  notice  which is personally served shall be effective upon the date of
service;  any  notice  given  by U.S. Mail shall be deemed effectively given, if
deposited in the United States Mail, registered or certified with return receipt
requested,  postage  prepaid  and  addressed  as  provided above, on the date of
receipt,  refusal or non-delivery indicated on the return receipt.  In addition,
either  party  may  send  notices  by  facsimile  or  by a nationally recognized
overnight  courier service provides written proof of delivery (such as U.P.S. or
Federal  Express).  Any  notice  sent  by  facsimile  shall  be  effective  upon
confirmation  of  receipt  in  legible form, and any notice sent by a nationally
recognized  overnight  courier shall be effective on the date of delivery to the
party  at  its  address  specified  above as set forth in the courier's delivery
receipt.  Either  party  may,  by  notice  to the other from time to time in the
manner  herein  provided,  specify  a  different  address  for  notice purposes.
ARTICLE  XXXIV.
34.1     Appraiser
         ---------
     .  If  it  becomes  necessary  to  determine  the Fair Market Value or Fair
Market  Rental  of any Facility for any purpose of this Lease, the same shall be
determined by Integra Realty Resources, or in the event Integra Realty Resources
no  longer  exists  upon  the  date  the  same  is  to  be determined, any other
nationally  recognized  appraisal  firm,  in  which  one or more of the members,
officers  or  principals  of  such firm are members of the American Institute of
Real  Estate  Appraisers  (or  any  successor  organization  thereto), as may be
selected  by  Lesser in writing to Lessee (the "Appraiser").  Lessor shall cause
such  Appraiser to determine the Fair Market Value or Fair Market Rental of such
Facility  as  of  the  relevant  date  (giving  effect to the impact, if any, of
inflation  from  the  date of the Appraiser's decision to the relevant date) and
the determination of such Appraiser shall be final and binding upon the parties.
To  the  extent consistent with sound appraisal practice as then existing at the
time  of  any  such appraisal, an appraisal of Fair Market Value for purposes of
this  Lease  shall take into account and shall give appropriate consideration to
all  three  customary  methods  of appraisal (i.e., the cost approach, the sales
comparison  approach  and  the  income  approach), and no one method or approach
shall  be  deemed conclusive simply by reason of the nature of Lessor's business
or because such approach may have been used for purposes of determining the fair
market  value  of  the applicable Facility at the time of acquisition thereof by
Lessor.  This  provision  for  determination  by appraisal shall be specifically
enforceable to the extent such remedy is available under applicable law, and any
determination  hereunder  shall  be final and binding upon the parties except as
otherwise provided by applicable law.  Lessor and Lessee shall each pay one-half
of  the  fees  and  expenses of the Appraiser and one-half of all other cost and
expenses  incurred  in  connection  with  such  appraisal.
ARTICLE  XXXV.
                             [Intentionally Omitted]
ARTICLE  XXXVI.
36.1     Lessor  May  Grant  Liens
         -------------------------
     .  Without  the  consent of Lessee, Lessor may, from time to time, directly
or indirectly, create or otherwise cause to exist any lien, encumbrance or title
retention agreement upon the Leased Property, or any portion thereof or interest
therein,  whether  to  secure  any  borrowing  or  other  means  of financing or
refinancing.  This Lease is and at all times shall be subject and subordinate to
any  ground  or  underlying  leases, mortgages, trust deeds or like encumbrances
(collectively,  "Priority  Encumbrances"), which may now or hereafter affect the
Leased Property and to all renewals, modifications, consolidations, replacements
and  extensions  of  any  such  lease, mortgage, trust deed or like encumbrance;
provided,  however,  that  (other  than  with  respect  to  the Initial Facility
    ----   -------
Mortgages) the subjection and subordination of this Lease and Lessee's leasehold
    ---
interest  hereunder  to  any  Priority Encumbrance shall be conditioned upon the
execution by the holder of each Priority Encumbrance and delivery to Lessee of a
nondisturbance  and  attornment  agreement  which  provides  that  so long as no
default has occurred and is continuing beyond the period of time allowed for the
remedy  thereof  under  the  terms  of  this  Lease, the holder of such Priority
Encumbrance  (i)  shall  not  disturb  either  Lessee's  leasehold  interest  or
possession of the Leased Property in accordance with the terms hereof, or any of
its  rights,  privileges  and  options,  (ii)  shall  permit  application of all
proceeds  of insurance and all Awards and payments in connection with the taking
of  all  or any portion of the Leased Property in accordance with the provisions
of  Articles  XIV  and  XV  of this Lease, (iii) waives all Priority Encumbrance
rights or interests in any of Lessee's Personal Property, and (iv) shall execute
a  release of such rights, privileges, options and all liens and claims that the
holder of such Priority Encumbrance may have in the Leased Property upon payment
of  the purchase price therefor in the event Lessee exercises any of its options
or rights to purchase the Leased Property provided in this Lease.  In connection
with the foregoing and at the request of Lessor, Lessee shall promptly execute a
reasonable  subordination,  nondisturbance  and  attornment agreement which will
incorporate  the  terms  set  forth  in  the preceding sentence.  Except for the
documents  described  in  the  preceding  sentences,  this  clause  shall  be
self-operative  and  no further instrument of subordination shall be required by
any  ground  or  underlying lessor or by any mortgagee or beneficiary, affecting
any lease or the Leased Property.  In confirmation of such subordination, Lessee
shall  execute  promptly  any  certificate  that  Lessor  may  request  for such
purposes.
36.2     Attornment
         ----------
     .  If Lessor's interest in the Leased Property is sold or conveyed upon the
exercise  of  any  remedy provided for in any Facility Mortgage, or otherwise by
operation  of  law:  (i)  at  the new owner's option, Lessee shall attorn to and
recognize  the new owner as Lessee's Lessor under this Lease or enter into a new
lease  substantially  in  the  form of this Lease with the new owner, and Lessee
shall  take  such  actions  to  confirm the foregoing within ten (10) days after
request;  and (ii) the new owner shall not be (a) liable for any act or omission
of  Lessor  under  this Lease occurring prior to such sale or conveyance, or (b)
subject  to any offset, abatement or reduction of rent because of any default of
Lessor  under  this  Lease  occurring  prior  to  such  sale  or  conveyance.
ARTICLE  XXXVII.
37.1     Hazardous  Substances
         ---------------------
     .  Lessee  shall  not  allow  any Hazardous Substance to be located in, on,
under  or  about  the Leased Property or incorporated in any Facility; provided,
however, that Hazardous Substances may be brought, kept, used or disposed of in,
on  or about the Leased Property in quantities and for purposes similar to those
brought,  kept,  used or disposed of in, on or about similar facilities used for
purposes  similar  to  the  Primary  Intended  Use  or  in  connection  with the
construction  of  facilities  similar  to  the applicable Facility and which are
brought,  kept,  used  and  disposed  of  in  strict  compliance  with  Legal
Requirements.  Lessee  shall not allow the Leased Property to be used as a waste
disposal  site  or  for  the  manufacturing,  handling, storage, distribution or
disposal  of  any  Hazardous  Substance.
37.2     Notices
         -------
     .  Lessee  shall  provide  to Lessor promptly, and in any event immediately
upon  Lessee's  receipt  thereof,  a  copy  of  any notice, or notification with
respect  to,  (i)  any  violation  of  a Legal Requirement relating to Hazardous
Substances  located  in,  on,  or  under  the  Leased  Property  or any adjacent
property;  (ii)  any  enforcement,  cleanup,  removal,  or other governmental or
regulatory action instituted, completed or threatened with respect to the Leased
Property; (iii) any claim made or threatened by any Person against Lessee or the
Leased  Property  relating to damage, contribution, cost recovery, compensation,
loss,  or  injury  resulting  from  or  claimed  to  result  from  any Hazardous
Substance;  and  (iv)  any  reports  made  to  any  federal,  state  or  local
environmental  agency  arising  out  of  or  in  connection  with  any Hazardous
Substance  in,  on,  under  or  removed  from the Leased Property, including any
complaints,  notices,  warnings  or asserted violations in connection therewith.
37.3     Remediation
         -----------
     .  If Lessee becomes aware of a violation of any Legal Requirement relating
to  any  Hazardous  Substance  in, on, under or about the Leased Property or any
adjacent  property,  or if Lessee, Lessor or the Leased Property becomes subject
to  any  order of any federal, state or local agency to repair, close, detoxify,
decontaminate  or  otherwise  remediate  the  Leased  Property,  Lessee  shall
immediately  notify Lessor of such event and, at its sole cost and expense, cure
such  violation  or effect such repair, closure, detoxification, decontamination
or  other  remediation.  If  Lessee fails to implement and diligently pursue any
such  cure,  repair,  closure,  detoxification,  decontamination  or  other
remediation,  Lessor  shall have the right, but not the obligation, to carry out
such  action  and  to  recover  from  Lessee  all of Lessor's costs and expenses
incurred  in  connection  therewith.
37.4     Indemnity
         ---------
     .  Lessee  shall  indemnify,  defend,  protect,  save,  hold  harmless, and
reimburse  Lessor  for,  from  and against any and all costs, losses (including,
losses of use or economic benefit or diminution in value), liabilities, damages,
assessments, lawsuits, deficiencies, demands, claims and expenses (collectively,
"Environmental  Costs")  (whether  or  not arising out of third-party claims and
regardless  of  whether  liability  without  fault  is  imposed, or sought to be
imposed,  on Lessor) incurred in connection with, arising out of, resulting from
or  incident  to,  directly  or indirectly, before or during (but not after) the
Term  or  such  portion  thereof  during  which the Leased Property is leased to
Lessee  (i)  the  production, use, generation, storage, treatment, transporting,
disposal,  discharge,  release or other handling or disposition of any Hazardous
Substances from, in, on or about the Leased Property (collectively, "Handling"),
including the effects of such Handling of any Hazardous Substances on any Person
or  property  within  or outside the boundaries of the Leased Property, (ii) the
presence  of any Hazardous Substances in, on, under or about the Leased Property
and (iii) the violation of any Environmental Law.  "Environmental Costs" include
interest,  costs  of  response,  removal, remedial action, containment, cleanup,
investigation,  design, engineering and construction, damages (including actual,
consequential  and  punitive  damages)  for personal injuries and for injury to,
destruction  of  or  loss  of  property  or  natural  resources,  relocation  or
replacement  costs,  penalties,  fines,  charges  or  expenses, attorney's fees,
expert  fees,  consultation  fees,  and  court  costs,  and  all amounts paid in
investigating,  defending  or  settling  any  of  the  foregoing.
Without  limiting  the  scope  or  generality of the foregoing, Lessee expressly
agrees to reimburse Lessor for any and all costs and expenses incurred by Lessor
in  connection  with, arising out of, resulting from or incident to, directly or
indirectly,  before  or  during (but not after) the Term or such portion thereof
during  which  the  Leased  Property  is  leased  to  Lessee  of  the following:
(a)     In  investigating  any  and  all matters relating to the Handling of any
Hazardous  Substances,  in,  on,  from,  under  or  about  the  Leased Property;
(b)     In  bringing  the  Leased  Property  into  compliance  with  all  Legal
Requirements;  and
(c)     Removing,  treating, storing, transporting, cleaning-up and/or disposing
of any Hazardous Substances used, stored, generated, released or disposed of in,
