LEASE
                                 SINGLE FACILITY
                      WASHINGTON LESSOR - SILVERDALE, INC.
                                       AND
                               ESC-SILVERDALE, LLC
                             DATED: AUGUST 15, 2003


     Facility:     Emeritus  Oaks  of  Silverdale
     1501  N.W.  Tower  View  Circle
Silverdale,  Washington  98383
<PAGE>



                                Table of Contents
                                -----------------

                                                                            Page
                                                                            ----


                                        i
ARTICLE  I     1
1.1  Lease     1
1.2  Term     1
1.3  Option  to  Renew     1
1.3  Option  to  Renew     2
ARTICLE  II     2
2.1  Definitions     2
ARTICLE  III     17
3.1  Base  Rent,  Monthly  Installments     17
3.2  Additional  Charges     18
3.3  Late  Charge,  Interest     18
3.4  Net  Lease     18
3.5  Payments  In  The  Event  of  a  Rent  Adjustment     18
ARTICLE  IV     19
4.1  Payment  of  Impositions     19
4.2  Adjustment  of  Impositions     19
4.3  Utility  Charges     20
4.4  Insurance  Premiums     20
ARTICLE  V     20
5.1  No  Termination,  Abatement,  etc.     20
ARTICLE  VI     20
6.1  Ownership  of  the  leased  property     20
6.2  Lessor's  Personal  Property     21
6.3  Lessee's  Personal  Property     21
6.4  Grant  of  Security  Interest  in  Lessee's  Personal Property and Accounts
21
ARTICLE  VII     21
7.1  Condition  of  the  Leased  Property     21
7.2  Use  of  the  Leased  Property     22
7.3  Certain  Environmental  Matters     22
ARTICLE  VIII     27
8.1  Compliance  with  Legal  and  Insurance  Requirements     27
8.2  Certain  Covenants     27
8.3  Minimum  Qualified  Capital  Expenditures     28
8.4  Management  Agreements     28
8.5  Other  Facilities     28
8.6  No  Other  Business     28
ARTICLE  IX     29
9.1  Maintenance  and  Repair     29
9.2  Encroachments,  Restrictions,  etc.     30
ARTICLE  X     30
10.1  Construction  of  Alterations and Additions to the Leased Property     30
ARTICLE  XI     31
11.1  Liens     31
ARTICLE  XII     31
12.1  Permitted  Contests     31
12.2  Lessor's  Requirement  for  Deposits     32
ARTICLE  XIII     32
13.1  General  Insurance  Requirements     32
13.2  Risks  to  be  Insured     33
13.3  Payment  of  Premiums  Copies  of  Policies,  Certificates     34
13.4  Umbrella  Policies     34
13.5  Additional  Insurance     35
13.6  No  Liability,  Waiver  of  Subrogation     35
13.8  Blanket  Policy     35
13.9  No  Separate  Insurance     35
ARTICLE  XIV     35
14.1  Insurance  Proceeds     35
14.2  Restoration  in  the  Event  of  Damage  or  Destruction     36
14.3  Restoration  of  Lessee's  Property     36
14.4  No  Abatement  of  Rent     36
14.5  Waiver     36
14.6  Disbursement  of  Insurance Proceeds Equal to or Greater Than The Approval
Threshold     36
14.7  Net  Proceeds  Paid  to  Facility  Mortgagee     37
ARTICLE  XV     38
15.1  Total  Taking or Other Taking with Leased Property Rendered Unsuitable for
Its  Primary  Intended  Use     38
15.2  Allocation  of  Award     38
15.3  Partial  Taking     39
15.4  Temporary  Taking     39
15.5  Awards  Paid  to  Facility  Mortgagee     39
ARTICLE  XVI     40
16.1  Lessor's  Rights  Upon  an  Event  of  Default     40
16.2  Certain  Remedies     40
16.3  Damages     41
16.4  Waiver     41
16.5  Application  of  Funds     42
16.6  Bankruptcy     42
ARTICLE  XVII     42
17.1  Lessor's  Right  to  Cure  Lessee's  Default     42
ARTICLE  XVIII     43
18.1  Holding  Over     43
18.2  Indemnity     43
ARTICLE  XIX     43
19.1  Subordination     43
19.2  Attornment     44
19.3  Lessee's  Certificate     44
ARTICLE  XX     44
20.1  Risk  of  Loss     44
ARTICLE  XXI     44
21.1  Indemnification     44
21.2  Survival  of  Indemnification     45
ARTICLE  XXII     45
22.1  General  Prohibition  against  Transfers     45
22.2  Subordination  and  Attornment     45
22.3  Sublease  Limitation     46
ARTICLE  XXIII     46
23.1  Financial  Statments  and  Other  Reports and Materials Required by Lessor
46
23.2  Public  Offering  Information     47
ARTICLE  XXIV     48
24.1  Lessor's  Right  to  Inspect     48
ARTICLE  XXV     48
25.1  No  Waiver     48
ARTICLE  XXVI     48
26.1  Remedies  Cumulative     48
ARTICLE  XXVII     48
27.1  Acceptance  of  Surrender     48
ARTICLE  XXVIII     48
28.1  No  Merger  of  Title     48
28.2  No  Partnership     49
ARTICLE  XXIX     49
29.1  Conveyance  by  Lessor     49
ARTICLE  XXX     49
30.1  Quiet  Enjoyment     49
ARTICLE  XXXI     49
31.1  Notices     49
ARTICLE  XXXII     50
32.1  Appraisers     50
ARTICLE  XXXIII     51
ARTICLE  XXXIV     51
34.1  Facility  Trade  Names     51
34.2  Transfer  of  Operational  Control  of  the  Facility     51
ARTICLE  XXXV     52
35.1  Arbitration     52
ARTICLE  XXXVI     53
36.1  Miscellaneous     53
ARTICLE  XXXVII     54
37.1  Commissions     54
ARTICLE  XXXVIII     54
38.1  Memorandum  or  Short  Form  of  Lease     54
ARTICLE  XXXIX     55
39.1  Security  Deposit     55
39.2  Application  of  Security  Deposit     55
39.3  Transfer  of  Security  Deposit     55
39.4  Return  of  Security  Deposit     56

<PAGE>


Emeritus  Oaks  of  Silverdale
Execution  Copy
                              SINGLE FACILITY LEASE
                          (Emeritus Oaks of Silverdale)
     THIS  LEASE  ("Lease")  is  executed  and  delivered as of this 15th day of
                    -----
August,  2003  and  is  entered  into by WASHINGTON LESSOR - SILVERDALE, INC., a
Maryland  corporation  ("Lessor"),  the  address  of which is 9690 Deereco Road,
                         -----
Suite  100,  Timonium,  MD  21093, and ESC-Silverdale, LLC, a Washington limited
liability  company ("Lessee"), the address of which is c\o Emeritus Corporation,
                     ------
3131  Elliott  Avenue,  Suite  500,  Seattle,  WA  98121  ("Lessee").
                                                            ------

                                    RECITALS
                                    --------
     The  circumstances  underlying the execution and delivery of this Lease are
as  follows:
A.     Capitalized  terms  used  and  not  otherwise  defined  herein  have  the
respective  meanings  given  them  in  Article  II  below.
B.     Lessor  is  the  owner  of  the  Leased  Property.
C.     Lessor  has agreed to lease the Leased Property to Lessee, and Lessee has
agreed to lease the Leased Property from Lessor, on the terms and conditions set
forth  in  this  Lease.
NOW,  THEREFORE,  Lessor  and  Lessee  agree  as  follows:
ARTICLE  I
1.1     Lease.  Upon  and  subject to the terms and conditions set forth in this
        -----
Lease,  Lessor  leases  to  Lessee,  and  Lessee  leases from Lessor, the Leased
Property.  The  Leased  Property is leased subject to all covenants, conditions,
restrictions, easements and other matters affecting the Leased Property, whether
     or  not  of  record, including the Permitted Encumbrances and other matters
which  would  be  disclosed  by  an  inspection or accurate survey of the Leased
Property.
1.2     Term.  The initial term of this Lease ("Initial Term") shall be ten (10)
        ----                                    ------------
Lease  Years  and  shall  commence  on  the  Commencement  Date.  The Term shall
commence  on  the  Commencement  Date  and  end  on  the  Expiration  Date.
1.3     Option to Renew.  Lessee is hereby granted two (2) successive options to
        ---------------
renew  this  Lease for a period of ten (10) Lease Years each, for a maximum Term
if  such  options are exercised of thirty (30) Lease Years.  Lessee's options to
renew  this  Lease  are  subject  to  the  following terms and conditions (which
conditions  may  be  waived  by  Lessor  in  its  sole  discretion):
(a)     An  option to renew is exercisable only by Notice to Lessor at least one
hundred  and  eighty  (180) days prior to the expiration of the Initial Term (or
prior  to  the  expiration  of  the preceding Renewal Term, as the case may be);
(b)     No  Event  of  Default or Unmatured Event of Default shall have occurred
and  be  continuing  either  at the time a renewal option is exercised or at the
commencement  of  a  Renewal  Term;  and
(c)     During  a  Renewal  Term,  all of the terms and conditions of this Lease
shall  remain  in  full  force  and  effect.
1.4     Option  to  Terminate.  During the period commencing on the first day of
        ---------------------
the  third  Lease Year and continuing until the fifteenth day of the third Lease
Year,  Lessee  may  terminate  this  Lease upon written notice (the "Termination
                                                                     -----------
Notice")  to Lessor.  In accordance with the request of Lessee, this Lease shall
    --
be  terminated  effective  on  the date set by written notice given by Lessor at
least  thirty  (30)  days  prior  to  the  effective date (the "Transfer Date").
                                                                -------------
Commencing  on  the  date  of  the  Termination  Notice and continuing until the
earlier  of  (1)  the  Transfer  Date,  or (2) the later of (i) the date six (6)
months  after  the  date of the Termination Notice and (ii) the date all Payment
Defaults,  if  any,  are cured, Lessee shall pay Base Rent at the rate in effect
during  the second Lease Year.  During the period commencing on the later of (i)
the  date  six  (6) months after the date of the Termination Notice and (ii) the
date  all  Payment Defaults, if any, are cured, and ending on the earlier of the
Transfer  Date  or  the termination of this Lease (the "Management Period"), (i)
                                                        -----------------
Lessee  shall  not  be obligated to pay Rent, (ii) Lessor agrees to pay Lessee a
management  fee  equal  to  five (5) percent of Gross Revenues, and (iii) Lessor
shall  provide all working capital needs of the Facility (it being the intent of
the  parties  that  Lessee  shall  not  bear  the  economic risk nor receive the
economic  benefit  of  operating  the  Facility  during  the Management Period).
During  the  Management  Period,  the  management  fee  shall be paid monthly in
arrears  on the fifteenth day of each month.  During the Management Period, upon
ninety  (90)  days written notice to Lessor, Lessee may terminate this Lease and
cease  managing the Facility effective at any time after the date one year after
the  Termination  Notice.  This Lease shall otherwise remain in effect until the
Transfer  Date.  Any  termination pursuant to this Section 1.4 shall not relieve
Lessee  of  its  obligations  under  Section  34.2  of  this  Lease.
ARTICLE  II
2.1     Definitions.  For  all  purposes  of  this  Lease,  except  as otherwise
        -----------
expressly  provided  or  unless  the  context  otherwise requires, (a) the terms
defined  in  this Article have the meanings assigned to them in this Article and
include  the  plural  as  well  as  the  singular;  (b) all accounting terms not
otherwise  defined  herein have the meanings assigned to them in accordance with
GAAP  as  at the time applicable; (c) all references in this Lease to designated
"Articles,"  "Sections"  and  other subdivisions are to the designated Articles,
Sections  and  other  subdivisions  of  this  Lease; and (d) 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:  All  Impositions  and  other amounts, liabilities and
     -------------------
obligations  that  Lessee  assumes  or  agrees  to  pay  under  this  Lease.
Affiliate:  Any Person who, directly or indirectly, Controls or is Controlled by
---------
or  is  under  common  Control  with  another  Person.
Approval  Threshold:  One  Hundred  Thousand  Dollars  ($100,000).
-------------------
Assessment:  Any  governmental  assessment on the Leased Property or any part of
----------
any  of  them  for  public  or  private improvements or benefits, whether or not
commenced  or  completed  prior  to  the  date  hereof  and whether or not to be
completed  within  the  Term.
Assumed  Indebtedness:  Any  indebtedness or other obligations expressly assumed
---------------------
in  writing by Lessor and secured by a mortgage, deed of trust or other security
agreement  to  which  Lessor's  title  to  the  Leased  Property  is  subject.
Award:  All compensation, sums or anything of value awarded, paid or received in
-----
connection  with  a  Taking  or  Partial  Taking.
     Base  Rent:
     ----------
(A)     During  the  Initial  Term,  the  Base  Rent  shall  be:
(1)     For  the  first  Lease  Year,  One  Hundred  Eighty  Thousand  Dollars
($180,000);
(2)     For  the  second  Lease  Year,  One  Hundred  Eighty  Thousand  Dollars
($180,000);
(3)     For  the  third  Lease  Year  Two  Hundred  Twenty Five Thousand Dollars
($225,000);
(4)     For the fourth Lease Year Two Hundred Fifty Thousand Dollars ($250,000);
(5)     For  the  fifth  Lease  Year  Two  Hundred Seventy Five Thousand Dollars
($275,000);
(6)     For  the sixth Lease Year Three Hundred Thousand Dollars ($300,000); and
(7)     For  each  succeeding  Lease Year in the Initial Term, the Base Rent for
the  previous  Lease  Year, increased by the product of (i) the Base Rent during
the  immediately preceding Lease Year and (b) the prior year's CPI (expressed as
a  percentage).
(B)     During  a  Renewal  Term,  the  Base  Rent  shall  be:
(1)     For  the  first  Lease Year during such Renewal Term, the greater of (a)
the  Fair  Market  Rent for the Leased Property on the first day of such Renewal
Term  and  (b)  the  Base  Rent  in  the  Lease  Year  immediately preceding the
commencement  of  such Renewal Term, increased by application of the formula set
forth  in  Section  (A)(7)  above;  and
(2)     For  each succeeding Lease Year during such Renewal Term,  the Base Rent
for the previous Lease Year increased by application of the formula set forth in
Section  (A)(7)  above.
     Business Day:  Each Monday, Tuesday, Wednesday, Thursday and Friday that 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.
Capitalization  Rate:  Nine  percent  (9%).
--------------------
Capitalized  Leases:  Leases  that  in  accordance  with GAAP are required to be
--------------------
capitalized  for  financial  reporting  purposes.
-----
Capitalized  Lease  Obligations:  All  obligations  under Capitalized Leases the
------------------------------
amount  of  the  indebtedness  for which shall be the capitalized amount of such
---
obligations  determined  in  accordance  with  GAAP.
---
Cash  Flow:  For  any period, the sum of (a) Net Income of Lessee arising solely
----------
from  the  operation  of  the  Facility  for  the applicable period, and (b) the
amounts  deducted  in  computing  Lessee's  Net  Income  for  the period for (i)
depreciation,  (ii)  amortization,  (iii)  Base  Rent,  (iv) interest (including
payments  in the nature of interest under Capitalized Leases and interest on any
Purchase Money Financing), (v) income taxes (or, if greater, income tax actually
paid  during  the  period)  and  (vi)  management  fees.
Cash  Flow  to Rent Ratio: For any fiscal period, the ratio of Cash Flow to Base
-------------------------
Rent.
Citation: Any operational or physical plant deficiency set forth in writing with
--------
respect  to  the  Facility by any governmental body or agency, having regulatory
oversight  over  the Facility, Lessee, any Sublessee or Manager, with respect to
which the scope and severity of the potential penalty for such deficiency is one
or  more  of  the  following:  loss  of  licensure or appointment of a temporary
manager.
Clean-Up:  The  investigation,  removal,  restoration,  remediation  and/or
--------
elimination  of,  or  other  response  to,  Contamination,  in  each case to the
--------
satisfaction  of  all  governmental  agencies having jurisdiction, in compliance
-------
with  or  as  may  be  required  by  Environmental  Laws.
---
Code:  The  Internal  Revenue  Code  of  1986,  as  amended.
----
Commencement  Date:  ______________,  2003.
------------------
Condemnor:  Any  public  or  quasi-public  authority,  or private corporation or
---------
individual,  having  the  power  of  condemnation.
----
Construction  Funds:  The  Net  Proceeds  and  such  additional  funds as may be
-------------------
deposited  with  Lessor  by  Lessee  pursuant to Section 14.6 for restoration or
------
repair  work  pursuant  to  this  Lease.
----
Contamination:  The  presence,  Release  or  threatened Release of any Hazardous
-------------
Substance  at the Leased Property in violation of any Environmental Law, or in a
---
quantity  that  would give rise to any affirmative Clean-Up obligations under an
Environmental Law, including, but not limited to, the existence of any injury or
potential  injury to public health, safety, natural resources or the environment
associated  therewith, or any other environmental condition at, in, about, under
or  migrating  from  or  to  the  Leased  Property.
Control  (and  its corollaries "Controlled by" and "under common Control with"):
-------
Possession,  directly  or  indirectly,  of  the  power  to  direct  or cause the
direction  of  the management and policies of a Person, through the ownership of
voting  securities,  partnership  interests  or  other  equity  interests.
CPI:  The  United States Department of Labor, Bureau of Labor Statistics Revised
---
Consumer  Price  Index for All Urban Consumers (1982-84=100), U.S. City Average,
All Items, or, if that index is not available at the time in question, the index
designated by such Department as the successor to such index, and if there is no
index so designated, an index for an area in the United States that most closely
corresponds  to  the  entire  United States, published by such Department, or if
none,  by  any  other  instrumentality  of  the  United  States.
Date  of Taking:  The date on which the Condemnor has the right to possession of
---------------
all  or  any  part  of  the  Leased  Property.
Distribution: Any payment or distribution of cash or any assets of Lessee to one
------------
or  more  shareholders  of  Lessee or to any Affiliate of Lessee, whether in the
form  of  a  dividend, a fee for management in excess of the fee required by the
terms  of  a  Management Agreement (but in any event not to exceed seven percent
(7%)  of  gross  revenues  of  the Facility), a payment for services rendered, a
reimbursement  for  expenditures  or  overhead incurred on behalf of Lessee or a
payment  on  any debt required by this Lease to be subordinated to the rights of
Lessee.
Effective Tax Rate:  For any period, the ratio of income taxes of Lessee and its
------------------
consolidated  subsidiaries  allocable  to  such  period  (as  reflected  in  the
provision for income taxes contained in the income statement for such period) to
the  Net  Income before income taxes of Lessee and its consolidated subsidiaries
for  such  period,  as  determined  in  conformity  with  GAAP.
Encumbrance:  Any  mortgage,  deed  of  trust, lien, encumbrance or other matter
-----------
affecting  title  to  the  Leased  Property,  or any portion thereof or interest
---
therein,  securing  any  borrowing  or  other means of financing or refinancing.
---
Environmental  Audit:  A  written  certificate that (a) is in form and substance
--------------------
satisfactory  to  Lessor, (b) is from an environmental consulting or engineering
---
firm  acceptable  to Lessor and (c) states that there is no Contamination on the
Leased  Property  and that the Leased Property is otherwise in strict compliance
with  Environmental  Laws.
Environmental  Documents:  Each and every (a) document received by Lessee or any
------------------------
Affiliate  from,  or  submitted by Lessee or any Affiliate to, the United States
Environmental  Protection  Agency  and/or  any  other  federal, state, county or
municipal  agency  responsible  for enforcing or implementing Environmental Laws
with  respect to the condition of the Leased Property, or Lessee's operations at
the  Leased  Property;  and  (b)  review,  audit, report, or other analysis data
pertaining  to  environmental  conditions,  including,  but  not limited to, the
presence  or  absence  of  Contamination,  at,  in, under or with respect to the
Leased  Property  that  have  been  prepared  by,  for  or  on behalf of Lessee.
Environmental  Laws:  All  federal,  state  and  local  laws (including, without
-------------------
limitation,  common  law),  statutes,  codes,  ordinances,  regulations,  rules,
------
orders,  permits or decrees now or at any time in effect and relating to (a) the
------
introduction,  emission,  discharge  or release of Hazardous Substances into the
indoor or outdoor environment (including without limitation, air, surface water,
groundwater,  land or soil), (b) the manufacture, processing, distribution, use,
treatment,  storage,  transportation  or disposal of Hazardous Substances or (c)
the  Clean-Up  of  Contamination.
Event  of  Default:  The  occurrence  of  any  of  the  following:
------------------
(b)     Lessee  fails  to  pay  or  cause  to  be  paid the Rent within five (5)
Business  Days  after  the  Rent  became  due  and  payable;
(c)     Lessee  or  Guarantor,  on a petition in bankruptcy filed against it, is
adjudicated a bankrupt or has an order for relief thereunder entered against it,
or  a  court  of  competent  jurisdiction enters an order or decree appointing a
receiver  of  Lessee,  any  Sublessee  or  any  Guarantor  or  of  the  whole or
substantially  all of its property, or approving a petition filed against Lessee
or  any  Guarantor  seeking  reorganization  or  arrangement  of  Lessee or such
Guarantor  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  is  not vacated or set aside or stayed within sixty (60) days
from  the date of the entry thereof, subject to the applicable provisions of the
Bankruptcy  Code  (11  USC   101 et. seq.) and to the provisions of Section 16.6
below;
(d)     Lessee  or  Guarantor:  (i)  Admits  in writing its inability to pay its
debts  generally  as  they  become due; (ii) files a petition in bankruptcy or a
petition  to  take  advantage  of  any  insolvency  law;  (iii)  makes a general
assignment for the benefit of its creditors; (iv) consents to the appointment of
a receiver of itself or of the whole or any substantial part of its property; or
(v)  files  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, subject to the applicable provisions of
the  Bankruptcy  Code  (11  USC   101 et. seq.) and to the provisions of Section
16.6  below;
(e)     Lessee  or  Guarantor  is liquidated or dissolved, or begins proceedings
toward  liquidation  or dissolution, or has filed against it a petition or other
proceeding  to  cause it to be liquidated or dissolved and the proceeding is not
dismissed within sixty (60) days thereafter, or Lessee in any manner permits the
sale  or  divestiture  of  all  or  substantially  all  of  its  assets;
(f)     The  estate  or  interest  of  Lessee in the Leased Property or any part
thereof is levied upon or attached in any proceeding and the same is not vacated
     or  discharged  within thirty (30) days thereafter (unless Lessee is in the
process  of  contesting such lien or attachment in good faith in accordance with
Article  XII  hereof);
(g)     Lessee  ceases  operation of the Facility for a period in excess of five
(5)  Business  Days  except  upon  prior  Notice  to, and with the express prior
written  consent  of,  Lessor (which consent Lessor may withhold in its absolute
discretion),  or  as  the  unavoidable consequence of damage or destruction as a
result  of  a  casualty,  or  a  Partial  or  total  Taking;
(h)     Any representation or warranty made by Lessee, Guarantor or any of their
Affiliates  in  the  Lease  or  the  other  Transaction  Documents,  or  in  any
certificates  delivered  in  connection with this Lease or the other Transaction
Documents, proves to be untrue when made in any material respect, it has, or may
reasonably  have,  a  Materially  Adverse Effect, and Lessee fails within twenty
(20)  days  after  Notice from Lessor or Omega, as the case may be, to cure such
condition  by terminating such adverse effect and making Lessor or Omega, as the
case  may be, whole for any damage suffered therefrom, or, if with due diligence
such  cure  cannot  be effected within twenty (20) days, if Lessee has failed to
commence  to  cure  the same within the twenty (20) days or failed thereafter to
proceed promptly and with due diligence to cure such condition and complete such
cure  prior  to  the time that such condition actually causes a Material Adverse
Effect  and  prior  to  the  time  that  the  same  results in civil or criminal
penalties  to  Lessor,  Lessee, any Affiliates of either or the Leased Property;
(i)     Lessee  (or,  if  applicable,  any  Sublessee  or  Manager):
(i)     has  any  license, permit, approval, certificate of need, certificate of
reimbursement  or  other  authorization  necessary  to operate the Facility as a
provider  of  health  care  services in accordance with its Primary Intended Use
suspended  or  revoked,  or  its  right  to so operate the Facility or to accept
patients  suspended,  and  Lessee  fails  to  remedy  any condition causing such
revocation  or  suspension  within  any  cure  period  allowed  therefor  by the
applicable  agency  or  authority  or,  if  no  such  cure  period is allowed or
specified  by  the  applicable  agency  or authority, Lessee fails to remedy the
condition  promptly  and diligently following Lessee's receipt of notice of such
condition  and,  in  any  event, prior to the final, nonappealable revocation or
suspension  of  any  such  license,  permit,  approval,  certificate  of  need,
certificate  of  reimbursement  ,  other  authorization  or right to operate the
Facility  or  to  accept  patients  at  the  Facility;  or
(ii)     receives  a Citation with respect to the Facility and fails to cure the
condition  that is the subject of the Citation prior to the final, nonappealable
revocation  or suspension of any license, permit, approval, certificate of need,
certificate  of  reimbursement  or  other authorization necessary to operate the
Facility  as  a  provider of health care services in accordance with its Primary
Intended  Use,  or  prior to the appointment of a temporary manager, as the case
may  be;  or
(iii)     fails  to  give  Lessor Notice that any event set forth in clauses (i)
and  (ii)  above  has  occurred  within  five  (5) Business Days after the event
occurs;
(j)      A  Transfer  occurs  without  the  prior  written  consent  of  Lessor;
(k)     An  "Event  of  Default"  (whether  defined  as an "Event of Default", a
"Guaranty  Default", a "Security Agreement Event of Default" or not specifically
defined)  occurs  under  any Transaction Document and such "Event of Default" is
not  cured  prior  to  the  expiration  of  any  applicable grace or cure period
provided  therein;
(l)     Lessee breaches any of the financial covenants set forth in Article VIII
hereof,  the  breach  is  capable  of  cure and the breach is not cured within a
period  of  the  shorter  of  (i) thirty (30) days after the Notice thereof from
Lessor,  and  (ii)  fifteen  (15)  days  following  the  date  of  delivery of a
certificate  pursuant  to  Section  23.1(i) or 23.1(ii); provided, however, that
Lessee's failure to amortize move-in expenses at the Facility-level shall not be
the  basis  of  a  breach of any of the financial covenants set forth in Article
VIII  hereof;
(m)     Lessee  or  an  Affiliate of Lessee defaults beyond any applicable grace
period  in  the  payment  of  any  amount or the performance of any material act
required  of  Lessee  or such Affiliate by the terms of any other lease or other
agreement  between  Lessee  or  such  Affiliate  and  Lessor or any Affiliate of
Lessor;  or
(n)     Lessee,  Guarantor  or  their  Affiliates fail to observe or perform any
other  term,  covenant  or  condition  of  this  Lease  or any other Transaction
Document  and  the failure is not cured by Lessee within a period of thirty (30)
days  after  Notice  thereof  from  Lessor,  unless  the failure cannot with due
diligence  be  cured  within  a  period  of thirty (30) days, in which case such
failure  shall  not  be  deemed an Event of Default if and for so long as Lessee
proceeds  promptly  and with due diligence to cure the failure and completes the
cure  prior to the time that the same causes a Material Adverse Effect and prior
to  the  time  that  the  same results in civil or criminal penalties to Lessor,
Lessee,  any  Affiliates  of  either  or  to  the  Leased  Properties.
     Executive  Officer:  Any  of  the  Chairman  of the Board of Directors, the
     ------------------
President,  the  Chief Executive Officer, the Chief Operating Officer, the Chief
Financial  Officer,  any  Vice President and the Secretary of any corporation, a
general  partner  of  any  partnership  and  a  managing  member  of any limited
liability  company  upon  which  service  of  a  Notice  is  to  be  made.
Expiration Date: means the Transfer Date if this Lease is terminated pursuant to
---------------
Section  1.4,  ______________,  2013  if  the  first Renewal Option has not been
exercised,  or _____________________, 2023, if the first Renewal Option has been
exercised  but  the  second  Renewal  Option  has  not  been  exercised,  or
_____________________,  2033,  if  the  second Renewal Option has been exercised
Facility:  The  health  care facility on the Land, including the Leased Property
--------
associated  with  such  Facility.
--
Facility  Mortgage: Any mortgage, deed of trust or other security agreement that
------------------
with  the express, prior, written consent of Lessor is a lien upon any or all of
the  Leased  Property,  whether  such  lien  secures  an Assumed Indebtedness or
another  obligation  or  obligations.
Facility Mortgagee: The secured party to a Facility Mortgage, its successors and
------------------
assigns, any servicer acting on behalf of a Facility Mortgagee with respect to a
Facility  Mortgage  and,  if a Facility Mortgage is deposited with a trust, then
the  trustee  acting  on  behalf  of  the  certificate  holders  of  such trust.
Facility  Trade  Names:  The  name(s) under which the Facility has done business
----------------------
during  the  Term.  The  Facility  Trade  Names  in  use  by the Facility on the
---
Commencement  Date  are  set  forth  on  attached  Exhibit  A.
---
     Fair  Market  Rent:  The  rent that, at the relevant time, a Facility would
     ------------------
most  probably  command  in  the open market, under a lease on substantially the
same terms and conditions as are set forth in this Lease with a lessee unrelated
to  Lessor  having experience and a reputation in the health care industry and a
credit  standing  reasonably equivalent to that of Lessee, and, if this Lease is
guaranteed, with such lease being guaranteed by guarantors having a net worth at
least  equal  to  that  of Guarantors, with evidence of such rent being the rent
that  is  being  asked and agreed to at such time under any leases of facilities
comparable to such Facility being entered into at such time in which the lessees
and  lease  guarantors  meet the qualifications set forth in this sentence. Fair
Market  Rent  shall be determined in accordance with the appraisal procedure set
forth  in Article XXXII or in such other manner as may be mutually acceptable to
Lessor  and  Lessee.
     Financial  Statement:
     --------------------
(A)     For  each  quarter  during  Lessee's  fiscal  year,  (i)  a statement of
earnings  for the current period and fiscal year to the end of such period, with
a  comparison  to  the corresponding figures for the corresponding period in the
preceding  fiscal  year from the beginning of the fiscal year to the end of such
period,  and (ii) a balance sheet as of the end of the period, with a comparison
to  the  corresponding  figures  for  the  corresponding period in the preceding
fiscal year from the beginning of the fiscal year to the end of such period; and
(B)     For  Lessee's  fiscal  year,  a  financial  report for Lessee containing
Lessee's  balance  sheet  as of the end of that year, and its related profit and
loss.
     Fixtures:  Collectively,  all  permanently  affixed  equipment,  machinery,
     --------
fixtures,  and  other items of real and/or personal property (excluding Lessor's
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,  without  limitation, 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 and apparatus (other than
individual  units),  sprinkler  systems and fire and theft protection equipment,
built-in  oxygen  and  vacuum  systems,  towers  and  other  devices  for  the
transmission  of  radio,  television  and  other  signals,  all of which, to the
greatest  extent  permitted  by  law, are hereby deemed by the parties hereto to
constitute  real  estate,  together  with  all  replacements,  modifications,
alterations  and  additions  thereto.
Force Majeure: An event or condition beyond the control of any Person, including
-------------
without  limitation  a  flood,  earthquake, or other Act of God; a fire or other
casualty  resulting in a complete or partial destruction of the Facility; a war,
revolution,  riot,  civil  insurrection  or  commotion, terrorism, or vandalism;
unusual  governmental action, delay, restriction or regulation not reasonably to
be  expected;  a  contractor  or  supplier  delay or failure in performance (not
arising  from  a  failure  to  pay any undisputed amount due), or a delay in the
delivery  of essential equipment or materials; bankruptcy or other insolvency of
a  contractor,  subcontractor  or  construction manager (not an Affiliate of the
party claiming Force Majeure); a strike, slowdown or other similar labor action;
or  any  other  similar  event or condition beyond the reasonable control of the
party  claiming  that  Force  Majeure  is delaying or preventing such party from
timely  and  fully performing its obligations under this Lease; provided that in
any  such  event,  the  party claiming the existence of Force Majeure shall have
given  the  other  party  Notice  of  such  claim within fifteen (15) days after
becoming  aware  thereof,  and if the party claiming Force Majeure shall fail to
give  such  Notice,  then  the  event or condition shall not be considered Force
Majeure  for  any period preceding the date such Notice shall be given.  No lack
of  funds  shall  be  construed  as  Force  Majeure.
GAAP:  Generally  accepted  accounting  principles  in  effect  at  the  time in
----
question.
----
Gross  Revenues:  All  revenues generated by the Facility during the term of the
---------------
Management  Period,  less bad debt expense resulting from uncollectible accounts
--
receivable  and  specifically  excluding  the  proceeds  from  the  sale  of the
Facility,  any  Facility  equipment  and any insurance proceeds and condemnation
proceeds, any contractual allowances, prior year third-party settlements and the
receipt  of  revenues during the Management Period which relate to periods prior
to,  or  after  the  Management  Period.
Guarantor:  means  Emeritus  Corporation,  a  Washington  corporation.
---------
Guaranty:  means  the  Guaranty  from  Guarantor  in  favor  of  Lessor.
--------
Hazardous  Substance:  Dangerous,  toxic  or  hazardous  material,  substance,
--------------------
pollutant,  contaminant,  chemical,  waste  (including medical waste), including
-------
petroleum products, asbestos and PCBs defined, listed or described as such under
---
any  Environmental  Law.
Impositions:  Collectively,  all  taxes  (including,  without  limitation,  all
-----------
capital  stock  and franchise taxes of Lessor and all ad valorem, sales and use,
------
single business, gross receipts, business privilege, transaction privilege, rent
or  similar taxes to the extent the same are assessed against Lessor in whole or
in  part  on  the basis of its gross or net income from this Lease, the value of
the  Leased  Property,  the  privilege  of  doing  business  in the State or any
political  subdivision  or  subdivisions  of  the State); assessments (including
Assessments),  ground  rents,  water, sewer or other rents and charges, excises,
tax  levies,  fees  (including, without limitation, 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 that at any
time prior to, during or in respect of the Term are assessed or imposed on or in
respect  of,  or  constitute  a lien upon (a) Lessor or Lessor's interest in the
Leased  Property;  (b)  the  Leased  Property  or  any  part thereof or any rent
therefrom  or  any  estate, right, title or interest therein; (c) 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  (i) any tax based on net income
(whether  denominated  as  a franchise or capital stock or other tax) imposed on
Lessor  or  any other Person, (ii) any transfer, or net revenue tax of Lessor or
any  other  Person  except Lessee and its successors, (iii) any tax imposed with
respect  to  the  sale,  exchange  or  other disposition by Lessor of any Leased
Property  or  the  proceeds  thereof,  or  (iv) 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 (i) or (ii) is levied,
assessed  or  imposed  in  lieu  thereof  or  as  a  substitute  therefor.
Initial  Term:  As  defined  in  Section  1.2.
-------------
Insurance  Requirements:  All  terms  of  any  insurance policy required by this
-----------------------
Lease  and  all  requirements  of  the  issuer  of  any  such  policy.
----
Investigation:  Soil  and  chemical  tests  or  any  other  environmental
-------------
investigations,  examinations  or  analyses.
-------------
Judgment  Date:  The  date  on  which  a judgment is entered against Lessee that
--------------
establishes, without the possibility of appeal, the amount of liquidated damages
----
to  which  Lessor  is  entitled  under  this  Lease.
Land:     The  real  property  described  in  attached  ExhibitB.
----                                                    ---------
Lease:  As  defined  in  the  Preamble.
-----
Lease  Year:  Each  period  from  and  including  ______________1  through
-----------
_______________  during  the Term of this Lease.  If this Lease is terminated or
----------
expires  before  the  end  of  any  Lease  Year,  the  final Lease Year shall be
______________  1  through  the  date  of  termination.
Leased Improvements: Collectively, all buildings, structures, Fixtures and other
-------------------
improvements of every kind on the Land, including, but not limited to, alleyways
and  connecting  tunnels,  sidewalks, utility pipes, conduits and lines (on-site
and  off-site),  parking  areas  and  roadways appurtenant to such buildings and
structures.
Leased  Property:  The  Land  on  which  the  Facility  is  located,  the Leased
-----------------
Improvements  on  the  Land,  the  Related  Rights with respect to the Land, and
--------
Lessor's  Personal  Property  with  respect  to  such  Facility.
-----
Legal  Requirements:  All  federal,  state,  county,  municipal  and  other
-------------------
governmental  statutes,  laws,  rules, orders, waivers, regulations, ordinances,
-----------
judgments,  decrees and injunctions affecting the Leased Property or any portion
--
thereof,  Lessee's  Personal  Property or the construction, use or alteration of
the  Leased  Property  (including  but  not  limited  to  the  Americans  with
Disabilities  Act),  whether  enacted  and  in  force  before,  after  or on the
Commencement  Date,  and  including  any  that  may  (a)  require  repairs,
modifications,  alterations  or  additions  in  or  to any portion or all of the
Facility,  or (b) in any way adversely affect the use and enjoyment thereof, and
all  permits,  licenses  and  authorizations  and  regulations relating thereto,
including,  but  not  limited  to,  (i)  those  relating to existing health care
licenses,  (ii)  those  authorizing the current number of licensed units and the
level  of  services  delivered from the Leased Property and (iii) all covenants,
agreements,  restrictions  and encumbrances contained in any instruments, either
of  record or known to Lessee (other than encumbrances created by Lessor without
the  consent  of  Lessee)  and  in  force  at  any  time  during  the  Term.
Lessee's  Certificate:  A  statement  in  writing  in  substantially the form of
---------------------
Exhibit  C  attached  hereto  (with  such  changes  thereto as may reasonably be
----------
requested  by  the  person  relying  on  such  certificate).
------
Lessee's Personal Property:  Personal Property owned or leased by Lessee that is
--------------------------
not  included within the definition of the term "Lessor's Personal Property" but
is  used by Lessee in the operation of the Facility, including Personal Property
provided  by  Lessee  in  compliance  with  Section  6.3  hereof.
Lessor's  Future  Rent  Loss:  An  amount equal to the Rent that would have been
----------------------------
payable by Lessee from and after the Liquidated Damages Payment Date through the
---
Expiration  Date  had the Lease not been terminated, plus such additional amount
as may be necessary in order to compensate Lessor for all other damages that are
proximately  caused  by, and in the ordinary course of things would be likely to
result  from,  Lessee's  failure  to  perform  its obligations under this Lease.
Lessor's  Interim  Rent  Loss:  An amount equal to the Rent that would have been
-----------------------------
payable  by  Lessee  from the Termination Date through the Judgment Date had the
--
Lease not been terminated (including interest and late charges determined on the
--
basis  of the date or dates on which Lessor's Interim Rent Loss is actually paid
by  Lessee),  plus  such  additional  amount  as  may  be  necessary in order to
compensate  Lessor  for all other damages that are proximately caused by, and in
the  ordinary  course of things would be likely to result from, Lessee's failure
to  perform  its  obligations  under  this  Lease.
Lessor's  Monthly  Rent Loss:  For any month, an amount equal to the installment
----------------------------
of  Rent  that  would  have been due in such month under the Lease if it had not
been  terminated,  plus,  if such amount is not paid on or before the day of the
month  on  which  such  installment  of  Rent would have been due, the amount of
interest and late charges thereon that also would have been due under the Lease,
plus  such  additional  amount as may be necessary in order to compensate Lessor
for all other damages that are proximately caused by, and in the ordinary course
of  things  would  be  likely  to  result  from, Lessee's failure to perform its
obligations  under  this  Lease.
Lessor's  Personal  Property:  All  Personal  Property  and intangibles, if any,
----------------------------
owned by Lessor and leased to Lessee on the Commencement Date, together with any
----
and  all  replacements  thereof,  and all Personal Property that pursuant to the
terms  of  the  Lease  becomes  the  property  of  Lessor  during  the  Term.
Notwithstanding  any  other  provision of this Lease, but subject to Section 6.4
relating to the security interest in favor of Lessor, Lessor's Personal Property
shall  not  include  goodwill nor shall it include any other intangible personal
property that is severable from Lessor's "interests in real property" within the
meaning  of  Section  856(d)  of the Code, or any similar or successor provision
thereto.
Liquidated  Damages  Payment  Date:  The date on which Lessee pays Lessor all of
----------------------------------
the  liquidated  damages  for  which  it  is  liable  under  Article  XVI.
--
Management  Agreement:  Any  agreement  (oral  or  written)  pursuant  to  which
---------------------
management  of the Facility is delegated by Lessee (subject to Lessee's ultimate
-------
responsibility as the licensed party) to any person not an employee of Lessee or
to  any  other  related  or  unrelated  party.
Management  Period:  As  defined  in  Section  1.4.
------------------
Manager:  The  Person  to  whom  management  of the operation of the Facility is
-------
delegated  pursuant  to  a  Management  Agreement.
----
Material  Adverse  Effect: means any material adverse effect whatsoever upon (a)
-------------------------
the validity, performance or enforceability of any Transaction Document, (b) the
properties,  contracts,  business operations, profits or condition (financial or
otherwise)  of  Lessee or any Guarantor, taken as a whole, or (c) the ability of
Lessee,  any  Guarantor  or  any  of their Affiliates to fulfill its obligations
under  the  Transaction  Documents.
Net  Income:  For  any  period,  Lessee's  net  income (or loss) for such period
-----------
attributable  to  the operation of the Facilities, determined in accordance with
-----
GAAP;  provided,  however,  that  Lessee's  Net  Income  shall  not  include any
extraordinary  gains  (or  losses)  or  nonrecurring  gains  (or  losses).
Net  Proceeds:  All  proceeds,  net of any costs incurred by Lessor in obtaining
-------------
such proceeds, payable under any policy of insurance required by Article XIII of
--
this  Lease  (including  any proceeds with respect to Lessee's Personal Property
that  Lessee  is  required  or  elects to restore or replace pursuant to Section
14.3)  or  paid  by  a  Condemnor  for  a Taking or Partial Taking of the Leased
Property.
Net  Reletting  Proceeds: Proceeds of the reletting of any portion of the Leased
------------------------
Property  received  by  Lessor,  net  of  Reletting  Costs.
Notice:  A  notice  given  in  accordance  with  Article  XXXI  hereof.
------
Notice  of  Termination:  A Notice from Lessor that it is terminating this Lease
-----------------------
by  reason  of  an  Event  of  Default.
Officer's  Certificate:  A  certificate  signed  by  an  Executive  Officer.
----------------------
Omega:  Omega  Healthcare  Investors,  Inc.,  a  Maryland  corporation.
-----
Overdue Rate:  On any date, the interest rate that is equal to five percent (5%)
------------
(five  hundred (500) basis points) above the Prime Rate, but in no event greater
than  the  maximum  rate  then  permitted  under  applicable  law.
Partial  Taking:  A  taking  of  less than the entire fee of the Leased Property
---------------
that  either  (a) does not render the Leased Property Unsuitable for its Primary
---
Use, or (b) renders the Leased Property Unsuitable for its Primary Intended Use,
but  neither  Lessor  nor  Lessee  elects  pursuant  to  Section  15.1 hereof to
terminate  this  Lease.
Payment  Date:  Any due date for the payment of the installments of Base Rent or
-------------
for the payment of Additional Charges or any other amount required to be paid by
Lessee  hereunder.
Payment  Default:  Any  Event of Default arising out of the failure to pay Rent.
----------------
Permitted  Encumbrances:  Encumbrances  listed  on  attached  Exhibit  D.
-----------------------                                       ----------
Person:  Any  natural  person,  trust,  partnership, corporation, joint venture,
------
limited  liability  company  or  other  legal  entity.
---
Personal  Property:  All  machinery,  equipment, furniture, furnishings, movable
------------------
walls or partitions, computers (and all associated software), trade fixtures and
--
other  personal  property (but excluding consumable inventory and supplies owned
by  Lessee)  used  in  connection  with  the  Leased Property, together with all
replacements  and  alterations  thereof  and additions thereto, except items, if
any,  included  within  the  definition  of  Fixtures  or  Leased  Improvements.
Pledge  Agreement:  The Pledge Agreement dated as of the same date as this Lease
-----------------
between  Lessor,  as  creditor,  and  Guarantor,  as  debtor.
     Pre-Existing  Hazardous  Substances: means Hazardous Substances located on,
     -----------------------------------
under  about  or  with  respect to the Leased Property prior to the Commencement
Date.

     Pre-Existing  Environmental  Conditions:  means  any Contamination or other
     ---------------------------------------
environmental  condition on, under, about or with respect to the Leased Property
existing  prior  to  the  Commencement  Date.

     Present Value: The value of future payments, determined by discounting each
     -------------
such  payment  at  a rate equal to the yield on the specified date on securities
issued  by  the  United States Treasury (bills, notes and bonds) maturing on the
date  closest to December 31 in the year in which such future payment would have
been  due.
Primary  Intended  Use:  Licensed  assisted  living  Facility providing care for
----------------------
Alzeheimer's  patients.
-----
Prime  Rate:  On any date, an interest rate equal to the prime rate published by
-----------
the  Wall  Street  Journal,  but  in no event greater than the maximum rate then
permitted  under  applicable  law.  If  the  Wall Street Journal ceases to be in
existence, or for any reason no longer publishes such prime rate, the Prime Rate
shall  be  the rate announced as its prime rate by Fleet Bank or other financial
institution  that  is  the  agent  for  the banks under Omega's revolving credit
agreement,  and  if such bank no longer exists or does not announce a prime rate
at  such  time,  the  Prime  Rate shall be the rate of interest announced as its
prime  rate  by  a  national  bank  selected  by  Lessor.
Proceeding:  Any  action,  proposal or investigation by any agency or entity, or
----------
any  complaint  to  such  agency  or  entity.
--
Purchase  Money Financing:     Any financing provided by a Person to Lessee or a
-------------------------
Sublessee  in  connection  with  the  acquisition  of  Personal Property used in
connection  with  the  operation  of the Facility, whether by way of installment
sale  or  otherwise.
Qualified Capital Expenditures:  Expenditures capitalized on the books of Lessee
------------------------------
for  alterations,  renovations,  repairs  and  replacements  to  the  Facility,
including  without  limitation any of the following:   Replacement of furniture,
fixtures  and  equipment,  including  refrigerators,  ranges,  major appliances,
bathroom  fixtures,  doors (exterior and interior), central air conditioning and
heating  systems  (including  cooling  towers,  water  chilling units, furnaces,
boilers  and  fuel  storage  tanks)  and major replacement of siding; major roof
replacements,  including  major  replacements  of gutters, downspouts, eaves and
soffits;  major  repairs  and  replacements  of  plumbing  and sanitary systems;
overhaul  of  elevator  systems;  major repaving, resurfacing and sealcoating of
sidewalks,  parking  lots and driveways; repainting of entire building exterior;
but  excluding  major  alterations,  renovations,  additions  (consisting  of
expansions  of the Facility, including construction of a new wing or a new story
on  the  Facility),  normal  maintenance  and  repairs.
Regulatory  Actions:  Any  claim,  demand, notice, action or proceeding brought,
-------------------
threatened  or  initiated  by  any governmental authority in connection with any
--
Environmental  Law,  including,  without  limitation,  civil,  criminal  and
--
administrative  proceedings, whether or not the remedy sought is costs, damages,
--
equitable  remedies,  penalties  or  expenses.
Related  Rights:  All  easements,  rights and appurtenances relating to the Land
---------------
and  the  Leased  Improvements.
--
Release:  The  intentional or unintentional spilling, leaking, dumping, pouring,
-------
emptying,  seeping,  disposing,  discharging,  emitting,  depositing, injecting,
leaching,  escaping,  abandoning,  or  any  other release or threatened release,
however  defined,  of  any  Hazardous  Substance.
Reletting Costs: Expenses incurred by Lessor in connection with the reletting of
---------------
the  Leased  Property  in  whole or in part after an Event of Default, including
without  limitation  attorneys'  fees and expenses, brokerage fees and expenses,
marketing  expenses  and the cost of repairs and renovations reasonably required
for  such  reletting.
Renewal  Term: A period for which the Term is renewed in accordance with Section
-------------
1.3.
Rent:  Collectively,  Base  Rent  and  Additional  Charges.
----
Replacement Cost:  The actual replacement cost of the Leased Property, including
----------------
an  increased  cost of construction endorsement, less exclusions provided in the
standard form of fire insurance policy.  In all events Replacement Cost shall be
an amount sufficient that neither Lessor nor Lessee is deemed to be a co-insurer
of  the  Leased  Property  in  question.
SEC:  Securities  and  Exchange  Commission.
---
Security Agreement: The Security Agreement between Lessor, as secured party, and
------------------
Lessee,  as  debtor.
Security  Deposit:  As  defined  in  Article  XXXIX  hereof.
-----------------
Senior  Healthcare:  Senior  Healthcare  Partners,  LLC.
------------------
Special  Purpose  Personal  Property:  Items of Lessee's Personal Property which
------------------------------------
meets  all of the following criteria: (1) it is delivered to the Facility at the
--
sole  cost  and expense of Lessee on or after the Commencement Date; (2) it does
not  replace,  either  specifically  or  in  use,  any  Personal Property at the
Facility  as  of the Commencement Date; (3) it is acquired as part of an overall
optional  marketing  program,  plan  or  strategy  of  Guarantor;  and (4) it is
identified  in  a  writing  delivered  to  Lessor within thirty (30) days of its
delivery  to  the Facility as "Special Purpose Personal Property".   Examples of
Special  Purpose  Personal Property may include a baby grand piano or additional
kitchen  appliances  not reasonably considered to be part of a customary kitchen
and  used  to  accommodate  special  menus.  With regard to any item of Personal
Property,  the  presumption  shall  be  that such item is not an item of Special
Purpose Personal Property and Lessee shall bear the burden of proof that an item
of  Personal  Property  is  Special  Purpose  Personal  Property.
Special  Risk  Insurance:  The  insurance  that  Lessee  is required to maintain
------------------------
pursuant  to  Section  13.2.1  of  this  Lease.
-----
State:  The  State  in  which  the  Leased  Property  is  located.
-----
Subordination  Agreement: The Subordination Agreement from Lessee and Guarantors
------------------------
in  favor  of  Lessor.
Taken:  Conveyed  pursuant  to  a  Taking  or  Partial  Taking.
-----
Taking:  A  taking  or voluntary conveyance during the Term of all of the Leased
------
Property,  or  any interest therein or right accruing thereto or use thereof, as
the  result  of,  or  in  settlement of any condemnation or other eminent domain
proceeding affecting the Leased Property, whether or not the proceeding actually
has  been  commenced.
Term:  Collectively, the Initial Term plus the Renewal Term or Renewal Terms, if
----
any.
Termination  Date:  The  date  on  which  a  Notice  of  Termination  is  given.
-----------------
Termination  Notice:  is  defined  in  Section  1.4.
-------------------
Third  Party  Claims:  Any  claims,  actions, demands or proceedings (other than
--------------------
Regulatory Actions) howsoever based (including without limitation those based on
---
negligence,  trespass,  strict  liability,  nuisance, toxic tort or detriment to
health  welfare  or  property)  due  to Contamination, whether or not the remedy
sought is costs, damages, penalties or expenses, brought by any person or entity
other  than  a  governmental  agency.
Transaction  Documents: means the following documents: this Lease, the Guaranty,
-----------------------
the  Security  Agreement, the Pledge Agreement, the Subordination Agreement, and
any  security  agreements,  pledge  agreements,  letter  of  credit  agreements,
guarantees,  notes or other documents which evidence, secure or otherwise relate
to  this  Lease, or the transactions contemplated by this Lease; and any and all
amendments,  modifications,  extensions  and  renewals  of  any of the foregoing
documents.
Transfer:  The  (a)  assignment,  mortgaging  or other encumbering of all or any
---------
part  of  Lessee's  interest  in  this  Lease  or  in  the  Leased Property; (b)
---
subletting of the whole or any part of the Leased Property; (c) entering into of
---
any  Management  Agreement  or  other  arrangement  under  which the Facility is
operated  by  or  licensed  to  be  operated by an entity other than Lessee; (d)
merger,  consolidation  or  reorganization  of  a  corporate Lessee or corporate
Manager,  or  the sale, issuance, transfer and/or redemption, cumulatively or in
one  transaction, of any voting stock by Lessee or Manager or by Persons who are
stockholders  of record of Lessee, or Manager, if such event or events result(s)
in  a change of Control of Lessee or Manager; or (e) sale, issuance, transfer or
redemption,  cumulatively  or  in  one  transaction,  of  any  interest,  or the
termination of any interest, in Lessee or Manager if Lessee or such Manager is a
joint  venture,  partnership, limited liability company or other association and
such  sale, issuance, transfer, redemption or termination of interest results in
a  change  of  Control  of  such  joint  venture, partnership, limited liability
company  or  other  association.
Transfer  Date:  is  defined  in  Section  1.4.
--------------
Transferee:  An  assignee,  subtenant  or  other occupant of the Leased Property
----------
pursuant  to  a  Transfer.
----
Unmatured  Event  of  Default:  means  the occurrence of an event which upon its
-----------------------------
occurrence,  or  with  the giving of notice, the passage of time, or both, would
----
constitute  an  Event  of  Default.
--
Unsuitable  for  Its Primary Intended Use:  A state or condition of the Facility
-----------------------------------------
such  that  by  reason of a Partial Taking, the Facility cannot be operated on a
commercially  practicable  basis  for  its  Primary  Intended  Use,  taking into
account,  among  other relevant factors, the number of usable units permitted by
applicable  law  and  regulation  in  the Facility after the Partial Taking, the
square  footage  Taken  and the estimated revenue impact of such Partial Taking.
ARTICLE  III
3.1     Base  Rent;  Monthly Installments.  In addition to all other payments to
        ---------------------------------
be  made  by  Lessee  under this Lease, Lessee shall pay Lessor the Base Rent in
lawful  money  of  the  United  States  of America which is legal tender for the
payment  of  public and private debts, in advance, in equal, consecutive monthly
installments, each of which shall be in an amount equal to one-twelfth (1/12) of
     the  Base  Rent  payable  for  the  Lease Year in which such installment is
payable. The first installment of Base Rent shall be payable on the Commencement
Date,  together  with  a  prorated  amount  of Base Rent for the period from the
Commencement  Date  until  the  last day of the first full calendar month of the
Term.  Thereafter, installments of Base Rent shall be payable on the first (1st)
day of each calendar month.  Base Rent shall be paid to Lessor, or to such other
Person  as  Lessor  from time to time may designate by Notice to Lessee, by wire
transfer  of  immediately available federal funds to the bank account designated
in  writing  by  Lessor.  If  Lessor  directs  Lessee  to  pay  any Base Rent or
Additional Charges to any Person other than Lessor, Lessee shall send to Lessor,
simultaneously  with  payment  of the Base Rent or Additional Charges, a copy of
the  transmittal  letter  or  invoice  and  check evidencing such, or such other
evidence  of  payment  as  Lessor  requires.
3.2     Additional  Charges.  In addition to the Base Rent, Lessee also will pay
        -------------------
as  and  when  due  all  Additional  Charges.
3.3     Late Charge; Interest.  If any Rent payable to Lessor is not paid within
        ---------------------
five (5) Business Days after the Rent first became due and payable, Lessee shall
pay  Lessor  on  demand,  as  an  Additional Charge, a late charge equal to five
percent  (5%)  of  the  amount not paid when due, and, in addition, if such Rent
(including  the  late charge) is not paid within thirty (30) days of the date on
which such Rent was due, interest thereon at the Overdue Rate from the date when
due  until  such  Rent (including the late charge and interest) is paid in full.
3.4     Net  Lease.
        ----------
3.4.1     The  Rent  shall  be paid absolutely net to Lessor, so that this Lease
shall  yield  to Lessor the full amount of the Rent payable to Lessor under this
Lease  throughout  the  Term.
3.4.2     If  Lessor  commences  any proceedings for non-payment of Rent, Lessee
will  not  interpose  any counterclaim or cross complaint or similar pleading of
any  nature or description in such proceedings unless Lessee would lose or waive
such  claim by the failure to assert it, but Lessee does not waive any rights to
assert  such claim in a separate action brought by Lessee.  The covenants to pay
Rent  are  independent  covenants,  and Lessee shall have no right to hold back,
offset  or  fail to pay any Rent because of any alleged default by Lessor or for
any  other  reason.
3.5     Payments  In  The  Event  of  a  Rent  Adjustment.
        -------------------------------------------------
3.5.1     Upon  the  adjustment,  pursuant  to  the definition of the term "Base
Rent," in the Base Rent payable pursuant to this Lease with respect to any Lease
     Year,  the  adjustment  shall  be effective as of the first payment of Base
Rent due in the Lease Year as to which such adjustment pertains.  Because it may
not  be possible to determine the adjusted Base Rent prior to the effective date
of  such  adjustment,  Lessee shall continue to pay the Base Rent at the rate in
effect  prior  to  the  adjustment  until  Lessor  gives  Lessee  Notice  of its
determination  of the adjusted Base Rent. Upon such determination, the Base Rent
shall  be  adjusted retroactively as of the effective date of such adjustment On
or  before  the  second  (2nd)  payment  date for Base Rent following receipt by
Lessee  of  Lessor's  Notice  of the adjustment, Lessee shall make an additional
payment  of  Base  Rent in such amount as will bring the Base Rent, as adjusted,
current on or before such second (2nd) payment date, and thereafter Lessee shall
pay  the  adjusted  Base  Rent  in correspondingly adjusted monthly installments
until  the  Base  Rent  is  next adjusted or reset as required under this Lease.
3.5.2     This  Section  3.5 shall survive the expiration or earlier termination
of this Lease with respect to any adjustment or reset that is not known or fully
paid  as  of  the  date  of  expiration  or  earlier  termination of this Lease.
ARTICLE  IV
4.1     Payment  of  Impositions.  Subject  to  Section  12.1  and Section 12.2,
        ------------------------
Lessee  will  pay  all Impositions before any fine, penalty, interest or cost is
added for non-payment, and will promptly, upon request, furnish to Lessor copies
     of  official receipts or other satisfactory proof evidencing such payments.
Subject  to Section 12.2, if at the option of the taxpayer any Imposition may be
paid  in  installments,  Lessee  may  pay  the same in the required installments
provided  it  also  pays  any  and  all interest due thereon as and when due and
shall  only  be  obligated  to  pay  the installments allocable to the Term.  If
during  the  first two Lease Years any Imposition is not payable in installments
and  covers  a  period greater than the first two Lease Years, then Lessee shall
pay  such Assessment and, if this Lease is terminated pursuant to Section 1.4 of
this  Lease,  then  upon  such termination, Lessee shall be entitled to a refund
from  Lessor  of  the  amount  of the Assessment so paid less the amount of such
Assessment  allocable  to  the  first  two  Lease  Years.
     Lessee  shall  prepare  and  file  as and when required all tax returns and
reports  required  by  governmental authorities with respect to all Impositions.
Lessor  and  Lessee  shall each, upon request, provide the other with such data,
including  without limitation cost and depreciation records, as is maintained by
the  party  to  whom the request is made as is necessary to prepare any required
returns  and  reports.  Lessee  shall  have  no responsibility for and shall not
prepare  or  file  any  of  Lessor's  income  tax  returns.
Lessee  shall  be  entitled  to  receive  and  retain  any  refund from a taxing
authority  in  respect  of  an  Imposition  paid by Lessee if at the time of the
refund no Event of Default has occurred, but if an Event of Default has occurred
at  the  time  of  the refund, Lessee shall not be entitled to receive or retain
such  refund, and if and when received by Lessor such refund shall be applied as
provided  in  Article  XVI.
Lessee  may,  upon Notice to and with the consent of Lessor (which consent shall
not  be  withheld  unreasonably),  at  Lessee's  sole cost and expense, protest,
appeal or institute such other proceedings as Lessee deems appropriate to effect
a  reduction  of  real  estate  or  personal property assessments and Lessor, at
Lessee's  expense  as  aforesaid,  shall  cooperate with Lessee in such protest,
appeal or other action.  Lessee shall reimburse Lessor for Lessor's direct costs
of  cooperating  with  Lessee  for  such  protest,  appeal  or  other  action.
4.2     Adjustment  of  Impositions.  Impositions  imposed in respect of the tax
        ---------------------------
fiscal  period during which the Term ends shall be adjusted and prorated between
Lessor  and  Lessee,  whether  or  not imposed before or after the expiration or
earlier  termination  of  the  Term, and Lessee's obligation to pay its prorated
share  thereof  shall survive the expiration or earlier termination of the Term.
4.3     Utility  Charges.  Lessee  will  pay  or  cause  to be paid when due all
        ----------------
charges for electricity, power, gas, oil, water and other utilities imposed upon
the  Leased  Property  or  upon  Lessor  or  Lessee  with  respect to the Leased
Property.
4.4     Insurance  Premiums.  Lessee  shall pay or cause to be paid when due all
        -------------------
premiums  for  the  insurance  coverage  required  to  be maintained pursuant to
Article XIII during the Term.  Lessee shall deposit with Lessor the premiums for
such  insurance in accordance with the provisions of Section 12.2 of this Lease.
ARTICLE  V
5.1     No  Termination,  Abatement,  etc.  Except  as  otherwise  specifically
        ---------------------------------
provided  in this Lease, Lessee shall not take any action without the consent of
Lessor  to  modify,  surrender or terminate this Lease, and shall not seek or be
entitled  to any abatement, deduction, deferment or reduction of Rent, or setoff
against  Rent.  The  respective  obligations  of  Lessor and Lessee shall not be
affected  by reason of (a) any damage to, or destruction of, the Leased Property
or  any  portion  thereof from whatever cause or any Taking or Partial Taking of
the  Leased  Property,  except  as expressly set forth herein; (b) the lawful or
unlawful  prohibition  of,  or  restriction  upon,  Lessee's  use  of the Leased
Property,  or  any  portion  thereof,  or  the interference with such use by any
Person  or  by  reason  of  eviction  by paramount title as a result of Lessee's
willful  misconduct  or gross negligence; (c) any claim that Lessee has or might
have  against  Lessor  or  by reason of any default or breach of any warranty by
Lessor  under this Lease or any other agreement between Lessor and Lessee, or to
which  Lessor  and  Lessee  are  parties;  (d)  any  bankruptcy,  insolvency,
reorganization,  composition, readjustment, liquidation, dissolution, winding up
or  other  proceedings affecting Lessor or any assignee or transferee of Lessor;
or  (e)  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 or
     the  lawful  eviction of Lessee because of defects in Lessor's title to the
Leased Property.  Lessee hereby specifically waives all rights, arising from any
occurrence  whatsoever, that now or hereafter may be conferred upon it by law to
(a)  modify,  surrender  or terminate this Lease or quit or surrender the Leased
Property  or  any  portion  thereof,  or  (b)  entitle  Lessee to any abatement,
reduction,  suspension  or deferment of the Rent or other sums payable by Lessee
hereunder,  except  as  otherwise  specifically  provided  hereunder.
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
possession  and use of the Leased Property upon the terms and conditions of this
Lease.  Lessee  will  not  (a)  file  any  income tax return or other associated
documents,  (b)  file  any  other  document  with  or submit any document to any
governmental  body  or  authority,  (c)  enter  into  any  written  contractual
arrangement  with  any Person or (d) release any financial statements of Lessee,
in any case that take any position other than that throughout the Term Lessor is
     the  owner  of  the Leased Property for federal, state and local income tax
purposes  and  this  Lease is a "true lease," and an "operating lease" and not a
"capital  lease."
6.2     Lessor's  Personal  Property.  Lessee  shall,  during  the  entire Term,
        ----------------------------
maintain  all  of Lessor's Personal Property in good order, condition and repair
as  shall be necessary in order to operate the Facility for the Primary Intended
Use  in compliance with all applicable licensure and certification requirements,
all  applicable  Legal  Requirements  and  Insurance Requirements, and customary
industry  practice  for  the  Primary Intended Use.  If any of Lessor's Personal
Property  requires  replacement  in  order  to comply with the foregoing, Lessee
shall replace it with similar property of the same or better quality at Lessee's
sole  cost  and expense, and when such replacement property is placed in service
with  respect to the Leased Property it shall become Lessor's Personal Property.
Lessee  shall  not  permit or suffer Lessor's Personal Property to be subject to
any  lien, charge, encumbrance, financing statement, contract of sale, equipment
lessor's  interest  or the like, except for any purchase money security interest
or  equipment  lessor's  interest  expressly approved in advance, in writing, by
Lessor.  At the expiration or earlier termination of this Lease, all of Lessor's
Personal  Property shall be surrendered to Lessor with the Leased Property at or
before  the  time  of the surrender of the Leased Property in at least as good a
condition  as  at  the Commencement Date (or, as to replacements, in at least as
good  a condition as when placed in service at the Facility) except for ordinary
wear  and  tear.
6.3     Lessee's  Personal  Property.  Lessee  shall provide and maintain during
        ----------------------------
the  Term  such Personal Property, in addition to Lessor's Personal Property, as
shall  be  necessary  and  appropriate  in order to operate the Facility for the
Primary  Intended  Use  in  compliance  with  all  licensure  and  certification
requirements, in compliance with all applicable Legal Requirements and Insurance
Requirements and otherwise in accordance with customary practice in the industry
for  the  Primary  Intended  Use.  Except  as  permitted  under Section 8.2.1.4,
without  the  prior written consent of Lessor, Lessee shall not permit or suffer
Lessee's  Personal  Property  to  be  subject  to any lien, charge, encumbrance,
financing  statement  or  contract  of sale or the like. Upon the termination of
this  Lease  pursuant  to Section 1.4 or Article XVI, without the payment of any
additional  consideration  by  Lessor,  Lessee  shall  be  deemed  to have sold,
assigned,  transferred  and  conveyed to Lessor all of Lessee's right, title and
interest in and to any of Lessee's Personal Property; provided, however, that if
this  Lease  is  terminated  pursuant  to  Section 1.4, then any Special Purpose
Personal  Property,  if any, shall not be transferred to Lessor pursuant to this
Section.   Upon  the  expiration  of the Term or the earlier termination of this
Lease  other  than  pursuant  to Section 1.4 or Article XVI, Lessee (i) may, but
shall not be required to, remove all of Lessee's Personal Property unless Lessor
purchases  Lessee's Personal Property upon terms acceptable to Lessor and Lessee
and  (ii)  shall  be  deemed to have sold, assigned, transferred and conveyed to
Lessor  all  of  Lessee's  right,  title  and interest in and to any of Lessee's
Personal  Property  that  Lessee  does not remove, all in its "as is" condition.
6.4     Grant  of  Security  Interest in Lessee's Personal Property.  Lessee has
        -----------------------------------------------------------
concurrently  granted to Lessor a security interest in the Collateral as defined
in  the  Security  Agreement,  which  includes, without limitation, the Lessee's
Personal  Property  as  defined  herein.
ARTICLE  VII
7.1     Condition  of  the  Leased  Property.  Lessee  acknowledges  that it has
        ------------------------------------
inspected  and  otherwise  has knowledge of the condition of the Leased Property
prior  to  the execution and delivery of this Lease and has found the same to be
in good order and repair and satisfactory for its purposes hereunder.  Lessee is
     leasing  the  Leased  Property "as is" in its condition on the Commencement
Date.  Lessee  waives  any  claim  or  action  against  Lessor in respect of the
condition  of  the Leased Property.  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 AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN,
LATENT OR PATENT, IT BEING AGREED THAT ALL SUCH RISKS ARE TO BE BORNE BY LESSEE.
Lessee  further  acknowledges  that  throughout  the  Term  Lessee  is  solely
responsible  for  the  condition  of  the  Leased  Property.
7.2     Use  of  the  Leased Property.  Throughout the Term Lessee shall use the
        -----------------------------
Leased  Property  continuously  for the Primary Intended Use and uses incidental
thereto. Lessee shall not use the Leased Property or any portion thereof for any
other  use without the prior written consent of Lessor.  No use shall be made or
permitted  to  be made of, or allowed in, the Leased Property, and no acts shall
be  done,  which  will  cause  the  cancellation  of,  or  be prohibited by, any
insurance policy covering the Leased Property or any part thereof, nor shall the
Leased  Property or Lessee's Personal Property be used for any unlawful purpose.
Lessee  shall  not  commit  or  suffer  to  be committed any waste on the Leased
Property,  or  cause  or  permit  any  nuisance thereon, or suffer or permit the
Leased  Property  or  any  portion thereof, or Lessee's Personal Property, to be
used  in  such  a  manner  as  (a)  might reasonably tend to impair Lessor's (or
Lessee's,  as  the  case may be) title thereto or to any portion thereof, or (b)
may  reasonably  make  possible  a  claim  or claims of adverse usage or adverse
possession  by  the  public,  as  such,  or  of implied dedication of the Leased
Property  or  any  portion  thereof.
7.3     Certain  Environmental  Matters.
        -------------------------------
(a)     Prohibition  Against  Use  of  Hazardous  Substances.  Lessee  shall not
        ----------------------------------------------------
permit,  conduct  or  allow the generation, introduction, presence, maintenance,
use,  receipt,  acceptance,  treatment,  manufacture,  production, installation,
management,  storage,  disposal  or  release  of  any Hazardous Substance on the
Leased  Property,  except  for  (i)  those  types  and  quantities  of Hazardous
Substances  necessary for and ordinarily associated with the conduct of Lessee's
business  and  used  in full compliance with all Environmental Laws and (ii) any
Pre-Existing  Hazardous  Substances.
(b)     Notice of Environmental Claims, Actions or Contaminations.  Lessee shall
        ---------------------------------------------------------
notify Lessor, in writing, immediately upon learning of any existing, pending or
threatened:  (i)  investigation,  inquiry,  claim  or action by any governmental
authority  in  connection  with any Environmental Laws, (ii) Third Party Claims,
(iii) Regulatory Actions, and/or (iv) Contamination of any portion of the Leased
Property
(c)     Costs of Remedial Actions with Respect to Environmental Matters.  If any
        ---------------------------------------------------------------
investigation  and/or Clean-Up of any Hazardous Substance or other environmental
condition on, under, about or with respect to the Leased Property is required by
any  Environmental  Law  (other  than  Pre-Existing  Hazardous  Substances  or
Pre-Existing  Environmental  Conditions),  Lessee  shall  complete,  at  its own
expense, such investigation and/or Clean-Up or cause any other Person who may be
legally  responsible  to  complete  such  investigation  and/or  Clean-Up.
(d)     Delivery  of  Environmental  Documents.  Lessee  shall deliver to Lessor
        --------------------------------------
complete copies of any and all Environmental Documents that may now be in, or at
any  time  hereafter  come  into,  the  possession  of  Lessee.
(e)     Environmental Audit.  At Lessee's expense, Lessee shall, upon and within
        -------------------
thirty  (30)  days  of  a  written  request  therefor  from Lessor or a Facility
Mortgagee, deliver an Environmental Audit to Lessor and a Facility Mortgagee, if
any.  All  tests  and  samplings shall be conducted using generally accepted and
scientifically  valid  technology  and  methodologies.  Lessee  shall  give  the
engineer  or  environmental  consultant  conducting  the  Environmental  Audit
reasonable  and complete access to the Leased Property and to all records in the
possession of Lessee that may indicate the presence (whether current or past) of
a Release or threatened Release of any Hazardous Substances on, in, under, about
and  adjacent to the Leased Property.  Lessee also shall provide the engineer or
environmental  consultant  full  access to and the opportunity to interview such
persons  as  may  be  employed  in  connection  with  the Leased Property as the
engineer  or  consultant  deems  appropriate.  However,  neither  Lessor  nor  a
Facility  Mortgagee  shall  be  entitled  to request an Environmental Audit from
Lessee  unless  (i)  after  the  Commencement  Date  there  have  been  changes,
modifications  or additions to Environmental Laws as applied to or affecting any
of  the  Leased  Property; (ii ) a significant change in the condition of any of
the  Leased  Property  has  occurred;  (iii) there are fewer than six (6) months
remaining  in the Term and Lessor has a reasonable belief that the Contamination
has  occurred  during  the  Term;  or  (iv)  Lessor  or a Facility Mortgagee has
another  good  reason  for  requesting such certificate or certificates.  If the
Environmental Audit discloses the presence of Contamination or any noncompliance
with  Environmental  Laws,  Lessee  shall  immediately  perform  all of Lessee's
obligations  under  this  Lease  with  respect  to  such Hazardous Substances or
noncompliance.
(f)     Entry  onto  Leased Property for Environmental Matters.  If Lessee fails
        ------------------------------------------------------
to  provide  an  Environmental  Audit  as  and when required by Subparagraph (e)
above,  in  addition to Lessor's other remedies Lessee shall permit Lessor and a
Facility  Mortgagee  from time to time, by its employees, agents, contractors or
representatives, to enter upon the Leased Property for the purpose of conducting
such  Investigations as Lessor may desire, the expense of which shall be paid or
reimbursed  promptly  by  Lessee  as  an  Additional Charge.  Lessor, a Facility
Mortgagee exercising such right of entry and the employees, agents, contractors,
consultants and/or representatives thereof, shall conduct any such Investigation
in  a  manner  that  does  not  unreasonably  interfere with Lessee's use of and
operations  on  the  Leased Property (however, reasonable temporary interference
with  such  use  and  operations  is  permissible  if  the  investigation cannot
otherwise  be  reasonably  and  inexpensively  conducted).  Other  than  in  an
emergency,  Lessor and a Facility Mortgagee exercising such right of entry shall
provide  Lessee  with prior notice before entering any of the Leased Property to
conduct  such  Investigation, and shall provide copies of any reports or results
to  Lessee,  and  Lessee  shall  cooperate  fully  in  such  Investigation.
(g)     Environmental  Matters  Upon  Termination  of the Lease or Expiration of
        ------------------------------------------------------------------------
Term.  Upon  the  expiration  or  earlier  termination of the Term, Lessee shall
   -
cause the Leased Property to be delivered free of any and all Regulatory Actions
   -
     and  Third  Party Claims and otherwise in compliance with all Environmental
Laws  with  respect  thereto,  and  in a manner and condition that is reasonably
required  to  ensure that the then present use, operation, leasing, development,
construction,  alteration,  refinancing or sale of the Leased Property shall not
be  restricted  by  any  environmental condition existing as of the date of such
expiration  or  earlier termination of the Term; provided, that Lessee shall not
be  required  to  take any of the foregoing actions with respect to Pre-Existing
Hazardous  Substances  or  Pre-Existing  Environmental  Conditions.
(h)     Compliance with Environmental Laws.  Lessee shall comply with, and cause
        ----------------------------------
     its agents, servants and employees to comply with, and shall use reasonable
efforts  to cause each occupant and user of the Leased Property, and the agents,
servants  and  employees  of  such  occupants and users to comply with, each and
every  Environmental Law applicable to Lessee, the Leased Property and each such
occupant or user with respect to the Leased Property.  Specifically, but without
limitation:
(i)     Maintenance  of  Licenses and Permits.  Lessee shall obtain and maintain
        -------------------------------------
(and Lessee shall use reasonable efforts to cause each tenant, occupant and user
to  obtain  and maintain) all permits, certificates, licenses and other consents
and  approvals  required  by  any applicable Environmental Law from time to time
with  respect  to  Lessee, each and every part of the Leased Property and/or the
conduct  of  any  business  at  the  Facility  or  related  thereto;
(ii)     Contamination.  Lessee  shall  not  cause,  suffer  or  permit  any
         -------------
Contamination  (other  than  Pre-Existing  Hazardous  Substances or Pre-Existing
         -
Environmental  Conditions);
(iii)     Clean-Up.  If  a  Contamination  occurs (other than one arising solely
          --------
out  of  Pre-Existing  Hazardous  Substances  or  Pre-Existing  Environmental
Conditions),  Lessee  promptly shall Clean-Up and remove any Hazardous Substance
or cause the Clean-Up and the removal of any Hazardous Substance and in any such
case  such  Clean-Up and removal of the Hazardous Substance shall be effected to