on,  from,  under  or  about  the  Leased  Property  or  off-site.
     If  any  claim  is made by Lessor for reimbursement for Environmental Costs
incurred  by  it hereunder, Lessee agrees to pay such claim promptly, and in any
event to pay such claim within thirty (30) calendar days after receipt by Lessee
of  notice  thereof.  If  any such claim is not so paid and Lessor is ultimately
found  or agrees to be responsible therefore, Lessee agrees also to pay interest
on  the  amount  paid  from  the  date of the first notice of such claim, at the
Overdue  Rate.
37.5     Environmental  Inspection
         -------------------------
     .  Lessor  shall  have the right, from time to time, during normal business
hours  and  upon not less than five (5) days written notice to Lessee, except in
the  case of an emergency in which event no notice shall be required, to conduct
an  inspection  of the Leased Property to determine the existence or presence of
Hazardous  Substances  on  or  about the Leased Property.  Lessor shall have the
right  to  enter  and inspect the Leased Property, conduct any testing, sampling
and  analyses  it  deems necessary and shall have the right to inspect materials
brought  into  the  Leased Property.  Lessor may, in its discretion, retain such
experts  to conduct the inspection, perform the tests referred to herein, and to
prepare  a  written  report  in  connection  therewith.  All  costs and expenses
incurred  by  Lessor  under  this  Section shall be paid on demand as Additional
Charges  by Lessee to Lessor.  Failure to conduct an environmental inspection or
to  detect  unfavorable  conditions  if such inspection is conducted shall in no
fashion  be  intended as a release of any liability for environmental conditions
subsequently  determined  to  be  associated  with  or  to  have occurred during
Lessee's  tenancy.  Lessee  shall  remain liable for any environmental condition
related  to  or  having  occurred  during  its  tenancy  regardless of when such
conditions  are  discovered  and regardless of whether or not Lessor conducts an
environmental  inspection  at the termination of the Lease.  The obligations set
forth in this Article shall survive the expiration or earlier termination of the
Lease.
ARTICLE  XXXVIII.
38.1     Memorandum  of  Lease
         ---------------------
     .  Lessor and Lessee shall, promptly upon the request of either, enter into
one  or  more short form memoranda of this Lease, in form suitable for recording
under  the  laws  of  the  State.  Lessee  shall  pay  all costs and expenses of
recording  any such memorandum and shall fully cooperate with Lessor in removing
from  record  any  such memorandum upon the expiration or earlier termination of
the  Term  with  respect  to  the  applicable  Facility.
ARTICLE  XXXIX.
39.1     Sale  of  Assets
         ----------------
     .  Notwithstanding  any  other provision of this Lease, Lessor shall not be
required  to  (i)  sell or transfer the Leased Property, or any portion thereof,
which is a real estate asset as defined in Section 856(c)(5)(B), or functionally
equivalent successor provision, of the Code, to Lessee if HCPI's counsel advises
Lessor  that  such  sale  or transfer may not be a sale of property described in
Section  857(b)(6)(C),  or  functionally  equivalent successor provision, of the
Code  or  (ii)  sell or transfer the Leased Property, or any portion thereof, to
Lessee  if HCPI's counsel advises Lessor that such sale or transfer could result
in  an  unacceptable  amount  of  gross  income  for purposes of the ninety five
percent (95 %) gross income test contained in Section 856(c)(2), or functionally
equivalent  successor  provision,  of the Code.  If Lessee has the obligation to
purchase the property pursuant to the terms herein, and if Lessor determines not
to sell such property pursuant to the above sentence, then Lessee shall purchase
such property, upon and subject to all applicable terms and conditions set forth
in  this  Lease,  including  the provisions of Article XXXV, at such time as the
transaction,  upon the advice of HCPI's counsel, would be a sale of property (to
the  extent  the  Leased  Property  is a real estate asset) described in Section
857(b)(6)(C),  or  functionally equivalent successor provision, of the Code, and
would  not result in an unacceptable amount of gross income to HCPI for purposes
of  the  ninety  five  percent  (95%)  gross  income  test  contained in Section
856(c)(2),  or functionally equivalent successor provision of the Code and until
such  time Lessee shall lease the Leased Property from Lessor at the Fair Market
Rental  determined  in accordance with Article XXXIV; provided, however, that if
Lessee's  obligation  to  purchase  arises  pursuant to Section 16.5, and if the
events  giving rise to the Event of Default for which Lessor exercised its right
to  put  the  Leased Property to Lessee pursuant to Section 16.5 have been cured
prior to the time Lessor determines to sell the Leased Property, then this Lease
shall  continue  in  full  force  and effect as if such Event of Default had not
occurred.
ARTICLE  XL.
40.1     Subdivision
         -----------
     .  If  the  Land  is  in  excess  of  that which is required to operate the
Facilities in accordance with the Primary Intended Use, Lessor may subdivide the
Land and amend this Lease and the legal description attached hereto as Exhibit A
                                                                       ---------
such  that the Land contains only so much of the Land as is necessary to operate
each Facility in accordance with its Primary Intended Use.  If Lessor subdivides
the  Land,  Lessee  shall  have  the  right  to an appropriate abatement of Rent
payable and of the purchase price payable in the event that Lessee exercises its
option to purchase the Leased Property pursuant to Article XXXV and the right to
reasonably  adjust any other obligations of either party accordingly.  After any
such subdivision Lessee shall have no rights to any land which is no longer part
of  the  Leased Property and Lessor may sell, lease or develop any land which is
no  longer  part  of  the Leased Property, provided that Lessor may not use such
land  for  the  operation  of  a  facility  providing  adult congregate care and
assisted living services, and provided further that Lessor may not sell or lease
such  land  to  a third party that Lessor knows intends to use such land for the
development  of  a  facility providing adult congregate care and assisted living
services.  If  Lessor  elects  to subdivide the Land Lessee shall cooperate with
Lessor  and  take  all  actions  reasonably  requested  by Lessor to effect such
subdivision.
ARTICLE  XLI.
41.1     Authority
         ---------
     .  If  Lessee  is  a  corporation,  trust, or partnership, Lessee, and each
individual  executing this Lease on behalf of Lessee, represent and warrant that
each  is  duly  authorized to execute and deliver this Lease on behalf of Lessee
and  shall  within  thirty  (30)  days  after execution of this Lease deliver to
Lessor  evidence  of  such  authority  satisfactory  to  Lessor.
ARTICLE  XLII.
42.1     Attorneys'  Fees
         ----------------
     .  If  Lessor  or  Lessee  brings an action or other proceeding against the
other  to  enforce  any  of  the  terms,  covenants  or conditions hereof or any
instrument  executed  pursuant  to  this  Lease,  or  by reason of any breach or
default  hereunder  or  thereunder,  the  party prevailing in any such action or
proceeding  and  any  appeal  thereupon  shall  be  paid  all  of  its costs and
reasonable  outside  attorneys'  fees  incurred  therein.  In  addition  to  the
foregoing and other provisions of this Lease that specifically require Lessee to
reimburse,  pay or indemnify against Lessor's attorneys' fees, Lessee shall pay,
as  Additional  Charges,  all  of  Lessor's  reasonable  outside attorneys' fees
incurred  in  connection  with  the administration or enforcement of this Lease,
including  attorneys'  fees incurred in connection with Lessee's exercise of its
option  to  purchase  the  Leased  Property or the renewal of this Lease for any
Extended  Term,  the review of any letters of credit, the review, negotiation or
documentation  of  any  subletting, assignment, or management arrangement or any
consent  requested in connection therewith, and the collection of past due Rent.
ARTICLE  XLIII.
43.1     Brokers
         -------
     .  Lessee  warrants  that  it  has not had any contact or dealings with any
Person  or real estate broker which would give rise to the payment of any fee or
brokerage  commission in connection with this Lease, and Lessee shall indemnify,
protect,  hold  harmless  and  defend Lessor from and against any liability with
respect to any fee or brokerage commission arising out of any act or omission of
Lessee.  Lessor  warrants  that  it has not had any contact or dealings with any
Person  or real estate broker which would give rise to the payment of any fee or
brokerage  commission in connection with this Lease, and Lessor shall indemnify,
protect,  hold  harmless  and  defend Lessee from and against any liability with
respect to any fee or brokerage commission arising out of any act or omission of
Lessor.
ARTICLE  XLIV.
44.1     Miscellaneous.
         --------------
44.1.1     Survival
           --------
     .  Anything  contained  in  this Lease to the contrary notwithstanding, all
claims  against,  and  liabilities  and indemnities of, Lessee or Lessor arising
prior  to  the  expiration or earlier termination of the Term shall survive such
expiration  or  termination.
44.1.2     Severability
           ------------
     .  If  any term or provision of this Lease or any application thereof shall
be  held  invalid  or  unenforceable,  the remainder of this Lease and any other
application  of  such  term  or  provision  shall  not  be  affected  thereby.
44.1.3     Non-Recourse
           ------------
     .  Lessee  specifically  agrees  to  look solely to the Leased Property for
recovery  of  any  judgment  from  Lessor.  It  is  specifically  agreed that no
constituent  partner  in  Lessor  or officer or employee of Lessor shall ever be
personally  liable  for  any  such  judgment  or for the payment of any monetary
obligation  to Lessee.  The provision contained in the foregoing sentence is not
intended  to, and shall not, limit any right that Lessee might otherwise have to
obtain  injunctive  relief  against  Lessor,  or  any  action  not involving the
personal  liability  of  Lessor.  Furthermore,  except  as  otherwise  expressly
provided  herein,  in  no  event  shall  Lessor ever be liable to Lessee for any
indirect  or  consequential  damages  suffered  by  Lessee  from whatever cause.
44.1.4     Licenses
           --------
     .  Upon the expiration or earlier termination of the Term, Lessee shall use
its  best  efforts to transfer to Lessor or Lessor's nominee and shall cooperate
with Lessor or Lessor's designee or nominee in connection with the processing by
Lessor  or  Lessor's  designee  or nominee of any applications for all licenses,
operating permits and other governmental authorization, all contracts, including
contracts  with  governmental  or quasi-governmental entities, business records,
data,  patient  and  resident  records, and patient and resident trust accounts,
which  may  be necessary or useful for the operation of the applicable Facility;
provided  that  the costs and expenses of any such transfer or the processing of
any  such  application  shall be paid by Lessor or Lessor's designee or nominee.
Lessee  shall not commit any act or be remiss in the undertaking of any act that
would  jeopardize  the  licensure  or certification of such Facility, and Lessee
shall  comply  with  all  requests  for an orderly transfer of the same upon the
expiration  or early termination of the Term.  In addition, upon request, Lessee
shall  promptly  deliver  copies of all books and records relating to the Leased
Property  and its operation to Lessor or Lessor's designee or nominee but Lessee
shall  not  be  required  to  deliver corporate financial records or proprietary
materials.  Lessee  shall  indemnify,  defend,  protect and hold harmless Lessor
from  and  against  any  loss,  damage,  cost  or  expense incurred by Lessor or
Lessor's  designee  or  nominee in connection with the correction of any and all
deficiencies  of  a  physical  nature  identified  by any governmental authority
responsible  for  licensing  the  Leased Property in the course of any change of
ownership inspection and audit and previously identified during the Term by such