Lessor's  reasonable  satisfaction  and  in  any event in strict compliance with
applicable  Environmental  Laws;
(iv)     Discharge  of  Lien.  Within  twenty  (20) days of the date any lien is
         -------------------
imposed  against the Leased Property or any part thereof under any Environmental
Law (other than those arising solely out of Pre-Existing Hazardous Substances or
Pre-Existing  Environmental  Conditions),  Lessee  shall  cause  such lien to be
discharged (by payment, by bond or otherwise to Lessor's absolute satisfaction);
(v)     Notification of Lessor.  Within three (3) Business Days after receipt by
        ----------------------
Lessee  of  Notice or discovery by Lessee of any fact or circumstance that might
result  in a breach or violation of any covenant or agreement, Lessee shall give
Lessor  Notice  of  such  fact  or  circumstance;  and
(vi)     Requests,  Orders  and  Notices.  Within  three (3) Business Days after
         -------------------------------
receipt  of  any  request, order or other notice relating to the Leased Property
under  any  Environmental  Law,  Lessee  shall forward a copy thereof to Lessor.
(i)     Environmental  Related  Remedies.  In  the  event  of a breach by Lessee
        --------------------------------
beyond  any  applicable notice and/or grace period of its covenants with respect
to environmental matters, Lessor may, in its sole discretion, do any one or more
     of  the  following  (the  exercise  of  one  right  or remedy hereunder not
precluding  the simultaneous or subsequent exercise of any other right or remedy
hereunder):
(i)     Cause  a  Clean-Up.  Cause  the  Clean-Up  of any Hazardous Substance or
        ------------------
other  environmental  condition  on  or  under  the Leased Property, or both, at
Lessee's  cost  and  expense  (except  to  the  extent  such Clean-Up relates to
Pre-Existing  Hazardous Substances or Pre-Existing Environmental Conditions); or
(ii)     Payment  of  Regulatory  Damages.  Pay on behalf of Lessee any damages,
         --------------------------------
costs,  fines  or  penalties  imposed  on  Lessee  or  Lessor as a result of any
Regulatory  Actions;  or
(iii)     Payments to Discharge Liens.  On behalf of Lessee, make any payment or
          ---------------------------
perform  any other act or cause any act to be performed that will prevent a lien
in favor of any federal, state or local governmental authority from attaching to
the  Leased  Property or that will cause the discharge of any lien then attached
to  the  Leased  Property;  or
(iv)     Demand of Payment.  Demand that Lessee make immediate payment of all of
         -----------------
the  costs  of  such  Clean-Up and/or exercise of the remedies set forth in this
Section  7.2  incurred  by  Lessor and not paid by Lessee as of the date of such
demand.
(j)     Environmental  Indemnification.  Lessee shall and does hereby indemnify,
        ------------------------------
and  shall  defend  and  hold  harmless, Lessor, each Facility Mortgagee and the
principals,  officers,  directors,  agents  and  employees  of  Lessor  and each
Facility  Mortgagee,  from each and every incurred and potential claim, cause of
action,  damage,  demand,  obligation,  fine,  laboratory  fee, liability, loss,
penalty,  imposition  settlement,  levy,  lien  removal,  litigation,  judgment,
proceeding,  disbursement, expense and/or cost (including without limitation the
cost  of  each  and  every  Clean-Up),  however  defined and of whatever kind or
nature,  known or unknown, foreseeable or unforeseeable, contingent, incidental,
consequential  or  otherwise  (including,  but  not limited to, attorneys' fees,
consultants'  fees,  experts'  fees and related expenses, capital, operating and
maintenance  costs,  incurred  in  connection  with  (i)  any  Investigation  or
monitoring  of  site  conditions, and (ii) any Clean-Up required or performed by
any federal, state or local governmental entity or performed by any other entity
     or  person  because  of  the  presence of any Hazardous Substance, Release,
threatened Release or any Contamination on, in, under or about any of the Leased
Property)  that  may  be  asserted against, imposed on, suffered or incurred by,
each  and every indemnitee arising out of or in any way related to, or allegedly
arising  out  of  or  due  to  any environmental matter (except to the extent it
arises  out  of  Pre-Existing Hazardous Substances or Pre-Existing Environmental
Conditions)  including,  but  not  limited to, any one or more of the following:
(i)     Release  Damage or Liability.  The presence of Contamination in, on, at,
        ----------------------------
under  or  near  the  Leased  Property  or migrating to the Leased Property from
another  location;
(ii)     Injuries.  All injuries to health or safety (including wrongful death),
         --------
or  to  the  environment,  by  reason  of  environmental matters relating to the
condition  of  or  activities  past  or  present  on, at, in or under the Leased
Property,  other  than  with  respect  to  or resulting solely from Pre-Existing
Hazardous  Substances  or  Pre-Existing  Environmental  Conditions;
(iii)     Violations  of  Law.  All  violations,  and alleged violations, of any
          -------------------
Environmental  Law relating to the Leased Property or any activity on, in, at or
under  the  Leased Property, other than with respect to or resulting solely from
Pre-Existing  Hazardous  Substances  or  Pre-Existing  Environmental Conditions;
(iv)     Misrepresentation.  All  material  misrepresentations  relating  to
         -----------------
environmental  matters  in  any  documents  or  materials furnished by Lessee to
Lessor  and/or  its  representatives  in  connection  with  the  Lease;
(v)     Event  of  Default.  Each  and  every  Event  of  Default  relating  to
        ------------------
environmental  matters;
        -
(vi)     Lawsuits.  Any  and  all  lawsuits  brought  or threatened, settlements
         --------
reached  and governmental orders relating to any Hazardous Substances at, on, in
or  under  the Leased Property, and all demands of governmental authorities, and
all  policies  and requirements of Lessor's, based upon or in any way related to
any  Hazardous  Substances  at,  on, in or under the Leased Property, other than
with  respect  to  or resulting solely from Pre-Existing Hazardous Substances or
Pre-Existing  Environmental  Conditions;  and
(vii)     Presence  of Liens.  All liens imposed upon any of the Leased Property
          ------------------
in  favor  of any governmental entity or any person as a result of the presence,
disposal,  release or threat of release of Hazardous Substances at, on, in, from
or  under  the  Leased  Property, other than with respect to or resulting solely
from Pre-Existing Hazardous Substances or Pre-Existing Environmental Conditions.
(k)     Rights  Cumulative  and  Survival.  The rights granted Lessor under this
        ---------------------------------
Section are in addition to and not in limitation of any other rights or remedies
     available  to  Lessor  under  this  Lease or allowed at law or in equity or
rights  of indemnification provided to Lessor in any agreement pursuant to which
Lessor  purchased  any  of the Leased Property.  The payment and indemnification
obligations  set  forth  in  this  Section  7.3  shall survive the expiration or
earlier  termination  of  the  Term.
(l)     Exculpation.  Notwithstanding  anything  to  the contrary in this Lease,
        ------------
Lessee  shall  not  be  liable for any costs, loss, liability, damage or expense
arising  from  or  in connection with the Clean-Up of any Pre-Existing Hazardous
Substances  or  Pre-Existing  Environmental  Conditions.
ARTICLE  VIII
8.1     Compliance  with  Legal  and  Insurance  Requirements.  In  its  use,
        -----------------------------------------------------
maintenance, operation and any alteration of the Leased Property, Lessee, at its
        -
     expense, promptly will (a) comply with all Legal Requirements and Insurance
Requirements, whether or not compliance with them requires structural changes in
any  of  the  Leased  Improvements (which structural changes shall be subject to
Lessor's prior written approval, which Lessor shall not unreasonably withhold or
delay)  or  interferes  with  or  prevents  the  use and enjoyment of the Leased
Property,  and  (b) procure, maintain and comply with all licenses, certificates
of  need,  provider  agreements and other authorizations required for the use of
the Leased Property and Lessee's Personal Property for the Primary Intended Use,
and  for  the  proper  erection,  installation, operation and maintenance of the
Leased  Property  or  any  part  thereof. The judgment of any court of competent
jurisdiction,  or  the  admission  of Lessee in any action or proceeding against
Lessee,  whether  or not Lessor is a party thereto, that Lessee has violated any
such  Legal  Requirements  or Insurance Requirements shall be conclusive of that
fact  as  between  Lessor  and  Lessee.
8.2     Certain  Covenants.
        ------------------
8.2.1     Certain  Financial  Covenants.
          -----------------------------
8.2.1.1     Cash  Flow to Rent Ratio. Commencing in the third Lease Year, Lessee
            ------------------------
shall  maintain  a  Cash  Flow  to  Rent  Ratio  of  1.10  or  more.
8.2.1.2     Limitation  of Distributions.  In or with respect to any Lease Year,
            ----------------------------
Lessee shall not make any Distributions to its shareholders or any Affiliate if,
as  of the date of such Distribution or upon giving effect to such Distribution,
(a) an Event of Default has occurred and is continuing or (b) an Unmatured Event
of  Default  has  occurred and is continuing; provided, however, that Lessee may
pay  to  Senior  Healthcare  the  lesser  of  (i)  the  actual,  unpaid  cost of
prescription  services  delivered  to the Facility during the Term; and (ii) the
market  price  for  such  services  in  the  State  of  Washington.
8.2.1.3     Guarantees  Prohibited.  Lessee shall not guarantee any indebtedness
            ----------------------
of  any  Affiliate  or  other  third  party.
8.2.1.4     Equipment  Financing.  The  aggregate amount of principal,  interest
            --------------------
and  lease  payments due from Lessee on any equipment financing shall not exceed
Fifty  Thousand  Dollars  ($50,000)  per  Lease  Year.
8.2.1.5     Loans  from  Affiliates.  Lessee  shall  not  borrow  money from any
            -----------------------
Affiliate unless the obligations of Lessee and the rights of its Affiliates with
respect  to any such loan are subordinated to the rights of Lessor pursuant to a
written  subordination  agreement  in  form  and substance acceptable to Lessor.
8.3     Minimum  Qualified  Capital  Expenditures.  Each Lease Year Lessee shall
        -----------------------------------------
expend  at  least Three Hundred Dollars ($300) per-licensed unit in the Facility
for  Qualified  Capital Expenditures to improve the Facility, which amount shall
be  increased  each  Lease  Year,  beginning  with  the  second  Lease  Year, in
proportion  to  increases  in  the  CPI.  At  least  annually, at the request of
Lessor, Lessor and Lessee shall review capital expenditures budgets and agree on
     modifications,  if  any,  required by changed circumstances and the changed
conditions  of  the  Leased  Property.
8.4     Management  Agreements.  Lessee  shall  not  enter into or terminate any
        ----------------------
Management  Agreement without the prior written consent of Lessor and a Facility
Mortgagee as to the identity of the Manager and the terms of such agreement, and
shall  not  amend,  modify,  or  otherwise  change  the  terms of any Management
Agreement  without  the  prior written consent of Lessor and, in addition, as to
any  amendment,  modification  or  other  change  that  directly  or  indirectly
increases  the compensation of the Manager or allows a change in the identity of
the  Manager,  without the consent of a Facility Mortgagee, which consent Lessor
and such Facility Mortgagee may withhold in its or their sole discretion, and in
no event without the execution by Lessee, Manager and Lessor of an agreement, in
form  and substance satisfactory to Lessor and a Facility Mortgagee, pursuant to
which  Manager's  right  to  receive  its  management fee is subordinated to the
obligation  of  Lessee  to  pay  the Rent as and when required under this Lease.
Lessor  (1)  acknowledges  that Guarantor shall manage the Facility on behalf of
Lessee  and  that  Guarantor  shall  paid a monthly fee of seven percent (7%) of
Gross  Revenues,  subject  only  to  the  terms  of  this  Lease  and  the other
Transaction  Documents,  (2)  consents  to such management by Guarantor, and (3)
acknowledges  that  the  consent  of any Facility Mortgagee is not required with
respect  to  such  management  by  Guarantor.
8.5     Other  Facilities.  Neither  Lessee nor any Affiliate shall own, operate
        -----------------
or  manage  any  nursing  home,  rest  home,  assisted living facility, subacute
facility,  retirement  center  or similar health care facility within a five (5)
mile  radius  of  the  Facility,  unless  Lessee first obtains the prior written
approval  of  Lessor,  which  shall  not  be  unreasonably  withheld.
8.6     No  Other  Business.  Lessee shall not engage in any business other than
        -------------------
the  operation  of  the  Facility.
ARTICLE  IX
9.1     Maintenance  and  Repair.
        ------------------------
9.1.1     Lessee,  at  its  expense,  will  keep  the  Leased  Property, and all
appurtenant  landscaping,  private  roadways, sidewalks and curbs that are under
Lessee's  control  and  Lessee's  Personal  Property  in  good order and repair,
whether  or  not the need for such repairs arises out of Lessee's use, any prior
use,  the  elements or the age of the Leased Property or any portion thereof, or
any cause whatsoever except the act or negligence of Lessor, and with reasonable
     promptness  shall  make  all  necessary  and appropriate repairs thereto of
every  kind  and  nature,  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 (concealed or
otherwise).  Lessee  shall  maintain,  operate  and  otherwise manage the Leased
Property  at  all times on a basis and in a manner consistent with the standards
of  the  other  facilities  maintained,  operated  or managed by Guarantor.  All
repairs  shall,  to  the extent reasonably achievable, be at least equivalent in
quality  to  the original work or the property to be repaired shall be replaced.
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 for
the  Primary  Intended  Use.
9.1.2     Lessor  shall  not  under  any  circumstances be required to maintain,
build  or  rebuild  any  improvements  on  the  Leased  Property (or any private
roadways,  sidewalks  or  curbs  appurtenant  thereto),  or to make any repairs,
replacements, alterations, restorations or renewals of any nature or description
to  the  Leased  Property,  whether  ordinary  or  extraordinary,  structural or
non-structural,  foreseen or unforeseen, or upon any adjoining property, whether
to  provide  lateral  or  other support or abate a nuisance, or otherwise, or to
make  any  expenditure  whatsoever with respect thereto, in connection with this
Lease.  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 shall be construed as (a) constituting
the  consent  or  request  of  Lessor,  expressed or implied, to any contractor,
subcontractor,  laborer,  materialmen 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  (b)  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.  Lessor shall have the right to give,
record  and  post,  as  appropriate,  notices  of  non-responsibility  under any
mechanics'  and  construction  lien  laws  now  or  hereafter  existing.
9.1.4     Lessee  promptly  shall  replace  any  of  the  Leased Improvements or
Lessor's  Personal  Property  that  becomes  worn  out,  obsolete or unusable or
unavailable  for  the  purpose for which intended. All replacements shall have a
value  and utility at least equal to that of the items replaced and shall become
part  of  the Leased Property immediately upon their acquisition by Lessee. Upon
Lessor's  request, Lessee promptly shall execute and deliver to Lessor a bill of
sale  or  other  instrument  establishing  Lessor's  lien-free ownership of such
replacements.  Lessee  promptly  shall  repair all damage to the Leased Property
incurred  in  the  course  of  such  replacement.
9.1.5     Lessee  will,  upon the expiration or earlier termination of the Term,
vacate  and surrender the Leased Property to Lessor in the condition in which it
was  originally received from Lessor, in good operating condition, ordinary wear
and tear excepted, except as repaired, rebuilt, restored, altered or added to as
permitted  or  required  by  the  provisions  of  this  Lease.
9.2     Encroachments,  Restrictions,  etc.  If,  at any time, any of the Leased
        ----------------------------------
Improvements  are  alleged to encroach upon any property, street or right of way
adjacent  to  the Leased Property, or to violate any restrictive covenant, or to
impair  the rights of others under any easement or right of way, Lessee promptly
shall  settle  such  allegations  or  take  such  other  lawful action as may be
necessary in order to be able to continue the use of the Leased Property for the
     Primary  Intended  Use  substantially  in  the manner and to the extent the
Leased  Property  was being used at the time of the assertion of such violation,
impairment or encroachment; provided, however, that no such action shall violate
any  other  provision  of  this Lease, and any alteration of the Leased Property
must  be  made  in  conformity  with  the  applicable requirements of Article X.
Lessee shall not have any claim against Lessor or offset against any of Lessee's
obligations  under  this Lease with respect to any such violation, impairment or
encroachment.
ARTICLE  X
10.1     Construction  of  Alterations  and  Additions  to  the Leased Property.
         ----------------------------------------------------------------------
10.1.1     Lessee  shall  not  (a)  make  or  permit  to  be made any structural
alterations,  improvements or additions of or to the Leased Property or any part
thereof,  or  (b)  materially  alter  the  plumbing,  HVAC or electrical systems
thereon or (c) make any other alterations, improvements or additions the cost of
     which  exceeds  (i) One Hundred Thousand ($100,000.00) Dollars in any Lease
Year,  unless  and until Lessee has (x) caused complete plans and specifications
therefor  to  have been prepared by a licensed architect and submitted to Lessor
at  least  ninety  (90)  Business  Days before the planned start of construction
thereof,  (y)  obtained  Lessor's written approval thereof and the approval of a
Facility Mortgagee and (z), if required to do so by Lessor, provided Lessor with
reasonable  assurance  of  the  payment  of  the  cost  of any such alterations,
improvements  or  additions,  in  the  form  of a bond, letter of credit or cash
deposit.  If  Lessor  requires  a  deposit, Lessor shall retain and disburse the
amount  deposited  in  the  same manner as is provided for insurance proceeds in
Section  14.6.  If the deposit is reasonably determined by Lessor at any time to
be  insufficient  for the completion of the alteration, improvement or addition,
Lessee  immediately shall increase the deposit to the amount reasonably required
by  Lessor.  Lessee shall be responsible for the completion of such improvements
in accordance with the plans and specifications approved by Lessor, and promptly
shall  correct  any  failure  with  respect  thereto.
10.1.2     Alterations  and  improvements  not  falling  within  the  categories
described  in the first sentence of Section 10.1.1 may be made by Lessee without
the  prior approval of Lessor, but Lessee shall give Lessor at least thirty (30)
days  prior  written  Notice  of  any  such  alterations  and  improvements.
10.1.3     All  alterations, improvements and additions shall (a) be constructed
in  a  first  class,  workmanlike,  manner,  in  compliance  with  all Insurance
Requirements and Legal Requirements, (b) be in keeping with the character of the
Leased  Property and the area in which the Leased Property is located and (c) be
designed  and  constructed  so that the value of the Leased Property will not be
diminished  and  the  Primary  Intended  Use  of the Leased Property will not be
changed.  All improvements, alterations and additions immediately shall become a
part  of  the  Leased  Property.
10.1.4     Lessee  shall  have no claim against Lessor at any time in respect of
the cost or value of any improvement, alteration or addition.  There shall be no
adjustment  in  the  Rent  by  reason  of  any  such  improvement, alteration or
addition.  With  Lessor's  consent, expenditures made by Lessee pursuant to this
Article  X  may be included as capital expenditures for purposes of inclusion in
the  capital  expenditures  budget for the Facility and for measuring compliance
with  the  obligations  of  Lessee  set  forth  in  Section  8.3  of this Lease.
10.1.5     In  connection  with  any  alteration  that  involves  the  removal,
demolition  or  disturbance  of  any  asbestos-containing material, Lessee shall
cause  to  be  prepared  at its expense a full asbestos assessment applicable to
such  alteration  and  shall  carry out such asbestos monitoring and maintenance
program  as  reasonably  shall be required thereafter in light of the results of
such  assessment.
ARTICLE  XI
11.1     Liens.  Without  the  consent  of  Lessor  or  as  expressly  permitted
         -----
elsewhere  herein,  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, and any
     attachment,  levy,  claim or encumbrance in respect of the Rent, except for
(a)  Permitted  Encumbrances,  (b)  liens  of  mechanics, laborers, materialmen,
suppliers  or  vendors  for  sums  not  yet  due,  and  (c) liens created by the
malfeasance  or  negligence  of  Lessor.
ARTICLE  XII
12.1     Permitted  Contests.  Lessee,  on  its own or on Lessor's behalf (or in
         -------------------
Lessor's  name),  but at Lessee's sole cost and expense, shall have the right to
contest,  by  appropriate legal proceedings conducted in good faith and with due
diligence,  the  amount or validity of any real or personal property assessment,
Imposition, Legal Requirement or Insurance Requirement, or any lien, attachment,
     levy,  encumbrance,  charge  or  claim  or  any encroachment or restriction
burdening  the  Leased  Property,  provided: (a) prior Notice of such contest is
given  to  Lessor;  (b)  the Leased Property would not be in any danger of being
sold, forfeited or attached as a result of such contest, and there is no risk to
Lessor  of  a loss of or interruption in the payment of Rent; (c) in the case of
an  unpaid  Imposition  or  other lien, attachment, levy, encumbrance, charge or
claim,  collection thereof is suspended during the pendency of such contest; (d)
in  the  case  of  a  contest  of a Legal Requirement, compliance may legally be
delayed  pending  such  contest  and  pending  such  contest no license, permit,
approval,  certificate  of  need,  certificate  of  reimbursement  or  other
authorization  necessary  to  operate  the Facility as a provider of health care
services  in  accordance  with  its  Primary  Intended  Use  may  be irrevocably
suspended  or  revoked,  or  its  right  to so operate the Facility or to accept
patients  irrevocably  suspended.  Upon  request of Lessor, Lessee shall deposit
funds  or  assure  Lessor in some other manner reasonably satisfactory to Lessor
that  the  amount  to  be  paid  by  Lessee  that  is the subject of a contested
Imposition,  Legal  Requirement,  Insurance  Requirement or Claim, together with
interest  and penalties, if any, thereon, and any and all costs for which Lessee
is  responsible  will  be  paid if and when required upon the conclusion of such
contest.  Lessee shall defend, indemnify and save harmless Lessor from all costs
or expenses arising out of or in connection with any such contest, including but
not limited to attorneys' fees. If at any time Lessor reasonably determines that
payment  of  any Imposition or other lien, attachment, levy, encumbrance, charge
or  claim, or compliance with any Legal or Insurance Requirement being contested
by Lessee is necessary in order to prevent loss of any of the Leased Property or
Rent  or  civil  or  criminal penalties or other damage (including revocation or
suspension of any license, permit, approval, certificate of need, certificate of
reimbursement  or  other  authorization  necessary  to operate the Facility as a
provider  of health care services in accordance with its Primary Intended Use or
suspension of any right to accept patients), upon such prior Notice to Lessee as
is reasonable in the circumstances Lessor may pay such amount, require Lessee to
comply  with such Legal or Insurance Requirement or take such other action as it
may deem necessary to prevent such loss or damage. If reasonably necessary, upon
Lessee's  written  request,  Lessor,  at  Lessee's expense, shall cooperate with
Lessee  in  a  permitted contest, provided Lessee upon demand makes arrangements
satisfactory to Lessor to assure the reimbursement of any and all Lessor's costs
incurred  in  cooperating  with  Lessee  in  such  contest.
12.2     Lessor's Requirement for Deposits.  After the occurrence of an Event of
         ---------------------------------
Default and while it continues, Lessee shall deposit with Lessor monthly, at the
time of its payments of Base Rent, a pro rata portion of the amounts required to
comply with Insurance Requirements, Impositions, Legal Requirements and Lessee's
obligations  under  Section  8.3 of this Lease, and when such obligations become
due,  Lessor  shall  pay  them  (to  the extent of the deposit) upon Notice from
Lessee  requesting such payment.  If sufficient funds have not been deposited to
cover  the amount of the obligations due at least thirty (30) days in advance of
the  due date, Lessee immediately shall deposit the same with Lessor upon Notice
from  Lessor.  Lessor  shall  not be obligated to segregate such deposited funds
from  its  other  funds  or  to  pay  Lessee any interest on any deposit held by
Lessor.  Upon  an Event of Default, any of the funds remaining on deposit may be
applied  under  this  Lease  in  any  manner  and in such priority as Lessor may
determine  in  its  sole  discretion.
ARTICLE  XIII
13.1     General Insurance Requirements.  Lessee shall keep the Leased Property,
         ------------------------------
     and  all  property located in or on the Leased Property, including Lessor's
Personal Property and Lessee's Personal Property, insured with insurance meeting
the  following  requirements:  (a)  all  insurance shall be written by companies
authorized to do insurance business in the applicable States and having a rating
classification  of  not less than A- and a financial size category of "Class X",
according  to  the  then  most  recent issue of Best's Key Rating Guide; (b) all
policies  must  name  Lessor as an additional insured, and name as an additional
insured  a  Facility  Mortgagee  by  way  of a standard form of mortgagee's loss
payable  endorsement  in use in the applicable States and in accordance with any
such  other  requirements  as  may  be  established  by such Facility Mortgagee.
However,  if  requested  by  Lessor  and  available on a commercially reasonable
basis,  all  public  liability  and  property  damage  insurance shall contain a
provision  that  Lessor,  although  named  as  an insured, nevertheless shall be
entitled  to recovery for loss, damage or injury to Lessor, its servants, agents
and  employees  by reason of the negligence of Lessee or Lessor; (c) losses must
be  payable to Lessor or Lessee as provided in Article XIV, and loss adjustments
shall  require the written consent of Lessor, a Facility Mortgagee and, provided
it  is  not  then  in  default,  Lessee, which consent shall not be unreasonably
withheld  by  either  Lessor or Lessee; (d) each insurer must agree that it will
give  Lessor  and  a Facility Mortgagee at least sixty (60) days' written Notice
before  its  policy  shall  be  altered,  allowed to expire or canceled; (e) the
amount  of  any  deductible or retention must be approved by Lessor prior to the
issuance  of  any  policy; and (f) the form of all policies shall be approved by
Lessor,  whose  approval  shall  not unreasonably be withheld, and by a Facility
Mortgagee.
13.2     Risks  to  be  Insured.  The  policies covering the Leased Property and
         ----------------------
Lessee's  Personal  Property  shall  insure  against  the  following  risks:
13.2.1     Loss or damage by fire, vandalism and malicious mischief, earthquake,
     extended coverage perils commonly known as "Special Risk," and all physical
loss  perils normally included in such Special Risk insurance, including but not
limited  to  sprinkler  leakage,  in an amount not less than one hundred percent
(100%)  of Replacement Cost (provided that Lessor shall have the right from time
to time, but no more frequently than once in any period of three (3) consecutive
Lease  Years,  to  have  Replacement  Cost  reasonably  redetermined by the fire
insurance  company  then  carrying  the  largest amount of fire insurance on the
Leased  Property  (Lessee  hereby  agreeing  to  pay  the  fee, if any, for such
insurer),  which determination shall be final and binding on the parties hereto,
and upon such determination Lessee immediately shall increase, but not decrease,
the  amount  of  the  insurance  carried  pursuant to this Section 13.2.1 to the
amount  so  determined,  subject  to  the  approval  of  a  Facility  Mortgagee;
13.2.2     Broad  form comprehensive boiler and machinery insurance on a blanket
repair  and  replace  basis, with limits for each accident in an amount not less
than  one  hundred  percent  (100%)  of  Replacement  Cost;
13.2.3     Loss of rental under a rental value insurance policy covering risk of
loss  during reconstruction necessitated by the occurrence of any of the hazards
described  in  Sections 13.2.1 or 13.2.2 (but in no event for a period less than
twelve  (12)  months)  in an amount sufficient to prevent Lessor and Lessee from
becoming  a  co-insurer;
13.2.4     Claims for bodily injury (including resulting death), personal injury
or  property  damage  under  a  policy  of  commercial  general public liability
insurance  with  a  combined  single  limit  per occurrence in respect of bodily
injury  and  death  and  property damage of One Million Dollars ($1,000,000.00),
which  insurance shall insure Lessee's contractual liability to Lessor under the
indemnity  provisions  of  this  Lease;
13.2.5     Claims  arising  out  of  malpractice  in an amount not less than Two
Million  Dollars ($2,000,000.00) for each person and for each occurrence and, if
written on a "claims-made" basis, Lessee also shall provide continuous liability
coverage  for  claims arising during the Term either by obtaining an endorsement
providing  for  an  extended reporting period reasonably acceptable to Lessor in
the  event  such policy is canceled or not renewed for any reason whatsoever, or
by  obtaining  "tail" insurance coverage converting the policies to "occurrence"
basis  policies providing coverage for a period of at least two (2) years beyond
the  expiration  of  the  Term;
13.2.6     Flood (with respect to any portions of the Leased Property located in
whole  or  in  part within a designated flood plain area) and such other hazards
and  in  such amounts as may be customary for comparable properties in the area;
13.2.7     During  such  time  as Lessee is constructing any improvements, (a) a
completed  operations  endorsement  to  the  commercial  general  liability  and
property  damage  insurance  policies  referred  to  above,  (b)  builder's risk
insurance,  completed  value  form,  covering  all  physical  loss, in an amount
satisfactory to Lessor, and (c) such other insurance, in such amounts, as Lessor
deems necessary to protect Lessor's interest in the Leased Property from any act
or  omission  of  Lessee's  contractors  or  subcontractors, and certificates of
insurance  evidencing  such  coverage,  in form satisfactory to Lessor, shall be
presented  to  Lessor  prior  to  the  commencement  of  construction  of  such
improvements;
13.2.8     Primary  automobile  liability  insurance  with limits of One Million
Dollars  ($1,000,000.00)  per  occurrence each for owned and non-owned and hired
vehicles;
13.2.9     Loss  or damage commonly covered by blanket crime insurance including
dishonesty, loss of money orders or paper currency and depositor's forgery, with
a  limit  of  not  less  than  Five  Hundred  Thousand  Dollars  ($500,000.00).
13.3     Payment  of  Premiums;  Copies  of  Policies; Certificates.  Subject to
         ----------------------------------------------------------
Section  12.2  of  this Lease, Lessee shall pay when due all of the premiums for
the  insurance  required  by  this  Lease,  and shall deliver to Lessor and to a
Facility  Mortgagee  requesting such evidence, certificates of insurance in form
satisfactory  to  Lessor and such Facility Mortgagee. Copies of the certificates
of  insurance  required  by  this  Lease  shall  be delivered to Lessor to their
effective  date  (and,  with respect to any renewal policy, not less than twenty
(20)  days  prior  to the expiration of the existing policy), with copies of the
policies  of  insurance  to follow when available to Lessee, and in the event of
the failure of Lessee either to carry the required insurance or pay the premiums
     therefor,  or  to  deliver  copies of policies or certificates to Lessor as
required, Lessor shall be entitled, but shall have no obligation, to obtain such
insurance  and  pay  the premiums therefor when due, in which event Lessee shall
repay to Lessor the premiums upon written demand therefor as Additional Charges.
13.4     Umbrella  Policies.  If  Lessee  chooses  to  carry  umbrella liability
         ------------------
coverage  to  obtain  the  limits  of  liability  required under this Lease, the
umbrella  policies  must  provide  coverage  in  the  same manner as the primary
commercial  general  liability policy and must contain no exclusions in addition
to,  or  limitations  materially  different  than,  those of the primary policy.
13.5     Additional  Insurance.  In  addition  to the insurance described above,
         ---------------------
Lessee  shall  at  all  times comply with all Legal Requirements with respect to
worker's  compensation  insurance  coverage.
13.6     No Liability; Waiver of Subrogation.  Lessor shall have no liability to
         -----------------------------------
Lessee,  and,  provided  Lessee  provides  the  insurance required of it by this
Lease,  Lessee  shall  have no liability to Lessor, regardless of the cause, for
any  loss  or  expense  resulting  from  or  in connection with damage to or the
destruction  or other loss of the Leased Property or Lessee's Personal Property,
and  neither  party  will have any right or claim against the other for any such