governmental  authority.
44.1.5     Successors  and  Assigns
           ------------------------
     .  This  Lease  shall be binding upon Lessor and its successors and assigns
and,  subject  to the provisions of Article XXIV, upon Lessee and its successors
and  assigns.
44.1.6     Governing  Law
           --------------
     .  THIS  LEASE  WAS  NEGOTIATED IN THE STATE OF CALIFORNIA, WHICH STATE THE
PARTIES  AGREE  HAS  A  SUBSTANTIAL  RELATIONSHIP  TO  THE  PARTIES  AND  TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY.  ACCORDINGLY, IN ALL RESPECTS THIS LEASE
(AND  ANY  AGREEMENT  FORMED PURSUANT TO THE TERMS HEREOF) SHALL BE GOVERNED BY,
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA (WITHOUT REGARD OF PRINCIPLES OR CONFLICTS OF LAW) AND ANY APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA, EXCEPT THAT ALL PROVISIONS HEREOF RELATING
TO  THE  CREATION  OF THE LEASEHOLD ESTATE AND ALL REMEDIES SET FORTH IN ARTICLE
XVI  RELATING  TO  RECOVERY OF POSSESSION OF THE LEASED PROPERTY OF ANY FACILITY
(SUCH  AS  AN  ACTION  FOR  UNLAWFUL  DETAINER OR OTHER SIMILAR ACTION) SHALL BE
CONSTRUED  AND  ENFORCED ACCORDING TO, AND GOVERNED BY, THE LAWS OF THE STATE IN
WHICH  THE  LEASED  PROPERTY  OF  SUCH  FACILITY  IS  LOCATED.
44.1.7     Waiver  of  Trial  by  Jury
           ---------------------------
     .  EACH  OF  LESSOR  AND  LESSEE ACKNOWLEDGES THAT IT HAS HAD THE ADVICE OF
COUNSEL  OF  ITS  CHOICE  WITH  RESPECT TO ITS RIGHTS TO TRIAL BY JURY UNDER THE
CONSTITUTION  OF  THE  UNITED  STATES  AND THE STATE.  EACH OF LESSOR AND LESSEE
HEREBY  EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR  CAUSE  OF  ACTION  (i)  ARISING  UNDER  THIS  LEASE (OR ANY AGREEMENT FORMED
PURSUANT TO THE TERMS HEREOF) OR (ii) IN ANY MANNER CONNECTED WITH OR RELATED OR
INCIDENTAL  TO  THE DEALINGS OF LESSOR AND LESSEE WITH RESPECT TO TIES LEASE (OR
ANY  AGREEMENT  FORMED  PURSUANT  TO  THE TERMS HEREOF) OR ANY OTHER INSTRUMENT,
DOCUMENT  OR  AGREEMENT  EXECUTED  OR  DELIVERED  IN CONNECTION HEREWITH, OR THE
TRANSACTIONS  RELATED  HERETO  OR  THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREINAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; EACH
OF  LESSOR  AND  LESSEE  HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND,
ACTION  OR CAUSE OF ACTION SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY, AND
THAT  EITHER  PARTY MAY FILE A COPY OF THIS SECTION WITH ANY COURT AS CONCLUSIVE
EVIDENCE  OF  THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL
BY  JURY.
LESSOR'S  INITIALS:
LESSEE'S  INITIALS:
44.1.8     Reserved
           --------
     .
44.1.9     Entire  Agreement
           -----------------
     .  This  Lease  and the Exhibits hereto constitutes the entire agreement of
the parties with respect to the subject matter hereof, and may not be changed or
modified  except  by  an agreement in writing signed by the parties.  Lessor and
Lessee  hereby  agree  that  all  prior  or contemporaneous oral understandings,
agreements  or  negotiations  relative to the leasing of the Leased Property are
merged  into  and  revoked  by  this  Lease.
44.1.10     Headings
            --------
     .  All  titles  and  headings to sections, subsections, paragraphs or other
divisions  of  this  Lease are only for the convenience of the parties and shall
not  be  construed  to  have  any  effect  or  meaning with respect to the other
contents  of  such  sections,  subsections,  paragraphs or other divisions, such
other  content  being  controlling as to the agreement among the parties hereto.
44.1.11     Counterparts
            ------------
     .  This  Lease may be executed in any number of counterparts, each of which
shall  be  a  valid  and  binding  original,  but  all  of  which together shall
constitute  one  and  the  same  instrument.
44.1.12     Joint  and  Several
            -------------------
     .  If more than one Person is the Lessee under this Lease, the liability of
such  Persons  under  this  Lease  shall  be  joint  and  several.
44.1.13     Interpretation
             -------------
     .  Both  Lessor  and Lessee have been represented by counsel and this Lease
and every provision hereof has been freely and fairly negotiated.  Consequently,
all  provisions  of  this  Lease  shall  be  interpreted according to their fair
meaning  and  shall  not  be  strictly  construed  against  any  party.
44.1.14     Time  of  Essence
            -----------------
     .  Time  is of the essence of this Lease and each provision hereof in which
time  of  performance  is  established.
44.1.15     Further  Assurances
            -------------------
     .  The  parties'  agree to promptly sign all documents reasonably requested
to  give  effect  to  the  provisions  of  this  Lease.
44.1.16     Third  Party  Beneficiaries
            ---------------------------
     .  The  provisions  of  this Lease are for the benefit of Lessor and Lessee
only;  provided,  however that HCPI shall be a third party beneficiary as to the
provisions  in  favor  of  Lessor,  including  but not limited to any rights and
remedies  of  Lessor  under this Lease.  Other than as set forth in Article XLVI
below,  the provisions of this Lease are not for the benefit of any third party,
and no third party shall have the right to enforce the provisions of this Lease.
44.1.17     Amended  and  Restated
            ----------------------
     .  If  there  is  a lease currently in effect for all or any portion of the
Leased  Property  between Lessor or an Affiliate of Lessor, on the one hand, and
Lessee or an Affiliate of Lessee on the other hand (a "Prior Lease"), this Lease
shall  amend  and  restate such Prior Lease, and such Prior Lease shall be of no
further  force  and  effect.
ARTICLE  XLV.
45.1     Provisions  Relating  to  Master  Lease
         ---------------------------------------
     .  Lessor and Lessee hereby acknowledge and agree that, except as otherwise
expressly  provided herein to the contrary, this Lease is and the parties intend
the  same for all purposes to be treated as a single, integrated and indivisible
agreement.  Lessee  acknowledges  that  in  order  to induce Lessor to lease the
Leased  Property  of  each Facility to Lessee and as a condition thereto, Lessee
insisted that the parties execute this Lease covering all of the Facilities in a
single,  integrated  and  indivisible  agreement.
45.2     Provisions  Relating  to  Tax  Treatment  of  Lease
         ---------------------------------------------------
     .  The  parties  intend  that  this  Lease shall be treated as an operating
lease  for  all purposes and  not as a synthetic lease, financing lease or loan,
and that Lessor shall be entitled to all the benefits of ownership of the Leased
Property,  including depreciation for all federal, state and local tax purposes.
ARTICLE  XLVI.
46.1     HCPI  Rights
         ------------
     .  Notwithstanding  anything  to the contrary in this Lease, so long as the
loan  pursuant  to  the  HCPI  Loan  Documents  is  outstanding:
(a)     Lessor  shall send a copy of any notice or statement under this Lease to
HCPI  in  accordance with Section 33.1 at the same time Lessor sends such notice
or  statement  to  Lessee;
(b)     Lessee  shall send a copy of any notice or statement under this Lease to
HCPI  in  accordance with Section 33.1 at the same time Lessee sends such notice
or  statement  to Lessor, including the financial statements, certifications and
other  documents  set  forth  in  Section  25.1.2  above;
(c)     HCPI's  consent  shall  be  required  for  any  provisions in this Lease
requiring the consent of Lessor.  The standards of consent for HCPI shall be the
same  as  those  which  are applicable to Lessor in the applicable provisions of
this  Lease;
(d)     this  Lease  shall  not  be surrendered, terminated, amended or modified
without  the  prior  written  consent  of  HCPI,  which  consent may be given or
withheld  in  HCPI's  sole  and  absolute  discretion;
(e)     Lessor  shall, at the request of HCPI, promptly exercise any of Lessor's
rights  and  remedies under this Lease, in each case as may be directed by HCPI;
(f)     Lessor  shall  not  exercise  any  of its rights and remedies under this
Lease without first obtaining the consent of HCPI, which consent may be given or
withheld  in  HCPI's  sole  and  absolute  discretion;
(g)     any Transfer Consideration received by Lessor in connection with Section
24.1.2.2 shall be promptly forwarded to HCPI in accordance with, and subject to,
the  terms  of  the  HCPI  Loan  Documents;
(h)     any  proceeds payable to Lessor pursuant to Article XIV for any Facility
shall,  subject  to  the  rights  of  the  Facility Mortgagee for such Facility,
instead  be payable to HCPI in accordance with, and subject to, the terms of the
HCPI  Loan  Documents;
(i)     any  purchase  price  paid  or  payable pursuant to Article XVIII hereof
shall  be paid directly to HCPI in accordance with, and subject to, the terms of
the  HCPI  Loan  Documents;
(j)     Lessor shall cause the letter of credit required pursuant to Article XXI
to  be  in  the  actual possession of HCPI, together with a transfer certificate
endorsed  to  HCPI,  in  form  and  substance  satisfactory  to  HCPI;
(k)     any amounts required to be deposited into an impound account pursuant to
Section  4.4  above  shall be deposited into an impound account to be maintained
with  and  subject  to the control of HCPI to be held for the benefit of Lessor;
(l)     other  than  the  Initial  Facility Mortgages, neither Lessor nor Lessee
shall  cause any encumbrances (including any Facility Mortgages) to be placed on
the  Leased Property without the prior written consent of HCPI, which consent or
approval  may  be  given or withheld in HCPI's sole and absolute discretion; and
(m)     subject  to  the rights of any Initial Facility Mortgages, all property,
loss  of  rental  and  business  interruption  type  insurance policies required
pursuant  to  this  Lease  shall  name  HCPI  as  "loss  payee".
Notwithstanding the foregoing, if a Facility Mortgagee which is not an Affiliate
of  Lessee acquires title to any of the Leased Properties (herein, a "Foreclosed
Property"),  including  by  reason of foreclosure, deed or assignment in lieu of
foreclosure  or  otherwise  purchases  the  rights  granted  under  any Facility
Mortgage  or  related  document,  then the provisions of this Section 46.1 shall
automatically  be of no further force and effect with respect to such Foreclosed
Property.
46.2     Change  in  Control  of  Lessor
         -------------------------------
     .  Lessee agrees that if HCPI or an Affiliate of HCPI acquires any interest
in any Lessor (whether directly or indirectly) (an "HCPI Lessor"), neither HCPI,
such  Affiliate  of  HCPI,  nor  such  HCPI  Lessor,  as  applicable,  shall be:
(a)     liable  for  any  act  or  omission  of  any  Lessor  occurring  (or not
occurring)  prior  to  such  Lessor  becoming  an  HCPI  Lessor;
(b)     subject to any defenses or offsets which any Lessee may have against any
Lessor,  prior  to  such  Lessor  becoming  an  HCPI  Lessor;
(c)     bound  by  any  payment  of Rent which any Lessee might have paid to any
Lessor,  except  to  the  extent  such  Rent  is actually received by HCPI, such
Affiliate  of  HCPI,  or  the  HCPI  Lessor;
(d)     bound  by  any  obligation  to  make any payment to any Lessee which was
required  to  be made prior to the time HCPI or such Affiliate of HCPI succeeded
to  or  acquired  any  interest  in  any  Lessor;
(e)     accountable  for  any  monies  deposited  with any Lessor, except to the
extent  such monies are actually received by HCPI, such Affiliate of HCPI or the
HCPI  Lessor;
(f)     bound  by  any surrender, termination, amendment or modification of this
Lease  made  without  the  prior  written  consent  of  HCPI;  or
(g)     liable  to  any  Lessee  or any other party for any conflict between the
provisions  of  this  Lease  and the provisions of any other lease affecting the
Leased  Property  which  is  not  entered  into by HCPI or an Affiliate of HCPI.
46.3     Covenants  in  Initial  Facility  Mortgage
         ------------------------------------------
     .  Lessor  has  provided  Lessee  copies  of  all documents relating to the
Initial  Facility Mortgages listed on Exhibit H hereto.  Lessee hereby covenants
                                      ---------
to  comply  with  all representations, warranties and covenants set forth in the
Initial  Facility  Mortgages  that  relate to Lessee and/or the operation of the
Facilities.
                            [Signature Page Follows]