loss  or  expense by way of subrogation. Each insurance policy carried by either
party  covering  any  of  the  Leased  Property  and Lessee's Personal Property,
including  without  limitation,  contents,  fire  and  casualty insurance, shall
contain an express waiver of any right of subrogation on the part of the insurer
against  the  other party.  Lessee shall pay any additional costs or charges for
obtaining  such  waiver.
13.7     Intentionally  omitted.
         -----------------------
13.8     Blanket  Policy.  Any  insurance required by this Lease may be provided
         ---------------
by so-called blanket policies of insurance carried by Lessee; provided, however,
that  the  coverage  afforded  Lessor thereby may not be less than or materially
different  from  that  which  would be provided by separate policies meeting the
requirements  of  this  Lease,  and provided further that such policies meet the
requirements  of  all  Facility  Mortgages.
13.9     No  Separate  Insurance.
         -----------------------
13.9.1     Lessee shall not, on its own initiative or pursuant to the request or
     requirement  of  any third party, take out separate insurance concurrent in
form  or  contributing in the event of loss with that required by this Lease, to
be  furnished by, or that may reasonably be required to be furnished by, Lessee,
or  increase the amount 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  named therein as additional insureds, and losses are
payable  thereunder  in  the same manner as losses are payable under this Lease.
13.9.2     Nothing herein shall prohibit Lessee, upon Notice to Lessor, from (a)
securing insurance required to be carried hereby with higher limits of liability
than  required  in  this  Lease,  or  (b)  securing  insurance against risks not
required  to be insured pursuant to this Lease, and as to such insurance, Lessor
and  a  Facility  Mortgagee need not be included therein as additional insureds,
nor  must  losses thereunder be payable in the same manner as losses are payable
under  this  Lease,  except  to  the  extent required to avoid a default under a
Facility  Mortgage  or  any  other  encumbrance.
ARTICLE  XIV
14.1     Insurance  Proceeds.  Net  Proceeds  shall  be paid to Lessor and held,
         -------------------
disbursed or retained by Lessor as provided herein. If the Net Proceeds are less
     than  the  Approval  Threshold, and no Event of Default has occurred and is
continuing,  Lessor  shall pay the Net Proceeds to Lessee promptly upon Lessee's
completion  of  the restoration of the damaged or destroyed Leased Property.  If
the Net Proceeds equal or exceed the Approval Threshold, and no Event of Default
has  occurred  and  is  continuing, the Net Proceeds shall be made available for
restoration  or  repair as provided in Section 14.6. Within fifteen (15) days of
the  receipt  of  the  Net Proceeds of Special Risk Insurance, Lessor and Lessee
shall  agree  as  to  the  portion thereof, if any, attributable to the Lessee's
Personal  Property  that Lessee is not required and does not elect to restore or
replace,  and  if  they cannot agree they shall submit the matter to arbitration
pursuant to Article XXXV hereof, and the portion of the proceeds of such Special
Risk  Insurance  agreed  or  determined by arbitration to be attributable to the
Lessee's  Personal  Property  that  Lessee is not required and does not elect to
restore  or  replace  shall  be  paid  to  Lessee.
14.2     Restoration  in  the  Event  of  Damage  or Destruction.  If all or any
         -------------------------------------------------------
portion  of  the  Leased  Property  is damaged by fire or other casualty, Lessee
shall:  (a)  give  Lessor  Notice  of such damage or destruction within five (5)
Business Days of the occurrence thereof; (b) within thirty (30) Business Days of
the  occurrence  commence  the  restoration  of  the  Leased  Property;  and (c)
thereafter  proceed  diligently  to  complete  such  restoration  as  quickly as
reasonably  possible,  but  in any event within one hundred eighty (180) days of
the occurrence, to the end that the Leased Property is in substantially the same
(or  better)  condition  as  it  was  in  immediately  prior  to  the  damage or
destruction.  Regardless  of the anticipated cost thereof, if the restoration of
the  Leased  Property requires any modification of structural elements, prior to
commencing  such  modification  Lessee shall obtain Lessor's written approval of
the  plans  and  specifications  therefor.
14.3     Restoration of Lessee's Property.  If Lessee is required to restore the
         --------------------------------
Leased Property, Lessee also concurrently shall restore any of Lessee's Personal
Property  that is integral to the Primary Intended Use of the Leased Property at
the  time  of  the  damage  or  destruction.
14.4     No Abatement of Rent.  There shall be no abatement of Rent by reason of
         --------------------
any  damage  to  or  the  partial  or  total destruction of the Leased Property.
14.5     Waiver.  Except  as  provided  elsewhere  in  this Lease, Lessee hereby
         ------
waives  any  statutory  or  common  law  rights of termination that may arise by
reason  of  any  damage  to  or  destruction  of  the  Leased  Property.
14.6     Disbursement  of  Insurance  Proceeds  Equal  to  or  Greater  Than The
         -----------------------------------------------------------------------
Approval  Threshold.  If Lessee restores or repairs the Leased Property pursuant
       ------------
to  this  Article  XIV,  and  if  the  Net Proceeds equal or exceed the Approval
Threshold,  the  restoration or repair and disbursement of funds to Lessee shall
be  in  accordance  with  the  following  procedures:
(a)     The  restoration  or  repair  work  shall  be done pursuant to plans and
specifications  approved  by Lessor and a certified construction cost statement,
to  be  obtained  by  Lessee  from a contractor reasonably acceptable to Lessor,
showing  the  total  cost  of  the restoration or repair; to the extent the cost
exceeds  the  Net  Proceeds,  Lessee shall deposit with Lessor the amount of the
excess  cost, and Lessor shall disburse the funds so deposited in payment of the
costs  of  restoration  or  repair  before  any  disbursement  of  Net Proceeds.
(b)     Construction  Funds  shall  be  made available, subject to a ten percent
(10%)  holdback, to Lessee upon request, but no more frequently than monthly, as
the restoration and repair work progresses pursuant to certificates, in form and
substance  reasonably  acceptable  to Lessor, of an architect selected by Lessee
and  reasonably  acceptable  to  Lessor (such architect to be, in the reasonable
judgment  of Lessor, highly qualified in the design and construction of the type
of  facility  being  repaired).
(c)     After  the  first  disbursement  to  Lessee,  sworn  statements and lien
waivers  in  an  amount  at  least  equal  to  the  amount of Construction Funds
previously  paid  to  Lessee  shall be delivered to Lessor from all contractors,
subcontractors and material suppliers covering all labor and materials furnished
through  the  date  of  the  previous  disbursement.
(d)     Lessee  shall deliver to Lessor such other evidence as Lessor reasonably
may  request, from time to time during the course of the restoration and repair,
as  to  the  progress  of  the  work,  compliance  with  the  approved plans and
specifications,  the  cost of restoration and repair and the total amount needed
to  complete  the  restoration  and  repair, and showing that there are no liens
against  the  Leased  Property  arising  in  connection with the restoration and
repair and that the cost of the restoration and repair at least equals the total
amount  of  Construction  Funds  then  disbursed  to  Lessee  hereunder.
(e)     If  the  Construction  Funds  are at any time determined by Lessor to be
inadequate  for  payment  in full of all labor and materials for the restoration
and  repair, Lessee immediately shall pay the amount of the deficiency to Lessor
to  be held and disbursed as Construction Funds prior to the disbursement of any
other  Construction  Funds  then  held  by  Lessor.
(f)     The  Construction  Funds  may be disbursed by Lessor to Lessee or to the
persons  entitled  to receive payment thereof from Lessee, and such disbursement
in  either case may be made directly or through a third party escrow agent, such
as,  but  not limited to, a title insurance company, or its agent, all as Lessor
may  determine  in  its  sole  discretion.  Provided  Lessee  is  not in default
hereunder, any excess Construction Funds shall be paid to Lessee upon completion
of  the  restoration  or  repair.
(g)     If Lessee at any time fails to perform promptly and fully the conditions
and  covenants set forth in subparagraphs (a) through (f) above, and the failure
is  not  corrected  within ten (10) days of written Notice thereof, or if during
the restoration or repair an Event of Default occurs, Lessor may, at its option,
immediately  cease making any further payments to Lessee for the restoration and
repair.
(h)     Lessor  may  reimburse  itself  out  of  the  Construction Funds for its
reasonable  expenses  incurred  in  administering  the  Construction  Funds  and
inspecting  the  restoration  and  repair  work,  including  without  limitation
attorneys'  and  other  professional  fees  and  escrow  fees  and  expenses.
14.7     Net  Proceeds Paid to Facility Mortgagee.   Notwithstanding anything in
         ----------------------------------------
this  Lease  to  the  contrary, if any Facility Mortgagee is entitled to any Net
Proceeds  or  any  portion thereof under the terms of any Facility Mortgage, the
Net  Proceeds  shall  be  applied,  held and/or disbursed in accordance with the
terms  of  the  Facility  Mortgage.  Lessor  shall  make commercially reasonable
efforts to cause the Net Proceeds to be applied to the restoration of the Leased
     Property. If the Facility Mortgagee elects to apply the Net Proceeds to the
indebtedness  secured  by  the  Facility  Mortgage  and  the  Net Proceeds would
otherwise  be  available  pursuant  to  this  Article XIV for restoration of the
Facility,  Lessee  may  elect  to (a) restore the Facility as nearly as possible
under  the  circumstances  to  a complete architectural unit of the same general
character  and  condition  as that of the Facility existing immediately prior to
such  damage  or  destruction or (b) terminate this Lease as to such Facility by
delivery  of  written  notice  to Lessor within thirty (30) days of the date the
Facility  Mortgagee elects to apply the Net Proceeds to the indebtedness secured
by  the  Facility  Mortgage.  In  any  such  circumstance where Lessee elects to
terminate  the  Lease as to the affected Facility pursuant to this Section 14.7,
Lessor  may,  at  its option, within thirty (30) days of Lessee's election to so
terminate  make  available  to Lessee pursuant to the same terms as set forth in
this  Article  XIV  of this Lease funds equal to the lesser of (x) the amount of
funds Lessor would be obligated to make available to Lessee for such restoration
pursuant  to  Article  XIV  of  this  Lease if the Facility Mortgagee had not so
applied  such  funds and (y) the amount of such funds so applied by the Facility
Mortgagee.  If  the Lessor does not elect to make such funds available to Lessee
within  such  thirty (30) day period, the Lease shall terminate on the thirtieth
(30th)  day  following  the last day of such thirty (30) day period.   If Lessor
does  make  such funds available to Lessee as provided for in this Section 14.7,
the  Lease  shall  not  terminate.
ARTICLE  XV
15.1     Total  Taking  or Other Taking with Leased Property Rendered Unsuitable
         -----------------------------------------------------------------------
for  Its  Primary  Intended  Use.  If title to the fee of the Leased Property is
 -------------------------------
Taken,  this  Lease  shall  cease  and terminate as of the Date of Taking by the
 --
Condemnor, and Rent shall be apportioned as of the termination date. If title to
 --
     the  fee  of  less  than the whole of the Leased Property is Taken, but the
Leased  Property is rendered Unsuitable for Its Primary Intended Use as a result
of  the  Partial  Taking, each of Lessee and Lessor shall have the option, which
shall  be  exercisable  by  written Notice to the other at any time prior to the
first  to  occur of the taking of possession by, or the date of vesting of title
in,  the  Condemnor,  to  terminate  this Lease as of the date so determined, in
which  event  this  Lease  shall so cease and terminate as of the earlier of the
date  specified  in  the  Notice or the date on which possession is taken by the
Condemnor.  If  this Lease is so terminated, Rent shall be apportioned as of the
termination  date.
15.2     Allocation  of  Award.  The total Award made with respect to all or any
         ---------------------
portion  of  the  Leased  Property or for loss of Rent, or for loss of business,
shall  be  solely  the property of and payable to Lessor or, if so provided in a
Facility  Mortgage,  to  a  Facility Mortgagee.  Nothing contained in this lease
will be deemed to create any additional interest in Lessee, or entitle Lessee to
any  payment based on the value of the unexpired term or so-called "bonus value"
to  Lessee  of  this  Lease.  Any Award made for the taking of Lessee's Personal
Property  that  is  not integral to the Primary Intended Use of the Facility, or
for  removal and relocation expenses of Lessee in any such proceedings, shall be
payable  to  Lessee. Any Award made for the taking of Lessee's Personal Property
that  is  integral  to the Primary Intended Use of the Facility shall payable to
Lessor  or,  if  so provided in a Facility Mortgage, to a Facility Mortgagee. In
any  proceedings  with respect to an Award, each of Lessor and Lessee shall seek
its  own  Award in conformity herewith, at its own expense.  Notwithstanding the
foregoing,  Lessee  may  pursue  a claim for loss of its business, provided that
under  the  laws  of  the  State of Washington, such claim will not diminish the
Award  to  Lessor.
15.3     Partial  Taking.  In  the event of a Partial Taking, Lessee, at its own
         ---------------
cost  and  expense,  shall,  within sixty (60) days of the first to occur of the
taking  of  possession  by,  or  the date of vesting of title in, the Condemnor,
commence the restoration of the Leased Property to a complete architectural unit
of  the same general character and condition (as nearly as may be possible under
the  circumstances)  as  existed  immediately  prior  to the Partial Taking, and
complete  such restoration with all reasonable dispatch, but in any event within
one hundred eighty (180) days of the date on which such Notice is given.  Lessor
shall contribute to the cost of restoration only such portion of the Award as is
made  therefor.  As  long as no Event of Default has occurred and is continuing,
if  such  portion of the Award is in an amount less than the Approval Threshold,
Lessor  shall  pay  the  same to Lessee upon completion of such restoration.  As
long  as  no Event of Default has occurred and is continuing, if such portion of
the  Award  is  in  an  amount  equal to or greater than the Approval Threshold,
Lessor  shall  make  such portion of the Award available to Lessee in the manner
provided  in Section 14.6 with respect to Net Proceeds in excess of the Approval
Threshold.  Notwithstanding  anything to the contrary in this Lease, if the Fair
Market  Rent  of the Leased Property is reduced by reason of the Partial Taking,
from  and  after  the  date  on  which  possession is taken by the Condemnor the
annualized  Base  Rent  shall be reduced by an amount determined by dividing the
portion  of the Award made to Lessor expressly for such reduction in Fair Market
Rent  by  the  Capitalization  Rate.
15.4     Temporary  Taking.  If  there  is a Partial Taking of possession or the
         -----------------
use of all or part of the Leased Property, but the fee of the Leased Property is
not  Taken  in  whole or in part, until such Partial Taking of possession or use
continues  for  more than six (6) months, all the provisions of this Lease shall
remain in full force and effect and the entire amount of any Award made for such
Partial  Taking  shall  be  paid  to  Lessee  provided there is then no Event of
Default.  Upon the termination of any such period of temporary use or occupancy,
Lessee at its sole cost and expense shall restore the Leased Property, as nearly
as  may  be  reasonably possible, to the condition existing immediately prior to
such  Partial  Taking.  If any such Partial Taking continues for longer than six
(6) months, and twenty-five percent (25%) or more of the patient capacity of the
Facility  is  thereby  rendered Unsuitable for Its Primary Use, this Lease shall
cease  and  terminate  as  of the last day of the sixth (6th) month, but if less
than  twenty-five  percent  (25%)  of  the  patient  capacity of the Facility is
thereby rendered Unsuitable for Its Primary Use, each of Lessee and Lessor shall
have  the  option,  which  shall  be exercisable by giving written Notice to the
other  at  least  sixty (60) days prior written Notice to the other, at any time
prior  to the end of the temporary Partial Taking, to terminate this Lease as of
the  date  set  forth  in such Notice, and Lessee shall be entitled to any Award
made  for  the  period  of  such  temporary  Partial Taking prior to the date of
termination  of  the  Lease.  Rent  shall  not  abate  during  the period of any
temporary  Partial  Taking.
15.5     Awards Paid to Facility Mortgagee.   Notwithstanding anything herein to
         ---------------------------------
the  contrary, if any Facility Mortgagee is entitled to any Award or any portion
thereof  under  the terms of any Facility Mortgage, such Award shall be applied,
held and/or disbursed in accordance with the terms of the Facility Mortgage.  If
the  Facility Mortgagee elects to apply the Award to the indebtedness secured by
the  Facility  Mortgage  and the Award represents an Award for Partial Taking as
described  in  Section  15.3 above, Lessee may elect to (a) restore the affected
Facility  as  nearly  as  possible  under  the  circumstances  to  a  complete
architectural  unit  of  the same general character and condition as that of the
Facility  existing  immediately prior to such Taking or (b) terminate this Lease
as  to  such Facility by delivery of written notice to Lessor within thirty (30)
days  of  the  date  the  Facility  Mortgagee  elects  to apply the Award to the
indebtedness  secured  by the Facility Mortgage.  In any such circumstance where
Lessee  elects  to  terminate  the Lease as to the affected Facility pursuant to
this  Section  15.5,  Lessor  may,  at  its  option,  within thirty (30) days of
Lessee's  election to so terminate make available to Lessee pursuant to the same
terms  as  set  forth in Section 15.3 of this Lease funds equal to the lesser of
(x)  the  amount  of funds Lessor would be obligated to make available to Lessee
for  such  restoration  pursuant  to  Section 15.3 of this Lease if the Facility
Mortgagee  had  not  so  applied  such funds and (y) the amount of such funds so
applied  by  the  Facility  Mortgagee. If the Lessor does not elect to make such
funds  available  to  Lessee within such thirty (30) day period, the Lease shall
terminate on the thirtieth (30th) day following the last day of such thirty (30)
day period.   If Lessor does make such funds available to Lessee as provided for
in  this  Section  15.5,  the  Lease  shall  not  terminate.
ARTICLE  XVI
16.1     Lessor's  Rights  Upon  an  Event  of  Default.  If an Event of Default
         ----------------------------------------------
occurs,  Lessor  may  terminate  this  Lease  by  giving  Lessee  a  Notice  of
Termination, and in such event the Term shall end and all rights of Lessee under
     this  Lease shall cease on the Termination Date.  The Notice of Termination
shall  be  in  lieu of and not in addition to any notice required by the laws of
any  State  as  a  condition  to bringing an action for possession of the Leased
Premises  or to recover damages under this Lease.  In addition to Lessor's right
to  terminate  this  Lease, Lessor shall have all other rights set forth in this
Lease  and  all  remedies  available  at  law  and  in  equity.
     Lessee shall, to the extent permitted by law, pay as Additional Charges all
costs  and  expenses  incurred  by  or  on  behalf of Lessor, including, without
limitation,  reasonable  attorneys' fees and expenses (whether or not litigation
is  commenced,  and  if  litigation  is  commenced,  including fees and expenses
incurred in appeals and post-judgment proceedings) as a result of any default of
Lessee  hereunder.
No  Event  of  Default  (other than a failure to make payment of money) shall be
deemed  to exist if and for so long as Lessee is unable to prevent such Event of
Default because of Force Majeure, provided that, upon the cessation of the Force
Majeure,  Lessee  immediately  shall  proceed  to remedy the action or condition
giving  rise  to  the  Event  of  Default  within  the applicable cure period as
extended  by  the  Force  Majeure.
16.2     Certain  Remedies.  If  an Event of Default occurs, whether or not this
         -----------------
Lease  has  been  terminated  pursuant  to Section 16.1, if required to do so by
Lessor,  Lessee immediately shall surrender the Leased Property to Lessor in the
condition required by Section 9.1.5 and quit the same, and Lessor may enter upon
     and repossess the Leased Property by reasonable force, summary proceedings,
ejectment  or otherwise, and may remove Lessee and all other persons and any and
all  personal  properties  from  the  Leased  Property, subject to rights of any
residents  or  patients  and to any Legal Requirements. In addition to all other
remedies  set forth or referred to in this Article XVI, after the occurrence and
during  the  continuance  of an Event of Default, Lessor shall have the right to
suspend  any Management Agreement and to retain a manager of the Facility at the
expense of Lessee, such manager to serve for such term (which term shall not end
upon  the  cure  of  all  Events  of Default) and at such compensation as Lessor
reasonably  determines  is  necessary under the circumstances.  Lessor shall use
commercially  reasonable,  good  faith  efforts  to  cause  any such replacement
management  agreement to include provisions pursuant to indemnifying Lessee from
any  damage to Lessee arising from the gross negligence or willful misconduct of
such  replacement  manager.
16.3     Damages.  None of (a) the termination of this Lease pursuant to Section
         -------
16.1,  (b) the repossession of the Leased Property, (c) the failure of Lessor to
relet  the  Leased Property, (d) the reletting of all or any portion thereof, or
(v)  the  failure  of Lessor to collect or receive any rentals due upon such any
reletting,  shall relieve Lessee of its liability and obligations hereunder, all
of which shall survive any such termination, repossession or reletting.  If this
Lease  is  terminated by Lessor, Lessee immediately shall pay to Lessor all Rent
due  and  payable  with  respect  to  the  Leased  Property to and including the
Termination  Date,  including  without  limitation all interest and late charges
payable  under Section 3.3 hereof with respect to any late payment of such Rent.
Lessee  also  shall  pay  to  Lessor, as liquidated damages, at Lessor's option,
either:
(A)     The  sum  of:
(i)     Lessor's  Interim  Rent  Loss,  minus  Net  Reletting  Proceeds for such
period, and minus the portion of Lessor's Interim Rent Loss, if any, that Lessee
proves  reasonably  could  have  been  mitigated  by  Lessor,  plus
(ii)     the  Present  Value  on the Judgment Date of Lessor's Future Rent Loss,
assuming  the  Cost  of Living Index were to increase four (4) percentage points
per  Lease  Year  from  the Judgment Date through the Expiration Date, minus the
Present  Value  on  the Termination Date of the portion of  Lessor's Future Rent
Loss  that  Lessee  proves  reasonably  could  be  mitigated  by  Lessor;
or
(B)     Each  month  between  the  Termination  Date  and  the  Expiration Date,
Lessor's Monthly Rent Loss, minus the Net Reletting Proceeds for such month, and
     minus the portion, if any, of Lessor's Monthly Rent Loss that Lessee proves
reasonably  could  have  been  avoided.  Any  suit brought to recover liquidated
damages  payable under this subsection (B) shall not prejudice Lessor's right to
collect  liquidated  damages  for  subsequent  months  in  a similar proceeding.
16.4     Waiver.  If  this  Lease is terminated pursuant to Section 16.1, Lessee
         ------
waives,  to  the  extent  permitted by applicable law, (a) any right of reentry,
repossession  or redesignation, (b) any right to a trial by jury in the event of
summary  proceedings  to enforce the remedies set forth in this Article XVI, and
(c)  the  benefit  of any laws now or hereafter in force exempting property from
liability  for  rent  or  for  debt.  Acceptance  of  Rent  at any time does not
prejudice or remove any right of Lessor as to any right or remedy.  No course of
     conduct  shall  be held to bar Lessor from literal enforcement of the terms
of  this  Lease.
16.5     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  shall  be  applied  to  Lessee's  obligations  in the order that Lessor
determines  in  its  sole  discretion  or  as  may  be  prescribed  by  law.
16.6     Bankruptcy.
         ----------
(a)     None  of  Lessee's  interest in this Lease, any estate hereby created in
Lessee's interest or any interest herein or therein shall pass to any trustee or
     receiver or assignee for the benefit of creditors or otherwise by operation
of  law,  except as specifically may be provided pursuant to the Bankruptcy Code
(11  USC   101  et.  seq.),  as  the  same  may  be  amended  from time to time.
(b)     Rights  and  Obligations  Under  the  Bankruptcy  Code.
(i)     Upon  filing  of  a  petition  by or against Lessee under the Bankruptcy
Code,  Lessee, as debtor and as debtor-in-possession, and any trustee who may be
appointed with respect to the assets of or estate in bankruptcy of Lessee, agree
to  pay  monthly  in  advance,  on  the  first  day of each month, as reasonable
compensation  for  the use and occupancy of the Leased Premises, an amount equal
to  all  Rent  due  pursuant  to  this  Lease.
(ii)     Included  within and in addition to any other conditions or obligations
imposed  upon  Lessee  or  its  successor  in the event of the assumption and/or
assignment of the Lease are the following: (A) the cure of any monetary defaults
and reimbursement of pecuniary loss within not more than thirty (30) days of the
assumption  and/or  assignment; (B) the deposit of an additional amount equal to
not  less  than  three  (3)  months'  Base  Rent, which amount is agreed to be a
necessary  and  appropriate  deposit  to secure the future performance under the
Lease  of  Lessee  or its assignee; (C) the continued use of the Leased Premises
for  the  Primary  Intended Use; and (D) the prior written consent of a Facility
Mortgagee.
ARTICLE  XVII
17.1     Lessor's  Right  to Cure Lessee's Default.  If Lessee fails to make any
         -----------------------------------------
payment  or  perform  any act required to be made or performed under this Lease,
and  fails  to cure the same within any grace or cure period applicable thereto,
upon  such  Notice as may be expressly required herein (or, if Lessor reasonably
determines  that  the giving of Notice would risk loss to the Leased Property or
cause  damage  to  Lessor,  upon  such  Notice  as  is  practical  under  the
circumstances),  and  without  waiving  or  releasing  any obligation of Lessee,
Lessor  may  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  for  such  purpose  and  take  all  such action thereon as, in
Lessor's  sole opinion, may be necessary or appropriate.  No such entry shall be
deemed  an  eviction of Lessee.  All amounts so paid by Lessor and all costs and
expenses  (including,  without  limitation,  reasonable  attorneys'  fees  and
expenses)  so  incurred, together with the late charge and interest provided for
in  Section  3.3  thereon,  shall  be  paid  by Lessee to Lessor on demand.  The
obligations  of  Lessee  and  rights  of  Lessor contained in this Article shall
survive  the  expiration  or  earlier  termination  of  this  Lease.
ARTICLE  XVIII
18.1     Holding  Over.  If  Lessee remains in possession of the Leased Property
         -------------
after  the  expiration  of  the  Term or earlier termination of this Lease, such
possession  shall  be  as  a month-to-month tenant, and throughout the period of
such possession Lessee shall pay as Rent for each month one and one-half (1 1/2)
     times  the sum of: (a) one-twelfth (1/12th) of the Base Rent payable during
the  Lease  Year  in  which  such expiration or termination occurs, plus (b) all
Additional  Charges  accruing  during  the  month.  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 applicable law to
month-to-month  tenancies,  to  continue  its  occupancy  and  use of the Leased
Property  until  the  month-to-month  tenancy  is terminated.  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.
18.2     Indemnity.  If  Lessee  fails  to  surrender  the  Leased Property in a
         ---------
timely  manner  and  in accordance with the provisions of Section 9.1.5 upon the
expiration or termination of this Lease, in addition to any other liabilities to
Lessor  accruing  therefrom, Lessee shall defend, indemnify and hold Lessor, its
principals,  officers,  directors,  agents  and  employees harmless from loss or
liability  resulting  from  such  failure,  including,  without  limiting  the
generality  of  the  foregoing,  loss of rental with respect to any new lease in
which  the rental payable thereunder exceeds the Rent paid by Lessee pursuant to
this  Lease  during Lessee's hold-over and any claims by any proposed new tenant
founded  on such failure.  The provisions of this Section 18.2 shall survive the
expiration  or  earlier  termination  of  the  Term.
ARTICLE  XIX
19.1     Subordination.  This  Lease  is subject and subordinate to any Facility
         -------------
Mortgage  to  all  advances  made  or hereafter to be made thereunder and to all
renewals, modifications, consolidations, replacements and extensions thereof and
     substitutions therefore. This clause shall be self-operative and no further
instrument  of subordination need be required by a Facility Mortgagee; provided,
however,  that  Lessor  or  a  Facility  Mortgagee  may elect to make this Lease
superior  to  a  Facility  Mortgage  at  any  time  by Notice to Lessee. As to a
Facility  Mortgage  to  which  this  Lease  is subordinate, Lessor shall provide
Lessee with a "non-disturbance agreement" reasonably acceptable to such Facility
Mortgagee  providing  that,  if  such  Facility  Mortgagee  acquires  the Leased
Property  by  way  of  foreclosure or deed in lieu of foreclosure, such Facility
Mortgagee  will  not  disturb  Lessee's  possession  under  this  Lease and will
recognize  Lessee's  rights  hereunder if and for so long as no Event of Default
has  occurred  under  this Lease and is continuing.  Lessee agrees that it shall
not  withhold  or  delay its consent unreasonably to any amendment of this Lease
reasonably  required by a Facility Mortgagee, and Lessee shall be deemed to have
withheld  or  delayed  its  consent  unreasonably  if  Lessee  has  received the
non-disturbance  agreement  provided  for above and the requested amendment does
not  materially  (a)  alter  the  economic terms of this Lease, (b) diminish the
rights  of  Lessee  under  this  Lease or (c) increase the obligations of Lessee
under  this  Lease.
19.2     Attornment.  If a Facility Mortgagee enforces the remedies provided for
         ----------
by  law  or  by  a  Facility  Mortgage, Lessee shall, at the option of the party
succeeding  to  the  interest  of Lessor as a result of such enforcement or as a
result  of  a  deed  or delivery of possession of the Leased Property in lieu of
such  enforcement,  attorn  to  such  successor  and recognize such successor as
Lessor  under  this  Lease;  provided,  however, that such successor in interest
shall  not  (a)  be  bound by any payment of Rent for more than one (1) month in
advance,  except  for  any such advance payments as may be expressly required by
this  Lease;  (b)  be  bound  by any modification of this Lease made without the
written  consent of a Facility Mortgagee or successor in interest; (c) be liable
for  any  act  or omission of Lessor; or (d) be subject to any offset or defense
arising  prior  to  the  date  such  successor in interest acquired title to the
Leased Property. Upon request, Lessee shall execute and deliver an instrument or
instruments  confirming  the  attornment  provided  for  herein.
19.3     Lessee's  Certificate.  Lessee  shall, upon not less than ten (10) days
         ---------------------
prior  Notice  from  Lessor, execute, acknowledge and deliver to Lessor Lessee's
Certificate  containing  then-current  facts.  It  is intended that any Lessee's
Certificate  delivered  pursuant  hereto  may  be  relied  upon  by  Lessor, any
prospective  tenant  or  purchaser  of  the  Leased  Property,  any mortgagee or
prospective  mortgagee  and  any  other  party  who  reasonably may rely on such
statement.  Lessee's  failure  to  deliver  the Lessee's Certificate within such
time  shall  constitute  an  Event  of Default.  In addition, if Lessee fails to
deliver  the  Lessee's  Certificate  within  the ten (10) day period referred to
above,  Lessee  hereby authorizes Lessor to execute and deliver a certificate to
the  effect (if true) that Lessee represents and warrants that (a) this Lease is
in  full  force and effect without modification, and (b) Lessor is not in breach
or  default  of  any  of  its  obligations  under  this  Lease.
ARTICLE  XX
20.1     Risk  of Loss.  During the Term, the risk of loss or of decrease in the
         -------------
enjoyment and beneficial use of the Leased Property in 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 those caused by Lessor and those claiming from, through
or  under Lessor) is assumed by Lessee, and, in the absence of gross negligence,
willful  misconduct  or  material  breach  of this Lease by Lessor, Lessor in no
event  shall  be  answerable or accountable therefor nor shall any of the events
mentioned  in  this  Section  entitle  Lessee  to  any  abatement  of  Rent.
ARTICLE  XXI
21.1     Indemnification.  Notwithstanding  the  existence  of  any insurance or
         ---------------
self-insurance  provided  for  in Article XIII, and without regard to the policy
limits of any such insurance or self-insurance, Lessee shall protect, indemnify,
     save  harmless  and  defend Lessor, and the principals, officers, directors
and  agents  and  employees  of  Lessor,  from  and  against  all  liabilities,
obligations,  claims,  damages,  penalties, causes of action, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses), to the
extent  permitted by law, imposed upon or incurred by or asserted against Lessor
by  reason  of:  (a)  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,  including without limitation any claims of malpractice; (b) any use,