<PAGE>
IN  WITNESS  WHEREOF,  the  parties  have  caused  this Lease to be executed and
attested  by  their  respective  officers  thereunto  duly  authorized.
     "Lessor"
"Witness"

     EMERITUS  REALTY  CORPORATION, a Nevada corporation, in its capacity as the
Sole  Member  of  each  of  the  entities  listed  below:

     By:  /s/  Raymond  R.  Brandstrom
        ------------------------------
     Its:  Raymond  R.  Brandstrom
         -------------------------
Witness     Title:  Vice  President  of  Finance
                  ------------------------------


Witness

     EMERITUS  REALTY  VII,  LLC,  a  Delaware  limited  liability  company

     EMERITUS  REALTY  V,  LLC,  a  Delaware  limited  liability  company


     ESC-PORT  ST.  RICHIE,  LLC,  a  Washington  limited  liability  company

     EMERITUS  REALTY  II,  LLC,  a  Delaware  limited  liability  company

     EMERITUS  REALTY  XIV,  LLC,  a  Delaware  limited  liability  company

     EMERITUS  REALTY  BOZEMAN,  LLC,  a  Delaware  limited  liability  company

     EMERITUS  REALTY  III,  LLC,  a  Delaware  limited  liability  company



     EMERITUS  REALTY  PUYALLUP,  LLC,  a  Delaware  limited  liability  company


<PAGE>
                                       71

                                       70

     "Lessee"
"Witness"


     EMERITUS  CORPORATION,  a  Washington  corporation

     By:  /s/  Raymond  R.  Brandstrom
        ------------------------------
Witness     Its:  Raymond  R.  Brandstrom
                -------------------------
     Title:  Vice  President  of  Finance
           ------------------------------

Witness


     EMERITUS  PROPERTIES  V,  INC.,  a  Washington  corporation

     By:  /s/  Raymond  R.  Brandstrom
        ------------------------------
Witness     Its:  Raymond  R.  Brandstrom
                -------------------------
     Title:  Vice  President  of  Finance
           ------------------------------

Witness


     ESC-NEW  PORT  RICHEY,  LLC,  a  Washington  limited  liability  company

     By:  Emeritus  Corporation,  a  Washington  corporation
Witness
     By:  /s/  Raymond  R.  Brandstrom
        -------------------------------
     Its:  Raymond  R.  Brandstrom
         -------------------------
Witness     Title:  Vice  President  of  Finance
                  ------------------------------



     EMERITUS  PROPERTIES  II,  INC.,  a  Washington  corporation

Witness     By:  /s/  Raymond  R.  Brandstrom
               ------------------------------
     Its:  Raymond  R.  Brandstrom
         -------------------------
     Title:  Vice  President  of  Finance
           ------------------------------
Witness


     EMERITUS  PROPERTIES  XIV,  LLC,  a  Washington  limited  liability company

     By:  Emeritus  Corporation,  a  Washington  corporation
Witness
     By:  /s/  Raymond  R.  Brandstrom
        -------------------------------
     Its:  Raymond  R.  Brandstrom
         -------------------------
Witness     Title:  Vice  President  of  Finance
                  ------------------------------


     ESC-BOZEMAN,  LLC,  a  Washington  limited  liability  company

     By:  Emeritus  Corporation,  a  Washington  corporation
Witness
     By:  /s/  Raymond  R.  Brandstrom
        -------------------------------
     Its:  Raymond  R.  Brandstrom
         -------------------------
Witness     Title:  Vice  President  of  Finance
                  ------------------------------



     EMERITUS  PROPERTIES  III,  INC.,  a  Washington  corporation

Witness     By:  /s/  Raymond  R.  Brandstrom
               ------------------------------
     Its:  Raymond  R.  Brandstrom
         -------------------------
     Title:  Vice  President  of  Finance
           ------------------------------
Witness



<PAGE>

                                       A-1


                                       A-1

                                   EXHIBIT A-1
                                   -----------
                               Description of Land
                 Villa Del Rey (Escondido Facility), California
                 ----------------------------------------------
Situated  in  the  County  of  San Diego, State of California, more particularly
described  as:

ALL  THAT  PORTION OF LOT 7 IN BLOCK 179 OF THE RANCHO RINCON DEL DIABLO, IN THE
CITY OF ESCONDIDO, IN THE COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO
MAP  THEREOF  NO.  723  FILED  IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO
COUNTY,  AUGUST  13,  1892,  DESCRIBED  AS  FOLLOWS:

BEGINNING  AT  A  POINT  IN THE NORTHWESTERLY LINE OF SAID LOT 7 DISTANT THEREON
NORTH  53  59'  20" EAST 226.83 FEET FROM THE NORTHWESTERLY CORNER THEREOF, SAID
POINT  BEING  ALSO  A  POINT  IN  THE  CENTER LINE OF THE SAN DIEGO COUNTY WATER
AUTHORITY  EASEMENT;  THENCE  CONTINUING  NORTH  53  59'  20"  EAST  ALONG  SAID
NORTHWESTERLY  LINE  OF LOT 7 A DISTANCE OF 66.87 FEET TO A CUSP FORMED WITH THE
ARC OF A 20.00 FOOT RADIUS CURVE, CONCAVE EASTERLY A RADIAL OF WHICH BEARS NORTH
36  00'  40"  WEST  TO  SAID  POINT  BEING  THE  TRUE POINT OF BEGINNING; THENCE
SOUTHERLY  ALONG  SAID  CURVE 30.83 FEET THROUGH A CENTRAL ANGLE OF 88  19' 45";
THENCE TANGENT TO SAID CURVE SOUTH 34  20' 25" EAST 317.19 FEET TO THE BEGINNING
OF A TANGENT 1000 FOOT RADIUS CURVE, CONCAVE NORTHEASTERLY; THENCE SOUTHEASTERLY
ALONG  SAID  CURVE  21.43  FEET  THROUGH  A  CENTRAL ANGLE OF 1  13' 40"; THENCE
TANGENT  TO  SAID  CURVE  SOUTH 35  34' 05" EAST 83.06 FEET TO THE NORTHEASTERLY
LINE OF THE LAND CONVEYED TO THE CITY OF ESCONDIDO BY DEED RECORDED DECEMBER 20,
1968  FILE  NO.  223861 OF OFFICIAL RECORDS SAID POINT BEING ALSO A POINT IN THE
ARC  OF  A  1077  FOOT  RADIUS CURVE, CONCAVE SOUTHERLY, A RADIAL OF WHICH BEARS
NORTH  4  27'  04"  WEST TO SAID POINT; THENCE EASTERLY ALONG SAID NORTHEASTERLY
LINE  TO  AND  ALONG  THE NORTHEASTERLY LINE OF THE LAND CONVEYED TO THE CITY OF
ESCONDIDO  BY  DEED  RECORDED  DECEMBER  20,  1968,  FILE NO. 223862 OF OFFICIAL
RECORDS  ALONG THE ARC OF SAID 1077 FOOT RADIUS CURVE THROUGH A CENTRAL ANGLE OF
9  16'  54"  A  DISTANCE  OF 178.04 FEET (RECORD 9  27' 38" A DISTANCE OF 177.83
FEET)  AND TANGENT TO SAID CURVE SOUTH 84  58' 46" EAST 77.22 FEET (RECORD SOUTH
83  52'  27"  EAST  77.78  FEET TO THE EASTERLY LINE OF SAID LOT 7; THENCE ALONG
SAID  EASTERLY LINE NORTH 18  03' 27" WEST 627.50 FEET (RECORD NORTH 16  58' 15"
WEST  627.52 FEET PER SAID FILE NO. 223862) TO THE MOST NORTHERLY CORNER OF SAID
LOT 7; THENCE ALONG THE NORTHWESTERLY LINE THEREOF SOUTH 53  59' 20" WEST 364.34
FEET  TO  THE  TRUE  POINT  OF  BEGINNING.

(ASSESSOR'S  PARCEL  NO.  230-141-11)




<PAGE>
                                       A-3

                                       A-2

                                   EXHIBIT A-2
                                   -----------

                               Description of Land
                  Fulton Villa (Stockton Facility), California
                  --------------------------------------------

Situated  in  the  County of San Joaquin, State of California, more particularly
described  as:

PARCEL  ONE:

Parcel  A, as shown on that certain Parcel Map filed for record July 18, 1972 in
Book  1  of Parcel Maps, Page 81, San Joaquin County Records, being a portion of
the Southeast quarter of Section 17, C.M. Weber  Grant, in the City of Stockton.

PARCEL  TWO:

A  right  of  way  20 feet in width lying Southerly of the Northerly line of the
land  described  in  Deed  to  Five Oak Pyramid, Inc., a California corporation,
dated June 30, 1954 recorded July 1, 1954 in Book 1646 of Official Records, page
496,  San  Joaquin  County  Records.

EXCEPT  THEREFROM  the  Westerly  203.81  feet.




<PAGE>
                                   EXHIBIT A-3
                                   -----------
                               Description of Land
              Stanford Centre (Altamonte Springs Facility), Florida
              -----------------------------------------------------

Situated  in  Seminole  County,  Florida,  more  particularly  described  as:

That  part  of  Lots  613,  614,  615,  616,  634,  635, 636 and 637, all in the
subdivision  of  Altamonte  Land, Hotel and Navigation Company, according to the
plat  thereof  as  recorded  in  Plat  Book 1, page 12, of the Public Records of
Seminole  County,  Florida,  described  as  follows:

Commencing  at  the  Southeast  corner of said Lot 637; thence North 000 17' 25"
West,  along the East line of said Lot 637, a distance of 5.00 feet to the North
right  of  way  line  of Orange Drive; thence on a bearing of South 90   00' 00"
West,  along  said  North right of way line, 141.71 feet to the West line of the
East  9.71 feet of said Lot 636 and the Point of Beginning; thence continue on a
bearing  of  South  90   00'  00" West along said North right of way line 260.00
feet  to  the  West  line of the East 5.80 feet of said Lots 634 and 613; thence
North  00  18'  40" West, along said West line, 369.91 feet to the North line of
the  South  111.00 feet of said Lots 613 and 616; thence South 89  53' 35" East,
along  said  North  line, 401.85 feet to the East line of said Lots 616 and 637;
thence  South  00  17'32"  East,  along said East line, 184.16 feet to the North
line  of  the South 190.00 feet of said Lots 636 and 637; thence on a bearing of
West,  along  said North line, 127.44 feet; thence South 53  48' 08" West, 17.62
feet  to  the  West line of the East 9.71 feet of said Lot 636; thence South 000
17'25"  East,  along  said  West  line  174.59  feet  to the Point of Beginning.

TOGETHER  WITH  an  easement  as  created  by  access and parking easement dated
December  23,  1986,  and  recorded  February 19, 1987, in Official Records Book
1820, and 287, of the Public Records of Seminole County, Florida, for access and
parking  purposes  over and across that part of said Lots 636 and 637, described
as  follows:

Commencing  at  the  Southeast  corner of said Lot 637; thence North 00  17' 25"
West,  along the East line of said Lot 637, a distance of 5.00 feet to the North
right-of-way line of Orange Drive; thence on a bearing of West, along said North
line  141.71 feet to the West line of the East 9.71 feet of said Lot 636; thence
North  00  17'  25"  West,  120.00  feet  to the Point of Beginning; thence on a
bearing  of  East, 75.00 feet; thence South 00   17' 25" East 90.00 feet; thence
on  a bearing of West, 75.00 feet to the West line of the East 9.71 feet of said
Lot  636;  thence  North 00  17' 25" West, 90.00 feet to the Point of Beginning.

Subject  to an easement for ingress, egress and utility purposes over and across
that  part  of  said  Lot  636,  described  as  follows:

A  portion  of Lot 636, ALTAMONTE LAND HOTEL AND NAVIGATION COMPANY SUBDIVISION,
as recorded in Plat Book 1, page 12, Public Records of Seminole County, Florida,
being  described  as  follows:
From the Southeast corner of Lot 637 of said ALTAMONTE LAND HOTEL AND NAVIGATION
COMPANY  SUBDIVISION,  run West along the South line of said Lots 636 and 637, a
distance  of  141.71  feet to the Point of Beginning; thence continue West along
said  South  lot  line  65.00  feet;  thence North 000 17' 25" West 110.00 feet;
thence  East 65.00 feet; thence South 00   17' 25" East 110.00 feet to the Point
of  Beginning,  as  recorded  in  Official  Records  Book 1820, page 291, Public
Records  of  Seminole  County,  Florida.