misuse,  non-use,  condition,  maintenance  or  repair  by  Lessee of the Leased
Property; (c) any failure on the part of Lessee to perform or comply with any of
the  terms  of  this  Lease;  and  (d)  the  nonperformance  of  any contractual
obligation,  express  or  implied,  assumed  or  undertaken by Lessee or Manager
Lessee  with  respect  to  the Leased Property or any business or other activity
carried  on  with  respect  to  the  Leased Property by Lessee or Manager on the
Leased  Property.  Any  amounts that become payable by Lessee under this Section
shall  be  paid  within  ten  (10)  days after liability therefor on the part of
Lessee  is determined by litigation or otherwise, and, if not timely paid, shall
bear interest (to the extent permitted by law) at the Overdue Rate from the date
of such determination to the date of payment.  Nothing herein shall be construed
as  indemnifying  either  Lessor or a Facility Mortgagee against its own grossly
negligent  acts  or  omissions  or  willful  misconduct.
21.2     Survival  of  Indemnification.  Lessee's  liability  under this Article
         -----------------------------
shall  survive  the  expiration  or  any  earlier  termination  of  this  Lease.
ARTICLE  XXII
22.1     General  Prohibition  against  Transfers.  Lessee  acknowledges  that a
         ----------------------------------------
significant  inducement  to  Lessor  to enter into this Lease with Lessee on the
terms  set  forth  herein  is the combination of financial strength, experience,
skill  and  reputation  possessed by Lessee, the Person or Persons in Control of
Lessee  and  the Manager of the Facility on the Commencement Date, together with
Lessee's  assurance  that Lessor shall have the unrestricted right to approve or
disapprove  any  proposed Transfer. Therefore, there shall be no Transfer except
as  specifically permitted by this Lease or consented to in advance by Lessor in
writing.  Lessee agrees that Lessor shall have the right to withhold its consent
to  any proposed Transfer on the basis of Lessor's judgment as to the effect the
proposed  Transfer  may  have  on the Facility and the future performance of the
obligations  of  the  Lessee under this Lease, whether or not Lessee agrees with
such  judgment.  Any  attempted  Transfer  that is not specifically permitted by
this  Lease  or  consented  to by Lessor in advance in writing shall be null and
void  and of no force and effect whatsoever.  In the event of a Transfer, Lessor
may  collect  Rent  and  other charges from the Transferee and apply the amounts
collected  to  the  Rent  and  other charges herein reserved, but no Transfer or
collection  of Rent and other charges shall be deemed to be a waiver of Lessor's
rights  to  enforce  Lessee's  covenants  or  an acceptance of the Transferee as
Lessee,  or  a  release  of  the Lessee named herein from the performance of its
covenants.  Notwithstanding  any  Transfer, Lessee shall remain fully liable for
the  performance  of  all  terms,  covenants  and provisions of this Lease.  Any
violation  of  this Lease by any Transferee shall be deemed to be a violation of
this  Lease  by  Lessee.
22.2     Subordination  and  Attornment.  Lessee  shall  insert  in any sublease
         ------------------------------
permitted  by  Lessor provisions to the effect that (a) such sublease is subject
and  subordinate  to  all  of  the terms and provisions of this Lease and to the
rights  of  Lessor hereunder, (b) if this Lease terminates before the expiration
of  such  sublease, the sublessee thereunder will, at Lessor's option, attorn to
Lessor  and  waive any right the sublessee may have to terminate the sublease or
to  surrender  possession  thereunder,  as  a  result of the termination of this
Lease,  and  (c)  if  the  sublessee  receives  a  written Notice from Lessor or
Lessor's  assignee,  if any, stating that Lessee is in default under this Lease,
the  sublessee  thereafter  shall be obligated to pay all rentals accruing under
the  sublease  directly  to  the  party giving such Notice, or as such party may
direct,  and such payments shall be credited against the amounts owing by Lessee
under  this  Lease.
22.3     Sublease  Limitation.  Anything contained in this Lease to the contrary
         --------------------
notwithstanding,  even if a sublease of the Leased Property is permitted, Lessee
shall  not  sublet  the  Leased Property on any basis such that the rental to be
paid  by the sublessee thereunder would be based, in whole or in part, on either
(a)  the  income or profits derived by the business activities of the sublessee,
or  (b)  any other formula such that any portion of the sublease rental received
by Lessor would 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.
The  parties  agree  that this Section shall not be deemed waived or modified by
implication,  but  may  be  waived  or modified only by an instrument in writing
explicitly  referring  to  this  Section  by  number.
ARTICLE  XXIII
23.1     Financial  Statements  and  Other  Reports  and  Materials  Required by
         -----------------------------------------------------------------------
Lessor.  Lessee  shall  furnish to Lessor, in paper form and by electronic means
satisfactory  to  Lessor:
(a)     Within  seventy  five (75) days after the end of each of Lessee's fiscal
years:  (i)  Lessee's  Financial Statement, prepared in accordance with GAAP and
certified  by  an officer of the Lessee, (ii) a variance report comparing actual
items  of  income and expenses to such items as budgeted; and (iii) an Officer's
Certificate  stating  that  Lessee  is  not  in  default  in  the performance or
observance  of  any  of  the  terms  of  this Lease, or if Lessee is in default,
specifying  all  such defaults, the nature thereof, and the steps being taken to
remedy  the  same;
(b)     Within thirty five (35) days after the end of each of Lessee's quarters,
quarterly Financial Statements of Lessee, together with an Officer's Certificate
stating  that  (i)  Lessee  is  not in default of any covenant set forth in this
Lease,  or  if  Lessee  is  in default, specifying all such defaults, the nature
thereof, and the steps being taken to remedy the same; and (ii) the then-current
number  of  licensed  and  operating  units  at  the  Facility;
(c)     Within thirty (30) days after the end of each month, a monthly financial
report  for  the  Facility, including a detailed statement of income and expense
and  detailed  operational statistics regarding occupancy rates, patient mix and
patient  rates  by  type;
(d)     Within fifteen (15) days of filing a copy of each cost report filed with
a  governmental  agency  for  the  Facility;
(e)     Within  fifteen  (15)  days after they are required to be filed with the
SEC,  copies of any annual or quarterly report and of information, documents and
other reports (or copies of such portions of any of the foregoing as the SEC may
by  rules  and  regulations  prescribe)  that  Lessee,  Guarantor  or Manager is
required  to file with the SEC pursuant to Section 13 or 15(d) of the Securities
Exchange  Act  of  1934;
(f)     Within thirty (30) days of Lessee's or Manager's receipt thereof, copies
of  surveys  performed by the appropriate governmental agencies for licensing or
certification  purposes, including, without limitation, annual surveys, revisits
and  complaint  surveys,  copies  of  any  plans  of  correction and all related
correspondence;
(g)     Immediate  Notice  to Lessor of any action, proposal or investigation by
any  agency  or  entity, or complaint to such agency or entity, known to Lessee,
the  result of which could be to (i) modify in a way adverse to Lessee or revoke
or  suspend  or  terminate,  or  fail  to renew or fully continue in effect, any
license  or  certificate or operating authority pursuant to which Lessee carries
on  any  part  of  the  Primary  Intended  Use of the Facility, or (ii) suspend,
terminate,  adversely  modify,  or fail to renew or fully continue in effect any
cost  reimbursement or cost sharing program by any state or federal governmental
agency,  or seek return of or reimbursement for any funds previously advanced or
paid  pursuant  to any such program, or (iii) impose any bed hold, limitation on
patient  admission  or  similar  restriction  on  the  Leased  Property, or (iv)
prosecute  any  party  with  respect  to  the  operation  of any activity in the
Facility or enjoin any party or seek any civil penalty in excess of One Thousand
Dollars  ($1,000.00)  in  respect  thereof;
(h)     As  soon  as  it  is prepared in each Lease Year, but not later than the
last  day  of  the second (2nd) month in each Lease Year a capital and operating
budget  for  the  Facility  for  that  and  the  following  Lease  Year;
(i)     With  reasonable  promptness,  such  other  information  respecting  the
financial  condition and affairs of Lessee and the Facility as Lessor reasonably
may  request  from  time  to time, including, without limitation, any such other
information  as  may  be available to the administration of the Leased Property;
(j)     Upon Lessor's request from time to time, such additional information and
     unaudited  quarterly  financial  information concerning the Leased Property
and  Lessee  as  Lessor may require for its on-going filings with the Securities
and  Exchange Commission, under both the Securities Act of 1933, as amended, and
the  Securities Exchange Act of 1934, as amended, including, but not limited to,
10-Q  Quarterly  Reports,  10-K Annual Reports and registration statements to be
filed  by  Lessor  during  the  Term  of  this  Lease;  and
(k)     At  least  fifteen  (15)  Business  Days  before  the expiration of each
license  and  permit  required for the operation of the Facility for the Primary
Intended  Use,  evidence  satisfactory to Lessor that such license or permit has
been  unconditionally  renewed  by  the  issuer  thereof.
23.2     Public  Offering  Information.  Lessee  specifically agrees that Lessor
         -----------------------------
may  include  financial  information and information concerning the operation of
the  Facility  that does not violate the confidentiality of the facility-patient
relationship  and  the  physician-patient  privilege  under  applicable laws, in
offering  memoranda  or  prospectus,  or similar publications in connection with
syndications  or  public  offerings of Lessor's securities or interests, and any
other  reporting requirements under applicable Federal and State Laws, including
those  of  any  successor  to  Lessor.  Lessee  agrees  to  provide  such  other
reasonable  information necessary with respect to Lessee and the Leased Property
to  facilitate  a  public  offering  or  to satisfy SEC or regulatory disclosure
requirements.  Upon  request  of  Lessor,  Lessee  shall  notify  Lessor  of any
necessary  corrections  to  information  Lessor  proposes  to  publish  within a
reasonable  period  of  time (not to exceed three (3) days) after being informed
thereof  by  Lessor.
ARTICLE  XXIV
24.1     Lessor's  Right  to  Inspect.  Lessee  shall  permit  Lessor  and  its
         ----------------------------
authorized representatives to inspect the Leased Property and Lessee's books and
     records pertaining thereto during normal business hours at any time without
Notice.  Lessor  acknowledges  that  notwithstanding anything to the contrary in
this  Lease,  Lessor  and  Lessee  do  not  intend  Lessor to have access to any
protected health information (as defined by the Health Insurance Portability and
Accountability  Act of 1996 ("HIPAA") at the Facility.  In the event that Lessor
                              -----
unintentionally  obtains  access  to  any  such protected health information, it
shall  hold  such  information  in  confidence  pursuant  to HIPAA and shall not
disclose  it  to  anyone.
ARTICLE  XXV
25.1     No  Waiver.  No failure by Lessor to insist upon the strict performance
         ----------
of  any  term hereof or to exercise any right, power or remedy consequent upon a
breach  hereof,  and no acceptance of full or partial payment of Rent during the
continuance  of any such breach, 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  XXVI
26.1     Remedies  Cumulative.  To  the  extent  permitted  by  law, 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  XXVII
27.1     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  XXVIII
28.1     No  Merger  of Title.  There shall be no merger of this Lease or of the
         --------------------
leasehold  estate  created  hereby  by  reason of the fact that the same person,
firm,  corporation  or  other  entity  may  acquire,  own  or  hold, directly or
indirectly,  (a)  this  Lease  or  the  leasehold  estate  created hereby or any
interest  in  this Lease or such leasehold estate, and (b) the fee estate in the
Leased  Property.
28.2     No  Partnership.  Nothing  contained  in  this  Lease will be deemed or
         ---------------
construed  to create a partnership or joint venture between Lessor and Lessee or
to  cause either party to be responsible in any way for the debts or obligations
of  the other or any other party, it being the intention of the parties that the
only  relationship  hereunder  is  that  of  Lessor  and  Lessee.
ARTICLE  XXIX
29.1     Conveyance  by  Lessor.  If Lessor or any successor owner of the Leased
         ----------------------
Property  conveys  the Leased Property other than as security for a debt, Lessor
or  such  successor owner, as the case may be, shall be released from all future
liabilities  and obligations of 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  be  binding  upon  the  new  owner.
ARTICLE  XXX
30.1     Quiet Enjoyment.  So long as Lessee pays all Rent as it becomes due and
         ---------------
     complies  with  all of the terms of this Lease and performs 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  date  hereof or hereafter provided for in this Lease or
consented  to by Lessee.  Except as otherwise provided in this Lease, no failure
by  Lessor  to  comply with the foregoing covenant will 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.  Lessee shall, however, 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  Section.
ARTICLE  XXXI
31.1     Notices.  Any notice, request or other communication to be given by any
         -------
     party  hereunder  shall  be  in  writing and shall be sent by registered or
certified  mail,  postage prepaid, or by hand delivery or facsimile transmission
to  the  following  address:
     To  Lessee:          ESC-Silverdale,  LLC
               c/o  Emeritus  Corporation
     3131  Elliott  Avenue,  Suite  500
Seattle,  WA  98121
Attn:  Raymond  Brandstrom
Telephone  No.:  (206)  298-2909
     Facsimile  No.:  (206)  301-4500
With  copy  to               The  Nathanson  Group  PLLC
     (which  shall  not     1520  Fourth  Avenue,  Sixth  Floor
constitute  notice):     Seattle,  Washington  98101
     Attn:  Randi  Nathanson
Telephone  No.:  (206)  623-6239
     Facsimile  No.:  (206)  623-1738
     To  Lessor:                    Washington  Lessor  -  Silverdale,  Inc.
                         c/o  Omega  Healthcare  Investors,  Inc.
     9690  Deereco  Road,  Suite  100
     Timonium,  MD  21093
Attn.:  Daniel  J.  Booth
Telephone  No.:  (410)  427-1700
     Facsimile  No.:  (410)  427-8800
And  with  copy  to          Myers  Nelson  Dillon  &  Shierk,  PLLC
(which  shall  not          125  Ottawa  Ave.,  N.W.,  Suite  270
constitute  notice):     Grand  Rapids,  Michigan  49503
                         Attn:  Mark  E.  Derwent
Telephone  No.:  (616)  233-9640
Facsimile  No.:  (616)  233-9642
or  to  such other address as either party may hereafter designate. Notice shall
be deemed to have been given on the date of delivery if such delivery is made on
a Business Day, or if not, on the first Business Day after delivery. If delivery
is  refused,  Notice shall be deemed to have been given on the date delivery was
first  attempted.  Notice  sent  by facsimile transmission shall be deemed given
upon confirmation that such Notice was received at the number specified above or
in  a Notice to the sender.  If Lessee has vacated the Leased Property, Lessor's
Notice  may  be  posted  on  the  door  of  the  Leased  Property.
ARTICLE  XXXII
32.1     Appraisers.  If  it becomes necessary to determine Fair Market Value or
         ----------
Fair  Market  Rent  for  any  purpose  under  this  Lease, the party required or
permitted  to  give  Notice  of such required determination shall include in the
Notice  the name of a person selected to act as appraiser on its behalf.  Within
ten  (10)  days  after  such  Notice, the party receiving such Notice shall give
Notice  to  the  other party of its selection of a person to act as appraiser on
its behalf.  The appraisers thus appointed, each of whom must be a member of the
     Appraisal Institute (or any successor organization thereto) and experienced
in  appraising  facilities used for purposes similar to the Primary Intended Use
of  the  Facilities,  shall,  within  forty-five (45) days after the date of the
Notice  appointing  the first appraiser, proceed to appraise the Leased Property
or  Leased Properties, as the case may be, to determine the Fair Market Value or
Fair  Market  Rent thereof as of the relevant date (giving effect to the impact,
if  any, of inflation between the date of their decision and the relevant date);
provided,  however,  that if only one appraiser has been so appointed, or if two
appraisers  have  been  so  appointed  but only one such appraiser has made such
determination within fifty (50) days after the date of the Notice appointing the
first  appraiser,  then  the  determination of such appraiser shall be final and
binding  upon  the  parties.  To  the  extent  consistent  with  sound appraisal
practice  at  the  time of any such appraisal, such appraisal shall be made on a
basis  consistent  with  the  basis  on  which  the  Leased  Property  or Leased
Properties  were  appraised for purposes of determining its Fair Market Value at
the time of Lessor's acquisition thereof.  If two appraisers have been appointed
and  have  made their determinations within the respective requisite periods set
forth  above,  and  if the difference between the amounts so determined does not
exceed  ten  percent  (10%)  of the lesser of such amounts, then the Fair Market
Value or Fair Market Rent shall be an amount equal to fifty percent (50%) of the
sum  of  the  amounts  so  determined.  If the difference between the amounts so
determined  exceeds  ten  percent (10%) of the lesser of such amounts, then such
two  appraisers  shall within twenty (20) days appoint a third appraiser.  If no
such  appraiser  is appointed within such twenty (20) days or within ninety (90)
days  of  the  date  of  the Notice appointing the first appraiser, whichever is
earlier,  either  Lessor or Lessee may apply to any court having jurisdiction to
have  such  appointment  made  by  such  court.  Any  appraiser appointed by the
original  appraisers  or by such court shall be instructed to determine the Fair
Market  Value  or Fair Market Rent within forty-five (45) days after appointment
of  such  appraiser.  The  determination  of the appraiser which differs most in
terms of dollar amount from the determinations of the other two appraisers shall
be  excluded, and the average of the remaining two determinations shall be final
and  binding upon Lessor and Lessee as the Fair Market Value or Fair Market Rent
of  the  Leased  Property  or Leased Properties, as the case may be. If the Fair
Market Rent is being determined for more than one year, the Fair Market Rent may
include  such  annual  increases,  if  any, as the appraisers determine to be in
accordance  with  the  terms  of  this  Lease.
32.2     This  provision  for  determining  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,  and judgment may be entered upon such
determination  in  a  court  of competent jurisdiction.  Lessor and Lessee shall
each  pay  the fees and expenses of the appraiser appointed by it and each shall
pay one-half of the fees and expenses of the third appraiser and one-half of all
other  costs  and  expenses  incurred  in  connection  with  each  appraisal.
ARTICLE  XXXIII
33.1     Intentionally  omitted.
         -----------------------
ARTICLE  XXXIV
34.1     Facility  Trade  Names.  Upon  expiration or termination of this Lease,
         ----------------------
Lessee  shall  not  use  the  Facility  Trade Names and Lessor shall not use any
Facility  Trade  Names  which  include  the  word  "Emeritus"  in  them.
34.2     Transfer  of  Operational  Control  of  the  Facility.
         -----------------------------------------------------
34.2.1     If  the  certificates  of  need  or  licenses  to  operate the Leased
Property  for  the  Primary  Intended  Use  are  issued  to Lessee, any approved
sublessee  or  the  Manager, Lessee agrees that it will cooperate with Lessor to
turn  over  or  cause  to  be  turned  over  to Lessor or its designee, upon the
expiration  or  earlier  termination  of  the  Term,  all  of  Lessee's and such
sublessee's  or  Manager's  rights  in  connection  with the certificate of need
and/or  licenses.
34.2.2     Upon  the expiration or earlier termination of the Term, Lessee shall
cooperate fully in transferring operational control of the Facility to Lessor or
Lessor's  nominee and shall use its best efforts to cause the business conducted
at  the  Facility to continue without interruption.  Upon the request of Lessor,
Lessee  shall execute and deliver an Operations Transfer Agreement to Lessor and
any  new  operator  identified  by  Lessor in substantially the same form as the
Operations  Transfer  Agreement attached as Exhibit E.  The obligation of Lessee
                                            ---------
regarding  the  Operations  Transfer  Agreement shall survive the termination of
this  Lease.  To that end, pending completion of the transfer of the operational
control  of  the  Facility  to  Lessor  or  its  nominee:
(a)     Lessee will provide all necessary information requested by Lessor or its
     nominee  for  the  preparation  and  filing  of  any  and  all  necessary
applications  or  notifications  of  any federal or state governmental authority
having  jurisdiction  over  a change in the operational control of the Facility,
and  any  other information reasonably required to effect an orderly transfer of
the Facility, and Lessee will use its best efforts to cause all operating health
care  licenses  to  be  transferred  to  Lessor  or  to  Lessor's  nominee;  and
(b)     Lessee  shall  engage  only  in  transactions  or  other activities with
respect  to  the  Facility  that  are in the ordinary course of its business and
shall  perform  all  maintenance  and  repairs  reasonably necessary to keep the
Facility  in satisfactory operating condition and repair, and shall maintain the
supplies and foodstuffs at levels that are consistent and in compliance with all
health  care  regulations,  and  shall  not sell or remove any personal property
except  in  the ordinary course of business and in accordance with the terms and
conditions  of  this  Lease.
ARTICLE  XXXV
35.1     Arbitration.  Except  with  respect  to  the payment of Rent under this
         -----------
Lease,  the  determination  of  Fair  Market Rent and any proceedings to recover
possession of the Leased Property, if any controversy arises between the parties
     hereto  as  to  any  of  the  provisions  of  this Lease or the performance
thereof, and if the parties are unable to settle the controversy by agreement or
as  otherwise  provided herein, the controversy shall be decided by arbitration.
The  arbitration  shall be conducted by three arbitrators selected in accordance
with  the  rules  and  procedures  of the American Arbitration Association.  The
decision  of  the  arbitrators  shall  be final and binding, and judgment may be
entered  thereon in any court of competent jurisdiction.  The decision shall set
forth  in  writing  the  basis  for the decision.  In rendering the decision and
award,  the  arbitrators shall not add to, subtract from or otherwise modify the
provisions  of  this  Lease.  The  expense  of  the arbitration shall be divided
between  Lessor  and Lessee unless otherwise specified in the award.  Each party
in  interest shall pay the fees and expenses of its own counsel. The arbitration
shall  be  conducted  in  Ann  Arbor, Michigan.  In any arbitration, the parties
shall  be  entitled  to  conduct discovery in the same manner as permitted under
Federal  Rules  of  Civil  Procedure 26 through 37, as amended.  No provision in
this  Article  shall  limit  the  right of any party to this Agreement to obtain
provisional or ancillary remedies from a court of competent jurisdiction before,
after  or  during  the  pendency  of  any  arbitration, and the exercise of such
remedies  does  not  constitute  a  waiver  of  the  right  of  either  party to
arbitration.
ARTICLE  XXXVI
36.1     Miscellaneous.
         -------------
36.1.1     Survival,  Choice  of  law.  Anything  contained in this Lease to the
           --------------------------
contrary  notwithstanding,  all  claims  against,  and liabilities of, Lessee or
Lessor  arising  prior  to  the  date of expiration or termination of this Lease
shall  survive such expiration or termination.  If any term or provision of this
Lease or any application thereof is held invalid or unenforceable, the remainder
     of  this  Lease  and any other application of such term or provisions shall
not  be  affected  thereby.  Neither  this Lease nor any provision hereof may be
changed, waived, discharged or terminated except by an instrument in writing and
in  recordable  form signed by Lessor, a Facility Mortgagee and Lessee.  All the
terms  and  provisions  of  this  Lease  shall  be binding upon and inure to the
benefit  of the parties hereto and their respective successors and assigns.  The
headings in this Lease are for convenience of reference only and shall not limit
or  otherwise  affect  the  meaning  hereof. This Lease shall be governed by and
construed  in  accordance  with  the  laws  of  the  State  of  Washington.
     LESSEE  CONSENTS  TO  IN PERSONAM JURISDICTION BEFORE THE STATE AND FEDERAL
COURTS  OF  THE  STATES OF WASHINGTON AND MARYLAND, AND AGREES THAT ALL DISPUTES
CONCERNING THIS AGREEMENT SHALL BE HEARD IN THE STATE AND FEDERAL COURTS LOCATED
IN  THE  STATE OF MARYLAND OR WASHINGTON.  LESSEE AGREES THAT SERVICE OF PROCESS
MAY  BE EFFECTED UPON IT UNDER ANY METHOD PERMISSIBLE UNDER THE LAW OF THE STATE
OF  MARYLAND  OR WASHINGTON AND IRREVOCABLY WAIVES ANY OBJECTION TO VENUE IN THE
STATE  AND  FEDERAL  COURTS  OF  THE  STATES  OF  MARYLAND  AND  WASHINGTON.
36.1.2     Limitation on Recovery.  Lessee specifically agrees to look solely to
           ----------------------
     Lessor's  interest in the Leased Property for recovery of any judgment from
Lessor, it being specifically agreed that no constituent shareholder, officer or
director  of Lessor shall ever be personally liable for any such judgment or for
the payment of any monetary obligation to Lessee.  Furthermore, Lessor (original
or  successor) shall never be liable to Lessee for any indirect or consequential
damages  suffered  by  Lessee  from  whatever  cause.
36.1.3     Waivers.  Lessee  waives  any  defense by reason of any disability of
           --------
Lessee,  and  waives  any  other  defense  based  on the termination of Lessee's
(including  Lessee's  successor's)  liability from any cause.  Lessee waives all
presentments,  demands  for  performance,  notices  of nonperformance, protests,
notices  of  protest, notices of dishonor, and notices of acceptance, and waives
all  notices  of  the  existence,  creation,  or  incurring of new or additional
obligations.
36.1.4     Consents.  Whenever  the  consent  or  approval of Lessor is required
           --------
hereunder,  Lessor  may  in its sole discretion and without reason withhold that
consent  or  approval  unless  otherwise  specifically  provided.
36.1.5     Counterparts.  This  Lease  may be executed in separate counterparts,
           ------------
each  of  which shall be considered an original when each party has executed and
delivered  to  the  other  one  or  more  copies  of  this  Lease.
36.1.6     Options  Personal.  The  renewal  options  granted  to Lessee in this
           -----------------
Lease,  if  any,  are  granted  solely  to  Lessee  and  are  not  assignable or
transferable  except  in  connection  with a Transfer permitted in Article XXII.
36.1.7     Rights  Cumulative.  Except  as  provided herein to the contrary, the
           ------------------
respective  rights  and remedies of the parties specified in this Lease shall be
cumulative  and  in  addition  to  any rights and remedies not specified in this
Lease.
36.1.8     Entire  Agreement.  There  are  no  oral  or  written  agreements  or
           -----------------
representations  between  the  parties  hereto affecting this Lease.  This Lease
supersedes  and  cancels  any  and  all  previous  negotiations,  arrangements,
representations,  brochures,  agreements  and  understandings,  if  any, between
Lessor  and  Lessee.
36.1.9     Amendments  in  Writing.  No  provision  of this Lease may be amended
           -----------------------
except  by  an  agreement  in  writing  signed  by  Lessor  and  Lessee.
36.1.10     Severability.  If  any provision of this Lease or the application of
            ------------
such  provision  to  any  person,  entity  or  circumstance  is found invalid or
unenforceable by a court of competent jurisdiction, such determination shall not
affect the other provisions of this Lease and all other provisions of this Lease
shall  be  deemed  valid  and  enforceable.
36.1.11     Time  of  the Essence.  Except for the delivery of possession of the
            ---------------------
Facility  to  Lessee,  time  is of the essence with respect to all provisions of
this  Lease  of  which  time  is  an  element.
ARTICLE  XXXVII
37.1     Commissions.  Lessee  represents  and  warrants  to Lessor that no real
         -----------
estate  commission,  finder's  fee or the like is due and owing to any person in
connection  with  this  Lease.  Lessee agrees to save, indemnify and hold Lessor
harmless  from  and  against  any and all claims, liabilities or obligations for
brokerage,  finder's  fees  or  the  like  in  connection with this Lease or the
transactions  contemplated  hereby,  asserted  by any person on the basis of any
statement  or  act  alleged  to  have  been  made  or  taken  by  Lessee.
ARTICLE  XXXVIII
38.1     Memorandum  or  Short Form of Lease.  Lessor and Lessee shall, promptly
         -----------------------------------
upon the request of either, enter into a Memorandum or Short Form of this Lease,
     substantially in the form of attached Exhibit F, with such modifications as
                                           ---------
may  be appropriate under the laws and customs of the State of Washington and in
the  customary  form  suitable  for  recording  under  the  laws of the State of
Washington.  Lessee  shall  pay  all  costs  and  expenses  of  recording  such
memorandum  or  short  form  of  this  Lease.
ARTICLE  XXXIX
39.1     Security  Deposit.  On  the  Commencement Date, Lessee shall deliver to
         -----------------
Lessor a security deposit in the amount of Forty-five Thousand Dollars ($45,000)
     ("Security  Deposit"), which Lessor shall hold as security for the full and
       ------------------
faithful  performance  by Lessee of each and every term, provision, covenant and
condition of this Lease. The Security Deposit shall not be considered an advance
payment  of  Rent  (or of any other sum payable to Lessee under this Lease) or a
measure  of  Lessor's  damages  in  case  of  a default by Lessee.  The Security
Deposit  shall not be considered a trust fund, and Lessee expressly acknowledges
and  agrees  that Lessor is not acting as a trustee or in any fiduciary capacity
in  controlling  or using the Security Deposit.  Lessor shall have no obligation
to maintain the Security Deposit separate and apart from Lessor's general and/or
other  funds.  Unless  earlier  returned pursuant to Section 39.4 of this Lease,
the Security Deposit, less any portion thereof applied as provided Section 39.2,
shall  be  returned to Lessee within sixty (60) days following the expiration of
the  Term.
39.2     Application  of Security Deposit.  If Lessee defaults in respect of any
         --------------------------------
of  the  terms,  provisions,  covenants  and  conditions of this Lease or of any
agreement  or  instrument  with which this Lease is cross-defaulted), including,
but  not  limited  to,  payment  of  any Rent and other sums of money payable by
Lessee, Lessor may, but shall not be required to, in addition to and not in lieu
of  any  other rights and remedies available to Lessor, apply all or any part of
the Security Deposit to the payment of any sum in default, or any other sum that
Lessor  may  expend  or  be  required  to  expend by reason of Lessee's default,
including  but not limited to, any damages or deficiency in reletting the Leased
Property.  Whenever,  and  as  often  as,  Lessor has applied any portion of the
Security  Deposit to cure Lessee's default hereunder or under any agreement with
which  this  Lease  is cross-defaulted, Lessee shall, within ten (10) days after
Notice  from  Lessor, deposit additional money with Lessor sufficient to restore
the  Security  Deposit  to  the  full  amount then required to be deposited with
Lessor  pursuant  to  Section  39.1  above,  and Lessee's failure to do so shall
constitute  an  Event  of  Default  without  any  further  Notice.
39.3     Transfer  of  Security Deposit.  If Lessor transfers its interest under
         ------------------------------
this  Lease,  Lessor  shall  assign  the  Security Deposit to the new lessor and
thereafter Lessor shall have no further liability for the return of the Security
Deposit,  and  Lessee  agrees to look solely to the new lessor for the return of
the  Security  Deposit.  The provisions of the preceding sentence shall apply to
every  transfer  or  assignment  of  Lessor's interest under this Lease.  Lessee
agrees  that it will not assign or encumber or attempt to assign or encumber the
Security  Deposit  and  that  Lessor,  its successors and assigns may return the
Security  Deposit to the last Lessee in possession at the last address for which
Notice  has given by such Lessee and that Lessor thereafter shall be relieved of
any  liability  therefor, regardless of one or more assignments of this Lease or
any such actual or attempted assignment or encumbrances of the Security Deposit.
39.4     Return  of Security Deposit.  On the first day of the third Lease Year,
         ---------------------------
provided  that  no  Event  of  Default  or Unmatured Event of Default shall have
occurred  and  is  continuing, or upon the first day thereafter that no Event of
Default  or  Unmatured  Event of Default shall exist, the Security Deposit, less
any  portion  thereof  applied as provided in Section 39.2, shall be returned to
Lessee  and  Lessee  shall  no longer be required to maintain a Security Deposit
under  this  Lease.
                             SIGNATURE PAGES FOLLOW

<PAGE>
IN  WITNESS  WHEREOF,  the  parties  have  executed  this  Lease  by  their duly
authorized  officers  as  of  the  date  first  above  written.

     LESSOR:
     ------
Washington  Lessor  -  Silverdale,  Inc.
     By:     /s/  Daniel  J.  Booth
Name:        Daniel  J.  Booth
Title:       Chief  Operating  Officer

     LESSEE:
     ------
ESC-Silverdale,  LLC
     By:     /s/  Raymond  R.  Brandstrom
Name:        Raymond  R.  Brandstrom
Title:       Vice  President  of  Finance


THE  STATE  OF  _____________)
     )
COUNTY  OF     _______________)
     This instrument was acknowledged before me on the ______ day of __________,
2003,  by __________, the _____________ of Washington Lessor - Silverdale, Inc.,
a  Maryland  corporation,  on  behalf  of  said  corporation.
     Notary  Public

THE  STATE  OF_____________)
     )
COUNTY  OF________________)
     This  instrument  was acknowledged before me on the _____ day of _________,
2003,  by  _____,  the ____________ of ESC-Silverdale, LLC, a Washington limited
liability  company,  on  behalf  of  said  limited  liability  company.
     Notary  Public

<PAGE>

                            LIST OF EXHIBITS TO LEASE
EXHIBITS  A  -                              Facility  Trade  Names
EXHIBIT  B  -                              Description  of  Land
EXHIBIT  C  -                              Form  of  Lessee's  Certificate
EXHIBIT  D  -                              Permitted  Encumbrances
EXHIBIT  E  -                              Form of Operations Transfer Agreement
EXHIBIT  F  -                              Form  of Memorandum and Short Form of
Lease
<PAGE>
     A-1
                                    EXHIBIT A
                              FACILITY TRADE NAMES


          Trade  Names
          ------------
Name     Address
----     -------
Emeritus  Oaks  of  Silverdale     1501  N.W.  Tower  View  Circle
     Silverdale,  Washington  98383     Emeritus  Oaks  of  Silverdale

<PAGE>
     B-1
                                    EXHIBIT B

                               DESCRIPTION OF LAND

Tract  1, Ridge Point West, Division 3, according to the plat recorded in Volume
25  of  Plats,  Pages  181,  182  and 183, Records of Kitsap County, Washington.