NOW  KNOWN  AS  Parcel  A  and part of Parcel B, "LA CASA GRANDE", Plat Book 39,
pages  50  and  51,  Public  Records  of  Seminole  County,  Florida.

<PAGE>
                                   EXHIBIT A-4
                                   -----------

                               Description of Land
                    River Oaks (Englewood Facility), Florida
                    ----------------------------------------


Situated  in  the  County  of  Sarasota,  State  of  Florida,  more particularly
described  as:

The  Northwesterly  533.39  feet,  more  or  less,  of Lots 509, 510 and 511, of
ENGLEWOOD  GARDENS  -  UNIT-NO. 6, as per plat thereof, recorded in Plat Book 4,
pages 74 and 75, Public Records of Sarasota County, Florida. LESS AND EXCEPT the
Northwesterly  27  feet  thereof,  conveyed  to  county  for  road.

<PAGE>
                                   EXHIBIT A-5
                                   -----------

                               Description of Land
               La Casa Grande (New Port Richey Facility), Florida
               --------------------------------------------------

Situated  in  Pasco  County,  State  of Florida, more particularly described as:

The  West  60 feet of Tract 49 and the East 270 feet of Tract 50, in Section 16,
Township  26  South,  Range  16  East,  Pasco County, Florida, said tracts being
designated  in accordance with the Plat of Tampa and Tarpon Springs Land Company
Subdivision recorded in Plat Book 1, pages 68, 69, and 70, of the Public Records
of  Pasco  County,  Florida.

LESS  ROAD  RIGHT  OF  WAY,  ALSO  DESCRIBED  AS:

A portion of Tracts 49 and 50, TAMPA AND TARPON SPRINGS LAND COMPANY SUBDIVISION
of  Section  16,  Township 26 South, Range 16 East, as shown on Plat recorded in
Plat  Book  1,  pages  68,  69  and  70,  of the Public Records of Pasco County,
Florida,  being  more  fully  described  as  follows:

Commence at the Northeast corner of said Tract 49; thence North 89  45'20" West,
along the Northerly boundary line of said Tract 49, 377.29 feet; thence South 00
15'48" West, 33.00 feet to the Point of Beginning; thence South 00  15'48" West,
along the Easterly boundary line of the West 60.00 feet of said Tract 49, 630.28
feet;  thence  North  89  42'50"  West,  along  the Southerly boundary line of a
portion  of  aid  Tracts  49 and 50, 330.00 feet; thence North 00  15' 48" East,
along  the  Westerly  boundary  line  of  the East 270.00 feet of said Tract 50,
630.04 feet; thence South 89  45'20" East, along the Southerly right of way line
of  Trouble  Creek  Road,  330.00  feet  to  the  Point  of  Beginning.




<PAGE>
                                   EXHIBIT A-6
                                   -----------
                               Description of Land
                   Silver Pines (Cedar Rapids Facility), Iowa
                   ------------------------------------------
Situated  in  County  of  Linn,  State  of  Iowa, more particularly described as
follows:

LOT  2  , EXCEPTING THEREFROM THE NORTH 150 FEET, AND LOT 3, RADEC FREEWAY THIRD
ADDITION  TO  THE  CITY  OF  CEDAR  RAPIDS,  LINN  COUNTY,  IOWA.



<PAGE>
                                   EXHIBIT A-7
                                   -----------
                               Description of Land
                   Juniper Meadows (Lewiston Facility), Idaho
                   ------------------------------------------
Situated in the County of Nez Perce, State of Idaho, more particularly described
as:

Lot  1  of  Scenic  Crest 4th Addition to the City of Lewiston, according to the
official  plat  thereof,  filed  in CABII 327B of Plats, Official Records of Nez
Perce  County,  Idaho


<PAGE>
                                   EXHIBIT A-8
                                   -----------
                               Description of Land
               Lodge at Eddy Pond (Auburn Facility), Massachusetts
               ---------------------------------------------------
Situated  in  the County of Worcester, State of Massachusetts, more particularly
described  as:

Lot  1
------

Auburn,  Massachusetts

A  certain  parcel  of  land  in  the  Commonwealth  of Massachusetts, County of
Worcester,  Town  of Auburn, Situated on the southerly side of Washington Street
(Route  20)  and  shown  as Lot 1 on a plan entitled "Plan of Land in Auburn, MA
(Worcester  County),"  scale  1" - 50', dated August 14, 2002, prepared by Beals
and Thomas, Inc., recorded on August 28, 2002 in Plan Book 785 as Plan 28, being
more  particularly  bounded  and  described  as  follows:

Beginning  at  the  northwesterly  corner of the parcel on the southerly side of
Washington  Street,  thence  running:

N 73 41 31 E     13.19 Feet, to a point, said course being by Washington Street,
thence  turning  and  running;

S 16 18 29 E     25.00 Feet, to a point, said course being by Washington Street,
thence  turning  and  running;

N  73  41  31  E     281.07  Feet,  to  a point, said course being by Washington
Street,  thence  turning  and  running;

S  20  04  51  W     330.52 feet, to a point, said course being by Lot 2 on said
plan,  thence  turning  and  running;

S  23  52  15  E     193.52  feet,  to a point, said course being by said Lot 2,
thence  turning  and  running;

S 75 01 44 E     144.12 feet to a point, said course being by said Lot 2, thence
turning  and  running;

S  36  36  20  E     270.85  feet,  to a point, said course being by said Lot 2,
thence  turning  and  running;

S  05  48  25  E     113.00  feet,  to a point, said course being by said Lot 2,
thence  turning  and  running;

N  79  20 40 W     737.00 feet, to a point, said course being by land n/f of the
Town  of  Auburn,  thence  turning  and  running;

N  13  27 36 E     678.19 feet, to a point, said course being by land n/f of the
Town  of  Auburn,  to  the  point  of  beginning.

Containing  300,897  square  feet  more  or  less.

Subject  to  and  with  the  benefit  of  Drainage,  Utility and Access Easement
Agreement  by  and  between Auburn Land, LLC and LM Auburn Assisted Living, LLC,
dated  April  26,  1996  and  recorded  May  1,  1996  at  Book 17872, Page 321.

Subject  to  and  with  the  benefit of Deed of Easement from LM Auburn Assisted
Living,  LLC  and Auburn Land, LLC to Auburn Water District dated April 29, 1996
and  recorded  May  1,  1996  at  Book  17872,  Page  398.

Confirmatory  Gas Easement dated August 22, 2002 and recorded on August 28, 2002
at  the  Worcester  Registry  of  Deeds  as  instrument  number  164439.



<PAGE>
                                   EXHIBIT A-9
                                   -----------
                               Description of Land
                   Spring Meadows (Bozeman Facility), Montana
                   ------------------------------------------
Situated  in  the  County  of  Gallatin,  State  of  Montana,  more particularly
described  as:

Lot  2  in  Block  2 of Spring Meadows Subdivision, being a portion of unplatted
SW1/4  of  Section  19  and Certificate of Survey 819A, situated in the NW1/4 of
Section  19,  Township  2 South, Range 6 East, P.M.M., Gallatin County, Montana,
according  to  Plat  on file and of record in the office of the County Clerk and
Recorder  of  Gallatin  County,  Montana.  [Plat  J-145]



<PAGE>
                                  EXHIBIT A-10
                                  ------------
                               Description of Land
                      Concorde (Las Vegas Facility), Nevada
                      -------------------------------------
Situated  in  the  County  of  Clark,  State  of  Nevada,  and more particularly
described  as  follows:

Government  Lot  Thirty-Seven  (37)  in  Section 13, Township 21 South, Range 61
East,  M.D.B.&M.,  County  of  Clark  County,  Nevada.

EXCEPT  that  portion  conveyed to the County of Clark for road purposes by Deed
recorded  January  17,  1996  in  Book  960117 as Document No. 01463 of Official
Records.

<PAGE>
                                  EXHIBIT A-11
                                  ------------
                               Description of Land
            Courtyard at the Willows (Puyallup Facility), Washington
            --------------------------------------------------------
SITUATED  IN  THE CITY OF PUYALLUP, PIERCE COUNTY, WASHINGTON, MORE PARTICULARLY
DESCRIBED  AS  FOLLOWS:

PARCEL  A:

LOT  1  OF  COLUMBIA PACIFIC MANAGEMENT BINDING SITE PLAN RECORDED JULY 19, 1995
UNDER  AUDITOR'S  NO.  9507190625,  RECORDS  OF  PIERCE  COUNTY,  WASHINGTON.

EXCEPT  THE  SOUTH  30 FEET THEREOF DEEDED TO THE CITY OF PUYALLUP, A WASHINGTON
MUNICIPAL  CORPORATION,  BY  DEED  RECORDED  UNDER  AUDITOR'S  NO.  9701090196.

PARCEL  B:

A NON-EXCLUSIVE ROAD EASEMENT AREA FOR PURPOSES OF INGRESS, EGRESS AND UTILITIES
AS DELINEATED ON COLUMBIA PACIFIC MANAGEMENT BINDING SITE PLAN RECORDED JULY 19,
1995  UNDER  AUDITOR'S  NO.  9507190625, AS GRANTED BY INSTRUMENT RECORDED UNDER
RECORDING  NUMBER  9806190616.

EXCEPT  FROM  SAID  EASEMENT  THAT  PORTION  LYING  WITHIN SAID LOT 1. PARCEL C:

A  NON-EXCLUSIVE  FENCE EASEMENT AREA FOR PURPOSES OF FENCING AND LANDSCAPING AS
GRANTED BY INSTRUMENT RECORDED UNDER RECORDING NUMBER 9806190616, OVER LOTS 2, 3
AND  4  OF  COLUMBIA PACIFIC MANAGEMENT BINDING SITE PLAN RECORDED JULY 19, 1995
UNDER  AUDITOR'S  NO.  9507190625.