<PAGE>
     C-1
                                    EXHIBIT C
                          FORM OF LESSEE'S CERTIFICATE
     The  undersigned
("Lessee")  under  that  certain  Lease  (the  "Lease")  dated
,  20     and  made  with,  a             ("Lessor"),  hereby  certifies:
1.     That it is Lessee under the Lease; that attached hereto as Exhibit "A" is
                                                                  -----------
a  true  and  correct copy of the Lease; that the Lease is now in full force and
effect  and  has  not  been amended, modified or assigned except as disclosed or
included  in  Exhibit  "A";  and that the Lease constitutes the entire agreement
              ------------
between  Lessor  and  Lessee.
2.     That there exist no defenses or offsets to enforcement of the Lease; that
there are, as of the date hereof, no breaches or uncured defaults on the part of
Lessee  or  Lessor thereunder; and that Lessee has no notice or knowledge of any
prior  assignment,  hypothecation,  subletting  or  other  transfer  of Lessor's
interest  in  the  Lease.
3.     That  the  Base  Rent  for  the  first  Lease  Year  under  this Lease is
$_____________.  All  Rent  which  is due has been paid, and there are no unpaid
         -----
Additional  Charges  owing  by Lessee under the Lease as of the date hereof.  No
Base  Rent or other items (including without limitation security deposit and any
impound  account  or  funds) have been paid by Lessee in advance under the Lease
except  for  the  security deposit held by Lessor [in the form of an irrevocable
letter  of  credit]  in the amount of $ and the monthly installment of Base Rent
that  became  due  on  .
4.     That Lessee has no claim against Lessor for any security deposit, impound
account  or  prepaid Rent except as provided in paragraph 3 of this Certificate.
5.     That  there  are  no  actions,  whether  voluntary  or otherwise, pending
against  the  undersigned  under the bankruptcy laws of the United States or any
state  thereof, nor has Lessee nor, to the best of Lessee's knowledge has Lessor
begun any action, or given or received any notice for the purpose of termination
of  the  Lease.
6.     That there are, as of the date hereof, no breaches or uncured defaults on
the  part  of  Lessee  under any other agreement executed in connection with the
Lease.
7.     This Certificate has been requested by Lessor pursuant to Section 19.3 of
this  Lease  and  for the benefit of __________________________________("Relying
Party").  The  Relying  Party  is  entitled  to rely on the statements of Lessee
contained  in  this  certificate.
8.     All  capitalized  terms used herein and not defined herein shall have the
meanings  for  such  terms  set  forth  in  the  Lease.
Dated:     _____,  20__                    LESSEE:
                                           ------
     By:

<PAGE>
     D-1
                                    EXHIBIT D
                             PERMITTED ENCUMBRANCES


1.     Easement,  including  its terms, covenants and provisions as disclosed by
instrument  recorded  October  7,  1988,  Recording  No.  8810070092,  aforesaid
records.
2.     Easement  recorded  May  10,  1989,  Recording  No. 8905100067, aforesaid
records.
3.     Easement  recorded  May  10,  1989,  Recording No. 89005100068, aforesaid
records.
4.     Easement recorded September 14, 1989, Recording No. 8909140032, aforesaid
records.
5.     Easement  in  favor  of  Puget Sound Power and Light Company and/or Puget
Sound Energy, recorded March 19, 1999, in the office of the recording officer of
Kitsap  County,  Washington under Auditor's File No. 3164188, aforesaid records.
6.     Covenants,  conditions  and restrictions contained in instrument recorded
September  22,  1998,  Recording  No.  3119741,  aforesaid  records.
7.     Liability  for  maintenance  of storm drainage as disclosed by instrument
recorded  under  Auditor's  File  No.  3119741,  aforesaid  records.
8.     Easement  as  dedicated  on  the  face  of  the plat of said addition for
slopes,  also  the  right  to  drain all streets over and across any lot or lots
where  water might take a natural course after the street or streets are graded.
9.     The  following  is  shown  in  the  dedication  on  the face of the plat:
Dimensions and uses of all lots, tracts or parcels of land embraced in this plat
are subject to and shall be in conformity with Kitsap County Zoning Regulations.
10.     Provisions  for multi-purpose easements as dedicated on the face of said
plat.
11.     Encroachment  of water line and grass area along the southwest corner of
the  property  as  disclosed  by survey made by Barghausen Consulting Engineers,
Inc.,  under  Job  No.  6313,  dated  June  2,  1999.

<PAGE>

E  -  17


                                    EXHIBIT E
                      FORM OF OPERATIONS TRANSFER AGREEMENT
                              ---_________________
                          OPERATIONS TRANSFER AGREEMENT
                        (Silverdale, Washington Facility)
     THIS  OPERATIONS  TRANSFER  AGREEMENT  ("Agreement")  is entered into as of
                                              ---------
_________,  20__  (the  "Effective Date") by and between EMERITUS CORPORATION, a
                         --------------
Washington  corporation  ("Manager"),  ESC-SILVERDALE, LLC, a Washington limited
                           -------
liability  company  ("ESC"),  WASHINGTON  LESSOR  - SILVERDALE, INC., a Maryland
                      ---
corporation  ("Lessor"),  and  ________________________,  a  ___________________
               ------
("New  Operator").
    -----------
                                   BACKGROUND
                                   ----------
     A.     Lessor  is  the owner of the following assisted living facility (the
"Facility"):
 --------
     Emeritus  Oaks  of  Silverdale
1501  NW  Tower  View  Circle
     Silverdale,  WA  98383
     B.     ESC  is  leasing  the  Facility  from  Lessor  pursuant  to a Single
Facility  Lease  dated  as  of  August  __, 2003, as amended (as so amended, the
"Lease").
     -
C.     Manager is the manager of the Facility pursuant to a Management Agreement
(as  defined in the Lease) between Manager and ESC (the "Management Agreement").
                                                         --------------------
ESC  and  Manager  are  each  referred  to as an "Emeritus Entity" and sometimes
                                                  ---------------
collectively  as  the  "Emeritus  Entities".
                        ------------------
D.     This  Agreement  is  being  executed  pursuant  to  the  Lease.
E.     The  parties  to  this  Agreement  desire to enter into this Agreement in
order to facilitate an orderly transition of the possession and operation of the
Facility  to  New  Operator.

                                    AGREEMENT
                                    ---------
     NOW,  THEREFORE,  in consideration of the mutual promises contained herein,
and for other good and valuable consideration, the receipt and adequacy of which
are  hereby  acknowledged,  the  parties  hereto  agree  that:
                                    ARTICLE I
                                   THE CLOSING
     1.1     Effectiveness  of  Closing.  The closing (the "Closing") under this
             --------------------------                     -------
Agreement  shall  be  effective as of 11:59:59 p.m. on the date agreed to by the
parties  following  New  Operator  obtaining  all  Regulatory  Clearances  (as
hereinafter  defined)  (the  "Closing  Date").
                              -------------
1.2     Manager's  Deliveries at Closing.  Manager and ESC, as applicable, shall
        --------------------------------
deliver  the  following  to  New  Operator  at  the  Closing:
(a)     Executed  warranty  Bill  of  Sale for Personal Property (as hereinafter
defined)  pursuant  to  Section  2.2  of  this  Agreement;
(b)     Executed  Assignments  of  the  Third  Party  Contracts requested by New
Operator  pursuant  to  Section  2.3  of  this  Agreement;
(c)     Executed  termination  with  respect  to  the  Management  Agreement;
(d)     Executed  counterparts  of a closing statement (the "Closing Statement")
                                                             -----------------
reflecting the estimated prorations and other payments and credits to be made at
Closing  pursuant  hereto,  which  amounts  are  subject  to  post-closing
reconciliation  pursuant  to  Section  2.9  below;  and
(e)     Payment  in  immediately available funds of amounts due New Operator, if
any,  from  the  Emeritus  Entities  pursuant  to  this  Agreement at Closing as
reflected  in  the  Closing  Statement.
     1.3     New  Operator's  Deliveries at Closing.  New Operator shall deliver
             --------------------------------------
the  following  to  the  Emeritus  Entities  at  the  Closing:
(a)     Executed  counterpart  of  the  Closing  Statement;
(b)     Payment  in  immediately  available  funds  of  amounts due the Emeritus
Entities,  if  any,  from  New  Operator  at Closing as reflected in the Closing
Statement;  and
     (c)     Reasonable  evidence  that New Operator has obtained all Regulatory
Clearances.
1.4     Payment.  Any  amounts  owed under Sections 1.2 and 1.3 shall be set off
        -------
against  each  other  at Closing.  To the extent a party is owed a payment after
such set off, such payment shall be made in cash at Closing via wire transfer of
immediately  available  funds  to  a  bank account specified by the party owed a
payment.
1.5     Liabilities  Not  Assumed.  Neither Lessor nor New Operator shall assume
        -------------------------
or  be  responsible  to  pay, perform or discharge any obligations, liabilities,
contracts  or  commitments  of  the  Emeritus  Entities  of  any  kind or nature
whatsoever,  other  than  those contracts and obligations New Operator expressly
agrees  to  assume  hereunder  or  at  Closing.
                                   ARTICLE II
                             TRANSFER OF OPERATIONS
     2.1     Cooperation.  The  Emeritus  Entities  agrees to cooperate with New
             -----------
Operator,  and  New  Operator agrees to cooperate with the Emeritus Entities, to
effect  an  orderly  transfer  of  possession and the operation of the Facility.
2.2     Conveyance  of  Supplies  and  Personal  Property.  Each of the Emeritus
        -------------------------------------------------
Entities  hereby  agree  to  sell, transfer and convey to New Operator as of the
Closing  Date,  all  of  its  right,  title  and interest, if any, in and to any
furniture, fixtures, equipment (including, to the extent owned, if any, computer
hardware and software, except (1) proprietary software and (2) computer hardware
and  software subject to lease), and supplies (including linens, consumables and
foodstuffs,  medical  supplies,  office  supplies,  and maintenance inventories)
owned  by  an  Emeritus  Entity and located at a Facility as of the Closing, but
specifically  excluding  the  Emeritus  Entities'  proprietary brochures and any
vehicles,  copiers,  facsimile machines, or other personal property (the "Leased
Property")  that  are leased by the Emeritus Entities as permitted by the Lease,
and  all  signage  bearing the Emeritus Entities' names (or portions thereof) or
trademarks  or  service marks owned by the Emeritus Entities (or either of them)
(collectively,  the  "Personal Property") for and in consideration of the mutual
                      -----------------
promises  contained  in  this Agreement, the Settlement Agreement and the Second
Amendment.  The  Emeritus  Entities  shall  also  assign  their  interest in any
telephone  or  facsimile  numbers in use at the Facility.  The Emeritus Entities
shall  have no obligation to deliver the Personal Property to any location other
than  the  Facility,  and  New Operator agrees that the presence of the Personal
Property  at the Facility at Closing shall constitute delivery thereof.   Except
for  the  Leased  Property and any Special Purpose Personal Property, all of the
furniture,  fixtures,  equipment  and  supplies used by the Emeritus Entities in
connection  with the operation of the Facility is being transferred and conveyed
to  New  Operator  under  this  Agreement.  On  the  Closing  Date, the Emeritus
Entities  covenant  that  the  supplies  at  the  Facility will be sufficient to
satisfy any minimum requirements established under applicable state law.   Other
than  the  vehicles,  copiers  and  facsimile  machines,  Manager  has no actual
knowledge  of  any  other  Leased  Property  at  the  Facility.
     2.3     Contracts.
             ---------

(a)     New  Operator  shall  not be obligated to assume any leases or executory
contracts  of  an Emeritus Entity in respect of the Facility; provided, however,
that  New  Operator  shall  assume the obligations of the Emeritus Entities with
respect to (1) residency agreements for residents at the Facility on the Closing
Date  for  residency  for periods after the Closing Date or for services or care
provided  after  the  Closing  Date, and (2) post-Closing Date services provided
pursuant  to  Designated  Third  Party  Contracts  (as  hereinafter  defined).
(b)     Prior  to  the  Effective  Date,  Manager has provided New Operator with
copies  of  all  of  the Emeritus Entities' current service contracts with third
party  vendors  that  are  in  effect  on  the  Effective  Date  (the "Operating
                                                                       ---------
Contracts").  A  list  of  those contracts is included as Schedule 2.3.   In the
event New Operator wishes the Emeritus Entities to terminate any such contracts,
New  Operator  shall  give  the Emeritus Entities notice of same within five (5)
business  days  after  the  Effective  Date,  and  upon the Closing the Emeritus
Entities  shall  give  notice  to  the  appropriate  vendors  to  terminate such
contracts as soon as possible after the Closing.   The Emeritus Entities and New
Operator  acknowledge  and agree that in the event Manager terminates any of the
Operating  Contracts  at the direction of New Operator but such termination will
not  be  effective until after the Closing Date as a result of notice provisions
set  forth  in  such  Operating Contacts (the "Termination Date"), if and to the
                                               ----------------
extent that New Operator derives any benefit from the goods or services provided
under  such  Operating  Contracts  between  the Closing Date and the Termination
Date,  New  Operator  shall  reimburse  the  Emeritus  Entities  as  part of the
reconciliation  process  for any payments under such Operating Contracts made by
the  Emeritus  Entities  between  the  Closing  Date  and  the Termination Date.

(c)     All service contracts identified on Schedule 2.3 which New Operator does
not  specify  that  the Emeritus Entities should terminate, shall constitute the
"Designated  Third  Party  Contracts"  and  shall  be  assigned  by the Emeritus
  ----------------------------------
Entities  to  New Operator at Closing; provided, however, that in no event shall
  -----
New  Operator  assume  any liability related to goods or services provided under
the  Designated  Third  Party  Contracts  on  or  before  the  Closing  Date.

(d)     If an Emeritus Entity enters into any contract with a third party vendor
after  the  Effective  Date,  (1)  the  contract  shall  provide  that it may be
terminated  upon  not  more  than  thirty  (30)  days'  notice, (2) the Emeritus
Entities shall immediately provide New Operator with a copy of the contract, and
(3)  the  contract  shall  be terminated by the Emeritus Entities on the Closing
Date  unless  New  Operator  notifies the Emeritus Entities prior to the Closing
Date that it wants the Emeritus Entities to assign the contract to New Operator,
in  which  event  it  shall  become  a  Designated  Third  Party  Contract.


     2.4     Transfer  of  Resident  Trust  Funds.  On  the  Closing  Date,  the
             ------------------------------------
Emeritus  Entities  shall  provide  to New Operator a true, correct and complete
accounting (properly reconciled) of any resident trust funds and an inventory of
all residents' property held by Manager on the Closing Date for residents at the
Facility.  On  the Closing Date, the Emeritus Entities shall assign and transfer
to  New Operator the resident trust accounts maintained by the Emeritus Entities
and  all  residents'  property  held  by  Manager  as  of  the  Closing  Date.
     2.5     Cooperation.     The  Emeritus  Entities  and  New  Operator  shall
             -----------
cooperate  with each other in connection with any claim, demand, appeal, lawsuit
or  proceeding,  arising  out  of or in any way relating to the operation of the
Facility prior to the Closing Date, including providing and making available for
inspection  and  copying,  at  the requesting party's sole cost and expense, any
information  that the requesting party reasonably deems necessary in prosecuting
or  defending  any  such  claim,  demand,  appeal,  lawsuit  or  proceeding.
     2.6     Employees.
             ---------
     (a)     The  Emeritus  Entities  shall  terminate  all  Hired Employees (as
defined  in  Section  2.6(b)  below)  effective as of the end of business on the
Closing  Date,  shall  either  terminate  or  reassign to other duties all other
employees  of  the  Facility  who  are  not Hired Employees, and shall be solely
responsible  for  all  costs  and  expenses in so terminating or reassigning, as
applicable,  all employees of the Facility.  The Emeritus Entities shall pay all
wages due to all Facility employees (whether or not they are Hired Employees) as
of  11:59:59 p.m. on the Closing Date.  In addition, the Emeritus Entities shall
be solely liable for payment of all Employee Benefits (as defined in Section 2.8
below)  due  as  of  11:59:59 p.m. on the Closing Date to all Facility employees
(including  all  Hired  Employees  pursuant  to  Section 2.8 of this Agreement).
There  shall be no proration at closing of payroll for employees (whether or not
they  are  Hired Employees), as all employees will be terminated by the Emeritus
Entities  as  of  the  Closing  Date.
(b)     New  Operator shall offer employment to at least two-thirds (2/3) of the
employees  of the Facility who, as of the Closing Date, work at the Facility and
have  been  employed  on  an  average  of 20 hours or more per week in the month
immediately preceding the Closing Date and have provided services solely to such
Facility.  Such  employees,  who  accept  employment with New Operator, shall be
referred  to  as the "Hired Employees."  Any such employment of a Hired Employee
                      ---------------
by New Operator shall be on such terms as New Operator in its discretion elects.
Manager  and  any  of  its affiliates shall have the right to employ or offer to
employ  in  any other facility or corporate offices of Manager or its affiliates
any  employee  of  the  Facility  who  declines  to  accept  employment with New
Operator;  provided,  however,  that  Manager  shall  not  actively solicit such
employment.  Prior  to  the  Closing Date, the Emeritus Entities shall grant New
Operator  reasonable  access to the Facility's employees for purpose of carrying
out  this  Section  2.6(b).
(c)     New  Operator  and  the Emeritus Entities acknowledge and agree that the
provisions  of Section 2.6(b) are designed, in part, to ensure that the Emeritus
Entities  are  not  required  to give notice to employees of the Facility of the
"closure"  thereof  under the Worker Adjustment and Restraining Notification Act
(the  "WARN Act") or any other comparable state law. Nothing in this Section 2.6
       --------
shall,  however,  create  any  rights in favor of any person not a party hereto,
including  employees  of  the Facility, or constitute an employment agreement or
condition  of employment for any employee of Manager or any affiliate of Manager
who  is  a  Hired  Employee.
(d)     The  Emeritus  Entities  shall  offer and provide, as appropriate, group
health plan continuation coverage pursuant to the requirement of Section 601 et.
seq.  of  ERISA  and Section 4980B of the Internal Revenue Code ("COBRA") to all
                                                                  -----
the  employees of the Facility to whom they are required to offer the same under
applicable  law.  New Operator in its discretion may also elect to provide group
health  plan  coverage  to Hired Employees on such terms as New Operator elects.
(e)     For  a  period of ninety (90) days after the Closing Date, Manager shall
retain  and  continue  to  make available for consultation with New Operator the
Directors  of  Nursing,  Facility  Administrators  and employees of the Emeritus
Entities who are not employed at the Facility but who provide essential services
to  the  Facility,  such  as  billing, collection, filing Medicaid cost reports,
attending  to  licensing  issues  and  similar  services,  and  investigating,
documenting  and filing proof of claims with respect to potential claims arising
under  the  Facility's  insurance  policies.
2.7     Accounts  Receivable.
        --------------------
(a)     Subject to (i) the terms of the Transaction Documents (as defined in the
Second Amendment), including the grant of security interests and exercise of any
remedies  thereunder in favor of Lessor, and (ii) Section 2.9 below with respect
to  the  proration  of  revenues  and  expenses from operating the Facility, the
Emeritus  Entities  shall  retain all unpaid accounts receivable, including, but
not  limited  to,  any  arising on or prior to the Closing Date and any accounts
receivable  arising from rate adjustments which relate to the period on or prior
to the Closing Date even if such adjustments occur after the Closing Date, as of
11:59:59  p.m. on the Closing Date with respect to the Facility, but only to the
extent  that such accounts receivable relate to services rendered on or prior to
the  Closing  Date,  and  shall  provide  New  Operator with copies of Manager's
records  with respect thereto upon request.  The Emeritus Entities shall, during
the  period  prior  to  the  Closing  Date, use and continue to use commercially
reasonable  efforts to collect accounts receivables relating to periods prior to
the  Closing  Date from the responsible party therefor.  All accounts receivable
that  relate  to  services  rendered  after  the  Closing Date shall be the sole
property  of  New Operator free and clear of any liens or any security interests
granted  by  the  Emeritus  Entities.
(b)     If  at  any  time after the Closing Date, New Operator shall receive any
payment, which payment represents payment for, or reimbursement with respect to,
payments or underpayments made to the Emeritus Entities for services rendered on
or prior to the Closing Date, then New Operator shall remit such payments to the
Emeritus  Entities.  If  at  any  time  before  or  after  the Closing Date, the
Emeritus  Entities  shall  receive any payment, which payment represents payment
for,  or  reimbursement  with  respect to, payments or underpayments made to New
Operator  for  services to be rendered after the Closing Date, then the Emeritus
Entities  shall remit such payments to New Operator. All non-designated payments
received  during the first thirty (30) days after the Closing Date will first be
applied to any pre-Closing Date accounts receivable of the Emeritus Entities due
from  such  payee  and not older than sixty (60) days since the date of invoice,
with  the excess, if any, applied to the extent of any balances due for services
rendered  by  New  Operator after the Closing Date.  All non-designated payments
thereafter  shall  be  retained  by New Operator; provided, however, that if New
Operator  has  been  paid all amounts due from a resident during the period that
New  Operator operates the Facility and that resident is no longer a resident of
the  Facility,  any  non-designated  payments  shall be remitted to the Emeritus
Entities  if  the  Emeritus  Entities document that they have a balance due from
that  resident.
 (c)     To  the  extent  either  party  receives any proceeds from the accounts
receivable of the other party, both parties acknowledge that the party receiving
the  payment  belonging to the other party shall hold the payment in trust, that
neither  party  shall  have  any  right  to offset with respect to such accounts
receivable,  and  that the party erroneously receiving the payment shall have no
right,  title  or interest whatsoever in the payment and shall remit the same to
the  other  within  ten  (10)  days  of  receipt.
2.8     Employment  Benefits.  On  or  before  the  Closing  Date,  the Emeritus
        --------------------
Entities shall prepare an accounting of all accrued and earned paid time off due
to all employees in accordance with the Emeritus Entities' standard policies and
state  and  federal  law  as of 11:59:59 p.m. on the Closing Date (collectively,
"Employee  Benefits").  On  the  next  regularly  occurring payday following the
   ----------------
Closing  Date, the Emeritus Entities shall pay to the respective employees their
   --
respective  Employee  Benefits  in their final paychecks.  The Emeritus Entities
acknowledge  that:
(a)     Neither  Lessor  nor  New  Operator  shall  have  any  liability  to any
employees  terminated  by  the Emeritus Entities on or prior to the Closing Date
for  benefits  pursuant  to  Section  601,  et  seq.  of  ERISA  and  COBRA; and
(b)     the Emeritus Entities shall be solely responsible for providing required
notices  to  all  employees  of  the Facility as of the Closing Date pursuant to
COBRA.
The  Emeritus  Entities  acknowledges  and  agrees  that  neither Lessor nor New
Operator  is assuming any of the Emeritus Entities' obligations under COBRA, and
that all such obligations shall remain the obligations of the Emeritus Entities.
2.9     Prorations  at  Closing.
        -----------------------

(a)     Expenses,  Costs  and  Charges.   The  following items shall be prorated
        ------------------------------
between the Emeritus Entities and New Operator effective as of the Closing Date,
with  the  Emeritus  Entities  responsible for such items prior to and as of the
Closing Date and New Operator responsible for such items after the Closing Date:

i.     real  and  personal  property  taxes  for  the calendar year in which the
Closing  occurs,  giving  recognition  to  any  discount  available for earliest
payment.  If taxes are prorated on an estimated basis rather than the actual tax
for  the year in which the Closing occurs, the parties shall adjust the prorated
amount  when  such actual tax is known, based on the final tax bill for the year
in  which  the  Closing  occurs;  and

ii.     water,  fuel,  electricity,  telephone,  garbage collection, sewage, and
other  utility  service  charges  and  expenses;  and

iii.     any  other  accrued  and  apportionable  operating  costs,  charges and
expenses.

     The  Emeritus  Entities  are not appealing any ad valorem tax assessment or
otherwise engaged in a tax contest.  Any refund or reduction in taxes applicable
to  any  year  prior to the year in which the Closing occurs shall be and remain
the  property  of  Manager and if any such tax refund is paid to, received by or
credited  to  New  Operator, New Operator shall promptly remit such payment or a
check  for  such  credit  to  the  Emeritus  Entities.

     The  Emeritus Entities and New Operator acknowledge and agree that many, if
not  all, of the items referenced in (ii) and (iii) may not be readily or easily
determinable  as  of  the  Closing  Date,  and  as  such  will  be  part  of the
reconciliation  process  more  particularly  described  below.

(b)     Resident  Rents  and  Services Fees; Reconciliation.  Resident rents and
        ---------------------------------------------------
service  fees  for  the  month  of Closing, shall be allocated as of the Closing
Date;  the  portion  thereof  allocable  to all time periods on and prior to the
Closing  Date shall be credited to the Emeritus Entities and the portion thereof
allocable  after  the  Closing  Date  shall  be  credited  to New Operator.  New
Operator  and the Emeritus Entities hereby recognize and agree that all resident
rents  and service fees for the month of Closing will not have been collected as
of  the  Closing Date.  Therefore, the parties agree to estimate such amounts on
the  Closing  Statement  and reconcile such estimate post-Closing as hereinafter
provided.  If  the  Closing  Date occurs on or before the 10th day of the month,
then  New Operator shall receive a credit at Closing in an amount equal to fifty
percent  (50%)  of  the total billed amount for resident rents and service fees.
If  the Closing occurs on or after the 10th  day of the month, then New Operator
shall  receive a credit at Closing which is prorated based on resident rents and
service  fees  actually  collected  by  the  Emeritus  Entities for the month of
Closing,  determined  as  of  the close of business on the date two (2) business
days  prior  to  the  Closing  Date.

     (c)     Within  forty-five (45) days after the Closing Date representatives
of  the  Emeritus  Entities  and  New Operator shall prepare and deliver to each
other  a schedule itemizing the prorations and adjustments to costs, charges and
expenses  under  Section  2.9(a),  together with resident rents and service fees
actually  collected  (the "Initial Reconciliation").  The Initial Reconciliation
                           ----------------------
shall  include appropriate detail to identify the items being adjusted.  A final
reconciliation  of  all such expenses, costs, charges, service fees and resident
rents shall be prepared and delivered by representatives of New Operator and the
Emeritus  Entities to each other within seventy-five (75) days after the Closing
Date (the "Final Reconciliation").  The Final Reconciliation shall appropriately
           --------------------
net  all items to reflect the net amount owed to New Operator or to the Emeritus
Entities  as a result of such reconciliation.  After approval by both parties of
the  Final  Reconciliation, the party determined to owe cash as a result of such
Final  Reconciliation  shall  promptly  pay  such  cash  to  the  other  party.