PARCEL  D:

A  NON-EXCLUSIVE  STORM DRAINAGE EASEMENT AREA FOR PURPOSES OF STORM DRAINAGE AS
GRANTED BY INSTRUMENT RECORDED UNDER RECORDING NUMBER 9806190616, OVER LOTS 2, 3
AND  4  OF  COLUMBIA PACIFIC MANAGEMENT BINDING SITE PLAN RECORDED JULY 19, 1995
UNDER  AUDITOR'S  NO.  9507190625.

PARCEL  E:

A  NON-EXCLUSIVE  PERPETUAL  EASEMENT OVER, UNDER, ACROSS AND THROUGH PORTION OF
LOT  2  OF  COLUMBIA PACIFIC MANAGEMENT BINDING SITE PLAN RECORDED JULY 19, 1995
UNDER  AUDITOR'S  NO.  9507190625,  NECESSARY  FOR  PURPOSES  OF  CONSTRUCTING,
MODIFYING,  MAINTAINING,  OPERATING,  AND USING THOSE LOT 1 OFFSITE IMPROVEMENTS
LOCATED  ON SAID LOT 2, AS GRANTED BY INSTRUMENT RECORDED UNDER RECORDING NUMBER
9806190616.

PARCEL  F:

A  NON-EXCLUSIVE  PERPETUAL  EASEMENT OVER, UNDER, ACROSS AND THROUGH PORTION OF
LOT  4  OF  COLUMBIA PACIFIC MANAGEMENT BINDING SITE PLAN RECORDED JULY 19, 1995
UNDER  AUDITOR'S  NO.  9507190625,  NECESSARY  FOR  PURPOSES  OF  CONSTRUCTING,
MODIFYING,  MAINTAINING,  OPERATING,  AND USING THOSE LOT 1 OFFSITE IMPROVEMENTS
LOCATED  ON SAID LOT 4, AS GRANTED BY INSTRUMENT RECORDED UNDER RECORDING NUMBER
9806190616.







<PAGE>
                                       B-1

                                    EXHIBIT B
                       List of Lessor's Personal Property
                          With Respect to Each Facility
                          -----------------------------
     All furniture, equipment, and tangible personal property, including but not
limited  to  the  following:  all  fabrics,  beds, mattresses, credenzas, desks,
mirrors,  framed  pictures,  prints,  art  work,  tables, chairs, lamps, luggage
racks,  draperies,  bed  spreads,  sofas,  nightstands, activity tables, stools,
shower curtains and hooks, registration equipment, planters, coat racks, ceiling
fans, memo holders, podiums, stands, window blinds, wastebaskets, copy machines,
file cabinets, typewriters, trash cans, safes, lockers, washers, dryers, towels,
washcloths, linens, blankets, mattress pads, pillows, laundry carts, maid carts,
vacuum  cleaners,  hand trucks, medical carts, time clocks, clothes hangers, ice
machines,  locksetters  and  equipment,  ice  bins,  blenders, moveable coolers,
beverage  dispensers, glass racks, syrup tanks, cash registers, coffee machines,
ranges, fryers, broilers, griddles, hot plates, warmers, toasters, waffle irons,
soup  wells,  microwaves,  heat  lamps,  timers,  dishwashers,  coffee grinders,
steamers, ovens, smallwares, china, silverware, glasses, t.v. sets, and supplies
of  every  type  and  nature  now  or  hereafter  used  in  the Facility and all
increases, substitutions, replacements, additions and accessions to any such, of
every  type,  and  any  certificate of occupancy and architectural drawings with
respect  to the Facility; excluding, however, other intangible personal property
relating  to the trade or business operated on the Facility, including operating
licenses  and  good will, and any inventory or vehicles relating to the trade or
business  operated  on  the  Facility.

<PAGE>

                                       C-1

                                    EXHIBIT C
                                    ---------

  LIST OF FACILITIES, FACILITY DESCRIPTION, ALLOCATED MINIMUM RENT AND ALLOCATED
  ------------------------------------------------------------------------------
                                      VALUE
                                      -----
                                          INITIAL
               FACILITY DESCRIPTION     MONTHLY ALLOCATED     ALLOCATED
        FACILITY     AND PRIMARY INTENDED USE     MINIMUM RENT     VALUE
                                                  ------------     -----
Villa  Del  Rey  Facility     Assisted  living  facility  located  at  1351  E.
-------------------------     -------------------------------------------------
Washington  Ave.  in  Escondido,  California,  consisting  of 84 assisted living
--------------------------------------------------------------------------------
                  facility units     $41,208.33     $4,600,000
                  --------------     ----------     ----------
Fulton  Villa  Facility     Assisted  living facility located at 517 East Fulton
-----------------------     ----------------------------------------------------
Street  in Stockton, California, consisting of 81 assisted living facility units
--------------------------------------------------------------------------------
                            $32,250.00     $3,600,000
                            ----------     ----------
Stanford  Centre  Facility     Assisted  living  facility  located at 433 Orange
--------------------------     -------------------------------------------------
Drive  in Altamonte Springs, Florida, consisting of 117 assisted living facility
--------------------------------------------------------------------------------
    units and special care (Alzheimer's) units     $26,875.00     $3,000,000
    ------------------------------------------     ----------     ----------
River  Oak Facility     Assisted living facility located at 925 South River Road
-------------------     --------------------------------------------------------
in  Englewood,  Florida,  consisting  of  155 assisted living facility units and
--------------------------------------------------------------------------------
         special care (Alzheimer's) units     $86,000.00     $9,600,000
         --------------------------------     ----------     ----------
La  Casa  Grande  Facility     Assisted  living facility located at 6400 Trouble
--------------------------     -------------------------------------------------
Creek  Rd.  in  New  Port  Richey,  Florida,  consisting  of 193 assisted living
--------------------------------------------------------------------------------
        facility units and special care (Alzheimer's) units     $154,979.17
        ---------------------------------------------------     -----------
                                   $17,300,000
                                   -----------
Silver Pines Facility     Assisted living facility located at 136 36th Avenue SW
---------------------     ------------------------------------------------------
in  Cedar  Rapids,  Iowa,  consisting  of  69 assisted living facility units and
--------------------------------------------------------------------------------
         special care (Alzheimer's) units     $27,770.83     $3,100,000
         --------------------------------     ----------     ----------
Juniper  Meadows  Facility     Assisted  living facility located at 2975 Juniper
--------------------------     -------------------------------------------------
Drive  in  Lewiston,  Idaho,  consisting  of  74  assisted living facility units
--------------------------------------------------------------------------------
                            $51,062.50     $5,700,000
                            ----------     ----------
Lodge  at  Eddy  Pond  Facility     Assisted  living  facility  located  at  669
-------------------------------     --------------------------------------------
Washington  Street  in  Auburn, Massachusetts, consisting of 108 assisted living
--------------------------------------------------------------------------------
                  facility units     $85,104.17     $9,500,000
                  --------------     ----------     ----------
Spring Meadows Facility     Assisted living facility located at 3175 Graf Street
-----------------------     ----------------------------------------------------
in  Bozeman,  Montana,  consisting  of  71  assisted  living  facility  units
-----------------------------------------------------------------------------
                            $84,208.33     $9,400,000
                            ----------     ----------
Concorde Facility     Assisted living facility located at 2465 East Twain Avenue
-----------------     ----------------------------------------------------------
in  Las  Vegas,  Nevada,  consisting of 73 assisted living facility units and 30
--------------------------------------------------------------------------------
             independent living units     $33,145.83     $3,700,000
             ------------------------     ----------     ----------
Courtyard  at  the Willows Facility     Assisted living facility located at 4610
-----------------------------------     ----------------------------------------
6th Place SE in Puyallup, Washington, consisting of 101 assisted living facility
--------------------------------------------------------------------------------
                      units     $98,541.67     $11,000,000
                      -----     ----------     -----------
                   TOTAL          $721,145.83     $80,500,000
                   -----          -----------     -----------

<PAGE>

                                       D-1

                                    EXHIBIT D
                                    ---------

                             [INTENTIONALLY OMITTED]
                             -----------------------


<PAGE>
                                     ------

                                       E-1
                                    EXHIBIT E
                                    ---------

                           PROPERTY CONDITION REPORTS
                           --------------------------

                     FACILITY     PROPERTY CONDITION REPORTS
                                  --------------------------
Escondido,  California     The  Phase  I  Environmental  Site  Assessment  dated
----------------------     -----------------------------------------------------
November  1,  2002  prepared  by  Vertex  Engineering.
------------------------------------------------------
Stockton,  California     The  Phase  I  Environmental  Site  Assessment  dated
---------------------     -----------------------------------------------------
November  1,  2002  prepared  by  Vertex  Engineering.
------------------------------------------------------
Altamonte  Springs,  Florida     The Phase I Environmental Site Assessment dated
----------------------------     -----------------------------------------------
November  4,  2002  prepared  by  Vertex  Engineering.
------------------------------------------------------
Englewood,  Florida     The Phase I Environmental Site Assessment dated November
-------------------     --------------------------------------------------------
4,  2002  prepared  by  Vertex  Engineering.
--------------------------------------------
New  Port  Richey,  Florida     The  Phase I Environmental Site Assessment dated
---------------------------     ------------------------------------------------
July  30,  2001  prepared  by  EnviroBusiness,  Inc.
----------------------------------------------------
Lewiston,  Idaho     The Phase I Environmental Site Assessment dated November 1,
----------------     -----------------------------------------------------------
2002  prepared  by  Vertex  Engineering.
----------------------------------------
Cedar  Rapids, Iowa     The Phase I Environmental Site Assessment dated November
-------------------     --------------------------------------------------------
4,  2002  prepared  by  Vertex  Engineering.
--------------------------------------------
Auburn,  Massachusetts     The  Phase  I Environmental Site Assessment dated May
----------------------     -----------------------------------------------------
31,  2002  prepared  by  Commercial  Inspectors.
------------------------------------------------
Bozeman,  Montana     The  Phase  I Environmental Site Assessment dated July 31,
-----------------     ----------------------------------------------------------
2002  prepared  by  EnviroBusiness,  Inc.
-----------------------------------------
Las  Vegas,  Nevada     The Phase I Environmental Site Assessment dated November
-------------------     --------------------------------------------------------
5,  2002  prepared  by  Vertex  Engineering.
--------------------------------------------
Puyallup,  Washington     The  Phase  I Environmental Site Assessment dated July
---------------------     ------------------------------------------------------
30,  2001  prepared  by  EnviroBusiness,  Inc.
----------------------------------------------


<PAGE>
                                       F-1

                                    EXHIBIT F
                                    ---------

                                LESSOR ADDRESSES
                                ----------------

Emeritus  Realty  II,  LLC
3131  Elliott  Avenue,  Suite  500-B
Seattle,  Washington  98121

Emeritus  Realty  III,  LLC
3131  Elliott  Avenue,  Suite  500-C
Seattle,  Washington  98121

Emeritus  Realty  VII,  LLC
3131  Elliott  Avenue,  Suite  500-D
Seattle,  Washington  98121

Emeritus  Realty  XIV,  LLC
3131  Elliott  Avenue,  Suite  500-E
Seattle,  Washington  98121

Emeritus  Properties  V,  LLC
3131  Elliott  Avenue,  Suite  500-F
Seattle,  Washington  98121

ESC-Port  St.  Richie,  LLC
3131  Elliott  Avenue,  Suite  500-G
Seattle,  Washington  98121

Emeritus  Realty  Bozeman,  LLC
3131  Elliott  Avenue,  Suite  500-I
Seattle,  Washington  98121

Emeritus  Realty  Puyallup,  LLC
3131  Elliott  Avenue,  Suite  500-J
Seattle,  Washington  98121

Emeritus  Realty  V,  LLC
3131  Elliott  Avenue,  Suite  500-K
Seattle,  Washington  98121




<PAGE>


                                       G-1

                                    EXHIBIT G
                                    ---------

                            [[INTENTIONALLY OMITTED]
                            ------------------------

<PAGE>
                                       H-1
                                    EXHIBIT H
                                    ---------

                       LIST OF INITIAL FACILITY MORTGAGES
                       ----------------------------------

The  Initial  Facility  Mortgage for each Leased Property is in favor of General
Electric  Capital  Corporation,  who  has a first priority lien encumbering such
Leased  Property."


<PAGE>
                                       I-1
                                    EXHIBIT I
                                    ---------

         LIST OF LESSORS, LESSEES AND LICENSE HOLDERS FOR EACH FACILITY
         --------------------------------------------------------------

FACILITY          LESSOR     LESSEE/LICENSE  HOLDER
--------          ------     ----------------------

Villa  Del  Rey     Emeritus  Realty  VII,  LLC,     Emeritus  Corporation,
     a  Delaware  limited  liability  company     a  Washington  corporation

Fulton  Villa     Emeritus  Realty  VII,  LLC,     Emeritus  Corporation,
     a  Delaware  limited  liability  company     a  Washington  corporation

Stanford  Centre     Emeritus  Realty  V,  LLC,     Emeritus Properties V, Inc.,
     a  Delaware  limited  liability  company     a  Washington  corporation

River  Oaks     Emeritus  Realty  V,  LLC,     Emeritus  Properties  V,  Inc.,
     a  Delaware  limited  liability  company     a  Washington  corporation

La  Casa  Grande     ESC-Port  St.  Richie,  LLC,     ESC-New  Port Richey, LLC,
     a  Washington  limited liability company     a Washington limited liability
          company  **

Silver  Pines     Emeritus  Realty  II,  LLC,     Emeritus  Properties II, Inc.,
     a  Delaware  limited  liability  company     a  Washington  corporation

Juniper  Meadows     Emeritus  Realty II, LLC,     Emeritus Properties II, Inc.,
     a  Delaware  limited  liability  company     a  Washington  corporation

Lodge  at  Eddy  Pond     Emeritus Realty XIV, LLC,     Emeritus Properties XIV,
a  Delaware  limited  liability  company     LLC,  a  Washington  limited
liability  company

Spring  Meadows     Emeritus  Realty  Bozeman,  LLC,     ESC-Bozeman,  LLC,
     a  Delaware  limited  liability  company     a Washington limited liability
company

Concorde     Emeritus  Realty  III,  LLC,     Emeritus  Properties  III,  Inc.,
     a  Delaware  limited  liability  company     a  Washington  corporation

Courtyard at the     Emeritus Realty Puyallup, LLC,     Emeritus Properties III,
Inc.,
Willows     a  Delaware  limited  liability company     a Washington corporation


**  License  Holder  is ESC-Port St. Richie, LLC, a Washington limited liability
company


<PAGE>
                                       J-2

                                       J-1

                                    EXHIBIT J
                                    ---------
                                     FORM OF
                      IRREVOCABLE STANDBY LETTER OF CREDIT
[Lessor]
[Lessor  Addresses]


Date:  _______________               Letter  of  Credit  No.:  ___________
                              Expiration  Date:  ________________

GENTLEMEN:

We  hereby  establish  our  irrevocable  letter  of credit in your favor for the
account  of  __________________________ available by your draft(s) on us payable
at  sight  not  to  exceed  a  total  of
__________________________________________________________________
(_____________________)  when  accompanied  by  this  letter  of  credit and the
following  documents.
1)     A  certificate  purported  to  be  executed  by  a  representative  of
_____________  stating  that ______________________, as lessee, has committed an
Event  of  Default  under  the  lease  dated  __________________,  between
__________________,  as  lessor,  and  __________________________, as lessee, or
that  __________________________  or  an  affiliate of _____________________ has
committed  an  event  of  default under any other lease, agreement or instrument
with  or  in  favor  of  Health Care Property Investors, Inc. or an affiliate of
Health  Care  Property  Investors,  Inc. and stating the amount for which a draw
under this letter of credit is made; (or) a certificate purported to be executed
by  a  representative  of  Health  Care  Property Investors, Inc. stating that a
replacement  letter of credit for this instrument has not been supplied prior to
thirty (30) days in advance of the expiration of this instrument for the account
of  Health Care Property Investors, Inc.  As used in this paragraph, "affiliate"
shall  not include any affiliates of Daniel R. Baty ("Baty") which but for their
relationship  with  Baty  would  not  be  considered  affiliates  of
_____________________.
2)     The  original letter of credit must accompany all drafts unless a partial
draw  is  presented,  in which case the original must accompany the final draft.
Partial drawings are permitted, with the letter of credit being reduced, without
amendment,  by  the  amount(s)  drawn  hereunder.
This  letter  of  credit  shall  expire  at  2:00  p.m.  at  the  office  of
____________________________  ________________________________________  on  the
expiration  date.
This  letter  of credit may be transferred or assigned by the beneficiary hereof
to  any  successor or assign of such beneficiary's interest in any such lease or
other  agreement  or  to any lender obtaining a lien or security interest in the
property  covered  by  any  such lease.  Each draft hereunder by any assignee or
successor  shall  be  accompanied  by  a copy of the fully executed documents or
judicial  orders  evidencing  such  encumbrance,  assignment  or  transfer.
Any  draft  drawn hereunder must bear the legend "Drawn under __________________
Letter  of  Credit  Number  _________  dated  _______________.  Except so far as
otherwise  expressly  stated,  this  letter of credit is subject to the "Uniform
Customs  and  Practice  for  Documentary  Credits (1993 Revision), International
Chamber  of  Commerce  Brochure  No.  500.  "  We  hereby agree with you and all
persons  negotiating  such  drafts  that  all  drafts  drawn  and  negotiated in
compliance  with  the  terms  of this letter of credit will be duly honored upon
presentment  and  delivery  of  the  documents  specified  above by certified or
registered mail to __________________ located at ____________________________ if
negotiated  not later that 2:00 pm on or before the expiration date shown above.
Very  truly  yours,



By

Its

<PAGE>
                                       K-1

                                    EXHIBIT K
                                    ---------
                             [INTENTIONALLY OMITTED]

<PAGE>


                                       L-1

                                    EXHIBIT L
                                    ---------
                             [INTENTIONALLY OMITTED]

<PAGE>
                                       M-1

                                    EXHIBIT M
                                    ---------
FACILITY  NAME     LOCATION
                   --------
1.  Concorde  (Las  Vegas,  NV)     Village  Oaks  at  Las  Vegas
-------------------------------     -----------------------------
2.  Lodge  at  Eddy  Pond  (Auburn,  MA)     Woods  at  Eddy  Pond
----------------------------------------     ---------------------
3.  Stanford  Centre  (Altamonte  Springs,  FL)     Village  Oaks  at Tuskawilla
-----------------------------------------------     ----------------------------
4.  Courtyard  at  the  Willows  (Puyallup,  WA)     Charlton  Place
------------------------------------------------     ---------------