     2.10     Resident  Deposits. The Emeritus Entities represent that there are
              ------------------
no  traditional security deposits posted by residents of the Facilities with the
Emeritus  Entities.  In  some  instances, the Emeritus Entities collects move-in
fees  from  residents,  which  fees  are  deemed  earned on their payment by the
resident  to  the  Emeritus  Entities.  Under limited circumstances, such as the
death  of  the  resident  or  if  the  resident's  physician determines that the
resident needs care not offered by the Emeritus Entities within the first ninety
(90) days after the resident moves into the Facility, the Emeritus Entities will
refund a pro-rated portion of one-half of the move-in fee.  New Operator and the
Emeritus  Entities  shall  not prorate the move-in fees at Closing. The Emeritus
Entities  shall be responsible for paying directly to a resident any refund of a
move-in  fee  that  may be owed to such resident post-Closing under the terms of
the  residency  agreement  between  an  Emeritus  Entity  and  the  resident.

     2.11     Transfer  of  Records.  Prior  to  the Closing, New Operator shall
              ---------------------
review  the  files  physically  located  at  the  Facility,  including  without
limitation  all  employment  files,  medical records, cost reports, surveys with
plans  of  correction,  historical  financial  records  related to the Facility,
nonproprietary  electronic  files, and any other nonproprietary operational data
reasonably  necessary  to  the  operation  of  the  Facility  as  authorized  by
applicable  law and notify Manager in writing not less than ten (10) days before
the Closing which files, if any, New Operator wants removed from the Facility at
Closing.  At  Closing,  the  Emeritus Entities shall remove the designated files
and  shall  transfer  to New Operator all other files at the Facility; provided,
however,  the  Emeritus  Entities shall be entitled to keep copies of all of the
foregoing  as  it  deems  necessary.
2.12     Computer  Systems.  Each  of  the  Emeritus  Entities represents to New
         -----------------
Operator  that  it does not own any computer hardware used at the Facility as of
the  date  of  this  Agreement.  The  Emeritus  Entities  agree  to  provide New
Operator,  upon its written request, with such unaudited financial and operating
reports  for the Facility relating to the period on or prior to the Closing Date
as New Operator may request from time to time, and which can be produced by such
Emeritus Entity on an automated basis, provided that any such request is made no
later  than  ninety  (90)  after  the  Closing  Date.
     2.13     Operations  Pending Transition. (a)     Prior to the Closing Date,
              ------------------------------
the  Emeritus  Entities shall operate the Facility in accordance with its normal
and  customary  business  practices,  including  the  continued  marketing  and
admission  of  residents (utilizing the form of residency agreement in effect on
the  Effective  Date  without  material  deviation),  hiring  and  management of
employees,  and compliance with governmental regulations.  Manager shall use its
commercially  reasonable best efforts to transition the Facility to New Operator
in  substantially the same condition as exists at the Facility as of the date of
this  Agreement.  New  Operator and Lessor acknowledge that the news of a change
in  management  often  results  in  employee  retention  decreases  and drops in
occupancy  levels.
     (b)     The  Emeritus  Entities agrees not to actively solicit for transfer
any  residents  of  the  Facility.
(c)     The Emeritus Entities agree not to directly solicit any employees of the
Facility  for employment at any other facility of the Emeritus Entities prior to
the  Closing  Date  and  agrees  not to directly solicit any Hired Employees for
employment  at  any  other facility of the Emeritus Entities for a period of one
year  after  the  Closing  Date.
(d)     The Emeritus Entities agree not to increase salaries of employees at the
Facility  except in the ordinary course of business consistent with the Emeritus
Entities'  practices  at  other  facilities.
(e)     The  Emeritus  Entities  agrees  to  provide New Operator with copies of
accounts  receivable aging reports as soon as such reports are available, but in
no  event  later than forty-five (45) days after the end of each calendar month.
     2.14     Regulatory  Clearances.  New  Operator  shall  be  responsible for
              ----------------------
obtaining  all  Regulatory  Clearances  and  the Emeritus Entities shall use its
commercially reasonable efforts to assist New Operator in such efforts.  As used
herein,  "Regulatory  Clearances" means receipt by New Operator of either: (i) a
license  issued by the Agency to operate the Facility of the type and kind which
is  substantially  consistent  with  the  operations  of  the Facility as of the
Effective Date, or (ii) reasonable assurances by the Agency that the Agency will
issue  a  license  authorizing  New Operator to operate the Facility in a manner
substantially  consistent with the manner that the Facility is being operated as
of  the  Effective  Date,  and  permission  to commence such operation.  As used
herein,  "Agency"  means  collectively  any  and  all  agencies  and departments
responsible  for  licensure  of  assisted  living  facilities  in  the  state of
Washington  or  their  successor  agencies  or  departments.

     2.15     Advances  by  Lessor  and  Security for Obligations. To the extent
              ---------------------------------------------------
that  the  Emeritus  Entities are unable to perform their obligations under this
Agreement,  which performance requires in whole or in part the payment of money,
Lessor  may  advance funds on behalf of any such Emeritus Entity for purposes of
fulfilling  such obligation.  To the extent that Lessor advances funds on behalf
of an Emeritus Entity, as contemplated by the immediately preceding sentence, to
effectuate  a  Facility  transfer  pursuant  to  this Agreement, including funds
advanced  for  purposes  of preparing bills, invoices or claims for payment with
third  party  payors with respect to services rendered or goods delivered at the
Facility, or to fund the Employee Benefits, the Emeritus Entities agree that any
amounts  advanced pursuant to this Agreement shall constitute additional secured
obligations  of the Emeritus Entities, due and payable upon demand, and shall be
secured  by the Transaction Documents.  The obligations of the Emeritus Entities
under  this  Agreement  to  the extent they are owed to, or ultimately performed
pursuant  to  this  Section  2.15  by,  Lessor  are  secured  by  all the liens,
encumbrances,  security  interests,  pledges  and  guaranties  given  or granted
pursuant  to  the  Transaction  Documents.   Lessor  agrees  that  the  Personal
Property  and  all  receivables  related to post-Closing Date services are being
transferred  free  of  any  liens,  encumbrances  or security interests given or
granted  by  any  of  the  Emeritus Entities to Lessor or any of its affiliates.

                                   ARTICLE III
                                 INDEMNIFICATION
     3.1     The  Emeritus  Entities  Indemnification  of  New Operator.     The
             ----------------------------------------------------------
Emeritus  Entities  shall,  jointly  and  severally  defend,  indemnify and hold
harmless  each  of  Lessor and New Operator from and against any and all losses,
damages, costs, expenses, liabilities, obligations and claims of any kind of any
nature,  whether arising in contract or tort, at law or in equity, or otherwise,
from or arising out of or in connection with the management and operation of the
Facility  on  or  prior  to the Closing Date, including, but not limited to, (i)
bodily  injury  or  property damage occurring within or about the Facility on or
prior  to the Closing Date, (ii) labor disputes, including unfair labor practice
allegations,  from  acts  or  occurrences on or prior to the Closing Date, (iii)
accounts  payable  with respect to goods or services provided to the Facility on
or  prior  to  the  Closing Date and which have not been assumed by New Operator
under  this  Agreement or which are not subject to proration hereunder, and (iv)
claims made by Lessor or New Operator against the Emeritus Entities with respect
to  the  Emeritus  Entities'  indemnification  obligations under this Agreement,
including  without  limitation  claims  relating to civil monetary penalties and
fraud  offsets  relating  to  the  period  on  or  prior  to  the  Closing Date.
     3.2     New Operator Indemnification of the Emeritus Entities. New Operator
             -----------------------------------------------------
shall  defend,  indemnify  and  hold  harmless  the  Emeritus  Entities,  their
directors,  officers  and  shareholders,  from  and  against any and all losses,
damages, costs, expenses, liabilities, obligations and claims of any kind of any
nature,  whether arising in contract or tort, at law or in equity, or otherwise,
from or arising out of or in connection with the management and operation of the
Facility  by New Operator after the Closing Date, including, but not limited to,
(i)  bodily  injury  or  property  damage occurring within or about the Facility
after  the  Closing  Date,  (ii) labor disputes, including unfair labor practice
allegations,  from  acts  or  occurrences after the Closing Date, (iii) accounts
payable  with  respect  to  goods or services provided to the Facility after the
Closing Date, and (iv) claims made by the Emeritus Entities against New Operator
with respect to New Operator's indemnification obligations under this Agreement,
including  without  limitation  claims  relating to civil monetary penalties and
fraud  offsets  relating  to  the  period  after  the  Closing  Date.
3.3     Claims.  As  soon  as  is  reasonably  practicable  after  the  Emeritus
        ------
Entities,  Lessor  or  New  Operator  becomes  aware of any claim that it has to
recover  against  the  other  under this Article IV, the party to be indemnified
("Indemnified  Party")  shall  notify  the other party ("Indemnifying Party") in
   -----------------                                     ------------------
writing,  which  notice shall describe the claim in reasonable detail, and shall
indicate  the amount (estimated, if necessary and to the extent feasible) of the
claim.  The  failure  of any Indemnified Party to promptly give any Indemnifying
Party  such  notice  shall  not  preclude  such Indemnified Party from obtaining
indemnification under this Agreement, except to the extent that such Indemnified
Party's  failure  has  materially  prejudiced the Indemnifying Party's rights or
materially  increased its liabilities and obligations hereunder. In the event of
a  third  party  claim which is subject to indemnification under this Agreement,
the  Indemnifying  Party  shall promptly defend such claim by counsel of its own
choosing, subject to the approval of the Indemnified Party, which approval shall
not unreasonably be withheld, and the Indemnified Party shall cooperate with the
Indemnifying  Party in the defense of such claim including the settlement of the
matter  on the basis stipulated by the Indemnifying Party (with the Indemnifying
Party  being  responsible for all costs and expenses of such settlement). If the
Indemnifying  Party  within  a  reasonable time after notice of a claim fails to
defend  the  Indemnified  Party,  the  Indemnified  Party  shall  be entitled to
undertake  the defense, compromise or settlement of such claim at the expense of
and  for  the  account  and  risk  of  the  Indemnifying  Party.
                                   ARTICLE IV
              RESPRESENTATIONS, WARRANTIES AND AGREEMENTS OF LESSOR
     Lessor  represents  and  warrants to the Emeritus Entities and New Operator
that  the  following  representations and warranties are true and correct on the
date  hereof:
4.1     Authority,  Validity  and Binding Effect. Lessor has all necessary power
        ----------------------------------------
and authority to carry on its business as it is now being conducted.  Lessor has
all  necessary  power  and authority to enter into this Agreement and to execute
all  documents and instruments referred to herein or contemplated hereby and all
necessary  action  has  been  taken  to  authorize the individual executing this
Agreement  to  do  so.  This  Agreement  has  been duly and validly executed and
delivered  by  Lessor  and  is enforceable against Lessor in accordance with its
terms.
4.2     Survival. All representations and warranties of Lessor shall survive the
        --------
Closing  Date  for  a  period  of  one  (1)  year.
                                    ARTICLE V
           RESPRESENTATIONS, WARRANTIES AND AGREEMENTS OF NEW OPERATOR
     New  Operator  represents  and warrants to the Emeritus Entities and Lessor
that  the  following  representations and warranties are true and correct on the
date  hereof:
5.1     Authority,  Validity  and Binding Effect. New Operator has all necessary
        ----------------------------------------
power  and  authority to carry on its business as it is now being conducted. New
Operator  has all necessary power and authority to enter into this Agreement and
to  execute  all  documents  and  instruments referred to herein or contemplated
hereby  and  all  necessary  action  has  been taken to authorize the individual
executing  this  Agreement  to  do so.  This Agreement has been duly and validly
executed  and  delivered by New Operator and is enforceable against New Operator
in  accordance  with  its  terms.
5.2     Access  to  Records.  Subsequent to the Closing Date, New Operator shall
        -------------------
allow  the  Emeritus  Entities  and  their  agents  and  representatives, at the
Emeritus  Entities'  sole  cost  and expense, to have reasonable access to (upon
reasonable  prior  notice),  and  to  make  copies of, the books and records and
supporting  material  of  the  Facility  relating  to  the  period  prior to and
including the Closing Date, to the extent reasonably necessary to enable Manager
to  investigate  and  defend  malpractice,  employee or other claims, to file or
defend  cost  reports and tax returns, to verify accounts receivable collections
due  the  Emeritus  Entities,  and to perform similar matters. New Operator will
maintain  such  books,  records  and  other  material  comprising records of the
Facility's  operations  prior to the Closing Date that have been received by New
Operator from the Emeritus Entities or otherwise, including, but not limited to,
resident  records  and records of resident funds, to the extent required by law,
but  in  no  event  less  than  a  period  of three (3) years (provided that New
Operator  will  have  no liability for failure to maintain any records which are
destroyed as a result of a fire or other similar casualty).  Notwithstanding the
above, (1) the Emeritus Entities shall remove from the Facility any records that
New Operator requests it to remove prior to the Closing; and (2) with respect to
any  records  that New Operator does not request the Emeritus Entities to remove
at  Closing,  New Operator may deliver any such records to the Emeritus Entities
at  any time after Closing and shall thereafter not be required to maintain such
records  except  to  the  extent  required  by  law.
5.3     Licenses  and  Permits.  New Operator shall represent and warrant to the
        ----------------------
Emeritus  Entities  as  of  the Closing Date that it has obtained all Regulatory
Clearances  as  of  the  Closing  Date.
5.4     Survival.  All  representations  and  warranties  of  New Operator shall
        --------
survive  the  Closing  Date  for  a  period  of  one  (1)  year.
                                   ARTICLE VI
             REPRESENTATIONS AND WARRANTIES OF THE EMERITUS ENTITIES
     Each of the Emeritus Entities hereby, jointly and severally, represents and
warrants  as  follows:
6.1     Authority,  Validity  and  Binding Effect. Each of the Emeritus Entities
        -----------------------------------------
has  all  necessary  power  and  authority  to  enter into this Agreement and to
execute  all documents and instruments referred to herein or contemplated hereby
and  all  necessary  action has been taken to authorize the individual executing
this  Agreement to do so.  This Agreement has been duly and validly executed and
delivered  by  each  of the Emeritus Entities and is enforceable against each of
the  Emeritus  Entities  in  accordance  with  its  terms.
6.2     Personal  Property.  The  Emeritus  Entities  have  maintained  Personal
        ------------------
Property,  including  inventories  of  linens,  consumables  and foodstuffs, and
medical  supplies prior to the Closing Date consistent with the operation of the
Facility  in  the ordinary course of business and the requirements of applicable
law,  and  the  Personal  Property  transferred to New Operator pursuant to this
Agreement  reflects  supply  levels  required  to  be maintained by the Emeritus
Entities  in  order  to  operate  a  assisted  living  facility.
6.3     Survival.  All  representations  and warranties of the Emeritus Entities
        --------
shall  survive  the  Closing  Date  for  a  period  of  one  (1)  year.
                                   ARTICLE VII
                                  MISCELLANEOUS
     7.1     Further  Assurances.  Each  of the parties hereto agrees to execute
             -------------------
and  deliver  any and all further agreements, documents or instruments necessary
to  effectuate  this  Agreement  and  the  transactions  referred  to  herein or
contemplated  hereby  or  reasonably  requested by the other party to perfect or
evidence  their  rights  hereunder.
7.2     Notices.  Any  notice,  request  or other communication ("Notice") to be
        -------                                                   ------
given by any party hereunder shall be in writing and shall be sent by registered
or  certified  mail,  postage  prepaid,  or  by  hand  delivery  or  facsimile
transmission  to  the  following  addresses:
     TO  THE  EMERITUS  ENTITIES:
          ESC-Silverdale,  LLC
     c/o  Emeritus  Corporation
1131  Elliott  Avenue
Suite  500
Seattle,  WA  98121
     Telephone  No.:  (206)  298-2909
     Facsimile  No.:  (206)  301-4500
With  copy  to               The  Nathanson  Group
     (which  shall  not          1520  Fourth  Avenue
constitute  notice):          Sixth  Floor
                         Seattle,  WA  98101
                         Attn:  Randi  S.  Nathanson
     Telephone  No.:  (206)  623-6239
Facsimile  No.:  (206)  623-1738

     TO  LESSOR:          c/o  Omega  Healthcare  Investors,  Inc.
     9690  Deereco  Road,  Suite  100
                         Timonium,  MD  21093
     Attn.:  Daniel  J.  Booth
Telephone  No.:  (410)  427-1700
     Facsimile  No.:  (410)  427-8800
With  copy  to               Mark  Derwent,  Esq.
(which  shall  not          Myers  Nelson  Dillon  &  Shierk,  PLLC
constitute  notice):          125  Ottawa  Avenue,  N.W.
                         Suite  270
                         Grand  Rapids,  MI  49503
Telephone  No.:  (616)  233-9640x14
Facsimile  No.:  (616)  233-9642
     TO  NEW  OPERATOR:     _______________________
     _______________________
     _______________________
Telephone  No.:  (___)  _______
     Facsimile  No.:  (___)  ________
With  copy  to               _______________________
     (which  shall  not          _______________________
constitute  notice):     _______________________
     _______________________
Telephone  No.:  (___)  _______
     Facsimile  No.:  (___)  ________
or  to  such other address as either party may hereafter designate. Notice shall
be deemed to have been given on the date of delivery if such delivery is made on
a business day, or if not, on the first business day after delivery. If delivery
is  refused,  Notice shall be deemed to have been given on the date delivery was
first  attempted.  Notice  sent  by facsimile transmission shall be deemed given
upon  confirmation  (electronic  or verbal) that such Notice was received at the
number  specified  above.
     7.3     MUTUAL  WAIVER  OF  RIGHT  TO JURY TRIAL.  EACH PARTY HERETO HEREBY
             ----------------------------------------
WAIVES  THE  RIGHT  TO  TRIAL  BY  JURY  IN ANY ACTION OR PROCEEDING BASED UPON,
ARISING  OUT  OF,  OR  IN  ANY  WAY  RELATING  TO  THIS  AGREEMENT.
7.4     Arbitration.  In  case any controversy arises between the parties hereto
        -----------
as  to  any  of the provisions of this Agreement or the performance thereof, and
the  parties  are  unable to settle the controversy by agreement or as otherwise
provided  herein,  the  controversy  shall  be  decided  by  arbitration.  The
arbitration  shall be conducted by three arbitrators selected in accordance with
the  rules and procedures of the American Arbitration Association.  The decision
of  the  arbitrators  shall  be  final  and binding, and judgment may be entered
thereon in any court of competent jurisdiction.  The decision shall set forth in
writing  the  basis  for the decision.  In rendering the decision and award, the
arbitrators  shall not add to, subtract from, or otherwise modify the provisions
of  this Agreement.  The expense of the arbitration shall be divided between the
parties  unless  otherwise specified in the award.  Each party in interest shall
pay  the  fees  and  expenses  of  its  own  counsel.  The  arbitration shall be
conducted  in  Seattle,  Washington.  In  any  arbitration, the parties shall be
entitled  to  conduct  discovery  in  the same manner as permitted under Federal
Rules  of  Civil  Procedure  26  through  37,  as amended.  No provision in this
Section  shall  limit  the  right  of  any  party  to  this  Agreement to obtain
provisional or ancillary remedies from a court of competent jurisdiction before,
after,  or  during  the  pendency  of  any arbitration, and the exercise of such
remedies  does  not  constitute  a  waiver  of  the  right  of  either  party to
arbitration.
7.5     Entire  Agreement;  Amendment; Waiver.  This Agreement together with the
        -------------------------------------
other  agreements  referred  to  herein,  constitutes  the  entire understanding
between  the  parties with respect to the subject matter hereof, superseding all
negotiations,  prior discussions and preliminary agreements.  This Agreement may
not  be  modified or amended except in writing signed by the parties hereto.  No
waiver of any term, provision or condition of this Agreement, in any one or more
instances,  shall  be  deemed  to  be or be construed as a further or continuing
waiver  of  any  such  term,  provision or condition or as a waiver of any other
term,  provision  or  condition  of  this Agreement.  No failure to act shall be
construed  as  a  waiver  of  any  term,  provision, condition or rights granted
hereunder.
7.6     Assignment.  Neither  this  Agreement  nor  the  rights,  duties  or
        ----------
obligations  arising  hereunder shall be assignable or delegable by either party
        --
hereto  without  the  express prior written consent of the other parties hereto;
provided,  however,  that,  (a)  the  rights  but not the obligations under this
Agreement  shall  be  assignable by Lessor in whole or in part without Manager's
prior  consent (but after notice to Manager and New Operator) to any entity that
is  owned  or  controlled  directly  or  indirectly  by  Lessor, any entity that
controls,  is  controlled  by or is under common control with Lessor, including,
without limitation, through any merger or acquisition, (b) any assignment by New
Operator  may  only  be  to  a  party  who  will  have  all necessary Regulatory
Clearances to operate the Facility as of the Closing Date and (c) this Agreement
may  be  assigned  as  a  matter  of  law  to  any  successor entity to Manager.
7.7     Joint  Venture;  Third  Party  Beneficiaries.  Nothing  contained herein
        --------------------------------------------
shall be construed as forming a joint venture or partnership between the parties
hereto  with  respect  to  the subject matter hereof.  The parties hereto do not
intend  that  any  third  party  shall  have  any  rights  under this Agreement.
7.8     Representation  by  Counsel.  The  parties  hereto acknowledge that they
        ---------------------------
have  been represented by independent legal counsel of their choosing throughout
all of the negotiations which preceded the execution of this Agreement, and that
each  party  has  executed  this Agreement with the consent and on the advice of
such  independent legal counsel.  This Agreement is a negotiated document.  As a
result,  any  rule  of  construction providing for any ambiguity in the terms of
this  Agreement to be construed against the draftsperson of this Agreement shall
be  inapplicable  to  the  interpretation  of  this  Agreement.
7.9     Attorneys'  Fees.  If  any  legal  action  or  arbitration proceeding is
        ----------------
brought for the enforcement of this Agreement, or because of an alleged dispute,
breach, default or misrepresentation in connection with any of the provisions of
this  Agreement, the successful or prevailing party or parties shall be entitled
to  recover  reasonable  and documented attorneys' fees and other costs actually
incurred  in that action in addition to any other relief to which it or they may
be  entitled.
7.10     Captions.  The  section  headings  contained herein are for convenience
         --------
only  and  shall  not  be  considered  or  referred to in resolving questions of
interpretation.
7.11     Counterparts.  This  Agreement  may  be  executed  in  one  or  more
         ------------
counterparts  and all such counterparts taken together shall constitute a single
         -
original  Agreement.
7.12     Governing  Law.  This  Agreement  shall  be  governed  by, interpreted,
         --------------
construed,  applied  and  enforced  in  accordance with the laws of the State of
Washington  applicable to contracts between residents of the State of Washington
which are to be performed entirely within the State of Washington, regardless of
(i)  where this Agreement is executed or delivered; or (ii) where any payment or
other  performance required by this Agreement is made or required to be made; or
(iii)  where  any breach of any provision of this Agreement occurs, or any cause
of  action  otherwise  accrues;  or (iv) where any action or other proceeding is
instituted  or pending; or (v) the nationality, citizenship, domicile, principal
place of business or jurisdiction of organization or domestication of any party;
or  (vi)  whether  the  laws of the forum jurisdiction otherwise would apply the
laws  of  the  jurisdiction  other  than  the  State of Washington; or (vii) any
combination  of  the  foregoing.
                          Signatures on following page.

<PAGE>
     E-19
     IN  WITNESS  WHEREOF,  the  parties  hereto  have  executed this Operations
Transfer  Agreement  as  of  the  day  and  year  first  above  written.
ESC-SILVERDALE,  LLC,  a  Washington  limited  liability  company
By:     _________________________________
     Name:     _________________________________
     Its:     _________________________________
EMERITUS  CORPORATION,  a  Washington  corporation
By:     _________________________________
     Name:     _________________________________
     Its:     _________________________________
WASHINGTON  LESSOR  -  SILVERDALE,  INC.,  a  Maryland  corporation
By:     _________________________________
     Name:     _________________________________
     Its:     _________________________________
__________________________,  a  _____________
By:     _________________________________
     Name:     _________________________________
     Its:     _________________________________

469100

<PAGE>
                                  SCHEDULE 2.3
                                       TO
                          OPERATIONS TRANSFER AGREEMENT
                          LIST OF ALL SERVICE CONTRACTS




<PAGE>
                                       F-3
                                    EXHIBIT F
                        MEMORANDUM OR SHORT FORM OF LEASE
THIS  INSTRUMENT  PREPARED  BY:
Mark  E.  Derwent
Myers  Nelson  Dillon  &  Shierk,  PLLC
125  Ottawa  Ave.,  N.W.,  Suite  370
Grand  Rapids,  Michigan  49503
     THIS LEASE, made and entered into as of _____________, 2003, by and between
WASHINGTON  LESSOR  -  SILVERDALE,  INC., a Maryland corporation ("Lessor"), the
                                                                   -----
address  of  which  is  9690  Deereco  Road,  Suite 100, Timonium, MD 21093, and
ESC-Silverdale,  LLC,  a  Washington  limited  liability company ("Lessee"), the
                                                                   ------
address  of  which  is c\o Emeritus Corporation, 3131 Elliott Avenue, Suite 500,
Seattle,  WA  98121  ("Lessee"), with respect to the real property identified in
                       ------
Exhibit  A  attached  hereto  and located in Kitsap County, State of Washington.
  --------
                                   WITNESSETH:
     1.     For  and  in  consideration  of  the  rents  reserved  and the other
covenants contained in that certain Lease made by and between the parties hereto
and dated the date hereof ("Lease"), Lessor has and does hereby lease to Lessee,
                            -----
and Lessee has and does hereby take and rent from Lessor, all of Lessor's rights
and interest in and to the parcel of real property described in attached Exhibit
                                                                         -------
"A"  and  all  fixtures and improvements thereto, and certain personal and other
---
property  as  set  forth  in  the  Lease.
--
2.     The  Initial  Term  of  the  Lease  is  ten  (10)  years,  commencing
_____________,  2003  and  ending  on  _________________,  2013.
3.     As more particularly provided in the Lease, Lessee may elect to renew the
original  term  for two (2) ten (10) year optional renewal periods for a maximum
term,  if  exercised,  of  thirty  (30)  years  after  the  Commencement  Date.
4.     This instrument is executed and recorded for the purpose of giving notice
of  Lessee's  interest in the property covered by the Lease and giving notice of
the  existence  of the Lease, to which reference is made for a full statement of
the  terms  and  conditions  thereof.  The  respective  addresses of the parties
hereto  are:
     To  Lessee:          ESC-Silverdale,  LLC
               c/o  Emeritus  Corporation
     3131  Elliott  Avenue,  Suite  500
Seattle,  WA  98121
Attn:  Raymond  Brandstrom
Telephone  No.:  (206)  298-2909
     Facsimile  No.:  (206)  301-4500
     To  Lessor:                    Washington  Lessor  -  Silverdale,  Inc.
                         c/o  Omega  Healthcare  Investors,  Inc.
     9690  Deereco  Road,  Suite  100
     Timonium,  MD  21093
Attn.:  Daniel  J.  Booth
Telephone  No.:  (410)  427-1700
     Facsimile  No.:  (410)  427-8800
     IN  WITNESS WHEREOF, the parties have caused this instrument to be executed
by  their  duly  authorized officer or officers and [general partners] [managing
partners],  as  applicable,  all  as  of  the  day and date first above written.
     LESSOR:
     ------
Washington  Lessor  -  Silverdale,  Inc.
     By:     ____________________________
Name:     ____________________________
     Title:     ____________________________
     LESSEE:
     ------
ESC-Silverdale,  LLC
     By:     ____________________________
Name:     ____________________________
                                   Title:     ____________________________
THE  STATE  OF  _____________)
     )
COUNTY  OF     _______________)
     This instrument was acknowledged before me on the ______ day of __________,
2003,  by __________, the _____________ of Washington Lessor - Silverdale, Inc.,
a  Maryland  corporation,  on  behalf  of  said  corporation.
     Notary  Public

THE  STATE  OF_____________)
     )
COUNTY  OF________________)
     This  instrument  was acknowledged before me on the _____ day of _________,
2003,  by  _____,  the ____________ of ESC-Silverdale, LLC, a Washington limited
liability  company,  on  behalf  of  said  company.
     Notary  Public